Exhibit 10.31

SIXTH AMENDMENT

TO

SECOND AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

THIS SIXTH AMENDMENT to Second Amended and Restated Loan and Security Agreement
(this “Amendment”) is entered into this 28 day of June, 2010 (the “Amendment
Date”), by and between SILICON VALLEY BANK (“Bank”) and QUICKLOGIC CORPORATION,
a Delaware corporation (“Borrower”), whose address is 1277 Orleans Drive,
Sunnyvale, California 94089-1138.

RECITALS

A. Borrower and Bank have previously entered into that certain Second Amended
and Restated Loan and Security Agreement dated as of June 30, 2006 (as amended,
modified, supplemented or restated, from time to time, the “Loan Agreement”).

B. Bank has extended credit to Borrower for the purposes permitted in the Loan
Agreement.

C. Borrower has requested that Bank amend the Loan Agreement and Bank has agreed
to so amend certain provisions of the Loan Agreement, but only to the extent, in
accordance with the terms, subject to the conditions and in reliance upon the
representations and warranties set forth below.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:

1. Definitions. Capitalized terms used but not defined in this Amendment shall
have the meanings given to them in the Loan Agreement.

2. Amendments to Loan Agreement.

2.1 Section 2.3 (Interest Rate; Payments). Section 2.3(c) of the Loan Agreement
is hereby amended in its entirety and replaced with the following:

(c) Interest Rates. Each Advance shall bear interest on the outstanding
principal amount thereof from the date when made, continued or converted until
paid in full at a rate per annum equal to (i) with respect to Prime Rate
Advances, the Prime Rate plus the Prime Rate Margin, or (ii) with respect to
LIBOR Advances, the LIBOR Rate plus the LIBOR Rate Margin, as the case may be.
On and after the expiration of any Interest Period applicable to any LIBOR
Advance outstanding on the date of occurrence of an Event of Default or
acceleration of the Obligations, the Effective Amount of such LIBOR Advance
shall, during the continuance of such Event of Default or after acceleration,
bear interest in accordance with Section 2.3(d).

2.2 Section 6.2 (Financial Statements, Reports, Certificates).
Section 6.2(a)(iv) of the Loan Agreement is hereby amended in its entirety and
replaced with the following:

(iv) Borrower’s budget and financial projections as of the earlier of: (A) 60
days after the last day of Borrower’s fiscal year for the subject year and
(B) the date provided to Borrower’s Board of Directors for the subject fiscal
year;

 

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2.3 Section 6.8 (Financial Covenants). Section 6.8 of the Loan Agreement is
hereby amended in its entirety and replaced with the following:

6.8 Financial Covenants. Borrower will maintain:

(a) Tangible Net Worth. A Tangible Net Worth of at least $15,000,000, tested as
of the last day of each quarter.

(b) Quick Ratio (Adjusted). A ratio of Quick Assets to Obligations of at least
2.00 to 1.00, tested as of the last day of each month.

(c) Cash. Unrestricted cash or Cash Equivalents at Bank or at any of Bank’s
Affiliates at all times in an amount of at least $8,000,000, tested as of the
last day of each month.

2.4 Section 13 (Definitions). The following definitions set forth in
Section 13.1 of the Loan Agreement are hereby amended in their entirety and
replaced with the following:

“Prime Rate Margin” is one half of one percent (0.50%).

“Revolving Maturity Date” is June 29, 2011.

2.5 Exhibit C (Compliance Certificate). The Compliance Certificate attached as
Exhibit C to the Loan Agreement is hereby amended in its entirety and replaced
with the form of Exhibit C attached to this Amendment.

2.6 Disclosure Letter. The Disclosure Letter delivered in connection with the
Second Amended and Restated Loan and Security Agreement is hereby amended in its
entirety and replaced with the Disclosure Letter attached as Exhibit I to this
Amendment. All references to the Disclosure Letter in the Loan Documents shall
be deemed to refer to the Disclosure Letter attached hereto.

3. Limitation of Amendments.

3.1 The amendments set forth in Section 2, above, are effective for the purposes
set forth herein and shall be limited precisely as written and shall not be
deemed to (a) be a consent to any amendment, waiver or modification of any other
term or condition of any Loan Document, or (b) otherwise prejudice any right or
remedy which Bank may now have or may have in the future under or in connection
with any Loan Document.

3.2 This Amendment shall be construed in connection with and as part of the Loan
Documents and all terms, conditions, representations, warranties, covenants and
agreements set forth in the Loan Documents, except as herein amended, are hereby
ratified and confirmed and shall remain in full force and effect.

