REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is made as of
January 18, 2001, by and between Tower Semiconductor Ltd., an Israeli
corporation (the "Company" or "T"), SanDisk Corporation, a Delaware corporation
("S"), Alliance Semiconductor Corp. a Delaware corporation ("Alliance"),
Macronix International Co., Ltd., a Taiwanese corporation (together with its
affiliates referred to as "Macronix"), QuickLogic Corporation, a Delaware
corporation ("QuickLogic") and The Israel Corporation Ltd., an Israeli
corporation ("TIC").
WHEREAS, the Company and S entered into a Share Purchase Agreement dated as
of July 4, 2000 (the "SPA") and an Additional Purchase Obligation Agreement
dated as of July 4, 2000 (the "Additional Purchase Obligation Agreement");
WHEREAS, the Company and Alliance entered into a Share Purchase Agreement
dated as of August 29, 2000 (the "Alliance SPA"), which includes certain
provisions of the Additional Purchase Obligation Agreement (the "Alliance
Additional Purchase Obligation Agreement");
WHEREAS, the Company and Macronix entered into a Share Purchase Agreement
dated as of December 12, 2000 (the "Macronix SPA"), which includes certain
provisions of the Additional Purchase Obligation Agreement (the "Macronix
Additional Purchase Obligation Agreement");
WHEREAS, the Company and QuickLogic entered into a Share Purchase Agreement
dated as of December 12, 2000 (the "QuickLogic SPA"), which includes certain
provisions of the Additional Purchase Obligation Agreement (the "QuickLogic
Additional Purchase Obligation Agreement");
WHEREAS, it is a condition precedent to the closing of the transactions
contemplated in the SPA, the Alliance SPA, the Macronix SPA and the QuickLogic
SPA that the parties hereto execute and deliver this Agreement;
NOW THEREFORE, in consideration of the premises, mutual promises and
covenants contained in this Agreement and intending to be legally bound, the
parties hereto hereby agree as follows:
1. DEFINITIONS
1.
2. For purposes of this Agreement:
3.
4. 1.1 The term "Holder" shall mean a member of the
Purchaser Group and/or TIC, as the case may be.
5.
6. 1.2 The term "Ordinary Shares" means the ordinary shares, par value
NIS1.00 each of the Company (as may be adjusted for any stock split,
stock combination, reclassification or any other recapitalization
event).
7.
8. 1.3 The term "Closing" means Closing as such term is
defined in the SPA.
9.
10. 1.4 The term "Purchaser Group" means S, Alliance, Macronix,
QuickLogic and any additional parties that enter into share purchase
agreements with T prior to the Closing and that close simultaneously
with the SPA or any successors thereto or permitted assignees
thereof.
11.
12. 1.5 The term "Registrable Securities" means the Purchaser Group
Registrable Securities and/or the TIC Registrable Securities, as the
case may be, and any securities issued as a dividend on or other
distribution with respect to, or in exchange for or replacement of
such secutities.
13.
