Contract
EXHIBIT 10.1
(LINE
OF CREDIT)
(LETTER
OF CREDIT SUB-FACILITY)
(FOREIGN EXCHANGE
SUB-FACILITY)
(TERM
LINE OF CREDIT)
This
Agreement (the "Agreement") is made and entered into as of May 7, 2009, by and
between BANK OF THE WEST (the "Bank") and MICREL, INCORPORATED (the "Borrower"),
on the terms and conditions that follow:
SECTION
1
DEFINITIONS
1.1
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Certain Defined
Terms: Unless elsewhere defined in this Agreement, the
following terms shall have the following meanings (such meanings to be
generally applicable to the singular and plural forms of the terms
defined):
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1.1.1
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"Advance": shall
mean an advance to the Borrower under the credit facility(ies) described
in Section 2.
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1.1.2
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"Alternate Base Rate":
shall mean, for any day, a rate per annum equal to the greatest of (a) the
Prime Rate in effect on such day or, (b) the Federal Funds Rate in effect
on such day plus 0.5% or (c) the Applicable Floating Rate on such date
(or, if such date is not a Business Day, the immediately preceding
Business Day). Any change in the Alternate Base Rate due to a change in
the Prime Rate or, the Federal Funds Rate or the Applicable Floating Rate
shall be effective from and including the effective date of such change in
the Prime Rate or, the Federal Funds Rate or the Applicable Floating Rate,
respectively.
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1.1.3
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"Alternate Base Rate
Advance": shall have the respective meaning as it is defined for
each facility under Section 2,
hereof.
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1.1.4
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"Applicable Floating
Rate". shall mean, as of any date, (a) the One-Month
LIBOR Rate on such day multiplied by the Statutory Reserve Rate plus (b)
1.00%. “Statutory Reserve Rate” means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is
the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board of Governors of the
Federal Reserve System with respect to the One-Month LIBOR Rate for
Eurocurrency funding (currently referred to as “Eurocurrencies
Liabilities” in Regulation D of the Board of Governors of the Federal
Reserve System), including those reserve percentages imposed pursuant to
Regulation D, adjusted automatically and as of the effective date of any
change in any reserve percentage.
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1.1.5
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"Business Day": shall
mean a day, other than a Saturday or Sunday, on which commercial banks are
open for business in
California.
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-1-
1.1.6
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“Close-Out
Date”: shall mean the Business Day on which the Bank
closes out and liquidates an FX
Transaction.
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1.1.7
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“Closing Value”: has the
meaning given to it in Section 7.5(i)
hereof.
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1.1.8
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“Closing Gain” and
“Closing Loss” :shall mean the
amount determined in accordance with Section 7.5(ii)
hereof.
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1.1.9
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“Credit Percentage”:
shall mean 10%.
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1.1.10
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"Debt": shall
mean all liabilities of the Borrower less Subordinated Debt, if
any.
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1.1.11
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"Effective Tangible Net
Worth": shall mean the Borrower's stated net worth plus
Subordinated Debt but less all intangible assets of the Borrower (i.e.,
goodwill, trademarks, patents, copyrights, organization expense, and
similar intangible items including, but not limited to, investments in and
all amounts due from affiliates, officers or
employees).
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1.1.12
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"Environmental Claims":
shall mean all claims, however asserted, by any governmental authority or
other person alleging potential liability or responsibility for violation
of any Environmental Law or for discharge or injury to the environment or
threat to public health, personal injury (including sickness, disease or
death), property damage, natural resources damage, or otherwise alleging
liability or responsibility for damages (punitive or otherwise), cleanup,
removal, remedial or response costs, restitution, civil or criminal
penalties, injunctive relief, or other type of relief, resulting from or
based upon (a) the presence, placement, discharge, emission or release
(including intentional and unintentional, negligent and non-negligent,
sudden or non-sudden, accidental or non-accidental placement, spills,
leaks, discharges, emissions or releases) of any Hazardous Material at,
in, or from property, whether or not owned by the Borrower, or (b) any
other circumstances forming the basis of any violation, or alleged
violation, of any Environmental
Law.
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1.1.13
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"Environmental Laws":
shall mean all federal, state or local laws, statutes, common law duties,
rules, regulations, ordinances and codes, together with all administrative
orders, directed duties, requests, licenses, authorizations and permits
of, and agreements with, any governmental authorities, in each case
relating to environmental, health, safety and land use matters; including
but not limited to the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 ("CERCLA”), the Clean Air Act, the Federal Water
Pollution Control Act of 1972, the Solid Waste Disposal Act, the Federal
Resource Conservation and Recovery Act, the Toxic Substances Control Act,
the Emergency Planning and Community Right-to-Know Act, the California
Hazardous Waste Control Law, the California Solid Waste Management,
Resource, Recovery and Recycling Act, the California Water Code and the
California Health and Safety Code.
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1.1.14
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"Environmental
Permits": shall have the meaning provided in Section
4.12 hereof.
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1.1.15
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"ERISA": shall
mean the Employee Retirement Income Security Act of 1974, as amended from
time to time, including (unless the context otherwise requires) any rules
or regulations promulgated
thereunder.
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1.1.16
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"Event of
Default": shall have the meaning set forth in Section
6.
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1.1.17
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"Expiration
Date": shall mean April 30, 2011, or the date of
termination of the Bank's commitment to lend under this Agreement pursuant
to Section 7, whichever shall occur
first.
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-2-
1.1.18
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“Federal Funds Rate":
shall mean, for any day, the weighted average (rounded upwards, if
necessary to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published
for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for
such transactions received by the Bank from three Federal funds brokers of
recognized standing selected by
Bank.
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1.1.19
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“Foreign
Currency”: shall mean any legally traded currency other
than US dollars and which may be transferred by paperless wire transfer or
cash and in which the Bank regularly
trades.
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1.1.20
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“Foreign Exchange
Sub-Facility”: shall mean the credit facility described
as such in Section 2.
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1.1.21
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“FX Risk
Liability”: shall mean the product of (a) the Credit
Percentage, times (b) the aggregate of the Notional Values of all FX
Transactions outstanding, net of any Offsetting
Transactions.
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1.1.22
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“FX
Limit”: shall mean
$2,000,000.00.
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1.1.23
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“FX
Transaction”: shall mean any transaction between the
Bank and the Borrower pursuant to which the Bank has agreed to sell to or
to purchase from the Borrower a Foreign Currency of an agreed amount at an
agreed price in US dollars or such other agreed upon Foreign Currency,
deliverable and payable on an agreed
date.
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1.1.24
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"Hazardous
Materials": shall mean all those substances which are
regulated by, or which may form the basis of liability under, any
Environmental Law, including all substances identified under any
Environmental Law as a pollutant, contaminant, hazardous waste, hazardous
constituent, special waste, hazardous substance, hazardous material, or
toxic substance, or petroleum or petroleum derived substance or
waste.
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1.1.25
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"Indebtedness": shall
mean, with respect to the Borrower, (i) all indebtedness for borrowed
money or for the deferred purchase price of property or services in
respect of which the Borrower is liable, contingently or otherwise, as
obligor, guarantor or otherwise, or in respect of which the Borrower
otherwise assures a creditor against loss and (ii) obligations under
leases which shall have been or should be, in accordance with generally
accepted accounting principles, reported as capital leases in respect of
which the Borrower is liable, contingently or otherwise, or in respect of
which the Borrower otherwise assures a creditor against loss. The word
“Indebtedness” also includes expenses incurred by the Bank to enforce
obligations of the Borrower under this Agreement, together with interest
on such amounts as provided in this Agreement, and all other obligations,
debts, and liabilities of the Borrower to the Bank as well as all claims
by the Bank against the Borrower that are now or hereafter existing,
voluntary or involuntary, due or not due, absolute or contingent,
liquidated or unliquidated, whether the Borrower may be liable
individually or jointly with others, whether recovery upon such
Indebtedness may be or hereafter may become barred by any statute of
limitations, and whether such Indebtedness may be or hereafter may become
otherwise unenforceable.
