TWELFTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER
THIS TWELFTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER (this
"Amendment") is made and entered into as of this 29th day of August, 2003, by
and among ARRIS INTERNATIONAL, INC., a Delaware corporation (the "Company"),
ARRIS INTERACTIVE L.L.C., a Delaware limited liability company ("Arris LLC"),
certain Subsidiaries of the Company listed on the signature pages hereof
(together with the Company and Arris LLC, the "Borrowers"), the financial
institutions listed on the signature pages hereof as lenders (the "Lenders"),
and THE CIT GROUP/BUSINESS CREDIT, as administrative agent, collateral agent
and syndication agent for the Lenders ("Agent").
WHEREAS, Borrowers, Lenders, and Agent entered into that certain
Credit Agreement, dated as of August 3, 2001, pursuant to which the Lenders
agreed to make certain loans to the Borrowers (as amended, modified,
supplemented and restated from time to time, the "Credit Agreement").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the Credit Agreement; and
WHEREAS, pursuant to Section 7.6A of the Credit Agreement, Borrowers
are required to maintain a Fixed Charge Coverage Ratio of at least 1.50:1.00
for the periods described therein, and Borrowers have notified Agent that they
expect to fail to meet the Fixed Charge Coverage Ratio for the third and fourth
Fiscal Quarters of 2003 (the "Fixed Charge Coverage Ratio Defaults"); and
WHEREAS, the Approving Lenders have agreed to waive the Fixed Charge
Coverage Ratio Defaults; and
WHEREAS, the Borrowers, the Agent, and the Approving Lenders wish to
amend the Loan Agreement as set forth herein;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
1. Amendments to Credit Agreement.
(a) Section 1.1 to the Credit Agreement shall be amended by
adding the following definition, which shall be inserted in the proper
alphabetical order:
"Twelfth Amendment" shall mean and refer to that certain "Twelfth
Amendment to Credit Agreement, Consent and Waiver" by and among the Borrowers,
Lenders, and Agent, as identified therein, dated as of August 29, 2003.
(b) Section 7.6 shall be amended by adding a new Subsection E as
follows:
E. EBITDA COVENANT
On a consolidated basis, the Borrowers shall have Consolidated EBITDA
for each of the third and fourth Fiscal Quarter period ending on the dates set
forth below of not less than the amounts indicated:
PERIOD CONSOLIDATED EBITDA
July 1, 2003 through September 30, 2003 -3,000,000
October 1, 2003 through December 31, 2003 3,000,000
2. Waiver. The Approving Lenders hereby agree to waive the Fixed
Charge Coverage Ratio Defaults.
3. Fee. Borrowers shall pay to Agent, for the benefit of itself
and the Lenders a fee of $________ (the "Fee") due and payable upon the
execution of this Amendment. The Fee shall be shared pro rata among the
Approving Lenders and shall be fully earned by Administrative Agent and
Approving Lenders when paid and shall not be subject to refund or rebate.
4. Representations, Warranties and Covenants of Borrowers. To
induce Agents and Lenders to enter into this Amendment:
(a) Each Borrower hereby represents, warrants and covenants to
Agents and Lenders that,
(i) as of the date hereof, and after giving effect to
the terms hereof, there exists no Event of Default under the Credit
Agreement or any of the other Loan Documents other than the Fixed
Charge Coverage Ratio Defaults,
(ii) each representation and warranty made or deemed to
be made in this Amendment and in the Loan Documents is true and
correct in all material respects on and as of the date of this
Amendment (except to the extent that any such representation or
warranty relates to a prior specific date or period) and Borrowers
hereby reaffirm each of the agreements, covenants and undertakings set
forth in the Loan Documents and in each and every other agreement,
instrument and other document executed in connection therewith or
pursuant thereto as if Borrowers were making said agreements,
covenants and undertakings on the date hereof,
(iii) each Borrower has the power and is duly authorized
to enter into, deliver and perform this Amendment and
(iv) this Amendment and each of the Loan Documents is the
legal, valid and binding obligation of each Borrower enforceable
against it in accordance with its terms.
(b) Each Borrower acknowledges and agrees that no right of
offset, defense (other than to the extent of prior payment or performance of
any Obligations), counterclaim, claim, causes of action or objection in favor
of any Borrower against either Agent or any Lender presently exists by reason
of any act, event, omission, manner, cause or things occurring on or prior to
the date of this Amendment arising out of or with respect to, (i) the Credit
Agreement, as hereby amended, or any of the other Loan Documents, (ii) any
other documents now or
heretofore evidencing, securing or in any way relating to the foregoing, or
(iii) the administration or funding of any of the Loans, the Obligations or any
Letter of Credit.
5. Further Assurances. Borrowers agree to take such further
action as Agent shall reasonably request in connection herewith to evidence the
agreement herein contained.
6. Counterparts. 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 to be an original and
all of which counterparts, taken together, shall constitute but one and the
same instrument.
7. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of, and the decisions of the courts in,
the State of New York.
[Signature Pages Follow]
IN WITNESS WHEREOF, Borrowers, the Agent and the Approving Lenders
have caused this Amendment to be duly executed, all as of the date first above
written.
BORROWERS:
ARRIS INTERNATIONAL, INC.
By: /s/ Lawrence A. Margolis
------------------------------------
Name: Lawrence A. Margolis
Title: Executive Vice President,
Chief Financial Officer and
Secretary
ARRIS INTERACTIVE L.L.C.
By: /s/ Lawrence A. Margolis
------------------------------------
Name: Lawrence A. Margolis
Title: Executive Vice President
ANTEC ASSET MANAGEMENT COMPANY
By: /s/ Lawrence A. Margolis
------------------------------------
Name: /s/ 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: /s/ Lawrence A. Margolis
Title: Vice President
KEPTEL, INC.
By: /s/ Lawrence A. Margolis
------------------------------------
Name: /s/ Lawrence A. Margolis
Title: Vice President
[Signatures Continue on Following Pages]
AGENT:
THE CIT GROUP/BUSINESS CREDIT, INC., as
Administrative Agent, Collateral Agent,
and Syndication Agent
By: /s/ John F. Bohan
------------------------------------
Name: John F. Bohan
Title: Vice President
[Lenders' Signatures Follow]
LENDERS:
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ John F. Bohan
------------------------------------
Name: John F. Bohan
Title: Vice President
CONGRESS FINANCIAL CORPORATION
(SOUTHWEST)
By: /s/ Paul Truax
------------------------------------
Name: Paul Truax
----------------------------------
Title: Vice President
---------------------------------
GMAC COMMERCIAL CREDIT LLC
By: /s/ Steven J. Brown
------------------------------------
Name: Steven J. Brown
Title: Vice President