Document:

Exhibit 10.16

AMENDMENT NO. 1 
TO 
FIRST AMENDED AND RESTATED  
LOAN AND SECURITY AGREEMENT AND LIMITED WAIVER

This AMENDMENT NO. 1 to FIRST AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT and LIMITED WAIVER (this “Amendment”) is entered into as of  March 18, 2015 and is made by and among SILICON VALLEY BANK, a California corporation (“Bank”), IKANOS COMMUNICATIONS, INC., a Delaware corporation (“Ikanos US”) and IKANOS COMMUNICATIONS (SINGAPORE) PRIVATE LIMITED, (registration no. 200702041W), a company incorporated under the laws of Singapore and a wholly-owned Subsidiary of Ikanos US (“Ikanos Singapore,” and together with Ikanos US, the “Borrowers”).  Capitalized terms used but not defined herein shall have the meanings given to them in the Loan Agreement (as defined below).
RECITALS
		
	A.
	Bank and Borrowers have entered into that certain First Amended and Restated Loan and Security Agreement dated as of October 7, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”).  

		
	B.
	Borrower notified Bank in December 2014 that it anticipated it would likely fail to comply with the covenant set forth in Section 6.7(a) (Adjusted Quick Ratio) of the Loan Agreement for the month ending January 25, 2015 (the “January 2015 AQR Covenant”) and, prior to actual violation of the covenant, Bank agreed to prospectively waive Borrowers’ compliance with the January 2015 AQR Covenant and amend certain other terms of the Loan Agreement, all upon the terms and conditions more fully set forth herein.

		
	C.
	Subject to the representations and warranties and covenants of Borrowers herein and upon the terms and conditions set forth in this Amendment, Bank is willing to amend the Loan and provide a waiver with respect to the January 2015 AQR Covenant, all upon the terms and conditions more fully set forth herein.

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.    LIMITED WAIVER.  Borrowers acknowledge and agree that they failed to comply with the January 2015 AQR Covenant and subject to the terms of Section 6 hereof, Bank hereby waives the January 2015 AQR Covenant.
2.    AMENDMENTS TO LOAN AGREEMENT
2.1    Section 2.5 (Payments; Application of Payments).  Subsection (b) of Section 2.5 of the Loan Agreement is amended and restated in its entirety as follows:
“Application of Payments.  All payments with respect to the Obligations may be applied in such order and manner as Bank shall determine in its sole discretion; provided that with respect to cash collections deposited by Borrower in accordance with Section 6.3(c), 

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such cash collections shall be applied daily against Borrower’s obligations.  Borrower shall have no right to specify the order or the accounts to which Bank shall allocate or apply any payments required to be made by Borrower to Bank or otherwise received by Bank under this Agreement.”

3.    LIMITATION.
3.1    The waiver and amendments set forth in Sections 1 and 2 hereof are effective only for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) to be a forbearance, 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; (b) to be a consent to any future amendment or modification, forbearance 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; or (c) to limit or impair Bank’s right to demand strict performance of all terms and covenants as of any date.    
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 are hereby ratified and confirmed and shall remain in full force and effect.
4.    REPRESENTATIONS AND WARRANTIES.  To induce Bank to enter into this Amendment, each 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 Documents;
4.3    The organizational documents of Borrower delivered to Bank on the Effective 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 Documents 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 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 

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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.
4.8    As of the date hereof, Borrower has no defenses against the obligation to pay any of the amounts constituting all or a part of Borrower’s 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.
5.    COUNTERPARTS.  This Amendment may be executed originally, by facsimile or by other means of electronic transmission, and 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.
6.    EFFECTIVENESS.  This Amendment shall be deemed effective upon (a) the due execution and delivery to Bank of this Amendment by each party hereto, (b) payment by Borrowers of all Bank Expenses (including all reasonable attorneys’ fees and reasonable expenses) incurred through the date of this Amendment; and (c) payment by Borrowers of a waiver fee of $5,000.
7.    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.
8.    GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICT OF LAW.  Borrowers and Bank each submit to the exclusive jurisdiction of the State and Federal courts in Santa Clara County, California.