14. 1.6 The term "Purchaser Group Registrable
Securities" means the Ordinary Shares (a)
purchased at the Closing under the SPA by S, (b)
purchased at the closing under the Alliance SPA
by Alliance, (c) purchased at the closing under
the Macronix SPA by Macronix, (d) purchased at
the closing under the QuickLogic SPA by
QuickLogic, (e) purchased by any additional
members of the Purchaser Group at the closing of
any additional share purchase agreements with T
that close simultaneously with the Closing of
the SPA, (f) purchased by S pursuant to the
Additional Purchase Obligation Agreement, (g)
purchased by Alliance pursuant to the Alliance
Additional Purchase Obligation Agreement, (h)
purchased by Macronix pursuant to the Macronix
Additional Purchase Obligation Agreement, (i)
purchased by QuickLogic pursuant to the
QuickLogic Additional Purchase Obligation
Agreement, (j) purchased by any additional
members of the Purchaser Group pursuant to an
additional purchase obligation agreement entered
into, prior to the Closing of the SPA, between T
and such additional members of the Purchaser
Group, (k) otherwise issued by the Company to S
pursuant to the terms of the SPA or the
Additional Purchase Obligation Agreement, (l)
otherwise issued by the Company to Alliance
pursuant to the terms of the Alliance SPA or the
Alliance Additional Purchase Obligation
Agreement, (m) otherwise issued by the Company
to Macronix pursuant to the terms of the
Macronix SPA or the Macronix Additional Purchase
Obligation Agreement, (n) otherwise issued by
the Company to QuickLogic pursuant to the terms
of the QuickLogic SPA or the QuickLogic
Additional Purchase Obligation Agreement, and
(o) otherwise issued by the Company to any
additional member of the Purchaser Group
pursuant to the terms of any additional share
purchase agreements with T that close
simultaneously with the Closing or any
additional purchase obligation agreement entered
into, prior to the Closing of the SPA, between T
and such additional members of the Purchaser
Group. As to any particular Registrable
Securities, such shares shall cease to be
Registrable Securities for purposes of this
Agreement when (i) a registration statement with
respect to the sale of such shares shall have
become effective under the Securities Act and
such shares shall have been disposed of under
such registration statement, (ii) such shares
shall have been otherwise transferred or
disposed of, and new certificates therefor not
bearing a legend restricting further transfer
shall have been delivered by the Company, and
subsequent transfer or disposition of them shall
not require their registration or qualification
under the Securities Act or any similar state
law then in force or (iii) such shares shall
have ceased to be outstanding.
15.
16. 1.7 The terms "register," "registered" and
"registration" refer to a registration effected
by preparing and filing a registration statement
or similar document in compliance with the
Securities Act, and the declaration or ordering
by the SEC of effectiveness of such registration
statement or document, or the equivalent under
the laws of another jurisdiction.
17.
18. 1.8 The term "Securities Act" means the United
States Securities Act of 1933, as amended.
19.
20. 1.9 The term "SEC" means the United States
Securities and Exchange Commission.
21.
22. 1.10 The term "TIC" means The Israel Corporation Ltd.
23.
24. 1.11 The term "TIC Registrable Securities" means the Ordinary Shares
held by TIC as of the date of the Closing. As to any particular TIC
Registrable Securities, such shares shall cease to be TIC Registrable
Securities for purposes of this Agreement when (i) a registration
statement with respect to the sale of such shares shall have become
effective under the Securities Act and such shares shall have been
disposed of under such registration statement, (ii) such shares shall
have been otherwise transferred or disposed of, and new certificates
therefor not bearing a legend restricting further transfer shall have
been delivered by the Company, and subsequent transfer or disposition
of them shall not require their registration or qualification under
the Securities Act or any similar state law then in force, (iii) such
shares shall have ceased to be outstanding, or (iv) such shares have
been sold pursuant to Rule 144 or Rule 144A under the Securities Act.
.
25.
26. 1.12 The term "Additional Purchase Obligation" means each of the
additional obligations to purchase Ordinary Shares of the Company
issued to S pursuant to the Additional Purchase Obligation Agreement,
the additional obligations to purchase Ordinary Shares of the Company
issued to Alliance pursuant to the Alliance Additional Purchase
Obligation Agreement, the additional obligations to purchase Ordinary
Shares of the Company issued to Macronix pursuant to the Macronix
Additional Purchase Obligation Agreement, the additional obligations
to purchase Ordinary Shares of the Company issued to QuickLogic
pursuant to the QuickLogic Additional Purchase Obligation Agreement
or any similar additional obligations to purchase Ordinary Shares of
the Company issued to any additional members of the Purchaser Group
pursuant to an additional purchase obligation agreement entered into,
prior to the Closing of the SPA, between T and such additional member
of the Purchaser Group.
