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