-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MSgdnrcC+rDQqnCHcxB37tDUP+VmkpLfqCFnUHXX3DUOM+MLfeCsiVNcSee7nRbV mC7IgV6HpyeQcjY70UE7vw== 0000950144-03-010702.txt : 20030909 0000950144-03-010702.hdr.sgml : 20030909 20030909081209 ACCESSION NUMBER: 0000950144-03-010702 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20030321 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030909 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARRIS GROUP INC CENTRAL INDEX KEY: 0001141107 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 582588724 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-31254 FILM NUMBER: 03887045 BUSINESS ADDRESS: STREET 1: 11450 TECHNOLOGY CIRCLE CITY: DULUTH STATE: GA ZIP: 30097 BUSINESS PHONE: 6784732000 MAIL ADDRESS: STREET 1: 11450 TECHNOLOGY CIRCLE CITY: DULUTH STATE: GA ZIP: 30097 FORMER COMPANY: FORMER CONFORMED NAME: BROADBAND PARENT CORP DATE OF NAME CHANGE: 20010521 8-K 1 g84874e8vk.txt ARRIS GROUP, INC. ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------------- FORM 8-K Current Report Dated March 21, 2003 of ARRIS GROUP, INC. A Delaware Corporation IRS Employer Identification No. 58-2588724 SEC File Number 001-16631 11450 Technology Circle Duluth, Georgia 30097 (678) 473-2000 ================================================================================ Item 5. Other Events. As used in this Current Report, the terms "ARRIS," "we," "our" and "us" each refer to ARRIS Group, Inc. and our consolidated subsidiaries, as appropriate in the context. ARRIS is filing in this Current Report on Form 8-K under Item 5, the ninth, tenth, eleventh and twelfth amendments to our credit agreement. On March 21, 2003, we modified the terms of our credit agreement to permit our purchase of the assets of Atoga Systems, Inc. We further modified the terms of our credit agreement on August 20, 2003 to permit our sale of the stock of our subsidiary Electronic System Products, Inc. ("ESP") to Rare Medium, Inc. and to assign a few patents pursuant to a previous agreement to which ESP was a party. The Atoga purchase and the impending ESP sale were described in our previous filings with the Securities and Exchange Commission under the Securities Exchange Act of 1934. By our August 28, 2003 amendment, we reduced by $22.5 million the aggregate revolving loan commitments under our credit facility to $92.5 million. In addition, we previously announced that we were seeking from the lenders a waiver to the fixed charge covenant ratio in our credit agreement and, on August 29, 2003, we obtained the waiver and made other modifications to our credit agreement. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits 10.1 Ninth Amendment to Credit Agreement, dated March 21, 2003. 10.2 Tenth Amendment to Credit Agreement and Consent, dated August 20, 2003. 10.3 Eleventh Amendment to Credit Agreement, dated August 28, 2003. 10.4 Twelfth Amendment to Credit Agreement and Waiver, dated August 29, 2003. SIGNATURES Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ARRIS Group, Inc. By: /s/ Lawrence A. Margolis ----------------------------------------- Lawrence A. Margolis Executive Vice President, Chief Financial Officer and Secretary Dated: September 8, 2003 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION - -------------- ----------- 10.1 Ninth Amendment to Credit Agreement, dated March 21, 2003. 10.2 Tenth Amendment to Credit Agreement and Consent, dated August 20, 2003. 10.3 Eleventh Amendment to Credit Agreement, dated August 28, 2003. 10.4 Twelfth Amendment to Credit Agreement and Waiver, dated August 29, 2003.
EX-10.1 3 g84874exv10w1.txt NINTH AMENDMENT TO CREDIT AGREEMENT NINTH AMENDMENT TO CREDIT AGREEMENT This NINTH AMENDMENT TO CREDIT AGREEMENT (this AMENDMENT) is dated as of March 21, 2003 and entered into by and among ARRIS GROUP, INC., a Delaware corporation, 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 19, 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, as further amended by that certain Sixth Amendment to Credit Agreement dated as of November 21, 2002, as further amended by that certain Seventh Amendment to Credit Agreement dated as of January 2, 2003 and as further amended by that certain Eight Amendment to Credit Agreement dated as of March 11, 2003 (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 and Administrative Agent. Capitalized terms used herein without definition shall have the same meanings herein as set