AMENDMENT NO. 1
Exhibit
99.01
AMENDMENT
NO. 1
dated
as of February 22, 2008
to
dated
as of
August
24, 2007
Among
MIPS
TECHNOLOGIES, INC.,
as
the Borrower,
VARIOUS
FINANCIAL INSTITUTIONS,
as
the Lenders,
JEFFERIES
FINANCE LLC,
as
Sole Lead Arranger, Sole Bookrunner,
Collateral
Agent, Administrative Agent,
Sole
Syndication Agent and Sole Underwriter
EXECUTION
VERSION
AMENDMENT NO. 1 TO CREDIT
AGREEMENT
This
AMENDMENT NO. 1 TO CREDIT AGREEMENT (this “Amendment”) is
entered into as of February 22, 2008, among MIPS TECHNOLOGIES, INC., a Delaware
corporation (the “Borrower”); (ii) the
Required Lenders (as defined in the Credit Agreement defined below) and
JEFFERIES FINANCE LLC (“JF”), as
administrative agent (in such capacity, the “Administrative
Agent”) and is acknowledged and consented to by each Subsidiary Guarantor
(as defined in the Credit Agreement referred to below). Capitalized
terms used herein and not otherwise defined herein shall the respective meanings
ascribed to such terms in the Credit Agreement defined below.
RECITALS:
A. The
Borrower, the Lenders, the Administrative Agent and JF, as collateral agent,
sole bookrunner, sole lead arranger, sole syndication agent and sole bookrunner
are parties to that certain Credit Agreement, dated as of August 24,
2007 (as the same may from time to time be amended, amended and restated,
supplemented, waived or otherwise modified, the “Credit
Agreement”). The Subsidiary Guarantors are party to that
certain Guaranty (as the same may be from time to time amended, amended and
restated, supplemented, waived or otherwise modified, the “Guaranty”) in favor
of the Administrative Agent.
B. The
Borrower, the Administrative Agent and the Lenders desire to amend the Credit
Agreement to modify certain provisions thereof.
AGREEMENT:
Section
1. Amendments. In
consideration of the premises and mutual covenants set forth herein and for
other valuable consideration and subject to the conditions and upon the terms
set forth herein, the Credit Agreement is hereby amended as
follows:
1.1 New
Definitions. Article I of the Credit Agreement is hereby
amended to add the following new definitions thereto:
““Amendment No. 1 Effective
Date” means February 22, 2008.”
““CAD Agreement” means
any licensing agreement, license and maintenance agreement, purchase agreement
or similar arrangement providing for the licensing of computer-aided design
technology to which the Borrower or any of its Subsidiaries is a party, in each
case to the extent such agreement provides for the deferral of purchase price
for periods in excess of one year (but excluding any maintenance and similar
fees).”
1.2 Amendments to Definitions in
Article I of the Credit Agreement. The definitions of “Applicable Margin”,
“EBITDA” and
“Revolving Lender
Commitment” are hereby amended by deleting such definitions in their
entirety and by replacing them in the applicable alphabetical order in Article I
of the Credit Agreement with the following definitions:
““Applicable Margin”
means 3.00%, in the case of ABR Revolving Loans, and 4.00%, in the case of
Eurodollar Revolving Loans.”
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““EBITDA” means, for
any Person for any period, Net Income for such period plus, without
duplication and to the extent reflected as a charge in the statement of such Net
Income for such period, the sum of (a) provisions for franchise tax and
income tax expense and withholding tax expense incurred in connection with
cross-border transactions, (b) Interest Expense, (c) depreciation and
amortization expense, (d) any extraordinary or unusual non-recurring
non-cash expenses or losses (including, whether or not otherwise includable as a
separate item in the statement of such Net Income for such period, non-cash
losses on sales of assets outside of the ordinary course of business) other than
non-cash charges resulting in the accrual of reserves for cash charges in any
future period, including impairment charges, and any other non-cash charges, (e)
any non-cash charges for stock compensation expense adjustments to comply with
FAS 123R and for the amortization of amounts in the Founders Deferral Escrow
Account if and to the extent such amounts constitute employee compensation and
(f) expenses, costs and fees associated with the Acquisition (and the
integration thereof) and the Borrower and its Subsidiaries’ closure of
facilities and reductions in head count in an aggregate amount not to exceed
$7,000,000 and minus, to the extent
included in the statement of such Net Income for such period, the sum of
(i) interest income, (ii) any extraordinary or unusual non-recurring
non-cash income or non-cash gains (including, whether or not otherwise
includable as a separate item in the statement of such Net Income for such
period, non-cash gains on the sales of assets outside of the ordinary course of
business), and (iii) any other non-cash income, all as determined on a
Consolidated basis; provided, however, that “EBITDA” for the
Fiscal Quarters ending December 31, 2006, March 31, 2007 and June 30, 2007,
shall be deemed to be $5,189,000, $3,260,000 and $3,299,000,
respectively.”
