EXHIBIT 4.85
AMENDMENT NO. 1
TO RESTATED FACILITY AGREEMENT
Made and entered into on this 10th day of September, 2007, by and
between:
(1) TOWER SEMICONDUCTOR LTD. ("THE BORROWER")
and
(2) BANK LEUMI LE-ISRAEL B.M. and BANK HAPOALIM B.M. ("THE BANKS")
WHEREAS: the Borrower, on the one hand, and the Banks, on the other hand,
are parties to a Facility Agreement dated January 18, 2001, as
amended from time to time and as amended and restated on August
24, 2006 (the Facility Agreement, as amended as aforesaid,
hereinafter "THE FACILITY AGREEMENT"); and
WHEREAS: the Borrower proposes, as part of its "ramp up" of Fab 2 in
accordance with the Project, to purchase the bulk of a tool set
of the 130 nm-90 nm technology bought by Macquarie Bank Australia
or other persons from Advanced Micro Devices Dresden fabrication
facility and/or related tools owned by Advanced Micro Devices
Dresden ("THE AMD EQUIPMENT"), or such complementary and/or other
tool sets that have substantially similar purposes, comparable
economic terms and similar anticipated benefits as the AMD
Equipment, all as may be approved in advance and in writing by
the Banks ("THE ALTERNATE EQUIPMENT"); and
WHEREAS: the Borrower estimates the cost of the AMD Equipment, including
acquisition, installation, accessories, facility extension and
other related tool costs, to be approximately US $100,000,000
(one hundred million United States Dollars); and
WHEREAS: by consent, dated June 6, 2007, the Banks consented to the
issuance by the Borrower of up to US $60,000,000 (sixty million
United States Dollars) of Permitted Subordinated Debt partially
to finance the purchase of the AMD Equipment, of which gross
proceeds of US $39,977,064 (thirty-nine million, nine hundred and
seventy-seven thousand and sixty-four United States Dollars) were
raised on June 13, 2007; and
WHEREAS: the Borrower's plan for financing the purchase of the AMD
Equipment or the Alternate AMD Equipment also includes US
$30,000,000 (thirty million United States Dollars) of financing
from TIC and US $30,000,000 (thirty million United States
Dollars) of bank financing; and
WHEREAS: the Borrower and the Banks have agreed to amend the Facility
Agreement in the manner set out below ("THIS AMENDMENT NO. 1"),
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. INTERPRETATION
1.1. Terms and expressions defined in the Facility Agreement shall have the
same meanings when used in this Amendment No. 1.
1.2. References herein to clauses and paragraphs, are to clauses and
paragraphs of the Facility Agreement.
1.3. References herein to sections, are to sections of this Amendment No.
1.
2. AMENDMENT
Subject to the fulfilment of the conditions precedent referred to in
section 3 below, the Facility Agreement shall, with effect from the date
upon which the Banks shall, pursuant to section 3.2 below, have confirmed
in writing fulfilment of all of the conditions precedent set out in section
3 below (if fulfilled) (such date hereinafter being referred to as "THE
AMENDMENT NO. 1 CLOSING DATE"), be amended in the manner set out below:
- 2 -
2.1. Clause 1 (INTERPRETATION) shall be amended as follows:
2.1.1. the following new definitions shall be added:
2.1.1.1. as new clause 1.1.5A:
"`ALTERNATE EQUIPMENT' - means such complementary and/or
other tool sets that have substantially similar purposes,
comparable economic terms and similar anticipated benefits
as the AMD Equipment (as defined below), all as may be
approved in advance and in writing by the Banks;"
2.1.1.2. as new clause 1.1.5B:
"`AMD EQUIPMENT' - means all or a portion of the tool set of
the 130 nm-90 nm technology bought by Macquarie Bank
Australia from the Advanced Micro Devices Dresden
