AutoCoded Document




Exhibit 10.12



AMENDMENT
NO. 3



Dated as
of October 3, 2003



to



RECEIVABLES
LOAN AGREEMENT



Dated as
of January 22, 2002



     THIS
AMENDMENT NO. 3 (this “Amendment”) dated as of October 3, 2003  is
entered into by and among AGERE SYSTEMS RECEIVABLES FUNDING LLC, a Delaware  limited
liability company (the “Borrower”), AGERE SYSTEMS INC.,  a Delaware
corporation, as collection agent (the “Collection  Agent”), the entities
parties hereto as “CONDUIT LENDERS,” “RELATED COMMITTED LENDERS” and
“LENDER AGENTS” and WESTLB  AG, NEW YORK BRANCH (formerly known as Westdeutsche
Landesbank Girozentrale, New  York Branch), as agent for the Lenders (in such capacity,
the  “Agent”).



PRELIMINARY
STATEMENTS



     A.   The Borrower, the Conduit Lenders, the Related Committed Lenders, the Lender
Agents and the Agent are parties to that certain Receivables Loan Agreement
dated as January 22, 2002 (as amended or otherwise modified prior to the date
hereof, the “Receivables Loan Agreement”). Capitalized terms
used and not otherwise defined herein shall have the meanings ascribed to them
in the Receivables Loan Agreement.



     B.   The parties hereto have agreed to amend the Receivables Loan Agreement on the terms and
conditions  hereinafter set forth.



     NOW,
THEREFORE, in consideration of the premises set forth above, and other good and  valuable
consideration the receipt and sufficiency of which is hereby  acknowledged, the parties
hereto agree as follows:



     SECTION
1.   Amendments to Receivables Loan Agreement. The Receivables Loan Agreement is hereby
amended as follows:



     1.1   Clause (d) of the definition of “Liquidity Termination Date” in  Schedule I is
amended to change the date set forth therein from “November  11, 2003” to “October
1, 2004”.



     1.2   The definition of “Loss and Dilution Reserve” in Schedule I is amended  in its
entirety to read as follows:



     “Loss
and Dilution Reserve” means, at any time, the product of (i) the greater of (a) the
Applicable Reserve Floor (as defined below) and (b) the sum of (x) the Applicable











Stress Factor
(as defined below) times the average Delinquency Ratio for the most recent three
Settlement Periods plus (y) the Applicable Stress Factor times the average Dilution Ratio
for the most recent three Settlement Periods multiplied by (ii) the Eligible Receivables
Balance at such time. “Applicable Stress Factor” means 2.5; provided that
(i) so long as the Collection Agent’s Liquidity is less than $300,000,000 but greater
than or equal to $200,000,000, the Applicable Stress Factor shall be 3.5 and (ii) so long
as the Collection Agent’s Liquidity is less than $200,000,000, the Applicable Stress
Factor shall be 4.5. “Applicable Reserve Floor” means 10%; provided that (i)
so long as the Collection Agent’s Liquidity is less than $300,000,000 but greater than or
equal to $200,000,000, the Applicable Reserve Floor shall be 15% and (ii) so long as the
Collection Agent’s Liquidity is less than $200,000,000, the Applicable Reserve Floor
shall be 20%. Liquidity shall be reported by the Collection Agent on the first Business
Day of each calendar week in the Daily Report for such Business Day. Changes in
Liquidity shall be deemed effective immediately upon delivery of the relevant Daily
Report reflecting such change.



     1.6   Clause (f) of the definition of “Termination Event” in Schedule I is
amended in its entirety to read as follows:



     “(f)   the average Delinquency Ratio for the most recent three Settlement Periods  exceeds 6.0%,
the average Dilution Ratio for the most recent three Settlement  Period exceeds 7.0%, the
average Charge-Off Ratio at the end each of the three  most recent Settlement Periods
exceeds 2.0%, or the average Turnover Ratio for  the most recent three Settlement Periods
exceeds 75 days;”



     1.7   Clause (j) of the definition of “Termination Event” in Schedule I is
amended in its entirety to read as follows:



     “(j)   the
Collection Agent’s Consolidated EBITDA for any fiscal quarter shall be  less than
the amount set forth below opposite such fiscal quarter:


		
	Fiscal Quarter Ended	 	Amount	 
		
	September 30, 2003	 	$44,200,000	 
	December 31, 2003	 	$5,000,000	 
	March 31, 2004	 	$30,000,000	 
	June 30, 2004 and thereafter	 	$40,000,000.	 




