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EXHIBIT 10.14
SUBSIDIARY SECURITY AGREEMENT
This SUBSIDIARY SECURITY AGREEMENT (this "AGREEMENT") is dated as
of February 27, 1998 and entered into by and among each of the undersigned
direct and indirect Subsidiaries of Zilog, Inc. ("COMPANY") (each of such
Subsidiaries being a "GRANTOR" and collectively, "GRANTORS"); provided, that
after the Closing Date, the "Grantors" shall include any Additional Grantors (as
hereinafter defined), and BANKBOSTON, N.A., as administrative agent for and
representative of (in such capacity herein called "SECURED PARTY") the financial
institutions ("LENDERS") party to the Credit Agreement referred to below.
PRELIMINARY STATEMENTS
A. Secured Party, Lenders and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners,
L.P., as Arranger and Syndication Agent, have entered into a Credit Agreement
dated as of February 27, 1998 (said Credit Agreement, as it may hereafter be
amended, supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined) with Zilog, Inc., a Delaware corporation,
pursuant to which Lenders have made certain commitments, subject to the terms
and conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company.
B. Grantors have executed and delivered that certain Subsidiary
Guaranty dated as of February 27, 1998 (said Subsidiary Guaranty, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "GUARANTY") in favor of Secured Party for the benefit of Lenders,
pursuant to which Grantors have guarantied the prompt payment and performance
when due of all obligations of Company under the Credit Agreement and the other
Loan Documents.
C. It is a condition precedent to the initial extensions of
credit by Lenders under the Credit Agreement that Grantors shall have granted
the security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce Lenders to make Loans and other extensions of credit under the Credit
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Grantors hereby agree with Secured
Party as follows:
SECTION 1. GRANT OF SECURITY. Each Grantor hereby assigns to
Secured Party, and hereby grants to Secured Party, for the benefit of Lenders, a
security interest in, all of such Grantor's right, title and interest in and to
the following, in each case whether now or hereafter existing or in which such
Grantor now has or hereafter acquires an interest and wherever the same may be
located (the "COLLATERAL"):
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(a) all inventory in all of its forms owned by such Grantor
including (i) all goods held by such Grantor for sale or lease or to be
furnished under contracts of service or so leased or furnished, (ii) all raw
materials, work in process, finished goods, and materials used or consumed in
the manufacture, packing, shipping, advertising, selling, leasing, furnishing or
production of such inventory or otherwise used or consumed in such Grantor's
business, (iii) all goods in which such Grantor has an interest in mass or a
joint or other interest or right of any kind, and (iv) all goods which are
returned to or repossessed by such Grantor and all accessions thereto and
products thereof (all such inventory, accessions and products being the
"INVENTORY") and all negotiable documents of title (including warehouse
receipts, dock receipts and bills of lading) issued by any Person covering any
Inventory (any such negotiable document of title being a "NEGOTIABLE DOCUMENT OF
TITLE");
(b) all rights to payments for goods sold or leased or for
services rendered no matter how evidenced, including but not limited to
accounts, contract rights, notes, drafts, acceptances, instruments and other
forms of obligations in accounts, whether or not earned by performance and all
rights in, to and under all security agreements, leases and other contracts
securing or otherwise relating to any such accounts, contract rights, notes,
drafts, acceptances, instruments or other forms of obligations in accounts (any
and all such accounts, contract rights, notes, drafts, acceptances, instruments
or other forms of obligations in accounts being the "ACCOUNTS", and any and all
such security agreements, leases and other contracts being the "RELATED
CONTRACTS"); and
(c) all proceeds, products, rents and profits of or from any and
all of the foregoing Collateral and, to the extent not otherwise included, all
payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral. For
purposes of this Agreement, the term "PROCEEDS" includes whatever is receivable
or received when Collateral or proceeds are sold, exchanged, collected or
otherwise disposed of, whether such disposition is voluntary or involuntary.
