EXHIBIT 4.84
EQUIPMENT FACILITY AGREEMENT
THIS EQUIPMENT FACILITY AGREEMENT ("THIS AGREEMENT") is made on the 10th day of
September, 2007,
BETWEEN:
(1) TOWER SEMICONDUCTOR LTD., a company incorporated under the laws of Israel
(company no. 52-004199-7), whose registered office is at X.X. Xxx 000,
Xxxxxxxxxx Xxxx, Xxxxxx Xxxxxx 00000, Xxxxxx ("THE BORROWER");
AND
(2) ISRAEL CORPORATION LTD. ("TIC")
WHEREAS: the Borrower carries on business as an independent "foundry"
manufacturer of semiconductor integrated circuits and a provider
of related design services and the Borrower wishes to purchase
the Ramp-Up Equipment (as defined in Schedule 1.2) and requires
financing for payment of the cost of acquisition of the Ramp-Up
Equipment;
AND WHEREAS: Bank Hapoalim B.M. and the Borrower are parties to an Equipment
Facility Agreement, dated September 10, 2007 and Bank Leumi
le-Israel B.M. and the Borrower are parties to an Equipment
Facility Agreement, dated September 10, 2007 (collectively, "THE
BANKS' EQUIPMENT FACILITY AGREEMENTS");
AND WHEREAS: as a condition precedent to the respective obligations of the
Banks under each of the Banks' Equipment Facility Agreements, TIC
shall deliver to the Banks the irrevocable and unconditional
undertaking in the form attached hereto as ANNEX A ("THE
UNDERTAKING");
AND WHEREAS: subject to the terms and conditions of this Agreement, including
the fulfilment of the conditions precedent set out below, TIC is
willing to make available to the Borrower an unsecured US Dollar
credit facility, subordinate to the Banks as set forth in clause
6A below, in order to partially finance the cost of acquisition
of the Ramp-Up Equipment,
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. INTERPRETATION
1.1. DEFINITIONS
In this Agreement, the following terms have the meanings given to them
in this clause 1.1:
1.1.1. "AVAILABILITY PERIOD" - means the period commencing on the
Closing Date and ending on the Termination Date;
1.1.2. "AVAILABLE COMMITMENT" - means the Commitment less: (a) all
outstanding Equipment Facility Credits provided by TIC; (b) any
such Equipment Facility Credits that have been requested and are
due to be made under the Equipment Facility on or before the
proposed Drawdown Date (for the removal of doubt, Equipment
Facility Credits that have been requested in connection with
Equipment L/Cs (as such term is defined in the Banks' Equipment
Facility Agreements) which have expired or the Maximum Drawing
Amount thereof has been reduced (to the extent of such reduction)
shall not reduce the Commitment);
1.1.3. "BANKS" - means Bank Hapoalim B.M. and Bank Leumi le-Israel
B.M. and their permitted assigns under the Finance Documents;
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1.1.4. "BORROWER" - means Tower Semiconductor Ltd.;
1.1.5. "BORROWER'S ACCOUNT" - means the account designated by the
Borrower in a Drawdown Request, into which account the
corresponding Equipment Loan by TIC will be paid in accordance
with clause 14.2 below;
1.1.6. RESERVED;
1.1.7. "COMMITMENT" - means the amount of US $30,000,000 thirty
million United States Dollars);
1.1.8. "DRAWDOWN DATE" - means, in respect of any Equipment Loan, the
date of the making of such Equipment Loan;
1.1.9. "DRAWDOWN REQUEST" - means a notice substantially in the form
of SCHEDULE 1.1.9 hereto;
1.1.10. "EQUIPMENT FACILITY" - means the US Dollar credit facility
granted to the Borrower by TIC pursuant to clause 2.1 below;
1.1.11. "EQUIPMENT FACILITY CREDIT" - means any Equipment Loans made
to the Borrower pursuant to the Equipment Facility or, as the
context requires, the principal amount of such Equipment Loans at
such relevant time; provided that, the maximum aggregate amount
of all Equipment Facility Credits shall not exceed US $30,000,000
(thirty million United States Dollars);
1.1.12. "EQUIPMENT FACILITY DEFAULT" - means any Equipment Facility
Event of Default or any event which with the giving of notice or
lapse of time, or the making of any determination hereunder, or
the satisfaction of any other condition (or any combination
thereof) would constitute an Equipment Facility Event of Default;
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1.1.13. "EQUIPMENT FACILITY EVENT OF DEFAULT" - means any of the
events or circumstances described in clauses 11.2-11.7
(inclusive) below;
1.1.14. "EQUIPMENT LOAN" - means an unsecured, subordinated (as set
forth in clause 6A below) loan made or to be made by TIC under
the Equipment Facility pursuant to clause 4.2 below;
1.1.15. "EQUIPMENT LOAN MATURITY DATE" - means the earlier of:
(a) the Final Equipment Facility Maturity Date; and
(b) the Business Day immediately following the second
anniversary of the date on which the Equipment Loan was
made,
subject, in each case, to mandatory prepayment on an earlier date
pursuant to clause 6.2 below;
1.1.16. "FACILITY AGREEMENT" - the Facility Agreement originally made
on January 18, 2001, by and among the Borrower and the Banks, as
amended and restated on August 24, 2006 and further amended on
September 10, 2007;
1.1.16A. "FEE LETTER" - means the fee letter dated the date hereof
between TIC and the Borrower in the form of SCHEDULE 1.1.16A
hereto;
1.1.17. "FINAL EQUIPMENT FACILITY MATURITY DATE" - means March 31,
2010;
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1.1.18. "SHARE WARRANTS" - means the warrants to acquire shares of the
Borrower to be issued by the Borrower to TIC in the form of
SCHEDULE 1.1.18 hereto;
1.1.19. "TERMINATION DATE" - means the Business Day immediately
following the second anniversary of the Closing Date;
1.1.20. "TIC" - means Israel Corporation Ltd.;
1.1.21. "TIC'S ACCOUNT" - means the account designated by TIC, into
which:
(a) all repayments and prepayments of Equipment Loans to TIC
will be made; and
(b) all other payments to TIC under this Agreement are to be
made pursuant to this Agreement.
