EXHIBIT 4.61
CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
EQUIPMENT PURCHASE AGREEMENT
This Equipment Purchase Agreement (this "AGREEMENT"), dated May 17, 2006,
is between Tower Semiconductor Ltd., a company organised under the laws of the
State of Israel ("TOWER") and Israel Corporation Ltd., a company organised under
the laws of the State of Israel ("TIC").
The above-mentioned parties are collectively known as the "PARTIES" and
individually known as a "PARTY".
W I T N E S S E T H:
WHEREAS, Tower's Board of Directors recently approved an accelerated
ramp-up plan for Tower's Fab 2 manufacturing facility ("FAB 2");
WHEREAS, TIC, a major shareholder of Tower, wishes to assist Tower in the
ramp-up of Fab 2 by purchasing certain equipment as set forth herein; and
WHEREAS, TIC and Tower wish to detail the conditions which would result in
the transferring of the title to such equipment from TIC to Tower.
NOW, THEREFORE, in consideration of the mutual promises herein contained, it is
hereby agreed as follows:
1. PURCHASE ORDERS AND/OR EQUIPMENT AGREEMENTS
1.1. Immediately following the signature of this Agreement, and by no later
than one (1) week from the date hereof, TIC shall order the equipment
listed in ANNEX A1 (the "EQUIPMENT"), in their entirety, from the
suppliers listed therein (the "SUPPLIERS") and at the total prices,
including all related costs and VAT which in the aggregate shall not
exceed $70 million, and delivery dates set forth therein (the
"PURCHASE ORDERS"; together with any and all equipment purchase and/or
installation agreements in connection therewith, the "EQUIPMENT
AGREEMENTS"). By no later than one (1) week after this Agreement is
effective pursuant to Section y5_hereof, TIC shall enter into
Equipment Agreements relating to the Equipment listed in ANNEX A2 in
their entirety, from the Suppliers at the total prices, including all
related costs and VAT which in the aggregate shall not exceed $11
million on the delivery dates set forth therein. For the avoidance of
doubt, the terms "Equipment", "Suppliers", "Purchase Orders" and
"Equipment Agreements" shall also relate to the Equipment listed on
Annex A1, Annex A2 and the Replacement Equipment.
The Parties acknowledge (i) that changes in price and/or delivery
dates may be required by the Suppliers and (ii) that the negotiation
and execution of all or any of the equipment purchase and/or
installation agreements to which the Purchase Orders relate may not be
completed within one (1) week, but the Parties hereto undertake to use
their commercially reasonable best efforts to finalize and execute
such agreements as soon as practicable following the date hereof.
However, Tower and TIC will agree in writing whether such new prices
and/or delivery dates are acceptable, provided that such new prices
including all related costs and VAT which, in the aggregate for the
Equipment in Annex A1 and Annex A2, shall not exceed $84 million.
1.2. The Equipment Agreements shall provide, INTER ALIA, that TIC shall be
the owner of the Equipment. While the Equipment Agreements shall not
provide details as to where the Equipment shall be delivered, the
Equipment shall be delivered to such location as instructed by TIC
prior to the delivery dates set forth in ANNEX A1 OR A2. In addition,
TIC and Tower shall use their best efforts when negotiating the
Equipment Agreements to ensure that the rights and obligations
associated therewith, including any and all Equipment warranties and
related service agreements, shall be assignable to Tower, without the
need for Supplier or other third party consents. In addition, Tower
shall use its best efforts when negotiating the Equipment Agreements
to ensure that the Equipment Agreements are cancelable for a period of
15 days after their signature with no cancellation fees.
1.3. The terms and conditions of the Equipment Agreements and any
amendments thereto shall be approved in writing b y Tower prior to
their execution. TIC shall furnish Tower with signed copies of the
Equipment Agreements and any amendments thereto as soon as practicable
following their execution.
1.4. The Parties acknowledge that on or about May 1, 2006, TIC transferred
[***] to [***] and [***] to [***] with respect to the certain
Equipment Agreements (each an "ADVANCE AGREEMENT") which were ordered
by Tower (each an "ADVANCE"), pursuant to the letter from Tower to
TIC, dated April 30, 2006 (the "ADVANCE LETTER").
As soon as practicable following the signature of this Agreement,
Tower shall use its best efforts to cause [***] and [***] to consent
to the assignment of the Advance Agreements to TIC.