““Revolving Commitment
Amount” means, (i) on any date prior to the Amendment No. 1 Effective
Date, a maximum amount of $35,000,000, (ii) on any date on or after the
Amendment No. 1 Effective Date to and including March 31, 2008, a maximum amount
of $20,000,000, (iii) thereafter to and including April 30, 2008, a maximum
amount of $19,000,000, (iv) thereafter to and including May 31, 2008, a maximum
amount of $18,000,000, (v) thereafter to and including June 30, 2008, a maximum
amount of $17,000,000, (vi) thereafter to and including July 31, 2008, a maximum
amount of $16,000,000, and (vii) in each case of clauses (i) through (vi) above,
as such maximum amount may further be reduced from time to time pursuant to the
terms hereof.”
1.3 Amendment to Section 7.10 of
the Credit Agreement. Section 7.10 of the Credit Agreement is
hereby amended by deleting such section in its entirety and by replacing it with
the following:
“Section 7.10 Use of
Proceeds. The Borrower shall apply the proceeds of Revolving
Loans (i) to fund the Escrow Accounts on the date the Acquisition is
consummated, to pay certain fees and expenses incurred in connection with the
initial Borrowing and (2) for working capital and general Business Entity
purposes of the Borrower and its Subsidiaries; provided, that no
proceeds of any Revolving Loans shall be used to pay or prepay obligations of
the Borrower or any of its Subsidiaries under or with respect to any CAD
Agreement; provided further, that nothing
herein shall prohibit the use of cash and Cash Equivalents of the Borrower and
its Subsidiaries as of the Amendment No. 1 Effective Date to make any scheduled
payments under such CAD Agreements .”
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1.4 Amendment to Section 8.2(b)
of the Credit Agreement. Section 8.2(b) of the Credit
Agreement is hereby amended by deleting such section in its entirety and by
replacing it with the following:
“(b) unsecured
Indebtedness (i) incurred in the ordinary course of business by the
Borrower and any of its Subsidiaries (including open accounts extended by
suppliers on normal trade terms in connection with purchases of goods and
services that are not overdue for a period of more than 90 days or, if overdue
for more than 90 days, as to which a dispute exists and adequate reserves in
conformity with GAAP or IFRS, as applicable, have been established on the books
of the Borrower or such Subsidiary), (ii) in respect of performance, surety
or appeal bonds provided in the ordinary course of business, but excluding (in
each case described in this clause (b)),
unsecured Indebtedness incurred through the borrowing of money or the incurrence
of Guarantee Obligations in respect thereof or (iii) incurred in connection with
CAD Agreements in an aggregate amount for all CAD Agreements during the term of
this Agreement not to exceed $12,000,000;”
1.5 Addition of Section 8.19 to
the Credit Agreement. The Credit Agreement is hereby amended
by adding the following new Section 8.19 immediately following Section 8.18 of
the Credit Agreement:
“Section
8.19. Limitations on Funds Held in Accounts Outside the United
States. The Borrower will not permit the amount of cash and
Cash Equivalents held in deposit accounts maintained in the name of the Borrower
or any of its Subsidiaries located in jurisdictions outside the United States to
exceed as of the last Business Day of any calendar month, in the aggregate, an
amount in excess of 50 percent of the aggregate of all cash and Cash Equivalents
held in all deposit accounts maintained in the name of the Borrower or any of
its Subsidiaries, whether such accounts are located in the United States or
outside the United States. ”
Section
2. Effectiveness.
2.1 Conditions Precedent.
The effectiveness of this Amendment is subject to the satisfaction of the
following conditions precedent:
(i) Amendment
Executed. This Amendment shall have been executed by the
Borrower, the Administrative Agent and the Required Lenders and acknowledged by
each Subsidiary Guarantor, and counterparts hereof as so executed shall have
been delivered to the Administrative Agent.
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(ii) Fees. The
Borrower shall have paid to the Administrative Agent (i) an amendment fee of
$200,000 in connection with the amendments set forth in Section 1 hereto and
(ii) all other fees and expenses due and payable in connection with the
preparation and negotiation of this Amendment and the other documents being
executed or delivered in connection herewith, including, without limitation, the
reasonable fees and expenses of counsel to the Administrative
Agent.
