Exhibit 4.94
This
Securities Purchase Agreement (the “Agreement”) is made and entered into
effective as of September 25, 2008 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 company organized under the
laws of the State of Israel (the “Purchaser”).
WHEREAS,
Tower is an independent manufacturer of wafers whose Ordinary Shares are traded on the
Nasdaq National Market under the symbol TSEM and whose Ordinary Shares and certain other
securities are traded on the Tel-Aviv Stock Exchange (“TASE”) under the
symbol TOWER;
WHEREAS,
pursuant to a letter between Bank Hapoalim B.M. and Bank Leumi Le-Israel B.M.
(collectively the “Banks”), Tower and the Purchaser, dated August 19,
2008 (the “MOU”), the Purchaser has committed to the Banks, inter
alia, subject to certain conditions as provided in the MOU, to invest in the Company a
sum of twenty million US Dollars as set forth in this Agreement (the
“Investment”);
WHEREAS,
pursuant to the MOU, the Investment in Tower is a condition precedent to the closing of an
amendment of the Facility Agreement (as defined in the MOU) and other definitive
documentation (the “Amendment”); and
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained herein and
for other good and valuable consideration the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
| 1 |
Issue
and Sale of Securities by the Company. |
| 1.1 |
Securities.
Subject to and in accordance with the terms and conditions of this Agreement, the Company
shall issue to the Purchaser, and the Purchaser shall purchase from the Company for an
aggregate purchase price of US $20,000,000 in immediately available funds (the “Note
Purchase Price”) an equity convertible capital note, which capital note is
convertible into 28,169,014 shares of the Company (subject to adjustments to changes in
capital structure, stock splits, etc.), such capital note being fully convertible, at any
time, in whole or in part and freely transferable, at any time, in whole or in part in
the form attached hereto as Schedule 1 (the “Capital Note”). For
the avoidance of doubt, the Capital Note issuable hereunder shall not entitle TIC to
interest, dividends, early redemption rights (for the removal of doubt, no conversion of
capital notes by TIC into shares shall be deemed a redemption or pre-payment of the
capital note), anti-dilution rights, or any adjustments due to changes to interest rates,
the market price of the Company’s shares or indexation of any kind, but shall
entitle TIC, as a capital note holder, to participate in rights offerings and shall be
subject to certain adjustments, including share splits, combinations and other
adjustments and with rights which are at least as good as the capital notes issued to the
Banks pursuant to a Conversion Agreement entered into with Tower on the date hereof. |
| 2.1 |
Closing
Date. The issue and allotment of the Capital Note, the purchase thereof by the
Purchaser and the registration of the Capital Note in the name of the Purchaser in the
register of the Company, shall take place at a closing (the “Closing”)
to be held on September 25, 2008 simultaneous with its signing in Tel Aviv, Israel at the
offices of Xxxxx Xxxxx & Co., One Azrieli Center, Tel-Aviv, Israel, or such other
time and place as the parties shall mutually agree. In the event that the Closing does
not take place prior to September 30, 2008, the Purchaser shall have the right, but not
the obligation, to cancel this Agreement unless the Purchaser has caused the Closing not
to have occurred in breach of this Agreement. The Company shall use its commercially
reasonable best efforts to (i) take or cause to be taken all necessary actions, and do or
cause to be done all things, necessary, proper or advisable under this Agreement and
applicable laws to consummate and make effective all the transactions contemplated by
this Agreement as soon as practicable, including, without limitation, preparing and
filing all documentation to effect all necessary filings, notices, petitions, statements,
registrations, submissions of information, applications and other documents and (ii)
obtain all approvals required to be obtained from any third party necessary, proper or
advisable to the transactions contemplated by this Agreement. The Purchaser shall
cooperate with the Company in the achieving the above but the primary responsibility
(including but not limited to bearing the relevant expenses therefor) shall be the Company’s. |
| 2.2 |
Transactions
upon Closing. At the Closing, the following transactions shall occur, which
transactions shall be deemed to take place simultaneously and no transaction shall be
deemed to have been completed or any document delivered until all such transactions have
been completed and all required documents delivered: |
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a) |
the
Company shall deliver to the Purchaser copies of resolutions of the Company’s
Audit Committee, the Company’s Board of Directors and the Company’s
shareholders approving the execution and performance of this Agreement,
including the issuance of the Capital Note; |
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b) |
the
Note Purchase Price shall be transferred by the Purchaser to the Company by
wire transfer into the account of the Company, in accordance with the
written instructions provided by the Company to the Purchaser; |
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c) |
the
Company shall deliver to the Purchaser a copy of the approval of the TASE
for listing the shares issuable upon conversion of the Capital Note (the
“Shares”); |
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d) |
the
Company shall record such issuance of the Capital Note in the name of the
Purchaser on the records of the Company; |
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e) |
The
Closings of the Amendment and each of the conversion agreements entered into
between the Company and the Banks shall take place simultaneously with the
Closing under this Agreement; and |
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f) |
The
Amended and Restated Registration Rights Agreement shall be executed and
delivered by the Company, in the form attached hereto as Schedule 2. |
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g) |
The
Company shall pay the Purchaser US $100,000 as the first installment of the
fee of US$300,000 provided for under the MOU. |
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h) |
The
legal opinion of Xxxxx Xxxxx & Co., Advocates, the Company’s
external legal counsel has been delivered to the Purchaser. |
| 3 |
Representations
and Warranties of the Company. |
The Company hereby represents and
warrants to the Purchaser, as follows:
| 3.1 |
Organization.
