AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT
EXHIBIT
10.1
AMENDMENT
NO. 1
TO
This Amendment
No. 1 to
Loan and Security Agreement (this
“Amendment”)
is entered into December 18, 2008, by and between MIPS
Technologies, Inc., a Delaware corporation (“Borrower”),
and Silicon
Valley Bank, (“Bank”). Capitalized
terms used herein without definition shall have the same meanings given them in
the Loan Agreement (as defined below).
Recitals
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A.
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Borrower
and Bank have entered into that certain Loan and Security Agreement dated
as of July 3, 2008 (the “Loan
Agreement”), pursuant to which the Bank has agreed to extend and
make available to Borrower certain advances of
money.
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B.
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Borrower
desires that Bank amend the Loan Agreement upon the terms and conditions
more fully set forth herein.
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C.
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Subject
to the representations and warranties of Borrower herein and upon the
terms and conditions set forth in this Amendment, Bank is willing to amend
the Loan Agreement.
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Agreement
NOW, THEREFORE, in
consideration of the foregoing Recitals and intending to be legally bound, the
parties hereto agree as follows:
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1.
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Amendments
to Loan Agreement.
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1.1
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Section 13.1
(Definitions). Subsection (e) of the definition of
Permitted Investments is amended in its entirety and replaced by the
following:
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“(e) (i)
Investments in or to Borrower or any Guarantor by Borrower or any of its
Subsidiaries, (ii) Investments by Borrower or any Guarantor in any other
Subsidiary in the aggregate not in excess of $5,000,000, provided
that, for so long as Borrower’s consolidated, unrestricted cash and Cash
Equivalents are not less than $14,000,000 (measured at the end of each quarter,
net of all Advances, and without reference to any availability under the
Revolving Line), such aggregate amount of Investment permitted under this
subsection (e)(ii) shall be: (1) commencing on January 1, 2009, $10,000,000 and
(2) commencing on April 1, 2009, $13,500,000; and (iii) Investments by any
Subsidiary of Borrower that is not a Guarantor in another Subsidiary of
Borrower.”
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1.2
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Exhibit E to Loan Agreement
(Compliance Certificate). Exhibit E (“Compliance
Certificate”) of the Loan Agreement is amended in its entirety by deleting
it and replacing it with Exhibit E
attached hereto.
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2.
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Borrower’s
Representations And Warranties.
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2.1
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Borrower
represents and warrants that:
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(a)
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immediately
upon giving effect to this Amendment (i) the representations and
warranties contained in the Loan Documents are true, accurate and complete
in all material respects as of the date hereof (except to the extent such
representations and warranties relate to an earlier date, in which case
they are true and correct as of such date), and (ii) no Event of
Default has occurred and is
continuing;
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(b)
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Borrower
has the corporate power and authority to execute and deliver this
Amendment and to perform its obligations under the Loan Agreement, as
amended by this Amendment;
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(c)
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the
certificate of incorporation, bylaws and other organizational documents of
Borrower delivered to Bank in connection with the execution of the Loan
Agreement, remain true, accurate and complete and have not been amended,
supplemented or restated and are and continue to be in full force and
effect;
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(d)
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the
execution and delivery by Borrower of this Amendment and the performance
by Borrower of its obligations under the Loan Agreement, as amended by
this Amendment, have been duly authorized by all necessary corporate
action on the part of Borrower;
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(e)
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this
Amendment has been duly executed and delivered by the Borrower and is the
binding obligation of Borrower, enforceable against it in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium or other similar laws
of general application and equitable principles relating to or affecting
creditors’ rights; and
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(f)
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as
of the date hereof, it has no defenses against the obligations to pay any
amounts under the Obligations. Borrower acknowledges that Bank
has acted in good faith and has conducted in a commercially reasonable
manner its relationships with Borrower in connection with this Amendment
and in connection with the Loan
Documents.
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2.2
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Borrower
understands and acknowledges that Bank is entering into this Amendment in
reliance upon, and in partial consideration for, the representations and
warranties in Section 2.1, and agrees that such reliance is reasonable and
appropriate.
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3.
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Limitation. The
amendments set forth in this Amendment shall be limited precisely as
written and shall not be deemed (a) to be a waiver or modification of any
other term or condition of the Loan Agreement or of any other instrument
or agreement referred to therein or to prejudice any right or remedy which
Bank may now have or may have in the future under or in connection with
the Loan Agreement or any instrument or agreement referred to therein; or
(b) to be a consent to any future amendment or modification or waiver to
any instrument or agreement the execution and delivery of which is
consented to hereby, or to any waiver of any of the provisions
thereof. Except as expressly amended hereby, the Loan Agreement
shall continue in full force and
effect.
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4.
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Effectiveness. This
Amendment shall become effective upon the satisfaction of all the
following conditions precedent:
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4.1
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Amendment. Borrower
and Bank shall have duly executed and delivered this Amendment to
Bank.
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4.2
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Variance
Fee. Borrower shall have paid to Bank a variance fee in
the amount of $2,500.