fabrication facility and/or bought by others, such as,
original equipment manufacturers (who bought such equipment
from the Advanced Micro Devices Dresden fabrication facility
for refurbishing or upgrading and resale) and/or related
tools owned by Advanced Micro Devices Dresden, in each case,
for use solely in Fab 2;"
- 3 -
2.1.1.3. as new clause 1.1.6A:
"`AMENDMENT NO. 1 CLOSING DATE' - means September 10, 2007;"
2.1.1.4. as new clause 1.1.49A:
"`EQUIPMENT FACILITY' - shall bear the meaning assigned to
such term in clause 1.1.115(l) below;"
2.1.1.5. as new clause 1.1.49B:
"`EQUIPMENT FACILITY CREDITS' - means any Equipment Loans
made to the Borrower pursuant to an Equipment Facility
and/or any Equipment L/Cs issued by an Equipment Lender in
lieu of all or part of the Equipment Loans or, as the
context requires, the principal amount of such Equipment
Loans at such relevant time and the Maximum Drawing Amount
of such Equipment L/Cs at such relevant time; provided that,
the maximum aggregate amount of all Equipment Facility
Credits shall not exceed US $30,000,000 (thirty million
United States Dollars);"
2.1.1.6. as new clause 1.1.49C:
"`EQUIPMENT L/CS' - shall bear the meaning assigned to such
term in clause 1.1.115(j) below;"
- 4 -
2.1.1.7. as new clause 1.1.49D:
"`EQUIPMENT LENDER' - means an Israeli bank or banks (which
need not be the Banks) that provides an Equipment Facility
to the Borrower;"
2.1.1.8. as new clause 1.1.49E:
"`EQUIPMENT LOANS' - means those parts of Equipment Facility
Credits consisting of any advance or loan or, as the context
defines, the principal amount of such advance or loan
outstanding at such relevant time;"
2.1.1.9. as new clause 1.1.49F:
"`EQUIPMENT SELLER' - means a seller of AMD Equipment or a
seller of the Alternate Equipment as may be approved in
advance and in writing by the Banks;"
2.1.1.10. as new clause 1.1.103:
"`MAXIMUM DRAWING AMOUNT' - means, in respect of any L/C
(including an Equipment L/C) at any time, the maximum
aggregate amount that the beneficiary of such L/C may at any
time draw thereunder, as such aggregate amount may be
reduced from time to time pursuant to the terms of such
L/C;"
- 5 -
and
2.1.1.11. as new clause 1.1.126A:
"`RAMP-UP EQUIPMENT' - shall mean the AMD Equipment, or if
the AMD Equipment is not being acquired by the Borrower, the
Alternate Equipment;"
2.1.2. clause 1.1.18 ("CHANGE OF OWNERSHIP") shall be amended by
adding in paragraph (b) thereof, after the word "Loans", the
following:
"and shall have repaid to the Banks in accordance with any
Finance Document, including any Equipment Facility provided
severally by any or both Banks to the Borrower, at least 50%
(fifty percent) of the credits made available pursuant to
such Finance Documents, including Equipment Facility Credits
that may be provided by a Bank pursuant to an Equipment
Facility;"
2.1.3. clause 1.1.37 ("DEBT SERVICE") shall be amended as follows:
2.1.3.1. paragraph (a) thereof shall be amended to delete the
words "and 1.1.115(f)" and substitute therefor, ",
1.1.115(f) and 1.1.115(l)"; and
2.1.3.2. paragraph (c) thereof shall be amended to delete the
words "and 1.1.115(d)" and substitute therefor, ",
1.1.115(d) and 1.1.115(l)";
2.1.4. clause 1.1.40 ("DISTRIBUTIONS") shall be amended to delete the
words "convertible securities" and substitute "Permitted
Subordinated Debt (save to the extent permitted under the
approved terms thereof in accordance with clause 1.1.118 below)"
therefor;
- 6 -
2.1.5. clause 1.1.60 ("FINAL MATURITY DATE") shall be amended to add
the words:
"or March 31, 2012, if the option set forth in clause 6.1
below is exercised by the Banks;"
2.1.6. clause 1.1.114 ("PERMITTED ENCUMBRANCES") shall be amended to
add the following:
