Exhibit
10.2
CONFIDENTIAL
WACHOVIA CAPITAL FINANCE
CORPORATION (WESTERN)
251 South Lake Avenue, Suite
900
Pasadena, California
91101
Acquicor
Technology, Inc.
4910 Birch
Street, Suite 102
Irvine,
California 92660
Attention:
Gilbert F. Amelio
$65,000,000 Senior Secured
Revolving Credit Facility
Commitment
Letter
Ladies and
Gentlemen:
Wachovia Capital Finance Corporation
(Western)(“Bank”) and Wachovia Capital Markets, LLC
(“WCM”, and together with the Bank,
“Wachovia”) are pleased to confirm to Acquicor
Technology, Inc. (the “Company”) the commitment of Bank
to provide and the commitment of WCM to structure, arrange and
syndicate, a senior secured revolving loan facility to the Company
and its subsidiaries in an amount up to $65,000,000 (the
“Credit Facility”), based upon and subject to the terms
and conditions set forth in this letter and the term sheet attached
as Exhibit A hereto (the “Term Sheet”, and together
with this letter, collectively, the “Commitment
Letter”). The Credit Facility would be used to finance the
Company’s acquisition of Jazz Semiconductor, Inc. and its
subsidiaries (collectively, “Jazz”), to refinance
existing indebtedness, to fund the working capital needs of the
Company, and to provide for general corporate purposes.
The Company hereby appoints WCM and WCM hereby
agrees, acting alone or through or with affiliates selected by it,
to act as the sole lead arranger and the sole bookrunner for the
Credit Facility in connection with arranging a syndicate of banks
and financial institutions (collectively, the
“Lenders”) mutually acceptable to Wachovia and the
Company to provide a portion of the Credit Facility. Bank will act
as administrative and collateral agent for the Credit Facility (in
such capacity, “Agent”). Bank agrees that completion of
such syndication is not a condition to its commitment
hereunder.
In connection with the efforts of WCM to form a
syndicate of financial institutions to become Lenders under the
Credit Facility, the Company and its affiliates agree to use
commercially reasonable efforts to actively assist in achieving a
syndication that is mutually satisfactory to Wachovia and the
Company. It is understood and agreed that WCM will approach
institutions reasonably acceptable to the Company and manage, in
consultation with the Company, all aspects of the syndication,
including, without limitation, decisions as to the final allocation
of the commitments, when commitments will be accepted, the
selection of proposed Lenders and titles among the Lenders. WCM may
use its affiliates to assist in the syndication of the Credit
Facility and may allocate fees payable to it and such affiliates in
such manner as it and its affiliates may agree. Wachovia may share
with any of its affiliates and advisors any information related to
the Company, its subsidiaries and the transactions contemplated
under this letter on a confidential basis. The Company (for itself
and its subsidiaries) agrees that the arrangements with Wachovia
will be on an exclusive basis for the term of the commitment set
forth in this letter and that the Company and its affiliates will
not engage, solicit or otherwise consult with any other financial
institution or entity regarding the Credit Facility or any other
proposed senior first lien for the Company and its subsidiaries. No
other agents, co-agents, arrangers, bookrunners or book managers
will be appointed or used by the Company or its affiliates in
connection with the financing pursuant to a senior credit
facility.
The Company agrees, and agrees to cause its
subsidiaries, (i) to cooperate with and assist Wachovia in its
efforts, both prior and for up to 90 days or such extended period
of time as may be reasonably necessary subsequent to closing to
syndicate the Credit Facility to Lenders, and, in connection
therewith, to make the management of the Company reasonably
available during normal business hours for due diligence meetings
or conference calls with prospective Lenders and (ii) to provide,
and use its commercially reasonable efforts to cause the agents,
accountants, investment bankers and other advisors of the Company
and its affiliates to provide all information, including financial
projections, as may be reasonably necessary to assist Wachovia in
preparing materials with appropriate information for submission to
potential Lenders, including a customary information memorandum to
be used in connection with the syndication of the Credit
Facility.
