Item 1.01
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Entry into a Material Definitive Agreement.
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Term Credit Agreement
On May 21, 2021, Skyworks
Solutions, Inc., a Delaware corporation (the “Company”), as a borrower, entered into a term credit agreement with various
financial institutions, as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Term Credit Agreement”),
providing for a $1.0 billion term loan facility (the “Term Loan”). The proceeds of the Term Loan are expected to be used to
finance a portion of the purchase price for the previously announced acquisition (“Acquisition”) of certain assets, rights,
and properties comprising the infrastructure and automotive business of Silicon Laboratories Inc. (“Silicon Labs”) pursuant
to an Asset Purchase Agreement, dated as of April 22, 2021 (the “Purchase Agreement”), by and between Silicon Labs and the
Company, and to pay fees and expenses incurred in connection therewith.
The Term Loan matures on the
third anniversary of its funding date, which is expected to be the closing date of the Acquisition, and all amounts then-outstanding under
the Term Loan, together with accrued and unpaid interest thereon, are repayable at maturity.
The Term Loan bears interest
from time to time at either the Alternate Base Rate (“ABR”) or the Adjusted LIBO Rate, as defined in and calculated under
and as in effect from time to time under the Term Credit Agreement, plus the Applicable Rate, as defined in the Term Credit Agreement.
The Applicable Rate is determined based on the debt rating of the Company. ABR borrowings are payable quarterly in arrears and Eurocurrency
borrowings are payable at the end of the relevant interest period therefor, but in no event less frequently than every three months. There
is no premium or penalty for prepayment of ABR borrowings or Eurocurrency borrowings.
The Term Loan will not initially
be guaranteed by any of the Company’s subsidiaries.
The Term Credit Agreement
contains customary representations and warranties and covenants, including restrictions on the incurrence of indebtedness by non-guarantor
subsidiaries and the creation of liens, and a financial covenant consisting of a limitation on leverage. The Term Credit Agreement also
contains customary events of default, which include failure to make required payments of principal and interest, breaches of representations and warranties, changes
of control or failures to pay money judgments and certain defaults in respect of specified material indebtedness, upon the occurrence
of which, among other remedies, the lenders may accelerate the maturity of the indebtedness and other obligations under the Term Credit
Agreement.
Certain of the lenders under
the Term Credit Agreement are also lenders under the Company’s Revolving Credit Agreement (defined below). The Company and its subsidiaries
also maintain other banking relationships with a number of such lenders.
Revolving Credit Agreement
On May 21, 2021, the Company
entered into a revolving credit agreement with various financial institutions, as lenders, and JPMorgan Chase Bank, N.A., as administrative
agent (the “Revolving Credit Agreement”), providing for a $750 million revolving credit facility (the “Revolver”).
The proceeds of the Revolver will be used for general corporate purposes and working capital needs of the Company and its subsidiaries.
The Company may at any time
and from time to time request the designation of any wholly owned subsidiary as a Borrowing Subsidiary, as defined in the Revolving Credit
Agreement. Drawings under the Revolver could be made by the Company or any Borrowing Subsidiary, and the Company will guarantee payment
of any amounts borrowed by any Borrowing Subsidiary. Borrowings under the Revolver will not initially be guaranteed by any of the Company’s
subsidiaries.
The Revolver provides for
revolving credit borrowings and letters of credit, with sublimits for letters of credit. The Revolver may be increased in specified circumstances
by up to $250 million at the discretion of the lenders. The Revolver matures on the fifth anniversary of its availability date, which
is expected to be the closing date of the Acquisition, and all unpaid borrowings, together with accrued and unpaid interest thereon, are
repayable at maturity.
The Revolver bears interest
from time to time at either the ABR or the Adjusted LIBO Rate, as defined in and calculated under and as in effect from time to time under
the Revolving Credit Agreement, plus the Applicable Rate, as defined in the Revolving Credit Agreement. The Applicable Rate is determined
based on the debt rating of the Company. ABR borrowings are payable quarterly in arrears and Eurocurrency borrowings are payable at the
end of the relevant interest period therefor, but in no event less frequently than every three months. There is no premium or penalty
for prepayment of ABR borrowings or Eurocurrency borrowings.
The Revolving Credit Agreement
contains customary representations and warranties and covenants, including restrictions on the incurrence of indebtedness by non-guarantor
subsidiaries and the creation of liens, and a financial covenant consisting of a limitation on leverage. The Revolving Credit Agreement
also contains customary events of default, which include failure to make required payments of principal and interest, breaches of representations and warranties,
changes of control or failures to pay money judgments and certain defaults in respect of specified material indebtedness, upon the occurrence
of which, among other remedies, the lenders may accelerate the maturity of the indebtedness and other obligations under the Revolving
Credit Agreement.
