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EXHIBIT 10.6
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[LOGO] SILICON VALLEY BANK
LOAN AND SECURITY AGREEMENT
BORROWER: BROADCOM CORPORATION
ADDRESS: 00000 XXXXXXXX XXXXXXXXX, 00XX XXXXX
XXX XXXXXXX, XXXXXXXXXX 00000
DATE: MARCH 23, 1995
THIS LOAN AND SECURITY AGREEMENT is entered into on the above date between
SILICON VALLEY BANK ("Silicon"), whose address is 0000 Xxxxxxxx Xxxxx, Xxxxx
Xxxxx, Xxxxxxxxxx 00000-0000 and the borrower named above (the "Borrower"),
whose chief executive office is located at the above address ("Borrower's
Address").
1. LOANS.
1.1 LOANS. Silicon, in its reasonable discretion, will make loans to the
Borrower (the "Loans") in amounts determined by Silicon in its reasonable
discretion up to the amount (the "Credit Limit") shown on the Schedule to this
Agreement (the "Schedule"), provided no Event of Default and no event which,
with notice or passage of time or both, would constitute an Event of Default has
occurred. The Borrower is responsible for monitoring the total amount of Loans
and other Obligations outstanding from time to time, and Borrower shall not
permit the same, at any time, to exceed the Credit Limit. If at any time the
total of all outstanding Loans and all other Obligations exceeds the Credit
Limit, the Borrower shall immediately pay the amount of the excess to Silicon,
without notice or demand.
1.2 INTEREST. All Loans and all other monetary Obligations shall bear interest
at the rate shown on the Schedule hereto. Interest shall be payable monthly, on
the due date shown on the monthly billing from Silicon to the Borrower. Silicon
may, in its discretion, charge interest to Borrower's deposit accounts
maintained with Silicon.
1.3 FEES. The Borrower shall pay to Silicon a loan origination fee in the
amount shown on the Schedule hereto concurrently herewith. This fee is in
addition to all interest and other sums payable to Silicon and is not
refundable.
2. GRANT OF SECURITY INTEREST.
2.1 OBLIGATIONS. The term "Obligations" as used in this Agreement means the
following: the obligation to pay all Loans and all interest thereon when due,
and to pay and perform when due all other present and future indebtedness,
liabilities, obligations, guarantees, covenants, agreements, warranties and
representations of the Borrower to Silicon, whether joint or several, monetary
or non-monetary, and whether created pursuant to this Agreement or any other
present or future agreement or otherwise. Silicon may, in its discretion,
require that Borrower pay monetary Obligations in cash to Silicon, or charge
them to Borrower's Loan account, in which event they will bear interest at the
same rate applicable to the Loans. Silicon may also, in its discretion, charge
any monetary Obligations to Borrower's deposit accounts maintained with Silicon.
2.2 COLLATERAL. As security for all Obligations, the Borrower hereby grants
Silicon a continuing security interest in all of the Borrower's interest in the
types of property described below, whether now owned or hereafter acquired, and
wherever located (collectively, the "Collateral"): (a) All accounts, contract
rights, chattel paper, letters of credit, documents, securities, money, and
instruments, and all other obligations now or in the future owing to the
Borrower; (b) All inventory, goods, merchandise, materials, raw materials, work
in process, finished goods, farm products, advertising, packaging and shipping
materials, supplies, and all other tangible personal property which is held for
sale or lease or furnished under contracts of service or consumed in the
Borrower's business, and all warehouse receipts and other documents; and (c) All
equipment, including without limitation all machinery, fixtures, trade fixtures,
vehicles, furnishings, furniture, materials, tools, machine tools, office
equipment, computers and peripheral devices, appliances, apparatus, parts, dies,
and jigs; (d) All general intangibles including, but not limited to, deposit
accounts, goodwill, names, trade names, trademarks and the goodwill of the
business symbolized thereby, trade secrets, drawings, blueprints, customer
lists, patents, patent applications, copyrights, security deposits, loan
commitment fees, federal, state and local tax refunds and claims, all rights in
all litigation presently or
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hereafter pending for any cause or claim (whether in contract, tort or
otherwise), and all judgments now or hereafter arising therefrom, all claims of
Borrower against Silicon, all rights to purchase or sell real or personal
property, all rights as a licensor or licensee of any kind, all royalties,
licenses, processes, telephone numbers, proprietary information, purchase
orders, and all insurance policies and claims (including without limitation
credit, liability, property and other insurance), and all other rights,
privileges and franchises of every kind; (e) All books and records, whether
stored on computers or otherwise maintained; and (f) All substitutions,
additions and accessions to any of the foregoing, and all products, proceeds and
insurance proceeds of the foregoing, and all guaranties of and security for the
foregoing; and all books and records relating to any of the foregoing. Silicon's
security interest in any present or future technology (including patents, trade
secrets, and other technology) shall be subject to any licenses or rights now or
in the future granted by the Borrower to any third parties in the ordinary
course of Borrower's business; provided that if the Borrower proposes to sell,
license or grant any other rights with respect to any technology in a
transaction that, in substance, conveys a major part of the economic value of
that technology, Silicon shall first be requested to release its security
interest in the same, and Silicon may withhold such release in its discretion.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER.
The Borrower represents and warrants to Silicon as follows, and the Borrower
covenants that the following representations will continue to be true, and that
the Borrower will comply with all of the following covenants:
3.1 CORPORATE EXISTENCE AND AUTHORITY. The Borrower, if a corporation, is and
will continue to be, duly authorized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation. The Borrower is and
will continue to be qualified and licensed to do business in all jurisdictions
in which any failure to do so would have a material adverse effect on the
Borrower. The execution, delivery and performance by the Borrower of this
Agreement, and all other documents contemplated hereby have been duly and
validly authorized, are enforceable against the Borrower in accordance with
their terms, and do not violate any law or any provision of, and are not grounds
for acceleration under, any agreement or instrument which is binding upon the
Borrower.
3.2 NAME; TRADE NAMES AND STYLES. The name of the Borrower set forth in the
heading to this Agreement is its correct name. Listed on the Schedule hereto are
all prior names of the Borrower and all of Borrower's present and prior trade
names. The Borrower shall give Silicon 15 days' prior written notice before
changing its name or doing business under any other name. The Borrower has
complied, and will in the future comply, with all laws relating to the conduct
of business under a fictitious business name.
3.3 PLACE OF BUSINESS; LOCATION OF COLLATERAL. The address set forth in the
heading to this Agreement is the Borrower's chief executive office. In addition,
the Borrower has places of business and Collateral is located only at the
locations set forth on the Schedule to this Agreement. The Borrower will give
Silicon at least 15 days prior written notice before changing its chief
executive office or locating the Collateral at any other location.
3.4 TITLE TO COLLATERAL; PERMITTED LIENS. The Borrower is now, and will at all
times in the future be, the sole owner of all the Collateral, except for items
of equipment which are leased by the Borrower. The Collateral now is and will
remain free and clear of any and all liens, charges, security interests,
encumbrances and adverse claims, except for the following ("Permitted Liens"):
(i) purchase money security interests in specific items of equipment; (ii)
leases of specific items of equipment; (iii) liens for taxes not yet payable;
(iv) additional security interests and liens consented to in writing by Silicon
in its reasonable discretion, which consent shall not be unreasonably withheld;
and (v) security interests being terminated substantially concurrently with this
Agreement. Silicon will have the right to require, as a condition to its consent
under subparagraph (iv) above, that the holder of the additional security
interest or lien sign an intercreditor agreement on Silicon's then standard
form, acknowledge that the security interest is subordinate to the security
interest in favor of Silicon, and agree not to take any action to enforce its
subordinate security interest so long as any Obligations remain outstanding, and
that the Borrower agree that any uncured default in any obligation secured by
the subordinate security interest shall also constitute an Event of Default
under this Agreement. Silicon now has, and will continue to have, a perfected
and enforceable security interest in all of the Collateral, subject only to the
Permitted Liens, and the Borrower will at all times defend Silicon and the
Collateral against all claims of others. None of the Collateral now is or will
be affixed to any real property in such a manner, or with such intent, as to
become a fixture.
3.5 MAINTENANCE OF COLLATERAL. The Borrower will maintain the Collateral in good
working condition, and the Borrower will not use the Collateral for any unlawful
purpose. The Borrower will immediately advise Silicon in writing of any material
loss or damage to the Collateral.
3.6 BOOKS AND RECORDS. The Borrower has maintained and will maintain at the
Borrower's Address complete and accurate books and records, comprising an
accounting system in accordance with generally accepted accounting principles.
3.7 FINANCIAL CONDITION AND STATEMENTS. All financial statements now or in the
future delivered to Silicon have been, and will be, prepared in conformity with
generally accepted accounting principles and now and in the future will
completely and accurately reflect the financial condition of the Borrower, at
the times and for the periods therein stated. Since the last
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date covered by any such statement, there has been no material adverse change in
the financial condition or business of the Borrower. The Borrower is now and
will continue to be solvent. The Borrower will provide Silicon: (i) within 30
days after the end of each month, a monthly financial statement prepared by the
Borrower, and a Compliance Certificate in such form as Silicon shall reasonably
specify, signed by the Chief Financial Officer of the Borrower, certifying that
as of the end of such month the Borrower was in full compliance with all of the
terms and conditions of this Agreement, and setting forth calculations showing
compliance with the financial covenants set forth on the Schedule and such other
information as Silicon shall reasonably request; and (ii) within 120 days
following the end of the Borrower's fiscal year, complete annual financial
statements, certified by independent certified public accountants acceptable to
Silicon and accompanied by the unqualified report thereon by said independent
certified public accountants.
