EX-10.1



 





 

 








AGERE SYSTEMS INC.




as Issuer




LSI LOGIC CORPORATION




as Guarantor




THE BANK OF NEW YORK,






as Trustee






 






$410,000,000 6.5% Convertible Subordinated Notes due 2009




 






SUPPLEMENTAL INDENTURE NO. 2




Dated as of April 1, 2007




 

 






 









 












          THIS SUPPLEMENTAL INDENTURE NO. 2, dated as of April 1, 2007 (this “Supplement”), by
and among Agere Systems Inc., a Delaware corporation (the “Company”), LSI Logic
Corporation, a Delaware corporation (“LSI”) and The Bank of New York, a New York banking
corporation, as trustee (the “Trustee”), hereby supplements the Indenture, dated as of June
19, 2002, as supplemented by the Supplemental Indenture No. 1, dated as of May 27, 2005 (as so
supplemented, the “Indenture”), by and between the Company and the Trustee.




RECITALS




          WHEREAS, the Company has certain 6.5% Convertible Subordinated Notes due 2009 (the
“Notes”) issued and outstanding pursuant to the terms and conditions of the Indenture;




          WHEREAS, pursuant to the terms of the Indenture, the Notes are convertible into shares of
common stock, par value $0.01 per share, of the Company (“Common Stock”);




          WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of December 3, 2006 (the
“Merger Agreement”), by and among the Company, LSI and Atlas Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of LSI (“Merger Sub”), Merger Sub will be merged
with and into the Company, with the Company continuing as the surviving corporation (the
“Merger”);




          WHEREAS, as a result of the Merger, each share of Common Stock outstanding immediately prior
to the effective time of the merger (the “Effective Time”) shall, except as provided in
Section 2.7(a)(ii) of the Merger Agreement with respect to shares of Common Stock held by the
Company, LSI or Merger Sub or any direct or indirect wholly owned subsidiary of any of them
immediately prior to the Effective Time, be converted into the right to receive 2.16 shares of LSI
Common Stock (as defined in the Merger Agreement), and cash in lieu of fractional shares pursuant
to Section 2.7(c) of the Merger Agreement;




          WHEREAS, pursuant to Section 12.6 of the Indenture, as a result of the Merger, the Company is
required to execute and deliver to the Trustee a supplemental indenture, to become effective as of
the Effective Time, (i) providing that the Notes shall be convertible into shares of LSI Common
Stock and cash in lieu of fractional shares, (ii) providing for adjustments which shall be as
nearly equivalent as practicable to the adjustments provided for in Article 12 of the Indenture and
(iii) modifying the provisions of the Indenture relating to the right of holders of Notes to cause
the Company to repurchase Notes following a Fundamental Change (as defined in the Indenture) to
make such provision apply to the LSI Common Stock and LSI;




          WHEREAS, LSI desires, from and after the Effective Time, to unconditionally and irrevocably
guarantee the full and punctual payment of principal of or premium, if any, and interest on, or
Fundamental Change Payment or Redemption Price with respect to, the Notes when due, whether at
maturity, by acceleration, by redemption or otherwise, and all other monetary obligations of the
Company under the Indenture (including obligations to the Trustee) and the Notes, and in the case
of any extension of time of payment of any Notes or any other obligations, the full and punctual
performance within applicable grace periods of all other obligations of the Company under the
Indenture and the Notes when due in accordance with the

 









 








terms of any such extension as provided in Section 4(a) of this Supplement (the “LSI
Guarantee”) in order to preserve the exemption available under Section 3(a)(9) of the
Securities Act for the conversion of the Notes into shares of LSI Common Stock;




          WHEREAS, Section 9.1 of the Indenture provides that the Company and the Trustee may amend or
supplement the Indenture without the consent of any holder of Notes to, among other things, (i)
provide for conversion rights of holders of Notes in the event of consolidation, merger, or sale of
all or substantially all of the assets of the Company as required to comply with Section 5.1 of the
Indenture or (ii) provide any additional rights or benefits to the holders of Notes or that does
not affect the legal rights under the Indenture of any such holder;




          WHEREAS, the Company and LSI desire to execute a supplemental indenture that complies with
Section 9.1 of the Indenture;




          WHEREAS, the Company has complied with all conditions precedent provided for in the Indenture
relating to this Supplement; and




          WHEREAS, the Company has requested that the Trustee execute and deliver this Supplement
pursuant to the terms of Section 12.6 of the Indenture.




          NOW, THEREFORE, in consideration of the premises and mutual agreements set forth herein and in
the Indenture, the parties hereby agree as follows:




          Section 1. Definition. Capitalized terms used and not otherwise defined herein have
the meanings assigned to such terms in the Indenture.




          Section 2. Concerning the Merger.




