STADTSPARKASSE MUNCHEN LINE OF CREDIT
Published on June 12, 1997
EXHIBIT 10.11
[logo] STADTSPARKASSE
MUNCHEN
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Sparkassenstr. 2
80331 Munich
SCM Schneider Microsysteme
Entwicklungs- u. Vertriebs GmbH
Luitpoldstrasse 6 Mr. Seemuller
Tel. 21675914
85276 Pfaffenhofen Fax 21675936
Munich, 11/13/96
Re: Your checking account 23-254444
Ladies and Gentlemen:
We are pleased to extend to you a framework credit through 3/30/98 with current
account in the amount of
DM 1,500,000.00
in words: one million five hundred thousand German marks.
The terms and additional conditions can be found in the attached framework
credit contract dated 11/13/96, which shall constitute a substantial component
of this assurance.
Please send us the documents which are checked in the disbursement schedule (see
attachment).
Sincerely yours, Enclosure(s)
Stadtsparkasse Munchen
Corporate Customer Service Headquarters
[signature]
[Footer Information]
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[logo] Stadtsparkasse Munchen
Sparkassenstr. 2
80331 Munich
Universal contract for
business credits
Customer no./Account. no. 23254444
Date Munich, 11/13/96
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SCM Schneider Microsysteme Entwicklungs- u. Vertriebs GmbH
Luitpoldstrasse 6, 85276 Pfaffenhofen
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- - hereinafter referred to as the Borrower - hereby concludes an agreement with
Sparkasse concerning the grant of the business credits named under no. 1; the
maximum sum defined below for the individual credits shall apply. If no
individual maximum sums are stipulated, an overall credit framework of DM
1,500,000.00 shall apply, within which the individual credits may be used in
fluctuating amounts.
1 CREDIT TYPES, CREDIT COSTS
1.1 CREDIT WITH ONGOING STATEMENT GERMAN MARKS
For the credit proceeds which are drawn, the interest and commission rates set
by Sparkasse for credits of this type shall be paid. The interest rate is
currently 8.75% per annum. Changes in the rate shall be communicated to the
Borrower. If the credit is not used, a credit commission of [blank]% per year
shall be charged as compensation for keeping the credit proceeds available.
At each closing of accounts, the credit costs incurred to date shall be charged.
If the granted credit is exceeded as a result, Sparkasse shall--as with every
credit overdraft--charge the following for the excess amount:
// the overdraft commission set at Sparkasse for overdrafts (along with
the aforementioned credit interest) which is currently [blank]% per
annum;
/X/ overdraft interest set for overdrafts, which is currently 14.50% per
annum.
In each instance, the Borrower shall be obligated to settle the overdrafts
promptly.
1.2 DRAFT DISCOUNT CREDIT GERMAN MARKS; BUNDESBANK-ELIGIBLE
DRAFT--AND--GOOD TRADE DRAFT(1)
The drafts shall be settled at the rates set by Sparkasse. Interest shall be
computed according to calendar days; for the purpose of calculating the interest
divisor, a 360-day year shall be assumed. This rule shall also apply to return
debits. In addition to a commission, the cash outlays which arise when a draft
was not made payable on one banking place shall be placed for account. These
fees shall be deducted from the draft amount at the time of settlement.
The equivalent value of the purchased draft shall be credited to the checking
account in the settlement amount. Otherwise, the additional terms for draft
discount credits which are attached as an appendix hereto shall apply.
1.3 GUARANTEE FRAMEWORK CREDIT GERMAN MARKS IN GUARANTEE ACCOUNT
For the guarantees assumed by Sparkasse, the Borrower shall be charged to the
aforementioned guarantee account. If Sparkasse is sued arising from the
guarantee, the Borrower shall be obligated to immediately reimburse the sums
paid toward the guarantee by Sparkasse. For the guarantees assumed, Sparkasse
shall charge the commission rates which it has set for guarantee credits of this
type, currently one time--per month--per(1) [blank]% of the guarantee sum, but
at least DM [blank].
The customer shall receive the debit notice separately. Changes in the guarantee
commission shall be reported to the customer. At the time of assumption or
cancellation of a guarantee, the customer shall receive notice concerning the
resulting amount of the overall obligation arising from the guarantee credit.
Sparkasse shall be authorized to obtain information from the guarantee creditors
concerning the respective amount of the guaranteed obligations.
Otherwise, the special terms concerning the guarantee transaction, which are
attached as an appendix, shall apply.
2 TERMINATION, TERM
2.1 The credit contract may be terminated by either party without compliance
with a termination notice period. Notwithstanding the rights of both parties to
terminate at any time without notice, the term for the granting of credit shall
initially extend until 3/30/93; if no term is entered above, the term for the
grant of credit shall be indefinite. If the term for granting credit is limited,
it can be extended at the request of the Borrower.
