Exhibit 10.1
SIXTH AMENDMENT
TO CREDIT AGREEMENT
This SIXTH AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") is
dated as of November 21, 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") and THE CIT GROUP/BUSINESS CREDIT, INC.,
as administrative agent, collateral agent and syndication 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, as supplemented
by that certain Acknowledgement dated as of March 21, 2002, as further amended
by that certain Second Amendment to Credit Agreement dated as of April 17, 2002,
as further amended by that certain Third Amendment to Credit Agreement dated as
of April 24, 2002, as further amended by that certain Fourth Amendment to Credit
Agreement dated as of May 31, 2002, as further supplemented by that certain
Fifth Amendment dated as of September 30, 2002 and as further supplemented by
that certain Consent dated as of September 30, 2002 (as so amended, restated,
supplemented or otherwise modified as of the date hereof, the "CREDIT
AGREEMENT"), by and among the Borrowers, the financial institutions listed on
the signature pages thereof, Credit Suisse First Boston 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 and Lenders desire to amend the Credit
Agreement to (i) allow Company and Texscan de Mexico, S.A. de C.V. ("TEXSCAN DE
MEXICO") to sell substantially all of the assets related to the Company's
Actives Electronics Business (the "ACTIVES DIVISION SALE") to
Scientific-Atlanta, Inc. ("SA") for cash proceeds of approximately $37,500,000;
(ii) allow for the release from the Lien created by the Collateral Documents of
the assets that in connection with the Actives Division Sale will be transferred
to SA by the Company and Texscan de Mexico; 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
Subsection 1.1 of the Credit Agreement is hereby amended by
adding thereto the following definitions, which shall be inserted in proper
alphabetical order:
"ACTIVES DIVISION" means that portion of the Company's and its
Subsidiaries' business engaged in the design, manufacture, distribution
and sale of (i) RF transmission products, including but not limited to
RF amplifiers, RF integrators and RF headend management products, and
(ii) optical transmission products, including but not limited to
optical transmitters and nodes, DWDM transport systems, multi-band
block converters, and element management software, including status
monitoring and control systems.
"ACTIVES DIVISION AMENDMENT" means the Amendment to Purchase
Agreement, dated as of November 21, 2002, by and among SA, Company and
Texscan de Mexico, as amended, restated, supplemented or otherwise
modified from time to time to the extent permitted under subsection
7.12.
"ACTIVES DIVISION ASSET PURCHASE AGREEMENT" means the
Agreement for Purchase and Sale of Assets, dated as of November 21,
2002, by and among SA, Company and Texscan de Mexico, as amended by the
Actives Division Amendment and as otherwise amended, restated,
supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.12.
"ACTIVES DIVISION ASSUMPTION AGREEMENT" means the Assumption
Agreement dated as of November 21, 2002, by and among SA, Company and
Texscan de Mexico, as amended, restated, supplemented or otherwise
modified from time to time to the extent permitted under subsection
7.12.
"ACTIVES DIVISION CLOSING DATE" means the Closing Date (as
such term is defined in the Actives Division Asset Purchase Agreement).
"ACTIVES DIVISION GENERAL BILL OF SALE AND ASSIGNMENT" means
the General Bill of Sale and Assignment, dated as of November 21, 2002,
by and among SA, Company and Texscan de Mexico, as amended, restated,
supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.12.
"ACTIVES DIVISION LICENSE AGREEMENT" means the Limited Patent
License Agreement dated as of November 21, 2002, by and among Company
and SA, as amended, restated, supplemented or otherwise modified from
time to time to the extent permitted under subsection 7.12.
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"ACTIVES DIVISION SALE" means the sale by Company and Texscan
de Mexico of the assets and properties used primarily in the conduct
and operation of the Actives Division in accordance with the terms of
the Actives Division Asset Purchase Agreement.
"ACTIVES DIVISION SALE DOCUMENTS" means the Actives Division
Asset Purchase Agreement, Actives Division Amendment, Actives Division
Assumption Agreement, Actives Division General Bill of Sale and
Assignment, Actives Division License Agreement, Actives Division
Settlement and Cross-License Agreement and the Actives Division
Transition Services Agreement and all other instruments or documents
delivered or entered into in connection with any of the foregoing, in
each case including all schedules, annexes and exhibits thereto, as
such Actives Division Sale Documents may be amended, restated,
supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.12.
"ACTIVES DIVISION SETTLEMENT AND CROSS-LICENSE AGREEMENT"
means the Settlement and Cross-License Agreement, dated as of November
21, 2002, by and among Company and SA, as amended, restated,
supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.12.
"ACTIVES DIVISION TRANSITION SERVICES AGREEMENT" means the
Transition Services Agreement dated as of November 21, 2002, by and
among Company and SA, as amended, restated, supplemented or otherwise
modified from time to time to the extent permitted under subsection
7.12.
"SA" means Scientific-Atlanta, Inc., a Georgia Corporation.