     1.8   Clause (o) of the definition of “Termination Event” in Schedule I is
amended to replace the period at the end of such clause with a semi-colon
followed by the word “or”, and the following new clause (p) is added
immediately after clause (o): 



     “(p)   (i)
The Collection Agent or any of its Subsidiaries (excluding Silicon  Manufacturing
Partners PTE Ltd.) shall fail to pay any principal of or premium  or interest  




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on any of its
Debt which is outstanding in a principal amount of at least $100,000,000 in the
aggregate when the same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; (ii) any other event shall occur or condition shall
exist under any agreement or instrument relating to any such Debt and shall continue
after the applicable grace period, if any, specified in such agreement or instrument,
if the effect of such event or condition is to accelerate the maturity of such Debt; or
(iii) any such Debt shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), redeemed, purchased or
defeased, in each case, prior to the stated maturity thereof; provided that (1) clause
(i) shall not apply if the Collection Agent or the applicable Subsidiary shall cure
such failure prior to the earlier to occur of (x) 10 Business Days and (y) the
acceleration of the maturity of such Debt and (2) clauses (ii) and (iii) shall not
apply to secured Debt that becomes due as a result of a voluntary sale or transfer of
the property or assets securing such Debt (which sale or transfer is permitted by the
agreement or instrument governing such Debt).” 



     1.9   The definition of “Consolidated EBITDA” in Schedule I is amended in
its entirety to read as follows: 



     “Consolidated
EBITDA” shall mean for any period, Consolidated Net Income for such  period plus,
without duplication and to the extent reflected as a charge  in the statement of such
Consolidated Net Income for such period, the sum of (a)  income tax expense, (b) interest
expense, amortization or write-off of debt  discount and debt issuance costs and
commissions, discounts and other fees and  charges associated with Debt (including the
Loans), (c) depreciation and  amortization expense, (d) amortization or write-off of
intangibles (including,  but not limited to, goodwill), (e) charges or expenses
relating to  purchased in-process research and development, (f) non-cash business
restructuring charges and related non-cash charges and expenses taken by the  Collection
Agent after June 30, 2003, (g) up to $137,000,000 in the aggregate of  cash business
restructuring charges and related cash charges and expenses taken  by the Collection
Agent after June 30, 2003, (h) any extraordinary, unusual or  non-recurring non-cash
expenses or losses (including, whether or not otherwise  includable as a separate item in
the statement of such Consolidated Net Income  for such period, non-cash losses on sales
of assets outside of the ordinary  course of business), and (i) any other non-cash
charges, and minus, to  the extent included in the statement of such Consolidated
Net Income for such  period, the sum of (i) interest income, (ii) any extraordinary,
unusual or  non-recurring income or gains (including, whether or not otherwise includable
as  a separate item in the statement of such Consolidated Net Income for such  period,
gains on the sales of assets outside of the ordinary course of business)  and (iii) any
other non-cash income, all as determined on a consolidated basis. 



     1.9   The definitions of “Capital Expenditures” and “Consolidated Net
Worth” in Schedule I are deleted in their entirety. 




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     SECTION
2.   Conditions Precedent. This Amendment shall become effective and be
deemed effective, as of the date hereof upon satisfaction of the following
conditions precedent: 



     2.1   The Agent shall have received counterparts of this Amendment duly executed by
the Borrower, the Collection Agent, the Lenders, the Lender Agents and the
Agent. 



     2.2   The Borrower shall have paid all reasonable fees and expenses of counsel for the
Agent incurred by the Agent in connection with the transactions contemplated
hereby for which an invoice has been received prior to the date hereof. 



