EXHIBIT 99.5
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made and entered
into effective as of September 28, 2006 by and between TOWER SEMICONDUCTOR LTD.
(the "COMPANY" or "TOWER"), a company organized under the laws of the State of
Israel, and ISRAEL CORPORATION LTD., a corporation organized under the laws of
the State of Israel ("TIC" or the "INVESTOR").
WHEREAS, Tower is an independent manufacturer of wafers whose Ordinary
Shares are traded on the Nasdaq Stock Market ("NASDAQ") under the symbol "TSEM"
and whose Ordinary Shares and certain other securities are traded on the
Tel-Aviv Stock Exchange ("TASE") under the symbol "TSEM";
WHEREAS, TIC and Tower have entered into a Securities Purchase Agreement
dated August 24, 2006 (the "PURCHASE AGREEMENT"), the conditions to the
effectiveness of which include, INTER ALIA, the issuance to TIC of an
equity-equivalent convertible capital note which will in turn be convertible, in
whole or in part, by the Investor at any time and from time to time into shares
of Tower; and
WHEREAS, Tower, TIC and certain other shareholders of Tower entered into a
Registration Rights Agreement, dated January 18, 2001 (the "2001 REGISTRATION
RIGHTS AGREEMENT"); for the avoidance of doubt, nothing herein shall derogate
from or limit the registration rights granted to TIC pursuant to the 2001
Registration Rights Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investor
hereby agree as follows:
1. DEFINITIONS AND INTERPRETATION.
As used in this Agreement, the following terms shall have the following
meanings:
(a) "CAPITAL NOTE" means any capital note that is convertible into shares
of Tower.
(b) "HOLDER" means TIC, any transferee or assignee to whom TIC, assigns
its rights, in whole or in part, and any transferee or assignee
thereof to whom a transferee or assignee assigns its rights, in
accordance with Section 9.
(c) "ISA" means the Israel Securities Authority or any similar or
successor agency of Israel administering the Israel Securities Law.
(d) "ISRAEL SECURITIES LAW" means the Israel Securities Law, 5728-1968
(including the regulations promulgated thereunder), as amended.
(e) "1933 ACT" means the U.S. Securities Act of 1933, as amended, and the
rules and regulations thereunder, or any similar successor statute.
(f) "1934 ACT" means the U.S. Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder, or any similar successor
statute.
(g) "REGISTER", "REGISTERED", and "REGISTRATION" refer to a registration
effected by preparing and filing a registration statement in
compliance with the 1933 Act and the effectiveness of such
registration statement in accordance with the 1933 Act or the
equivalent actions under the laws of another jurisdiction.
(h) "REGISTRABLE SECURITIES" means (i) the ordinary shares of the Company
issued or issuable upon conversion of any Capital Note by any Holder,
and (ii) any shares of capital stock issued or issuable with respect
to the ordinary shares of the Company issued or issuable upon
conversion of the Capital Note as a result of any stock split, stock
dividend, rights offering, recapitalization, merger, exchange or
similar event or otherwise, as described in any Capital Note.
(i) "REGISTRATION STATEMENT" means a registration statement or
registration statements of the Company covering Registrable Securities
filed with (a) the SEC under the 1933 Act, and (b) the ISA under the
Israel Securities Law, to the extent required under the Israel
Securities Law, so as to allow the Holder to freely resell the
Registrable Securities in Israel, including on the TASE.
(j) "SEC" means the United States Securities and Exchange Commission or
any similar or successor agency of the United States administering the
1933 Act.
In this Agreement:
(a) Words importing the singular shall include the plural and VICE VERSA
and words importing any gender shall include all other genders and
references to persons shall include partnerships, corporations and
unincorporated associations.
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(b) Any reference in this Agreement to a specific form or to any rule or
regulation adopted by the SEC shall also include any successor form or
amended or successor rule or regulation subsequently adopted by the
SEC, all as the same may be in effect at the time.
