Exhibit 4.1
CREDIT AND SECURITY AGREEMENT
Dated as of March 31, 2003
Ramtron International Corporation, a Delaware corporation ("Ramtron"),
Enhanced Memory Systems, Inc., a Delaware corporation ("EMS"), and Mushkin
Inc., a Colorado corporation ("Mushkin" and, together with Ramtron and EMS,
the "Borrowers"), and Xxxxx Fargo Business Credit, Inc., a Minnesota
corporation (the "Lender"), hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. For all purposes of this Agreement, except as
otherwise expressly provided, the following terms shall have the meanings
assigned to them in this Section or in the Section referenced after such
term:
"Accounts" means all of the Borrowers' accounts, as such term is defined
in the UCC, including each and every right of each Borrower to the
payment of money, whether such right to payment now exists or hereafter
arises, whether such right to payment arises out of a sale, lease or
other disposition of goods or other property, out of a rendering of
services, out of a loan, out of the overpayment of taxes or other
liabilities, or otherwise arises under any contract or agreement,
whether such right to payment is created, generated or earned by any
Borrower or by some other person who subsequently transfers such
person's interest to any Borrower, whether such right to payment is or
is not already earned by performance, and howsoever such right to
payment may be evidenced, together with all other rights and interests
(including all Liens) which any Borrower may at any time have by law or
agreement against any account debtor or other obligor obligated to make
any such payment or against any property of such account debtor or other
obligor; all including but not limited to all present and future
accounts, contract rights, loans and obligations receivable, chattel
papers, bonds, notes and other debt instruments, tax refunds and rights
to payment in the nature of general intangibles; provided, however, that
"Accounts" shall not include any rights to payment arising out of a
sale, lease, or other disposition of any Equipment or Intellectual
Property Rights, or of any other goods or other property that is not
otherwise included in the definition of Collateral.
"Advance" means a Revolving Advance.
"Affiliate" or "Affiliates" means any Person controlled by, controlling
or under common control with any Borrower, including any Subsidiary of
any Borrower. For purposes of this definition, "control," when used with
respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise.
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"Agreement" means this Credit and Security Agreement.
"Availability" as to any Borrower means at any time the difference of
(i) such Borrower's Borrowing Base and (ii) the outstanding principal
balance of such Borrower's Revolving Note.
"Available Cash" means the sum of Availability plus cash on hand, as
determined in accordance with GAAP.
"Banking Day" means a day on which the Federal Reserve Bank of New York
is open for business.
"Base Rate" means the rate of interest per annum publicly announced from
time to time by Xxxxx Fargo Bank National Association at its principal
office in San Francisco as its "prime rate", with the understanding that
the "prime rate" is one of Xxxxx Fargo's base rates (not necessarily the
lowest of such rates) and serves as the basis upon which effective rates
of interest are calculated for loans making reference thereto.
"Book Net Worth" means the aggregate of the common and preferred
stockholders' equity in the Borrower, determined in accordance with
GAAP, but calculated without regard to any change in the valuation of
goodwill made in accordance with FASB Accounting Standard 142.
"Borrowing Base" as of any date of determination for any Borrower means
at any time an amount equal to the lesser of:
(a) the Maximum Line; or
(b) subject to change from time to time in the Lender's sole
discretion, with respect to Ramtron and EMS, 80% of such Borrower's
Eligible Accounts; and with respect to Mushkin, 70% of such
Borrower's Eligible Accounts.
"Capital Expenditures" means for a period, any unfinanced expenditure of
money during such period for the purchase or other acquisition of any
capital asset and any other amounts, whether payable currently or in the
future, which would in accordance with GAAP, be set forth as capital
expenditures on the consolidated statement of cash flows of Ramtron for
such period.
"Change of Control" means the occurrence of any of the following events:
(i) any Person or "group" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934), other than Ramtron
with respect to EMS and Mushkin, is or becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, except that a Person will be deemed to have
"beneficial ownership" of all securities that such Person has the
right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of more
than 50% of the voting power of all classes of voting equity
interests of any Borrower.
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(ii) During any consecutive two-year period, individuals who at the
beginning of such period constituted the board of Directors of any
Borrower (together with any new Directors whose election to such
board of Directors, or whose nomination for election by the owners
of any Borrower, was approved by a vote of 66-2/3% of the Directors
then still in office who were either Directors at the beginning of
such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a
majority of the board of Directors of such Borrower then in office.
"Collateral" means all of the Borrowers' Accounts, chattel paper,
deposit accounts, documents, General Intangibles (other than
Intellectual Property Rights), goods, instruments, Inventory, Investment
Property, letter-of-credit rights, letters of credit, all sums on
deposit in any Collateral Account, and any items in any Lockbox;
together with (i) all substitutions and replacements for and products of
any of the foregoing; (ii) in the case of all goods, all accessions;
(iii) all warehouse receipts, bills of lading and other documents of
title now or hereafter covering such goods; (iv) all collateral subject
to the Lien of any Security Document; (v) any money, or other assets of
the Borrower that now or hereafter come into the possession, custody, or
control of the Lender; and (vi) proceeds of any and all of the
foregoing; provided, however, that "Collateral" shall not include any
European Accounts or any general intangibles, contract rights, choses of
action, causes of action or other intangible personal property of
Ramtron of every kind and nature now owned in connection with the
European Accounts or hereafter acquired in connection with the European
Accounts or any additions or accessions to, substitutions for or any
replacements, products or proceeds thereof.
"Collateral Account" means a "Lender Account" as defined in any Lockbox
and Collection Account Agreement.
"Commitment" means the Lender's commitment to make Advances to the
Borrowers pursuant to Article II.
"Constituent Documents" means with respect to any Person, as applicable,
such Person's certificate of incorporation, articles of incorporation,
by-laws, certificate of formation, articles of organization, limited
liability company agreement, management agreement, operating agreement,
shareholder agreement, partnership agreement or similar document or
agreement governing such Person's existence, organization or management
or concerning disposition of ownership interests of such Person or
voting rights among such Person's owners.
"Credit Facility" means the credit facility being made available to the
Borrower by the Lender under Article II.
"Default" means an event that, with giving of notice or passage of time
or both, would constitute an Event of Default.
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"Default Period" means any period of time beginning on the day an Event
of Default occurs and ending on the date the Lender notifies the
Borrowers in writing that such Event of Default has been waived.
"Default Rate" means an annual interest rate equal to three percent (3%)
over the Floating Rate, which interest rate shall change when and as the
Floating Rate changes.
"Deposit Account Control Agreements" has the meaning given in Section
4.1(e).
"Director" of a Borrower means a director if such Borrower is a
corporation, a governor, manager, or managing member (as applicable) if
such Borrower is a limited liability company, or a general partner if
such Borrower is a partnership.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is a member of a group which includes the Borrower
and which is treated as a single employer under Section 414 of the IRC.
"Eligible Accounts" for a Borrower means all unpaid Accounts of such
Borrower arising from the sale or lease of goods or the performance of
services, net of any credits, but excluding any such Accounts having any
of the following characteristics:
(i) That portion of Accounts (A) unpaid more than 60 days past the
stated due date or (B) unpaid more than 90 days past the invoice
date (except in the case of Accounts owing from China National
Machinery, in which case such limit shall be 120 days past the
invoice date);
(ii) That portion of Accounts that is (A) disputed or (B) subject to
a claim of offset or a contra account;
(iii) That portion of Accounts not yet earned by the final delivery of
goods or rendition of services, as applicable, by the Borrower to
the customer, including progress xxxxxxxx, and that portion of
Accounts for which an invoice has not been sent to the applicable
account debtor;
(iv) Accounts constituting (i) proceeds of copyrightable material
unless such copyrightable material shall have been registered
with the United States Copyright Office, or (ii) proceeds of
patentable inventions unless such patentable inventions have been
registered with the United States Patent and Trademark Office;
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(v) Accounts owed by any unit of government, whether foreign or
domestic (provided, however, that there shall be included in
Eligible Accounts that portion of Accounts owed by such units of
government for which the Borrower has provided evidence
satisfactory to the Lender that (A) the Lender has a first
priority perfected security interest and (B) such Accounts may be
enforced by the Lender directly against such unit of government
under all applicable laws);
(vi) Accounts owed by an account debtor located outside the United
States which are not (A) backed by a bank letter of credit naming
the Lender as beneficiary or assigned to the Lender, in the
Lender's possession or control, and with respect to which a
control agreement concerning the letter-of-credit rights is in
effect, and acceptable to the Lender in all respects, in its sole
discretion, or (B) covered by a foreign receivables insurance
policy acceptable to the Lender in its sole discretion and
assigned to the Lender;
(vii) Accounts owed by an account debtor that is insolvent, the subject
of bankruptcy proceedings or has gone out of business;
(viii) Accounts owed by an Owner, Subsidiary, Affiliate, Officer or
employee of the Borrower;
(ix) Accounts not subject to a duly perfected security interest in the
Lender's favor or which are subject to any Lien in favor of any
Person other than the Lender, including without limitation all
European Accounts;
(x) That portion of Accounts that has been restructured, extended,
amended or modified;
(xi) That portion of Accounts that constitutes advertising, finance
charges, service charges or sales or excise taxes;
(xii) Accounts owed by an account debtor to the Borrowers, regardless
of whether otherwise eligible, to the extent that the balance of
such Accounts exceeds 15% of the aggregate amount of all Accounts
of the Borrowers; except that in the case of Accounts covered by
a foreign receivables insurance policy acceptable to the Lender
in its sole discretion, such limit shall be equal to the special
credit limit set under such policy;
(xiii) Accounts owed by an account debtor, regardless of whether
otherwise eligible, if 10% or more of the total amount due to any
Borrower under Accounts from such debtor is ineligible under
clauses (i), (ii)(A) or (x) above; and
(xiv) Accounts, or portions thereof, otherwise deemed ineligible by the
Lender in its sole discretion.
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"EMS Revolving Note" means the revolving promissory note of EMS and
Ramtron, payable to the order of the Lender in substantially the form of
Exhibit B hereto.
"Environmental Law" means any federal, state, local or other
governmental statute, regulation, law or ordinance dealing with the
protection of human health or the environment.
"Equipment" means all of the Borrower's equipment, as such term is
defined in the UCC, whether now owned or hereafter acquired, including
but not limited to all present and future machinery, vehicles,
furniture, fixtures, manufacturing equipment, shop equipment, office and
recordkeeping equipment, parts, tools, supplies, and including
specifically the goods described in any equipment schedule or list
herewith or hereafter furnished to the Lender by the Borrower.
"European Accounts" means all accounts, receivables, contract rights,
chattel paper, instruments and documents, and all rights to payment, but
only to the extent such accounts, receivables, contract rights, chattel
paper, instruments, documents, and rights to payment arise out of sales
by the Borrower for which the original invoice shows a "xxxx to" or
"ship to" address in any of the countries listed in Exhibit F.
"Event of Default" has the meaning specified in Section 7.1.
"Financial Covenants" means the covenants set forth in Section 6.2.
"Floating Rate" means an annual interest rate equal to the sum of the
Base Rate plus one half of one percent (0.50%), which interest rate
shall change when and as the Base Rate changes.
"Funding Date" has the meaning given in Section 2.1.
"GAAP" means generally accepted accounting principles in the United
States of America, applied on a basis consistent with the accounting
practices applied in the financial statements described in Section 5.6.
"General Intangibles" means all of the Borrowers' general intangibles,
as such term is defined in the UCC, whether now owned or hereafter
acquired, including all present and future Intellectual Property Rights,
customer or supplier lists and contracts, manuals, operating
instructions, permits, franchises, the right to use each Borrower's
name, and the goodwill of each Borrower's business.
"Guarantors" means Mushkin, EMS, and any other Person that now or
hereafter guaranties the Obligations.
"Hazardous Substances" means pollutants, contaminants, hazardous
substances, hazardous wastes, petroleum and fractions thereof, and all
other chemicals, wastes, substances and materials listed in, regulated
by or identified in any Environmental Law.
"IRC" means the Internal Revenue Code of 1986.
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"Infringe" means, when used with respect to Intellectual Property
Rights, any infringement or other violation of Intellectual Property
Rights.
"Intellectual Property Rights" means all actual or prospective rights
arising in connection with any intellectual property or other
proprietary rights, including all rights arising in connection with
copyrights, patents, service marks, trade dress, trade secrets,
trademarks, trade names or mask works.
"Intercreditor Agreements" means the Intercreditor Agreement of even
date herewith by and between the Lender and Infineon Technologies AG and
the Intercreditor Agreement of even date herewith by and among the
Lender, Xxxxxxxx Capital Corp., and Halifax Fund, L.P.
"Inventory" means all of the Borrowers' inventory, as such term is
defined in the UCC, whether now owned or hereafter acquired, whether
consisting of whole goods, spare parts or components, supplies or
materials, whether acquired, held or furnished for sale, for lease or
under service contracts or for manufacture or processing, and wherever
located.
"Investment Property" means all of the Borrowers' investment property,
as such term is defined in the UCC, whether now owned or hereafter
acquired, including but not limited to all securities, security
entitlements, securities accounts, commodity contracts, commodity
accounts, stocks, bonds, mutual fund shares, money market shares and
U.S. Government securities.
"Licensed Intellectual Property" has the meaning given in
Section 5.11(c).
"Lien" means any security interest, mortgage, deed of trust, pledge,
lien, charge, encumbrance, title retention agreement or analogous
instrument or device, including the interest of each lessor under any
capitalized lease and the interest of any bondsman under any payment or
performance bond, in, of or on any assets or properties of a Person,
whether now owned or hereafter acquired and whether arising by agreement
or operation of law.
"Loan Documents" means this Agreement, the Notes, and the Security
Documents.
"Lockbox" means each Lockbox, as such term is defined in the separate
Lockbox and Collection Account Agreements.
"Lockbox and Collection Account Agreement" means each of the separate
Lockbox and Collection Account Agreements by and among each Borrower,
Xxxxx Fargo Bank, N.A., and the Lender, of even date herewith.
"Material Adverse Effect" means any of the following:
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(i) a material adverse effect on the business, operations, results of
operations, prospects, assets, liabilities or financial condition
of any Borrower;
(ii) a material adverse effect on the ability of any Borrower to
perform its obligations under the Loan Documents;
(iii) a material adverse effect on the ability of the Lender to enforce
the Obligations or to realize the intended benefits of the
Security Documents, including a material adverse effect on the
validity or enforceability of any Loan Document or of any rights
against any Guarantor, or on the status, existence, perfection,
priority (subject to Permitted Liens) or enforceability of any
Lien securing payment or performance of the Obligations; or
(iv) any claim against any Borrower or threat of litigation (other
than any existing claims or litigation in respect of patents set
forth on Schedule 5.7) which if determined adversely to such
Borrower would cause such Borrower to be liable to pay an amount
exceeding $250,000 or would be an event described in clauses (i),
(ii) and (iii) above.
"Maturity Date" means March 31, 2006.
"Maximum Line" means $3,000,000 unless said amount is reduced pursuant
to Section 2.8, in which event it means such lower amount.
"Minimum Interest Charge" has the meaning given in Section 2.4(b).
"Multiemployer Plan" means a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) to which the Borrower or any ERISA Affiliate
contributes or is obligated to contribute.
"Mushkin Revolving Note" means the revolving promissory note of Mushkin
and Ramtron, payable to the order of the Lender in substantially the
form of Exhibit C hereto.
"Net Income" means pre-tax net income excluding extraordinary gains, as
determined in accordance with GAAP but calculated without regard to any
change in the valuation of goodwill made in accordance with FASB
Accounting Standard 142.
"Note" means a Revolving Note.
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"Obligations" means the Notes and each and every other debt, liability
and obligation of every type and description which any Borrower may now
or at any time hereafter owe to the Lender, whether such debt, liability
or obligation now exists or is hereafter created or incurred, whether it
arises in a transaction involving the Lender alone or in a transaction
involving other creditors of any Borrower, and whether it is direct or
indirect, due or to become due, absolute or contingent, primary or
secondary, liquidated or unliquidated, or sole, joint, several or joint
and several, and including all indebtedness of any Borrower arising
under any Loan Document or guaranty between such Borrower and the
Lender, whether now in effect or hereafter entered into.
"Officer" means with respect to any Borrower, an officer if such
Borrower is a corporation, an officer or manager if such Borrower is a
limited liability company, or a partner if such Borrower is a
partnership.
"Organizational Guarantors" means each Guarantor that is not an
individual.
"Owned Intellectual Property" has the meaning given in Section 5.11(a).
"Owner" means with respect to any Borrower, each Person having legal or
beneficial title to an ownership interest in such Borrower or a right to
acquire such an interest.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
ERISA) maintained for employees of any Borrower or any ERISA Affiliate
and covered by Title IV of ERISA.
"Permitted Lien" has the meaning given in Section 6.3(a).
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) maintained for employees of any Borrower or any ERISA Affiliate.
"Premises" means all premises where any Borrower conducts its business
and has any rights of possession, including the premises described in
Exhibit E attached hereto.
"Ramtron Revolving Note" means the revolving promissory note of Ramtron,
payable to the order of the Lender in substantially the form of Exhibit
A hereto.
"Reportable Event" means a reportable event (as defined in Section 4043
of ERISA), other than an event for which the 30-day notice requirement
under ERISA has been waived in regulations issued by the Pension Benefit
Guaranty Corporation.
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"Revolving Advance" has the meaning given in Section 2.1.
"Revolving Notes" means the Ramtron Revolving Note, the EMS Revolving
Note, and the Mushkin Revolving Note.
"Security Documents" means this Agreement, each Lockbox and Collection
Account Agreement, each Deposit Account Control Agreement, and any other
document delivered to the Lender from time to time to secure the
Obligations.
"Security Interest" has the meaning given in Section 3.1.
"Significant Owner" means with respect to any Borrower, each Person
having legal or beneficial title to an ownership interest in such
Borrower or a right to acquire such an interest, all of which in the
aggregate now constitutes or, on a fully exercised basis, would result
in, an ownership of more than 5% of the issued and outstanding ownership
interests in such Borrower.
"Subordination Agreement" means any subordination agreement accepted by
the Lender from time to time.
"Subsidiary" means any entity of which more than 50% of the outstanding
ownership interests having general voting power under ordinary
circumstances to elect a majority of the board of Directors of such
entity, irrespective of whether or not at the time ownership interests
of any other class or classes shall have or might have voting power by
reason of the happening of any contingency, is at the time directly or
indirectly owned by any Borrower, by any Borrower and one or more other
Subsidiaries, or by one or more other Subsidiaries.
"Termination Date" means the earliest of (i) the Maturity Date, (ii) the
date the Borrowers terminate the Credit Facility, or (iii) the date the
Lender demands payment of the Obligations after an Event of Default
pursuant to Section 7.2.
"UCC" means the Uniform Commercial Code as in effect in the state
designated in Section 8.13 as the state whose laws shall govern this
Agreement, or in any other state whose laws are held to govern this
Agreement or any portion hereof.
"Xxxxx Fargo Bank" means Xxxxx Fargo Bank, N.A.
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Section 1.2. Other Definitional Terms; Rules of Interpretation. The words
"hereof", "herein" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. All accounting terms not otherwise
defined herein have the meanings assigned to them in accordance with GAAP.
All terms defined in the UCC and not otherwise defined herein have the
meanings assigned to them in the UCC. References to Articles, Sections,
subsections, Exhibits, Schedules and the like, are to Articles, Sections and
subsections of, or Exhibits or Schedules attached to, this Agreement unless
otherwise expressly provided. The words "include", "includes" and "including"
shall be deemed to be followed by the phrase "without limitation". Unless the
context in which used herein otherwise clearly requires, "or" has the
inclusive meaning represented by the phrase "and/or". Defined terms include
in the singular number the plural and in the plural number the singular.
Reference to any agreement (including the Loan Documents), document or
instrument means such agreement, document or instrument as amended or
modified and in effect from time to time in accordance with the terms thereof
(and, if applicable, in accordance with the terms hereof and the other Loan
Documents), except where otherwise explicitly provided, and reference to any
promissory note includes any promissory note which is an extension or renewal
thereof or a substitute or replacement therefor. Reference to any law, rule,
regulation, order, decree, requirement, policy, guideline, directive or
interpretation means as amended, modified, codified, replaced or reenacted,
in whole or in part, and in effect on the determination date, including rules
and regulations promulgated thereunder.
ARTICLE III
AMOUNT AND TERMS OF THE CREDIT FACILITY
Section 2.1. Revolving Advances. The Lender agrees, on the terms and subject
to the conditions herein set forth, to make advances to each Borrower from
time to time from the date all of the conditions set forth in Section 4.1 are
satisfied (the "Funding Date") to the Termination Date (the "Revolving
Advances"). The Lender shall have no obligation to make a Revolving Advance
to a Borrower to the extent (a) the amount of the Revolving Advance requested
by such Borrower exceeds such Borrower's Availability or (b) after giving
effect to the requested Revolving Advance, the total of the Revolving
Advances outstanding to the Borrowers would, in the aggregate, exceed the
Maximum Line. Each Borrower's obligation to pay the Revolving Advances shall
be evidenced by such Borrower's Revolving Note and shall be secured by the
Collateral. Within the limits set forth in this Section 2.1, each Borrower
may borrow, prepay pursuant to Section 2.8 and reborrow.
