SECOND LOAN MODIFICATION AGREEMENT
This Second Loan Modification Agreement is entered into as of February
3,1999, by and between MAKER COMMUNICATIONS, INC., a Delaware corporation with
its principal place of business at 00 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxxx 00000 ("Borrower" and SILICON VALLEY BANK, a California-chartered
bank ("Bank"), with its principal place of business at 0000 Xxxxxx Xxxxx, Xxxxx
Xxxxx, XX 00000 and with a loan production office located at Wellesley Office
Park, 00 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000, doing business under
the name "Silicon Valley East".
1. DESCRIPTION OF EXISTING INDEBTEDNESS. Among other indebtedness which may be
owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a loan
arrangement dated as of February 18, 1997, evidenced by, among other documents,
(i) an Equipment Line Promissory Note in the original principal amount of One
Million Dollars ($1,000,000.00) (the "Equipment Note"), and (ii) a Revolving
Promissory Note in the original principal amount of One Million Dollars
($1,000,000.00) (the "Revolving Promissory Note"). The Equipment Note and the
Revolving Note are governed by the terms of a certain Loan and Security
Agreement dated as of February 18, 1997 between Borrower and Bank, as amended by
a certain Loan Modification Agreement dated as of May 12, 1998 (as amended, the
"Loan Agreement"). Capitalized terms used but not otherwise defined herein shall
have the same meaning as in the Loan Agreement
Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the "Indebtedness".
2. DESCRIPTION OF COLLATERAL. Repayment of the Indebtedness is secured by the
Collateral as described in the Loan Agreement (together with any other
collateral security granted to Bank, the "Security Documents").
Hereinafter, the Security Documents, together with all other documents
evidencing or securing the Indebtedness shall be referred to as the "Existing
Loan Documents".
3. DESCRIPTION OF CHANGE IN TERMS.
A. Modification(s) to Loan Agreement.
1. The Loan Agreement shall be amended by deleting the following
definition appearing in Section 1.1 thereof:
""Committed Revolving Line" means a credit extension of up
to Two Million Dollars ($2,000,000.00)."
and inserting in lieu thereof the following:
""Committed Revolving Line" means a credit extension of up
to Two Million Five Hundred Thousand Dollars
($2,500,000.00)."
2. The Loan Agreement shall be amended by deleting the following
definition appearing in Section 1.1 thereof:
""Equipment Advance" has the meaning set forth in Section
2.1.2."
and inserting in lieu thereof the following:
""Equipment Advance" or "Equipment Advances" shall mean any
advance made hereunder pursuant to Sections 2.1.2,2.1.3 and
2.1.5."
3. The Loan Agreement shall be amended by inserting immediately
after the definition of "Material Adverse Effect" appearing in
Section 1.1 thereof the following definition:
""Maturity Date" means, as applicable, (i) the Revolving
Maturity Date for Advances pursuant to Section 2.1.1; (ii)
the Equipment Maturity Date for Equipment Advances pursuant
to Section 2.1.2; (iii) the 1998 Equipment Maturity Date for
1998 Equipment Advances pursuant to Section 2.1.3; and (iv)
the 1999 Equipment Maturity Date for Equipment Advances
pursuant to Section 2.1.5."
4. The Loan Agreement shall be amended by deleting the following
definition appearing in Section 1.1 thereof:
""1998 Committed Equipment Line" means a credit extension of
up to One Million Five Hundred Thousand Dollars
($1,500,000.00)."
and inserting in lieu thereof the following:
""1998 Committed Equipment Line" means a credit extension of
up to One Million One Hundred Thirty-Nine Thousand Dollars
($1,139,000.00)."
5. The Loan Agreement shall be amended by inserting immediately
after the definition of "1998 Equipment Advance" appearing in
Section 1.1 thereof the following definitions:
""1999 Committed Equipment Line" means a credit extension of
up to One Million Dollars ($1,000,000.00).
"1999 Equipment Availability End Date" has the meaning set
forth in Section 2.1.5.
"1999 Equipment Maturity Date" means thirty-six (36) months
after the 1999 Equipment Availability End Date."