"(e) a first-ranking fixed charge over the Ramp-Up Equipment that
may be granted by the Borrower in favour of the Equipment
Lender solely to secure Permitted Financial Indebtedness
described in clause 1.1.115(l) below; provided that, the
Ramp-Up Equipment is duly pledged to the Banks by way of
fixed charge (subordinate only to the first-ranking fixed
charge to be granted to secure said Permitted Financial
Indebtedness) under, and by way of supplement to, the
Debenture and otherwise perfected in accordance with its
terms. For the avoidance of doubt, in the event that the
only Equipment Lenders providing the Permitted Financial
Indebtedness described in clause 1.1.115(l) below are the
Banks, such Permitted Financial Indebtedness shall be
secured by a first-ranking fixed charge over the Ramp-Up
Equipment in favour of the Banks under, and by way of
supplement to, the Debenture and otherwise perfected in
accordance with its terms;"
2.1.7. clause 1.1.115 ("PERMITTED FINANCIAL INDEBTEDNESS") shall be
amended to:
2.1.7.1. delete in paragraph (j) thereof the words "all such
L/Cs" and substitute therefor, "L/Cs that are not Equipment
L/Cs";
2.1.7.2. add the following sentence to the end of paragraph (j):
"The aggregate Indebtedness in respect of L/C's issued in
favour of the Equipment Seller to acquire the Ramp-Up
Equipment pursuant to the Equipment Facility ("THE EQUIPMENT
L/CS") together with the aggregate of all other Equipment
Facility Credits, shall not exceed US $30,000,000 (thirty
million United States Dollars);"
- 7 -
and
2.1.7.3. insert the following new paragraph (l) at the end
thereof:
"(l) Financial Indebtedness in respect of a credit facility
or facilities with a maturity of not less than 2 (two)
years (subject to subparagraph (i)(3) below) obtained
from an Israeli bank or banks solely to finance the
purchase of the Ramp-Up Equipment (`THE EQUIPMENT
FACILITY") which shall at no time exceed US $30,000,000
(thirty million United States Dollars) in the
aggregate; provided that, as a condition to such
Financial Indebtedness being incurred, there shall have
prior thereto been unconditionally and irrevocably
invested or provided (or there shall have been
delivered to the Banks unconditional and irrevocable
undertakings, satisfactory in form and substance to the
Banks, so to invest or provide) a net aggregate amount
equal to at least US $70,000,000 (seventy million
United States Dollars) for purchase of the Ramp-Up
Equipment, consisting of the following:
- 8 -
(i) TIC shall have unconditionally and irrevocably invested
in, and/or provided to the Borrower (or there shall
have been delivered to the Banks an unconditional and
irrevocable undertaking, in favour of the Banks, in
form and substance satisfactory to the Banks, so to
invest or provide), at least US $30,000,000 (thirty
million United States Dollars) of Paid-in Equity and/or
unsecured non-convertible loans or L/Cs that are
subordinated to the rights of the Banks under this
Agreement and under all other Finance Documents
("PERMITTED SUBORDINATED TIC DEBT") having terms
substantially similar to that of the Equipment
Facility, including: (1) with respect to Permitted
Subordinated TIC Debt, Interest at a rate not in excess
of the lowest rate paid in any Equipment Facility; (2)
such Permitted Subordinated TIC Debt and/or Paid-in
Equity to be disbursed and/or paid by TIC to the
Borrower prior to, or simultaneously with, and in an
aggregate amount equal to, the aggregate amount of all
drawdowns of Equipment Loans, including any requested
or deemed drawdowns of Equipment Loans as a consequence
of a payment by an Equipment Lender of any L/C issued
by such Equipment Lender pursuant to such Equipment
Facility, by the Borrower (and the undertaking by TIC
