Exhibit 10.1
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
RAMTRON INTERNATIONAL CORPORATION
This AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this "Agreement")
dated effective as of September 15, 2005, between SILICON VALLEY BANK
("Bank"), whose address is ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ (facsimile no. 303-938-0486), and RAMTRON INTERNATIONAL CORPORATION
("Borrower"), whose address is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ (facsimile no. 719-481-9294) provides the terms on which Bank will lend
to Borrower and Borrower will repay Bank. This Agreement amends and restates
that certain Loan and Security Agreement dated as of July 1, 2005, among
Borrower, Bank and Mushkin Inc., a former subsidiary of Borrower. The
parties agree as follows:
1. ACCOUNTING AND OTHER TERMS
All capitalized terms used herein shall have the meanings set forth in
Section 13 of this Agreement. Accounting terms not defined in this Agreement
will be construed following GAAP. Calculations and determinations must be
made following GAAP. The term "financial statements" includes the notes and
schedules. The terms "including" and "includes" always mean "including (or
includes) without limitation," in this or any Loan Document.
2. LOAN AND TERMS OF PAYMENT
2.1 Promise to Pay.
Borrower promises to pay Bank the unpaid principal amount of all Credit
Extensions and interest on the unpaid principal amount of the Credit
Extensions as set forth in this Agreement.
2.1.1 Revolving Advances.
(a) Bank will make Advances not exceeding the lesser of (i) the
Committed Revolving Line or (ii) the Borrowing Base. Amounts
borrowed under this Section may be repaid and reborrowed during
the term of this Agreement.
(b) To obtain an Advance, Borrower must notify Bank by facsimile or
telephone by 12:00 noon Pacific time on the Business Day the
Advance is to be made. Borrower must promptly confirm the
notification by delivering to Bank the Payment/Advance Form
attached as Exhibit B. Bank will credit Advances to the deposit
account of Borrower listed on the Payment/Advance Form. Bank may
make Advances under this Agreement based on instructions from a
Responsible Officer or his or her designee or without
instructions if the Advances are necessary to meet Obligations
that have become due. Bank may rely on any telephone notice
given by a person whom Bank reasonably believes is a Responsible
Officer or designee. Borrower will indemnify Bank for any loss
Bank suffers due to such reliance.
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(c) The Committed Revolving Line terminates on the Revolving Maturity
Date, when all Advances are immediately payable.
2.1.2 Term Loan.
(a) Bank will make the Term Loan available to Borrower on the
Effective Date for working capital purposes.
(b) Borrower will pay thirty-six (36) equal installments of principal
in the amount of $83,333.33 on the Term Loan plus (the "Term Loan
Principal Payment"). The first Term Loan Principal Payment shall
be due on the Effective Date. Every other Term Loan Principal
Payment is payable on the first day of each month thereafter
during the term of the Term Loan. Borrower's final Term Loan
Principal Payment shall be due on the Term Loan Maturity Date,
and shall be in an amount necessary to satisfy in full all
outstanding principal of the Term Loan and accrued interest on
the Term Loan through such date. The Term Loan may not be
reborrowed once repaid.
2.2 Termination of Commitment to Lend.
Bank's obligation to lend the undisbursed portion of the Obligations will
terminate if, in Bank's sole discretion, there has been a Material Adverse
Change.
2.3 Overadvances.
If Borrower's Obligations under Sections 2.1.1 exceed the lesser of (a) the
Committed Revolving Line or (b) the Borrowing Base, Borrower must immediately
pay Bank the excess.
2.4 Interest Rate, Payments.
2.4.1 As to the Term Loan.
(a) Interest Rate. The Term Loan accrues interest at a per annum
rate of one percentage point (1.00%) above the Prime Rate. The
interest rate on the Term Loan increases or decreases when the
Prime Rate changes. Interest is computed on a three hundred
sixty (360) day year for the number of days elapsed.
(b) Interest Payments. Interest due on the Term Loan is payable in
arrears on the first day of each month in conjunction with the
Term Loan Principal Payments. Payments of any kind under this
Agreement received after 12:00 noon Pacific Time are considered
received at the opening of business on the next Business Day.
When a payment is due on a day that is not a Business Day, the
payment is due the next Business Day and additional interest
shall accrue. On the Term Loan Maturity Date, Borrowers will pay
all unpaid accrued interest and principal and all other amounts
due with respect to the Term Loan. The principal amount of the
Term Loan may be repaid only in accordance with Section 2.4.1(c).
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(c) Permitted Prepayment of Term Loan. Borrower shall have the
option to prepay all, but not less than all, of the Term Loan,
provided Borrower (i) provides written notice to Bank of its
election to prepay the Term Loan at least thirty (30) days prior
to such prepayment, and (ii) pays on the date of the prepayment
(A) all unpaid accrued interest on the Term Loan through the date
of the prepayment, (B) all outstanding principal amounts of the
Term Loan, (C) a prepayment premium, based on the number of
months from the Effective Date to the date such prepayment is
made, as follows: (x) two percent (2%) of the Term Loan ($60,000)
if prepayment is made 0-12 months after the Effective Date, (y)
one and one-half percent (1.5%) of the Term Loan ($45,000) if
prepayment is made 13-24 months after the Effective Date, and (z)
one percent (1%) of the Term Loan ($30,000) if prepayment is made
thereafter, and (D) all other sums, if any, that shall have
become due and payable hereunder with respect to the Term Loan.
2.4.2 As to Advances on Revolving Facility.
(a) Interest Rate. Advances accrue interest on the outstanding
principal balance at a per annum rate of one-half percentage
point (0.5%) above the Prime Rate, with a minimum interest rate
of six percent (6%). The interest rate increases or decreases
when the Prime Rate changes. Interest is computed on a three
hundred sixty (360) day year for the actual number of days
elapsed.
