AGREEMENT dated as of December 22, 1999, among Data Systems & Software
Inc., a Delaware corporation ("DSSI"), Israel Corporation Ltd., a company
organized under the laws of the State of Israel ("TIC"), and Tower Semiconductor
Holdings 1993 Ltd., a company organized under the laws of the State of Israel
("Holdings").
DSSI and TIC are the sole shareholders of Holdings. Holdings is the holder
of 5,419,164 Ordinary Shares (the "TSL Shares") of Tower Semiconductor Ltd.
("Tower").
TIC, DSSI and Holdings have agreed to take all action necessary to
consummate the acquisition by TIC of, and the sale by DSSI of all of the right,
title and interest of DSSI in, the TSL Shares, and the related actions
contemplated hereby (collectively, the "Transaction").
1. Agreement to Consummate the Transaction.
Section 1.1. Covenant of the Parties to Consummate the Transaction. TIC,
DSSI and Holdings hereby covenant and agree to take any and all action
(including, without limitation, determining and obtaining the Required
Transaction Consents (as defined in Section 5.2(a)(iv) hereof) and the Required
Tower Consents (as defined in Section 5.2(b)(iv) hereof)) necessary to
consummate the Transaction in accordance with this agreement, including Schedule
I hereto (the "Agreement"). In furtherance of the foregoing covenant, the
parties agree to instruct their officers, employees, agents, representatives,
accountants and attorneys to, execute and deliver any documents, instruments,
conveyances, resolutions, notices, opinions or instructions of any kind which
may be necessary or advisable to fulfill the conditions to Closing set forth in
Article 5 of this Agreement and to consummate the Transaction and generally to
cooperate with each other in good faith in connection with the foregoing.
Section 1.2. Adjustment of Purchase Price. TIC covenants and agrees that in
the event that during the period beginning the Closing Date and ending on
December 31, 2000, TIC shall sell (other than in unsolicited market transactions
or in a sale or transfer to an affiliate of TIC) any of the TSL Shares at a
sales price greater than $11.00 per share, TIC shall promptly pay to Holdings
(as an adjustment of the purchase price referred to in Section 1.1 of Schedule
I), in respect of each share so sold by TIC, an amount per share equal to 60% of
the amount by which such amount per share received by TIC exceeds $11.00;
provided, however, that in no event shall the amount per share payable under
this Section 1.2 exceed $0.75 per share.
2. Representations and Warranties of DSSI. DSSI hereby represents and
warrants as follows:
Section 2.1. Corporate Organization and Authority of DSSI. DSSI is a
corporation duly incorporated, validly existing and in good standing under the
laws of the
State of Delaware, with full corporate power and authority to conduct its
affairs as now conducted. DSSI has the power to enter into and perform its
obligations pursuant to this Agreement. DSSI's execution, delivery and
performance of this Agreement have been duly authorized by all requisite
corporate action on the part of DSSI. This Agreement constitutes DSSI's legal,
valid and binding obligation.
Section 2.2. Absence of Conflicts and Consent Requirements. DSSI's
execution and delivery of this Agreement, and the performance of its obligations
hereunder, do not and will not (a) conflict with or violate any provision of
DSSI's Certificate of Incorporation or Bylaws, (b) violate or (alone or with
notice or the passage of time) result in the material breach or the termination
of, or otherwise give any contracting party the right to terminate or declare a
default under, the terms of any material contract to which DSSI is a party or by
which it is bound; or (c) violate any judgment, order, decree, or to the best
knowledge of DSSI, any material law, statute, regulation or other judicial or
governmental restriction to which DSSI is subject. Other than as may be required
in connection with any Required Transaction Consents there is no requirement
applicable to DSSI to make any filing with, or to obtain any permit,
authorization, consent or approval of, any governmental or regulatory authority
as a condition to the lawful performance by DSSI of its obligations hereunder.
DSSI makes no representation or warranty with respect to what Required
Transaction Consents or Required Tower Consents may be necessary in connection
with or as a result of the Transaction. DSSI hereby specifically disclaims any
representation or warranty regarding the assignability of the Management
Agreement referred to in Section 5.2(b) of this Agreement.