[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.

IKANOS COMMUNICATIONS, INC., 
a Delaware corporation
By:        /s/ DENNIS ANTHONY BENCALA     
    Name: Dennis Anthony Bencala 
    Title: Chief Financial Officer and Vice  
                      President of Finance
IKANOS COMMUNICATIONS SINGAPORE PRIVATE LIMITED (registration no. 200702041W), 
a company incorporated under the laws of Singapore
By:        /s/ DENNIS ANTHONY BENCALA     
    Name: Dennis Anthony Bencala 
    Title: Chief Financial Officer and Vice  
                      President of Finance

[Signature Page to Amendment No. 1 
to First A&R LSA]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.
SILICON VALLEY BANK, 
a California banking corporation
By:        /s/ DREW BEITO     
    Name: Drew Beito 
    Title:  Vice President

[Signature Page to Amendment No. 1 
to First A&R LSA]ex10-1.htm

Exhibit 10.1

 

	
BUILD-A-BEAR WORKSHOP, INC.
	
Grant Date:
	
 

	RESTRICTED STOCK &	
Employee:
	  
	NON-QUALIFIED STOCK OPTION 	
No. of Shares of Time-Based Restricted Stock:
	  
	AGREEMENT	
Maximum Number of Shares of Performance-Based Restricted Stock:
	  
	  	
No. of Shares Subject to Option:
	  
	  	
Exercise Price of Option:
	
$

 

 

This Agreement will certify that the employee named above (“Employee”) is awarded the total number of restricted shares of common stock, $0.01 par value per share (the “Common Stock”), of Build-A-Bear Workshop, Inc. (the “Company”) designated above (the “Restricted Stock”), and an option to purchase the number of shares of Company Common Stock designated above (the “Option”), pursuant to the Build-A-Bear Workshop, Inc. 2004 Stock Incentive Plan, as amended through the date hereof (the “Plan”), as of the date indicated above (the “Grant Date”) and subject to the terms, conditions and restrictions in the Plan and those set forth below. Any capitalized, but undefined, term used in this Agreement shall have the meaning ascribed to it in the Plan. Employee’s electronic acceptance within 60 days on his/her personal Merrill Lynch account constitutes Employee’s acceptance of this award and acknowledgement of Employee’s agreement to all the terms, conditions and restrictions contained in the Plan and this Agreement. If the Employee does not accept this award on his/her personal Merrill Lynch account within 60 days of the Grant Date, the Employer may revoke this grant.

 

 

	
BUILD-A-BEAR WORKSHOP, INC.

	  	  
	  	  
	  	  
	
By:
	  
	  	
Sharon Price John

	  	
Chief Executive Officer

 

 

Terms and Conditions

 

A.     Terms and Conditions Applicable to Restricted Stock

 

1.     Terms of Restricted Stock Award. Pursuant to action of the Compensation and Development Committee (the “Committee”), the Company awards to the Employee the number of shares of Restricted Stock set forth above. The Restricted Stock is nontransferable by the Employee during the period described below and is subject to the risk of forfeiture as described below. Prior to the time shares become transferable, the shares of Restricted Stock shall bear a legend indicating their nontransferability, and, subject to the terms of this Agreement, if the Employee terminates service as an Employee of the Company prior to the time a restriction lapses, the Employee shall forfeit any shares of Restricted Stock which are still subject to the restrictions at the time of termination of such service.

 

(a) Time-Based Restricted Stock

 

The restrictions on transfer described in this Section A.1 applicable to the Time-Based Restricted Stock awarded above shall lapse and be of no further force and effect as follows, if the Employee is still an employee of the Company on the respective date set forth below, and has been continuously serving as such an employee of the Company during such 12-month period ending on such date:

 

 

 

 

 

	
Date
	  	
Portion of Grant for which Restrictions Lapse on Indicated Date

	
Grant Date
	  	
0

	
[insert date]:
	  	
One-third

	
[insert date]:
	  	
One-third

	
[insert date]:
	  	
One-third

 

 

For avoidance of doubt, on [insert date], one hundred percent (100%) of the Time-Based Restricted Stock shall be transferable by the Employee if the Employee is still an Employee, and has been continuously serving from the Grant Date through [insert date] as an employee of the Company on such date. 