(c) Any reference in this Agreement to a statute, act or law shall be
construed as a reference to such statute, act or law as the same may
have been, or may from time to time be, amended or reenacted.
(d) A "PERSON" shall be construed as a reference to any person, firm,
company, corporation, government, state or agency of a state or any
association or partnership (whether or not having separate legal
personality) or two or more of the aforegoing.
(e) "INCLUDING" and "INCLUDES" means, including, without limiting the
generality of any description preceding such terms.
(f) The headings herein are for convenience only, do not constitute a part
of this Agreement and shall not be deemed to limit or affect any of
the provisions hereof.
2. REGISTRATION.
(a) The Company shall prepare, and, as soon as practicable but in no event
later than 45 days after the date of this Agreement file with the SEC
a Registration Statement on Form F-3 and make all required filings
with the ISA covering the resale of all of the then Registrable
Securities that are not already registered. The Company shall use its
best efforts to have the Registration Statement declared effective by
the SEC and the ISA as soon as possible after such filing with the SEC
and the ISA.
(b) In the event that Form F-3 shall not be available for the registration
of the resale of Registrable Securities hereunder, the Company shall
(i) register the resale of the Registrable Securities on another
appropriate form reasonably acceptable to the Holders of the
Registrable Securities to be registered on such Registration Statement
and (ii) undertake to register the Registrable Securities on Form F-3
as soon as such form is available, provided that, in each such event,
the Company shall maintain the effectiveness of the Registration
Statement then in effect until such time as a Registration Statement
on Form F-3 covering the Registrable Securities has been declared
effective by the SEC.
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3. RELATED OBLIGATIONS.
(a) Following the filing and effectiveness of each Registration Statement
with the SEC pursuant to Section 2(a), the Company shall keep the
Registration Statement effective pursuant to Rule 415 of the 1933 Act
and under the Israel Securities Law at all times until the earlier of
(i) the date as of which all of the Holders confirm to the Company in
writing that they may sell all of the Registrable Securities covered
by such Registration Statement without restriction pursuant to all of
the following: (x) Rule 144(k) under the 1933 Act, (y) the Israel
Securities Law and (z) other securities or "blue sky" laws of each
jurisdiction in which the Company obtained a registration or
qualification in accordance with Section 3(d) below or (ii) the date
on which the Holders shall have sold all the Registrable Securities
covered by such Registration Statement (A) in accordance with such
Registration Statement (except to another Holder pursuant to Section
9) or (B) to the public pursuant to Rule 144 under the 1933 Act, (the
"REGISTRATION PERIOD") the Company to ensure that such Registration
Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein, or necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading, subject
to Section 3(e) below.
(b) The Company shall prepare and file with the SEC and the ISA (to the
extent required) such amendments (including post-effective amendments)
and supplements to each Registration Statement and the prospectus used
in connection with such Registration Statement, which prospectus is to
be filed pursuant to Rule 424 under the 1933 Act or under the Israel
Securities Law, as may be necessary to keep such Registration
Statement effective at all times during the Registration Period, and,
during such period, comply with the provisions of the 1933 Act and the
Israel Securities Law with respect to the disposition of all
Registrable Securities of the Company covered by such Registration
Statement until such time as all of such Registrable Securities shall
have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such
Registration Statement, which, for the avoidance of doubt, shall
include sales on the Nasdaq Stock Market and the TASE, as well as
sales not made on such exchanges. In the case of amendments and
supplements to a Registration Statement which are required to be filed
pursuant to the Agreement (including pursuant to this Section 3(b) by
reason of the Company filing a report on Form 20-F, Form 6-K or any
analogous report under the 1934 Act), the Company shall have
incorporated such report by reference into the Registration Statement,
if applicable, or shall file such amendments or supplements with the
SEC and the ISA on the same day on which the 1934 Act report is filed
which created the requirement for the Company to amend or supplement
the Registration Statement.