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[***] THE CONFIDENTIAL PORTION OF THIS AGREEMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIALITY.
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If, within two weeks from the date hereof, either or both of such
consents to the assignment of the Advance Agreements to TIC are
obtained,
(i) Immediately after effectiveness of this Agreement pursuant
to Section 5 hereof, Tower shall assign and TIC shall assume
Tower's rights and obligations in connection with such
assigned Advance Agreement, including, without limitation,
Tower's rights to the equipment underlying such purchase
order and Tower's obligations to make future payments in
connection therewith.
(ii) The provisions of this Agreement shall be applicable to each
of the assigned Advance Agreements and the total price of
the Equipment to be purchased by TIC under Section 1.1 of
this Agreement shall be increased by the amounts paid and
due to be paid under such assigned Advance Agreement such
that if both the consents of [***] and [***] are received,
the total price including all related costs and VAT of the
Equipment to be purchased under this Agreement shall be $100
million.
(iii) For the avoidance of all doubt, with respect to the
Equipment purchased pursuant to such assigned Advance
Agreement, Tower shall be released from its repayment
obligations as set forth in the Advance Letter but shall be
subject to all of the terms and conditions of this
Agreement.
If, within two weeks from the date hereof, one or more of such
consents are not obtained, and this Agreement is effective pursuant to
Section 5 hereof (i) Tower shall be entitled to request that TIC order
additional Equipment up to the aggregate amount of the unpaid portions
of the purchase prices under such unassigned Advance Agreement(s) (the
"REPLACEMENT EQUIPMENT"); (ii) this Agreement shall apply to such
Replacement Equipment MUTATIS MUTANDIS; and (iii) the Advance Letter
shall remain in full force and effect with respect to the unassigned
Advance Agreement and such Equipment shall not be subject to this
Agreement. If neither consent is received within such two week time
period, the total amount including all related costs and VAT to be
ordered under this Agreement in aggregate, shall not exceed $94.3
million.
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[***] THE CONFIDENTIAL PORTION OF THIS AGREEMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIALITY.
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2. PURCHASE AND SALE OF EQUIPMENT
2.1. PUT OPTION. Tower hereby grants TIC the right (the "PUT OPTION"),
during the period commencing on the Effective Date (as defined below)
to sell all or part of the Equipment and the rights purchased pursuant
to the Equipment Agreements to which such Equipment relate (together
the "PURCHASED ASSETS") to Tower, in consideration for the aggregate
consideration paid by TIC, in connection with such Purchased Assets
(hereinafter, the "PURCHASE PRICE" as more fully defined in Section 3
hereof). TIC may exercise the Put Option on all or part of the
Purchased Assets by delivering a written notice to Tower (the "PUT
NOTICE"), and upon receipt, Tower shall be obligated to purchase such
Purchased Assets and pay the Purchase Price within fifteen (15) days
of receipt of the Put Notice, or such later date as directed by TIC,
provided, that such payment shall be made no later than the date of
the consummation of the Investment. Notwithstanding anything to the
contrary herein the Put Option may only be exercised in the event and
to the extent that the Purchased Assets have not been uncrated, used
or installed for the benefit or in the facilities of a party other
than Tower and if TIC elects under the Put Option to sell to Tower any
of the Purchased Assets labeled as belonging to a Set of Equipment in
Annex A1 or A2, at the discretion of Tower, TIC shall also sell all or
part of the other Purchased Assets belonging to such Set of Equipment
to Tower, provided that if the relevant Supplier does not supply any
portion of a Set of Equipment to Tower, TIC shall not be required to
sell to Tower such portion(s) of the Set of Equipment.