1.2. Unless otherwise defined in this Agreement, terms defined in SCHEDULE
1.2 hereto are hereby incorporated by reference and shall have the
same meaning and construction, MUTATIS MUTANDIS, in this Agreement.
Notwithstanding the fact that such Schedule 1.2 includes terms from
the Facility Agreement, such terms, for the purposes of this
Agreement, shall not be affected by any amendment of the Facility
Agreement.
1.3. The recitals and schedules hereto form an integral part thereof.
2. THE EQUIPMENT FACILITY
2.1. GRANT OF EQUIPMENT FACILITY
Subject to the closing of this Agreement including but not limited to
the fulfilment of the conditions precedent set out in clause 3 below,
and compliance with the further conditions set out in clause 4 below,
TIC, relying upon each of the representations and warranties made or
incorporated by reference in this Agreement, agrees to grant to the
Borrower, for application only in accordance with clause 2.2 below and
otherwise subject to the terms and conditions of this Agreement, the
Equipment Facility in the aggregate amount of US $30,000,000 (thirty
million United States Dollars), being a Dollar facility.
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2.2. PURPOSE
The Borrower shall apply all Equipment Facility Credits only towards
the payment of the cost of acquisition of the Ramp-Up Equipment.
2.3. NO OBLIGATION TO MONITOR
TIC shall not be under any obligation to monitor or verify the
application of any Equipment Facility Credit made pursuant to this
Agreement. The Borrower shall promptly notify TIC of the making of any
additional commitments to purchase or any other purchase orders
relating to any acquisition of Ramp Up Equipment.
2.4. TIC UNDERTAKING
Notwithstanding anything to the contrary in this Agreement, nothing
contained herein shall in any way derogate from the obligations of TIC
pursuant to the TIC Undertaking. Accordingly, and without limiting the
generality of the aforegoing, TIC shall, prior to or simultaneously
with the making of any Equipment Loans (as such term is defined in the
Banks' Equipment Facility Agreements) by any Bank, provide Equipment
Facility Credits to the Borrower in an amount equal to the aggregate
amount of all Equipment Loans (as such term is defined in the Banks'
Equipment Facility Agreements) to be provided by theBanks.
3. CLOSING AND CONDITIONS PRECEDENT
3.1. CLOSING
A closing shall take place after the conditions precedent set forth in
clauses 3.3 and 3.4 below have been satisfied or waived in accordance
with their terms ("XXX XXXXXXX") at the offices of Xxxxx Xxxxx & Co.,
One Azrieli Center, Tel-Aviv, Israel, or at such other time and place
as the parties shall mutually agree ("THE CLOSING DATE").
3.2. CONDITIONS FOR CLOSING
The obligations of TIC under this Agreement are subject to the
condition that this Agreement has been closed (including the actual
delivery of all executed documents necessary to be delivered at
closing and the satisfaction or waiver of all other conditions
precedent to Closing) by not later than December 31, 2007.
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3.3. Each of the following documents shall be duly delivered at Closing:
3.3.1. a copy, certified as a true copy by the external legal counsel
of the Borrower, of the Certificate of Incorporation, Memorandum
of Association and Articles of Association of the Borrower;
3.3.2. copies of resolutions of the Board of Directors of the Borrower
authorising named officers of the Borrower to execute, deliver
and perform this Agreement and to give all notices and take all
other action required to be given or taken by the Borrower under
this Agreement;
3.3.3. an opinion of Xxxxx Xxxxx & Co., Advocates, the Borrower's
external legal counsel, addressed to TIC in the form of SCHEDULE
3.3.3 attached hereto;
3.3.4. executed Share Warrants in the amount and in the form of
SCHEDULE 3.3.4 attached hereto;
3.3.5. executed Fee Letter and payment of all fees payable to TIC
thereunder;
3.3.6. written evidence of the receipt by the Borrower of a gross
amount of US $39,977,064 (thirty-nine million, nine hundred and
seventy-seven thousand and sixty-four United States Dollars) from
the issuance on or about June 13, 2007 of debentures (convertible
and non-convertible) and warrants by way of a private placement;
3.3.7. copies of the written confirmations received by the Borrower of
the receipt of all requisite corporate and third party, including
Israeli and foreign Governmental Body, approvals to the
transactions contemplated by this Agreement; and
3.3.8. an officer's certificate signed by the CEO and CFO of the
Borrower on behalf of the Borrower indicating that all of the
provisions of this clause 3.3 have been complied with in their
entirety.