(b) Payments. Accrued interest on the Committed Revolving Line is
due and payable on the first day of each month. Payments
received after 12:00 noon Pacific time are considered received at
the opening of business on the next Business Day. When a payment
is due on a day that is not a Business Day, the payment is due
the next Business Day and additional interest shall accrue. On
the Revolving Maturity Date, Borrower will pay all unpaid accrued
interest and principal and all other amounts due with respect to
the Committed Revolving Line.
(c) Prepayments of Committed Revolving Line. Borrower shall have the
option to terminate the Committed Revolving Line only upon paying
to Bank a termination premium equal to (i) one percent (1%) of
the Committed Revolving Line if such termination occurs prior to
the first anniversary of the date of this Agreement, or (ii) one-
half of one percent (0.5%) of the Committed Revolving Line if
such termination occurs after the first anniversary of the date
of this Agreement. Notwithstanding the foregoing, the
termination premium set forth in this Section 2.4(c) shall not
apply in the event Borrower refinances the Committed Revolving
Line with Bank or an Affiliate of Bank.
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2.4.3 Request to Debit Accounts.
Bank may debit any of Borrower's deposit accounts for principal and interest
payments or any amounts Borrower owes Bank when due. Bank will notify
Borrower when it debits Borrower's accounts. These debits are not a set-off.
2.5 Fees.
Borrower will pay:
(a) Revolving Facility Fee. A fully earned, non-refundable revolving
facility fee of $40,000, $20,000 of which was previously paid and
$20,000 of which is due on July 1, 2006.
(b) Term Loan Fee. A fully earned, non-refundable term loan facility
fee of $15,000 on the Effective Date.
(c) Bank Expenses. All Bank Expenses (including reasonable attorneys'
fees and reasonable expenses) incurred through and after the date
of this Agreement, are payable when due.
(d) Non-Utilization Fee. A non-utilization fee ("Non-Utilization
Fee"), calculated on the last day of each fiscal quarter, equal to
0.15% multiplied by the difference between the Committed Revolving
Line and the average daily outstanding balance of the Advances
during that quarter. The Non-Utilization Fee shall be due and
payable twenty (20) days after the end of each fiscal quarter.
3. CONDITIONS OF LOANS
3.1 Conditions Precedent to Initial Credit Extension.
Bank's obligation to make the initial Credit Extension is subject to the
condition precedent that it receive the agreements, documents and fees in
this document.
3.2 Conditions Precedent to all Credit Extensions.
Bank's obligations to make each Credit Extension, including the initial
Credit Extension, is subject to the following:
(a) timely receipt of any Payment/Advance Form; and
(b) the representations and warranties in Section 5 must be materially
true on the date of the Payment/Advance Form and on the effective
date of each Credit Extension and no Event of Default may have
occurred and be continuing, or result from the Credit Extension.
Each Credit Extension is Borrower's representation and warranty on
that date that the representations and warranties of Section 5 are
true as of such date. Borrower shall notify Bank if any
representation, warranty or schedule is untrue or needs to be
updated; provided, however, that unless agreed to by Bank in
writing, if such action constitutes a breach of any representation
and warranty, such update shall not cure any such breach.
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4. CREATION OF SECURITY INTEREST
4.1 Grant of Security Interest.
Borrower grants Bank a continuing security interest in all presently existing
and later acquired Collateral to secure all Obligations and performance of
each of Borrower's duties under the Loan Documents. Except for Permitted
Liens, any security interest will be a first priority security interest in
the Collateral. If this Agreement is terminated, Bank's lien and security
interest in the Collateral will continue until Borrower fully satisfies the
Obligations.
4.1.1 Authorization of Filing.
Borrower authorizes Bank to file financing statements without notice to
Borrower, with all appropriate jurisdictions, as Bank deems appropriate, in
order to perfect or protect Bank's interest in the Collateral.
5. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants as follows:
5.1 Due Organization and Authorization.
Borrower and each Subsidiary is duly existing and in good standing in its
state of incorporation or organization and qualified and licensed to do
business in, and in good standing in, any state in which the conduct of its
business or its ownership of property requires that it be qualified, except
where the failure to do so could not reasonably be expected to cause a
Material Adverse Change. Except as set forth on the Schedule, Borrower has
not changed its state of formation or its organizational form of the entity
or any organizational number (if any) assigned by its jurisdiction of
formation.
The execution, delivery and performance of the Loan Documents have been duly
authorized, and do not conflict with Borrower's formation documents, nor
constitute an event of default under any material agreement by which Borrower
is bound. Borrower is not in default under any agreement to which or by
which they are bound in which the default could reasonably be expected to
cause a Material Adverse Change.
5.2 Collateral.
Borrower has good title to the Collateral, free of Liens except Permitted
Liens or Borrower has Rights to each asset that is Collateral. Borrower has
no other deposit account, other than the deposit accounts described in the
Schedule. The Accounts are bona fide, existing obligations, and the service
or property has been performed or delivered to the account debtor or its
agent for immediate shipment to and unconditional acceptance by the account
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debtor. The Collateral is not in the possession of any third party bailee
(such as at a warehouse). In the event that Borrower, after the date hereof,
intends to store or otherwise deliver the Collateral to such a bailee, then
Borrower will receive the prior written consent of Bank and such bailee must
acknowledge in writing that the bailee is holding such Collateral for the
benefit of Bank. Borrower has no notice of any actual or imminent Insolvency
Proceeding of any account debtor whose accounts are an Eligible Account in
any Borrowing Base Certificate. All Inventory is in all material respects of
good and marketable quality, free from material defects.
5.3 Litigation.
Except as shown in the Schedule, there are no actions or proceedings pending
or, to the knowledge of Borrower's Responsible Officers and legal counsel,
threatened by or against Borrower or any Subsidiary in which a likely adverse
decision could reasonably be expected to cause a Material Adverse Change.