2.2. CALL OPTION. TIC hereby grants Tower the right (the "CALL OPTION"),
during the period commencing on the later of: (i) the consummation of
an Investment (as defined below); and (ii) the Effective Date and
ending on the date on which the Reserve Period ends, to purchase all
and not part of the Purchased Assets, in consideration for the
Purchase Price. Tower may exercise the Call Option by delivering a
written notice to TIC (the "CALL NOTICE"), and upon receipt, TIC shall
be obligated to sell to Tower the Purchased Assets and Tower shall pay
the Purchase Price within fifteen (15) days of receipt of the Call
Notice, or such later date as directed by TIC, provided, that such
payment shall be made no later than the date of the consummation of
the Investment. In the event suc h payment of the Purchase Price has
not been made within [***] after the Call Notice was delivered to TIC
for any reason, the exercise of the Call Option shall be voided and
for the avoidance of doubt, Tower shall not have any further right to
exercise any Call Option hereunder. For the avoidance of doubt, TIC is
not required to sell or transfer the Purchased Assets or transfer
title thereto to Tower, unless it has received the Purchase Price in
full. For purposes of this Agreement, an "INVESTMENT" shall mean an
investment or investments in Tower by one or more investors after the
date hereof in exchange for securities of Tower and/or proceeds which
were paid to Tower on account of the future issuance of securities,
including debt securities and/or including payments on account of
wafer prepayments, which result in gross proceeds to Tower in an
aggregate amount equal to or greater than one hundred million US
dollars ($100,000,000), subject to such Investment obtaining such
approvals as may be required by law. For the avoidance of doubt, the
Parties hereto may jointly agree, that any or all amounts paid by TIC
under this Agreement shall constitute an Investment, provided that
nothing herein shall require TIC to so agree.
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[***] THE CONFIDENTIAL PORTION OF THIS AGREEMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIALITY.
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2.3. RESERVE PERIOD. During the period ending on the earliest of: (i) the
exercise by Tower of the Call Option; (ii) the exercise by TIC of the
Put Option; (iii) the termination of this Agreement pursuant to
Section y7 or the existence of an Event of Default; and (iv) [***]
from the date of signature of this Agreement (the "RESERVE PERIOD"),
in the absence of the prior written consent of Tower, TIC shall not:
(x) sell, assign or otherwise transfer title or interest in the
Purchased Assets to a party other than Tower; (y) uncrate the
Purchased Assets; or (z) install or cause the installation of the
Purchased Assets in the facilities of a party other than Tower (the
"EQUIPMENT INTEGRITY RESTRICTIONS"). After the Reserve Period, TIC may
sell or assign all or part of the Purchased Assets, in its sole
discretion, without any consent required from Tower to any third party
with no limitation on the identity or business of such third party.
Nothing herein creates any obligation for TIC to deliver the Purchased
Assets to Tower, or to allow Tower to uncrate, use or install the
Purchased Assets until both (i) the exercise of the Put Option or the
Call Option and (ii) the payment of the Purchase Price in full (or
such applicable percentage of the Purchase Price in the event of a
partial exercise of the Put Option).
2.4. CONSENTS. To the extent that the purchase by Tower of the Purchased
Assets, or a portion thereof, is subject to the receipt of Supplier or
any other third party consent, TIC and Tower shall apply fo r or
otherwise seek, and use their commercially reasonable efforts to
obtain, the necessary consents to consummate the purchase.
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[***] THE CONFIDENTIAL PORTION OF THIS AGREEMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIALITY.
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2.5. For the avoidance of doubt, upon the exercise of the Put Option or the
Call Option and to the extent that: (i) an Equipment Agreement that is
the subject of such exercise is assignable to Tower; and (ii) there
are payments outstanding under such Equipment Agreement, such
Equipment Agreement shall be assigned to Tower and upon assignment,
(a) Tower shall assume all of the obligations associated with such
outstanding payments (provided that TIC shall reimburse Tower for
penalties incurred due to any non-payment to a Supplier by TIC unless
TIC has been advised by Tower not to pay such Supplier) (b) TIC shall
be released by such supplier in writing and (c) the Purchase Price
shall not include amounts due and payable at a later time in
connection therewith ("FUTURE PAYMENTS"). To the extent that any
Equipment Agreement is not assignable or is not completely assignable
in a manner that TIC is fully released from any obligation under such
Equipment Agreement ("NON-ASSIGNABLE OBLIGATIONS"), the Purchase Price
shall include the entire purchase price of such Purchased Asset
including Future Payments and Tower shall simultaneously pay TIC for
all Future Payments together with all other portions of the Purchase
Price. TIC shall hold all amounts paid by Tower on account of Future
Payments in trust and shall continue to make payments to Suppliers in
accordance with the Non-Assignable Obligations. If an Equipment
Agreement is not assignable to Tower but the Purchase Price related to
such Equipment (including all Future Payments included therein) has
been paid to TIC, TIC shall be obligated to transfer to Tower the
Equipment including title and possession thereto, immediately upon its
receipt of same.