The Company is duly organized and validly existing under the laws of the State of Israel
and has full corporate power and authority to own, lease and operate its properties and
assets and to conduct its business as now being conducted and to perform all its
obligations under this Agreement. |
| 3.2 |
Memorandum
and Articles of Association. The Company has made available for inspection by the
Purchaser complete and correct copies of the Articles of Association of the Company, as
amended to the date furnished. Such Articles of Association are in effect as of the date
hereof and as will be in effect at the Closing. |
| 3.3 |
Share
Capitalization. |
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As
of September 25, 2008, the authorized share capital of the Company consists of
1,100,000,000 ordinary shares, of which 159,656,318 shares are issued and outstanding,
135,523,401 shares are reserved for issuance upon exercise of outstanding options and
warrants (including options granted to employees, officers, directors, related parties,
banks, and other public investors), 96,504,214 shares are reserved for issuance upon
conversion of outstanding convertible debentures, 321,988,510 shares are reserved for
issuance upon conversion of equity equivalent capital notes, and 5,900,000 shares are
reserved for future grants of options to employees, officers, consultants and directors.
Attached hereto as Schedule 3 is a capitalization table reflecting all
shareholdings and holdings of securities (including capital notes, warrants, options and
convertible debentures) in the Company after the Closing. All issued and outstanding
share capital of the Company has been duly authorized, and is validly issued and
outstanding and fully paid and non-assessable. The Capital Note and the Shares issued
upon its conversion will be validly issued, fully paid, nonassessable and not subject to
any pledge, lien or restriction on transfer, except for restrictions on transfer imposed
hereunder and by the applicable securities laws. The Company has reserved for issuance
enough ordinary shares to issue the Shares. The issuance of the Capital Note and the
Shares issued upon its conversion will not conflict with the Articles of Association of
the Company then in effect nor with any outstanding warrant, option, call, preemptive
right or commitment of any type relating to the Company’s capital stock.
