Document:

Exhibit 10.2

 

SECOND FORBEARANCE AGREEMENT

 

THIS SECOND
FORBEARANCE AGREEMENT (this “Second Forbearance Agreement”), dated as of
September 30, 2009, is entered into by and among certain holders of the
8-1/2% Senior Subordinated Notes due 2015 (“Notes”) issued pursuant to
an indenture dated as of January 31, 2005 (the “Indenture”) among
the Issuer (as defined below), certain guarantors (the “Guarantors”) and
The Bank of New York Mellon Trust Company, N.A.(f.k.a. The Bank of New York
Trust Company, N.A.), as Trustee (the “Trustee”), which holders are
signatories hereto (each individually a “Holder” and collectively, “Holders”),
and Accuride Corporation, a Delaware corporation (“Issuer”).

 

W  I  T  N  E  S
S  E  T  H:

 

WHEREAS, the
Issuer has not paid the $11,687,500 of interest on the Notes due on August 3,
2009  and such interest remains unpaid as
of the date hereof;

 

WHEREAS,
pursuant to Section 501(ii) of the Indenture, such failure to pay
interest constitutes an Event of Default;

 

WHEREAS, the Issuer is engaged in discussions with lenders under its
Senior Credit Facilities and with the Holders regarding a restructuring of its
capital structure (a “Restructuring”);

 

WHEREAS,
Holders entered into a forbearance agreement dated as of August 31, 2009,
pursuant to which Holders agreed to provisionally forbear from exercising their
rights and remedies under the Indenture and the Notes as a result of the
foregoing default until September 30, 2009;

 

WHEREAS, the
Issuer has requested that Holders agree to extend the provisional forbearance
of the Specified Default (as defined below) through the Second Forbearance
Termination Date (as defined below) in order to afford the Issuer and Holders
an opportunity to continue discussions and attempt to finalize a Restructuring
on terms and conditions acceptable to Holders (in their sole discretion);

 

WHEREAS,
Holders are willing to agree to extend the provisional forbearance of the
Specified Default through the Second Forbearance Termination Date, subject to
the terms and conditions and to the extent set forth herein and without any
advance understanding or agreement by Holders to consent to any proposed terms
of Restructuring or the consummation of any transaction for which consent or
waiver would be required under the Indenture; and

 

WHEREAS, the
parties hereto desire to enter into this Second Forbearance Agreement to
evidence and effectuate such extension of the provisional forbearance, subject
to the terms and conditions and to the extent set forth herein.

 

NOW,
THEREFORE, in consideration of the foregoing, and the respective agreements,
warranties and covenants contained herein, the parties hereto agree, covenant
and warrant as follows:

 

 

1.            Definitions

 

1.1           Definitions.  As used herein, the following terms shall
have the respective meanings given to them below:

 

(a)           “Second Forbearance
Agreement” shall mean this Second Forbearance Agreement by and among Issuer
and Holders, as the same now exists or may hereafter be amended, modified,
extended, renewed, restated or replaced.

 

(b)           “Second Forbearance
Termination Date” shall mean the earliest to occur of October 5, 2009,
or the date of the occurrence of any Termination Event.

 

(c)           “Third Temporary Waiver”
shall mean that certain Third Temporary Waiver Agreement, dated as of September 15,
2009, by and among Accuride Corporation, Accuride Canada Inc., the lenders
party thereto and Citicorp USA, Inc.

 

(d)           “Third Temporary Waiver Termination Date” shall have the meaning ascribed to it in
the Third Temporary Waiver.

 

(e)           “Senior Credit
Facilities” shall mean the
credit agreement dated as of January 31, 2005, as amended from time to
time, among the Issuer, Accuride Canada Inc., a corporation organized and
existing under the law of the Province of Ontario, the lenders named therein, Deutsche
Bank Trust Company Americas (as successor to Citicorp USA, Inc.), as the administrative agent, and other
agent parties thereto.

