<PAGE>
EXHIBIT 10.2
EXECUTION COPY
AMENDMENT NO. 1, CONSENT, WAIVER AND AGREEMENT dated as of
August 19, 2005 (this "AMENDMENT"), to the Credit Agreement
dated
as of April 1, 2005 (the "CREDIT AGREEMENT"), among AMI
SEMICONDUCTOR, INC., a Delaware corporation (the "BORROWER"),
AMIS HOLDINGS, INC., a Delaware corporation ("HOLDINGS"), the
Lenders (as defined in Article I of the Credit Agreement) and
CREDIT SUISSE (formerly known as Credit Suisse First Boston),
as
administrative agent (in such capacity, the "ADMINISTRATIVE
AGENT") and as collateral agent (in such capacity, the
"COLLATERAL AGENT" ) for the Lenders.
A. Pursuant to
the Credit Agreement, the Lenders have extended, and have
agreed to extend, credit to the
Borrower.
B. Holdings and
the Borrower have informed the Administrative Agent that
Holdings and the Borrower, including
through one or more existing or newly
formed Wholly Owned Subsidiaries that are
Foreign Subsidiaries (each a
"TRANSACTION SUBSIDIARY"), intend to
acquire (the "ACQUISITION") from
Flextronics Semiconductor, Inc., a
corporation organized under the laws of
Delaware, and certain of its affiliates
(collectively, the "SELLERS"), the
assets comprising the mixed signal,
peripheral imaging components and digital
businesses of the Sellers (the "ACQUIRED
BUSINESS"), pursuant to one or more
asset purchase agreements (as the same may
be amended from time to time on or
prior to the Supplemental Term Loan Closing
Date (as defined below), the
"PURCHASE AGREEMENTS") among the Borrower,
certain affiliates of the Borrower
and the Sellers, for aggregate cash
consideration of approximately $135,000,000
(subject to adjustment in accordance with
the Purchase Agreements, the
"ACQUISITION CONSIDERATION").
C. In connection with the
foregoing, Holdings and the Borrower have
requested that (i) senior secured
supplemental term loans (the "SUPPLEMENTAL
TERM LOANS") be made to the Borrower by
certain financial institutions (the
"SUPPLEMENTAL TERM LENDERS") in an
aggregate principal amount of $110,000,000,
the proceeds of which will be used to
finance in part the Acquisition and to pay
related fees and expenses and the terms of
which shall be identical to the
existing Term Loans outstanding under the
Credit Agreement, and (ii) the
Required Lenders (a) consent to the
Acquisition, (b) waive compliance by
Holdings and the Borrower with certain
provisions of the Credit Agreement in
connection therewith and (c) agree to waive
and amend certain provisions of the
Credit Agreement as provided herein.
D. Holdings and
the Borrower have further informed the Administrative Agent
that, following the consummation of the
Acquisition, Holdings and the Borrower,
including through one or more Wholly Owned
Subsidiaries, propose to sell the
"System on a Chip" business acquired
pursuant to the Acquisition (the "SOC
SALE"). Holdings and the Borrower
anticipate that the SOC Sale will generate Net
Cash Proceeds of up to $10,000,000.
E. Holdings and
the Borrower have also informed the Administrative Agent
that AMI Acquisition II LLC, a Wholly Owned
Subsidiary of the Borrower ("AMI
ACQUISITION II"), proposes to merge with
and into the Borrower (the "PROPOSED
MERGER"). AMI Acquisition II and the
Borrower each holds a 5% general membership
interest in Emma Mixed Signal C.V. ("EMMA")
and AMI Acquisition LLC, another
Wholly Owned Subsidiary of the Borrower
("AMI
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2
ACQUISITION"), holds a 90% limited
membership interest in Emma. Following the
consummation of the Proposed Merger, the
Borrower will hold a 10% general
membership interest in Emma, and
modifications will be made to Emma's
constitutive documents (or shareholders'
agreements relating thereto) such that
AMI Acquisition will hold 90% of the voting
interests in Emma and the Borrower
will hold 10% of the voting interests in
Emma (the "VOTING INTEREST
REALIGNMENT").
F. The
Supplemental Term Lenders are willing to make the Supplemental
Term
Loans and the Required Lenders are willing
to grant such consents and waivers
and to agree to such amendments, in each
case on the terms and subject to the
conditions set forth herein.
