REVOLVING CREDIT LOAN AGREEMENT BY AND AMONG INTEGRATED CIRCUIT SYSTEMS, INC. ICST, INC. ICS TECHNOLOGIES, INC. MICRO NETWORKS CORPORATION AND FLEET NATIONAL BANK Dated: March 1, 2004
Exhibit 10.1
REVOLVING CREDIT LOAN AGREEMENT
BY AND AMONG
INTEGRATED CIRCUIT SYSTEMS, INC.
ICST, INC.
ICS TECHNOLOGIES, INC.
MICRO NETWORKS CORPORATION
AND
FLEET NATIONAL BANK
Dated: March 1, 2004
TABLE OF CONTENTS
Page | ||
ARTICLE I: DEFINITIONS |
4 | |
1.01. Definitions |
4 | |
1.02. Construction of Terms |
14 | |
1.03. Accounting Terms |
14 | |
ARTICLE II: LOANS, LETTERS OF CREDIT AND BANKER’S ACCEPTANCES |
14 | |
2.01. Revolving Credit Commitment |
14 | |
2.02. Termination or Reduction of Commitment |
15 | |
2.03. Notice and Manner of Borrowing for Loans |
16 | |
2.04. Interest Rate Options for Loans |
16 | |
2.05. Note |
17 | |
2.06. Conversions and Renewals of Loans |
17 | |
2.07. Repayment of Loans |
17 | |
2.08. Interest after Maturity of Loans |
18 | |
2.09. Mandatory Prepayment of Loans |
18 | |
2.10. Optional Prepayment of Loans |
18 | |
2.11. Method of Payment |
19 | |
2.12. Use of Proceeds |
19 | |
2.13. Recovery of Payments |
19 | |
2.14. Illegality |
19 | |
2.15. Disaster |
19 | |
2.16. Funding Loss Indemnification |
20 | |
2.17. Increased Cost |
20 | |
2.18. Risk-Based Capital |
21 | |
2.19. Bank’s Determination Conclusive; Notice of Amounts Due |
21 | |
2.20. No Setoff or Deduction |
21 | |
2.21. Fees |
21 | |
2.22. Late Charge |
22 | |
ARTICLE III: CONDITIONS PRECEDENT |
22 | |
3.01. Condition Precedent to First Loan, Banker’s Acceptance or Letter of Credit |
22 | |
3.02. Conditions Precedent to All Loans, Banker’s Acceptances and Letters of Credit |
23 | |
ARTICLE IV: REPRESENTATIONS AND WARRANTIES |
23 | |
4.01. Incorporation, Good Standing, Due Qualification, Corporate Power and Authority |
23 | |
4.02. Due Authorization; No Consents or Contravention |
24 | |
4.03. Legally Enforceable Agreement |
24 | |
4.04. Financial Statements; Accuracy of Information |
24 | |
4.05. Labor Disputes and Acts of God |
25 | |
4.06. Other Agreements |
25 | |
4.07. Litigation |
25 | |
4.08. No Defaults on Outstanding Judgments or Orders |
25 | |
4.09. Ownership and Liens |
25 | |
4.10. Subsidiaries and Ownership of Stock |
25 | |
4.11. ERISA |
25 | |
4.12. Operation of Business |
26 |
4.13. Taxes |
26 | |
4.14. Debt |
26 | |
4.15. Environmental Matters |
26 | |
4.16. Material Adverse Changes |
26 | |
4.17. Valid, Binding and Enforceable |
26 | |
4.18. No Untrue Statements |
27 | |
4.19. Anti-Terrorism Statutes |
27 | |
ARTICLE V: AFFIRMATIVE COVENANTS |
28 | |
5.01. Maintenance of Existence |
28 | |
5.02. Maintenance of Records |
28 | |
5.03. Maintenance of Properties |
28 | |
5.04. Conduct of Business; Permits and Approvals; Compliance with Laws |
28 | |
5.05. Maintenance of Insurance |
28 | |
5.06. Payment of Debt |
28 | |
5.07. Right of Inspection |
28 | |
5.08. Reporting Requirements |
29 | |
5.09. Further Assurances |
30 | |
5.10. Compliance with Laws |
30 | |
5.11. Environment |
31 | |
5.12. Environmental Indemnification |
31 | |
5.13. Reimbursement for Expenses |
31 | |
5.14. Joinder of Borrowers or Guarantors |
31 | |
5.15. Replacement Instruments |
32 | |
5.16. Anti-Terrorism Statutes |
32 | |
ARTICLE VI: NEGATIVE COVENANTS |
32 | |
6.01. Liens |
32 | |
6.02. Debt |
33 | |
6.03. Mergers |
34 | |
6.04. Leases |
34 | |
6.05. Sale and Leaseback |
34 | |
6.06. Dividends |
34 | |
6.07. Sale of Assets |
34 | |
6.08. Guaranties |
35 | |
6.09. Transaction with Affiliate |
35 | |
6.10. Stock of Subsidiary |
35 | |
6.11. Hazardous Materials |
35 | |
6.12. Negative Pledge |
35 | |
6.13. Subsidiaries or Affiliates |
35 | |
6.14. Recapitalization |
35 | |
ARTICLE VII: FINANCIAL COVENANTS |
36 | |
7.01. Funded Debt to EBITDA Ratio |
36 | |
7.02. Fixed Charge Coverage Ratio |
36 | |
7.03. Tangible Net Worth |
36 | |
7.04. Liquidity Ratio |
36 | |
ARTICLE VIII: EVENTS OF DEFAULT |
36 | |
8.01. Events of Default |
36 |
ii
8.02. Remedies of Bank |
38 | |
8.03. Set-Off |
38 | |
8.04. Further Remedies |
39 | |
ARTICLE IX: MISCELLANEOUS |
39 | |
9.01. Amendments |
39 | |
9.02. Notices |
39 | |
9.03. Indemnification |
39 | |
9.04. Assignment and Participation |
39 | |
9.05. Prior Understandings |
40 | |
9.06. Counterparts |
40 | |
9.07. No Waiver of Remedies |
40 | |
9.08. Taxes |
41 | |
9.09. Governing Law and Consent to Jurisdiction |
41 | |
9.10. Severability of Provisions |
41 | |
9.11 Survival of Agreement \f C \l |
41 | |
9.12. Form of Power of Attorney |
41 | |
9.13. Successors and Assigns |
42 | |
9.14. Joint and Several Liability |
42 | |
9.15. Waiver of Jury Trial and Certain Damages |
42 | |
9.16. Confidentiality |
42 | |
9.17. Pledge to Federal Reserve |
42 |
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REVOLVING CREDIT LOAN AGREEMENT
This REVOLVING CREDIT LOAN AGREEMENT dated as of the 1st day of March, 2004, is among INTEGRATED CIRCUIT SYSTEMS, INC., a corporation organized and existing under the laws of the Commonwealth of Pennsylvania, with its chief executive office at 2435 Boulevard of the Generals, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, ICST, INC., a corporation organized and existing under the laws of the Commonwealth of Pennsylvania, with its chief executive office at 2435 Boulevard of the Generals, Xxxxxxxxxx, Xxxxxxxxxxxx 00000; ICS TECHNOLOGIES, INC., a corporation organized and existing under the laws of the State of Delaware, with its chief executive office at 000 Xxxxx Xxxx, Xxxxx 000 Xxxxxxxxxx, Xxxxxxxx 00000; MICRO NETWORKS CORPORATION, a corporation organized and existing under the laws of the State of Delaware, with its chief executive office at 2435 Boulevard of the Generals, Xxxxxxxxxx, Xxxxxxxxxxxx 00000; and FLEET NATIONAL BANK, a national banking association, with an address at 0000 Xxxxxx Xxxxx Xxxx, Xxxx Xxxxxxxxxx, Xxxxxxxxxxxx 00000.
“Affiliate” means any Person (1) which directly or indirectly controls, or is controlled by, or is under common control with the Borrower or a Subsidiary; (2) which directly or indirectly beneficially owns or holds five percent (5%) or more of any class of voting stock of the Borrower or any Subsidiary; or (3) five percent (5%) or more of the voting stock of which is directly or indirectly beneficially owned or held by the Borrower or a Subsidiary. The term “control” means the possession, directly or indirectly, or the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.
“Agreement” means this Revolving Credit Loan Agreement, as amended, supplemented, or modified from time to time.