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3.4. In addition to each of the documents described in clause 3.3 above to
be delivered at Closing above, the closing of this Agreement shall be
subject to each of the conditions to closing below:
3.4.1. no Equipment Facility Default shall have occurred and the
consummation of this Agreement shall not cause an Equipment
Facility Default to occur;
3.4.2. all of the Borrower's representations and warranties given by
the Borrower pursuant to this Agreement shall be accurate in all
material respects as of the Closing Date, as if made on the
Closing Date;
3.4.3. no Material Adverse Effect shall have occurred;
3.4.4. there shall be no impediment, restriction, limitation or
prohibition, including impediments, restrictions, limitations or
prohibitions imposed under law or by any Governmental Body, as to
the proposed financing under this Agreement or as to the issuance
of the Share Warrants to TIC;
3.4.5. the Facility Agreement, including Amendment No. 1, dated
September 10, 2007, to the Restated Facility Agreement, dated
August 24, 2006, shall be effective and in full force and effect,
in the form of SCHEDULE 3.4.5 attached hereto, simultaneously
with the closing of this Agreement;
3.4.6. the closing of the Banks' Equipment Facility Agreements shall
occur simultaneously with the closing of this Agreement and
copies of the executed definitive documentation between the
Borrower and the Banks, with respect to, in the aggregate, US
$30,000,000 (thirty million United States Dollars) of Equipment
Loans (as such term is defined in the Banks' Equipment Facility
Agreements) and/or Equipment L/Cs (as such term is defined in the
Banks' Equipment Facility Agreements) are delivered to TIC; and
3.4.7. an officer's certificate signed by the CEO and CFO of the
Borrower on behalf of the Borrower indicating that all of the
provisions of this clause 3.4 have been complied with in their
entirety.
In the event that the conditions precedent are not fulfilled by
December 31, 2007 then this Agreement shall no longer be of any force
or effect and neither party shall have any claim against the other
party arising out of or in connection with this Agreement. TIC
undertakes that promptly following the fulfilment to the satisfaction
of TIC of all the conditions precedent referred to in clause 3.3
above, TIC shall confirm to the Borrower in writing that the
conditions precedent have been fulfilled and TIC is prepared to close,
subject to the fulfilment of the conditions set forth in clause 3.4.
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4. AVAILABILITY OF EQUIPMENT FACILITY CREDITS
4.1. AVAILABILITY
Notwithstanding anything to the contrary in this Agreement:
4.1.1. TIC shall not be obliged to make any Equipment Facility Credit
available to the extent that doing so would cause the aggregate
amount of Equipment Facility Credits extended by TIC to exceed
the Commitment; and
4.1.2. Equipment Facility Credits shall be made during the
Availability Period only and then only if all the following
conditions for each Equipment Facility Credit specified hereunder
in this clause 4 are fulfilled:
4.1.2.1. the Banks, simultaneously therewith, providing, in
accordance with the Banks' Equipment Facility Agreements, an
equal amount, in the aggregate, of Equipment Loans (as such
term is defined in the Banks' Equipment Facility
Agreements), having the same purpose and the same maturity
date as the Equipment Facility Credit proposed to be
provided by TIC. For the purposes of this clause 4.1.2.1,
Equipment L/Cs (as such term is defined in the Banks'
Equipment Facility Agreements) shall be considered Equipment
Loans (as such term is defined in the Banks' Equipment
Facility Agreements) only to the extent such Equipment L/Cs
are converted into Equipment Loans (as such term is defined
in the Banks' Equipment Facility Agreements) under the
Banks' Equipment Facility Agreements following the
notification by a beneficiary under an Equipment L/C that
the Bank(s) are required to make a payment of funds, unless
the Borrower shall (without utilising any Equipment Loans
under any Bank Equipment Facility Agreement) have paid the
full relevant amount demanded on the Equipment L/C on or
prior to the date payment of the Equipment L/C is due. No
later than one (1) Business Day after delivering an
application for an Equipment L/C to a Bank, the Borrower
shall provide a copy thereof to TIC, together with a
Drawdown Request for an amount equal to one-half of the
maximum aggregate amount that the beneficiary of such
Equipment L/C may at any time draw thereunder, as such
aggregate amount may be reduced from time to time pursuant
to the terms of such Equipment L/C ("THE MAXIMUM DRAWING
AMOUNT"), and within two (2) Business Days from the receipt
thereof, TIC shall deliver to the Borrower (which may
provide a copy thereof to the Banks), written confirmation
that to the extent such Equipment L/C is converted into
Equipment Loans (as such term is defined in the Banks'
Equipment Facility Agreements) under the Banks' Equipment
Facility Agreements as aforesaid, TIC shall pay 50% of the
amount of such Equipment L/C which payment shall constitute
an Equipment Loan as contemplated by this Agreement (or,
subject to the terms of this Agreement, TIC shall deliver a
written statement setting forth the reasons why TIC is not
required to provide such confirmation). For the avoidance of
doubt, the confirmations shall not be deemed to be a waiver
of any right that TIC may have against Tower under this
Agreement;
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4.1.2.2. the proposed date for the making of such Equipment
Facility Credit is a Business Day which is or precedes the
Termination Date;
4.1.2.3. the Borrower shall have entered into a purchase contract
and/or submitted a purchase order for the Ramp-Up Equipment,
whereby upon payment therefor, the Borrower shall own the
Ramp-Up Equipment (TIC hereby acknowledges and agrees that
it does not and shall not have or be granted hereby or by
operation of law any Encumbrance over any or all of the
Ramp-Up Equipment and that the Borrower shall not be
restricted under this Agreement to permit the imposition of
any Encumbrance on any or all of the Ramp-Up Equipment);
4.1.2.4. no Equipment Facility Default shall have occurred and be
continuing and no Equipment Facility Default shall occur as
a result of the making of such Equipment Facility Credit;
4.1.2.5. the amount of the Equipment Facility Credit requested
shall not exceed the total Available Commitment as at the
Drawdown Date;
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4.1.2.6. the representations and warranties given by the Borrower
pursuant to this Agreement shall be true and accurate in all
material respects on and as at the proposed date for the
making of the Equipment Facility Credit;
4.1.2.7. none of the Ramp-Up Equipment or any part thereof has
been disposed or sold in the absence of TIC's prior consent;
and
4.1.2.8. the Available Commitment as at the Termination Date
shall automatically be cancelled.