forth in the Credit Agreement. RECITALS WHEREAS, Company and Atoga Systems, Inc., a California corporation ("ATOGA") have entered into that certain Asset Purchase Agreement, dated as of February 26, 2003, pursuant to which Company has agreed to purchase substantially all of the assets and assume certain liabilities of Atoga; and WHEREAS, Borrowers and Lenders desire to amend the Credit Agreement to (i) permit Company to acquire substantially all of the assets and assume certain liabilities of Atoga and (ii) 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: "ATOGA" means Atoga Systems, Inc., a California corporation. "ATOGA ACQUISITION" means the purchase by Company of substantially all of Atoga's assets and certain liabilities of Atoga on the Ninth Amendment Effective Date, pursuant to the Atoga Acquisition Documents. "ATOGA ACQUISITION DOCUMENTS" means the Atoga Asset Purchase 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 Atoga Acquisition Documents may be amended, restated, supplemented or otherwise modified from time to time to the extent permitted under subsection 7.12. "ATOGA ASSET PURCHASE AGREEMENT" means that certain Asset Purchase Agreement, dated February 26, 2003 between Company and Atoga, as may be amended, restated, supplemented or otherwise modified from time to time to the extent permitted under subsection 7.12. "NINTH AMENDMENT EFFECTIVE DATE" means the date the Ninth Amendment to this Agreement became affective in accordance with its terms. 1.2 AMENDMENTS TO SECTION 7: BORROWERS' NEGATIVE COVENANTS A. Subsection 7.2 of the Credit Agreement is hereby amended by deleting clause (v) in its entirety and substituting the following therefor: "(v) Liens (other than Liens on any (x) Accounts or Inventory of Holdings, any Borrower or any Domestic Subsidiary or Mexican Subsidiary of any Borrower or (y) Capital Stock) granted by Borrowers and their Subsidiaries securing Indebtedness permitted by subsections 7.1(vi), 7(vii) and 7.1(xii) in an aggregate amount not to exceed $10,000,000 at any time outstanding; provided, however, that Borrowers and their Domestic Subsidiaries shall not grant such Liens in connection with any Indebtedness of any Foreign Subsidiary of any Borrower incurred pursuant to subsection 7.l(vii); provided, further, that (i) Holdings and its Subsidiaries may not grant any Liens in connection with any Indebtedness assumed by Holdings or any of its Subsidiaries in connection with the Cadant Acquisition or the Atoga Acquisition and (ii) no assets acquired pursuant to the Cadant Acquisition or the Atoga Acquisition may be subject to any Liens under any such assumed Indebtedness except to the extent such Liens evidence Capital Leases and are otherwise permitted by subsection 7.2(vii);" 2 B. Subsection 7.3 of the Credit Agreement is hereby amended by deleting the "and" at the end of clause (xix), deleting the period at the end of clause (xviii) and substituting therefor ";and", and inserting the following clause (xx) at the end of such subsection: "(xxi) So long as no Event of Default or Potential Event of Default has occurred and is continuing or would result therefrom, Company may consummate the Atoga Acquisition, in accordance with (1) the Atoga Acquisition Documents and (2) the following terms: (a) the aggregate amount of consideration paid by Company for the Atoga Acquisition shall not exceed (i) the assumption by Company of liabilities in an aggregate amount not to exceed $1,357,938 plus (ii) the payment by Company of the weekly operating expenses of Atoga from February 6, 2003 until March 18, 2003 in an aggregate amount not to exceed $800,000 in accordance with the terms of the Atoga Asset Purchase Agreement; (b) the aggregate amount of all liabilities being assumed by Company in connection with the Atoga Acquisition, including any Indebtedness and Capital Leases, shall not exceed $1,357,938 plus the payment of up to $800,000 of weekly operating expenses from February 6, 2003 until March 18, 2003; (c) concurrently with the consummation of the Atoga Acquisition, Borrowers shall have fully complied with the requirements of subsections 6.8 and 6.9 of this Agreement and Section 5 of the Security Agreement, with respect to the Atoga Acquisition; (e) Company shall have delivered to Administrative Agent (i) the results of recent searches, by a Person or Persons satisfactory to Administrative Agent, of all effective UCC financing statements and