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1.1.26
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“Letter of Credit”:
shall have the meaning given to such term in Section
2.
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1.1.27
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“Letter of Credit
Sub-Facility”: shall mean the credit facility described
as such in Section 2.
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-3-
1.1.28
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"LIBOR Advance": shall
have the respective meaning as it is defined for each facility under
Section 2, hereof.
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1.1.29
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"LIBOR Interest Period":
shall have the respective meaning as it is defined for each facility under
Section 2, hereof.
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1.1.30
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"LIBOR Rate": shall have
the respective meaning as it is defined for each facility under Section 2,
hereof.
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1.1.31
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"Line
Account": shall have the meaning provided in Section 2.5
hereof.
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1.1.32
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"Line of
Credit": shall mean the credit facility described as
such in Section 2.
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1.1.33
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“Notional
Value”: shall mean the US Dollar equivalent of the price
at which the Bank agreed to purchase or sell to the Borrower a Foreign
Currency in an aggregate amount not to exceed
$20,000,000.00.
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1.1.34
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"Obligations": shall
mean all amounts owing by the Borrower to the Bank pursuant to this
Agreement including, but not limited to, the unpaid principal amount of
any loans or advances.
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1.1.35
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“Offsetting
Transaction”: shall mean a FX Transaction to purchase a Foreign
Currency and a FX Transaction to sell the same Foreign Currency , each
with the same Settlement Date and designated as an Offsetting Transaction
at the time of entering into the FX
Transaction.
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1.1.36
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"One-Month LIBOR Rate":
shall mean, for any day, the rate of interest per annum that is equal to
the one month LIBOR rate appearing on the REUTERS BBA Libor Rates Page
3750 (or on any successor or substitute page of such page) at
approximately 11:00 a.m. London time on such
day.
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1.1.37
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"Ordinary Course of
Business": shall mean, with respect to any transaction
involving the Borrower or any of its subsidiaries or affiliates, the
ordinary course of the Borrower's business, as conducted by the Borrower
in accordance with past practice and undertaken by the Borrower in good
faith and not for the purpose of evading any covenant or restriction in
this Agreement or in any other document, instrument or agreement executed
in connection herewith.
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1.1.38
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"Permitted
Liens": shall mean: (i) liens and security interests
securing indebtedness owed by the Borrower to the Bank; (ii) liens for
taxes, assessments or similar charges not yet due; (iii) liens of
materialmen, mechanics, warehousemen, or carriers or other like liens
arising in the Ordinary Course of Business and securing obligations which
are not yet delinquent; (iv) purchase money liens or purchase money
security interests upon or in any property acquired or held by the
Borrower in the Ordinary Course of Business to secure Indebtedness
outstanding on the date hereof or permitted to be incurred herein; (v)
liens and security interests which, as of the date hereof, have been
disclosed to and approved by the Bank in writing; (vi) those liens and
security interests which in the aggregate constitute an immaterial and
insignificant monetary amount with respect to the net value of the
Borrower's assets; and (vii) liens securing capital leases entered into in
the Ordinary Course of Business.
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1.1.39
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"Prime
Rate": shall mean an index for a variable interest rate
which is quoted, published or announced by Bank as its prime rate and as
to which loans may be made by Bank at, above or below such
rate.
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-4-
1.1.40
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“Prior Agreement”: shall
mean that certain credit agreement dated April 20, 2007 and upon execution
of this Agreement, the Prior Agreement is hereby cancelled and terminated.
Any outstanding Advances under the Prior Agreement shall be deemed to have
been made under this Agreement. The Interest Period in
connection with any outstanding Advances under the Prior Agreement shall
continue under this Agreement and no penalties, breakage costs or other
like fees will be charged in connection with the entry into this
Agreement.From and after the date of this Agreement, no new Advances will
be made under the Prior Agreement.
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1.1.41
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“Settlement
Date”: shall mean the Business Day on which the Borrower
has agreed to (a) deliver the required amount of Foreign Currency, or (b)
pay in US dollars the agreed upon purchase price of the Foreign
Currency.
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1.1.42
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"Subordinated
Debt": shall mean such liabilities of the Borrower which
have been subordinated to those owed to the Bank in a manner acceptable to
the Bank.
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1.1.43
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"Term Line of
Credit": shall mean the credit facility described as
such in Section 2.
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1.2
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Accounting
Terms: All references to financial statements, assets,
liabilities, and similar accounting items not specifically defined herein
shall mean such financial statements or such items prepared or determined
in accordance with generally accepted accounting principles consistently
applied and, except where otherwise specified, all financial data
submitted pursuant to this Agreement shall be prepared in accordance with
such principles.
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1.3
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Other
Terms: Other terms not otherwise defined shall have the
meanings as applicable attributed to such terms in the Uniform Commercial
Code as in effect on July 1, 2001 and from time to time thereafter in the
State of California.
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SECTION
CREDIT
FACILITIES
2.1.1
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The Line of
Credit: On terms and conditions as set forth herein, the
Bank agrees to make Advances to the Borrower from time to time from the
date hereof to the Expiration Date, provided the aggregate amount of such
Advances outstanding at any time does not exceed $5,000,000.00 (the “Line
of Credit”). Within the foregoing limits, the Borrower may
borrow, partially or wholly prepay, and reborrow under this Section
2.1. Proceeds of the Line of Credit shall be used to assist
with the working capital needs of the Borrower's
operations.
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2.1.2
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Making Line
Advances: Each Advance shall be conclusively deemed to
have been made at the request of and for the benefit of the Borrower (i)
when credited to any deposit account of the Borrower maintained with the
Bank or (ii) when paid in accordance with the Borrower's written
instructions. Subject to the requirements of Section 4 and
provided such request is made in a timely manner as provided in Section
2.1.5 below, Advances shall be made by the Bank under the Line of
Credit.
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2.1.3
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Repayment: On
the Expiration Date, the Borrower hereby promises and agrees to pay to the
Bank in full the aggregate unpaid principal amount of all Advances then
outstanding, together with all accrued and unpaid interest
thereon.
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-5-
(i)
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Alternate Base Rate
Advances: At the Alternate Base Rate plus 1.00%. Interest
shall be adjusted concurrently with any change in the Alternate Base Rate.
An Advance based upon the Alternate Base Rate is hereinafter referred to
as an "Alternate Base Rate
Advance".
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(ii)
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Applicable Floating
Rate Advances: At the Applicable Floating Rate plus
1.25%. Interest shall be adjusted concurrently with any change
in the Applicable Floating Rate. An Advance based upon the
Applicable Floating Rate is herein referred to as an “Applicable Floating
Rate Advance”.
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(iii)
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LIBOR
Advances: A fixed rate quoted by the Bank for 1, 2, 3 or
6 months or for such other period of time that the Bank may quote and
offer (provided that any such period of time does not extend beyond
Expiration Date) (the "LIBOR Interest Period") for Advances in the minimum
amount of $100,000.00. Such interest rate shall be a percentage
approximately equivalent to 2.25% in excess of the Bank's LIBOR Rate which
is that rate of interest per annum that is equal to the 1, 2, 3 or 6
months or such other period appearing on the Reuters BBA Libor Rates Page
3750 (or any successor or substitute page) at approximately 11:00 AM
London time on such day (adjusted for any and all assessments, surcharges
and reserve requirements) (the "LIBOR Rate"). An Advance based
upon the LIBOR Rate is hereinafter referred to as a "LIBOR
Advance".
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Interest
on any Advance shall be computed on the basis of 360 days per year, but charged
on the actual number of days elapsed (other than with respect to any Alternate
Base Rate calculated using the Prime Rate, in which case such calculation should
be based upon a year of 365 days or, in the case of a leap year, 366 days, shall
be payable for the actual days elapsed (including the first day but excluding
the last day) in the period for which such interest is payable, and shall be
adjusted in accordance with any changes in the Alternate Base Rate to take
effect on the beginning of the day of such change in the Alternate Base
Rate).