5.4 No Material Adverse Change in Financial Statements.
All consolidated financial statements for Borrower, and any Subsidiary,
delivered to Bank fairly present in all material respects Borrower's
consolidated financial condition and Borrower's consolidated results of
operations as of the date of such financial statements. There has not been
any material deterioration in Borrower's consolidated financial condition
since the date of the most recent financial statements submitted to Bank.
5.5 Solvency.
The fair salable value of Borrower's assets (including goodwill minus
disposition costs) exceeds the fair value of their liabilities; the Borrower
is not left with unreasonably small capital after the transactions in this
Agreement; and Borrower is able to pay its debts (including trade debts) as
they mature.
5.6 Regulatory Compliance.
Borrower is not an "investment company" or a company "controlled" by an
"investment company" under the Investment Company Act. Borrower is not
engaged as one of its important activities in extending credit for margin
stock (under Regulations T and U of the Federal Reserve Board of Governors).
Borrower has complied in all material respects with the Federal Fair Labor
Standards Act. Borrower has not violated any laws, ordinances or rules, the
violation of which could reasonably be expected to cause a Material Adverse
Change. None of Borrower's or any Subsidiary's properties or assets has been
used by Borrower or any Subsidiary or, to the best of Borrower's knowledge,
by previous Persons, in disposing, producing, storing, treating, or
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transporting any hazardous substance other than legally. Borrower and each
Subsidiary has timely filed all required tax returns and paid, or made
adequate provision to pay, all material taxes, except those being contested
in good faith with adequate reserves under GAAP. Borrower and each
Subsidiary has obtained all consents, approvals and authorizations of, made
all declarations or filings with, and given all notices to, all government
authorities that are necessary to continue its business as currently
conducted, except where the failure to do so could not reasonably be expected
to cause a Material Adverse Change.
5.7 Investments in Subsidiaries.
Borrower does not own any stock, partnership interest or other equity
securities except for Permitted Investments.
5.8 Full Disclosure.
No written representation, warranty or other statement of Borrower in any
certificate or written statement given to Bank (taken together with all such
written certificates and written statements to Bank) contains any untrue
statement of a material fact or omits to state a material fact necessary to
make the statements contained in the certificates or statements not
misleading. It being recognized by Bank that the projections and forecasts
provided by Borrower in good faith and based upon reasonable assumptions are
not viewed as facts and that actual results during the period or periods
covered by such projections and forecasts may differ from the projected and
forecasted results.
6. AFFIRMATIVE COVENANTS
Borrower will do all of the following for so long as Bank has an obligation
to lend, or there are outstanding Obligations:
6.1 Government Compliance.
Borrower will maintain its and all Subsidiaries' legal existence and good
standing in their jurisdictions of incorporation or organization and maintain
qualification in each jurisdiction in which the failure to so qualify would
reasonably be expected to cause a Material Adverse Change. Borrower will
comply, and have each Subsidiary comply, with all laws, ordinances and
regulations to which they are subject, noncompliance with which would
reasonably be expected to cause a Material Adverse Change.
6.2 Financial Statements, Reports, Certificates.
(a) (i) Within five (5) days of filing, Borrower will deliver to Bank
copies of all statements, reports and notices made available to
Borrower's security holders or to any holders of Subordinated Debt,
and all reports on Form 10-K and 10-Q filed with the Securities and
Exchange Commission, and (ii) within five (5) days of filing a
report on Form 10-Q (or a report on Form 10-K for the fourth
quarter) each fiscal quarter, Borrower will deliver to Bank a
Compliance Certificate signed by a Responsible Officer in the form
of Exhibit D.
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(b) Within thirty (30) days after the last day of each month Borrower
will deliver to Bank (i) a company prepared consolidated balance
sheet and income statement covering Borrower's consolidated
operations during the period certified by a Responsible Officer and
in a form acceptable to Bank, and (ii) a Compliance Certificate
signed by a Responsible Officer in the form of Exhibit D.
(c) Within twenty (20) days after the last day of each month or, if no
Advance is outstanding, within thirty (30) days after the last day
of each month, Borrower will deliver to Bank a Borrowing Base
Certificate showing Eligible Accounts signed by a Responsible
Officer in the form of Exhibit C, with aged listings of accounts
receivable and accounts payable in a format reasonably acceptable
to Bank.
(d) Borrower will allow Bank to audit Borrower's Collateral at
Borrower's expense as reasonably determined by Bank, it being
agreed that at least once every twelve (12) months is reasonable.
6.3 Taxes.
Borrower will make, and cause each Subsidiary to make, timely payment of all
federal, state, and local taxes or assessments and will deliver to Bank, on
demand, appropriate certificates attesting to the payment.
6.4 Accounts.
Borrower will maintain a majority of its depository and operating accounts
(determined both with respect to amount and number) with the Bank.
6.5 Account Control Agreements.
In the event Borrower maintains other depository and investment accounts with
other financial institutions, Borrower shall deliver to Bank no later than
thirty (30) days after the Effective Date (or for new accounts after the date
hereof, upon entering into such accounts) an account control agreement duly
executed by Borrower in a form acceptable to Bank in its good faith business
judgment for such accounts.
6.6 Financial Covenants.
Borrower will maintain as of the last day of each month (except for the
Minimum Fixed Charge Coverage which will be tested quarterly):
(a) Maximum Senior Leverage Ratio. A ratio of (i) Term Loan
Outstandings to (ii) EBITDA of not more than 1.00 to 1.00.
(b) Minimum Fixed Charge Coverage. A ratio of (i) EBITDA to (ii) Fixed
Charges of not less than 1.35 to 1.00.
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(c) Liquidity Coverage. A ratio of (i) unrestricted cash (and
equivalents) plus Eligible Accounts Receivable minus the
outstanding balance of the Committed Revolving Line to (ii) Term
Loan Outstandings of not less than 2.00 to 1.00.