all judgment and tax lien filings which may have been made with respect to any personal or mixed property acquired in the Atoga Acquisition, together with copies of all such filings disclosed by such search, (ii) UCC termination statements duly executed by all applicable Persons for filing in all applicable jurisdictions as may be necessary to terminate any effective UCC financing statements disclosed in such search, (iii) to the extent requested by Administrative Agent, recent searches, by Person or Persons satisfactory to Administrative Agent of all effective filings with the PTO or United States Copyright Office which may have been made with respect to any patents, trademarks of copyrights being acquired in the Atoga Acquisition and (iv) and all other documents or instruments necessary to release all Liens on any personal or mixed property acquired in the Atoga Acquisition, in each case in form and substance satisfactory to Administrative Agent; and (f) Company shall have delivered an Officer's Certificate, in form and substance satisfactory to Administrative Agent certifying that no Potential Event of Default or Event of Default shall then exist or shall occur after giving effect to the Atoga Acquisition." 3 C. Subsection 7.12 of the Credit Agreement is hereby amended by deleting subsection 7.12A in its entirety and substituting therefor the following: "A. AMENDMENTS OR WAIVERS OF CERTAIN AGREEMENTS. Neither Holdings, any Borrower nor any their respective Subsidiaries will agree to any amendment to, or waive any of its rights under (i) any Reorganization Document (other than the Amended and Restated Arris Membership Agreement which is otherwise subject to clause (y) below), Mexican Intercompany Security Document or Tax Abatement Transaction Document after the Closing Date; (ii) any Cadant Acquisition Document after the First Amendment Effective Date; (iii) any Keptel Sale Document after the closing of the Third Amendment to this Agreement; (iv) any Actives Division Sale Document after the closing of the Sixth Amendment to this Agreement; (v) after the Eighth Amendment Effective Date, (x) any Holdings Common Stock Redemption Document, the Nortel Letter Agreement, the Option Agreement, the Settlement and Release Agreement, and the Arris Intercompany Note and, (y) only to the extent such amendment or waiver of rights adversely affects the rights of the Lenders, the Amended and Restated Arris Membership Agreement; or (vi) after the Ninth Amendment Effective Date, any Atoga Acquisition Document, without, in each case, obtaining the prior written consent of Requisite Lenders to such amendment or waiver." Section 2. 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 "NINTH AMENDMENT EFFECTIVE DATE"): A. Lenders shall have received from Administrative Agent a completed audit of the Accounts to be acquired in the Atoga Acquisition and Administrative Agent shall have determined the extent to which such Accounts and Inventory shall be included as Eligible Accounts immediately after the consummation of the Atoga Acquisition. B. On the Ninth Amendment Effective Date, all conditions to the consummation of the Atoga Acquisition (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 the Requisite Lenders and Administrative Agent shall have received (i) a fully executed or conformed copy of each Atoga Acquisition Document to be entered into on or prior to the Ninth Amendment Effective Date, in form and substance reasonably satisfactory to the Administrative Agent and Requisite Leaders, and each such Atoga 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 Requisite Lenders, and the parties to the Atoga Acquisition Documents shall not have failed in any material respect to perform any material obligation or covenant required by the Atoga Asset Purchase Agreement, respectively, to be performed or complied with by any of them on or before the Ninth 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 Atoga will proceed to consummate the Atoga Acquisition contemporaneously with the effectiveness of this Amendment. 