 

Notwithstanding the foregoing, in the event of a Change of Control, all previously granted shares of Time-Based Restricted Stock not yet free of the restrictions of this Section A.1.(a) shall become immediately free of such restrictions.

 

(b) Performance-Based Restricted Stock

 

The restrictions on transfer described in this Section A.1 applicable to the Performance-Based Restricted Stock awarded above shall lapse and be of no further force and effect as follows, if (1) the performance criteria applicable to the Performance-Based Restricted Stock as established by the Committee and included in Exhibit A hereto (the “Performance Criteria”) has been satisfied, and (2) the Employee is still an employee of the Company on the respective date set forth below, and has been continuously serving as such an employee of the Company during such 12-month period ending on such date:

 

	
Date
	  	
Portion of Grant for which Restrictions Lapse on Indicated Date

	
Grant Date
	  	
0

	
[insert date]:
	  	
One-third

	
[insert date]:
	  	
One-third

	
[insert date]:
	  	
One-third

 

For avoidance of doubt, on the date ending [insert date], one hundred percent (100%) of the Performance-Based Restricted Stock shall be transferable by the Employee if (1) the Performance Criteria included in Exhibit A hereto has been satisfied, and (2) the Employee is still an Employee, and has been continuously serving from the Grant Date through [insert date] as an employee of the Company on such date. 

 

Notwithstanding the foregoing, in the event of a Change of Control that occurs prior to the end of the fiscal year in which the Performance-Based Restricted Stock is awarded, fifty percent (50%) of the Maximum Number of Shares of Performance-Based Restricted Stock (as set forth on page 1) shall become immediately free of the restrictions of this Section A.1.(b). If a Change of Control occurs at any time after the end of the fiscal year in which the Performance-Based Restricted Stock is awarded, 100% of the shares earned based on the Performance Criteria (as set forth in Exhibit A) not yet free of the restrictions of this Section A.1.(b) shall become immediately free of such restrictions.

 

2.      Death or Disability of the Employee. 

 

(a) Time-Based Restricted Stock

 

In the event of (i) the death of the Employee, or (ii) the Company terminates the Employee’s employment due to a permanent and total disability which results in the Employee’s inability to return to work, all previously granted shares of Time-Based Restricted Stock not yet free of the restrictions of Section A.1 shall become immediately free of such restrictions.

 

(b) Performance-Based Restricted Stock

 

In the event of (i) the death of the Employee, or (ii) the Company terminates the Employee’s employment due to a permanent and total disability which results in the Employee’s inability to return to work, in either case prior to the end of the fiscal year to which the Performance Criteria relate, fifty percent (50%) of Maximum Number of Shares of Performance-Based Restricted Stock (as set forth on page 1) shall become immediately free of the restrictions of Section A.1. 

 

 

2

 

 

In the event of (i) the death of the Employee, or (ii) the Company terminates the Employee’s employment due to a permanent and total disability which results in the Employee’s inability to return to work, in either case subsequent to the end of the fiscal year to which the Performance Criteria relate, all shares of Performance-Based Restricted Stock which are earned but not yet free of the restrictions of Section A.1 shall become immediately free of such restrictions.

 

3.     Cost of Restricted Stock. The purchase price of the shares of Restricted Stock shall be $0.00.

 

4.     Rights as Stockholder. The Employee shall be entitled to all of the rights of a stockholder, including the right to vote such shares and to receive dividends and other distributions payable with respect to such shares, as follows: (i) with respect to the shares of Time-Based Restricted Stock, since the Grant Date; and (ii) with respect to the shares of Performance-Based Restricted Stock, only upon satisfaction of the Performance Criteria. 