6.7 Further Assurances.
Borrower will execute any further instruments and take further action as Bank
reasonably requests to perfect or continue Bank's security interest in the
Collateral or to effect the purposes of this Agreement.
6.8 Real Estate Financing.
Borrower will close certain real estate financing on its office building
located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ resulting in net
proceeds to Borrower of at least $4,000,000 by December 31, 2005 (the
"Approved Mortgage"). Bank and Borrower will use their best efforts to cause
the Approved Mortgage financing party to enter into an agreement with Bank
regarding procedures and priorities on each parties' collateral of Borrower.
6.9 Paydown of Committed Revolving Line.
Borrower will pay the Committed Revolving Line such that it has a maximum
balance of $500,000 for at least one (1) Business Day prior to December 31,
2005.
7. NEGATIVE COVENANTS
Borrower will not do any of the following without Bank's prior written
consent for so long as Bank has an obligation to lend and there are any
outstanding Obligations:
7.1 Dispositions.
Convey, sell, lease, transfer or otherwise dispose of (collectively
"Transfer"), or permit any of its Subsidiaries to Transfer, all or any part
of its business or property outside the ordinary course of business of
Borrower.
7.2 Changes in Business, Ownership, Management or Locations of Collateral.
Engage in or permit any of its Subsidiaries to engage in any business other
than the businesses currently engaged in by Borrower or reasonably related
thereto or have a change in the members of the board of directors of Borrower
such that the members of the board prior to any vote or other action do not
constitute at least a majority of the board of directors after such action or
a change in the chief executive officer and the chief financial officer of
Borrower or a change in its ownership of more than fifty percent (50%) of the
voting power of all classes of voting equity interests of Borrower (other
than by the sale of Borrower's equity securities in a public offering or to
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venture capital investors so long as Borrower identifies the venture capital
investors prior to the closing of the investment). Borrower will not,
without at least thirty (30) days prior written notice, relocate its chief
executive office, change its state of formation (including reincorporation),
change its organizational number or name or add any new offices or business
locations (such as warehouses) in which Borrower maintains or stores over
$5,000 in Collateral.
7.3 Mergers or Acquisitions.
Merge or consolidate, or permit any of its Subsidiaries to merge or
consolidate, with any other Person, or acquire, or permit any of its
Subsidiaries to acquire, all or substantially all of the capital stock or
property of another Person, except that after the Approved Mortgage has been
closed Borrower may take such action so long as (a) no Event of Default has
occurred and is continuing or would result from such action during the term
of this Agreement and (b), the acquisition price is less than an amount equal
to twenty-five percent (25%) of Borrower's Tangible Net Worth. A Subsidiary
may merge or consolidate into another Subsidiary or into Borrower.
7.4 Indebtedness.
Except the Approved Mortgage contemplated by Section 6.8, create, incur,
assume, or be liable for any Indebtedness, or permit any Subsidiary to do so,
other than Permitted Indebtedness; provided, however, that Borrower is
allowed to pay $250,000 per year to National Semiconductor Corporation
("NSC") in accordance with the terms of the NSC settlement agreement entered
into by Borrower in 2004. In any event, Borrower will notify Bank of any
Indebtedness to be entered into by Borrower.
7.5 Encumbrance.
Create, incur, or allow any Lien on any of its property, or assign or convey
any right to receive income, including the sale of any Accounts, or permit
any of its Subsidiaries to do so, except for Permitted Liens, or permit any
Collateral not to be subject to the first priority security interest granted
here, subject to Permitted Liens.
7.6 Distributions; Investments.
Directly or indirectly acquire or own any Person, or make any Investment in
(or any other capital contributions to) any Person, other than Permitted
Investments, or permit any of its Subsidiaries to do so; provided that
Borrower may make Investments in (and capital contributions to) Goal
Semiconductor Inc. in an amount not to exceed $750,000 per fiscal year. Pay
any dividends or make any distribution or payment or redeem, retire or
purchase any capital stock.
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7.7 Transactions with Affiliates.
Directly or indirectly enter into or permit to exist any material transaction
with any Affiliate of Borrower except for transactions that are in the
ordinary course of Borrower's business, upon fair and reasonable terms that
are no less favorable to Borrower than would be obtained in an arm's length
transaction with a nonaffiliated Person.
7.8 Subordinated Debt.
Make or permit any payment on any Subordinated Debt, except under the terms
of the Subordinated Debt, or amend any provision in any document relating to
the Subordinated Debt without Bank's prior written consent.
7.9 Compliance.
Become an "investment company" or a company controlled by an "investment
company," under the Investment Company Act of 1940 or undertake as one of its
important activities extending credit to purchase or carry margin stock, or
use the proceeds of any Credit Extension for that purpose; fail to meet the
minimum funding requirements of ERISA, permit a Reportable Event or
Prohibited Transaction, as defined in ERISA, to occur; fail to comply with
the Federal Fair Labor Standards Act or violate any other law or regulation,
if the violation could reasonably be expected to have a material adverse
effect on Borrower's business or operations or would reasonably be expected
to cause a Material Adverse Change, or permit any of its Subsidiaries to do
so.
7.10 Capital Expenditures.
Unless Bank otherwise consents in writing, the Borrower will not make or
incur any capital expenditures for the purchase of capital equipment and
tangible assets in amounts greater than an aggregate of $1,300,000 as
determined on a trailing twelve (12) month basis.