 

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4. Representations and Warranties. To induce Bank to enter into this Amendment,
Borrower hereby represents and warrants to Bank as follows:

4.1 Immediately after giving effect to this Amendment (a) 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 (b) no Event of Default has occurred and
is continuing;

4.2 Borrower has the power and authority to execute and deliver this Amendment
and to perform its obligations under the Loan Agreement, as amended by this
Amendment;

4.3 The organizational documents of Borrower delivered to Bank on the Closing
Date remain true, accurate and complete and have not been amended, supplemented
or restated and are and continue to be in full force and effect;

4.4 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;

4.5 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, do not and will not contravene (a) any law or regulation binding on
or affecting Borrower, (b) any contractual restriction with a Person binding on
Borrower, (c) any order, judgment or decree of any court or other governmental
or public body or authority, or subdivision thereof, binding on Borrower, or
(d) the organizational documents of Borrower;

4.6 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, do not require any order, consent, approval, license, authorization
or validation of, or filing, recording or registration with, or exemption by any
governmental or public body or authority, or subdivision thereof, binding on
Borrower, except as already has been obtained or made; and

4.7 This Amendment has been duly executed and delivered by Borrower and is the
binding obligation of Borrower, enforceable against Borrower 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.

5. Costs and Expenses. Borrower shall pay to Bank all of Bank’s out-of-pocket
costs and expenses (including, without limitation, the fees and expenses of its
counsel), arising in connection with the preparation, execution, and delivery of
this Amendment and all related documents.

6. Counterparts. This Amendment may be executed in any number of counterparts
and all of such counterparts taken together shall be deemed to constitute one
and the same instrument.

7. Effectiveness. This Amendment shall be deemed effective upon (a) the due
execution and delivery to Bank of this Amendment by each party hereto, and
(b) Bank’s receipt of a loan fee in the amount of $10,000, fully earned and
payable to Bank as of the Amendment Date.

[Signature page follows.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered as of the date first written above.

 

BANK     BORROWER Silicon Valley Bank     QuickLogic Corporation By:  

 

    By:  

/s/ Ralph S. Marimon

Name:  

 

    Name:  

Ralph S. Marimon

Title:  

 

    Title:  

CFO

Sixth Amendment to Second Amended and Restated Loan and Security Agreement

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered as of the date first written above.

 

BANK     BORROWER Silicon Valley Bank     QuickLogic Corporation By:  

/s/ Rick Freeman

    By:  

 

Name:  

Rick Freeman

    Name:  

 

Title:  

Relationship Manager

    Title:  

 

Sixth Amendment to Second Amended and Restated Loan and Security Agreement

 

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EXHIBIT C

FORM OF COMPLIANCE CERTIFICATE

QUICKLOGIC CORPORATION

 

TO:   

SILICON VALLEY BANK

3003 Tasman Drive

Santa Clara, CA 95054

FROM:   

QUICKLOGIC CORPORATION

1227 Orleans Drive

Sunnyvale, CA 94089-1138

The undersigned authorized officer (“Officer”) of QuickLogic Corporation
(“Borrower”) certifies that under the terms and conditions of the Loan and
Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower is
in complete compliance for the period ending                      with all
required covenants except as noted below and (ii) all representations and
warranties in the Agreement are true and correct in all material respects on
this date, except for representations and warranties made as of a specific
earlier date, which are to be true and correct in all material respects as of
such earlier date. Attached are the required documents supporting the
certification. The Officer certifies that these are prepared in accordance with
Generally Accepted Accounting Principles (GAAP) consistently applied from one
period to the next except as explained in an accompanying letter, footnotes or
year end adjustments. The Officer 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.

Please indicate compliance status by circling Yes/No under “Complies” column.

 

Reporting and Financial Covenants

  

Required

   Complies

Monthly financial statements, Compliance Certificate

  

Monthly within 45 days

   Yes    No

Annual (Audited)

  

Annual within 120 days of FYE

   Yes    No

Board Approved Projections

  

Annual within 60 days of FYE or the date provided to Borrowers’ Board

   Yes    No

Accounts Payable and Accounts Receivable Listings

  

Within 30 days of the end of each month

   Yes    No

10-Q, 10-K, and 8-K

  

Within 5 days after filing with SEC

   Yes    No

Minimum Tangible Net Worth

  

Quarterly; $15,000,000

   Yes    No

Quick Ratio Adjusted

  

Monthly; 2.00 to 1.00

   Yes    No

Minimum Cash

  

Monthly; $8,000,000

   Yes    No

Have there been updates to Borrower’s intellectual property, if appropriate?

   Yes    No

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 no
exceptions exist, state “No exceptions to note.”)

 

 

 

 

 

 

 

 

[Signature page follows]

Exhibit C

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QUICKLOGIC CORPORATION     BANK USE ONLY By:  

 

    Received by:  

 

Name:  

 

    AUTHORIZED SIGNER Title:  

 

    Date:  

 

      Verified:  

 

      AUTHORIZED SIGNER       Date:  

 

      Compliance Status:        Yes        No

Exhibit C

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Schedule 1 to Compliance Certificate

Financial Covenants of Borrower

Dated:                     

 

I. Tangible Net Worth (Section 6.8(a))

Required:            $15,000,000

Actual:

 

  A.   Value of Line I. (Tangible Net Worth)

   $            

Is line A equal to or greater than $15,000,000?

