EXHIBIT 10.1(B)
EXECUTION
SECOND AMENDMENT
TO CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") is dated
as of April 19, 2002 and entered into by and among ARRIS INTERNATIONAL, INC., a
Delaware corporation (the "COMPANY"), ARRIS INTERACTIVE L.L.C., a Delaware
limited liability company ("ARRIS"), EACH OF COMPANY'S SUBSIDIARIES LISTED ON
THE SIGNATURE PAGES HEREOF (Company, Arris and each such subsidiary are
individually referred to herein as a "BORROWER" and, collectively, on a joint
and several basis, as the "BORROWERS"), THE FINANCIAL INSTITUTIONS LISTED ON THE
SIGNATURE PAGES HEREOF (each individually referred to herein as a "LENDER" and
collectively as "LENDERS"), CREDIT SUISSE FIRST BOSTON, as syndication agent for
Lenders (in such capacity, "SYNDICATION AGENT") and THE CIT GROUP/BUSINESS
CREDIT, INC., as administrative agent and collateral agent for Lenders (in such
capacity, "ADMINISTRATIVE AGENT"), and is made with reference to that certain
Credit Agreement dated as of August 3, 2001, as amended by that certain First
Amendment to Credit Agreement dated as of January 8, 2002 (the "FIRST
AMENDMENT") and as further supplemented by that certain Acknowledgement dated as
of March ___, 2002 (as amended, restated, supplemented or otherwise modified as
of the date hereof, the "CREDIT AGREEMENT"), by and among the Borrowers,
Lenders, Syndication Agent and Administrative Agent. Capitalized terms used
herein without definition shall have the same meanings herein as set forth in
the Credit Agreement.
RECITALS
WHEREAS, Borrowers desire to enter into certain Currency Agreements in
connection with the sale of its products to foreign purchasers; and
WHEREAS, Borrowers and Lenders desire to amend the Credit Agreement to
(i) secure any Currency Agreement entered into by any Borrower with any Lender
or any Affiliate of any Lender; (ii) reduce availability under the Credit
Agreement by an amount equal to a portion of the funds subject to such Currency
Agreement to be agreed upon by such Lender and Company; and (iii) make certain
other amendments as set forth below;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 AMENDMENTS TO SECTION 1: PROVISIONS RELATING TO DEFINED TERMS
A. Subsection 1.1 of the Credit Agreement is hereby amended by adding
thereto the following definitions, which shall be inserted in proper
alphabetical order:
"CURRENCY AGREEMENT LENDER" means any Revolving Lender that enters into
or has an Affiliate that enters into a Currency Agreement with any Borrower.
"CURRENCY AGREEMENT RESERVED AMOUNT" means for each Lender Currency
Agreement, at any date of determination, an amount (expressed in Dollars) to
be agreed upon in writing by Company and the Currency Agreement Lender that
entered into (or whose Affiliate entered into) such Lender Currency
Agreement; provided, however, that notwithstanding any agreement between the
Company and any Currency Agreement Lender, no Currency Agreement Reserved
Amount shall be established for any Lender Currency Agreement that would
cause the Lender Currency Agreement Reserve to exceed $8,000,000.
"LENDER CURRENCY AGREEMENT" means any Currency Agreement entered into
between any Borrower and any Lender or any Affiliate of any Lender that
Administrative Agent has written notice of from such Lender that attaches a
copy of the written agreement of the Company and such Lender on the
requested Currency Agreement Reserved Amount for such Lender Currency
Agreement.
"LENDER CURRENT AGREEMENT RESERVE" means an amount equal to the
aggregate amount of all Currency Agreement Reserved Amounts.
B. Subsection 1.1 of the Credit Agreement is hereby further amended by
deleting the definitions of "Obligations", "Discretionary Overdraft Loan",
"Discretionary Post-Default Overdraft Loan", "Excess Availability" and "Loan
Documents" therefrom in their entirety and substituting the following therefore:
"OBLIGATIONS" means all obligations of every nature of each Loan Party
from time to time owed to Administrative Agent, Lenders or any of them (or
any Affiliate of any Lender that is a party to a Lender Currency Agreement)
under the Loan Documents, whether for principal, interest, reimbursement of
amounts drawn under Letters of Credit, fees, expenses, indemnification or
otherwise.