shall, INTER alia, include its undertaking to make,
prior to or simultaneously with any such requested or
deemed drawdown, an investment in, or a provision of
funds to, the Borrower in an amount equal to each
payment of an Equipment L/C by an Equipment Lender)
(and such disbursements and/or payments by TIC to the
Borrower shall be a condition to any such drawdown by
the Borrower under an Equipment Facility); and (3)
repayments of any such Permitted Subordinated TIC Debt
shall only be made by the Borrower to TIC
simultaneously with, or subsequent to, repayment of an
equal amount of Equipment Facility Credits (including
Equipment Loans), including once: (A) a Triggering
Quarter (as defined in clause 6.1 below) shall have
occurred, the permitted prepayment by the Borrower of
1/4 (one-fourth) of the Equipment Facility Credits to
the Equipment Lender(s) and 1/4 (one-fourth) of such
Permitted Subordinated TIC Debt to TIC over each of the
four Quarters following the Triggering Quarter; and (B)
an Accelerated Trigger Quarter (as defined in clause
6.1 below) shall have occurred, the permitted
prepayment at an aggregate quarterly rate of US
$25,000,000 (twenty-five million United States
Dollars), of which US $12,500,000 (twelve million five
hundred thousand United States Dollars) shall be paid
to the Equipment Lender(s) on account of the Equipment
Facility Credits and of which US $12,500,000 (twelve
million five hundred thousand United States Dollars)
shall be paid to TIC on account of such Permitted
Subordinated TIC Debt to TIC until all such Equipment
Facility Credits and Permitted Subordinated TIC Debt
are paid in full;
- 9 -
(ii) a gross amount of US $39,977,064 (thirty-nine million,
nine hundred and seventy-seven thousand and sixty-four
United States Dollars) shall have been unconditionally
and irrevocably paid by investors in Permitted
Subordinated Debt in conformity with the terms of
Schedule 1.118 hereto; and
(iii) a net amount of at least US $40,000,000 (forty million
United States Dollars) shall have either been: (1)
unconditionally and irrevocably invested in the
Borrower by way of Paid-in Equity, Permitted
Subordinated Debt, including amounts already raised (as
described in (ii) above) and capable of being raised in
conformity with Schedule 1.118 hereto, or unsecured
customer advances in form and substance satisfactory to
the Banks; or (2) generated from Excess Cash Flow,
including as may be reflected in the Borrower's
Accounts for a Quarter commencing from the first
Quarter of 2007, provided that any such Excess Cash
Flow is held by the Borrower as cash in short term bank
deposits.
For the removal of doubt, except and to the extent set forth
in any Equipment Facility provided by a Bank as an Equipment
Lender, none of the Banks shall be under any obligation
whatsoever to provide such financing;"
- 10 -
2.1.8. clause 1.1.118 ("PERMITTED SUBORDINATED DEBT") shall be amended
to add the following paragraph thereto:
"All references in this clause 1.1.118 to `convertible
debentures' and `Equity Convertible Debentures' shall be deemed
to apply to (a) non-convertible debentures issued by the Borrower
in accordance with the consent, dated June 6, 2007, given by the
Banks, a copy of which is attached as SCHEDULE 1.1.118 hereto,
and (b) to any Permitted Subordinated TIC Debt provided to the
Borrower by TIC pursuant to clause 1.1.115(l)(i) above;"
2.1.9. clause 1.1.142 ("TOTAL DEBT") shall be amended to delete the
words "and (d)" and substitute therefor the words, ", (d) and
(l)"; and
2.1.10. clause 1.3.14 shall be amended to add the following to the
first sentence thereof:
"or, effective January 1, 2008, International Financial Reporting
Standards (`IFRS')."