Section 2.3. Holdings Shares. Except as set forth in Schedule 2.3, DSSI
continues to be the holder beneficially and of record, of 6,001 Ordinary Shares
of Holdings, free and clear of any liens or other encumbrances.
Section 2.4. No Lien on TSL Shares. DSSI has taken no action, or caused
Holdings to take or purport to take any action, to create any lien or
encumbrance against the TSL Shares.
3. Representations and Warranties of TIC
TIC hereby represents and warrants as follows:
Section 3.1. Corporate Organization and Authority. TIC is a company duly
organized, validly existing and in good standing under the laws of the State of
Israel, with full power and authority to conduct its affairs as now conducted.
TIC has the power to enter into and perform its obligations pursuant to this
Agreement. TIC's execution, delivery and performance of this Agreement have been
duly authorized by all requisite corporate action on the part of TIC. This
Agreement constitutes TIC's legal, valid and binding obligation.
Section 3.2. Absence of Conflicts and Consent Requirements. TIC's execution
and delivery of this Agreement, and the performance of its obligations
hereunder, do not
and will not (a) conflict with or violate any provision of TIC's Memorandum
or Articles of Association, (b) violate or (alone or with notice or the passage
of time) result in the material breach or the termination of, or otherwise give
any contracting party the right to terminate or declare a default under, the
terms of any material contract to which TIC is a party or by which it is bound;
or (c) violate any judgment, order, decree, or to the best knowledge of TIC, any
material law, statute, regulation or other judicial or governmental restriction
to which
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TIC is subject. Assuming receipt of all of the Required Transaction Consents and
the Required Tower Consents referred to below, there is no requirement
applicable to TIC to make any filing with, or to obtain any permit,
authorization, consent or approval of, any governmental or regulatory authority
as a condition to the lawful performance by TIC of its obligations hereunder.
Section 3.3. Holdings Shares. TIC continues to be the holder, beneficially
and of record, of 4,001 Ordinary Shares of Holdings, free and clear of any liens
or other encumbrances.
4. Establishment of Escrow
Section 4.1. Escrow Agent; Escrow Agreement. The parties agree to appoint
the law firm of Xxx Xxxxxx, Xxxxx & Co. to act as the escrow agent in accordance
with the provisions of this Article 4 (the "Escrow Agent"). DSSI and Holdings
confirm that they are aware that the Escrow Agent has represented TIC in
connection with this Agreement and will continue to represent TIC with respect
to the Transaction and the performance of the Closing.
Section 4.2 Delivery of Escrowed Property . Within 14 calendar days
following the execution of this Agreement, the following actions shall take
place and shall be deemed to have taken place simultaneously (a) TIC shall
deliver to the Escrow Agent by certified check or wire transfer the sum of
$30,889,235 to be deposited in an interest-bearing account in a major Israeli
bank in Israel (the "Escrowed Funds"), (b) Holdings shall deliver to the Escrow
Agent certificates evidencing all of the TSL Shares (duly endorsed in blank or
accompanied by appropriate stock powers endorsed in blank), and (c) the
designees of DSSI on the Tower board shall deliver to the Escrow Agent the
resignations referred to in Sections 1.5 and 3.2 of Schedule I hereto. The
Escrowed Funds, share certificates and other items deposited with the Escrow
Agent pursuant hereto are sometimes collectively referred to herein as the as
the "Escrowed Property."
Section 4.3. Disposition of Escrowed Property. Upon notice from DSSI and
TIC that the conditions precedent to the Closing have been satisfied or waived,
the Escrow Agent shall release the Escrowed Funds and the other Escrowed
Property to Holdings for further disposition in accordance with Schedule I of
this Agreement. In the event of any termination of this Agreement pursuant to
Article 11, and irrespective of any disputes the Parties may have regarding the
termination, the Escrow Agent shall deliver the Escrowed Funds to TIC and the
other Escrowed Property to the respective depositors thereof.