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4.3
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Bank
Expenses. Borrower shall have paid all Bank Expenses
incurred through the date of this
Amendment.
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5.
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Counterparts. This
Amendment may be signed in any number of counterparts, and by different
parties hereto in separate counterparts, with the same effect as if the
signatures to each such counterpart were upon a single
instrument. All counterparts shall be deemed an original of
this Amendment.
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6.
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Integration. This
Amendment and any documents executed in connection herewith or pursuant
hereto contain the entire agreement between the parties with respect to
the subject matter hereof and supersede all prior agreements,
understandings, offers and negotiations, oral or written, with respect
thereto and no extrinsic evidence whatsoever may be introduced in any
judicial or arbitration proceeding, if any, involving this Amendment;
except that any financing statements or other agreements or instruments
filed by Bank with respect to Borrower shall remain in full force and
effect.
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7.
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Governing
Law; Venue. THIS
AMENDMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. Borrower
and Bank each submit to the exclusive jurisdiction of the State and
Federal courts in Santa Xxxxx County,
California.
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[Signature page
follows.]
IN WITNESS WHEREOF, the
parties hereto have caused this Amendment to be executed as of the date first
written above.
| Borrower: |
MIPS
Technologies, Inc.
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| a Delaware corporation | |||
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By:
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/s/ XXXXX XXXXXX | |
| Printed Name: | Xxxxx Xxxxxx | ||
| Title: | CFO | ||
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Bank:
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Silicon
Valley Bank
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By:
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/s/ XXXX XXXXXXXX | |
| Printed Name: | Xxxx Xxxxxxxx | ||
| Title: | Relationship Manager | ||
EXHIBIT E TO AMENDMENT NO.
1
EXHIBIT E - COMPLIANCE
CERTIFICATE
TO: SILICON
VALLEY
BANK Date: ___________
FROM: MIPS
TECHNOLOGIES, INC.
The
undersigned authorized officer of MIPS Technologies, Inc. (“Borrower”) certifies
that under the terms and conditions of the Loan and Security Agreement between
Borrower and Bank (the “Agreement ”), (1) Borrower is in complete compliance for
the period ending _______________ with all required covenants except as noted
below, (2) there are no Events of Default, (3) all representations and
warranties in the Agreement are true and correct in all material respects on
this date except as noted below; provided, however, that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof; and
provided, further that those representations and warranties expressly referring
to a specific date shall be true, accurate and complete in all material respects
as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed
all required tax returns and reports (or has been granted an extension to file
such tax return and reports), and Borrower has timely paid all foreign, federal,
state and local taxes, assessments, deposits and contributions owed by Borrower
except as otherwise permitted pursuant to the terms of Section 5.9 of the
Agreement, and (5) no Liens have been levied or claims made against Borrower or
any of its Subsidiaries relating to unpaid employee payroll or benefits of which
Borrower has not previously provided written notification to
Bank. Attached are the required documents supporting the
certification. The undersigned certifies that these are prepared in
accordance with GAAP consistently applied from one period to the next except as
explained in an accompanying letter or footnotes. The undersigned
acknowledges that no borrowings may be requested at any time or date of
determination that Borrower is not in compliance with any of the terms of the
Agreement, and that compliance is determined not just at the date this
certificate is delivered. Capitalized terms used but not otherwise
defined herein shall have the meanings given them in the Agreement.
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Please
indicate compliance or qualification status by circling Yes/No under
“Complies” or ”Qualifies” column.
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Reporting
Covenants
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Required
by*
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Complies
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Borrowing
Base Certificate
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If any amount is outstanding
under the Revolving Line:
30
days after month end
Otherwise:
5
days prior to borrowing under the Revolving Line
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Yes No
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A/R
& A/P Agings plus Deferred Revenue
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With
every Borrowing Base Certificate
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Yes No
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10K
(or link thereto)
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5
days after SEC filing or 90 days after FYE
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Yes No
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10Q
(or link thereto)
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5
days after SEC filing or 45 days after FQE
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Yes No
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Compliance
Certificate
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With
every 10K or 10Q report
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Yes No
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Consolidating
Financial Statements
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With
every 10K or 10Q report
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Yes No
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Royalty
Trend Report
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30
days after FQE
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Yes No
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Annual
financial projections
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90
days after FYE or 10 days after Board approval
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Yes No
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FYE=Fiscal
Year End FQE=Fiscal Quarter
End *
If more than one deadline is indicated, the earlier deadline is the
required deadline.
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Financial
Covenants
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Required
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Actual
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Complies
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Maintain
at the end of each quarter:
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Minimum Fixed Charge
Coverage
(rolling
two fiscal quarters’ basis)
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FQE
09/30/08: 1.25
to 1.00
FQE
12/31/08: 1.25
to 1.00
Following
FQEs: 1.50
to 1.00
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_____:1.00
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Yes No
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Maximum
Senior Debt Leverage Ratio
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2.00 to 1.00
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_____:1.00
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Yes No
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Minimum
Adjusted Quick Ratio
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FQE
09/30/08: 0.65
to 1.00
FQE
12/31/08: 0.75
to 1.00
FQE
03/31/09: 0.75
to 1.00
Following
FQEs: 1.00
to 1.00
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_____:1.00
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Yes No
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Other
Items
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Required
to Qualify
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Actual
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Qualifies
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Increase
in Permitted Investments (e)(ii)
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Consolidated
cash + Cash Equivalents at FQE >= $14,000,000
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$___________
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Yes No
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The
following financial covenant analys[is][es] and information set forth in
Schedule 1 attached hereto are true and accurate as of the date of this
Certificate.