The Company hereby represents, warrants and
covenants that (i) all information, other than Projections (as
defined below), which has been or is hereafter made available to
Wachovia or any prospective Lender by or on behalf of the Company
or any of its representatives in connection with the business of
the Company and its subsidiaries (“Information”) is and
will be complete and correct as to the subject matter thereof in
all material respects as of the date made available to Wachovia or
such prospective Lender and does not and will not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements contained therein not
materially misleading and (ii) all financial projections concerning
the Company and its affiliates that have been or are hereafter made
available to Wachovia or prospective Lenders by the Company or any
of its representatives (the “Projections”) have been or
will be prepared in good faith based upon assumptions believed by
the Company to be reasonable when made (it being understood that
such Projections are not to be viewed as facts and are subject to
significant uncertainties and contingencies, many of which are
beyond the Company’s control (including the accuracy of
information supplied by Jazz and its subsidiaries), that no
assurance can be given that any particular Projections will be
realized, and that actual results may differ and such differences
may be material). The Company agrees to furnish to Wachovia such
Information and Projections as Wachovia may reasonably request and
to supplement the Information and the Projections from time to time
until the closing date of the Credit Facility so that the
representation, warranty and covenant in the preceding sentence is
correct on the closing date of the Credit Facility. In arranging
and syndicating the Credit Facility, Wachovia will be using and
relying on the Information and the Projections without
responsibility for independent verification thereof.
The Company will reimburse Wachovia on the
earliest of the closing date, March 31, 2007, or abandonment of the
transaction to be financed for all reasonable out of pocket costs
and expenses incurred by Wachovia in connection with its continuing
review of the transaction and the preparation and negotiation of
this Commitment Letter (including any amendment or modification
hereto), and the loan documentation and the syndication of the
Credit Facility, including reasonable attorneys’ fees and
legal expenses, appraisal fees (Wachovia may require that the
Company pay appraisal charges directly), filing and search charges,
recording taxes and field examination expenses (including the then
standard per diem charges per person per day plus out-of-pocket
expenses for the field examiners of Wachovia in the field and in
the office, including travel, hotel and all other reasonable
out-of-pocket expenses) and including all CUSIP fees for
registration with the Standard & Poor’s CUSIP Service
Bureau (the “CUSIP Bureau”).
Wachovia has the right to apply to such charges
and expenses any sums received from or on behalf of the Company or
any of its subsidiaries. Without limiting the generality of the
foregoing, in connection with the execution of this Commitment
Letter, the Company will pay to Wachovia an expense reimbursement
deposit of $75,000 and an additional expense reimbursement deposit
of $75,000 will be due and payable upon the negotiation of the
initial draft of the Loan and Security Agreement for the Credit
Facility (the “Deposits”). The arrangements with
respect to such charges after the closing of the Credit Facility
will be governed by the terms of the loan documentation.
The Deposits will be applied at closing to any
unpaid charges and expenses with any remaining balance credited at
closing to the fees due under the Credit Facility. The Deposits may
also be retained by Wachovia as a fee if either (i) the transaction
does not close on or before March 31, 2007 due to delays or actions
of the Company or the inability of the Company to fulfill the
conditions to closing or (ii) the Company or any of its affiliates
elect not to obtain the Credit Facility. In addition, if the
transaction does not close on or before March 31, 2007, and such
failure to close is not caused by the failure of Wachovia to
perform its duties pursuant to this commitment, the Company agrees
to then pay to Wachovia a work fee of $125,000 (the “Work
Fee”); provided , that any amounts remaining from the
Deposits, after the out of pocket costs and expenses described
above have been paid, will be applied to the Work Fee to reduce the
amount of such fee accordingly; provided , further ,
that, if the transaction closes after March 31, 2007 and the
Company uses the Credit Facility, the Work Fee will be credited
against fees payable at closing; provided , further ,
that, if the acquisition of Jazz does close but the Company or its
affiliates do not use the Credit Facility even though Wachovia was
ready, willing and able to provide the Credit Facility on the terms
set forth in this Commitment Letter, in addition to Wachovia
retaining the Deposits, the Company agrees to pay Wachovia a
breakup fee of $325,000 (less the Work Fee, if already paid). The
Company hereby acknowledges and agrees that each fee payable
hereunder is fully earned and non-refundable on the date such fee
is due and payable as provided above. Any balance remaining from
the Deposits after all fees and out of pocket costs and expenses
have been satisfied will be returned to the Company.
