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EXHIBIT 10.1
[Conformed Copy]
FOURTH AMENDMENT TO LOAN DOCUMENTS
THIS FOURTH AMENDMENT ("Amendment"), dated as of November 23,
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.
C. The parties are willing to amend and modify the Credit
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.
2. AMENDMENT OF CREDIT AGREEMENT.
(a) Section 2.13(c) of the Credit Agreement is amended to read
in its entirety as follows:
"(c) Not later than the third Business Day following the
receipt of Net Cash Proceeds in respect of any Restricted
Indebtedness, which, when added to the Net Cash Proceeds of all
Restricted Indebtedness previously incurred, created or assumed
since the Closing Date exceed $100,000,000 in the aggregate, the
Total Revolving Commitment shall be reduced on a dollar for
dollar basis by the amount of such Net Cash Proceeds from
Restricted Indebtedness in the aggregate in excess of
$100,000,000, provided, however, that in determining the
foregoing
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there shall be excluded from Net Cash Proceeds any and all
proceeds arising from Indebtedness referred to in clauses (2)
and (3) of the definition of "Acquisition Cost" in Section 6.4."
(b) Section 6.4(b)(ii) of the Credit Agreement is amended to
read in its entirety as follows:
"(ii) investments selected by the Company in accordance
with its Investment Authority policy as adopted by the Company
on December 14, 1998 (as the same may be amended to time to
time);"
(c) Section 6.4(b)(xiii) of the Credit Agreement is amended to
read in its entirety as follows:
"(xiii) other Investments of any kind in a Related
Business; provided, that:
(x) no Default or Event of Default exists at the
time of making such Investment or would result from the
making of such Investment; and
(y) the Company shall have delivered to the
Administrative Agent a certificate certifying that at
the time of and immediately after giving effect to any
such Investment, the ratio of (1) the Total Debt of the
Company and its Subsidiaries on the date of such
Investment (including all Indebtedness incurred in
connection with or resulting from such Investment that
would constitute Total Debt) to (2) the sum of, without
duplication, (I) Pro Forma Acquisition EBITDA of the
entity, business, property or assets acquired pursuant
to such Investment, plus (II) Consolidated EBITDA, in
each case for the period of four fiscal quarters most
recently ended prior to the date of such Investment,
shall be equal to or less than 2.25:1 on the subject
date; provided, that the Company shall have no
obligation to deliver a certificate certifying the
information set forth in this clause (y) in respect of
any Investment in a Related Business which has an
Acquisition Cost of less than $10,000,000 until the
first to occur of:
(i) the aggregate Acquisition Cost of all such
Investments for which no certificate has been
delivered pursuant to this clause (y) exceeds
$25,000,000, or
(ii) the Company makes such an Investment with
an Acquisition Cost equal to or greater than
$10,000,000, at which time the Company shall
deliver the certificate certifying the
information set forth in this clause (y) on a
combined basis for all such
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Investments in a Related Business for which no
certificate has previously been delivered
pursuant to such clause; and
(z) in the case of an Investment in a Foreign
Entity, immediately before and after giving effect
thereto:
(i) the dollar equivalent of the aggregate
Company Share of the Tangible Assets of all
Foreign Entities in which the Company or any of
its Subsidiaries holds Investments shall not
exceed 20% of the Tangible Assets of the Company
and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP as of
the date of the most recent financial statements
filed pursuant to Section 5.4 of the Credit
Agreement; and
(ii) the dollar equivalent of the aggregate
Company Share of the Tangible Net Worth of all
Foreign Entities in which the Company or any of
its Subsidiaries holds Investments shall not
exceed 20% of the Tangible Net Worth of the
Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP as of
the date of the most recent financial statements
filed pursuant to Section 5.4 of the Credit
Agreement;
provided, however, that this clause (z) shall not permit
Investments of the type referred to in Section
6.4(a)(iv) in a Foreign Entity in which neither the
Company nor any of its Subsidiaries holds an Investment
consisting of capital stock or other equity interests.
For purposes of this Agreement, the terms set forth below shall
have the following meanings:
"Acquisition Cost" shall mean, with respect to any
Investment, the sum of, without duplication, (1) the amount of
any money paid to acquire such Investment, plus (2) the
principal amount of any Indebtedness issued by the Company or
any Subsidiary to acquire such Investment, plus (3) the
principal amount of any Indebtedness assumed in connection with
the acquisition of such Investment (including, in the case of
the acquisition of capital stock or other equity securities of
any person that, after giving effect to such acquisition,
becomes a Subsidiary, the principal amount of the Indebtedness
of such person outstanding on the date it becomes a Subsidiary,
after giving effect to any prepayment or repayment of
Indebtedness made contemporaneously with such acquisition), plus
(4) in the case of any Investment of the type referred to in
Section 6.4(a)(iii), the fair market value, as determined by the
board of directors of the Company, of any property contributed
in kind to any person other than any Subsidiary Guarantor which
is a Domestic Subsidiary.