"TEXSCAN DE MEXICO" means Texscan de Mexico, S.A. de C.V, a
company organized under the laws of Mexico
1.2 AMENDMENTS TO SECTION 2: AMOUNTS AND TERMS OF COMMITMENTS AND
LOANS
Subsection 2.4A(iii)(a) of the Credit Agreement is hereby
amended by deleting the proviso at the end of such subsection and substituting
therefore the following:
" ; provided, further, that notwithstanding anything in this
clause (a) to the contrary, from and after the Fifth Amendment
Effective Date, if no Event of Default or Potential Event of Default
has occurred and is continuing, so long as any Convertible Subordinated
Notes are outstanding, Borrowers shall apply an amount equal to such
Net Asset Sale Proceeds from the Keptel Sale, the Actives Division Sale
or any Asset Sale permitted pursuant to subsection 7.7(vi), first, to
repay any outstanding Loans to the full extent thereof and reduce the
Revolving Loan Commitments by an amount equal to such repayment,
second, in accordance with subsection 6.16(b) and third, as otherwise
provided in this clause (a); provided, further, that notwithstanding
anything in the
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immediately foregoing proviso to the contrary, so long as (i)
no Event of Default or Potential Event of Default has occurred
and is continuing and (ii) there are Convertible Subordinated
Notes outstanding, the Commitments shall not be reduced in
connection with any repayment of the Loans made pursuant to
this clause (a) in connection with the receipt of Net Asset
Sale Proceeds from the Actives Division Sale."
1.3 AMENDMENTS TO SECTION 6: AFFIRMATIVE COVENANTS
Section 6 of the Credit Agreement is hereby amended by
deleting subsection 6.16(b) and substituting therefore the following:
"(b) If at any time after the Fifth Amendment Effective Date,
Holdings or any of its Subsidiaries shall make an Asset Sale permitted
by subsections 7.7(vi) or 7.7(xii) or issue any Subordinated
Indebtedness or unsecured Indebtedness in accordance with subsection
7.1(xii), so long as (i) any Convertible Subordinated Notes are
outstanding and (ii) the conditions set forth in subsection 7.5(xi) are
satisfied, Borrowers shall within 15 days of the receipt of such Net
Asset Sale Proceeds or Net Securities Proceeds, (x) repay or redeem the
Convertible Subordinated Notes and/or (y) deposit Cash in the
Redemption/Repayment Deposit Account, in an amount equal to such Net
Asset Sale Proceeds or Net Securities Proceeds minus the amount of any
repayment of the Loans required to be made in accordance with
subsection 2.4(A)(iii) in connection with the receipt of such Net Asset
Sale Proceeds or Net Securities Proceeds."
1.4 AMENDMENTS TO SECTION 7: BORROWERS' NEGATIVE COVENANTS
A. Subsection 7.3 of the Credit Agreement is hereby amended by deleting
the "and" at the end of clause (xvi), deleting the period at the end of clause
(xvii) and substituting therefore "; and", and inserting the following clause
(xviii) at the end of such subsection:
"(xviii) Company and Texscan de Mexico may acquire and hold
the right to receive any payment in connection with the post-closing
purchase price adjustment contained in the Actives Division Asset
Purchase Agreement in accordance with the terms thereof."
B. Subsection 7.7 of the Credit Agreement is hereby amended by deleting
the "and" at the end of clause (x), deleting the period at the end of clause
(xi) and substituting therefore "; and", and inserting the following clause
(xii) at the end of such subsection:
"(xii) So long as no Event of Default or Potential Event of
Default has occurred and is continuing or would be caused thereby,
Company and Texscan de Mexico may sell, license, assign or transfer the
assets and properties used primarily in the conduct and operation of
the Company's and its Subsidiaries' Actives Division for cash
consideration of $37,500,000 (subject to a post-closing purchase price
adjustment as provided in the Actives Division Asset Purchase
Agreement) payable on of after the Actives Division Closing Date in
accordance with the terms of the Actives Division Sale Documents."
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C. Subsection 7.12 of the Credit Agreement is hereby amended by
deleting subsection 7.12A and substituting therefor the following:
"A. AMENDMENTS OR WAIVERS OF CERTAIN AGREEMENTS. Neither any
Borrower nor any of its Subsidiaries will agree to any amendment to, or
waive any of its rights under, any Reorganization Document, Mexican
Intercompany Security Document, Tax Abatement Transaction Document,
Cadant Acquisition Document, Keptel Sale Document or Actives Division
Sale Document after the Closing Date, without in each case obtaining
the prior written consent of Requisite Lenders to such amendment or
waiver."
SECTION 2. RELEASE OF CERTAIN COLLATERAL
In connection with the Actives Division Sale, the Lenders hereby
authorize Administrative Agent to release from the Liens created by the
Collateral Documents (i) the assets sold by the Company and Texscan de Mexico
pursuant to the Actives Division Sale Documents and (ii) the Intellectual
Property Collateral (as defined in the Security Agreement) transferred by
Borrowers pursuant to the Actives Division Sale Documents.