3.8 TAX RETURNS AND PAYMENTS; PENSION CONTRIBUTIONS. The Borrower has timely
filed, and will timely file, all tax returns and reports required by foreign,
federal, state and local law, and the Borrower has timely paid, and will timely
pay, all foreign, federal, state and local taxes, assessments, deposits and
contributions now or in the future owed by the Borrower. The Borrower may,
however, defer payment of any contested taxes, provided that the Borrower (i) in
good faith contests the Borrower's obligation to pay the taxes by appropriate
proceedings promptly and diligently instituted and conducted, (ii) notifies
Silicon in writing of the commencement of, and any material development in, the
proceedings, and (iii) posts bonds or takes any other steps required to keep the
contested taxes from becoming a lien upon any of the Collateral. The Borrower is
unaware of any claims or adjustments proposed for any of the Borrower's prior
tax years which could result in additional taxes becoming due and payable by the
Borrower. The Borrower has paid, and shall continue to pay all amounts necessary
to fund all present and future pension, profit sharing and deferred compensation
plans in accordance with their terms, and the Borrower has not and will not
withdraw from participation in, permit partial or complete termination of, or
permit the occurrence of any other event with respect to, any such plan which
could result in any liability of the Borrower, including, without limitation,
any liability to the Pension Benefit Guaranty Corporation or its successors or
any other governmental agency.
3.9 COMPLIANCE WITH LAW. The Borrower has complied, and will comply, in all
material respects, with all provisions of all foreign, federal, state and local
laws and regulations relating to the Borrower, including, but not limited to,
those relating to the Borrower's ownership of real or personal property, conduct
and licensing of the Borrower's business, and environmental matters.
3.10 LITIGATION. Except as disclosed in the Schedule, there is no claim, suit,
litigation, proceeding or investigation pending or (to best of the Borrower's
knowledge) threatened by or against or affecting the Borrower in any court or
before any governmental agency (or any basis therefor known to the Borrower)
which may result, either separately or in the aggregate, in any material adverse
change in the financial condition or business of the Borrower, or in any
material impairment in the ability of the Borrower to carry on its business in
substantially the same manner as it is now being conducted. The Borrower will
promptly inform Silicon in writing of any claim, proceeding, litigation or
investigation in the future threatened or instituted by or against the Borrower
involving amounts in excess of $250,000.
3.11 USE OF PROCEEDS. All proceeds of all Loans shall be used solely for lawful
business purposes.
4. ADDITIONAL DUTIES OF THE BORROWER.
4.1 FINANCIAL AND OTHER COVENANTS. The Borrower shall at all times comply with
the financial and other covenants set forth in the Schedule to this Agreement.
4.2 OVERADVANCE; PROCEEDS OF ACCOUNTS. If for any reason the total of all
outstanding Loans and all other Obligations exceeds the Credit Limit, without
limiting Silicon's other remedies, and whether or not Silicon declares an Event
of Default, Borrower shall remit to Silicon all checks and other proceeds of
Borrower's accounts and general intangibles, in the same form as received by
Borrower, within one day after Borrower's receipt of the same, to be applied to
the Obligations in such order as Silicon shall determine in its discretion.
4.3 INSURANCE. The Borrower shall, at all times insure all of the tangible
personal property Collateral and carry such other business insurance, with
insurers reasonably acceptable to Silicon, in such form and amounts as Silicon
may reasonably require. All such insurance policies shall name Silicon as an
additional loss payee, and shall contain a lenders loss payee endorsement in
form reasonably acceptable to Silicon. Upon receipt of the proceeds of any such
insurance, Silicon shall apply such proceeds in reduction of the Obligations as
Silicon shall determine in its sole and absolute discretion, except that,
provided no Event of Default has occurred, Silicon shall release to the Borrower
insurance proceeds with respect to equipment totaling less than $100,000, which
shall be utilized by the Borrower for the replacement of the equipment with
respect to which the insurance proceeds were paid. Silicon may require
reasonable assurance that the insurance proceeds so released will be so used. If
the Borrower fails to provide or pay for any insurance, Silicon may, but is not
obligated to, obtain the same at the Borrower's expense. The Borrower shall
promptly deliver to Silicon copies of all reports made to insurance companies.
4.4 REPORTS. The Borrower shall provide Silicon with such written reports with
respect to the Borrower (including without limitation budgets, sales
projections, operating plans and other financial documentation), as Silicon
shall from time to time reasonably specify.
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4.5 ACCESS TO COLLATERAL, BOOKS AND RECORDS. At all reasonable times, and upon
one business day notice, Silicon, or its agents, shall have the right to inspect
the Collateral, and the right to audit and copy the Borrower's accounting books
and records and Borrower's books and records relating to the Collateral. Silicon
shall take reasonable steps to keep confidential all information obtained in any
such inspection or audit, but Silicon shall have the right to disclose any such
information to its auditors, regulatory agencies, and attorneys, and pursuant to
any subpoena or other legal process. The foregoing audits shall be at Silicon's
expense, except that the Borrower shall reimburse Silicon for its reasonable out
of pocket costs for semi-annual accounts receivable audits by third parties
retained by Silicon, and Silicon may debit Borrower's deposit accounts with
Silicon for the cost of such semi-annual accounts receivable audits (in which
event Silicon shall send notification thereof to the Borrower). Notwithstanding
the foregoing, after the occurrence of an Event of Default all audits shall be
at the Borrower's expense.
4.6 NEGATIVE COVENANTS. Except as may be permitted in the Schedule hereto, the
Borrower shall not, without Silicon's prior written consent, do any of the
following: (i) merge or consolidate with another corporation, except that the
Borrower may merge or consolidate with another corporation if the Borrower is
the surviving corporation in the merger and the aggregate value of the assets
acquired in the merger do not exceed 25% of Borrower's Tangible Net Worth (as
defined in the Schedule) as of the end of the month prior to the effective date
of the merger, and the assets of the corporation acquired in the merger are not
subject to any liens or encumbrances, except Permitted Liens; (ii) acquire any
assets outside the ordinary course of business for an aggregate purchase price
exceeding 25% of Borrower's Tangible Net Worth (as defined in the Schedule) as
of the end of the month prior to the effective date of the acquisition; (iii)
enter into any other transaction outside the ordinary course of business (except
as permitted by the other provisions of this Section); (iv) sell or transfer any
Collateral, except for the sale of finished inventory in the ordinary course of
the Borrower's business, and except for the sale of obsolete or unneeded
equipment in the ordinary course of business; (v) make any loans of any money or
any other assets; (vi) incur any debts, outside the ordinary course of business,
which would have a material, adverse effect on the Borrower or on the prospect
of repayment of the Obligations; (vii) guarantee or otherwise become liable with
respect to the obligations of another party or entity; (viii) pay or declare any
dividends on the Borrower's stock (except for dividends payable solely in stock
of the Borrower); (ix) redeem, retire, purchase or otherwise acquire, directly
or indirectly, any of the Borrower's stock; (x) make any change in the
Borrower's capital structure which has a material adverse effect on the Borrower
or on the prospect of repayment of the Obligations; or (xi) dissolve or elect to
dissolve. Transactions permitted by the foregoing provisions of this Section are
only permitted if no Event of Default and no event which (with notice or passage
of time or both) would constitute an Event of Default would occur as a result of
such transaction.
4.7 LITIGATION COOPERATION. Should any third-party suit or proceeding be
instituted by or against Silicon with respect to any Collateral or in any manner
relating to the Borrower, the Borrower shall, without expense to Silicon, make
available the Borrower and its officers, employees and agents and the Borrower's
books and records to the extent that Silicon may deem them reasonably necessary
in order to prosecute or defend any such suit or proceeding.
4.8 VERIFICATION. Silicon may, from time to time, following prior notification
to Borrower, verify directly with the respective account debtors the validity,
amount and other matters relating to the Borrower's accounts, by means of mail,
telephone or otherwise, either in the name of the Borrower or Silicon or such
other name as Silicon may reasonably choose, provided that no prior notification
to Borrower shall be required following an Event of Default.
4.9 EXECUTE ADDITIONAL DOCUMENTATION. The Borrower agrees, at its expense, on
request by Silicon, to execute all documents in form satisfactory to Silicon, as
Silicon, may deem reasonably necessary or useful in order to perfect and
maintain Silicon's perfected security interest in the Collateral, and in order
to fully consummate all of the transactions contemplated by this Agreement.
5. TERM.
5.1 MATURITY DATE. This Agreement shall continue in effect until the maturity
date set forth on the Schedule hereto (the "Maturity Date").
5.2 EARLY TERMINATION. This Agreement may be terminated, without penalty, prior
to the Maturity Date as follows: (i) by the Borrower, effective three business
days after written notice of termination is given to Silicon; or (ii) by Silicon
at any time after the occurrence of an Event of Default, without notice,
effective immediately.