2.2. Clause 6.1 (REPAYMENT OF LOANS) shall be amended to add the following
at the end thereof:
"provided, however, that once the Borrower's EBITDA for any Quarter
equals or exceeds US $35,000,000 (thirty-five million United States
Dollars) but equals less than US $50,000,000 (fifty million United
States Dollars) (`THE TRIGGERING QUARTER') and the Equipment Facility
Credits are paid in full by the Borrower, the Banks shall have the
option, by written notice to the Borrower by the Banks, to require the
Borrower, as a mandatory prepayment, as to which clause 8 below shall
apply, to repay the last instalment of the Loans otherwise payable in
June 2012 and (1)/2 (one-half) of the penultimate instalment otherwise
payable in March 2012 (such amounts, collectively, `THE AGGREGATE
TRIGGER PREPAYMENT AMOUNT'), at the end of 3 (three) earlier
consecutive Quarters following the Triggering Quarter, but no earlier
than (1)/3 (one-third) of the Aggregate Trigger Prepayment Amount on
the last Business Day in December 2008, (1)/3 (one-third) on the last
Business Day in March 2009 and (1)/3 (one-third) on the last Business
Day in June 2009, provided further, however, that once Borrower's
EBITDA for any Quarter equals or exceeds US $50,000,000 (fifty million
United States Dollars) (`THE ACCELERATED TRIGGER QUARTER'), the
mandatory quarterly prepayments shall be in a minimum amount of US
$25,000,000 (twenty-five million United States Dollars), in which case
the Aggregate Trigger Prepayment Amount would be paid in 2 (two)
quarterly instalments rather than in 3 (three). For the avoidance of
doubt and by way of illustration only, should the Equipment Facility
Credits be paid in full on or prior to June 30, 2009 and the
Triggering Quarter be the Quarter ended June 30, 2009, the Banks would
have the option to require said mandatory prepayments to be made on
the last Business Days in each of September 2009, December 2009 and
March 2010, respectively, and, should the Quarter ended June 30, 2009
be an Accelerated Trigger Quarter, the Banks would have the option to
require a mandatory prepayment in the amount of US $25,000,000
(twenty-five million United States Dollars) on the last Business Day
of September 2009 and the remainder of the Aggregate Trigger
Prepayment Amount on the last Business Day in December 2009, in each
case, in addition to the repayments of principal of the Loans also due
on such dates pursuant to this clause 6.1 above."
- 11 -
2.3. Clause 15 (REPRESENTATIONS AND WARRANTIES) shall be amended as
follows:
2.3.1. clause 15.5 (NO DEFAULT) shall be amended to read in its
entirety as follows:
"No Default is continuing which has not been waived."
2.3.2. clause 15.7 (SHARE CAPITAL) shall be amended to read in its
entirety as follows:
"The authorised share capital of the Borrower consists of
800,000,000 (eight hundred million) ordinary shares. The
Borrower's most recently filed Annual Report on Form 20-F (`THE
ANNUAL REPORT'), as filed with the United States Securities and
Exchange Commission (`THE SEC'), sets forth, as of the month
ended immediately prior to the filing of the Annual Report, the
number of shares issued and outstanding, the approximate
aggregate number of shares reserved for issuance upon exercise of
all outstanding warrants and options and conversion of all
convertible securities (without being required to take into
account options, warrants or convertible securities that are
substantially "out of the money") and sets forth the list of all
those persons which, to the Knowledge of the Borrower, as of the
month ended immediately prior to the filing of the Annual Report,
are the beneficial holders of 5% (five percent) or more of the
issued and outstanding shares of the Borrower. All of the
outstanding ordinary shares have been duly authorised and validly
issued."
- 12 -
2.3.3. clause 15.8 (SEC DOCUMENTS; FINANCIAL STATEMENTS) shall be
amended to read in its entirety as follows:
"15.8.1. The Borrower has furnished to the Banks copies of the
Borrower's most recent Annual Report as filed with the SEC.
The Borrower represents and warrants that: (a) the Annual
Report has been duly filed with the SEC and when filed was
in compliance in all material respects with the requirements
of the Exchange Act and the rules and regulations of the SEC
applicable to such Annual Report; and (b) the Annual Report
was complete and correct in all material respects as of its
date and, as of its date, did not contain any untrue
statement of material fact or omit to state a material fact
required to be stated therein or necessary in order to make
the statements made therein, in light of the circumstances
under which they were made, not misleading. The Borrower has
provided the Banks with a copy of each document submitted to
the SEC on Form 6-K since January 1, 2007 (`THE 6K
REPORTS'). The Borrower represents and warrants to the Banks
that: (i) the 6K Reports have been duly submitted to the SEC
and when submitted were in compliance in all material
respects with the requirements of law relating to the 6K
Reports; and (ii) the 6K Reports were complete and correct
in all material respects as of their respective dates and,
as of such dates, did not contain any untrue statement of
material fact or omit to state a material fact required to
be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under
which they were made, not misleading.