"DISCRETIONARY OVERDRAFT LOAN" means any Discretionary Loan if (i) the
making of such Discretionary Loan would cause the Total Utilization of
Revolving Loan Commitments to exceed an amount equal to (x) the Borrowing
Base then in effect minus (y) the Lender Currency Agreement Reserve Amount
then in effect or (ii) at the time such Discretionary Loan is made the Total
Utilization of Revolving Loan Commitments exceeds an amount equal to (x) the
Borrowing Base then in effect minus (y) the Lender Currency Agreement
Reserve Amount then in effect.
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"DISCRETIONARY POST-DEFAULT OVERDRAFT LOAN" means any Discretionary
Post-Default Loan if (i) the making of such Discretionary Post-Default Loan
would cause the Total Utilization of Revolving Loan Commitments to exceed an
amount equal to (x) the Borrowing Base then in effect minus (y) the Lender
Currency Agreement Reserve Amount then in effect or (ii) at the time such
Discretionary Post-Default Loan is made the Total Utilization of Revolving
Loans exceeds an amount equal to (x) the Borrowing Base then in effect minus
(y) the Lender Currency Agreement Reserve Amount then in effect.
"EXCESS AVAILABILITY" means the amount, as of any date of
determination, by which (a) the lesser of (i) an amount equal to (x) the
Borrowing Base then in effect minus (y) the Lender Currency Agreement
Reserve Amount then in effect or (ii) the Revolving Loan Commitments exceeds
(b) the Total Utilization of Revolving Loan Commitments, as determined by
Administrative Agent.
"LOAN DOCUMENTS" means this Agreement, the Notes, any Letter of Credit
Guaranty, the Guaranties, any Lender Currency Agreement and the Collateral
Documents.
1.2 AMENDMENTS TO SECTION 2: AMOUNTS AND TERMS OF COMMITMENTS AND
LOANS
A. Subsection 2.1A of the Credit Agreement is hereby amended by
deleting the last paragraph of clause (i) of such subsection in its entirety and
substituting therefore the following:
"In addition, no Revolving Loans (other than Revolving Discretionary
Loans) shall be made at any time if the Total Utilization of Revolving Loan
Commitments at any time exceeds an amount equal to (x) the Borrowing Base
then in effect minus (y) the Lender Currency Agreement Reserve Amount then
in effect."
B. Subsection 2.1A of the Credit Agreement is hereby further amended by
deleting the second paragraph of clause (ii)(a) of such subsection in its
entirety and substituting therefore the following:
"Anything contained in this Agreement to the contrary notwithstanding,
the Swing Line Loans and the Swing Line Loan Commitment shall be subject to
the limitation, that in no event shall the Total Utilization of Revolving
Loan Commitments at any time exceed the lesser of (i) the Revolving Loan
Commitments then in effect and (ii) an amount equal to (x) the Borrowing
Base then in effect minus (y) the Lender Currency Agreement Reserve then in
effect (other than Discretionary Loans made in accordance with the following
paragraph)."
C. Subsection 2.1A of the Credit Agreement is hereby further amended by
deleting clause (ii)(a)(2)(A) of such subsection in its entirety and
substituting therefore the following:
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"(A) the Total Utilization of Revolving Loan Commitments exceeds an
amount equal to (x) the Borrowing Base then in effect minus (y) the Lender
Currency Agreement Reserve then in effect and/or"
D. Subsection 2.1A of the Credit Agreement is hereby further amended by
deleting the last proviso contained in clause (ii)(a)(2) of such subsection in
its entirety and substituting therefore the following:
"provided, further, that anything contained in this Agreement to the
contrary notwithstanding, the making of any Swing Line Loans that constitute
Discretionary Loans shall be subject to the limitation that in no event
shall the Total Utilization of Revolving Loan Commitments at any time exceed
the lesser of (i) an amount equal to (x) the Maximum Discretionary Borrowing
Base Amount then in effect minus (y) the Lender Currency Agreement Reserve
then in effect and (ii) the Revolving Loan Commitments then in effect."
E. Subsection 2.4A of the Credit Agreement is hereby amended by
deleting clause (iii)(h)(2) of such subsection in its entirety and substituting
therefore the following:
"(2) if at any time (x) the Total Utilization of Revolving Loan
Commitments minus the aggregate principal amount of outstanding
Discretionary Loans and Revolving Discretionary Loans exceed (y) an amount
equal to (i) the Borrowing Base then in effect minus (ii) the Lender
Currency Agreement Reserve then in effect, Borrowers shall prepay first the
Swing Line Loans (other than any Revolving Discretionary Loans) and second
the Revolving Loans (other than any Revolving Discretionary Loans) in an
amount equal to such excess."