The Collateral shall include, without limitation, all Inventory,
Accounts, Related Contracts and proceeds thereof relating to any of the
copyrights listed on Schedule 1 (it being understood that the copyrights listed
on Schedule 1 shall not constitute Collateral hereunder).
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures, and
the Collateral is collateral security for, the prompt payment or performance in
full when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. Section 362(a)), of all obligations and
liabilities of every nature of Grantor now or hereafter existing under or
arising out of or in connection with the Guaranty and all extensions or renewals
thereof, whether for principal, interest (including interest that, but for the
filing of a petition in bankruptcy with respect to Company, would accrue on such
obligations, whether or not a claim is allowed against Company for such interest
in the related bankruptcy proceeding), reimbursement of amounts drawn under
Letters of Credit, fees, expenses, indemnities or
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otherwise, whether voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly owed with others,
and whether or not from time to time decreased or extinguished and later
increased, created or incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Secured Party or any Lender as
a preference, fraudulent transfer or otherwise and all obligations of every
nature of Grantors now or hereafter existing under this Agreement (all such
obligations of Grantors being the "SECURED OBLIGATIONS").
SECTION 3. GRANTOR REMAINS LIABLE. Anything contained herein to
the contrary notwithstanding, (a) each Grantor shall remain liable under any
contracts and agreements included in the Collateral, to the extent set forth
therein, to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by Secured
Party of any of its rights hereunder shall not release such Grantor from any of
its duties or obligations under the contracts and agreements included in the
Collateral, and (c) Secured Party shall not have any obligation or liability
under any contracts and agreements included in the Collateral by reason of this
Agreement, nor shall Secured Party be obligated to perform any of the
obligations or duties of any Grantor thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Each Grantor
represents and warrants as follows:
(a) Ownership of Collateral. Except for the security interest
created by this Agreement, each Grantor owns the Collateral owned by such
Grantor free and clear of any Lien.
(b) Location of Inventory. All of the Inventory of such Grantor
is, as of the date hereof, located at the places specified in Schedule 4(b)
annexed hereto.
(c) Negotiable Documents of Title. No Negotiable Documents of
Title are outstanding with respect to any of the Inventory.
(d) Office Locations. The chief place of business, the chief
executive office and the office where such Grantor keeps its records regarding
the Accounts and all originals of all chattel paper that evidence Accounts is,
and has been for the four month period preceding the date hereof, located at the
locations set forth in Schedule 4(d) annexed hereto.
(e) Other Names. Such Grantor has not in the past done, and does
not now do, business under any other name (including any trade-name or
fictitious business name) except the names listed on Schedule 4(e) annexed
hereto.
(f) Perfection. This Agreement, together with the filing of UCC
financing statements describing the Collateral with the filing offices indicated
on Schedule 4(f)
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annexed hereto and filings with the United States Copyright Office, creates a
valid and perfected First Priority Lien (other than Liens described in clause
(vi) of the definition of Permitted Encumbrances) in all Collateral in which a
security interest may be perfected by the filing of a financing statement,
securing the payment of the Secured Obligations.
(g) Delivery of Certain Collateral. All notes and other
instruments (excluding checks) comprising any and all items of Collateral have
been delivered to Secured Party duly endorsed and accompanied by duly executed
instruments of transfer or assignment in blank.
SECTION 5. FURTHER ASSURANCES.
(a) Each Grantor agrees that from time to time, at the expense of
such Grantor, such Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that Secured Party may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable Secured Party to exercise and enforce its rights and remedies hereunder
with respect to any Collateral. Without limiting the generality of the
foregoing, each Grantor will: (i) at the request of Secured Party, deliver and
pledge to Secured Party hereunder all promissory notes and other instruments
(including checks) and all original counterparts of chattel paper constituting
Collateral, duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to Secured Party,
(ii) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as Secured Party may request, in order to perfect and preserve the
security interests granted or purported to be granted hereby, (iii) at any
reasonable time, upon prior reasonable request by Secured Party, exhibit the
Collateral to and allow inspection of the Collateral by Secured Party, or
persons designated by Secured Party, and (iv) at Secured Party's request, appear
in and defend any action or proceeding that may affect such Grantor's title to
or Secured Party's security interest in all or any part of the Collateral.