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(c) The Company shall furnish each Holder whose Registrable Securities are
included in any Registration Statement, without charge, (i) promptly
after the same is prepared and filed with the SEC, at least three (3)
copies of such Registration Statement and any amendment(s) thereto,
including financial statements and schedules, all documents
incorporated therein by reference, all exhibits and each preliminary
prospectus (or such other number of copies as such Holder may
reasonably request), (ii) upon the effectiveness of any Registration
Statement, at least ten (10) copies of the prospectus included in such
Registration Statement and all amendments and supplements thereto (or
such other number of copies as such Holder may reasonably request) and
(iii) such other documents, including copies of any preliminary or
final prospectus and of any Registration Statements and prospectuses
filed with the ISA, as such Holder may reasonably request from time to
time in order to facilitate the disposition of the Registrable
Securities owned by such Holder.
(d) The Company shall use its best efforts to (i) register and qualify,
unless an exemption from registration and qualification applies, the
resale by the Holders of the Registrable Securities covered by a
Registration Statement under such other securities or "blue sky" laws
of all the states of the United States, (ii) prepare and file in those
jurisdictions, such amendments (including post-effective amendments)
and supplements to such registrations and qualifications as may be
necessary to maintain the effectiveness thereof during the
Registration Period, (iii) take such other actions as may be necessary
to maintain such registrations and qualifications in effect at all
times during the Registration Period, and (iv) take all other actions
reasonably necessary or advisable to qualify the Registrable
Securities for sale in such jurisdictions; provided, however, that the
Company shall not be required in connection therewith or as a
condition thereto to (x) qualify to do business in any jurisdiction
where it would not otherwise be required to qualify but for this
Section 3(d), or (y) file a general consent to service of process in
any such jurisdiction. The Company shall promptly notify each Holder
who holds Registrable Securities of the receipt by the Company of any
notification with respect to the suspension of the registration or
qualification of any of the Registrable Securities for sale under the
securities or "blue sky" laws of any jurisdiction in the United States
or its receipt of actual notice of the initiation or threatening of
any proceeding for such purpose.
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(e) The Company shall notify each Holder in writing of the happening of
any event, as promptly as practicable after becoming aware of such
event, as a result of which the prospectus included in a Registration
Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading. The
Company shall use its best efforts to minimize the period of time
during which a Registration Statement includes an untrue statement of
a material fact or omission to state a material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading. The
Company shall promptly notify each Holder in writing (i) when a
prospectus or any prospectus supplement or post-effective amendment
has been filed so that the Registration Statement does not include an
untrue statement of a material fact or omission to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and when a Registration Statement or any post-effective
amendment has become effective (notification of such effectiveness
shall be delivered to each Holder by facsimile on the same day of such
effectiveness and by overnight mail), (ii) of any request by the SEC
or the ISA for amendments or supplements to a Registration Statement
or related prospectus or related information, and (iii) of the
Company's reasonable determination that a post-effective amendment to
a Registration Statement would be appropriate.
(f) The Company shall use its best efforts to prevent the issuance of any
stop order or other suspension of effectiveness of a Registration
Statement, or the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction and, if such an
order or suspension is issued, to obtain the withdrawal of such order
or suspension at the earliest possible moment and to notify each
Holder who holds Registrable Securities being sold of the issuance of
such order and the resolution thereof or its receipt of actual notice
of the initiation or threat of any proceeding for such purpose.
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(g) The Company shall cause all the Registrable Securities covered by a
Registration Statement to be listed on each securities exchange on
which securities of the same class or series issued by the Company are
then listed, including the NASDAQ and the TASE and the Company shall,
not later than the effective date of a Registration Statement, deliver
to the Holders a copy of the approvals of the TASE and the NASDAQ
(and/or any other exchange, if applicable) to the listing of the
Registrable Securities covered by such Registration Statement on such
exchange.