- 13 -
15.8.2. The Borrower has delivered to the Banks: (a) audited
consolidated Accounts of the Borrower as at December 31 in
each of the 2 (two) years ended with the last Fiscal Year
included in the Annual Report (inclusive) (including the
audited consolidated balance sheets, consolidated statements
of income, changes in shareholders' equity and cash flow for
each of the Fiscal Years then ended, together with the
report thereon of the Auditors); and (b) unaudited reviewed
consolidated Accounts of the Borrower as at the Quarter
included in the most recently filed Report on Form 6-K
containing quarterly financial information (including the
consolidated balance sheets, consolidated statements of
income, changes in shareholders' equity and cash flow for
the period then ended, including in each case the notes
thereto). Such Accounts and notes truly and fairly present
the financial condition and the results of operations,
changes in shareholders' equity and cash flow of the
Borrower as at the respective dates of and for the periods
referred to in such Accounts, all in accordance with GAAP,
subject, in the case of interim Accounts, to normal
recurring year-end adjustments (the effect of which will
not, individually or in the aggregate, be materially
adverse); the Accounts referred to in this clause 15.8.2
reflect the consistent application of such accounting
principles throughout the periods involved, except as stated
in the Accounts and in the explanation provided pursuant to
clause 16.2.6 below."
and
2.3.4. clause 15.13 (PERMITTED SUBORDINATED DEBT) shall be amended to
delete the words "existing as at the Amendment Closing Date are
attached as SCHEDULE 15.13 hereto" and substitute therefor,
"issued since the Amendment Closing Date have been delivered to
the Banks".
- 14 -
2.4. Clause 16 (UNDERTAKINGS) shall be amended as follows:
2.4.1. clause 16.7 (DISTRIBUTIONS) shall be amended as follows:
2.4.1.1. clause 16.7.3 shall be amended to add the following:
"(x) payments to TIC with respect to Permitted Subordinated
TIC Debt provided by TIC to the Borrower partially to
finance the purchase of the Equipment (but only to the
extent such payments are permitted under the terms of
clause 1.1.115(l) above);"
and
2.4.1.2. to add a new clause 16.7.4 thereto, as follows:
"16.7.4 make or resolve to make any repayment, prepayment or
payment (in cash or in kind) of the principal of, or
Interest (whether or not capitalised) or other amount
on or in respect of the Equipment Facility, or any
purchase, redemption or retirement of any Equipment
Facility Credits, save to the extent permitted under
the terms of clause 1.1.115(l) above;
2.4.2. clause 16.10 (INSURANCE) shall be amended to add the following
at the end of clause 16.10.1:
"and the total outstandings under all other Finance Documents,
including the aggregate of all Equipment Facility Credits
outstanding under Equipment Facilities provided severally by a
Bank to the Borrower at such time;"
2.4.3. clause 16.31.1 (BANK ACCOUNTS) shall be amended to delete the
words "and 1.1.115(j)" in clause 16.31.1 and substitute therefor,
", 1.1.115(j) and 1.1.115(l)";
2.4.4. clause 16.27.3.3 shall be amended to add the following at the
end thereof:
"Notwithstanding anything to the contrary in this clause
16.27.3.3, no Paid-in Equity contributed or wafer prepayments
paid in order to meet the conditions set forth in clause
1.1.115(l) above so as to permit the incurrence by the Borrower
of Financial Indebtedness described in clause 1.1.115(l) above
may also be counted as Paid-in Equity or wafer prepayments to be
procured by the Borrower under this clause 16.27.3.3 above.";
- 15 -
and
2.4.5. clause 16.29 shall be amended to add the following paragraph
thereto:
"The attached SCHEDULE 16.29A, prepared in accordance with IFRS
shall replace and supersede Schedule 16.29 effective January 1,
2008 with respect to Quarters beginning on and after January 1,
2008 and all references in this clause 16.29 to `Schedule 16.29'
shall be references to `Schedule 16.29A'. Should the Borrower
voluntarily choose to adopt IFRS prior to January 1, 2008, the
Borrower shall notify the Banks in writing of same and Schedule