“Applicable Margin” means for any Prime Loan or LIBOR Loan on any date, the percentage per annum set forth below, as applicable, opposite the Funded Debt to EBITDA Ratio shown on the last Affidavit of No Default and Compliance delivered by the Borrower to the Bank pursuant to subsection 5.08 (5) prior to such date:
Funded Debt to EBITDA Ratio |
Prime Loan |
LIBOR Loan |
||||
Less than or equal to 1.0 to 1.0 |
0 | % | 0.50 | % | ||
Greater than 1.0 to 1.0, but less than or equal to 1.25 to 1.0 |
0 | % | 0.60 | % | ||
Greater than 1.25 to 1.0, but less than or equal to 1.5 to 1.0 |
0 | % | 0.75 | % |
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The Applicable Margin shall be reset from time to time in accordance with the above matrix on the first day of the fiscal quarter immediately following the delivery by the Borrower, in accordance with Sections 5.08 (2) and 5.08 (3), of financial statements together with the required Affidavit of No Default and Compliance reflecting the computation of the consolidated Funded Debt to EBITDA Ratio as of the last day of the preceding fiscal quarter, beginning with the fiscal quarter ending March 27, 2004. If the Borrower shall fail to deliver an Affidavit of No Default and Compliance within sixty (60) days after the end of each of the first three fiscal quarters (or ninety (90) days after the end of the last fiscal quarter), the Applicable Margin for LIBOR Loans shall be .75%, and the Applicable Margin for Prime Loans shall be 0.00%, for the period from and including the 61st day (the 91st day in the case of the last quarter) after the end of such fiscal quarter to the date of the delivery by the Borrower to the Bank of an Affidavit of No Default and Compliance demonstrating the Applicable Margin. In the event that the actual Funded Debt to EBITDA Ratio for any fiscal quarter is subsequently determined to be greater than that set forth in the Affidavit of No Default and Compliance for such fiscal quarter, the Applicable Margin shall be recalculated for the applicable period based upon such actual Funded Debt to EBITDA Ratio. Any additional interest on the Loans resulting from the operation of the previous sentence shall be payable by the Borrower to the Bank within five (5) days after receipt of a written demand therefor from the Bank.
“Application” shall mean in respect of each Letter of Credit issued or Banker’s Acceptance accepted by the Bank, an application, in such form as the Bank may specify from time to time, requesting the issuance of a Letter of Credit or the acceptance of a Banker’s Acceptance.
“Anti-Terrorism Statute” shall mean any Law relating to terrorism or money laundering, including Executive Order No. 13224 and the USA Patriot Act.
“Bank” means Fleet National Bank and its successors and assigns.
“Banker’s Acceptances” means one or more, as the context may require, of the banker’s acceptances to be accepted by the Bank under Section 2.01 below.
“Banker’s Acceptance Commission Rate” means, on any date, the percentage per annum set forth below opposite the Funded Debt to EBITDA Ratio shown on the last Affidavit of No Default and Compliance delivered by the Borrower to the Bank pursuant to subsection 5.08 (5) prior to such date.
Funded Debt to EBITDA Ratio |
Banker’s Acceptances Commission Rate |
||
Less than or equal to 1.0 to 1.0 |
0.50 | % | |
Greater than 1.0 to 1.0 but less than or equal to 1.25 to 1.0 |
0.60 | % | |
Greater than 1.25 to 1.0 but less than or equal to 1.5 to 1.0 |
0.75 | % |
5
The Banker’s Acceptance Commission Rate shall be reset from time to time in accordance with the above matrix on the first day of the fiscal quarter immediately following the delivery by the Borrower, in accordance with Sections 5.08 (2) and 5.08 (3), of financial statements together with the required Affidavit of No Default and Compliance reflecting the computation of the consolidated Funded Debt to EBITDA Ratio as of the last day of the preceding fiscal quarter, beginning with the fiscal quarter ending March 27, 2004. If the Borrower shall fail to deliver an Affidavit of No Default and Compliance within sixty (60) days after the end of each of the first three fiscal quarters (or ninety (90) days after the end of the last fiscal quarter), the Banker’s Acceptance Commission Rate shall be .75%, for the period from and including the 61st day (the 91st day in the case of the last quarter) after the end of such fiscal quarter to the date of the delivery by the Borrower to the Bank of an Affidavit of No Default and Compliance demonstrating the Banker’s Acceptance Commission Rate. In the event that the actual Funded Debt to EBITDA Ratio for any fiscal quarter is subsequently determined to be greater than that set forth in the Affidavit of No Default and Compliance for such fiscal quarter, the Banker’s Acceptance Commission Rate shall be recalculated for the applicable period based upon such actual Funded Debt to EBITDA Ratio. Any additional increase in the Banker’s Acceptance Commission Rate resulting from the operation of the previous sentence shall be payable by the Borrower to the Bank within five (5) days after receipt of a written demand therefor from the Bank.
“Blocked Person” shall have the meaning assigned to such term in Section 4.19.
“Borrower” means individually and collectively Integrated Circuit Systems, Inc., ICST, Inc., ICS Technologies, Inc., Micro Networks Corporation, and their successors and assigns.
“Borrowing” shall mean the incurrence by the Borrower (including as a result of conversions and continuations of outstanding Loans pursuant to Section 2.06), on a single date of a group of Loans of a single Type and, in the case of LIBOR Loans, as to which a single Interest Period is in effect.
“Borrowing Date” shall mean, with respect to any Borrowing, the date upon which such Borrowing is made.
“Business Day” means any day other than a Saturday, Sunday, or other day on which commercial banks in Philadelphia are authorized or required to close under the laws of the Commonwealth of Pennsylvania and, if the applicable day relates to a LIBOR Loan or an Interest Period a day on which dealings in Dollar deposits are also carried on in the London interbank market and banks are open for business in London.
“Capital Lease” means all leases which have been or should be capitalized on the books of the lessee in accordance with GAAP.
“Closing” shall mean the execution and delivery to the Bank of all of the documents and instruments required by the terms of this Agreement and the closing of the loan transactions contemplated by this Agreement.
“Closing Date” shall mean the date on which the Closing takes place.
6
“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations and published interpretations thereof.
“Collateral” shall mean any and all property of any Person now or hereafter subject to a security agreement, mortgage, pledge agreement, assignment, hypothecation or other document granting the Bank a Lien as security for the Loans.
“Commitment” means the Bank’s obligation to make Loans or issue Letters of Credit or accept Banker’s Acceptances to or for the benefit of the Borrower pursuant to Sections 2.01 and 2.02 in the maximum amount referred to therein.
“Commitment Fee Rate” means, on any date, the percentage per annum set forth below opposite the Funded Debt to EBITDA Ratio shown on the last Affidavit of No Default and Compliance delivered by the Borrower to the Bank pursuant to subsection 5.08 (5) prior to such date:
Funded Debt to EBITDA Ratio |
Commitment Fee Rate |
||
Less than or equal to 1.0 to 1.0 |
0.20 | % | |
Greater than 1.0 to 1.0 but less than or equal to 1.25 to 1.0 |
0.225 | % | |
Greater than 1.25 to 1.0 but less than or equal to 1.5 to 1.0 |
0.25 | % |
The Commitment Fee Rate shall be reset from time to time in accordance with the above matrix on the first day of the fiscal quarter immediately following the delivery by the Borrower, in accordance with Sections 5.08 (2) and 5.08 (3), of financial statements together with the required Affidavit of No Default and Compliance reflecting the computation of the consolidated Funded Debt to EBITDA Ratio as of the last day of the preceding fiscal quarter, beginning with the fiscal quarter ending March 27, 2004. If the Borrower shall fail to deliver an Affidavit of No Default and Compliance within sixty (60) days after the end of each of the first three fiscal quarters (or ninety (90) days after the end of the last fiscal quarter), the Commitment Fee Rate shall be .25%, for the period from and including the 61st day (the 91st day in the case of the last quarter) after the end of such fiscal quarter to the date of the delivery by the Borrower to the Bank of an Affidavit of No Default and Compliance demonstrating the Commitment Fee Rate. In the event that the actual Funded Debt to EBITDA Ratio for any fiscal quarter is subsequently determined to be greater than that set forth in the Affidavit of No Default and Compliance for such fiscal quarter, the Commitment Fee Rate shall be recalculated for the applicable period based upon such actual Funded Debt to EBITDA Ratio. Any additional increase in the Commitment Fee Rate resulting from the operation of the previous sentence shall be payable by the Borrower to the Bank within five (5) days after receipt of a written demand therefor from the Bank.
“Debt” means (1) indebtedness or liability for borrowed money or for the deferred purchase price of property or services (including trade obligations); (2) obligations as lessee under Capital Leases and synthetic leases; (3) current liabilities in respect of unfunded vested benefits under any Plan; (4) obligations under letters
7
of credit issued for the account of any Person; (5) all obligations arising under acceptance facilities; (6) all guaranties, endorsements (other than for collection or deposit in the ordinary course of business), and other contingent obligations to purchase, to provide funds for payment, to supply funds to invest in any Person, or otherwise to assure a creditor against loss; (7) obligations outstanding as a result of an accounts receivable sales program, and (8) obligations secured by any Lien on property owned by any Person, whether or not the obligations have been assumed.
“Default” means any of the events specified in Section 8.01, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied.
“Dollars” and the “$” mean lawful money of the United States of America.
“EBITDA” shall mean, as applied to any Person, the sum of consolidated net income plus (to the extent deducted in the calculation of consolidated net income) (1) interest, (2) taxes, (3) depreciation, (4) amortization, and (5) non-cash charges incurred in connection with asset impairment and the write down of goodwill relating to plant closings and the disposition of assets.