2. DEMAND REGISTRATION
2.1 At any time following the third anniversary of the Closing (the
"Demand Period"), TIC and each of S, Alliance and Macronix, may
request in writing that all or part of their Registrable Securities
be registered under the Securities Act and/or listed so as to be
eligible for public trading on any securities exchange on which the
Ordinary Shares are otherwise traded (a "Demand"); provided, however,
the initiation of such a Demand may not be made by a Holder that
holds under 1,500,000 Ordinary Shares. In addition, at any time
during the Demand Period, members of the Purchaser Group holding a
majority of the Purchaser Group Registrable Securities may jointly
initiate an additional Demand. Notwithstanding the foregoing, in the
event that, pursuant to Section 5.3 of the Additional Purchase
Obligation Agreement, a member of the Purchaser Group that holds at
least 800,000 Ordinary Shares does not exercise any of its Additional
Purchase Obligations, the right of such member of the Purchaser Group
to initiate a Demand shall be accelerated to the tenth day after the
date upon which the event giving rise to the right of such member of
the Purchaser Group not to exercise the Additional Purchase
Obligation occurs. Upon receipt of a Demand of a member or members of
the Purchaser Group, the Company will promptly give written notice of
such Demand to TIC and to all other members of the Purchaser Group
and the Company shall effect the registration of all Registrable
Securities for which registration has been requested including
Registrable Securities which the Company has been requested to
register by TIC or members of the Purchaser Group by written request
given to the Company within 30 days after the giving of such written
notice by the Company. The Company shall use its best efforts to have
a Demand become effective by the 60th day after a member of the
Purchaser Group makes such Demand and, shall keep such Demand
effective until the distribution of such Registrable Securities
registered pursuant thereto is complete, if underwritten, or,
otherwise, for 180 days. Upon receipt of a Demand of TIC, the Company
will promptly give written notice of such Demand to all members of
the Purchaser Group and the Company shall effect the registration of
all Registrable Securities for which registration has been requested
including Registrable Securities which the Company has been requested
to register by members of the Purchaser Group by written request
given to the Company within 30 days after the giving of such written
notice by the Company. The Company shall use its best efforts to have
a Demand become effective by the 60th day after TIC makes such Demand
and, shall keep such Demand effective until the distribution of such
Registrable Securities registered pursuant thereto is complete, if
underwritten, or, otherwise, for 180 days.
2.2 In the event of a Demand by a member or members of the Purchaser
Group in which the registration of Registrable Securities is
underwritten and the managing underwriter of the offering advises the
members of the Purchaser Group and TIC in writing that marketing
factors require a limitation of the number of shares to be
underwritten, then there shall be excluded from such registration and
underwriting to the extent necessary to satisfy such limitation,
first shares which the Company may wish to register for its own
account or for the account of other shareholders of the Company, and
then shares held by TIC, and then shares held by the members of the
Purchaser Group on a pro rata basis to the number of shares that each
member of the Purchaser Group included in the Demand. In the event of
a Demand by TIC in which the registration of the Registrable
Securities is underwritten and the managing underwriter of the
offering advises TIC and the members of the Purchaser Group in
writing that marketing factors require a limitation of the number of
shares to be underwritten, then there shall be excluded from such
registration and underwriting to the extent necessary to satisfy such
limitation, first shares which the Company may wish to register for
its own account or for the account of other shareholders of the
Company, and then shares held by the members of the Purchaser Group
on a pro rata basis to the number of shares that each member of the
Purchaser Group included in the Demand, and then shares held by TIC.
In the event that, following a receipt of a request by the members of
the Purchaser Group and/or TIC, as the case may be, as detailed
above, the managing underwriter advises the Company that due to
marketing factors the shares requested to be registered for trading
could not be sold, and accordingly the Company does not effect a
registration statement, then such request by the members of the
Purchaser Group and/or TIC, as the case may be, shall not be
considered a Demand under this Section 2.
2.3 Any registration proceeding begun pursuant to Section 2.1 that is
subsequently withdrawn at the request of the members of the Purchaser
Group that initiated such registration proceeding and/or TIC, as the
case may be, shall count toward the quota of registration statements
which the members of the Purchaser Group and/or TIC, as the case may
be, have the right to Demand pursuant to Section 2.1; provided,
however, that such withdrawn registration shall not be so counted as
a Demand if such withdrawal is based upon (a) material adverse
information relating to the Company or its condition, business or
prospects which is different from that generally known to the
member(s) of the Purchaser Group that were to participate in such
registration proceeding, in the event of a Demand by a member or
members of the Purchaser Group and/or TIC, in the event of a Demand
by TIC, as the case may be, at the time of its request or (b) general
securities market conditions which are different from that generally
known to the member(s) of the Purchaser Group that were to
participate in such registration proceeding, in the event of a Demand
by a member or members of the Purchaser Group and/or TIC, in the
event of a Demand by TIC, as the case may be, at the time of its
request, provided, in connection with this clause (b), that the
member(s) of the Purchaser Group that were to participate in such
registration proceeding, in the event of a Demand by a member or
members of the Purchaser Group and/or TIC, in the event of a Demand
by TIC, as the case may be, reimburse the Company for its expenses
incurred in connection with effecting such withdrawn registration.
