Supplement No. 1 to Security Agreement dated December 1, 2006, by Sigmatel, Inc. and Citibank, N.A.

Summary

This agreement adds Sigmatel, Inc. as a new grantor under an existing Security Agreement originally dated December 1, 2006, among Freescale Semiconductor Holdings V, Inc., Freescale Semiconductor, Inc., other related entities, and Citibank, N.A. as Collateral Agent. By signing, Sigmatel, Inc. agrees to grant a security interest in its assets to secure obligations under a related Credit Agreement. The agreement confirms Sigmatel’s obligations, the location of its collateral, and that all other terms of the original Security Agreement remain unchanged.

EX-10.18 6 dex1018.htm SUPPLEMENT NO. 1 UNDER THE SECURITY AGREEMENT DATED AS OF DECEMBER 1, 2006 Supplement No. 1 under the Security Agreement dated as of December 1, 2006

Exhibit 10.18

EXECUTION COPY

SUPPLEMENT NO. 1 dated as of June 5, 2008, to the Security Agreement dated as of December 1, 2006 (the “Security Agreement”), among FREESCALE SEMICONDUCTOR HOLDINGS V, INC. (formerly known as FREESCALE ACQUISITION HOLDINGS CORP.) (“Holdings”), FREESCALE SEMICONDUCTOR, INC. (formerly known as FREESCALE ACQUISITION CORPORATION) (the “Borrower”), FREESCALE SEMICONDUCTOR HOLDINGS IV, LTD. (formerly known as FREESCALE HOLDINGS (BERMUDA) IV, LTD.), a Bermuda exempted limited liability company (“Foreign Holdings”), the Subsidiaries of FREESCALE SEMICONDUCTOR HOLDINGS III, LTD. (formerly known as FREESCALE HOLDINGS (BERMUDA) III, LTD.) (“Parent”) from time to time party thereto and CITIBANK, N.A., as Collateral Agent for the Secured Parties.

A. Reference is made to the Credit Agreement dated as of December 1, 2006 (as amended February 14, 2007 and as otherwise amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, Foreign Holdings, Holdings, Parent, CITIBANK, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer, and each lender from time to time party thereto (collectively, the “Lenders” and individually, a “Lender”).

B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement and the Security Agreement referred to therein.

C. The Grantors have entered into the Security Agreement in order to induce the Lenders to make Loans and the L/C Issuers to issue Letters of Credit. Section 6.14 of the Security Agreement provides that additional Restricted Subsidiaries of Parent may become Grantors under the Security Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned Restricted Subsidiary (the “New Subsidiary”) is executing this Supplement in accordance with the requirements of the Credit Agreement to become a Grantor under the Security Agreement in order to induce the Lenders to make additional Loans and the L/C Issuers to issue additional Letters of Credit and as consideration for Loans previously made and Letters of Credit previously issued.

Accordingly, the Collateral Agent and the New Subsidiary agree as follows:

SECTION 1. In accordance with Section 6.14 of the Collateral Agreement, the New Subsidiary by its signature below becomes a Grantor under the Security Agreement with the same force and effect as if originally named therein as a Grantor and the New Subsidiary hereby (a) agrees to all the terms and provisions of the Security Agreement applicable to it as a Grantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Grantor thereunder are


true and correct on and as of the date hereof. In furtherance of the foregoing, the New Subsidiary, as security for the payment and performance in full of the Obligations (as defined in the Security Agreement) does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security interest in and lien on all of the New Subsidiary’s right, title and interest in and to the Collateral (as defined in the Security Agreement) of the New Subsidiary. Each reference to a “Grantor” in the Security Agreement shall be deemed to include the New Subsidiary. The Security Agreement is hereby incorporated herein by reference.

SECTION 2. The New Subsidiary represents and warrants to the Collateral Agent and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws and by general principles of equity.

SECTION 3. This Supplement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Collateral Agent shall have received a counterpart of this Supplement that bears the signature of the New Subsidiary, and the Collateral Agent has executed a counterpart hereof. Delivery of an executed signature page to this Supplement by facsimile transmission or other electronic communication shall be as effective as delivery of a manually signed counterpart of this Supplement.