2.6. TITLE. Title to a Purchased Asset shall be transferred or deemed
transferred if title cannot be transferred to Tower only upon full
payment by Tower of the entire amount of the Purchase Price relating
to such Purchased Assets and shall continue to vest in TIC until such
payment has been made. If, TIC, in its sole discretion and with no
obligation to do so, decides to deliver a Purchased Asset to Tower or
to allow Tower to uncrate, use and/or install such Purchased Asset
prior to the exercise of the Put Option or the Call Option, in respect
of such Purchased Asset, title shall not pass to Tower except in
accordance with the foregoing. To the extent that: (i) Purchased
Assets are uncrated, used and/or installed at Tower's facilities; and
(ii) title to such Purchased Assets has not been transferred to Tower
in accordance with the foregoing ("UTILIZED EQUIPMENT"), if necessary,
Tower will (a) assist TIC in registering any pledge or other
registration on such Purchased Assets promptly and (b) disassemble and
repackage such Purchased Assets for Resale by TIC (as defined below)
to a third party, if requested by TIC, in its sole discretion. TIC
acknowledges that the grant and registration of a pledge as
contemplated by this Section 2.6 may be subject to third party
consents, which Tower undertakes to use its best commercial efforts to
obtain.
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2.7. NO WARRANTIES. Subject to TIC's compliance with the Equipment
Integrity Restrictions prior to any Resale, any sale or assignment by
TIC to Tower of any of the Purchased Assets or of the Equipment
Agreements pursuant to the Put Option, Call Option or any other manner
shall be on an "AS IS" manner and Tower shall not have any claim
against TIC for defects in such Purchased Assets or any other product
liability. Tower may make any such claims against the supplier
directly without any involvement of TIC. Prior to their assignment or
transfer of title to Tower, TIC shall use its commercially reasonable
best efforts to enforce any and all warranties associated with all
Utilized Equipment to the extent it is aware of such claims, including
in accordance with Tower's instructions, provided, that Tower shall
pay for all costs related to such enforcement directly and that in any
event, TIC may enforce such warranties on its own and the costs of
such effort shall be added to the Purchase Price if not paid for by
Tower. TIC shall be entitled, in its sole discretion, to assign to
Tower any or all rights to enforce such warranties, if such
enforcement rights can be assigned.
3. REIMBURSEMENT AND INDEMNIFICATION BY TOWER OF ALL PAYMENTS AND EXPENSES OF
TIC UNDER THIS AGREEMENT
3.1. Tower shall repay TIC for all amounts that TIC has paid or incurred or
will be required to pay or incur under the terms of this Agreement
and/or the Equipment Agreements. The full amount of the obligations of
Tower contained in this Section 3.1 may be fulfilled through (i)
payment of the Purchase Price pursuant to the Call Option or the Put
Option; or (ii) payment of the Indemnification Amount (as defined
below).
3.2. The "PURCHASE PRICE" shall include but shall not be limited to the
following (each amount in this Section 3.2 shall include any domestic
or foreign VAT, sales tax or the equivalent thereof):
3.2.1. any amount paid by TIC or, to the extent not fully assignable
to Tower, obligated but not paid by to, any Supplier, including
shipping, storage, VAT (whether foreign or Israeli), sales tax,
or other taxes or duties, licensing fees, warranty/service
agreements or insurance.
3.2.2. legal fees.
3.2.3. any amounts necessary to secure consent to assignment of any
Equipment Agreements, sale of any Purchased Assets or transfer of
any license, service agreement or warranty relating to any of the
Purchased Assets.
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3.2.4. any expenses in connection with the Equipment Agreements prior
to their assignment to Tower hereunder.
3.2.5. wiring fees.
3.2.6. registration of title.
3.2.7. registration of any pledge, if requested by TIC pursuant to
Section 2.6.
3.2.8. customs fees and expenses, including warehousing fees. (If TIC
shall direct that the Equipment be delivered to Tower prior to
the sale thereof to Tower, Tower shall make available storage
space for such purposes and TIC shall pay Tower applicable market
storage fees therefor.)
3.2.9. Other Financing Expenses (as defined below).
For the removal of doubt, if only a portion of the Purchased Assets is
purchased by Tower, then only the applicable portion of the Purchase Price
shall be paid.
3.3. "OTHER FINANCING EXPENSES" shall mean other cash-related costs
incurred by TIC including its cost of capital at a rate of [***], to
be accrued between the date that TIC makes any payment under this
Agreement and the actual date that such amount gets repaid in full by
Tower.