G. Capitalized
terms used but not defined herein shall have the meanings
assigned to them in the Credit
Agreement.
Accordingly, in
consideration of the mutual agreements herein contained and
other good and valuable consideration, the
sufficiency and receipt of which are
hereby acknowledged, the parties hereto
agree as follows:
SECTION 1.
SUPPLEMENTAL TERM LOANS. (a) Subject to the terms and
conditions
set forth herein and relying upon the
representations and warranties set forth
herein and in the other Loan Documents,
each Supplemental Term Lender agrees,
severally and not jointly, to make a
Supplemental Term Loan to the Borrower on
the Supplemental Term Loan Closing Date in
a principal amount not to exceed the
commitment of such Supplemental Term Lender
to make Supplemental Term Loans as
set forth on Schedule I hereto.
(b) The Borrower
will use the proceeds of the Supplemental Term Loans only
for the purposes specified in the recitals
to this Amendment.
(c) Unless the
context shall otherwise require, the terms "TERM LOANS" and
"LOANS" as used in the Credit Agreement
shall include the Supplemental Term
Loans, and the terms "TERM LENDERS" and
"LENDERS" as used herein and in the
Credit Agreement shall include each
Supplemental Term Lender (other than any
Supplemental Term Lender that has ceased to
be a party to the Credit Agreement
pursuant to an Assignment and
Acceptance).
SECTION 2.
CONSENT AND WAIVER. (a) The Required Lenders hereby consent to
the Acquisition on substantially the terms
described above, and hereby waive
compliance by Holdings and the Borrower
with the provisions of Sections 6.01,
6.04, 6.05 and 6.07 of the Credit Agreement
to the extent (but only to the
extent) necessary to permit Holdings, the
Borrower and its Subsidiaries (i) to
enter into the Purchase Agreements, to
consummate the Acquisition, and to
allocate, sell or otherwise transfer the
assets acquired pursuant to the
Acquisition between or amongst themselves
and (ii) to capitalize the Transaction
Subsidiaries and any intermediate Wholly
Owned Subsidiary holding company,
including by way of intercompany loans
evidenced by one or more promissory notes
pledged to the Collateral Agent for the
ratable benefit of the Secured Parties
to the extent required by the Loan
Documents, for purposes of the foregoing.
(b) The Required
Lenders hereby consent to the SOC Sale, and hereby waive
compliance by Holdings and the Borrower
with the provisions of Section 6.05 of
the Credit Agreement to the extent (but
only to the extent) necessary to permit
Holdings, the Borrower and its Subsidiaries
to enter into the definitive
documentation in respect of the SOC Sale
(the "SOC SALE DOCUMENTS") and to
consummate the SOC Sale.
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3
(c) The Required
Lenders and the Requisite Term Lenders (as defined below)
hereby waive compliance by the Borrower
with the provisions of Section 2.13(b)
of the Credit Agreement to the extent (but
only to the extent) that such Section
would otherwise require the Borrower to
prepay Term Loans with the Net Cash
Proceeds of the SOC Sale. For purposes of
this Amendment, "REQUISITE TERM
LENDERS" shall mean Term Lenders under the
Credit Agreement holding a majority
of the aggregate principal amount of
outstanding Term Loans (prior to giving
effect to this Amendment and the making of
the Supplemental Term Loans
hereunder).
(d) The Required
Lenders hereby waive compliance by Holdings with the
provisions of Section 6.14(a) of the Credit
Agreement to the extent (but only to
the extent) necessary to permit Holdings to
enter into the Purchase Agreements
and the SOC Sale Documents and exercise its
rights and perform its obligations
thereunder and capitalize its Subsidiaries,
including by way of intercompany
loans, to the extent contemplated by this
Section 2.
(e) The Required
Lenders hereby consent to the Proposed Merger and hereby
waive compliance by Holdings, the Borrower
and its Subsidiaries with the Loan
Documents (including Sections 6.05, 6.07
and 6.10 of the Credit Agreement and
applicable provisions of the Foreign Pledge
Agreement referred to in clause (a)
of the definition of such term set forth in
the Credit Agreement) to the extent
(but only to the extent) necessary to
permit AMI Acquisition II and the Borrower
to enter into an agreement of merger in
connection with the Proposed Merger and
to consummate the Proposed Merger and the
Voting Interest Realignment.