The
following are the exceptions with respect to the certification
above: (if none, state “No exceptions to note.”)
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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MIPS
Technologies, Inc.
By:
Name:
Title:
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BANK
USE ONLY
Received
by: ________________________
authorized
signer
Date: ____________________________
Verified:
____________________________
authorized
signer
Date: __________________________
Compliance
Status: Yes No
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Schedule 1 to Exhibit E -
Compliance Certificate
Financial Covenants of
Borrower
In the
event of a conflict between this Schedule and the Loan Agreement, the terms of
the Loan Agreement shall govern.
Dated: ____________________
I. Calculation
of Quick Assets
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A.
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Aggregate
value of the unrestricted cash and Cash Equivalents of Borrower and its
Subsidiaries (not less than 50% of which are held in the US)
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$____________
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B.
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Aggregate
value of the gross accounts receivable of Borrower and its
Subsidiaries
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$____________
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C.
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Aggregate
value of the Investments with maturities of fewer than 12 months
of
Borrower and it Subsidiaries
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$____________
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D.
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Quick
Assets (the sum of lines A through C)
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$____________
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* * * * *
II. Calculation of EBITDA (on a
rolling-2 quarter basis)
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A.
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Net
Income
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$____________
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B.
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To
the extent included in the determination of Net Income
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1. Interest
Expense
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$____________
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2. Consolidated
income taxes
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$____________
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3. Amortization
expense
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$____________
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4. Depreciation
expense
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$____________
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5.
All other non-cash charges (including non-cash stock compensation
expense)
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$____________
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6. Non-cash
charges for amortization of amounts in the Founders Deferral Escrow
Account if constituting employee compensation
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$____________
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7. The
sum of lines 1 through 6
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$____________
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C.
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EBITDA
(line A plus line B.7)
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$____________
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* * * * *
III. Fixed Charge Coverage Ratio
Covenant (Section 6.7(a) of Loan Agreement)
Required:
Fixed
Charge Coverage Ratio as at the last day of any period of two consecutive fiscal
quarters ending with any fiscal quarters set forth below to be not less than the
ratio set forth below opposite such fiscal quarters:
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Fiscal Quarter Ending
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Fixed Charge Coverage
Ratio
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September
30, 2008
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1.25:1.00
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December
31, 2008
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1.25:1.00
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March
31, 2009 and thereafter
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1.50:1.00
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Actual:
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A.
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EBITDA
(from Line II.C above)
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$____________
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B.
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Unfunded
capital expenditures
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$____________
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C.
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Line
A minus Line B
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$____________
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D.
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Scheduled
payments of principal and interest on all Indebtedness (for the same two
rolling quarters, but excluding the pay-off or pre-payment of Indebtedness
to Jefferies Finance LLC on or before July 3, 2008)
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$____________
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E.
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Fixed
Charge Coverage Ratio
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_____:1.00
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Is line
III.E equal to or greater
than the required ratios set forth above? (please circle
answer)
No, not in
compliance Yes,
in compliance
* * * * *
IV. Senior Debt Leverage Ratio
(Section 6.7(b) of Loan Agreement)
Required:
Senior
Debt Leverage Ratio of not more than 2.00:1.00 as of the last day of any fiscal
quarter
Actual:
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A.
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All
Indebtedness (including Advances and Term Loans) owed to
banks
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$____________
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B.
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Capital
lease obligations
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$____________
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C.
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Sum
of Line A plus Line B
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$____________
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D.
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EBITDA
(line II.C above) annualized
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$____________
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E.
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Senior
Debt Leverage Ratio (line C divided by line D)
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_____:1.00
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Is line
IV.E equal to or less
than the required ratios set forth above? (please circle
answer)
No, not in
compliance Yes, in compliance
* * * * *
V. Adjusted Quick Ratio (Section
6.7(c) of Loan Agreement)
Required:
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Fiscal Quarter Ending
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Adjusted Quick Ratio
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September
30, 2008
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0.65:1.00
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December
31, 2008
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0.75:1.00
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March
31, 2009
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0.75:1.00
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June
30, 2009 and thereafter
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1.00:1.00
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Actual:
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A.
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Quick
Assets (Line I.D above)
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$____________
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B.
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Current
Liabilities (as defined in the Agreement)
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$____________
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C.
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Deferred
Revenue
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$____________
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D.
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Line
B minus line C
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$____________
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E.
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Adjusted
Quick Ratio (line A divided by line D)
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_____:1.00
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Is line
V.G equal to or greater
than the number required in the table above? (please circle
answer)
No,
not in
compliance
Yes, in compliance
* * * * *