4.2. EQUIPMENT LOANS
Subject to the fulfilment of the conditions precedent, to compliance
with the conditions set out in clause 4.1 above and to compliance with
the following conditions, TIC shall make an Equipment Loan under the
Equipment Facility during the Availability Period only if:
4.2.1. the Borrower shall have delivered to TIC a Drawdown Request for
such Equipment Loan executed by the CEO or CFO of the Borrower,
specifying a date for making such Equipment Loan, being at least
7 (seven) Business Days after the date of delivery of such
Drawdown Request, provided that a Drawdown Request in connection
with an Equipment L/C shall not specify a date for making such
Equipment Loan (it being understood that the Borrower shall not
be required to drawdown such Equipment Loan if the Borrower shall
have paid the full relevant amount demanded on the Equipment L/C
without utilising any Equipment Loans under any Bank Equipment
Facility Agreement). Any Drawdown Request will upon delivery
thereof be irrevocable;
4.2.2. the minimum amount of each Equipment Loan shall be a minimum
amount of US $1,000,000 (one million United States Dollars) and
an integral multiple of US $1,000,000 (one million United States
Dollars) (other than (i) in the case of an Equipment Loan
provided in connection with an Equipment L/C which shall not be
required to be in any minimum amount or in any integral multiple
or (ii) in the case of an Equipment Loan which shall be for the
balance of the Available Commitment); and
4.2.3. all Equipment Loans made under this Agreement shall be in US
Dollars.
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5. REPAYMENT
5.1. REPAYMENT OF LOANS
The Borrower shall repay each Equipment Loan in full upon the earlier
of: (a) the Final Equipment Facility Maturity Date; and (b) the
Business Day immediately following the second anniversary of the
making of such Equipment Loan, subject to mandatory prepayment in
accordance with clause 6 below.
5.2. PAYMENT OF ALL OTHER SUMS DUE ON THE FINAL MATURITY DATE
On the Final Equipment Facility Maturity Date, the Borrower
additionally shall pay to TIC all other sums then outstanding under
this Agreement.
5.3. REPAYMENT IN CURRENCY OF LOAN
For the removal of doubt, each Equipment Loan, as well as all Interest
thereon, shall be repaid in US Dollars.
5.4. REPAYMENTS (INCLUDING PREPAYMENT) TO TIC'S ACCOUNT
All repayments as aforesaid and all prepayments (in accordance with
clause 6 below) shall be made by transfer to TIC to TIC's Account.
5.5. NO REBORROWING
The Borrower shall not be entitled to reborrow any part of an
Equipment Loan which is repaid.
5.6. CANCELLATION OF COMMITMENT
For the removal of doubt, the Commitment of TIC shall be cancelled by
any amount repaid or prepaid under this Agreement.
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6. PREPAYMENT
6.1. VOLUNTARY PREPAYMENT
The Borrower may make a prepayment to TIC of any Equipment Loan, in
each case subject to the Borrower, simultaneously therewith, making a
voluntary prepayment with respect to equipment facility credits under
the Banks' Equipment Facility Agreements in an aggregate amount equal
to the amount of any such voluntary prepayment. A prepayment of any
Equipment Loan shall be made in the currency of the Equipment Loan.
The Borrower shall not be entitled to reborrow any amount prepaid on
account of any Equipment Loan. The Borrower shall pay to TIC, on the
date of prepayment a commission of 0.25% (nought point two five
percent) of the amount (principal) prepaid. All prepayments shall be
made together with all accrued Interest on the amount prepaid and all
other sums due in respect of the amount prepaid.
6.2. MANDATORY PREPAYMENT
6.2.1. Upon the occurrence of a Triggering Quarter, the Borrower
shall, prior to any prepayments to the Banks under their
mandatory prepayment option in clause 6.1 of the Facility
Agreement (such clause attached hereto in SCHEDULE 6.2.1),
immediately prepay the principal of the Equipment Loans at a rate
of US $7,500,000 (seven million five hundred thousand United
States Dollars) per Quarter, commencing on the last Business Day
of each Quarter following the Triggering Quarter until the
Equipment Loans under this Agreement are fully repaid.
For the avoidance of doubt and by way of illustration only, if
the Triggering Quarter is the Quarter ended March 31, 2008 and
the then outstanding Equipment Facility Credits aggregate US
$30,000,000 (thirty million United States Dollars), the Borrower
shall prepay US $7,500,000 (seven million five hundred thousand
United States Dollars) of Equipment Loans on the last Business
Day of each of the Quarters ended in June, September and
December, 2008 and March, 2009.
6.2.2. Upon the occurrence of an Accelerated Trigger Quarter, the
Borrower shall, prior to any prepayments to the Banks under their
mandatory prepayment option in clause 6.1 of the Facility
Agreement (such clause attached hereto in Schedule 6.2.1),
immediately prepay the principal of the Equipment Loans to TIC at
a rate of US $12,500,000 (twelve million five hundred thousand
United States Dollars) per Quarter, commencing on the last
Business Day of each Quarter following the Accelerated Trigger
Quarter until the Equipment Loans under this Agreement are fully
repaid.
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For the avoidance of doubt and by way of illustration only, if
the Accelerated Trigger Quarter is the Quarter ended March 31,
2008 and the then outstanding Equipment Facility Credits
aggregate US $25,000,000 (twenty-five million United States
Dollars), the Borrower shall prepay US $12,500,000 (twelve
million five hundred thousand United States Dollars) in Equipment
Loans on the last Business Day of each of the Quarters ended in
June and September, 2008.