(iii) Opinion. The
Administrative Agent shall have received a written opinion (addressed to the
Administrative Agent and the Lenders and dated as of the Amendment Effective
Date) of Xxxxxx Godward Kronish LLP, counsel to the Borrower, covering this
Amendment and the transactions contemplated herein as the Administrative Agent
shall reasonably request.
(iv) Other
Matters. The Borrower shall have provided such other items and
shall have satisfied such other conditions as may be reasonably required by the
Administrative Agent.
2.2 Amendment Effective
Date. This Amendment shall be effective on the date (the
“Amendment Effective
Date”) upon which the conditions precedent set forth in Section 2.1 above
are satisfied. Unless otherwise specifically set forth herein, each
of the amendments and other modifications set forth in this Amendment shall be
effective on and after the Amendment Effective Date.
Section
3. Miscellaneous.
3.1 Representations and
Warranties. The Borrower and each Subsidiary Guarantor, by
signing below, hereby represents and warrants to the Administrative Agent and
the Lenders that:
(i) each of
the Borrower and each Subsidiary Guarantor has the legal power and authority to
execute and deliver this Amendment;
(ii) the
officers executing this Amendment on behalf of the Borrower and each Subsidiary
Guarantor have been duly authorized to execute and deliver the same and bind the
Borrower and such Subsidiary Guarantor with respect to the provisions hereof, as
applicable;
(iii) the
execution and delivery hereof by the Borrower and each Subsidiary Guarantor and
the performance and observance by the Borrower and each Subsidiary Guarantor of
the provisions hereof do not and will not (a) violate or contravene any
applicable law, (b) violate or contravene any organizational documents of such
Person or any shareholder agreement, voting trust or similar arrangement
applicable to such Person’s Equity Interests or (c) conflict with or result
in a breach or contravention of, or require any payment to be made under, any
material Contractual Obligation of any such Person, except in the case of
clauses (a) and (c), any of the foregoing which could not reasonably be expected
to have a Material Adverse Effect;
(iv) no
Default or Event of Default exists under the Credit Agreement except as has been
duly waived in writing by the parties prior to the date hereof, nor will any
occur immediately after the execution and delivery of this Amendment or by the
performance or observance of any provision hereof;
(v) neither
the Borrower nor any Subsidiary Guarantor has any claim or offset against, or
defense or counterclaim to, any obligations or liabilities of the Borrower or
such Subsidiary Guarantor under the Credit Agreement or any other Loan
Document;
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(vi) this
Amendment constitutes a valid and binding obligation of the Borrower in every
respect, enforceable in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency or other similar laws of
general application affecting the enforcement of creditors’ rights or by general
principles of equity limiting the availability of equitable remedies;
and
(vii) each of
the representations and warranties set forth in Article VI of the Credit
Agreement is true and correct in all material respects as of the date hereof,
except to the extent that any thereof expressly relate to an earlier
date.
3.2 Continuing Effect; No Other
Amendments. Except as expressly amended hereby, all of the
terms and provisions of the Credit Agreement are and shall remain in full force
and effect and be unaffected hereby. The amendments provided for
herein are limited to the specific provisions of the Credit Agreement specified
herein and to the extent specified herein and shall not constitute a waiver or
an amendment of, or an indication of the Administrative Agent’s and the Lenders’
willingness at any other time to amend or waive any other provisions of, the
Credit Agreement.
3.3 Subsidiary Guarantor
Acknowledgment. Each Subsidiary Guarantor, by signing this
Amendment:
(i) consents
to, agrees to and acknowledges the terms of this Amendment;
(ii) acknowledges
and agrees that all of the Loan Documents to which such Subsidiary Guarantor is
a party or otherwise bound shall continue in full force and effect and that all
of such Subsidiary Guarantor’s obligations thereunder shall be valid and
enforceable and shall not be impaired or limited by the execution or
effectiveness of this Amendment;
(iii) represents
and warrants to the Administrative Agent and the Lenders that all
representations and warranties made by such Subsidiary Guarantor and contained
in this Amendment or any other Loan Document to which it is a party are true and
correct in all material respects on and as of the Amendment Effective Date to
the same extent as though made on and as of the Amendment Effective Date, except
to the extent that any thereof expressly relate to an earlier date;
and
(iv) acknowledges
and agrees that (A) notwithstanding the conditions to effectiveness set
forth in this Amendment, the consent of such Subsidiary Guarantor is not
required by the terms of the Credit Agreement or any other Loan Document to
which such Subsidiary Guarantor is a party to give effect to the amendments to
the Credit Agreement effected pursuant to this Amendment and (B) nothing in
the Credit Agreement, this Amendment or any other Loan Document shall be deemed
to require the consent of such Subsidiary Guarantor to any future amendments or
modifications to the Credit Agreement
3.4 Reference to
Agreement. The Credit Agreement and any and all other
documents or instruments now or hereafter executed and delivered pursuant to the
terms hereof or pursuant to the terms of the Credit Agreement, as amended
hereby, are hereby amended so that any reference to the Credit Agreement shall
mean a reference to the Credit Agreement, as amended hereby.