(b) Each Grantor hereby authorizes Secured Party to file one or
more financing or continuation statements, and amendments thereto, relative to
all or any part of the Collateral without the signature of any Grantor. Each
Grantor agrees that a carbon, photographic or other reproduction of this
Agreement or of a financing statement signed by a Grantor shall be sufficient as
a financing statement and may be filed as a financing statement in any and all
jurisdictions.
(c) Each Grantor will furnish to Secured Party from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail.
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SECTION 6. CERTAIN COVENANTS OF GRANTOR. Each Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral;
(b) notify Secured Party of any change in such Grantor's name,
identity or corporate structure within 15 days of such change;
(c) give Secured Party 30 days' prior written notice of any
change in such Grantor's chief place of business, chief executive office or
residence or the office where such Grantor keeps its records regarding the
Accounts and all originals of all chattel paper that evidence Accounts;
(d) if Secured Party gives value to enable such Grantor to
acquire rights in or the use of any Collateral, use such value for such
purposes; and
(e) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all claims
(including claims for labor, materials and supplies) against, the Collateral,
except to the extent the validity thereof is being contested in good faith;
provided that such Grantor shall in any event pay such taxes, assessments,
charges, levies or claims not later than five days prior to the date of any
proposed sale under any judgment, writ or warrant of attachment entered or filed
against such Grantor or any of the Collateral as a result of the failure to make
such payment.
SECTION 7. SPECIAL COVENANTS WITH RESPECT TO INVENTORY. Each
Grantor shall keep all Inventory located in the United States owned by such
Grantor at the places therefor specified on Schedule 4(b) annexed hereto and at
such other places in jurisdictions where all action that may be necessary in
order to perfect and protect any security interest granted or purported to be
granted hereby, or to enable Secured Party to exercise and enforce its rights
and remedies hereunder, with respect to such Inventory shall have been taken,
except to the extent Inventory may be in transit between such places or may be
shipped to a jurisdiction outside of the United States in the ordinary course of
business.
SECTION 8. INSURANCE. Each Grantor shall, at its own expense,
maintain insurance with respect to the Inventory owned by such Grantor in
accordance with the terms of the Credit Agreement.
SECTION 9. SPECIAL COVENANTS WITH RESPECT TO ACCOUNTS AND RELATED
CONTRACTS.
(a) Each Grantor shall keep its chief place of business and chief
executive office and the office where it keeps its records concerning the
Accounts and Related Contracts, and all originals of all chattel paper that
evidence Accounts, at the location therefor specified in Section 4 or, upon 30
days' prior written notice to Secured Party, at
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such other location in a jurisdiction where all action that may be necessary or
desirable, or that Secured Party may request, in order to perfect and protect
any security interest granted or purported to be granted hereby, or to enable
Secured Party to exercise and enforce its rights and remedies hereunder, with
respect to such Accounts and Related Contracts shall have been taken. Each
Grantor will hold and preserve such records and chattel paper and will permit
representatives of Secured Party upon prior and reasonable notice to Grantor
during normal business hours to inspect and make abstracts from such records and
chattel paper, and each Grantor agrees to render to Secured Party, at Grantor's
cost and expense, such clerical and other assistance as may be reasonably
requested with regard thereto. Promptly upon the request of Secured Party, each
Grantor shall deliver to Secured Party complete and correct copies of each
Related Contract.