6.2.3. Should the Borrower wish to make a voluntary prepayment with
respect to any equipment facility credits under the Banks'
Equipment Facility Agreements, to the Banks, the Borrower shall,
simultaneously with such voluntary prepayment, pay an amount
equal to the aggregate amount of any such voluntary prepayment to
TIC.
6.3. The provisions of clauses 8.2 ("NO REBORROWING OF MANDATORY
PREPAYMENT"), 8.4 ("MANDATORY PREPAYMENT TOGETHER WITH INTEREST AND
OTHER SUMS OWED"), 8.5 ("CURRENCY FOR MANDATORY PREPAYMENT") and 8.6
("SCHEDULE FOR MANDATORY PREPAYMENT") of the Facility Agreement with
necessary changes, attached hereto in SCHEDULE 6.3, are hereby
incorporated by reference.
6A. SUBORDINATION
Notwithstanding anything to the contrary in this Agreement, TIC agrees, as
an obligation in favour of, and enforceable by, the Banks, as follows:
6A.1. the Indebtedness of the Borrower in respect of this Agreement is
subordinated to the rights of the Banks under the Facility Agreement
and under all other Finance Documents (as defined in the Facility
Agreement) in all respects, including with respect to payments of
principal and Interest and all other amounts payable to the Banks
under the Facility Agreement and under all other Finance Documents and
shall not be secured by any collateral whatsoever and, save in
accordance with the provisions of clauses 5 and 6 above and clause 7
and clause 8 below, no amount, whether in respect of principal,
Interest or any other amount, shall be payable by the Borrower on
account of such Indebtedness, prior to the date on which: (a) all
amounts payable by the Borrower under the Finance Documents shall have
been paid in full; and (b) no Bank shall be under any obligation under
any Finance Document to provide any Financial Indebtedness to the
Borrower;
6A.2. this Agreement shall not be amended in any way which may be adverse
in any manner to any interest or right of any Bank under any Finance
Documents, without the prior written consent of the Banks;
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6A.3. in the event of any Equipment Facility Event of Default, no amount of
whatsoever nature shall be payable by the Borrower in respect of the
Equipment Facility Credits (whether in respect of principal, Interest
or any other amount), until all amounts owing by the Borrower under
the Finance Documents shall have been paid in full;
6A.4. any variation of the terms of the Finance Documents(save for
variations that purport to increase TIC's obligations to provide
Equipment Facility Credits to the Borrower or that purport to derogate
from the obligations of the Banks to provide Equipment Facility
Credits to the Borrower under the Banks' Equipment Facility
Agreements) shall not require the consent of TIC, nor shall it
constitute an Equipment Facility Default;
6A.5. no payment of principal or Interest shall be made in respect of the
Equipment Facility Credits under this Agreement, unless, as at the
date of any such payment no Default exists and is continuing under any
of the Finance Documents; and
6A.6. notwithstanding the foregoing provisions of this clause 6A, the
provisions of clause 1.1.118 of the Facility Agreement applicable to
"Equity Convertible Debentures" shall be applicable to the
Indebtedness under this Agreement, MUTATIS MUTANDIS.
6A.7 The subordination pursuant to this clause 6A shall apply only with
respect to (i) the existing Loans under and as defined in the Facility
Agreement and all other amounts (including Interest, fees,
commissions, costs and expenses) owed from time to time under the
Finance Documents (but, for the avoidance of doubt, excluding new
loans, if any, which may increase the principal amount of the Loans
outstanding as of the date hereof), (ii) the Equipment Facility
Credits under the Banks' Equipment Facility Agreements (in the
aggregate principal amount not to exceed $30 million US dollars) and
all other amounts (including Interest, fees, commissions, costs and
expenses) owed from time to time in connection therewith, and (iii)
standby or documentary letters of credit or bank guarantees, which
shall not in the aggregate exceed $10 million, issued and/or to be
issued from time to time by any Bank and all other amounts (including
Interest, fees, commissions, costs and expenses) owed from time to
time in connection therewith.
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7. INTEREST
7.1. INTEREST RATE
The rate of Interest applicable to the Equipment Loans in respect of
each Interest Period (provided that the first Interest Period in
respect of any Equipment Loan made other than on the first day of a
Quarter, shall commence on the date of the making of such Equipment
Loan and end on the last Business Day of the Quarter in which such
Equipment Loan is made) shall be the sum of: (a) the rate per annum
determined to be LIBOR in accordance with clause 1.1.94 of the
Facility Agreement on the Interest Determination Date for such
Interest Period; and (b) 3% (three percent) per annum.
7.2. ACCRUAL OF INTEREST
Interest as aforesaid in clause 7.1 above in respect of the Equipment
Loans shall accrue from day to day and shall be calculated on the
basis of the actual number of days elapsed and a 360 (three hundred
and sixty) day year.
7.3. PAYMENT OF INTEREST
All Interest accrued as aforesaid in clause 7.2 above on the Equipment
Loans shall be paid on each Interest Payment Date and on the Final
Equipment Facility Maturity Date. The Borrower shall pay to TIC all
Interest payable as aforesaid into TIC's Account.
7.4. SUBSTITUTE INTEREST RATES
The provisions of clause 10 ("SUBSTITUTE INTEREST RATES") of the
Facility Agreement with necessary changes, attached hereto in SCHEDULE
7.4, are hereby incorporated by reference.
8. COMMISSIONS, FEES AND EXPENSES
The Borrower shall, in respect of the Availability Period, pay to TIC a
Commitment commission at the rate per annum of 0.25% (nought point two five
percent) on the Available Loan Commitment from time to time as from the
date of signature of this Agreement until the last day of the Availability
Period. Such fee shall accrue from day to day and shall be calculated on
the basis of the actual number of days elapsed and a 360 (three hundred and
sixty) day year and shall be paid in arrears on each Interest Payment Date
during the Availability Period and on the Termination Date. "AVAILABLE LOAN
COMMITMENT" means, at any time, the Commitment at such time, less all
Equipment Loans outstanding at such time.