“Environmental Law” means any presently existing or hereafter enacted or decided federal, state or local statutory or common law relating to pollution or protection of the environment, including without limitation, any common law of nuisance or trespass, and any law or regulation relating to emissions, discharges, releases or threatened release of pollutants, contaminants or chemicals or industrial, toxic or hazardous substances or wastes into the environment (including without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants or chemicals, or industrial, toxic or hazardous substances or wastes.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations and published interpretations thereof.
“ERISA Affiliate” means any trade or business (whether or not incorporated) which together with any Borrower would be treated as a single employer under Section 4001 of ERISA.
“Event of Default” means any of the events specified in Section 8.01, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied.
“Executive Order No. 13224” shall mean the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.
“Existing Debt” shall mean the Debt set forth on Schedule A of this Agreement.
“Federal Reserve Board” shall mean the Board of Governors of the United States Federal Reserve System or any successor thereto.
“Funded Debt” shall mean, as applied to any Person, the sum of all indebtedness for borrowed money (including, without limitation, capital lease and synthetic lease obligations, asset securitizations, subordinated debt (including debt subordinated to the Bank), banker’s acceptances, and unreimbursed drawings under letters
8
of credit), and any other monetary obligation evidenced by a note, bond, debenture or other agreement or similar instrument, and all guarantees.
“GAAP” means generally accepted accounting principles in the United States of America (as such principles may change from time to time) applied on a consistent basis (except for changes in application in which the Borrower’s independent certified public accountant’s concur), applied both to classification of items and amounts.
“Governmental Authority” shall mean any nation or government, any state or other political subdivision thereof and any central bank thereof, any municipal, local, city or county government, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.
“Guarantor” shall mean any Person who guarantees the payment and performance of all or any part of the Obligations.
“Guaranty Agreement” shall mean that certain Guaranty Agreement by any Guarantor in favor of the Bank as security for the obligations of the Borrower to the Bank, together with all exhibits, amendments, modifications, and supplements thereto as
“Hazardous Materials” means any contaminants, hazardous substances, regulated substances or hazardous wastes which may be the subject of liability pursuant to any Environmental Law.
“Interest Payment Date” shall mean (a) as to any Prime Loan, the first Business Day of each month, commencing the first such day after such Loan and at the Termination Date, (b) as to any LIBOR Loan having an Interest Period of three months or less, the last day of such Interest Period,
“Interest Period” means with respect to any LIBOR Loan, the period commencing on the date such LIBOR Rate Loan is made and ending, as the Borrower may select, pursuant to Section 2.04, on the numerically corresponding day in the first, second, or third calendar month thereafter; provided that the foregoing provisions relating to Interest Periods are subject to the following:
(a) No Interest Period for any Loan may extend beyond the Termination Date;
(b) Subject to clause (a) above, if an Interest Period would end on a day that is not a Business Day, such Interest Period shall be extended to the next Business Day, unless, in the case of a LIBOR Loan, such Business Day would fall in the next calendar month, in which event such Interest Period shall end on the immediately preceding Business Day.
(c) If any Interest Period applicable to a LIBOR Loan begins on the last Business Day of a calendar month (or on any day for which there is no numerically corresponding day in the appropriate subsequent calendar month during which such Interest Period would otherwise expire, such Interest Period shall expire on the last Business Day of such calendar month, and
(d) If, upon the expiration of any Interest Period applicable to a LIBOR Loan, the Borrower shall have failed to elect a new Interest Period to be applicable to such LIBOR Loan, then the Borrower shall be
9
deemed to have elected to convert such LIBOR Loan into a Prime Loan as of the expiration of the then current Interest Period applicable thereto.
“Law” means any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order, injunction, writ, decree or award of any Governmental Authority.
“Lending Office” means the principal office of the Bank at 0000 Xxxxxx Xxxxx Xxxx, Xxxx Xxxxxxxxxx, Xxxxxxxxxxxx 00000 or such other office as the Bank may specify to Borrower from time to time.
“Letter of Credit” means one or more, as the context may require, of the letters of credit to be issued by the Bank under Section 2.01 below.
“Letter of Credit Fee” has the meaning assigned to that term in subsection 2.02.
“Letter of Credit Fee Rate” means, on any date, the percentage per annum set forth below opposite the Funded Debt to EBITDA Ratio shown on the last Affidavit of No Default and Compliance delivered by the Borrower to the Bank pursuant to subsection 5.08 (5) prior to such date:
Funded Debt to EBITDA Ratio |
Letter of Credit Fee Rate |
||
Less than or equal to 1.0 to 1.0 |
0.50 | % | |
Greater than 1.0 to 1.0 but less than or equal to 1.25 to 1.0 |
0.60 | % | |
Greater than 1.25 to 1.0 but less than or equal to 1.5 to 1.0 |
0.75 | % |
The Letter of Credit Fee Rate shall be reset from time to time in accordance with the above matrix on the first day of the fiscal quarter immediately following the delivery by the Borrower, in accordance with Sections 5.08 (2) and 5.08 (3), of financial statements together with the required Affidavit of No Default and Compliance reflecting the computation of the consolidated Funded Debt to EBITDA Ratio as of the last day of the preceding fiscal quarter, beginning with the fiscal quarter ending March 27, 2004. If the Borrower shall fail to deliver an Affidavit of No Default and Compliance within sixty (60) days after the end of each of the first three fiscal quarters (or ninety (90) days after the end of the last fiscal quarter), the Letter of Credit Fee Rate shall be ..75%, for the period from and including the 61st day (the 91st day in the case of the last quarter) after the end of such fiscal quarter to the date of the delivery by the Borrower to the Bank of an Affidavit of No Default and Compliance demonstrating the Letter of Credit Fee Rate. In the event that the actual Funded Debt to EBITDA Ratio for any fiscal quarter is subsequently determined to be greater than that set forth in the Affidavit of No Default and Compliance for such fiscal quarter, the Letter of Credit Fee Rate shall be recalculated for the applicable period based upon such actual Funded Debt to EBITDA Ratio. Any additional increase in the Letter of Credit Fee Rate resulting from the operation of the previous sentence shall be payable by the Borrower to the Bank on the earlier of the Termination Date or within five (5) days after receipt of a written demand therefor from the Bank.
10
“Letter of Credit/Banker’s Acceptance Obligations” shall mean at any time, an amount equal to the sum of (a) 100% of the maximum Dollar amount available to be drawn under all Letters of Credit or Banker’s Acceptances outstanding at such time (determined without regard to whether any conditions to drawing could be met at such time) and (b) the aggregate Dollar amount of drawings under Letters of Credit or Banker’s Acceptances which have not then been reimbursed pursuant to subsection 2.01.
“LIBOR” shall mean, as applicable to any LIBOR Loan, the rate per annum as determined on the basis of the offered rates for deposits in U.S. Dollars for a period of time to the relevant corresponding number of months maturity of a selected Interest Period (i. e., 1, 2, 3) which appears on the Telerate page 3750 as of 11:00 am. London time on the day that is two Business Days preceding the first day of such LIBOR Loan; provided, however, if the rate described above does not appear on the Telerate System on any applicable interest determination date, the LIBOR rate shall be the rate (rounded upward, if necessary, to the nearest one hundred-thousandth of a percentage point), determined on the basis of the offered rates for deposits in U.S. Dollars for a period of time comparable to such LIBOR Loan which are offered by four major banks in the London interbank market at approximately 11: 00 a. m. London time, on the day that is two (2) Business Days preceding the first day of such LIBOR Loan as selected by Bank The principal London office of each of the four major London banks will be requested to provide a quotation of its U. S. Dollar deposit offered rate. If at least two such quotations are provided, the rate for that date will be the arithmetic mean of the quotations. If fewer than two quotations are provided as requested, the rate for that date will be determined on the basis of the rates quoted for loans in U. S. Dollars to leading European banks for a period of time comparable to such LIBOR Loan offered by major banks in New York City at approximately 11:00 am. New York City time, on the day that is two Business Days preceding the first day of such LIBOR Loan. In the event that Bank is unable to obtain any such quotation as provided above, it will be deemed that LIBOR pursuant to a LIBOR Loan cannot be determined. In the event that the Board of Governors of the Federal Reserve System shall impose a Reserve Percentage with respect to LIBOR deposits of Bank, then for any period during which such Reserve Percentage shall apply, LIBOR shall be equal to the amount determined above divided by an amount equal to 1 minus the Reserve Percentage. “Reserve Percentage” shall mean the maximum aggregate Reserve Requirement.
“LIBOR Based Rate” means, for each LIBOR Loan, the LIBOR rate per annum equal to the applicable Interest Period selected by the Borrower plus the Applicable Margin.
“LIBOR Loan” means any Loan when and to the extent that the interest rate therefor is determined by reference to the LIBOR Based Rate.