(b) Except as otherwise provided in this subsection (c), each
Grantor shall continue to collect, at its own expense, all amounts due or to
become due to such Grantor under the Accounts and Related Contracts. In
connection with such collections, each Grantor may take (and, at Secured Party's
direction, shall take) such action as such Grantor or Secured Party may deem
necessary or advisable to enforce collection of amounts due or to become due
under the Accounts; provided, however, that Secured Party shall have the right
at any time, upon the occurrence and during the continuation of an Event of
Default and upon written notice to such Grantor of its intention to do so, to
notify the account debtors or obligors under any Accounts of the assignment of
such Accounts to Secured Party and to direct such account debtors or obligors to
make payment of all amounts due or to become due to such Grantor thereunder
directly to Secured Party, to notify each Person maintaining a lockbox or
similar arrangement to which account debtors or obligors under any Accounts have
been directed to make payment to remit all amounts representing collections on
checks and other payment items from time to time sent to or deposited in such
lockbox or other arrangement directly to Secured Party and, upon such
notification and at the expense of such Grantor, to enforce collection of any
such Accounts and to adjust, settle or compromise the amount or payment thereof,
in the same manner and to the same extent as such Grantor might have done. After
receipt by such Grantor of the notice from Secured Party referred to in the
proviso to the preceding sentence, (i) all amounts and proceeds (including
checks and other instruments) received by such Grantor in respect of the
Accounts and the Related Contracts shall be received in trust for the benefit of
Secured Party hereunder, shall be segregated from other funds of such Grantor
and shall be forthwith paid over or delivered to Secured Party in the same form
as so received (with any necessary endorsement) to be held as cash Collateral
and applied as provided by Section 16, and (ii) such Grantor shall not adjust,
settle or compromise the amount or payment of any Account, or release wholly or
partly any account debtor or obligor thereof, or allow any credit or discount
thereon.
SECTION 10. TRANSFERS AND OTHER LIENS. No Grantor shall:
(a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except as permitted by the Credit Agreement;
or
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(b) except for the security interest created by this Agreement or
pursuant to clause (vi) of the definition of Permitted Encumbrances, create or
suffer to exist any Lien upon or with respect to any of the Collateral to secure
the indebtedness or other obligations of any Person.
SECTION 11. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Each
Grantor hereby, upon the occurrence and during the continuance of an Event of
Default, irrevocably appoints Secured Party as Grantor's attorney-in-fact, with
full authority in the place and stead of such Grantor and in the name of such
Grantor, Secured Party or otherwise, from time to time in Secured Party's
discretion to take any action and to execute any instrument that Secured Party
may deem necessary or advisable to accomplish the purposes of this Agreement,
including:
(a) to obtain and adjust insurance required to be maintained by
such Grantor or paid to Secured Party pursuant to Section 8;
(b) to ask for, demand, collect, ▇▇▇ for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(c) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clauses (a) and (b)
above;
(d) to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Secured Party in its
sole discretion, any such payments made by Secured Party to become obligations
of such Grantor to Secured Party, due and payable immediately without demand;
(f) to sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with Accounts and other
documents relating to the Collateral; and
(g) generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely
as though Secured Party were the absolute owner thereof for all purposes, and to
do, at Secured Party's option and such Grantor's expense, at any time or from
time to time, all acts and things that Secured Party deems necessary to protect,
preserve or realize upon the Collateral and Secured Party's security interest
therein in order to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.
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SECTION 12. SECURED PARTY MAY PERFORM. If any Grantor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party incurred
in connection therewith shall be payable by such Grantor under Section 16.
SECTION 13. STANDARD OF CARE. The powers conferred on Secured
Party hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the exercise
of reasonable care in the custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, Secured Party shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral. Secured Party shall be deemed to have exercised reasonable care in
the custody and preservation of Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Secured Party accords
its own property.
