EXHIBIT 4.47
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("THE SECURITIES
ACT") AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT COVERING THIS
WARRANT AND/OR SUCH SECURITIES, OR THIS WARRANT OR SUCH SECURITIES ARE SOLD ON
THE TEL-AVIV STOCK EXCHANGE IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES
ACT, OR THE HOLDER RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THE WARRANT
AND/OR SUCH SECURITIES SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND THE QUALIFICATION
REQUIREMENTS UNDER APPLICABLE STATE OR FOREIGN LAW.
WARRANT TO PURCHASE ORDINARY SHARES
Tower Semiconductor Ltd., an Israeli company ("THE COMPANY"), whose shares are
currently traded on Nasdaq and the Tel-Aviv Stock Exchange ("TASE") hereby
grants to BANK HAPOALIM B.M. ("THE HOLDER"), the right to purchase from the
Company the number of Ordinary Shares of the Company, nominal value NIS. 1.00
("THE ORDINARY SHARES") specified below, subject to the terms and conditions set
forth below, effective July 24, 2005 ("THE EFFECTIVE DATE"), the date upon which
Bank Hapoalim B.M. and Bank Leumi Le-Israel B.M. ("THE BANKS") entered into the
Ninth Amendment ("THE NINTH AMENDMENT") to the Facility Agreement dated January
18, 2001, as amended ("THE AGREEMENT"), by and among the Company and the Banks.
1. NUMBER OF ORDINARY SHARES AVAILABLE FOR PURCHASE
This Warrant may be exercised to purchase 4,132,232 (four million one
hundred and thirty-two thousand, two hundred and thirty-two) of the
Company's Ordinary Shares, with each Ordinary Share having a value
calculated as set forth in Section 2 below, subject to adjustment under
Section 7 of this Warrant ("THE WARRANT SHARES"), and all references to
Warrant Shares or Ordinary Shares "purchaseable hereunder" shall refer to
all 4,132,232 (four million one hundred and thirty-two thousand, two
hundred and thirty-two) Warrant Shares, as such number may be adjusted
under Section 7 of this Warrant, less Warrant Shares already purchased
through exercise of this Warrant.
2. EXERCISE PRICE
The exercise price for each Warrant Share purchasable hereunder shall be,
subject to adjustment under Section 7 of this Warrant, US $1.21 (one United
States Dollar and twenty-one US cents) per share ("THE WARRANT PRICE").
2A. EXERCISABILITY; TERM
This Warrant may be exercised: (a) with respect to 2,066,116 (two million
and sixty-six thousand, one hundred and sixteen) Warrant Shares, during the
period beginning from the Ninth Amendment Closing Date (as defined in the
Ninth Amendment) and ending on the date which is 5 (five) years following
the Ninth Amendment Closing Date ("THE FIRST TRANCHE EXPIRATION DATE"); and
(b) with respect to 2,066,116 (two million and sixty-six thousand, one
hundred and sixteen) Warrant Shares, during the period beginning from the
date of signature by the Company and the Banks of an agreement by the Banks
to reschedule the repayment dates of the Interest Payment Loans (as defined
in the Ninth Amendment) ("THE SECOND TRANCHE EXERCISABILITY DATE") and
ending on the date which is 5 (five) years following the Second Tranche
Exercisability Date ("THE SECOND TRANCHE EXPIRATION DATE"). The "First
Tranche Expiration Date" and the "Second Tranche Expiration Date" are
sometimes hereinafter collectively referred to as "THE EXPIRATION DATE".
3. EXERCISE OF WARRANT
This Warrant may be exercised in whole or in part, on one or more occasions
during its term, provided that only up to 2,066,116 (two million and
sixty-six thousand, one hundred and sixteen) Warrant Shares may be
exercised prior to the Second Tranche Exercisability Date and, provided
further, that if the Second Tranche Exercisability Date does not occur, no
more than 2,066,116 (two million and sixty-six thousand, one hundred and
sixteen) Warrant Shares will be exercisable during the term of this
Warrant. The Warrant may be exercised by the surrender of the Warrant to
the Company at its principal office together with the Notice of Exercise
annexed hereto duly completed and executed on behalf of the Holder.
a. EXERCISE FOR CASH
To exercise for cash, the Notice of Exercise must be accompanied by
payment in full of the amount of the aggregate purchase price of the
Warrant Shares being purchased upon such exercise in immediately
available funds.
b. NET EXERCISE
In lieu of the payment method set forth in Section 3(a) above, the
Holder may elect to exchange the Warrant for a number of Warrant
Shares equal to the increase in value of the Warrant Shares otherwise
purchasable hereunder on the date of exchange. If the Holder elects to
exchange this Warrant as provided in this Section 3(b), the Holder
shall tender to the Company the Warrant along with the Notice of
Exercise and the Company shall issue to the Holder the number of
Warrant Shares computed using the following formula:
Y (A - B)
X = ---------
A
WHERE:
X = the number of Warrant Shares to be issued to the Holder;
Y = the number of Warrant Shares purchasable under this Warrant
or, if only a portion of the Warrant is being exercised, the
number of Warrant Shares being exercised under the Warrant
(as adjusted to the date of such calculation);
A = the Fair Market Value (as defined below) of one (1) Ordinary
Share; and
B = Warrant Price (for the removal of doubt, as adjusted to the
date of such calculation).
"FAIR MARKET VALUE" of an Ordinary Share shall mean:
(i) if the Ordinary Shares are listed on a national securities
exchange or are quoted on the Nasdaq National Market
(NASDAQ/NMS), then the closing or last sale price, respectively,
reported on the last trading day immediately preceding the
exercise date, as reported by Nasdaq or the principal national
securities exchange upon which the Ordinary Shares are listed or
traded; provided that, if the Ordinary Shares are listed on
Nasdaq and another national securities exchange, the applicable
price shall be the price reported by Nasdaq;
(ii) if the Ordinary Shares are not listed on a national securities
exchange or quoted on NASDAQ/NMS, but are traded in the
over-the-counter market, then the mean of the closing bid and
asked prices as reported on the last trading day immediately
preceding the exercise date; and
(iii) if the Ordinary Shares are not publicly traded, then as
determined by the Company's Board of Directors in good faith.
The exchange of this Warrant as provided in this Section 3(b) may not
be utilized on more than 9 (nine) occasions.
c. ISSUANCE OF SHARES ON EXERCISE
The Company agrees that the Warrant Shares so purchased shall be
issued as soon as practicable thereafter, and that the Holder shall be
deemed the record owner of such Warrant Shares as of and from the
close of business on the date on which this Warrant shall be
surrendered, together with payment in full as required pursuant to
subsection a. above or when surrendered for exchange pursuant to
subsection b. above. In the event of a partial exercise, the Company
shall concurrently issue to the Holder a replacement Warrant on the
same terms and conditions as this Warrant, but representing the number
of Warrant Shares remaining after such partial exercise.
4. FRACTIONAL INTEREST
No fractional shares will be issued in connection with any exercise
hereunder, but in lieu of such fractional shares, the Company shall make a
cash payment therefor upon the basis of the current market price of such
shares then in effect as determined in good faith by the Company's Board of
Directors.
5. WARRANT CONFERS NO RIGHTS OF SHAREHOLDER
Except as otherwise set forth in this Warrant, the Holder shall not have
any rights as a shareholder of the Company with regard to the Warrant
Shares prior to actual exercise resulting in the purchase of any Warrant
Shares.