2.4 The Company may not cause any other registration of securities for
sale for its own account (other than a registration of securities to
be offered to employees, directors or consultants pursuant to a
benefit plan on Form S-8 or a registration in connection with a
merger, an exchange offer or any acquisition) to be initiated after a
registration requested pursuant to Section 2.1 and to become
effective less than 180 days after the effective date of the
registration requested pursuant to Section 2.1.
2.5 Notwithstanding the other provisions of this Section 2, in the event
that at any time during the Demand Period the Company shall receive
from a Holder, or a group of Holders, a written request that the
Company effect a registration on Form F-3 (or any equivalent or
successor form) with respect to Registrable Securities (the "F-3")
where the aggregate net proceeds from the sale of such Registrable
Securities equals at least three million United States Dollars
(US$3,000,000), the Company will within twenty (20) days after
receipt of any such request, file such registration and all such
qualifications and compliance as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion
of the Registrable Securities as are specified in such request, and
use its best efforts to have such registration on Form F-3 effective
by the 60th day after the Holder, or group of Holders, make such
request and keep such registration on Form F-3 effective until the
distribution is complete, if underwritten, or, otherwise, for 270
days; PROVIDED, HOWEVER, that the Company shall not be obligated to
file any such registration, qualification or compliance, pursuant to
this Section 2.5 if the Company has, within the 180 day period
preceding the date of such request, already effected one (1)
registration for a requesting Holder pursuant to this Section 2.5.
The Company undertakes that it will use its best efforts to continue
to comply with all necessary filings and other requirements so as to
maintain its qualification to use Form F-3.
2.6 The Company shall not be required to effect more than three (3)
registrations initiated by TIC under Section 2.1. The Company shall
not be required to effect more than one (1) registration initiated by
each of S, Alliance and Macronix under Section 2.1 and one (1)
additional registration jointly initiated by members of the Purchaser
Group holding a majority of the Purchaser Group Registrable
Securities under Section 2.1. Concurrent registrations in respect of
multiple exchanges shall be construed as a single registration for
the purposes of this Section 2.6.
2.7 The Company shall have the right to defer filing a registration
statement (a "Registration Deferral") under the Securities Act
pursuant to this Section 2 not more than once in any 12-month period
if (i) the Board of Directors of the Company shall determine that it
would be seriously detrimental to the Company to file such
registration statement at the date the filing would otherwise be
required under this Agreement, or (ii) the Board of Directors of the
Company determines in good faith that (A) the Company is in
possession of material, non-public information concerning an
acquisition, merger, recapitalization, consolidation, reorganization
or other material transaction by or of the Company or concerning
pending or threatened litigation and (B) disclosure of such
information would jeopardize any such transaction or litigation or
otherwise materially harm the Company.
2.8 A Registration Deferral shall end by the date that is 90 days from
the date of such determination by the Company (the "90th Day"), or,
in the case described in Section 2.7(ii) above, the earlier of the
90th Day and the date such material information is disclosed to the
public or ceases to be material, such transaction is completed or
abandoned or such litigation is settled or finally determined. In the
event a Registration Deferral is instituted, the members of the
Purchaser Group and/or TIC, as the case may be, shall be entitled to
withdraw such request. If such request is withdrawn, such
registration shall not count as one of the permitted registrations
under this Section 2. The Company shall promptly notify the members
of the Purchaser Group and/or TIC of the expiration or earlier
termination of any Registration Deferral.