(h) The Company shall cooperate with the Holders who hold Registrable
Securities being offered and, to the extent applicable, facilitate the
timely preparation and delivery of certificates (not bearing any
restrictive legend) representing the Registrable Securities to be
offered pursuant to a Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may
be, as the Holders may reasonably request and registered in such names
as the Holders may request.
(i) The Company shall provide a transfer agent and registrar of all
Registrable Securities and a CUSIP number not later than the effective
date of the applicable Registration Statement.
(j) If requested by a Holder, the Company shall (i) as soon as practicable
incorporate in a prospectus supplement or post-effective amendment
such information as a Holder requests to be included therein,
information with respect to the number of Registrable Securities being
offered or sold, the purchase price being paid therefor and any other
terms of the offering of the Registrable Securities to be sold in such
offering; (ii) as soon as practicable make all required filings of
such prospectus supplement or post-effective amendment after being
notified of the matters to be incorporated in such prospectus
supplement or post-effective amendment; and (iii) as soon as
practicable, supplement or make amendments to any Registration
Statement if reasonably requested by a Holder of such Registrable
Securities.
(k) In the event of any underwritten public offering of the Registrable
Securities, 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 offering.
The Holder shall also enter into and perform its obligations under
such an agreement (the terms of which must be satisfactory to the
Holder if the Holder is to participate in such offering).
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(l) The Company shall afford the Holder and its representatives (including
counsel) the opportunity at any time and from time to time during the
Registration Period to make such examinations of the business affairs
and other material financial and corporate documents 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).
(m) The Company shall 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 and on the date of each
post-effective amendment thereof: (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.
(n) The Company shall comply with all applicable rules and regulations of
the SEC and shall make generally available to its security holders an
earnings statement satisfying the provisions of Section 11(a) of the
1933 Act as soon as practicable after the effective date of the
Registration Statement and in any event no later than 45 days after
the end of a 12-month period (or 90 days, if such period is a fiscal
year) beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of the Registration
Statement.
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4. OBLIGATIONS OF THE HOLDERS.
Each Holder agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in the first sentence of
Section 3(e) or in Section 3(f), such Holder will immediately discontinue
disposition of Registrable Securities pursuant to any Registration
Statement(s) covering such Registrable Securities until such Holder's
receipt of the copies of the supplemented or amended prospectus
contemplated by the first sentence of Section 3(e) or receipt of notice
that no supplement or amendment is required.
5. EXPENSES OF REGISTRATION.
All expenses, other than underwriting discounts and commissions, incurred
in connection with registrations, filings or qualifications pursuant to
Sections 2 and 3, including, without limitation, all registration, listing
and qualifications fees, printers and accounting fees, fees and
disbursements of counsel to the Company and the Holders, including in
connection with such examinations described in Section 3(l) above, shall be
paid by the Company.
