Exhibit 10.1

AMENDMENT NO. 2
 
TO
 
LOAN AND SECURITY AGREEMENT AND CONSENT
 
This Amendment No. 2 to Loan and Security Agreement and Consent (this
“Amendment”) is entered into May 7, 2009, by and among MIPS Technologies, Inc.,
a Delaware corporation (“Borrower”), MIPS Technologies Holding LLC, a Delaware
limited liability company (“Guarantor”), 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
 
A.  
Borrower and Bank have entered into that certain Loan and Security Agreement
dated as of July 3, 2008, as amended by that certain Amendment No. 1 to Loan and
Security Agreement dated December 18, 2008 (as so amended and as may be further
amended, restated or modified, the “Loan Agreement”), pursuant to which the Bank
has agreed to extend and make available to Borrower certain advances of money.

 
B.  
In support of Borrower’s Obligations under the Loan Agreement, (i) Guarantor and
Bank have entered into that certain Unconditional Guaranty and Security
Agreement dated as of July 3, 2008 (the “Guaranty”), and Guarantor, Borrower,
and Bank have entered into that certain Uncertificated Security Control
Agreement dated as of July 3, 2008 (the “USCA”).

 
C.  
Borrower has informed Bank that Borrower wishes to sell its analog business
group, comprised of Guarantor and all of Guarantor’s Subsidiaries (such sale,
the “Transaction”), to Synopsys, Inc., a Delaware corporation (the “Buyer”),
pursuant to a Membership Interest Purchase Agreement substantially in the form
of the document received by Bank via e-mail from Borrower on May 6, 2009, at
12:32 p.m. (the “Transaction Document”).

 
D.  
Borrower and Guarantor acknowledge and confirm that Sections 7.1, 7.3, and 7.5
of the Loan Agreement and various sections of the Guaranty and the USCA prohibit
Borrower from entering into the Transaction without Bank’s prior written
consent.

 
E.  
Borrower and Guarantor desire that Bank (i) consent to the Transaction, (ii)
terminate the Guaranty and the USCA, and (iii) amend the Loan Agreement to
modify a financial covenant and make certain other changes, all upon the terms
and conditions more fully set forth herein.

 
F.  
Subject to the representations and warranties of Borrower and Guarantor herein
and upon the terms and conditions set forth in this Amendment, Bank is willing
to consent to the Transaction, to terminate the USCA and the Guaranty, and to
amend the Loan Agreement.

 
Agreement
 
NOW, THEREFORE, in consideration of the foregoing Recitals and intending to be
legally bound, the parties hereto agree as follows:
 
1.  
Consent to Transaction.  Subject to Section 6, Bank hereby grants its consent
(i) to Borrower entering into and consummating the Transaction in accordance
with the Transaction Document and (ii) to the transfer of the membership
interests of Guarantor to the Buyer in connection with the Transaction, free and
clear of any security interest held by Bank under the Loan Documents.  Bank
further agrees that the actions described in (i) and (ii) above, in and of
themselves, shall not be deemed to be an Event of Default under the Loan
Agreement.  The foregoing consent is conditioned on the Transaction closing not
later than May 11, 2009.

 
2.  
Termination of Guaranty, USCA, and related UCC filings.

 
2.1  
Guaranty.  Subject to Section 6, Bank and Guarantor hereby agree that
immediately upon the consummation of the Transaction as consented to by Bank,
the Guaranty shall be terminated.  Following such termination of the Guaranty,
Bank shall file (i) a UCC termination statement with regard to UCC financing
statement 82300091 and (ii) a UCC amendment with regard to UCC financing
statement 82300034 modifying the definition of Guarantor in such financing
statement to be consistent with definition of Guarantor in the Loan Agreement,
as amended pursuant to Section 3.3 below.

 
2.2  
USCA.  Subject to Section 6 of this Amendment, Bank hereby gives notice pursuant
to Section 8(a) of the USCA that immediately upon the consummation of the
Transaction as consented to by Bank,  the USCA shall be terminated.

 
 

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3.  
Amendments to Loan Agreement.