2.2 The provisions of this contract shall continue to apply to the guarantees
already assumed at the time of termination. Notwithstanding the release claim
pursuant to Section 775 BGB [German Civil Code], however, Sparkasse may demand a
release from these guarantee obligations from the Borrower. Sentence 1 shall
apply mutatis mutandis to drafts already discounted up to the time of
termination.
3 SPECIAL AGREEMENTS
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See special attachment
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4 COLLATERAL
The credit may only be used if the stipulated collateral is furnished and
Sparkasse has a confirmation in this regard, if necessary. Notwithstanding the
liability from any existing or future collateral in connection with its security
purpose, Sparkasse shall be given the following collateral in special documents:
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See separate attachment
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1. [Footnote] Please delete as applicable
5 MULTIPLE BORROWERS/RETURN OF COLLATERAL
Multiple borrowers shall be jointly and severally liable for the liabilities
arising from this contract. If Sparkasse is satisfied by one Borrower, Sparkasse
shall not examine whether said Borrower is entitled to claims to collateral no
longer needed by Sparkasse. In principle, Sparkasse shall return such collateral
to the provider of security, unless the performing Borrower demonstrates that
the provider of security has consented to the release of said Borrower.
6 DISCLOSURE AND INFORMATIONAL DUTY
The credit institutions also have to disclose the financial circumstances of
their borrowers pursuant to statutory provisions. Accordingly, the Borrower
shall allow Sparkasse (or an office hired by Sparkasse) access to its financial
circumstances at any time; specifically, it shall present its books, balance
sheets, financial statements and business papers or permit access and review of
these documents, provide all requested information and facilitate an inspection
of its business operation. In consultation with the Borrower, Sparkasse may
demand the documents necessary therefor directly from the Borrower's advisors in
bookkeeping and tax matters. If the aforementioned documents are stored on data
media, the Borrower shall be obligated to make them legible in a reasonable
period of time. In the event that the Borrower does not satisfy these
obligations, Sparkasse shall be entitled to terminate the credit relationship
for immediate repayment. Sparkasse shall be entitled to inspect the public
register and land register at any time and request simple or certified copies
and excerpts at the Borrower's expense; in addition, it may obtain information
from insurance companies, governmental authorities and other offices,
particularly credit institutions, which Sparkasse may consider necessary in
order to evaluate the credit circumstances.
7 COSTS OF THE CONTRACT
The Borrower shall bear all costs arising as a result of the conclusion and
performance of this contract, including the provision of collateral.
8 PLACE OF VENUE
To the extent that jurisdiction of Sparkasse's general place of venue does not
arise from Section 29 ZPO [German Code of Civil Procedure], Sparkasse may pursue
its claims by way of litigation proceedings in its general place of venue if the
borrower to be sued by way of litigation proceedings is a Kaufmann [statutory
"merchant" under the German Commercial Code] or a legal entity within the
meaning of no. 6 AGB [Standard Contract Terms], or if the borrower has no
general place of venue domestically at the time of the conclusion of the
contract or later shifts his domicile or ordinary place of residence from the
Federal Republic of Germany or if his domicile or ordinary place of residence is
unknown at the time of the filing of the complaint.
9 LEGAL VALIDITY
If agreements which are made in this contract lack legal validity in whole or in
part or are not performed, it is intended that the remaining agreements remain
in effect.
10 STANDARD CONTRACT TERMS
Sparkasse hereby expressly points out that its Standard Contract Terms (AGB)
shall constitute a supplemental component of the contract. The AGB shall be
available for inspection in the cash offices of Sparkasse.(1)
The contract and the copy shall be signed by all Borrowers named on the
front side.
1. Every contract partner of Sparkasse receives a copy of the Standard Contract
Terms, as long as there is not yet a business connection and the execution of
the contract does not involve Sparkasse.
Terms for the guarantee transaction
The credit institution shall assume guarantees and suretyships--hereinafter
referred to in the aggregate as "liability assurance"--on behalf of customers
under the following terms and conditions:
1. DIRECT/INDIRECT LIABILITY ASSURANCE, WORDING
The credit institution may prepare the liability assurance personally (direct
liability assurance) or have it prepared on its behalf by a different credit
institution (second bank).
To the extent that the credit institution or second bank follows the
instructions of the principal in drafting the document concerning the liability
assurance (document), it shall not be subject to any review or notice duty vis a
vis the principal.
The credit institution shall assume guarantees as a principal, waiving the
defenses of voidability or offset.
2. GUARANTEE ACCOUNT/GUARANTEE COMMISSION
The guarantee account of the principal shall be charged in the amount of the
assured sum upon delivery/dispatch of the document or dispatch of the order to
the second bank for the creation of a liability assurance. From that point in
time on, the principal shall be charged a guarantee commission on the charged
amount until deletion. In the case of any later use, the guarantee commission
shall be remitted retrospectively until payment.
3. RETURN OF THE DOCUMENT, RELEASE FROM LIABILITY
After the end/settlement of the liability assurance, the principal shall ensure
the return of the document, or, alternatively, the release of the credit
institution from liability.