SECTION 3. CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall become effective only upon
the satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "SIXTH AMENDMENT
EFFECTIVE DATE") on the Sixth Amendment Effective Date, all conditions to the
consummation of the Actives Division Sale (other than payment of the purchase
price therefor and the conveyance of assets resulting therefrom) shall have been
satisfied or waived with the consent of Administrative Agent and Administrative
Agent shall have received (i) a fully executed or conformed copy of each Actives
Division Sale Document to be entered into on or prior to the Sixth Amendment
Effective Date, in form and substance reasonably satisfactory to the
Administrative Agent and each such Actives Division Acquisition Document shall
be in full force and effect and no provision thereof shall have been modified or
waived without the consent of Administrative Agent and the parties to the
Actives Division Sale Documents shall not have failed in any material respect to
perform any material obligation or covenant required by the Actives Division
Asset Purchase Agreement, respectively, to be performed or complied with by any
of them on or before the Sixth Amendment Effective Date, and (ii) an Officer's
Certificate of Company (1) to the effect set forth in clause (i) and (2) stating
that Company and Texscan de Mexico will proceed to consummate the Actives
Division Sale contemporaneously with the effectiveness of this Amendment.
SECTION 4. 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:
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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 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, other than filings required by the Securities Act and the regulations
relating thereto.
E. BINDING OBLIGATION. This Amendment and the Amended Agreement have
been duly executed and delivered by each Borrower and are 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, 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 Sixth 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.
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SECTION 5. ACKNOWLEDGEMENT AND CONSENT
A. 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 6. 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.
(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.
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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.
[Remainder of page intentionally left blank]
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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: /s/ Lawrence A. Margolis
_____________________________
Name: Lawrence A. Margolis
Title: Vice President, Chief
Financial Officer &
Secretary
COMPANY: ARRIS INTERNATIONAL, INC.
By: /s/ Lawrence A. Margolis
_____________________________
Name: Lawrence A. Margolis
Title: Executive Vice
President, Chief
Financial
Officer & Secretary
ARRIS: ARRIS INTERACTIVE L.L.C.
By: /s/ Lawrence A. Margolis
_____________________________
Name: Lawrence A. Margolis
Title: Executive Vice
President
SUBSIDIARIES OF COMPANY: ANTEC ASSET MANAGEMENT COMPANY
By: /s/ Lawrence A. Margolis
_____________________________
Name: Lawrence A. Margolis
Title: President
ANTEC LICENSING COMPANY
By: /s/ Lawrence A. Margolis
_____________________________
Name: Lawrence A. Margolis
Title: President
TEXSCAN CORPORATION
By: /s/ Lawrence A. Margolis
-----------------------------
Name: Lawrence A. Margolis
Title: Chairman of the Board
ELECTRONIC CONNECTOR CORPORATION OF
ILLINOIS
By: /s/ Lawrence A. Margolis
-----------------------------
Name: Lawrence A. Margolis
Title: Vice President
POWER GUARD, INC.
By: /s/ Lawrence A. Margolis
-----------------------------
Name: Lawrence A. Margolis
Title: Vice President
ELECTRONIC SYSTEM PRODUCTS INC.
By: /s/ Lawrence A. Margolis
-----------------------------
Name: Lawrence A. Margolis
Title: Vice President
KEPTEL, INC.
By: /s/ Lawrence A. Margolis
-----------------------------
Name: Lawrence A. Margolis
Title: Vice President
S-2
SUBSIDIARY GUARANTORS,
for purposes of Section 3 only, TEXSCAN DE MEXICO, S.A. DE C.V.
By: /s/ Lawrence A. Margolis
---------------------------
Name: Lawrence A. Margolis
Title: Chairman
KEPTEL DE MEXICO S.A. DE C.V.
By: /s/ Lawrence A. Margolis
---------------------------
Name: Lawrence A. Margolis
Title: Chairman
ANTEC INTERNATIONAL CORPORATION
By: /s/ Lawrence A. Margolis
---------------------------
Name: Lawrence A. Margolis
Title: Director
S-3
LENDERS: THE CIT GROUP/BUSINESS CREDIT, INC.,
individually and as Administrative Agent
and Collateral Agent
By: /s/ John F. Bohan
---------------------------------
Name: John F. Bohan
Title: Vice President
S-4
AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO
By: /s/ Diane M. Zurick
-------------------------------
Name: Diane M. Zurick
Title: Assistant Vice President
S-5
COMERICA BANK
By: /s/ Roamre Desolvatore
-----------------------------
Name: Roamre Desolvatore
Title: Vice President
S-6
CONGRESS FINANCIAL CORPORATION
(SOUTHERN)
By: /s/ Morris P. Holloway
-----------------------------
Name: Morris P. Holloway
Title: Senior Vice President
S-7
FLEET CAPITAL CORPORATION
By: /s/ Douglas Strange
-----------------------------
Name: Douglas Strange
Title: Vice President
S-8
GMAC COMMERCIAL CREDIT LLC
By: /s/ Patrick McComack
-----------------------------
Name: Patrick McComack
Title: Vice President
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