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9. TAXES
9.1 TAXES
All payments to be made by the Borrower to TIC shall be made free and
clear of and without deduction for or on account of Tax, unless the
Borrower is required by law to make such payment subject to the
deduction or withholding of Tax, in which case (save where such
deduction or withholding is in respect of Tax on Overall Net Income of
TIC and the Borrower shall have delivered to TIC a receipt as referred
to in clause 9.3 below, simultaneously with the making of the payment
from which such Tax deduction has been made) the sum payable by the
Borrower in respect of which such deduction or withholding is required
to be made shall be increased, to the extent necessary, to ensure that
after the making of the required deduction or withholding, TIC
receives and retains (free from any liability in respect of any such
deduction or withholding), a net sum equal to the sum which it would
have received and so retained had no such deduction or withholding
been made or required to be made, provided that the aforesaid shall
not apply with respect to any Taxes (including, for the removal of
doubt, Tax on Overall Net Income) of TIC in connection with the
issuance of any shares, warrants or capital notes of the Borrower or
the exercise or conversion thereof.
9.2 NOTIFICATION OF TAXES
If, at any time, the Borrower is required by law to make any deduction
or withholding from any sum payable by it hereunder, the Borrower
shall, as soon as reasonably practicable, notify TIC.
9.3 PAYMENT AND SUBMISSION OF RECEIPT
If the Borrower makes any payment hereunder in respect of which it is
required to make any deduction or withholding, it shall pay the full
amount required to be deducted or withheld to the relevant taxation or
other authority within the time allowed for such payment under
applicable law and shall deliver to TIC, as soon as reasonably
practicable after it has made such payment to the applicable
authority, an original receipt (or a certified copy thereof) issued by
such authority evidencing the payment to such authority of all amounts
so required to be deducted or withheld in respect of such payment.
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9.4 TAX SAVING
9.4.1 In the event that following the imposition of any Tax on any
payment by the Borrower in consequence of which the Borrower is
required, under clause 9.1, to pay any additional amount in
respect thereof, TIC shall, in its sole opinion and based on its
own interpretation of any relevant laws or regulations (but
acting in good faith), receive or be granted a repayment of Tax,
or a credit against, or remission for, or deduction from, or in
respect of, any Tax payable by it (any of the aforegoing, to the
extent so reasonably identifiable and quantifiable, being
referred to as "A SAVING"), TIC shall, to the extent that it can
do so without prejudice to the retention of the relevant saving
and subject to the Borrower's obligation to repay the amount to
TIC, if the relevant saving is subsequently disallowed or
cancelled (which repayment shall be made promptly on receipt of
notice by the Borrower from such person of such disallowance or
cancellation), reimburse the Borrower promptly after receipt of
such saving by TIC with such amount equal to the lower of: (i)
the additional amount paid by the Borrower in respect of such Tax
under clause 9.1 as aforesaid; and (ii) such amount as TIC shall,
in its sole opinion but in good faith, have concluded to be the
finally determined amount or value of the relevant saving.
9.4.2 Nothing contained in this Agreement shall interfere with the
right of TIC to arrange its Tax and other affairs in whatever
manner it thinks fit and, in particular, TIC shall be under no
obligation to claim relief from Tax on its corporate profits, or
from any similar Tax liability, in respect of the Tax, or to
claim relief in priority to any other claims, reliefs, credits or
deductions available to it or to disclose details of its Tax
affairs. TIC shall not be required to disclose any confidential
information relating to the organisation of its affairs.
9.4.3. TIC will notify the Borrower promptly of the receipt by it of
any saving and of its opinion as to the amount or value of that
saving.
9.5 VAT
The Borrower shall add to any payment to be made by the Borrower to
TIC under this Agreement all VAT, if applicable. For the avoidance of
doubt, VAT will be added and paid by the Borrower to TIC pursuant to
payments of interest, fees, warrants and exchange rate differences, if
applicable.
10. REPRESENTATIONS AND WARRANTIES
10.1. ORGANIZATION
The Borrower is duly organized and validly existing under the laws of
the State of Israel and has full corporate power and authority to own,
lease and operate its properties and assets and to conduct its
business as now being conducted and to perform all its obligations
under this Agreement.
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10.2. MEMORANDUM AND ARTICLES OF ASSOCIATION
The Borrower has made available for inspection by TIC complete and
correct copies of the Memorandum of Association and Articles of
Association of the Borrower, as amended to the date furnished. Such
Memorandum and Articles of Association are in effect as of the date
hereof and as will be in effect at the Closing Date.
10.3. AUTHORIZATION; APPROVALS
Prior to the Closing Date, all corporate action on the part of the
Borrower necessary for the execution, delivery and performance of this
Agreement shall have been taken. Except for the approval of the
Investment Centre and the Banks, no consent, approval or authorization
of, exemption by, or filing with, any governmental or regulatory
authority or any third party is required in connection with the
execution, delivery and performance of this Agreement. This Agreement
when executed and delivered by or on behalf of the Borrower, shall
constitute the valid and legally binding obligations of the Borrower,
legally enforceable against the Borrower in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other laws relating to creditor's
rights generally and general principles of equity.
10.4. NO CONFLICTS
Neither the execution and delivery of this Agreement by the Borrower,
nor the compliance with the terms and provisions of this Agreement on
the part of the Borrower, will: (i) violate any statute or regulation
of any governmental authority, domestic or foreign, affecting the
Borrower; (ii) require the issuance of any authorization, license,
consent or approval of any governmental agency, or any other person
other than the Investment Centre and the Banks; 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 the Borrower is a party, or
by which the Borrower is bound, or constitute a default thereunder,
the effect of which might have a Material Adverse Effect on the
Borrower.