6. The Loan Agreement shall be amended by deleting the following
definition appearing in Section 1.1 thereof:
""Revolving Maturity Date" means May 11, 1999."
and inserting in lieu thereof the following:
""Revolving Maturity Date" means February 3, 2000."
7. The outstanding principal balance of all 1998 Equipment Advances
made pursuant to Section 2.1.3, as of January 25, 1999, is Six
Hundred Eighty-Nine Thousand Dollars ($689,000.00).
All Equipment Advances currently amortizing under Section 2.1.2
shall continue to be repaid as provided in Section 2.1.2. The
outstanding principal balance of all Equipment Advances made
pursuant to Section 2.1.2, as of January 25, 1999, is Two Hundred
Forty-Six Thousand Seven Hundred Fifty-Two Dollars ($246,752.00).
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8. The Loan Agreement shall be amended by deleting the following
text appearing as the first sentence of paragraph (a) of Section
2.1.3 thereof entitled "1998 Equipment Advances":
"Subject to and upon the terms and conditions of this
Agreement, at any time through May 11, 1999, Bank agrees to
make advances (each an "1998 Equipment Advance" and
collectively, the "1998 Equipment Advances") to Borrower in
an aggregate outstanding amount not to exceed the Committed
Equipment Line."
and inserting in lieu thereof the following:
"Subject to and upon the terms and conditions of this
Agreement, at any time through February 15, 1999 (the "1998
Equipment Availability End Date"), Bank agrees to make
Equipment Advances (each a "1998 Equipment Advance" and
collectively, the "1998 Equipment Advances") to Borrower
under this Section 2.1.3 in an aggregate outstanding amount
not to exceed the 1998 Committed Equipment Line."
9. The Loan Agreement shall be amended by deleting paragraph (b) of
Section 2.1.3 entitled "1998 Equipment Advances" and inserting in
lieu thereof the following:
"(b) Interest shall accrue from the date of each 1998
Equipment Advance made pursuant to this Section 2.1.3 at a
per annum rate equal to the aggregate of Prime Rate, plus
One Quarter of One percent (0.25%), and shall be payable
monthly on the Payment Date of each month through the month
in which the 1998 Equipment Availability End Date falls. Any
1998 Equipment Advances made pursuant to this Section 2.1.3
that are outstanding on the 1998 Equipment Availability End
Date will be payable in thirty-nine (39) equal monthly
installments of principal, plus all accrued interest,
beginning on the Payment Date of each month following the
1998 Equipment Availability End Date and ending on May 5,
2002 (the "1998 Equipment Maturity Date"). Equipment
Advances, once repaid, may not be reborrowed."
10. The Loan Agreement shall be amended by inserting after Section
2.1.4 thereof the following new section entitled "1999 Equipment
Advances".
"2.1.5 1999 Equipment Advances.
(a) Subject to and upon the terms and conditions of this
Agreement, at any time through February 3, 2000 (the "1999
Equipment Availability End Date"), Bank agrees to make Equipment
Advances (each an "Equipment Advance" and collectively, the
"Equipment Advances") to Borrower under this Section 2.1.5 in an
aggregate outstanding amount not to exceed the 1999 Committed
Equipment Line. To evidence the Equipment Advances, Borrower
shall deliver to Bank, at the time of each Equipment Advance
request, an invoice for the equipment to be purchased. The
Equipment Advances shall be used only to purchase or refinance
Equipment purchased after November 30, 1998 and shall not exceed
One Hundred Percent (100%) of the invoice amount of such
equipment approved from time to time by Bank, excluding taxes,
shipping, warranty charges, freight discounts and installation
expense. Software may only constitute up to twenty-five percent
(25%) of aggregate Equipment Advances under this Section 2.1.5.