 

(f)            “Termination Event”
shall mean the occurrence of any of the following events:

 

(i)            any Event of Default, other
than the Specified Default;

 

(ii)           any breach of any
of the conditions or agreements provided in this Second Forbearance Agreement,
including, without limitation, the covenant set forth in Section 4.1 (it
being agreed that prior to declaring a Termination Event for failure to satisfy
the covenant in Section 4.1, Holders or their representative must first
provide the Company with notice of the breach and at least two (2) days to
cure such breach);

 

(iii)          the Trustee pursues any other
remedies or rights permitted under Section 502 or 503 of the Indenture
(notwithstanding its having received the notice required by the last sentence
of Section 2.1(a));

 

(iv)          the lenders under the Senior
Credit Facilities accelerate the obligations under the Senior Credit Facilities
or pursue any remedies or rights in respect of the Senior Credit Facilities
permitted by Section 7.01 of the Senior Credit Facilities; or

 

(v)           the lenders under the Senior
Credit Facilities do not extend the Third Temporary Waiver Termination Date
through and including at least October 5, 2009 or otherwise grant an
additional waiver of any Default or Event of Default (each as defined in the
Senior Credit Facilities) under the Senior Credit Facilities or agree to
forbear from taking any 

 

 

Enforcement Action (as defined in the Second
Temporary Waiver) through and including at least October 5, 2009, on or
before September 30, 2009.

 

1.2           Interpretation.  All capitalized terms used herein shall have
the meanings assigned thereto in the Indenture unless otherwise defined herein.

 

2.            Provisional
Forbearance as to Specified Default

 

2.1           Acknowledgment of Default.

 

(a)           The Issuer hereby acknowledges
and agrees that (i) $11,687,500 of interest on the Notes due August 3,
2009 was not paid, and, as the date hereof, remains unpaid and such failure to
pay constitutes an Event of Default (the “Specified Default”) pursuant
to Section 501(ii) of the Indenture; and (ii) immediately upon
the occurrence of the Specified Default, the Trustee or Holders of at least 30%
of the principal amount of outstanding Notes are entitled to exercise certain
rights and remedies under the Indenture, the Notes and applicable law.  The Issuer hereby represents and warrants
that except for the Specified Default, no other defaults or Events of Default
under the Indenture have occurred and are continuing as of the date
hereof.  Except as expressly set forth in
this Second Forbearance Agreement, the agreements of the Trustee and Holders
hereunder to forbear provisionally in the exercise of their respective rights and
remedies under the Indenture in respect of the Specified Default until the
Second Forbearance Termination Date does not in any manner whatsoever limit any
right of any of the Trustee and Holders to insist upon strict compliance by the
Issuer with this Second Forbearance Agreement, the Indenture or the Notes.  Holders, however, agree to have their
representatives inform the Trustee of this Second Forbearance Agreement and of
their desire to have the Trustee act consistently with the forbearance
arrangements provided for herein.

 

(b)           Holders have not waived
presently, do not intend to waive and may never waive the Specified Default,
and nothing contained herein or the transactions contemplated hereby shall be
construed or interpreted to constitute any such waiver.  The Trustee’s and Holders’ actions in
entering into this Second Forbearance Agreement are without prejudice to the
rights of any of the Trustee and Holders to pursue any and all remedies under
the Indenture pursuant to applicable law or in equity available to it in its
sole discretion upon the termination (whether upon expiration thereof, upon
acceleration or otherwise) of this Second Forbearance Agreement.

 

2.2           Forbearance.

 

(a)           Subject to satisfaction of the
conditions precedent specified in Section 5 below, each Holder hereby
agrees to forbear, and directs the Trustee to forbear, from exercising their
respective rights and remedies under the Indenture, the Notes and applicable
law until the Second Forbearance Termination Date.

 

(b)           Upon the Second Forbearance
Termination Date, the agreement of each Holder to forbear, and direct the
Trustee to forbear, with respect to the Specified Default shall automatically
and without further action immediately terminate and be of no force and effect,
it being understood and agreed that the effect of such termination will be to
permit Trustee and/or Holders to immediately exercise their respective rights
and remedies under the Notes and 

 

 

Indenture, applicable law or otherwise with respect to the Specified Default,
or any other Events of Default, which shall exist or shall have occurred and be
continuing at such time.