Certain of the lenders under
the Revolving Credit Agreement are also lenders under the Company’s Term Credit Agreement. The Company and its subsidiaries also
maintain other banking relationships with a number of such lenders.
The above summaries of
the Term Credit Agreement and Revolving Credit Agreement do not purport to be complete discussions of those agreements or related
documents and are qualified in their entirety by reference to the full text of the Term Credit Agreement and Revolving Credit
Agreement, copies of which are attached hereto as Exhibits 10.1 and 10.2, respectively, and incorporated herein by reference.
Senior Notes
On May 12, 2021, the
Company agreed to sell $500,000,000 0.900% Senior Notes due 2023 (the “2023 Notes”), $500,000,000 1.800% Senior Notes
due 2026 (the “2026 Notes”), and $500,000,000 3.000% Senior Notes due 2031 (the “2031 Notes” and, together
with the 2023 Notes and the 2026 Notes, the “Notes”) pursuant to an Underwriting Agreement, dated May 12, 2021 (the
“Underwriting Agreement”), by and among the Company and J.P. Morgan Securities LLC, BofA Securities, Inc. and Goldman
Sachs & Co. LLC, as representatives of the several underwriters named therein. The offering of the Notes was registered under
the Securities Act of 1933 pursuant to the Company’s Registration Statement on Form S-3 (Registration No. 333-255945). A
prospectus supplement, dated May 12, 2021, relating to the offering and sale of the Notes was filed with the Securities and Exchange
Commission on May 14, 2021.
The terms of the Notes will
be governed by an Indenture, dated as of May 26, 2021 (the “Base Indenture”), as supplemented by a First Supplemental Indenture,
dated as of May 26, 2021 (the “First Supplemental Indenture”), relating to the 2023 Notes, a Second Supplemental Indenture,
dated as of May 26, 2021 (the “Second Supplemental Indenture”), relating to the 2026 Notes, and a Third Supplemental Indenture,
dated as of May 26, 2021 (the “Third Supplemental Indenture” and, collectively with the Base Indenture, the First Supplemental
Indenture and the Second Supplemental Indenture, the “Indenture”), relating to the 2031 Notes, in each case by and between
the Company and U.S. Bank National Association, as trustee. The Indenture contains customary covenants that, among other things, limit
the ability of the Company, with certain exceptions, to incur debt secured by liens, engage in sale and leaseback transactions and enter
into certain consolidations, mergers and transfers of all or substantially all of the assets of the Company and its subsidiaries, taken
as a whole.
The Company may redeem
all or a portion of the 2023 Notes at any time after June 1, 2022, and all or a portion of the 2026 Notes and the 2031 Notes at any
time and from time to time prior to maturity, in whole or in part, for cash at the applicable redemption prices set forth in the
respective supplemental indenture. If the Company undergoes a change of control repurchase event, as defined in the Indenture,
holders may require the Company to repurchase the Notes in whole or in part for cash at a price equal to 101% of the principal
amount of the Notes to be purchased, plus any accrued and unpaid interest to, but not including, the repurchase date.
In addition, if the (i) the
consummation of the Acquisition does not occur prior to 5:00 p.m., New York City time, on October 29, 2021, (ii) the Company notifies
the trustee and the holders of the 2023 Notes that it will not pursue the consummation of the Acquisition or (iii) the Purchase Agreement
has been terminated without the consummation of the Acquisition, the 2023 Notes will be subject to a special mandatory redemption upon
the terms and at the redemption price set forth in the First Supplemental Indenture. The 2026 Notes and the 2031 Notes will not be subject
to any special mandatory redemption if the Acquisition is not completed.
The Indenture contains customary
events of default, including failure to make required payments of principal and interest, certain events of bankruptcy and insolvency
and default in the performance or breach of any covenant or warranty contained in the Indenture or the Notes.
The 2023 Notes will bear interest
from and including May 26, 2021 at the rate of 0.900% per annum. The 2026 Notes will bear interest from and including May 26, 2021 at
the rate of 1.800% per annum. The 2031 Notes will bear interest from and including May 26, 2021 at the rate of 3.000% per annum.
The Notes will be senior unsecured
obligations of the Company and rank equally in right of payment with all of its existing and future senior unsecured debt, but effectively
junior to any of the Company’s senior secured debt to the extent of the value of collateral securing such debt, and are structurally
subordinated to all existing and future obligations of the Company’s subsidiaries.
The above summaries of
the Base Indenture, the First Supplemental Indenture, the Second Supplemental Indenture and the Third Supplemental Indenture do not
purport to be complete discussions of those agreements or related documents and are qualified in their entirety by reference to the
full text of those agreements, copies of which are attached hereto as Exhibits 4.1, 4.2, 4.3 and 4.4, respectively, and incorporated
herein by reference.