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Exhibit 10.1
 
SECOND AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT AND WAIVER
 
THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
AND WAIVER (this “Amendment”), dated as of July 16, 2009, is entered into among
Jazz Semiconductor, Inc., a Delaware corporation (“Jazz”) Newport Fab, LLC
(d/b/a Jazz Semiconductor Operating Company), a Delaware limited liability
company (“Operating Company”, and Operating Company together with Jazz,
collectively, the “Borrowers” and each of them individually, a “Borrower”), Jazz
Technologies, Inc, formerly known as Acquicor Technology Inc., a Delaware
corporation (“Parent Guarantor”), the lenders party to the “Loan Agreement”
as defined below (each individually, a ‘‘Lender” and collectively, “Lenders”),
and Wachovia Capital Finance Corporation (Western), a California corporation, in
its capacity as agent for the Lenders (in such capacity, “Agent”).
 
RECITALS
 
A.           Borrowers, Parent Guarantor, Agent, Lenders, and Wachovia Capital
Markets, LLC, in its capacity as lead arranger, bookrunner and syndication
agent, have previously entered into that certain Second Amended and Restated
Loan and Security Agreement dated as of September 19, 2008, as amended by the
First Amendment to Second Amended and Restated Loan and Security Agreement,
dated as of March 17, 2009 (as amended, the “Loan Agreement”), pursuant to which
Agent and Lenders have made certain loans and financial accommodations available
to Borrowers.  Terms used herein without definition shall have the meanings
ascribed to them in the Loan Agreement.
 
B.           The following Events of Default have occurred and are continuing
under Section 9.11(g) of the Loan Agreement:
 
(1)      Parent Guarantor repurchased Indebtedness arising under the Senior
Notes on June 22, 2009.  Such repurchase was not permitted pursuant to Section
9.11(g) of the Loan Agreement as Borrowers’ Excess Availability plus Qualified
Cash was not projected, to the Agent’s reasonable satisfaction, to be
$30,000,000 or more for 60 consecutive days following the consummation of such
repurchase; and
 
(2)      Parent Guarantor repurchased Indebtedness arising under the Senior
Notes on July 1, 2009.  Such repurchase was not permitted pursuant to Section
9.11(g) of the Loan Agreement as (i) an Event of Default had occurred and was
continuing; (ii) Borrowers’ Excess Availability plus Qualified Cash was less
than $30,000,000; and (iii) Borrowers’ Excess Availability plus Qualified Cash
was not projected, to the Agent’s reasonable satisfaction, to be $30,000,000 or
more for 60 consecutive days following the consummation of such repurchase
 
The foregoing Events of Default will be referred to herein as the “Specified
Existing Defaults”.
 
C.           Borrowers and Guarantor have requested that Agent and the Lenders
amend the Loan Agreement and waive the Specified Existing Defaults, which Agent
and the Lenders are willing to do pursuant to the terms and conditions set forth
herein.
 
D.           Borrowers and Guarantor are entering into this Amendment with the
understanding and agreement that, except as specifically provided herein, none
of Agent’s or any Lender’s rights or remedies as set forth in the Loan Agreement
is being waived or modified by the terms of this Amendment.
 
 

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AGREEMENT
 
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
 
Amendment to Loan Agreement.
 
Section 1 of the Loan Agreement is hereby amended by inserting the following new
Section1.122A:
 
“1.122A  “Second Amendment Effective Date” shall mean July 16, 2009.
 
Section 9.11(g) of the Loan Agreement is hereby amended and restated to read in
its entirety as follows:
 
“(g)           Parent Guarantor may repurchase any of its Indebtedness arising
under the Senior Notes; provided, that at the time of such repurchase and after
giving effect thereto, (A) no Default or Event of Default shall have occurred
and be continuing, (B) Borrowers’ Excess Availability plus Qualified Cash shall
not be less than (i) for the period commencing on the Second Amendment Effective
Date and ending on December 31, 2009, $20,000,000 and (ii) at all other times,
$30,000,000; (C) Borrowers’ Excess Availability plus Qualified Cash shall be
projected, to the Agent’s reasonable satisfaction, to be (i) for the period
commencing on the Second Amendment Effective Date and ending on December 31,
2009, $20,000,000 or more for 90 consecutive days following the consummation of
such repurchase and (ii) at all other times, $30,000,000 or more for 90
consecutive days following the consummation of such repurchase, and (D) the
aggregate amount of all such repurchases made after the Effective Date and
permitted by this Section 9.11(g) shall not exceed $20,000,000.”
 