16.29A shall replace and supersede Schedule 16.29 as of the
Quarter in respect of which such early adoption is first applied
and with effect therefrom all references in this clause 16.29 to
`Schedule 16.29' shall be references to `Schedule 16.29A'. In
addition, with effect from the earlier of the first day of the
first Quarter in respect of which IFRS is fully adopted by the
Borrower as aforesaid or January 1, 2008, clause 1.1.65 shall be
deemed to be amended to read as follows:
`1.1.65 `GAAP' - means International Financial Reporting
Standards (`IFRS') in force from time to time;'
Should the Borrower voluntarily choose to adopt, with respect to
any Quarter prior to January 1, 2008, only partially IFRS, then
Schedule 16.29 shall continue to apply, provided that, if the
Borrower is with respect to any such Quarter as aforesaid not in
compliance with one or more of the ratios set out in Schedule
16.29, the Borrower shall be deemed not to be in default of this
clause 16.29 if such non-compliance is solely as a result of such
early and partial adoption and the Borrower's Auditors shall have
delivered (together with the Accounts at the times referred to in
clause 16.1.1(v) above) to the Banks a certificate, (confirmed as
being correct by the Bank Adviser), that had GAAP been applied in
its entirety in respect of such Quarter, the Borrower would have
been fully in compliance with this clause 16.29 and Schedule
16.29 hereto."
- 16 -
2.5. Clause 17 (DEFAULT) shall be amended to add the following new clause:
"17.3.4 the Borrower fails to comply with any undertaking or any
obligation contained in any Equipment Facility provided to the
Borrower by an Equipment Lender and, if such breach if capable of
remedy within such period, within 7 (seven) days after receipt by
the Borrower of written notice from such Equipment Lender
requiring the failure to be remedied, the Borrower shall have
failed to cure such default."
2.6. New Schedule 1.1.118 (JUNE 6, 2007 CONSENT OF THE BANKS) in the form
attached as APPENDIX A hereto shall be added to and form part of the
Facility Agreement.
2.7. Each of the following Schedules shall be replaced by the Amendment No.
1 Closing Date by updated Schedules as referred to in section 3.1.2
below (the updated Schedules, for the removal of doubt, to be in form
and substance acceptable to the Banks and to bear the same heading
(Schedule number) as those replaced): Schedule 1.1.16 (BUSINESS PLAN),
Schedule 16.29 (FINANCIAL COVENANTS-ISRAELI GAAP), Schedule 16.29A
(FINANCIAL COVENANTS-IFRS) and Schedule 1.1.106 (NET CASH FLOW).
3. CONDITIONS PRECEDENT
3.1. This Amendment No. 1 is subject to the conditions precedent that the
Banks shall have received, by not later than December 31, 2007 (or
such earlier date expressly set out with respect thereto below), the
following documents, information, matters and things in form and
substance satisfactory to the Banks:
3.1.1. an opinion of Xxxxx Xxxxx & Co., Advocates, the Borrower's
external legal counsel, addressed to the Banks;
- 17 -
3.1.2. each updated Schedule referred to in section 2.7 above;
3.1.3. payment by the Borrower of any and all fees payable to each
Bank on or prior to the Amendment No. 1 Closing Date; and
3.1.4. all of the Borrower's representations and warranties given
pursuant to this Amendment No. 1 shall be accurate in all
material respects as of the Amendment No. 1 Closing Date, as if
made on the Amendment No. 1 Closing Date.
3.2. In the event that the aforegoing conditions precedent are not all
fulfilled by December 31, 2007, then, save for section 5 below, this
Amendment No. 1 shall no longer be of any force or effect and the
Facility Agreement shall remain unaltered and in full force and effect
and, save as aforesaid, no party shall have any claim arising out of
or in connection with this Amendment No. 1. The Banks undertake that
promptly following the fulfilment to the satisfaction of the Banks of
all the conditions precedent referred to in section 3.1 above, the
Banks shall confirm to the Borrower in writing that the conditions
precedent have been fulfilled and this Amendment No. 1 has become
effective.
