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EXHIBIT 10-a-3
SECOND AMENDMENT TO LOAN DOCUMENTS
THIS SECOND AMENDMENT ("Amendment"), dated as of September 17, 1999, is
entered into by and among Conexant Systems, Inc., (the "Company"), each of the
Subsidiaries party to the Credit Agreement (as defined below) as of the date
hereof (the "Borrower Subsidiaries" and together with the Company, each a
"Borrower" and collectively, the "Borrowers"), the Lenders party to the Credit
Agreement, the Issuing Bank (as defined in the Credit Agreement) and Credit
Suisse First Boston, a bank organized under the laws of Switzerland, acting
through its New York branch, as administrative agent (in such capacity, the
"Administrative Agent") and as collateral agent for the Lenders (in such
capacity, the "Collateral Agent", and together with the Administrative Agent,
the "Agents").
RECITALS
A. The Borrowers, Lenders, the Issuing Bank and the Agents are parties
to a certain Credit Agreement dated as of December 21, 1998 (as amended prior to
the date hereof, the "Credit Agreement") pursuant to which the Lenders have
agreed to extend credit to the Borrower.
B. The Company has requested that the Lenders amend certain provisions
of the Credit Agreement, the Pledge Agreement and the Security Agreement.
C. The parties are willing to amend and modify the Credit Agreement,
the Pledge Agreement and the Security Agreement subject to the terms and
conditions of this Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereby agree as follows:
1. DEFINED TERMS. Unless otherwise defined herein, capitalized terms
used herein shall have the meanings, if any, assigned to them in the Credit
Agreement, as amended.
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2. AMENDMENTS OF CREDIT AGREEMENT; WAIVER.
2.1 SEC Filings. Section 5.4(d) of the Credit Agreement is amended to
read in its entirety as follows:
"(d) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials
filed by the Company or any Subsidiary with the SEC, or with any
national securities exchange, or distributed to its shareholders, as
the case may be; provided, however, that, unless otherwise requested
under Section 5.4(e), the Company shall not be required to furnish
copies of any prospectus supplement filed in respect of, or
post-effective amendment of, the Company's Registration Statement on
Form S-3 (Registration No. 333-82399) if such prospectus supplement or
post-effective amendment is filed solely to amend or supplement
information concerning any matter under the headings "Selling
Securityholders" or "Plan of Distribution" set forth in such
Registration Statement or in any other prospectus supplement relating
to, or post-effective amendment of, such Registration Statement;"
2.2 Stock Plan Loans. Section 6.4(b)(iii) is amended to read in its
entirety as follows:
"(iii) loans and advances to officers and employees in the
ordinary course of business, consistent with past practice, and loans
and advances to participants in any stock-based benefit plan of the
Company or any Subsidiary of the Company, which loan or advance is made
pursuant to or in connection with any such plan;"
2.3 Investment of Net Cash Proceeds. Section 6.4(b)(xi) is amended to
read in its entirety as follows:
"(xi) Investments made with the Net Cash Proceeds from issuance
of equity securities or Convertible Debt of the Company (x) within six
months of receipt of such Net Cash Proceeds or (y) within eighteen
months of receipt of such Net Cash Proceeds if within six months of
such receipt (1) the Company has a binding commitment to make such
Investment within such eighteen month period subject only to the
satisfaction of closing conditions normal and customary for the type of
Investment to be made or to the satisfaction of post-closing conditions
for such Investment, including any earnout, escrow, reserve, deferred
payment or contingent purchase price payment provisions, as the
Company, in its reasonable discretion, may consider necessary or
appropriate for the Investment to be made and (2) the Company has
furnished to the Administrative Agent written notice of any such
Investment which notice identifies the Investment to be made and the
aggregate amount of Net Cash Proceeds to be used to make such
Investment; provided that such issuance is made in connection with and
for the express purpose of making the specific Investment then being
made or committed to be made;"
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2.4 Waiver of SEC Filings. Any Default or Event of Default that may
exist on or before the Closing Date (as defined below) solely as a result of the
failure to furnish any prospectus supplement relating to, or post-effective
amendment of, the Registration Statement referred to in Section 2.1 of this
Amendment, to the extent and only to the extent that the Company would not have
been required to furnish such prospectus supplement or post-effective amendment
if this Amendment had been in effect at the time such materials were filed with
the SEC, is hereby waived.