5.3 PAYMENT OF OBLIGATIONS. On the Maturity Date or on any earlier effective
date of termination, the Borrower shall pay and perform in full all Obligations,
whether evidenced by installment notes or otherwise, and whether or not all or
any part of such Obligations are otherwise then due and payable. Without
limiting the generality of the foregoing, if on the Maturity Date, or on any
earlier effective date of termination, there are any outstanding letters of
credit issued by Silicon or issued by another institution based upon an
application, guarantee, indemnity or similar agreement on the part of Silicon,
then on such date Borrower shall provide to Silicon cash collateral in an amount
equal to the face amount of all such letters of credit plus all interest, fees
and cost due or to become due in connection therewith, to secure all of the
Obligations relating to said letters of credit, pursuant to Silicon's then
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standard form cash pledge agreement. Notwithstanding any termination of this
Agreement, all of Silicon's security interests in all of the Collateral and all
of the terms and provisions of this Agreement shall continue in full force and
effect until all Obligations have been paid and performed in full; provided
that, without limiting the fact that Loans are subject to the reasonable
discretion of Silicon, Silicon may, in its sole discretion, refuse to make any
further Loans after termination. No termination shall in any way affect or
impair any right or remedy of Silicon, nor shall any such termination relieve
the Borrower of any Obligation to Silicon, until all of the Obligations have
been paid and performed in full. Upon payment and performance in full of all the
Obligations, Silicon shall promptly deliver to the Borrower termination
statements, requests for reconveyances and such other documents as may be
required to fully terminate any of Silicon's security interests.
6. EVENTS OF DEFAULT AND REMEDIES.
6.1 EVENTS OF DEFAULT. The occurrence of any of the following events shall
constitute an "Event of Default" under this Agreement, and the Borrower shall
give Silicon immediate written notice thereof: (a) Any warranty, representation,
statement, report or certificate made or delivered to Silicon by the Borrower or
any of the Borrower's officers, employees or agents, now or in the future, shall
be untrue or misleading in any material respect; or (b) the Borrower shall fail
to pay when due any Loan or any interest thereon or any other monetary
Obligation; or (c) the total Loans and other Obligations outstanding at any time
exceed the Credit Limit; or (d) the Borrower shall fail to comply with any of
the financial covenants set forth in the Schedule or shall fail to perform any
other non-monetary Obligation which by its nature cannot be cured; or (e) the
Borrower shall fail to pay or perform any other non-monetary Obligation, which
failure is not cured within 5 business days after the date due; or (f) Any levy,
assessment, attachment, seizure, lien or encumbrance is made on all or any part
of the Collateral which is not cured within 10 days after the occurrence of the
same; or (g) Dissolution, termination of existence, insolvency or business
failure of the Borrower; or appointment of a receiver, trustee or custodian, for
all or any part of the property of, assignment for the benefit of creditors by,
or the commencement of any proceeding by the Borrower under any reorganization,
bankruptcy, insolvency, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, now or in the future in effect;
or (h) the commencement of any proceeding against the Borrower or any guarantor
of any of the Obligations under any reorganization, bankruptcy, insolvency,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, now or in the future in effect, which is not cured by the
dismissal thereof within 30 days after the date commenced; (i) revocation or
termination of, or limitation or denial of liability upon, any guaranty of the
Obligations or any attempt to do any of the foregoing; or commencement of
proceedings by any guarantor of any of the Obligations under any bankruptcy or
insolvency law; or (j) revocation or termination of, or limitation or denial of
liability upon, any pledge of any certificate of deposit, securities or other
property or asset of any kind pledged by any third party to secure any or all of
the Obligations, or any attempt to do any of the foregoing; or commencement of
proceedings by or against any such third party under any bankruptcy or
insolvency law; or (k) the Borrower makes any payment on account of any
indebtedness or obligation which has been subordinated to the Obligations other
than as permitted in the applicable subordination agreement or if any person who
has subordinated such indebtedness or obligations terminates or in any way
limits his subordination agreement; or (l) there shall be a change in the record
or beneficial ownership of an aggregate of more than 20% of the outstanding
shares of stock of the Borrower, in one or more transactions, compared to the
ownership of outstanding shares of stock of the Borrower in effect on the date
hereof, without the prior written consent of Silicon; or (m) the Borrower shall
generally not pay its debts as they become due; or the Borrower shall conceal,
remove or transfer any part of its property, with intent to hinder, delay or
defraud its creditors, or make or suffer any transfer of any of its property
which may be fraudulent under any bankruptcy, fraudulent conveyance or similar
law. Silicon may cease making any Loans hereunder during any of the above cure
periods, and thereafter if an Event of Default has occurred.
6.2 REMEDIES. Upon the occurrence of any Event of Default, and at any time
thereafter, Silicon, at its option, and without notice or demand of any kind
(all of which are hereby expressly waived by the Borrower), may do any one or
more of the following: (a) Cease making Loans or otherwise extending credit to
the Borrower under this Agreement or any other document or agreement; (b)
Accelerate and declare all or any part of the Obligations to be immediately due,
payable, and performable, notwithstanding any deferred or installment payments
allowed by any instrument evidencing or relating to any Obligation; (c) Take
possession of any or all of the Collateral wherever it may be found, and for
that purpose the Borrower hereby authorizes Silicon without judicial process to
enter onto any of the Borrower's premises without interference to search for,
take possession of, keep, store, or remove any of the Collateral, and remain on
the premises or cause a custodian to remain on the premises in exclusive control
thereof without charge for so long as Silicon deems it reasonably necessary in
order to complete the enforcement of its rights under this Agreement or any
other agreement; provided, however, that should Silicon seek to take possession
of any or all of the Collateral by Court process, the Borrower hereby
irrevocably waives: (i) any bond and any surety or security relating thereto
required by any statute, court rule or otherwise as an incident to such
possession; (ii) any demand for possession prior to the commencement of any suit
or action to recover possession thereof; and (iii) any requirement that Silicon
retain possession of and not dispose of any such Collateral until after trial or
final judgment; (d) Require the Borrower to assemble any or all of
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the Collateral and make it available to Silicon at places designated by Silicon
which are reasonably convenient to Silicon and the Borrower, and to remove the
Collateral to such locations as Silicon may deem advisable; (e) Require Borrower
to deliver to Silicon, in kind, all checks and other payments received with
respect to all accounts and general intangibles, together with any necessary
indorsements, within one day after the date received by the Borrower; (f)
Complete the processing, manufacturing or repair of any Collateral prior to a
disposition thereof and, for such purpose and for the purpose of removal,
Silicon shall have the right to use the Borrower's premises, vehicles, hoists,
lifts, cranes, equipment and all other property without charge; (g) Sell, lease
or otherwise dispose of any of the Collateral in its condition at the time
Silicon obtains possession of it or after further manufacturing, processing or
repair, at any one or more public and/or private sales, in lots or in bulk, for
cash, exchange or other property, or on credit, and to adjourn any such sale
from time to time without notice other than oral announcement at the time
scheduled for sale. Silicon shall have the right to conduct such disposition on
the Borrower's premises without charge, for such time or times as Silicon deems
reasonable, or on Silicon's premises, or elsewhere and the Collateral need not
be located at the place of disposition. Silicon may directly or through any
affiliated company purchase or lease any Collateral at any such public
disposition, and if permissible under applicable law, at any private
disposition. Any sale or other disposition of Collateral shall not relieve the
Borrower of any liability the Borrower may have if any Collateral is defective
as to title or physical condition or otherwise at the time of sale; (h) Demand
payment of, and collect any accounts and general intangibles comprising
Collateral and, in connection therewith, the Borrower irrevocably authorizes
Silicon to endorse or sign the Borrower's name on all collections, receipts,
instruments and other documents, to take possession of and open mail addressed
to the Borrower and remove therefrom payments made with respect to any item of
the Collateral or proceeds thereof, and, in Silicon's sole discretion, to grant
extensions of time to pay, compromise claims and settle accounts and the like
for less than face value; (i) Offset against any sums in any of Borrower's
general, special or other deposit accounts with Silicon; and (j) Demand and
receive possession of any of the Borrower's federal and state income tax returns
and the books and records utilized in the preparation thereof or referring
thereto. All reasonable attorneys' fees, expenses, costs, liabilities and
obligations incurred by Silicon with respect to the foregoing shall be added to
and become part of the Obligations, shall be due on demand, and shall bear
interest at a rate equal to the highest interest rate applicable to any of the
Obligations. Without limiting any of Silicon's rights and remedies, from and
after the occurrence of any Event of Default, the interest rate applicable to
the Obligations shall be increased by an additional four percent per annum.