1.3 AMENDMENT TO SECTION 3: LETTERS OF CREDIT
Subsection 3.1A of the Credit Agreement is hereby amended by deleting
clause (ii) of such subsection in its entirety and substituting therefore the
following:
"(ii) any Letter of Credit if, after giving effect to such issuance,
the Total Utilization of Revolving Loan Commitments would exceed an amount
equal to (x) the Borrowing Base then in effect minus (y) the Lender Currency
Agreement Reserve then in effect;"
1.4 AMENDMENT TO SECTION 4: CONDITIONS TO LOANS AND LETTERS OF
CREDIT
A. Subsection 4.2B of the Credit Agreement is hereby amended by
deleting clause (v) of such subsection in its entirety and substituting
therefore the following:
"(v) After giving effect to the Loans requested on the Funding Date,
the Total Utilization of Revolving Loan Commitments will not exceed an
amount equal to (x) the Borrowing Base then in effect minus (y) the Lender
Currency Agreement Reserve then in effect; provided, however, that this
clause shall not apply to the borrowing of any Swing Line Loan that is a
Discretionary Overdraft Loan or any Revolving Loans that are Revolving
Discretionary Overdraft Loans;"
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B. Subsection 4.2B of the Credit Agreement is hereby further amended by
deleting clause (vi)(a) of such subsection if its entirety and substituting
therefore the following:
"(a) after giving effect to the Loans requested on the Funding Date,
the Total Utilization of Revolving Loan Commitments will not exceed an
amount equal to (x) the Maximum Discretionary Borrowing Base Amount then in
effect minus (y) the Lender Currency Agreement Reserve then in effect;"
SECTION 2. BORROWERS' REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend
the Credit Agreement in the manner provided herein, Borrowers represent and
warrant to each Lender that the following statements are true, correct and
complete:
A. CORPORATE POWER AND AUTHORITY. Each Borrower has all requisite
corporate power and authority to enter into this Amendment, and perform its
obligations under, the Credit Agreement as amended by the First Amendment and
this Amendment (the "AMENDED AGREEMENT").
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
Amendment and the performance of the Amended Agreement have been duly authorized
by all necessary corporate action on the part of each of the Borrowers.
C. NO CONFLICT. The execution and delivery by Borrowers of this
Amendment and the performance by Borrowers of the Amended Agreement do not and
will not (i) violate any provision of any law or any governmental rule or
regulation applicable to any Borrower or any of their respective Subsidiaries,
the Certificate or Articles of Incorporation or Bylaws or Certificate of
Formation or Operating Agreement, as applicable, of any Borrower or any of its
Subsidiaries or any order, judgment or decree of any court or other agency of
government binding on any Borrower or any of its Subsidiaries, (ii) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any Contractual Obligation of any Borrower or any of its
Subsidiaries, (iii) result in or require the creation or imposition of any Lien
upon any of the properties or assets of any Borrower or any of its Subsidiaries
(other than Liens created under any of the Loan Documents in favor of
Administrative Agent on behalf of Lenders), or (iv) require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of any Borrower or any of its Subsidiaries.
D. GOVERNMENTAL CONSENTS. The execution and delivery by each Borrower
of this Amendment and the performance by the Borrowers of the Amended Agreement
and the transactions contemplated by this Amendment do not and will not require
any registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body.
E. BINDING OBLIGATION. This Amendment and the Amended Agreement have
been duly executed and delivered by each Borrower and is the legally valid and
binding obligations of the Borrowers, enforceable against the Borrowers in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization,
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moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 5 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the First Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this Amendment
that would constitute an Event of Default or a Potential Event of Default.
SECTION 3. ACKNOWLEDGEMENT AND CONSENT
Holdings, each Borrower and each Subsidiary Guarantor hereby
acknowledges that such Loan Party has read this Amendment and consents to the
terms hereof and further hereby confirms and agrees that, notwithstanding the
effectiveness of this Amendment, the obligations of such Loan Party under each
of the Loan Documents to which such Loan Party is a party shall not be impaired
and each of the Loan Documents to which such Loan Party is a party are, and
shall continue to be, in full force and effect and are hereby confirmed and
ratified in all respects.