Section 2.2. Procedures for Requesting Advances. Each Borrower shall comply
with the following procedures in requesting Revolving Advances:
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(a) Time for Requests. Such Borrower shall request each Advance not
later than 11:00 a.m., Denver, Colorado time on the Banking Day
which is the date the Advance is to be made. Each such request
shall be effective upon receipt by the Lender, shall be in writing
or by telephone or facsimile transmission, to be confirmed in
writing by such Borrower if so requested by the Lender, shall be by
(i) an Officer of such Borrower; or (ii) a person designated as
such Borrower's agent by an Officer of such Borrower in a writing
delivered to the Lender; or (iii) a person whom the Lender
reasonably believes to be an Officer of such Borrower or such a
designated agent. Such Borrower shall repay such Advances even if
the Lender does not receive such confirmation and even if the
person requesting an Advance was not in fact authorized to do so.
Any request for an Advance, whether written or telephonic, shall be
deemed to be a representation by such Borrower that the conditions
set forth in Section 4.2 have been satisfied as of the time of the
request.
(b) Disbursement. Upon fulfillment of the applicable conditions set
forth in Article IV, the Lender shall disburse the proceeds of the
requested Advance by crediting the same to the requesting
Borrower's demand deposit account maintained with Xxxxx Fargo Bank,
N.A. unless the Lender and such Borrower shall agree in writing to
another manner of disbursement.
Section 2.3. Increased Costs; Capital Adequacy; Funding Exceptions.
(a) Increased Costs; Capital Adequacy. If the Lender determines at any
time that its Return has been reduced as a result of any Rule
Change, such Lender may so notify the Borrowers and require the
Borrowers, beginning thirty (30) days after such notice, to pay it
the amount necessary to restore its Return to what it would have
been had there been no Rule Change. For purposes of this Section
2.2:
(i) "Capital Adequacy Rule" means any law, rule, regulation,
guideline, directive, requirement or request regarding
capital adequacy, or the interpretation or administration
thereof by any governmental or regulatory authority, central
bank or comparable agency, whether or not having the force
of law, that applies to any Related Lender, including rules
requiring financial institutions to maintain total capital
in amounts based upon percentages of outstanding loans,
binding loan commitments and letters of credit.
(ii) "Related Lender" includes (but is not limited to) the
Lender, any parent of the Lender, any assignee of any
interest of the Lender hereunder and any participant in the
Credit Facility.
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(iii) "Return", for any period, means the percentage determined by
dividing (i) the sum of interest and ongoing fees earned by
the Lender under this Agreement during such period, by (ii)
the average capital such Lender is required to maintain
during such period as a result of its being a party to this
Agreement, as determined by such Lender based upon its total
capital requirements and a reasonable attribution formula
that takes account of the Capital Adequacy Rules then in
effect, costs of issuing or maintaining any Advance and
amounts received or receivable under this Agreement or the
Note with respect to any Advance. Return may be calculated
for each calendar quarter and for the shorter period between
the end of a calendar quarter and the date of termination in
whole of this Agreement.
(iv) "Rule Change" means any change in any Capital Adequacy Rule
occurring after the date of this Agreement, or any change in
the interpretation or administration thereof by any
governmental or regulatory authority, but the term does not
include any changes that at the Funding Date are scheduled
to take place under the existing Capital Adequacy Rules or
any increases in the capital that the Lender is required to
maintain to the extent that the increases are required due
to a regulatory authority's assessment of that Lender's
financial condition.
The initial notice sent by the Lender shall be sent as promptly as
practicable after such Lender learns that its Return has been
reduced, shall include a demand for payment of the amount necessary
to restore such Lender's Return for the quarter in which the notice
is sent, and shall state in reasonable detail the cause for the
reduction in its Return and its calculation of the amount of such
reduction. Thereafter, such Lender may send a new notice during
each calendar quarter setting forth the calculation of the reduced
Return for that quarter and including a demand for payment of the
amount necessary to restore its Return for that quarter. The
Lender's calculation in any such notice shall be conclusive and
binding absent demonstrable error.
Section 2.4. Interest; Minimum Interest Charge; Default Interest;
Participations; Processing Days; Usury.
(a) Note. Except as set forth in Subsections (c) and (f), the
outstanding principal balance of the Notes shall bear interest at
the Floating Rate.
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(b) Minimum Interest Charge. Notwithstanding the interest payable
pursuant to Subsection (a), the Borrowers shall pay to the Lender
interest of not less than $100,000 per Loan Year (the "Minimum
Interest Charge") during the term of this Agreement, prorated for
periods less than one Loan Year, and the Borrowers shall pay any
deficiency between the Minimum Interest Charge and the amount of
interest otherwise calculated under Subsection (a) on the first day
following each anniversary of the Funding Date and on the
Termination Date. As used in this subsection (b), "Loan Year" means
each one-year period ending on an anniversary of the Funding Date.
(c) Default Interest Rate. Upon notice to the Borrowers from the Lender
from time to time, the principal of the Advances outstanding from
time to time shall bear interest at the Default Rate, effective as
of the first day of the month during which any Default Period
begins through the last day of such Default Period. The Lender's
election to charge the Default Rate shall be in its sole discretion
and shall not be a waiver of any of its other rights and remedies.
The Lender's election to charge interest at the Default Rate for
less than the entire period during which the Default Rate may be
charged shall not be a waiver of its right to later charge the
Default Rate for the entire such period.
(d) Processing Day. Notwithstanding Section 2.7(b)(ii), interest at the
interest rate applicable under this Section 2.3 shall accrue on the
amount of all payments (even if in the form of immediately
available federal funds) for one (1) day for processing.
(e) Participations. If any Person shall acquire a participation in the
Advances, the Borrowers shall be obligated to the Lender to pay the
full amount of all interest calculated under this Section 2.3,
along with all other fees, charges and other amounts due under this
Agreement, regardless if such Person elects to accept interest with
respect to its participation at a lower rate than that calculated
under this Section 2.3, or otherwise elects to accept less than its
prorata share of such fees, charges and other amounts due under
this Agreement.
(f) Usury. Notwithstanding anything to the contrary contained herein,
no rate change shall be put into effect, which would result in a
rate greater than the highest rate permitted by law.
Notwithstanding anything to the contrary contained in any Loan
Document, all agreements which either now are or which shall become
agreements between the Borrowers and the Lender are hereby limited
so that in no contingency or event whatsoever shall the total
liability for payments in the nature of interest, additional
interest and other charges exceed the applicable limits imposed by
any applicable usury laws. If any payments in the nature of
interest, additional interest and other charges made under any Loan
Document are held to be in excess of the limits imposed by any
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applicable usury laws, it is agreed that any such amount held to be
in excess shall be considered payment of principal hereunder, and
the indebtedness evidenced hereby shall be reduced by such amount
so that the total liability for payments in the nature of interest,
additional interest and other charges shall not exceed the
applicable limits imposed by any applicable usury laws, in
compliance with the desires of the Borrowers and the Lender. This
provision shall never be superseded or waived and shall control
every other provision of the Loan Documents and all agreements
between the Borrowers and the Lender, or their successors and
assigns.
Section 2.5. Fees.
(a) Origination Fee. The Borrowers shall pay the Lender a fully earned
and non-refundable origination fee of $15,000, due and payable upon
the execution of this Agreement. The Lender has received $20,000
toward payment of this fee and the fees, costs and expenses
described in subsection (c) of this Section 2.5 and in Section 8.5.
(b) Unused Line Fees. For the purposes of this Section 2.5(b), "Unused
Amount" means the Maximum Line reduced by outstanding Revolving
Advances of all Borrowers. The Borrowers shall pay the Lender an
unused line fee at the rate of one quarter of one percent (0.25%)
per annum on the average daily Unused Amount from the date of this
Agreement to and including the Termination Date, due and payable
monthly in arrears on the first day of the month and on the
Termination Date.
(c) Audit Fees. The Borrowers shall pay the Lender, on demand, audit
fees in connection with any audits or inspections conducted by or
on behalf of the Lender of any Collateral or the Borrowers'
operations or business at the rates established from time to time
by the Lender as its audit fees (which fees are currently $95 per
hour per auditor), together with all actual out-of-pocket costs and
expenses incurred in conducting any such audit or inspection.
(d) Termination and Line Reduction Fees. If the Credit Facility is
terminated (i) by the Lender during a Default Period that begins
before the Maturity Date, (ii) by the Borrowers (A) as of a date
other than the Maturity Date or (B) as of the Maturity Date but
without the Lender having received written notice of such
termination at least 30 days before such Maturity Date, or if the
Borrowers reduce the Maximum Line, the Borrowers shall pay to the
Lender a fee in an amount equal to a percentage of the Maximum Line
(or the reduction of the Maximum Line, as the case may be) as
follows: (A) three percent (3%) if the termination or reduction
occurs on or before the first anniversary of the Funding Date; (B)
two percent (2%) if the termination or reduction occurs after the
first anniversary of the Funding Date but on or before the second
anniversary of the Funding Date; and (C) one percent (1%) if the
termination or reduction occurs after the second anniversary of the
Funding Date.
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(e) Waiver of Termination Fees. The Borrowers will not be required to
pay the termination fees otherwise due under Section 2.5(d) if (a)
such termination is made because of refinancing of the Borrowers in
full by an affiliate of the Lender or (b) such termination is made
within 90 days after a demand for payment of increased costs
pursuant to Section 2.3.
(f) Other Fees. The Lender may from time to time, upon five (5) days
prior notice to the Borrowers, charge additional fees for Revolving
Advances made in excess of Availability, for late delivery of
reports, in lieu of imposing interest at the Default Rate, and for
other reasons. Any Borrower's request for a Revolving Advance at
any time after such notice is given and such five (5) day period
has elapsed shall constitute the Borrowers' agreement to pay the
fees described in such notice.
Section 2.6. Time for Interest Payments; Payment on Non-Banking Days;
Computation of Interest and Fees.
(a) Time For Interest Payments. Interest shall be due and payable in
arrears on the last day of each month and on the Termination Date.
(b) Payment on Non-Banking Days. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a Banking
Day, such payment may be made on the next succeeding Banking Day,
and such extension of time shall in such case be included in the
computation of interest on the Advances or the fees hereunder, as
the case may be.
(c) Computation of Interest and Fees. Interest accruing on the
outstanding principal balance of the Advances and fees hereunder
outstanding from time to time shall be computed on the basis of
actual number of days elapsed in a year of 360 days.
Section 2.7. Lockbox; Collateral Account; Application of Payments.
(a) Lockbox and Collateral Account.
(i) Upon notice from the Lender, each Borrower shall instruct all
account debtors to pay all Accounts directly to such
Borrower's Lockbox. Upon any Borrower's receipt of payments
on Accounts, whether before or after such instructions have
been given, such Borrower shall deposit such payments into
such Borrower's Collateral Account. Each Borrower shall also
deposit all other cash proceeds of Collateral directly to its
Collateral Account. Until so deposited, each Borrower shall
hold all such payments and cash proceeds in trust for and as
the property of the Lender and shall not commingle such
property with any of its other funds or property. All
deposits in the Collateral Account shall constitute proceeds
of Collateral and shall not constitute payment of the
Obligations.
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(ii) All items deposited in any Borrower's Collateral Account shall
be subject to final payment. If any such item is returned
uncollected, such Borrower will immediately pay the Lender,
or, for items deposited in the Collateral Account, the bank
maintaining such account, the amount of that item, or such
bank at its discretion may charge any uncollected item to such
Borrower's commercial account or other account. Each Borrower
shall be liable as an endorser on all items deposited in such
Borrower's Collateral Account, whether or not in fact endorsed
by such Borrower.
(b) Application of Payments.
(i) Each Borrower may, from time to time, in accordance with the
Lockbox and Collection Account Agreement, cause funds in its
Collateral Account to be transferred to the Lender's general
account for payment of the Obligations. Except as provided in
the preceding sentence, amounts deposited in the Collateral
Account shall not be subject to withdrawal by any Borrower,
except after full payment and discharge of all Obligations.
(ii) All payments to the Lender shall be made in immediately
available funds and shall be applied to the Obligations upon
receipt by the Lender. Funds received from the Collateral
Account shall be deemed to be immediately available. The
Lender may hold all payments not constituting immediately
available funds for three (3) days (in addition to processing
days set forth in Section 2.4(d)) before applying them to the
Obligations.
Section 2.8. Voluntary Prepayment; Reduction of the Maximum Line;
Termination of the Credit Facility by the Borrower. Except as otherwise
provided herein, the Borrowers may prepay the Advances in whole at any time
or from time to time in part. The Borrowers may terminate the Credit Facility
or reduce the Maximum Line at any time if they (i) give the Lender at least
30 days' prior written notice and (ii) pay the Lender termination and Maximum
Line reduction fees in accordance with Section 2.5(d). Any reduction in the
Maximum Line must be in an amount of not less than $250,000 or an integral
multiple thereof. If the Borrowers reduce the Maximum Line to zero, all
Obligations shall be immediately due and payable. Subject to termination of
the Credit Facility and payment and performance of all Obligations, the
Lender shall, at the Borrowers' expense, release or terminate the Security
Interest and the Security Documents to which each Borrower is entitled by
law.
Section 2.9. Mandatory Prepayment. Unless the Lender has given its prior
written consent, then without notice or demand, if the outstanding principal
balance of the Revolving Advances made to any Borrower at any time exceeds
such Borrower's Borrowing Base, such Borrower shall immediately prepay the
Revolving Advances to the extent necessary to eliminate such excess. Any
payment received by the Lender under this Section 2.9 or under Section 2.8
may be applied to the Obligations, in such order and in such amounts as the
Lender, in its discretion, may from time to time determine.
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Section 2.10. Revolving Advances to Pay Obligations. Notwithstanding
anything in Section 2.1, the Lender may, in its discretion at any time or
from time to time, without the Borrower's request and even if the conditions
set forth in Section 4.2 would not be satisfied, make a Revolving Advance in
an amount equal to the portion of the Obligations from time to time due and
payable.
Section 2.11. Use of Proceeds. The Borrowers shall use the proceeds of
Advances for general corporate purposes.
Section 2.12. Liability Records. The Lender may maintain from time to time,
at its discretion, records as to the Obligations. All entries made on any
such record shall be presumed correct until the Borrowers establish the
contrary. Upon the Lender's demand, each Borrower will admit and certify in
writing the exact principal balance of the Obligations that such Borrower
then asserts to be outstanding. Any billing statement or accounting rendered
by the Lender and delivered to Ramtron shall be conclusive and fully binding
on the applicable Borrower unless such Borrower gives the Lender specific
written notice of exception within 30 days after receipt.
ARTICLE III
SECURITY INTEREST; OCCUPANCY; SETOFF
Section 3.1. Grant of Security Interest. Each Borrower hereby pledges,
assigns and grants to the Lender a lien and security interest (collectively
referred to as the "Security Interest") in the Collateral, as security for
the payment and performance of the Obligations.
Section 3.2. Notification of Account Debtors and Other Obligors. The Lender
may at any time during a Default Period notify any account debtor or other
person obligated to pay the amount due that such right to payment has been
assigned or transferred to the Lender for security and shall be paid directly
to the Lender. Each Borrower will join in giving such notice if the Lender so
requests. At any time during a Default Period after any Borrower or the
Lender gives such notice to an account debtor or other obligor and so long as
a Default Period exists, the Lender may, but need not, in the Lender's name
or in such Borrower's name, (a) demand, xxx for, collect or receive any money
or property at any time payable or receivable on account of, or securing, any
such right to payment, or grant any extension to, make any compromise or
settlement with or otherwise agree to waive, modify, amend or change the
obligations (including collateral obligations) of any such account debtor or
other obligor; and (b) as such Borrower's agent and attorney-in-fact, notify
the United States Postal Service to change the address for delivery of such
Borrower's mail to any address designated by the Lender, otherwise intercept
such Borrower's mail, and receive, open and dispose of such Borrower's mail,
applying all Collateral as permitted under this Agreement and holding all
other mail for such Borrower's account or forwarding such mail to such
Borrower's last known address.
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Section 3.3. Assignment of Insurance. As additional security for the payment
and performance of the Obligations, each Borrower hereby assigns to the
Lender any and all monies (including proceeds of insurance and refunds of
unearned premiums) due or to become due under, and all other rights of such
Borrower with respect to, any and all policies of insurance now or at any
time hereafter covering the Collateral or any evidence thereof or any
business records or valuable papers pertaining thereto, and such Borrower
hereby directs the issuer of any such policy to pay all such monies directly
to the Lender. At any time, whether or not a Default Period then exists, the
Lender may (but need not), in the Lender's name or in such Borrower's name,
execute and deliver proof of claim, receive all such monies, endorse checks
and other instruments representing payment of such monies, and adjust,
litigate, compromise or release any claim against the issuer of any such
policy.
Section 3.4. Occupancy.
(a) Each Borrower hereby irrevocably grants to the Lender the right to
take exclusive possession of the Premises at any time during a
Default Period; provided, however, that nothing in this Section 3.4
shall prohibit Xxxxxxxx Capital Corp. or Halifax Fund, L.P. from
gaining access to the Premises.
(b) The Lender may use the Premises only to hold, process, manufacture,
sell, use, store, liquidate, realize upon or otherwise dispose of
goods that are Collateral and for other purposes that the Lender
may in good xxxxx xxxx to be related or incidental purposes.
(c) The Lender's right to hold the Premises shall cease and terminate
upon the earlier of (i) payment in full and discharge of all
Obligations and termination of the Credit Facility, and (ii) final
sale or disposition of all goods constituting Collateral and
delivery of all such goods to purchasers.
(d) The Lender shall not be obligated to pay or account for any rent or
other compensation for the possession, occupancy or use of any of
the Premises; provided, however, that if the Lender does pay or
account for any rent or other compensation for the possession,
occupancy or use of any of the Premises, each Borrower shall
reimburse the Lender promptly for the full amount thereof. In
addition, each Borrower will pay, or reimburse the Lender for, all
taxes, fees, duties, imposts, charges and expenses at any time
incurred by or imposed upon the Lender by reason of the execution,
delivery, existence, recordation, performance or enforcement of
this Agreement or the provisions of this Section 3.4.
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Section 3.5. License. Without limiting the generality of any other Security
Document, each Borrower hereby grants to the Lender a non-exclusive,
worldwide and royalty-free license to use or otherwise exploit all
Intellectual Property Rights of the Borrower (other than any Intellectual
Property Rights that have been assigned as security to Infineon Technology
AG) for the purpose of: (a) completing the manufacture of any in-process
materials during any Default Period so that such materials become saleable
Inventory, all in accordance with the same quality standards previously
adopted by such Borrower for its own manufacturing and subject to such
Borrower's reasonable exercise of quality control; and (b) selling, leasing
or otherwise disposing of any or all Collateral during any Default Period.
Section 3.6. Financing Statement. Each Borrower authorizes the Lender to
file from time to time where permitted by law, such financing statements
against collateral describing the Collateral or specific items of collateral
as the Lender deems necessary or useful to perfect the Security Interest. A
carbon, photographic or other reproduction of this Agreement or of any
financing statements signed by any Borrower is sufficient as a financing
statement and may be filed as a financing statement in any state to perfect
the security interests granted hereby. For this purpose, the following
information is set forth:
Name and address of Debtors:
Ramtron International Corporation
0000 Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Federal Employer Identification No. 00-0000000
Organizational Identification No. 2026110
Enhanced Memory Systems, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Federal Employer Identification No. 00-0000000
Organizational Identification No. 2508167
Mushkin Inc.
000 X. Xxxxxx Xxx.
Xxxxxx, Xxxxxxxx 00000
Federal Employer Identification No. 00-0000000
Organizational Identification No. 19961098262
Name and address of Secured Party:
Xxxxx Fargo Business Credit, Inc.
MAC C7300-210
0000 Xxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Federal Employer Identification No. 00-0000000
Page-20
Section 3.7. Setoff. The Lender may at any time or from time to time, at its
sole discretion and without demand and without notice to anyone, setoff any
liability owed to any Borrower by the Lender, whether or not due, against any
Obligation of such Borrower, whether or not due. In addition, each other
Person holding a participating interest in any Obligations shall have the
right to appropriate or setoff any deposit or other liability then owed by
such Person to any Borrower, whether or not due, and apply the same to the
payment of said participating interest, as fully as if such Person had lent
directly to such Borrower the amount of such participating interest.