 

2.3           No Waivers; Reservation of
Rights.  Holders have not waived, are
not by this Second Forbearance Agreement waiving and have no intention of waiving,
any Defaults or Events of Default that have occurred or which may be continuing
on the date hereof or any Defaults or Events of Default which may occur after
the date hereof (whether the same or similar to the Specified Default or
otherwise), and except as expressly set forth herein solely with respect to the
Specified Default, Holders have not agreed to forbear with respect to any of
its rights or remedies concerning any Defaults or Events of Default, which may
have occurred or are continuing as of the date hereof or which may occur after
the date hereof.

 

3.            Representations
and Warranties

 

The Issuer hereby represents, warrants and covenants with and to
Holders as follows, which representations, warranties and covenants are
continuing and shall survive the execution and delivery hereof:

 

3.1           This Second Forbearance Agreement has been duly
authorized, executed and delivered by Issuer and is in full force and effect as
of the date hereof.  The agreements and
obligations of the Issuer contained herein constitute the legal, valid and
binding obligations of the Issuer enforceable by Holders against it in
accordance with their respective terms, except as such enforceability may be
limited by an applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditors’ rights generally and by general principles of
equity regardless of whether considered a proceeding in equity or at law.

 

3.2           The execution, delivery and performance of this Second
Forbearance Agreement are all within the Issuer’s corporate powers.  Neither the execution, delivery or
performance of this Second Forbearance Agreement by the Issuer, nor the
consummation of the transactions contemplated herein, nor compliance with the
provisions hereof (a) has violated or will violate any law or regulation
or any order or decree of any court or governmental authority in any respect,
or (b) does or shall conflict with or result in the breach of, or
constitute a default in any respect under, any indenture, mortgage, deed of
trust, security agreement, agreement or instrument to which Issuer is a party
or Issuer or its property may be bound, or (c) has violated or will
violate any provision of the certificate of incorporation, by-laws or other
organizational or governing documents of the Issuer, or (d) has or will
result in, or require, the creation or imposition of any lien, charge, security
interest or other encumbrance on any of the assets or properties of the Issuer.

 

4.            Covenant

 

4.1           The Special Committee of the Board of
Directors of the Issuer and its advisors will continue to diligently pursue
negotiations with Holders (or a designated subset of Holders) of the terms of a
Restructuring and will conduct such negotiations in good faith.  If the Special Committee of the Board of Directors
of Accuride and its advisors fail to pursue good faith negotiations with the
Holders (or a designated subset of Holders) for a Restructuring, Holders
(or a designated subset of Holders) or
their representative may provide the Company with notice of the breach of this Section 4.1,
and if such breach is not cured in two (2) days, they may terminate 

 

 

this Second Forbearance Agreement and shall
have no further recourse against the Issuer on account of such breach.

 

5.            Conditions
to Effectiveness

 

The effectiveness of the
forbearance made pursuant to this Second Forbearance Agreement shall be subject
to the satisfaction of each of the following conditions precedent and the
effective date of this Second Forbearance Agreement (the “Effective Date”)
shall be on the date on which each of the following conditions precedent has
been satisfied:

 

5.1           The Issuer or its counsel
shall have received counterparts of this Second Forbearance Agreement, duly
authorized, executed and delivered, by Holders of a percentage of the principal
amount of the outstanding Notes that is reasonably acceptable to the Issuer as
indicated by a written confirmation provided by the Issuer to the counsel to
the “ad hoc committee” of Holders of the Notes.

 

5.2           The Issuer shall have paid, or concurrently herewith will pay, all
reasonable documented fees and expenses (including attorney fees) of the
Trustee as of the date hereof and all reasonable documented fees and expenses
of Holders as of the date hereof (including one attorney for all Holders, which
is currently Milbank, Tweed, Hadley & Mccloy LLP and a single
financial advisor for all Holders, which is currently Rothschild Inc.) incurred
in connection with this Second Forbearance Agreement and the discussions
regarding a restructuring of its capital structure.