3. INCIDENTAL REGISTRATION
3.1 If the Company at any time proposes to register (other than a
registration of securities to be offered to employees, directors or
consultants pursuant to a benefit plan on Form S-8 or a registration
in connection with a merger, an exchange offer or any acquisition)
any of its securities, it shall give notice to each Holder of such
intention at least thirty (30) days prior to filing such registration
statement. Upon the written request of any Holder within twenty (20)
days after receipt of any such notice, the Company shall include in
such registration all of the Registrable Securities indicated in such
request, so as to permit the disposition of the shares so registered.
3.2 Notwithstanding any other provision of this Section 3, in the event
that the Company is undertaking a registration of its securities
other than pursuant to a Demand under Section 2 of this Agreement and
the managing underwriter advises the Company in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then there shall be excluded from such registration and
underwriting, to the extent necessary to satisfy such limitation,
first shares held by any shareholders other than the Holders, then
shares held by the Holders pro rata to their respective shareholdings
in the Company, provided that in the event that a Holder does not
wish to include the full pro rata amount of shares it could include
in the relevant registration, then the remaining Holders shall have
the right to include in such registration an amount of shares equal
to their pro rata portion plus the amount of the other Holder's pro
rata portion that such Holder has chosen not to include; and then
shares which the Company may wish to register for its own account.
4. OBLIGATIONS OF THE COMPANY
1.
2. Whenever required under this Agreement to file a registration statement
with respect to the Registrable Securities, the Company shall:
3.
4. 4.1 Prepare and file with the SEC (or other relevant body) a
registration statement with respect to such Registrable Securities
and use its best efforts to cause such registration statement to
become effective.
5.
6. 4.2 Promptly prepare and file with the SEC (or other
relevant body) such amendments and supplements
to such registration statement and the
prospectus used in connection with such
registration statement as may be necessary to
comply with the provisions of the Securities Act
(or other relevant legislation) with respect to
the disposition of all securities covered by
such registration statement.
7.
8. 4.3 Furnish to the Holders such number of copies of
a prospectus, including a preliminary
prospectus, in conformity with the requirements
of the Securities Act (or other relevant
legislation), and such other documents as it may
reasonably request in order to facilitate the
disposition of Registrable Securities owned by
it.
9.
10. 4.4 Register and qualify the securities covered by
such registration statement under such other
securities or blue sky laws of such
jurisdictions as shall be reasonably requested
by the Holders, provided, however, that the
Company shall not be required to qualify to do
business as a foreign corporation or to file any
general consent to service of process in any
jurisdiction in which it has not already so
qualified or filed.
11.
12. 4.5 In the event of any underwritten public
offering, enter into and perform its obligations
under an underwriting agreement with usual and
customary terms that are generally satisfactory
to the managing underwriter of such offer. The
Holders shall also enter into and perform their
obligations under such an agreement (the terms
of which must be satisfactory to each Holder if
such Holder is to participate in such
offering).
13.
14. 4.6 Notify the Holders at any time when a prospectus
relating to a registration statement filed
pursuant hereto is required to be delivered
under the Securities Act or the happening of any
event as a result of which the prospectus
included in such registration statement, as then
in effect, includes an untrue statement of a
material fact or omits to state a material fact
required to be stated therein or necessary to
make the statements therein not misleading in
the light of the circumstances then existing, in
which event the Holders shall forthwith
discontinue disposition of its Registrable
Securities pursuant to such prospectus until it
is advised in writing by the Company that the
use of such prospectus may be resumed or until
such holder receives copies of any supplement or
amendment to such prospectus.
15.
16. 4.7 Cause all Registrable Securities registered
pursuant thereunder to be listed on each
securities exchange on which similar securities
issued by the Company are then listed.
17.
18. 4.8 Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all
such Registrable Securities not later than the effective date of such
registration.
19.
20. 4.9 Afford the Holders and their representatives the
opportunity to make such examination of the
business affairs of the Company and its
subsidiaries as the Holders may reasonably deem
necessary to satisfy itself as to the accuracy
of the registration statement (subject to a
reasonable confidentiality undertaking on the
part of the Holders and their representatives).
21.