6. INVESTMENT REPRESENTATION
Neither this Warrant nor the Warrant Shares issuable upon the exercise of
this Warrant have been registered under the Securities Act, or any other
securities laws. The Holder acknowledges by acceptance of the Warrant that
(a) it has acquired this Warrant for investment and not with a view to
distribution; (b) it has either a pre-existing personal or business
relationship with the Company, or its executive officers, or by reason of
its business or financial experience, it has the capacity to protect its
own interests in connection with the transaction; and (c) it is an
accredited investor as that term is defined in Regulation D promulgated
under the Securities Act. The Holder agrees that any Warrant Shares
issuable upon exercise of this Warrant will be acquired for investment and
not with a view to distribution and, unless the Warrant Shares are
theretofore registered, including following the exercise of the Holder of
its registration rights under Section 9 below, such Warrant Shares will not
be registered under the Securities Act and applicable state securities laws
and that such Warrant Shares may have to be held indefinitely unless they
are subsequently registered or qualified under the Securities Act and
applicable state securities laws, or based on an opinion of counsel
reasonably satisfactory to the Company, an exemption from such registration
and qualification is available. The Holder, by acceptance hereof, consents
to the placement of legend(s) on all securities hereunder as to the
applicable restrictions on transferability in order to ensure compliance
with the Securities Act, unless in the reasonable opinion of counsel for
the Company such legend is not required in order to ensure compliance with
the Securities Act. The Company may issue stop transfer instructions to its
transfer agent in connection with such restrictions.
7. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES
The number and kind of securities purchasable initially upon the exercise
of this Warrant and the Warrant Price shall be subject to adjustment from
time to time upon the occurrence of certain events, as follows:
a. ADJUSTMENT FOR SHARES SPLITS AND COMBINATIONS
If the Company at any time or from time to time effects a subdivision
of the outstanding Ordinary Shares, the number of Warrant Shares
purchaseable hereunder immediately before the subdivision shall be
proportionately increased, and conversely, if the Company at any time
or from time to time combines the outstanding Ordinary Shares, the
number of Warrant Shares purchaseable hereunder immediately before the
combination shall be proportionately decreased. Any adjustment under
this Section 7(a) shall become effective at the close of business on
the date the subdivision or combination becomes effective.
b. ADJUSTMENT FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS
In the event the Company at any time, or from time to time, makes or
fixes a record date for the determination of holders of Ordinary
Shares entitled to receive a dividend or other distribution payable in
additional shares of Ordinary Shares, then and in each such event, the
number of Ordinary Shares purchaseable hereunder shall be increased as
of the time of such issuance or, in the event such a record date is
fixed, as of the close of business on such record date, by multiplying
the number of Ordinary Shares issuable upon exercise of this Warrant
by a fraction: (i) the numerator of which shall be the total number of
Ordinary Shares issued and outstanding immediately prior to the time
of such issuance or the close of business on such record date plus the
number of Ordinary Shares issuable in payment of such dividend or
distribution; and (ii) the denominator of which is the total number of
Ordinary Shares issued and outstanding immediately prior to the time
of such issuance or the close of business on such record date;
provided, however, that if such record date is fixed and such dividend
is not fully paid or if such distribution is not fully made on the
date fixed thereof, the number of Ordinary Shares purchaseable
hereunder shall be recomputed accordingly as of the close of business
on such record date and thereafter the number of Ordinary Shares
purchaseable hereunder shall be adjusted pursuant to this Section 7(b)
as of the time of the actual payment of such dividends or
distribution.
c. ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS
In the event the Company at any time or from time to time makes, or
fixes a record date for the determination of holders of Ordinary
Shares entitled to receive a dividend or other distribution payable in
securities of the Company other than Ordinary Shares, then in each
such event provision shall be made so that the Holder shall receive
upon exercise of this Warrant, in addition to the number of Ordinary
Shares receivable thereupon, the amount of securities of the Company
that the Holder would have received had this Warrant been exercised to
purchase all Ordinary Shares purchaseable hereunder immediately prior
to such event (or the record date for such event) and had the Holder
thereafter, during the period from the date of such event to and
including the date of exercise, retained such securities receivable by
it as aforesaid during such period, subject to all other adjustments
called for during such period under this Section and the Company's
Articles of Association with respect to the rights of the Holder.
d. ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE AND SUBSTITUTION
If the Ordinary Shares purchaseable hereunder are changed into the
same or a different number of shares of any class or classes of
shares, whether by recapitalization, reclassification or otherwise
(other than a subdivision or combination of shares or shares dividend
or a reorganization, merger, consolidation or sale of assets, provided
for elsewhere in this Section), then and in any such event the Holder
shall have the right thereafter to exercise this Warrant into the kind
and amount of shares and other securities receivable upon such
recapitalization, reclassification or other change, by holders of the
number of shares of Ordinary Shares for which this Warrant might have
been exercised with respect to all Ordinary Shares purchaseable
hereunder immediately prior to such recapitalization, reclassification
or change, all subject to further adjustment as provided herein and
under the Company's Articles of Association.
e. REORGANIZATION, MERGERS, CONSOLIDATIONS OR SALES OF ASSETS
If at any time or from time to time there is a capital reorganization
of the Ordinary Shares (other than a recapitalization, subdivision,
combination, reclassification or exchange of shares as provided for
elsewhere in this subsection), or a merger or consolidation of the
Company with or into another corporation, or the sale of all or
substantially all of the Company's properties and assets to any other
person, then, as a part of such reorganization, merger, consolidation
or sale, provision shall be made so that the Holder shall thereafter
be entitled to receive upon exercise of this Warrant, the number of
shares or other securities or property of the Company, or of the
successor corporation resulting from such merger or consolidation or
sale, to which a holder of Ordinary Shares deliverable upon conversion
would have been entitled on such capital reorganization, merger,
consolidation or sale. In any such case (except to the extent any cash
or property is received in such transaction), appropriate adjustment
shall be made in the application of the provisions of this subsection
and the Company's Articles of Association with respect to the rights
of the Holder after the reorganization, merger, consolidation or sale
to the end that the provisions of this subsection and the Company's
Articles of Association (including adjustment of the number of
Ordinary Shares purchaseable hereunder) shall be applicable after that
event and be as nearly equivalent to the provisions hereof as may be
practicable.
f. OTHER TRANSACTIONS
In the event that the Company shall issue shares to its shareholders
as a result of a split-off, spin-off or the like, then the Company
shall only complete such issuance or other action if, as part thereof,
allowance is made to protect the economic interest of the Holder
either by increasing the number of Warrant Shares or by procuring that
the Holder shall be entitled, on economically proportionate terms, to
acquire additional shares of the spun-off or split-off entities.
g. GENERAL PROTECTION
The Company will not, by amendment of its Articles of Association or
other charter document or through any reorganization,
recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder, or impair the
economic interest of the Holder, but will at all times in good faith
assist in the carrying out of all the provisions hereof and in taking
of all such actions and making all such adjustments as may be
necessary or appropriate in order to protect the rights and the
economic interests of the Holder against impairment.