The
Borrower hereby jointly and severally promises and agrees to pay interest in
arrears on Applicable Floating Rate Advances and LIBOR Advances on the last day
of each month.
The LIBOR
Rate shall be adjusted to occur on the same day that payment is due as set forth
in the section entitled Payments below.
If
Interest is not paid as and when it is due, it shall be added to the principal,
become and be treated as a part thereof, and shall thereafter bear like
interest.
(i)
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An
Alternate Base Rate Advance may be made on the day notice is received by
the Bank, provided however, that if the Bank shall not have received
notice at or before 2:00 p.m. on the day such Advance is requested to be
made, such Alternate Base Rate Advance may, at the Bank's option, be made
on the next Business Day.
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(ii)
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Applicable
Floating Rate Advances. An Applicable Floating Rate Advance may
be made on the day notice is received by the Bank; provided, however, that
if the Bank shall not have received notice at or before 2:00
p.m. on the day such Advance is requested to be made, such
Applicable Floating Rate Advances may, at the Bank's option, be made on
the next Business Day.
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(iii)
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A
LIBOR Advance. Notice of any LIBOR Advance shall be received by
the Bank no later than two Business Days prior to the day (which shall be
a Business Day) on which the Borrower requests such LIBOR Advance to be
made.
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2.1.6
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Notice of Election to Adjust
Interest Rate: The Borrower may
elect:
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(i)
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That
interest on an Alternate Base Rate Advance shall be adjusted to accrue at
the LIBOR Rate or Applicable Floating Rate Advance; provided, however,
that such notice shall be received by the Bank no later than two Business
Days prior to the day (which shall be a Business Day) on which the
Borrowers request that interest be adjusted to accrue at the LIBOR Rate or
One Month LIBOR Rate.
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(ii)
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That
interest on an Applicable Floating Rate Advance shall be adjusted to
accrue at the LIBOR Rate or Alternate Base Rate; provided, however, that
such notice shall be received by the Bank no later than two Business Days
prior to the day (which shall be a Business Day) on which the Borrower
requests that interest be adjusted to accrue at the LIBOR Rate or
Alternate Base Rate.
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(iii)
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That
interest on a LIBOR Advance shall continue to accrue at a newly quoted
LIBOR Rate or shall be adjusted to commence to accrue at the Alternate
Base Rate or Applicable Floating Rate; provided, however, that such notice
shall be received by the Bank no later than two Business Days prior to the
last day of the LIBOR Interest Period pertaining to such LIBOR
Advance. If the Bank shall not have received notice (as
prescribed herein) of the Borrowers’ election that interest on any LIBOR
Advance shall continue to accrue at the newly quoted LIBOR Rate for such
new interest period, the Borrowers shall be deemed to have elected that
interest thereon shall be adjusted to accrue at the Alternate Base Rate
upon the expiration of the then existing LIBOR Interest Period pertaining
to such LIBOR Advance.
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2.1.7
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Prepayment: The
Borrower may prepay any Advance in whole or in part, at any time and
without penalty, provided, however, that: (i) any partial
prepayment shall first be applied, at the Bank's option, to accrued and
unpaid interest and next to the outstanding principal balance; and (ii)
during any period of time in which interest is accruing on any Advance on
the basis of the LIBOR Rate, no prepayment, unless otherwise permitted,
shall be made except on a day which is the last day of the LIBOR Interest
Period pertaining thereto. If the whole or any part of any
LIBOR Advance is prepaid by reason of acceleration or otherwise, the
Borrower shall, upon the Bank's request, promptly pay to and indemnify the
Bank for all costs, expenses and any loss actually incurred by the Bank
and any loss (including loss of profit resulting from the re-employment of
funds) deemed sustained by the Bank as a consequence of such
prepayment.
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The Bank
shall be entitled to fund all or any portion of its Advances in any manner it
may determine in its sole discretion, but all calculations and transactions
hereunder shall be conducted as though the Bank actually funded all Advances
through the purchase of dollar deposits bearing interest at the same rate as
U.S. Treasury securities in the amount of the relevant Advance and in maturities
corresponding to the date of such purchase to the Expiration Date
hereunder.
-7-
Indemnification for
Applicable Floating Rate Costs or LIBOR Costs: During any
period of time in which interest on any Alternate Base Rate Advance or LIBOR
Advance is accruing on the basis ofthe Applicable Floating Rate or LIBOR Rate,
the Borrower shall, upon the Bank's request, promptly pay to and reimburse the
Bank for all costs incurred and payments made by the Bank by reason of any
future assessment, reserve, deposit or similar requirement or any surcharge, tax
or fee imposed upon the Bank or as a result of the Bank's compliance with any
directive or requirement of any regulatory authority pertaining or
relating to funds used by the Bank in quoting and determining the Applicable
Floating Rate or LIBOR Rate.
2.1.8
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Conversion from Applicable
Floating Rate or LIBOR Rate: In the event that the Bank
shall at any time determine that the accrual of interest on the basis of
the Applicable Floating Rate or LIBOR Rate (i) is infeasible because the
Bank is unable to determine the One-Month LIBOR Rate or the LIBOR Rate due
to the unavailability of U.S. dollar deposits, contracts or certificates
of deposit in an amount approximately equal to the amount of the relevant
Advance and for a period of time approximately equal to relevant LIBOR
Interest Period or (ii) is or has become unlawful or infeasible by reason
of the Bank's compliance with any new law, rule, regulation, guideline or
order, or any new interpretation of any present law, rule, regulation,
guideline or order, then the Bank shall give telephonicnotice thereof
(confirmed in writing) to the Borrower, in which event any Alternate Base
Rate Advance bearing interest at the Applicable Floating Rate or any LIBOR
Rate Advance bearing interest at the LIBOR Rate shall thereupon
immediately accrue interest at the greater of the Prime Rate or Fed Funds
Rate.
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2.2
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LETTER
OF CREDIT SUB-FACILITY
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2.2.1
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Letter of Credit
Sub-Facility: The Bank agrees to issue commercial and/or
standby letters of credit (each a "Letter of Credit") on behalf of the
Borrower of up to $5,000,000.00. At no time, however, shall the
total principal amount of all Advances outstanding under the Line of
Credit, combined with the aggregate FX Risk Liability together with the
total face amount of all Letters of Credit outstanding, less any partial
draws paid by the Bank, exceed the Line of
Credit.
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For the
purposes hereof, any Letters of Credit issued and outstanding for the account of
the Borrower as of the date hereof shall be deemed to be issued
hereunder.
(i)
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Upon
the Bank's request, the Borrower shall promptly pay to the Bank annual
issuance fees of 1.25% for standby letters of credit and standard pricing
for commercial letters of credit, and such other fees, commissions, costs
and any out-of-pocket expenses charged or incurred by the Bank with
respect to any Letter of Credit. Letter of Credit fees shall be
paid quarterly in advance on standby letters of credit and at the time of
issuance for commercial letters of
credit.
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(ii)
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The
commitment by the Bank to issue Letters of Credit shall, unless earlier
terminated in accordance with the terms of the Agreement, automatically
terminate on the Expiration Date of the Line of Credit and no Letter of
Credit shall expire on a date which is more than 365 days after the
Expiration Date.
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(iii)
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Each
Letter of Credit shall be in form and substance satisfactory to the Bank
and in favor of beneficiaries satisfactory to the Bank, provided that the
Bank may refuse to issue a Letter of Credit due to the nature of the
transaction or its terms or in connection with any transaction where the
Bank, due to the beneficiary or the nationality or residence of the
beneficiary, would be prohibited by any applicable law, regulation or
order from issuing such Letter of
Credit.
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-8-
(iv)
|
Prior
to the issuance of each Letter of Credit, but in no event later than 10:00
a.m. (California time) on the day such Letter of Credit is to be issued
(which shall be a Business Day), the Borrower shall deliver to the Bank a
duly executed form of the Bank's standard form of application for issuance
of a Letter of Credit with proper
insertions.