6. INDEMNIFICATION.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
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(a) To the fullest extent permitted by law, the Company will, and hereby
does, indemnify, hold harmless and defend each Holder, the directors,
officers, partners, employees, agents, representatives of, and each
Person, if any, who controls any Holder within the meaning of the 1933
Act or 1934 Act (each, an "INDEMNIFIED PERSON"), against any losses,
claims, damages, liabilities, judgments, fines, penalties, charges,
costs, reasonable attorneys' fees, amounts paid in settlement or
expenses, joint or several, (collectively, "CLAIMS") incurred in
investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing
by or before any court or governmental, administrative or other
regulatory agency, body or the SEC or the ISA, whether pending or
threatened, whether or not a person to be indemnified is or may be a
party thereto ("INDEMNIFIED DAMAGES"), to which any of them may become
subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based
upon: (i) any untrue statement or alleged untrue statement of a
material fact in a Registration Statement or any post-effective
amendment thereto or in any filing made in connection with the
qualification of the offering under the securities or other "blue sky"
laws of any jurisdiction in which Registrable Securities are offered
("BLUE SKY FILING"), or the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) any untrue statement or
alleged untrue statement of a material fact contained in any
Registration Statement, preliminary prospectus, final prospectus or
"free writing prospectus" (as such term is defined in Rule 405 under
the 1933 Act) or any amendment or supplement to any such prospectus or
the omission or alleged omission to state therein any material fact
necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not
misleading, (iii) any violation or alleged violation by the Company of
the 1933 Act, the 1934 Act, any other law, including, without
limitation, any state securities law, the Israel Securities Law or any
rule or regulation thereunder relating to the offer or sale of the
Registrable Securities pursuant to a Registration Statement or (iv)
any material violation of this Agreement (the matters in the foregoing
clauses (i) through (iv) being, collectively, "VIOLATIONS"). Subject
to Section 6(c), the Company shall reimburse the Indemnified Persons
promptly as such expenses are incurred and are due and payable, for
any legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (i) shall
not apply to a Claim by an Indemnified Person arising out of or based
upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by such Indemnified
Person expressly for inclusion in any such Registration Statement,
preliminary prospectus, final prospectus or free writing prospectus or
any such amendment thereof or supplement thereto and (ii) shall not
apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld. Such indemnity shall
remain in full force and effect regardless of any investigation made
by or on behalf of the Indemnified Person and shall survive the
transfer of the Registrable Securities by the Holders pursuant to
Section 9.
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(b) In connection with any Registration Statement in which a Holder is
participating, each such Holder agrees, severally and not jointly, to
indemnify, hold harmless and defend, to the same extent and in the
same manner as is set forth in Section 6(a), the Company, each of its
directors, each of its officers who signs the Registration Statement,
each Person, if any, who controls the Company within the meaning of
the 1933 Act or the 1934 Act (each an "INDEMNIFIED PARTY"), against
any Claim or Indemnified Damages to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as
such Claim or Indemnified Damages 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
inclusion in Registration Statement, preliminary prospectus, final
prospectus or free writing prospectus and, subject to Section 6(c),
such Holder will reimburse any legal or other expenses reasonably
incurred by an Indemnified Party in connection with investigating or
defending any such Claim; provided, however, that the indemnity
agreement contained in this Section 6(b) and the agreement with
respect to contribution contained in Section 7 shall not apply to
amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of such Holder; provided, further,
however, that the Holder shall be liable under this Section 6 for only
that amount of a Claim or Indemnified Damages as does not exceed the
net proceeds to such Holder as a result of the sale of Registrable
Securities pursuant to such Registration Statement. Such indemnity
shall remain in full force and effect regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the
transfer of the Registrable Securities by the Holders pursuant to
Section 9.
(c) Promptly after receipt by an Indemnified Person or Indemnified Party
under this Section 6 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving
a Claim, such Indemnified Person or Indemnified Party shall, if a
Claim in respect thereof is to be made against any indemnifying party
under this Section 6, deliver to the indemnifying party a written
notice 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 control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified
Person or the Indemnified Party, as the case may be; provided,
however, that an Indemnified Person or Indemnified Party shall have
the right to retain its own counsel with the fees and expenses of not
more than one counsel for such Indemnified Person or Indemnified Party
to be paid by the indemnifying party, if, the representation by such
counsel of the Indemnified Person or Indemnified Party and the
indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified
Party and any other party represented by such counsel in such
proceeding. In the case of an Indemnified Person, legal counsel
referred to in the immediately preceding sentence shall be selected by
the Holders holding a majority in interest of the Registrable
Securities included in the Registration Statement to which the Claim
relates. The Indemnified Party or Indemnified Person shall cooperate
with the indemnifying party in connection with any negotiation or
defense of any such action or Claim by the indemnifying party and
shall furnish to the indemnifying party all information reasonably
available to the Indemnified Party or Indemnified Person which relates
to such action or Claim. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any
such action shall not relieve such indemnifying party of any liability
to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its
ability to defend such action 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 Person or Party
otherwise than under this Section 6(c), including under Section 6(e).