3.5 Severability. Any
provision of this Amendment held by a court of competent jurisdiction to be
invalid or unenforceable shall not impair or invalidate the remainder of this
Amendment and the effect thereof shall be confined to the provision so held to
be invalid or unenforceable.
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3.6 Successors and
Assigns. This Amendment is binding upon and shall inure to the
benefit of the Borrower, the Administrative Agent and the Lenders and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of the Lenders.
3.7 Release. The
Borrower and each Subsidiary Guarantor, by signing below, hereby waives and
releases the Administrative Agent and each of the Lenders and their respective
Related Parties from any and all actions, causes of action, claims, demands,
damages offsets, defenses, counterclaims and liabilities of whatever kind or
nature, in law or in equity, now known or unknown, suspected or unsuspected to
the extent that any of the foregoing arises from any action or failure of to act
by any of the Related Persons on or prior to the date of the Amendment No. 1
Effective Date, such waiver and release being with full knowledge and
understanding of the circumstances and effect thereof and after having consulted
legal counsel with respect thereto.
3.8 Waiver. Upon
the effectiveness of this Amendment, the Administrative Agent and the Required
Lenders waive any non-compliance of the Borrower with the covenant set forth in
Section 8.1 of the Credit Agreement as of December 31, 2007 and any Event of
Default under Section 9.1(c) of the Credit Agreement resulting
therefrom.
3.9 Entire
Agreement. This Amendment, together with the Credit Agreement
and the other Loan Documents integrate all the terms and conditions mentioned
herein or incidental hereto and supersede all oral representations and
negotiations and prior writings with respect to the subject matter
hereof.
3.10 Counterparts This
Amendment may be executed in any number of counterparts, by different parties
hereto in separate counterparts and by facsimile or electronic signature, each
of which when so executed and delivered shall be deemed to be an original and
all of which taken together shall constitute but one and the same
agreement.
3.11 Governing
Law. THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW
YORK. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE BORROWER
AND EACH SUBSIDIARY GUARANTOR HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY
CLAIM TO ASSERT THAT THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF NEW
YORK GOVERNS THIS AMENDMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
3.12 JURY
TRIAL WAIVER. EACH OF THE PARTIES TO THIS AMENDMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AMENDMENT OR ANY OF THE OTHER
LOAN DOCUMENTS (INCLUDING, WITHOUT LIMITATION, ANY AMENDMENTS, WAIVERS OR OTHER
MODIFICATIONS RELATING TO ANY OF THE FOREGOING), OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
3.13 Ratification.
(i) Except as
specifically modified by this Amendment, the Credit Agreement and each other
Loan Document is hereby ratified and confirmed in all respects and shall
continue to apply with full force and effect.
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(ii) Each
Subsidiary Guarantor acknowledges that its obligations under the Guaranty are
not impaired or adversely affected by this Amendment, and such Guaranty is, and
after giving effect to this Amendment shall continue to be, in full force and
effect and is hereby confirmed and ratified in all respects.
3.14 Headings
Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this
Amendment.
[Signature
pages follow.]
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IN WITNESS WHEREOF, this Amendment has
been duly executed and delivered as of the date first above
written.
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MIPS
TECHNOLOGIES, INC.,
as
the Borrower
By: /s/ XXXX
XXXXXXXX
Name:
Xxxx Xxxxxxxx
Title:
President and Chief Executive Officer
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JEFFERIES
FINANCE LLC,
as
the Administrative Agent and as a Lender
By:
/s/
E. XXXXXX XXXX
Name:
E. Xxxxxx Xxxx
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Each
of the undersigned Subsidiary Guarantors acknowledges the terms of and
consents to the foregoing:
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MIPS
TECHNOLOGIES HOLDING LLC
By: /s/ XXXXXX X. XXXXXXX
Name: Xxxxxx X.
Xxxxxxx
Title: Manager
MIPS
TECHNOLOGIES INTERNATIONAL AG
By: /s/ XXXXXXXX XXXXXXX
Name: Xxxxxxxx
Xxxxxxx
Title: Director
By: /s/ XXXXXX X. XXXXXXX
Name: Xxxxxx X.
Xxxxxxx
Title:
Director