6.3 STANDARDS FOR DETERMINING COMMERCIAL REASONABLENESS. The Borrower and
Silicon agree that a sale or other disposition (collectively, "sale") of any
Collateral which complies with the following standards will conclusively be
deemed to be commercially reasonable: (i) Notice of the sale is given to the
Borrower at least seven days prior to the sale, and, in the case of a public
sale, notice of the sale is published at least seven days before the sale in a
newspaper of general circulation in the county where the sale is to be
conducted; (ii) Notice of the sale describes the collateral in general,
non-specific terms; (iii) The sale is conducted at a place designated by
Silicon, with or without the Collateral being present; (iv) The sale commences
at any time between 8:00 a.m. and 6:00 p.m.; (v) Payment of the purchase price
in cash or by cashier's check or wire transfer is required; (vi) With respect to
any sale of any of the Collateral, Silicon may (but is not obligated to) direct
any prospective purchaser to ascertain directly from the Borrower any and all
information concerning the same. Silicon may employ other methods of noticing
and selling the Collateral, in its discretion, if they are commercially
reasonable.
6.4 POWER OF ATTORNEY. Upon the occurrence of any Event of Default, without
limiting Silicon's other rights and remedies, the Borrower grants to Silicon an
irrevocable power of attorney coupled with an interest, authorizing and
permitting Silicon (acting through any of its employees, attorneys or agents) at
any time, at its option, but without obligation, with or without notice to the
Borrower, and at the Borrower's expense, to do any or all of the following, in
the Borrower's name or otherwise: (a) Execute on behalf of the Borrower any
documents that Silicon may, in its sole and absolute discretion, deem advisable
in order to perfect and maintain Silicon's security interest in the Collateral,
or in order to exercise a right of the Borrower or Silicon, or in order to fully
consummate all the transactions contemplated under this Agreement, and all other
present and future agreements; (b) Execute on behalf of the Borrower any
document exercising, transferring or assigning any option to purchase, sell or
otherwise dispose of or to lease (as lessor or lessee) any real or personal
property which is part of Silicon's Collateral or in which Silicon has an
interest; (c) Execute on behalf of the Borrower, any invoices relating to any
account, any draft against any account debtor and any notice to any account
debtor, any proof of claim in bankruptcy, any Notice of Lien, claim of
mechanic's, materialman's or other lien, or assignment or satisfaction of
mechanic's, materialman's or other lien; (d) Take control in any manner of any
cash or non-cash items of payment or proceeds of Collateral; endorse the name of
the Borrower upon any instruments, or documents, evidence of payment or
Collateral that may come into Silicon's possession; (e) Endorse all checks and
other forms of remittances received by Silicon; (f) Pay, contest or settle any
lien, charge, encumbrance, security interest and adverse claim in or to any of
the Collateral, or any judgment based thereon, or otherwise take any action to
terminate or discharge the same; (g) Grant extensions of time to pay, compromise
claims and settle accounts and general intangibles for less than face value and
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SILICON VALLEY BANK LOAN AND SECURITY AGREEMENT
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execute all releases and other documents in connection therewith; (h) Pay any
sums required on account of the Borrower's taxes or to secure the release of any
liens therefor, or both; (i) Settle and adjust, and give releases of, any
insurance claim that relates to any of the Collateral and obtain payment
therefor; (j) Instruct any third party having custody or control of any books or
records belonging to, or relating to, the Borrower to give Silicon the same
rights of access and other rights with respect thereto as Silicon has under this
Agreement; and (k) Take any action or pay any sum required of the Borrower
pursuant to this Agreement and any other present or future agreements. Silicon
shall exercise the foregoing powers in a commercially reasonable manner. Any and
all reasonable sums paid and any and all reasonable costs, expenses,
liabilities, obligations and attorneys' fees incurred by Silicon with respect to
the foregoing shall be added to and become part of the Obligations, shall be
payable on demand, and shall bear interest at a rate equal to the highest
interest rate applicable to any of the Obligations. In no event shall Silicon's
rights under the foregoing power of attorney or any of Silicon's other rights
under this Agreement be deemed to indicate that Silicon is in control of the
business, management or properties of the Borrower.
6.5 APPLICATION OF PROCEEDS. All proceeds realized as the result of any sale of
the Collateral shall be applied by Silicon first to the costs, expenses,
liabilities, obligations and attorneys' fees incurred by Silicon in the exercise
of its rights under this Agreement, second to the interest due upon any of the
Obligations, and third to the principal of the Obligations, in such order as
Silicon shall determine in its sole discretion. Any surplus shall be paid to the
Borrower or other persons legally entitled thereto; the Borrower shall remain
liable to Silicon for any deficiency. If, Silicon, in its sole discretion,
directly or indirectly enters into a deferred payment or other credit
transaction with any purchaser at any sale or other disposition of Collateral,
Silicon shall have the option, exercisable at any time, in its sole discretion,
of either reducing the Obligations by the principal amount of purchase price or
deferring the reduction of the Obligations until the actual receipt by Silicon
of the cash therefor.
6.6 REMEDIES CUMULATIVE. In addition to the rights and remedies set forth in
this Agreement, Silicon shall have all the other rights and remedies accorded a
secured party under the California Uniform Commercial Code and under all other
applicable laws, and under any other instrument or agreement now or in the
future entered into between Silicon and the Borrower, and all of such rights and
remedies are cumulative and none is exclusive. Exercise or partial exercise by
Silicon of one or more of its rights or remedies shall not be deemed an
election, nor bar Silicon from subsequent exercise or partial exercise of any
other rights or remedies. The failure or delay of Silicon to exercise any rights
or remedies shall not operate as a waiver thereof, but all rights and remedies
shall continue in full force and effect until all of the Obligations have been
fully paid and performed.
7. GENERAL PROVISIONS.
7.1 NOTICES. All notices to be given under this Agreement shall be in writing
and shall be given either personally or by regular first-class mail, or
certified mail return receipt requested, addressed to Silicon or the Borrower at
the addresses shown in the heading to this Agreement, or at any other address
designated in writing by one party to the other party. All notices shall be
deemed to have been given upon delivery in the case of notices personally
delivered to the Borrower or to Silicon, or at the expiration of two business
days following the deposit thereof in the United States mail, with postage
prepaid.
7.2 SEVERABILITY. Should any provision of this Agreement be held by any court
of competent jurisdiction to be void or unenforceable, such defect shall not
affect the remainder of this Agreement, which shall continue in full force and
effect.
7.3 INTEGRATION. This Agreement and such other written agreements, documents
and instruments as may be executed in connection herewith are the final, entire
and complete agreement between the Borrower and Silicon and supersede all prior
and contemporaneous negotiations and oral representations and agreements, all of
which are merged and integrated in this Agreement. There are no oral
understandings, representations or agreements between the parties which are not
set forth in this Agreement or in other written agreements signed by the parties
in connection herewith.
7.4 WAIVERS. The failure of Silicon at any time or times to require the
Borrower to strictly comply with any of the provisions of this Agreement or any
other present or future agreement between the Borrower and Silicon shall not
waive or diminish any right of Silicon later to demand and receive strict
compliance therewith. Any waiver of any default shall not waive or affect any
other default, whether prior or subsequent thereto. None of the provisions of
this Agreement or any other agreement now or in the future executed by the
Borrower and delivered to Silicon shall be deemed to have been waived by any act
or knowledge of Silicon or its agents or employees, but only by a specific
written waiver signed by an officer of Silicon and delivered to the Borrower.
The Borrower waives demand, protest, notice of protest and notice of default or
dishonor, notice of payment and nonpayment, release, compromise, settlement,
extension or renewal of any commercial paper, instrument, account, general
intangible, document or guaranty at any time held by Silicon on which the
Borrower is or may in any way be liable, and notice of any action taken by
Silicon, unless expressly required by this Agreement.
7.5 NO LIABILITY FOR ORDINARY NEGLIGENCE. Neither Silicon, nor any of its
directors, officers, employees, agents, attorneys or any other person affiliated
with or representing Silicon shall be liable for any claims, demands, losses or
damages, of any kind whatsoever, made, claimed, incurred or suffered by the
Borrower or any other party through the ordinary negligence of
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Silicon, or any of its directors, officers, employees, agents, attorneys or any
other person affiliated with or representing Silicon.
7.6 AMENDMENT. The terms and provisions of this Agreement may not be waived or
amended, except in a writing executed by the Borrower and a duly authorized
officer of Silicon.
7.7 TIME OF ESSENCE. Time is of the essence in the performance by the Borrower
of each and every obligation under this Agreement.
7.8 ATTORNEYS FEES AND COSTS. The Borrower shall reimburse Silicon for all
reasonable attorneys' fees and all filing, recording, search, title insurance,
appraisal, audit, and other reasonable costs incurred by Silicon, pursuant to,
or in connection with, or relating to this Agreement (whether or not a lawsuit
is filed), including, but not limited to, any reasonable attorneys' fees and
costs Silicon incurs in order to do the following: prepare and negotiate this
Agreement and the
documents relating to this Agreement; obtain legal advice in connection with
this Agreement; enforce, or seek to enforce, any of its rights; prosecute
actions against, or defend actions by, account debtors; commence, intervene in,
or defend any action or proceeding; initiate any complaint to be relieved of the
automatic stay in bankruptcy; file or prosecute any probate claim, bankruptcy
claim, third-party claim, or other claim; examine, audit, copy, and inspect any
of the Collateral or any of the Borrower's books and records; protect, obtain
possession of, lease, dispose of, or otherwise enforce Silicon's security
interest in, the Collateral; and otherwise represent Silicon in any litigation
relating to the Borrower. In satisfying Borrower's obligation hereunder to
reimburse Silicon for attorneys fees, Borrower may, for convenience, issue
checks directly to Silicon's attorneys, Levy, Small & Xxxxxx, but Borrower
acknowledges and agrees that Levy, Small & Xxxxxx is representing only Silicon
and not Borrower in connection with this Agreement. If either Silicon or the
Borrower files any lawsuit against the other predicated on a breach of this
Agreement, the prevailing party in such action shall be entitled to recover its
reasonable costs and attorneys' fees, including (but not limited to) reasonable
attorneys' fees and costs incurred in the enforcement of, execution upon or
defense of any order, decree, award or judgment. All attorneys' fees and costs
to which Silicon may be entitled pursuant to this Paragraph shall immediately
become part of the Borrower's Obligations, shall be due on demand, and shall
bear interest at a rate equal to the highest interest rate applicable to any of
the Obligations.