8. EVENTS OF DEFAULT
Any one of the following is an Event of Default:
8.1 Payment Default.
If Borrower fails to pay any of the Obligations within three (3) days after
their due date, however, during such period no Credit Extensions will be
made;
8.2 Covenant Default.
(a) If Borrower fails to perform any obligation under Sections 6.2 or
6.6 or violates any of the covenants contained in Article 7 of this
Agreement, or
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(b) If Borrower fails or neglects to perform, keep, or observe any
other material term, provision, condition, covenant, or agreement
contained in this Agreement, in any of the Loan Documents, or in
any other present or future agreement between Borrower and Bank and
as to any default under such other term, provision, condition,
covenant or agreement that can be cured, has failed to cure such
default within ten (10) days after the occurrence thereof;
provided, however, that if the default cannot by its nature be
cured within the ten (10) day period or cannot after diligent
attempts by Borrower be cured within such ten (10) day period, and
such default is likely to be cured within a reasonable time, then
Borrower shall have an additional reasonable period (which shall
not in any case exceed thirty (30) days to attempt to cure such
default, and within such reasonable time period the failure to have
cured such default shall not be deemed an Event of Default
(provided that no Credit Extensions will be made during such cure
period);
8.3 Material Adverse Change.
If there (a) occurs a material adverse change in the business, operations, or
financial condition of the Borrower, or (b) is a material impairment of the
prospect of repayment of any portion of the Obligations; or (c) is a material
impairment of the value or priority of Bank's security interests in the
Collateral (the foregoing being defined as a "Material Adverse Change");
8.4 Attachment.
If any material portion of Borrower's assets is attached, seized, levied on,
or comes into possession of a trustee or receiver and the attachment, seizure
or levy is not removed in ten (10) days, or if Borrower is enjoined,
restrained, or prevented by court order from conducting a material part of
its business or if a judgment or other claim becomes a Lien on a material
portion of Borrower's assets, or if a notice of lien, levy, or assessment is
filed against any of Borrower's assets by any government agency and not paid
within ten (10) days after Borrower receives notice. These are not Events of
Default if stayed or if a bond is posted pending contest by Borrower (but no
Credit Extensions will be made during the cure period);
8.5 Insolvency.
If Borrower becomes insolvent or if Borrower begins an Insolvency Proceeding
or an Insolvency Proceeding is begun against Borrower and not dismissed or
stayed within thirty (30) days (but no Credit Extensions will be made before
any Insolvency Proceeding is dismissed);
8.6 Other Agreements.
If there is a default in any agreement between either Borrower and a third
party that gives the third party the right to accelerate any Indebtedness
exceeding $100,000 or that could cause a Material Adverse Change;
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8.7 Judgments.
If a money judgment(s) in the aggregate of at least $50,000 is rendered
against Borrower and is unsatisfied and unstayed for ten (10) days (but no
Credit Extensions will be made before the judgment is stayed or satisfied);
or
8.8 Misrepresentations.
If Borrower or any Responsible Officer of Borrower makes any material
misrepresentation or material misstatement now or later in any warranty or
representation in this Agreement or in any writing delivered to Bank or to
induce Bank to enter this Agreement or any Loan Document.
9. BANK'S RIGHTS AND REMEDIES
9.1 Rights and Remedies.
When an Event of Default occurs and continues Bank may, without notice or
demand, do any or all of the following:
(a) Declare all Obligations immediately due and payable (but if an
Event of Default described in Section 8.5 occurs all Obligations
are immediately due and payable without any action by Bank);
(b) Stop advancing money or extending credit for Borrower's benefit
under this Agreement or under any other agreement between Borrower
and Bank;
(c) Settle or adjust disputes and claims directly with account debtors
for amounts, on terms and in any order that Bank considers
advisable; notify any Person owing Borrower money of Bank's
security interest in the funds and verify the amount of the
Account. Borrower must collect all payments in trust for Bank and,
if requested by Bank, immediately deliver the payments to Bank in
the form received from the account debtor, with proper endorsements
for deposit;
(d) Make any payments and do any acts it considers necessary or
reasonable to protect its security interest in the Collateral.
Borrower will assemble the Collateral if Bank requires and make it
available as Bank designates. Bank may enter premises where the
Collateral is located, take and maintain possession of any part of
the Collateral, and pay, purchase, contest, or compromise any Lien
which appears to be prior or superior to its security interest and
pay all expenses incurred. Borrower grants Bank a license to enter
and occupy any of its premises, without charge, to exercise any of
Bank's rights or remedies;
Page-13
(e) Apply to the Obligations any (i) balances and deposits of Borrower
it holds, or (ii) any amount held by Bank owing to or for the
credit or the account of Borrower;
(f) Ship, reclaim, recover, store, finish, maintain, repair, prepare
for sale, advertise for sale, and sell the Collateral; and
(g) Dispose of the Collateral according to the Code.
9.2 Power of Attorney.
Effective only when an Event of Default occurs and continues, Borrower
irrevocably appoints Bank as their lawful attorney to: (a) endorse
Borrower's name on any checks or other forms of payment or security; (b) sign
Borrower's name on any invoice or ▇▇▇▇ of lading for any Account or drafts
against account debtors, (c) make, settle, and adjust all claims under
Borrower's insurance policies; (d) settle and adjust disputes and claims
about the Accounts directly with account debtors, for amounts and on terms
Bank determines reasonable; (e) Bank may place a "hold" on any deposit
account pledged as Collateral and deliver a notice of exclusive control, any
entitlement order, or other directions or instructions pursuant to any
control agreement or similar agreements providing control of any Collateral;
and (f) transfer the Collateral into the name of Bank or a third party as the
Code permits. Bank may exercise the power of attorney to sign Borrower's
name on any documents necessary to perfect or continue the perfection of any
security interest regardless of whether an Event of Default has occurred.
Bank's appointment as Borrower's attorney in fact, and all of Bank's rights
and powers, coupled with an interest, are irrevocable until all Obligations
have been fully repaid and performed and Bank's obligation to provide Credit
Extensions terminates.
9.3 Bank Expenses.
If Borrower fails to pay any amount or furnish any required proof of payment
to third persons, Bank may make all or part of the payment. Any amounts paid
by Bank are Bank Expenses and immediately due and payable, bearing interest
at the then applicable rate and secured by the Collateral. No payments by
Bank are deemed an agreement to make similar payments in the future or Bank's
waiver of any Event of Default.