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(d) The indemnification required by this Section 6 shall be made by
periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or
Indemnified Damages are incurred.
(e) The indemnity agreements contained herein shall be in addition to (i)
any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii)
any liabilities the indemnifying party may be subject to pursuant to
the law.
7. CONTRIBUTION.
To the extent any indemnification by an indemnifying party is prohibited or
limited by law or insufficient to hold an Indemnified Person or an
Indemnified Party, as the case may be, harmless, then the indemnifying
party, in lieu of indemnifying such Indemnified Person or Indemnified Party
hereunder, shall contribute to the amount paid or payable by such
Indemnified Person or Indemnified Party as a result of such Claims and
Indemnified Damages (each as defined in Section 6(a) above) in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the Indemnified Person or
Indemnified Party, as the case may be, on the other in connection with the
statements or omissions that resulted in such loss, liability, claim,
damage, or expense as well as any other relevant equitable considerations.
The relative fault of the indemnifying party and of the Indemnified Person
or Indemnified Party, as the case may be, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the Indemnified Person
or Indemnified Party and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement or
omission.
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Notwithstanding the foregoing, (i) no person involved in the sale of
Registrable Securities, which person is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in
connection with such sale, shall be entitled to contribution from any
person involved in such sale of Registrable Securities who was not guilty
of fraudulent misrepresentation; and (ii) contribution by any seller of
Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable
Securities pursuant to such Registration Statement.
8. REPORTS UNDER THE 1934 ACT.
With a view to making available to the Holders the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of
the SEC that may at any time permit the Holders to sell securities of the
Company to the public without registration ("RULE 144"), the Company agrees
to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other documents
required by the Company under the 1993 Act and the 1934 Act so long as
the Company remains subject to such requirements and the filing of
such reports and other documents is required for the applicable
provisions of Rule 144; and
(c) furnish to each Holder so long as such Holder owns Registrable
Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule
144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as
may be reasonably requested to permit the Holders to sell such
securities pursuant to any rule or regulation of the SEC allowing the
Holder to sell any securities without registration.
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9. ASSIGNMENT OF REGISTRATION RIGHTS.
The rights under this Agreement shall be freely assignable, in whole or in
part at any time and from time to time during the Registration Period, by
the Holder to any transferee of all or any portion of a Capital Note or of
the Registrable Securities (provided that, in the case of the transfer of
Registrable Securities only, the rights under the Agreement may be
transferred only if the Holder reasonably believes that such transferee
cannot immediately make a public distribution of such Registrable
Securities without restriction under the 1933 Act, the Israel Securities
Law or other applicable securities laws) if: (i) the Holder agrees in
writing with the transferee or assignee to assign such rights, and a copy
of such agreement is furnished to the Company within a reasonable time
after such transfer or assignment; (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of
(a) the name and address of such transferee or assignee, and (b) the
securities with respect to which such registration rights are being
transferred or assigned; and (iii) within a reasonable period of time after
such transfer or assignment, the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions contained herein. At
the transferee's request, the Company shall promptly prepare and file any
required prospectus supplement under Rule 424(b)(3) of the 1933 Act or
other applicable provision of the 1933 Act and/or the Israel Securities Law
to appropriately amend the list of selling shareholders thereunder to
include such transferee.
10. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the
Company and the Holders. Any amendment or waiver effected in accordance
with this Section 10 shall be binding upon each Holder and the Company. No
such amendment shall be effective to the extent that it applies to less
than all of the Holders of the Registrable Securities. No consideration
shall be offered or paid to any Person to amend or consent to a waiver or
modification of any provision of any of this Agreement unless the same
consideration also is offered to all of the parties to this Agreement.
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11. OTHER REGISTRATION STATEMENTS; DEMAND AND INCIDENTAL REGISTRATIONS; NO
CONFLICTING AGREEMENTS.