h. NOTICE OF CAPITAL CHANGES
If at any time the Company shall offer for subscription pro rata to
the holders of Ordinary Shares any additional shares of any class,
other rights or any equity security of any kind, or there shall be any
capital reorganization or reclassification of the capital shares of
the Company, or consolidation or merger of the Company with, or sale
of all or substantially all of its assets to another company or there
shall be a voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or other transaction described in this
Section 7, then, in any one or more of the said cases, the Company
shall give the Holder written notice, by registered or certified mail,
postage prepaid, of the date on which: (i) a record shall be taken for
such subscription rights; or (ii) such reorganization,
reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up shall take place, as the case may be. Such
notice shall also specify the date as of which the holders of record
of Ordinary Shares shall participate in such subscription rights, or
shall be entitled to exchange their Ordinary Shares for securities or
other property deliverable upon such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up,
as the case may be. Such written notice shall be given at least 14
(fourteen) days prior to the action in question and not less than 14
(fourteen) days prior to the record date in respect thereto.
i. ADJUSTMENT OF WARRANT PRICE
Upon each adjustment in the number of Ordinary Shares purchasable
hereunder, the Warrant Price shall be proportionately increased or
decreased, as the case may be, in a manner that is the inverse of the
manner in which the number of Ordinary Shares purchasable hereunder
shall be adjusted.
j. NOTICE OF ADJUSTMENTS
Whenever the Warrant Price or the number of Ordinary Shares
purchasable hereunder shall be adjusted pursuant to Section 7 hereof,
the Company shall prepare a certificate signed by the chief financial
officer of the Company setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated, and the Warrant Price and the
number of Ordinary Shares purchasable hereunder after giving effect to
such adjustment, and shall cause copies of such certificate to be
mailed (by first class mail, postage prepaid) to the Holder.
k. ASSUMED EXERCISABILITY
For the avoidance of doubt, the fact that an adjustment event
described in this Section 7 occurs prior to the time this Warrant is
fully exercisable by the Holder shall not be taken into account and,
for purposes of determining any adjustment or other actions to be
taken by the Company pursuant to this Section 7, it shall be assumed
that this Warrant is fully exercisable as of the Effective Date.
8. TRANSFER OF THIS WARRANT OR SHARES
a. With respect to any offer, sale or other disposition of this Warrant
or securities purchaseable hereunder, the Holder will give written
notice to the Company prior thereto, describing briefly the manner
thereof, together with, if reasonably requested by the Company, a
written opinion of such Holder's counsel, to the effect that such
offer, sale or other distribution may be effected without registration
or qualification (under any federal or state law then in effect);
provided, however, that no legal opinion shall be required if the
transfer will be effected on TASE and the Holder represents to the
Company that the applicable conditions under Regulation S under the
Securities Act have been satisfied. If the proposed transfer is
intended to rely on a Regulation D exemption under the Securities Act,
such opinion letter and all such transferees must warrant and
represent that they are an "accredited" investor as that term is
defined under Regulation D of the Securities Act. Promptly, as
practicable, upon receiving such written notice and opinion and
warranties and representations, if so requested, the Company, as
promptly as practicable, shall deliver to the Holder one or more
replacement Warrant certificates on the same terms and conditions as
this Warrant for delivery to the transferees. Each Warrant thus
transferred and each certificate representing the securities thus
transferred shall bear legend(s) as to the applicable restrictions on
transferability in order to ensure compliance with the Securities Act,
unless in the opinion of counsel for the Company such legend is not
required in order to ensure compliance with the Securities Act. The
Company may issue stop transfer instructions to its transfer agent in
connection with such restrictions. Any provision of this Warrant to
the contrary notwithstanding, the Holder may not offer, sell or
otherwise dispose of this Warrant to any third party, other than: (i)
to a wholly owned subsidiary of Bank Hapoalim B.M.; or (ii) to any
other transferee approved by the Company in writing with such approval
not to be unreasonably withheld.
b. In the event that the Company or its shareholders receive an offer to
transfer all or substantially all of the shares in the Company, or to
effect a merger or acquisition or sale of all or substantially all of
the assets of the Company, then the Company shall promptly inform the
Holder in writing of such offer.
9. REGISTRATION RIGHTS
The Company covenants and agrees as follows:
a. DEFINITIONS
For purposes of this Section 9:
(i) "REGISTRABLE SHARES" means: (1) the Warrant Shares; and (2) any
Ordinary Shares of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security
that is issued as) a dividend or other distribution with respect
to, or in exchange for or in replacement of, such Warrant Shares;
provided, however, that any exercise of this Warrant in
connection with an exercise of rights to registration under this
Section 9 may be made conditional upon the closing of the
offering contemplated by such registration;
(ii) "REGISTER", "REGISTERED" and "REGISTRATION" refer to a
registration effected by filing a registration statement in
compliance with the Securities Act and the declaration or
ordering by the SEC of effectiveness of such registration
statement, or the equivalent actions under the laws of another
jurisdiction;
(iii) "INVESTOR HOLDERS" refers to SanDisk Corporation, Alliance
Semiconductor Corp., Macronix International Co., Ltd., QuickLogic
Corporation, and The Israel Corporation Ltd. and any additional
parties that entered into share purchase agreements with the
Company prior to the closing of and that closed simultaneously
with the Share Purchase Agreement dated as of July 4, 2000 by and
between the Company and SanDisk Corporation or any successors
thereto or permitted assignees thereof;
(iv) "1934 ACT" means the Securities Exchange Act of 1934, as amended;
(v) "SEC" means the United States Securities and Exchange Commission.
b. INCIDENTAL REGISTRATION
If the Company at any time proposes to register any of its securities
(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), it shall give notice to the Holder of such intention.
Upon the written request of the Holder given within 20 (twenty) days
after receipt of any such notice, the Company shall include in such
registration all of the Registrable Shares indicated in such request,
so as to permit the disposition of the shares so registered at the
expense of the Company.
Notwithstanding any other provision of this Section 9(b), in the event
that the Company is undertaking a registration of its securities and
the managing underwriter advises the Company in writing that marketing
factors require a limitation of the number of Ordinary Shares to be
underwritten, then there shall be excluded from such registration and
underwriting, to the extent necessary to satisfy such limitation,
Ordinary Shares held by any shareholders other than the Investor
Holders pro rata to their respective shareholdings in the Company.
c. ASSIGNMENT OF REGISTRATION RIGHTS
The rights to cause the Company to register Registrable Shares
pursuant to the Registration Rights may be assigned by a Holder to a
transferee or assignee of such shares to the same extent as permitted
by Section 8 of this Warrant.
d. NO CONFLICTING AGREEMENTS
The Company represents and warrants to the Holder that the Company is
not a party to any agreement that conflicts in any manner with the
Holder's rights to cause the Company to register Registrable Shares
pursuant to the Registration Rights. The Company covenants and agrees
that it shall not, without the prior written consent of the holders of
a majority of the outstanding Registrable Shares, amend, modify or
restate the Registration Rights if the Holder would be adversely
affected by the amendment in a different manner than other holders of
"Registrable Shares" similarly situated.
e. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE AND EXPIRATION OF WARRANT
The rights and obligations of the Company and the Holder set forth in
this Section 9 and in the Registration Rights shall survive the
exercise, conversion and expiration of this Warrant.
f. STAND-OFF PERIOD
The Holder, 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 Registrable Shares held by the Holder
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 the
Holder shall not be obligated to enter into a Market Stand-off
Agreement if any officer, director or holder of 5% (five percent) 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.
g. INDEMNIFICATION
In the event any Registrable Shares are included in a registration
statement in accordance herewith:
To the extent permitted by law, the Company will indemnify and hold
harmless the Holder, its officers and directors, 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 1934 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 1934 Act, any state securities law or any rule
or regulation promulgated under the Securities Act, the 1934 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 9(g), 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 the 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 the Holder, underwriter or controlling
person. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Holder,
the underwriter or any controlling person of the Holder or the
underwriter, and regardless of any sale in connection with such
offering by the Holder.