(f) The Required
Lenders hereby consent to the Collateral Agent and the
relevant Loan Parties entering into
amendments, restatements or supplements to
the Foreign Pledge Agreements to the extent
(but only to the extent) necessary
to secure the Supplemental Term Loans as
additional obligations thereunder and
permit the Voting Interest Realignment and
the other transactions contemplated
hereby.
SECTION 3.
AMENDMENTS. (a) The definition of the term "Consolidated
Operating Income" set forth in Section 1.01
of the Credit Agreement is hereby
amended by inserting the phrase "or
Flextronics Acquisition Transaction Costs"
at the end of clause (f) therein.
(b) The
definition of the term "Excess Cash Flow" set forth in Section
1.01
of the Credit Agreement is hereby amended
by inserting the phrase "and the
Flextronics Acquisition Transaction Costs"
after the phrase "including the
Transaction Costs" in the parenthetical set
forth in clause (b)(vi) therein.
(c) Section 1.01
of the Credit Agreement is hereby amended by adding the
following defined term in appropriate
alphabetical order:
(i) ""FLEXTRONICS ACQUISITION TRANSACTION COSTS" shall mean
the fees and expenses paid by Holdings or the Borrower in
connection with the acquisition of the assets comprising the
mixed signal, peripheral imaging components and digital
businesses of Flextronics Semiconductor, Inc. and certain of
its
Affiliates."
(d) Effective
upon the making of the Supplemental Term Loans on the
Supplemental Term Loan Closing Date, the
table appearing in Section 2.11 of the
Credit Agreement is hereby amended and
restated in its entirety to read as
follows:
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4
<TABLE>
<CAPTION>
Date
Amount
----
------
<S>
<C>
June 30, 2005
$
525,000.00
September 30, 2005
$
800,000.00
December 31, 2005
$
800,000.00
March 31, 2006
$
800,000.00
June 30, 2006
$ 800,000.00
September 30, 2006
$
800,000.00
December 31, 2006
$
800,000.00
March 31, 2007
$
800,000.00
June 30, 2007
$
800,000.00
September 30, 2007
$
800,000.00
December 31, 2007
$
800,000.00
March 31, 2008
$
800,000.00
June 30, 2008
$
800,000.00
September 30, 2008
$
800,000.00
December 31, 2008
$
800,000.00
March 31, 2009
$
800,000.00
June 30, 2009
$
800,000.00
September 30, 2009
$
800,000.00
December 31, 2009
$
800,000.00
March 31, 2010
$
800,000.00
June 30, 2010
$
800,000.00
September 30, 2010
$
800,000.00
December 31, 2010
$
800,000.00
March 31, 2011
$
800,000.00
June 30, 2011
$
800,000.00
September 30, 2011
$
800,000.00
December 31, 2011
$
800,000.00
Term Loan Maturity Date $298,675,000.00
---------------
TOTAL:
$320,000,000.00
---------------
</TABLE>
(e) The proviso
appearing at the end of Section 2.13(d) of the Credit
Agreement is hereby amended and restated in
its entirety to read as follows:
";
provided, however, that (i) the amount of such prepayment shall
be
reduced to 25%
of such Excess Cash Flow if the Senior Leverage Ratio at the
end of such
fiscal year shall be less than 1.75 to 1.00, but greater than
or equal to 1.50
to 1.00, and (ii) such prepayment shall not be required if
the Senior
Leverage Ratio at the end of such fiscal year shall be less
than
1.50 to
1.00."
<PAGE>
5
(f) Section 6.05
of the Credit Agreement is hereby amended by deleting the
parenthetical "(or agree to do any of the
foregoing at any future time)" from
both places it appears in the lead-in
paragraph thereof.