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(v)
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The
Borrower shall, upon the Bank's request, promptly pay to and reimburse the
Bank for all costs incurred and payments made by the Bank by reason of any
future assessment, reserve, deposit or similar requirement or any
surcharge, tax or fee imposed upon the Bank or as a result of the Bank's
compliance with any directive or requirement of any regulatory authority
pertaining or relating to any Letter of
Credit.
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In the
event that the Borrower fails to pay any drawing under any Letter of Credit or
the balances in the depository account or accounts maintained by the Borrower
with Bank are insufficient to pay such drawing, without limiting the rights of
Bank hereunder or waiving any Event of Default caused thereby, Bank may, and
Borrower hereby authorizes Bank to create an Advance bearing interest at the
rate or rates provided in Section 8.2 hereof to pay such drawing.
2.3
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FOREIGN
EXCHANGE SUB-FACILITY
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2.3.1
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Foreign Exchange
Sub-Facility: The Bank agrees to enter into FX
Transactions with the Borrower, at the Borrower’s request therefor made
prior to the Expiration Date, provided however, that at no time shall the
aggregate FX Risk Liability of the Borrower exceed the FX Limit, and
provided further, at no time shall the aggregate FX Liability combined
with the total face amount of all Letters of Credit outstanding less any
partial draws paid by the Bank together with the total principal amount of
all outstanding Advances, exceed the Line of Credit. Each FX Transaction
shall be used to hedge the Borrower’s foreign exchange
exposure.
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(i)
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Requests. Each
request for a FX Transaction shall be made by telephone to the Bank’s
Treasury Department (“Request”), shall specify the Foreign Currency to be
purchased or sold, the amount of such Foreign Currency and the Settlement
Date. Each Request shall be communicated to the Bank no later than 3:00
p.m. California time on the Business Day on which the FX Transaction is
requested.
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(ii)
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Tenor. No FX
Transaction shall have a Settlement Date which is more than 365 days after
the date of entry into such FX Transaction, and provided further, no FX
Transaction shall expire on a date which is after the Expiration
Date.
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(iii)
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Availability. Bank
may refuse to enter into a FX Transaction with the Borrower where the
Bank, at its sole discretion, determines that (1) the requested Foreign
Currency is unavailable, or (2) the Bank is not then dealing in the
requested Foreign Currency, or (3) the Bank would be prohibited by any
applicable law, rule, regulation or order from purchasing such Foreign
Currency.
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(iv)
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Payment. Payment
is due on the Settlement Date of the relevant FX Transaction. The Bank is
hereby authorized by the Borrower to charge the full settlement price of
any FX Transaction against the depository account or accounts maintained
by the Borrower with the Bank on the Settlement Date. In the event that
the Borrower fails to pay the settlement price of any FX Transaction on
the Settlement Date or the balances in the depository account or accounts
maintained with Bank are insufficient to pay the settlement price, without
limiting the rights of Bank hereunder or waiving any Event of Default
caused thereby, Bank may, and Borrower
hereby
|
-9-
(v)
|
authorizes
Bank to, create an Advance bearing interest at the Prime Rate to pay the
settlement price on the Settlement
Date.
|
(vi)
|
Increased
Costs. Borrower shall promptly pay to and reimburse the
Bank for all costs incurred and payments made by the Bank by reason of any
assessment, reserve, deposit, capital maintenance or similar requirement
or any surcharge, tax or fee imposed upon the Bank or as a result of the
Bank’s compliance with any directive or requirement of any regulatory
authority pertaining or relating to any FX
Transaction.
|
(vii)
|
Impossibility of
Performance. In the event that the Borrower or the Bank
cannot perform under a FX Transaction due to force majeure or an act of
state or it becomes unlawful or impossible to perform, all in the good
faith judgement of the Borrower or the Bank, then upon notice to the other
party, the Borrower or the Bank may require the close-out and liquidation
of the affected FX Transaction in accordance with the provisions of this
Agreement.
|
2.4
|
THE
TERM LINE OF CREDIT
|
2.4.1
|
The Term Line of
Credit: On terms and conditions as set forth herein, the
Bank agrees to make Advances to the Borrower from time to time from the
date hereof until August 6, 2009, provided the aggregate amount of such
Advances outstanding at any time does not exceed $15,000,000.00 (the “Term
Line of Credit”). Any sums repaid under the Term Line of Credit may not be
reborrowed. Proceeds of the Term Line of Credit shall be used
to assist with the repurchase of
stock.
|
2.4.2
|
Making Line
Advances: Each Advance shall be conclusively deemed to
have been made at the request of and for the benefit of the Borrower (i)
when credited to any deposit account of the Borrower maintained with the
Bank or (ii) when paid in accordance with the Borrower's written
instructions. Subject to the requirements of Section 4 and
provided such request is made in a timely manner as provided in Section
2.2.5 below, Advances shall be made by the Bank under the Term Line of
Credit.
|
2.4.3
|
Repayment: On
August 6, 2009, the outstanding amount of Advances outstanding hereunder
shall be amortized on a twenty one month basis and the Term Line of Credit
shall be repaid in twenty one (21) equal monthly installments. The
Borrower hereby promises and agrees to pay each installment commencing on
August 31, 2009 and continuing on the last day of each month
thereafter. On the Expiration Date, the Borrower hereby
promises and agrees to pay to the Bank the entire unpaid principal
balance, together with accrued and unpaid interest
thereon.
|
Each
payment received by the Bank shall, at the Bank's option, be applied to pay
interest then due and unpaid and the remainder thereof (if any) shall be applied
to pay principal.
2.4.4
|
Interest on
Advances: Interest shall accrue from the date of each
Advance under the Term Line of Credit at one of the following rates, as
quoted by the Bank and as elected by the Borrower
below:
|
(i)
|
Alternate Base Rate
Advances: At the Alternate Base Rate plus 1.00%. Interest
shall be adjusted concurrently with any change in the Alternate Base Rate.
An Advance based upon the Alternate Base Rate is hereinafter referred to
as an "Alternate Base Rate
Advance".
|
(ii)
|
Applicable Floating
Rate Advances: At the Applicable Floating Rate plus
1.25%.
|
-10-
(iii)
|
Interest
shall be adjusted concurrently with any change in the Applicable Floating
Rate. An Advance based upon the Applicable Floating Rate is
herein referred to as an “Applicable Floating Rate
Advance”.
|
(iv)
|
LIBOR
Advances: A fixed rate quoted by the Bank for 1, 2, 3 or
6 months or for such other period of time that the Bank may quote and
offer (provided that any such period of time does not extend beyond
Expiration Date) (the "LIBOR Interest Period") for Advances in the minimum
amount of $100,000.00. Such interest rate shall be a percentage
approximately equivalent to 2.25% in excess of the Bank's LIBOR Rate which
is that rate of interest per annum that is equal to the 1, 2, 3 or 6
months or such other period appearing on the Reuters BBA Libor Rates Page
3750 (or any successor or substitute page) at approximately 11:00 AM
London time on such day (adjusted for any and all assessments, surcharges
and reserve requirements) (the "LIBOR Rate"). An Advance based
upon the LIBOR Rate is hereinafter referred to as a "LIBOR
Advance".
|
Interest
on any Advance shall be computed on the basis of 360 days per year, but charged
on the actual number of days elapsed (other than with respect to any Alternate
Base Rate calculated using the Prime Rate, in which case such calculation should
be based upon a year of 365 days or, in the case of a leap year, 366 days, shall
be payable for the actual days elapsed (including the first day but excluding
the last day) in the period for which such interest is payable, and shall be
adjusted in accordance with any changes in the Alternate Base Rate to take
effect on the beginning of the day of such change in the Alternate Base
Rate).
The
Borrower hereby jointly and severally promises and agrees to pay interest in
arrears on Applicable Floating Rate Advances and LIBOR Advances on the last day
of each month.
The LIBOR
Rate shall be adjusted to occur on the same day that payment is due as set forth
in the section entitled Payments below.
If
Interest is not paid as and when it is due, it shall be added to the principal,
become and be treated as a part thereof, and shall thereafter bear like
interest.