Section 3.8. Collateral. This Agreement does not contemplate a sale of
accounts, contract rights or chattel paper, and, as provided by law, the
Borrowers are entitled to any surplus and shall remain liable for any
deficiency. The Lender's duty of care with respect to Collateral in its
possession (as imposed by law) shall be deemed fulfilled if it exercises
reasonable care in physically keeping such Collateral, or in the case of
Collateral in the custody or possession of a bailee or other third person,
exercises reasonable care in the selection of the bailee or other third
person, and the Lender need not otherwise preserve, protect, insure or care
for any Collateral. The Lender shall not be obligated to preserve any rights
any Borrower may have against prior parties, to realize on the Collateral at
all or in any particular manner or order or to apply any cash proceeds of the
Collateral in any particular order of application. The Lender has no
obligation to clean-up or otherwise prepare the Collateral for sale. Each
Borrower waives any right it may have to require the Lender to pursue any
third person for any of the Obligations.
ARTICLE IV
CONDITIONS OF LENDING
Section 4.1. Conditions Precedent to the Initial Advances . The Lender's
obligation to make the initial Advances shall be subject to the condition
precedent that the Lender shall have received all of the following, each in
form and substance satisfactory to the Lender:
(a) This Agreement, properly executed by each Borrower.
(b) The Notes, properly executed by the appropriate Borrowers.
(c) A true and correct copy of any and all leases pursuant to which any
Borrower is leasing the Premises, together with a landlord's
disclaimer and consent with respect to each such lease.
(d) The separate Lockbox and Collection Account Agreements, properly
executed by each Borrower and Xxxxx Fargo Bank, N.A.
(e) Control agreements, properly executed by each Borrower and each
bank at which each Borrower maintains deposit accounts (the
"Deposit Account Control Agreements").
Page-21
(f) An assignment of the Borrower's foreign receivables insurance
policy.
(g) The Intercreditor Agreements, properly executed by Infineon
Technologies AG and by Xxxxxxxx Capital Corp. and Halifax Fund,
L.P.
(h) Current searches of appropriate filing offices showing that (i) no
Liens have been filed and remain in effect against any Borrower
except Permitted Liens or Liens held by Persons who have agreed in
writing that upon receipt of proceeds of the initial Advances, they
will satisfy, release or terminate such Liens in a manner
satisfactory to the Lender, and (ii) the Lender has duly filed all
financing statements necessary to perfect the Security Interest, to
the extent the Security Interest is capable of being perfected by
filing.
(i) A certificate of each Borrower's Secretary or Assistant Secretary
certifying that attached to such certificate are (i) the resolutions
of such Borrower's Directors and, if required, Owners, authorizing
the execution, delivery and performance of the Loan Documents, (ii)
true, correct and complete copies of such Borrower's Constituent
Documents, and (iii) examples of the signatures of such Borrower's
Officers or agents authorized to execute and deliver the Loan
Documents and other instruments, agreements and certificates,
including Advance requests, on such Borrower's behalf.
(j) Current certificates issued by the Secretary of State of Delaware
or Colorado, as appropriate, certifying that each Borrower is in
good standing in such Borrower's respective state of incorporation.
(k) Evidence that each Borrower is duly licensed or qualified to
transact business in all jurisdictions where the character of the
property owned or leased or the nature of the business transacted
by it makes such licensing or qualification necessary.
(l) A certificate of an Officer of each Borrower confirming, in his or
her official capacity, the representations and warranties set forth
in Article V.
(m) An opinion of counsel to each Borrower, addressed to the Lender.
(n) Certificates of the insurance required hereunder, with all hazard
insurance containing a lender's loss payable endorsement in the
Lender's favor and with all liability insurance naming the Lender
as an additional insured.
(o) A separate guaranty, properly executed by each Guarantor, pursuant
to which each Guarantor unconditionally guarantees the full and
prompt payment of all Obligations.
Page-22
(p) Payment of the fees and commissions due under Section 2.5 through
the date of the initial Advance and expenses incurred by the Lender
through such date and required to be paid by the Borrowers under
Section 8.5, including all legal expenses incurred through the date
of this Agreement.
(q) Evidence that after making the initial Revolving Advance,
satisfying all trade payables older than 60 days from invoice date,
book overdrafts and closing costs, Availability shall be not less
than $2,000,000.
(r) Such other documents as the Lender in its reasonable discretion may
require.
Section 4.2. Conditions Precedent to All Advances. The Lender's obligation
to make each Advance shall be subject to the further conditions precedent
that:
(a) the representations and warranties contained in Article V are
correct on and as of the date of such Advance as though made on and
as of such date, except to the extent that such representations and
warranties relate solely to an earlier date; and
(b) no event has occurred and is continuing, or would result from such
Advance which constitutes a Default or an Event of Default.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrowers represent and warrant to the Lender as follows:
Section 5.1. Existence and Power; Name; Chief Executive Office; Inventory
Locations; Federal Employer Identification Number. Each of Ramtron and EMS is
a corporation, duly organized, validly existing and in good standing under
the laws of the State of Delaware. Mushkin is a corporation, duly organized,
validly existing and in good standing under the laws of the State of
Colorado. Each Borrower is duly licensed or qualified to transact business
in all jurisdictions where the character of the property owned or leased or
the nature of the business transacted by it makes such licensing or
qualification necessary. Each Borrower has all requisite power and authority
to conduct its business, to own its properties and to execute and deliver,
and to perform all of its obligations under, the Loan Documents. During the
past six years, each Borrower has done business solely under the names set
forth in Schedule 5.1. Each Borrower's chief executive office and principal
place of business is located at the address set forth in Schedule 5.1 and all
of such Borrower's records relating to its business or the Collateral are
kept at that location. All Inventory is located at that location or at one of
the other locations listed in Schedule 5.1. Each Borrower's federal employer
identification number is correctly set forth in Section 3.6.
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Section 5.2. Capitalization. Schedule 5.2 constitutes a correct and complete
list of (i) all Significant Owners of Ramtron, (ii) all ownership interests
and rights to acquire ownership interests including the record holder, number
of interests and percentage interests on a fully diluted basis, of each
Borrower other than Ramtron, and (iii) an organizational chart showing the
ownership structure of all Subsidiaries of each Borrower.
Section 5.3. Authorization of Borrowing; No Conflict as to Law or
Agreements. Except as set forth on Schedule 5.3, the execution, delivery and
performance by each Borrower of the Loan Documents and the borrowings from
time to time hereunder have been duly authorized by all necessary corporate
action and do not and will not (i) require any consent or approval of any
Borrower's Owners; (ii) require any authorization, consent or approval by, or
registration, declaration or filing with, or notice to, any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or any third party, except such authorization, consent, approval,
registration, declaration, filing or notice as has been obtained,
accomplished or given prior to the date hereof; (iii) violate any provision
of any law, rule or regulation (including Regulation X of the Board of
Governors of the Federal Reserve System) or of any order, writ, injunction or
decree presently in effect having applicability to any Borrower or of any
Borrower's Constituent Documents; (iv) result in a breach of or constitute a
default under any indenture or loan or credit agreement or any other material
agreement, lease or instrument to which any Borrower is a party or by which
it or its properties may be bound or affected; or (v) result in, or require,
the creation or imposition of any Lien (other than the Security Interest)
upon or with respect to any of the properties now owned or hereafter acquired
by any Borrower.
Section 5.4. Legal Agreements. This Agreement constitutes and, upon due
execution by each Borrower, the other Loan Documents will constitute the
legal, valid and binding obligations of each Borrower, enforceable against
each Borrower in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforceability of
creditor's rights generally and by general equitable principles.
Section 5.5. Subsidiaries. Except as set forth in Schedule 5.5 hereto, no
Borrower has any Subsidiaries.
Section 5.6. Financial Condition; No Adverse Change. Ramtron has furnished
to the Lender its audited financial statements for its fiscal year ended
December 31, 2001 and unaudited financial statements for the fiscal year
ended December 31, 2002, prepared on a consolidated and a consolidating
basis, and those statements fairly present each Borrower's financial
condition on the dates thereof and the results of its operations and cash
flows for the periods then ended and were prepared in accordance with
generally accepted accounting principles. Since the date of the most recent
financial statements, there has been no change in any Borrower's business,
properties or condition (financial or otherwise) which has had a Material
Adverse Effect.
Page-24
Section 5.7. Litigation. Except as set forth in Schedule 5.7, there are no
actions, suits or proceedings pending or, to any Borrower's knowledge,
threatened against or affecting any Borrower or any Affiliate or the
properties of any Borrower or any Affiliate before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, which, if determined adversely to such Borrower or any such
Affiliate, would have a Material Adverse Effect.
Section 5.8. Regulation U. No Borrower is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System), and no part of the proceeds of any Advance will be used to
purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock.
Section 5.9. Taxes. Each Borrower and its Affiliates have paid or caused to
be paid to the proper authorities when due all federal, state and local taxes
required to be withheld by each of them. Each Borrower and its Affiliates
have filed all federal, state and local tax returns which to the knowledge of
the Officers of such Borrower or such Affiliate, as the case may be, are
required to be filed, and each Borrower and its Affiliates have paid or
caused to be paid to the respective taxing authorities all taxes as shown on
said returns or on any assessment received by any of them to the extent such
taxes have become due.
Section 5.10. Titles and Liens. Each Borrower has good and absolute title to
all Collateral free and clear of all Liens other than Permitted Liens. No
financing statement naming any Borrower as debtor is on file in any office
except to perfect only Permitted Liens.
Section 5.11. Intellectual Property Rights.
(a) Owned Intellectual Property. Schedule 5.11 is a complete list of
all patents, applications for patents, trademarks, applications for
trademarks, service marks, applications for service marks, mask
works, trade dress and copyrights for which any Borrower is the
registered owner (the "Owned Intellectual Property"). Except as
disclosed on Schedule 5.11, (i) each Borrower owns the Owned
Intellectual Property free and clear of all restrictions (including
covenants not to xxx a third party), court orders, injunctions,
decrees, writs or Liens, whether by written agreement or otherwise,
(ii) no Person other than such Borrower owns or has been granted
any right in the Owned Intellectual Property, (iii) all Owned
Intellectual Property is valid, subsisting and enforceable and (iv)
such Borrower has taken all commercially reasonable action
necessary to maintain and protect the Owned Intellectual Property.
Page-25
(b) Agreements with Employees and Contractors. Each Borrower has
entered into a legally enforceable agreement with each of its
employees and contractors obligating each such Person to assign to
such Borrower, without any additional compensation, any
Intellectual Property Rights created, discovered or invented by
such Person in the course of such Person's employment or engagement
with such Borrower (except to the extent prohibited by law), and
further requiring such Person to cooperate with such Borrower,
without any additional compensation, in connection with securing
and enforcing any Intellectual Property Rights therein; provided,
however, that the foregoing shall not apply with respect to
employees and subcontractors whose job descriptions are of the type
such that no such assignments are reasonably foreseeable.
(c) Intellectual Property Rights Licensed from Others. Schedule 5.11 is
a complete list of all agreements under which any Borrower has
licensed Intellectual Property Rights from another Person
("Licensed Intellectual Property") other than readily available,
non-negotiated licenses of computer software and other intellectual
property used solely for performing accounting, word processing and
similar administrative tasks ("Off-the-shelf Software") and a
summary of any ongoing payments such Borrower is obligated to make
with respect thereto. Except as disclosed on Schedule 5.11 and in
written agreements copies of which have been given to the Lender,
each Borrower's licenses to use the Licensed Intellectual Property
are free and clear of all restrictions, Liens, court orders,
injunctions, decrees, or writs, whether by written agreement or
otherwise, other than Off-the-shelf Software. Except as disclosed
on Schedule 5.11, no Borrower is obligated or under any liability
whatsoever to make any payments of a material nature by way of
royalties, fees or otherwise to any owner of, licensor of, or other
claimant to, any Intellectual Property Rights, other than Off-the-
shelf Software.
(d) Other Intellectual Property Needed for Business. Except for Off-
the-shelf Software and as disclosed on Schedule 5.11, the Owned
Intellectual Property and the Licensed Intellectual Property
constitute all Intellectual Property Rights used or necessary to
conduct each Borrower's business as it is presently conducted or as
such Borrower reasonably foresees conducting it.
(e) Infringement. Except as disclosed on Schedule 5.11, no Borrower has
any knowledge of, and has not received any written claim or notice
alleging, any Infringement of another Person's Intellectual
Property Rights (including any written claim that such Borrower
must license or refrain from using the Intellectual Property Rights
of any third party) nor, to any Borrower's knowledge, is there any
threatened claim or any reasonable basis for any such claim.
Page-26
Section 5.12. Plans. Except as set forth on Schedule 5.12, neither any
Borrower nor any ERISA Affiliate (i) maintains or has maintained any Pension
Plan, (ii) contributes or has contributed to any Multiemployer Plan or
(iii) provides or has provided post-retirement medical or insurance benefits
with respect to employees or former employees (other than benefits required
under Section 601 of ERISA, Section 4980B of the IRC or applicable state
law). Neither any Borrower nor any ERISA Affiliate has received any notice or
has any knowledge to the effect that it is not in full compliance with any of
the requirements of ERISA, the IRC or applicable state law with respect to
any Plan. No Reportable Event exists in connection with any Pension Plan.
Each Plan which is intended to qualify under the IRC is so qualified, and no
fact or circumstance exists which may have an adverse effect on the Plan's
tax-qualified status. Neither any Borrower nor any ERISA Affiliate has
(i) any accumulated funding deficiency (as defined in Section 302 of ERISA
and Section 412 of the IRC) under any Plan, whether or not waived, (ii) any
liability under Section 4201 or 4243 of ERISA for any withdrawal, partial
withdrawal, reorganization or other event under any Multiemployer Plan or
(iii) any liability or knowledge of any facts or circumstances which could
result in any liability to the Pension Benefit Guaranty Corporation, the
Internal Revenue Service, the Department of Labor or any participant in
connection with any Plan (other than routine claims for benefits under the
Plan).
Section 5.13. Default. Each Borrower is in compliance with all provisions of
all agreements, instruments, decrees and orders to which it is a party or by
which it or its property is bound or affected, the breach or default of which
could have a Material Adverse Effect.
Section 5.14. Environmental Matters.
(a) To each Borrower's best knowledge, there are not present in, on or
under the Premises any Hazardous Substances in such form or
quantity as to create any material liability or obligation for
either any Borrower or the Lender under common law of any
jurisdiction or under any Environmental Law, and no Hazardous
Substances have ever been stored, buried, spilled, leaked,
discharged, emitted or released in, on or under the Premises in
such a way as to create any such material liability.
(b) To each Borrower's best knowledge, no Borrower has disposed of
Hazardous Substances in such a manner as to create any material
liability under any Environmental Law.
(c) There are not and there never have been any requests, claims,
notices, investigations, demands, administrative proceedings,
hearings or litigation, relating in any way to any Borrower or, to
any Borrower's best knowledge, to the Premises, alleging material
liability under, violation of, or noncompliance with any
Environmental Law or any license, permit or other authorization
issued pursuant thereto. To each Borrower's best knowledge, no such
matter is threatened or impending.
Page-27
(d) To each Borrower's best knowledge, each Borrower's businesses are
and have in the past always been conducted in accordance with all
Environmental Laws and all licenses, permits and other
authorizations required pursuant to any Environmental Law and
necessary for the lawful and efficient operation of such businesses
are in such Borrower's possession and are in full force and effect.
No permit required under any Environmental Law is scheduled to
expire within 12 months, and to the Borrowers' best knowledge there
is no threat that any such permit will be withdrawn, terminated,
limited or materially changed.
(e) To each Borrower's best knowledge, the Premises are not and never
have been listed on the National Priorities List, the Comprehensive
Environmental Response, Compensation and Liability Information
System or any similar federal, state or local list, schedule, log,
inventory or database.
(f) Each Borrower has delivered to Lender all environmental
assessments, audits, reports, permits, licenses and other documents
describing or relating in any way to such Borrower's businesses or,
to any Borrower's best knowledge, to the Premises.
Section 5.15. Submissions to Lender. All financial and other information
provided to the Lender by or on behalf of any Borrower in connection with any
Borrower's request for the credit facilities contemplated hereby is (i) true
and correct in all material respects, (ii) does not omit any material fact
necessary to make such information not misleading and, (iii) as to
projections, valuations or pro forma financial statements, present a good
faith opinion as to such projections, valuations and pro forma condition and
results.
Section 5.16. Financing Statements. Each Borrower has authorized the filing
of financing statements sufficient when filed to perfect the Security
Interest and the other security interests created by the Security Documents.
When such financing statements are filed in the offices noted therein, the
Lender will have a valid and perfected security interest in all Collateral
which is capable of being perfected by filing financing statements. None of
the Collateral is or will become a fixture on real estate, unless a
sufficient fixture filing is in effect with respect thereto.
Section 5.17. Rights to Payment. Each right to payment and each instrument,
document, chattel paper and other agreement constituting or evidencing
Collateral is (or, in the case of all future Collateral, will be when arising
or issued) the valid, genuine and legally enforceable obligation, subject to
no defense, setoff or counterclaim, of the account debtor or other obligor
named therein or in any Borrower's records pertaining thereto as being
obligated to pay such obligation.
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Section 5.18. Financial Solvency. Both before and after giving effect to the
transactions contemplated in the Loan Documents, no Borrower and no
Affiliate:
(a) was or will be insolvent, as that term is used and defined in
Section 101(32) of the United States Bankruptcy Code and Section 2
of the Uniform Fraudulent Transfer Act;
(b) has unreasonably small capital or is engaged or about to engage in
a business or a transaction for which any remaining assets of such
Borrower or such Affiliate are unreasonably small;
(c) by executing, delivering or performing its obligations under the
Loan Documents or other documents to which it is a party or by
taking any action with respect thereto, intends to, nor believes
that it will, incur debts beyond its ability to pay them as they
mature;
(d) by executing, delivering or performing its obligations under the
Loan Documents or other documents to which it is a party or by
taking any action with respect thereto, intends to hinder, delay or
defraud either its present or future creditors; and
(e) at this time contemplates filing a petition in bankruptcy or for an
arrangement or reorganization or similar proceeding under any law
any jurisdiction, nor, to the best knowledge of such Borrower, is
the subject of any actual, pending or threatened bankruptcy,
insolvency or similar proceedings under any law of any
jurisdiction.
ARTICLE VI
COVENANTS
So long as the Obligations shall remain unpaid, or the Credit Facility shall
remain outstanding, each Borrower will comply with the following
requirements, unless the Lender shall otherwise consent in writing:
Section 6.1. Reporting Requirements. Each Borrower will deliver, or cause to
be delivered, to the Lender each of the following, which shall be in form and
detail acceptable to the Lender:
Page-29
(a) Annual Financial Statements. As soon as available, and in any event
within 90 days after the end of each fiscal year of Ramtron,
Ramtron will deliver, or cause to be delivered, to the Lender, its
audited financial statements with the unqualified opinion of
independent certified public accountants selected by the Borrowers
and acceptable to the Lender, which annual financial statements
shall include the Ramtron's balance sheet as at the end of such
fiscal year and the related statements of Ramtron's income,
retained earnings and cash flows for the fiscal year then ended,
prepared on a consolidating and consolidated basis to include each
Borrower and, if the Lender so requests, any other Affiliates, all
in reasonable detail and prepared in accordance with GAAP, together
with (i) copies of all management letters prepared by such
accountants; (ii) a report signed by such accountants stating that
in making the investigations necessary for said opinion they
obtained no knowledge, except as specifically stated, of any
Default or Event of Default and all relevant facts in reasonable
detail to evidence, and the computations as to, whether or not the
Borrowers are in compliance with the Financial Covenants; and (iii)
a certificate of Ramtron's chief financial officer stating that
such financial statements have been prepared in accordance with
GAAP, fairly represent each Borrower's financial position and the
results of its operations, and whether or not such officer has
knowledge of the occurrence of any Default or Event of Default and,
if so, stating in reasonable detail the facts with respect thereto.
(b) Monthly Financial Statements. As soon as available and in any event
within 20 days after the end of each month, the Borrowers will
deliver to the Lender an unaudited/internal balance sheet and
statements of income and retained earnings of the Borrowers as at
the end of and for such month and for the year to date period then
ended, prepared on a consolidating and consolidated basis to
include each Borrower and, if the Lender so requests, any other
Affiliates, in reasonable detail and stating in comparative form
the figures for the corresponding date and periods in the previous
year, all prepared in accordance with GAAP, subject to year-end
audit adjustments and fairly represent each Borrower's financial
position and the results of its operations; and accompanied by a
certificate of each Borrower's chief financial Officer,
substantially in the form of Exhibit D hereto stating (i) that such
financial statements have been prepared in accordance with GAAP,
subject to year-end audit adjustments, (ii) whether or not such
officer has knowledge of the occurrence of any Default or Event of
Default not theretofore reported and remedied and, if so, stating
in reasonable detail the facts with respect thereto, and (iii) all
relevant facts in reasonable detail to evidence, and the
computations as to, whether or not each Borrower is in compliance
with the Financial Covenants.