4 SECTION 3. BORROWERS' AND HOLDINGS' REPRESENTATIONS AND WARRANTIES In order to induce Lenders to enter into this Amendment and to amend the Credit Agreement in the manner provided herein, Holdings and Borrowers represent and warrant to each Lender that the following statements are true, correct and complete: A. CORPORATE POWER AND AUTHORITY. Holdings and each Borrower have 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 Holdings and each Borrower. C. NO CONFLICT. The execution and delivery by Holdings and Borrowers of this Amendment and the performance by Holdings and 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 Holdings, 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 Holdings or any Borrower or any of their respective Subsidiaries or any order, judgment or decree of any court or other agency of government binding on Holdings, any Borrower or any of their respective 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 Holdings, any Borrower or my of their Subsidiaries, (iii) result in or require the creation or imposition of any Lien upon any of the properties or assets of Holdings, any Borrower or any of their 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 Holdings, any Borrower or any of their respective Subsidiaries. D. GOVERNMENTAL CONSENTS. The execution and delivery by Holdings and each Borrower of this Amendment and the performance by Holdings and 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 Holdings and each Borrower and is the legally valid and binding obligations of such Persons, enforceable against Holdings and 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 5 are and will be true, correct and complete in all material respects on and as of the Ninth 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 Defeult or a Potential Event of Default SECTION 4. 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 5. MISCELLANEOUS A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS. (i) On and after the Ninth 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. 6 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 (i) 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 telephone notification of such execution and authorization of delivery thereof and (ii) the satisfaction of the conditions precedent contained in Section 2 hereof. 7 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 S-1 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 4 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, Syndication Agent and Collateral Agent By: /s/ John F. Bohan ------------------------------------ Name: John F. Bohan Title: Vice President BANK ONE, NA, as successor in interest of American National Bank and Trust Company of Chicago By: /s/ Diane M. Zurick ------------------------------------ Name: Diane M. Zurick Title: Associate Director CONGRESS FINANCIAL CORPORATION (SOUTHEREN) By: /s/ Gary S. Silvers ------------------------------------ Name: Gary S. Silvers Title: Vice President FLEET CAPITAL CORPORATION By: /s/ Douglas Strange ------------------------------------ Name: Title: Vice President S-4 EX-10.2 4 g84874exv10w2.txt TENTH AMENDMENT TO CREDIT AGREEMENT TENTH AMENDMENT TO CREDIT AGREEMENT AND CONSENT THIS TENTH AMENDMENT TO CREDIT AGREEMENT AND CONSENT (the "Amendment") is made and entered into as of this 20th 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 ("Collateral 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, in connection with the Credit Agreement, Arris Group, Inc., a Delaware corporation ("Holdings," sometimes also referred to herein as "Seller"), Borrowers, certain other direct and indirect subsidiaries of Company, and Collateral Agent entered into that certain Security Agreement, dated as of August 3, 2001 (the "Security Agreement"), whereby Collateral Agent holds security interests and liens (collectively, the "Liens"), for the benefit of itself and the Lenders, in and to certain assets owned by Holdings and the Borrowers, including the capital stock of Electronic System Products, Inc. ("ESP"), a Borrower, as collateral for the loans made by the Lenders to the Borrowers; and WHEREAS, pursuant to Section 7.7 of the Credit Agreement, Holdings and Borrowers are restricted from transferring or otherwise disposing of all or any part of their business, property or assets (including the Capital Stock of a Subsidiary), except as otherwise permitted therein or except as otherwise consented to by the Requisite Lenders in writing; and WHEREAS, pursuant to Section 7.9 of the Credit Agreement, Holdings and Borrowers are prohibited from entering into certain transactions with shareholders and affiliates, except as otherwise permitted therein or except as otherwise consented to by the Requisite Lenders in writing; and WHEREAS, Seller desires to sell one hundred percent of the