7.9 BENEFIT OF AGREEMENT. The provisions of this Agreement shall be binding
upon and inure to the benefit of the respective successors, assigns, heirs,
beneficiaries and representatives of the parties hereto; provided, however, that
the Borrower may not assign or transfer any of its rights under this Agreement
without the prior written consent of Silicon, and any prohibited assignment
shall be void. No consent by Silicon to any assignment shall release the
Borrower from its liability for the Obligations.
7.10 JOINT AND SEVERAL LIABILITY. If the Borrower consists of more than one
person, their liability shall be joint and several, and the compromise of any
claim with, or the release of, any Borrower shall not constitute a compromise
with, or a release of, any other Borrower.
7.11 PARAGRAPH HEADINGS; CONSTRUCTION. Paragraph headings are only used in this
Agreement for convenience. The Borrower acknowledges that the headings may not
describe completely the subject matter of the applicable paragraph, and the
headings shall not be used in any manner to construe, limit, define or interpret
any term or provision of this Agreement. This Agreement has been fully reviewed
and negotiated between the parties and no uncertainty or ambiguity in any term
or provision of this Agreement shall be construed strictly against Silicon or
the Borrower under any rule of construction or otherwise.
7.12 MUTUAL WAIVER OF JURY TRIAL. THE BORROWER AND SILICON EACH HEREBY WAIVE THE
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF,
OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE
INSTRUMENT OR AGREEMENT BETWEEN SILICON AND THE BORROWER, OR ANY CONDUCT, ACTS
OR OMISSIONS OF SILICON OR THE BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH SILICON OR THE
BORROWER, IN ALL OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE.
7.13 GOVERNING LAW; JURISDICTION; VENUE. This Agreement and all acts and
transactions hereunder and all rights and obligations of Silicon and the
Borrower shall be governed by, and in accordance with, the laws of the State of
California. Any undefined term used in this Agreement that is defined in the
California Uniform Commercial Code shall have the meaning assigned to that term
in the California Uniform Commercial Code. As a material part of the
consideration to Silicon to enter into this Agreement, the Borrower (i) agrees
that all actions and proceedings relating directly or indirectly hereto shall,
at Silicon's option, be litigated in courts located within California, and that
the exclusive venue therefor shall be Orange County; (ii) consents to the
jurisdiction and venue of any such court and consents to service of process in
any such action or proceeding by personal delivery or any other method permitted
by law; and (iii) waives any and all rights the Borrower may have to object to
the jurisdiction of any such court, or to transfer or change the venue of any
such action or proceeding.
BORROWER:
BROADCOM CORPORATION
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BY_______________________________
PRESIDENT OR VICE PRESIDENT
BY_______________________________
SECRETARY OR ASS'T SECRETARY
SILICON:
SILICON VALLEY BANK
BY_______________________________
TITLE______________________________
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[LOGO] SILICON VALLEY BANK
AMENDMENT TO LOAN AGREEMENT
BORROWER: BROADCOM CORPORATION
ADDRESS: 00000 XXXXXX XXXXXX XXXX
XXXXXX, XXXXXXXXXX 00000
DATE: APRIL 6, 1997
THIS AMENDMENT TO LOAN AGREEMENT is entered into between SILICON VALLEY
BANK ("Silicon") and the borrower named above (the "Borrower"), with reference
to the following facts:
Silicon entered into that certain Loan and Security Agreement with the
Borrower dated March 23, 1995 (the "Original Loan Agreement"), as amended by
that Amendment to Loan Agreement dated September 8, 1995, as amended by that
Amendment to Loan Agreement dated November 17, 1995, and as amended by that
Amendment to Loan Agreement dated April 9, 1996 (the Original Loan Agreement as
so amended and as otherwise amended from time to time is referred to herein as
the "Loan Agreement"). The parties desire to amend the Loan Agreement as herein
set forth effective as of the date hereof. (Capitalized terms used but not
defined in this Amendment, shall have the meanings set forth in the Loan
Agreement.)
1. AMENDED SCHEDULE. The Schedule to the Loan Agreement is hereby deleted
and replaced with the Schedule to the Loan Agreement as attached hereto.
2. MODIFIED SECTION 4.5. Section 4.5 of the Loan Agreement is hereby
amended to read as follows:
"4.5 ACCESS TO COLLATERAL, BOOKS AND RECORDS. At all reasonable times,
and upon one business day notice, Silicon, or its agents, shall have the right
to inspect the Collateral, and the right to audit and copy the Borrower's
accounting books and records and Borrower's books and records relating to the
Collateral. Silicon shall take reasonable steps to keep confidential all
information obtained in any such inspection or audit, but Silicon shall have the
right to disclose any such information to its auditors, regulatory agencies, and
attorneys, and pursuant to any subpoena or other legal process. The foregoing
audits shall be at Silicon's expense, except that the Borrower shall reimburse
Silicon for its reasonable costs for semi-annual accounts receivable audits at
all times that there have been any Accounts Loans (as defined in the Schedule)
outstanding, and Silicon may debit Borrower's deposit accounts with Silicon for
the cost of such semi-annual accounts receivable audits (in which event Silicon
shall send notification thereof to the Borrower); at times that there have been
no Accounts Loans outstanding, then such audits shall be on an annual basis.
Notwithstanding the foregoing, after the occurrence of an Event of Default all
audits shall be at the Borrower's expense."
3. FEE. Borrower shall pay to Silicon a fee of $22,500 in connection with
this Amendment, which fee shall be in addition to all interest and all other
amounts payable under the Loan Agreement and which shall not be refundable.
4. GENERAL PROVISIONS. This Amendment, the Loan Agreement, all prior
written amendments to the Loan Agreement signed by Silicon and the Borrowers or
any of them, and the other written documents and agreements between Silicon and
the Borrowers or any of them set forth in full all of the representations and
agreements of the parties with respect to the subject matter hereof and
supersede all prior discussions, representations, agreements and understandings
between the parties with respect to the subject hereof. Except as herein
expressly amended, all of the terms and provisions of the Loan Agreement, and
all other documents and agreements between Silicon and the Borrowers or any of
them shall continue in full force and effect and the same are hereby ratified
and confirmed.
BROADCOM CORPORATION SILICON VALLEY BANK
BY_______________________________ BY_______________________________
PRESIDENT OR VICE PRESIDENT
TITLE__________________________
BY_______________________________
SECRETARY OR ASS'T SECRETARY
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[LOGO] SILICON VALLEY BANK
AMENDMENT TO LOAN AGREEMENT
BORROWER: BROADCOM CORPORATION
ADDRESS: 00000 XXXXXX XXXXXX XXXX
XXXXXX, XXXXXXXXXX 00000
DATE: JUNE 11, 1997
THIS AMENDMENT TO LOAN AGREEMENT is entered into between SILICON VALLEY
BANK ("Silicon") and the borrower named above (the "Borrower"), with reference
to the following facts:
Silicon entered into that certain Loan and Security Agreement with the
Borrower dated March 23, 1995 (the "Original Loan Agreement"), as amended by
that Amendment to Loan Agreement dated September 8, 1995, as amended by that
Amendment to Loan Agreement dated November 17, 1995, as amended by that
Amendment to Loan Agreement dated April 9, 1996, and as amended by that
Amendment to Loan Agreement dated April 6, 1997 (the Original Loan Agreement as
so amended and as otherwise amended from time to time is referred to herein as
the "Loan Agreement"). The parties desire to amend the Loan Agreement as herein
set forth effective as of the date hereof. (Capitalized terms used but not
defined in this Amendment, shall have the meanings set forth in the Loan
Agreement.)
1. AMENDED SCHEDULE. The Schedule to the Loan Agreement is hereby deleted
and replaced with the Schedule to the Loan Agreement as attached hereto.
2. GENERAL PROVISIONS. This Amendment, the Loan Agreement, all prior
written amendments to the Loan Agreement signed by Silicon and the Borrowers or
any of them, and the other written documents and agreements between Silicon and
the Borrowers or any of them set forth in full all of the representations and
agreements of the parties with respect to the subject matter hereof and
supersede all prior discussions, representations, agreements and understandings
between the parties with respect to the subject hereof. Except as herein
expressly amended, all of the terms and provisions of the Loan Agreement, and
all other documents and agreements between Silicon and the Borrowers or any of
them shall continue in full force and effect and the same are hereby ratified
and confirmed.
