Company Intends to Raise Capital and Tender for Its Convertible Notes
NEWPORT BEACH, Calif.–(Business Wire)–
Conexant Systems, Inc. (NASDAQ: CNXT) today announced a comprehensive
refinancing plan designed to improve its balance sheet and address its liquidity
needs. The company expects that this refinancing plan will provide sufficient
financial flexibility to tender for its outstanding 4% convertible subordinated
notes due 2026 and to realize the benefits associated with its business and
growth opportunities.

Conexant has priced $175 million of new 11.25% senior secured notes due 2015,
and is launching an offering of approximately 14 million shares of its common
stock. The senior secured notes have already been placed with institutional
investors, and the company expects to complete the equity offering in the next
several days. The proceeds from these offerings, together with available cash,
will be used by the company to tender for any and all of its outstanding $232
million convertible subordinated notes, which are “puttable” in March 2011.
Under the terms of a tender offer commenced today, holders of convertible
subordinated notes will be offered par value in cash. The tender offer will be
contingent upon the successful completion of the new debt and equity offerings
and is expected to be completed by March 30, 2010.

“Last year we concluded the major operational restructuring of Conexant with the
sale of our DSL business,” said Scott Mercer, Conexant chairman and chief
executive officer. “Since then, completing the financial restructuring of our
company has been one of our highest priorities. Once we successfully close our
new debt and equity offerings and retire our convertible debt, we will have a
stronger, more sustainable capital structure. At that point our company
transformation will be complete, and we will be focused exclusively on driving
profitable growth by expanding our market-leading position in solutions for
imaging, audio, embedded modem, and video surveillance applications. In
addition, we intend to use our core expertise in analog and mixed-signal design
to take advantage of new opportunities in adjacent markets.”

Newport Beach Property Transaction

On January 19, 2010, Conexant announced that it had agreed to sell approximately
25 acres of property adjacent to its Newport Beach, California headquarters to
City Ventures LLC for $26.1 million, contingent upon further due diligence by
City Ventures and customary closing conditions. The companies have agreed to
extend the diligence period, and City Ventures has asked for concessions that
include a price reduction and a financing contingency, so it is now unlikely
that the transaction will close prior to the end of March 2010 as originally
anticipated.

Additional Refinancing Plan Information

There can be no assurance that one or more of the transactions that are part of
the refinancing plan described in this press release will be executed in the
amounts and in the timeframe required to address the company`s needs, if at all.
The securities offerings pursuant to the refinancing plan are subject to market
and other conditions, including customary closing conditions. The company`s
tender offer may not be consummated or, even if the tender offer is consummated,
a significant amount of the convertible subordinated notes may not be tendered
and will remain outstanding.

This press release is for informational purposes only and does not constitute an
offer to buy or the solicitation of an offer to sell the securities of Conexant
described herein. The notes to be offered as part of the refinancing plan have
not been and will not be registered under the Securities Act of 1933, as
amended, and, as such, may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements.

The equity offering described herein may be made only by means of the
preliminary prospectus supplement and the prospectus relating to the proposed
equity offering, copies of which may be obtained, when available, from Goldman
Sachs & Co., Attention: Prospectus Department, 85 Broad Street, New York, New
York 10004, by telephone at (866) 471-2526, or via email at
prospectus-ny@ny.email.gs.com.

In addition, the tender offer described herein will be made only pursuant to an
Offer to Purchase, Letter of Transmittal, and related materials that Conexant
intends to distribute to its security holders and file with the Securities and
Exchange Commission (SEC). Security holders and investors should read carefully
the Offer to Purchase, Letter of Transmittal and related materials. Security
holders and investors will be able to obtain a free copy of the Tender Offer
Statement on Schedule TO, the Offer to Purchase, the Letter of Transmittal, and
other documents Conexant intends to file with the SEC at the SEC`s website at
www.sec.gov, from the Information Agent named in the tender offer documents, or
from Conexant.

About Conexant

Conexant`s comprehensive portfolio of innovative semiconductor solutions
includes products for imaging, audio, embedded modem, and video surveillance
applications. Conexant is a fabless semiconductor company headquartered in
Newport Beach, California.

Safe Harbor Statement

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of
1995: This release includes forward-looking statements intended to qualify for
the safe harbor from liability established by the Private Securities Litigation
Reform Act of 1995. These forward-looking statements generally can be identified
by phrases such as Conexant or its management “believes,” “expects,”
“anticipates,” “foresees,” “forecasts,” “estimates,” or other words or phrases
of similar import. Forward-looking statements in this press release include
statements concerning the proposed debt and equity offerings and the proposed
tender offer, the anticipated timing of such transactions, the anticipated use
of proceeds from the debt and equity offerings, expectations regarding our
capital structure following completion of the proposed refinancing plan, our
business strategies and objectives following completion of the proposed
refinancing plan, and our expectations regarding the closing of the sale of our
real property in Newport Beach, California. All such forward-looking statements
are subject to certain risks and uncertainties that could cause actual results
to differ materially from those in the forward-looking statements. These risks
and uncertainties include, but are not limited to: the risk that our significant
level of indebtedness, including the debt incurred in the debt offering, will
adversely affect our financial health and prevent us from fulfilling our
indebtedness obligations; the possible adverse impact on the market price of our
shares of common stock due to the dilutive effect of the shares of common stock
to be sold in the equity offering; capital needed for our business and to repay
our indebtedness will not be available when needed; risks associated with our
international operations; the cyclical nature of the semiconductor industry,
which is subject to significant downturns that may negatively impact our
business, financial condition, cash flow, and results of operations; the
cyclical nature of the markets addressed by our products and our customers’
products; volatility in the technology sector and the semiconductor industry;
the financial risks of default by tenants and subtenants in the space we own or
lease; intellectual property; our successful development of new products; the
timing of our new product introductions and our product quality; demand for and
market acceptance of our new and existing products; our ability to anticipate
trends and develop products for which there will be market demand; product
obsolescence; changes in our product mix; pricing pressures and other
competitive factors; our ability to timely develop and implement new
technologies and to obtain protection for the related ability of our customers
to manage inventory; our ability to identify and execute acquisitions,
divestitures, mergers, or restructurings, as deemed appropriate by management,
including expectations regarding the sale of our real property in Newport Beach,
California; the availability of manufacturing capacity; the uncertainties of
litigation, including claims of infringement of third-party intellectual
property rights or demands that we license third-party technology, and the
demands it may place on the time and attention of our management and the expense
it may place on our company; general economic and political conditions and
conditions in the markets we address; and possible disruptions in commerce
related to terrorist activity or armed conflict, as well as other risks and
uncertainties, including those detailed from time to time in our Securities and
Exchange Commission filings.

Conexant is a registered trademark of Conexant Systems, Inc.

Conexant Systems, Inc.
Editorial Contact:
Gwen Carlson, 949-483-7363
or
Investor Relations Contact:
Scott Allen, 949-483-2698

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