3.4. In the event that following the Reserve Period TIC assigns all or part
of the Equipment Agreements or sells all or part of the Purchased
Assets or transfers any license, service agreement or warranty
relating to any of the Purchased Assets to any party other than Tower
to the extent permitted hereunder (each a "RESALE"), in TIC's sole
discretion, Tower shall indemnify TIC for each of the following (and
TIC shall have a right to demand that Tower pay any known costs below
directly), no later than [***] after any such Resale, as they relate
to each such Equipment Agreement, Purchased Asset, license, service
agreement or warranty (the "INDEMNIFICATION AMOUNT"):
3.4.1. the amount equal to (x) the Purchase Price minus (y) the amount
received (net after reasonable brokers fees, shipping fees,
insurance, taxes, VAT and storage fees) from such Resale.
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[***] THE CONFIDENTIAL PORTION OF THIS AGREEMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIALITY.
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3.4.2. any necessary costs of reconfiguring or modifying the Purchased
Assets for resale.
3.4.3. Other Financing Expenses.
3.4.4. any amounts necessary to secure consent to assignment of any of
the Equipment Agreements, sale of any of the Purchased Assets or
transfer of any license, service agreement or warranty relating
to any of the Purchased Assets.
3.4.5. storage and insurance fees.
3.4.6. any costs to enforce any warranty on the Equipment not
previously paid for by Tower as per Section 2.7.
3.5. If a Resale is necessary, the parties to this Agreement agree that
such Resale should take place at reasonable prices under the
circumstances. Since Tower has the necessary industry expertise
relating to the Equipment, Tower shall assist TIC in obtaining the
best price possible for the Equipment as quickly as practicable.
Notwithstanding the provisions in this Section, TIC will have the sole
discretion to decide on the terms of such Resale.
4. REPRESENTATIONS OF TOWER
Tower represents and warrants to TIC as follows:
4.1. Tower has full legal right, power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby.
This Agreement, has been approved by Tower's audit committee and Board
of Directors and when executed and delivered by Tower and approved by
its shareholders (if there will be a written request by any
shareholder or shareholders of Tower who hold at least 1% of the
issued shares or voting rights of Tower, provided that such request is
made no later than fourteen (14) calendar days from the date on which
Tower announces its decision to enter into this Agreement),
constitutes and will constitute the legal, valid and binding
obligation of Tower, enforceable against it in accordance with its
terms, except to the extent that such enforceability may be limited by
bankruptcy, insolvency, reorganization and other laws affecting
creditors' rights generally. Tower has attached the legal opinion of
its counsel, Xxxxx Xxxxx & Co., Advocates to this effect hereto as
ANNEX B.
4.2. Neither the execution and delivery of this Agreement by Tower, nor the
compliance with the terms and provisions of this Agreement on the part
of Tower, will: (i) violate any statute or regulation of any
governmental authority, domestic or foreign, affecting Tower; (ii)
require the issuance of any authorization, license, consent or
approval of any governmental agency, or any other person; or (iii)
conflict with or result in a breach of any of the terms, conditions or
provisions of any judgment, order, injunction, decree, loan agreement
or other material agreement or instrument to which Tower is a party,
or by which Tower is bound, or constitute a default thereunder, the
effect of which will have a material adverse effect on Tower.
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4.3. All necessary consents of (i) any parties to any material contracts
which are material to Tower's business, and (ii) any governmental
authorities or agencies, to the extent required, in connection with
the transactions contemplated by this Agreement, for which the failure
to obtain such consents would have a material adverse effect on Tower,
shall have been obtained and true and complete copies thereof
delivered to TIC.
4.4. There are no actions, suits, proceedings, or injunctive order, pending
or threatened against or affecting Tower which could prevent the
consummation of the transactions contemplated by this Agreement.
4.5. Tower has not engaged any broker or finder in connection with the
transactions contemplated by this Agreement, and no broker or other
person is entitled to any commission or finder's fee in connection
with such transactions.