Page-30
(c) Collateral Reports.
(i) Within 15 days after the end of each month or more frequently
if the Lender so requires, each Borrower will deliver to the
Lender agings of such Borrower's accounts receivable and its
accounts payable, and a calculation of such Borrower's
Accounts, and Eligible Accounts as at the end of such month
or shorter time period.
(ii) Weekly or more frequently if the Lender so requires, the
Borrower will deliver to the Lender reports of sales, credit
memos, and collections, an accounts receivable reconciliation
report, and copies of invoices to account debtors, shipping
documents and delivery receipts for goods sold in excess of
$50,000.
(d) Projections. At least 20 days before the beginning of each fiscal
year of each Borrower, such Borrower will deliver to the Lender
the projected balance sheets and income statements for each month
of such year, each in reasonable detail, representing such
Borrower's good faith projections and certified by such Borrower's
chief financial Officer as being the most accurate projections
available and identical to the projections used by such Borrower
for internal financial planning purposes, together with a statement
of underlying assumptions and such supporting schedules and
information as the Lender may in its discretion require.
(e) Litigation. Promptly after the Borrower obtains knowledge of the
commencement thereof, each Borrower will deliver to the Lender
notice in writing of all litigation and of all proceedings before
any governmental or regulatory agency affecting such Borrower (i)
of the type described in Section 5.14(c) or (ii) which seek a
monetary recovery against such Borrower in excess of $250,000.
(f) Defaults. As promptly as practicable (but in any event not later
than five business days) after an Officer of any Borrower obtains
knowledge of the occurrence of any Default or Event of Default,
such Borrower will deliver to the Lender notice of such occurrence,
together with a detailed statement by a responsible Officer of such
Borrower of the steps being taken by the Borrowers to cure the
effect thereof.
(g) Plans. As soon as possible, and in any event within 30 days after
any Borrower knows or has reason to know that any Reportable Event
with respect to any Pension Plan has occurred, such Borrower will
deliver to the Lender a statement of such Borrower's chief
financial Officer setting forth details as to such Reportable Event
and the action which such Borrower proposes to take with respect
thereto, together with a copy of the notice of such Reportable
Event to the Pension Benefit Guaranty Corporation. As soon as
possible, and in any event within 10 days after any Borrower fails
Page-31
to make any quarterly contribution required with respect to any
Pension Plan under Section 412(m) of the IRC, such Borrower will
deliver to the Lender a statement of such Borrower's chief
financial Officer setting forth details as to such failure and the
action which such Borrower proposes to take with respect thereto,
together with a copy of any notice of such failure required to be
provided to the Pension Benefit Guaranty Corporation. As soon as
possible, and in any event within 10 days after any Borrower knows
or has reason to know that it has or is reasonably expected to have
any liability under Section 4201 or 4243 of ERISA for any
withdrawal, partial withdrawal, reorganization or other event under
any Multiemployer Plan, such Borrower will deliver to the Lender a
statement of such Borrower's chief financial Officer setting forth
details as to such liability and the action which such Borrower
proposes to take with respect thereto.
(h) Disputes. Promptly upon knowledge thereof, each Borrower will
deliver to the Lender notice of (i) any disputes or claims by such
Borrower's customers exceeding $10,000 individually or $50,000 in
the aggregate during any fiscal year; (ii) credit memos not
disclosed in accordance with Section 6.1(c)(ii); and (iii) any
goods returned to or recovered by such Borrower the aggregate value
of which exceeds $25,000.
(i) Officers and Directors. Promptly upon knowledge thereof, each
Borrower will deliver to the Lender notice of any change in the
persons constituting such Borrower's Officers and Directors.
(j) Collateral. Promptly upon knowledge thereof, each Borrower will
deliver to the Lender notice of any loss of or material damage to
any Collateral or of any substantial adverse change in any
Collateral or the prospect of payment thereof.
(k) Intellectual Property.
(i) Each Borrower will give the Lender 30 days prior written
notice of its intent to acquire material Intellectual
Property Rights; and except for transfers permitted under
Section 6.16, each Borrower will give the Lender 30 days
prior written notice of its intent to dispose of material
Intellectual Property Rights; and upon request, shall provide
the Lender with copies of all applicable documents and
agreements.
(ii) Promptly upon knowledge thereof, each Borrower will deliver
to the Lender notice of (A) any Infringement of its
Intellectual Property Rights by others, (B) claims that any
Borrower is Infringing another Person's Intellectual Property
Rights and (C) any threatened cancellation, termination or
material limitation of its Intellectual Property Rights.
Page-32
(iii) Promptly upon receipt, each Borrower will give the Lender
copies of all registrations and filings with respect to its
Intellectual Property Rights.
(l) Reports to Owners. Promptly upon their distribution, each Borrower
will deliver to the Lender copies of all financial statements,
reports and proxy statements which such Borrower shall have sent to
its Owners in their capacity as Owners.
(m) SEC Filings. Promptly after the sending or filing thereof, each
Borrower will deliver to the Lender copies of all regular and
periodic reports which such Borrower shall file with the Securities
and Exchange Commission or any national securities exchange.
(n) Tax Returns. As soon as possible, and in any event by not later
than 15 days after they are due (including any extensions), copies
of the state and federal tax returns and all schedules thereto,
estimated filings, and extension requests, of each Borrower.
(o) Violations of Law. Promptly upon knowledge thereof, each Borrower
will deliver to the Lender notice of such Borrower's violation of
any law, rule or regulation, the non-compliance with which could
materially and adversely affect any Borrower's business or its
financial condition.
(p) Other Reports. From time to time, with reasonable promptness, each
Borrower will deliver to the Lender any and all receivables
schedules, collection reports, deposit records, equipment
schedules, copies of invoices to account debtors, shipment
documents and delivery receipts for goods sold, and such other
material, reports, records or information as the Lender may
request.
Section 6.2. Financial Covenants.
(a) Consolidated Minimum Book Net Worth. Ramtron on a consolidated
basis will maintain, as of each date described below, their Book
Net Worth at an amount not less than the amount set forth opposite
such date:
Page-33
Date Minimum Book Net Worth
---- ----------------------
December 31, 2002 $19,500,000
January 31, 2003 $18,800,000
February 28, 2003 $18,300,000
March 31, 2003 $18,300,000
April 30, 2003 $17,600,000
May 31, 2003 $17,400,000
June 30, 2003 $17,950,000
July 31, 2003 $17,500,000
August 31, 2003 $18,000,000
September 30, 2003 $19,050,000
October 31, 2003 $19,400,000
November 30, 2003 $20,200,000
December 31, 2003
and the last day of
each month thereafter $21,100,000
(b) Consolidated Minimum Net Income. Ramtron on a consolidated basis
will achieve as of each date set forth below, fiscal year-to-date
Net Income of not less than the amount set forth opposite such
date:
Date Minimum YTD Net Income
---- ----------------------
December 31, 2002 ($2,500,000)
March 31, 2003 ($1,850,000)
June 30, 2003 ($2,200,000)
September 30, 2003 ($1,100,000)
December 31, 2003 $950,000
(c) Consolidated Minimum Available Cash. Ramtron on a consolidated
basis will maintain, as of the last day of each month, Available
Cash of not less than $2,000,000.
(d) Individual Minimum Book Net Worth. Each Borrower will maintain, as
of the last day of each month, Book Net Worth in the amount set
forth opposite such Borrower in the table below:
Borrower Minimum Book Net Worth
-------- ----------------------
Ramtron $14,750,000
EMS $1,000,000
Mushkin $8,000,000
(e) Capital Expenditures. Ramtron on a consolidated basis will not
incur or contract to incur Capital Expenditures of more than
$1,500,000 in the aggregate during either of its fiscal years
ending December 31, 2002 or December 31, 2003.
Page-34
(f) Financial Covenant Reset. On or before December 31, 2003, the
Borrower and the Lender shall agree on new covenant levels for the
Financial Covenants for periods after that date, but if the
Borrower and the Lender do not agree, the Lender may designate the
required amounts in its reasonable discretion, and failure by the
Borrower to maintain the designated amounts shall constitute an
Event of Default hereunder.
Section 6.3. Permitted Liens; Financing Statements.
(a) No Borrower will create, incur or suffer to exist any Lien upon or
of any of the Collateral, now owned or hereafter acquired, to
secure any indebtedness; excluding, however, from the operation of
the foregoing, the following (collectively, "Permitted Liens"):
(i) Liens in existence on the date hereof and listed in Schedule
6.3 hereto, securing indebtedness for borrowed money
permitted under Section 6.4; and
(ii) the Security Interest and Liens created by the Security
Documents.
(b) No Borrower will amend any financing statements in favor of the
Lender except as permitted by law. Any authorization by the Lender
to any Person to amend financing statements in favor of the Lender
shall be in writing.
Section 6.4. Indebtedness. No Borrower will incur, create, assume or permit
to exist any indebtedness or liability on account of deposits or advances or
any indebtedness for borrowed money or letters of credit issued on such
Borrower's behalf, or any other indebtedness or liability evidenced by notes,
bonds, debentures or similar obligations, except:
(a) indebtedness arising hereunder;
(b) indebtedness of any Borrower in existence on the date hereof and
listed in Schedule 6.4 hereto;
(c) with respect to EMS, indebtedness payable to Ramtron permitted in
accordance with Section 6.6(f); and
(d) indebtedness incurred solely in order to finance the acquisition of
fixed or capital assets, in an amount not to exceed the fair market
value of the assets acquired using the proceeds of such
indebtedness.
Section 6.5. Guaranties. No Borrower will assume, guarantee, endorse or
otherwise become directly or contingently liable in connection with any
obligations of any other Person, except:
Page-35
(a) the endorsement of negotiable instruments by any Borrower for
deposit or collection or similar transactions in the ordinary
course of business; and
(b) guaranties, endorsements and other direct or contingent liabilities
in connection with the obligations of other Persons, in existence
on the date hereof and listed in Schedule 6.4 hereto.
Section 6.6. Investments and Subsidiaries. No Borrower will purchase or hold
beneficially any stock or other securities or evidences of indebtedness of,
make or permit to exist any loans or advances to, or make any investment or
acquire any interest whatsoever in, any other Person, including any
partnership or joint venture, except:
(a) investments in direct obligations of the United States of America
or any agency or instrumentality thereof whose obligations
constitute full faith and credit obligations of the United States
of America having a maturity of one year or less, commercial paper
issued by U.S. corporations rated "A-1" or "A-2" by Standard &
Poors Corporation or "P-1" or "P-2" by Xxxxx'x Investors Service or
certificates of deposit or bankers' acceptances having a maturity
of one year or less issued by members of the Federal Reserve System
having deposits in excess of $100,000,000 (which certificates of
deposit or bankers' acceptances are fully insured by the Federal
Deposit Insurance Corporation);
(b) travel advances or loans to such Borrower's Officers and employees
not exceeding at any one time an aggregate of $25,000;
(c) advances in the form of progress payments, prepaid rent not
exceeding two months or security deposits;
(d) current investments in the Subsidiaries in existence on the date
hereof and listed in Schedule 5.5 hereto;
(e) loans by any Borrower to its employees in connection with
management incentive plans, in an amount not to exceed $100,000
outstanding at any time; and
(f) so long as (i) no Default Period then exists or would exist
immediately after giving effect to such loan or contribution or as
a result thereof, (ii) the representations set forth in Section
5.18 are true with respect to Ramtron both before and immediately
after such loan or contribution, (iii) Ramtron has maintained
average daily Available Cash of at least $2,000,000 for the 90 days
prior to making such loan or contribution, and (iv) Ramtron would
have Available Cash of at least $2,000,000 after giving effect to
such loan or contribution, Ramtron may make equity contributions to
EMS not to exceed $9,000,000 in the aggregate during the fiscal
year ending December 31, 2003 and loans to EMS in a principal
amount outstanding at any given time not to exceed the difference
of (A) $9,000,000 and (B) the amount of equity contributions made
to EMS by Ramtron during the fiscal year ending December 31, 2003.
Page-36
Section 6.7 Dividends and Distributions. No Borrower will declare or pay any
dividends (other than dividends payable solely in stock of the Borrower) on
any class of its stock or make any payment on account of the purchase,
redemption or other retirement of any shares of such stock or make any
distribution in respect thereof, either directly or indirectly; provided,
however, that so long as (a) no Default Period exists or would exist
immediately after or as a result of such distribution, (b) the
representations set forth in Section 5.18 are true with respect to Mushkin
both before and immediately after such loan or contribution, (c) Mushkin has
maintained average daily Available Cash of at least $500,000 for the 90 days
prior to such distribution, and (d) Mushkin would have at least $500,000 in
Available Cash immediately after giving effect to such distribution, Mushkin
may make distributions to Ramtron not to exceed $1,000,000 during its fiscal
year ending December 31, 2003.
Section 6.8. Books and Records; Inspection and Examination. Each Borrower
will keep accurate books of record and account for itself pertaining to the
Collateral and pertaining to such Borrower's business and financial condition
and such other matters as the Lender may from time to time request in which
true and complete entries will be made in accordance with GAAP and, upon the
Lender's request, will permit any officer, employee, attorney or accountant
for the Lender to audit, review, make extracts from or copy any and all
company and financial books and records of such Borrower at all times during
ordinary business hours, to send and discuss with account debtors and other
obligors requests for verification of amounts owed to such Borrower, and to
discuss such Borrower's affairs with any of its Directors, Officers,
employees or agents. Each Borrower hereby irrevocably authorizes all
accountants and third parties to disclose and deliver to Lender, at such
Borrower's expense, all financial information, books and records, work
papers, management reports and other information in their possession
regarding such Borrower. Each Borrower will permit the Lender, or its
employees, accountants, attorneys or agents, to examine and inspect any
Collateral or any other property of such Borrower at any time during ordinary
business hours.
Section 6.9. Account Verification. The Lender may at any time and from time
to time send or require any Borrower to send requests for verification of
accounts or notices of assignment to account debtors and other obligors. The
Lender may also at any time and from time to time telephone account debtors
and other obligors to verify accounts.
Section 6.10. Compliance with Laws.
(a) Each Borrower will (i) comply with the requirements of applicable
laws and regulations, the non-compliance with which would
materially and adversely affect its business or its financial
condition and (ii) use and keep the Collateral, and require that
others use and keep the Collateral, only for lawful purposes,
without violation of any federal, state or local law, statute or
ordinance.
Page-37
(b) Without limiting the foregoing undertakings, each Borrower
specifically agrees that it will comply with all applicable
Environmental Laws and obtain and comply with all permits, licenses
and similar approvals required by any Environmental Laws, and will
not generate, use, transport, treat, store or dispose of any
Hazardous Substances in such a manner as to create any material
liability or obligation under the common law of any jurisdiction or
any Environmental Law.
Section 6.11. Payment of Taxes and Other Claims. Each Borrower will pay or
discharge, when due, (a) all taxes, assessments and governmental charges
levied or imposed upon it or upon its income or profits, upon any properties
belonging to it (including the Collateral) or upon or against the creation,
perfection or continuance of the Security Interest, prior to the date on
which penalties attach thereto, (b) all federal, state and local taxes
required to be withheld by it, and (c) all lawful claims for labor, materials
and supplies which, if unpaid, might by law become a Lien upon any properties
of any Borrower; provided, that no Borrower shall be required to pay any such
tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings and for which proper
reserves have been made.
Section 6.12. Maintenance of Properties.
(a) Each Borrower will keep and maintain the Collateral and all of its
other properties necessary or useful in its business in good
condition, repair and working order (normal wear and tear excepted)
and will from time to time replace or repair any worn, defective or
broken parts; provided, however, that nothing in this Section 6.12
shall prevent any Borrower from discontinuing the operation and
maintenance of any of its properties if such discontinuance is, in
such Borrower's judgment, desirable in the conduct of such
Borrower's business and not disadvantageous in any material respect
to the Lender. Each Borrower will take all commercially reasonable
steps necessary to protect and maintain its Intellectual Property
Rights.
(b) Each Borrower will defend the Collateral against all Liens, claims
or demands of all Persons (other than the Lender) claiming the
Collateral or any interest therein. Each Borrower will keep all
Collateral free and clear of all Liens except Permitted Liens. Each
Borrower will take all commercially reasonable steps necessary to
prosecute any Person Infringing its Intellectual Property Rights
and to defend itself against any Person accusing it of Infringing
any Person's Intellectual Property Rights.
Page-38
Section 6.13. Insurance. Each Borrower will obtain and at all times maintain
insurance with insurers believed by such Borrower to be responsible and
reputable, in such amounts and against such risks as may from time to time be
required by the Lender, but in all events in such amounts and against such
risks as is usually carried by companies engaged in similar business and
owning similar properties in the same general areas in which such Borrower
operates. Without limiting the generality of the foregoing, each Borrower
will at all times maintain business interruption insurance including coverage
for force majeure and keep all tangible Collateral insured against risks of
fire (including so-called extended coverage), theft, collision (for
Collateral consisting of motor vehicles) and such other risks and in such
amounts as the Lender may reasonably request, with any loss payable to the
Lender to the extent of its interest, and all policies of such insurance
shall contain a lender's loss payable endorsement for the Lender's benefit.
All policies of liability insurance required hereunder shall name the Lender
as an additional insured.
Section 6.14. Preservation of Existence. Each Borrower will preserve and
maintain its existence and all of its rights, privileges and franchises
necessary or desirable in the normal conduct of its business and shall
conduct its business in an orderly, efficient and regular manner.
Section 6.15. Delivery of Instruments, etc. Upon request by the Lender, each
Borrower will promptly deliver to the Lender in pledge all instruments,
documents and chattel paper constituting Collateral, duly endorsed or
assigned by such Borrower.
Section 6.16. Sale or Transfer of Assets; Suspension of Business Operations.
No Borrower will sell, lease, assign, transfer or otherwise dispose of (i)
the stock of any Subsidiary, (ii) all or a substantial part of its assets, or
(iii) any Collateral or any interest therein (whether in one transaction or
in a series of transactions) to any other Person other than (a) the sale of
Inventory in the ordinary course of business and (b) the sale, lease,
assignment, transfer or disposal of obsolete or worn out Equipment disposed
of in the ordinary course of business the value of which does not exceed
$100,000 during any fiscal year. No Borrower will liquidate, dissolve or
suspend its business operations. No Borrower will transfer any part of its
ownership interest in any Intellectual Property Rights and will not permit
any agreement under which it has licensed Licensed Intellectual Property to
lapse, except that a Borrower may transfer such rights or permit such
agreements to lapse if it shall have reasonably determined that the
applicable Intellectual Property Rights are no longer useful in its business.
If a Borrower transfers any Intellectual Property Rights for value, such
Borrower will pay over the proceeds to the Lender for application to the
Obligations. No Borrower will license any other Person to use any of such
Borrower's Intellectual Property Rights, except that such Borrower may grant
licenses in the ordinary course of its business in connection with (A) sales
of Inventory, (B) provision of services to its customers, (C) research and
development programs, and (D) foundary services.
Page-39
Section 6.17. Consolidation and Merger; Asset Acquisitions. No Borrower will
consolidate with or merge into any Person, or permit any other Person to
merge into it, or acquire (in a transaction analogous in purpose or effect to
a consolidation or merger) all or substantially all the assets of any other
Person.
Section 6.18. Sale and Leaseback. No Borrower will enter into any
arrangement, directly or indirectly, with any other Person whereby such
Borrower shall sell or transfer any real or personal property (other than
Equipment), whether now owned or hereafter acquired, and then or thereafter
rent or lease as lessee such property or any part thereof or any other
property which such Borrower intends to use for substantially the same
purpose or purposes as the property being sold or transferred.
Section 6.19. Restrictions on Nature of Business. No Borrower will engage in
any line of business materially different from that presently engaged in by
such Borrower and will not purchase, lease or otherwise acquire assets not
related to its business.
Section 6.20. Accounting. No Borrower will adopt any material change in
accounting principles other than as required by GAAP. No Borrower will adopt,
permit or consent to any change in its fiscal year.
Section 6.21. Discounts, etc. After notice from the Lender, which notice
shall be given only during a Default Period, no Borrower will grant any
discount, credit or allowance to any customer of such Borrower or accept any
return of goods sold. No Borrower will at any time modify, amend,
subordinate, cancel or terminate the obligation of any account debtor or
other obligor of such Borrower.
Section 6.22. Plans. Unless disclosed to the Lender pursuant to Section
5.12, neither any Borrower nor any ERISA Affiliate will (i) adopt, create,
assume or become a party to any Pension Plan, (ii) incur any obligation to
contribute to any Multiemployer Plan, (iii) incur any obligation to provide
post-retirement medical or insurance benefits with respect to employees or
former employees (other than benefits required by law) or (iv) amend any Plan
in a manner that would materially increase its funding obligations.