 

6.            Provisions
of General Application

 

6.1           Effect of this Second
Forbearance Agreement.  Except as
modified pursuant hereto, no other changes or modifications to the Notes and
Indenture are intended or implied and in all other respects the Notes and
Indenture are hereby specifically ratified, restated and confirmed by all
parties hereto as of the effective date hereof.

 

6.2           Merger.  This Second Forbearance Agreement and the
documents executed in connection herewith represent the entire expression of
the agreement of the Issuer and Holders regarding the matters set forth herein.
No modification, rescission, waiver, release or amendment of any provision of
this Second Forbearance Agreement shall be made, except by a written agreement
signed by the Issuer and Holders.

 

6.3           Governing Law; Submission
to Jurisdiction; Waiver of Jury Trial.  
THIS SECOND FORBEARANCE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT SUCH PRINCIPLES
ARE NOT MANDATORILY APPLICABLE BY STATUTE AND THE APPLICATION OF THE LAW OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. THE ISSUER AND EACH HOLDER
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT
SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL
COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF
ANY SUIT, ACTION OR PROCEEDING 

 

 

ARISING OUT OF OR RELATING TO THIS SECOND FORBEARANCE AGREEMENT AND
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE ISSUER AND EACH
HOLDER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THAT IT MAY EFFECTIVELY
DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY HOLDER OF
THE NOTES TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE ISSUER OR ANY GUARANTOR IN
ANY OTHER JURISDICTION.

 

6.4           Binding Effect; No Third
Party Beneficiaries.  This Second
Forbearance Agreement shall be binding upon and inure to the benefit of each of
the parties hereto and their respective successors and assigns, including, with
respect to each Holder, its successor-in-interest with respect to the
Notes.  This Second Forbearance Agreement
is solely for the benefit of each of the parties hereto and their respective
successors and assigns, and no other Person shall have any right, benefit,
priority or interest under, or because of the existence of, this Second
Forbearance Agreement.

 

6.5           Severability.  In case any provision of this Second
Forbearance Agreement shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.

 

6.6           Counterparts.  This Second Forbearance Agreement may be
executed in any number of counterparts, but all of such counterparts shall
together constitute but one and the same agreement.  In making proof of this Second Forbearance
Agreement, it shall not be necessary to produce or account for more than one
counterpart thereof signed by each of the parties hereto.  Delivery of an executed counterpart of this
Second Forbearance Agreement by facsimile or other electronic method of
transmission shall have the same force and effect as delivery of an original
executed counterpart of this Second Forbearance Agreement.  Any party delivering an executed counterpart
of this Second Forbearance Agreement by facsimile or other electronic method of
transmission also shall deliver an original executed counterpart of this Second
Forbearance Agreement, but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect
of this Second Forbearance Agreement as to such party or any other party.

 

7.            Release
of Claims.

 

The Issuer, on behalf of itself, and any
Person claiming by, through, or under the Issuer (collectively, the “Issuer
Group”) acknowledges that it has no claim, counterclaim, setoff,
recoupment, action or cause of action of any kind or nature whatsoever (“Claims”)
against all or any of the Trustee or any of the Holders or any of their
respective directors, officers, employees, agents, attorneys, financial
advisors, legal representatives, affiliates, shareholders, partners,

 

 