2.4.5
|
Notice of
Borrowing: Upon written or telephonic notice which shall
be received by the Bank at or before 2:00 p.m. (Pacific time) on a
Business Day, the Borrower may borrow under the Term Line of Credit
Facility by requesting:
|
(i)
|
An
Alternate Base Rate Advance may be made on the day notice is received by
the Bank, provided however, that if the Bank shall not have received
notice at or before 2:00 p.m. on the day such Advance is requested to be
made, such Alternate Base Rate Advance may, at the Bank's option, be made
on the next Business Day.
|
(ii)
|
Applicable
Floating Rate Advances. An Applicable Floating Rate Advance may
be made on the day notice is received by the Bank; provided, however, that
if the Bank shall not have received notice at or before 2:00
p.m. on the day such Advance is requested to be made, such
Applicable Floating Rate Advances may, at the Bank's option, be made on
the next Business Day.
|
(iii)
|
A
LIBOR Advance. Notice of any LIBOR Advance shall be received by
the Bank no later than two Business Days prior to the day (which shall be
a Business Day) on which the Borrower requests such LIBOR Advance to be
made.
|
-11-
(iv)
|
Notice
of Election to Adjust Interest Rate: The Borrower may
elect:
|
(v)
|
That
interest on an Alternate Base Rate Advance shall be adjusted to accrue at
the LIBOR Rate or Applicable Floating Rate Advance; provided, however,
that such notice shall be received by the Bank no later than two Business
Days prior to the day (which shall be a Business Day) on which the
Borrowers request that interest be adjusted to accrue at the LIBOR Rate or
One Month LIBOR Rate.
|
(vi)
|
That
interest on an Applicable Floating Rate Advance shall be adjusted to
accrue at the LIBOR Rate or Alternate Base Rate; provided, however, that
such notice shall be received by the Bank no later than two Business Days
prior to the day (which shall be a Business Day) on which the Borrower
requests that interest be adjusted to accrue at the LIBOR Rate or
Alternate Base Rate.
|
(vii)
|
That
interest on a LIBOR Advance shall continue to accrue at a newly quoted
LIBOR Rate or shall be adjusted to commence to accrue at the Alternate
Base Rate or Applicable Floating Rate; provided, however, that such notice
shall be received by the Bank no later than two Business Days prior to the
last day of the LIBOR Interest Period pertaining to such LIBOR
Advance. If the Bank shall not have received notice (as
prescribed herein) of the Borrowers’ election that interest on any LIBOR
Advance shall continue to accrue at the newly quoted LIBOR Rate for such
new interest period, the Borrowers shall be deemed to have elected that
interest thereon shall be adjusted to accrue at the Alternate Base Rate
upon the expiration of the then existing LIBOR Interest Period pertaining
to such LIBOR Advance.
|
2.4.6
|
Prepayment: The
Borrower may prepay any Advance in whole or in part, at any time and
without penalty, provided, however, that: (i) any partial
prepayment shall first be applied, at the Bank's option, to accrued and
unpaid interest and next to the outstanding principal balance; and (ii)
during any period of time in which interest is accruing on any Advance on
the basis of the LIBOR Rate, no prepayment shall be made except on a day
which is the last day of the LIBOR Interest Period pertaining
thereto. If the whole or any part of any LIBOR Advance is
prepaid by reason of acceleration or otherwise, the Borrower shall, upon
the Bank's request, promptly pay to and indemnify the Bank for all costs,
expenses and any loss actually incurred by the Bank and any loss
(including loss of profit resulting from the re-employment of funds)
deemed sustained by the Bank as a consequence of such
prepayment.
|
The Bank
shall be entitled to fund all or any portion of its Advances in any manner it
may determine in its sole discretion, but all calculations and transactions
hereunder shall be conducted as though the Bank actually funded all Advances
through the purchase of dollar deposits bearing interest at the same rate as
U.S. Treasury securities in the amount of the relevant Advance and in maturities
corresponding to the date of such purchase to the Expiration Date
hereunder.
2.4.7
|
Indemnification for Applicable
Floating Rate Costs or LIBOR Costs: During any period of
time in which interest on any Alternate Base Rate Advance or LIBOR Advance
is accruing on the basis ofthe Applicable Floating Rate or LIBOR Rate, the
Borrower shall, upon the Bank's request, promptly pay to and reimburse the
Bank for all costs incurred and payments made by the Bank by reason of any
future assessment, reserve, deposit or similar requirement or any
surcharge, tax or fee imposed upon the Bank or as a result of the Bank's
compliance with any directive or requirement of any regulatory
authority pertaining or relating to funds used by the Bank in quoting and
determining the Applicable Floating Rate or LIBOR
Rate.
|
-12-
2.4.8
|
Conversion from Applicable
Floating Rate or LIBOR Rate: In the event that the Bank
shall at any time determine that the accrual of interest on the basis of
the Applicable Floating Rate or LIBOR Rate (i) is infeasible because the
Bank is unable to determine the One-Month LIBOR Rate or the LIBOR Rate due
to the unavailability of U.S. dollar deposits, contracts or certificates
of deposit in an amount approximately equal to the amount of the relevant
Advance and for a period of time approximately equal to relevant LIBOR
Interest Period or (ii) is or has become unlawful or infeasible by reason
of the Bank's compliance with any new law, rule, regulation, guideline or
order, or any new interpretation of any present law, rule, regulation,
guideline or order, then the Bank shall give telephonicnotice thereof
(confirmed in writing) to the Borrower, in which event any Alternate Base
Rate Advance bearing interest at the Applicable Floating Rate or any LIBOR
Rate Advance bearing interest at the LIBOR Rate shall thereupon
immediately accrue interest at the greater of the Prime Rate or Fed Funds
Rate.
|
2.6
|
Payments: If any payment
required to be made by the Borrower hereunder becomes due and payable on a
day other than a Business Day, the due date thereof shall be extended to
the next succeeding Business Day and interest thereon shall be payable at
then applicable rate during such extension. All payments
required to be made hereunder shall be made to the office of the Bank
designated for the receipt of notices herein or such other office as Bank
shall from time to time designate.
|
2.7
|
Late
Payment: In addition to any other rights the Bank may
have hereunder, if any payment of principal or interest or any portion
thereof, under this Agreement is not paid within 15 days of when due, a
late payment charge equal to five percent (5%) of such past due payment
may be assessed and shall be immediately
payable.
|
SECTION
3
CONDITIONS
PRECEDENT
3.1
|
Conditions Precedent to the
Initial Extension of Credit: The obligation of the Bank
to make the initial Advance or the first extension of credit to or on
account of the Borrower hereunder is subject to the conditions precedent
that the Bank shall have received before the date of such initial Advance
or such first extension of credit all of the following, in form and
substance satisfactory to the Bank:
|
(i)
|
Authority to
Borrow. Evidence that the execution, delivery and
performance by the Borrower of this Agreement and any document, instrument
or agreement required hereunder have been duly
authorized.
|
(ii)
|
Fees. A fee
of $42,500.00, such fee to be deemed to be fully earned upon payment
together with payment of all of the Bank's out-of-pocket expenses in
connection with the preparation and negotiation of this
Agreement.
|
-13-
(iii)
|
Miscellaneous. Such
other evidence as the Bank may request to establish the consummation of
the transaction contemplated hereunder and compliance with the conditions
of this Agreement.
|
3.2
|
Conditions Precedent to All
Extensions of Credit: The obligation of the Bank to make
each Advance or each other extension of credit, as the case may be, to or
on account of the Borrower (including the initial Advance or the first
extension of credit) shall be subject to the further conditions precedent
that, on the date of each Advance or each extension of credit and after
the making of such Advance or extension of
credit:
|
(i)
|
Reporting
Requirements. The Bank shall have received the documents
set forth in Section 5.1.
|
(ii)
|
Subsequent
Approvals. The Bank shall have received such
supplemental approvals, opinions or documents as the Bank may reasonably
request.
|
(iii)
|
Representations and
Warranties. The representations contained in Section 4
and in any other document, instrument or certificate delivered to the Bank
hereunder are true, correct and complete (other than representations which
are made with respect to a specific date, in which case such
representations shall be true and correct in all material respects on the
date specified).
|
(iv)
|
Event of
Default. No event has occurred and is continuing which
constitutes, or with the lapse of time or giving of notice or both, would
constitute an Event of Default.
|
The
Borrower's acceptance of the proceeds of any loan, Advance or extension of
credit, or the Borrower's applying for any Letter of Credit, or the Borrower's
execution of any document or instrument evidencing or creating any Obligation
hereunder shall, unless otherwise communicated in writing to Bank by Borrower,
be deemed to constitute the Borrower's representation and warranty that all of
the above statements are true and correct.