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(b) Interest shall accrue from the date of each Equipment Advance
made pursuant to this Section 2.1.5 at a per annum rate equal to
the aggregate of the Prime Rate, plus One Quarter of One percent
(0.25%), and shall be payable monthly on the Payment Date of each
month through the month in which the 1999 Equipment Availability
End Date falls. Any Equipment Advances made pursuant to this
Section 2.1.5 that are outstanding on the 1999 Equipment
Availability End Date will be payable in thirty-six (36) equal
monthly installments of principal, plus all accrued interest,
beginning on the Payment Date of each month following the 1999
Equipment Availability End Date and ending on the 1999 Equipment
Maturity Date. Equipment Advances, once repaid, may not be
reborrowed.
(c) When Borrower desires to obtain an Equipment Advance,
Borrower shall notify Bank (which notice shall be irrevocable) by
facsimile transmission to be received no later than 3:00 p.m.
Eastern time one (1) Business Day before the day on which the
Equipment Advance is to be made, Such notice shall be
substantially in the form of Exhibit B. The notice shall be
signed by a Responsible Officer or its designee and include a
copy of the invoice for the Equipment to be financed."
11. The Loan Agreement shall be amended by deleting the following
text appearing as the first sentence of Section 2.7 thereof
entitled "Term":
"Except as otherwise set forth herein, this Agreement shall
become effective on the Closing Date and, subject to Section
12.7, shall continue in full force and effect for a term
ending on the Revolving Maturity Date."
and inserting in lieu thereof the following:
"Except as otherwise set forth herein, this Agreement shall
become effective on the Closing Date and, subject to Section
12.7, shall continue in full force and effect for a term
ending on the Maturity Date."
12. The Loan Agreement shall be amended by deleting paragraph (f) of
Section 6.3 thereof entitled "Financial Statements, Reports,
Certificates" and inserting in lieu thereof the following:
"(f) Within twenty-five (25) days after the last day of each
month with respect to which either (i) Obligations are
outstanding, or (ii) Credit Extensions were made, Borrower
shall deliver to Bank a Borrowing Base Certificate signed by
a Responsible Officer in substantially the form of Exhibit C
hereto, together with aged listings of accounts receivable."
13. The Loan Agreement shall be amended by deleting in its entirety
Section 6.8 thereof entitled "Adjusted Quick Ratio".
14. The Loan Agreement shall be amended by deleting the following
text appearing as Section 6.10 thereof entitled "Tangible Net
Worth" and inserting in lieu thereof the following:
"6.10 Tangible Net Worth. Borrower shall maintain, as of the
last day of each calendar month, a Tangible Net Worth of not
less than: (i) Seven Million Dollars ($7,000,000.00) for
each month through the month ending June 30, 1999, and (ii)
Four Million Five Hundred Thousand Dollars ($4,500,000.00)
for each month thereafter."
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15. The Borrower shall execute and deliver to the Bank
contemporaneously with the execution of this Loan Modification
Agreement each of the following instruments in form and substance
acceptable to the Bank: (i) an Amended and Restated Revolving
Promissory Note in the original principal amount of Two Million
Five Hundred Thousand Dollars ($2,500,000.00), (ii) an Equipment
Line Promissory Note in the original principal amount of One
Million Dollars ($1,000,000.00), and (iii) an Equipment Line
Promissory Note dated as of May 12, 1998 in the original
principal amount of One Million Five Hundred Thousand Dollars
($1,500,000.00).
16. The Borrowing Base Certificate appearing as Exhibit C to the Loan
Agreement is hereby replaced with the Compliance Certificate
attached as Exhibit A hereto.
17. The Compliance Certificate appearing as Exhibit D to the Loan
Agreement is hereby replaced with the Compliance Certificate
attached as Exhibit B hereto.
4. FEE. Borrower shall pay to Bank a modification fee equal to Eleven Thousand
Two Hundred Fifty Dollars ($11,250.00), which fee shall be due on the date
hereof and shall be deemed fully earned as of the date hereof.
5. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
6. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and
reaffirms all terms and conditions of all security or other collateral granted
to the Bank, and confirms that the indebtedness secured thereby includes,
without limitation, the Indebtedness.
7. NO DEFENSE OF BORROWER. Borrower agrees that, as of this date, it has no
defenses against the obligations to pay any amounts under the Indebtedness.
8. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Indebtedness, Bank is relying upon Borrower's representations,
warranties, and agreements, as set forth in the Existing Loan Documents. Except
as expressly modified pursuant to this Loan Modification Agreement, the terms of
the Existing Loan Documents remain unchanged and in full force and effect.
Bank's agreement to modifications to the existing Indebtedness pursuant to this
Loan Modification Agreement in no way shall obligate Bank to make any future
modifications to the Indebtedness. Nothing in this Loan Modification Agreement
shall constitute a satisfaction of the Indebtedness. It is the intention of Bank
and Borrower to retain as liable parties all makers of Existing Loan Documents,
unless the party is expressly released by Bank in writing. No maker will be
released by virtue of this Loan Modification Agreement.
9. JURISDICTION/VENUE. Borrower accepts for itself and in connection with its
properties, unconditionally, the non-exclusive jurisdiction of any state or
federal court of competent jurisdiction in the Commonwealth of Massachusetts in
any action, suit, or proceeding of any kind against it which arises out of or by
reason of this Loan Modification Agreement; provided, however, that if for any
reason Bank cannot avail itself of the courts of the Commonwealth of
Massachusetts, then venue shall lie in Santa Xxxxx County, California.
10. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective
only when it shall have been executed by Borrower and Bank (provided, however,
in no event shall this Loan Modification Agreement become effective until signed
by an officer of Bank in California).
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This Loan Modification Agreement is executed as a sealed instrument under
the laws of the Commonwealth of Massachusetts as of the date first written
above.
BORROWER: BANK:
MAKER COMMUNICATIONS, INC. SILICON VALLEY BANK, doing business as
S1LICON VALLEY EAST
By: /s/ XXXXXXX X. XXXXXXX By:______________________________________
Name: Xxxxxxx X. Xxxxxxx Name:____________________________________
Title: President Title:___________________________________
/s/ XXXXXXX XXXXXX SILICON VALLEY BANK
Xxxxxxx Xxxxxx By:______________________________________
VP & CFO Name:____________________________________
Title:___________________________________
(signed in Santa Xxxxx County, California)
TCP/
56120/148
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EXHIBIT A
BORROWING BASE CERTIFICATE
Borrower: Maker Communications, Inc. Bank: Silicon Valley Bank
Commitment Amount: $2,500,000.00
ACCOUNTS RECEIVABLE
1. Accounts Receivable Book Value as of __________ $_________
2. Additions (please explain on reverse) $_________
3. TOTAL ACCOUNTS RECEIVABLE $_________
ACCOUNTS RECEIVABLE DEDUCTIONS
4. Amounts over 90 days due $_________
5. Balance of 50% over 90 day accounts $_________
6. Concentration Limits $_________
7. Ineligible Foreign Accounts $_________
8. Governmental Accounts $_________
9. Contra Accounts $_________
10. Promotion or Demo Accounts $_________
11. Intercompany/Employee Accounts $_________
12. Other (please explain on reverse) $_________
13. TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS $_________
14. Eligible Accounts (#3 minus #13) $_________
15. LOAN VALUE OF ACCOUNTS (80.0% of #14) $_________
BALANCES
16. Maximum Loan Amount $_________
17. Total Funds Available (Lesser of #16 or #15) $_________
18. Present balance owing on Line of Credit $_________
19. Outstanding under Sublimits (Letters of Credit) $_________
20. RESERVE POSITION (#17 minus #18 and #19) $_________
The undersigned represents and warrants that the foregoing is true, complete and
correct, and that the information reflected in this Borrowing Base Certificate
complies with the representations and warranties set forth in the Loan and
Security Agreement between the undersigned and Silicon Valley Bank.
-------------------------------
COMMENTS: BANK USE ONLY
Received
By: ___________________________
Date: _________________________
Reviewed
_________________________________ By: ___________________________
Compliance Status: Yes / No
-------------------------------
By: _____________________________
Authorized Signer
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EXHIBIT B
COMPLIANCE CERTIFICATE
TO: SILICON VALLEY BANK
FROM: MAKER COMMUNICATIONS, INC.