22. 4.10 Furnish, at the request of the Holders in connection with the
registration of Registrable Securities pursuant to this Agreement, on
the date that such Registrable Securities are delivered to the
underwriters for sale, if such securities are being sold through
underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with
respect to such securities becomes effective, (i) an opinion, dated
such date, of the counsel representing the Company for the purposes
of such registration, in form and substance as is customarily given
to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to the Holders, and (ii) a letter, dated
such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the
Holders.
23.
24. 5. INFORMATION
25.
26. It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Agreement that each Holder shall furnish
to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such
securities as shall be required to effect the registration of their
Registrable Securities.
27.
28. 6. EXPENSES OF REGISTRATION
29.
30. All expenses incurred by the Company in connection with any registration
pursuant to this Agreement (other than underwriter's commissions and fees)
including without limitation all registration, filing and qualification
fees, printers' and accounting fees and fees and disbursements of counsel
for the Company and fees and disbursements of one counsel for the Holders,
shall be borne by the Company.
31.
32. 7. INDEMNIFICATION
33.
34. In the event any Ordinary Shares are included in a
registration statement in accordance herewith:
35.
36. 7.1 To the extent permitted by law, the Company will
indemnify and hold harmless the Holders, the
officers and directors of any Holder, any
underwriter (as defined in the Securities Act)
for any Holder and each person, if any, who
controls any Holder or underwriter within the
meaning of the Securities Act or the 1934 Act
against any losses, claims, damages, or
liabilities to which they may become subject
under the Securities Act, the Securities
Exchange Act or other United States federal or
state law or the securities laws of the State of
Israel, insofar as such losses, claims, damages,
or liabilities (or actions in respect thereof)
arise out of or are based upon any of the
following statements, omissions or violations
(collectively a "Violation"): (i) any untrue
statement of a material fact contained in such
registration statement, including any
preliminary prospectus or final prospectus
contained therein or any amendments or
supplements thereto; (ii) the omission to state
therein a material fact required to be stated
therein, or necessary to make the statements
therein not misleading in light of the
circumstances under which they were made, or
(iii) any violation by the Company of the
Securities Act, the Securities Exchange Act, any
state securities law or any rule or regulation
promulgated under the Securities Act, the
Securities Exchange Act or any state securities
law, or any of the securities laws of the State
of Israel or any rule or regulation thereunder;
and the Company will reimburse each such Holder,
officer or director, underwriter or controlling
person for any legal or other expenses
reasonably incurred by them in connection with
investigating or defending any such loss, claim,
damage, liability, or action; provided, however,
that the indemnity agreement contained in this
Section 7, shall not apply to amounts paid in
settlement of any such loss, claim, damage,
liability, or action if such settlement is
effected without the consent of the Company
(which consent shall not be unreasonably
withheld), nor shall the Company be liable to a
Holder, underwriter or controlling person in any
such case for any such loss, claim, damage,
liability, or action to the extent that it
arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with
written information furnished to the Company
expressly for use in connection with such
registration by a Holder, underwriter or
controlling person. Such indemnity shall remain
in full force and effect regardless of any
investigation made by or on behalf of a Holder,
the underwriter or any controlling person of a
Holder or the underwriter, and regardless of any
sale in connection with such offering by a
Holder.
37.
38. 7.2 To the extent permitted by law, each Holder will
indemnify and hold harmless the Company, each of
its directors, each of its officers who have
signed the registration statement, each person,
if any, who controls the Company within the
meaning of the Securities Act, any underwriter
(within the meaning of the Securities Act) for
the Company, any person who controls such
underwriter, and any other parties selling
securities in such registration statement or any
directors or officers or any persons controlling
such parties, against any losses, claims,
damages, or liabilities to which the Company or
any such director, officer, controlling person,
or underwriter or controlling person may become
subject under the Securities Act, the Securities
Exchange Act or other United States federal or
state law, or any of the securities laws of the
State of Israel, insofar as such losses, claims,
damages, liabilities (or actions in respect
hereto) arise out of or are based upon any
Violation, in each case to the extent (and only
to the extent) that such Violation occurs in
reliance upon and in conformity with written
information furnished to the Company by such
Holder expressly for use in connection with such
registration statement; and such Holder will
reimburse any legal or other expenses reasonably
incurred by the Company or any such director,
officer, controlling person, underwriter or
controlling person, in connection with
investigating or defending any such loss, claim,
damage, liability or action attributable to such
Violation or alleged Violation; provided,
however, that the indemnity agreement contained
in this Section 7 shall not apply to amounts
paid in settlement of any such loss, claim,
damage, liability or action if such settlement
is effected without the consent of such Holder,
which consent shall not be unreasonably
withheld. In no event shall the liability of a
Holder hereunder exceed the net proceeds from
the offering received by such Holder.