 
3.1  
Section 6.7(c) (Adjusted Quick Ratio).  Section 6.7(c) of the Loan Agreement is
amended in its entirety and replaced by the following:

 
“(c)  Adjusted Quick Ratio.  As of the end of each fiscal quarter, a ratio of
(x) the sum of Quick Assets divided by (y) Current Liabilities minus Deferred
Revenue, which ratio shall be not less than (a) 0.75 to 1.00, for the quarter
ending March 31, 2009, and (b) 1.75 to 1.00 for the quarter ending June 30,
2009, and each quarter ending thereafter.”
 
3.2  
Section 10 (Notices).  Borrower’s notice address in Section 10 of the Loan
Agreement is modified to read as follows:

 
 
“If to Borrower:
(before June 1, 2009)
MIPS Technologies, Inc.
1225 Charleston Road
Mountain View, CA 94043
Attn: General Counsel
Fax:  (650) 567-5154
Email: gail@mips.com
 

 
(on or after June 1, 2009)
MIPS Technologies, Inc.
955 E. Arques Avenue
Sunnyvale, CA 94085-4521
Attn: General Counsel
Fax:  ______________
Email: gail@mips.com”
 

3.3  
Section 13 (Definitions).  The definition of “Guarantor” in Section 13.1 of the
Loan Agreement is amended in its entirety by deleting it and replacing it with
the following:

 
““Guarantor” is any present or future guarantor of the Obligations.”
 
3.4  
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 A attached hereto.

 
4.  
Borrower’s Representations And Warranties.

 
4.1  
Borrower represents and warrants that:

 
(a)  
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;

 
(b)  
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;

 
(c)  
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;

 
(d)  
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)  
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;

 
(f)  
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; and

 
(g)  
the Transaction, and the executed documents effecting the Transaction, shall
not, on an individual basis or together with one or more other executed
documents, (i) substantially differ from the Transaction Document or (ii) differ
from the reasonable expectation of Bank in light of the Recitals.

 
4.2  
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 4.1, and agrees that such reliance is reasonable and
appropriate.

 
5.  
Limitation.  The amendments and the consent 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.  This Amendment is a Loan Document and any breach of this Amendment by
Borrower shall be an immediate Event of Default under the Loan Agreement.

 
6.  
Effectiveness.  This Amendment shall become effective upon the satisfaction of
all the following conditions precedent:

 
6.1  
Amendment.  Borrower and Bank shall have duly executed and delivered this
Amendment to Bank.

 
6.2  
Transaction Document.  Borrower shall have delivered to Bank a true, accurate
and complete copy of the executed document effecting the Transaction together
with a redline comparison of the foregoing executed document to the Transaction
Document.

 
6.3  
Bank Expenses.  Borrower shall have paid all Bank Expenses incurred through the
date of this Amendment.

 
7.  
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.

 
8.  
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.

 
9.  
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 Clara County, California.

 
[Signature page to Amendment No. 2 to Loan and Security Agreement and Consent]
 
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
as of the date first written above.
 
 
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Borrower:
MIPS Technologies, Inc.
            a Delaware corporation          
 
By:
/s/   JOHN BOURGOIN       Printed Name:  John Bourgoin       Title:  Chief
Executive Officer          

 
 
Guarantor:
MIPS Technologies Holding LLC
            a Delaware limited liability company             By:  MIPS
Technologies, Inc., its sole member           
 
By:
/s/   MAURY AUSTIN       Printed Name:  Maury Austin       Title:  Chief
Financial Officer          

 

Bank:
Silicon Valley Bank
         
 
By:
/s/   NICK TSIAGKAS       Printed Name:  Nick Tsiagkas       Title: 
Relationship Manager        

 

 
 

 
 
 
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EXHIBIT A TO AMENDMENT NO. 2
 
EXHIBIT E TO LOAN AGREEMENT - 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.

Please indicate compliance or qualification status by circling Yes/No under
“Complies” or ”Qualifies” column.
 