stock of ESP (the "Stock") to Rare Medium Group, Inc., a Delaware corporation (the "Purchaser") for a purchase price of one dollar ($1.00), under the terms of that certain Stock Purchase Agreement, dated as of August 18, 2003 (the "Purchase Agreement"), by and between Seller and Purchaser, a copy of which is attached hereto as EXHIBIT A (consummation of the transactions described in, and in a manner not materially inconsistent with the terms and conditions of, the Purchase Agreement is referred to herein as the "Sale"), and Borrowers have requested that the Lenders consent to the Sale and agree release ESP as a Borrower under the Credit Agreement following the consummation of the Sale; and WHEREAS, in connection with that certain Digital BTSC Encoding Agreement, effective on or about November 25, 2002, by and between ESP and THAT Corporation ("THAT Corp."), Company desires to assign certain patents to THAT Corp., and Borrowers have requested that the Lenders consent to such assignment and to the release of Collateral Agent's Liens on such patents. 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. Upon the consummation of the Sale in accordance with the terms and conditions contained herein, the introduction to the Credit Agreement shall be amended by deleting the following text "EACH OF COMPANY'S SUBSIDIARIES LISTED ON THE SIGNATURE PAGES HEREOF" in its entirety, and inserting in lieu thereof the following text: "EACH OF COMPANY'S SUBSIDIARIES LISTED ON EXHIBIT B TO THE TENTH AMENDMENT". (b) Section 1.1 to the Credit Agreement shall be amended by adding the following definition, which shall be inserted in the proper alphabetical order: "Tenth Amendment" shall mean and refer to that certain "Tenth Amendment to Credit Agreement and Consent" by and among the Borrowers, Lenders, and Agent, as identified therein, dated as of August 20, 2003. 2. Consents. (a) Pursuant to the terms and conditions of the Credit Agreement, the Security Agreement and the other Loan Documents, and upon satisfaction of the terms and conditions contained herein, the Lenders hereby consent to the Sale, which includes the following inter-company transactions to be entered into by Seller and ESP: (i) a capital contribution to be made by Seller to ESP immediately prior to the Closing (as defined in the Purchase Agreement, the "Closing") equal to the positive amount by which $545,000 exceeds the amount of the Qualified Receivables (as such term is defined in the Purchase Agreement); (ii) the sale by Seller to ESP, not later than immediately prior to the Closing, of the fixed assets identified in Exhibit 5(i) to the Purchase Agreement; (iii) the assignment by ESP to Seller, prior to the Closing, without recourse or representation or warranty, of all of ESP's right, title and interest in and to the notes receivable set forth on Exhibit 5(j) to the Purchase Agreement; (iv) the assignment by ESP to Seller, prior to the Closing, without any representation, warranty or covenant, of its equity interests in CoaXmedia Corporation and Evolve Communications, Inc.; 2 (v) the entering into a consulting arrangement, pursuant to a consulting agreement to be executed immediately prior to Closing, between Seller and ESP whereby ESP will be permitted to utilize up to three members of Seller's technical staff on projects at cost for a period of up to six months following the Closing; (vi) the transfer between ESP and Seller, prior to the Closing, of certain intellectual property pursuant to the Intellectual Property Transfer and License Agreement (as defined in the Purchase Agreement); and (vii) the entering into a sublease arrangement between Seller and ESP, pursuant to which ESP shall be entitled to remain in its current location and shall not be obligated to pay any rent until the period commencing July 15, 2004. (b) In connection with the Lenders' consent to the Sale, the Borrowers agree that: (i) The Sale shall be consummated pursuant to the terms and conditions of the Purchase Agreement, in substantially the form set forth therein, to the satisfaction of the Collateral Agent in its reasonable discretion. (ii) Promptly after the Closing, Seller shall deliver to Collateral Agent duly executed copies of the Purchase Agreement, the related schedules and related agreements, instruments and documents. Any failure of Borrowers or Seller to comply with either of the foregoing clauses (i) or (ii) shall be deemed an Event of