Section 6.23. Place of Business; Name. No Borrower will transfer its chief
executive office or principal place of business, or move, relocate, close or
sell any business location. No Borrower will permit any tangible Collateral
or any records pertaining to the Collateral to be located in any state or
area in which, in the event of such location, a financing statement covering
such Collateral would be required to be, but has not in fact been, filed in
order to perfect the Security Interest. No Borrower will change its name or
jurisdiction of organization.
Section 6.24. Constituent Documents; S Corporation Status. No Borrower will
amend its Constituent Documents. No Borrower will become an S Corporation.
Page-40
Section 6.25 Performance by the Lender. If any Borrower at any time fails to
perform or observe any of the foregoing covenants contained in this Article
VI or elsewhere herein, and if such failure shall continue for a period of
ten calendar days after the Lender gives such Borrower written notice thereof
(or in the case of the agreements contained in Section 6.11 and Section 6.13,
immediately upon the occurrence of such failure, without notice or lapse of
time), the Lender may, but need not, perform or observe such covenant on
behalf and in the name, place and stead of such Borrower (or, at the Lender's
option, in the Lender's name) and may, but need not, take any and all other
actions which the Lender may reasonably deem necessary to cure or correct
such failure (including the payment of taxes, the satisfaction of Liens, the
performance of obligations owed to account debtors or other obligors, the
procurement and maintenance of insurance, the execution of assignments,
security agreements and financing statements, and the endorsement of
instruments); and the Borrowers shall thereupon pay to the Lender on demand
the amount of all monies expended and all costs and expenses (including
reasonable attorneys' fees and legal expenses) incurred by the Lender in
connection with or as a result of the performance or observance of such
agreements or the taking of such action by the Lender, together with interest
thereon from the date expended or incurred at the Default Rate. To facilitate
the Lender's performance or observance of such covenants of the Borrowers,
each Borrower hereby irrevocably appoints the Lender, or the Lender's
delegate, acting alone, as such Borrower's attorney in fact (which
appointment is coupled with an interest) with the right (but not the duty)
from time to time to create, prepare, complete, execute, deliver, endorse or
file in the name and on behalf of such Borrower any and all instruments,
documents, assignments, security agreements, financing statements,
applications for insurance and other agreements and writings required to be
obtained, executed, delivered or endorsed by such Borrower under this Section
6.25.
ARTICLE VII
EVENTS OF DEFAULT, RIGHTS AND REMEDIES
Section 7.1 Events of Default. "Event of Default", wherever used herein,
means any one of the following events:
(a) Default in the payment of any Obligations when they become due and
payable;
(b) Default in the performance, or breach, of any covenant or agreement
of any Borrower contained in this Agreement;
(c) A Change of Control shall occur;
Page-41
(d) Any Borrower or any Guarantor shall be or become insolvent, or
admit in writing its or his inability to pay its or his debts as
they mature, or make an assignment for the benefit of creditors; or
any Borrower or any Guarantor shall apply for or consent to the
appointment of any receiver, trustee, or similar officer for it or
him or for all or any substantial part of its or his property; or
such receiver, trustee or similar officer shall be appointed
without the application or consent of such Borrower or such
Guarantor, as the case may be; or any Borrower or any Guarantor
shall institute (by petition, application, answer, consent or
otherwise) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, dissolution, liquidation or similar
proceeding relating to it or him under the laws of any
jurisdiction; or any such proceeding shall be instituted (by
petition, application or otherwise) against any Borrower or any
such Guarantor; or any judgment, writ, warrant of attachment or
execution or similar process shall be issued or levied against a
substantial part of the property of any Borrower or any Guarantor;
(e) A petition shall be filed by or against any Borrower or any
Guarantor under the United States Bankruptcy Code naming such
Borrower or such Guarantor as debtor;
(f) Any representation or warranty made by any Borrower in this
Agreement, by any Guarantor in any guaranty delivered to the
Lender, or by any Borrower (or any of its Officers) or any
Guarantor in any agreement, certificate, instrument or financial
statement or other statement contemplated by or made or delivered
pursuant to or in connection with this Agreement or any such
guaranty shall prove to have been incorrect in any material respect
as of the date deemed to be made;
(g) The rendering against any Borrower of an arbitration award, final
judgment, decree or order for the payment of money in excess of
$100,000 and the continuance of such arbitration award, judgment,
decree or order unsatisfied and in effect for any period of 30
consecutive days without a stay of execution;
(h) A default under any of the 5% Secured Convertible Debentures
payable to Infineon Technologies AG, Xxxxxxxx Capital Corp., or
Halifax Fund L.P., or under any other bond, debenture, note or
other evidence of material indebtedness of any Borrower owed to any
Person other than the Lender, unless such default has been cured or
waived within ten (10) days following such breach, or under any
indenture or other instrument under which any such evidence of
indebtedness has been issued or by which it is governed, unless
such default has been cured or waived within ten (10) days
following such breach, or under any material lease or other
contract, and the expiration of the applicable period of grace, if
any, specified in such debenture, bond, note, evidence of
indebtedness, indenture, other instrument, lease or contract,
unless such default has been cured or waived within ten (10) days
following such breach;
Page-42
(i) Any Reportable Event, which the Lender determines in good faith
might constitute grounds for the termination of any Pension Plan or
for the appointment by the appropriate United States District Court
of a trustee to administer any Pension Plan, shall have occurred
and be continuing 30 days after written notice to such effect shall
have been given to any Borrower by the Lender; or a trustee shall
have been appointed by an appropriate United States District Court
to administer any Pension Plan; or the Pension Benefit Guaranty
Corporation shall have instituted proceedings to terminate any
Pension Plan or to appoint a trustee to administer any Pension
Plan; or any Borrower or any ERISA Affiliate shall have filed for a
distress termination of any Pension Plan under Title IV of ERISA;
or any Borrower or any ERISA Affiliate shall have failed to make
any quarterly contribution required with respect to any Pension
Plan under Section 412(m) of the IRC, which the Lender determines
in good faith may by itself, or in combination with any such
failures that the Lender may determine are likely to occur in the
future, result in the imposition of a Lien on any Borrower's assets
in favor of the Pension Plan; or any withdrawal, partial
withdrawal, reorganization or other event occurs with respect to a
Multiemployer Plan which results or could reasonably be expected to
result in a material liability of any Borrower to the Multiemployer
Plan under Title IV of ERISA.
(j) An event of default shall occur under any Security Document;
(k) Any Borrower shall liquidate, dissolve, terminate or suspend its
business operations or otherwise fail to operate its business in
the ordinary course, or sell or attempt to sell all or
substantially all of its assets, without the Lender's prior written
consent;
(l) The patent interference proceeding declared in 1991 in the United
States Patent and Trademark Office between the Borrower, National
Semiconductor Corporation and the Department of the Navy in regard
to one of the Borrower's issued United States patents is
adjudicated, settled, or otherwise resolved in a manner that has,
or could reasonably be expected to have, a Material Adverse Effect;
(m) Default in the payment of any amount owed by any Borrower to the
Lender other than any indebtedness arising hereunder, and such
default is not cured or waived within ten (10) days;
(n) Any Guarantor or person signing a support agreement in favor of the
Lender shall repudiate, purport to revoke or fail to perform his,
her, or its obligations under his, her, or its guaranty or support
agreement in favor of the Lender, or any Guarantor shall cease to
exist;
Page-43
(o) Any Borrower shall take or participate in any action which would be
prohibited under the provisions of any Subordination Agreement or
make any payment on any Subordinated Indebtedness (as defined in
any Subordination Agreement) that any Person was not entitled to
receive under the provisions of such Subordination Agreement;
(p) Any breach, default or event of default by or attributable to any
Affiliate under any material agreement between such Affiliate and
the Lender shall occur.
Section 7.2. Rights and Remedies. During any Default Period, the Lender may
exercise any or all of the following rights and remedies:
(a) the Lender may, by notice to the Borrowers, declare the Commitment
to be terminated, whereupon the same shall forthwith terminate;
(b) the Lender may, by notice to the Borrowers, declare the Obligations
to be forthwith due and payable, whereupon all Obligations shall
become and be forthwith due and payable, without presentment,
notice of dishonor, protest or further notice of any kind, all of
which each Borrower hereby expressly waives;
(c) the Lender may, without notice to the Borrowers and without further
action, apply any and all money owing by the Lender to any Borrower
to the payment of the Obligations;
(d) the Lender may exercise and enforce any and all rights and remedies
available upon default to a secured party under the UCC, including
the right to take possession of Collateral, or any evidence
thereof, proceeding without judicial process or by judicial process
(without a prior hearing or notice thereof, which each Borrower
hereby expressly waives) and the right to sell, lease or otherwise
dispose of any or all of the Collateral (with or without giving any
warranties as to the Collateral, title to the Collateral or similar
warranties), and, in connection therewith, each Borrower will on
demand assemble the Collateral and make it available to the Lender
at a place to be designated by the Lender which is reasonably
convenient to both parties;
(e) the Lender may exercise and enforce its rights and remedies under
the Loan Documents; and
(f) the Lender may exercise any other rights and remedies available to
it by law or agreement.
Notwithstanding the foregoing, upon the occurrence of an Event of Default
described in Section 7.1(d) or Section 7.1(e), the Obligations shall be
immediately due and payable automatically without presentment, demand,
protest or notice of any kind. If the Lender sells any of the Collateral on
credit, the Obligations will be reduced only to the extent of payments
actually received. If the purchaser fails to pay for the Collateral, the
Lender may resell the Collateral and shall apply any proceeds actually
received to the Obligations.
Page-44
Section 7.3. Certain Notices. If notice to any Borrower of any intended
disposition of Collateral or any other intended action is required by law in
a particular instance, such notice shall be deemed commercially reasonable if
given (in the manner specified in Section 8.3) at least ten calendar days
before the date of intended disposition or other action.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. No Waiver; Cumulative Remedies; Compliance with Laws. No
failure or delay by the Lender in exercising any right, power or remedy under
the Loan Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
under the Loan Documents. The remedies provided in the Loan Documents are
cumulative and not exclusive of any remedies provided by law. The Lender may
comply with any applicable state or federal law requirements in connection
with a disposition of the Collateral and such compliance will not be
considered adversely to affect the commercial reasonableness of any sale of
the Collateral.
Section 8.2. Amendments, Etc. No amendment, modification, termination or
waiver of any provision of any Loan Document or consent to any departure by
any Borrower therefrom or any release of a Security Interest shall be
effective unless the same shall be in writing and signed by the Lender, and
then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No notice to or demand on any
Borrower in any case shall entitle any Borrower to any other or further
notice or demand in similar or other circumstances.
Section 8.3 Addresses for Notices; Requests for Accounting. Except as
otherwise expressly provided herein, all notices, requests, demands and other
communications provided for under the Loan Documents shall be in writing and
shall be (a) personally delivered, (b) sent by first class United States
mail, (c) sent by overnight courier of national reputation, or (d)
transmitted by facsimile, in each case addressed or telecopied to the party
to whom notice is being given at its address or facsimile number as set forth
below next to its signature or, as to each party, at such other address or
facsimile number as may hereafter be designated by such party in a written
notice to the other party complying as to delivery with the terms of this
Section. All such notices, requests, demands and other communications shall
be deemed to have been given on (a) the date received if personally
delivered, (b) when deposited in the mail if delivered by mail, (c) the date
sent if sent by overnight courier, or (d) the date of transmission if
delivered by facsimile, except that notices or requests to the Lender
pursuant to any of the provisions of Article II shall not be effective until
received by the Lender. All requests under Section 9-210 of the UCC (i) shall
be made in a writing signed by a person authorized under Section 2.2(a),
(ii) shall be personally delivered, sent by registered or certified mail,
Page-45
return receipt requested, or by overnight courier of national reputation
(iii) shall be deemed to be sent when received by the Lender and (iv) shall
otherwise comply with the requirements of Section 9-210. Each Borrower
requests that the Lender respond to all such requests which on their face
appear to come from an authorized individual and releases the Lender from any
liability for so responding. The Borrowers shall pay Lender the maximum
amount allowed by law for responding to such requests.
Section 8.4. Further Documents. Each Borrower will from time to time execute
and deliver or endorse any and all instruments, documents, conveyances,
assignments, security agreements, financing statements, control agreements
and other agreements and writings that the Lender may reasonably request in
order to secure, protect, perfect or enforce the Security Interest or the
Lender's rights under the Loan Documents (but any failure to request or
assure that such Borrower executes, delivers or endorses any such item shall
not affect or impair the validity, sufficiency or enforceability of the Loan
Documents and the Security Interest, regardless of whether any such item was
or was not executed, delivered or endorsed in a similar context or on a prior
occasion).
Section 8.5. Costs and Expenses. The Borrowers shall pay on demand all costs
and expenses, including reasonable attorneys' fees, incurred by the Lender in
connection with the Obligations, this Agreement, the Loan Documents, and any
other document or agreement related hereto or thereto, and the transactions
contemplated hereby, including all such costs, expenses and fees incurred in
connection with the negotiation, preparation, execution, amendment,
administration, performance, collection and enforcement of the Obligations
and all such documents and agreements and the creation, perfection,
protection, satisfaction, foreclosure or enforcement of the Security
Interest.
Section 8.6. Indemnity. In addition to the payment of expenses pursuant to
Section 8.5, each Borrower shall indemnify, defend and hold harmless the
Lender, and any of its participants, parent corporations, subsidiary
corporations, affiliated corporations, successor corporations, and all
present and future officers, directors, employees, attorneys and agents of
the foregoing (the "Indemnitees") from and against any of the following
(collectively, "Indemnified Liabilities"):
(i) any and all transfer taxes, documentary taxes, assessments or
charges made by any governmental authority by reason of the
execution and delivery of the Loan Documents or the making of the
Advances;
(ii) any claims, loss or damage to which any Indemnitee may be
subjected if any representation or warranty contained in Section
5.14 proves to be incorrect in any respect or as a result of any
violation of the covenant contained in Section 6.10(b); and
Page-46
(iii) any and all other liabilities, losses, damages, penalties,
judgments, suits, claims, costs and expenses of any kind or
nature whatsoever (including the reasonable fees and
disbursements of counsel) in connection with the foregoing and
any other investigative, administrative or judicial proceedings,
whether or not such Indemnitee shall be designated a party
thereto, which may be imposed on, incurred by or asserted against
any such Indemnitee, in any manner related to or arising out of
or in connection with the making of the Advances and the Loan
Documents or the use or intended use of the proceeds of the
Advances;
provided, however, that no Borrower will be liable for amounts owed pursuant
to this Section 8.6 resulting from the gross negligence or willful misconduct
of the Indemnitee.
If any investigative, judicial or administrative proceeding arising from any
of the foregoing is brought against any Indemnitee, upon such Indemnitee's
request, each Borrower, or counsel designated by such Borrower and
satisfactory to the Indemnitee, will resist and defend such action, suit or
proceeding to the extent and in the manner directed by the Indemnitee, at the
Borrowers' sole cost and expense. Each Indemnitee will use its best efforts
to cooperate in the defense of any such action, suit or proceeding. If the
foregoing undertaking to indemnify, defend and hold harmless may be held to
be unenforceable because it violates any law or public policy, the Borrowers
shall nevertheless make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible
under applicable law. The Borrowers' obligation under this Section 8.6 shall
survive the termination of this Agreement and the discharge of the Borrowers'
other obligations hereunder.
Section 8.7. Participants. The Lender and its participants, if any, are not
partners or joint venturers, and the Lender shall not have any liability or
responsibility for any obligation, act or omission of any of its
participants. All rights and powers specifically conferred upon the Lender
may be transferred or delegated to any of the Lender's participants,
successors or assigns.
Section 8.8. Execution in Counterparts; Facsimile Execution. This Agreement
and other Loan Documents may be executed in any number of counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which counterparts, taken together, shall constitute but one and the
same instrument. Delivery of an executed counterpart of this Agreement by
facsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart
of this Agreement by facsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect
of this Agreement.
Page-47
Section 8.9 Retention of Borrowers' Records. The Lender shall have no
obligation to maintain any electronic records or any documents, schedules,
invoices, agings, or other papers delivered to the Lender by any Borrower or
in connection with the Loan Documents for more than four months after receipt
by the Lender.
Section 8.10. Binding Effect; Assignment; Complete Agreement; Exchanging
Information. The Loan Documents shall be binding upon and inure to the
benefit of each Borrower and the Lender and their respective successors and
assigns, except that no Borrower shall have the right to assign its rights
thereunder or any interest therein without the Lender's prior written
consent. To the extent permitted by law, each Borrower waives and will not
assert against any assignee any claims, defenses or set-offs which such
Borrower could assert against the Lender. This Agreement shall also bind all
Persons who become a party to this Agreement as a borrower. This Agreement,
together with the Loan Documents, comprises the complete and integrated
agreement of the parties on the subject matter hereof and supersedes all
prior agreements, written or oral, on the subject matter hereof. Without
limiting the Lender's right to share information regarding each Borrower and
its Affiliates with the Lender's participants, accountants, lawyers and other
advisors, the Lender, Xxxxx Fargo & Company, and all direct and indirect
subsidiaries of Xxxxx Fargo & Company, may exchange any and all information
they may have in their possession regarding any Borrower and its Affiliates,
and each Borrower waives any right of confidentiality it may have with
respect to such exchange of such information.
Section 8.11. Severability of Provisions. Any provision of this Agreement
which is prohibited or unenforceable shall be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof.
Section 8.12. Headings. Article, Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
Section 8.13. Governing Law; Jurisdiction, Venue; Waiver of Jury Trial. The
Loan Documents shall be governed by and construed in accordance with the
substantive laws (other than conflict laws) of the State of Colorado. The
parties hereto hereby (i) consent to the personal jurisdiction of the state
and federal courts located in the State of Colorado in connection with any
controversy related to this Agreement; (ii) waive any argument that venue in
any such forum is not convenient, (iii) agree that any litigation initiated
by the Lender or any Borrower in connection with this Agreement or the other
Loan Documents may be venued in either the State or Federal courts located in
City and County of Denver, Colorado; and (iv) agree that a final judgment in
any such suit, action or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment or in any other manner
provided by law.
Page-48
THE PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
BASED ON OR PERTAINING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the
date first above written.
Ramtron International Corporation RAMTRON INTERNATIONAL
CORPORATION
0000 Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000 By: /S/ XxXxx X. Xxxxxx
Attention: XxXxx X. Xxxxxx ---------------------
e-mail: xxxxx.xxxxxx@xxxxxxx.xxx XxXxx X. Xxxxxx
Chief Financial Officer
Enhanced Memory Systems, Inc. ENHANCED MEMORY SYSTEMS, INC.
0000 Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000 By: /S/ XxXxx X. Xxxxxx
Attention: XxXxx X. Xxxxxx ---------------------
e-mail: xxxxx.xxxxxx@xxxxxxx.xxx XxXxx X. Xxxxxx
Chief Financial Officer
Mushkin Inc. MUSHKIN INC.
000 X. Xxxxxx Xxx.
Xxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000 By: /S/ XxXxx X. Xxxxxx
Attention: XxXxx X. Xxxxxx ---------------------
e-mail: xxxxx.xxxxxx@xxxxxxx.xxx XxXxx X. Xxxxxx
Chief Financial Officer
Xxxxx Fargo Business Credit, Inc. XXXXX FARGO BUSINESS CREDIT INC.
MAC C7300-210
0000 Xxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000 By: /S/ Xxxxxxxxxxx X. Xxxxxx
Attention: Xxxxx Xxxxxx ----------------------------
e-mail: xxxxxxxxxxx.x.xxxxxx@xxxxxxxxxx.xxx Xxxxxxxxxxx X. Xxxxxx
Vice President
Page-49
Table of Exhibits and Schedules
Exhibit A . . . . . . . . Form of Ramtron Revolving Note
Exhibit B . . . . . . . . Form of EMS Revolving Note
Exhibit C . . . . . . . . Form of Mushkin Revolving Note
Exhibit D . . . . . . . . Compliance Certificate
Exhibit E . . . . . . . . Premises
Exhibit F . . . . . . . . Countries used to determine
"European Accounts"
-------------------
Schedule 5.1 Trade Names, Chief Executive Office,
Principal Place of Business, and Locations of
Collateral
Schedule 5.2 Capitalization and Organizational Chart
Schedule 5.3 Consents Required
Schedule 5.5 Subsidiaries
Schedule 5.7 Litigation
Schedule 5.11 Intellectual Property Disclosures
Schedule 5.12 Plans
Schedule 6.3 Permitted Liens
Schedule 6.4 Permitted Indebtedness and Guaranties
Page-50
Exhibit A to Credit and Security Agreement
REVOLVING NOTE
(Ramtron International Corporation)
$3,000,000 Denver, Colorado
March XX, 2003
For value received, the undersigned, RAMTRON INTERNATIONAL CORPORATION,
a Delaware corporation (the "Borrower"), hereby promises to pay on the
Termination Date under the Credit Agreement (defined below), to the order of
XXXXX FARGO BUSINESS CREDIT, INC., a Minnesota corporation (the "Lender"), at
its main office in Minneapolis, Minnesota, or at any other place designated
at any time by the holder hereof, in lawful money of the United States of
America and in immediately available funds, the principal sum of Three
Million Dollars ($3,000,000) or, if less, the aggregate unpaid principal
amount of all Revolving Advances made by the Lender to the Borrower under the
Credit Agreement (defined below) together with interest on the principal
amount hereunder remaining unpaid from time to time, computed on the basis of
the actual number of days elapsed and a 360-day year, from the date hereof
until this Note is fully paid at the rate from time to time in effect under
the Credit and Security Agreement of even date herewith (as the same may
hereafter be amended, supplemented or restated from time to time, the "Credit
Agreement") by and between the Lender, the Borrower, Enhanced Memory Systems,
Inc., and Mushkin Inc. The principal hereof and interest accruing thereon
shall be due and payable as provided in the Credit Agreement. This Note may
be prepaid only in accordance with the Credit Agreement.