     2.3   Each Lender Agent shall have received an amended and restated Fee Letter duly
executed by the Borrower and the Lender Agents in form and substance
satisfactory to the Lender Agents, and all fees required to be paid by the
Borrower to the Lender Agents and the Agent on or prior to the date hereof
pursuant to the terms of such Fee Letter or otherwise shall have been paid in
full. 



     SECTION
3.   Covenants, Representations and Warranties of the Borrower and Collection
Agent. 



     3.1   Upon the effectiveness of this Amendment, each of the Borrower and the
Collection Agent hereby reaffirms all covenants, representations and warranties
made by it in the Receivables Loan Agreement (as amended hereby) and agrees that
all such covenants, representations and warranties shall be deemed to have been
remade as of the effective date of this Amendment. 



     3.2   Each of the Borrower and the Collection Agent hereby represents and warrants
that (i) this Amendment constitutes the legal, valid and binding obligation of
such party, enforceable against such party in accordance with its terms and (ii)
upon the effectiveness of this Amendment, no Termination Event shall exist under
the Receivables Loan Agreement. 



     SECTION
4.   Reference to and Effect on the Receivables Loan Agreement. 



     4.1   Upon the effectiveness of this Amendment, each reference in the Receivables Loan
Agreement to “this Agreement,” “hereunder,”
“hereof,” “herein,” “hereby” or words of like
import shall mean and be a reference to the Receivables Loan Agreement as
amended hereby, and each reference to the Receivables Loan Agreement in any
other document, instrument and agreement executed and/or delivered in connection
with the Receivables Loan Agreement shall mean and be a reference to the
Receivables Loan Agreement as amended hereby. 



     4.2   Except as specifically amended hereby, the Receivables Loan Agreement and all
other documents, instruments and agreements executed and/or delivered in
connection therewith shall remain in full force and effect and are hereby
ratified and confirmed. 



     4.3   Except
as expressly provided herein, the execution, delivery and effectiveness  of this
Amendment shall not operate as a waiver of any right, power or remedy of  the Lenders,
the Lender Agents or the Agent under the Receivables Loan Agreement  or any other  



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document,
instrument, or agreement executed in connection  therewith, nor constitute a waiver of
any provision contained therein. 



     SECTION
5.   Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO THE
LAW OF CONFLICTS) OF THE STATE OF NEW YORK. 



     SECTION
6.   Execution in 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 taken together shall constitute but one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Amendment by facsimile shall be effective as delivery of a manually executed
counterpart of this Amendment. 



     SECTION
7.   Headings. Section 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. 





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     IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by  their
respective officers thereunto duly authorized as of the date first written  above. 



	 	AGERE
SYSTEMS RECEIVABLES FUNDING LLC, as Borrower 








	 	By: /s/ Barry Pakenham

          Name: Barry Pakenham 
          Title: Asst. Treasurer 







	 	 






	 	AGERE
SYSTEMS INC., as Collection Agent 








	 	By: /s/ Barry Pakenham

          Name: Barry Pakenham 
          Title: Asst. Treasurer 








	 	WESTLB
AG, NEW YORK BRANCH, as a Related Committed Lender, as Lender Agent and  as Agent 








	 	By: /s/ Martine Nowicki

          Name: Martine Nowicki 
          Title: Director
                    Global Specialized Finance 







	 	By: /s/ Julie Stern

          Name: Julie Stern 
          Title: Director

                    Global Specialized Finance
                    Transaction Management/Credit 








	 	DRESDNER
BANK AG, NEW YORK BRANCH, as a Related Committed Lender and as Lender  Agent 








	 	By: /s/ William Aguiar

          Name: William Aguiar 
          Title: Director 







	 	By: /s/ Stefan Ziese
 
          Name: Stefan Ziese 
          Title: Director 








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	 	PARADIGM
FUNDING LLC, as a Conduit Lender 








	 	By: /s/ Evelyn Echevarria

          Name: Evelyn Echevarria 
          Title: Vice President 








	 	BEETHOVEN
FUNDING CORPORATION, as a Conduit Lender 








	 	By: /s/ Matthew M. Dorr

          Name: Matthew M. Dorr 
          Title: Vice President 







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