               (a) Conversion Privilege. Pursuant to Section 12.6 of the Indenture, from and after
the Effective Time, any right of a holder of Notes to convert Notes into Common Stock shall be
changed into the right to convert such Notes into (i) that number of fully paid and non-assessable
shares of LSI Common Stock (as such shares shall then be constituted, the “Stock
Consideration”) obtained by dividing the principal amount of the Notes or portion thereof to be
converted by $15.3125 (or such Conversion Price in effect at such time) (the “New Conversion
Price”), and (ii) in lieu of any fractional shares of LSI Common Stock otherwise receivable
pursuant to clause (i) hereof, cash in lieu of such fractional shares in an amount that would have
been paid in lieu of such amount of fractional shares of LSI Common Stock pursuant to Section
2.7(c) of the Merger Agreement (the “Cash Consideration”), subject to further adjustments
which shall be as nearly equivalent as may be practicable to the adjustments provided for in
Article 12 of the Indenture (as so adjusted, the “Conversion Consideration”).



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               (b) References to the Company, to Common Stock and the Conversion Price.




                    (i) Subject to the other provisions of this Supplement, from and after the Effective
Time all references in the Indenture to Common Stock shall be deemed to be references to the
Conversion Consideration or LSI Common Stock, to the extent necessary to give effect to
Section 12.6 of the Indenture.




                    (ii) Subject to the other provisions of this Supplement, from and after the Effective
Time all references in the Indenture to the Company shall be deemed to be references to LSI
to the extent necessary to give effect to Section 12.6 of the Indenture.




                    (iii) Subject to the other provisions of this Supplement, from and after the Effective
Time all references in the Indenture to the Conversion Price shall be deemed to be
references to the New Conversion Price to the extent necessary to give effect to Section
12.6 of the Indenture.



               (c) Reservation of Shares. LSI hereby (i) agrees, from and after the Effective Time,
to (A) reserve and keep available out of its authorized but unissued capital stock, solely for the
purpose of issuance upon conversion of Notes as provided in this Supplement, a number of shares of
LSI Common Stock sufficient to issue the Stock Consideration upon conversion of all outstanding
Notes and (B) issue and deliver in accordance with this Supplement, the Stock Consideration and the
Cash Consideration upon conversion of any Note, and (ii) covenants that from and after the
Effective Time all LSI Common Stock issued upon conversion of the Notes, when so issued, shall be
fully paid and non-assessable.



          Section 3. Repurchase Upon Fundamental Change. Pursuant to Sections 4.6 and 12.6 of
the Indenture, following a Fundamental Change from and after the Effective Time and prior to the
Maturity Date, any Fundamental Change Payment in respect of Notes properly tendered pursuant to a
Fundamental Change Offer and not withdrawn, shall be payable by LSI in lieu of the Company. All
references to the Company in the definitions of Fundamental Change, Change in Control and
Termination of Trading shall be deemed to be references to LSI. All references to the Common Stock
of the Company in the definitions of Fundamental Change, Change in Control and Termination of
Trading shall be deemed to be references to LSI Common Stock.




          Section 4. The LSI Guarantee.





               (a) Guarantee. From and after the Effective Time, LSI irrevocably and unconditionally
guarantees, to each holder of Notes and to the Trustee and its successors and



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assigns, (i) the full and punctual payment of principal of or premium, if any, and interest
on, or Fundamental Change Payment or Redemption Price with respect to, the Notes when due, whether
at maturity, by acceleration, by redemption or otherwise, and all other monetary obligations of the
Company under the Indenture (including obligations to the Trustee) and the Notes and (ii) in the
case of any extension of time of payment of any Notes or any other obligations, the full and
punctual performance within applicable grace periods of all other obligations of the Company under
the Indenture and the Notes when due in accordance with the terms of any such extension. LSI
further agrees that its obligations hereunder shall be unconditional irrespective of the absence or
existence of any action to enforce the same, the recovery of any judgment against the Company or
LSI (except to the extent such judgment is paid) or any waiver or amendment of the provisions of
the Indenture or the Notes to the extent that any such action or any similar action would otherwise
constitute a legal or equitable discharge or defense of a guarantor (except that such waiver or
amendment shall be effective in accordance with its terms.)




               (b) Payment, Performance and Compliance. LSI further agrees that the LSI Guarantee
constitutes a guarantee of payment, performance and compliance and not merely of collection.




               (c) Waivers. LSI further agrees to waive presentment to, demand of payment from and
protest to the Company of the LSI Guarantee, and also waives diligence, notice of acceptance of the
LSI Guarantee, presentment, demand for payment, notice of protest for nonpayment, the filing of
claims with a court in the event of merger or bankruptcy of the Company or any successor thereto
and any right to require a proceeding first against the Company, any successor thereto or any other
Person. The obligations of LSI shall not be affected by any failure or policy on the part of the
Trustee to exercise any right or remedy under the Indenture or the Notes.