9.4 Bank's Liability for Collateral.
If Bank complies with reasonable banking practices and Section 9-207 of the
Code, it is not liable for: (a) the safekeeping of the Collateral; (b) any
loss or damage to the Collateral; (c) any diminution in the value of the
Collateral; or (d) any act or default of any carrier, warehouseman, bailee,
or other person. Except as provided above, Borrower bears all risk of loss,
damage or destruction of the Collateral.
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9.5 Remedies Cumulative.
Bank's rights and remedies under this Agreement, the Loan Documents, and all
other agreements are cumulative. Bank has all rights and remedies provided
under the Code, by law, or in equity. Bank's exercise of one right or remedy
is not an election, and Bank's waiver of any Event of Default is not a
continuing waiver. Bank's delay is not a waiver, election, or acquiescence.
No waiver is effective unless signed by Bank and then is only effective for
the specific instance and purpose for which it was given.
9.6 Demand Waiver.
Borrower waives demand, notice of default or dishonor, notice of payment and
nonpayment, notice of any default, nonpayment at maturity, release,
compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees held by Bank on which Borrower is
liable.
10. NOTICES
Unless otherwise provided in this Agreement, all notices or demands by any
party relating to this Agreement or any other agreement entered into in
connection herewith shall be in writing and (except for financial statements
and other informational documents which may be sent by first-class mail,
postage prepaid) shall be personally delivered or sent by a recognized
overnight courier delivery service, certified mail, postage prepaid, return
receipt requested, or by telefacsimile to Borrower or to Bank, as the case
may be, at its addresses set forth below:
If to Borrower:
Ramtron International Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇, CFO
FAX: ▇▇▇-▇▇▇-▇▇▇▇
If to Bank:
Silicon Valley Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
11. CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER
California law governs the Loan Documents without regard to principles of
conflicts of law. Borrower and Bank each submit to the exclusive
jurisdiction of the State and Federal courts in Santa ▇▇▇▇▇ County,
California.
Page-15
BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY CONTEMPLATED
TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS.
THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS
AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
12. GENERAL PROVISIONS
12.1 Successors and Assigns.
This Agreement binds and is for the benefit of the successors and permitted
assigns of each party. Borrower may not assign this Agreement or any rights
under it without Bank's prior written consent which may be granted or
withheld in Bank's discretion. Bank has the right, without the consent of or
notice to Borrower, to sell, transfer, negotiate, or grant participation in
all or any part of, or any interest in, Bank's obligations, rights and
benefits under this Agreement.
12.2 Indemnification.
Borrower will indemnify, defend and hold harmless Bank and its officers,
employees, and agents against: (a) all obligations, demands, claims, and
liabilities asserted by any other party in connection with the transactions
contemplated by the Loan Documents; and (b) all losses or Bank Expenses
incurred, or paid by Bank from, following, or consequential to transactions
between Bank and Borrower (including reasonable attorneys fees and expenses),
except for losses caused by Bank's gross negligence or willful misconduct.
12.3 Time of Essence.
Time is of the essence for the performance of all obligations in this
Agreement.
12.4 Severability of Provisions.
Each provision of this Agreement is severable from every other provision in
determining the enforceability of any provision.
12.5 Amendments in Writing, Integration.
All amendments to this Agreement must be in writing and signed by Borrower
and Bank. This Agreement represents the entire agreement about this subject
matter, and supersedes prior negotiations or agreements. All prior
agreements, understandings, representations, warranties, and negotiations
between the parties about the subject matter of this Agreement merge into
this Agreement and the Loan Documents.
12.6 Counterparts.
This Agreement may be executed in any number of counterparts and by different
parties on separate counterparts, each of which, when executed and delivered,
are an original, and all taken together, constitute one Agreement.
Page-16
12.7 Survival.
All covenants, representations and warranties made in this Agreement continue
in full force while any Obligations remain outstanding. The obligations of
Borrower in Section 12.2 to indemnify Bank will survive until all statutes of
limitations for actions that may be brought against Bank have run.
12.8 Confidentiality.
In handling any confidential information, Bank will exercise the same degree
of care that it exercises for its own proprietary information, but disclosure
of information may be made (a) to Bank's subsidiaries or affiliates in
connection with their business with Borrower, (b) to prospective transferees
or purchasers of any interest in the loans (provided, however, Bank shall use
commercially reasonable efforts in obtaining such prospective transferee or
purchasers agreement of the terms of this provision), (c) as required by law,
regulation, subpoena, or other order, (d) as required in connection with
Bank's examination or audit, and (e) as Bank considers appropriate exercising
remedies under this Agreement. Confidential information does not include
information that either: (i) is in the public domain or in Bank's possession
when disclosed to Bank, or becomes part of the public domain after disclosure
to Bank; or (ii) is disclosed to Bank by a third party, if Bank does not know
that the third party is prohibited from disclosing the information.
12.9 Attorneys' Fees, Costs and Expenses.
In any action or proceeding between Borrower and Bank arising out of the Loan
Documents, the prevailing party will be entitled to recover its reasonable
attorneys' fees and other reasonable costs and expenses incurred, in addition
to any other relief to which it may be entitled.
12.10 Consent to Acquisition of Goal Semiconductor.
Bank hereby acknowledges and waives any noncompliance herewith (or any
predecessor agreement) with respect to obtaining Bank's prior written consent
to Borrower's acquisition of Goal Semiconductor Inc. provided that the total
consideration paid for such acquisition was less than $8,000,000.
13. DEFINITIONS
13.1 Definitions.
In this Agreement:
"Accounts" are all existing and later arising accounts, contract rights, and
other obligations owed Borrower in connection with their sale or lease of
goods (including licensing software and other technology) or provision of
services, all credit insurance, guaranties, other security and all
merchandise returned or reclaimed by Borrower and Borrower's Books relating
to any of the foregoing, as such definition may be amended from time to time
according to the Code.