“Lien” means any mortgage, deed of trust, pledge, security interest, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), or preference, priority, or other security agreement or preferential arrangement, charge, or encumbrance of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction to evidence any of the foregoing).
“Loan(s)” means the Loans as defined in Section 2.01 hereof.
“Loan Document(s)” means this Agreement, the Note, any Guaranty Agreement, and all other documents or applications of any kind relating to the advances made by the Bank under the Commitment but does not include Swap Agreements.
11
“Multiemployer Plan” means a Plan described in Section 4001(a)(3) of ERISA which covers employees of the Borrower or any ERISA Affiliate.
“Note” means the promissory note of the Borrower executed and delivered under this Agreement, together with all extensions, renewals, refinancings or refundings in whole or in part.
“Obligations” means all indebtedness owing under the Loans and the Letter of Credit/Banker’s Acceptance Obligations, including any past, present or future advances, renewals, extensions, modifications, interest, late charges, costs and fees of any type, and any and all other indebtedness, direct or indirect, due or to become due, now existing or hereafter contracted of any nature whatsoever of Borrower to Bank, and all obligations under or in connection with any Swap Agreements between Borrower and Bank whenever executed.
“Obligor(s)” means the Borrower, any Guarantor, and any other person or entity liable, either absolutely or contingently, for the payment of any indebtedness evidenced by any Loan Document as well as any person or entity granting the Bank a security interest in property to secure all or a portion of said indebtedness.
“Option(s)” means any of the interest rate options specified in Section 2.04 (a) hereof.
“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
“Person” means an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority, or other entity of whatever nature.
“Plan” means any employee benefit or pension plan established, maintained, or to which contributions have been made by the Borrower or any ERISA Affiliate.
“Pledge Agreement” shall mean the Pledge Agreement dated the Closing Date by Integrated Circuit Systems, Inc. in favor of the Bank, together with all exhibits, amendments, modifications, and supplements thereto as may be in effect from time to time.
“Prime Based Rate” means, for each Prime Loan, the Prime Rate plus the Applicable Margin.
“Prime Loan” shall mean, at any time, any Loan when and to the extent that the interest rate therefor is determined by reference to the Prime Based Rate.
“Prime Rate” means the variable per annum rate of interest so designated from time to time by the Bank as its prime rate. The Prime Rate is a referenced rate and does not necessarily represent the lowest or best rate charged to any customer. Changes in the rate of interest resulting from changes in the Prime Rate shall take place immediately without notice or demand of any kind
“Prohibited Transaction” means any transaction set forth in Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1954, as amended from time to time.
“Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System as amended or supplemented from time to time.
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“Reportable Event” means any of the events set forth in Section 4043 of ERISA.
“Requirement of Law” shall mean, with respect to any Person, the charter, articles or certificate of organization or incorporation and bylaws or other organizational or governing documents of such Person, and any statute, law, treaty, rule, regulation, order, decree, writ, injunction or determination of any arbitrator or court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject or otherwise pertaining to any or all of the transactions contemplated by this Agreement and the other Loan Documents.
“Reserve Requirement” shall mean, with respect to any Interest Period, the aggregate of the then stated maximum rates during such Interest Period of all reserve requirements (including, without limitation, marginal, emergency, supplemental and special reserves), expressed as a decimal, established by the Board of Governors of the Federal Reserve System and any other banking authority to which the Bank and other major United States money center banks are subject, in respect of eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board of Governors of the Federal Reserve System) or in respect of any other category of liabilities including deposits by reference to which the interest rate on LIBOR Loans is determined or any category extensions of credit or other assets which includes loans by non-domestic offices of any Bank to United States residents. Such reserve requirements shall include, without limitation, those imposed under such Regulation D. The LIBOR Rate shall be adjusted automatically on and as of the effective date of any change in any such reserve requirements.
“Subsidiary” means a corporation of which shares of stock having ordinary voting power (other than stock having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries or both, by any Borrower.
“Swap Agreement” shall have the meaning provided in 11 U. S. C. §101.
“Tangible Net Worth” shall mean as to any Person total assets minus total liabilities. For purposes of this computation, the aggregate amount of any intangible assets of Borrower including, without limitation, goodwill, franchises, licenses, patents, trademarks, trade names, copyrights, service marks, and brand names, shall be subtracted from total assets, and total liabilities shall include debt fully subordinated to the Bank on terms and conditions acceptable to the Bank.
“Termination Date” means the earlier of three years from the date hereof (or such other subsequent date as the Bank may agree to in writing in its sole discretion) or the termination of the Commitment pursuant to Section 8.02.
“Total Outstandings” shall have the meaning assigned to such term in Section 2.01.
“Type” shall mean shall mean that with respect to the Loans, at the option of the Borrower and subject to the terms of this Agreement, either Prime Loans, or LIBOR Loans provided that all Loans comprising the same Borrowing shall, unless otherwise specifically provided herein, be of the same Type.
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“USA Patriot Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.
ARTICLE II: LOANS, LETTERS OF CREDIT AND BANKER’S ACCEPTANCES
2.01. Revolving Credit Commitment.
Commitment: The Bank agrees on the terms and conditions hereinafter set forth to make financial accommodations by means of Banker’s Acceptances, Letters of Credit, and loans (individually a “Loan” and collectively the “Loans”) to or for the benefit of the Borrower from time to time during the period from the Closing Date up to but not including the Termination Date in an aggregate amount which shall not exceed at any time outstanding Twenty Million Dollars ($20,000,000.00) (the “Commitment”). Each financial accommodation hereunder which shall not utilize the Commitment in full shall be in an amount not less than Five Hundred Thousand Dollars ($500,000.00). Within the limits of the Commitment, and subject to the conditions of this Agreement, the Borrower may borrow, prepay pursuant to Section 2.10, and reborrow under this Section 2.01, from time to time.
Letters of Credit Sublimit and Banker’s Acceptances: In lieu of Loans under the Commitment, the Borrower may request the Bank (i) to accept a draft or xxxx of exchange drawn by the Borrower upon the Bank (each, a “Banker’s Acceptance” and, collectively, the “Banker’s Acceptances”), or (ii) to issue a letter of credit (each, a “Letter of Credit” and, collectively, the “Letters of Credit”) in favor of a designated beneficiary. Such Letters of Credit or Banker’s Acceptances shall be on such terms and conditions as shall be requested by the Borrower and are reasonably satisfactory to the Bank by delivering to the Bank a duly completed Application in such form and with such other certificates, documents, indemnities and other information as the Bank may specify from time to time by no later than 10:30 a.m., Philadelphia Pennsylvania time, at least five (5) Business
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Days, or such shorter period as may be agreed to by the Bank, in advance of the proposed date of issuance for the account of the Borrower. Each Banker’s Acceptance and Letter of Credit shall be denominated in Dollars. Subject to the terms and conditions hereof, the Bank will accept one or more Banker’s Acceptances or issue one or more Letters of Credit, provided, that each Letter of Credit shall (a) have a maximum maturity of 365 days from the date of issuance, and (b) in no event expire no later than One (1) Business Day prior to the Termination Date, and provided further, that in no event shall (c) the amount of all Letters of Credit at any one time exceed $5,000,000.00, or (d) the aggregate outstanding principal balance of all Loans plus the aggregate amount available to be drawn under all Letters of Credit plus the aggregate amount of unreimbursed drawings under all Letters of Credit plus the aggregate face amount of all outstanding Banker’s Acceptances (“Total Outstandings”) at any one time exceed the Commitment. The Bank shall not at any time be obligated to accept any Banker’s Acceptance or issue any Letter of Credit hereunder if such action would conflict with, or cause the Bank to exceed any limits imposed by, any applicable Requirement of Law. All Banker’s Acceptances and Letters of Credit are to be used by Borrower solely for a business purpose acceptable to the Bank. The Bank’s obligation to issue Letters of Credit or to accept Banker’s Acceptances shall terminate if Borrower is in Default (however denominated) hereunder or under the other Loan Documents, or in any case, if not sooner terminated, no later than One (1) Business Day prior to the Termination Date. The Commitment shall at all times be deemed to be utilized by the amount of the Letter of Credit/Banker’s Acceptance Obligations from time to time for all purposes of this Agreement. Borrower shall pay to Bank, on the maturity date of each Banker’s Acceptance, a commission (“Banker’s Acceptance Commission”) on the principal amount of each Banker’s Acceptance at the Banker’s Acceptance Commission Rate in connection with each Banker’s Acceptance. Borrower shall pay to Bank, at such times as Bank shall customarily require the Bank’s standard fees in connection with each Letter of Credit, as in effect from time to time, plus an additional fee (“Letter of Credit Fee”) equal to the Letter of Credit Fee Rate in effect from time to time on the face amount of each Letter of Credit (computed in each case on the basis of the actual number of days such Letters of Credit are outstanding in a year of 360 days). Each Letter of Credit Fee shall be payable annually, in advance, for so long as such Letter of Credit is outstanding and on the Termination Date. Once paid, each Letter of Credit Fee and Banker’s Acceptance Commission shall be nonrefundable under all circumstances.