To the extent permitted by law, the 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
1934 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 the
Holder expressly for use in connection with such registration
statement; and the 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 9(g) 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 Holder, which consent shall not
be unreasonably withheld. In no event shall the liability of the
Holder hereunder exceed the net proceeds from the offering received by
the Holder.
Promptly after receipt by an indemnified party under this Section 9(g)
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 9(g), 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 9(g), 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
9(g).
9A. OBLIGATIONS OF THE COMPANY
Whenever the Company files a registration statement with respect to any
Registrable Shares, the Company, at its expense, shall:
9A.1 prepare and file with the SEC (or other relevant body) a registration
statement with respect to such Registrable Shares and use its best
efforts to cause such registration statement to become effective.
9A.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.
9A.3 furnish to the Holder 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 Shares owned by it.
9A.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 Holder,
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.
9A.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 Holder shall also enter into and
perform their obligations under such an agreement (the terms of which
must be satisfactory to the Holder if the Holder is to participate in
such offering).
9A.6 notify the Holder 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
Holder shall forthwith discontinue disposition of its Registrable
Shares 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.
9A.7 cause all Registrable Shares registered pursuant thereunder to be
listed on each securities exchange on which similar securities issued
by the Company are then listed.
9A.8 provide a transfer agent and registrar for all Registrable Shares
registered pursuant hereunder and a CUSIP number for all such
Registrable Share not later than the effective date of such
registration.
9A.9 afford the Holder and its representatives the opportunity to make such
examination of the business affairs of the Company and its
subsidiaries as the Holder 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 Holder and
its representatives).
9A.10 furnish, at the request of the Holder in connection with the
registration of Registrable Shares pursuant to this Agreement, on the
date that such Registrable Shares 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 Holder, 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 Holder.
9B. RULE 144 REPORTING
With a view to making available the benefits of certain rules and
regulations of the SEC that may permit the sale of the Registrable Shares
to the public without registration, the Company agrees to use its best
efforts to:
9B.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;
9B.2 file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the 1934 Act at
any time after it has become subject to such reporting requirements;
9B.3 so long as the Holder owns any Registrable Shares, furnish to the
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 1934 Act, a copy of the most
recent annual or quarterly report of the Company, and such other
reports and documents so filed as the Holder may reasonably request in
availing itself of any rule or regulation of the SEC allowing the
Holder to sell any such securities without registration.
9C. EXPENSES OF REGISTRATION
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 Holder,
shall be borne by the Company.
10. REPRESENTATIONS, WARRANTIES AND COVENANTS
The Company represents, warrants and covenants to the Holder as follows:
a. this Warrant has been duly authorized and executed by the Company and
is a valid and binding obligation of the Company enforceable in
accordance with its terms;
b. the Warrant Shares are duly authorized and reserved for issuance by
the Company and, when issued in accordance with the terms hereof, will
be validly issued, fully paid and non-assessable and not subject to
any pre-emptive rights;
c. the execution and delivery of this Warrant are not, and the issuance
of the Warrant Shares upon exercise of this Warrant in accordance with
the terms hereof will not be, inconsistent with the Company's
Certificate of Incorporation, Memorandum of Association or Articles of
Association, do not and will not contravene any law, governmental rule
or regulation, judgment or order applicable to the Company and, except
for consents that have already been obtained by the Company, do not
and will not conflict with or contravene any provision of, or
constitute a default under, any indenture, mortgage, contract or other
instrument of which the Company is a party or by which it is bound or
require the consent or approval of, the giving of notice to, the
registration with or the taking of any action in respect of or by, any
federal, state or local governmental authority or agency or other
person; and
d. that it shall, upon the request of the Holder, procure the approvals
required in order to list the Warrant Shares for trading on TASE.
11. EXPENSES
The Company will pay the Israeli Stamp Duty on the issuance of the Warrant
Shares, and will notify the Israeli Companies Registrar of such issuance
within the time period required by law. The Stamp Duty on this Warrant, if
any, will be paid in full by the Company.
12. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of any Warrant or Shares
certificate, and in case of loss, theft or destruction, of indemnity, or
security reasonably satisfactory to it, and upon reimbursement to the
Company of all reasonable expenses incidental thereto, and upon surrender
and cancellation of such Warrant or Shares certificate, if mutilated, the
Company will make and deliver a new Warrant or Shares certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or Shares
certificate.
13. NOTICES
Any notice or other communication hereunder shall be in writing and shall
be deemed to have been given upon delivery, if personally delivered or 3
(three) business days after deposit if deposited in the mail for mailing by
certified mail, postage prepaid, and addressed as follows:
If to the Holder: Bank Hapoalim B.M.
Corporate Division
Zion Building
45 Rothschild Boulevard
Tel-Aviv
ATTENTION: HEAD OF CORPORATE DIVISION
FACSIMILE: (03) 567 3728
If to the Company: Tower Semiconductor Ltd.
P.O. Box 619
Ramat Gabriel Industrial Zone
Migdal Haemek 23105
Israel
ATTENTION: CHIEF FINANCIAL OFFICER
FACSIMILE: (04) 654 6510
WITH A COPY TO: Yigal Arnon & Co.
1 Azrieli Center
Tel Aviv
Israel
ATTENTION: DAVID H. SCHAPIRO, ADV.
FACSIMILE: (03) 608 7714
Each of the above addressees may change its address for purposes of this
paragraph by giving to the other addressees notice of such new address in
conformance with this paragraph.
14. APPLICABLE LAW; JURISDICTION
This Warrant shall be governed by and construed in accordance with the laws
of the State of Israel as applicable to contracts between two residents of
the State of Israel entered into and to be performed entirely within the
State of Israel. Any dispute arising under or in relation to this Warrant
shall be resolved in the competent court for Tel Aviv-Jaffa district, and
each of the parties hereby submits irrevocably to the jurisdiction of such
court.
Dated: August 4, 2005
for TOWER SEMICONDUCTOR LTD.
By: _____________________________
Title: _____________________________
NOTICE OF EXERCISE
TO:
[________________]
[1. The undersigned hereby elects to purchase ______ (________) Ordinary Shares
of Tower Semiconductor Ltd., pursuant to the terms of the attached Warrant,
and tenders herewith payment of the purchase price for such shares in full.
[OR
The undersigned hereby elects to exchange the attached Warrant for ______
(____________) [INSERT NUMBER OF WARRANT SHARES] Ordinary Shares of Tower
Semiconductor Ltd. on a Net Exercise basis, pursuant to clause 3.b of the
attached Warrant and the other terms and conditions contained therein]
2. In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the Ordinary Shares are being acquired solely for the
account of the undersigned and not as a nominee for any other party, or for
investment, and that the undersigned will not offer, sell or otherwise
dispose of any such Ordinary Shares except under circumstances that will
not result in a violation of the Securities Act of 1933, as amended, or any
state securities laws.
3. Please issue a certificate representing said Ordinary Shares in the name of
the undersigned.
4. Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned.