 

             No, not in compliance                 Yes, in compliance

 

II. Adjusted Quick Ratio (Section 6.8(b))

Required:            2:00:1.00

Actual:

 

  A.   Aggregate value of the unrestricted cash and cash equivalents of Borrower
and its Subsidiaries

   $            

  B.   Aggregate value of the net billed accounts receivable of Borrower and its
Subsidiaries

   $            

  C.   Aggregate value of the Investments with maturities of fewer than 12
months of Borrower and it Subsidiaries held at Bank or its affiliates

   $            

  D.   Quick Assets (the sum of lines A through C)

   $            

  E.   Aggregate value of Obligations to Bank

   $            

  F.   Quick Ratio (line D divided by line E)

                 

Is line F equal to or greater than 2.00:1:00?

 

             No, not in compliance

                Yes, in compliance

 

III. Cash (Section 6.8(c))

Required: $8,000,000

Actual:

 

  A. Value of Line III. (Cash)

   $            

Is line A equal to or greater than $8,000,000?

 

             No, not in compliance

                Yes, in compliance

Schedule 1

Exhibit C

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EXHIBIT I

Attached hereto

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DISCLOSURE LETTER

To: Silicon Valley Bank

This amendment to the Disclosure Letter is delivered pursuant to the Sixth
Amendment to the Second Amended and Restated Loan and Security Agreement (the
“Credit Agreement”) dated as of June 30, 2006, by and between QuickLogic
Corporation, as Borrower (“Company”), and Silicon Valley Bank, as Bank. The
items set forth in the attached Schedules represent exceptions, qualifications
and disclosures which are listed herein pursuant to the terms of the Credit
Agreement which are in addition to the Litigation, Permitted Indebtedness,
Permitted Investments and Permitted Liens identified in the Credit Agreement.
Capitalized terms used herein (or in the attached Schedules) and defined in the
Credit Agreement shall have the meanings ascribed in the Credit Agreement,
unless the context otherwise requires.

IN WITNESS WHEREOF, the undersigned has executed this amended Disclosure Letter
as of June 28, 2010.

 

QuickLogic Corporation

a Delaware Corporation

By:  

/s/ Ralph S. Marimon

Name:   Ralph S. Marimon Title:   Chief Financial Officer

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Schedule A

Litigation

To the Borrower’s knowledge, Borrower has no material proceeding, pending or
threatened litigation which is not disclosed in either the Credit Agreement or
the Borrower’s public financial statements filed with the Securities and
Exchange Commission.

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Schedule B

Permitted Indebtedness

To the Borrower’s knowledge, Borrower has no material indebtedness which is not
disclosed in either the Credit Agreement, the Borrower’s public financial
statements filed with the Securities and Exchange Commission or filed under the
Uniform Commercial Code, including but not limited to the following items:

Current debt with Silicon Valley Bank

Lease obligations, including but not limited to:

Avaya, Inc. – PBX lease

International office leases

Orleans Properties, LLC – Sunnyvale facility, including leasehold improvements

De Lage Landen Financial Services – copiers, fax machines, etc.

Pitney Bowes Credit Corporation– mail machine

Mentor – synthesis software for resale

Cadence – design software license

Indebtedness to trade creditors in the ordinary course of business

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Schedule C

Permitted Investments

To the Borrower’s knowledge, Borrower has no material investments which are not
disclosed in either the Credit Agreement or the Borrower’s public financial
statements filed with the Securities and Exchange Commission (other than the
Amkor Investment), including but not limited to the following items:

Investments in Tower Semiconductor ordinary shares and wafer credits. The
Company plans to hold 450,000 shares of Tower to secure favorable wafer pricing
and may decide to sell the remaining 194,543 Tower shares.

Investments, advances, and bank accounts in wholly-owned subsidiaries, including
but not limited to QuickLogie International, Inc., QuickLogic Canada Company,
QuickLogic Kabushiki Kaisha, and QuickLogic (India) Private Limited.

Travel advances and relocation loans to employees

Housing advances to employees in India

Notes receivable of, or prepaid royalties or license fees, and other credit
extensions, to customers and suppliers who are not Affiliates, in the ordinary
course of business.

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Schedule D

Permitted Liens

To the Borrower’s knowledge, Borrower has no material liens which are not
disclosed in either the Credit Agreement, the Borrower’s public financial
statements filed with the Securities and Exchange Commission or filed under the
Uniform Commercial Code, including but not limited to the following items:

Liens for taxes, fees, assessments and other government charges or levies that
are either not delinquent or are being contested in good faith.

Purchase money liens on Equipment or Software.

Liens for Permitted Debt, including Capital Leases and debt with Cadence for EDA
software, with Mentor Grahics for development and support synthesis software and
with other suppliers used to finance our equipment and software purchases,
including but not limited to:

UCC filings by Silicon Valley Bank;

UCC filings by De Lage Landen Financial Services;

Licenses and sublicenses granted in the ordinary course of business;

Leases of subleases granted in the ordinary course of business, including in
connection with Borrower’s leased premises or leased property.

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Schedule E

Business Locations

Borrower currently has offices in California; Texas; Ontario, Canada; Bangalore,
India; London, England; Taiwan; Shanghai, China, Taipei, Taiwan, and Tokyo,
Japan.