EXHIBIT 10.2
FIRST AMENDMENT
FINANCING AGREEMENT
AGREEMENT dated as of November 6, 2002 among Conexant Systems, Inc., a
Delaware corporation ("CONEXANT"), Skyworks Solutions, Inc., a Delaware
corporation formerly known as Alpha Industries, Inc. ("SKYWORKS"), and the
subsidiaries of Skyworks that are parties to the Financing Agreement referred to
below ("SKYWORKS SUBSIDIARIES").
PRELIMINARY STATEMENTS
A. Conexant, Skyworks and the Skyworks Subsidiaries are parties to a
Financing Agreement dated as of June 25, 2002 (the "FINANCING AGREEMENT").
B. Conexant and Skyworks are parties to a Refinancing Agreement dated as
of November 6, 2002 (the "REFINANCING AGREEMENT").
C. The Refinancing Agreement provides for the Financing Agreement to be
amended as set forth in this Agreement.
SECTION 1
DEFINED TERMS; RULES OF CONSTRUCTION
1.1 DEFINED TERMS. In this Agreement, terms defined in the preamble,
preliminary statements or other sections of this Agreement shall have the
meanings set forth therein, and capitalized terms used but not otherwise defined
in this Agreement which are defined in the Refinancing Agreement or the
Financing Agreement shall have the meanings set forth in the Refinancing
Agreement or the Financing Agreement.
1.2 RULES OF CONSTRUCTION. The rules of construction set forth in Exhibit A
to the Financing Agreement shall apply to this Agreement.
SECTION 2
AMENDMENTS
2.1 COMMITMENT REDUCTION. Section 2.1.1.2 of the Financing Agreement is
amended and restated to read in its entirety as follows:
"2.1.1.2 COMMITMENT AMOUNT. The Commitment shall be
$50,000,000, subject to reduction and termination as provided
in Section 2.1.1.3 (the "COMMITMENT")."
2.2 ACQUISITION NOTES.
2.2.1 AMENDMENT OF SECTION 2.2. Section 2.2 of the Financing
Agreement is amended and restated to read in its entirety as
follows:
"2.2 INTERIM CONVERTIBLE NOTES. Each of the Interim
Convertible Notes issued pursuant to the Refinancing Agreement
shall be:
2.2.1 an Alpha Note, an Alpha Obligation and a
Note for all purposes of this Agreement;
2.2.2 entitled to the benefit of the guaranties
set forth in Section 3 of this Agreement;
and
2.2.3 an Obligation secured by the security
interest granted in Section 4 of this
Agreement and by each of the other Security
Documents."
2.2.2 REFERENCES TO ACQUISITION NOTES. Each reference in the
Financing Agreement to "Acquisition Notes" shall be deleted.
2.3 MANDATORY PREPAYMENTS OF ACQUISITION NOTES. Sections 2.1.5.4 and
2.1.5.5 of the Financing Agreement are amended and restated to read in
their entirety as follows:
"2.1.5.4 MANDATORY PREPAYMENTS; RELEVANT TRANSACTIONS. In
addition to any other mandatory prepayments or commitment
reductions required pursuant to this Agreement, not later than
one Business Day after Alpha receives any Net Cash Proceeds
from any Relevant Transaction, Alpha shall apply all of the
Net Cash Proceeds of such Relevant Transaction to prepay
Revolving Loans then outstanding (whereupon the Commitment
shall be reduced as provided in Section 2.1.1.3).
Notwithstanding the foregoing, Alpha may retain that portion
of the Net Cash Proceeds of such Relevant Transaction as may
be required to assure that the amount of Available Cash is not
less than $60,000,000; provided that nothing herein shall
permit Alpha to retain any amount of Available Cash in excess
of $60,000,000 after the Excess Cash Payment Date immediately
following the receipt of such Net Cash Proceeds; and provided,
that this Section shall not apply to the proceeds of the sale
of Junior Notes which Skyworks is permitted to retain under
Section 3.1 of the First Amendment."
"2.1.5.5 MANDATORY PREPAYMENTS; EXCESS CASH. In addition to
any other mandatory prepayments or commitment reductions
required pursuant to this Agreement, on each Excess Cash
Payment Date following July 31, 2002, Alpha shall apply an
amount equal to all Excess Cash to
prepay Revolving Loans then outstanding (whereupon the
Commitment shall be reduced as provided in Section 2.1.1.3);
and provided, that this Section shall not apply to the
proceeds of the sale of Junior Notes which Skyworks is
permitted to retain under Section 3.1 of the First Amendment."