SECTION
4
REPRESENTATIONS
AND WARRANTIES
The
Borrower hereby makes the following representations and warranties to the Bank,
which representations and warranties are continuing:
4.1
|
Legal
Status: The Borrower’s correct legal name is as stated
in this Agreement and the Borrower is a corporation duly organized and
validly existing under the laws of the state of California and with its
chief executive office in the state of California and is properly licensed
and is qualified to do business and in good standing in, and, where
necessary to maintain the Borrower's rights and privileges, has complied
with the fictitious name statute of every jurisdiction in which the
Borrower is doing business.
|
4.2
|
Authority and
Validity: This Agreement and each other document,
contract and instrument required by or at any time delivered to the Bank
in connection with this Agreement have been duly authorized, and upon
their execution and delivery in accordance with the provisions hereof will
constitute legal valid and binding agreements and obligations of the
Borrower or the party which executes the same, enforceable in accordance
with their respective terms.
|
-14-
4.3
|
Solvency. The
Borrower is now and shall be at all times hereafter solvent and able to
pay the Borrower’s debts (including trade debts) as they
mature.
|
4.4
|
Legal
Effect: This Agreement constitutes, and any instrument,
document or agreement required hereunder when delivered hereunder will
constitute, legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their respective
terms.
|
4.5
|
Fictitious Business
Names: There are no fictitious business names used by
the Borrower in connection with its business operations other than Micrel
Semiconductor. The Borrower shall notify the Bank not less than 30 days
prior to effecting any change in the matters described herein or prior to
using any other fictitious business name at any future date, indicating
the name and state(s) of its use.
|
4.6
|
Financial
Statements: All financial statements, information and
other data which may have been or which may hereafter be submitted by the
Borrower to the Bank are true, accurate and correct as of the date thereof
and have been or will be prepared in accordance with generally accepted
accounting principles consistently applied and accurately represent the
financial condition or, as applicable, the other information disclosed
therein. Since the most recent submission of such financial
information or data to the Bank, the Borrower represents and warrants that
no material adverse change in the Borrower's financial condition or
operations has occurred which has not been fully disclosed to the Bank in
writing.
|
4.7
|
Title to
Assets: The Borrower has good and marketable title to
all of its assets and the same are not subject to any security interest,
encumbrance, lien or claim of any third person except for Permitted
Liens.
|
4.8
|
ERISA Warranty: The
Borrower has not withdrawn from (and no termination, partial termination
or other event has occurred with respect to) any deferred compensation
plan maintained for the benefit of Borrower’s employees, and has not
withdrawn from any multi- employer plan described in Section 4001(a)(3) of
ERISA.
|
4.9
|
Payment of Taxes: All
assessments and taxes, whether real, personal or otherwise, due or payable
by, or imposed, levied or assessed against the Borrower, or any of the
Borrower’s property, have been paid in full before
delinquency.
|
4.10
|
Margin
Stock. The proceeds of any loan or advance hereunder
will not be used to purchase or carry margin stock as such term is defined
under Regulation U of the Board of Governors of the Federal Reserve
System.
|
-15-
4.12
|
disposing
of Hazardous Materials off-site, and (ii) the Borrower has notified all of
their employees of the existence, if any, of any health hazard arising
from the conditions of their employment and have met all notification
requirements under Title III of CERCLA and all other Environmental
Laws.
|
4.13
|
Warranties and Representations
Cumulative. Each warranty, representation and agreement
contained in this Agreement shall be automatically deemed repeated with
each loan and/or advance and shall be true, accurate and correct at each
such time and shall be conclusively presumed to have been relied on by the
Bank regardless of any investigation made or information possessed by the
Bank. The warranties, representations and agreements set forth
herein shall be cumulative and in addition to any and all other warranties
and representations and agreements which the Borrower shall give, or cause
to be given, to the Bank, either now or
hereafter.
|
SECTION
5
COVENANTS
The
Borrower covenants and agrees that, during the term of this Agreement, and so
long thereafter as the Borrower is indebted to the Bank under this Agreement,
the Borrower will, unless the Bank shall otherwise consent in
writing:
(i)
|
Not
later than 95 days after the end of each of the Borrower's fiscal years, a
copy of the annual audited financial report of the Borrower for such year,
prepared by a firm of certified public accountants acceptable to Bank and
accompanied by an unqualified opinion of such
firm.
|
(ii)
|
Not
later than 50 days after the end of each of the first three fiscal
quarters of such fiscal year of the Borrower, a copy of the Borrower's
unaudited financial statement as of the end of each such fiscal
quarter.
|
(iii)
|
Not
later than 90 days after the end of each of the Borrower’s fiscal year, a
copy of the Borrower’s budget for the upcoming operating
year.
|
(iv)
|
Promptly
upon the Bank's request, such other information pertaining to the Borrower
hereunder as the Bank may reasonably
request.
|
5.2
|
Financial
Condition: The Borrower promises and agrees, during the
term of this Agreement and until payment in full of all of the Borrower's
Obligations, commencing, unless otherwise noted, with fiscal quarter
ending March 31, 2009, the Borrower will maintain at all
times:
|
(i)
|
A
Minimum Effective Tangible Net Worth in excess of the aggregate of
$155,000,000.00 plus 50% of the amount of net income after tax per quarter
(without reduction for losses).
|
(ii)
|
A
ratio of Debt to Effective Tangible Net Worth of not more than .75 to
1.
|
(iii)
|
The
aggregate of cash, cash equivalents, marketable securities, and 50% of the
book value of auction rate securities as stated on Borrower’s quarterly
and annual financial statements, of not less than
$50,000,000.00
|
-16-
(iv)
|
Profitability,
by not allowing more than one quarterly loss(es) in any four consecutive
fiscal quarters.
|
(v)
|
Commencing
with fiscal year ending December 31, 2009, a minimum net profit after tax
of at least $5,000,000.00 at each fiscal year
end.
|
5.3
|
Preservation of Existence;
Compliance with Applicable Laws: Maintain and preserve
its existence and all rights and privileges now enjoyed; and conduct its
business and operations in accordance with all applicable laws, rules and
regulations.
|
5.4
|
Merge or
Consolidate: Not liquidate or dissolve, merge or
consolidate with or into, or acquire any other business organization,
provided however, that Borrower may make business acquisitions of up to
$5,000,000.00 in any one fiscal
year.
|
5.5
|
Maintenance of
Insurance: Maintain insurance in such amounts and
covering such risks as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in
which the Borrower operates and maintain such other insurance and
coverages as may be required by the Bank. All such insurance
shall be in form and amount and with companies satisfactory to the
Bank.
|
5.6
|
Payment of Obligations and
Taxes: Make timely payment of all assessments and taxes
and all of its liabilities and obligations including, but not limited to,
trade payables, unless the same are being contested in good faith by
appropriate proceedings with the appropriate court or regulatory
agency. For purposes hereof, the Borrower's issuance of a
check, draft or similar instrument without delivery to the intended payee
shall not constitute payment.
|
5.7
|
Depository
Relationships: Maintain its primary business depository
relationship with Bank, including general, operating and administrative
deposit accounts and cash management
services.
