Document:

exh101q209.htm

     

    EXHIBIT
10.1

    AMENDMENT
NO. 1

     

    TO

     

    LOAN
AND SECURITY AGREEMENT

     

    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

     

    
      	
              A.  

            	
              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.

            

    

     

    
      	
              B.  

            	
              Borrower
      desires that Bank amend the Loan Agreement upon the terms and conditions
      more fully set forth herein.

            

    

     

    
      	
              C.  

            	
              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.

            

    

     

    Agreement

     

    NOW, THEREFORE, in
consideration of the foregoing Recitals and intending to be legally bound, the
parties hereto agree as follows:

     

    
      	
              1.  

            	
              Amendments
      to Loan Agreement.

            

    

     

    
      	
              1.1  

            	
              Section 13.1
      (Definitions).  Subsection (e) of the definition of
      Permitted Investments is amended in its entirety and replaced by the
      following:

            

    

     

    “(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.”

     

    
      	
              1.2  

            	
              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.

            

    

     

    
      	
              2.  

            	
              Borrower’s
      Representations And Warranties.

            

    

     

    
      	
              2.1  

            	
              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;

            

    

     

    
      	
              (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; and

            

    

     

    
      	
              (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.

            

    

     

    
      	
              2.2  

            	
              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 2.1, and agrees that such reliance is reasonable and
      appropriate.

            

    

     

    
      	
              3.  

            	
              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.

            

    

     

    
      	
              4.  

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

            

    

     

    
      	
              4.1  

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

            

    

     

    
      	
              4.2  

            	
              Variance
      Fee.  Borrower shall have paid to Bank a variance fee in
      the amount of $2,500.

            

    

     

    
      	
              4.3  

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

            

    

     

    
      	
              5.  

            	
              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.

            

    

     

    
      	
              6.  

            	
              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.

            

    

     

    
      	
              7.  

            	
              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
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.

              

            	 
	 	 	 
	 	 a
      Delaware corporation	 
	 	 	 	 
	
               

            	
              By:
    

            	/s/ MAURY
      AUSTIN	 
	 	 Printed Name:	 Maury
      Austin	 
	 	 Title:	 CFO	 
	 	 	 	 

    

     

     

    
      	
              Bank:

            	
              
                Silicon
      Valley Bank

              

            	 
	 	 	 
	 	 	 	 
	
               

            	
              By:
    

            	/s/ NICK
      TSIAGKAS	 
	 	 Printed Name:	 Nick
      Tsiagkas	 
	 	 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.

    

    
      
        	
                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
      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

                  	
                    _____: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

                

        

      

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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.”)

    ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

     

    

    
      	
              MIPS
      Technologies, Inc.

               

               

              By:

              Name:

              Title:

               

            	
              BANK
      USE ONLY

               

              Received
      by: ________________________

              authorized
      signer

              Date:      ____________________________

               

              Verified:
      ____________________________

              authorized
      signer

              Date:           __________________________

               

              Compliance
      Status:                               Yes     No

            

    

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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

     

    
      
        
          	
                  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)

                	
                  $____________

                

        

      

    

    

    

    *           *           *           *           *

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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

    

    *           *           *           *           *

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

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

    

    Required:

    
      
        	
                Fiscal Quarter Ending

                 

              	
                Adjusted Quick Ratio

              
	
                September
      30, 2008

              	
                0.65:1.00

              
	
                December
      31, 2008

              	
                0.75:1.00

              
	
                March
      31, 2009

              	
                0.75:1.00

              
	
                June
      30, 2009 and thereafter

              	
                1.00:1.00

              

      

    

    

    

    

    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

    

    

    *           *           *           *           *exh102q209.htm

     

    EXHIBIT
10.2

    

    

    

    [Name]

    [Title]

    MIPS
Technologies, Inc.

    1225
Charleston Road

    Mountain
View, CA  94043-1353

    

    Dear
[First Name]:

    

    This
letter (the “Agreement”) amends the agreement between MIPS Technologies, Inc.
and you dated [Date] (the “Change in Control Agreement”), in light of the
requirements of the final regulations promulgated under Section 409A (“Section
409A”) of the Internal Revenue Code of 1986, as amended. MIPS Technologies, Inc.
must receive a copy of this Agreement, executed by you, not later than December
31, 2008. A copy of your Change in Control Agreement is attached for your
reference.

     

    Section
3(c) of your Change in Control Agreement is amended to add the following
sentence at the end:

     

    With
regard to cash payable to you, such payments shall each be classified as
separate payments under Treas. Reg. 1.409A-2(b)(2) and each separate payment
shall be assessed for qualification as a short-term deferral under Treas. Reg.
1.409A-1(a)(4), with the result that only the amount not classifiable as exempt
from Section 409A of the Code shall be regarded as subject to the distribution
requirements of Section 409A.

     

    Section
6(ii) of your Change in Control Agreement is amended to add the following
parenthetical clause after “Excise Tax”:

     

    (with
reduction to occur in the following order: (i) reduction of payments of cash;
and (ii) reduction in equity awards; and with reduction in each category to be
pro rata between those payments subject to Section 409A and payments not subject
to Section 409A)

     

    Except in
respect of the above amendments, we agree no other changes are made to your
Change in Control Agreement.

     

    Please
acknowledge your agreement with the above by signing below and returning the
original to me for filing with our records.  Should you have any
questions or comments, please do not hesitate to contact me.

     

    Thank you
for your assistance and cooperation with this matter.

     

    IN WITNESS WHEREOF, the
parties have executed this Agreement as of the day and year first above
written.

    

    

    

    Executive:                                                                       MIPS
Technologies, Inc.:

    

    

    _________________________________            By:
____________________________________

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