 

5.     Escrow of Share Certificates. Certificates for the Restricted Stock shall be issued in the Employee’s name and shall be held in escrow by the Company until all restrictions lapse or such shares are forfeited as provide herein. A certificate or certificates representing the Restricted Stock as to which restrictions have lapsed shall be delivered to the Employee upon such lapse. 

 

6.     Government Regulations. Notwithstanding anything contained herein to the contrary, the Company’s obligation to issue or deliver certificates evidencing the Restricted Stock shall be subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required. 

 

7.     Withholding Taxes. The Company shall have the right to require the Employee to remit to the Company, or to withhold from other amounts payable to the Employee, as compensation or otherwise, an amount sufficient to satisfy all federal, state and local withholding tax requirements. 

 

8. Accounting Restatement. In the event the Company is required to prepare an accounting restatement of its financial statements due to the Company's material noncompliance with any financial reporting requirement under the securities laws, the Committee may require reimbursement or forfeiture of shares of Performance-Based Restricted Stock which have been earned and/or which have vested pursuant to this Agreement during the three-year period preceding the date on which the Company is required to prepare an accounting restatement. The amount to be recovered will be the excess of the number of shares of Performance-Based Restricted Stock earned and/or vested based on the erroneous data over the shares of Performance-Based Restricted Stock that would have been earned and vested had it been based on the restated results, as determined by the Committee.  The Committee will determine, in its sole discretion, the method for recouping the Performance-Based Restricted Stock hereunder which may include, without limitation: (i) seeking recovery of any gain realized on the vesting, sale, transfer or other disposition of shares of the Performance-Based Restricted Stock; (ii) offsetting the recouped amount from any compensation otherwise owed by the Company to the Employee; (iii) cancelling outstanding vested or unvested share of the Performance-Based Restricted Stock; or (iv) taking any other remedial and recovery action permitted by law, as determined by the Committee.

 

 

B.     Terms and Conditions Applicable to the Option

 

1.     Grant and Terms of Option. Pursuant to action of the Committee, the Company grants to the Employee the Option to purchase the number of shares of Common Stock set forth above, for a period of ten (10) years from the Grant Date, at the exercise price set forth above; provided, however, that the right to exercise such Option shall be, and is hereby, restricted as follows:

 

(a)(i)     No shares may be purchased prior to [insert date];

 

 

3

 

 

(ii)     At any time during the term of the Option granted hereby on or after [insert date], the Employee may purchase up to one-third of the total number of shares to which the Option granted hereby relates;

 

(iii)     At any time during the term of the Option granted hereby on or after [insert date], the Employee may purchase up to an additional one-third of the total number of shares to which the Option granted hereby relates; and

 

(iv)     At any time during the term of the Option granted hereby on or after [insert date] the Employee may purchase up to an additional one-third of the total number of shares to which the Option granted hereby relates; 

 

so that on or after [insert date], during the term hereof, the Employee will have become entitled to purchase the entire number of shares to which the Option granted hereby relates.

 

(b)     Notwithstanding the foregoing, in the event of a Change of Control, the Employee may purchase 100% of the total number of shares to which the Option granted hereby relates. 

 

(c)     In no event may the Option granted hereby or any part thereof be exercised after the expiration of ten (10) years from the Grant Date.

 

(d)     The purchase price of the shares subject to the Option may be paid for (i) in cash, (ii) in the discretion of the Committee, by tender of shares of Common Stock already owned by the Employee, or (iii) in the discretion of the Committee, by a combination of methods of payment specified in clauses (i) and (ii), all in accordance with the provisions of the Plan. Notwithstanding the preceding sentence, the Employee may request that the Committee agree that payment in full of the option price need not accompany the written notice of exercise; provided that, the notice of exercise directs that the certificate or certificates for the shares of Common Stock for which the Option is exercised be delivered to a licensed broker acceptable to the Committee as the agent for the Employee and, at the time such certificate or certificates are delivered, the broker tenders to the Committee cash (or cash equivalents acceptable to the Committee) equal to the option price for the shares of Common Stock purchased pursuant to the exercise of the Option plus the amount (if any) of any withholding obligations on the part of the Company. Such request may be granted or denied in the sole discretion of the Committee.

