Exhibit 10.1
SECOND AMENDMENT TO CREDIT
AGREEMENT
THIS AMENDMENT TO CREDIT AGREEMENT
(this “Amendment”) is entered into as of May 21,
2009, by and between MAGMA DESIGN AUTOMATION, INC., a Delaware
corporation (“Borrower”), and WELLS FARGO BANK,
NATIONAL ASSOCIATION (“Bank”).
RECITALS
WHEREAS, Borrower is currently
indebted to Bank pursuant to the terms and conditions of that
certain Credit Agreement, dated as of October 31, 2008 (as
amended from time to time, the “Credit Agreement”), by
and between Borrower and Bank.
WHEREAS, Bank and Borrower have
agreed to certain changes in the terms and conditions set forth in
the Credit Agreement and have agreed to amend the Credit Agreement
to reflect said changes.
NOW, THEREFORE, for valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree that the Credit Agreement
shall be amended as follows:
1. Section 5.1 of
the Credit Agreement is hereby amended and restated in its entirety
to read as follows:
“SECTION 5.1. USE OF
FUNDS. Use any of the proceeds of any credit extended
hereunder except for the purposes stated in Article I
hereof. Notwithstanding the forgoing Borrower may also use the
proceeds of credit extended hereunder to make principal and
interest payments on the Existing Notes and scheduled interest
payments on the 2009 Refinance Notes (as such Notes are defined in
Section 5.2(d)), provided, in each case, that no such payment
shall be made by Borrower if an Event of Default, or any condition,
event or act which with the giving of notice or the passage of time
or both would constitute such an Event of Default, shall have
occurred and be continuing or would occur or exist as a result of
such payment.”
2. Section 5.2 is
hereby amended and restated in its entirety to read as
follows:
“SECTION 5.2. OTHER
INDEBTEDNESS. Create, incur, assume or permit to exist any
indebtedness resulting from borrowings, loans or advances, whether
secured or unsecured, matured or unmatured, liquidated or
unliquidated, joint or several, except for Permitted
Indebtedness.
“Permitted Indebtedness”
means:
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(a)
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the liabilities
of Borrower or any Subsidiary to Bank;
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(b)
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indebtedness to
UBS resulting from loans made by UBS against the value of auction
rate securities held by UBS for the account of Borrower or its
Subsidiaries;
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(c)
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indebtedness of
Borrower or such Subsidiary existing as of the date
hereof;
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(d)
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the 2%
Convertible Senior Notes due 2010 (the “Existing
Notes”), or any indebtedness resulting from the issuance of
new convertible notes in 2009 in an aggregate principal amount not
to exceed $50,000,000.00 (the “2009 Refinance Notes”),
the net proceeds of which are used to purchase, repurchase, redeem,
defease, acquire or retire the Existing Notes, provided, in each
case, that such indebtedness is unsecured, and with respect to the
2009 Refinance Notes, if any, such 2009 Refinance Notes shall be
subject to terms and conditions no less favorable to Bank than
those applicable to the Existing Notes;
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(e)
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unsecured
indebtedness to trade creditors incurred in the ordinary course of
business;
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(f)
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indebtedness
incurred as a result of endorsing negotiable instruments received
in the ordinary course of business;
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(g)
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inter-company
indebtedness that otherwise constitutes a Permitted
Investment;
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(h)
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indebtedness
secured by liens permitted under Section 5.6(e);
and
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(i)
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extensions,
refinancings, modifications, amendments and restatements of any
items of Permitted Indebtedness (a) through (h) above,
provided that the principal amount thereof is not increased or the
terms thereof are not modified to impose more burdensome terms upon
Borrower or any Subsidiary, as the case may be.”
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2. Section 5.6 is
hereby amended and restated in its entirety to read as
follows:
“SECTION 5.6. DOUBLE NEGATIVE
PLEDGE. Mortgage, pledge, grant or permit to exist a security
interest in, or lien upon, all or any portion of Borrower’s
or any Subsidiary’s assets now owned or hereafter acquired,
except for Permitted Liens. In addition, Borrower shall not agree
with any other creditor to prohibit or condition the granting of a
security interest in its intellectual property (or any portion
thereof).
“Permitted Liens”
means:
2
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(a)
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liens in favor
of Bank;
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(b)
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liens which
consist of security interests in auction rate securities described
in and subject to the terms of Section 5.2(b);
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(c)
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liens existing
as of the date hereof;
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(d)
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liens for
taxes, fees, assessments or other government charges or levies,
either not delinquent or being contested in good faith and for
which Borrower maintains adequate reserves on its books;
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(e)
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purchase money
or capital lease liens not at any time securing indebtedness in
excess of $5,000,000.00 in the aggregate (i) on equipment
acquired or held by Borrower incurred for financing the acquisition
of the equipment, or (ii) existing on equipment when acquired,
if the lien is confined to the property and improvements and the
proceeds of the equipment;
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(f)
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liens of
carriers, warehousemen, suppliers, or other per
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