______________________ _________________________
(Date) (Print Name)
_________________________
(Signature)
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("THE SECURITIES
ACT") AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT COVERING THIS
WARRANT AND/OR SUCH SECURITIES, OR THIS WARRANT OR SUCH SECURITIES ARE SOLD ON
THE TEL-AVIV STOCK EXCHANGE IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES
ACT, OR THE HOLDER RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THE WARRANT
AND/OR SUCH SECURITIES SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND THE QUALIFICATION
REQUIREMENTS UNDER APPLICABLE STATE OR FOREIGN LAW.
WARRANT TO PURCHASE ORDINARY SHARES
Tower Semiconductor Ltd., an Israeli company ("THE COMPANY"), whose shares are
currently traded on Nasdaq and the Tel-Aviv Stock Exchange ("TASE") hereby
grants to BANK LEUMI LE-ISRAEL B.M. ("THE HOLDER"), the right to purchase from
the Company the number of Ordinary Shares of the Company, nominal value NIS.
1.00 ("THE ORDINARY SHARES") specified below, subject to the terms and
conditions set forth below, effective July 24, 2005 ("THE EFFECTIVE DATE"), the
date upon which Bank Hapoalim B.M. and Bank Leumi Le-Israel B.M. ("THE BANKS")
entered into the Ninth Amendment ("THE NINTH AMENDMENT") to the Facility
Agreement dated January 18, 2001, as amended ("THE AGREEMENT"), by and among the
Company and the Banks.
1. NUMBER OF ORDINARY SHARES AVAILABLE FOR PURCHASE
This Warrant may be exercised to purchase 4,132,232 (four million one
hundred and thirty-two thousand, two hundred and thirty-two) of the
Company's Ordinary Shares, with each Ordinary Share having a value
calculated as set forth in Section 2 below, subject to adjustment under
Section 7 of this Warrant ("THE WARRANT SHARES"), and all references to
Warrant Shares or Ordinary Shares "purchaseable hereunder" shall refer to
all 4,132,232 (four million one hundred and thirty-two thousand, two
hundred and thirty-two) Warrant Shares, as such number may be adjusted
under Section 7 of this Warrant, less Warrant Shares already purchased
through exercise of this Warrant.
2. EXERCISE PRICE
The exercise price for each Warrant Share purchasable hereunder shall be,
subject to adjustment under Section 7 of this Warrant, US $1.21 (one United
States Dollar and twenty-one US cents) per share ("THE WARRANT PRICE").
2A. EXERCISABILITY; TERM
This Warrant may be exercised: (a) with respect to 2,066,116 (two million
and sixty-six thousand, one hundred and sixteen) Warrant Shares, during the
period beginning from the Ninth Amendment Closing Date (as defined in the
Ninth Amendment) and ending on the date which is 5 (five) years following
the Ninth Amendment Closing Date ("THE FIRST TRANCHE EXPIRATION DATE"); and
(b) with respect to 2,066,116 (two million and sixty-six thousand, one
hundred and sixteen) Warrant Shares, during the period beginning from the
date of signature by the Company and the Banks of an agreement by the Banks
to reschedule the repayment dates of the Interest Payment Loans (as defined
in the Ninth Amendment) ("THE SECOND TRANCHE EXERCISABILITY DATE") and
ending on the date which is 5 (five) years following the Second Tranche
Exercisability Date ("THE SECOND TRANCHE EXPIRATION DATE"). The "First
Tranche Expiration Date" and the "Second Tranche Expiration Date" are
sometimes hereinafter collectively referred to as "THE EXPIRATION DATE".
3. EXERCISE OF WARRANT
This Warrant may be exercised in whole or in part, on one or more occasions
during its term, provided that only up to 2,066,116 (two million and
sixty-six thousand, one hundred and sixteen) Warrant Shares may be
exercised prior to the Second Tranche Exercisability Date and, provided
further, that if the Second Tranche Exercisability Date does not occur, no
more than 2,066,116 (two million and sixty-six thousand, one hundred and
sixteen) Warrant Shares will be exercisable during the term of this
Warrant. The Warrant may be exercised by the surrender of the Warrant to
the Company at its principal office together with the Notice of Exercise
annexed hereto duly completed and executed on behalf of the Holder.
a. EXERCISE FOR CASH
To exercise for cash, the Notice of Exercise must be accompanied by
payment in full of the amount of the aggregate purchase price of the
Warrant Shares being purchased upon such exercise in immediately
available funds.
b. NET EXERCISE
In lieu of the payment method set forth in Section 3(a) above, the
Holder may elect to exchange the Warrant for a number of Warrant
Shares equal to the increase in value of the Warrant Shares otherwise
purchasable hereunder on the date of exchange. If the Holder elects to
exchange this Warrant as provided in this Section 3(b), the Holder
shall tender to the Company the Warrant along with the Notice of
Exercise and the Company shall issue to the Holder the number of
Warrant Shares computed using the following formula:
Y (A - B)
X = ---------
A
WHERE:
X = the number of Warrant Shares to be issued to the Holder;
Y = the number of Warrant Shares purchasable under this Warrant
or, if only a portion of the Warrant is being exercised, the
number of Warrant Shares being exercised under the Warrant
(as adjusted to the date of such calculation);
A = the Fair Market Value (as defined below) of one (1) Ordinary
Share; and
B = Warrant Price (for the removal of doubt, as adjusted to the
date of such calculation).
"FAIR MARKET VALUE" of an Ordinary Share shall mean:
(i) if the Ordinary Shares are listed on a national securities
exchange or are quoted on the Nasdaq National Market
(NASDAQ/NMS), then the closing or last sale price, respectively,
reported on the last trading day immediately preceding the
exercise date, as reported by Nasdaq or the principal national
securities exchange upon which the Ordinary Shares are listed or
traded; provided that, if the Ordinary Shares are listed on
Nasdaq and another national securities exchange, the applicable
price shall be the price reported by Nasdaq;
(ii) if the Ordinary Shares are not listed on a national securities
exchange or quoted on NASDAQ/NMS, but are traded in the
over-the-counter market, then the mean of the closing bid and
asked prices as reported on the last trading day immediately
preceding the exercise date; and
(iii) if the Ordinary Shares are not publicly traded, then as
determined by the Company's Board of Directors in good faith.
The exchange of this Warrant as provided in this Section 3(b) may not
be utilized on more than 9 (nine) occasions.
c. ISSUANCE OF SHARES ON EXERCISE
The Company agrees that the Warrant Shares so purchased shall be
issued as soon as practicable thereafter, and that the Holder shall be
deemed the record owner of such Warrant Shares as of and from the
close of business on the date on which this Warrant shall be
surrendered, together with payment in full as required pursuant to
subsection a. above or when surrendered for exchange pursuant to
subsection b. above. In the event of a partial exercise, the Company
shall concurrently issue to the Holder a replacement Warrant on the
same terms and conditions as this Warrant, but representing the number
of Warrant Shares remaining after such partial exercise.
4. FRACTIONAL INTEREST
No fractional shares will be issued in connection with any exercise
hereunder, but in lieu of such fractional shares, the Company shall make a
cash payment therefor upon the basis of the current market price of such
shares then in effect as determined in good faith by the Company's Board of
Directors.
5. WARRANT CONFERS NO RIGHTS OF SHAREHOLDER
Except as otherwise set forth in this Warrant, the Holder shall not have
any rights as a shareholder of the Company with regard to the Warrant
Shares prior to actual exercise resulting in the purchase of any Warrant
Shares.