SECTION 4. The New Subsidiary hereby represents and warrants that (a) set forth on Schedule I attached hereto is a true and correct schedule of the location of any and all Collateral of the New Subsidiary and (b) set forth under its signature hereto is the true and correct legal name of the New Subsidiary, its jurisdiction of formation and the location of its chief executive office.

SECTION 5. Except as expressly supplemented hereby, the Security Agreement shall remain in full force and effect.

SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 7. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Security Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

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SECTION 8. All communications and notices hereunder shall be in writing and given as provided in Section 6.01 of the Security Agreement.

SECTION 9. The New Subsidiary agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Collateral Agent.

 

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IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly executed this Supplement to the Security Agreement as of the day and year first above written.

 

SIGMATEL, INC.
  By:  

/s/ Daryl Raiford

    Name:   Daryl Raiford
    Title:  

Chief Executive Officer,

President & Chief

Financial Officer

Jurisdiction of Formation: DELAWARE

Address Of Chief Executive Office: 1601 S. MoPac Expressway, Suite 100 Austin, TX 78746

[Security Agreement Supplement]


CITIBANK, N.A.,

as Collateral Agent

  By:  

/s/ Rob Ziemer

    Name:   Rob Ziemer
    Title:   Vice President

[Security Agreement Supplement]


SCHEDULE I

TO SUPPLEMENT NO. 1 TO THE

SECURITY AGREEMENT

LOCATION OF COLLATERAL

Chart A

 

Collateral Description

  

Location

   Value as of
April 30, 2008
 

Cash - Operating

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 1,061,163.09   

Cash - Operating - JP Morgan

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 6,426.63   

Cash - West Coast Imaging Ctr

   California USA    $ 195,098.12   

Cash - Delaware

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 1,000.00   

Cash - Petty

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 2,324.59   

Bear Stearns - Needham & Co Investments

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 2,472,729.84   

US Bank - SVB

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 6,432,539.63   

WCMA

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 70,456.30   

Wells Fargo - West Coast Imaging Ctr

   California USA    $ 2,653.97   

UBS Money Market

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 759,235.37   

US Bank - SVB, Investment

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 1,500,898.79   

ST Restricted Cash

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 154,310.60   

A/R - Trade

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 161,503.75   

A/R - Accrual

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 47,722.58   

Prepaid Software Maint

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 292,975.69   

Prepaid Expenses

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 823,211.79   

Prepaid Income Taxes

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 2,516,562.23   

Receivable - Other

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 168,060.23   

Accr. interest receivable - Bear Stearns - Needham

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 17,005.99   

Accr. interest receivable - US Bank - SVB

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 25,448.43   

Accr. interest receivable - UBS

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 23,433.16   

Mask Sets/Production Tool

   See Chart B Below    $ 210,053.58   

Equipment

   See Chart B Below    $ 2,168,447.12   

Computers

   See Chart B Below    $ 267,232.09   

 

Schedule I-1


Software

   See Chart B Below    $ 2,002,565.19   

Furniture & Fixtures

   See Chart B Below    $ 685,437.65   

Leasehold Improvements

   See Chart B Below    $ 893,807.90   

Construction in Progress

   See Chart B Below    $ 139,713.25

Investments - LT - XX

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 35,954,750.33   

Investment in Subsidiary - Int’l Holding

   Delaware USA    $ 19,200,188.96   

Non-Current Income Tax Receivable

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 3,304,612.28   

Non-Current Income Tax Receivable - FIN 48

  

1601 S. MoPac Expressway, Suite 100

Austin TX, 78746

   $ 3,321,234.05   

Chart B (Detail)

 

Collateral

Description

  

201 Jones
Road,

Waltham,
MA 02451

    

1601 S.

MoPac
Expressway,
Suite 100

Austin TX,
78746

    

Taiwan

    

India

    

Thailand

    

Value as of
April 30, 2008

 

Mask Sets/Production Tool

         $ 209,219.48          $ 833.40       $ 210,052.87   

Equipment

   $ 112,172.28       $ 2,044,568.58          $ 11,366.26          $ 2,168,107.12   

Computers

   $ 15,029.19       $ 252,202.85                $ 267,232.04   

Software

   $ 125,781.17       $ 1,854,461.09          $ 14,242.30          $ 1,994,484.56   

Furniture & Fixtures

   $ 64,542.56       $ 581,220.32                $ 645,762.88   

Leasehold Improvements

   $ 179,844.16       $ 713,963.20                $ 893,807.36   

Construction in Progress

   $ 497,369.35       $ 5,446,416.03       $ 209,219.48       $ 25,608.56       $ 833.40       $ 6,179,446.82   

EQUITY INTERESTS

None.