BROADCOM CORPORATION SILICON VALLEY BANK
BY_______________________________ BY_______________________________
PRESIDENT OR VICE PRESIDENT
TITLE____________________________
BY_______________________________
SECRETARY OR ASS'T SECRETARY
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SCHEDULE TO LOAN AND SECURITY AGREEMENT -.S.
13
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[LOGO] SILICON VALLEY BANK
SCHEDULE TO
LOAN AND SECURITY AGREEMENT
BORROWER: BROADCOM CORPORATION
ADDRESS: 00000 XXXXXX XXXXXX XXXX
XXXXXX, XXXXXXXXXX 00000
DATE: JUNE 11, 1997
THIS SCHEDULE IS AN INTEGRAL PART OF THE LOAN AND SECURITY AGREEMENT
BETWEEN SILICON VALLEY BANK ("SILICON") AND THE ABOVE-NAMED BORROWER
("BORROWER").
CREDIT LIMIT
(SECTION 1.1): AN AMOUNT NOT TO EXCEED:
(A) THE TERM LOAN (AS DEFINED BELOW);
PLUS
(B) THE LESSER OF (THE "ACCOUNTS LOANS"): (I)
$3,000,000 AT ANY ONE TIME OUTSTANDING; OR (II)
80% OF THE NET AMOUNT OF BORROWER'S ACCOUNTS,
WHICH SILICON IN ITS DISCRETION DEEMS ELIGIBLE
FOR BORROWING. "NET AMOUNT" OF AN ACCOUNT MEANS
THE GROSS AMOUNT OF THE ACCOUNT, MINUS ALL
APPLICABLE SALES, USE, EXCISE AND OTHER SIMILAR
TAXES AND MINUS ALL DISCOUNTS, CREDITS AND
ALLOWANCES OF ANY NATURE GRANTED OR CLAIMED.
LOANS THAT ARE MADE BASED ON BORROWER'S
ELIGIBLE ACCOUNTS AS DESCRIBED HEREIN ARE
REFERRED TO AS THE "ACCOUNTS LOANS."
WITHOUT LIMITING THE FACT THAT THE
DETERMINATION OF WHICH ACCOUNTS ARE ELIGIBLE
FOR BORROWING IS A MATTER OF SILICON'S
DISCRETION, THE FOLLOWING WILL NOT BE DEEMED
ELIGIBLE FOR BORROWING: ACCOUNTS OUTSTANDING
FOR MORE THAN 90 DAYS FROM THE INVOICE DATE,
ACCOUNTS SUBJECT TO ANY CONTINGENCIES, ACCOUNTS
OWING FROM THE UNITED STATES OR ANY DEPARTMENT,
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES
OR ANY STATE, CITY OR MUNICIPALITY, ACCOUNTS
OWING FROM AN ACCOUNT DEBTOR OUTSIDE THE UNITED
STATES (UNLESS PRE-APPROVED BY SILICON IN ITS
DISCRETION, OR BACKED BY A LETTER OF CREDIT
SATISFACTORY TO SILICON, OR FCIA INSURED
SATISFACTORY TO SILICON)*, ACCOUNTS OWING FROM
ONE ACCOUNT DEBTOR TO THE EXTENT THEY EXCEED
25% OF THE TOTAL ELIGIBLE ACCOUNTS
OUTSTANDING**, ACCOUNTS OWING FROM AN AFFILIATE
OF BORROWER, AND ACCOUNTS OWING FROM AN ACCOUNT
DEBTOR TO WHOM BORROWER IS OR MAY BE LIABLE FOR
GOODS PURCHASED FROM SUCH ACCOUNT DEBTOR OR
OTHERWISE. IN ADDITION, IF MORE THAN 50% OF THE
ACCOUNTS OWING FROM AN
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SILICON VALLEY BANK SCHEDULE TO LOAN AND SECURITY AGREEMENT
--------------------------------------------------------------------------------
ACCOUNT DEBTOR ARE OUTSTANDING MORE THAN 90
DAYS FROM THE INVOICE DATE OR ARE OTHERWISE NOT
ELIGIBLE ACCOUNTS, THEN ALL ACCOUNTS OWING FROM
THAT ACCOUNT DEBTOR WILL BE DEEMED INELIGIBLE
FOR BORROWING.
* (ACCOUNTS OWING FROM GENERAL INSTRUMENTS
SHALL NOT BE DEEMED INELIGIBLE BY VIRTUE OF THE
LOCATION OF THE ACCOUNT DEBTOR OUTSIDE OF THE
UNITED STATES)
** (PROVIDED THAT THE PERCENTAGE APPLICABLE TO
GENERAL INSTRUMENTS, SCIENTIFIC ATLANTA,
HEWLETT PACKARD, MOTOROLA OR ROCKWELL SHALL BE
50%)
TERM LOAN (A) SUBJECT TO AND UPON THE TERMS AND
CONDITIONS OF THIS AGREEMENT, SILICON AGREES TO
MAKE A TERM LOAN (THE "TERM LOAN") TO BORROWER
SUBSTANTIALLY CONCURRENTLY UPON ENTERING INTO
THE AMENDMENT TO THE LOAN AGREEMENT DATED JUNE
11, 1997 BETWEEN THE BORROWER AND SILICON IN AN
AGGREGATE, OUTSTANDING AMOUNT NOT TO EXCEED
$3,000,000, PROVIDED IN NO EVENT SHALL THE
AMOUNT OF THE TERM LOAN EXCEED 100% OF THE NET
PURCHASE PRICE OF EQUIPMENT AND ASSOCIATED
SOFTWARE BEING PURCHASED BY BORROWER OR
EQUIPMENT AND ASSOCIATED SOFTWARE THAT THE
BORROWER HAS PURCHASED NO EARLIER THAN 12
MONTHS PRIOR TO THE DATE OF THE TERM LOAN,
WHICH ARE OTHERWISE ACCEPTABLE TO SILICON IN
ITS DISCRETION (THE "EQUIPMENT BORROWING
BASE"). THE "NET PURCHASE PRICE" OF EQUIPMENT
MEANS THE PURCHASE PRICE THEREOF, AS SHOWN ON
THE APPLICABLE INVOICE, NET OF ALL CHARGES FOR
TAXES, FREIGHT, DELIVERY, INSTALLATION,
INSURANCE, SET-UP, TRAINING, MANUALS, FEES,
SERVICE CHARGES AND OTHER SIMILAR ITEMS. TO
SUPPORT SILICON'S MAKING OF THE TERM LOAN,
BORROWER SHALL DELIVER TO SILICON, EVIDENCE, IN
FORM AND SUBSTANCE SATISFACTORY TO SILICON (THE
"TERM LOAN EVIDENCE"), OF THE EQUIPMENT
PURCHASES THAT ARE THE SUBJECT OF THE EQUIPMENT
BORROWING BASE.
(B) UPON THE BORROWER'S WRITTEN ELECTION TO
SILICON ON THE MAKING OF THE TERM LOAN,
INTEREST SHALL ACCRUE AT EITHER THE PRIME RATE
OPTION (AS DEFINED BELOW) OR THE FIXED RATE
OPTION (AS DEFINED BELOW); IF BORROWER FAILS TO
NOTIFY THE SILICON ON OR BEFORE THE MAKING OF
THE TERM LOAN OF SUCH INTEREST RATE ELECTION,
THEN THE INTEREST RATE SHALL BE DEEMED TO BE
THE PRIME RATE OPTION. SUCH INTEREST SHALL BE
PAYABLE MONTHLY FOR EACH MONTH WHILE THE TERM
LOAN IS OUTSTANDING. AS USED HEREIN THE TERM
"FIXED RATE OPTION" SHALL MEAN THE TREASURY
XXXX RATE (AS DEFINED BELOW) IN EFFECT AS OF
THE DATE OF THE MAKING OF THE TERM LOAN ON A
PER ANNUM BASIS PLUS THREE AND ONE- HALF
PERCENT (3.50%). THE TERM "PRIME RATE OPTION"
SHALL MEAN A PER ANNUM INTEREST RATE EQUAL TO
ONE-HALF OF ONE PERCENT (0.50%) ABOVE THE
PRIME RATE (AS DEFINED BELOW).
"PRIME RATE" MEANS THE VARIABLE RATE OF INTEREST, PER ANNUM, MOST RECENTLY
ANNOUNCED BY SILICON, AS ITS "PRIME RATE," WHETHER OR NOT SUCH ANNOUNCED RATE IS
THE LOWEST RATE AVAILABLE FROM SILICON.