4A. Certificate Regarding Tower Consents
The parties shall endeavor to receive from Tower as soon a possible and no
later than 14 days from the date of execution of this Agreement, a certificate
signed by the Co-Chief Executive Officers and Chief Financial Officer of Tower,
which certificate shall
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specify, to the best knowledge and belief of such officers after due
investigation, all consents, waivers, permits and/or approvals which may be
necessary as a result of the Transaction pursuant to or in connection with any
permits, government grant or incentive programs or agreements which are
necessary for the continued operation of Tower in the manner currently operated
or otherwise material to the business or assets of Tower.
5. Closing
Section 5.1. Time and Place of Closing. The Closing of the Transaction
contemplated by this Agreement (the "Closing") will be held at the offices of
TIC, 0 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxxxxx, at 10:00 a.m. Israel time, on the date
(the "Closing Date") five business days after (a) the receipt of an approval by
the Israeli antitrust authorities [Memuneh al Hegbelim Iskiyim] to the
Transaction or (b) the expiration of the notification period under applicable
Israeli antitrust rules. In the event that one or more of the Required
Transaction Consents or Required Tower Consents shall not have been obtained or
waived by the date referred to in the preceding sentence, the Closing Date shall
be adjourned until such time as such consents shall have been obtained or
waived; provided, that in no event shall the Closing Date be adjourned beyond
February 15, 2000 without the written consent of both DSSI and TIC. On the
Closing Date, all parts of the Transaction set forth on Schedule I to be
performed on the Closing Date shall be completed and each of the parties shall
make any and all deliveries and shall take, and shall cause the taking of, all
such action as shall be necessary to effectuate the Transaction. Except as set
forth on Schedule I hereto, the entire Transaction shall be deemed to have
occurred simultaneously on the Closing Date.
Section 5.2. Conditions to Closing. The obligation of the parties to effect
the Transaction is contingent upon the fulfillment of the following conditions:
(a) Conditions to DSSI's Obligation. The obligation of DSSI to complete the
Closing is contingent upon the fulfillment of each of the following conditions
on or before the Closing Date, except to the extent that DSSI may, in its
absolute discretion, waive any one or more thereof in whole or in part:
(i) Representations, Warranties and Covenants of TIC; Certificate. The
representations and warranties of TIC in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the
same effect as though such representations and warranties had been made on
and as of such date, and the covenants and agreements of TIC to be
performed on or before the Closing Date in accordance with this Agreement
shall have been duly performed in all material respects and TIC shall
deliver to DSSI a certificate of its General Manager or a Deputy General
Manager to such effect.
(ii) No Violation of Law; No Injunction. The consummation of the
Transaction shall not violate any applicable law or governmental
regulation. At the Closing Date, there shall be no injunction, restraining
order or decree of any nature of any court or governmental agency or body
of competent jurisdiction that is in effect that restrains or prohibits the
consummation of the Transaction contemplated hereunder or imposes
conditions on such consummation not otherwise provided for herein.
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(iii) Opinion of Counsel. TIC shall have delivered or shall have
caused to be delivered to DSSI an opinion of Xxx Xxxxxx, Xxxxx & Co,
counsel to TIC, substantially in the form of Exhibit A hereto.
(iv) Required Transaction Consents. All consents, waivers, permits
and/or approvals of statutory or governmental agencies or bodies which are
required to allow the consummation of the Transaction under applicable law
(the "Required Transaction Consents"), including, without limitation, any
consents or waivers of the Israeli antitrust authorities, shall have been
obtained without conditions.
(b) Conditions to TIC's Obligation. The obligation of TIC to complete the
Closing is contingent upon the fulfillment of each of the following conditions
on or before the Closing Date, except to the extent that TIC may, in its
absolute discretion, waive any one or more thereof in whole or in part:
(i) Representations, Warranties and Covenants of DSSI; Certificate.
The representations and warranties of DSSI in this Agreement
shall be true and correct in all material respects on and as of
the Closing Date with the same effect as though such
representations and warranties had been made on and as of such
date, and the covenants and agreements of DSSI to be performed on
or before the Closing Date in accordance with this Agreement
shall have been duly performed in all material respects and DSSI
shall deliver to TIC shall a certificate of its President or Vice
President to such effect.