successors and assigns (the Trustee or any of the Holders and their
respective directors, officers, employees, agents, attorneys, financial
advisors, legal representatives, affiliates, shareholders, partners, successors
and assigns are jointly and severally referred to as the “Holder Group”),
that directly or indirectly arise out of or are based upon or in any manner
connected with any “Prior Event” (as defined below), and the Issuer on behalf
of itself and all the other members of the Issuer Group hereby releases each
member of the Holder Group from any liability whatsoever should any Claims
nonetheless exist.  As used herein the
term “Prior Event” means any transaction, event, circumstances, action,
failure to act or occurrence of any sort or type, whether known or unknown,
which occurred, existed, was taken, permitted or begun prior to the execution
of this Second Forbearance Agreement and occurred, existed, was taken,
permitted or begun in accordance with, pursuant to or by virtue of any terms of
the Indenture, this Second Forbearance Agreement, or any of the transactions
contemplated herein or therein or any oral or written agreement relating to any
of the foregoing, including without limitation any approval or acceptance given
or denied.  Notwithstanding the
foregoing, this Section 7 shall not apply to (i) Claims directly or
indirectly arising out of or based upon any breach of the confidentiality
agreement entered into between a member of the Holder Group and the Issuer, if
any, in connection with the Restructuring, or (ii) any Claims of bad faith
or willful misconduct on the part of the Holder Group, in each case relating to
breach or conduct, as the case may be, which occurred or existed and was
unknown to the Issuer prior to the execution of this Second Forbearance
Agreement. This Section 7 shall survive the termination of this Second
Forbearance Agreement.

 

[REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]Exhibit
10.29

 

FIFTH AMENDMENT

TO

SECOND AMENDED AND RESTATED 

LOAN AND SECURITY AGREEMENT

 

THIS FIFTH AMENDMENT to Second Amended and
Restated Loan and Security Agreement (this “Amendment”) is entered into
this 25th day of September, 2009 (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 6.8
(Financial Covenants).  Section 6.8(a) of
the Loan Agreement is hereby amended in its entirety and replaced with the
following:

 

(a)                                  Tangible
Net Worth.  A Tangible
Net Worth of at least $11,000,000, commencing with the month ending September 27,
2009.

 

2.2                               Section 6.8
(Financial Covenants).  Section 6.8(c) is
hereby added to the Loan Agreement as follows:

 

(c)                                  Cash. 
Borrower shall maintain unrestricted cash or Cash Equivalents (subject
to Bank’s security interest) at all times in an amount of at least $8,000,000.

 

2.3                               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.

 

1

 

2.4                               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.

 

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

 

2

 

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.                                      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.

 

6.                                      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.]

 

3

 

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/ Kevin Wallace

  	
   

  	
  BY:

  	
  /s/ Ralph Marimon

  
	
  NAME:

  	
  Kevin Wallace

  	
   

  	
  NAME:

  	
  Ralph Marimon

  
	
  TITLE:

  	
  Relationship Manager

  	
   

  	
  TITLE:

  	
  CFO

  

 

Fifth
Amendment to Second Amended and Restated Loan and Security Agreement

 

S-1

 

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 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 + CC

  	
   

  	
  Monthly within 45 days

  	
   

  	
  Yes

  	
   

  	
  No

  
	
  Annual (Audited)

  	
   

  	
  Annual within 120 of FYE

  	
   

  	
  Yes

  	
   

  	
  No

  
	
  Board Approved Projections

  	
   

  	
  Prior to December 20th

  	
   

  	
  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

  	
   

  	
  Monthly; $11,000,000

  	
   

  	
  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]

 

 

	
  QUICKLOGIC
  CORPORATION

  	
   

  	
  BANK USE ONLY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  Received by:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  AUTHORIZED SIGNER

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Verified:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Compliance Status:        Yes   No

  
							

 

Schedule
1

 

 

EXHIBIT I

 

Attached hereto

 

 

DISCLOSURE LETTER

 

To:  Silicon Valley Bank

 

This amendment to
the Disclosure Letter is delivered in connection with 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 Disclosure Letter
as of September 27, 2009.

 

	
   

  	
  QuickLogic Corporation

  
	
   

  	
  a Delaware Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  //Ralph S. Marimon

  
	
   

  	
  Name:

  	
  Ralph S. Marimon

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  

 

 

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.  In
addition to the above disclosures, the Company is aware of the following
matters, none of which it considers to be material at this time:

 

On September 18, 2009, QuickLogic was served with an Amended
Complaint for Patent Infringement.  The
action was filed in the U.S. District Court for the State of Delaware against
multiple defendant corporations by Xpoint Technologies, Inc.   The action seeks monetary damages and injunctive
relief under the Patent Act of the United States and alleges defendants
infringe U.S. Patent No. 5,913,028 entitled “Client/Server Data Traffic
Delivery System and Method”. 
Specifically, the action alleges QuickLogic’s Smart Programmable Integrated
Data Aggregator (SPIDA) technology infringes the ‘028 patent.  QuickLogic is currently reviewing the
complaint and the patent to determine its defenses to the action.