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SILICON VALLEY BANK SCHEDULE TO LOAN AND SECURITY AGREEMENT
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"TREASURY XXXX RATE" MEANS THE INTEREST RATE PER ANNUM EQUAL TO THE MOST RECENT
WEEKLY AVERAGE YIELD ON ACTIVELY TRADED U.S. TREASURY OBLIGATIONS HAVING A FINAL
MATURITY OF THREE YEARS AS DETERMINED BY REFERENCE TO THE WEEK ENDING FIGURES
PUBLISHED IN THE MOST RECENT FEDERAL RESERVE STATISTICAL RELEASE WHICH SHALL
BECOME AVAILABLE AT LEAST TWO BUSINESS DAYS PRIOR TO THE DATE AS OF WHICH SUCH
YIELD IS TO BE DETERMINED, OR IF A STATISTICAL RELEASE IS NOT THEN PUBLISHED,
THE ARITHMETIC AVERAGE (ROUNDED TO THE NEAREST .01%) OF THE PER ANNUM YIELDS TO
MATURITY FOR EACH BUSINESS DAY DURING THE WEEK ENDING AT LEAST TWO BUSINESS DAYS
PRIOR TO THE DATE SUCH DETERMINATION IS MADE, OF ALL ISSUES OF ACTIVELY TRADED
MARKETABLE UNITED STATES TREASURY FIXED INTEREST RATE SECURITIES WITH A CONSTANT
MATURITY EQUAL TO, OR NOT MORE THAN 30 DAYS LONGER OR 30 DAYS SHORTER THAN THREE
YEARS (EXCLUDING ALL SUCH SECURITIES WHICH CAN BE SURRENDERED AT THE OPTION OF
THE HOLDER AT THE FACE VALUE OF PAYMENT OF ANY FEDERAL ESTATE TAX, OR WHICH
PROVIDE FOR TAX BENEFITS TO THE HOLDER).
(D) IN THE EVENT THE PRIME RATE IS CHANGED FROM
TIME TO TIME HEREAFTER, THE APPLICABLE RATE OF
INTEREST HEREUNDER SHALL BE INCREASED OR
DECREASED EFFECTIVE AS OF 12:01 A.M. ON THE DAY
THE PRIME RATE IS CHANGED, BY AN AMOUNT EQUAL
TO SUCH CHANGE IN THE PRIME RATE. ALL INTEREST
CHARGEABLE UNDER THE LOAN DOCUMENTS SHALL BE
COMPUTED ON THE BASIS OF A THREE HUNDRED SIXTY
(360) DAY YEAR FOR THE ACTUAL NUMBER OF DAYS
ELAPSED.
(E) THE TERM LOAN WILL BE PAYABLE IN THIRTY-SIX
(36) EQUAL MONTHLY INSTALLMENTS OF PRINCIPAL,
PLUS ALL ACCRUED INTEREST, WITH THE FIRST OF
SUCH PAYMENTS DUE ON JULY 1, 1997, AND
CONTINUING WITH EACH SUCCEEDING PAYMENT DUE AND
PAYABLE ON THE FIRST DAY OF EACH MONTH
THEREAFTER FOR THE FOLLOWING THIRTY-FOUR (34)
CONSECUTIVE MONTHS, AND WITH THE REMAINING
AMOUNT OF THE TERM LOAN AND ALL OBLIGATIONS
RELATING THERETO TO BE FULLY DUE AND PAYABLE IN
A FINAL PAYMENT NO LATER THAN JUNE 1, 2000. ANY
PORTION OF THE TERM LOAN, ONCE REPAID, MAY NOT
BE REBORROWED.
(F) IN THE EVENT ANY PRINCIPAL OF THE TERM LOAN
IS PREPAID PRIOR TO THE DATES DUE UNDER THE
SCHEDULE OF PRINCIPAL PAYMENTS SET FORTH ABOVE
AND BORROWER HAS ELECTED THE FIXED RATE OPTION
ONLY, BORROWER SHALL ALSO PAY SILICON A
PREPAYMENT FEE IN AN AMOUNT EQUAL TO THE
FOLLOWING PERCENTAGE OF THE AMOUNT PREPAID OR
REQUIRED TO BE PREPAID, BASED ON THE DATE THE
PREPAYMENT OCCURS OR THE DATE PREPAYMENT IS DUE
AS A RESULT OF AN EVENT OF DEFAULT OR
TERMINATION OF THIS AGREEMENT:
ON OR BEFORE 7/1/98: 3%
AFTER 7/1/98 AND ON OR BEFORE 7/1/99: 2%
AFTER 7/1/99 AND ON OR BEFORE 6/1/2000: 1%
LETTER OF CREDIT SUBLIMIT SILICON, IN ITS REASONABLE DISCRETION, WILL
FROM TIME TO TIME DURING THE TERM OF THIS
AGREEMENT ISSUE LETTERS OF CREDIT FOR THE
ACCOUNT OF THE BORROWER ("LETTERS OF CREDIT"),
IN AN AGGREGATE AMOUNT AT ANY ONE TIME
OUTSTANDING NOT TO EXCEED $500,000, UPON THE
REQUEST OF THE BORROWER, PROVIDED THAT, ON THE
DATE THE LETTERS OF CREDIT ARE TO BE ISSUED,
BORROWER HAS AVAILABLE TO IT LOANS IN AN AMOUNT
EQUAL TO OR GREATER THAN THE FACE AMOUNT OF THE
LETTERS OF CREDIT TO BE ISSUED. PRIOR TO
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SILICON VALLEY BANK SCHEDULE TO LOAN AND SECURITY AGREEMENT
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THE ISSUANCE OF ANY LETTERS OF CREDIT, BORROWER
SHALL EXECUTE AND DELIVER TO SILICON
APPLICATIONS FOR LETTERS OF CREDIT AND SUCH
OTHER DOCUMENTATION AS SILICON SHALL SPECIFY
(THE "LETTER OF CREDIT DOCUMENTATION"). FEES
FOR THE LETTERS OF CREDIT SHALL BE AS PROVIDED
IN THE LETTER OF CREDIT DOCUMENTATION. LETTERS
OF CREDIT MAY HAVE A MATURITY DATE UP TO TWELVE
MONTHS BEYOND THE MATURITY DATE IN EFFECT FROM
TIME TO TIME, PROVIDED THAT IF, ON THE MATURITY
DATE, OR ON ANY EARLIER EFFECTIVE DATE OF
TERMINATION, THERE ARE ANY OUTSTANDING LETTERS
OF CREDIT ISSUED BY SILICON OR ISSUED BY
ANOTHER INSTITUTION BASED UPON AN APPLICATION,
GUARANTEE, INDEMNITY OR SIMILAR AGREEMENT ON
THE PART OF SILICON, THEN ON SUCH DATE BORROWER
SHALL PROVIDE TO SILICON CASH COLLATERAL IN AN
AMOUNT EQUAL TO THE FACE AMOUNT OF ALL SUCH
LETTERS OF CREDIT PLUS ALL INTEREST, FEES AND
COST DUE OR TO BECOME DUE IN CONNECTION
THEREWITH, TO SECURE ALL OF THE OBLIGATIONS
RELATING TO SAID LETTERS OF CREDIT, PURSUANT TO
SILICON'S THEN STANDARD FORM CASH PLEDGE
AGREEMENT. THE CREDIT LIMIT SHALL BE REDUCED BY
THE AMOUNT OF LETTERS OF CREDIT FROM TIME TO
TIME OUTSTANDING AND NO LETTER OF CREDIT SHALL
BE ISSUED UNLESS THERE IS SUFFICIENT
AVAILABILITY UNDER THE CREDIT LIMIT AT THE TIME
THAT ANY SUCH ISSUANCE IS PROPOSED TO BE MADE.
INTEREST RATE (SECTION 1.2): WITH RESPECT TO THE ACCOUNTS LOANS: A RATE
EQUAL TO THE PRIME RATE IN EFFECT FROM TIME TO
TIME PER ANNUM. INTEREST SHALL BE CALCULATED ON
THE BASIS OF A 360-DAY YEAR FOR THE ACTUAL
NUMBER OF DAYS ELAPSED. THE INTEREST RATE
APPLICABLE TO THE OBLIGATIONS SHALL CHANGE ON
EACH DATE THERE IS A CHANGE IN THE PRIME RATE.
WITH RESPECT TO TERM LOAN: AS SET FORTH ABOVE
IN THE TERM LOAN SECTION.
LOAN ORIGINATION FEE
(SECTION 1.3): SEE AMENDMENT OF EVEN DATE HEREWITH.
MATURITY DATE
(SECTION 5.1): APRIL 5, 1998, OTHER THAN WITH RESPECT TO
THE TERM LOAN, WHICH SHALL HAVE A MATURITY DATE
AS SET FORTH IN THE PROVISIONS ABOVE REGARDING
THE TERM LOAN.
PRIOR NAMES OF BORROWER
(SECTION 3.2): BASEBAND TECHNOLOGIES; BROADBAND TELECOM
TRADE NAMES OF BORROWER
(SECTION 3.2): NONE
OTHER LOCATIONS AND ADDRESSES
(SECTION 3.3): NONE
MATERIAL ADVERSE LITIGATION
(SECTION 3.10): NONE
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SILICON VALLEY BANK SCHEDULE TO LOAN AND SECURITY AGREEMENT
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NEGATIVE COVENANTS-EXCEPTIONS
(SECTION 4.6): WITHOUT SILICON'S PRIOR WRITTEN CONSENT,
BORROWER MAY DO THE FOLLOWING, PROVIDED THAT,
AFTER GIVING EFFECT THERETO, NO EVENT OF
DEFAULT HAS OCCURRED AND NO EVENT HAS OCCURRED
WHICH, WITH NOTICE OR PASSAGE OF TIME OR BOTH,
WOULD CONSTITUTE AN EVENT OF DEFAULT, AND
PROVIDED THAT THE FOLLOWING ARE DONE IN
COMPLIANCE WITH ALL APPLICABLE LAWS, RULES AND
REGULATIONS: (I) REPURCHASE SHARES OF
BORROWER'S STOCK PURSUANT TO ANY EMPLOYEE STOCK
PURCHASE OR BENEFIT PLAN, PROVIDED THAT THE
TOTAL AMOUNT PAID BY BORROWER FOR SUCH STOCK
DOES NOT EXCEED $100,000 IN ANY FISCAL YEAR.