Default pursuant to the terms of the Credit Agreement and other Loan Documents. (c) Pursuant to the terms and conditions of the Credit Agreement, the Security Agreement and the other Loan Documents, the Lenders hereby consent to the assignment by Company to THAT Corp. (the "Assignment") of the following patents (collectively, the "Assigned Patents") and to the release of Collateral Agent's Liens in and to the Assigned Patents: (i) US Patent No. 6,037,993 (ii) US Patent No. 6,259,482 (iii) US Patent No., 6,192,086 3. Release of Collateral. (a) Upon the consummation of the Sale, pursuant to the terms and conditions contained herein, Collateral Agent will (i) release its Liens on the Stock and any of the assets of ESP subject of the Sale (the "Assets"), which Assets include without limitation the intellectual property described on EXHIBIT C hereto (the "Transferred IP"), (ii) promptly deliver the original stock certificate(s) for ESP to Borrowers at the address to be indicated by the Borrowers, (iii) promptly file any Lien release documentation with the United States Patent and Trademark Office (the "PTO") necessary to record the release of Liens on the Transferred IP, (iv) be deemed to have authorized hereby the filing of any UCC termination statements required to 3 release the Liens on the Stock and any of the Assets, and (iv) provide such other Lien release documentation with respect to the Stock and the Assets as Borrowers may reasonably request. (b) Upon consummation of the Assignment, pursuant to the terms and conditions contained herein, Collateral Agent will (i) release its Liens on the Assigned Patents, (ii) promptly record the release of such Liens with the PTO, (iii) be deemed to have authorized hereby the filing of any UCC termination statements required to release the Liens on the Assigned Patents, and (iv) provide such other Lien release documentation with respect to the Assigned Patents as Borrowers may reasonably request. 4. Release of ESP as Borrower. Upon the consummation of the Sale, pursuant to the terms and conditions contained herein, all of ESP's Obligations under the Credit Agreement and the other Loan Documents, including without limitation ESP's obligations and duties to the other Borrowers pursuant to Section 2.10 of the Credit Agreement and the Borrowers' Guaranty, shall be deemed to be released and discharged without any notice to, or further action by, any other Person, (b) ESP shall cease to be a Borrower under the Credit Agreement and shall thereafter be deemed removed as a party to any of the other Loan Documents; and (c) the Obligations of the remaining Borrowers under the Credit Agreement, and their corresponding obligations under the other Loan Documents, shall continue in full force and effect, and shall remain binding upon the remaining Borrowers notwithstanding the release of ESP. 5. Consent Fee. Borrowers shall pay to Collateral Agent, for the benefit of itself and the Lenders, a fee of $________ (the "Consent Fee") due and payable upon the execution of this Amendment. The Consent Fee shall be shared pro rata among the Lenders and shall be fully earned by Collateral Agent and Lenders when paid and shall not be subject to refund or rebate. 6. 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, (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, 4 (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. (c) Each Borrower acknowledges and agrees that if Borrowers shall fail to perform in a timely manner any covenants, agreements or obligations of the Borrowers contained in this Amendment or any of the Loan Documents, Collateral Agent may, but shall not be obligated to, perform such covenants, agreements or obligations at the cost and expense of the Borrowers; provided, however, that the performance of such covenants by Collateral Agent shall not be deemed to have waived or cured any default of Borrowers with respect to the performance of such covenants, agreements or obligations. The Borrowers agree to pay on demand all costs and expenses incurred by Collateral Agent and its representatives in connection with the foregoing, including, without limitation, the reasonable fees and out-of-pocket expenses of legal counsel to the Agent. The Borrowers authorize and direct the Collateral Agent to charge the Collateral Account for such costs and expenses as Revolving Loans. (d) Each Borrower acknowledges and agrees that the consents contained in