The Company and its subsidiaries agree to
jointly and severally indemnify and hold harmless Wachovia and each
director, officer, employee, attorney, advisor, agent and affiliate
of Wachovia (each such person or entity referred to hereafter in
this paragraph as an “Indemnified Person”) from any
losses, claims, costs, damages, expenses or liabilities (or
actions, suits or proceedings, including any inquiry or
investigation, with respect thereto) to which any Indemnified
Person may become subject, insofar as such losses, claims, costs,
damages, expenses or liabilities (or actions, suits, or
proceedings, including any inquiry or investigation, with respect
thereto) arise out of, relate to, or result from, this Commitment
Letter, reports or other information provided to any Indemnified
Person or contemplated by or referred to herein or therein or the
other transactions contemplated hereby and thereby and to reimburse
upon demand each Indemnified Person for any and all legal and other
expenses incurred in connection with investigating, preparing to
defend or defending any such loss, claim, cost, damage, expense or
inquiry or investigation, with respect thereto; provided, that the
Company shall have no obligation to any Indemnified Person under
this indemnity provision for liabilities to the extent that such
liabilities have resulted from the gross negligence or willful
misconduct of such Indemnified Person; provided, further, that the
Company shall not be required to reimburse the legal fees and
expenses of more than one outside counsel for all Indemnified
Persons with respect to any matter for which indemnification is
sought unless, as reasonably determined by any such Indemnified
Person’s counsel (and the Company’s counsel reasonably
concurs), representation of all such Indemnified Persons would
create an actual or potential conflict of interest. The foregoing
provisions of this paragraph shall be in addition to any right that
an Indemnified Person shall have at common law or
otherwise.
Promptly after receipt by any Indemnified Person
of notice of its involvement in any pending or threatened
proceeding as to which, or related to or arising out of any matter
for which, indemnification may be sought hereunder (an
“Indemnified Proceeding”), such Indemnified Person
shall, if a claim in respect thereof is to be made against the
Company hereunder, notify the Company in writing of such
involvement, provided, however, that the failure by such
Indemnified Person to so notify the Company shall not relieve the
Company from the obligation to indemnify or any other liability
hereunder or otherwise except to the extent that such failure to
provide notice prejudices the Company in any material respect. In
case any Indemnified Person’s involvement in such Indemnified
Proceeding shall be in any capacity other than as a witness, the
Company and its counsel shall be entitled to participate therein
with such Indemnified Person and its counsel. To the extent the
Company wishes, the Company also shall be entitled to assume the
defense of any Indemnified Proceeding with counsel of the
Company’s choice that is reasonably acceptable to the
relevant Indemnified Person and after notice from the Company to
the Indemnified Person of the Company’s election so to assume
the defense thereof, the Company will not be liable to such
Indemnified Person for the cost of defense thereof. Notwithstanding
the foregoing, the Company shall not be entitled to assume the
defense of any Indemnified Proceeding, and the limitations in the
proceeding sentence on its liability to any Indemnified Person
shall not apply, if counsel to any Indemnified Person reasonably
determines, and the Company’s counsel reasonably concurs,
that there are actual or potential conflicts of interest between
such Indemnified Person and the Company or that defenses available
to such Indemnified Person may not be asserted by the Company on
the behalf of such Indemnified Person. In any event,
notwithstanding the foregoing, the Company shall not be liable for
any settlement of any Indemnified Proceedings effected without your
consent (which consent shall not be unreasonably withheld), but if
settled with your written consent or if there is a final judgment
for the plaintiff in any such Indemnified Proceedings, the Company
agrees to indemnify and hold harmless each Indemnified Person from
and against any and all losses, claims, damages, liabilities and
expenses by reason of such settlement or judgment in accordance
with the preceeding paragraph.