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| 3.4 |
Authorization;
Approvals. Prior to the Closing, all corporate action on the part of the Company
necessary for the execution, delivery and performance of this Agreement and the other
agreements contemplated to take place at the Closing shall have been taken. Except as set
forth in Schedule 4.4, no consent, approval or authorization of, exemption by, or
filing with, any governmental or regulatory authority or any third party is required in
connection with the execution, delivery and performance by the Company of this Agreement
and the consummation by the Company of the transactions contemplated hereby. Other than
approval by the Company’s shareholders, this Agreement when executed and delivered
by or on behalf of the Company, shall constitute the valid and legally binding
obligations of the Company, legally enforceable against the Company in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other laws relating to creditor’s rights generally
and general principles of equity. |
| 3.5 |
No
Conflicts. Neither the execution and delivery of this Agreement by Tower, nor the
compliance with the terms and provisions of this Agreement on the part of Tower, will:
(i) violate any statute or regulation of any governmental authority, domestic or foreign,
affecting Tower; (ii) require the issuance of any authorization, license, consent or
approval of any governmental agency, or any other person other than as set forth in Schedule
4.4; or (iii) conflict with or result in a breach of any of the terms, conditions or
provisions of any judgment, order, injunction, decree, loan agreement or other material
agreement or instrument to which Tower is a party, or by which Tower is bound, or
constitute a default thereunder, the effect of which might have a material adverse effect
on Tower. |
| 3.6 |
No
Litigation. There are no actions, suits, proceedings, or injunctive orders, pending
or threatened against or affecting Tower relating to the subject matter of this Agreement
or any of the transactions expected to take place simultaneously at the Closing. |
| 3.7 |
Cross
Default. Upon the Closing of the Amendment, the Company will not be in default under
the Facility Agreement. |
| 3.8 |
The
Capital Notes shall have rights which are at least as good as the capital notes issued to
the Banks pursuant to a Conversion Agreement entered into with Tower on the date hereof. |
| 4 |
Representations
and Warranties of the Purchaser. |
The Purchaser hereby represents and
warrants to the Company as follows:
| 4.1 |
Organizations;
Good Standing. The Purchaser is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Israel with full corporate power and
authority to perform all its obligations under this Agreement. |
| 4.2 |
Authorization;
Approvals. Prior to the Closing, all corporate action on the part of the Purchaser
necessary for the execution and delivery of this Agreement and other agreements
contemplated hereby has been taken. No consent, approval or authorization of, exemption
by, or filing with, any governmental or regulatory authority is required in connection
with the execution, delivery and performance by the Purchaser of this Agreement and the
consummation by the Purchaser of the transactions contemplated hereby except relating to
the filing of an amendment to a Schedule 13D which will be required with the US
Securities and Exchange Commission. This Agreement and other agreements contemplated
hereby, when executed and delivered by or on behalf of the Purchaser, shall constitute
the valid and legally binding obligations of the Purchaser, legally enforceable against
the Purchaser in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other laws
relating to creditor’s rights generally and general principles of equity. |
| 4.3 |
Investment
Intent; No Registration |
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The
Purchaser is acquiring the Capital Note and the Shares issued upon its conversion for its
own account and not with a view to their distribution within the meaning of Section 2(11)
of the Securities Act of 1933 (the “Securities Act”). The Purchaser has
requisite knowledge and experience in financial and business matters to be capable of
evaluating the merits and risks of an investment in the Company and is an accredited
investor as defined under Regulation D as promulgated by the United States Securities and
Exchange Commission; and
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The
Purchaser understands that none of the Capital Note or the Shares issued upon its
conversion have been registered under the Securities Act, or the laws of any
jurisdiction, and agrees that the Capital Note and the Shares issued upon its conversion
may not be sold, offered for sale, transferred, pledged, hypothecated or otherwise
disposed of except in compliance with the Securities Act, Israeli Securities Law or any
applicable securities laws of any jurisdiction (including but not limited to pursuant to
an exemption therefrom). The Purchaser also acknowledges that the Capital Note and the
Shares issued upon its conversion, upon issuance, will bear the following legend:
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THESE
SECURITIES HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR ANY STATE OR OTHER JURISDICTION’S SECURITIES LAWS.
THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE OR PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE
SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL (SATISFACTORY IN FORM AND SUBSTANCE TO
THE COMPANY) THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144
OF THE ACT.
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| 4.4 |
No
Litigation. There are no actions, suits, proceedings, or injunctive orders, pending
or threatened against or affecting the Purchaser relating to the subject matter
of this Agreement. |
| 5 |
Conditions
of Closing of the Purchaser. |
The obligations of the Purchaser to purchase the Capital Note and to transfer the Note
Purchase Price at the Closing are subject to the fulfillment at or before the Closing of
the following conditions precedent, any one or more of which may be waived in whole or in
part by the Purchaser, which waiver shall be at the sole discretion of the Purchaser:
| 5.1 |
Representations
and Warranties. The representations and warranties made by the Company in this
Agreement shall have been true and correct when made, and, shall be true and correct in
all material respects as of the Closing, as if made on the date of the Closing. |
| 5.2 |
Covenants.