 

 

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

 

GMBH Auto Lease

 

International office leases

 

Orleans Properties, LLC – Sunnyvale facility,
including leasehold improvements

 

G E Capital – copiers, business equipment

 

Pinnacle
Document Systems – copiers, fax machines, etc.

 

Pitney Bowes Credit Corporation– mail machine

 

Mentor – synthesis software for resale

 

Toronto copier lease

 

Indebtedness to trade creditors in the ordinary course of business

 

 

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 894,543 Tower shares.

 

Investments according to our investment
policy, including but not limited to money market investment account at SVB
Securities, E*Trade and Banc of America Investment Services, Inc., of which 40%
may be held outside of Silicon Valley Bank.

 

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

 

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.

 

A payment of
$1,000,000 (maximum $1,500,000) to Amkor to secure assembly and test capacity
for a two-year period. This payment will be
refunded to QuickLogic at a rate of $125,000 per quarter (assuming $1,000,000),
provided that Quicklogic loads a specified volume at Amkor for the
quarter.  If QuickLogic
loads less than the specified volume Amkor retains all or a portion of the
$125,000 for that quarter.

 

 

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 of levies, either not delinquent or being contested in good
faith.

 

Purchase money liens on Equipment of
Software.

 

Liens for Permitted Debt, including Capital
Leases and debt with Cadence for EDA software, with Mentor Graphics 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 G E Capital;

 

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;

 

Liens arising from judgments, decrees or
attachments, including the state of Texas withdrew approximately $110,000 of
funds on deposit at Silicon Valley Bank. The state of Texas assumed that the
Company owed sales tax on revenue since 1993. The Company expects to recover a
portion of these funds.

 

 

Schedule E

 

Business Locations

 

Borrower currently has offices in California;
Maryland; Massachusetts, Minnesota; New Hampshire; Texas; Pennsylvania;
Ontario, Canada; Bangalore, India; Hong Kong; London, England; Malaysia;
Munich, Germany; Taiwan; Shanghai, China; Beijing, China; and Tokyo, Japan.

 

 

Schedule 1 to Compliance
Certificate

 

Financial Covenants of Borrower

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  I.

  	
  Tangible Net Worth
  (Section 6.8(a))

  
	
   

  	
   

  
	
  Required:

  	
  $11,000,000

  
	
   

  	
   

  
	
  Actual:

  	
   

  
				

 

	
  A.

  	
   

  	
  Value of Line I. (Tangible Net Worth)

  	
   

  	
  $

  	
   

  

 

	
  Is line A equal to
  or greater than $11,000,000?

  
	
   

  	
   

  
	
   

  	
  o No, not in compliance

  	
  o 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?

  
	
   

  	
   

  
	
   

  	
  o No, not in compliance

  	
  o 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?

  
	
   

  	
   

  
	
   

  	
  o No, not in compliance

  	
  o Yes, in compliance

  

 

 

 

SILICON VALLEY BANK

 

PRO FORMA INVOICE FOR LOAN CHARGES

 

	
  BORROWER:

  	
  QuickLogic Corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  LOAN OFFICER:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  DATE:

  	
  September      , 2009

  	
   

  	
   

  

 

	
  Loan Fee

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Documentation Fee

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TOTAL FEES DUE

  	
   

  	
  $

  	
  10,000.00

  	
   

  

 

o  A check for the total
amount is attached.

 

o  Debit DDA #                                   
for the total amount.

 

 

	
  BORROWER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Authorized Signer

  	
  (Date)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SILICON VALLEY BANK

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Loan Officer Signature

  	
  (Date)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}]]