The Borrower agrees to reimburse the Bank in respect of a Letter of Credit or a Banker’s Acceptance on each date on which a draft presented under a Letter of Credit is paid by the Bank or on the maturity date of a Banker’s Acceptance for the amount of (a) such Banker’s Acceptance or Letter of Credit draft so paid and (b) any taxes, fees, charges or other costs or expenses incurred by the Bank in connection with such payment. Each such payment shall be made to the Bank in Dollars and in immediately available funds. Interest shall be payable on any and all amounts remaining unpaid by the Borrower under this Section 2.01 (2) from the date such amounts become payable until payment in full (i) for the first three days at the per annum rate equal to the Prime Rate and (ii) thereafter, at the per annum rate equal to the Prime Based Rate plus 4.0%, and shall be payable by the Borrower on demand by the Bank.
The Commitment once reduced or terminated may not be reinstated.
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2.03. Notice and Manner of Borrowing for Loans. The Borrower shall give the Bank irrevocable written or telephonic notice of a request (effective upon receipt) for a Borrowing under this Agreement not later than 11:00 a.m. Philadelphia, Pennsylvania time at the office of Bank first shown above (1) on the same business day as each proposed Prime Loan and (2) at least 2 business days before each proposed LIBOR Loan. Each such notice shall specify (a) the Borrowing Date, which shall be a Business Day, (b) the amount of each Loan, (c) the Type of Loan, (d) in the case of a LIBOR Loan, the duration of the Interest Period applicable thereto, which period must correspond to one of the Interest Rate options, and (e) the purpose of the Loan. Notices received after 11:00 a.m. Philadelphia, Pennsylvania time at the office of Bank first shown above shall be deemed received on the next Business Day. Notwithstanding anything to the contrary contained herein: (i) If the Borrower shall have failed to designate the Type of Loan, the Borrower shall be deemed to have requested a Prime Loan; and (ii) If the Borrower shall have failed to select the duration of the Interest Period to be applicable to any LIBOR Loan, then the Borrower shall be deemed to have selected an Interest Period with a duration of one month.
Each telephonic request must be promptly confirmed in writing if requested by the Bank and by such method as the Bank may require. The Borrower authorizes the Bank to accept telephonic requests for a Loan, and the Bank shall be entitled to rely upon the authority of any person providing such request or instruction. Not later than 2:00 p.m. Philadelphia, Pennsylvania time on the date of such Loan and upon fulfillment of the applicable conditions set forth in Article III, the Bank will make such Loan available to the Borrower in immediately available funds by crediting the amount thereof to the Borrower’s account with the Bank. If Borrower subscribes to Bank’s cash management services and such services are applicable to this revolving line of credit, the terms of such service shall control the manner in which funds are transferred between the applicable demand deposit account and the line of credit for credit or debit to the line of credit.
Interest and fees, if any, shall be computed on the basis of a 360-day year for the actual number of days in the applicable period (“Actual/360 Computation”). The Actual/360 Computation determines the annual effective yield by taking the stated (nominal) rate for a year’s period and then dividing said rate by 360 to determine the daily periodic rate to be applied for each day in the applicable period. Application of the Actual/360 Computation produces an annualized effective rate exceeding the nominal rate.
If, at any time, the rate of interest, together with all amounts which constitute interest and which are reserved, charged or taken by Bank as compensation for fees, services or expenses incidental to the making, negotiating or collection of the Obligations evidenced hereby, shall be deemed by any competent court of law, governmental agency or tribunal to exceed the maximum rate of interest permitted to be charged by Bank to Borrower under applicable law, then, during such time as such rate of interest would be deemed excessive, that portion of each sum paid attributable to that portion of such interest rate that exceeds the maximum rate of interest so permitted shall be deemed a voluntary prepayment of principal. As used herein, the term ‘applicable law” shall mean the law in effect as of the date hereof provided, however, that in the event there is a change in
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the law which results in a higher permissible rate of interest, then this Agreement shall be governed by such new law as of its effective date.
2.06. Conversions and Renewals of Loans. The Borrower may elect from time to time to convert all or a part of one Type of Loan into another Type of Loan or to renew all or part of a Loan by giving the Bank notice at least one (1) Business Day before conversion into a Prime Loan, and at least two (2) Business Days before the conversion into or renewal of a LIBOR Loan, specifying: (1) the renewal or conversion date; (2) the amount of the Loan to be converted or renewed; (3) in the case of conversions, the Type of Loan to be converted into; and (4) in the case of renewals of or a conversion into LIBOR Loans, the duration of the Interest Period applicable thereto; provided that (a) the aggregate minimum principal amount of all Loans outstanding after a renewal or conversion thereof on a single date shall be Five Hundred Thousand Dollars ($500,000.00); and (b) a LIBOR Loan can be converted only on the last day of the Interest Period for such LIBOR Loan. All notices given under this Section shall be irrevocable and shall be given not later than 11:00 A.M. Philadelphia, Pennsylvania time on the day which is not less than the number of Business Days specified above for such notice. If the Borrower shall fail to give the Bank the notice as specified above for the renewal or conversion of a LIBOR Loan prior to the end of the Interest Period with respect thereto, such LIBOR Loan shall automatically be converted into a Prime Loan on the last day of the Interest Period for such LIBOR Loan. If any Default or Event of Default has occurred and the Bank does not otherwise elect to exercise any right to accelerate the Loans, a maturing LIBOR Loan shall automatically be continued as a Prime Loan. During the period(s) that the Loan is classified as a Prime Loan, the Borrower shall make regular payments of principal and interest when due and in amounts set forth in Section 2.07 hereof. Notwithstanding the foregoing, all Loans shall mature and become payable in full on the Termination Date.
(1) | For a Prime Loan at a rate equal to the Prime Based Rate. |
(2) | For a LIBOR Loan at a rate equal to the LIBOR Based Rate. |
Interest on the Loans shall be paid in immediately available funds at the Lending Office as follows:
(1) For each Prime Loan, in arrears, on the first Business Day of each month, commencing the first such day after such Loan and at maturity for such Loan; and
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(2) For each LIBOR Loan on the last day of the Interest Period with respect thereto.
All outstanding principal under the Loans and all accrued interest thereon shall be repaid on the Termination Date. All payments shall be applied first to the payment of all fees, expenses and other amounts due to the Bank (excluding principal and interest), then to accrued interest, and the balance on account of outstanding principal; provided, however, that after the occurrence of a Default or Event of Default payments will be applied to the obligations of Borrower to Bank as Bank determines in its sole discretion. Whenever any payment to be made under this Agreement or under the Note shall be stated to be due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of the payment of interest and fees in connection with such payment.
(1) For each Prime Loan at a rate equal to the Prime Based Rate plus four percent (4%);
(2) For each LIBOR Loan at a rate equal to the LIBOR Based Rate plus four percent (4%) from time of Default until the end of the then current Interest Period therefor, and thereafter at a rate equal to the Prime Based Rate plus four percent (4%).
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2.11. Method of Payment. The Borrower shall make each payment under this Agreement and under the Note not later than 1:00 p.m. Philadelphia, Pennsylvania, time on the date when due in lawful money of the United States to the Bank at the Lending Office for the account of the applicable Lending Office in immediately available funds. The Borrower hereby authorizes the Bank, if and to the extent payment is not made when due under this Agreement or under the Note, to charge automatically from time to time against any account of any Borrower with the Bank any amount so due. Borrower further certifies that Borrower holds legitimate ownership of such account(s) and preauthorizes this periodic debit as part of its right under said ownership. Until the Obligations are paid in full, each Borrower grants to Bank a security interest and continuing lien in all of Borrower’s accounts with Bank or any of its Affiliates.
(1) Quotations of interest rates for the relevant deposits referred to in the definition of LIBOR Based Rate are not being provided in the relevant amounts or for the relative maturities for purposes of determining the rate of interest on such Loan as provided in this Agreement; or
(2) The relevant rates of interest referred to in the definition of a LIBOR Based Rate, upon the basis of which the rate of interest for any such type of Loan is to be determined, do not accurately cover the cost to the Bank of making or maintaining such Type of Loans;
then the Bank shall forthwith give notice thereof to the Borrower, whereupon until the Bank notifies the Borrower that the circumstances giving rise to such suspension no longer exist, (a) the obligation of the Bank to
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make Loans shall be suspended; and (b) the Borrower shall repay in full the then outstanding principal amount of each LIBOR Loan together with accrued interest thereon on the last day of the then current Interest Period applicable to such LIBOR Loan.
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2.19. Bank’s Determination Conclusive; Notice of Amounts Due.
(1) Determinations by the Bank for purposes of Section 2.16, 2.17, and 2.18 shall be conclusive absent manifest error.