All covenants, agreements, and conditions contained in this Agreement to be performed or
complied with by the Company prior the Closing shall have been performed or complied with
by the Company prior to or at the Closing. |
| 5.3 |
Consents,
etc. The Company shall have secured all permits, consents and authorizations that
shall be reasonably necessary or required lawfully for the Company to consummate this
Agreement and to issue the Capital Note and the Shares issued upon its conversion to be
purchased by the Purchaser at the Closing, including the approval of the Company’s
Audit Committee, Board of Directors and General Assembly and third party and/or
governmental consents. |
| 5.4 |
Registration
Rights Agreement. The Company and the Purchaser shall have entered into a
registration rights agreement in form and substance satisfactory to the Purchaser and the
Banks and with rights which are at least as good as those provided to the Banks and no
worse than those currently enjoyed by the Purchaser and provides a satisfactory
arrangement with respect to the registration rights of the Shares of the Company owned by
the Purchaser on the date of this Agreement. |
| 5.5 |
Delivery
of Documents. All of the documents to be delivered by the Company, and all actions to
be performed or concluded pursuant to Section 2 by the Company, shall be in a form and
substance reasonably satisfactory to the Purchaser and its counsel and shall have been
delivered to the Purchaser. |
| 5.6 |
The
Amendment. The conditions precedent for the closing of transactions contemplated by
the Amendment shall have been satisfied (or waived by the Bank) other than the Investment
contemplated by this Agreement which shall take place simultaneously thereto. |
| 6 |
Conditions
of Closing of the Company. |
The obligations of the Company to sell and issue the Capital Note at the Closing are subject
to the fulfillment at or before the Closing of the following conditions precedent, any one
or more of which may be waived in whole or in part by the Company, which waiver shall be
at the sole discretion of the Company:
| 6.1 |
Representations
and Warranties. The representations and warranties made by the Purchaser in this
Agreement shall have been true and correct when made, and shall be true and correct in
all material respects as of the Closing, as if made on the date of the Closing. |
| 6.2 |
Covenants.
All covenants, agreements, and conditions contained in this Agreement to be performed or
complied with by the Purchaser prior the Closing shall have been performed or complied
with by the Purchaser prior to or at the Closing. |
| 6.3 |
Consents,
etc. The Purchaser and the Company shall have secured all permits, consents and
authorizations, including, without limitations, approval of its corporate organs that
shall be reasonably necessary or required lawfully for the Company to consummate this
Agreement and to issue the Capital Note and the Shares issued upon its conversion to be
purchased by the Purchaser at the Closing. |
| 6.4 |
Delivery
of Documents. All of the documents to be delivered by the Purchaser, and all actions
to be performed or concluded pursuant to Section 2 by the Purchaser, shall be in a form
and substance reasonably satisfactory to the Company and its counsel. |
| 6.5 |
Antitrust
Approval. To the extent required under law, the unconditional approval of the
Comptroller to the consummation of the Closing under this Agreement has been received. |
| 7.1 |
Ordinary
Course. Between the date hereof and the Closing Date, the Company will operate in the
ordinary course of business as now being conducted and as currently proposed to be
conducted , except that the Company may perform its obligations pursuant to the Agreement
and Plan of Merger and Reorganization entered into as of May 19, 2008, by and among the
Company, Xxxxxxxxx Acquisition Corp., a wholly owned subsidiary of the Company, and Jazz
Technologies, Inc., and the transactions pursuant thereto, including with respect to the
closing of the merger transaction. |
| 7.2 |
Dividends.
Between the date hereof and the Closing Date, the Company will not declare, make or
pay any dividend or other distribution. |
| 7.3 |
Actions
inconsistent with this Agreement. Between the date hereof and the Closing Date,
neither the Purchaser nor the Company will take any action inconsistent with this
Agreement. For the avoidance of any doubt, nothing herein shall require the Purchaser to
take or refrain from taking any action as a shareholder or investor in the Company. |
| 7.4 |
Fees.
The Company shall pay the Purchaser a fee of US$100,000 on January 1, 2009 and an
additional fee of US$100,000 on April 1, 2009. |
| 8.1 |
Further
Assurances. Each of the parties hereto shall perform such further acts and execute
such further documents as may reasonably be necessary to carry out and give full effect
to the provisions of this Agreement and the intentions of the parties as reflected
thereby. |
| 8.2 |
Governing
Law; Jurisdiction. This Agreement will be governed by the laws of the State of Israel
without regard to conflicts of law principles. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection with,
this Agreement or the transactions contemplated hereby may be brought in the Courts of
Tel Aviv-Jaffa, and each of the parties hereby consents to the jurisdiction of such
courts in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such suit, action or proceeding in any such court or that any such
suit, action or proceeding which is brought in any such court has been brought in an
inconvenient forum. |
| 8.3 |
Successors
and Assigns; Assignment. Except as otherwise expressly limited herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors, assigns,
heirs, executors, and administrators of the parties hereto. This Agreement may not be
assigned by any party without the prior written consent of the other party hereto. |
| 8.4 |
Expenses.