(ii) No Violation of Law; No Injunction. The consummation of the
Transaction shall not violate any applicable law or governmental
regulation. At the Closing Date, there shall be no injunction,
restraining order or decree of any nature of any court or
governmental agency or body of competent jurisdiction that is in
effect that restrains or prohibits the consummation of the
Transaction contemplated hereunder or imposes conditions on such
consummation not otherwise provided for herein.
(iii)Opinion of Counsel. DSSI shall have delivered or shall have
caused to be delivered to TIC an opinion of Xxxxxxxxxx Xxxxxxxxx
& Xxxxxx LLP substantially in the form of Exhibit B hereto, which
opinion may rely on an opinion of Xxxxx Xxxxx & Co. as to certain
matters of Israeli law, and on an opinion of an established
Delaware law firm as to certain matters of Delaware law.
(iv) Officers' Certificate. TIC shall have received a certificate,
executed by the Chief Executive Officers and the Chief Financial
Officer of Tower, which certificate shall certify, to the best
knowledge and belief of such officers after due investigation,
that Tower has obtained without conditions any and all consents,
waivers, permits and/or approvals necessary as a result of the
Transaction pursuant to or in connection with any permits,
government grant or incentive programs or agreements which are
necessary for the continued
5
operation of Tower in the manner currently operated or otherwise
material to the business or assets of Tower which would, in the
absence of such consent, waiver or approval, be void, terminable
or otherwise otherwise materially impaired (the "Required Tower
Consents.")
(v) Required Consents. All Required Transaction Consents and Required
Tower Consents shall have been obtained without conditions. The
Required Transaction Consents and Required Tower Consents may
include, but may not be limited to, the preliminary list of such
consents set forth in Schedule 5.2 (b) hereof.
(vi) Opinions of Counsel to Tower. TIC shall have received opinions of
Xxxxx Xxxxx & Co. and Xxxxxxxxxx Xxxxxxxxx & Xxxxxx LLP stating
that (to their knowledge) all Required Tower Consents have been
obtained.
(vii) Registration Rights Agreement. Holdings shall have assigned to
TIC all of its rights under the Registration Rights Agreement
dated as of February 28, 1993.
(viii) Management Agreement. DSSI shall have assigned to TIC any and
all right, title and interest in and to, and any and all claims
under or in respect of, the Management Agreement, to the extent
assignable.
6. Expenses and Indemnification
Section 6.1. Pre-Transaction Expenses, Liabilities. DSSI and TIC agree that
they shall each be responsible to provide to Holdings, in accordance with their
respective pro-rata share (i.e. 60% DSSI, 40% TIC), the funds necessary to
enable Holdings to pay any unpaid expenses or liabilities of Holdings which
arose out of or otherwise relate to the conduct of Holdings' business during the
period from January 1, 1999 to December 31, 1999, as set forth in the draft
financial statements of Holdings for such period (without giving effect to
Holdings' equity interest in Tower) which are expected to be delivered to DSSI
and TIC and mutually agreed upon on or before January 15, 2000.
Section 6.2. Holdings Expenses, Etc.
(a) The parties agree that, except as set forth herein, any expenses
incurred by Holdings in connection with or arising out of the Transaction shall
be shared by them pro rata in accordance with their current equity percentages
in Holdings, i.e. DSSI, 60% and TIC, 40%. These expenses shall include the fees
and expenses of Xxxxxxxxx Almagor & Co. in connection with the Transaction.
(b) Any withholding taxes which Holdings shall be required to withhold on
any dividends or other distributions shall be so withheld and transferred to the
appropriate tax authorities.
Section 6.3. Parties to Bear Their Own Expenses Related to the Transaction.
Except as specifically set forth in Section 6.4, each of TIC and DSSI shall be
responsible for its respective expenses in connection with the Transactions,
including the payment of
6
any and all taxes (including without limitation, income taxes, gains taxes,
withholding or "source" taxes or value-added-taxes) incurred by them under the
laws of any jurisdiction.