Notwithstanding the provisions of Sections 9.12 and 9.24 of the Loan Agreement,
it is hereby agreed that the Borrowers may purchase from Foreign Parent
Nonguarantor the assets described on Schedule I hereto for an aggregate amount
not to exceed $6,950,000; provided that all such assets shall constitute
Collateral.
 
Section 9.24(d) of the Loan Agreement is hereby modified and amended to read in
its entirety as follows:
 
“(d)           make payments to third party vendors for assets purchased by, or
services rendered to, Foreign Parent Nonguarantor or any of its Affiliates that
is not a Credit Party, provided that (i) no Default or Event of Default has
occurred and is continuing or would occur as a result of such vendor payment,
(ii) the Excess Availability, after giving effect to such vendor payment, shall
be equal to or greater than $10,000,000, (iii) the maximum aggregate amount of
all such vendor payments, at any one time, made by the Credit Parties net of any
cash reimbursements therefor received by the Credit Parties from Foreign Parent
Nonguarantor, or any of its Affiliates that is not a Credit Party, shall not
exceed $2,000,000 during the term of this Agreement, and (iv) the Credit Parties
will invoice Foreign Parent Nonguarantor or any of its Affiliates that is not a
Credit Party once per quarter for all such assets purchased by, or services
rendered, and the Credit Parties shall receive such cash reimbursements within
45 calendar days of the date of such invoice, provided that in the event that
the quarterly purchases exceed $250,000, Foreign Parent Nonguarantor will pay
for all invoices exceeding said amount separately; and”
 
Waiver of Specified Existing Defaults.  Agent and Lenders hereby waive
enforcement of their rights against Borrowers and Guarantors arising from the
Specified Existing Defaults; provided, however, nothing herein shall be deemed a
waiver with respect to any failure of any Borrower or Guarantor to comply fully
with Section 9.11 of the Loan Agreement in any other respect.  This waiver shall
be effective only for the specific defaults comprising the Specified Existing
Defaults, and in no event shall this waiver be deemed to be a waiver of
enforcement of Agent’s or Lenders’ rights with respect to any other Defaults or
Events of Default now existing or hereafter arising.
 
 
 

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Effectiveness of this Amendment.  The effectiveness of this Amendment (and the
waivers contained herein) is subject to the satisfaction of each of the
following conditions precedent:
 
Amendment.  Agent shall have received this Amendment, fully executed by
Borrowers, Guarantor, Agent and Required Lenders in a sufficient number of
counterparts for distribution to all parties.
 
Accommodation Fee.  Agent shall have received, for the ratable benefit of the
Lenders, a non-refundable accommodation fee in the amount of Ten Thousand
Dollars ($10,000), which fee is fully earned as of and due and payable on the
date hereof.
 
Representations and Warranties.  The representations and warranties set forth
herein and in the Loan Agreement must be true and correct.
 
Other Required Documentation.  All other documents and legal matters in
connection with the transactions contemplated by this Amendment shall have been
delivered or executed or recorded and shall be in form and substance
satisfactory to Agent.
 
Representations and Warranties.  Each Borrower and Guarantor each represents and
warrants as follows:
 
Authority.  Each Borrower and Guarantor have the requisite company power and
authority to execute and deliver this Amendment, and to perform its obligations
hereunder and under the Financing Agreements (as amended or modified hereby) to
which it is a party.  The execution, delivery and performance by each Borrower
and Guarantor of this Amendment have been duly approved by all necessary company
action and no other company proceedings are necessary to consummate such
transactions.
 
Enforceability.  This Amendment has been duly executed and delivered by each
Borrower and Guarantor.  This Amendment and each Financing Agreement (as amended
or modified hereby) are the legal, valid and binding obligation of each Borrower
and Guarantor, enforceable against each Borrower and Guarantor in accordance
with their terms, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium or similar laws limiting creditors’ rights generally or
by general equitable principles, and are in full force and effect.
 