3. AMENDMENTS OF SECURITY DOCUMENTS.
3.1 No Pledge of Employee Notes. Section 1.1(b) of the Pledge Agreement
is amended to read in its entirety as follows:
"(b)(i) the debt securities listed opposite the name of the Pledgor on
Schedule II hereto, (ii) any debt securities in the future issued to
the Pledgor and (iii) the promissory notes and any other instruments
evidencing such debt securities (the "Pledged Debt Securities");
provided, however, that Pledged Debt Securities shall not include any
debt securities, promissory notes or other instruments evidencing debt
that may be issued to the Pledgor or held by the Pledgor in connection
with any loans or advances of the type referred to in Section
6.4(b)(iii) of the Credit Agreement;"
3.2 Exclusion of Employee Loans from Collateral. The definition of
"Excluded Property" in Section 1.2 of the Security Agreement is amended by (x)
deleting, in the first sentence of that definition, the words "and (v)" and (y)
inserting, in lieu thereof, the following:
(v) any right, title or interest of the Grantor in, to or under any
loans or advances of the type referred to in Section 6.4(b)(iii) of the
Credit Agreement (including (1) any debt securities, promissory notes
or other instruments evidencing debt that may be issued to the Grantor
or held by the Grantor in connection with any such loans or advances
and (2) any setoff right or collateral security that may be granted or
issued to or held by the Grantor in connection with any such loans or
advances and (3) any cash or non-cash proceeds of any such loans or
advances), and (vi)"
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4. REPRESENTATIONS AND WARRANTIES. The Borrowers hereby represent and
warrant to the Administrative Agent and the Lenders as follows:
(a) No Default or Event of Default has occurred and is continuing
after giving effect to this Amendment.
(b) The execution, delivery and performance by the Borrowers of this
Amendment has been duly authorized by all necessary corporate and other action
and do not and will not require any registration with, consent or approval of,
notice to or action by, any Person in order to be effective and enforceable.
Each of the Credit Agreement, the Pledge Agreement and the Security Agreement,
as amended by this Amendment, constitutes the legal, valid and binding
obligation of the Borrowers parties thereto, enforceable against them in
accordance with its terms.
(c) All representations and warranties of the Borrowers contained in
the Credit Agreement and in the other Loan Documents are true and correct in all
material respects as of the date hereof with the same effect as though made on
the date hereof and as though applied to the Credit Agreement, the Pledge
Agreement and the Security Agreement, as herein amended, except to the extent
such representations and warranties expressly relate to an earlier date.
(d) The Borrowers are entering into this Amendment on the basis of
their own investigation and for their own reasons, without reliance upon the
Agents, the Lenders or any other Person.
5. EFFECTIVENESS DATE. This Amendment shall become effective as of the
date (the "Closing Date") as of which the Administrative Agent shall have
received, in form and substance satisfactory to the Administrative Agent,
counterparts (or if elected by the Administrative Agent, an executed facsimile
copy) of (i) this Amendment executed by the Required Lenders, the Borrowers and
the Agents and (ii) the Guarantor Acknowledgment and Consent annexed to this
Amendment, executed by each of the Guarantors.
6. RESERVATION OF RIGHTS. The Borrowers acknowledge and agree that the
execution and delivery by the Agents and the Lenders of this Amendment, shall
not be deemed (i) to create a course of dealing or otherwise obligate the Agents
or the Lenders to
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forbear or execute similar amendments under the same or similar circumstances in
the future, or (ii) to amend, relinquish or impair any right of the Agents or
the Lenders to receive any indemnity or similar payment from any Person or
entity as a result of any matter arising from or relating to this Amendment.
7. MISCELLANEOUS.
(a) Except as herein amended, all terms, covenants and provisions of
the Credit Agreement, the Pledge Agreement and the Security Agreement are and
shall remain in full force and effect and all references therein to the Credit
Agreement, the Pledge Agreement and the Security Agreement shall henceforth
refer to the Credit Agreement, the Pledge Agreement and the Security Agreement,
as amended by this Amendment. This Amendment shall be deemed incorporated into,
and a part of, the Credit Agreement, the Pledge Agreement and the Security
Agreement.
(b) This Amendment shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. No third party
beneficiaries are intended in connection with this Amendment.
(c) This Amendment shall be governed by and construed in accordance
with the law of the State of New York, without regard to the conflict of laws
principles thereof.
(d) This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, but all such counterparts together
shall constitute but one and the same instrument. Each of the parties hereto
understands and agrees that this document (and any other document required
herein) may be delivered by any party thereto either in the form of an executed
original or an executed original sent by facsimile transmission to be followed
promptly by mailing of a hard copy original, and that receipt by the
Administrative Agent of a facsimile transmitted document purportedly bearing the
signature of a Lender or a Borrower shall bind such Lender or such Borrower,
respectively, with the same force and effect as the delivery of a hard copy
original. Any failure by the Administrative Agent to receive the hard copy
executed original of such document shall not diminish the binding effect of
receipt of the facsimile transmitted executed original of such document of the
party whose hard copy page was not received by the Administrative Agent.