"Company Share" shall mean, with respect to any Person
in which the
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Company or any Subsidiary holds an Investment consisting of
capital stock or other equity interests, a percentage equal to
the Company's or such Subsidiary's aggregate interest in the
capital or profits of such Person (whichever is less).
"Foreign Entity" shall mean any Foreign Subsidiary or
any other Person not incorporated or organized under the laws of
the United States of America, any State thereof or the District
of Columbia.
"Intangible Assets" shall mean assets that are
considered to be intangible assets under GAAP.
"Tangible Assets" shall mean, with respect to any
Person, the assets of such Person determined in accordance with
GAAP, exclusive of Intangible Assets of such Person.
"Tangible Net Worth" shall mean, with respect to any
Person, the Net Worth of such Person, less the value of the
Intangible Assets of such Person determined in accordance with
GAAP."
(d) Section 6.5(a)(i) of the Credit Agreement is amended to read
in its entirety as follows:
"(i) if at the time thereof and immediately after giving
effect thereto no Default or Event of Default shall have
occurred and be continuing (A) any wholly-owned Subsidiary may
merge into the Company in a transaction in which the Company is
the surviving corporation, (B) any wholly-owned Subsidiary may
merge into or consolidate with any other wholly-owned Subsidiary
that is a Subsidiary Guarantor and is a Domestic Subsidiary in a
transaction in which the surviving entity is a wholly-owned
Subsidiary that is a Subsidiary Guarantor and is a Domestic
Subsidiary and no person other than the Company or a
wholly-owned Subsidiary that is a Subsidiary Guarantor and is a
Domestic Subsidiary receives any consideration, (C) the Company
or any Subsidiary may merge or consolidate with any other person
in connection with any Investment permitted by Section
6.4(a)(i), provided that, to the extent the Company is a party
to such a merger or consolidation with a Foreign Entity, the
Company shall be the surviving corporation, (D) any wholly-owned
Foreign Entity may merge into or consolidate with any other
wholly-owned Foreign Entity, (E) any wholly-owned Foreign Entity
may merge into or consolidate with the Company or any
wholly-owned Subsidiary that is a Subsidiary Guarantor and is a
Domestic Subsidiary in a transaction in which the surviving
entity is the Company or a wholly-owned Subsidiary that is a
Subsidiary Guarantor and is a Domestic Subsidiary and (F) any
Foreign Entity may merge into or consolidate with any
wholly-owned Foreign Entity in a transaction in which the
surviving entity is a wholly-owned Foreign Entity in a
transaction permitted by Section 6.4; and"
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(e) The parenthetical beginning on the third line of Section
6.5(a)(ii)(C) of the Credit Agreement is amended to read as follows:
"(within 60 days after the occurrence of such sale or
disposition of property)"
3. 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. The Credit 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 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.
4. 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.
5. 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 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.
6. MISCELLANEOUS.
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(a) Except as herein amended, all terms, covenants and
provisions of the Credit Agreement are and shall remain in full force and effect
and all references therein to the Credit Agreement shall henceforth refer to the
Credit Agreement as amended by this Amendment. This Amendment shall be deemed
incorporated into, and a part of, the Credit 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.
(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.
(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
Acknowledgment) confirm that the Security Documents secure the Obligations under
the Credit Agreement as amended by this Amendment. Each Guarantor by execution
of the Acknowledgment confirms
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that the benefit of such Guarantor's Company Guarantee Agreement or Subsidiary
Guarantee Agreement, as applicable, applies to all Obligations under the Credit
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
-----------------------------------------
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
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
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By: /s/ Xxxx X'Xxxx
-----------------------------------------
Name: Xxxx X'Xxxx
Title: Vice President
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:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
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
-----------------------------------------
Name: Xxxxxxxx X. Xxxxxxxxxx
Title: Vice President
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BANK ONE, N.A.
(f.k.a. 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
KEYBANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ Xxxx X. Xxxxx
-----------------------------------------
Name: Xxxx X. Xxxxx
Title: Assistant Vice President
NATIONAL BANK OF CANADA,
as a Lender
By: /s/ Xxxxx X. Xxxx
-----------------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
By: /s/ Xxxx X. Xxxx
-----------------------------------------
Name: Xxxx X. Xxxx
Title: Vice President
TRANSAMERICA COMMERCIAL FINANCE CORPORATION,
as a Lender
By: /s/ Xxxxxxxxxxx X. Meals
-----------------------------------------
Name: Xxxxxxxxxxx X. Meals
Title: Vice President - Credit
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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
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President
IBM CREDIT CORPORATION,
as a Lender
By: /s/ Xxx Xxxxxx
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Name: Xxx Xxxxxx
Title: Manager of Credit
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
-----------------------------------------
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 Fourth 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
November 23, 1999