6. INVESTMENT REPRESENTATION
Neither this Warrant nor the Warrant Shares issuable upon the exercise of
this Warrant have been registered under the Securities Act, or any other
securities laws. The Holder acknowledges by acceptance of the Warrant that
(a) it has acquired this Warrant for investment and not with a view to
distribution; (b) it has either a pre-existing personal or business
relationship with the Company, or its executive officers, or by reason of
its business or financial experience, it has the capacity to protect its
own interests in connection with the transaction; and (c) it is an
accredited investor as that term is defined in Regulation D promulgated
under the Securities Act. The Holder agrees that any Warrant Shares
issuable upon exercise of this Warrant will be acquired for investment and
not with a view to distribution and, unless the Warrant Shares are
theretofore registered, including following the exercise of the Holder of
its registration rights under Section 9 below, such Warrant Shares will not
be registered under the Securities Act and applicable state securities laws
and that such Warrant Shares may have to be held indefinitely unless they
are subsequently registered or qualified under the Securities Act and
applicable state securities laws, or based on an opinion of counsel
reasonably satisfactory to the Company, an exemption from such registration
and qualification is available. The Holder, by acceptance hereof, consents
to the placement of legend(s) on all securities hereunder as to the
applicable restrictions on transferability in order to ensure compliance
with the Securities Act, unless in the reasonable opinion of counsel for
the Company such legend is not required in order to ensure compliance with
the Securities Act. The Company may issue stop transfer instructions to its
transfer agent in connection with such restrictions.
7. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES
The number and kind of securities purchasable initially upon the exercise
of this Warrant and the Warrant Price shall be subject to adjustment from
time to time upon the occurrence of certain events, as follows:
a. ADJUSTMENT FOR SHARES SPLITS AND COMBINATIONS
If the Company at any time or from time to time effects a subdivision
of the outstanding Ordinary Shares, the number of Warrant Shares
purchaseable hereunder immediately before the subdivision shall be
proportionately increased, and conversely, if the Company at any time
or from time to time combines the outstanding Ordinary Shares, the
number of Warrant Shares purchaseable hereunder immediately before the
combination shall be proportionately decreased. Any adjustment under
this Section 7(a) shall become effective at the close of business on
the date the subdivision or combination becomes effective.
b. ADJUSTMENT FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS
In the event the Company at any time, or from time to time, makes or
fixes a record date for the determination of holders of Ordinary
Shares entitled to receive a dividend or other distribution payable in
additional shares of Ordinary Shares, then and in each such event, the
number of Ordinary Shares purchaseable hereunder shall be increased as
of the time of such issuance or, in the event such a record date is
fixed, as of the close of business on such record date, by multiplying
the number of Ordinary Shares issuable upon exercise of this Warrant
by a fraction: (i) the numerator of which shall be the total number of
Ordinary Shares issued and outstanding immediately prior to the time
of such issuance or the close of business on such record date plus the
number of Ordinary Shares issuable in payment of such dividend or
distribution; and (ii) the denominator of which is the total number of
Ordinary Shares issued and outstanding immediately prior to the time
of such issuance or the close of business on such record date;
provided, however, that if such record date is fixed and such dividend
is not fully paid or if such distribution is not fully made on the
date fixed thereof, the number of Ordinary Shares purchaseable
hereunder shall be recomputed accordingly as of the close of business
on such record date and thereafter the number of Ordinary Shares
purchaseable hereunder shall be adjusted pursuant to this Section 7(b)
as of the time of the actual payment of such dividends or
distribution.
c. ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS
In the event the Company at any time or from time to time makes, or
fixes a record date for the determination of holders of Ordinary
Shares entitled to receive a dividend or other distribution payable in
securities of the Company other than Ordinary Shares, then in each
such event provision shall be made so that the Holder shall receive
upon exercise of this Warrant, in addition to the number of Ordinary
Shares receivable thereupon, the amount of securities of the Company
that the Holder would have received had this Warrant been exercised to
purchase all Ordinary Shares purchaseable hereunder immediately prior
to such event (or the record date for such event) and had the Holder
thereafter, during the period from the date of such event to and
including the date of exercise, retained such securities receivable by
it as aforesaid during such period, subject to all other adjustments
called for during such period under this Section and the Company's
Articles of Association with respect to the rights of the Holder.
d. ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE AND SUBSTITUTION
If the Ordinary Shares purchaseable hereunder are changed into the
same or a different number of shares of any class or classes of
shares, whether by recapitalization, reclassification or otherwise
(other than a subdivision or combination of shares or shares dividend
or a reorganization, merger, consolidation or sale of assets, provided
for elsewhere in this Section), then and in any such event the Holder
shall have the right thereafter to exercise this Warrant into the kind
and amount of shares and other securities receivable upon such
recapitalization, reclassification or other change, by holders of the
number of shares of Ordinary Shares for which this Warrant might have
been exercised with respect to all Ordinary Shares purchaseable
hereunder immediately prior to such recapitalization, reclassification
or change, all subject to further adjustment as provided herein and
under the Company's Articles of Association.
e. REORGANIZATION, MERGERS, CONSOLIDATIONS OR SALES OF ASSETS
If at any time or from time to time there is a capital reorganization
of the Ordinary Shares (other than a recapitalization, subdivision,
combination, reclassification or exchange of shares as provided for
elsewhere in this subsection), or a merger or consolidation of the
Company with or into another corporation, or the sale of all or
substantially all of the Company's properties and assets to any other
person, then, as a part of such reorganization, merger, consolidation
or sale, provision shall be made so that the Holder shall thereafter
be entitled to receive upon exercise of this Warrant, the number of
shares or other securities or property of the Company, or of the
successor corporation resulting from such merger or consolidation or
sale, to which a holder of Ordinary Shares deliverable upon conversion
would have been entitled on such capital reorganization, merger,
consolidation or sale. In any such case (except to the extent any cash
or property is received in such transaction), appropriate adjustment
shall be made in the application of the provisions of this subsection
and the Company's Articles of Association with respect to the rights
of the Holder after the reorganization, merger, consolidation or sale
to the end that the provisions of this subsection and the Company's
Articles of Association (including adjustment of the number of
Ordinary Shares purchaseable hereunder) shall be applicable after that
event and be as nearly equivalent to the provisions hereof as may be
practicable.
f. OTHER TRANSACTIONS
In the event that the Company shall issue shares to its shareholders
as a result of a split-off, spin-off or the like, then the Company
shall only complete such issuance or other action if, as part thereof,
allowance is made to protect the economic interest of the Holder
either by increasing the number of Warrant Shares or by procuring that
the Holder shall be entitled, on economically proportionate terms, to
acquire additional shares of the spun-off or split-off entities.
g. GENERAL PROTECTION
The Company will not, by amendment of its Articles of Association or
other charter document or through any reorganization,
recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder, or impair the
economic interest of the Holder, but will at all times in good faith
assist in the carrying out of all the provisions hereof and in taking
of all such actions and making all such adjustments as may be
necessary or appropriate in order to protect the rights and the
economic interests of the Holder against impairment.