SECTION 4. OTHER
AGREEMENTS. Holdings, the Borrower and the Required
Lenders hereby agree that:
(a) for all
purposes of the Credit Agreement, the Acquisition shall be
deemed to constitute a "Permitted
Acquisition", but shall be deemed not to have
utilized any portion of the basket
described in clause (b)(iii)(y) of the
proviso to the definition of the term
"Permitted Acquisition";
(b) no portion
of any basket provided for in Section 6.01 or 6.04 of the
Credit Agreement shall be deemed utilized
by the capitalization of any
Transaction Subsidiary (and any
intermediate Wholly Owned Subsidiary holding
company) by Holdings, the Borrower or any
of its Subsidiaries, including by way
of intercompany debt, to the extent
contemplated by Section 2 hereof;
(c) no portion
of any basket provided for in Section 6.05(a) of the Credit
Agreement shall be deemed utilized by the
receipt of the Net Cash Proceeds from
the SOC Sale;
(d) in addition
to investments, including intercompany loans, contemplated
by Section 2 hereof, the Loan Parties may
invest, including by way of
intercompany loans, an additional
$10,000,000 in the Transaction Subsidiaries
(and any intermediate Wholly Owned
Subsidiary holding companies) and any such
investment or loan shall be deemed not to
utilize any portion of any basket
provided for in Section 6.01 or 6.04 of the
Credit Agreement;
(e) the
allocation, sale or other transfer of the assets acquired
pursuant
to the Acquisition between or among
Holdings, the Borrower and its Subsidiaries
shall be deemed not to constitute an Asset
Sale or the acquisition of an asset
for purposes of the Credit Agreement;
(f)
contemporaneously with the closing of the SOC Sale, the assets
sold
pursuant to the SOC Sale shall be deemed to
have been automatically released
from the Liens created pursuant to the
Security Documents, and the
Administrative Agent and the Collateral
Agent are hereby authorized to take any
action deemed appropriate to effect the
foregoing;
(g)
contemporaneously with the consummation of the Proposed Merger,
the
interests of AMI Acquisition and AMI
Acquisition II in Emma shall be deemed to
have been automatically released from the
Liens created pursuant to the Security
Documents, and the Administrative Agent and
the Collateral Agent are hereby
authorized to take any action deemed
appropriate to effect the foregoing;
(h) promptly
following the consummation of the Proposed Merger, the
Borrower shall cause (x) the financial
interests of AMI Acquisition in Emma to
be pledged to the Collateral Agent to
secure the Obligations and (y) a power of
attorney to be issued to the Collateral
Agent granting to the Collateral Agent
the authority to vote 65% of the voting
interest in Emma, in each case pursuant
to a pledge agreement in form and substance
reasonably satisfactory to the
Collateral Agent; and
(i) the
obligations of Holdings, the Borrower or any of its Subsidiaries
to
pay up to $10,000,000 of the revenues
attributable to the assets acquired
pursuant to the "DSP Acquisition"
consummated on or about November 12, 2004 to
any Governmental Authority in Canada
pursuant to certain government aid
agreements shall be deemed not to
constitute Indebtedness for purposes of the
Credit Agreement.
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6
SECTION 5.
REPRESENTATIONS AND WARRANTIES. To induce the other parties
hereto to enter into this Amendment,
Holdings and the Borrower represent and
warrant to each of the Lenders (including
the Supplemental Term Lenders), the
Administrative Agent and the Collateral
Agent that, after giving effect to this
Amendment and the transactions contemplated
hereby, (a) this Amendment has been
duly executed and delivered by Holdings,
the Borrower and each Subsidiary
Guarantor, (b) the representations and
warranties set forth in Article III of
the Credit Agreement are true and correct
in all material respects on and as of
the date hereof, except to the extent such
representations and warranties
expressly relate to an earlier date (with
the reference to the "Transactions" in
Section 3.02 of the Credit Agreement being
deemed for this purpose to include
the Acquisition and the other transactions
contemplated hereby and the reference
in such Section to "including the
borrowings hereunder" being deemed to include
the borrowings of the Supplemental Term
Loans hereunder), and (c) no Default or
Event of Default has occurred and is
continuing.
SECTION 6.
CONDITIONS TO THE MAKING OF SUPPLEMENTAL TERM LOANS. The
obligations of the Supplemental Term
Lenders to make Supplemental Term Loans are
subject to the satisfaction of the
following conditions on the date, occurring
on or prior to November 1, 2005, of such
Borrowing (such date, the "SUPPLEMENTAL
TERM LOAN CLOSING DATE"):
(a) The
Administrative Agent shall have received a notice of the
Borrowing
in respect of the Supplemental Term Loans
that satisfies the requirements of
Section 2.03 of the Credit Agreement (with
the reference to the Closing Date in
the first and second sentences thereof
deemed to be a reference to the
Supplemental Term Loan Closing Date).