Reporting Covenants
Required by*
Complies
     
Borrowing Base Certificate
If any amount is outstanding under the Revolving Line:
30 days after month end
Otherwise:
5 days prior to borrowing under the Revolving Line
Yes   No
A/R & A/P Agings plus Deferred Revenue
With every Borrowing Base Certificate
Yes   No
10K (or link thereto)
5 days after SEC filing or 90 days after FYE
Yes   No
10Q (or link thereto)
5 days after SEC filing or 45 days after FQE
Yes   No
Compliance Certificate
With every 10K or 10Q report
Yes   No
Consolidating Financial Statements
With every 10K or 10Q report
Yes   No
Royalty Trend Report
30 days after FQE
Yes   No
Annual financial projections
90 days after FYE or 10 days after Board  approval
Yes   No
 
FYE=Fiscal Year End     FQE=Fiscal Quarter
End                                                                                     *
If more than one deadline is indicated, the earlier deadline is the required
deadline.

Financial Covenants
Required
Actual
Complies
Maintain at the end of each quarter:
     
Minimum Fixed Charge Coverage
(rolling two fiscal quarters’ basis)
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
_____:1.00
Yes   No
 Maximum Senior Debt Leverage Ratio
                        2.00 to 1.00
_____:1.00
Yes   No
Minimum Adjusted Quick Ratio
FQE 03/31/09:                                0.75 to 1.00
FQE 06/30/09:                                1.75 to 1.00
Following FQEs:                           1.75 to 1.00
_____:1.00
Yes   No

Other Items
Required to Qualify
Actual
Qualifies
Increase in Permitted Investments (e)(ii)
Consolidated cash + Cash Equivalents at FQE >= $14,000,000
$___________
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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MIPS Technologies, Inc.
 
 
By:
Name:
Title:
 
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 to Loan Agreement - 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
 
A.
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)
 
    $____________
B.
Aggregate value of the gross 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
 
    $____________
D.
Quick Assets (the sum of lines A through C)
    $____________

*           *           *           *           *

II.           Calculation of EBITDA  (on a rolling-2 quarter basis)

A.
Net Income
$____________
B.
To the extent included in the determination of Net Income
   
1.           Interest Expense
 
$____________
 
2.           Consolidated income taxes
 
$____________
 
3.           Amortization expense
 
$____________
 
4.           Depreciation expense
 
$____________
 
5.            All other non-cash charges (including non-cash stock compensation
expense)
 
$____________
 
6.           Non-cash charges for amortization of amounts in the Founders
Deferral Escrow Account if constituting employee compensation
 
$____________
 
7.           The sum of lines 1 through 6
 
$____________
C.
EBITDA (line A plus line B.7)
$____________

*           *           *           *           *

 
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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:

Fiscal Quarter Ending
 
Fixed Charge Coverage Ratio
September 30, 2008
1.25:1.00
December 31, 2008
1.25:1.00
March 31, 2009 and thereafter
1.50:1.00

Actual:
A.
EBITDA (from Line II.C above)
 
$____________
B.
Unfunded capital expenditures
 
    $____________
C.
Line A minus Line B
 
$____________
D.
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)
 
$____________
E.
Fixed Charge Coverage Ratio
_____:1.00
 

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:
A.
All Indebtedness (including Advances and Term Loans)  owed to banks
 
$____________
B.
Capital lease obligations
 
$____________
C.
Sum of Line A plus Line B
 
$____________
D.
EBITDA (line II.C above) annualized
 
    $____________
E.
Senior Debt Leverage Ratio (line C divided by line D)
 
_____:1.00

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

*           *           *           *           *

 
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V.           Adjusted Quick Ratio (Section 6.7(c) of Loan Agreement)

Required:
Fiscal Quarter Ending
 
Adjusted Quick Ratio
March 31, 2009
0.75:1.00
June 30, 2009 and thereafter
1.75:1.00

Actual:

A.
Quick Assets (Line I.D above)
 
$____________
B.
Current Liabilities (as defined in the Agreement)
 
$____________
C.
Deferred Revenue
 
$____________
D.
Line B minus line C
 
$____________
E.
Adjusted Quick Ratio (line A divided by line D)
 
_____:1.00

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

*           *           *           *           *
 

 
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