h. NOTICE OF CAPITAL CHANGES
If at any time the Company shall offer for subscription pro rata to
the holders of Ordinary Shares any additional shares of any class,
other rights or any equity security of any kind, or there shall be any
capital reorganization or reclassification of the capital shares of
the Company, or consolidation or merger of the Company with, or sale
of all or substantially all of its assets to another company or there
shall be a voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or other transaction described in this
Section 7, then, in any one or more of the said cases, the Company
shall give the Holder written notice, by registered or certified mail,
postage prepaid, of the date on which: (i) a record shall be taken for
such subscription rights; or (ii) such reorganization,
reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up shall take place, as the case may be. Such
notice shall also specify the date as of which the holders of record
of Ordinary Shares shall participate in such subscription rights, or
shall be entitled to exchange their Ordinary Shares for securities or
other property deliverable upon such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up,
as the case may be. Such written notice shall be given at least 14
(fourteen) days prior to the action in question and not less than 14
(fourteen) days prior to the record date in respect thereto.
i. ADJUSTMENT OF WARRANT PRICE
Upon each adjustment in the number of Ordinary Shares purchasable
hereunder, the Warrant Price shall be proportionately increased or
decreased, as the case may be, in a manner that is the inverse of the
manner in which the number of Ordinary Shares purchasable hereunder
shall be adjusted.
j. NOTICE OF ADJUSTMENTS
Whenever the Warrant Price or the number of Ordinary Shares
purchasable hereunder shall be adjusted pursuant to Section 7 hereof,
the Company shall prepare a certificate signed by the chief financial
officer of the Company setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated, and the Warrant Price and the
number of Ordinary Shares purchasable hereunder after giving effect to
such adjustment, and shall cause copies of such certificate to be
mailed (by first class mail, postage prepaid) to the Holder.
k. ASSUMED EXERCISABILITY
For the avoidance of doubt, the fact that an adjustment event
described in this Section 7 occurs prior to the time this Warrant is
fully exercisable by the Holder shall not be taken into account and,
for purposes of determining any adjustment or other actions to be
taken by the Company pursuant to this Section 7, it shall be assumed
that this Warrant is fully exercisable as of the Effective Date.
8. TRANSFER OF THIS WARRANT OR SHARES
a. With respect to any offer, sale or other disposition of this Warrant
or securities purchaseable hereunder, the Holder will give written
notice to the Company prior thereto, describing briefly the manner
thereof, together with, if reasonably requested by the Company, a
written opinion of such Holder's counsel, to the effect that such
offer, sale or other distribution may be effected without registration
or qualification (under any federal or state law then in effect);
provided, however, that no legal opinion shall be required if the
transfer will be effected on TASE and the Holder represents to the
Company that the applicable conditions under Regulation S under the
Securities Act have been satisfied. If the proposed transfer is
intended to rely on a Regulation D exemption under the Securities Act,
such opinion letter and all such transferees must warrant and
represent that they are an "accredited" investor as that term is
defined under Regulation D of the Securities Act. Promptly, as
practicable, upon receiving such written notice and opinion and
warranties and representations, if so requested, the Company, as
promptly as practicable, shall deliver to the Holder one or more
replacement Warrant certificates on the same terms and conditions as
this Warrant for delivery to the transferees. Each Warrant thus
transferred and each certificate representing the securities thus
transferred shall bear legend(s) as to the applicable restrictions on
transferability in order to ensure compliance with the Securities Act,
unless in the opinion of counsel for the Company such legend is not
required in order to ensure compliance with the Securities Act. The
Company may issue stop transfer instructions to its transfer agent in
connection with such restrictions. Any provision of this Warrant to
the contrary notwithstanding, the Holder may not offer, sell or
otherwise dispose of this Warrant to any third party, other than: (i)
to a wholly owned subsidiary of Bank Hapoalim B.M.; or (ii) to any
other transferee approved by the Company in writing with such approval
not to be unreasonably withheld.
b. In the event that the Company or its shareholders receive an offer to
transfer all or substantially all of the shares in the Company, or to
effect a merger or acquisition or sale of all or substantially all of
the assets of the Company, then the Company shall promptly inform the
Holder in writing of such offer.
9. REGISTRATION RIGHTS
The Company covenants and agrees as follows:
a. DEFINITIONS
For purposes of this Section 9:
(i) "REGISTRABLE SHARES" means: (1) the Warrant Shares; and (2) any
Ordinary Shares of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security
that is issued as) a dividend or other distribution with respect
to, or in exchange for or in replacement of, such Warrant Shares;
provided, however, that any exercise of this Warrant in
connection with an exercise of rights to registration under this
Section 9 may be made conditional upon the closing of the
offering contemplated by such registration;
(ii) "REGISTER", "REGISTERED" and "REGISTRATION" refer to a
registration effected by filing a registration statement in
compliance with the Securities Act and the declaration or
ordering by the SEC of effectiveness of such registration
statement, or the equivalent actions under the laws of another
jurisdiction;
(iii) "INVESTOR HOLDERS" refers to SanDisk Corporation, Alliance
Semiconductor Corp., Macronix International Co., Ltd., QuickLogic
Corporation, and The Israel Corporation Ltd. and any additional
parties that entered into share purchase agreements with the
Company prior to the closing of and that closed simultaneously
with the Share Purchase Agreement dated as of July 4, 2000 by and
between the Company and SanDisk Corporation or any successors
thereto or permitted assignees thereof;
(iv) "1934 ACT" means the Securities Exchange Act of 1934, as amended;
(v) "SEC" means the United States Securities and Exchange Commission.
b. INCIDENTAL REGISTRATION
If the Company at any time proposes to register any of its securities
(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), it shall give notice to the Holder of such intention.
Upon the written request of the Holder given within 20 (twenty) days
after receipt of any such notice, the Company shall include in such
registration all of the Registrable Shares indicated in such request,
so as to permit the disposition of the shares so registered at the
expense of the Company.
Notwithstanding any other provision of this Section 9(b), in the event
that the Company is undertaking a registration of its securities and
the managing underwriter advises the Company in writing that marketing
factors require a limitation of the number of Ordinary Shares to be
underwritten, then there shall be excluded from such registration and
underwriting, to the extent necessary to satisfy such limitation,
Ordinary Shares held by any shareholders other than the Investor
Holders pro rata to their respective shareholdings in the Company.
c. ASSIGNMENT OF REGISTRATION RIGHTS
The rights to cause the Company to register Registrable Shares
pursuant to the Registration Rights may be assigned by a Holder to a
transferee or assignee of such shares to the same extent as permitted
by Section 8 of this Warrant.
d. NO CONFLICTING AGREEMENTS
The Company represents and warrants to the Holder that the Company is
not a party to any agreement that conflicts in any manner with the
Holder's rights to cause the Company to register Registrable Shares
pursuant to the Registration Rights. The Company covenants and agrees
that it shall not, without the prior written consent of the holders of
a majority of the outstanding Registrable Shares, amend, modify or
restate the Registration Rights if the Holder would be adversely
affected by the amendment in a different manner than other holders of
"Registrable Shares" similarly situated.
e. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE AND EXPIRATION OF WARRANT
The rights and obligations of the Company and the Holder set forth in
this Section 9 and in the Registration Rights shall survive the
exercise, conversion and expiration of this Warrant.
f. STAND-OFF PERIOD
The Holder, 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 Registrable Shares held by the Holder
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 the
Holder shall not be obligated to enter into a Market Stand-off
Agreement if any officer, director or holder of 5% (five percent) 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.
g. INDEMNIFICATION
In the event any Registrable Shares are included in a registration
statement in accordance herewith:
To the extent permitted by law, the Company will indemnify and hold
harmless the Holder, its officers and directors, 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 1934 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 1934 Act, any state securities law or any rule
or regulation promulgated under the Securities Act, the 1934 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 9(g), 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 the 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 the Holder, underwriter or controlling
person. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Holder,
the underwriter or any controlling person of the Holder or the
underwriter, and regardless of any sale in connection with such
offering by the Holder.