Holdings and each Subsidiary Guarantor acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Amendment,
such Loan Party is not required by the terms of the Credit Agreement or any
other Loan Document to consent to the amendments to the Credit Agreement
effected pursuant to this Amendment and (ii) nothing in the Credit Agreement,
this Amendment or any other Loan Document shall be deemed to require the consent
of such Loan Party to any future amendments to the Credit Agreement.
SECTION 4. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
(i) On and after the Second Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Credit Agreement, and each
reference in the other Loan Documents to the "Credit Agreement", "thereunder",
"thereof" or words of like import referring to the Credit Agreement shall mean
and be a reference to the Amended Agreement.
(ii) Except as specifically amended by this Amendment, the Credit
Agreement and the other Loan Documents shall remain in full force and effect and
are hereby ratified and confirmed.
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(iii) The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of
Administrative Agent or any Lender under, the Credit Agreement or any of the
other Loan Documents.
B. FEES AND EXPENSES. Company acknowledges that all costs, fees and
expenses as described in subsection 10.2 of the Credit Agreement incurred by
Agents and their counsel with respect to this Amendment and the documents and
transactions contemplated hereby shall be for the account of Borrowers.
C. HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Amendment shall become effective upon the execution of a
counterpart hereof by each of the Borrowers, each of the Subsidiary Guarantors,
Holdings and Requisite Lenders and receipt by Company and Administrative Agent
of written or telephonic notification of such execution and authorization of
delivery.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
HOLDINGS: ARRIS GROUP, INC.
By:
----------------------------------------
Name: Lawrence A. Margolis
Title: Vice President, Chief Financial
Officer & Secretary
COMPANY: ARRIS INTERNATIONAL, INC.
By:
----------------------------------------
Name: Lawrence A. Margolis
Title: Executive Vice President, Chief
Financial Officer & Secretary
ARRIS: ARRIS INTERACTIVE L.L.C.
By:
----------------------------------------
Name: Lawrence A. Margolis
Title: Executive Vice President
SUBSIDIRIES OF COMPANY: ANTEC ASSET MANAGEMENT COMPANY
By:
----------------------------------------
Name: Lawrence A. Margolis
Title: President
ANTEC LICENSING COMPANY
By:
----------------------------------------
Name: Lawrence A. Margolis
Title: President
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TEXSCAN CORPORATION
By:
------------------------------------
Name: Lawrence A. Margolis
Title: Chairman of the Board
ELECTRONIC CONNECTOR
CORPORATION OF ILLINOIS
By:
------------------------------------
Name: Lawrence A. Margolis
Title: Vice President
POWER GUARD, INC.
By:
------------------------------------
Name: Lawrence A. Margolis
Title: Vice President
ELECTRONIC SYSTEM PRODUCTS INC.
By:
------------------------------------
Name: Lawrence A. Margolis
Title: Vice President
KEPTEL, INC.
By:
------------------------------------
Name: Lawrence A. Margolis
Title: Vice President
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SUBSIDIARY GUARATORS,
for purposes of Section 3 only, TEXSCAN DE MEXICO, S.A. DE C.V.
By:
------------------------------------
Name: Lawrence A. Margolis
Title: Chairman
KEPTEL DE MEXICO S.A. DE C.V.
By:
------------------------------------
Name: Lawrence A. Margolis
Title: Chairman
ANTEC INTERNATIONAL
CORPORATION
By:
------------------------------------
Name: Lawrence A. Margolis
Title: Director
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LENDERS: THE CIT GROUP/BUSINESS CREDIT,
INC.,
individually and as Administrative Agent
and Collateral Agent
By:
------------------------------------
Name:
Title:
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CREDIT SUISSE FIRST BOSTON,
individually and as Syndication Agent
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
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AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO
By:
------------------------------------
Name:
Title:
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COMERICA BANK
By:
------------------------------------
Name:
Title:
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CONGRESS FINANCIAL CORPORATION
(SOUTHERN)
By:
------------------------------------
Name:
Title:
S-8
FLEET CAPITAL CORPORATION
By:
------------------------------------
Name:
Title:
S-9
GMAC COMMERCIAL CREDIT LLC
By:
------------------------------------
Name:
Title:
S-10
IBM CREDIT CORPORATION
By:
------------------------------------
Name:
Title:
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PNC BANK, NATIONAL ASSOCIATION
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
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