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10.5. NO LITIGATION
There are no actions, suits, proceedings, or injunctive orders,
pending or threatened against or affecting the Borrower relating to
the subject matter of this Agreement.
10.6. BANKS' EQUIPMENT LOANS
The Equipment Loans under this Agreement have substantially the same
economic terms and conditions, including but not limited to any fees
or other compensation, as the equipment loans under the Banks'
Equipment Facility Agreements, except that the Equipment Loans are
unsecured, subordinated to the obligations of the Borrower to the
Banks under the Finance Documents in accordance with clause 6A above
and, under the Banks' Equipment Facility Agreements, the Banks may
issue Equipment L/Cs.
11. DEFAULT
11.1. EVENTS OF DEFAULT
Each of the events set out in clause 11.2 to clause 11.7 is an event
of default ("AN EQUIPMENT FACILITY EVENT OF DEFAULT") (whether or not
caused by any reason outside the control of the Borrower or of any
other person). Promptly after the occurrence of an Equipment Facility
Event of Default, the Borrower will notify TIC that such an Equipment
Facility Event of Default has occurred.
11.2. NON-PAYMENT
The Borrower does not pay any amount payable by it under this
Agreement at the place and in the funds expressed to be payable,
within the earlier of: (a) 7 (seven) Business Days; or (b) 10 (ten)
days, of the due date for payment.
11.3. BREACH OF OBLIGATIONS
There is any breach of any undertaking by the Borrower in this
Agreement and, if such default is capable of remedy within such
period, within 7 (seven) days after receipt by the Borrower of written
notice from TIC requiring the breach to be remedied, the Borrower
shall have failed to cure such default.
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11.4. MISREPRESENTATION/BREACH OF WARRANTIES
Any representation or warranty made or repeated by or on behalf of the
Borrower in this Agreement (including through incorporation by
reference into this Agreement), or in any certificate or statement
delivered by or on behalf of the Borrower or under this Agreement is
incorrect or misleading in any material respect when made or deemed to
be made or repeated.
11.5. INVALIDITY
This Agreement shall cease to be in full force and effect in any
respect or shall cease to constitute the legal, valid, binding and
enforceable obligation of the Borrower.
11.6. DEFAULT UNDER THE FACILITY AGREEMENT
A Default or Event of Default (as distinguished from a Equipment
Facility Event of Default) under the Facility Agreement, as amended,
has occurred and is continuing.
11.7. CROSS ACCELERATION
Any amount in respect of Financial Indebtedness of the Borrower which
aggregates US $20,000,000 (twenty million United States Dollars) or
its equivalent, or more at any one time outstanding: (a) becomes
prematurely due and payable; (b) becomes due for redemption before its
normal maturity date; or (c) is placed on demand, in each such case by
reason of the occurrence of an event of default (howsoever
characterised) or any event having the same effect resulting from a
default by the Borrower.
11.8. EXECUTION OR OTHER PROCESS
Any execution, attachment, sequestration or other process arising out
of any claim by any third party against the Borrower, save where: (a)
the Borrower is in good faith on reasonable grounds, contesting the
execution, attachment, sequestration or other process by appropriate
Proceedings diligently pursued; (b) TIC is satisfied that the ability
of the Borrower to comply with its respective obligations under this
Agreement will not be adversely affected whilst such distress,
execution, attachment, diligence or other process is being so
contested; and (c) such process as aforesaid is cancelled or withdrawn
not later than 45 (forty-five) days after the institution thereof.
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11.9. ACCELERATION
Upon the occurrence of an Equipment Facility Event of Default and at
any time thereafter while the same is continuing, TIC may, by notice
to the Borrower:
11.9.1. declare that an Equipment Facility Event of Default has
occurred; and/or
11.9.2. declare that the Equipment Loans together with all Interest
accrued on all Equipment Loans and all other amounts (including
amounts due under clause 13, to the extent applicable) payable by
the Borrower under this Agreement from time to time, shall
thenceforth be repayable on demand being made by TIC (and in the
event of any such demand, the Equipment Loans, such Interest and
such other amounts shall be immediately due and payable); and/or
11.9.3. declare the Equipment Loans immediately due and payable,
whereupon they shall, subject to clause 6A above, become
immediately due and payable, together with all Interest accrued
on the Equipment Loans and all other amounts payable by the
Borrower (including, amounts due under clause 13, to the extent
applicable).
11.10. EQUIPMENT LOANS DUE ON DEMAND
Subject to clause 6A above, If, pursuant to clause 11.9.2 above TIC
declares the Equipment Loans to be due and payable on demand, then and
at any time thereafter, so long as any Equipment Facility Event of
Default is continuing or has not been waived, TIC may by written
notice to the Borrower require repayment of the Equipment Loans on
such date as TIC may specify in such notice (whereupon the same shall
become due and payable on such date together with accrued Interest
thereon and any other sums then owed by the Borrower hereunder) or
withdraw such declaration with effect from such date as they may
specify in such notice.
11.11. COLLECTION
Subject to clause 6A above, in the event of acceleration of the
Equipment Loans pursuant to clause 11.9.3 above or of a written notice
under clause 11.10 above, then, without derogating from any other
remedies or relief available to TIC under law or under this Agreement,
TIC shall be entitled to take all steps as it deems fit in order to
collect all sums owed by the Borrower to TIC under or in connection
with this Agreement (including all sums referred to in clause 11.9
above), all at the expense of the Borrower and to utilise the sums
received to repay in part or in full all amounts owed by the Borrower
hereunder.