This Note is issued pursuant, and is subject, to the Credit Agreement,
which provides, among other things, for acceleration hereof. This Note is the
Ramtron Revolving Note referred to in the Credit Agreement. This Note is
secured, among other things, pursuant to the Credit Agreement and the
Security Documents as therein defined, and may now or hereafter be secured by
one or more other security agreements, mortgages, deeds of trust, assignments
or other instruments or agreements.
The Borrower shall pay all costs of collection, including reasonable
attorneys' fees and legal expenses if this Note is not paid when due, whether
or not legal proceedings are commenced.
Presentment or other demand for payment, notice of dishonor and protest
are expressly waived.
RAMTRON INTERNATIONAL CORPORATION
By ---------------------------------------
XxXxx X. Xxxxxx, Chief Financial Officer
Page-51
Exhibit B to Credit and Security Agreement
REVOLVING NOTE
(Enhanced Memory Systems, Inc.)
$3,000,000 Denver, Colorado
March XX, 2003
For value received, the undersigned, ENHANCED MEMORY SYSTEMS, INC., a
Delaware corporation ("EMS"), and RAMTRON INTERNATIONAL CORPORATION, a
Delaware corporation (each, a "Borrower"), hereby promise, jointly and
severally, to pay on the Termination Date under the Credit Agreement (defined
below), to the order of XXXXX FARGO BUSINESS CREDIT, INC., a Minnesota
corporation (the "Lender"), at its main office in Minneapolis, Minnesota, or
at any other place designated at any time by the holder hereof, in lawful
money of the United States of America and in immediately available funds, the
principal sum of Three Million Dollars ($3,000,000) or, if less, the
aggregate unpaid principal amount of all Revolving Advances made by the
Lender to EMS under the Credit Agreement (defined below) together with
interest on the principal amount hereunder remaining unpaid from time to
time, computed on the basis of the actual number of days elapsed and a 360-
day year, from the date hereof until this Note is fully paid at the rate from
time to time in effect under the Credit and Security Agreement of even date
herewith (as the same may hereafter be amended, supplemented or restated from
time to time, the "Credit Agreement") by and between the Lender, Mushkin
Inc., and the Borrowers. The principal hereof and interest accruing thereon
shall be due and payable as provided in the Credit Agreement. This Note may
be prepaid only in accordance with the Credit Agreement.
This Note is issued pursuant, and is subject, to the Credit Agreement,
which provides, among other things, for acceleration hereof. This Note is the
EMS Revolving Note referred to in the Credit Agreement. This Note is secured,
among other things, pursuant to the Credit Agreement and the Security
Documents as therein defined, and may now or hereafter be secured by one or
more other security agreements, mortgages, deeds of trust, assignments or
other instruments or agreements.
The Borrowers shall pay all costs of collection, including reasonable
attorneys' fees and legal expenses if this Note is not paid when due, whether
or not legal proceedings are commenced.
Presentment or other demand for payment, notice of dishonor and protest
are expressly waived.
ENHANCED MEMORY SYSTEMS, INC.
By ----------------------------------------
XxXxx X. Xxxxxx, Chief Financial Officer
RAMTRON INTERNATIONAL CORPORATION
By ----------------------------------------
XxXxx X. Xxxxxx, Chief Financial Officer
Page-52
Exhibit C to Credit and Security Agreement
REVOLVING NOTE
(Mushkin Inc.)
$3,000,000 Denver, Colorado
March XX, 2003
For value received, the undersigned, MUSHKIN INC., a Colorado
corporation ("Mushkin"), and RAMTRON INTERNATIONAL CORPORATION, a Delaware
corporation (each, a "Borrower"), hereby promise, jointly and severally, to
pay on the Termination Date under the Credit Agreement (defined below), to
the order of XXXXX FARGO BUSINESS CREDIT, INC., a Minnesota corporation (the
"Lender"), at its main office in Minneapolis, Minnesota, or at any other
place designated at any time by the holder hereof, in lawful money of the
United States of America and in immediately available funds, the principal
sum of Three Million Dollars ($3,000,000) or, if less, the aggregate unpaid
principal amount of all Revolving Advances made by the Lender to Mushkin
under the Credit Agreement (defined below) together with interest on the
principal amount hereunder remaining unpaid from time to time, computed on
the basis of the actual number of days elapsed and a 360-day year, from the
date hereof until this Note is fully paid at the rate from time to time in
effect under the Credit and Security Agreement of even date herewith (as the
same may hereafter be amended, supplemented or restated from time to time,
the "Credit Agreement") by and between the Lender, Enhanced Memory Systems,
Inc., and the Borrowers. The principal hereof and interest accruing thereon
shall be due and payable as provided in the Credit Agreement. This Note may
be prepaid only in accordance with the Credit Agreement.
This Note is issued pursuant, and is subject, to the Credit Agreement,
which provides, among other things, for acceleration hereof. This Note is the
Mushkin Revolving Note referred to in the Credit Agreement. This Note is
secured, among other things, pursuant to the Credit Agreement and the
Security Documents as therein defined, and may now or hereafter be secured by
one or more other security agreements, mortgages, deeds of trust, assignments
or other instruments or agreements.
The Borrowers shall pay all costs of collection, including reasonable
attorneys' fees and legal expenses if this Note is not paid when due, whether
or not legal proceedings are commenced.
Presentment or other demand for payment, notice of dishonor and protest
are expressly waived.
MUSHKIN INC.
By ----------------------------------------
XxXxx X. Xxxxxx, Chief Financial Officer
RAMTRON INTERNATIONAL CORPORATION
By ----------------------------------------
XxXxx X. Xxxxxx, Chief Financial Officer
Page-53
Exhibit D to Credit and Security Agreement
Compliance Certificate
----------------------
To: ------------------------------
Xxxxx Fargo Business Credit, Inc.
Date: ----------------, 200XX
Subject: Ramtron International Corporation
Enhanced Memory Systems, Inc.
Mushkin Inc.
Financial Statements
In accordance with our Credit and Security Agreement dated as of March XX,
2003 (the "Credit Agreement"), attached are the financial statements of
Ramtron International Corporation, Enhanced Memory Systems, Inc., and Mushkin
Inc. (the "Borrowers") as of and for ------------, 20XX (the "Reporting
Date") and the year-to-date period then ended (the "Current Financials").
Capitalized terms used, but not defined, in this certificate have the
meanings given to such terms in the Credit Agreement.
I certify that the Current Financials of Ramtron International Corporation
have been prepared in accordance with GAAP, subject to year-end audit
adjustments, and fairly present the Borrower's financial condition as of the
date thereof.
Events of Default. (Check one):
( ) The undersigned does not have knowledge of the occurrence of a
Default or Event of Default under the Credit Agreement except as
previously reported in writing to the Lender.
( ) The undersigned has knowledge of the occurrence of a Default or
Event of Default under the Credit Agreement not previously
reported in writing to the Lender and attached hereto is a
statement of the facts with respect to thereto. The Borrower
acknowledges that pursuant to Section 2.4(c) of the Credit
Agreement, the Lender may impose the Default Rate at any time
during the resulting Default Period.
Financial Covenants. I further hereby certify as follows:
1. Consolidated Minimum Book Net Worth. Pursuant to Section 6.2(a) of
the Credit Agreement, as of the Reporting Date, Ramtron's consolidated Book
Net Worth was $XXXXXXX which ( ) satisfies ( ) does not satisfy the
requirement that such amount be not less than $XXXXXXXX on the Reporting
Date as set forth in table below:
Page-54
Date Minimum Book Net Worth
---- ----------------------
December 31, 2002 $19,500,000
January 31, 2003 $18,800,000
February 28, 2003 $18,300,000
March 31, 2003 $18,300,000
April 30, 2003 $17,600,000
May 31, 2003 $17,400,000
June 30, 2003 $17,950,000
July 31, 2003 $17,500,000
August 31, 2003 $18,000,000
September 30, 2003 $19,050,000
October 31, 2003 $19,400,000
November 30, 2003 $20,200,000
December 31, 2003
and the last day of
each month thereafter $21,100,000
2. Consolidated Minimum Net Income. Pursuant to Section 6.2(b) of the Credit
Agreement, Ramtron's consolidated Net Income for the ---------- period ending
on the Reporting Date, was $XXXXXXXX, which ( ) satisfies ( ) does not
satisfy the requirement that such amount be not less than $XXXXXXXXX during
such period as set forth in table below:
Date Minimum YTD Net Income
---- ----------------------
December 31, 2002 ($2,500,000)
March 31, 2003 ($1,850,000)
June 30, 2003 ($2,200,000)
September 30, 2003 ($1,100,000)
December 31, 2003 $950,000
3. Minimum Available Cash. Pursuant to Section 6.2(c) of the Credit
Agreement, as of the Reporting Date, the Borrowers consolidated Available
Cash was $XXXXXXXX, which ( ) satisfies ( ) does not satisfy the
requirement that Available Cash be not less than $2,000,000 in the aggregate
on such date.
4. Individual Minimum Book Net Worth. Pursuant to Section 6.2(d) of the
Credit Agreement, as of the Reporting Date, Ramtron's individual Book Net
Worth was $XXXXXXXX, which ( ) satisfies ( ) does not satisfy the
requirement that such amount be not less than $XXXXXXXX on the Reporting
Date, EMS's individual Book Net Worth was $XXXXXXXXX, which ( ) satisfies
( ) does not satisfy the requirement that such amount be not less than
$XXXXXXXX on the Reporting Date, and Mushkin's individual Book Net Worth was
$XXXXXXXX, which ( ) satisfies ( ) does not satisfy the requirement that
such amount be not less than $XXXXXXXXX on the Reporting Date, as set
forth in table below:
Page-55
Borrower Minimum Book Net Worth
-------- ----------------------
Ramtron $14,750,000
EMS $1,000,000
Mushkin $8,000,000
5. Capital Expenditures. Pursuant to Section 6.2(e) of the Credit Agreement,
for the year-to-date period ending on the Reporting Date, the Borrowers have
expended or contracted to expend, for Capital Expenditures,
$XXXXXXXXX in the aggregate, which ( ) satisfies ( ) does not satisfy the
requirement that such expenditures not exceed $XXXXXXXXX in the aggregate
during such year.
6. Ramtron Investments in EMS. Pursuant to Section 6.6(f) of the Credit
Agreement, for the fiscal year-to-date period ending on the Reporting Date,
Ramtron has made debt and equity investments in EMS in an aggregate amount of
$XXXXXXXXX, which ( ) satisfies ( ) does not satisfy the requirement that
such investments not exceed $9,000,000 in the aggregate during such period.
7. Mushkin Distributions. Pursuant to Section 6.7 of the Credit Agreement,
for the fiscal year-to-date period ending on the Reporting Date, Mushkin has
made distributions in an aggregate amount of $XXXXXXXX, which ( ) satisfies
( ) does not satisfy the requirement that such investments not exceed
$1,000,000 in the aggregate during such period.
Attached hereto are all relevant facts in reasonable detail to evidence, and
the computations of the financial covenants referred to above. These
computations were made in accordance with GAAP.
RAMTRON INTERNATIONAL CORPORATION
By -----------------------------
Its Chief Financial Officer
ENHANCED MEMORY SYSTEMS, INC.
By -----------------------------
Its Chief Financial Officer
MUSHKIN INC.
By -----------------------------
Its Chief Financial Officer
Page-56
Exhibit E to Credit and Security Agreement
Premises
--------
The Premises referred to in the Credit and Security Agreement are described
as follows:
0000 Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
000 X. Xxxxxx Xxx.
Xxxxxx, Xxxxxxxx 00000
Page-57
Exhibit F to Credit and Security Agreement
Countries used to determine "European Accounts"
-----------------------------------------------
United Kingdom Albania
Ireland Greece
Belgium Macedonia
Netherlands Bulgaria
Denmark Moldova
Luxembourg Slovakia
Liechtenstein Czech Republic
France Poland
Germany Belarus
Switzerland Ukraine
Spain Georgia
Portugal Croatia
Italy Romania
Austria Hungary
Norway Serbia & Montenegro
Sweden Slovenia
Finland Estonia
Iceland Latvia
Bosnia & Herzegovina Lithuania
Page-58
Schedule 5.1 to Credit and Security Agreement
Trade Names, Chief Executive Office, Principal
Place of Business, and Locations of Collateral
----------------------------------------------
Trade Names
-----------
Mushkin Enhanced Memory Systems
Chief Executive Office/Principal Place of Business
--------------------------------------------------
0000 Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Other Inventory and Equipment Locations
---------------------------------------
Mushkin Inc.
000 X. Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Hana Semiconductor Co LTD
#100, Moo 1 T.Baan-Xxx
X. Bangpa-In, K.A. 00 Xxxx Xxxx
Xxxxxxxx, Xxxxxxxx
NS Electronics Bangkok LT
NS Electronics
0000 Xxxxx Xxxx
Xxxxx Xxxxx, XX 00000
XXXX
0 Xxxxxxxxx Xxxxx Xxx 0
Xxxxxxxxx 000000
Page-59
Schedule 5.2 to Credit and Security Agreement
Capitalization and Organizational Chart
---------------------------------------
No. of shares
(after exercise of Percent interest
Type of all rights to on a fully diluted
Holder* Rights/Stock acquire shares) basis
---------------- ------------ ------------------ ------------------
Infineon Common 4,430,005 23.7%
Technologies AG Convertible
Debenture 795,967
Warrants 262,663
National Common 1,638,680 11.1%
Electrical Benefit Warrants 905,697
Fund Options 11,000
*Show only holders of 5% or more of any equity class
Attach organizational chart showing the ownership structure of all
Subsidiaries of the Borrower.
Page-60
Attachment - Schedule 5.2 to Credit and Security Agreement
Ownership Structure of all Subsidiaries
---------------------------------------
Enhanced Memory Systems, Inc.
Ownership: Ramtron International Corporation - 80%
Infineon Technologies, AG - 20%
Mushkin Inc.
Ownership: Ramtron International Corporation - 100%
Ramtron K.K.
Ownership: Ramtron International Corporation - 100%
Page-61
Schedule 5.3 to Credit and Security Agreement
Consents Required
-----------------
NONE
Page-62
Schedule 5.5 to Credit and Security Agreement
Subsidiaries
------------
Ramtron: EMS, Mushkin, and Ramtron K.K.
EMS: None
Mushkin: None
Ramtron KK: None
Page-63
Schedule 5.7 to Credit and Security Agreement
Litigation Matters
------------------
Patent Interference Proceeding. A patent interference proceeding, which was
declared in 1991 in the United States Patent and Trademark Office (the
"Patent Office") between the Company, National Semiconductor Corporation
("National") and the Department of the Navy in regard to one of the Company's
issued United States patents, is continuing. The patent involved covers a
basic ferroelectric memory cell design invention the Company believes is of
fundamental importance to its FRAM business in the United States. An
interference is declared in the Patent Office when two or more parties each
claim to have made the same invention. The interference proceeding is
therefore conducted to determine which party is entitled to the patent rights
covering the invention. In the present interference contest, the Company is
the "senior" party, which means that it is in possession of the issued United
States Patent and retains all rights associated with such patent. The other
two parties involved in the interference are the "junior" parties, and each
has the burden of proof of convincing the Patent Office by a preponderance of
the evidence that it was the first to invent the subject matter of the
invention and thus is entitled to the corresponding patent rights. Only the
Company and National filed briefs in this matter. Oral arguments were
presented before the Patent Office on March 1, 1996.
The Patent Office decided the interference on May 6, 1997, holding that all
of the claims were patentable to National, one of the "junior" parties. The
other "junior" party, the Department of the Navy, was not granted any patent
claims pursuant to the interference proceedings. On June 20, 1997, the
Company filed a Request for Reconsideration with the Patent Office concerning
the interference decision. Pursuant to the Request for Reconsideration, the
Company requested that five separate issues be reconsidered because, from the
Company's perspective, they were either ignored or misconstrued in the
original decision. A decision on the Request for Reconsideration was issued
on November 19, 1998, again holding that all of the claims were patentable to
National. On January 9, 1999, the Company appealed the decision of the
Patent Office on one of the interference counts directly to the Court of
Appeals for the Federal Circuit. On February 2, 2000, the Court of Appeals
vacated and remanded the decision of the Patent Office for further
proceedings. The Company also filed complaints in Federal District Court
seeking a review of the decision of the Patent Office on the remaining
interference counts. The Company remains in possession of the issued United
States Patent and retains all rights associated with such patent while it
pursues its appeal options. The "junior" party has received no rights
associated with this patent decision and will not receive any such rights as
long as the appeal process continues. Under a Patent Office decision on
August 13, 2001, the Company was found to be the first to invent, however,
the Patent Office concluded that the enablement and best-mode requirements
for patent issuance had not been met by the Company. In October 2001, both
the Company and National filed a Request for Reconsideration with the Patent
Office. The Patent Office response is still pending. If the Company's
Request for Reconsideration is denied, the Company will appeal the decision
of the Patent Office.
Page-64
If the Company's patent rights that are the subject of the interference
proceeding are ultimately lost or significantly compromised, the Company
would be precluded from producing FRAM products in the United States using
the Company's existing design architecture, absent being able to obtain a
suitable license to exploit such rights. If such patent rights are
ultimately awarded to National, and if a license to such rights is not
subsequently entered into by the Company with National, National could use
the patent to prevent the manufacture, use or sale by the Company, and/or its
licensees, within the United States of any products that come within the
scope of such patent rights, which would include all FRAM products as
currently designed, and which would materially adversely affect the Company.
The Company has vigorously defended its patent rights in this interference
contest and will continue such efforts. The Company is uncertain as to the
ultimate outcome of the interference proceeding, as well as to the resulting
effects upon the Company's financial position or results of operations.
Page-65
Schedule 5.11 to Credit and Security Agreement
Intellectual Property Disclosures
---------------------------------
See Attachment
Page-66
Attachment to Schedule 5.11 to Credit and Security Agreement
Total Number of
Issued Patent Applications
RAM Patent
No. Tech Title No. Issued Expires Inventor
------- ---- ---------------------- ---------- ---------- ---------- --------------------
-------------------------------------------------------------------------------------------------------------------
APPLICATION AMERICA-USA
RAM145 FRAM MONOLITHIC MEMORY 4,707,897 11/24/1987 11/24/2004 XXXXXX
RAM220 FRAM ION BEAM METHOD 4,713,157 12/15/1987 5/14/2005 XXXXXXXX
RAM240 FRAM METHOD OF MAKING 5,024,964 6/18/1991 6/18/2008 XXXXXX, XXXXXXXX
FERROELECTRIC MEMORY DEVICE
RAM240 FRAM MONOLITHIC SEMICONDUCTOR 5,214,300 5/25/1993 5/25/2010 XXXXXX, XXXXXXXX
DIV2 INTEGRATED CIRCUIT
FERROELECTRIC MEMORY DEVICE
RAM302 FRAM SELF RESTORING 4,873,664 10/10/1989 2/12/2007 XXXXX
FERROELECTRIC MEMORY
RAM303 FRAM MEMORY CELL WITH VOLATILE 4,809,225 2/28/1989 7/2/2007 DIMMLER, XXXXX
AND NON-VOLATILE PORTIONS
HAVING FERROELECTRIC CAPACITORS
RAM304 FRAM/ TIMEPIECE COMMUNICATION 4,800,543 1/24/1989 12/3/2007 XXXXXX-XXXXX, GNADINGER.