2.4 DEFINED TERMS.
2.4.1 AMENDMENT OF EXHIBIT A. Exhibit A of the Financing Agreement
is amended as follows:
2.4.1.1 Each of the following defined terms is deleted:
2.4.1.1.1 Acquisition Notes
2.4.1.1.2 Eligible Receivables, including Schedule I
2.4.1.1.3 Reserve.
2.4.1.2 The term "Alpha Notes" is amended and restated to
read in its entirety as follows:
"ALPHA NOTES" shall mean the Interim Convertible
Notes.
2.4.1.3 The term "Commitment" is added in the appropriate
alphabetical order and defined as follows:
"COMMITMENT" shall have the meaning set forth in
Section 2.1.1.2.
2.4.1.4 The term "Financing Documents" is amended and
restated to read in its entirety as follows:
"FINANCING DOCUMENTS" shall mean this Agreement, the
First Amendment, the Security Documents, any
Financing Agreement Supplement, the Interim
Convertible Notes, the Revolving Note, the Mexicali
Note, the Closing Certificate, any Compliance
Certificate, and any other document, instrument or
certificate required by this Agreement or any
Security Document to be delivered to Conexant by or
on behalf of any Obligor, individually and
collectively.
2.4.1.5 The term "First Amendment" is added in the
appropriate alphabetical order and defined as
follows:
"FIRST AMENDMENT" shall mean the First Amendment of
Financing Agreement dated as of November 6, 2002.
2.4.1.6 The term "Interim Convertible Note" is added in the
appropriate alphabetical order and defined as
follows:
"INTERIM CONVERTIBLE NOTES" shall have the meaning
set forth in the Refinancing Agreement.
2.4.1.7 The term "Junior Convertible Notes" is added in the
appropriate alphabetical order and defined as
follows:
"JUNIOR NOTES" shall have the meaning set forth in
the Refinancing Agreement.
2.4.1.8 The term "Notes" is amended and restated to read in
its entirely as follows:
"NOTES" shall mean the Interim Convertible Notes and
the Revolving Note, if issued, individually and
collectively.
2.4.1.9 The term "Refinancing Agreement" is added in the
appropriate alphabetical order and defined as
follows:
"REFINANCING AGREEMENT" shall mean the Refinancing
Agreement dated as of November 6, 2002 by and among
Conexant and Alpha.
2.4.1.10 The term "Senior Convertible Notes" is added in the
appropriate alphabetical order and defined as
follows:
"SENIOR CONVERTIBLE NOTES" shall have the meaning set
forth in the Refinancing Agreement.
2.5 COVENANT AMENDMENTS.
2.5.1 AMENDMENT OF SECTION 7.8. Section 7.8 of the Financing
Agreement is amended by adding, at the end thereof, the
following:
"(h) a sale and leaseback disposition of Skyworks'
facilities located in Woburn, Massachusetts,
Mexicali, Mexico and Newbury Park, California may be
made where:
(1) the consideration received consists entirely
of cash; and
(2) the Net Cash Proceeds of which (x) are at
least equal to 75% of the book value of such
assets, as shown on the consolidated balance
sheet of Alpha for the fiscal quarter ended
immediately prior to such sale and leaseback
disposition, and (y) are immediately applied
solely to the prepayment of Revolving Loans,
in accordance with Section 2.1.5.4,
without regard to the amount of Available
Cash at the time of such prepayment."
"(i) sales, leases, transfers or other dispositions of
assets may be made where:
(i) the Net Cash Proceeds of any single sale,
lease, transfer or other disposition, or any
group of sales, leases, transfers or other
dispositions which are consummated on the
same day, are immediately applied solely to
the prepayment of Revolving Loans in
accordance with Section 2.1.5.4, without
regard to the amount of Available Cash at
the time of such prepayment, and after
giving effect to such prepayment, the
outstanding principal amount of the
Revolving Loans and the amount of the
Commitment are each less than $20 million."
2.5.2 AMENDMENT OF SECTION 7.9. Section 7.9 of the Financing
Agreement is amended by adding, at the end, the phrase " and
(iii) Liens securing the Senior Convertible Notes."