4. DELETION
In the case of direct liability assurances for which a maturity date is
designated in the document, the credit institution shall delete the charge from
the guarantee account after the passage of the maturity date if the following
prerequisites are satisfied:
- - the liability assurance lapses in accordance with its clear wording if
no use takes place prior to the passage of the maturity date and
- - the liability assurance is governed by German law and
- - the credit institution is not sued within the time period.
If, in such a case, the credit institution is sued by the beneficiary under
foreign law on the basis of the liability assurance after the passage of the
maturity date, it shall only pay if there is an authorization
by the principal to pay or an enforceable decision ordering payment.
In other cases, the credit institution shall delete the sum of the liability
assurance from the guarantee account if the document issued concerning the
liability assurance has been returned to it or if it has been clearly released
from liability by the beneficiary or the second bank.
If the subject matter of the liability assurance is a litigation guarantee in
which the consent of the beneficiary is necessary to return the document, the
credit institution shall be required to delete the charged amount only upon
demonstration of such consent.
5. ENTITLEMENT TO DEPOSIT UPON USE
The credit institution shall also be entitled to deposit the assured amount--to
the same extent stipulated with regard to the beneficiary in the liability
assurance.
6. EXAMINATION OF DOCUMENTS
If the credit institution must receive documents/declarations in connection with
the liability assurance, it shall exercise the care of an ordinary businessman
to examine whether they comply, with regard to external form, with the
conditions for use arising from the liability assurance.
The credit institution shall be subject to no further examination obligations,
particularly with regard to authenticity and absence of forgery, formal
correctness, completeness or legal validity of the documents/declaration or the
general or specific conditions contained therein or the correctness of attached
translations.
Declarations shall also be deemed to be in order if they have been transmitted
by cable, telegram, facsimile or via other information systems.
7. REIMBURSEMENT OF EXPENDITURES
The principal shall reimburse the credit institution in the same currency for
all expenditures which are incurred in connection with the execution of its
function--even after deletion of the liability assurance and/or in connection
with judicial or extra-judicial prosecution of rights domestically or abroad.
This shall also apply if the credit institution avails itself of a right to
deposit.
If the credit institution is not able to debit the expenditures to a current
account in connection with a balance or line of credit, the interest, fees and
commissions generally charged for overdrafts shall be paid.
8. FURNISHING OF COLLATERAL
Upon request, the principal shall be obligated in accordance with no. 22 AGB to
provide the credit institution with bank collateral or cash coverage or increase
existing collateral if a change in the risk situation arises as a result of
circumstances which arise or become known subsequently.
Notwithstanding other collateral, all claims arising in favor of the principal
against the beneficiary in connection with the use arising from the liability
assurance are assigned to the credit institution to secure the credit
institution's claim for reimbursement of expenditures. The credit institution
shall assign the claims back as soon as it has been satisfied with respect to
all of its claims against the principal.
In the event of deposit, the reimbursement claim which the principal acquires
through a deposit made in the principal's name by the credit institution it
assigned to the credit institution at this time to secure the expenditure
reimbursement claim.
9. PLACE OF VENUE
If the customer is a Kaufmann [statutory "merchant" under the German Commercial
Code] which is not included in the business persons described in Section 4 of
the Commercial Code, a legal entity organized under public law or a public law
special fund, the credit institution may sue at its general place of venue and
may only be sued at such place of venue.
APPENDIX TO THE FRAMEWORK CREDIT CONTRACT DATED 11/13/96, ACCOUNT 23-254444
SCM SCHNEIDER MICROSYSTEME ENTWICKLUNGS- U. VERTRIEBS GMBH
CONCERNING NUMBER 3 - SPECIAL AGREEMENTS
When the credit is granted, the current account credit dated 5/14/93 - 2/20/95
for DM 350,000.00 shall lapse.
1. This framework contract shall relate to all existing or future
obligations at Stadtsparkasse Munchen; said liabilities may not exceed
the total of the framework credit which has been extended.
2. It shall be deemed agreed upon that Stadtsparkasse Munchen shall
receive a guarantee declaration or comfort letter from the future
parent corporation (holding).
3. The corporation shall be obligated to take all measures to maintain the
current capital base. This shall apply in particular to any losses in
subsequent years and any planned distributions. If it is not possible
to meet this obligation, Sparkasse shall have the right of
extraordinary termination of this contract.
CONCERNING NUMBER 4 - COLLATERAL
In order to secure the claims of Sparkasse against the customer arising from the
credit framework contract, the customer shall be obligated not to place other
credit providers in a better position than Sparkasse. If, in future, the
customer obtains comparable grants of credits and loans, it shall treat
Sparkasse equally to the other credit providers with regard to the type and
scope of collateral. Moreover, the customer shall be obligated to send Sparkasse
the same information as other credit providers.
The customer shall likewise provide assurance that only negative declarations
have been submitted to secure comparable credit relationships and that no other
additional collateral has been furnished.
11/13/96 [signature]
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Date Stadtsparkasse Munchen Date Company stamp and signature
smf1311krel.sdw