39.
40. 7.3 Promptly after receipt by an indemnified party
under this Section 7.3 of notice of the
commencement of any action (including any
governmental action), such indemnified party
will, if a claim in respect thereof is to be
made against any indemnifying party under this
Section 7, notify the indemnifying party in
writing of the commencement thereof and the
indemnifying party shall have the right to
participate in, and, to the extent the
indemnifying party so desires, jointly with any
other indemnifying party similarly noticed, to
assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however,
that an indemnified party shall have the right
to retain its own counsel, with the fees and
expenses to be paid by the indemnifying party,
if representation of such indemnified party by
the counsel retained by the indemnifying party
would be inappropriate due to actual or
potential differing interests between such
indemnified party and any other party
represented by such counsel in such proceeding.
The failure to notify an indemnifying party
within a reasonable time of the commencement of
any such action, if prejudicial to its ability
to defend such action, shall relieve such
indemnifying party of any liability to the
indemnifying party under this Section 7, but the
omission to so notify the indemnifying party
will not relieve such indemnifying party of any
liability that it may have to any indemnified
party otherwise than under this Section 7.
41.
42.
8. CONTRIBUTION
43.
44. If for any reason the foregoing indemnity is unavailable, or is
insufficient to hold harmless an indemnified party, then the indemnifying
party shall contribute to the amount paid or payable by the indemnified
party as a result of such losses, claims, damages, liabilities or expenses
(i) in such proportion as is appropriate to reflect the relative benefits
received by the indemnifying party on the one hand and the indemnified
party on the other from the registration or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, or
provides a lesser sum to the indemnified party than the amount hereinafter
calculated, in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnifying party on the one hand and
the indemnified party on the other but also the relative fault of the
indemnifying party and the indemnified party as well as any other relevant
equitable considerations; provided that in no event shall any amount paid
or due by a Holder pursuant to Sections 7 and 8 hereunder exceed the net
proceeds from the offering received by such Holder. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
45.
46. 9. DESIGNATION OF UNDERWRITER
47.
48. 9.1 In the case of any registration effected
pursuant to Section 2.1, should the offering be
underwritten, the Company and the relevant
member of the Purchaser Group and/or TIC, as the
case may be, shall confer as to the selection of
a managing underwriter. Should they fail to
reach agreement, the selection shall be made by
the relevant member of the Purchaser Group
and/or TIC, as the case may be.
49.
50. 9.2 In the case of any registration initiated by the
Company, the Company shall have the right to
designate the managing underwriter in any
underwritten offering.
51.
52. 10. RULE 144 REPORTING
53.
54. With a view to making available the benefits of certain rules and
regulations of the SEC that may permit the sale of the Registrable
Securities to the public without registration, the Company agrees to use
its best efforts to:
55.
56. 10.1 make and keep public information regarding the
Company available as those terms are understood
and defined in Rule 144 under the Securities
Act, at all times;
57.
58. 10.2 file with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and
the Securities Exchange Act at any time after it has become subject
to such reporting requirements;
59.
60. 10.3 so long as a Holder owns any Registrable Securities, furnish to
such Holder forthwith upon written request a written statement by the
Company as to its compliance with the reporting requirements of Rule
144, and of the Securities Act and the Securities Exchange Act, a
copy of the most recent annual or quarterly report of the Company,
and such other reports and documents so filed as such Holder may
reasonably request in availing itself of any rule or regulation of
the SEC allowing such Holder to sell any such securities without
registration.