(e) This Amendment, together with the Credit Agreement and the other
Loan Documents, contains the entire and exclusive agreement of the parties
hereto with reference to the matters discussed herein and therein. This
Amendment supersedes all prior drafts and communications with respect thereto.
This Amendment may not be amended except in accordance with the provisions of
Section 9.8 of the Credit Agreement.
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(f) If any term or provision of this Amendment shall be deemed
prohibited by or invalid under any applicable law, such provision shall be
invalidated without affecting the remaining provisions of this Amendment or of
the Credit Agreement, the Pledge Agreement and the Security Agreement.
(g) The Borrowers covenant to pay to or reimburse the Administrative
Agent, upon demand, for all reasonable costs and expenses (including costs of
its outside legal counsel and allocated costs of in-house counsel) actually
incurred by the Administrative Agent in connection with the development,
preparation, negotiation, execution and delivery of this Amendment.
(h) The Borrowers (and each Guarantor by execution of the
Acknowledgement) confirm that the Security Documents secure the Obligations
under the Credit Agreement, the Pledge Agreement and the Security Agreement as
amended by this Amendment. Each Guarantor by execution of the Acknowledgement
confirms that the benefit of such Guarantor's Company Guarantee Agreement or
Subsidiary Guarantee Agreement, as applicable, applies to all Obligations under
the Credit Agreement, the Pledge Agreement and the Security Agreement as amended
by this Amendment.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first above written.
CONEXANT SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Vice President and Treasurer
CONEXANT SYSTEMS FRANCE S.A.S.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Director of Finance &
Administration, Europe
CONEXANT SYSTEMS U.K. LIMITED
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Treasurer
CONEXANT SYSTEMS HOLDINGS LIMITED
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Treasurer
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CREDIT SUISSE FIRST BOSTON,
as a Lender, Issuing Bank,
Administrative Agent, Collateral Agent
and Swingline Lender
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Vice President
By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: Associate
UNION BANK OF CALIFORNIA, N.A.
as a Lender
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Vice President
BANK POLSKA KASA OPIEKI, S.A.-PEKAO
S.A. GROUP, NEW YORK BRANCH,
as a Lender
By: /s/ Hussein B. El-Xxxxx
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Name: Hussein B. El-Xxxxx
Title: Vice President
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BANQUE NATIONALE DE PARIS, as a Lender
By: /s/ X. Xxxxxxx
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Name: X. Xxxxxxx
Title: Senior Vice President &
Manager
By: /s/ Xxxxxxxx Xxxxxxxx
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Name: Xxxxxxxx Xxxxxxxx
Title: Vice President
COMERICA WEST INCORPORATED, as a Lender
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxxxx
Title: Vice President
BANK ONE, N.A.
(formerly known as The First National
Bank of Chicago), as a Lender
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: First Vice President
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KEYBANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: Assistant Vice President
NATIONAL BANK OF CANADA, as a Lender
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: Vice President
By: /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
Title: Assistant Vice President
TRANSAMERICA COMMERCIAL FINANCE
CORPORATION, as a Lender
By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
Title: Vice President
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XXXXX XXXX BANK, as a Lender
By: /s/ Xxxx Xxxx
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Name: Xxxx Xxxx
Title: Senior Vice President &
General Manager
XXXXXXXX BANK, as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President
IBM CREDIT CORPORATION, as a Lender
By:
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Name:
Title:
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UBS AG, STAMFORD BRANCH, as a Lender
By: /s/ Xxxxxx X. Xxxxx III
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Name: Xxxxxx X. Xxxxx III
Title: Executive Director
By: /s/ Xxxxxxx Saint
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Name: Xxxxxxx Saint
Title: Associate Director
Loan Portfolio Support, US
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GUARANTOR ACKNOWLEDGMENT AND CONSENT
The undersigned, each a guarantor or third party pledgor with respect
to the Borrowers' obligations to the Agents and the Lenders under the Credit
Agreement, each hereby (i) acknowledges and consents to the execution, delivery
and performance by the Company and the Borrower Subsidiaries of the foregoing
Second Amendment to Credit Agreement ("Amendment"), and (ii) reaffirm and agree
that the respective guaranty, pledge agreement or security agreement to which
the undersigned is party and all other documents and agreements executed and
delivered by the undersigned to the Administrative Agent or the Collateral Agent
and the Lenders in connection with the Credit Agreement are in full force and
effect, without defense, offset or counterclaim. (Capitalized terms used herein
have the meanings specified in the Amendment.)
GUARANTORS
CONEXANT SYSTEMS, INC.
CONEXANT SYSTEMS WORLDWIDE, INC.
BROOKTREE CORPORATION
BROOKTREE WORLDWIDE SALES CORPORATION
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Treasurer
September 17, 1999
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