Representations and Warranties.  The representations and warranties contained in
each Financing Agreement (other than any such representations or warranties
that, by their terms, are specifically made as of a date other than the date
hereof) are correct on and as of the date hereof as though made on and as of the
date hereof.
 
Execution.  The execution, delivery and performance of this Amendment are within
the power of each Borrower and Guarantor, have been duly authorized by all
necessary company action, have received all necessary governmental approval, if
any, and do not contravene any law or any contractual restrictions binding on
any Borrower or Guarantor.
 
No Default.  Except for the Specified Existing Defaults, no event has occurred
and is continuing that constitutes an Event of Default.
 
Choice of Law.  The validity of this Amendment, its construction, interpretation
and enforcement, the rights of the parties hereunder, shall be determined under,
governed by, and construed in accordance with the internal laws of the State of
California governing contracts only to be performed in that State.
 
Counterparts.  This Amendment may be executed in any number of counterparts and
by different parties and separate counterparts, each of which when so executed
and delivered, shall be deemed an original, and all of which, when taken
together, shall constitute one and the same instrument.  Delivery of an executed
counterpart of a signature page to this Amendment by telefacsimile shall be
effective as delivery of a manually executed counterpart of this Amendment.
 
 

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Reference to and Effect on the Financing Agreements.
 
Upon and after the effectiveness of this Amendment, each reference in the Loan
Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import
referring to the Loan Agreement, and each reference in the other Financing
Agreements to “the Loan Agreement”, “thereof” or words of like import referring
to the Loan Agreement, shall mean and be a reference to the Loan Agreement
as modified and amended hereby.
 
Except as specifically amended above, the Loan Agreement and all other Financing
Agreements, are and shall continue to be in full force and effect and are hereby
in all respects ratified and confirmed.
 
The execution, delivery and effectiveness of this Amendment shall not, except
as expressly provided herein, operate as a waiver of any right, power or remedy
of Agent or any Lender under any of the Financing Agreements, nor constitute a
waiver of any provision of any of the Financing Agreements.
 
To the extent that any terms and conditions in any of the Financing Agreements
shall contradict or be in conflict with any terms or conditions of the Loan
Agreement, after giving effect to this Amendment, such terms and conditions are
hereby deemed modified or amended accordingly to reflect the terms and
conditions of the Loan Agreement as modified or amended hereby.
 
Estoppel.  To induce Agent and Lenders to enter into this Amendment and to
induce Agent and Lenders to continue to make advances to Borrowers under the
Loan Agreement, each Borrower and Guarantor hereby acknowledges and agrees that,
after giving effect to this Amendment, as of the date hereof, there exists no
Default or Event of Default and no right of offset, defense, counterclaim or
objection in favor of any Borrower or Guarantor as against Agent or any Lender
with respect to the Obligations.
 
Integration.  This Amendment, together with the other Financing Agreements,
incorporates all negotiations of the parties hereto with respect to the subject
mattes hereof and is the final expression and agreement of the parties hereto
with respect to the subject matter hereof.
 
Severability.  In case any provision in this Amendment shall be invalid, illegal
or unenforceable, such provision shall be severable from the remainder of this
Amendment and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
 
[Remainder of Page Left Intentionally Blank]

 
 

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IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date
first above written.

JAZZ SEMICONDUCTOR, INC.,
as a Borrower

By: /s/ SUSANNA H. BENNETT
Title:  Chief Financial Officer
 
NEWPORT FAB, LLC,
as a Borrower

By: /s/ SUSANNA H. BENNETT
Title:  Chief Financial Officer of Jazz Semiconductor, Inc.
the sole owner of Newport Fab, LLC
 
JAZZ TECHNOLOGIES, INC.,
as a Guarantor

By: /s/ SUSANNA H. BENNETT
Title:  Chief Financial Officer
 
WACHOVIA CAPITAL FINANCE CORPORATION (WESTERN),
as Agent and a Lender

By:  /s/  ROBIN VAN METER
Title: Vice President

 
 

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SCHEDULE I

Asset
Estimated Equipment Cost
Estimated Installation Cost
Emax or SuperE oxide  etch Platform with 3 chamber
$1,250,000
$250,000
1 DUV lithography cell
$3,600,000
      $500,000
1 Endura metal tool
$1,100,000
$250,000

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