Page-17
"Advance" or "Advances" is a loan advance (or advances) under the Committed
Revolving Line.
"Affiliate" of a Person is a Person that owns or controls directly or
indirectly the Person, any Person that controls or is controlled by or is
under common control with the Person, and each of that Person's senior
executive officers, directors, partners and, for any Person that is a limited
liability company, that Person's managers and members.
"Approved Mortgage" is defined in Section 6.8.
"Bank Expenses" are all reasonable audit fees and expenses and reasonable
costs and expenses (including reasonable attorneys' fees and expenses) for
preparing, negotiating, administering, defending and enforcing the Loan
Documents (including appeals or Insolvency Proceedings).
"Borrower's Books" are all Borrower's books and records including ledgers,
records regarding Borrower's assets or liabilities, the Collateral, business
operations or financial condition and all computer programs or discs or any
equipment containing the information.
"Borrowing Base" is eighty percent (80%) of Eligible Accounts as set forth on
Borrower's most recent Borrowing Base Certificate; provided, however, that
Bank may lower such percentage after performing an audit of Borrower's
Collateral.
"Borrowing Base Certificate" is attached as Exhibit C.
"Business Day" is any day that is not a Saturday, Sunday or a day on which
the Bank is closed.
"Code" is the Colorado Uniform Commercial Code, as applicable.
"Collateral" is the property described on Exhibit A.
"Committed Revolving Line" is an Advance or Advances of up to $4,000,000.
"Contingent Obligation" is, for any Person, any direct or indirect liability,
contingent or not, of that Person for (a) any indebtedness, lease, dividend,
letter of credit or other obligation of another such as an obligation
directly or indirectly guaranteed, endorsed, co-made, discounted or sold with
recourse by that Person, or for which that Person is directly or indirectly
liable; (b) any obligations for undrawn letters of credit for the account of
that Person; and (c) all obligations from any interest rate, currency or
commodity swap agreement, interest rate cap or collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation
in interest rates, currency exchange rates or commodity prices; but
"Contingent Obligation" does not include endorsements in the ordinary course
of business. The amount of a Contingent Obligation is the stated or
determined amount of the primary obligation for which the Contingent
Obligation is made or, if not determinable, the maximum reasonably
anticipated liability for it determined by the Person in good faith; but the
amount may not exceed the maximum of the obligations under the guarantee or
other support arrangement.
Page-18
"Credit Extension" is each Advance, the Term Loan or any other extension of
credit by Bank for Borrower's benefit.
"Current Liabilities" are the aggregate amount of Borrower's Total
Liabilities that mature within one (1) year.
"EBITDA" is, with respect to the Borrower and its Subsidiaries for any
twelve-month period ending on the date of computation thereof, the sum of,
without duplication, (a) net income (exclusive of any extraordinary gains or
losses), (b) interest expense, (c) taxes on income, (d) amortization, and
(e) depreciation, all determined on a consolidated basis in accordance with
GAAP.
"Effective Date" is the date of this Agreement.
"Eligible Accounts" are Accounts in the ordinary course of Borrower's
business that meet all Borrower's representations and warranties in Section
5; but, after performing an audit of Borrower's Collateral, Bank may change
eligibility standards by giving Borrower written notice. Unless Bank agrees
otherwise in writing, Eligible Accounts will not include:
(a) Accounts that the account debtor has not paid within ninety (90)
days of invoice date;
(b) Accounts for an account debtor, fifty percent (50%) or more of
whose Accounts have not been paid within ninety (90) days of
invoice date;
(c) Credit balances due and outstanding over ninety (90) days from
invoice date;
(d) Accounts for an account debtor, including its Affiliates, whose
total obligations to Borrower exceed twenty-five percent (25%) of
all Accounts, for the amounts that exceed that percentage, unless
the Bank approves in writing;
(e) Accounts for which the account debtor does not have its principal
place of business in the United States or for which the original
invoice shows a "▇▇▇▇ to" or "ship to" address outside the United
States, except for Eligible Foreign Accounts;
(f) Accounts for which the account debtor is a federal, state or local
government entity or any department, agency, or instrumentality;
(g) Accounts for which Borrower owes the account debtor, but only up to
the amount owed (sometimes called "contra" accounts, accounts
payable, customer deposits or credit accounts);
(h) Accounts for demonstration or promotional equipment, or in which
goods are consigned, sales guaranteed, sale or return, sale on
approval, ▇▇▇▇ and hold, or other terms if account debtor's payment
may be conditional;
Page-19
(i) Accounts for which the account debtor is Borrower's Affiliate,
officer, employee, or agent;
(j) Accounts in which the account debtor disputes liability or makes
any claim and Bank reasonably believes there may be a legitimate
basis for dispute (but only up to the disputed or claimed amount),
or if the Account Debtor is subject to an Insolvency Proceeding, or
becomes insolvent, or goes out of business; or
(k) Accounts for which Bank reasonably determines collection to be
doubtful.
"Eligible Foreign Accounts" are any Accounts in the ordinary course of
Borrower's business for which the account debtor does not have its principal
place of business in the United States that (i) meet all Borrower's
representations and warranties in Section 5 and all of the requirements of
Eligible Accounts (except for foreign status), and (ii) do not exceed
$2,000,000.
"ERISA" is the Employment Retirement Income Security Act of 1974, and its
regulations.
"Event of Default" is defined in Section 8.
"Fixed Charges" are, for any quarter, (a) all tax and interest expense for
such quarter multiplied by four (4), plus (b) the amount of all scheduled
payments of principal on the Term Loan for the next twelve (12) months, (c)
the amount of all payments scheduled to be made by Borrower to NSC (as
allowed by Section 7.4) for the next twelve (12) months (excluding interest),
plus (d) the amount of all scheduled payments of principal on the Allowed
Mortgage for the next twelve (12) months.