(2) The Bank will notify the Borrower of any event occurring after the date of this Agreement that will entitle the Bank to compensation pursuant to Section 2.16, 2.17 or 2.18 as promptly as practicable after it obtains knowledge thereof and determines to request such compensation. Said notice shall be in writing, shall specify the applicable Section or Sections of this Agreement to which it relates and shall set forth the amount or amounts then payable pursuant to such Sections. The Borrower shall pay the Bank the amount shown as due on such notice within 10 days after its receipt of the same.
(3) Failure on the part of a Bank to demand compensation pursuant to Section2.16, 2.17 or 2.18 shall not constitute a waiver of the Bank’s right to demand compensation with respect to such period or any other period.
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on the first Business Day of each succeeding quarter thereafter with a final payment due and payable on the Termination Date.
ARTICLE III: CONDITIONS PRECEDENT
3.01. Condition Precedent to First Loan, Banker’s Acceptance or Letter of Credit. The obligation of the Bank to make the first Loan and to accept the first Banker’s Acceptance or issue the first Letter of Credit to the Borrower is subject to the condition precedent that the Bank shall have received on or before the day of such action each of the following, in form and substance satisfactory to the Bank and its counsel:
(1) The Note duly executed by the Borrower.
(2) A certificate (dated the date of this Agreement) of the Secretary of the Borrower (a) setting forth and certifying as true and correct all corporate action taken by the Borrower, including resolutions of its Board of Directors, authorizing the execution, delivery, and performance of the Loan Documents to which it is a party and each other document to be delivered pursuant to this Agreement and (b) certifying the names and true signatures of the officers of the Borrower authorized to sign the Loan Documents to which it is a party and the other documents to be delivered by the Borrower under this Agreement;
(3) A copy of the Articles of Incorporation and the By-laws of each Borrower certified as true and correct by its Secretary.
(4) A Certificate of Good Standing for each Borrower from all jurisdictions in which such Borrower is required to qualify to conduct business.
(5) A Solvency Certificate executed by the President, Chief Financial Officer, or Treasurer of each Borrower and Guarantor.
(6) An Opinion executed by counsel to each Borrower dated as of Closing Date, in form and substance reasonably satisfactory to the Bank and its counsel.
(7) A copy of each and every authorization, permit, consent, and approval of and other action by, and notice to and filing with, every Governmental Authority and regulatory body which is required to be obtained or made by the Borrower for the due execution, delivery and performance of this Agreement and the other Loan Documents.
(8) The Pledge Agreement duly executed by Integrated Circuit Systems, Inc. granting to the Bank a pledge of and a security interest in 66 2/3% of all issued and outstanding voting shares (collectively, the
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“Shares”) of capital stock of Integrated Circuit Systems PTE, Ltd., together with such financing statements and other documents as the Bank may reasonably require.
(9) All original certificates and instruments representing or evidencing the Shares, in suitable form for transfer by delivery or accompanied by undated stock powers signed in blank, all in form and substance satisfactory to the Bank, evidencing the Shares.
(10) The payment of all legal and other costs incurred by the Bank in connection with the Loan and the transactions contemplated thereby.
(11) Evidence of Payment of Existing Debt.
(12) Such other and further documents as may be required reasonably by the Bank in order to consummate the transactions contemplated hereunder.
(1) The following statements shall be true and the Bank shall have received, if requested by the Bank, a certificate signed by a duly authorized officer of the Borrower dated the date of such Loan, Banker’s Acceptance, or Letter of Credit stating that
(a) The representations and warranties contained in Article IV of this Agreement are correct on and as of the date of such Loan, Banker’s Acceptance or Letter of Credit as though made on and as of such date; and
(b) No litigation (including, without limitation, derivative actions), arbitration proceedings or governmental proceedings not disclosed in writing by the Borrower to the Bank prior to the date of the last previous Loan, Banker’s Acceptance or Letter of Credit hereunder (or in the case of the initial Loan, Banker’s Acceptance or Letter of Credit, prior to the date of execution and delivery of this Agreement) shall be pending or known to be threatened against the Borrower, and no material development not so disclosed shall have occurred in any litigation (including, without limitation, derivative actions), arbitration proceedings or governmental proceedings so disclosed, which in the reasonable opinion of the Bank is likely to materially adversely affect the financial condition or business of the Borrower or impair the ability of the Borrower to perform its obligations under the Loan Documents to which it is a party; and
(c) No Default or Event of Default has occurred and is continuing, or would result from such Loan; and
(2) The Bank shall have received such other applications, approvals, opinions, or documents as the Bank may reasonably request.
ARTICLE IV: REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Bank that:
4.01. Incorporation, Good Standing, Due Qualification, Corporate Power and Authority. Each Borrower and each of its Subsidiaries is a corporation duly incorporated, validly existing, and in good standing under the
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laws of the jurisdiction of its incorporation; is duly qualified as a foreign corporation and in good standing under the laws of each other jurisdiction in which such qualification is required; and has the corporate power and authority to own its assets and to transact the business in which it is now engaged or proposed to be engaged.
4.02. Due Authorization; No Consents or Contravention. The execution, delivery, and performance by the Borrower of the Loan Documents to which it is a party have been duly authorized by all necessary corporate action and do not and will not (1) require any consent or approval of the shareholders of the Borrower; (2) contravene such corporation’s charter or bylaws; and, with respect to the Borrower, will not (3) violate any provision of or cause or result in a breach of or constitute a default under any law, rule, regulation (including, without limitation, Regulation U of the Board of Governors of the Federal Reserve System), order writ, judgment, injunction, decree, determination, or award presently in effect having applicability to the Borrower; (4) cause or result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease, or instrument to which the Borrower is a party or by which it or its properties may be bound or affected; (5) cause or result in or require the creation or imposition of any Lien, upon or with respect to any of the properties now owned or hereafter acquired by the Borrower except as contemplated by this Agreement; or (6) cause the Borrower to be in default under any such law, rule, regulation, order, writ, judgment, injunction, decree, determination, or award or any such indenture, agreement, lease, or instrument.
4.04. Financial Statements; Accuracy of Information.
(1) The most recent financial statements [consolidated and consolidating as to the Borrower and any Subsidiary] delivered to the Bank are true and correct and represent fairly their financial position as of the date thereof and the results of their operations or affairs for the period indicated, and show all known liabilities, direct or contingent, of Borrower and any Subsidiary as of the date thereof, all in accordance with GAAP consistently applied. Since the date of such financial statements, there has been no material adverse change in condition, financial or otherwise, of Borrower or any Subsidiary or in their business and properties and since such date, Borrower and any Subsidiary have not incurred, other than in the ordinary course of business, any indebtedness, liabilities, obligations or commitments, contingent or otherwise, except as otherwise reported to the Bank in writing. No information, exhibit, or report furnished by the Borrower or any Subsidiary to the Bank in connection with the negotiation of this Agreement contained any material misstatement of fact or omitted to state a material fact or any fact necessary to make the statement contained therein not materially misleading. All projections delivered by the Borrower and any Subsidiary to the Bank were made on a reasonable basis and in good faith. Except as disclosed to the Bank in writing by the Borrower, neither the Borrower nor any Subsidiary has any material contingent liabilities (including liabilities for taxes), unusual forward or long-term commitments or unrealized or anticipated losses from unfavorable commitments.
(2) All information, financial statements, exhibits, and reports furnished by the Borrower and any Subsidiary to the Bank in connection with this Agreement, the other Loan Documents and the borrowings contemplated hereby are, and all such information, financial statements, exhibits and reports hereafter furnished by the Borrower or any Subsidiary to the Bank will be true and correct in every material respect on the date furnished to the Bank, and no such information, financial statements, exhibit or report contains or will contain
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any material misstatement of fact or omits or will omit to state a material fact or any fact necessary to make the statement contained therein not materially misleading.
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Sections 4201 or 4204 of ERISA from a Multiemployer Plan; each Borrower and each ERISA Affiliate has met its minimum funding requirements under ERISA with respect to all of its Plans and the present fair market value of all Plan assets exceeds the present value of all vested benefits under each Plan, as determined on the most recent valuation date of the Plan and in accordance with the provisions of ERISA and the regulations thereunder for calculating the potential liability of the Borrower or any ERISA Affiliate to the PBGC or the Plan under Title IV of ERISA; and neither the Borrower nor any ERISA Affiliate has incurred any liability to the PBGC under ERISA.
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legally binding obligations of such parties enforceable in accordance with their respective terms, except as enforcement of this Agreement and the other Loan Documents may be limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights and except as enforcement is subject to general equitable principles.
4.19. Anti-Terrorism Statutes.
(a) A Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224;
(b) A Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224;
(c) A Person or entity with which the Bank is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Statute;
(d) A Person or entity that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order No. 13224;
(e) A Person or entity that is named as a “specially designated national” on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control at its official website or any replacement website or other replacement official publication of such list; or
(f) A person or entity who is an Affiliate of a Person or entity listed above.
Neither the Borrower nor or to the Borrower’s knowledge, any of its Affiliates or agents acting in any capacity in connection with the Loans made or the Letters of Credit issued hereunder or other transactions contemplated hereby (i) conducts any business with, or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order No. 13224.