5. EFFECTIVENESS. In accordance with Tower's representations in Section 4.1
hereof, the effectiveness of Sections 2 and 3 of this Agreement shall be on
(the "EFFECTIVE DATE") the earlier of (i) approval of Tower's shareholders
(if there will be a written request by any shareholder or shareholders of
Tower who hold at least 1% of the issued shares or voting rights of Tower
no later than fourteen (14) calendar days from the date on which Tower
announces its decision to enter into this Agreement) or (ii) fifteen (15)
calendar days from the date on which Tower announces its decision to enter
into this Agreement if such shareholder vote has not been so requested. By
signature hereof, Tower acknowledges and agrees that it will make such
announcement within one (1) business day after the date of the signing of
this Agreement. Notwithstanding the foregoing, upon the occurrence of any
Event of Default, TIC shall not be obligated to enter into any additional
Equipment Agreements and shall be permitted but not obligated to revoke any
Equipment Agreements already entered into to the extent possible.
6. COVENANTS
6.1. Within five (5) days of becoming aware of the existence of any
condition or event which constitutes an Event of Default (as defined
below), or any condition or event which would upon notice or lapse of
time, or both, constitute an Event of Default, Tower shall give TIC
written notice thereof specifying the nature and duration thereof and
the action being or proposed to be taken with respect thereto.
6.2. Until the exercise of the Put Option or Call Option, Tower will
operate in the ordinary course of business and neither TIC nor Tower
will take any action inconsistent with this Agreement. For the
avoidance of any doubt, nothing herein shall require TIC to take or
refrain from taking any action as a shareholder or investor of Tower.
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6.3. To the extent that TIC assigns any of the Equipment Agreements, sells
the Equipment or transfers any license, maintenance agreement or
warranty relating to the Equipment, to any party other than Tower as
permitted hereunder, Tower hereby acknowledges that TIC may make such
transfer assignment or sale to any third party without limitation on
the identity or business of such third party and hereby waives any
claim it might have against TIC with respect thereto.
7. TERMINATION
7.1. TIC may terminate this Agreement upon [***] notice, except for (i) the
rights and obligations of the Parties in connection with the Put
Option; (ii) Tower's obligation to repay the Purchase Price and/or to
indemnify TIC; and (iii) Sections 2.7, 8, 9 and 10 hereof, which shall
survive indefinitely if any of the following events occur, each an
"EVENT OF DEFAULT":
a. If no Investment is consummated on or prior to such date which is
[***] from the date of signature of this Agreement.
b. If Tower shall default in connection with any agreement for
greater than [***] with any creditor, which entitles said
creditor to accelerate the maturity thereof.
c. If Tower shall file a voluntary petition in bankruptcy or a
voluntary petition or answer seeking liquidation, reorganization,
arrangement, readjustment of its debts, or for any other relief
under the Companies Law or Companies Ordinance, or under any
other act or law pertaining to insolvency or debtor relief,
whether Israeli or foreign, now or hereafter existing; Tower
shall enter into any agreement indicating its consent to,
approval of, or acquiescence in, any such petition or proceeding;
Tower shall apply for or permit the appointment by consent or
acquiescence of a receiver, custodian or trustee of Tower for all
or a substantial part of its property; Tower shall make an
assignment for the benefit of creditors; Tower shall be unable or
shall fail to pay its debts generally as such debts become due;
or Tower shall admit, in writing, its inability or failure to pay
its debts generally as such debts become due.
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[***] THE CONFIDENTIAL PORTION OF THIS AGREEMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIALITY.
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d. If, (i) there shall have been filed against Tower an involuntary
petitio n in bankruptcy or seeking liquidation, reorganization,
arrangement, readjustment of its debts or for any other relief
under the Companies Law or Companies Ordinance, or under any
other act or law pertaining to insolvency or debtor relief; (ii)
Tower shall suffer or permit the involuntary appointment of a
receiver, custodian or trustee of Tower or for all or a
substantial part of its property; (iii) Tower shall suffer or
permit the issuance of a warrant of attachment, execution or
similar process against all or any substantial part of the
property of Tower; (iv) any motion, complaint or other pleading
is filed in any bankruptcy case of any person or entity other
than Tower and such motion, complaint or pleading seeks the
consolidation of Tower's assets and liabilities with the assets
and liabilities of such person or entity.
e. If the Board of Directors or Audit Committee of Tower shall
rescind their approval of this Agreement, whether legally allowed
to do so or not.
f. If the shareholders of Tower are requested to approve the terms
of this Agreement and the transactions contemplated hereby and
fail to approve the same at the meeting called to approve it.
7.2. In the event any of the proceedings in Section 7.1.d shall be
dismissed or removed within 60 days, this Agreement shall be
reinstated or enforceable to the extent no other Event of Default has
occurred and to the extent the Call Option would not have otherwise
expired, as if such Event of Default had not occurred, including the
reinstatement of the Call Option.