This Commitment Letter is addressed solely to
the Company and is not intended to confer any obligations to or on,
or benefits to or on, any third party. No Indemnified Person shall
be liable for any damages arising from the use by others of
Information or other materials obtained through internet,
Intralinks, SyndTrak or other similar transmission systems in
connection with the Credit Facility except to the extent that such
liabilities have resulted from the gross negligence or willful
misconduct of such Indemnified Person. In addition, no Indemnified
Person shall be responsible or liable for special, indirect,
consequential, exemplary, incidental or punitive damages which may
be alleged as a result of this Commitment Letter.
Except as required by applicable law, the Fee
Letter executed concurrently herewith and the contents thereof
shall not be disclosed by the Company or any of its affiliates to
any third party without the prior consent of Wachovia, other than
to Jazz and its affiliates, potential providers of subordinated
debt to assist in financing the acquisition, and, in each case, to
their respective attorneys, financial advisors and
accountants.
The Company acknowledges and agrees that
Wachovia and/or its affiliates may disclose information relating to
the Credit Facility to industry and/or bank trade publications,
including, without limitation, Gold Sheets, the ABF Journal, and
the Secured Lender, with such information to consist of deal terms
and other information customarily found in such publications (the
“Publication Information”). The Company further
acknowledges and agrees that Wachovia and/or its affiliates may use
the Publication Information in its own pitchbooks and other
marketing materials that are shared with other prospective
customers, and may also reproduce and include in such materials the
Company’s corporate logo, if any, in the form in which it
appears on the Company’s Website on the date on which such
materials are prepared. The Publication Information will not
include any confidential information.
This Commitment Letter will be of no force and
effect unless a counterpart hereof and a counterpart of the Fee
Letter are accepted and agreed to by the Company and, as so
accepted and agreed to, received by Wachovia by 5:00 p.m. in
Pasadena, California on September 26, 2006, as duly authorized,
executed and delivered by the Company. The commitments of Wachovia
under this Commitment Letter, if timely accepted and agreed to by
the Company, will terminate upon the earlier of (i) the occurrence
of any event that Wachovia reasonably believes in good faith has,
or would be expected to have, a Material Adverse Effect (as defined
below) and (ii) as of the close of business on March 31, 2007, if
the initial borrowings under the Credit Facility have not occurred
on or prior to such date. All indemnities and obligations of the
Company and its subsidiaries and affiliates hereunder shall be
joint and several and shall survive the termination of this
Commitment Letter or the commitments of Wachovia hereunder.
Following any termination hereof, the Credit Facility will require
reapproval by the credit committee of Wachovia even if Wachovia and
its counsel and other advisors continue to work on the transaction.
Such reapproval, if obtained, may result in different terms or
conditions, or the determination not to consummate the
transaction.
As used herein, the term “Material Adverse
Effect” shall mean any change, event, effect, claim,
circumstance or matter that (considered together with all other
changes, effects, claims, circumstances or matters) has materially
and adversely affected, or would reasonably be expected to
materially and adversely affect the business, financial condition,
properties, assets, liabilities or results of operations of the
Company and its subsidiaries taken as a whole; provided,
however , that none of the following, in and of itself, either
individually or in the aggregate, shall be deemed to constitute a
Material Adverse Effect: (i) any change or event attributable to
conditions generally affecting the semiconductor wafer fabrication
or semiconductor design industries in which Jazz participates,
provided that such change or event does not have a materially
disproportionate impact on the Company, Jazz or their subsidiaries,
taken as a whole; (ii) any change or event attributable to
conditions generally affecting the general economy as a whole,
prov