4. REPRESENTATIONS AND WARRANTIES
The Borrower acknowledges that the Banks have agreed to this Amendment No.
1 in full reliance on the representations and warranties set forth in
clause 15, as amended in this Amendment No. 1, subject to the disclosures
set out in Annex A hereto, which shall be deemed to have been repeated on
the date of signature of this Amendment No. 1 and on the Amendment No. 1
Closing Date, except that the representations and warranties set forth in
clause 15.9 shall be deemed to be repeated only on the Amendment No. 1
Closing Date and only with respect to the Business Plan to be delivered
pursuant to section 2.7.
For the removal of doubt, the term "Finance Documents" when referred to in
the representations and warranties set out in clause 15, includes also this
Amendment No. 1.
5. UNDERTAKINGS
The Borrower undertakes, by no later than November 30, 2007, that the Banks
shall have received all of the following documents, matters and things in
form and substance satisfactory to the Banks:
- 18 -
5.1. a Supplement to the Debenture shall be executed by the Borrower
relating to all equipment, Material Contracts, registered Intellectual
Property Assets and other assets and rights required under the
Debenture to be pledged by way of first-ranking fixed charge in favour
of the Banks, but not as yet specifically included in the Debenture
and such Supplement shall be perfected and duly registered with the
Registrar of Companies and the Registrar of Pledges and the Borrower
shall deliver all documents as referred to in clause 3.2 of the
Debenture (MUTATIS MUTANDIS) (including, without limitation, under
clause 3.2.7 of the Debenture, if any of the Existing XXX Leases has
been registered with the Israeli Lands Registry in the name of the
Borrower, which shall be confirmed by the Borrower, without derogating
from the Borrower's obligations under clause 8 of the Debenture) and
shall sign all other documents and forms required for the purposes of
the aforegoing;
5.2. notices of assignment by way of charge of all Material Contracts
(other than those referred to in clauses 1.1.36(c)(i) and (ii) of the
Facility Agreement); and
5.3. notices to insurers and acknowledgements of such notices, as referred
to in clause 3.2 of the Debenture (other than under Insurance Policies
in respect of liability of the Borrower to third parties or of
liability of the Borrower for damage to property of third parties or
of the type listed in Schedule 16.10.6(d) to the Facility Agreement).
6. FEES AND EXPENSES
Without derogating from the obligations of the Borrower to pay the Banks
commissions, fees and expenses pursuant to the Facility Agreement and
pursuant to any Equipment Facility that may be entered into severally by
any Bank with the Borrower and, in addition thereto, and for the removal of
doubt, the Borrower shall pay to the Banks on the date of signature of this
Amendment No. 1 and thereafter on demand legal fees for external counsel
(and out-of-pocket expenses incurred by such counsel) incurred by the Banks
in connection with the negotiation, preparation and execution of this
Amendment No. 1.
7. AMENDMENT TO THE FACILITY AGREEMENT
Subject to the fulfilment of the conditions precedent set out in section
3.1 above and with effect from the Amendment No. 1 Closing Date, the
Facility Agreement shall be amended as expressly set out in this Amendment
No. 1 above. This Amendment No. 1 shall be read together with the Facility
Agreement as one agreement and, save as expressly amended by this Amendment
No. 1, the Facility Agreement shall remain unaltered and in full force and
effect.
- 19 -
IN WITNESS WHEREOF, THE PARTIES HAVE SIGNED THIS AMENDMENT NO. 1 ON THE DATE
FIRST MENTIONED ABOVE.
for: TOWER SEMICONDUCTOR LTD.
By: ________________________
Title: ________________________
for: BANK LEUMI LE-ISRAEL B.M. for: BANK HAPOALIM B.M.
By: ________________________ By: ______________________
Title: ________________________ Title: ______________________
- 20 -