 

(e)     No shares of Common Stock may be tendered in exercise of the Option granted hereby if such shares were acquired by the Employee through the exercise of an Incentive Stock Option (within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended), unless (i) such shares have been held by the Employee for at least one year, and (ii) at least two years have elapsed since such Incentive Stock Option was granted.

 

2.     Termination of Employment. In the event of the termination of employment of the Employee for any reason other than for cause, as shall be determined in the sole discretion of the Committee, the Option granted, to the extent it was eligible for exercise at the date of such termination of employment: (i) shall be exercisable for up to ninety (90) days after the date of such termination; and (ii) may, subject to the Committee’s sole discretion and consent, be exercised for such longer period as the Committee may permit, but not after ten (10) years from the Grant Date.

 

3.     Death or Disability of the Employee. In the event of the death of the Employee during the term of this Agreement and while he or she is employed by the Company (or a subsidiary) or within three (3) months after the termination of his or her employment other than for cause, the Option granted hereby shall become fully vested (if not already fully vested) and may be exercised by a legatee or legatees of the Employee under his or her last will, or by his or her personal representatives or distributees, at any time within a period of one (1) year after his or her death, but not after ten (10) years from the Grant Date. In the event the Company terminates the Employee’s employment due to a permanent and total disability which results in the Employee’s inability to return to work, the Option granted hereby shall become fully vested (if not already fully vested) and may be exercised by the Employee at any time within a period of three (3) months after his or her employment is so terminated, but not after ten (10) years from the Grant Date.

 

 

4

 

 

4.     Shares Issued on Exercise of Option. It is the intention of the Company that on any exercise of the Option granted hereby it will transfer to the Employee shares of its authorized but unissued stock or transfer Treasury shares, or utilize any combination of Treasury shares and authorized but unissued shares, to satisfy its obligations to deliver shares on any exercise hereof.

 

5.     Option Not an Incentive Stock Option. It is intended that the Option granted hereby shall not be treated as an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended.

 

C.     Terms and Conditions Applicable to All Awards

 

1.     Adjustments Upon Changes in Capitalization or Corporate Acquisitions. Notwithstanding any other provision in the Agreement, if there is any change in the Common Stock by reason of stock dividends, spin-offs, split ups, recapitalizations, mergers, consolidations, reorganizations, combinations or exchanges of shares, the number of shares of Common Stock under this award of Restricted Stock not yet vested, and the price thereof, as applicable, shall be appropriately adjusted by the Committee.

 

2.     No Right to Continued Service. Nothing in this Agreement shall be deemed to create any limitation or restriction on such rights as the Company otherwise would have to terminate the service of the Employee.

 

3.     Committee Administration. This award has been made pursuant to a determination made by the Committee, and the Committee or any successor or substitute committee authorized by the Board of Directors or the Board of Directors itself, subject to the express terms of this Agreement, shall have plenary authority to interpret any provision of this Agreement and to make any determinations necessary or advisable for the administration of this Agreement and may waive or amend any provisions hereof in any manner not adversely affecting the rights granted to the Employee by the express terms hereof. 

 

4.     Grant Subject to Plan. This Restricted Stock and Option award is granted under and is expressly subject to all the terms and provisions of the Plan, and the terms of the Plan are incorporated herein by reference. The Employee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof. The Committee has been appointed by the Board of Directors and designated by it, as the Committee to make grants of Restricted Stock and Options.

 

5.     Governing Law. This Agreement shall be construed under the laws of the State of Delaware.

 

 

5

 

 

Exhibit A

 

Performance Criteria Applicable to Performance-Based Restricted Stock

 

 

[insert performance criteria] 

 

 

 

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