Section 6.4. DSSI Tax Indemnification. The parties agree that if any tax is
imposed upon Holdings as a result of the Transaction, TIC shall have no
obligation to pay or otherwise bear any portion of such tax liability, all of
which shall be borne by DSSI. DSSI hereby agrees to indemnify TIC and its
directors, shareholders and affiliates and to hold them harmless from any such
tax liability.
7. Public Announcements.
Neither TIC nor DSSI shall make, nor permit any agent, affiliate or parent
corporation to make, any public statements, including, without limitation, any
press releases, with respect to this Agreement and the Transaction contemplated
hereby without the prior written consent of the other party hereto, except as
may be required by law or stock exchange rule.
8. Holdings Shareholders Agreement.
Upon completion of the Closing, the Shareholders Agreement dated as of
February 28, 1993, between DSSI and TIC, as amended to date, shall be terminated
and shall be of no further force and effect.
9. Intentionally Deleted.
10. Confidentiality; Non-Competition; Non-Solicitation.
Section 10.1. Confidentiality. DSSI agrees that following the Closing,
neither DSSI nor any of its affiliates, officers, directors or agents shall
disclose to any third party, nor use in any way except in furtherance of the
Transaction, any confidential information regarding the business of Tower that
is, or may hereafter come into, its possession except if required by court order
or decree or applicable law, or if such information is, or becomes, publicly
available without breach of this Section.
Section 10.2. Non-Competition. DSSI agrees that, without the written
consent of TIC, neither DSSI nor any Affiliate will for a period of three years
following the Closing Date, engage in the manufacture and sale of semiconductor
products anywhere in the world. DSSI acknowledges that any breach of the terms,
conditions or covenants set forth in this Section would be competitively unfair
and may cause irreparable damage to Tower, and that TIC's recovery of damages at
law would not be adequate remedy. Accordingly, DSSI agrees that for any breach
of the covenants and agreements of this Section a restraining order or
injunction or both may be issued against DSSI in addition to any other rights or
remedies TIC may have.
10.3. Non-Solicitation of Employees. DSSI agrees that for a period of three
years after the Closing Date, neither DSSI nor any of its affiliates shall (i)
directly or indirectly, recruit, solicit, or induce or attempt to recruit,
solicit or induce any employee of Tower, to leave his or her employment with
Tower to go to work, as an employee, consultant or independent contractor, for
DSSI or any of its affiliates, or (ii) make any offer to hire any employee of
Tower.
7
11. Termination
Section 11.1. Termination This Agreement may be terminated at any time
prior to the Closing under the following circumstances:
(i) by the mutual written consent of DSSI and TIC;
(ii) by either DSSI or TIC if the Closing shall not have been
consummated on or before February 15, 2000, unless such date has been
extended by mutual written consent of DSSI and TIC;
(iii) by TIC, if DSSI materially breaches or fails to perform in any
material respect any of its material covenants, agreements or warranties
under this Agreement and such breach or failure is not cured by DSSI before
the earlier of February 15, 2000 or within 10 days after being given notice
of such breach or failure;
(iv) by DSSI, if TIC materially breaches or fails to perform in any
material respect any of its material covenants, agreements or warranties
under this Agreement and such breach or failure is not cured by TIC before
the earlier of February 15, 2000 or within 10 days after being given notice
of such breach or failure;
(v) by DSSI, if any event shall have occurred which renders any of the
conditions set forth in Section 5.2(a) hereof incapable of fulfillment and
such condition is not waived by DSSI; or
(vi) by TIC, if any event shall have occurred which renders any of the
conditions set forth in Section 5.2(b) hereof incapable of fulfillment and
such condition is not waived by TIC.
Any termination of this Agreement by a party pursuant to the preceding sentence
shall be effective upon the delivery of a written notice of termination to the
other party.
Section 11.2. Effect of Termination; Survival. In the event of termination
of this Agreement as provided in Section 11.1 hereof, the obligations of the
parties hereunder shall cease, except for obligations under Article 7 hereof.