RFID SYSTEM BLACK, XXXXXX
RAM305 DRAM DATA STORAGE DEVICE AND 4,853,893 8/1/1989 7/2/2007 XXXXX, XXXXXX
METHOD OF USING A
FERROELECTRIC CAPACITANCE
DIVIDER
RAM305 DRAM SRAM WITH PROGRAMMABLE 4,918,654 4/17/1990 7/2/2007 XXXXX, XXXXXX
DIV1 CAPACITANCE DIVIDER
RAM305 DRAM DRAM WITH PROGRAMMABLE 4,910,708 3/20/1990 7/2/2007 XXXXX, XXXXXX
DIV2 CAPACITANCE DIVIDER
RAM305 DRAM ONE TRANSISTOR MEMORY CELL 4,914,627 4/3/1990 7/2/2007 XXXXX, XXXXXX
DIV3 WITH PROGRAMMABLE CAPACITANCE
DIVIDER
RAM309 FRAM FERROELECTRIC RETENTION 4,893,272 1/9/1990 4/22/2008 XXXXX, XXXXXX
METHOD
Page-67
RAM310 FRAM DRAM MEMORY CELL AND 5,109,357 4/28/1992 4/28/2009 XXXXX
CON METHOD OF OPERATION
THEREOF FOR TRANSFERRING
INCREASED AMOUNT OF CHARGE
TO A BIT LINE
RAM311/ FRAM NON-VOLATILE MEMORY CELL 4,888,733 12/19/1989 9/12/2008 XXXXXX
312 AND SENSING METHOD
RAM314 FRAM MULTILAYER ELECTRODES FOR 5,005,102 4/2/1991 6/20/2009 XXXXXX
INTEGRATED CIRCUIT CAPACITORS
RAM317 DRAM METHOD FOR CREATING SELF- 5,104,822 4/14/1992 7/30/2010 XXXXXX
ALIGNED, NON-PATTERNED
CONTACT AREAS AND STACKED
CAPACITORS USING THE METHOD
RAM317 DRAM STACKED CAPACITOR WITH 5,162,890 11/10/1992 7/30/2010 XXXXXX
DIV SIDEWALL INSULATION
RAM319 DRAM REACTION BARRIER FOR A 5,170,242 12/8/1992 12/8/2009 XXXXXXX
CON MULTILAYER STRUCTURE IN AN
INTEGRATED CIRCUIT
RAM320 DRAM TRENCH CAPACITOR FOR LARGE 5,075,817 12/24/1991 6/22/2010 XXXXXX
SCALE INTEGRATED MEMORY
RAM321 DRAM PROCESS FOR FABRICATING 5,610,099 3/11/1997 6/28/2014 STEVENS, BAILEY, XXXXXX
TRANSISTORS USING COMPOSITE
NITRIDE STRUCTURE
RAM322 DRAM SEALED SELF ALIGNED 5,043,790 8/27/1991 4/5/2010 XXXXXX
CONTACTS USING TWO NITRIDES
PROCESS
FRAM322 DRAM SEALED SELF ALIGNED CONTACT 5,216,281 6/1/1993 6/1/2010 XXXXXX
CIP INCORPORATING A DOPANT SOURCE
RAM322 DRAM SEALED SELF ALIGNED 5,385,634 1/31/1995 1/31/2012 XXXXXX
DIV2 CONTACTS USING TWO NITRIDES
RAM324 DRAM CURRENT SUPPLY CIRCUIT FOR 5,134,310 7/28/1992 1/23/2011 XXXXXX, XXXXX
DRIVING HIGH CAPACITANCE
LOAD IN AN INTEGRATED CIRCUIT
RAM325 DRAM REFERENCE GENERATOR FOR 5,117,177 5/26/1992 1/23/2011 XXXXX
AN INTEGRATED CIRCUIT
RAM326 DRAM OUTPUT CONTROL CIRCUIT 5,255,222 10/19/1993 1/23/2011 XXXXX
HAVING CONTINUOUSLY
VARIABLE DRIVE CURRENT
Page-68
RAM329 FRAM OZONE GAS PROCESSING FOR 5,374,578 12/20/1994 2/25/2012 XXXXX, XXXXXXX
FWC FERROELECTRIC MEMORY CIRCUITS
RAM330 FRAM CONDUCTING ELECTRODE 5,142,437 8/25/1992 6/13/2011 KAMMERDINER, HUFFMAN,
LAYERS FOR FERROELECTRIC GOLABI
CAPACITORS IN INTEGRATED
CIRCUITS AND METHOD
RAM332 FRAM METHOD FOR MAKING A 5,580,814 12/3/1996 6/10/2014 XXXXXX
DIV FERROELECTRIC MEMORY CELL
WITH A FERROELECTRIC CAPACITOR
OVERLYING A MEMORY TRANSISTOR
RAM332 FRAM STACKED FERROELECTRIC 5,495,117 2/27/1996 5/27/2013 XXXXXX
FWC2 MEMORY CELL
RAM335 FRAM STRUCTURE OF HIGH 5,338,951 8/16/1994 11/6/2011 ARGOS, XXXXXX
DIELECTRIC CONSTANT METAL/
DIELECTRIC/SEMICONDUCTOR
CAPACITOR FOR USE AS THE
STORAGE CAPACITOR IN MEMORY
DEVICES
RAM336 FRAM SERIES FERROELECTRIC 5,206,788 4/27/1993 12/12/2011 LARSON, DAVENPORT, XxXXXXX
CAPACITOR STRUCTURE FOR
MONOLITHIC INTEGRATED
CIRCUITS AND METHOD
RAM337 FRAM USE OF PALLADIUM AS AN 5,191,510 3/2/1993 4/29/2012 XXXXXXX
ADHESION LAYER AND AS AN
ELECTRODE IN FERROELECTRIC
MEMORY DEVICES
RAM338 FRAM SEIMCONDUCTOR DEVICE WITH 5,293,510 3/8/1994 12/20/2011 TAKENAKA
FERROELECTRIC AND METHOD
OF MANUFACTURING THE SAME
RAM340 FRAM METHOD OF MANUFACTURING 5,229,309 7/20/1993 5/31/2011 KATO
SEMICONDUCTOR DEVICE USING
A FERROELECTRIC FILM OVER A
SOURCE REGION
RAM341 FRAM STRUCTURE AND METHOD FOR 5,216,572 6/1/1993 3/19/2012 XXXXXX, XXXXXXX
INCREASING THE DIELECTRIC
CONSTANT OF INTEGRATED
FERROELECTRIC CAPACITORS
RAM343 EDRAM ENHANCED DRAM WITH ALL 5,699,317 12/16/1997 12/16/2014 SARTORE, MOBLEY,
CIP READS FROM ON-CHIP CACHE XXXXXXXX, XXXXX
AND ALL WRITERS TO MEMORY
ARRAY
Page-69
RAM343 EDRAM ENHANCED DRAM WITH SINGLE 5,721,862 2/24/1998 2/24/2015 SARTORE, MOBLEY
CON ROW SRAM CACHE FOR ALL XXXXXXXX, XXXXX
DEVICE READ OPERATIONS
RAM343 EDRAM ENHANCED DRAM WITH 5,887,272 3/23/1999 6/2/2015 SARTORE, MOBLEY
DIV EMBEDDED REGISTERS XXXXXXXX, XXXXX
RAM343 EDRAM ENHANCED DRAM WITH 6,347,357 2/12/2002 2/12/2018 SARTORE, MOBLEY
DIV/CON EMBEDDED REGISTERS XXXXXXXX, XXXXX
RAM348 FRAM SEMCONDUCTOR DEVICE 5,369,296 11/29/1994 5/12/2012 KATO
FWC HAVING A FERROELECTRIC FILM
IN A THROUGH-HOLE
RAM352 FRAM SEMICONDUCTOR DEVICE 5,523,595 6/4/1996 6/4/2013 TAKENAKA
FWC HAVING A TRANSISTOR, A
FERROELECTRIC CAPACITOR
AND A HYDROGEN BARRIER FILM
RAM357 FRAM FERROELECTRIC MEMORY 5,866,926 2/2/1999 2/2/2016 TAKENAKA
FWC DEVICE WITH CAPACITOR
ELECTRODE IN DIRECT CONTACT
WITH SOURCE REGION
RAM358 FRAM SEMICONDUCTOR DEVICE WITH 5,475,248 12/12/1995 12/13/2013 TAKENAKA
FWC2 A CONDUCTIVE REACTION-
PREVENTING FILM
RAM360 FRAM NON-VOLATILE FERROELECTRIC 5,371,699 12/6/1994 11/17/2012 XXXXXX
MEMORY WITH FOLDED BIT LINES
AND METHOD OF MAKING THE SAME
RAM365 FRAM FERROELECTRIC-BASED RAM 5,381,364 1/10/1995 6/24/2013 CHERN, XXXXXXX
SENSING SCHEME INCLUDING
BIT-LINE CAPACITANCE
ISOLATION
RAM368 FRAM/ METHOD OF MAKING 5,909,624 6/1/1999 9/8/2015 XXXXXX, XXXXXX
DIV RFID INTEGRATION OF HIGH VALUE
CAPACITOR WITH FERROELECTRIC
MEMORY
RAM368 FRAM/ INTEGRATION OF HIGH VALUE 5,608,246 3/4/1997 2/10/2014 XXXXXX, XXXXXX
FWC RFID CAPACITOR WITH FERROELECTRIC
MEMORY
RAM370 FRAM FERROELECTRIC MEMORY 5,530,668 6/25/1996 4/12/2015 CHERN, WILSON
SENSING SCHEME USING BIT
LINES PRECHARGED TO A LOGIC
ONE VOLTAGE
Page-70
RAM371 FRAM VOLTAGE REFERENCE FOR A 5,572,459 11/5/1996 9/16/2014 XXXXXX, XXXXXXX
FERROELECTRIC 1T/1C BASED
MEMORY
RAM371 FRAM VOLTAGE REFERENCE FOR A 5,822,237 10/13/1998 9/16/2014 XXXXXX, XXXXXXX
DIV FERROELECTRIC 1T/1C BASED
MEMORY
RAM374 FRAM FERROELECTRIC CAPACITOR 5,525,528 6/11/1996 2/23/2014 XXXXXX, XXXXX
RENEWAL METHOD
RAM375 RFID SYSTEM AND METHOD FOR 5,434,572 7/18/1995 6/7/2014 XXXXX
INITIATING COMMUNICATIONS
BETWEEN A CONTROLLER AND A
SELECTED SUBSET OF MULTIPLE
TRANSPONDERS IN A COMMON RF
FIELD
RAM376 FRAM NOISE AND GLITCH 5,479,132 12/26/1995 6/6/2014 XXXXXXXXX, XXXXX
SUPPRESSING FILTER WITH
FEEDBACK
RAM377 FRAM METHOD OF MANUFACTURING 5,426,075 6/20/1995 6/15/2014 XXXXXX
FERROELECTRIC BISMUTH
LAYERED OXIDES
RAM377 FRAM METHOD OF MANUFACTURING 5,519,566 5/21/1996 6/15/2014 XXXXXX, XXXXXXXXX
CON FERROELECTRIC BISMUTH
LAYERED OXIDES
RAM378 FRAM LAYERED LOCAL INTERCONNECT 5,498,569 3/12/1996 8/22/2014 XXXXXX
COMPATIBLE WITH INTEGRATED
CIRCUIT FERROELECTRIC
CAPACITORS
RAM379 FRAM PASSIVATION METHOD AND 5,438,023 8/1/1995 3/11/2014 ARGOS, XXXXXXX, XXXXX
STRUCTURE FOR A
FERROELECTRIC INTEGRATED
CIRCUIT USING HARD CERAMIC
MATERIALS OR THE LIKE
RAM379 FRAM PASSIVATION METHOD AND 5,578,867 11/26/1996 3/11/2014 ARGOS, XXXXXXX, XXXXX
DIV STRUCTURE USING HARD
CERAMIC MATERIALS OR
THE LIKE
RAM381 EDRAM CIRCUIT WITH A SINGLE 5,566,318 10/15/1996 8/2/2014 XXXXXX
ADDRESS REGISTER THAT
AUGMENTS A MEMORY
CONTROLLER BY ENABLING
CACHE READS AND PAGE-MODE
WRITES
Page-71
RAM382 FRAM FERROELECTRIC MEMORY 5,532,953 7/2/1996 3/29/2015 XXXXXX, XXXXXX
SENSING METHOD USING
DISTINCT READ AND WRITE
VOLTAGES
RAM384 FRAM CIRCUIT AND METHOD FOR 5,592,410 1/7/1997 4/10/2015 XXXXXXXXX, XXXXXXX
REDUCING A COMPENSATION OF
A FERROELECTRIC CAPACITOR
BY MULTIPLE PULSING OF THE
PLATE LINE FOLLOWING A
WRITE OPERATION
RAM384 FRAM CIRCUIT AND METHOD FOR 5,815,430 9/29/1998 4/10/2015 XXXXXXXXX, XXXXXXX
DIV REDUCING COMPENSATION OF
A FERROELECTRIC CAPACITOR
BY MULTIPLE PULSING OF THE
PLATE LINE FOLLOWING A
WRITE OPERATION
RAM386 FRAM LOW LOSS, REGULATED CHARGE 5,889,428 3/30/1999 3/30/2016 YOUNG
PUMP WITH INTEGRATED
FERROELECTRIC CAPACITORS
RAM387 FRAM FERROELECTRIC NONVOLATILE 5,598,366 1/28/1997 8/16/2015 XXXXX, XXXXXX
RANDOM ACCESS MEMORY
UTILIZING SELF-BOOTSTRAPING
PLATE LINE SEGMENT DRIVERS
RAM388 FRAM BOOTSTRAPPING CIRCUIT 5,774,392 6/30/1998 3/28/2016 XXXXX, XXXXXX
UTILIZING A FERROELECTRIC
CAPACITOR
RAM391 RFID PROGRAMMABLE OUTPUT 5,926,110 7/20/1999 8/30/2015 DOWNS, XXXXX
DEVICES FOR CONTROLLING
SIGNAL LEVELS IN A RFID
TRANSPONDER
RAM393 EDRAM EDRAM WITH INTEGRATED 5,835,442 11/10/1998 3/22/2016 XXXXXX, XXXXXXX
GENERATION AND CONTROL OF
WRITE ENABLE AND COLUMN
LATCH SIGNALS AND METHOD
FOR MAKING SAME
RAM394 EDRAM EDRAM HAVING A DYNAMICALLY- 5,983,313 11/9/1999 4/10/2016 XXXXXX, XXXXXXX
SIZED CACHE MEMORY AND
ASSOCIATED METHOD
RAM396 FRAM USE OF CALCIUM AND 5,969,935 10/19/1999 3/15/2016 KAMMERDINER,
STRONTIUM DOPANTS TO XXXXXXXXX, XXXXXXX
IMPROVE RETENTION
PERFORMACE IN A PZT
FERROELECTRIC FILM
Page-72
RAM396 FRAM USE OF CALCIUM AND 5,800,683 9/1/1998 3/15/2016 KAMMERDINER,
DIV STRONTIUM DOPANTS TO XXXXXXXXX, XXXXXXX
IMPROVE RETENTION
PERFORMACE IN A PZT
FERROELECTRIC FILM
RAM397 FRAM A METHOD OF MEASURING 6,008,659 12/28/1999 3/15/2016 XXXXXXX
RETENTION PERFORMANCE AND
IMPRINT DEGRADATION OF
FERROELECTRIC FILMS
RAM398 FRAM IRIDIUM OXIDE LOCAL 5,838,605 11/17/1998 3/20/2016 XXXXXX
INTERCONNECT
RAM398 FRAM METHOD OF FORMING IRIDIUM 5,985,713 11/16/1999 3/20/2016 XXXXXX
DIV OXIDE LOCAL INTERCONNECT
RAM399 FRAM YIELD ENHANCEMENT 5,990,513 11/23/1999 00/0/0000 XXXXXX, XXXXX, XXXXX,
TECHNIQUE FOR INTEGRATED XXXXXX
CIRCUIT PROCESSING TO
REDUCE EFFECTS OF
UNDESIRED DIELECTRIC
MOISTURE RETENTION AND
SUBSEQUENT HYDROGEN
OUT-DIFFUSION
RAM399 FRAM YIELD ENHANCEMENT 6,190,926 2/20/2001 2/20/2017 XXXXXX, XXXXX, ARGOS
DIV TECHNIQUE FOR INTEGRATED XXXXXX
CIRCUIT PROCESSING TO
REDUCE EFFECTS OF
UNDESIRED DIELECTRIC
MOISTURE RETENTION AND
SUBSEQUENT HYDROGEN
OUT-DIFFUSION
RAM400 FRAM/ LOW VOLTAGE BOOTSTRAPPING 5,999,461 12/7/1999 6/7/2016 XXXXXXXXX, XXXXXX
DRAM CIRCUIT
RAM404 FRAM SAME STATE AND OPPOSITE 5,661,730 8/26/1997 9/27/2016 MITRA, XXXXXXXXX
STATE DIAGNOSTIC TEST FOR
FERROELECTRIC MEMORIES
RAM405 FRAM BANDGAP REFERENCE BASED 5,852,376 12/22/1998 8/23/2016 XXXXX
POWER-ON DETECT CIRCUIT
INCLUDING A SUPRESSION
CIRCUIT
RAM405 FRAM BANDGAP REFERENCE BASED 5,867,047 2/2/1999 8/23/2016 XXXXX
CON POWER-ON DETECT CIRCUIT
INCLUDING A SUPRESSION
CIRCUIT
Page-73
RAM407 FRAM COMPLETELY ENCAPSULATED 5,920,453 7/6/1999 8/20/2016 XXXXX, ARGOS
TOP ELECTRODE OF A
FERROELECTRIC CAPACITOR
RAM407 FRAM PARTIALLY OR COMPLETELY 5,864,932 2/2/1999 8/20/2016 XXXXX, ARGOS
CIP ENCAPSULATED TOP
ELECTRODE OF A
FERROELECTRIC CAPACITOR
RAM407 FRAM PARTIALLY OR COMPLETELY 6,027,947 2/22/2000 10/11/2016 XXXXX, ARGOS
CIP2 ENCAPSULATED TOP
ELECTRODE OF A
FERROELECTRIC CAPACITOR
RAM407 FRAM METHOD OF FABRICATING 6,150,184 11/21/2000 11/21/2016 XXXXX, ARGOS
CIP2 DV PARTIALLY OR COMPLETELY
ENCAPSULATED TOP ELECTRODE
OF A FERROELECTRIC CAPACITOR
RAM407 FRAM COMPLETELY ENCAPSULATED 6,211,542 4/3/2001 4/3/2017 XXXXXX, XXXXX
CIP3 TOP ELECTRODE OF A
FERROELECTRIC CAPACITOR
USING A LEAD-ENHANCED
ENCAPSULATION LAYER
RAM407 FRAM COMPLETELY ENCAPSULATED 6,281,023 8/28/2001 1/11/2021 XXXXXX, XXXXX
CIP3 DIV TOP ELECTRODE OF A
FERROELECTRIC CAPACITOR
USING A LEAD-ENHANCED
ENCAPSULATION LAYER
RAM409 DRAM SEMICONDUCTOR MEMORY 5,818,771 10/6/1998 9/30/2016 XXXXXX, XXXXXXXXX
DEVICE
RAM414 FRAM SENSING METHODOLOGY FOR A 5,880,989 3/9/1999 11/14/2017 WILSON, KRAUS, XXXXXX
1T/1C FERROELECTRIC MEMORY
RAM415 FRAM DUAL-LEVEL METALIZATION 5,902,131 5/11/1999 5/9/2017 ARGOS
METHOD FOR INTEGRATED
CIRCUIT FERROELECTRIC
DEVICES
RAM417 EDRAM ENHANCED SIGNAL PROCESSING 5,991,851 11/23/1999 5/2/2017 ALWAIS, XXXXXX
RANDOM ACCESS MEMORY DEVICE
UTILZING A DRAM MEMORY ARRAY
INTEGRATED WITH AN ASSOCIATED
SRAM CACHE AND INTERNAL
REFRESH CONTROL
Page-74
RAM418 EDRAM/ FIRST-IN, FIRST-OUT 5,901,100 5/4/1999 4/1/2017 XXXXXX
DRAM INTEGRATED CIRCUIT MEMORY
DEVICE UTILIZING A DYNAMIC
RANDOM ACCESS MEMORY ARRAY
FOR DATA STORAGE IMPLEMENTED
IN CONJUNCTION WITH AN
ASSOCIATED STATIC RANDOM
ACCESS MEMORY CACHE
RAM418 EDRAM/ FIRST-IN, FIRST-OUT 6,072,741 6/6/2000 6/6/2018 XXXXXX
CIP DRAM INTEGRATED CIRCUIT MEMORY
DEVICE INCORORATING A
RETRANSMIT FUNCTION
RAM418 EDRAM/ FIRST-IN, FIRST-OUT 6,172,927 1/9/2001 1/9/2019 XXXXXX
CIP2 DRAM INTEGRATED CIRCUIT MEMORY
DEVICE INCORORATING A
RETRANSMIT FUNCTION
RAM421 FRAM MULTI-LAYER APPROACH FOR 6,080,499 6/27/2000 7/18/2017 XXXXXX
OPTIMIZING FERROELECTRIC
FILM PERFORMANCE
RAM421 FRAM MULTI-LAYER APPROACH FOR 6,090,443 7/18/2000 7/18/2017 XXXXXX
CIP OPTIMIZING FERROELECTRIC
FILM PERFORMANCE
RAM421 FRAM MULTI-LAYER APPROACH FOR 6,287,637 9/11/2001 9/11/2018 CHU, FOX, XXXXXX
CIP2 OPTIMIZING FERROELECTRIC
FILM PERFORMANCE
RAM422 EDRAM/ INTEGRATED CIRCUIT MEMORY 6,263,398 7/17/2001 7/17/2018 TAYLOR, CARRIGAN,
FRAM DEVICE INCORPORATING A NON- ALWAIS
VOLATILE MEMORY ARRAY AND
A RELATIVE FASTER ACCESS
TIME MEMORY CACHE