(a) From and after the time of filing of any Registration Statement filed
pursuant hereto and prior to the effectiveness thereof, the Company
shall not file a registration statement (including any shelf
registration statements) (other than on Form S-8) with the SEC with
respect to any securities of the Company, provided that nothing herein
shall limit the filing of any registration statement demanded to be
filed pursuant to a "demand" right granted by the Company prior to the
filing of any such Registration Statement.
(b) If at any time during the Registration Period there is not an
effective Registration Statement covering all of the then Registrable
Securities, the Company shall, upon the demand of any Holder,
immediately file a registration statement covering all of the then
Registrable Securities and the provisions of this Agreement shall
apply to such Registration Statement, MUTATIS MUTANDIS.
(c) If at any time the Company shall determine to prepare and file with
the SEC and/or the ISA a registration statement relating to an
underwritten offering for its own account or the account of others
under the 1933 Act and/or the Israel Securities Law of any of its
equity securities, other than on Form F-4 or Form S-8 (each as
promulgated under the 1933 Act) or their then equivalents relating to
equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans, then the
Company shall send each Holder written notice of such determination
and, if within twenty days after receipt of such notice, any such
Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities
such Holder requests to be registered, subject to customary
underwriter cutbacks applicable on a basis consistent with the
Company's obligation to other existing holders of registration rights.
(d) 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 this Agreement.
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12. MISCELLANEOUS.
(a) Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt,
when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or
(iii) three business days after deposit if deposited in the mail for
mailing by certified mail, postage prepaid, in each case properly
addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:
to the Borrower at: Tower Semiconductor Ltd.
P.O. Box 619
Migdal Haemek
Israel
Facsimile: (04) 604 7242
Attention: Oren Shirazi
Acting Chief Financial Officer
WITH A COPY TO (WHICH SHALL NOT CONSTITUTE NOTICE):
Yigal Arnon & Co.
1 Azrieli Center
46th Floor, The Round Tower
Tel-Aviv, Israel 67021
Facsimile: (03) 608 7714
Attention: David H. Schapiro, Adv./
Ari Fried, Adv.
to TIC at: Israel Corporation Ltd.
Milennium Tower
23 Aranha St.
Tel Aviv Israel 61070
Facsimile: (03) 684 4574
Attention: Chief Financial Officer
WITH A COPY TO (WHICH SHALL NOT CONSTITUTE NOTICE):
Gornitzky & Co.
45 Rothschild Blvd.
Tel Aviv, Israel 65784
Facsimile: (03) 560 6555
Attention: Zvi Ephrat, Adv.
to any other Holder at: such address as shall be notified to the
Company pursuant to Section 9 above.
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(b) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right
or remedy, shall not operate as a waiver thereof.
(c) This Agreement 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 Agreement 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.
(d) This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof and thereof. There
are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein. This Agreement
supersedes all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.
(e) Neither this Agreement, nor any of Tower's obligations hereunder, may
be assigned by Tower, except with the prior written consent of all the
Holders. Subject to the requirements of Section 9, this Agreement
shall inure to the benefit of and be binding upon the successors and
permitted assigns of each of the parties hereto.
(f) The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
(g) This Agreement may be executed in identical counterparts, each of
which shall be deemed an original but all of which shall constitute
one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by facsimile transmission
of a copy of this Agreement bearing the signature of the party so
delivering this Agreement.
(h) Each party shall do and perform, or cause to be done and performed,
all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the
other party may reasonably request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
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(i) The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent and no rules of
strict construction will be applied against any party.
(j) This Agreement is intended for the benefit of the parties hereto and
their respective successors and permitted assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other
person.
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the day and year first above written.
COMPANY:
TOWER SEMICONDUCTOR LTD.
By: ______________________________
Name: ____________________________
Its: _______________________________
ISRAEL CORPORATION LTD.:
By: ______________________________
Name: ____________________________
Its: _______________________________
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