paragraph 2 of this Amendment (i) are not intended, and should not be construed, as an amendment of, the Credit Agreement, but instead constitutes a waiver of certain provisions of the Credit Agreement which would otherwise have prohibited the Sale (such waiver includes, without limitation, the Change in Control and any other Event of Default which would result from the Sale), and (ii) shall not represent a consent or waiver related to any future actions of any Borrower or Seller, including, without limitation, any future sale of assets. Further, each of the Lenders reserves all of its rights pursuant to the Credit Agreement and all other Loan Documents. (e) Each Borrower acknowledges and aggress that Lenders' agreement to consent to the specific matters herein addressed, does not and shall not create (nor shall Seller nor any Borrower rely upon the existence of or claim or assert that there exists) any obligation of Lenders or the Requisite Lenders to consider or agree to any further consents and, in the event that any Lender subsequently agrees to consider any further consents, neither this consent nor any other conduct of any Lender shall be of any force or effect on such Lender's consideration or decision with respect to any such requested consent, and such Lender shall have no obligation whatsoever to consider or agree to further consents. 5 7. Further Assurances. Borrowers agree to take such further action as Collateral Agent shall reasonably request in connection herewith to evidence the agreement herein contained. 8. 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. 9. 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] 6 IN WITNESS WHEREOF, Borrowers, the Agent and the Lenders have caused this Amendment to be duly executed, all as of the date first above written. BORROWERS: ARRIS INTERNATIONAL, INC. By: /s/Armando Rois-Mendez -------------------------------------------- Name: Armando Rois-Mendez Title: Assistant Secretary ARRIS INTERACTIVE L.L.C. By: /s/Armando Rois-Mendez -------------------------------------------- Name: Armando Rois-Mendez Title: Assistant Secretary ANTEC ASSET MANAGEMENT COMPANY By: /s/Armando Rois-Mendez -------------------------------------------- Name: Armando Rois-Mendez Title: Vice President and Assistant Secretary ANTEC LICENSING COMPANY By: /s/Armando Rois-Mendez -------------------------------------------- Name: Armando Rois-Mendez Title: Assistant Secretary TEXSCAN CORPORATION By: /s/Armando Rois-Mendez -------------------------------------------- Name: Armando Rois-Mendez Title: Vice President 7 ELECTRONIC CONNECTOR CORPORATION OF ILLINOIS By: /s/Armando Rois-Mendez -------------------------------------------- Name: Armando Rois-Mendez Title: Assistant Secretary POWER GUARD, INC. By: /s/Armando Rois-Mendez -------------------------------------------- Name: Armando Rois-Mendez Title: Assistant Secretary ELECTRONIC SYSTEM PRODUCTS INC. By: /s/Armando Rois-Mendez -------------------------------------------- Name: Armando Rois-Mendez Title: Assistant Secretary KEPTEL, INC. By: /s/Armando Rois-Mendez -------------------------------------------- Name: Armando Rois-Mendez Title: Assistant Secretary [Signatures Continue on Following Pages] 8 COLLATERAL 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] 9 LENDERS: BANK ONE, NA, as successor by merger to American National Bank And Trust Company Of Chicago By: /s/ Diane M. Zurick -------------------------------------------- Name: Diane M. Zurick Title: Associate Director 10 THE CIT GROUP/BUSINESS CREDIT, INC. By: /s/ John F. Bohan -------------------------------------------- Name: John F. Bohan Title: Vice President 11 CONGRESS FINANCIAL CORPORATION (SOUTHWEST) By: /s/ Paul Truax -------------------------------------------- Name: Paul Truax Title: Vice President 12 FLEET CAPITAL CORPORATION By:/s/ Douglas Strange -------------------------------------------- Name: Douglas Strange Title: Vice President 13 GMAC COMMERCIAL FINANCE LLC successor by merger to GMAC COMMERCIAL CREDIT LLC By: /s/ David Duffy -------------------------------------------- Name: David Duffy Title: Senior Vice President 14 EX-10.3 5 g84874exv10w3.txt ELEVENTH AMENDMENT TO CREDIT AGREEMENT ELEVENTH AMENDMENT TO CREDIT AGREEMENT THIS ELEVENTH AMENDMENT TO CREDIT AGREEMENT (the "Amendment") is made and entered into as of this 28 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 ("Collateral 