(b) The
representations and warranties set forth in Article III of the
Credit Agreement and in each other Loan
Document (including this Amendment)
shall be true and correct in all material
respects on and as of the Supplemental
Term Loan Closing Date with the same effect
as though made on and as of such
date, except to the extent such
representations and warranties expressly relate
to an earlier date.
(c) (i) The
Borrower and each other Loan Party shall be in compliance in
all material respects with all the terms
and provisions set forth herein, in the
Credit Agreement and in each other Loan
Document on its part to be observed or
performed on or prior to the Supplemental
Term Loan Closing Date, (ii) the
Borrower shall be in Pro Forma Compliance
after giving effect to the Acquisition
and the making of the Supplemental Term
Loans and (iii) at the time of and
immediately after the making of the
Supplemental Term Loans, no Event of Default
or Default shall have occurred and be
continuing.
(d) The
Administrative Agent shall have received, on behalf of itself
and
the Lenders, a favorable written opinion of
(i) Davis Polk & Wardwell, special
counsel for the Borrower, (ii) Darlene
Gerry, Senior Vice President, General
Counsel and Secretary for Holdings and the
Borrower and (iii) each local counsel
listed on Schedule II hereto, in each case
(A) dated the Supplemental Term Loan
Closing Date, (B) addressed to the
Administrative Agent and the Lenders and (C)
covering such matters relating to this
Amendment and the transactions
contemplated hereby as the Administrative
Agent shall reasonably request and in
form and substance reasonably satisfactory
to the Administrative Agent, and
Holdings and the Borrower hereby request
such counsel to deliver such opinions.
(e) All legal
matters incident to this Amendment and to the Borrowing of
the Supplemental Term Loans shall be
reasonably satisfactory to the Lenders and
to the Administrative Agent.
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7
(f) The
Administrative Agent shall have received (i) an omnibus
certificate, dated the Supplemental Term
Loan Closing Date and signed by the
Secretary or Assistant Secretary of each
Loan Party, certifying that (A) except
as set forth on any schedule attached
thereto, the certificate or articles of
incorporation (or other equivalent
formation document) of such Loan Party
previously delivered on the Closing Date
(or such later date on which such
person became a Loan Party) have not been
amended since the date of such
delivery, (B) except as set forth on any
schedule attached thereto, the by-laws
(or other equivalent organizational
document) of such Loan Party as in effect
and delivered on the Closing Date (or such
later date on which such person
became a Loan Party) have not been amended
since the date of such delivery, (C)
attached thereto is a true and complete
copy of resolutions duly adopted by the
Board of Directors (or other equivalent
governing body) of such Loan Party
authorizing the execution, delivery and
performance of this Amendment and, in
the case of the Borrower, the Acquisition
and the Borrowing of the Supplemental
Term Loans, and that such resolutions have
not been modified, rescinded or
amended and are in full force and effect,
(D) attached thereto is a certificate
as to the good standing of such Loan Party
as of a recent date by the Secretary
of State (or other similar official) of the
jurisdiction of its organization,
and (E) as to the incumbency and specimen
signature of each officer executing
this Amendment, (ii) a certificate of
another officer as to the incumbency and
specimen signature of the Secretary or
Assistant Secretary executing the
certificate pursuant to clause (i) above,
and (iii) such other documents as the
Lenders or the Administrative Agent may
reasonably request.
(g) The
Administrative Agent shall have received a certificate, dated
the
Supplemental Term Loan Closing Date and
signed by a Financial Officer of the
Borrower, confirming compliance with the
conditions precedent set forth in
paragraphs (b) and (c) of this Section
6.
(h) The
Administrative Agent shall have received, or shall receive
substantially simultaneously with the
Borrowing of the Supplemental Term Loans
hereunder, all fees and other amounts due
and payable on or prior to the
Supplemental Term Loan Closing Date,
including, to the extent invoiced,
reimbursement or payment of all reasonable
out-of-pocket expenses required to be
reimbursed or paid by the Borrower
hereunder or under any other Loan Document.
(i) The Security
Documents shall be in full force and effect on the
Supplemental Term Loan Closing Date, and
each document (including each Uniform
Commercial Code financing statement and
each recordation of modifications to the
Mortgages reflecting, among other things,
the making of the Supplemental Term
Loans) required by law or reasonably
requested by the Collateral Agent to be
filed, registered or recorded in order to
create or continue in favor of the
Collateral Age