|
5.8
|
Inspection Rights and
Accounting Records: The Borrower will maintain adequate
books and records in accordance with generally accepted accounting
principles consistently applied and in a manner otherwise acceptable to
Bank, and, at any reasonable time and from time to time, permit the Bank
or any representative thereof to examine and make copies of the records
and visit the properties of the Borrower and discuss the business and
operations of the Borrower with any employee or representative
thereof. If the Borrower shall maintain any records (including,
but not limited to, computer generated records or computer programs for
the generation of such records) in the possession of a third party, the
Borrower hereby agrees to notify such third party to permit the Bank free
access to such records at all reasonable times and to provide the Bank
with copies of any records which it may request, all at the Borrower's
expense, the amount of which shall be payable immediately upon
demand.
|
5.9
|
Payment of
Dividends: Cash dividends may be made to the Borrower’s
shareholders provided however that any said payment may not be made if any
covenant violation shall occur as a result of said
payment.
|
5.10
|
Transfer Assets: Not,
after the date hereof, sell, contract for sale, convey, transfer, assign,
lease or sublet, any of its assets except in the Ordinary Course of
Business and, then, only for full, fair and reasonable
consideration.
|
5.11
|
Change in Nature of
Business: Not make any material change in its financial
structure or the nature of its business as existing or conducted as of the
date hereof.
|
-17-
5.12
|
Maintenance of
Jurisdiction: Borrower shall maintain the jurisdiction
of its organization and chief executive office, or if applicable,
principal residence, as set forth herein and not change such jurisdiction
name or form of organization without 30 days prior written notice to
Bank.
|
5.13
|
Compensation of
Employees: Compensate its employees for services
rendered at an hourly rate at least equal to the minimum hourly rate
prescribed by any applicable federal or state law or
regulation.
|
5.14
|
Notice: Give
the Bank prompt written notice of any and all (i) Events of Default; (ii)
litigation, arbitration or administrative proceedings to which the
Borrower is a party and in which the claim or liability exceeds
$2,500,000.00; (iii) other matters which have resulted in, or might result
in a material adverse change in the financial condition or business
operations of the Borrower.
|
5.15
|
Environmental
Compliance: The Borrower shall conduct its operations
and keep and maintain all of its property in compliance with all
Environmental Laws.
|
SECTION
EVENTS
OF DEFAULT
Any one
or more of the following described events shall constitute an event of default
(an "Event of Default") under this Agreement:
6.1
|
Non-Payment: Any
Borrower shall fail to pay the principal amount of any Obligations when
due or interest on the Obligations within 5 days of when
due.
|
6.2
|
Performance Under This
Agreement: The Borrower shall fail in any material
respect to perform or observe any term, covenant or agreement contained in
this Agreement or in any document, instrument or agreement relating to
this Agreement or any other document or agreement executed by the Borrower
with or in favor of Bank and any such failure shall continue unremedied
for more than 30 days after written notice from the Bank to the Borrower
of the existence and character of such Event of
Default.
|
6.3
|
Representations and Warranties;
Financial Statements: Any representation or warranty
made by the Borrower under or in connection with this Agreement or any
financial statement given by the Borrower or any guarantor shall prove to
have been incorrect in any material respect when made or given or when
deemed to have been made or given.
|
6.4
|
Other
Agreements: If there is a default under any material
agreement to which Borrower is a party with Bank or with a third party or
parties resulting in a right by the Bank or by such third party or
parties, whether or not exercised, to accelerate the maturity of any
Indebtedness.
|
6.5
|
Insolvency: The
Borrower or any guarantor shall: (i) become insolvent or be
unable to pay its debts as they mature; (ii) make an assignment for the
benefit of creditors or to an agent authorized to liquidate any
substantial amount of its properties and assets; (iii) file a voluntary
petition in bankruptcy or seeking reorganization or to effect a plan or
other arrangement with creditors; (iv) file an answer admitting the
material allegations of an involuntary petition relating to bankruptcy or
reorganization or join in any such petition; (v) become or be adjudicated
a bankrupt; (vi) apply for or consent to the appointment of, or consent
that an order be made, appointing any receiver, custodian or trustee, for
itself or any of its properties, assets or businesses; or (vii) in an
involuntary proceeding, any receiver, custodian or trustee shall have been
appointed for all or substantial
part
|
-18-
6.6
|
of
the Borrower’s or guarantor’s properties, assets or businesses and shall
not be discharged within 30 days after the date of such
appointment.
|
6.7
|
Execution: Any
writ of execution or attachment or any judgment lien shall be issued
against any property of the Borrower and shall not be discharged or bonded
against or released within 30 days after the issuance or attachment of
such writ or lien.
|
6.8
|
Suspension: The
Borrower shall voluntarily suspend the transaction of business or allow to
be suspended, terminated, revoked or expired any permit, license or
approval of any governmental body necessary to conduct the Borrower's
business as now conducted.
|
6.9
|
Material Adverse
Change: If there occurs a material adverse change in the
Borrower's business or financial condition, or if there is a material
impairment of the prospect of repayment of any portion of the Obligations,
or if a Borrower who is a natural person shall
die.
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6.10
|
Change in
Ownership: There shall occur a sale, transfer,
disposition or encumbrance (whether voluntary or involuntary), or an
agreement shall be entered into to do so, with respect to more than 15% of
the issued and outstanding capital stock of the
Borrower.
|
REMEDIES
ON DEFAULT
Upon the
occurrence of any Event of Default, the Bank may, at its sole and absolute
election, without demand and only upon such notice as may be required by
law:
7.1
|
Acceleration: Declare
any or all of the Borrower's indebtedness owing to the Bank, whether under
this Agreement or any other document, instrument or agreement, immediately
due and payable, whether or not otherwise due and
payable.
|
7.2
|
Cease Extending
Credit: Cease making Advances or otherwise extending
credit to or for the account of the Borrower under this Agreement or under
any other agreement now existing or hereafter entered into between the
Borrower and the Bank.
|
7.3
|
Termination: Terminate
this Agreement as to any future obligation of the Bank without affecting
the Borrower's obligations to the Bank or the Bank's rights and remedies
under this Agreement or under any other document, instrument or
agreement.
|
7.4
|
Letters of
Credit: Require the Borrower to pay immediately to the
Bank, for application against drawings under any outstanding Letters of
Credit, the outstanding principal amount of any such Letters of Credit
which have not expired. Any portion of the amount so paid to
the Bank which is not applied to satisfy draws under any such Letters of
Credit or any other obligations of the Borrower to the Bank shall be
repaid to the Borrower without
interest.
|
-19-
(ii)
|
Transaction;
or (2) in the case of a FX Transaction whose Settlement Date precedes the
Close-Out Date, the amount of the Foreign Currency adjusted by adding
interest with respect thereto at the Prime Rate from the Settlement Date
to the Close-Out Date, into US Dollars at a rate of exchange at which the
Bank can buy or sell US dollars with or against the Foreign Currency for
delivery on the Close-Out Date.
|
(iv)
|
Net Present
Value. The Closing Gain or Closing Loss for each
Settlement Date falling after the Close-out Date will be discounted by the
Bank to it net present value.
|
(v)
|
Payment. To
the extent that the net amount of the aggregate Closing Gains exceeds the
Closing Losses, such amount shall be payable by the Bank to the Borrower.