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ARTICLE V: AFFIRMATIVE COVENANTS
So long as the Obligations shall remain unpaid or the Bank shall have any Commitment under this Agreement, the Borrower, except as otherwise agreed by the Bank in writing, shall (and shall cause any Subsidiary it may create or acquire to):
5.01. Maintenance of Existence. Preserve and maintain its corporate existence and good standing in the jurisdiction of its incorporation, and qualify and remain qualified as a foreign corporation in each jurisdiction in which such qualification is required.
5.02. Maintenance of Records. Keep accurate records and books of account in which complete entries will be made in accordance with GAAP consistently applied, reflecting all financial transactions of the Borrower and any Subsidiary.
5.03. Maintenance of Properties. Maintain, keep, and preserve all of its properties (tangible and intangible) necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear and tear excepted.
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5.08. Reporting Requirements. Furnish to the Bank:
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Default or Event of Default has occurred and is continuing, a statement as to the nature thereof and the action which is proposed to be taken with respect thereto, and (b) reflecting the calculation of, and demonstrating compliance with, the covenants contained in Article VII.
(10) Reports to other creditors. Promptly after the furnishing thereof, copies of any statements or report furnished to any other party pursuant to the terms of any indenture, loan, credit, or similar agreement and not otherwise required to be furnished to the Bank pursuant to any other clause of this Section.
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to the Bank or (2) in the sole discretion of the Bank, upon the request of the Borrower, to join this Agreement as a Borrower in accordance with documents and instruments satisfactory to the Bank.
ARTICLE VI: NEGATIVE COVENANTS
So long as the Obligations shall remain unpaid or the Bank shall have any Commitment under this Agreement, the Borrower shall not:
(1) Liens in favor of the Bank;
(2) Liens for taxes or assessments or other government charges or levies if not yet due and payable or, if due and payable, if they are being contested in good faith by appropriate proceedings promptly initiated and diligently conducted and for which appropriate reserves are maintained and so long as no foreclosure, distraint, sale or other similar proceedings shall have been commenced with respect thereto;
(3) Liens imposed by law, such as mechanics’, materialmen’s, landlords’, warehousemen’s, and carriers’ Liens, and other similar Liens, securing obligations incurred in the ordinary course of business which are not past due for more than thirty (30) days or which are being contested in good faith by appropriate proceedings promptly initiated and diligently conducted and for which appropriate reserves have been established and so long as foreclosure, distraint, sale or other similar proceedings shall not have been commenced with respect thereto;
(4) Liens under workmen’s compensation, unemployment insurance, Social Security, or similar legislation;
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(5) Liens, deposits, or pledges to secure the performance of bids, tenders, contracts (other than contracts for the payment of money), leases (permitted under the terms of this Agreement), or public or statutory obligations; surety, indemnity, performance, or other similar bonds; or other similar obligations arising in the ordinary course of business;
(6) Liens existing on the date hereof and referred to in the Financial Statements referred to herein securing obligations in the amounts and owing to the creditors as disclosed to the Bank in writing, but not the extension of the Lien to other property, or the granting of the Lien to secure the extension of the maturity, refunding, or modification of such obligation, in whole or in part;
(7) Judgment and other similar Liens arising in connection with court proceedings, provided the execution or other enforcement of such Liens is effectively stayed and the claims secured thereby are being actively contested in good faith and by appropriate proceedings promptly initiated and diligently conducted;
(8) Easements, rights-of-way, restrictions, and other similar encumbrances which, in the aggregate, do not materially interfere with the occupation, use, and enjoyment by the Borrower or any Subsidiary of the property or assets encumbered thereby in the normal course of its business or materially impair the value of the property subject thereto;
(9) Liens securing obligations of a Subsidiary to the Borrower or another Subsidiary; and
(10) Purchase-money Liens on any property hereafter acquired or the assumption of any Lien on property existing at the time of such acquisition, or a Lien incurred in connection with any conditional sale or other title retention agreement or a Capital Lease; provided that
(a) Any property subject to any of the foregoing is acquired by the Borrower or any Subsidiary in the respective business and the Lien on any such property is created contemporaneously with such acquisition;
(b) The obligation secured by any Lien so created, assumed, or existing shall not exceed one hundred (100%) of the cost as of the time of acquisition of the property covered thereby to the Borrower or Subsidiary acquiring the same;
(c) Each such Lien shall attach only to the property so acquired and fixed improvements thereon;
(d) The Debt secured by all such Liens shall not exceed Five Million Dollars ($5,000,000.00) at any time outstanding in the aggregate; and
(e) The obligation secured by such Lien is permitted by the provisions of Section 6.02 and the related expenditure is not in violation of any financial covenant of the Borrower to the Bank.
(1) Debt of the Borrower under this Agreement or the Note or any Swap Agreements with the Bank;
(2) Debt of Borrower to any Person(s) (other than the Bank) which, in the aggregate, does not exceed $10,000,000.00 at any one time outstanding;
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(3) Debt existing on the date hereof and disclosed in the Borrower’s financial statements referred to in Section 4.04 or otherwise disclosed to the Bank in writing prior to the date hereof, but no renewals, extensions, or refinancings thereof;
(4) Debt of the Borrower subordinated on terms satisfactory to the Bank to the Borrower’s obligations under this Agreement and the Note;
(5) Debt of the Borrower to any Subsidiary or of any Subsidiary to the Borrower or another Subsidiary;
(6) Accounts payable to trade creditors for goods or services which are not aged more than 90 days from billing date and current operating liabilities (other than for borrowed money) which are not more than 90 days past due, in each case incurred in the ordinary course of business and paid within the specified time, unless contested in good faith and by appropriate proceedings; and
(7) Debt of the Borrower secured by purchase-money Liens permitted by Section 6.01(10); provided that all exceptions set forth in Sections 6.02 (2), (3), (4), (5), (6) and (7) shall be allowed only if such action would not cause the Borrower to violate any financial covenant set forth in Article VII hereof assuming testing of such financial covenant upon the occurrence of such action.
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without limitation, shares of stock and indebtedness of Subsidiaries, receivables, and leasehold interests), except: (1) for inventory disposed of in the ordinary course of business; (2) the sale or other disposition of assets no longer used or useful in the conduct of its business; and (3) that any Subsidiary may sell, lease, assign or otherwise transfer its assets to the Borrower.
6.09. Transaction with Affiliate. Enter into any transaction, including, without limitation, the purchase, sale, or exchange of property or the rendering of any service, with any Affiliate, or permit any Subsidiary to enter into any transaction, including, without limitation, the purchase, sale, or exchange of property or the rendering of any service, with any Affiliate, except in the ordinary course of and pursuant to the reasonable requirements of the Borrower’s or such Subsidiary’s business and upon fair and reasonable terms no less favorable to the Borrower or such Subsidiary than would obtain in a comparable arm’s length transaction with a Person not an Affiliate.
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ARTICLE VII: FINANCIAL COVENANTS
Borrower agrees to the following provisions from the date hereof until final payment in full of the Loans, unless Bank shall otherwise consent in writing, and all financial covenants shall be calculated on a consolidated basis, using the financial information for the Borrower, its Subsidiaries, Affiliates and its holding or parent company, as applicable:
ARTICLE VIII: EVENTS OF DEFAULT
(1) The failure of any Obligor to pay any Obligation when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise).
(2) If any representation, signature, warranty, certificate, opinion, financial statement or other information made or deemed made by any Obligor to the Bank at any time in any Loan Document or otherwise shall prove to have been incorrect, incomplete, or misleading in any material respect on or as of the date made or deemed made.
(3) Any Obligor fails to perform or observe any term, covenant, agreement or condition contained in, or there shall occur any default under or as defined in, (i) any agreement with any other Person (other than either of the Bank) applicable to any Obligor or by which any of them is bound involving a liability in an amount equal to or greater than One Million Dollars ($1,000,000.00), which shall not be remedied within the period of
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time (if any) within which such other agreement permits such default to be remedied, whether or not such default is waived in writing by the other party thereto, or (ii) any existing or future agreement any Obligor has with the Bank.
(4) The validity, binding nature of, or enforceability of any material term or provision of any of the Loan Documents is disputed by, on behalf of, or in the right or name of any Obligor or any material term or provision of any such Loan Document is found or declared to be invalid, avoidable, or non-enforceable by any court of competent jurisdiction.
(5) If any Obligor shall in any material respect fail to comply with any statute, rule, regulation, ordinance, order, law or judicial decree regarding said Obligor or any of its property or assets.
(6) Any Obligor (a) shall generally not pay, or shall be unable to pay, or shall admit in writing its inability to pay its debts as such debts become due; or (b) shall make an assignment for the benefit of creditors, or petition or apply to any tribunal for the appointment of a custodian, receiver, or trustee for it or a substantial part of its assets; or (c) shall commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, or liquidation law or statute of any jurisdiction, whether now or hereafter in effect; or (d) shall have had any such petition or application filed or any such proceeding commenced against it in which an order for relief is entered or an adjudication for relief or appointment is made and such involuntary case or proceeding shall remain undismissed and unstayed for a period of sixty (60) days; or (e) shall take any corporate action indicating its consent to, approval of, or acquiescence in any such petition, application, proceeding, or order for relief or the appointment of a custodian, receiver, or trustee for all or any substantial part of its properties.