DEBT SECURITIES

 

CUSIP

  

Issuer

  

Face

    

Market

Value *

    

Maturity /
Auction

 

Auction Rate

           

194267AH3

   College Loan Corp 01/25/47      2,500,000         2,392,500         4/3/08   

917546GK3

   Utah State Brd Of Rgts 05/01/46      2,500,000         2,392,500         4/3/08   

207784AN9

   Connecticut Student Loan Fndtn      2,000,000         1,912,360         4/7/08   

 

Schedule I-2


CUSIP

  

Issuer

  

Face

    

Market

Value *

    

Maturity /
Auction

 
   06/01/34         

00432CBQ3

   Access Group 12/27/32      1,150,000         1,100,550         4/9/08   

71722TAF1

   Pennsylvania Higher Ed Assist 04/25/44      2,200,000         2,105,400         4/9/08   

709163FS3

   Pennsylvania High Educ Assist      2,000,000         1,914,000         4/16/08   

452281HC5

   Illinois Student Assist Comm 03/01/43      2,500,000         2,392,500         4/16/08   

207784AG4

   Connecticut Student Loan Fnd      2,000,000         1,912,360         4/22/08   

49130NAF6

   Kentucky High Ed Stud Ln Corp      2,050,000         1,961,850         4/22/08   

644616AD6

   New Hampshire Higher Ed Loan 12/01/32      2,500,000         2,352,400         4/22/08   

78442GEW2

   SLM Funding Corporation      2,000,000         1,914,000         4/23/08   

606072GX8

   Missouri Higher Ed Loan Auth 07/01/32      2,300,000         2,201,100         4/23/08   

49130NBH1

   Kentucky High Ed Stud Ln Corp      2,000,000         1,914,000         4/24/08   

452281HT8

   Illinois Student Asst Comm      2,000,000         1,914,000         4/28/08   

49130NBA6

   Kentucky Higher Ed Student Loan 06/01/34      2,550,000         2,440,350         4/28/08   

644616AG9

   New Hampshire High Ed Ln Corp      950,000         893,912         5/5/08   

49130NBM0

   Kentucky High Ed Stud Ln Corp      2,000,000         1,914,000         5/7/08   

64966CQY0

   New York City General Obligation      225,000         215,325         5/9/08   

606072GS9

   Missouri High Educ Loan Auth      2,000,000         1,914,000         5/9/08   
                       
        37,425,000         35,757,107      

Corporate

           

441812FY5

   Household Finance Corp      250,000         250,918         6/17/08   

524908JA9

   Lehman Bros Holdings      250,000         247,055         8/7/08   

14912LZ38

   Caterpillar Fin      250,000         249,350         1/15/09   

38143UAA9

   Goldman Sachs Group Inc      250,000         248,848         1/15/09   

929771AM5

   Wachovia Corp      250,000         254,093         3/15/09   

7800876N7

   Royal Bank of Canada      250,000         252,778         5/4/09   

02635PSP9

   American General Fin      250,000         247,988         5/15/09   
                       
        1,750,000         1,751,028      

Money Mkt Fund

           

261934103

   Dreyfus Cash Management Plus      4,330,462         4,330,462      

90262Y505

   UBS Select MMF      5,697,006         5,697,006      

31846V500

   First American Prime Obligations Fund      6,881,789         6,881,789      
                       
        16,909,257         16,909,257      

TOTAL

      $ 56,084,257       $ 54,417,392      

 

* ARS market values are current SGTL book values based on UBS pricing methodology

 

Schedule I-3