To the extent that the aggregate net amount of the Closing Losses exceeds
the Closing Gains, such amount shall be payable by the Borrower to the
Bank.
|
7.6
|
Non-Exclusivity of
Remedies: Exercise one or more of the Bank's rights set
forth herein or seek such other rights or pursue such other remedies as
may be provided by law, in equity or in any other agreement now existing
or hereafter entered into between the Borrower and the Bank, or
otherwise.
|
SECTION
8
MISCELLANEOUS
8.1
|
Amounts Payable on
Demand: If the Borrower shall fail to pay on demand any
amount so payable under this Agreement, the Bank may, at its option and
without any obligation to do so and without waiving any default occasioned
by the Borrower having so failed to pay such amount, create an Advance
under this Agreement in an amount equal to the amount so payable, which
Advance shall thereafter bear interest as provided
hereunder.
|
8.3
|
Reliance and Further
Assurances: Each warranty, representation, covenant,
obligation and agreement contained in this Agreement shall be conclusively
presumed to have been relied upon by the Bank regardless of any
investigation made or information possessed by the Bank and shall be
cumulative and in addition to any other warranties, representations,
covenants and agreements which the Borrower now or hereafter shall give,
or cause to be given, to the Bank. Borrower agrees to execute
all documents and instruments and to perform such acts as the Bank may
reasonably
|
-20-
8.4
|
deem
necessary to confirm and secure to the Bank all rights and remedies
conferred upon the Bank by this agreement and all other documents related
thereto.
|
8.5
|
Attorneys'
Fees: Borrower shall pay to the Bank all costs and
expenses, including but not limited to reasonable attorneys fees, incurred
by Bank in connection with the administration, enforcement, including any
bankruptcy, appeal or the enforcement of any judgment or any refinancing
or restructuring of this Agreement or any document, instrument or
agreement executed with respect to, evidencing or securing the
indebtedness hereunder.
|
8.6
|
Notices: All
notices, payments, requests, information and demands which either party
hereto may desire, or may be required to give or make to the other party
hereto, shall be given or made to such party by hand delivery or through
deposit in the United States mail, postage prepaid, or by facsimile
delivery, or to such other address as may be specified from time to time
in writing by either party to the
other.
|
To
the Borrower:
MICREL,
INCORPORATED
0000
Xxxxxxx Xxxxx
Xxx
Xxxx, XX 00000
Attn:Xxxxxxx
X. Xxxx
President
& CEO
Xxx
Xxxxxx
Vice
President, Finance & CFO
FAX: (000)
000-0000
|
To
the Bank:
BANK
OF THE WEST
San
Xxxx Office (NBO)
Xxx
Xxxxxxx Xxxxxxxxx
Xxx
Xxxx, XX 00000
Attn:Xxxx
Xxxxx
Vice President
FAX: (000)
000-0000
|
8.7
|
Waiver: Neither
the failure nor delay by the Bank in exercising any right hereunder or
under any document, instrument or agreement mentioned herein shall operate
as a waiver thereof, nor shall any single or partial exercise of any right
hereunder or under any other document, instrument or agreement mentioned
herein preclude other or further exercise thereof or the exercise of any
other right; nor shall any waiver of any right or default hereunder, or
under any other document, instrument or agreement mentioned herein,
constitute a waiver of any other right or default or constitute a waiver
of any other default of the same or any other term or
provision.
|
8.8
|
Conflicting
Provisions: To the extent the provisions contained in
this Agreement are inconsistent with those contained in any other
document, instrument or agreement executed pursuant hereto, the terms and
provisions contained herein shall control. Otherwise, such
provisions shall be considered
cumulative.
|
8.9
|
Binding Effect;
Assignment: This Agreement shall be binding upon and
inure to the benefit of the Borrower and the Bank and their respective
successors and assigns, except that the Borrower shall not have the right
to assign its rights hereunder or any interest herein without the prior
written consent of the Bank. The Bank may sell, assign or grant
participation in all or any portion of its rights and benefits
hereunder. The Borrower agrees that, in connection with any
such sale, grant or assignment, the Bank may deliver to the prospective
buyer, participant or assignee financial statements and other relevant
information relating to the Borrower and any
guarantor.
|
8.10
|
Jurisdiction: This
Agreement, the rights of the parties hereunder, and any documents,
instruments or agreements mentioned or referred to herein shall be
governed by and construed according to the laws of the State of California
without regard to conflict of law principles, to the jurisdiction of whose
courts the parties hereby
submit.
|
-21-
8.11
|
Waiver Of Jury
Trial. THE BORROWER AND
BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL
RIGHT, AND THAT IT MAY BE WAIVED UNDER CERTAIN
CIRCUMSTANCES. TO THE EXTENT PERMITTED BY LAW EACH PARTY, AFTER
CONSULTING (OR HAVING THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS
CHOICE, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION
RELATED TO THIS AGREEMENT OR ANY OTHER DOCUMENT, INSTRUMENT OR
TRANSACTION BETWEEN THE PARTIES.
|
8.12
|
Judicial Reference Provision. In
the event the above Jury Trial Waiver is unenforceable, the parties elect
to proceed under this Judicial Reference Provision. With the
exception of the items specified below, any controversy, dispute or claim
between the parties relating to this Agreement or any other document,
instrument or transaction between the parties (each, a “Claim”), will be
resolved by a reference proceeding in California pursuant to Sections 638
et seq. of the California Code of Civil Procedure, or their successor
sections, which shall constitute the exclusive remedy for the resolution
of any Claim, including whether the Claim is subject to
reference. Venue for the reference will be the Superior Court
in the County where real property involved in the action, if any, is
located, or in a County where venue is otherwise appropriate under law
(the Court). The following matters shall not be subject to reference: (i)
nonjudicial foreclosure of any security interests in real or personal
property, (ii) exercise of self-help remedies (including without
limitation set-off), (iii) appointment of a receiver, and (iv) temporary,
provisional or ancillary remedies (including without limitation writs of
attachment, writs of possession, temporary restraining orders or
preliminary injunctions). The exercise of, or opposition to, any of the
above does not waive the right to a reference
hereunder.
|
The
referee shall be selected by agreement of the parties. If the parties do not
agree, upon request of any party a referee shall be selected by the Presiding
Judge of the Court. The referee shall determine all issues in
accordance with existing case law and statutory law of the State of California,
including without limitation the rules of evidence applicable to proceedings at
law. The referee is empowered to enter equitable and legal relief, and rule on
any motion which would be authorized in a court proceeding, including without
limitation motions for summary judgment or summary adjudication. The referee
shall issue a decision, and pursuant to CCP §644 the referee’s decision shall be
entered by the Court as a judgment or order in the same manner as if tried by
the Court. The final judgment or order from any decision or order entered by the
referee shall be fully appealable as provided by law. The parties reserve the
right to findings of fact, conclusions of law, a written statement of decision,
and the right to move for a new trial or a different judgment, which new trial
if granted, will be a reference hereunder. AFTER CONSULTING (OR
HAVING THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS CHOICE, EACH PARTY AGREES
THAT ALL CLAIMS RESOLVED UNDER THIS REFERENCE PROVISION WILL BE DECIDED BY A
REFEREE AND NOT A JURY.
8.13
|
Telephone
Recording: The Borrower agrees that the Bank may
electronically record all telephone conversations between the Borrower and
the Bank with respect to any FX Transaction and that any such recording
may be submitted in evidence in any arbitration or other legal proceeding.
Such recording shall be deemed to be conclusive evidence as to the terms
of any FX Transaction in the event of a
dispute.
|
8.14
|
Counterparts: This
Agreement may be executed in any number of counterparts and all such
counterparts taken together shall be deemed to constitute one and the same
instrument.
|
8.15
|
Headings: The
headings herein set forth are solely for the purpose of identification and
have no legal significance.
|
8.16
|
Entire Agreement and
Amendments: This Agreement and all documents,
instruments and agreements mentioned herein constitute the entire and
complete understanding of the parties
with
|
-22-
8.17
|
respect
to the transactions contemplated hereunder. All previous
conversations, memoranda and writings between the parties pertaining to
the transactions contemplated hereunder not incorporated or referenced in
this Agreement or in such documents, instruments and agreements are
superseded hereby. This Agreement may be amended only by an instrument in
writing signed by the Borrower and the
Bank.
|
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed as of the date first hereinabove
written.
BANK:
BANK
OF THE WEST
BY:
/s/ Xxxx Xxxxx
NAME: Xxxx
Xxxxx, Vice President
|
BORROWER:
MICREL,
INCORPORATED
BY:
/s/ Xxxxxxx X. Xxxx
NAME: Xxxxxxx
X. Xxxx, President & CEO
|
BY:
/s/ Xxxxx X. Xxxxxx
NAME: Xxx
Xxxxxx, Vice President, Finance & CFO
|
|
-23-