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11.12. INDEMNITY
Subject to clause 6A above, the Borrower shall indemnify TIC against
any losses, charges or expenses which TIC may sustain or incur as a
consequence of:
11.12.1. the occurrence of any Equipment Facility Event of Default or
Equipment Facility Default; or
11.12.2. the operation of clauses 11.9, 11.10 or 11.11,
including, any losses, charges or expenses on account of funds
acquired, contracted for or utilised to fund any amount payable
under this Agreement or any amount repaid or prepaid. A
certificate of TIC as to the amount of any such loss or expense
shall be PRIMA FACIE evidence in the absence of manifest error.
11.13. TERMINATION OF COMMITMENT
In the event of the operation of clause 11.9 above, TIC shall be
entitled to terminate its Commitments. For the removal of doubt, such
termination shall not derogate from any obligations of the Borrower to
TIC under this Agreement.
12. DEFAULT INTEREST
12.1. DEFAULT RATE PERIODS
If any sum due and payable by the Borrower hereunder is not paid on
the due date therefor in accordance with the provisions of this
Agreement ("UNPAID SUM"), the period beginning on such due date and
ending on the date upon which the obligation of the Borrower to pay
the Unpaid Sum is discharged, shall be divided into successive
periods, each of which (other than the first) shall start on the last
day of such preceding period and the duration of each of which shall
(except as otherwise provided in this clause 12) be selected by TIC
(such periods selected as aforesaid "INTEREST PERIODS").
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12.2. DEFAULT INTEREST
During each such Interest Period as is mentioned in clause 12.1 above,
an Unpaid Sum shall bear Interest at the rate per annum which is the
sum from time to time of: (a) 3% (three percent); and (b) the Interest
rate in respect of such Interest Period as would have been determined
in accordance with clause 7.1 above (provided that, if, for any such
Interest Period LIBOR cannot be determined, the rate of Interest
applicable to such Unpaid Sum shall be the rate per annum which is the
sum of: (i) 3% (three percent); and (ii) 3% (three percent) plus a
rate as certified by TIC in accordance with clause 7.4 above.
12.3. PAYMENT OF DEFAULT INTEREST
Any Interest which shall have accrued under clause 12.2 above in
respect of an Unpaid Sum shall be due and payable and shall be paid by
the Borrower at the end of each Interest Period by reference to which
it is calculated or on such other dates as TIC may specify by written
notice to the Borrower.
12.4. LIMIT ON DEFAULT INTEREST
Notwithstanding anything to the contrary in this clause 12, the
effective rate of Interest (having regard to the periods determined
above) payable on Unpaid Sums shall at no time exceed the lower rate
of Interest applicable at the same time under the Banks' Equipment
Facility Agreements. For the avoidance of doubt, VAT, Tax withholding
or other Tax required to be paid shall not be taken into account for
the purposes of comparing Interest rates.
13. FAILURE TO DRAW AN EQUIPMENT LOAN
In the event that the Borrower shall make any Drawdown Request, but shall
not be entitled to receive (and shall have not received) the relevant
Equipment Loan by reason of not having fulfilled all of the conditions
therefor listed in clauses 4.1 or 4.2 above, then, without derogating from
any other right of TIC hereunder and under any applicable law, the Borrower
shall indemnify and compensate TIC for any and all of TIC's costs and
expenses in financing the amount requested by the Borrower, the liquidation
of any such funds and including loss of profit of TIC by reason of any such
event.
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14. PAYMENTS
14.1. PAYMENTS BY BORROWER
All payments to be made by the Borrower to TIC shall be made in same
day funds to TIC's Account. All payments required to be made by the
Borrower under this Agreement shall be calculated without reference to
any set-off or counterclaim and shall be made free and clear of and
without any deduction for or on account of, any set-off or
counterclaim.
14.2. PAYMENTS BY TIC TO BORROWER
All payments to be made by TIC to the Borrower in respect of Equipment
Loans shall be made by transfer of such payment to the Borrower's
Account.
15. MISCELLANEOUS
The provisions of clause 26 ("REMEDIES AND WAIVERS"), clause 27 ("NOTICES")
(other than clauses 27.2.2 and 27.2.3, which shall be replaced with:
"27.2.2. to TIC at:
Israel Coropration Ltd.
Xxxxxxxxx Xxxxx
00 Xxxxxx Xx.
Xxx-Xxxx, Xxxxxx 00000
ATTENTION: CHIEF FINANCIAL OFFICER
FACSIMILE: 972-3-684-457
WITH A COPY TO:
Gornitzky & Co.
00 Xxxxxxxxxx Xxxx.
Xxx Xxxx, Xxxxxx 00000
ATTENTION: XXX XXXXXX, ADV.
FACSIMILE: (00) 000 0000,
clause 28 ("AMENDMENTS"), clause 29 ("COUNTERPARTS"), clause 30 ("GOVERNING
LAW AND JURISDICTION"), clause 31 ("ENTIRE AGREEMENT") and clause 33
("BANKS REPRESENTATION") of the Facility Agreement with necessary changes,
attached hereto in SCHEDULE 15, are hereby incorporated by reference. This
Agreement may not be assigned by any party without the prior written
consent of the other party hereto.
- 25 -
IN WITNESS WHEREOF, THE PARTIES HAVE SIGNED THIS EQUIPMENT FACILITY AGREEMENT ON
THE DATE FIRST MENTIONED ABOVE.
for: TOWER SEMICONDUCTOR LTD.
By:
_____________________________
Title:
_____________________________
for: ISRAEL CORPORATION LTD.
By:
_____________________________
Title:
_____________________________
- 26 -