61.
62.
11. ASSIGNMENT OF REGISTRATION RIGHTS
63.
64. A Holder may assign its rights and obligations under this Agreement to any
person or entity provided that such assignment may be made only in
connection with sale of at least 300,000 Ordinary Shares by a Holder to a
person or an entity and that the assignment relates only to those shares
transferred to such person or entity, and further provided that such
assignee agrees to be bound by the terms of this Agreement.
65.
66. 12. AMENDMENTS, WAIVERS, ETC.
67.
68. This Agreement may not be amended, waived or otherwise modified or
terminated except by an instrument in writing signed by the Company and a
Holder, if the amendment is to be effective against such Holder.
69.
70. 13. MARKET STAND-OFF AGREEMENT.
71.
72. Holders of Registrable Securities, if requested by the Company and the
underwriters of the Company's securities, shall enter into an agreement
(the "Market Stand-off Agreement") not to sell, sell any option, or
otherwise transfer or dispose of any Ordinary Shares or other securities
of the Company held by such holders during the 90-day period (or such
shorter period as is required by the underwriters) following the effective
date of a registration statement of the Company filed under the Securities
Act, provided that such restrictions shall not apply to Ordinary Shares or
other securities of the Company that are included in such registration
statement, and shall apply only to the first firmly underwritten
registered equity offering of the Company's securities occurring after the
third anniversary of the date of the this Agreement and no such holder
shall be obligated to enter into a Market Stand-off Agreement if any
officer, director or holder of 5% or more of the outstanding Ordinary
Shares of the Company is not subject to a Market Stand-off Agreement with
substantially similar terms. The underwriters in connection with such
registration statement are intended third party beneficiaries of this
provision.
73.
74. In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the securities held by each
Holder (and the securities of every other person subject to the foregoing
restriction) until the end of such period.
75.
76. 14. COUNTERPART
77.
78. This Agreement may be executed in one or more
counterparts, all of which shall be considered one
and the same agreement. Each party need not sign the
same counterpart.
79.
80. 15. ENTIRE AGREEMENT
81.
82. This Agreement constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof, including the Registration
Rights Agreement, dated February 28, 1993, by and among the Company,
National Semiconductor (IC) Ltd., and Tower Semiconductor Holdings (1993)
Ltd.
83.
84. 16. GOVERNING LAW AND JURISDICTION
85.
86. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of California regardless of the laws that might
otherwise govern under applicable principles of conflicts of law thereof.
Any action or proceeding seeking to enforce any provision of, or based on
any right arising out of, this Agreement may be brought against any of the
parties solely in the courts of the State of California, and each of the
parties consents to the jurisdiction of such courts (and of the
appropriate appellate courts) in any such action or proceeding and waives
any objection to venue laid therein. Process in any action or proceeding
referred to in the preceding sentence may be served on any party anywhere
in the world.
87.
88. 17. ADDITIONAL PARTIES
89.
90. The parties hereto agree that by the execution of a joinder to this
Agreement, any additional parties that enter into share purchase
agreements with T prior to the Closing of the SPA and that close
simultaneously with the SPA may become parties to this Agreement and shall
be members of the Purchaser Group.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed on its behalf by its officers thereunto duly authorized as of the date
first written above.
Tower Semiconductor Ltd.
By: /s/ Yoav Nissan-Cohen
----------------------
Name: Yoav Nissan-Cohen
Title: Co-CEO
SanDisk Corporation
By: /s/ Eli Harari
----------------------
Name: Eli Harari
Title: CEO
The Israel Corporation Ltd.
By: /s/ Yossi Rose
----------------------
Name: Yossi Rose
Title: President and CEO
Alliance Semiconductor Corp.
By: /s/ N. Damodar Reddy
----------------------
Name: N. Damodar Reddy
Title: President and CEO
Macronix International Co.,
Ltd., on behalf of itself and
its affiliates
By: /s/ Miin Wu
----------------------
Name: Miin Wu
Title: President
QuickLogic Corp.
By: /s/ E. Thomas Hart
----------------------
Name: E. Thomas Hart
Title: President and CEO