               (d) Payment by the Company. The obligation of LSI to make any payment hereunder may
be satisfied by causing the Company to make such payment. If any holder of Notes or the Trustee is
required by any court or otherwise to return to the Company or LSI any amount paid by either of
them to the Trustee or such holder of Notes, the LSI Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect.




               (e) Costs and Expenses. LSI also agrees to pay any and all costs and expenses
(including reasonable attorneys’ fees) incurred by the Trustee or any holder of Notes in enforcing
any of their respective rights under the LSI Guarantee.




               (f) Maximum. Any term or provision of this Supplement to the contrary
notwithstanding, the maximum aggregate amount of the LSI Guarantee shall not exceed the maximum
amount that can be hereby guaranteed without rendering this Supplement, as it relates to LSI,
voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar
laws affecting the rights of creditors generally.



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          Section 5. Acceptance. The Trustee hereby accepts this Supplement and agrees to
perform the same under the terms and conditions set forth in the Indenture.




          Section 6. Miscellaneous.





               (a) Effectiveness of Supplement. This Supplement shall be effective as of the
Effective Time.




               (b) Effect of Supplement. Upon the execution and delivery of this Supplement by the
Company and the Trustee, the Indenture shall be supplemented and amended in accordance herewith,
and this Supplement shall form a part of the Indenture for all purposes, and every holder of Notes
heretofore or hereafter authenticated and delivered under the Indenture shall be bound thereby.




               (c) Use of the Term “Indenture”. The term “Indenture” as used in the Indenture shall
be deemed to refer to the Indenture as supplemented hereby.




               (d) Indenture Remains in Full Force and Effect. Except as set forth herein, the
Indenture shall remain in full force and effect and shall be otherwise unaffected hereby.




               (e) Incorporation of Indenture. All the provisions of this Supplement shall be deemed
to be incorporated in, and made a part of, the Indenture; and the Indenture, as supplemented and
amended by this Supplement, shall be read, taken and construed as one and the same instrument. If
any provision of this Supplement shall be inconsistent with any provision of the Indenture, the
provisions of this Supplement shall control.




               (f) Headings. The headings of the Articles and Sections of this Supplement are
inserted for convenience of reference and shall not be deemed to be a part thereof.




               (g) Counterparts. This Supplement may be executed in two or more counterparts, each
of which shall be deemed to be an original, but all for which together shall constitute one and the
same instrument.




               (h) Conflict with Trust Indenture Act. If any provision of this Supplement limits,
qualifies or conflicts with any provision of the Trust Indenture Act that is required under the
Trust Indenture Act to be part of and govern any provision of this Supplement, such provision of
the Trust Indenture Act shall control. If any provision of this Supplement modifies or excludes
any provision of the Trust Indenture Act that may be so



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modified or excluded, the provision of the Trust Indenture Act shall be deemed to apply to the
Indenture as so modified or to be excluded by this Supplement, as the case may be.




               (i) Separability Clause. In case any provision in this Supplement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.




               (j) Benefits of Supplemental Indenture, Etc. This Supplement and all provisions
hereof shall be binding upon, inure to the benefit of, and be enforceable by the Company, LSI, the
Trustee and any holder of the Notes.




               (k) Recitals. The recitals contained herein shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Supplement.




               (l) No Security Interest Created. Nothing in this Supplement, express or implied,
shall be construed to constitute a security interest under the Uniform Commercial Code or similar
legislation, as now or hereafter enacted and in effect, in any jurisdiction in which property of
the Company and its Subsidiaries is located.




               (m) Governing Law. This Supplement shall be deemed to be a contract made under the
laws of the State of New York and for all purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts to be made and performed entirely within such
State.



[SIGNATURE PAGE FOLLOWS]




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          IN WITNESS WHEREOF, the parties have caused this Supplement to be duly executed and attested,
all as of the date first above written, signifying their agreements contained in this Supplement.




	 	 	 	 	 
	 	AGERE SYSTEMS INC., as Issuer

 	 
	 	By:  	/s/ Peter Kelly
 	 
	 	 	Name:  	Peter Kelly 	 
	 	 	Title:  	Executive Vice President and Chief Financial Officer 	 
	 
	 	LSI LOGIC CORPORATION, as Guarantor

 	 
	 	By:  	/s/ Bryon Look
 	 
	 	 	Name:  	Bryon Look 	 
	 	 	Title:  	Executive Vice President and Chief Financial Officer 	 
	 
	 	THE BANK OF NEW YORK, as Trustee

 	 
	 	By:  	/s/ Mary LaGumina
 	 
	 	 	Name:  	Mary LaGumina 	 
	 	 	Title:  	Vice President 	 
	 




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