Termination of this Agreement shall not affect any rights that any party may
have (whether at law or in equity), consistent with the terms and conditions of
this Agreement, in respect of any breach of this Agreement occurring prior to
such termination.
8
12. Indemnification
Section 12.1. Indemnification by DSSI. DSSI hereby agrees to indemnify and
hold harmless TIC and its affiliates, successors and assigns from and against
any and all losses, liabilities, actions, causes of action, damages, costs,
expenses (including, without limitation, reasonable fees and disbursements of
counsel), charges, claims, liens and other obligations whatsoever arising out of
or in connection with any material breach of any representation, warranty,
covenant or agreement made herein by DSSI.
Section 12.2. Indemnification by TIC. TIC hereby agrees to indemnify and
hold harmless DSSI and its affiliates, successors and assigns from and against
any and all losses, liabilities, actions, causes of action, damages, costs,
expenses (including, without limitation, reasonable fees and disbursements of
counsel), charges, claims, liens and other obligations whatsoever arising out of
or in connection with any material breach of any representation, warranty,
covenant or agreement made herein by TIC.
13. Notices.
Any notice or other communication required or authorized to be given under
this Agreement shall be in writing and shall be personally delivered, sent by
facsimile transmission (with copy by airmail in each case) or sent registered
airmail to the address listed below or such other address as shall be specified
by the parties hereto by notice in accordance with the provisions hereof. Any
notice shall operate and be deemed to have been received (a) 14 days after
posting by registered airmail and (ii) on the next following business day if by
facsimile or personally delivered; provided however, that any notice of change
of address shall be effective only upon receipt.
If to TIC:
The Israel Corporation Ltd.
Xxxx Xxxxx
0 Xxxxxxx Xxxxxx
Xxx-Xxxx, 00000 XXXXXX
Facsimile: 000-0-0000000
Attention: Xx. X. Xxxxx, CEO
with a copy to:
Xxx Xxxxxx, Xxxxx & Co.
0 Xxxxx Xxx Xxxxxx
Xxxxxxx Xxxxxxx 00000, Xxxxxx
Facsimile: 972-9-9589596
Attention: Xxxx Xxxxx, Adv.
If to DSSI:
Data Systems & Software Inc.
000 Xxxxx 00
Xxxxxx, Xxx Xxxxxx 00000 XXXXXX XXXXXX
Facsimile: 000-000-0000
Attention: President
9
with a copy to:
Xxxxxxxxxx Xxxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 XXXXXX XXXXXX
Facsimile: 212-986-2399
Attention: Xxxxxxx Xxxxxx
14. Jurisdiction; Choice of Law; Arbitration.
Section 14.1 Jurisdiction. DSSI hereby irrevocably submits to the exclusive
jurisdiction of any the courts of the State of Israel, in any action or
proceeding arising out of or relating to this Agreement. DSSI hereby irrevocably
appoints Xxxxx Xxxxx & Co. as its agent for service of process in respect of any
such action or proceeding.
Section 14.2 Choice of Law. This Agreement shall be construed, interpreted
and the rights of the parties determined in accordance with the laws of the
State of Israel, without reference to the conflict of laws provisions thereof.
Section 14.3 Arbitration. Any disputes regarding the execution,
interpretation, performance or termination of the Agreement shall be settled by
arbitration to be held in Israel before a single arbitrator to be appointed by
TIC and DSSI within seven days from the date of the request of either TIC or
DSSI. If TIC and DSSI shall fail to agree on the identity of a single arbitrator
within such seven-day period, the arbitration shall be held before a panel of
three arbitrators, one chosen by TIC, one chosen by DSSI and the third to be
chosen by agreement of such two arbitrators. In the event that such two
arbitrators shall fail to agree upon the identity of the third arbitrator, the
third arbitrator shall be appointed by the Chairman of the Israeli Bar
Association.
The arbitrator(s) shall not be bound by the rules of procedure or the laws
of evidence but shall be required to issue a reasoned decision.