The undersigned authorized officer of MAKER COMMUNICATIONS, INC. hereby
certifies that in accordance with the terms and conditions of the Loan and
Security Agreement between Borrower and Bank (the "Agreement"), (i) Borrower is
in complete compliance for the period ending _________ with all required
covenants except as noted below and (ii) all representations and warranties of
Borrower stated in the Agreement are true and correct in all material respects
as of the date hereof. Attached herewith are the required documents supporting
the above certification. The Officer further certifies that these are prepared
in accordance with Generally Accepted Accounting Principles (GAAP) and are
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes. The Officer expressly acknowledges that no
borrowings may be requested by the Borrower at any rime or date of determination
that Borrower is not in compliance with any of the terms of the Agreement, and
that such compliance is determined not just at the date this certificate is
delivered.
Please indicate compliance status by circling Yes/No under "Complies"
column.
Reporting Covenant Required Complies
------------------ -------- --------
Monthly financial statements and CC Monthly within 25 days Yes No
Annual (CPA Audited) FYE within 120 days Yes No
Monthly BBC & A/R Agings Monthly within 25 days
(when borrowing) Yes No
Financial Covenant Required Actual Complies
------------------ -------- ------ --------
Maintain on a Monthly Basis:
Minimum Tangible Net Worth $7,000,000
thru 6/30/99; $______ Yes No
$4,500,000
thereafter
-------------------------------
BANK USE ONLY
Received
By: ___________________________
Date: _________________________
Reviewed
Comments Regarding Exceptions: By: ___________________________
Compliance Status: Yes / No
-------------------------------
Sincerely,
________________________ Date: __________
SIGNATURE
________________________
TITLE
-8-
EQUIPMENT LINE PROMISSORY NOTE
$1,500,000.00 ____________, Massachusetts
May 12, 1998
FOR VALUE RECEIVED, the undersigned, MAKER COMMUNICATIONS, INC., a Delaware
corporation (the "Borrower"), promises to pay to the order of Silicon Valley
Bank, a California-chartered bank ("Bank") at such place as the holder hereof
may designate, in lawful money of the United States of America, the aggregate
unpaid principal amount of all advances ("Equipment Advances") made by Bank to
Borrower in accordance with the terms of the Loan and Security Agreement between
Borrower and Bank dated as of February 18, 1997, as amended by a Loan
Modification Agreement of even date herewith, as may be further amended from
time to time (as amended, the "Loan Agreement"), up to a maximum principal
amount of ONE MILLION FIVE HUNDRED THOUSAND AND NO/1OOTHS Dollars
($1,500,000.00), until paid in full. Borrower shall also pay interest on the
aggregate unpaid principal amount of such Equipment Advances at the rates and in
accordance with the terms of the Loan Agreement. The entire principal amount and
all accrued interest shall be due and payable on May 5, 2002.
Borrower irrevocably waives the right to direct the application of any and
all payments at any time hereafter received by Bank from or on behalf of
Borrower, and Borrower irrevocably agrees that Bank shall have the continuing
exclusive right to apply any and all such payments against the then due and
owing obligations of Borrower as Bank may deem advisable. In the absence of a
specific determination by Bank with respect thereto, all payments shall be
applied in the following order: (a) then due and payable fees and expenses; (b)
then due and payable interest payments and mandatory prepayments; and (c) then
due and payable principal payments and optional prepayments.
Bank is hereby authorized by Borrower to endorse on Bank's books and
records each Equipment Advance made by Bank under this Note and the amount of
each payment or prepayment of principal of each such Equipment Advance received
by Bank; it being understood, however, that failure to make any such endorsement
(or any error in notation) shall not affect the obligations of Borrower with
respect to Equipment Advances made hereunder, and payments of principal by
Borrower shall be credited to Borrower notwithstanding the failure to make a
notation (or any errors in notation) thereof on such books and records.
Borrower promises to pay Bank all costs and expenses of collection of this
Note and to pay all reasonable attorneys' fees incurred in such collection,
whether or not there is a suit or action, or in any suit or action to collect
this Note or in any appeal thereof. Borrower waives presentment, demand,
protest, notice of protest, notice of dishonor, notice of nonpayment, and any
and all other notices and demands in connection with the delivery, acceptance,
performance, default or enforcement of this Note, as well as any applicable
statutes of limitations. No delay by Bank in exercising any power or right
hereunder shall operate as a waiver of any power or right. Time is of the
essence as to all obligations hereunder.