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, Borrowers, Lenders, and Agent desire to amend the Credit Agreement to reduce the Revolving Loan Commitments to $92,500,000 by terminating the Revolving Loan Commitment of Bank One, NA ("Bank One") and to 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: 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: "Eleventh Amendment" shall mean and refer to that certain "Eleventh Amendment to Credit Agreement" by and among the Borrowers, Lenders, and Agent, as identified therein, dated as of Eleventh Amendment Date. "Eleventh Amendment Date" shall mean August 28, 2003. (b) Section 2.4A(iii) of the Credit Agreement is hereby amended by adding the following clause (l) at the end of such subsection: "(l) Elimination of Revolving Loan Commitment of Bank One on Eleventh Amendment Date. On the Eleventh Amendment Date, the Revolving Loan Commitment of Bank One shall be reduced to zero and the aggregate Revolving Loan Commitments shall be reduced to $92,500,000 after giving effect so such reduction of the Revolving Loan Commitment of Bank One, in each case in accordance with the terms of the Eleventh Amendment. 2. Termination of Revolving Loan Commitment of Bank One and Reduction of Aggregate Revolving Loan Commitments. The Borrowers, Lenders and Agents acknowledge and agree that as of the date hereof, (i) no Loans are outstanding, (ii) the Revolving Loan Commitment of Bank One shall terminate, (iii) Bank One shall relinquish its rights as a Lender under the Credit Agreement (other than any rights Bank One may have as a Lender under subsection 10.10B of the Credit Agreement, which rights survive the termination of Bank One's Revolving Loan Commitment hereunder and the termination of the Credit Agreement), (iv) Bank One shall be released from its obligations as a Lender under the Credit Agreement (including, without limitation, any obligations relating to letters of credit outstanding as of the date hereof) and any related loan documents and shall cease to be a party thereto, and (v) the aggregate Revolving Loan Commitments shall be reduced to $92,500,000. In addition, the Borrowers agree to pay to Agent, for distribution to Bank One, (i) any commitment fees accrued up to and including the Eleventh Amendment Date which are due to Bank One pursuant to Section 2.3 of the Credit Agreement, and (ii) any Letter of Credit fees accrued up to and including the Eleventh Amendment Date which are due to Bank One pursuant to Section 3.2 of the Credit Agreement. As of the date hereof, the amount of each Revolving Lender's Revolving Loan Commitment is set forth opposite its name on Schedule 1 annexed hereto. 3. Representations, Warranties and Covenants of Borrowers. (a) Each Borrower hereby represents, warrants and covenants to Agents and Lenders that, (i) 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, (ii) each Borrower has the power and is duly authorized to enter into, deliver and perform this Amendment, and (iii) 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. 2 4. Further Assurances. Borrowers agree to take such further action as Collateral Agent shall reasonably request in connection herewith to evidence the agreement herein contained. 5. 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. 6. 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] 3 IN WITNESS WHEREOF, Borrowers, the Agent and the 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: 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 KEPTEL, INC. By: /s/ Lawrence A. Margolis ------------------------------------ Name: Lawrence A. Margolis Title: Vice President [Signatures Continue on Following Pages] COLLATERAL 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: BANK ONE, NA, as successor by merger to American National Bank And Trust Company Of Chicago By: /s/ Diane M. Zurick ------------------------------------ Name: Diane M. Zurick Title: Associate Director 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 FLEET CAPITAL CORPORATION By: /s/ Douglas Strange ------------------------------------ Name: Douglas Strange Title: Vice President GMAC COMMERCIAL FINANCE LLC successor, by merger, to GMAC COMMERCIAL CREDIT LLC By: /s/ Steven J. Brown ------------------------------------ Name: Steven J. Brown Title: Vice President EX-10.4 6 g84874exv10w4.txt TWELFTH AMENDMENT TO CREDIT AGREEMENT 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 -----END PRIVACY-ENHANCED MESSAGE-----