(7) (a) A judgment or lien is entered, or an order or orders of any judicial authority or governmental entity is issued, against any Obligor or any Subsidiary (such judgment(s), lien(s) and order(s) are hereinafter collectively referred to as the “Judgment”) (i) for the payment of money, which Judgment, in the aggregate, exceeds Five Million Dollars ($5,000,000.00) outstanding at any one time; or (ii) for injunctive or declaratory relief which would have a material adverse effect on the ability of any Obligor or Subsidiary to conduct its business, or (b) the issuance of any execution, levy, attachment or garnishment proceeding against any Obligor or any property in which any Obligor has an interest.
(8) The dissolution, merger, consolidation, reorganization or change of control of any Obligor which is a corporation, partnership, or other entity, without the prior written consent of the Bank.
(9) If any Obligor shall fail to remit promptly when due to the appropriate governmental agency or authorized depository any amount due, including but not limited to any amount collected or withheld from any employee of any Obligor or Subsidiary for payroll taxes, social security payments or similar payroll deduction, unless such payment is being contested in good faith, by appropriate proceedings diligently pursued, and Obligor or Subsidiary shall have set aside on its books adequate reserves with respect thereto, and so long as no foreclosure or other such proceeding shall have commenced against Obligor or Subsidiary.
(10) Any change in the financial condition or business operation of any Obligor that causes the Bank reasonably to believe that the performance of any of the Obligations is impaired or doubtful.
The Borrower agrees that the election by Bank of any right or remedy provided to it upon the occurrence of any Default shall be conclusively presumed to be done in good faith by Bank notwithstanding any prior course of
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dealing or otherwise, including without limitation the acceptance by Bank of any partial payments on any Obligation.
8.02. Remedies of Bank. Upon the occurrence of:
(1) A Default specified in Section 8.01 (6) or 8.01 (7) (b) of this Agreement, the Commitment (including without limitation the obligations of the Bank to issue Letters of Credit or to accept Banker’s Acceptances) shall immediately terminate automatically and all Obligations (other than Obligations under any Swap Agreements between Borrower and Bank, or its affiliates, which shall be governed by the default and termination provisions of said Swap Agreements), including, without limitation, the obligation of the Borrower to repay any outstanding Banker’s Acceptances or Letters of Credit, whether or not the beneficiaries of the then outstanding Banker’s Acceptances or Letters of Credit shall have presented the documents required thereunder, shall immediately become due and payable;
(2) An Event of Default other than a Default specified in Section 8.01 (6) or 8.01 (7) (b), the Bank, without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived by the Borrower, may take any one or more of the following actions:
(a) Terminate the Commitment;
(b) Declare all or any of the Obligations (other than Obligations under any Swap Agreements between Borrower and Bank, or its affiliates, which shall be governed by the default and termination provisions of said Swap Agreements), to be due and payable immediately; and presentment, demand, protest and all other notices of any kind in connection with any Event of Default or acceleration are hereby expressly waived by the Borrower;
(c) Increase the rate of interest on the Obligations to the applicable Default Rate;
(d) Take such other remedies as may be available to the Bank under applicable law.
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executed, such documents, including without limitation, amendments to this Agreement and to any other documents, instruments and agreements executed in connection herewith as Bank shall deem necessary to effect the foregoing. In addition, at the request of Bank and any such Assignee, Borrower shall issue one or more new promissory notes as applicable, to any such Assignee and, if Bank has retained any of its rights and obligations hereunder following such assignment to Bank which new promissory notes shall be issued in replacement of; but not in discharge of, the liability evidenced by the promissory note held by Bank prior to such assignment and shall reflect the amount of the respective commitments and loans held by such Assignee and Bank after giving effect to such assignment. Upon the execution and delivery of appropriate assignment documentation, amendments and any other documentation required by Bank in connection with such assignment and the payment by Assignee of the purchase price agreed to by Bank and such Assignee, such Assignee shall be a party to this Agreement and shall have all of the rights and obligations of Bank hereunder (and under any and all other guaranties, documents, instruments and agreements executed in connection herewith) to the extent that such rights and obligations have been assigned by Bank pursuant to the assignment documentation between Bank and such Assignee, and Bank shall be released from its obligations hereunder and thereunder to a corresponding extent. Bank shall also have the unrestricted right at any time and from time to time, and without the consent of or notice to Borrower or any Guarantor to grant to one or more banks or other financial institutions (each, a “Participant’) participating interests in Bank’s obligation to lend hereunder and/or any or all of the loans held by Bank hereunder. In the event of any such grant by Bank of a participating interest to a Participant, whether or not upon notice to Borrower, Bank shall remain responsible for the performance of its obligations hereunder and Borrower shall continue to deal solely and directly with Bank in connection with Bank’s rights and obligations hereunder. Bank may furnish any information concerning Borrower in its possession from time to time to prospective Assignees or Participants, provided that Bank shall require any such prospective Assignees or Participants to agree in writing to maintain the confidentiality of such information. The foregoing is not to be understood as a limitation upon any other right or duty the Bank may have to make any disclosure to anyone under any applicable law. No action by the Bank hereunder shall be deemed to change any of the financial terms or conditions set forth in any Loan Document without the express written consent of the Borrower.
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or as to any subject from any officer of the Bank unless and until such representation, modification or assurance is set forth in writing and signed by such officer of the Bank.
9.09. Governing Law and Consent to Jurisdiction. This Agreement and the other Loan Documents have been executed, delivered and accepted in, and shall be deemed to have been made in, Pennsylvania and shall be governed by and construed and enforced and construed as if drafted equally by all parties hereto in accordance with the laws of the Commonwealth of Pennsylvania (without regard to the conflicts of law provisions thereof). The Borrower hereby consents to the nonexclusive jurisdiction of any state court within Xxxxxxxxxx County, Pennsylvania or any federal court located within the Eastern District of the Commonwealth of Pennsylvania for any proceeding instituted hereunder or under any of the other Loan Documents, or arising out of or in connection with this Agreement or any of the other Loan Documents, or any proceeding to which the Bank or the Borrower is a party, including any actions based upon, arising out of, or in connection with, any course of conduct, course of dealing, statement (whether oral or written) or actions of the Bank or the Borrower. The Borrower irrevocably agrees to be bound (subject to any available right of appeal) by any judgment rendered or relief granted thereby and further waives any objection that it may have based on lack of jurisdiction or improper venue or forum non-conveniens to the conduct of any such proceeding. The Borrower consents that all service of process be made by registered or certified mail directed to it at its address set forth herein above, and service so made shall be deemed to be completed upon the earlier of actual receipt thereof or three (3) days after deposit in the United States mails, return receipt requested, proper postage prepaid and properly addressed. Nothing in this Agreement shall be deemed or operate to affect the rights of the Bank to serve legal process or to bring any action permitted by law against any Obligor or involving any Collateral in the appropriate court of any other appropriate jurisdiction or forum.
9.11 Survival of Agreement pursuant hereto shall survive the making by the Bank of the Loans or any Letter of Credit and the execution and delivery to the Bank of the Note and shall continue in full force and effect so long as any Obligation is outstanding and unpaid.
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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or assignment or enforcement thereof shall release Bank from its obligations under any of the Loan Documents.
“BANK” |
“BORROWER” | |||||||
FLEET NATIONAL BANK |
INTEGRATED CIRCUIT SYSTEMS, INC. | |||||||
By: | /s/ XXXXXXX X. XXXXXXX | By: | /s/ XXXXXXX XXXX | |||||
Xxxxxxx X. Xxxxxxx, Senior Vice President | Xxxxxxx Xxxx, Chief Financial Officer | |||||||
Attest: | /s/ XXXXXXX XXXX | |||||||
Xxxxxxx Xxxx, Secretary | ||||||||
[SEAL] | ||||||||
ICST, INC. |
ICS TECHNOLOGIES, INC. | |||||||
By: | /s/ XXXXXXX XXXX | By: | /s/ XXXXXXX XXXX | |||||
Xxxxxxx Xxxx, Chief Financial Officer | Xxxxxxx Xxxx, Treasurer | |||||||
Attest: | /s/ XXXXXXX XXXX | Attest: | /s/ XXXXXXX XXXX | |||||
Xxxxxxx Xxxx, Secretary | Xxxxxxx Xxxx, Secretary | |||||||
[SEAL] | [SEAL] |
MICRO NETWORKS CORPORATION | ||
By: | /s/ XXXX X. XXX | |
Xxxx X. Xxx, President | ||
Attest: | /s/ XXXXXXX XXXX | |
Xxxxxxx Xxxx, Secretary | ||
[SEAL] |
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