RAM424 FRAM VOLTAGE BOOST CIRCUIT AND 5,854,568 12/29/1998 8/20/2017 MOSCALUK
OPERATION THEREOF AT LOW
POWER SUPPLY VOLTAGE
RAM425 FRAM PLASTIC PACKAGE ASSEMBLY 6,232,153 5/15/2001 5/15/2018 XXX, XXXXX
METHOD FOR FERROELECTRIC-
BASED INTEGRATED CIRCUIT
RAM427 FRAM SENSE AMPLIFIER UTILIZING A 5,901,088 5/4/1999 2/11/2018 XXXXX
BALANCING RESISTOR
Page-75
RAM429 EDRAM TECHNIQUE FOR REDUCING 6,141,281 10/31/2000 10/31/2018 XXXXXX, ASH
ELEMENT DISABLE FUSE PITCH
REQUIREMENTS IN AN INTEGRATED
CIRCUIT DEVICE INCORPORATING
REPLACEABLE CIRCUIT ELEMENTS
RAM430 EDRAM DYNAMIC RANDOM ACCESS 6,055,192 4/25/2000 4/25/2018 XXXXXX
MEMORY WORD LINE BOOST
TECHNIQUE EMPLOYING A
BOOST-ON-WRITES POLICY
RAM432 EDRAM MULTI-ARRAY MEMORY DEVICE, 6,064,620 5/16/2000 5/16/2018 XXXXXX
AND ASSOCIATED METHOD,
HAVING SHARED DECODER
CIRCUITRY
RAM432 EDRAM MULTI-ARRAY MEMORY DEVICE, 6,278,646 8/21/2001 8/21/2019 XXXXXX
CIP AND ASSOCIATED METHOD,
HAVING SHARED DECODER
CIRCUITRY
RAM433 FRAM REFERENCE CELL FOR A 1T/1C 5,956,266 9/21/1999 11/14/2017 WILSON, KRAUS,
FERROELECTRIC MEMORY XXXXXX, XXXXXXX
RAM434 FRAM MEMORY CELL CONFIGURATION 6,028,783 2/22/2000 11/14/2017 ALLEN, KRAUS, XXXXXX
FOR A 1T/1C FERROELECTRIC
MEMORY
RAM434 FRAM MEMORY CELL CONFIGURATION 6,185,123 2/6/2001 2/6/2018 ALLEN, KRAUS, XXXXXX
CON FOR A 1T/1C FERROELECTRIC
MEMORY
RAM435 FRAM REFERENCE CELL 5,986,919 11/16/1999 11/14/2017 XXXXX, KRAUS, WILSON,
CONFIGURATION FOR A 1T/1C XXXXXX
FERROELECTRIC MEMORY
RAM435 FRAM REFRENCE CELL 6,252,793 6/26/2001 6/26/2018 XXXXX, KRAUS, LEHMAN,
CON CONFIGURATION FOR A 1T/1C XXXXXX
FERROELECTRIC MEMORY
RAM436 FRAM SENSE AMPLIFIER 5,969,980 10/19/1999 11/14/2017 ALLEN, WILSON, XXXXXX
CONFIGURATION FOR A 1T/1C
FERROELECTRIC MEMORY
RAM437 FRAM COLUMN RECODER 5,892,728 4/6/1999 11/14/2017 ALLEN, WILSON, PERKALIS
CONFIGURATION FOR A 1T/1C
FERROELECTRIC MEMORY
RAM438 FRAM SENSE AMPLIFIER LATCH 6,002,634 12/14/1999 11/14/2017 XXXXXX
DRIVER CIRCUIT FOR A 1T/1C
FERROELECTRIC MEMORY
Page-76
RAM439 FRAM PLATE LINE DRIVER CIRCUIT FOR 5,978,251 11/2/1999 11/14/2017 XXXXX, XXXXXXXXX
A 1T/1C FERROELECTRIC MEMORY
RAM440 FRAM PLATE LINE SEGMENTATION IN A 5,995,406 11/30/1999 11/14/2017 XXXXX, XXXXXX
1T/1C FERROELECTRIC MEMORY
RAM442 FRAM FERROELECTRIC THIN FILMS 6,203,608 3/20/2001 3/20/2018 SUN, HADNAGY, XXXXXXXXX
AND SOLUTIONS: COMPOSITIONS
RAM443 FRAM CMOS RC EQUIVALENT DELAY 6,097,231 8/1/2000 8/1/2018 MOSCALUK
CIRCUIT
RAM444 FRAM METHOD OF MANUFACTURING 6,174,735 1/16/2001 1/16/2019 XXXXX
FERROELECTRIC MEMORY
DEVICE USEFUL FOR PREVENTING
HYDROGEN LINE DEGRADATION
RAM444 FRAM FERROELECTRIC MEMORY 6,201,726 3/13/2001 10/23/2018 XXXXX
DIV DEVICE STRUCTURE USEFUL
FOR PREVENTING HYDROGEN
LINE DEGRADATION
RAM444 FRAM FERROELECTRRIC MEMORY 6,358,755 3/19/2002 3/19/2019 XXXXX
DIV2 DEVICE STRUCTURE USEFUL
FOR PREVENTING HYDROGEN
LINE DEGRADATION
RAM445 FRAM POLARIZATION METHOD FOR 6,238,933 5/29/2001 5/29/2018 SUN, XXXXXXX
MINIMIZING THE EFFECTS OF
HYDROGEN DAMAGE ON
FERROELECTRIC THIN FILM
CAPACITORS
RAM446 FRAM HYDROGEN BARRIER 6,249,014 6/19/2001 6/10/2018 XXXXXX
ENCAPSULATION TECHNIQUES
FOR THE CONTROL OF HYDROGEN
INDUCED DEGRADATION OF
FERROELECTRIC CAPACITORS
IN CONJUNCTION WITH
MULTILEVEL METAL PROCESSING
FOR NON-VOLATILE INTEGRATED
CIRCUIT MEMORY DEVICES
RAM447 EDRAM EMBEDDED ENHANCED DRAM 5,963,481 10/5/1999 6/30/2018 ALWAIS, XXXXXX
AND ASSOCIATED METHOD
RAM448 EDRAM MULTI-BANK ESDRAM WITH 6,249,840 6/19/2001 6/19/2018 XXXXXX
CROSS-COUPLED SRAM CACHE
REGISTERS
Page-77
RAM450 DRAM DOUBLE DATA RATE 6,330,636 12/11/2001 12/11/2018 BONDURANT, PETERS,
SYNCHRONOUS DYNAMIC XXXXXX
RANDOM ACCESS MEMORY
DEVICE INCORPORATING A
STATIC RAM CACHE PER
MEMORY BANK
RAM451 FRAM CMOS PREFERRED STATE 6,060,919 5/9/2000 5/9/2018 XXXXXX, XXXXX
POWER-UP LATCH
RAM452 FRAM INTEGRATED CIRCUIT MEMORY 6,249,841 6/19/2001 6/19/2018 SIKES, ALWAIS, XXXXXXXX
DEVICE AND METHOD
INCORPORATING FLASH AND
FERROELECTRIC RANDOM ACCESS
MEMORY ARRAYS
RAM454 FRAM BARRIER LAYER TO PROTECT A 6,242,299 6/5/2001 6/5/2019 XXXXXXX
FERROELECTRIC CAPACITOR
AFTER CONTACT HAS BEEN MADE
TO THE CAPACITOR ELECTRODE
RAM456 FRAM FERROELECTRIC NON-VOLATILE 6,141,237 10/31/2000 10/31/2018 XXXXX, XXXXXXX
LATCH CIRCUITS
RAM458 FRAM ENHANCED PROCESS CAPABILITY 6,455,326 9/24/2002 9/24/2017 XXXXXX
FOR SPUTTERED FERROELECTRIC
FILMS USING LOW FREQUENCY
PULSED DC AND RF POWER
SUPPLIES
RAM460 EDRAM ENHANCED BUS TURNAROUND 6,151,236 11/21/2000 11/21/2018 BONDURANT, FISCH,
INTEGRATED CIRCUIT DYNAMIC GRIESHABER, MOBLEY,
RANDOM ACCESS MEMORY XXXXXX
DEVICE
RAM460 EDRAM ENHANCED BUS TURNAROUND 6,301,183 10/9/2001 10/9/2019 BONDURANT, FISCH,
CON INTEGRATED CIRCUIT DYNAMIC GRIESHABER, MOBLEY,
RANDOM ACCESS MEMORY XXXXXX
DEVICE
RAM461 FRAM FAST RESPONSE CIRCUIT 6,392,441 5/21/2002 6/13/2019 MOSCALUK
RAM462 FRAM NONVOLATIILE OCTAL LATCH 6,362,675 3/26/2002 3/26/2019 ALWAIS
& D-TYPE REGISTER
RAM463 EDRAM PACKET-BASED INTEGRATED 6,373,751 4/16/2002 4/16/2019 XXXXXXXXX
CIRCUIT DYNAMIC RANDOM
ACCESS MEMORY DEVICE
INCORPORATING AN ON-CHIP
ROW REGISTER CACHE TO REDUCE
DATA ACCESS LATENCIES
Page-78
RAM464 DRAM STRUCTURE AND METHOD FOR 6,501,698 12/31/2002 12/31/2019 XXXXXX
HIDING DRAM CYCLE TIME
BEHIND A BURST ACCESS
RAM476 EDRAM/ CACHED SYNCHRONOUS DRAM ARCH 5,787,457 7/28/1998 XXXXXXXXX, XXXXXX
IBM
RAM478 FRAM FERROELECTRIC VOLTAGE 6,275,425 8/14/2001 11/16/2020 XXXXXXX
BOOST CIRCUITS
RAM479 FRAM STRUCTURE FOR MASKING 6,495,413 12/17/2002 12/17/2019 SUN, XXXXXXX, XXXXXXX
INTEGRATED CAPACITORS OF XXXXXX, XXXX
PARTICULAR UTILITY FOR
FERROELECTRIC MEMORY
INTEGRATED CIRCUITS
RAM482 FRAM CHARGE PUMP OR OTHER CHARGE 6,492,673 12/10/2002 12/10/2019 FOX, XXXXX
STORAGE CAPACITOR INCLUDING
PZT LAYER OF COMBINED USE AS
ENCAPSULATION LAYER AND
DIELECTRIC LAYER OF FERRO-
ELECTRIC CAPACITOR AND A METHOD
FOR MANUFACTURING THE SAME
RAM483 FRAM METHOD FOR MANUFACTURING A 6,376,259 4/23/2002 4/21/2021 CHU, FOX
FERROELECTRIC MEMORY CELL
INCLUDING CO-ANNEALING
RAM485 FRAM FERROELECTRIC RANDOM ACCESS 6,445,608 9/3/2002 9/10/2018 XXXXXXXX, XXXXXX
MEMORY CONFIGURABLE OUTPUT
DRIVER CIRCUIT
RAM494 FRAM PZT LAYER AS A TEMPORARY 6,423,592 7/23/2002 7/23/2019 SUN
ENCAPSULTATION AND HARD
MASK FOR A FERROELECTRIC
CAPACITOR
RAM495 FRAM CMOS BOOSTING CIRCUIT 6,430,093 8/6/2002 8/6/2019 XXXXXXX, XXXXX
UTILIZING FERROELECTRIC
CAPACITORS
RAM499 EDRAM/ CACHED SYNCHRONOUS DRAM 6,289,413 9/11/2001 XXXXXX, XXXXXXXXX
IBM ARCH
RAM500 FRAM SELF REFERENCING IT/1C FE 6,459,609 10/1/2002 12/13/2018 DU
Total: 145 - America US
---------------------------------------------------------------------------------------------------------------
APPLICATION AUSTRALIA
RAM302 FRAM SELF RESTORING 581820 6/9/1989 9/7/2007 XXXXX
AUS FERROELECTRIC MEMORY
Total: 1 - Australia
---------------------------------------------------------------------------------------------------------------
Page-79
APPLICATION GERMANY
RAM302 FRAM SELF RESTORING P3751171.8-08 8/17/1994 12/31/2008 XXXXX
EPO FERROELECTRIC MEMORY
RAM303 FRAM FERROELECTRIC SHADOW RAM P3886600.5-08 12/29/1993 6/22/2008 DIMMLER
EPO
RAM303 FRAM FERROELECTRIC SHADOW RAM P3855877.7-08 12/29/1993 7/2/2007 DIMMLER
EPO DIV
RAM309 FRAM FERROELECTRIC RETENTION P3887130.0-08 5/19/1994 9/21/2008 XXXXX
EPO METHOD
RAM FRAM 2T CELL READ METHOD P68919393.9-08 11/17/1994 8/15/2009 XXXXXX
311/312 EPO
RAM330 FRAM ELECTRODE LAYERS FOR P69203395.5-08 7/12/1995 5/26/2012 KAMMERDINER
EPO FERROELECTRIC CAPACITOR
RAM338 FRAM SEMICONDUCTOR DEVICE P69123422.1-08 12/4/1996 4/23/2011 TAKENAKA
EPO
RAM340 FRAM METHOD OF MANUFACTURING P69123557.0-08 6/7/1993 5/31/2011 KATO
EPO
RAM343 EDRAM EDRAM WITH EMBEDDED 69324508.5 4/21/1999 1/14/2013 XXXXXXXX
EPO REGISTERS
RAM365 FRAM FERROELECTRIC-BASED RAM 69426903.4-0 3/21/2001 CHERN
EPO SENSING SCHEME
RAM371 FRAM VOLTAGE REFERENCE FOR A 702372 9/12/2001 XXXXXX
EPO FERROELECTRIC 1T/1C
RAM380 FRAM WRITE-PROTECTING 674318 12/9/1994 12/9/2014 DOWNS
EPO PREDETERMINED
RAM384 FRAM CIRCUIT AND METHOD FOR 69613424.1-08 6/20/2001 4/10/2016 XXXXXXXXX
EPO REDUCING
Total: 13 - Germany
---------------------------------------------------------------------------------------------------------------
APPLICATION JAPAN
RAM302 FRAM SELF RESTORING 2,674,775 5/30/1997 2/12/2008 XXXXX
JPN FERROELECTRIC MEMORY
RAM303 FRAM SHADOW RAM 2,693,967 9/5/1997 7/1/2008 DIMMLER
JPN
Page-80
RAM309 FRAM FERROELECTRIC RETENTION 2,771,551 4/17/1998 10/5/2008 XXXXX
JPN
RAM314 FRAM ELECTRODE STRUCTURES 2,825,606 11/18/1998 6/20/2018 XXXXXX
JPN
RAM316 FRAM INTEGRATED FERROELECTRIC 2,918,284 4/23/1999 4/23/2018 GNADINGER
JPN CAPACITOR
RAM317 DRAM SELF-ALIGNED CONTACT 2,673,615 7/18/1997 7/30/2011 XXXXXX
JPN PROCESS
RAM319 DRAM DIFFUSION BARRIER 2,075,540 7/25/1996 7/13/2010 XXXXXXX
JPN
RAM320 DRAM TRENCH CAPACITOR 2,089,169 9/2/1996 6/21/2011 XXXXXX
JPN
RAM322 DRAM SEALED SELF ALIGNED 2,005,865 1/11/1996 4/5/2011 XXXXXX
JPN CONTACTS USING
RAM324 DRAM CURRENT SUPPLY CIRCUIT FOR 2,932,122 5/28/1999 1/23/2012 XXXXXX
JPN DRIVING
RAM325 DRAM REFERENCE GENERATOR FOR 3,106,216 9/8/2000 1/23/2012 XXXXX
JPN AN INTEGRATED CIRCUIT
RAM326 DRAM OUTPUT CONTROL CIRCUIT 3,136,424 12/8/2000 1/22/2012 XXXXX
JPN HAVING CONTINUOUSLY
RAM335 FRAM STRUCTURE OF HIGH 3,162,512 2/23/2001 2/23/2013 ARGOS
JPN DIELECTRIC
RAM343 EDRAM ENHANCED DRAM WITH EMBEDDED 2,851,503 11/13/1998 1/21/2013 SARTORE
JPN
RAM360 FRAM NON-VOLATILE FERROELECTRIC 3,174,209 3/30/2001 3/30/2017 XXXXXX
JPN MEMORY WITH FOLDED
RAM370 FRAM FERROELECTRIC MEMORY 3,238,068 10/5/2001 4/12/2016 XXXXXX, CHERN
JPN SENSING SCHEME
RAM371 FRAM VOLTAGE REFERENCE FOR A 2,987,316 10/1/1999 10/1/2012 XXXXXXX
JPN FERROELECTRIC 1T/1C
RAM374 FRAM FERROELECTRIC CAPACITOR 3,039,760 3/3/2000 3/3/2012 MITRA
JPN RENEWAL METHOD
RAM380 FRAM WRITE-PROTECTING 2,943,847 6/25/1999 3/20/2015 DOWNS
JPN PREDETERMINED
Page-81
RAM382 FRAM FERROELECTRIC MEMORY 3,200,009 6/15/2001 6/15/2013 XXXXXX
JPN SENSING METHOD
RAM415 FRAM DUAL-LEVEL METALIZATION 2,962,475 8/6/1999 5/11/2018 ARGOS
JPN METHOD
Total: 21 - Japan
---------------------------------------------------------------------------------------------------------------
APPLICATION UNITED KINGDOM
RAM309 FRAM FERROELECTRIC RETENTION 338158 1/12/1994 9/21/2008 XXXXX
EPO
RAM FRAM 2T CELL AND READ 359404 11/17/1994 8/15/2009 XXXXXX
311/312 EPO METHOD
RAM371 FRAM VOLTAGE REFERENCE FOR A 702372 9/12/2001 XXXXXX
XXX XXXXXXXXXXXXX 0X/0X
Xxxxx: 0 - Xxxxxx Xxxxxxx
---------------------------------------------------------------------------------------------------------------
Note: The patent interference proceeding listed on Schedule 5.7
Page-82
Schedule 5.12 to Credit and Security Agreement
Plans
-----
Ramtron International Corporation 401(k) Retirement Plan
Post retirement medical and life insurance benefits are provided to the
Company's former Chairman, L. Xxxxx Xxxxx, as per his employment agreement
dated January 18, 2000 and as amended December 14, 2000. Medical and life
insurance premiums for Xx. Xxxxx and his spouse will be paid by the Company
until November 13, 2006.
Page-83
Schedule 6.3 to Credit and Security Agreement
Permitted Liens
---------------
Filing
Creditor Collateral Jurisdiction Date Filing No.
-------- ---------- ------------ ------- ----------
Infineon Patents, Delaware S of S 3-26-02 20769715
Technologies AG European 4-23-02 20999049-Amd
Receivables,
General
Intangibles
related thereto
Xxxxxxxx Colorado Springs El Paso County 4-1-02 202050944
Capital Corp. real estate (946)
Colorado S of S 4-19-02 20022041829
Halifax Fund, Colorado Springs El Paso County 4-1-02 202050944
L.P. real estate (945)
Colorado S of S 4-19-02 20022041830
Page-84
Schedule 6.4 to Credit and Security Agreement
Permitted Indebtedness and Guaranties
-------------------------------------
Indebtedness
------------
Principal Maturity Interest
Creditor Amount Date Payment Collateral
--------------- ---------- --------- -------- -----------------
Infineon $3,000,000 March 28, $75,000 Patents, European
Technologies AG 2007 semi- Receivables, and
annually General
Intangibles
related thereto
Xxxxxxxx $2,500,000 March 28, $62,500 Colorado Springs
Capital Corp. 2007 semi- real estate
annually
Halifax Fund, $2,500,000 March 28, $62,500 Colorado Springs
L.P. 2007 semi- real estate
annually
Guaranties
----------
Amount and Description
Primary Obligor of Obligation Guaranteed Beneficiary of Guaranty
--------------- ------------------------ -----------------------
EMS Monthly equipment lease Cypress Semiconductor
in the amount of Corporation
$75,733.32. Lease
terminates 10-1-04.
Page-85
