EXHIBIT 10.21
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 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.
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, unless such holder has yet to
exercise a Demand and jointly initiates a Demand with at least one (1)
other Holder that has yet to exercise a Demand provided that (i) the
Holders included in such joint initiation have aggregate holdings of
at least 1,500,000 Ordinary Shares, and (ii) all the Holders included
in such joint initiation hold under 1,500,000 Ordinary Shares on an
individual basis as the result of the sale of 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.
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.
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 (the "Additional Registration") jointly
initiated by members of the Purchaser Group holding a majority of the
Purchaser Group Registrable Securities under Section 2.1. For purposes
of clarity, in the event multiple Holders that have yet to exercise a
Demand jointly initiate a Demand and each such holder holds under
1,500,000 Ordinary Shares as the result of the sale of Ordinary Shares
but together such holders hold at least 1,500,000 Ordinary Shares,
such Demand shall be deemed to be a registration initiated on an
individual basis by each Holder included in such joint initiation and
shall not be considered an Additional Registration. 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 "90th Day"), or, in the
case described in Section 2.7(ii) above, the earlier of the 90th Day
and 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.
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.
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 (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.
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.
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.
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:
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Name:
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Title:
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SanDisk Corporation
By:
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Name:
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Title:
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The Israel Corporation Ltd.
By:
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Name:
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Title:
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Alliance Semiconductor Corp.
By:
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Name:
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Title:
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Macronix International Co., Ltd., on
behalf of itself and its affiliates
By:
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Name:
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Title:
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QuickLogic Corp.
By:
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Name:
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Title:
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