SECTION 14. REMEDIES. If any Event of Default shall have occurred
and be continuing, Secured Party may exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default under
the Uniform Commercial Code as in effect in any relevant jurisdiction (the
"CODE") (whether or not the Code applies to the affected Collateral), and also
may (a) require each Grantor to, and each Grantor hereby agrees that it will at
its expense and upon request of Secured Party forthwith, assemble all or part of
the Collateral as directed by Secured Party and make it available to Secured
Party at a place to be designated by Secured Party that is reasonably convenient
to both parties, (b) enter onto the property where any Collateral is located and
take possession thereof with or without judicial process, (c) prior to the
disposition of the Collateral, store, process, repair or recondition the
Collateral or otherwise prepare the Collateral for disposition in any manner to
the extent Secured Party deems appropriate, (d) place custodians on each
Grantor's premises for the purpose of taking any actions described in the
preceding clause (c), and (e) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of Secured Party's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon such
other terms as Secured Party may deem commercially reasonable. Secured Party or
any Lender may be the purchaser of any or all of the Collateral at any such sale
and Secured Party, as agent for and representative of Lenders (but not any
Lender or Lenders in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing), shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by Secured Party at such sale. Each purchaser
at any such sale shall hold the property sold absolutely free from any claim or
right on the part of Grantor, and Grantor hereby waives (to the extent permitted
by applicable law) all rights of redemption, stay and/or appraisal which it now
has or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Grantor agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to Grantor of the time and
place of any public sale or the time after which any private sale is to be made
shall constitute
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reasonable notification. Secured Party shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. Secured Party may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. Grantor hereby waives any
claims against Secured Party arising by reason of the fact that the price at
which any Collateral may have been sold at such a private sale was less than the
price which might have been obtained at a public sale, even if Secured Party
accepts the first offer received and does not offer such Collateral to more than
one offeree. If the proceeds of any sale or other disposition of the Collateral
are insufficient to pay all the Secured Obligations, Grantor shall be liable for
the deficiency and the fees of any attorneys employed by Secured Party to
collect such deficiency.
SECTION 15. APPLICATION OF PROCEEDS. All proceeds received by
Secured Party in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral shall be applied as provided in
subsection 2.4C of the Credit Agreement.
SECTION 16. INDEMNITY AND EXPENSES.
(a) Each Grantor agrees to indemnify Secured Party and each
Lender from and against any and all claims, losses and liabilities in any way
relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including enforcement of this Agreement),
except to the extent such claims, losses or liabilities result solely from
Secured Party's or such Lender's gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction.
(b) Grantors shall pay to Secured Party upon demand the amount of
any and all costs and expenses, including the reasonable fees and expenses of
its counsel and of any experts and agents, that Secured Party may incur in
connection with (i) the custody, preservation, use or operation of, or the sale
of, collection from, or other realization upon, any of the Collateral, (ii) the
exercise or enforcement of any of the rights of Secured Party hereunder, or
(iii) the failure by any Grantor to perform or observe any of the provisions
hereof.
(c) The provisions of this Section 16 shall survive any
termination of this Agreement.
SECTION 17. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS. This
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the payment in full of the
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, (b) be binding
upon each Grantor, its successors and assigns, and (c) inure, together with the
rights and remedies of Secured Party hereunder, to the benefit of Secured Party
and its successors, transferees and assigns. Without limiting the generality of
the foregoing clause (c), but subject to the provisions of subsection 10.1 of
the Credit Agreement, any Lender may assign or otherwise transfer any Loans held
by it to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect
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thereof granted to Lenders herein or otherwise. Upon the payment in full of all
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to Grantors. Upon any such termination Secured Party will, at Grantors'
expense, execute and deliver to Grantors such documents as Grantors shall
reasonably request to evidence such termination.
SECTION 18. SECURED PARTY AS ADMINISTRATIVE AGENT.
(a) Secured Party has been appointed to act as Secured Party
hereunder by Lenders. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including
the release or substitution of Collateral), solely in accordance with this
Agreement and the Credit Agreement.