7.3. Nothing herein shall terminate TIC's Put Option or Tower's obligation
to indemnify TIC.
8. NOTICES
All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally or by commercial delivery service,
or mailed by registered or certified mail (return receipt requested) or sent via
facsimile (with confirmation of receipt) to the Parties at the following address
(or at such other address for a Party as shall be specified by like notice):
If to Tower: If to TIC:
Tower Semiconductor Ltd. Israel Corporation Ltd.
Ramat Gavriel Industrial Area Millennium Tower,
X.X. Xxx 000 00 Xxxxxx Xx. Xxx Xxxx Xxxxxx 00000
Xxxxxx Haemek Israel 23105 Fax: 000-0-000-0000
Fax. 000-0-0000000 Attn: Chief Financial Officer
Attn: Xxxx Xxxxxxx, Acting CFO
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with a copy to (which shall not with a copy to (which shall not constitute
constitute notice): notice):
Xxxxx Xxxxx & Co. Gornitzky & Co.
One Azrieli Center, 00 Xxxxxxxxxx Xxxx.,
Xxx Xxxx 00000 Xxxxxx Xxx-Xxxx 00000 Xxxxxx
Fax: 000-0-000-0000 Fax: 000-0-000-0000
Attn: Adv. Xxxxx X. Xxxxxxxx Attn: Adv. Xxx Xxxxxx
9. PUBLICITY
The Parties agree not to publish any press release or disclosure filing or
otherwise publicize the existence, or any of the terms, of this Agreement
without the prior consent of the other Party, except as may be required under
law.
10. MISCELLANEOUS
10.1. This Agreement, including the validity, interpretation, or
performance of this Agreement and any of its terms or provisions, and
the rights and obligations of the parties under this Agreement shall
be governed by, and construed and interpreted in and only in
accordance with, the domestic laws of the State of Israel without
giving effect to any choice or conflict of law provision or rule that
would cause the application of the laws of any jurisdiction other than
the State of Israel. The competent court in Tel Aviv-Jaffa will have
the sole and exclusive jurisdiction over any dispute arising under
this Agreement.
10.2. A Party's delay or failure to enforce at any time any of the
provisions of this Agreement or any right with respect thereto shall
in no way be construed to be a waiver of such provision, or rights or
in any way to affect its right later to enforce them. A Party's
exercise of any of its rights hereunder shall not preclude or
prejudice that Party from thereafter exercising the same or any right
which it may have under this Agreement, irrespective of any previous
action or proceeding taken by it hereunder.
10.3. This Agreement shall be binding upon and inure to the benefit of the
successors and assigns of Tower and TIC.
10.4. This Agreement and the Annexes hereto shall be modified only by an
instrument in writing that is signed by duly-authorized
representatives of the Parties.
10.5. In the event that any provision of this Agreement, or the application
thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement
will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the Parties. The Parties further
agree to replace such void or unenforceable provision of this
Agreement with a valid and enforceable provision that will achieve, to
the extent possible, the economic, business and other purposes of such
void or unenforceable provision.
- 13 -
10.6. At any time and from time to time, each Party agrees, without further
consideration, to take such actions and to execute and deliver such
documents as may be reasonably necessary to effectuate the purposes of
this Agreement and shall refrain from taking any action that may
frustrate the purpose of this Agreement.
10.7. No Party shall be entitled to assign this Agreement or its rights
under it without the prior written consent of the other Party.
10.8. This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by a Party
hereto and delivered to the other Party hereto.
10.9. This document constitutes the entire agreement between the Parties
with respect to the subject matter hereof, and supersedes all previous
communications, representations, understandings and agreements, either
oral or written, between the Parties or any official or representative
thereof.
10.10. The Parties have participated jointly in the negotiation and
drafting of this Agreement. In the event that an ambiguity or question
of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of
proof shall arise favoring or disfavoring any Party by virtue of the
authorship of any provisions of this Agreement.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed as of the date first hereinabove set forth, such Parties acting by
their officers, being thereunto duly authorized.
______________________________ ______________________________
TOWER SEMICONDUCTOR LTD. ISRAEL CORPORATION LTD.
Name: Xxxxxxx Xxxxxxxxx Name: ___________________
Title: Chief Executive Officer Title: __________________