FINANCIAL COVENANTS
(SECTION 4.1): BORROWER SHALL COMPLY WITH ALL OF THE FOLLOWING
COVENANTS. COMPLIANCE SHALL BE DETERMINED AS OF
THE END OF EACH MONTH, EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED BELOW:
QUICK ASSET RATIO: BORROWER SHALL MAINTAIN A RATIO OF "QUICK
ASSETS" TO CURRENT LIABILITIES OF NOT LESS THAN
1.25 TO 1.
TANGIBLE NET WORTH: BORROWER SHALL MAINTAIN A TANGIBLE NET WORTH
OF NOT LESS THAN $8,500,000.
DEBT TO TANGIBLE
NET WORTH RATIO: BORROWER SHALL MAINTAIN A RATIO OF TOTAL
LIABILITIES TO TANGIBLE NET WORTH OF NOT MORE
THAN .75 TO 1.
PROFITABILITY BORROWER SHALL NOT INCUR A LOSS (AFTER TAXES)
IN ANY FISCAL YEAR ("ANNUAL PROFITABILITY"),
PROVIDED THAT, DURING EACH FISCAL
YEAR, BORROWER MAY INCUR QUARTERLY LOSSES
(AFTER TAXES) AS LONG AS THE CUMULATIVE AMOUNT
OF SUCH LOSSES (INCLUDING THE OFFSET OF ANY
QUARTERLY PROFITS DURING SUCH PERIOD AGAINST
ANY LOSSES) DOES NOT EXCEED $1,000,000 AND
BORROWER OTHERWISE ATTAINS ANNUAL
PROFITABILITY.
DEBT SERVICE RATIO/
LIQUIDITY RATIO BORROWER SHALL EITHER MAINTAIN THE DEBT
SERVICE RATIO AS SET FORTH BELOW OR THE
LIQUIDITY RATIO AS SET FORTH BELOW AT ALL TIMES
THAT ANY TERM LOAN IS OUTSTANDING:
DEBT SERVICE RATIO: BORROWER SHALL MAINTAIN A
QUARTERLY DEBT SERVICE RATIO (AS REFERRED TO
BELOW) OF NOT LESS THAN 1.50 TO 1, RELATING TO
THE IMMEDIATELY PRECEDING TWO FISCAL QUARTERS
FOR THE PERIOD ENDING JUNE 30, 1997, RELATING
TO THE IMMEDIATELY PRECEDING THREE FISCAL
QUARTERS FOR THE PERIOD ENDING SEPTEMBER 30,
1997, AND RELATING TO THE IMMEDIATELY PRECEDING
FOUR FISCAL QUARTERS FOR THE PERIODS ENDING
THEREAFTER.
LIQUIDITY COVERAGE RATIO: BORROWER SHALL
MAINTAIN A LIQUIDITY COVERAGE RATIO OF 2.0 TO 1
ON A MONTHLY BASIS.
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DEFINITIONS: "CURRENT ASSETS," AND "CURRENT LIABILITIES"
SHALL HAVE THE MEANINGS ASCRIBED TO THEM IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
"TANGIBLE NET WORTH" MEANS THE EXCESS OF TOTAL
ASSETS OVER TOTAL LIABILITIES, DETERMINED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES, EXCLUDING HOWEVER ALL ASSETS WHICH
WOULD BE CLASSIFIED AS INTANGIBLE ASSETS UNDER
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES,
INCLUDING WITHOUT LIMITATION GOODWILL,
LICENSES, PATENTS, TRADEMARKS, TRADE NAMES,
COPYRIGHTS, CAPITALIZED SOFTWARE AND
ORGANIZATIONAL COSTS, LICENSES AND FRANCHISES.
"QUICK ASSETS" MEANS CASH ON HAND OR ON DEPOSIT
IN BANKS, READILY MARKETABLE SECURITIES ISSUED
BY THE UNITED STATES, READILY MARKETABLE
COMMERCIAL PAPER RATED "A-1" BY STANDARD &
POOR'S CORPORATION (OR A SIMILAR RATING BY A
SIMILAR RATING ORGANIZATION), CERTIFICATES OF
DEPOSIT AND BANKER'S ACCEPTANCES, AND ACCOUNTS
RECEIVABLE (NET OF ALLOWANCE FOR DOUBTFUL
ACCOUNTS).
"LIQUIDITY QUICK ASSETS" MEANS CASH ON HAND OR
ON DEPOSIT IN BANKS, READILY MARKETABLE
SECURITIES ISSUED BY THE UNITED STATES, READILY
MARKETABLE COMMERCIAL PAPER RATED "A-1" BY
STANDARD & POOR'S CORPORATION (OR A SIMILAR
RATING BY A SIMILAR RATING ORGANIZATION),
CERTIFICATES OF DEPOSIT AND BANKER'S
ACCEPTANCES, PLUS 50% OF THE BORROWER'S
ACCOUNTS ELIGIBLE FOR BORROWING PURSUANT TO THE
TERMS AND CONDITIONS OF THIS AGREEMENT MINUS
THE AMOUNT OF THE ACCOUNTS LOANS.
"DEBT SERVICE RATIO" MEANS THE RATIO OF (A) NET
INCOME OF BORROWER BEFORE INTEREST, TAXES,
DEPRECIATION AND OTHER NON-CASH AMORTIZATION
EXPENSES AND OTHER NON-CASH EXPENSES OF THE
BORROWER, DETERMINED IN ACCORDANCE WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES,
CONSISTENTLY APPLIED, TO (B) THE AMOUNT OF
BORROWER'S OBLIGATIONS RELATING TO PAYMENT OF
INTEREST AND CURRENT MATURITIES OF PRINCIPAL ON
BORROWER'S OUTSTANDING LONG TERM INDEBTEDNESS,
DETERMINED IN ACCORDANCE WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES, CONSISTENTLY
APPLIED.
"LIQUIDITY COVERAGE RATIO" MEANS THE RATIO OF
(A) LIQUIDITY QUICK ASSETS TO (B) THE AGGREGATE
AMOUNT OF BORROWER'S OBLIGATIONS RELATING TO
THE TERM LOAN.
SUBORDINATED DEBT: "LIABILITIES" FOR PURPOSES OF THE FOREGOING
COVENANTS DO NOT INCLUDE INDEBTEDNESS WHICH IS
SUBORDINATED TO THE INDEBTEDNESS TO SILICON
UNDER A SUBORDINATION AGREEMENT IN FORM
SPECIFIED BY SILICON OR BY LANGUAGE IN THE
INSTRUMENT EVIDENCING THE INDEBTEDNESS WHICH IS
ACCEPTABLE TO SILICON.
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SILICON VALLEY BANK SCHEDULE TO LOAN AND SECURITY AGREEMENT
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OTHER COVENANTS
(SECTION 4.1): BORROWER SHALL AT ALL TIMES COMPLY WITH ALL OF
THE FOLLOWING ADDITIONAL COVENANTS:
1. BANKING RELATIONSHIP. BORROWER SHALL AT ALL
TIMES MAINTAIN ITS PRIMARY BANKING RELATIONSHIP
WITH SILICON.
2. MONTHLY BORROWING BASE CERTIFICATE AND
LISTING. WITHIN 30 DAYS AFTER THE END OF EACH
MONTH, BORROWER SHALL PROVIDE SILICON WITH A
BORROWING BASE CERTIFICATE IN SUCH FORM AS
SILICON SHALL SPECIFY, AND AN AGED LISTING OF
BORROWER'S ACCOUNTS RECEIVABLE AND ACCOUNTS
PAYABLE.
3. INDEBTEDNESS. WITHOUT LIMITING ANY OF THE
FOREGOING TERMS OR PROVISIONS OF THIS
AGREEMENT, BORROWER SHALL NOT IN THE FUTURE
INCUR INDEBTEDNESS FOR BORROWED MONEY, EXCEPT
FOR (I) INDEBTEDNESS TO SILICON, AND (II)
INDEBTEDNESS INCURRED IN THE
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SILICON VALLEY BANK SCHEDULE TO LOAN AND SECURITY AGREEMENT
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FUTURE FOR THE PURCHASE PRICE OF OR LEASE OF
EQUIPMENT IN AN AGGREGATE AMOUNT NOT EXCEEDING
$100,000 AT ANY TIME OUTSTANDING.
BORROWER:
BROADCOM CORPORATION
BY_______________________________
PRESIDENT OR VICE PRESIDENT
BY_______________________________
SECRETARY OR ASS'T SECRETARY
SILICON:
SILICON VALLEY BANK
BY_______________________________
TITLE______________________________
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