(b) Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5A of the Credit Agreement
shall also constitute notice of resignation as Secured Party under this
Agreement; removal of Administrative Agent pursuant to subsection 9.5A of the
Credit Agreement shall also constitute removal as Secured Party under this
Agreement; and appointment of a successor Administrative Agent pursuant to
subsection 9.5A of the Credit Agreement shall also constitute appointment of a
successor Secured Party under this Agreement. Upon the acceptance of any
appointment as Administrative Agent under subsection 9.5A of the Credit
Agreement by a successor Administrative Agent, that successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Secured Party under this
Agreement, and the retiring or removed Secured Party under this Agreement shall
promptly (i) transfer to such successor Secured Party all sums held by Secured
Party hereunder (which shall be deposited in a new Collateral Account
established and maintained by such successor Secured Party), together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under this Agreement,
and (ii) execute and deliver to such successor Secured Party such amendments to
financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Secured Party of
the security interests created hereunder, whereupon such retiring or removed
Secured Party shall be discharged from its duties and obligations under this
Agreement. After any retiring or removed Administrative Agent's resignation or
removal hereunder as Secured Party, the provisions of this Agreement shall inure
to its benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Secured Party hereunder.
SECTION 19. ADDITIONAL GRANTORS. The initial Grantors hereunder
shall be the Subsidiary of Company that is a signatory hereto on the date
hereof. From time to time subsequent to the date hereof, additional Subsidiaries
of Company may become parties hereto, as additional Grantors (each an
"ADDITIONAL GRANTOR"), by executing a counterpart of this Agreement
substantially in the form of Schedule 19 annexed hereto. Upon delivery
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of any such counterpart to Administrative Agent, notice of which is hereby
waived by Grantors, each such Additional Grantor shall be a Grantor and shall be
as fully a party hereto as if such Additional Grantor were an original signatory
hereof. Each Grantor expressly agrees that its obligations arising hereunder
shall not be affected or diminished by the addition or release of any other
Grantor hereunder, nor by any election of Administrative Agent not to cause any
Subsidiary of Company to become an Additional Grantor hereunder. This Agreement
shall be fully effective as to any Grantor that is or becomes a party hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Grantor hereunder.
SECTION 20. AMENDMENTS; ETC. No amendment, modification,
termination or waiver of any provision of this Agreement, and no consent to any
departure by any Grantor therefrom, shall in any event be effective unless the
same shall be in writing and signed by Secured Party and, in the case of any
such amendment or modification, by Grantors. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.
SECTION 21. NOTICES. Any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telexed or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, or upon receipt of telefacsimile or telex or United States mail
with postage prepaid. For the purposes hereof, the address of each party hereto
shall be as set forth under such party's name on the signature pages hereof or,
as to either party, such other address as shall be designated by such party in a
written notice delivered to Administrative Agent.
SECTION 22. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Secured Party in the exercise of
any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
SECTION 23. SEVERABILITY. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 24. HEADINGS. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 25. GOVERNING LAW; TERMS; RULES OF CONSTRUCTION. THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND
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ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT
THE CODE PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise
defined herein or in the Credit Agreement, terms used in Articles 8 and 9 of the
Uniform Commercial Code in the State of New York are used herein as therein
defined. The rules of construction set forth in subsection 1.3 of the Credit
Agreement shall be applicable to this Agreement mutatis mutandis.
SECTION 26. COUNTERPARTS. This Agreement may be executed in one
or more counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
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IN WITNESS WHEREOF, each of the undersigned Grantors and Secured
Party have caused this Agreement to be duly executed and delivered by their
respective officers thereunto duly authorized as of the date first written
above.
ZILOG EUROPE
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Title: Secretary
----------------------------------
Notice Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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-------------------------
ZILOG TOA COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Title: Secretary
----------------------------------
Notice Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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-------------------------
BANKBOSTON, N.A., AS SECURED PARTY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Title: Vice President
----------------------------------
Notice Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
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Suite 250
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▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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