"GAAP" is generally accepted accounting principles, consistently applied.
"Indebtedness" is (a) indebtedness for borrowed money or the deferred price
of property or services, such as reimbursement and other obligations for
surety bonds and letters of credit, (b) obligations evidenced by notes,
bonds, debentures or similar instruments, (c) capital lease obligations and
(d) Contingent Obligations.
"Insolvency Proceeding" are proceedings by or against any Person under the
United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.
"Investment" is any beneficial ownership of (including stock, partnership
interest or other securities) any Person, or any loan, advance or capital
contribution to any Person.
Page-20
"Lien" is a mortgage, lien, deed of trust, charge, pledge, security interest
or other encumbrance.
"Loan Documents" are, collectively, this Agreement, any note, or notes or
guaranties executed by Borrower, and any other present or future agreement
between Borrower and/or for the benefit of Bank in connection with this
Agreement, all as amended, extended or restated.
"Material Adverse Change" is defined in Section 8.3.
"Non-Utilization Fee" is defined in Section 2.5(c).
"Obligations" are debts, principal, interest, Bank Expenses and other amounts
Borrower owes Bank now or later, including Advances, the Term Loan and
including interest accruing after Insolvency Proceedings begin and debts,
liabilities, or obligations of Borrower assigned to Bank.
"Payment/Advance Form" is the form attached as Exhibit B.
"Permitted Indebtedness" is:
(a) Borrower's indebtedness to Bank under this Agreement or any other
Loan Document;
(b) Indebtedness existing on the Effective Date and shown on the
Schedule;
(c) the Approved Mortgage;
(d) Subordinated Debt;
(e) Indebtedness to trade creditors incurred in the ordinary course of
business; and
(f) Indebtedness secured by Permitted Liens.
"Permitted Investments" are:
(a) Investments shown on the Schedule and existing on the Effective
Date; and
(b) (i) marketable direct obligations issued or unconditionally
guaranteed by the United States or its agency or any State maturing
within one (1) year from its acquisition, (ii) commercial paper
maturing no more than one (1) year after its creation and having
the highest rating from either Standard & Poor's Corporation or
▇▇▇▇▇'▇ Investors Service, Inc., and (iii) Bank's certificates of
deposit issued maturing no more than one (1) year after issue.
Page-21
"Permitted Liens" are:
(a) Liens existing on the Effective Date and shown on the Schedule or
arising under this Agreement or other Loan Documents;
(b) Liens for taxes, fees, assessments or other government charges or
levies, either not delinquent or being contested in good faith and
for which Borrower maintains adequate reserves on their Books, if
they have no priority over any of Bank's security interests;
(c) Purchase money Liens (i) on Equipment acquired or held by Borrower
or its Subsidiaries incurred for financing the acquisition of the
Equipment (whether pursuant to a loan, capital lease obligation or
sale/leaseback transaction), or (ii) existing on equipment when
acquired, if the Lien is confined to the property and improvements
and the proceeds of the equipment;
(d) Licenses or sublicenses granted in the ordinary course of
Borrower's business and any interest or title of a licensor or
under any license or sublicense, if the licenses and sublicenses
permit granting Bank a security interest;
(e) Leases or subleases granted in the ordinary course of Borrower's
business, including in connection with Borrower's leased premises
or leased property; and
(f) Liens incurred in the extension, renewal or refinancing of the
indebtedness secured by Liens described in (a) through (c), but any
extension, renewal or replacement Lien must be limited to the
property encumbered by the existing Lien and the principal amount
of the indebtedness may not increase.
"Person" is any individual, sole proprietorship, partnership, limited
liability company, joint venture, company association, trust, unincorporated
organization, association, corporation, institution, public benefit
corporation, firm, joint stock company, estate, entity or government agency.
"Prime Rate" is Bank's most recently announced "prime rate," even if it is
not Bank's lowest rate.
"Responsible Officer" is each of the Chief Executive Officer, the President,
the Chief Financial Officer and the Controller of Borrower.
"Revolving Maturity Date" is March 28, 2007.
"Rights", as applied to the Collateral, means the Borrower's rights and
interests in, and powers with respect to, that Collateral, whatever the
nature of those rights, interests and powers and, in any event, including
Borrower's power to transfer rights in such Collateral to Bank.
Page-22
"Schedule" is any attached schedule of exceptions.
"Subordinated Debt" is debt incurred by Borrower subordinated to Borrower's
indebtedness owed to Bank and which is reflected in a written agreement in a
manner and form acceptable to Bank and approved by Bank in writing.
"Subsidiary" is for any Person, or any other business entity of which more
than fifty percent (50%) of the voting stock or other equity interests is
owned or controlled, directly or indirectly, by the Person or one or more
Affiliates of the Person.
"Tangible Net Worth" is, on any date, the consolidated total assets of
Borrower and its Subsidiaries minus, (a) any amounts attributable to (i)
goodwill, (ii) intangible items such as unamortized debt discount and
expense, patents, trade and service marks and names, copyrights and research
and development expenses except prepaid expenses, and (iii) reserves not
already deducted from assets, and (b) Total Liabilities.
"Term Loan" is a non-revolving term loan of $3,000,000.
"Term Loan Maturity Date" is August 1, 2008.
"Term Loan Outstandings" are all amounts of principal and interest
outstanding with respect to the Term Loan.
"Term Loan Principal Payment" is defined in Section 2.1.2(b).
"Total Liabilities" is on any day, obligations that should, under GAAP, be
classified as liabilities on Borrower's consolidated balance sheet, including
all Indebtedness (including Subordinated Debt).
"Transfer" is defined in Section 7.1.
BORROWER:
RAMTRON INTERNATIONAL CORPORATION
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: CFO
BANK:
SILICON VALLEY BANK
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Relationship Manager
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