15. Entire Agreement.
This Agreement and Schedule I hereto constitute the entire agreement of the
parties with respect to the Transaction and supersedes all previous agreements,
understandings or discussions with respect to the subject matter hereof.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on their respective behalf, by their respective officers thereunto duly
authorized, on the day and year first above written.
DATA SYSTEMS & SOFTWARE INC.
By: /s/ Xxxxxx Xxxxxxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxxxxxx
Title: Chairman, President and CEO
ISRAEL CORPORATION LTD.
By: /s/ Xxxxx Xxxxx
-----------------------------------
Name: Xxxxx Xxxxx
Title: Chief Executive Officer
By: /s/ Xxx Xxxxxxx
-----------------------------------
Name: Xxx Xxxxxxx
Title: Chief Financial Officer
TOWER SEMICONDUCTOR HOLDINGS (1993) LTD.
By: /s/ Xxxxx Xxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxx
Title: Director
By: /s/ Mony Xxx Xxx
-----------------------------------
Name: Mony Xxx Xxx
Title: Director
We agree to act as the Escrow Agent in accordance with the provisions hereof.
/s/ Xxx Xxxxxx, Xxxxx & Co.
---------------------------
Xxx Xxxxxx, Xxxxx & Co.
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SCHEDULE I
1. Upon Closing, all the actions specified in Section 1 below shall be
executed simultaneously:
1.1 Sale of Tower Shares. Holdings shall sell to TIC and/or a subsidiary
thereof 4,219,164 Ordinary Shares of Tower at a price per share of US$ 9.50
(aggregate US $40,082,058) in consideration for US$ 30,889,235 in cash and the
$9,192,823 balance on credit.
1.2 Dividend. Holdings will distribute to its shareholders a dividend in
the amount of US$ 39,515,000, it being agreed that dividend shall be paid to
DSSI in cash in the amount of US$ 23,709,000 and to TIC by the transfer to TIC
of 1,200,000 Ordinary Shares of Tower (the value of which, at a price of US$
9.50 per share, is US$ 11,400,000) and an amount of US$ 4,406,000 in cash which
shall be applied against the credit extended to TIC by Holdings as stated in
Section 1.1 above.
1.3 Withholding Taxes. From each dividend distribution mentioned above,
Holdings shall withhold withholding tax as required by applicable law and shall
transfer it on the date required to the Income Tax Authorities unless the
recipient of the said distribution is exempted by applicable law and/or in
accordance with an approval of the relevant Income Tax Authorities.
1.4 Loan. Holdings shall loan to DSSI an amount of US$ 7,180,235 against a
capital note.
1.5 Resignation from the Board of Directors. The designees of DSSI on the
Board of Directors of Tower shall resign from the Board of Directors of Tower,
effective upon the Closing. Letters of resignation shall be deposited with the
Escrow Agent on the date the cash consideration is deposited by TIC and shall be
released to Tower at the time of the Closing.
2. After the above actions have been completed, Holdings shall "check the
box" to be treated as a partnership for US tax purposes.
3. After the performance of the above actions, but in no event prior to
January 3, 2000, the following actions shall be taken:
3.1 Purchase of the Entire Shares in Holdings. DSSI ( or a wholly owned
subsidiary thereof) shall acquire from TIC its shares in Holdings and TIC shall
assign to DSSI the "payments on account of shares" paid by TIC to Holdings in
consideration for an amount of US$ 4,786,823 which shall be applied to pay the
debt of TIC to Holdings, said payment constituting the complete and full payment
by TIC to Holdings.
3.2 Resignations. The designees of TIC on the Board of Directors of
Holdings shall resign.
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Schedule 2.3
Lien of Bank Leumi USA
13
Schedule 5.2(b)
Consents or waivers under the following permits, programs and agreements may be
Required Consents:
1. Motorola
2. Saifun
3. National - transfer of technology and know-how
4. National - asset purchase
5. WSI
6. Xxxxxxxxx
7. Acer
8. Israeli Land Authority
9. Investment Center
10. Chief Scientist
11. MAGNET
12. Key Employees
13. Bank Leumi
00.Xxxx HaPoalim
The foregoing list is preliminary and additional consents may be Required
Consents.
14