Each party to this agreement shall bear its own expenses and costs with respect to this
agreement and the transactions contemplated thereby. |
| 8.5 |
Entire
Agreement; Amendment and Waiver. This Agreement and the Schedules hereto constitute
the full and entire understanding and agreement between the parties with regard to the
subject matters hereof and thereof. Any term of this Agreement may be amended and the
observance of any term hereof may be waived (either prospectively or retroactively and
either generally or in a particular instance) only with the written consent of the
parties to this Agreement. |
| 8.6 |
Notices,
etc. All notices and other communications required or permitted hereunder to be given
to a party to this Agreement shall be in writing and shall be faxed or mailed by
registered or certified mail, postage prepaid, or otherwise delivered by hand or by
messenger, addressed to such party’s address as set forth below or at such other
address as the party shall have furnished to each other party in writing in accordance
with this provision: |
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If to the Purchaser: |
Israel Corporation Ltd. |
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Xxxxxxxxxx Xxxxx, |
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00 Xxxxxx Xx. |
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Xxx Xxxx Xxxxxx 00000 |
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Fax: 000-0-000-0000 |
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Attn: Chief Financial Officer |
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with a copy to |
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(which shall not |
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constitute notice): |
Gornitzky & Co. |
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00 Xxxxxxxxxx Xxxx., |
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Xxx-Xxxx 00000 Xxxxxx |
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Fax: 000-0-000-0000 |
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Attn: Adv. Xxx Xxxxxx |
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if to the Company: |
Tower Semiconductor Ltd. |
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Ramat Gavriel Industrial Area |
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X.X. Xxx 000 |
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Xxxxxx Xxxxxx Xxxxxx 00000 |
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Fax. 000-0-0000000 |
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Attn: Xxxx Xxxxxxx, Acting CFO |
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with a copy to |
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(which shall not |
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constitute notice): |
Xxxxx Xxxxx & Co. |
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1 Azrieli Xxxxxx |
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00xx Xxxxx |
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Xxx Xxxx, Xxxxxx, 00000 |
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Fax: 00-000-0000 |
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Attn: Xxxxx Xxxxxxxx, Adv. |
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or
such other address with respect to a party as such party shall notify each other party in
writing as above provided. Any notice sent in accordance with this Section 8.6 shall be
effective (i) if mailed, five (5) business days after mailing, (ii) if sent by messenger,
upon delivery, and (iii) if sent via facsimile, one (1) business day following
transmission and electronic confirmation of receipt.
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| 8.7 |
Delays
or Omissions. No delay or omission to exercise any right, power, or remedy accruing
to any party upon any breach or default under this Agreement, shall be deemed a waiver of
any other breach or default theretofore or thereafter occurring. Any waiver, permit,
consent, or approval of any kind or character on the part of any party of any breach or
default under this Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to the
extent specifically set forth in such writing. Unless provided otherwise herein, all
remedies, either under this Agreement or by law or otherwise afforded to any of the
parties, shall be cumulative and not alternative. |
| 8.8 |
Severability.
If any provision of this Agreement is held by a court of competent jurisdiction to be
unenforceable under applicable law, then such provision shall be excluded from this
Agreement and the remainder of this Agreement shall be interpreted as if such provision
were so excluded and shall be enforceable in accordance with its terms; provided,
however, that in such event this Agreement shall be interpreted so as to give effect, to
the greatest extent consistent with and permitted by applicable law, to the meaning and
intention of the excluded provision as determined by such court of competent
jurisdiction. |
| 8.9 |
Counterparts.
This Agreement may be executed in any number of counterparts (including facsimile
counterparts), each of which shall be deemed an original, and all of which together shall
constitute one and the same instrument. |
| 8.10 |
Headings.
The headings of the sections and paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or to
affect the construction hereof. |
[Signature Page to
Securities Purchase Agreement]
IN
WITNESS WHEREOF, each of the parties has signed this Agreement as of the date first
hereinabove set forth.
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By:__________________________
Name:________________________
Title:_________________________ |
By:__________________________
Name:________________________
Title:_________________________ |