To the extent permitted by law, the 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
1934 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 the
Holder expressly for use in connection with such registration
statement; and the 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 9(g) 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 Holder, which consent shall not
be unreasonably withheld. In no event shall the liability of the
Holder hereunder exceed the net proceeds from the offering received by
the Holder.
Promptly after receipt by an indemnified party under this Section 9(g)
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 9(g), 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 9(g), 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
9(g).
9A. OBLIGATIONS OF THE COMPANY
Whenever the Company files a registration statement with respect to any
Registrable Shares, the Company, at its expense, shall:
9A.1 prepare and file with the SEC (or other relevant body) a registration
statement with respect to such Registrable Shares and use its best
efforts to cause such registration statement to become effective.
9A.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.
9A.3 furnish to the Holder 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 Shares owned by it.
9A.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 Holder,
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.
9A.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 Holder shall also enter into and
perform their obligations under such an agreement (the terms of which
must be satisfactory to the Holder if the Holder is to participate in
such offering).
9A.6 notify the Holder 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
Holder shall forthwith discontinue disposition of its Registrable
Shares 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.
9A.7 cause all Registrable Shares registered pursuant thereunder to be
listed on each securities exchange on which similar securities issued
by the Company are then listed.
9A.8 provide a transfer agent and registrar for all Registrable Shares
registered pursuant hereunder and a CUSIP number for all such
Registrable Share not later than the effective date of such
registration.
9A.9 afford the Holder and its representatives the opportunity to make such
examination of the business affairs of the Company and its
subsidiaries as the Holder 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 Holder and
its representatives).
9A.10 furnish, at the request of the Holder in connection with the
registration of Registrable Shares pursuant to this Agreement, on the
date that such Registrable Shares 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 Holder, 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 Holder.
9B. RULE 144 REPORTING
With a view to making available the benefits of certain rules and
regulations of the SEC that may permit the sale of the Registrable Shares
to the public without registration, the Company agrees to use its best
efforts to:
9B.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;
9B.2 file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the 1934 Act at
any time after it has become subject to such reporting requirements;
9B.3 so long as the Holder owns any Registrable Shares, furnish to the
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 1934 Act, a copy of the most
recent annual or quarterly report of the Company, and such other
reports and documents so filed as the Holder may reasonably request in
availing itself of any rule or regulation of the SEC allowing the
Holder to sell any such securities without registration.
9C. EXPENSES OF REGISTRATION
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 Holder,
shall be borne by the Company.
10. REPRESENTATIONS, WARRANTIES AND COVENANTS
The Company represents, warrants and covenants to the Holder as follows:
a. this Warrant has been duly authorized and executed by the Company and
is a valid and binding obligation of the Company enforceable in
accordance with its terms;
b. the Warrant Shares are duly authorized and reserved for issuance by
the Company and, when issued in accordance with the terms hereof, will
be validly issued, fully paid and non-assessable and not subject to
any pre-emptive rights;
c. the execution and delivery of this Warrant are not, and the issuance
of the Warrant Shares upon exercise of this Warrant in accordance with
the terms hereof will not be, inconsistent with the Company's
Certificate of Incorporation, Memorandum of Association or Articles of
Association, do not and will not contravene any law, governmental rule
or regulation, judgment or order applicable to the Company and, except
for consents that have already been obtained by the Company, do not
and will not conflict with or contravene any provision of, or
constitute a default under, any indenture, mortgage, contract or other
instrument of which the Company is a party or by which it is bound or
require the consent or approval of, the giving of notice to, the
registration with or the taking of any action in respect of or by, any
federal, state or local governmental authority or agency or other
person; and
d. that it shall, upon the request of the Holder, procure the approvals
required in order to list the Warrant Shares for trading on TASE.
11. EXPENSES
The Company will pay the Israeli Stamp Duty on the issuance of the Warrant
Shares, and will notify the Israeli Companies Registrar of such issuance
within the time period required by law. The Stamp Duty on this Warrant, if
any, will be paid in full by the Company.
12. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of any Warrant or Shares
certificate, and in case of loss, theft or destruction, of indemnity, or
security reasonably satisfactory to it, and upon reimbursement to the
Company of all reasonable expenses incidental thereto, and upon surrender
and cancellation of such Warrant or Shares certificate, if mutilated, the
Company will make and deliver a new Warrant or Shares certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or Shares
certificate.
13. NOTICES
Any notice or other communication hereunder shall be in writing and shall
be deemed to have been given upon delivery, if personally delivered or 3
(three) business days after deposit if deposited in the mail for mailing by
certified mail, postage prepaid, and addressed as follows:
If to the Holder: Bank Leumi Le-Israel B.M.
Corporate Division
34 Yehuda Halevi Street
Tel-Aviv
ATTENTION: MANAGER OF HI-TECH
INDUSTRIES SECTION
FACSIMILE: (03) 514 9017
If to the Company: Tower Semiconductor Ltd.
P.O. Box 619
Ramat Gabriel Industrial Zone
Migdal Haemek 23105
Israel
ATTENTION: CHIEF FINANCIAL OFFICER
FACSIMILE: (04) 654 6510
WITH A COPY TO: Yigal Arnon & Co.
1 Azrieli Center
Tel Aviv
Israel
ATTENTION: DAVID H. SCHAPIRO, ADV.
FACSIMILE: (03) 608 7714
Each of the above addressees may change its address for purposes of this
paragraph by giving to the other addressees notice of such new address in
conformance with this paragraph.
14. APPLICABLE LAW; JURISDICTION
This Warrant shall be governed by and construed in accordance with the laws
of the State of Israel as applicable to contracts between two residents of
the State of Israel entered into and to be performed entirely within the
State of Israel. Any dispute arising under or in relation to this Warrant
shall be resolved in the competent court for Tel Aviv-Jaffa district, and
each of the parties hereby submits irrevocably to the jurisdiction of such
court.
Dated: August 4, 2005
for TOWER SEMICONDUCTOR LTD.
By: _____________________________
Title: _____________________________
NOTICE OF EXERCISE
TO:
[________________]
[1. The undersigned hereby elects to purchase ______ (________) Ordinary Shares
of Tower Semiconductor Ltd., pursuant to the terms of the attached Warrant,
and tenders herewith payment of the purchase price for such shares in full.
[OR
The undersigned hereby elects to exchange the attached Warrant for ______
(____________) [INSERT NUMBER OF WARRANT SHARES] Ordinary Shares of Tower
Semiconductor Ltd. on a Net Exercise basis, pursuant to clause 3.b of the
attached Warrant and the other terms and conditions contained therein]
2. In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the Ordinary Shares are being acquired solely for the
account of the undersigned and not as a nominee for any other party, or for
investment, and that the undersigned will not offer, sell or otherwise
dispose of any such Ordinary Shares except under circumstances that will
not result in a violation of the Securities Act of 1933, as amended, or any
state securities laws.
3. Please issue a certificate representing said Ordinary Shares in the name of
the undersigned.
4. Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned.
______________________ _________________________
(Date) (Print Name)
_________________________
(Signature)