2.5.3 AMENDMENT OF SECTION 7.12. Section 7.12(a) of the Financing
Agreement is amended as follows:
2.5.2.1 by adding, at the end of clause (i), the phrase ",
including the Interim Convertible Notes" and
2.5.2.2 by adding, at the end of clause (iv), the phrase ",
and any Indebtedness of Alpha provided that all of
the Net Cash Proceeds of that Indebtedness are
immediately applied solely to prepay Revolving Loans
in accordance with Section 2.1.5.4, without regard to
the amount of Available Cash at the time of such
prepayment, and after giving effect to such
prepayment, the outstanding principal amount of the
Revolving Loans and the amount of the Commitment are
each less than $20 million" and
2.5.2.3 by adding, at the end of clause (xii), a new clause
(xiii) as follows: "(xiii) Indebtedness under the
Senior Convertible Notes".
2.5.4 BENEFIT OF GUARANTIES AND SECURITY. A new Section 9.17 is
added to the Financing Agreement and reads in its entirety as
follows:
"9.17 BENEFIT OF GUARANTIES AND SECURITY. Each of the Interim
Convertible Notes and the Senior Convertible Notes, for so
long as they are held by, and, in the case of the Senior
Convertible Notes, registered in the name of, Conexant, shall
be entitled to the benefits of the Guaranties set forth in
Section 3, the Security Interests set forth in Section 4 and
the other Security Documents and are, for such purposes, Alpha
Obligations, until such benefits are terminated in accordance
with the provisions of this Agreement."
SECTION 3
WAIVERS
3.1 LIMITED WAIVER OF PREPAYMENT. Notwithstanding Section 2.1.5.4 of the
Financing Agreement, Skyworks may retain Net Cash Proceeds from the sale of the
Junior Notes in an aggregate amount equal to (x) $40,000,000 (or such lesser
amount equal to the Net Cash Proceeds from the sale of Junior Notes retained by
Skyworks after giving effect to the payments required to be made pursuant to
Section 2.1 of the Refinancing Agreement), plus (y) if (and only if) Net Cash
Proceeds from the sale of the Junior Notes exceed $160,000,000 an amount equal
to one half of the amount by which such Net Cash Proceeds exceed $160,000,000;
provided that all other Net Cash Proceeds are applied as provided in Section 2.1
of the Refinancing Agreement.
3.2 MEXICALI EQUIPMENT. The existing Default under the Financing Agreement
arising from the transfer of Equipment to the Mexicali facility from United
States locations, as described in the letter dated October 30, 2002 addressed to
▇▇▇▇ ▇▇▇▇ from ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, is waived.
SECTION 4
REPRESENTATIONS AND WARRANTIES
4.1 REFINANCING AGREEMENT. Each of the representations and warranties set
forth in Section 5.2 of the Refinancing Agreement is true and correct as of the
date hereof and is made by each of the Obligors, jointly and severally, as of
the date hereof as if set forth verbatim in this Agreement.
SECTION 5
CONDITIONS PRECEDENT
5.1 CONDITIONS TO EFFECTIVENESS. This Agreement shall become effective on
the date that each of the following conditions shall have been satisfied (or
waived in accordance with Section 6.7):
5.1.1 This Agreement shall have been signed by each of the parties
hereto.
5.1.2 Skyworks shall have received proceeds (without giving effect
to any discounts or commissions required to be paid) of not
less that $160 million pursuant to the sale of the Junior
Notes on the terms and conditions set forth in the Junior Note
Documentation.
5.1.3 Skyworks shall have performed and complied with all of its
covenants and agreements in the Refinancing Agreement required
to be performed by
Skyworks on or prior to the date that the conditions in
Sections 5.1.1 and 5.1.2 have first been satisfied.
5.2 EFFECTIVENESS. Subject to Section 5.1, the provisions of this Agreement
shall become effective as follows:
5.2.1 Section 3.1 shall become effective immediately upon
satisfaction of the conditions precedent in Section 5.1.