This Note is issued pursuant to the Loan Agreement, which shall govern the
rights and obligations of Borrower with respect to all obligations hereunder.
This Note shall be deemed to be made under, and shall be construed in
accordance with and governed by, the laws of the Commonwealth of Massachusetts,
excluding conflicts of laws principles.
Executed as an instrument under seal.
MAKER COMMUNICATIONS, INC.
By: /s/ XXXXXXX X. XXXXXXX
--------------------------
Name: Xxxxxxx X. Xxxxxxx
------------------------
Title: President
-----------------------
ATTEST: /s/ [ILLEGIBLE]
/s/ [ILLEGIBLE]
Xxxxxxx [ILLEGIBLE]
VP & CFO
EQUIPMENT LINE PROMISSORY NOTE
$1,000,000.00 ____________, Massachusetts
February 3, 1999
FOR VALUE RECEIVED, the undersigned, MAKER COMMUNICATIONS, INC., a Delaware
corporation (the "Borrower"), promises to pay to the order of Silicon Valley
Bank, a California-chartered bank ("Bank") at such place as the holder hereof
may designate, in lawful money of the United States of America, the aggregate
unpaid principal amount of all advances ("Equipment Advances") made by Bank to
Borrower in accordance with the terms of the Loan and Security Agreement between
Borrower and Bank dated as of February 18, 1997, as amended by a Loan
Modification Agreement dated as of May 12, 1998, as amended by a Second Loan
Modification Agreement of even date herewith, as may be further amended from
time to time (as amended, the "Loan Agreement"), up to a maximum principal
amount of ONE MILLION AND NO/lOOTHS Dollars ($1,000,000.00), until paid in full.
Borrower shall also pay interest on the aggregate unpaid principal amount of
such Equipment Advances at the rates and in accordance with the terms of the
Loan Agreement. The entire principal amount and all accrued interest shall be
due and payable on February 3, 2003.
Borrower irrevocably waives the right to direct the application of any and
all payments at any time hereafter received by Bank from or on behalf of
Borrower, and Borrower irrevocably agrees that Bank shall have the continuing
exclusive right to apply any and all such payments against the then due and
owing obligations of Borrower as Bank may deem advisable. In the absence of a
specific determination by Bank with respect thereto, all payments shall be
applied in the following order: (a) then due and payable fees and expenses; (b)
then due and payable interest payments and mandatory prepayments; and (c) then
due and payable principal payments and optional prepayments.
Bank is hereby authorized by Borrower to endorse on Bank's books and
records each Equipment Advance made by Bank under this Note and the amount of
each payment or prepayment of principal of each such Equipment Advance received
by Bank; it being understood, however, that failure to make any such endorsement
(or any error in notation) shall not affect the obligations of Borrower with
respect to Equipment Advances made hereunder, and payments of principal by
Borrower shall be credited to Borrower notwithstanding the failure to make a
notation (or any errors in notation) thereof on such books and records.
Borrower promises to pay Bank all costs and expenses of collection of this
Note and to pay all reasonable attorneys' fees incurred in such collection,
whether or not there is a suit or action, or in any suit or action to collect
this Note or in any appeal thereof. Borrower waives presentment, demand,
protest, notice of protest, notice of dishonor, notice of nonpayment, and any
and all other notices and demands in connection with the delivery, acceptance,
performance, default or enforcement of this Note, as well as any applicable
statutes of limitations. No delay by Bank in exercising any power or right
hereunder shall operate as a waiver of any power or right. Time is of the
essence as to all obligations hereunder.
This Note is issued pursuant to the Loan Agreement, which shall govern the
rights and obligations of Borrower with respect to all obligations hereunder.
This Note shall be deemed to be made under, and shall be construed in
accordance with and governed by, the laws of the Commonwealth of Massachusetts,
excluding conflicts of laws principles.
Executed as an instrument under seal.
MAKER COMMUNICATIONS, INC.
By: /s/ XXXXXXX X. XXXXXXX
--------------------------
Name: Xxxxxxx X. Xxxxxxx
------------------------
Title: President
-----------------------
ATTEST: /s/ [ILLEGIBLE]
/s/ [ILLEGIBLE]
Xxxxxxx [ILLEGIBLE]
VP & CFO
AMENDED AND RESTATED REVOLVING PROMISSORY NOTE
$2,500,000.00 ____________, Massachusetts
February 3, 1999
FOR VALUE RECEIVED, the undersigned, MAKER COMMUNICATIONS, INC., a Delaware
corporation (the "Borrower") promises to pay to the order of Silicon Valley
Bank, a California-chartered bank ("Bank"), at such place as the holder hereof
may designate, in lawful money of the United States of America, the aggregate
unpaid principal amount of all advances ("Advances") made by Bank to Borrower in
accordance with the terms of the Loan and Security Agreement between Borrower
and Bank dated as of February 18, 1997, as amended by a Loan Modification
Agreement dated as of May 12, 1998, as amended by a Second Loan Modification
Agreement of even date herewith, as may be further amended from time to time (as
amended, the "Loan Agreement"), up to a maximum principal amount of TWO MILLION
FIVE HUNDRED THOUSAND AND NO/lOOTHS Dollars ($2,500,000.00), until paid in full.
Borrower shall also pay interest on the aggregate unpaid principal amount of
such Advances at the rates and in accordance with the terms of the Loan
Agreement. The entire principal amount and all accrued interest shall be due and
payable on February 3, 2000. This Amended and Restated Revolving Promissory Note
amends and restates a certain Revolving Promissory Note by the Borrower in favor
of the Bank dated February 18, 1997.
Borrower irrevocably waives the right to direct the application of any and
all payments at any time hereafter received by Bank from or on behalf of
Borrower, and Borrower irrevocably agrees that Bank shall have the continuing
exclusive right to apply any and all such payments against the then due and
owing obligations of Borrower as Bank may deem advisable. In the absence of a
specific determination by Bank with respect thereto, all payments shall be
applied in the following order: (a) then due and payable fees and expenses; (b)
then due and payable interest payments and mandatory prepayments; and (c) then
due and payable principal payments and optional prepayments.
Bank is hereby authorized by Borrower to endorse on Bank's books and
records each Advance made by Bank under this Note and the amount of each payment
or prepayment of principal of each such Advance received by Bank; it being
understood, however, that failure to make any such endorsement (or any error in
notation) shall not affect the obligations of Borrower with respect to Advances
made hereunder, and payments of principal by Borrower shall be credited to
Borrower notwithstanding the failure to make a notation (or any errors in
notation) thereof on such books and records.
Borrower promises to pay Bank all costs and expenses of collection of this
Note and to pay all reasonable attorneys' fees incurred in such collection,
whether or not there is a suit or action, or in any suit or action to collect
this Note or in any appeal thereof Borrower waives presentment, demand, protest,
notice of protest, notice of dishonor, notice of nonpayment, and any and all
other notices and demands in connection wit the delivery, acceptance,
performance, default or enforcement of this Note, as well as any applicable
statutes of limitations. No delay by Bank in exercising any power or right
hereunder shall operate as a waiver of any power or right. Time is of the
essence as to all obligations hereunder.
This Note is issued pursuant to the Loan Agreement, which shall govern the
rights and obligations of Borrower with respect to all obligations hereunder.
This Note shall be deemed to be made under, and shall be construed in
accordance with and governed by, the laws of the Commonwealth of Massachusetts,
excluding conflicts of laws principles.
Executed as an instrument under seal.
MAKER COMMUNICATIONS, INC.
By: /s/ XXXXXXX X. XXXXXXX
--------------------------
Name: Xxxxxxx X. Xxxxxxx
------------------------
Title: President
-----------------------
ATTEST: /s/ [ILLEGIBLE]
/s/ [ILLEGIBLE]
Xxxxxxx [ILLEGIBLE]
VP & CFO
