Exhibit 10.3
SEVENTH AMENDMENT
TO CREDIT AGREEMENT
This SEVENTH AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") is
dated as of January 2, 2003 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, as further supplemented by that
certain Consent dated as of September 30, 2002, and as further amended by that
certain Sixth Amendment to Credit Agreement dated as of November 21, 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 amend the minimum consolidated net worth covenant contained in subsection
7.6C of the Credit Agreement.
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 7: BORROWERS' NEGATIVE COVENANTS
Subsection 7.6 of the Credit Agreement is hereby amended by deleting
subsection C and substituting the following therefore:
"C. MINIMUM CONSOLIDATED NET WORTH. Prior to the date that is December 31,
2002, Holdings and Borrowers shall not permit Consolidated Net Worth at any time
to be less than the sum of (i) $368.9 million plus (ii) (a) the sum of
Consolidated Net Income for each Fiscal Quarter ending after the Closing Date
and ending on or before such date of determination in which Consolidated Net
Income was positive multiplied by (b) 75%; provided that for purposes of
calculating Consolidated Net Income for the Fiscal Quarter ending on September
30, 2001, such Fiscal Quarter shall be deemed to commence on the first day after
the Closing Date and end on September 30, 2001."
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 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
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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 true, correct and complete in all material respects on and as of
the date hereof to the same extent as though made on and as of such 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
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
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 date hereof, 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
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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: /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
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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
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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
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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
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BANK ONE, N.A., as successor in interest of
American National Bank and Trust Company of
Chicago
By: /s/ Diane M. Zurick
-------------------------------
Name: Diane M. Zurick
Title: Assistant Vice President
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COMERICA BANK
By:
-----------------------------
Name:
Title:
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CONGRESS FINANCIAL CORPORATION
(SOUTHERN)
By: /s/ Gary S. Silvers
-----------------------------
Name: Gary S. Silvers
Title: Vice President
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FLEET CAPITAL CORPORATION
By: /s/ Douglas Strange
-----------------------------
Name: Douglas Strange
Title: Vice President
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GMAC COMMERCIAL CREDIT LLC
By:
-----------------------------
Name:
Title:
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