5.2.2 Section 2 and the other provisions of this Agreement shall
become effective only when the following additional conditions
have been satisfied:
5.2.2.1 All Net Cash Proceeds from the sale of the Junior
Notes, other than the amounts Skyworks is expressly
permitted to retain pursuant to Section 3.1 of this
Agreement, have been applied to the prepayment or
repayment of principal of Acquisition Notes and
Revolving Loans as provided in Section 2.1.5.4 of the
Financing Agreement, prior to giving effect to
Section 2 of this Agreement, and such prepayments or
repayments of principal shall not be less than the
amounts provided in Sections 2.1.1 and 2.1.2 of the
Refinancing Agreement.
5.2.2.2 Skyworks shall have authorized, executed, issued and
delivered to Conexant Interim Convertible Notes,
dated the date hereof, in an aggregate principal
amount equal to the aggregate principal amount of
Acquisition Notes outstanding after giving effect to
the prepayments required by Section 5.2.2.1 of this
Agreement and Section 2.1 of the Refinancing
Agreement.
SECTION 6
MISCELLANEOUS
6.1 NO WAIVER. The execution and delivery by Conexant of this Agreement
shall not be deemed (i) to create a course of dealing or otherwise obligate
Conexant to forbear or execute similar amendments or waivers under the same or
similar circumstances in the future, or (ii) to amend, relinquish or impair any
right of Conexant to receive any indemnity or similar payment from any Person or
entity as a result of any matter arising from or relating to this Agreement.
6.2 EFFECT ON FINANCING AGREEMENT. Except as herein modified or waived, all
terms, covenants and provisions of the Financing Agreement are and shall remain
in full
force and effect and all references therein or in any other Financing Documents
to the Financing Agreement shall henceforth refer to the Financing Agreement as
modified by this Agreement. This Agreement shall be deemed incorporated into,
and a part of, the Financing Agreement.
6.3 BINDING AGREEMENT. This Agreement 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 Agreement.
6.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the law of the State of New York.
6.5 COUNTERPARTS. This Agreement 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 Conexant of a facsimile transmitted document purportedly bearing
the signature of any Obligor shall bind such Obligor, with the same force and
effect as the delivery of a hard copy original. Any failure by Conexant to
receive the hard copy executed original shall not diminish the binding effect of
receipt of the facsimile transmitted copy of such document of the party whose
hard copy page was not received by Conexant.
6.6 ENTIRE AGREEMENT. This Agreement, together with the Refinancing
Agreement, the Financing Agreement and the other Financing Documents, and the
Refinancing Documents contain the entire and exclusive agreement of the parties
hereto with reference to the matters discussed herein and therein. This
Agreement supersedes all prior drafts and communications with respect thereto.
6.7 AMENDMENTS AND WAIVERS. This Agreement may not be amended, modified or
waived except in accordance with the provisions of Section 9.2 of the Financing
Agreement.
6.8 SEVERABILITY. If any term or provision of this Agreement shall be
deemed prohibited by or invalid under any applicable law, such provision shall
be invalidated without affecting the remaining provisions of this Agreement or
any of the Financing Documents.
6.9 SECURITY AND GUARANTIES CONFIRMED AND EXTENDED. Each Obligor confirms
that the Security Documents secure the Interim Convertible Notes and the Senior
Convertible Notes (for so long as they are held by and, in the case of the
Senior Convertible Notes, registered in the name of, Conexant) and all
Obligations under the Financing Agreement as modified by this Agreement. Each
Guarantor confirms that the
benefit of such Guarantor's Guaranty applies to the Interim Convertible Notes
and the Senior Convertible Notes (for so long as they are held by and, in the
case of the Senior Convertible Notes, registered in the name of, Conexant) and
all Obligations under the Financing Agreement as modified by this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
CONEXANT SYSTEMS, INC.
By: /s/ Balakrishnan ▇. ▇▇▇▇
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Name: Balakrishnan ▇. ▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
SKYWORKS SOLUTIONS, INC.,
as an Obligor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and Chief Executive
Officer
ALPHA INDUSTRIES LIMITED,
as an Obligor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
ALPHA SECURITIES CORPORATION,
as an Obligor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
TRANSTECH, INC.,
as an Obligor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
AIMTA, INC.,
as an Obligor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
CFP HOLDING COMPANY, INC.,
as an Obligor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
4067959 CANADA, INC.,
as an Obligor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
CONEXANT SYSTEMS, S.A. de C.V.,
as an Obligor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
LEADERCO JAPAN KK,
as an Obligor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
LEADERCO WORLDWIDE, INC.,
as an Obligor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory