0000902561-11-000023.txt : 20110328 0000902561-11-000023.hdr.sgml : 20110328 20110328160714 ACCESSION NUMBER: 0000902561-11-000023 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20110328 DATE AS OF CHANGE: 20110328 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: TOWER SEMICONDUCTOR LTD CENTRAL INDEX KEY: 0000928876 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 000000000 STATE OF INCORPORATION: L3 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-45635 FILM NUMBER: 11715708 BUSINESS ADDRESS: STREET 1: RAMAT GAVRIEL INDUSTRIAL PARK STREET 2: PO BOX 619 CITY: MIGDAL HAEMEK STATE: L3 ZIP: 23105 BUSINESS PHONE: 97246506611 MAIL ADDRESS: STREET 1: RAMAT GAVRIEL INDUSTRIAL PARK STREET 2: PO BOX 619 CITY: MIGDAL HAEMEK STATE: L3 ZIP: 23105 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BANK LEUMI LE ISRAEL BM CENTRAL INDEX KEY: 0000947357 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 24-32 YEHUDA HALEVY ST STREET 2: P O BOX 2 CITY: TEL AVIV ISRAEL STATE: L3 ZIP: 61003 BUSINESS PHONE: 01197235147941 MAIL ADDRESS: STREET 1: C/O EDGARFILINGS STREET 2: 2200 WEST LOOP SOUTH, STE 900 CITY: HOUSTON STATE: TX ZIP: 77027 SC 13D 1 sch13d.htm SCHEDULE 13D Unassociated Document

 
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 

SCHEDULE 13D
Under the Securities Exchange Act of 1934


Tower Semiconductor Ltd.
(Name of Issuer)


Ordinary Shares, NIS 1.00 par value per share
(Title of Class of Securities)


M87915-10-0
(CUSIP Number)


Yael (Ben Moshe) Rudnicki
Bank Leumi le-Israel B.M.
34 Yehuda Halevi Street
Tel Aviv 65546, Israel
972-3-5149419
 

(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)


February 3, 2011
(Date of Event which Requires Filing of this Statement)


If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [     ]

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).


Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.




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1.
Names of Reporting Persons.
Bank Leumi le-Israel B.M.
 
 
I.R.S. Identification Nos. of above persons (entities only).
Not applicable.
 
2.
Check the Appropriate Box if a Member of a Group (See Instructions)
 
 
(a)  [     ]
(b)  [ X ]
 
3.
SEC Use Only
 
4.
Source of Funds (See Instructions)   OO
 
5.
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)   [ X ]
 
6.
Citizenship or Place of Organization   -  Israel
 
   
   
Number of Shares Beneficially Owned by Each Reporting Person With
7.        Sole Voting Power  - 107,343,895
 
8.        Shared Voting Power  - 0
 
9.        Sole Dispositive Power  - 107,343,895
 
10.        Shared Dispositive Power  - 0
 
11.
Aggregate Amount Beneficially Owned by Each Reporting Person -107,343,895
 
12.
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   [ X ]
 
13.
Percent of Class Represented by Amount in Row (11) – 28.2% (1)
 
14.
Type of Reporting Person (See Instructions)
BK
 
 
(1)
Based on ordinary shares outstanding as at January 23, 2011, as reported in Tower’s Registration Statement on Form F-3, File No. 333-17912 (declared effective by the Securities and Exchange Commission (the “Commission”) on February 8, 2011) (the “February 2011 Registration statement”), plus 8,452,216 Ordinary Shares covered by the February 2011 Registration Statement, and calculated in accordance with rule 13d-3(d)(1)(i).
 



 
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Item 1.  Security and Issuer

The name of the issuer to which this Statement on Schedule 13D (this “Statement”) relates is Tower Semiconductor Ltd. (“Tower”).  Its principal executive offices are located at Ramat Gavriel Industrial Park, P.O. Box 619, Migdal Haemek 23105, Israel.  This Statement relates to Tower’s ordinary shares, New Israel Sheqels (“NIS”) 1.00 par value per share (the “Ordinary Shares”).

Item 2.  Identity and Background

This Statement is filed on behalf of Bank Leumi le-Israel B.M. (“Leumi”).  Leumi is sometimes referred to herein as a “Reporting Person”.

The Reporting Person, together with Bank Hapoalim B.M. (“Hapoalim”) and its subsidiary, Tarshish Hahzakot Vehashkaot Hapoalim Ltd. (“Tarshish”), jointly filed a Statement on Schedule 13D, dated September 28, 2006 (as amended by Amendments No. 1 and No. 2 thereto) with respect to the Ordinary Shares of Tower (the “Joint Statement”).  This Statement represents an amendment to and a separate restatement of the Joint Statement as it relates to the Reporting Person.

Leumi is a commercial bank organized under the laws of Israel.  Leumi is listed on the Tel Aviv Stock Exchange.   The address of the principal office of Leumi is 34 Yehuda Halevi Street, Tel Aviv 65546, Israel.

The name, citizenship, business address and present principal occupation or employment of each director and executive officer of Leumi are listed in Part I of Schedule A attached hereto which is incorporated herein by reference. See Part II of Schedule A for information regarding controlling persons of Leumi.

Other than as detailed in Part III of Schedule A, during the last five years, neither Leumi, nor, to Leumi’s knowledge, any of the persons named in Part I of Schedule A attached hereto, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person was or is subject to a judgment, decree or final order enjoining future violations of or prohibiting or mandating activity subject to Federal or State securities laws or finding any violation with respect to such laws.

Item 3.  Source and Amount of Funds or Other Consideration

Leumi is one of the lenders to Tower (Hapoalim is the other lender) pursuant to a Facility Agreement, originally dated January 18, 2001, as amended and restated on two occasions and as further amended from time to time (the “Facility Agreement”).

This Statement relates to (a) debt restructurings (the “Debt Restructurings”) (i) the first of which became effective on September 28, 2006 whereby Leumi converted US $79,000,000 of loans made to Tower pursuant to the Facility Agreement into an equity equivalent convertible capital note in the principal amount of US $39,500,000, such capital note being convertible into 25,986,842 Ordinary Shares; and (ii) the second of which became effective on September 29, 2008 whereby Leumi converted all US $15,000,000 of loans separately made by Leumi to Tower pursuant to a separate equipment finance facility and approximately US $85,000,000 of loans made to Tower pursuant to the Facility Agreement into an equity equivalent capital note in the principal amount of US $100,000,000, such capital note being convertible into 70,422,535 Ordinary Shares; (b) warrants to purchase Ordinary Shares granted to the Reporting Person in connection with Leumi entering into certain amendments to the Facility Agreement and in connection with Leumi providing a separate equipment facility, in each case, as requested by Tower (such warrants having been granted in 2003, 2005, 2007, 2009 and 2010); and (c) 4,225,996 Ordinary Shares issued to Leumi on February 3, 2011 (the “February 2011 Issuance”) in consideration for a decreased amount of interest paid by Tower to Leumi under the Facility Agreement between May 17, 2006 and September 29, 2008, in connection with the Debt Restructuring in 2006 (the Decreased Amount”).
 
 
 
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Item 4.  Purpose of Transaction

The purpose of the (a) acquisition of the capital notes was to effectuate the Debt Restructurings; (b) acquisition of the warrants was to permit Tower to provide non-cash consideration to the Reporting Person in connection with certain amendments to the Facility Agreement requested by Tower and in connection with the provision by Leumi of a separate equipment facility requested by Tower; and (c) the February 2011 Issuance was to permit Tower to provide non-cash consideration to Leumi on account of the Decreased Amount.  Except as described in Item 6, the Reporting Person has no plans or proposals concerning Tower with respect to the matters set forth in subparagraphs (a) through (j) of item 4 to Schedule 13D, save that the Reporting Person may, depending on market conditions and other pertinent factors, dispose of securities of Tower.

Item 5.  Interest in Securities of the Issuer

To the knowledge of the Reporting Person:

(a)
(1)
Leumi is the beneficial owner of 107,343,895 Ordinary Shares, including 96,409,377 Ordinary Shares issuable upon conversion of its currently convertible capital notes and 6,708,522 Ordinary Shares issuable upon exercise of currently exercisable warrants.   Leumi’s ownership represents approximately 28.2% of the Ordinary Shares outstanding as at January 23, 2011, as reported in Tower’s February 2011 Registration Statement, plus 8,452,216 Ordinary Shares covered by the February 2011 Registration Statement, and calculated in accordance with rule 13d-3(d)(1)(i).
 
 
(2)
To the best knowledge of Leumi, none of the persons named in Part I of Schedule A beneficially owns any Ordinary Shares.
 
(b)
Leumi has sole voting and dispositive power over 107,343,895 Ordinary Shares, including 96,409,377 Ordinary Shares issuable upon conversion of currently convertible capital notes and 6,708,522 Ordinary Shares issuable upon exercise of currently exercisable warrants.
 
(c)
Neither Leumi nor, to its knowledge, any person named in Part I of Schedule A has effected any transactions in the Ordinary Shares during the past sixty (60) days.
 
(d)
To the knowledge of the Reporting Person, Hapoalim, as the other lender to Tower and party to the Facility Agreement, received an identical amount of capital notes convertible into an identical number of Ordinary Shares, received 4,226,220 Ordinary Shares in consideration for the Decreased Amount (as applicable to Hapoalim) and, as party to amendments to the Facility Agreement requested by Tower, was granted identical amounts of warrants from Tower in 2003, 2005, 2009 and 2010 and, in connection with a separate equipment facility provided to Tower by Leumi, was granted a warrant in 2007 to purchase 1,470,588 Ordinary Shares.  Based on Hapoalim’s Statement on Schedule 13D, dated February 3, 2011, Hapoalim was the beneficial owner of 102,807,920 Ordinary Shares, including 96,409,377 Ordinary Shares issuable upon conversion of its Capital Notes and 1,918,886 Ordinary Shares issuable upon exercise of warrants.
 
(e)
Hapoalim’s ownership as aforesaid represented approximately 27.3% of the Ordinary Shares outstanding as at January 23, 2011, as reported in Tower’s February 2011 Registration Statement, plus the 8,452,216 Ordinary Shares covered by Tower’s February 2011 Registration Statement.



 
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Neither the filing of this Statement nor any of its contents shall be deemed to constitute an admission by the Reporting Person (as defined above) that the Reporting Person and any other persons or entities (including Hapoalim or any subsidiary thereof) constitute a “group” for purposes of Section 13(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules promulgated thereunder.  Further, the filing of this Statement shall not be construed as an admission that the Reporting Person is, for the purposes of Section 13(d) or 13(g) of the Exchange Act, or for any other purpose, the beneficial owner of any Ordinary Shares other than those Ordinary Shares over which the Reporting Person has voting and dispositive power, as reported herein.  The Reporting Person disclaims any pecuniary interest in any securities of Tower owned by any other person, and expressly disclaims the existence of a group.

Without limiting the generality of the foregoing, although, as described in Item 6 below, Leumi entered into (a) a Tag Along Agreement, as amended, with Israel Corporation Ltd. (“TIC”), Tower’s largest shareholder, and (b) an agreement with TIC, SanDisk Corporation, Alliance Semiconductor Corporation and Macronix International Co. Ltd. (collectively, the “Lead Investors”), the Reporting Person expressly disclaims the existence of a group with such counterparties.  Based on Tower’s Proxy Statement dated September 15, 2010 for its Annual General Meeting of Shareholders (filed in its report on Form 6-K for the month of September 2010 (No. 3) filed with the Commission on September 15, 2010 (“Tower’s September 2010 Proxy Statement”)), as at September 1, 2010, the Lead Investors (comprised of TIC as the only Lead Investor then beneficially owning at least 5% of Tower’s Ordinary Shares) may be deemed to beneficially own 223.04 million Ordinary Shares.  Such beneficial ownership represented 48.09% of the outstanding shares of Tower as at September 1, 2010, as reported in Tower’s September 2010 Proxy Statement.  Leumi owns ordinary shares in TIC representing 17.96% of TIC’s issued share capital (18.13% of the voting rights)(on an undiluted basis). In addition, for as long as Leumi owns between 10% to 20% of TIC's issued share capital, 20% of the members of TIC’s board of directors are proposed by Leumi. The identities of the directors proposed by Leumi are subject to the approval of TIC's controlling shareholder.

Item 6.
Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

Conversion Agreements and Capital Notes

On September 28, 2006, Leumi entered into a Conversion Agreement (the “2006 Conversion Agreement”) with Tower pursuant to which Leumi converted US $79 million of its loans to Tower into a Capital Note in the principal amount of US $39,500,000 which, in turn, is fully convertible, at any time and from time to time, in whole or in part, into an aggregate of 25,986,842 Ordinary Shares, at an initial conversion price of US $1.52 per Ordinary Share (the “2006 Capital Note”).  The initial conversion price was the average of the closing prices of the Ordinary Shares on the NASDAQ Stock Market for the ten trading days prior to May 17, 2006, the date the Memorandum of Understanding with respect to the Debt Restructuring was entered into by Tower with Leumi and Hapoalim.

On September 25, 2008, Leumi entered into a Conversion Agreement (the “2008 Conversion Agreement”) with Tower pursuant to which Leumi converted US $100 million of its loans to Tower into a Capital Note (the “2008 Capital Note”) in the principal amount of US $100,000,000 which, in turn, is fully convertible, at any time and from time to time, in whole or in part, into an aggregate of 70,422,535 Ordinary Shares, at an initial conversion price of US $1.42 per Ordinary Share.  The initial conversion price was 200% of the average of the closing prices of the Ordinary Shares on the NASDAQ Stock Market for the ten trading days prior to August 7, 2008, the date of Tower’s public announcement with respect to its negotiations with Leumi and Hapoalim regarding the debt restructuring.

The 2006 Conversion Agreement and the 2008 Conversion Agreement are sometimes referred to in this Statement individually as a “Conversion Agreement” and collectively as the “Conversion Agreements”.  The 2006 Capital Note and the 2008 Capital Note are sometimes referred to individually in this Statement as a “Capital Note” and collectively as the “Capital Notes”.




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The principal amount of each Capital Note does not bear interest, is not linked to any index, is subordinated to all liabilities of Tower having priority over the Ordinary Shares and is payable only out of distributions made upon the winding-up (whether solvent or insolvent), liquidation or dissolution of Tower.

The number of Ordinary Shares issuable upon conversion of each Capital Note is subject to adjustment upon the occurrence of certain events, such as dividends and distributions (including cash dividends), share splits and combinations, reclassifications, reorganizations and mergers.  A holder of a Capital Note will be eligible to participate in rights offerings that may be made by Tower on the same basis and at the same time as such rights may be exercised by shareholders of Tower (in such number as to which the holder would be entitled had the holder converted its entire Capital Note into shares immediately prior to the record date for such rights offering).

Each Capital Note is freely transferable or assignable by the holder, in whole or in part, at any time and from time to time, subject to receipt, if reasonably requested by Tower, of a written opinion that such transfer or assignment may be effected without registration under the Securities Act of 1933, as amended (the “Securities Act”).

Each Conversion Agreement includes an undertaking by Tower that, for so long as any shares or Capital Notes are issuable to Leumi or its 25% or more owned subsidiaries, pursuant to the Conversion Agreement, and any securities of Tower (including Capital Notes, Warrants and shares), constituting or convertible into 5% or more of any class of voting securities (as defined in 12 C.F.R. Section 225.2(q)) of Tower are beneficially owned by Leumi and/or its 25% or more owned subsidiaries, Tower will use its best efforts in order (a) that more than 50% of the consolidated assets of Tower as of December 31 of each calendar year are located outside of the United States (the “Asset Test”); (b) that more than 50% of the consolidated revenues of Tower as of December 31 of each calendar year are derived from outside the United States (the “Revenue Test”); (c) that the activities of Tower within the United States and the activities of its U.S. 25% or more owned subsidiaries are of the same kind as or support the activities of Tower or its non-U.S. 25% or more owned subsidiaries (the “Same Line of Business Test”); (d) that neither Tower nor any of its 25% or more owned subsidiaries will conduct activities in the United States that consist of engaging in the business of banking, securities, insurance or real estate (the “Financial Activities Test”); and (e) not to engage, or permit any of its 25% or more owned subsidiaries to engage, or to own or permit any of its 25% or more owned subsidiaries to own more than 5% of a class of voting securities of a person that engages, in the business of securities’ underwriting or distribution in the United States (the “No Underwriting Test”), provided, however, that nothing in the above shall require Tower to prejudice the business or financial interests of Tower and Tower may take such actions or refrain from taking actions that may cause it not to satisfy the Asset Test, the Revenue Test, the Same Line of Business Test, the Financial Activities Test and/or the No Underwriting Test, provided, further, that the taking of such actions, or refraining from taking such actions, are in the business or financial interests of Tower as reasonably determined by Tower.

As part of the Debt Restructuring in 2006, the spread over LIBOR applicable to Tower’s quarterly interest payments on its then remaining approximately US $369 million of loans under the Facility Agreement to the Banks was decreased by 1.4 percentage points from 2.5% to 1.1%, effective from May 17, 2006 (the date of the execution of the Memorandum of Understanding with respect to the Debt Restructuring).  As part of the Debt Restructuring in 2008, the spread over LIBOR applicable to Tower’s quarterly interest payments on its then remaining approximately US $200 million of loans to the Banks was increased by 1.4 percentage points back to 2.5% from 1.1%, effective September 29, 2008.  Pursuant to the Facility Agreement, Tower issued to Leumi on February 3, 2011 4,225,996 Ordinary Shares representing the Decreased Amount, i.e., US $6,043,175, representing the aggregate amount of interest that would have been payable and allocable to Leumi under the Facility Agreement but for the decrease in the spread over LIBOR applicable to Tower’s quarterly interest payments on its loans during the period of May 17, 2006 through September 29, 2008 under the Facility Agreement divided by US $1.43, the average NASDAQ closing price of the Ordinary Shares during the fourth quarter of 2010.




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The Facility Agreement provides that the issuance of the Ordinary Shares on account of the Decreased Amount was conditioned on (i) no Default or Event of Default having occurred; (ii) no law (including non-Israeli laws or interpretations by non-Israeli governmental bodies) prohibiting Hapoalim or Leumi from acquiring such shares or restricting Hapoalim’s or Leumi’s ability to indefinitely hold such shares; and (iii) all of Tower’s agreements with Hapoalim and Leumi with respect to shares and securities convertible into or exercisable for shares, including, without limitation, the Conversion Agreements and the Registration Rights Agreements (the “Equity Documents”), being in full force and effect and Tower not in default of any of its obligations thereunder.  The Facility Agreement further provides that all such issuances were to be made in accordance with the terms of the respective Equity Documents.  If such conditions were not met, the Decreased Amount would have been payable to Leumi in cash by Tower rather than in Ordinary Shares.

Without derogating from the immediately preceding paragraph, Tower undertook, in the Facility Agreement, to ensure that all of its Ordinary Shares to be issued on account of the Decreased Amount would be, by the time of their issue, freely tradeable without any restrictions (including any holding period restrictions (“hasima”)); provided that, if, despite Tower’s best efforts (including the taking of all steps in good time so as to achieve freely tradeable shares as aforesaid), the action required to be taken by the applicable securities regulator in order for all such shares to be freely tradeable by such time shall not have been taken, Tower would use its best efforts to ensure that all such shares are made freely tradeable as aforesaid as soon as possible thereafter.  Tower issued fully tradeable shares to Leumi on February 10, 2011.

The Facility Agreement further provides that any default by Tower under any Equity Document shall constitute a Default or Event of Default, as applicable, under the Facility Agreement.

The conditions precedent for the issuance of Ordinary Shares to Leumi on account of the Decreased Amount, as set forth in the 2006 Conversion Agreement, included, inter alia, receipt of all necessary governmental and third party approvals, requisite legal opinions and confirmation from the Chief Financial Officer of Tower that Tower (a) satisfied the Asset Test, the Revenue Test, the Same Line of Business Test, the Financial Activities Test and the No Underwriting Test (collectively, the “Tests”) as of December 31 in each of the two years immediately prior to 2011; and (b) was not aware of any reason why it would not continue to satisfy each of the Tests during 2011 and 2012.

The foregoing summaries of the Conversion Agreements and Capital Notes are qualified in their entirety by reference to the Conversion Agreements and the forms of Capital Note attached as Exhibit 1 to each of the Conversion Agreements.  The 2006 Conversion Agreement (Exhibit 1 to this Statement) and the 2008 Conversion Agreement (Exhibit 2 to this Statement) are each in their entirety incorporated herein by reference.

Registration Rights Agreement

Under the Amended and Restated Registration Rights Agreement entered into by Tower with Leumi on September 29, 2008, as amended (the “Registration Rights Agreement”), Leumi has the right from time to time with respect to all or any portion of Leumi’s Registrable Securities (as defined below) to require Tower to file a registration statement with the Commission as soon as practicable, but no later than 45 days after written demand, and make all required filings with the Israeli Securities Authority (the “Authority”) with respect to such Registrable Securities and use its best efforts to have the registration statement declared effective by the Commission and the Authority as soon as possible after such filing with the Commission and the Authority.  Tower is obligated to keep each such registration statement effective pursuant to Rule 415 of the Securities Act and under the Israel Securities Law at all times until the earlier of (i) the date as of which all of the Holders (as defined below) confirm to Tower in writing that they may sell all of the Ordinary Shares covered by such Registration Statement without restriction pursuant to all of the following: (x) Rule 144(k) under the Securities Act, (y) the Israel Securities Law, and (z) other securities or “blue sky” laws of each jurisdiction in which Tower obtained a registration or qualification, or (ii) the date on which the Holders shall have sold all the Ordinary Shares covered by such Registration Statement (A) in accordance with such Registration Statement (except to another Holder), or (B) to the public pursuant to Rule 144 under the Securities Act.  The Registration Rights Agreement also requires Tower to keep effective Form F-3 Registration Statement





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No. 333-131315 previously filed by Tower covering Ordinary Shares issuable upon the exercise of warrants issued to Leumi in 2003 and 2005.  The Ordinary Shares issued or issuable (a) upon conversion of any of the Capital Notes; (b) in consideration for the Decreased Amount; and (c) upon exercise of any of the warrants issued to Leumi in 2003, 2005, 2007, 2009, 2010 and to be issued to Leumi in 2011 (see “Warrants” below), together with any shares of capital stock issued or issuable with respect to the Ordinary Shares, are referred to herein as “Registrable Securities”.

The registration rights under the Registration Rights Agreement are freely assignable, in whole or in part, at any time or from time to time, by the Reporting Person, any nominee of Leumi to hold the securities issued with respect to the Decreased Amount, and any transferee or assignee to whom Leumi or such nominee assigns its rights (collectively, the “Holder”) to any transferee of all or any portion of a Capital Note or of the Registrable Securities (provided that, in the case of the transfer of such Registrable Securities only, the rights under the Registration Rights Agreement may be transferred only if the Holder reasonably believes that such transferee cannot immediately make a public distribution of such securities without restriction under the Securities Act, the Israel Securities Law or other applicable securities laws).

Under the Registration Rights Agreement, Tower is responsible to pay all expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications required to be made by Tower pursuant to the Registration Rights Agreement, including, without limitation, all registration, listing and qualification fees, printers and accounting fees, fees and disbursements of counsel to Tower and the Holders.

The foregoing summary of the Registration Rights Agreement is qualified in its entirety by reference to the Amended and Restated Registration Rights Agreement entered into between Tower and Leumi (Exhibit 3 to this Statement) and the 2009 Amendment to the Amended and Restated Registration Rights Agreement between Tower and Leumi (Exhibit 4 to this Statement) which are each incorporated herein in their entirety by reference.

Warrants

In December 2003, Tower issued a five-year warrant to purchase 448,298 Ordinary Shares at an exercise price of US $6.17 per Ordinary Share to Leumi (the “2003 Warrant”) in connection with the seventh amendment to the Facility Agreement.

In August 2005, Tower issued a warrant to purchase 4,132,232 Ordinary Shares at an exercise price of US $1.21 per Ordinary Share to Leumi (the “2005 Warrant”) in connection with the ninth amendment to the Facility Agreement.  Under the original terms of the 2005 Warrant, the right to purchase 2,066,116 Ordinary Shares became exercisable on the effectiveness of the ninth amendment in August 2005 and was to expire after a period of five years and the right to purchase the remaining 2,066,116 Ordinary Shares became exercisable on September 28, 2006, the date of signature by Tower, Hapoalim and Leumi of an agreement to reschedule the repayment dates of certain loans made to Tower pursuant to the ninth amendment and was to expire after a period of five years.

Each of the 2003 Warrants and 2005 Warrants contained registration rights provisions and pursuant thereto a Form F-3 Registration Statement No. 333-131315 was filed by Tower and declared effective by the Commission on March 15, 2006.

On September 28, 2006, Tower and Leumi entered into First Amendments to each of the Warrants, inter alia, extending the term of each of the Warrants to September 28, 2011.

On September 10, 2007, Tower issued to Leumi a warrant to purchase 1,000,000 Ordinary Shares at an exercise price of US $2.04 per Ordinary Share in connection with equipment finance facilities provided by Leumi to Tower (the “2007 Warrant”).  The warrant was to expire on March 31, 2010, which was the final maturity date of such facility, subject to the automatic extension to the date, if any, after March 31, 2010 upon which all of Tower’s obligations to Leumi under said facility shall have been fully discharged.
 
 

 
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On August 17, 2009, in connection with waivers provided by Leumi to Tower under the Facility Agreement and a further amendment to the Facility Agreement to extend the Final Maturity Date thereof to June 30, 2013, Tower agreed to extend the expiry date of the 2003, 2005 and 2007 Warrants to June 30, 2013.  In addition, Tower agreed to issue to Leumi on each of October 1, 2009, September 1, 2010 and September 1, 2011, such number of Warrants as when multiplied by the New Warrant Exercise Price (as defined below) shall equal US $500,000 (the “New Warrants”) to Leumi.  The exercise price for each tranche of the New Warrants was agreed to be the lower of: (i) US $0.88653, representing the average closing price of the shares of Tower on the NASDAQ for the last fifteen trading days (the “Fifteen-Day Average Price”) prior to August 17, 2009; and (ii) the Fifteen-Day Average Price prior to each of October 1, 2009, September 1, 2010 and September 1, 2011, as applicable (the “New Warrant Exercise Price”); provided that the New Warrant Exercise Price will in no event be less than the nominal value of Tower’s ordinary shares (NIS 1.00).  The New Warrants were to expire on October 1, 2012, September 1, 2013 and September 1, 2014, respectively and were to be in the form, mutatis mutandis, of the existing warrants held by Leumi.  Tower also agreed to amend the Registration Rights Agreement to reflect the New Warrants. See Registration Rights Agreement above.

Pursuant to the foregoing, Tower issued to Leumi on October 13, 2009 a warrant to purchase 563,996 ordinary shares at an exercise price of US $0.88653 per share with an expiry date of October 1, 2012 (the “2009 Warrant”).

On October 13, 2009, Tower and Leumi entered into Second Amendments to each of the 2003 and 2005 Warrants and a First Amendment to the 2007 Warrant, inter alia, extending the term of each of such Warrants to June 30, 2013 and providing that the registration rights provided for in the Registration Rights Agreements, as amended by the 2009 Amendment thereto, shall apply to the Ordinary Shares issuable upon exercise of such Warrants.

On August 16, 2010, in connection with a further amendment to the Facility Agreement which, inter alia, extended the Final Maturity Date thereunder to December 31, 2015, Tower further amended the 2003, 2005, 2007 and 2009 Warrants to extend the expiry date of each such Warrant to December 31, 2015.

On September 1, 2010, Tower issued to Leumi a warrant to purchase 563,996 ordinary shares at an exercise price of US $0.88653 per share with an expiry date of December 31, 2015 (the “2010 Warrant”).  On September 1, 2010, at the request of Leumi, Tower issued to Leumi amended and restated 2003, 2005, 2007 and 2009 Warrants reflecting the foregoing amendments thereto.

The foregoing summary of the 2003, 2005, 2007, 2009 and 2010 Warrants is qualified in its entirety by reference to the Amended and Restated 2003 Warrant (Exhibit 5 to this Statement), the Amended and Restated 2005 Warrant (Exhibit 6 to this Statement), the Amended and Restated 2007 Warrant (Exhibit 7 to this Statement), the Amended and Restated 2009 Warrant (Exhibit 8 to this Statement) and the 2010 Warrant (Exhibit 9 to this Statement), which are each incorporated herein in their entirety by reference.

Tag Along Agreement

In a Tag Along Agreement with Leumi originally dated September 28, 2006, as amended by Amendment No. 1 thereto dated September 25, 2008, TIC granted Leumi and its affiliates “tag along” rights proportionally to participate in, and on the same terms and conditions as, a sale by TIC to a third party (other than non-prearranged sales by TIC into the market on any stock exchange in which the Ordinary Shares are then traded or listed) as a result of which TIC would cease (either on the basis of Tower’s then issued and outstanding shares or on a fully-diluted basis) to be Tower’s largest shareholder.  The tag along rights apply only to Capital Notes or shares issued upon conversion thereof and/or shares to be received on account of the Decreased Amount.   However, Ordinary Shares held by a subsidiary of TIC that is publicly held and that purchases, solely as a financial investment, such Ordinary Shares or securities convertible into or exercisable for Ordinary Shares in the market (i.e., not directly or indirectly from Tower or TIC) and not at the request or instruction of TIC, would not be deemed held by TIC for purposes of the tag along right.




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The foregoing summary of the Tag Along Agreement, as amended by Amendment No. 1 thereto, is qualified in its entirety by reference to the Tag Along Agreement entered into between TIC and Leumi (Exhibit 10 to this Statement) and Amendment No. 1 thereto (Exhibit 11 to this Statement), which are each incorporated herein in their entirety by reference.

Agreement with Lead Investors

On September 28, 2006, Leumi entered into an agreement (the “Agreement”) with TIC, SanDisk Corporation, Alliance Semiconductor Corporation and Macronix International Co. Ltd. (collectively, “the Lead Investors”) pursuant to which the Lead Investors would be obligated towards any one (and not more than one) acquirer of 5% or more of the then outstanding issued share capital of Tower (but only if the source of such 5% interest is the 2006 Capital Note) to vote for the nominee of such acquirer to be appointed as a director of Tower.

Leumi would have the right to designate which acquirer of such 5% interest (the “Acquiring Person”) shall have the rights under the Agreement and Leumi may, in its discretion, not designate any acquirer as the Acquiring Person.

A majority (in number and not shareholdings) of the Lead Investors then having the right to have one of its nominees elected to the board of directors of Tower pursuant to the Consolidated Shareholders Agreement by and among the Lead Investors, dated January 18, 2001, as amended and as may be amended from time to time (the “CSA”) (“Eligible Lead Investors”) are entitled to object to the appointment of any particular individual nominated by an Acquiring Person as a director of Tower on reasonable grounds (including, without limitation, that the nominee is a competitor of Tower, or is an employee of, or consultant to, Tower or to a competitor of Tower).  In addition, an Acquiring Person would not have any rights under the Agreement if a majority (in number and not shareholdings) of the Eligible Lead Investors shall object to the identity thereof but only on the following grounds: that the Acquiring Person is a competitor of Tower or an employee of, or consultant to, Tower or to a competitor of Tower or is a person organized under the laws of a state that either (a) is at war with the State of Israel, or (b) has been declared by the Israel Minister of Defence as a state “hostile” to Israel.

In the event that the Acquiring Person and its subsidiaries hold together in the aggregate less than 5% of the outstanding Ordinary Shares, the Acquiring Person will not be entitled to designate any nominee, and if requested by any of the Lead Investors, will cause its nominee then serving as a director of Tower to resign immediately from such position, provided that in the event that the Acquiring Person and its subsidiaries hold together at any one time in the aggregate 6% or more of the outstanding Ordinary Shares, and, subsequent to such time, the Acquiring Person and its subsidiaries hold together in the aggregate less than 5% of the outstanding Ordinary Shares solely as a result of additional Ordinary Shares having become issued and outstanding (and not as a result of any sales of Ordinary Shares by the Acquiring Person or its subsidiaries) (such date, the “Dilution Date”), and within 90 days of the Dilution Date, the Acquiring Person and its subsidiaries shall not again become together the holders of 5% or more of the outstanding Ordinary Shares (such 90th day, the “Loss of Right Date”), the Acquiring Person shall not, after the Loss of Right Date, be entitled to designate a nominee and, if requested by any of the Lead Investors, shall cause its nominee then serving as a director of Tower to resign immediately from such position.  In the absence of such resignation within 24 hours of such request, the Lead Investors agree to take such action as is necessary to cause a general meeting of shareholders of Tower to be assembled, and to vote all their Ordinary Shares in order to remove such director from Tower’s board of directors.




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The obligation of each of the Lead Investors towards the Acquiring Person and the Acquiring Person’s nominee under the Agreement is subject to the Acquiring Person agreeing to attend and vote (and/or, if applicable, cause any and all of its subsidiaries holding Ordinary Shares to vote) at general meetings of shareholders of Tower all of the Ordinary Shares held by the Acquiring Person and its subsidiaries for (and only for) (a) the election of (i) the Acquiring Person’s nominee; (ii) the nominees to the board of directors of Tower for which any of the Lead Investors shall be obligated to vote for pursuant to the CSA; and (iii) a representative of TIC as Chairman of the board of directors of Tower if any of the Lead Investors shall be obligated to vote therefor pursuant to the CSA, and (b) in the case of each of (a)(i), (ii) and (iii) above, any other resolution which is necessary in order to finalize each such election and against any resolution the effect of which is to prevent or impede each such election, provided that, if any such Lead Investor shall not have a nominee to the board of directors of Tower, such Lead Investor shall nonetheless remain obligated to the Acquiring Person and the Acquiring Person’s nominee under the Agreement.  The Acquiring Person and the Lead Investors (and/or their respective subsidiaries) shall have the right to vote on other matters in such manner as they deem fit.  The Agreement makes clear, however, that the Acquiring Person is not required to agree to vote as set out above and may at any time terminate such agreement (in which case, the Acquiring Person shall be relieved of any obligation so to vote) and, with respect to the Lead Investors, the sole consequence of an Acquiring Person’s failure to agree or termination of such agreement as aforesaid is that the Lead Investors will not be obligated to vote for the Acquiring Person’s nominee.

The Agreement terminates on January 18, 2013 or such later date to which the CSA shall have been extended.

In the event the CSA terminates prior to January 18, 2013, each of the Lead Investors will remain obligated to the Acquiring Person and the Acquiring Person’s nominee under the Agreement, provided that, if such Lead Investor has a nominee to the board of directors of Tower, each such Lead Investor’s obligations shall be subject to the Acquiring Person agreeing to attend and vote (and/or, if applicable, cause any and all of its subsidiaries holding Ordinary Shares to vote) at general meetings of shareholders of Tower all of the Ordinary Shares held by the Acquiring Person and its subsidiaries for (and only for) (a) the election of (i) the Acquiring Person’s nominee; and (ii) such Lead Investor’s nominee or nominees to the board of directors of Tower, and (b) in the case of (i) and (ii) above, any other resolution which is necessary in order to finalize each such election and against any resolution the effect of which is to prevent each such election, provided that, if two or more Lead Investors have agreed to vote for one another’s nominees, the vote by the Acquiring Person and, if applicable, its subsidiaries, for all such nominees of such Lead Investors shall be deemed a vote for (and only for) the nominee of each such Lead Investor.  The Agreement makes clear that the Acquiring Person and the Lead Investors (and/or their respective subsidiaries) have the right to vote on other matters in such manner as they deem fit.

The foregoing summary of the Agreement with the Lead Investors is qualified in its entirety by reference to the Agreement entered into between the Lead Investors and Leumi (Exhibit 12 to this Statement), which in its entirety is incorporated herein by reference.

Facility Agreement

The Facility Agreement imposes a number of restrictions on Tower, including restrictions on debt, investments, mergers, acquisitions, disposals, prohibitions on the payment of dividends and changes in ownership.

A change of ownership will be deemed to occur if (a) the Lead Investors shall, directly or indirectly through subsidiaries, cease to nominate, in aggregate, more than 50% of the board of directors of Tower (excluding, for this purpose, external directors (Dahaz), 1 (one) independent director under Nasdaq Marketplace Rules, officers of Tower (including the chief executive officer) who are ex-officio directors of Tower and any directors appointed by a purchaser of Hapoalim’s or Leumi’s shares); or (b) at any time TIC shall cease to hold (directly or indirectly through subsidiaries) in the aggregate at least 48,164,483 Ordinary Shares and/or capital notes convertible into Ordinary Shares.




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The Facility Agreement further provides that, upon certain triggering events (such as the commencement of bankruptcy or receivership proceedings against Tower ordered by a court of competent jurisdiction or the prior determination of an arbitrator that bankruptcy or receivership proceedings would be issued by a court against Tower were a petition to be filed with a court seeking reorganization or arrangement under applicable bankruptcy law or upon Tower requesting creditor protection), Leumi and Hapoalim will be able to bring a firm offer made by a potential investor to purchase the Ordinary Shares at a price provided in the offer, provided the offer is accompanied by an opinion from a reputable investment banking firm that the offer is fair to Tower. In such case, Tower would be required thereafter to procure a rights offering to invest up to 60% of the amount of this offer on the same terms. If the offeror intends to purchase a majority of Tower’s outstanding share capital, the rights offering will be limited to allow for this, unless the Lead Investors agree to exercise in a rights offering rights applicable to their shareholdings and agree to purchase in a private placement enough shares to ensure that the full amount of the offer is invested.

Item 7.  Material to Be Filed as Exhibits

1.  
Conversion Agreement, dated September 28, 2006, between Tower Semiconductor Ltd. and Bank Leumi le-Israel B.M. (incorporated by reference to Exhibit 2 to the Joint Statement of Bank Leumi le–Israel B.M., Bank Hapoalim B.M. and Tarshish Hahzakot Vehashkaot Hapoalim Ltd., dated September 28, 2006 (the “Joint Statement”)).
 
2.  
Conversion Agreement, dated September 25, 2008, between Tower Semiconductor Ltd. and Bank Leumi le-Israel B.M. (incorporated by reference to Exhibit 18 to Amendment No. 2, dated September 29, 2008, to Joint Statement).
 
3.  
Amended and Restated Registration Rights Agreement, dated September 25, 2008, between Tower Semiconductor Ltd. and Bank Leumi le-Israel B.M. (incorporated by reference to Exhibit 3 to Amendment No. 2, dated September 29, 2008, to Joint Statement).
 
4.  
2009 Amendment, dated October 13, 2009, between Tower Semiconductor Ltd. and Bank Leumi le-Israel B.M. to Amended and Restated Registration Rights Agreement, dated September 25, 2008.
 
5.  
Warrant originally dated December 11, 2003 granted by Tower Semiconductor Ltd. to Bank Leumi le–Israel B.M., as amended and restated to reflect First Amendment thereto, dated September 28, 2006, Second Amendment thereto, dated October 13, 2009 and Third Amendment thereto, dated August 16, 2010.
 
6.  
Warrant originally dated August 4, 2005, granted by Tower Semiconductor Ltd. to Bank Leumi le–Israel B.M., as amended and restated to reflect First Amendment thereto, dated September 28, 2006, Second Amendment thereto, dated October 13, 2009 and Third Amendment thereto, dated August 16, 2010.
 
7.  
Warrant originally dated September 10, 2007, granted by Tower Semiconductor Ltd. to Bank Leumi le–Israel B.M., as amended and restated to reflect First Amendment thereto, dated October 13, 2009 and Second Amendment thereto, dated August 16, 2010.
 
8.  
Warrant originally dated October 13, 2009, granted by Tower Semiconductor Ltd. to Bank Leumi le–Israel B.M., as amended and restated to reflect First Amendment thereto, dated August 16, 2010.
 
9.  
Warrant dated September 1, 2010, granted by Tower Semiconductor Ltd. to Bank Leumi le–Israel B.M..
 
10.  
Tag Along Agreement, dated September 28, 2006, between Israel Corporation Ltd. and Bank Leumi le–Israel B.M. (incorporated by reference to Exhibit 11 to Joint Statement).
 



 
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11.  
Amendment No. 1, dated September 25, 2008, to Tag Along Agreement, dated September 28, 2006, between Israel Corporation Ltd. and Bank Leumi le–Israel B.M. (incorporated by reference to Exhibit 20 to Amendment No. 2, dated September 29, 2008, to Joint Statement).
 
12.  
Agreement, dated September 28, 2006, among Bank Leumi le–Israel B.M., Israel Corporation Ltd., SanDisk Corporation, Alliance Semiconductor Corporation and Macronix International Co. Ltd. (incorporated by reference to Exhibit 12 to Joint Statement).
 




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Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.



March 14, 2011
    
Date
    
     
 
/s/ 
Batsheva Lapidot
/s/ 
David Sackstein
Signature
    
     
   
Batsheva Lapidot
VP- Sector Manager
  
David Sackstein
Office of the Corporate Secretary
 
                                                                          Bank Leumi le-Israel B.M.
Name/Title
    





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SCHEDULE A

I.
Information Regarding Executive Officers and Directors of Bank Leumi le-Israel B.M
 

 
Board of Directors

Name
 
             Business Address
Principal Occupation
Citizenship
David Brodet
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Chairman of the Board of Directors of Bank Leumi le-Israel B.M.
Israeli
Reuven Adler
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
C.P.A. (Isr.), Business Consultant and Company Director
Israeli
Doron Cohen
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
CEO, Co-Op Blue Square Services Corporation Ltd., Economic and Business Consulting
Israeli
Moshe Dovrat
 
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Company Director
Israeli
Yehuda Drori
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Company Director and member of Investment Committee, Financial Consultant
Israeli
Zipora Gal Yam
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Economic Consultant, Company Director
Israeli
Arieh Gans
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Professor of Accounting, Tel Aviv University and Company Director
Israeli
Rami Avraham Guzman
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Company Director, Public/Government Company Advisor
Israeli
Miri Katz
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Attorney
Israeli
Zvi Koren
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Economic Advisor
Israeli
Jacob Mashaal
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Company Manager
 
Israeli
Yoav Nardi
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Company Director, Financial and Risk Management Consultant
Israeli
Efraim Sadka
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Professor of Economics, Tel Aviv University
Israeli
Gabriela Shalev
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
President of the Higher Academic Council, Ono Academic College
Israeli
Ehud Shapira
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
Doctor of Economics and Finance, Company Director, Chairman of  Bar-Ilan Yeda Ltd., Chairman of the Investment Committee of Bar-Ilan University
 
Israeli
 


 
   
Page 16 of 17


Executive Officers - Members of Management of Bank Leumi le-Israel B.M.


Name
 
               Business Address
Principal Occupation – Position held with the Bank
Citizenship
Galia Maor
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
President and Chief Executive Officer
Israeli
Zeev Nahari1
 
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
Senior Deputy Chief Executive Officer, Acting CEO in the absence of the President and CEO, Senior Member of Management for Finance, Accounting and Capital Markets, Manager of Market Risks
 
Israeli
Gideon Altman
 
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Acting Head of Commercial Banking Division
Israeli
David Bar-Lev
 
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Head of Human Resources
Israeli
Hedva Ber
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Chief Risk Officer, Head of Risk Management Division
Israeli
Yaacov (Kobi) Haber
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Head of Finance and Economics Division
Israeli
Zvi Itskovitch
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Head of International and Private Banking Division
Israeli
Baruch Lederman
 
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Head of Banking Division
Israeli
Itzhak Malach
 
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Head of Operations, Information Systems and Administration, Manager of Operational Risks
Israeli
Rakefet Russak-Aminoach
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Head of Corporate Division, Manager of Credit Risks
Israeli
Menachem Schwartz
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Chief Accounting Officer, Head of Accounting
Israeli
Daniel Tsiddon
34 Yehuda Halevi Street,
Tel Aviv 65546, Israel
 
Head of Capital Markets Division
Israeli

 
1)
Mr. Nahari serves as one of Leumi’s representatives on the board of directors of Israel Corporation which is the largest holder of Tower’s Ordinary Shares.




   
Page17 of 17


II.
Information regarding Persons Controlling Bank Leumi le-Israel B.M. (the “Bank”)
 
 
No shareholder currently holds 10% or more of the means of control of the Bank. The Government of Israel on behalf of the State of Israel currently holds 6.46% of the issued share capital and voting rights of the Bank. Pursuant to Israeli law, the Government is required to avoid involvement in the ongoing management of the Bank's affairs, and the Bank shall not be deemed to be a corporation with governmental participation in its management for the purposes of any law and for all intents and purposes.
 
 
Further, under Israeli banking legislation, since September 2004 no person may control a banking corporation without receiving a control permit from the Bank of Israel, and no person may hold 5% or more of the means of control of a banking corporation without receiving a holding permit from the Bank of Israel (until that date, 10%). As of the date of this report, no such control permit has been granted to any of the Bank's shareholders.
 
III.
In January 2008, the Tel Aviv-Jaffa Magistrate’s Court approved a plea bargain that had been reached between the Bank, Leumi L.P. Ltd. (formerly Leumi-Pia Trust Management Co. Ltd.), Leumi Management Ltd. (formerly Psagot Managers of Mutual Funds -  Leumi Ltd.) and Leumi Securities and Investments Ltd. (formerly Psagot Ofek Investment House Ltd.) – which are subsidiaries of the Bank – and the prosecutor’s office, with respect to an indictment that was filed in respect of a breach of section 82 of the Joint Investment Trusts Law, 1984 in its form at the time of the alleged offence, together with section 29(b) of the Penal Law, 1977.
 
 
As part of the plea bargain, the prosecutor retracted all the allegations related to the Bank’s employees and the employees of the subsidiaries, and filed an amended indictment against the Bank and the subsidiaries only.  The amended indictment was significantly narrower in that it charged the Bank with the offence of lack of supervision only. The prosecutor declared that the circumstances surrounding the offence were not especially serious. The Bank and the subsidiaries admitted to the facts that were the subject of the amended indictment, and the following fines were imposed on them: the Bank – NIS 5 million, Leumi L.P. Ltd. – NIS 10 million, and Leumi Management Ltd. and Leumi Securities and Investments Ltd. – NIS 10 million, which was divided between the two of them.
 



 
 
 EX-4.1 2 exhibit4.htm EXHIBIT 4 Unassociated Document

Exhibit 4
2009 AMENDMENT
 
to
 
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
 
 
THIS 2009 AMENDMENT is made on the 13th day of October, 2009, between:
 
 
(1)
TOWER SEMICONDUCTOR LTD., a company incorporated in Israel (registered number 52–004199–7), having its registered office at P.O. Box 619, Migdal Haemek 23105, Israel (“the Company”);
 
 
and
 
 
(2)
BANK LEUMI LE–ISRAEL B.M. (“the Bank”)
 
 
WHEREAS:
 
(A)
this registration rights agreement was originally entered into on September 28, 2006 between the Company and the Bank and amended and restated by the parties on September 25, 2008 (“the Agreement”); and
 
(B)
at the request of the Company, the Company and the Banks entered into a  letter agreement, dated August 17, 2009 (“the 2009 Waiver Letter”), pursuant to which the Banks, inter alia, waived compliance with certain financial covenants contained in the Facility Agreement and extended the repayment schedule of the loans under the Facility Agreement and the Company, inter alia, agreed to issue additional Warrants to the Bank and to enter into this 2009 Amendment (“this Amendment”) to the Agreement,
 
NOW THEREFORE IT IS AGREED BETWEEN THE PARTIES HERETO AS FOLLOWS:
 
1.
Unless otherwise defined in this Amendment, terms defined and references contained in the Agreement, shall have the same meaning and construction in this Amendment.
 
2.
The Agreement is hereby amended to add the following new definitions (n), (o), (p) and (q) to Section 1 (“Definitions and Interpretation”) and to renumber and amend existing definition (n) (“Warrant”) to read in its entirety as follows:
 
 
(n)
“2009 Waiver Letter” means the letter agreement, dated August 17, 2009, pursuant to which the Banks, inter alia, waived certain financial covenants in the Facility Agreement and extended the repayment schedule of the loans under the Facility Agreement.
 
 
(o)
“2009 Warrant” means the Warrant granted by the Company to the Bank effective as of October 1, 2009 pursuant to the 2009 Waiver Letter.
 
 
(p)
“2010 Warrant” means the Warrant to be granted by the Company to the Bank on September 1, 2010 pursuant to the 2009 Waiver Letter.
 
 
(q)
“2011 Warrant” means the Warrant to be granted by the Company to the Bank on September 1, 2011 pursuant to the 2009 Waiver Letter.
 
 
(r)
“Warrant” means the 2003 Warrant, the 2005 Warrant, the 2007 Warrant, the 2009 Warrant, the 2010 Warrant and the 2011 Warrant or any of them or any portion thereof as any of such Warrants may be amended at any time and from time to time.
 
3.
Save as amended expressly pursuant to this Amendment, the provisions of the Agreement shall continue in full force and effect and the Agreement and this Amendment shall be read and construed as one instrument.
 
4.
This Amendment shall be governed by and construed in accordance with the laws of the State of Israel.
 
IN WITNESS WHEREOF, the parties have signed this 2009 Amendment on the 13th day of October 2009.
 
for:
TOWER SEMICONDUCTOR LTD.
    for:
BANK LEUMI LE–ISRAEL B.M.
       
By:
/s/  Tziona Shriki
    By:
/s/    Anat Golan 
       
Name:
       Tziona Shriki 
   Name:
         Anat Golan 
       
Title:
  
  Title:
         SRM
 
 
 
By:
/s/
Oren Shirazi
  
By:
/s/
Galit Greenberg
             
Name:
  
Oren Shirazi
  
Name:
  
Galit Greenberg
             
Title
  
CFO
  
Title
    



 
 




 EX-5.1 3 exhibit5.htm EXHIBIT 5 Unassociated Document
Exhibit 5

THIS WARRANT HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (“THE ACT”), OR ANY U.S. STATE OR OTHER JURISDICTION’S SECURITIES LAWS. THIS WARRANT, AND THE SECURITIES ISSUABLE PURSUANT THERETO, MAY NOT BE SOLD, OFFERED FOR SALE OR PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT UNDER THE ACT WITH RESPECT TO THIS WARRANT OR THE SECURITIES ISSUABLE PURSUANT THERETO OR AN OPINION OF COUNSEL (REASONABLY SATISFACTORY TO THE COMPANY) THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF THE ACT OR ON THE TEL-AVIV STOCK EXCHANGE IN COMPLIANCE WITH REGULATION S UNDER THE ACT.


 
AMENDED AND RESTATED
 
WARRANT TO PURCHASE ORDINARY SHARES
 
(Reflecting First Amendment dated September 28, 2006,
 
Second Amendment dated October 13, 2009
 
and Third Amendment dated August 16, 2010)

Tower Semiconductor Ltd., an Israeli company (“the Company”), whose shares are currently traded on Nasdaq and the Tel-Aviv Stock Exchange (“TASE”) hereby grants to BANK LEUMI LE–ISRAEL B.M. (“the Holder”), the right to purchase from the Company the number of Ordinary Shares of the Company, nominal value NIS. 1.00 (“the Ordinary Shares”) specified below, subject to the terms and conditions set forth below, effective as of the date upon which Bank Leumi Le–Israel B.M. Bank Hapoalim B.M. (“the Banks”) shall have confirmed in writing fulfilment of all of the conditions precedent to the effectiveness of the Seventh Amendment, dated November 11, 2003, to the Facility Agreement dated January 18, 2001, as amended (“the Agreement”), entered into by and among the Company and the Banks (“the Seventh Amendment Closing Date” or “the Effective Date”).

1.
NUMBER OF ORDINARY SHARES AVAILABLE FOR PURCHASE

This Warrant may be exercised to purchase 448,298 of the Company's Ordinary Shares, with each Ordinary Share having a value calculated as set forth in Section 2 below, subject to adjustment under Section 7 of this Warrant (“the Warrant Shares”).

2.
Exercise Price

The exercise price for each Warrant Share purchasable hereunder shall be, subject to adjustment under Section 7 of this Warrant, US $6.17 per share (“the Warrant Price”).

2A.
TERM

This Warrant may be exercised in whole during the period beginning from the Effective Date and ending on December 31, 2015 (“the Expiration Date”).

3.
EXERCISE OF WARRANT

This Warrant may be exercised in whole or in part, on one or more occasions during its term. The Warrant may be exercised by the surrender of the Warrant to the Company at its principal office together with the Notice of Exercise annexed hereto duly completed and executed on behalf of the Holder.

a.           Exercise for Cash

To exercise for cash, the Notice of Exercise must be accompanied by payment in full of the amount of the aggregate purchase price of the Warrant Shares being purchased upon such exercise in immediately available funds.

b.           Net Exercise

In lieu of the payment method set forth in Section 3(a) above, the Holder may elect to exchange the Warrant for a number of Warrant Shares equal to the increase in value of the Warrant Shares otherwise purchasable hereunder on the date of exchange.  If the Holder elects to exchange this Warrant as provided in this Section 3(b), the Holder shall tender to the Company the Warrant along with the Notice of Exercise and the Company shall issue to the Holder the number of Warrant Shares computed using the following formula:

 
X
=
Y (A-B)
A
  
where:

 
X
=
the number of Warrant Shares to be issued to the Holder;
       
 
Y
=
the number of Warrant Shares purchasable under this Warrant (as adjusted to the date of such calculation, but excluding those shares already issued under this Warrant);
       
 
A
=
the Fair Market Value (as defined below) of one (1) Ordinary Share; and
       
 
B
=
Warrant Price (as adjusted to the date of such calculation)

“Fair Market Value” of an Ordinary Share shall mean:

 
(i)
if the Ordinary Shares are listed on a national securities exchange or are quoted on the Nasdaq National Market (NASDAQ/NMS), then the closing or last sale price, respectively, reported on the last trading day immediately preceding the exercise date, as reported by Nasdaq or the principal national securities exchange upon which the Ordinary Shares are listed or traded; provided that, if the Ordinary Shares are listed on Nasdaq and another national securities exchange, the applicable price shall be the price reported by Nasdaq;
 
 
(ii)
if the Ordinary Shares are not listed on a national securities exchange or quoted on NASDAQ/NMS, but are traded in the over-the-counter market, then the mean of the closing bid and asked prices as reported on the last trading day immediately preceding the exercise date;
 
 
(iii)
if the Ordinary Shares are not publicly traded, then as determined by the Company’s Board of Directors in good faith.
 
In the event of a net exercise, the entire Warrant must be surrendered and no new Warrant shall be issued.
 
c.           Issuance of Shares on Exercise
 
The Company agrees that the Warrant Shares so purchased shall be issued as soon as practicable thereafter, and that the Holder shall be deemed the record owner of such Warrant Shares as of and from the close of business on the date on which this Warrant shall be surrendered, together with payment in full as required above.  In the event of a partial exercise, the Company shall concurrently issue to the Holder a replacement Warrant on the same terms and conditions as this Warrant, but representing the number of Warrant Shares remaining after such partial exercise.
 
4.
FRACTIONAL INTEREST
 
No fractional shares will be issued in connection with any exercise hereunder, but in lieu of such fractional shares, the Company shall make a cash payment therefor upon the basis of the current market price of such shares then in effect as determined in good faith by the Company’s Board of Directors.
 
5.
WARRANT CONFERS NO RIGHTS OF SHAREHOLDER
 
Except as otherwise set forth in this Warrant, the Holder shall not have any rights as a shareholder of the Company with regard to the Warrant Shares prior to actual exercise resulting in the purchase of any Warrant Shares.

6.
INVESTMENT REPRESENTATION
 
 
This Warrant has not been registered under the Securities Act, or any other securities laws.  The Holder acknowledges by acceptance of the Warrant that (a) it has acquired this Warrant for investment and not with a view to distribution; (b) it has either a pre-existing personal or business relationship with the Company, or its executive officers, or by reason of its business or financial experience, it has the capacity to protect its own interests in connection with the transaction; and (c) it is an accredited investor as that term is defined in Regulation D promulgated under the Securities Act.  The Warrant Shares have been registered under the Securities Act on Form F-3 Registration Statement No. 333-131315.  The Holder, by acceptance hereof, consents to the placement of legend(s) on all securities hereunder as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act.  The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.
 
7.
ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES
 
 
The number and kind of securities purchasable initially upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows:

a.           Adjustment for Shares Splits and Combinations
 
If the Company at any time or from time to time effects a subdivision of the outstanding Ordinary Shares, the number of Warrant Shares issuable upon exercise of this Warrant immediately before the subdivision shall be proportionately increased, and conversely, if the Company at any time or from time to time combines the outstanding Ordinary Shares, the number of Warrant Shares issuable upon exercise of this Warrant immediately before the combination shall be proportionately decreased.  Any adjustment under this Section 7(a) shall become effective at the close of business on the date the subdivision or combination becomes effective.

b.           Adjustment for Certain Dividends and Distributions

In the event the Company at any time, or from time to time, makes or fixes a record date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in additional shares of Ordinary Shares, then and in each such event, the number of Ordinary Shares issuable upon exercise of this Warrant shall be increased as of the time of such issuance or, in the event such a record date is fixed, as of the close of business on such record date, by multiplying the number of Ordinary Shares issuable upon exercise of this Warrant by a fraction: (i) the numerator of which shall be the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of Ordinary Shares issuable in payment of such dividend or distribution; and (ii) the denominator of which is the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date; provided, however, that if such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed thereof, the number of Ordinary Shares issuable upon exercise of this Warrant shall be recomputed accordingly as of the close of business on such record date and thereafter the number of Ordinary Shares issuable upon exercise of this Warrant shall be adjusted pursuant to this Section 7(b) as of the time of the actual payment of such dividends or distribution.
 
c.           Adjustments for Other Dividends and Distributions
 
In the event the Company at any time or from time to time makes, or fixes a record date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in securities of the Company other than Ordinary Shares, then in each such event provision shall be made so that the Holder shall receive upon exercise of this Warrant, in addition to the number of Ordinary Shares receivable thereupon, the amount of securities of the Company that the Holder would have received had this Warrant been exercised for Ordinary Shares immediately prior to such event (or the record date for such event) and had the Holder thereafter, during the period from the date of such event to and including the date of exercise, retained such securities receivable by it as aforesaid during such period, subject to all other adjustments called for during such period under this Section and the Company’s Articles of Association with respect to the rights of the Holder.
 
d.           Adjustment for Reclassification, Exchange and Substitution
 
If the Ordinary Shares issuable upon the exercise of this Warrant are changed into the same or a different number of shares of any class or classes of shares, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination of shares or shares dividend or a reorganization, merger, consolidation or sale of assets, provided for elsewhere in this Section), then and in any such event the Holder shall have the right thereafter to exercise this Warrant into the kind and amount of shares and other securities receivable upon such recapitalization, reclassification or other change, by holders of the number of shares of Ordinary Shares for which this Warrant might have been exercised immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein and under the Company’s Articles of Association.
 
e.           Reorganization, Mergers, Consolidations or Sales of Assets
 
If at any time or from time to time there is a capital reorganization of the Ordinary Shares (other than a recapitalization, subdivision, combination, reclassification or exchange of shares as provided for elsewhere in this subsection), or a merger or consolidation of the Company with or into another corporation, or the sale of all or substantially all of the Company’s properties and assets to any other person, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant, the number of shares or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation or sale, to which a holder of Ordinary Shares deliverable upon conversion would have been entitled on such capital reorganization, merger, consolidation or sale.  In any such case (except to the extent any cash or property is received in such transaction), appropriate adjustment shall be made in the application of the provisions of this subsection and the Company’s Articles of Association with respect to the rights of the Holder after the reorganization, merger, consolidation or sale to the end that the provisions of this subsection and the Company’s Articles of Association (including adjustment of the number of Ordinary Shares issuable upon exercise of this Warrant) shall be applicable after that event and be as nearly equivalent to the provisions hereof as may be practicable.
 
f.            Other Transactions
 
In the event that the Company shall issue shares to its shareholders as a result of a split-off, spin-off or the like, then the Company shall only complete such issuance or other action if, as part thereof, allowance is made to protect the economic interest of the Holder either by increasing the number of Warrant Shares or by procuring that the Holder shall be entitled, on economically proportionate terms, to acquire additional shares of the spun-off or split-off entities.
 
g.           General Protection
 
The Company will not, by amendment of its Articles of Association or other charter document or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder, or impair the economic interest of the Holder, but will at all times in good faith assist in the carrying out of all the provisions hereof and in taking of all such actions and making all such adjustments as may be necessary or appropriate in order to protect the rights and the economic interests of the Holder against impairment.
 
h.           Notice of Capital Changes
 
If at any time the Company shall offer for subscription pro rata to the holders of Ordinary Shares any additional shares of any class, other rights or any equity security of any kind, or there shall be any capital reorganization or reclassification of the capital shares of the Company, or consolidation or merger of the Company with, or sale of all or substantially all of its assets to another company or there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Company, or other transaction described in this Section 7, then, in any one or more of the said cases, the Company shall give the Holder written notice, by registered or certified mail, postage prepaid, of the date on which: (i) a record shall be taken for such subscription rights; or (ii) such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up shall take place, as the case may be.  Such notice shall also specify the date as of which the holders of record of Ordinary Shares shall participate in such subscription rights, or shall be entitled to exchange their Ordinary Shares for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, as the case may be.  Such written notice shall be given at least fourteen (14) days prior to the action in question and not less than fourteen (14) days prior to the record date in respect thereto.
 
i.            Adjustment of Warrant Price
 
Upon each adjustment in the number of Ordinary Shares purchasable hereunder, the Warrant Price shall be proportionately increased or decreased, as the case may be, in a manner that is the inverse of the manner in which the number of Ordinary Shares purchasable hereunder shall be adjusted.
 
j.            Notice of Adjustments
 
Whenever the Warrant Price or the number of Ordinary Shares purchasable hereunder shall be adjusted pursuant to Section 7 hereof, the Company shall prepare a certificate signed by the chief financial officer of the Company setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Warrant Price and the number of Ordinary Shares purchasable hereunder after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder.
 
8.
TRANSFER OF THIS WARRANT OR SHARES ISSUABLE ON EXERCISE HEREOF

 
a.
With respect to any offer, sale or other disposition of this Warrant, the Holder will give written notice to the Company prior thereto, describing briefly the manner thereof, together with, if reasonably requested by the Company, a written opinion of such Holder's counsel, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect); provided, however, that no legal opinion shall be required if the transfer will be effected on TASE and the Holder represents to the Company that the applicable conditions under Regulation S under the Securities Act have been satisfied or unless sold pursuant to Rule 144 of the Securities Act.  If the proposed transfer is intended to rely on a Regulation D exemption under the Securities Act, such opinion letter and all such transferees must warrant and represent that they are an “accredited” investor as that term is defined under Regulation D of the Securities Act.  Promptly, as practicable, upon receiving such written notice and opinion and warranties and representations, if so requested, the Company, as promptly as practicable, shall deliver to the Holder one or more replacement Warrant certificates on the same terms and conditions as this Warrant for delivery to the transferees.  Each Warrant thus transferred and each certificate representing the securities thus transferred shall bear legend(s) as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act.  The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.  Any provision of this Warrant to the contrary notwithstanding, the Holder may not offer, sell or otherwise dispose of this Warrant to any third party, other than: (i) to a wholly owned subsidiary of Bank Leumi Le–Israel B.M.; or (ii) to any other transferee approved by the Company in writing with such approval not to be unreasonably withheld.
 
 
b.
In the event that the Company or its shareholders receive an offer to transfer all or substantially all of the shares in the Company, or to effect a merger or acquisition or sale of all or substantially all of the assets of the Company, then the Company shall promptly inform the Holder in writing of such offer.

9.
REGISTRATION RIGHTS

The Company covenants and agrees to provide the Holder the registration rights provided in the registration rights agreement between the Company and Bank Leumi Le-Israel B.M., dated September 28, 2006, as amended and restated by the parties on September 25, 2008, as further amended on October 13, 2009, a copy of which is attached hereto as Appendix A, and as such agreement may be further amended from time to time (“the Registration Rights Agreement”).  Such registration rights may be assigned by the Holder pursuant to and in accordance with the terms of the Registration Rights Agreement but only to a transferee or assignee of this Warrant pursuant to and in accordance with Section 8 of this Warrant.

10.
REPRESENTATIONS, WARRANTIES AND COVENANTS

The Company represents, warrants and covenants to the Holder as follows:
 
 
a.
this Warrant has been duly authorized and executed by the Company and is a valid and binding obligation of the Company enforceable in accordance with its terms;
 
 
b.
the Warrant Shares are duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms hereof, will be validly issued, fully paid and non-assessable and not subject to any pre-emptive rights;
 
 
c.
the execution and delivery of this Warrant are not, and the issuance of the Warrant Shares upon exercise of this Warrant in accordance with the terms hereof will not be, inconsistent with the Company’s Certificate of Incorporation, Memorandum of Association or Articles of Association, do not and will not contravene any law, governmental rule or regulation, judgment or order applicable to the Company and, except for consents that have already been obtained by the Company, do not and will not conflict with or contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other instrument of which the Company is a party or by which it is bound or require the consent or approval of, the giving of notice to, the registration with or the taking of any action in respect of or by, any federal, state or local governmental authority or agency or other person; and
 
 
d.
that it shall, upon the request of the Holder, procure the approvals required in order to list the Warrant Shares for trading on TASE.

11.
EXPENSES

 
The Company will pay the Israeli Stamp Duty on the issuance of the Warrant Shares, and will notify the Israeli Companies Registrar of such issuance within the time period required by law.  The Stamp Duty on this Warrant, if any, will be paid in full by the Company.

12
LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT

 
Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of any Warrant or Shares certificate, and in case of loss, theft or destruction, of indemnity, or security reasonably satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of such Warrant or Shares certificate, if mutilated, the Company will make and deliver a new Warrant or Shares certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or Shares certificate, provided that if this Warrant has been amended, at the request of the Holder, the Company shall issue an amended and restated Warrant certificate reflecting such amendment or amendments. In addition, but without derogating from the aforesaid, if this Warrant has been amended, the Holder shall have the right, at the option of the Holder, at any time and, if applicable, from time to time, to surrender this Warrant certificate and receive an amended and restated Warrant certificate reflecting any such amendment or amendments.

13.
NOTICES

 
Any notice or other communication hereunder shall be in writing and shall be deemed to have been given upon delivery, if personally delivered or (3) three business days after deposit if deposited in the mail for mailing by certified mail, postage prepaid, and addressed as follows:

 
If to the Holder:
Bank Leumi Le-Israel B.M.
Special Credits Division
13 Ahad Ha’am Street Tel-Avi
Attention:   Head of Special Credits Division
Facsimile:  (03) 514-7092
 
 
with a copy to:
 
(which shall not
constitute notice:
Leumi Partners
5 Azrieli Center, The Square Tower
Tel Aviv
Israel
Attention:   General Counsel
Facsimile:   (03) 514-1255
 
 
If to the Company
Tower Semiconductor Ltd.
P.O. Box 619
Ramat Gabriel Industrial Zone
Migdal Haemek 23105
Israel
Attention:   Chief Financial Officer
Facsimile:   04 604-7242
 
 
with a copy to:
Yigal Arnon & Co.
1 Azrieli Center
Tel Aviv
Israel
Attention:   David H. Schapiro, Adv.
Facsimile:   03 608-7714
 

Each of the above addressees may change its address for purposes of this paragraph by giving to the other addressees notice of such new address in conformance with this paragraph.

14.
APPLICABLE LAW; JURISDICTION

This Warrant shall be governed by and construed in accordance with the laws of the State of Israel as applicable to contracts between two residents of the State of Israel entered into and to be performed entirely within the State of Israel.  Any dispute arising under or in relation to this Warrant shall be resolved in the competent court for Tel Aviv-Jaffa district, and each of the parties hereby submits irrevocably to the jurisdiction of such court.

 
Originally Dated:
December 11, 2003
 
 
Restated:
September 1, 2010
     
   
for           TOWER SEMICONDUCTOR LTD.
 



 
By:
/s/
Oren Shirazi
  
By:
/s/
Yoram Glatt
  
                 
 
Name:
  
Oren Shirazi
  
Name:
  
Yoram Glatt
  
                 
 
Title
  
V.P. & CFO
  
Title
  
Treasurer
  

 
 
 
 
NOTICE OF EXERCISE



 
To:
 
[________________]


[1.
The undersigned hereby elects to purchase ______ (________) Ordinary Shares of  Tower Semiconductor Ltd., pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price for such shares in full.

 
[OR

 
The undersigned hereby elects to exchange the attached Warrant for ______ (____________) [insert number of Warrant Shares] Ordinary Shares of Tower Semiconductor Ltd. on a Net Exercise basis, pursuant to clause 3.b of the attached Warrant and the other terms and conditions contained therein]

2.
In exercising this Warrant, the undersigned hereby confirms and acknowledges that the Ordinary Shares are being acquired solely for the account of the undersigned and not as a nominee for any other party, or for investment, and that the undersigned will not offer, sell or otherwise dispose of any such Ordinary Shares except under circumstances that will not result in a violation of the Securities Act of 1933, as amended, or any state securities laws.

3.
Please issue a certificate representing said Ordinary Shares in the name of the undersigned.

4.
Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned [Note: this paragraph to be deleted if the Warrant is to be exercised on a Net Exercise basis].



     
(Date)
  
(Print Name)
     
     
     
   
(Signature)

 
 
 

Appendix A


Intentionally Omitted


(See Exhibit 3 and Exhibit 4
to this  Statement on Schedule 13D)

 EX-1.1 4 exhibit6.htm EXHIBIT 6 Unassociated Document
Exhibit 6
 
THIS WARRANT HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (“THE ACT”), OR ANY U.S. STATE OR OTHER JURISDICTION’S SECURITIES LAWS. THIS WARRANT, AND THE SECURITIES ISSUABLE PURSUANT THERETO, MAY NOT BE SOLD, OFFERED FOR SALE OR PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT UNDER THE ACT WITH RESPECT TO THIS WARRANT OR THE SECURITIES ISSUABLE PURSUANT THERETO OR AN OPINION OF COUNSEL (REASONABLY SATISFACTORY TO THE COMPANY) THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF THE ACT OR ON THE TEL-AVIV STOCK EXCHANGE IN COMPLIANCE WITH REGULATION S UNDER THE ACT.
 
AMENDED AND RESTATED
WARRANT TO PURCHASE ORDINARY SHARES
(Reflecting First Amendment dated September 28, 2006,
Second Amendment dated October 13, 2009
and Third Amendment dated August 16, 2010)
 
Tower Semiconductor Ltd., an Israeli company (“the Company”), whose shares are currently traded on Nasdaq and the Tel-Aviv Stock Exchange (“TASE”) hereby grants to BANK LEUMI LE-ISRAEL B.M. (“the Holder”), the right to purchase from the Company the number of Ordinary Shares of the Company, nominal value NIS. 1.00 (“the Ordinary Shares”) specified below, subject to the terms and conditions set forth below, effective July 24, 2005 (“the Effective Date”), the date upon which Bank Hapoalim B.M. and Bank Leumi Le–Israel B.M. (“the Banks”) entered into the Ninth Amendment (“the Ninth Amendment”) to the Facility Agreement dated January 18, 2001, as amended (“the Agreement”), by and among the Company and the Banks.
 
1.
Number of Ordinary Shares Available for Purchase
 
This Warrant may be exercised to purchase 4,132,232 (four million one hundred and thirty-two thousand, two hundred and thirty-two) of the Company's Ordinary Shares, with each Ordinary Share having a value calculated as set forth in Section 2 below, subject to adjustment under Section 7 of this Warrant (“the Warrant Shares”), and all references to Warrant Shares or Ordinary Shares “purchaseable hereunder” shall refer to all 4,132,232 (four million one hundred and thirty-two thousand, two hundred and thirty-two) Warrant Shares, as such number may be adjusted under Section 7 of this Warrant, less Warrant Shares already purchased through exercise of this Warrant.
 
2.
EXERCISE PRICE
 
The exercise price for each Warrant Share purchasable hereunder shall be, subject to adjustment under Section 7 of this Warrant, US $1.21 (one United States Dollar and twenty-one US cents) per share (“the Warrant Price”).
 
2A.
EXERCISABILITY; TERM
 
This Warrant may be exercised: (a) with respect to 2,066,116 (two million and sixty-six thousand, one hundred and sixteen) Warrant Shares, during the period beginning from the Ninth Amendment Closing Date (as defined in the Ninth Amendment) and ending on December 31, 2015 (“the First Tranche Expiration Date”); and (b) with respect to 2,066,116 (two million and sixty-six thousand, one hundred and sixteen) Warrant Shares, during the period beginning from September 28, 2006 (“the Second Tranche Exercisability Date”) and ending on December 31, 2015 (“the Second Tranche Expiration Date”).  The “First Tranche Expiration Date” and the “Second Tranche Expiration Date” are sometimes hereinafter collectively referred to as “the Expiration Date”.
 
3.
EXERCISE OF WARRANT
 
This Warrant may be exercised in whole or in part, on one or more occasions during its term, provided that only up to 2,066,116 (two million and sixty-six thousand, one hundred and sixteen) Warrant Shares may be exercised prior to the Second Tranche Exercisability Date.  The Warrant may be exercised by the surrender of the Warrant to the Company at its principal office together with the Notice of Exercise annexed hereto duly completed and executed on behalf of the Holder.
 
 
a.
Exercise for Cash
 
To exercise for cash, the Notice of Exercise must be accompanied by payment in full of the amount of the aggregate purchase price of the Warrant Shares being purchased upon such exercise in immediately available funds.
 
 
b.
Net Exercise
 
In lieu of the payment method set forth in Section 3(a) above, the Holder may elect to exchange the Warrant for a number of Warrant Shares equal to the increase in value of the Warrant Shares otherwise purchasable hereunder on the date of exchange.  If the Holder elects to exchange this Warrant as provided in this Section 3(b), the Holder shall tender to the Company the Warrant along with the Notice of Exercise and the Company shall issue to the Holder the number of Warrant Shares computed using the following formula:
 
 
X
=
Y (A–B)
A
  
 
where
 
 
X
=
the number of Warrant Shares to be issued to the Holder;
 
Y
=
the number of Warrant Shares purchasable under this Warrant or, if only a portion of the Warrant is being exercised, the number of Warrant Shares being exercised under the Warrant (as adjusted to the date of such calculation);
 
A
=
the Fair Market Value (as defined below) of one (1) Ordinary Share; and
 
B
=
Warrant Price (for the removal of doubt, as adjusted to the date of such calculation).

 
“Fair Market Value” of an Ordinary Share shall mean:
 
 
(i)
if the Ordinary Shares are listed on a national securities exchange or are quoted on the Nasdaq National Market (NASDAQ/NMS), then the closing or last sale price, respectively, reported on the last trading day immediately preceding the exercise date, as reported by Nasdaq or the principal national securities exchange upon which the Ordinary Shares are listed or traded; provided that, if the Ordinary Shares are listed on Nasdaq and another national securities exchange, the applicable price shall be the price reported by Nasdaq;
 
 
(ii)
if the Ordinary Shares are not listed on a national securities exchange or quoted on NASDAQ/NMS, but are traded in the over-the-counter market, then the mean of the closing bid and asked prices as reported on the last trading day immediately preceding the exercise date; and
 
 
(iii)
if the Ordinary Shares are not publicly traded, then as determined by the Company’s Board of Directors in good faith.
 
The exchange of this Warrant as provided in this Section 3(b) may not be utilized on more than 9 (nine) occasions.
 
 
c.
Issuance of Shares on Exercise
 
The Company agrees that the Warrant Shares so purchased shall be issued as soon as practicable thereafter, and that the Holder shall be deemed the record owner of such Warrant Shares as of and from the close of business on the date on which this Warrant shall be surrendered, together with payment in full as required pursuant to subsection a. above or when surrendered for exchange pursuant to subsection b. above.  In the event of a partial exercise, the Company shall concurrently issue to the Holder a replacement Warrant on the same terms and conditions as this Warrant, but representing the number of Warrant Shares remaining after such partial exercise.
 
4.
Fractional Interest
 
No fractional shares will be issued in connection with any exercise hereunder, but in lieu of such fractional shares, the Company shall make a cash payment therefor upon the basis of the current market price of such shares then in effect as determined in good faith by the Company’s Board of Directors.
 
5.
WARRANT CONFERS NO RIGHTS OF SHAREHOLDER
 
Except as otherwise set forth in this Warrant, the Holder shall not have any rights as a shareholder of the Company with regard to the Warrant Shares prior to actual exercise resulting in the purchase of any Warrant Shares.
 
6.
INVESTMENT REPRESENTATION
 
This Warrant has not been registered under the Securities Act, or any other securities laws.  The Holder acknowledges by acceptance of the Warrant that (a) it has acquired this Warrant for investment and not with a view to distribution; (b) it has either a pre-existing personal or business relationship with the Company, or its executive officers, or by reason of its business or financial experience, it has the capacity to protect its own interests in connection with the transaction; and (c) it is an accredited investor as that term is defined in Regulation D promulgated under the Securities Act.  The Warrant Shares have been registered under the Securities Act on Form F-3 Registration Statement No. 333-131315.  The Holder, by acceptance hereof, consents to the placement of legend(s) on all securities hereunder as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the reasonable opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act.  The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.
 
7.
ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES
 
The number and kind of securities purchasable initially upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows:
 
 
a.
Adjustment for Shares Splits and Combinations
 
If the Company at any time or from time to time effects a subdivision of the outstanding Ordinary Shares, the number of Warrant Shares purchaseable hereunder immediately before the subdivision shall be proportionately increased, and conversely, if the Company at any time or from time to time combines the outstanding Ordinary Shares, the number of Warrant Shares purchaseable hereunder immediately before the combination shall be proportionately decreased.  Any adjustment under this Section 7(a) shall become effective at the close of business on the date the subdivision or combination becomes effective.
 
 
b.
Adjustment for Certain Dividends and Distributions
 
In the event the Company at any time, or from time to time, makes or fixes a record date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in additional shares of Ordinary Shares, then and in each such event, the number of Ordinary Shares purchaseable hereunder shall be increased as of the time of such issuance or, in the event such a record date is fixed, as of the close of business on such record date, by multiplying the number of Ordinary Shares issuable upon exercise of this Warrant by a fraction: (i) the numerator of which shall be the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of Ordinary Shares issuable in payment of such dividend or distribution; and (ii) the denominator of which is the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date; provided, however, that if such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed thereof, the number of Ordinary Shares purchaseable hereunder shall be recomputed accordingly as of the close of business on such record date and thereafter the number of Ordinary Shares purchaseable hereunder shall be adjusted pursuant to this Section 7(b) as of the time of the actual payment of such dividends or distribution.
 
 
c.
Adjustments for Other Dividends and Distributions
 
In the event the Company at any time or from time to time makes, or fixes a record date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in securities of the Company other than Ordinary Shares, then in each such event provision shall be made so that the Holder shall receive upon exercise of this Warrant, in addition to the number of Ordinary Shares receivable thereupon, the amount of securities of the Company that the Holder would have received had this Warrant been exercised to purchase all Ordinary Shares purchaseable hereunder immediately prior to such event (or the record date for such event) and had the Holder thereafter, during the period from the date of such event to and including the date of exercise, retained such securities receivable by it as aforesaid during such period, subject to all other adjustments called for during such period under this Section and the Company’s Articles of Association with respect to the rights of the Holder.
 
 
d.
Adjustment for Reclassification, Exchange and Substitution
 
If the Ordinary Shares purchaseable hereunder are changed into the same or a different number of shares of any class or classes of shares, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination of shares or shares dividend or a reorganization, merger, consolidation or sale of assets, provided for elsewhere in this Section), then and in any such event the Holder shall have the right thereafter to exercise this Warrant into the kind and amount of shares and other securities receivable upon such recapitalization, reclassification or other change, by holders of the number of shares of Ordinary Shares for which this Warrant might have been exercised with respect to all Ordinary Shares purchaseable hereunder immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein and under the Company’s Articles of Association.
 
 
e.
Reorganization, Mergers, Consolidations or Sales of Assets
 
If at any time or from time to time there is a capital reorganization of the Ordinary Shares (other than a recapitalization, subdivision, combination, reclassification or exchange of shares as provided for elsewhere in this subsection), or a merger or consolidation of the Company with or into another corporation, or the sale of all or substantially all of the Company’s properties and assets to any other person, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant, the number of shares or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation or sale, to which a holder of Ordinary Shares deliverable upon conversion would have been entitled on such capital reorganization, merger, consolidation or sale.  In any such case (except to the extent any cash or property is received in such transaction), appropriate adjustment shall be made in the application of the provisions of this subsection and the Company’s Articles of Association with respect to the rights of the Holder after the reorganization, merger, consolidation or sale to the end that the provisions of this subsection and the Company’s Articles of Association (including adjustment of the number of Ordinary Shares purchaseable hereunder) shall be applicable after that event and be as nearly equivalent to the provisions hereof as may be practicable.
 
 
f.
Other Transactions
 
In the event that the Company shall issue shares to its shareholders as a result of a split-off, spin-off or the like, then the Company shall only complete such issuance or other action if, as part thereof, allowance is made to protect the economic interest of the Holder either by increasing the number of Warrant Shares or by procuring that the Holder shall be entitled, on economically proportionate terms, to acquire additional shares of the spun-off or split-off entities.
 
 
g.
General Protection
 
The Company will not, by amendment of its Articles of Association or other charter document or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder, or impair the economic interest of the Holder, but will at all times in good faith assist in the carrying out of all the provisions hereof and in taking of all such actions and making all such adjustments as may be necessary or appropriate in order to protect the rights and the economic interests of the Holder against impairment.
 
 
h.
Notice of Capital Changes
 
If at any time the Company shall offer for subscription pro rata to the holders of Ordinary Shares any additional shares of any class, other rights or any equity security of any kind, or there shall be any capital reorganization or reclassification of the capital shares of the Company, or consolidation or merger of the Company with, or sale of all or substantially all of its assets to another company or there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Company, or other transaction described in this Section 7, then, in any one or more of the said cases, the Company shall give the Holder written notice, by registered or certified mail, postage prepaid, of the date on which: (i) a record shall be taken for such subscription rights; or (ii) such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up shall take place, as the case may be.  Such notice shall also specify the date as of which the holders of record of Ordinary Shares shall participate in such subscription rights, or shall be entitled to exchange their Ordinary Shares for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, as the case may be.  Such written notice shall be given at least 14 (fourteen) days prior to the action in question and not less than 14 (fourteen) days prior to the record date in respect thereto.
 
 
i.
Adjustment of Warrant Price
 
Upon each adjustment in the number of Ordinary Shares purchasable hereunder, the Warrant Price shall be proportionately increased or decreased, as the case may be, in a manner that is the inverse of the manner in which the number of Ordinary Shares purchasable hereunder shall be adjusted.
 
 
j.
Notice of Adjustments
 
Whenever the Warrant Price or the number of Ordinary Shares purchasable hereunder shall be adjusted pursuant to Section 7 hereof, the Company shall prepare a certificate signed by the chief financial officer of the Company setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Warrant Price and the number of Ordinary Shares purchasable hereunder after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder.
 
 
k.
Assumed Exercisability
 
For the avoidance of doubt, the fact that an adjustment event described in this Section 7 occurs prior to the time this Warrant is fully exercisable by the Holder shall not be taken into account and, for purposes of determining any adjustment or other actions to be taken by the Company pursuant to this Section 7, it shall be assumed that this Warrant is fully exercisable as of the Effective Date.
 
8.
TRANSFER OF THIS WARRANT OR SHARES
 
 
a.
With respect to any offer, sale or other disposition of this Warrant, the Holder will give written notice to the Company prior thereto, describing briefly the manner thereof, together with, if reasonably requested by the Company, a written opinion of such Holder's counsel, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect); provided, however, that no legal opinion shall be required if the transfer will be effected on TASE and the Holder represents to the Company that the applicable conditions under Regulation S under the Securities Act have been satisfied or unless sold pursuant to Rule 144 of the Securities Act.  If the proposed transfer is intended to rely on a Regulation D exemption under the Securities Act, such opinion letter and all such transferees must warrant and represent that they are an “accredited” investor as that term is defined under Regulation D of the Securities Act.  Promptly, as practicable, upon receiving such written notice and opinion and warranties and representations, if so requested, the Company, as promptly as practicable, shall deliver to the Holder one or more replacement Warrant certificates on the same terms and conditions as this Warrant for delivery to the transferees.  Each Warrant thus transferred and each certificate representing the securities thus transferred shall bear legend(s) as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act.  The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.  Any provision of this Warrant to the contrary notwithstanding, the Holder may not offer, sell or otherwise dispose of this Warrant to any third party, other than: (i) to a wholly owned subsidiary of Bank Leumi; or (ii) to any other transferee approved by the Company in writing with such approval not to be unreasonably withheld.
 
 
b.
In the event that the Company or its shareholders receive an offer to transfer all or substantially all of the shares in the Company, or to effect a merger or acquisition or sale of all or substantially all of the assets of the Company, then the Company shall promptly inform the Holder in writing of such offer.
 
9.
REGISTRATION RIGHTS
 
The Company covenants and agrees to provide the Holder the registration rights provided in the registration rights agreement between the Company and Bank Leumi Le-Israel B.M., dated September 28, 2006, as amended and restated by the parties on September 25, 2008, as further amended on October 13, 2009, a copy of which is attached hereto as Appendix A, and as such agreement may be further amended from time to time (“the Registration Rights Agreement”).  Such registration rights may be assigned by the Holder pursuant to and in accordance with the terms of the Registration Rights Agreement but only to a transferee or assignee of this Warrant pursuant to and in accordance with Section 8 of this Warrant.
 
10.
REPRESENTATIONS, WARRANTIES AND COVENANTS
 
The Company represents, warrants and covenants to the Holder as follows:
 
 
a.
this Warrant has been duly authorized and executed by the Company and is a valid and binding obligation of the Company enforceable in accordance with its terms;
 
 
b.
the Warrant Shares are duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms hereof, will be validly issued, fully paid and non-assessable and not subject to any pre-emptive rights;
 
 
c.
the execution and delivery of this Warrant are not, and the issuance of the Warrant Shares upon exercise of this Warrant in accordance with the terms hereof will not be, inconsistent with the Company’s Certificate of Incorporation, Memorandum of Association or Articles of Association, do not and will not contravene any law, governmental rule or regulation, judgment or order applicable to the Company and, except for consents that have already been obtained by the Company, do not and will not conflict with or contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other instrument of which the Company is a party or by which it is bound or require the consent or approval of, the giving of notice to, the registration with or the taking of any action in respect of or by, any federal, state or local governmental authority or agency or other person; and
 
 
d.
that it shall, upon the request of the Holder, procure the approvals required in order to list the Warrant Shares for trading on TASE.
 
11.
EXPENSES
 
The Company will pay the Israeli Stamp Duty on the issuance of the Warrant Shares, and will notify the Israeli Companies Registrar of such issuance within the time period required by law.  The Stamp Duty on this Warrant, if any, will be paid in full by the Company.
 
12.
LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT
 
Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of any Warrant or Shares certificate, and in case of loss, theft or destruction, of indemnity, or security reasonably satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of such Warrant or Shares certificate, if mutilated, the Company will make and deliver a new Warrant or Shares certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or Shares certificate, provided that if this Warrant has been amended, at the request of the Holder, the Company shall issue an amended and restated Warrant certificate reflecting such amendment or amendments. In addition, but without derogating from the aforesaid, if this Warrant has been amended, the Holder shall have the right, at the option of the Holder, at any time and, if applicable, from time to time, to surrender this Warrant certificate and receive an amended and restated Warrant certificate reflecting any such amendment or amendments.
 
13.
NOTICES
 
Any notice or other communication hereunder shall be in writing and shall be deemed to have been given upon delivery, if personally delivered or 3 (three) business days after deposit if deposited in the mail for mailing by certified mail, postage prepaid, and addressed as follows:
 
If to the Holder:
Bank Leumi Le-Israel B.M.
Special Credits Division
13 Ahad Ha’am Street
Tel-Aviv
Attention:    Head of Special
      Credits Division
Facsimile:    (03) 514 7092
 
with a copy to:
 
(which shall not
constitute notice)
Leumi Partners
5 Azrieli Center, The Square Tower
Tel Aviv
Israel
Attention:   General Counsel
Facsimile:   (03) 514 1255
   
If to the Company:
Tower Semiconductor Ltd.
P.O. Box 619
Ramat Gabriel Industrial Zone
Migdal Haemek 23105
Israel
Attention:    Chief Financial Officer
Facsimile:    (04) 604 7242
   
with a copy to:
Yigal Arnon & Co.
1 Azrieli Center
Tel Aviv
Israel
Attention:   David H. Schapiro, Adv.
Facsimile:   (03) 608 7714

Each of the above addressees may change its address for purposes of this paragraph by giving to the other addressees notice of such new address in conformance with this paragraph.
 
14.
APPLICABLE LAW; JURISDICTION
 
This Warrant shall be governed by and construed in accordance with the laws of the State of Israel as applicable to contracts between two residents of the State of Israel entered into and to be performed entirely within the State of Israel.  Any dispute arising under or in relation to this Warrant shall be resolved in the competent court for Tel Aviv-Jaffa district, and each of the parties hereby submits irrevocably to the jurisdiction of such court.
 
 
Originally Dated:
August 4, 2005
 
Restated:
September 1, 2010
   
 
for    TOWER SEMICONDUCTOR LTD.
 

 
By:
/s/
Oren Shirazi
  
By:
/s/
Yoram Glatt
  
                 
 
Name:
  
Oren Shirazi
  
Name:
  
Yoram Glatt
  
                 
 
Title
  
V.P. & CFO
  
Title
  
Treasurer
  

 
 
 
 
 
NOTICE OF EXERCISE



 
To:
 
[________________]


 
[1.
The undersigned hereby elects to purchase ______ (________) Ordinary Shares of  Tower Semiconductor Ltd., pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price for such shares in full.
 
 
[OR
 
 
The undersigned hereby elects to exchange the attached Warrant for ______ (____________) [insert number of Warrant Shares] Ordinary Shares of Tower Semiconductor Ltd. on a Net Exercise basis, pursuant to clause 3.b of the attached Warrant and the other terms and conditions contained therein]
 
2.
In exercising this Warrant, the undersigned hereby confirms and acknowledges that the Ordinary Shares are being acquired solely for the account of the undersigned and not as a nominee for any other party, or for investment, and that the undersigned will not offer, sell or otherwise dispose of any such Ordinary Shares except under circumstances that will not result in a violation of the Securities Act of 1933, as amended, or any state securities laws.
 
3.
Please issue a certificate representing said Ordinary Shares in the name of the undersigned.
 
4.
Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned.
 


     
(Date)
  
(Print Name)
     
     
     
   
(Signature)
 

 
 
 
 
Appendix A



Intentionally Omitted


(See Exhibit 3 and Exhibit 4
to this  Statement on Schedule 13D)
 EX-7.1 5 exhibitt7.htm EXHIBIT 7 Unassociated Document

Exhibit 7
 
 
THIS WARRANT HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (“THE ACT”), OR ANY U.S. STATE OR OTHER JURISDICTION’S SECURITIES LAWS. THIS WARRANT, AND THE SECURITIES ISSUABLE PURSUANT THERETO, MAY NOT BE SOLD, OFFERED FOR SALE OR PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT UNDER THE ACT WITH RESPECT TO THIS WARRANT OR THE SECURITIES ISSUABLE PURSUANT THERETO OR AN OPINION OF COUNSEL (REASONABLY SATISFACTORY TO THE COMPANY) THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF THE ACT OR ON THE TEL-AVIV STOCK EXCHANGE IN COMPLIANCE WITH REGULATION S UNDER THE ACT.
 
AMENDED AND RESTATED
WARRANT TO PURCHASE ORDINARY SHARES
(Reflecting First Amendment dated October 13, 2009
and Second Amendment dated August 16, 2010)
 

Tower Semiconductor Ltd., an Israeli company (“the Company”), whose shares are currently traded on Nasdaq and the Tel-Aviv Stock Exchange (“TASE”) hereby grants to BANK LEUMI LE-ISRAEL B.M. (“the Holder”), the right to purchase from the Company the number of Ordinary Shares of the Company, nominal value NIS. 1.00 (one New Israel Sheqel) (“the Ordinary Shares”) specified below, subject to the terms and conditions set forth below, effective as of September 10, 2007 (“the Effective Date”).

1.         NUMBER OF ORDINARY SHARES AVAILABLE FOR PURCHASE
 
This Warrant may be exercised to purchase 1,000,000 (one million) of the Company's Ordinary Shares, with each Ordinary Share having a value calculated as set forth in Section 2 below, subject to adjustment under Section 7 of this Warrant (“the Warrant Shares”).
 
2.         Exercise Price
 
The exercise price for each Warrant Share purchasable hereunder shall be, subject to adjustment under Section 7 of this Warrant, US $2.04 (two United States Dollars and four US cents) per share (“the Warrant Price”).
 
2A.      TERM
 
This Warrant may be exercised in whole or in part beginning on the Effective Date and ending on December 31, 2015.
 

 
 
 

3.         EXERCISE OF WARRANT
 
This Warrant may be exercised in whole or in part, on one or more occasions during its term. The Warrant may be exercised by the surrender of the Warrant to the Company at its principal office together with the Notice of Exercise annexed hereto duly completed and executed on behalf of the Holder.
 
(a)           Exercise for Cash
 
To exercise for cash, the Notice of Exercise must be accompanied by payment in full of the amount of the aggregate purchase price of the Warrant Shares being purchased upon such exercise in immediately available funds.
 
(b)           Net Exercise
 
In lieu of the payment method set forth in Section 3(a) above, the Holder may elect to exchange the Warrant for a number of Warrant Shares equal to the increase in value of the Warrant Shares otherwise purchasable hereunder on the date of exchange.  If the Holder elects to exchange this Warrant as provided in this Section 3(b), the Holder shall tender to the Company the Warrant along with the Notice of Exercise and the Company shall issue to the Holder the number of Warrant Shares computed using the following formula:
 
where:
 
 
X
=
Y (A–B)
A
  

 
 
X
=
the number of Warrant Shares to be issued to the Holder;
 
 
Y
=
the number of Warrant Shares purchasable under this Warrant (as adjusted to the date of such calculation, but excluding those Ordinary Shares already issued under this Warrant or Warrant Shares purchasable under this Warrant but not being exercised);
 
 
A
=
the Fair Market Value (as defined below) of one (1) Ordinary Share; and
 
 
B
=
Warrant Price (as adjusted to the date of such calculation).

“Fair Market Value” of an Ordinary Share shall mean:

 
(i)
if the Ordinary Shares are listed on a national securities exchange or are quoted on the Nasdaq Global Market (NASDAQ/NGS) (“NASDAQ”), then the closing or last sale price, respectively, reported on the last trading day immediately preceding the exercise date, as reported by NASDAQ or the principal national securities exchange upon which the Ordinary Shares are listed or traded; provided that, if the Ordinary Shares are listed on NASDAQ and another national securities exchange, the applicable price shall be the price reported by NASDAQ;
 
 
(ii)
if the Ordinary Shares are not listed on a national securities exchange or quoted on NASDAQ, but are traded in the over-the-counter market, then the mean of the closing bid and asked prices as reported on the last trading day immediately preceding the exercise date;
 
 
(iii)
if the Ordinary Shares are not publicly traded, then as determined by the Company’s Board of Directors in good faith.
 
The exchange of this Warrant as provided in this Section 3(b) may not be utilized on more than 3(three) occasions.
 
(c)           Issuance of Shares on Exercise
 
The Company agrees that the Warrant Shares so purchased shall be issued as soon as practicable thereafter, and that the Holder shall be deemed the record owner of such Warrant Shares as of and from the close of business on the date on which this Warrant shall be surrendered, together with payment in full as required above.  In the event of a partial exercise, the Company shall concurrently issue to the Holder a replacement Warrant on the same terms and conditions as this Warrant, but representing the number of Warrant Shares remaining after such partial exercise.
 
4.             FRACTIONAL INTEREST
 
No fractional shares will be issued in connection with any exercise hereunder, but in lieu of such fractional shares, the Company shall make a cash payment therefor upon the basis of the current market price of such shares then in effect as determined in good faith by the Company’s Board of Directors.
 
5.
WARRANT CONFERS NO RIGHTS OF SHAREHOLDER
 
Except as otherwise set forth in this Warrant, the Holder shall not have any rights as a shareholder of the Company with regard to the Warrant Shares prior to actual exercise resulting in the purchase of any Warrant Shares.
 
6.
INVESTMENT REPRESENTATION
 
Neither this Warrant nor the Warrant Shares issuable upon the exercise of this Warrant have been registered under the Securities Act, or any other securities laws.  The Holder acknowledges by acceptance of the Warrant that (a) it has acquired this Warrant for investment and not with a view to distribution; (b) it has either a pre-existing personal or business relationship with the Company, or its executive officers, or by reason of its business or financial experience, it has the capacity to protect its own interests in connection with the transaction; and (c) it is an accredited investor as that term is defined in Regulation D promulgated under the Securities Act.  The Holder agrees that any Warrant Shares issuable upon exercise of this Warrant will be acquired for investment and not with a view to distribution and that such Warrant Shares may have to be held indefinitely unless they are subsequently registered or qualified under the Securities Act and applicable state securities laws, or based on an opinion of counsel reasonably satisfactory to the Company, an exemption from such registration and qualification is available.  The Holder, by acceptance hereof, consents to the placement of legend(s) on all securities hereunder as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act.  The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.
 
7.          ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES
 
The number and kind of securities purchasable initially upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows:
 
 
(a)
Adjustment for Shares Splits and Combinations
 
If the Company at any time or from time to time effects a subdivision of the outstanding Ordinary Shares, the number of Warrant Shares issuable upon exercise of this Warrant immediately before the subdivision shall be proportionately increased, and conversely, if the Company at any time or from time to time combines the outstanding Ordinary Shares, the number of Warrant Shares issuable upon exercise of this Warrant immediately before the combination shall be proportionately decreased.  Any adjustment under this Section 7(a) shall become effective at the close of business on the date the subdivision or combination becomes effective.
 
 
(b)
Adjustment for Certain Dividends and Distributions
 
In the event the Company at any time, or from time to time, makes or fixes a record date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in additional shares of Ordinary Shares, then and in each such event, the number of Ordinary Shares issuable upon exercise of this Warrant shall be increased as of the time of such issuance or, in the event such a record date is fixed, as of the close of business on such record date, by multiplying the number of Ordinary Shares issuable upon exercise of this Warrant by a fraction: (i) the numerator of which shall be the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of Ordinary Shares issuable in payment of such dividend or distribution; and (ii) the denominator of which is the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date; provided, however, that if such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed thereof, the number of Ordinary Shares issuable upon exercise of this Warrant shall be recomputed accordingly as of the close of business on such record date and thereafter the number of Ordinary Shares issuable upon exercise of this Warrant shall be adjusted pursuant to this Section 7(b) as of the time of the actual payment of such dividends or distribution.
 
 
(c)
Adjustments for Other Dividends and Distributions
 
In the event the Company at any time or from time to time makes, or fixes a record date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in securities of the Company other than Ordinary Shares, then in each such event provision shall be made so that the Holder shall receive upon exercise of this Warrant, in addition to the number of Ordinary Shares receivable thereupon, the amount of securities of the Company that the Holder would have received had this Warrant been exercised for Ordinary Shares immediately prior to such event (or the record date for such event) and had the Holder thereafter, during the period from the date of such event to and including the date of exercise, retained such securities receivable by it as aforesaid during such period, subject to all other adjustments called for during such period under this Section and the Company’s Articles of Association with respect to the rights of the Holder.
 
 
(d)
Adjustment for Reclassification, Exchange and Substitution
 
If the Ordinary Shares issuable upon the exercise of this Warrant are changed into the same or a different number of shares of any class or classes of shares, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination of shares or shares dividend or a reorganization, merger, consolidation or sale of assets, provided for elsewhere in this Section), then and in any such event the Holder shall have the right thereafter to exercise this Warrant into the kind and amount of shares and other securities receivable upon such recapitalization, reclassification or other change, by holders of the number of shares of Ordinary Shares for which this Warrant might have been exercised immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein and under the Company’s Articles of Association.
 
 
(e)
Reorganization, Mergers, Consolidations or Sales of Assets
 
If at any time or from time to time there is a capital reorganization of the Ordinary Shares (other than a recapitalization, subdivision, combination, reclassification or exchange of shares as provided for elsewhere in this subsection), or a merger or consolidation of the Company with or into another corporation, or the sale of all or substantially all of the Company’s properties and assets to any other person, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant, the number of shares or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation or sale, to which a holder of Ordinary Shares deliverable upon conversion would have been entitled on such capital reorganization, merger, consolidation or sale.  In any such case (except to the extent any cash or property is received in such transaction), appropriate adjustment shall be made in the application of the provisions of this subsection and the Company’s Articles of Association with respect to the rights of the Holder after the reorganization, merger, consolidation or sale to the end that the provisions of this subsection and the Company’s Articles of Association (including adjustment of the number of Ordinary Shares issuable upon exercise of this Warrant) shall be applicable after that event and be as nearly equivalent to the provisions hereof as may be practicable.
 
 
(f)
Other Transactions
 
In the event that the Company shall issue shares to its shareholders as a result of a split-off, spin-off or the like, then the Company shall only complete such issuance or other action if, as part thereof, allowance is made to protect the economic interest of the Holder either by increasing the number of Warrant Shares or by procuring that the Holder shall be entitled, on economically proportionate terms, to acquire additional shares of the spun-off or split-off entities.
 
 
(g)
Rights Offerings
 
If the Company, at any time and from time to time, shall fix a record date for, or shall make a distribution to, its shareholders of rights or warrants to subscribe for or purchase any security (collectively, “Rights”), then, in each such event, the Company will provide the Holder, concurrently with the distribution of the Rights to its shareholders, identical rights, having terms and conditions identical to the Rights (for the avoidance of doubt, exercisable at the same time as the Rights), in such number to which the Holder would be entitled had the Holder exercised this Warrant in full immediately prior to the record date for such distribution, or if no record date shall be fixed, then immediately prior to such distribution, as applicable.  Nothing in this Section 7 shall require the Company to complete any such distribution of Rights to its shareholders, including following the record date thereof, unless required pursuant to the terms of such distribution and, if such distribution of Rights to its shareholders is not completed in conformity with the terms of such distribution, then the Company shall be entitled not to complete the provision of rights to the Holder pursuant to this Section 7(g) above.
 
 
(h)
General Protection
 
The Company will not, by amendment of its Articles of Association or other charter document or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder, or impair the economic interest of the Holder, but will at all times in good faith assist in the carrying out of all the provisions hereof and in taking of all such actions and making all such adjustments as may be necessary or appropriate in order to protect the rights and the economic interests of the Holder against impairment.
 
 
(i)
Notice of Capital Changes
 
If at any time the Company shall offer for subscription pro rata to the holders of Ordinary Shares any additional shares of any class, other rights or any equity security of any kind, or there shall be any capital reorganization or reclassification of the capital shares of the Company, or consolidation or merger of the Company with, or sale of all or substantially all of its assets to another company or there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Company, or other transaction described in this Section 7, then, in any one or more of the said cases, the Company shall give the Holder written notice, by registered or certified mail, postage prepaid, of the date on which: (i) a record shall be taken for such subscription rights; or (ii) such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up shall take place, as the case may be.  Such notice shall also specify the date as of which the holders of record of Ordinary Shares shall participate in such subscription rights, or shall be entitled to exchange their Ordinary Shares for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, as the case may be.  Such written notice shall be given at least 14 (fourteen) days prior to the action in question and not less than 14 (fourteen) days prior to the record date in respect thereto.
 
 
(j)
Adjustment of Warrant Price
 
Upon each adjustment in the number of Ordinary Shares purchasable hereunder, the Warrant Price shall be proportionately increased or decreased, as the case may be, in a manner that is the inverse of the manner in which the number of Ordinary Shares purchasable hereunder shall be adjusted.
 
 
(k)
Notice of Adjustments
 
Whenever the Warrant Price or the number of Ordinary Shares purchasable hereunder shall be adjusted pursuant to Section 7 hereof, the Company shall prepare a certificate signed by the chief financial officer of the Company setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Warrant Price and the number of Ordinary Shares purchasable hereunder after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder.
 
8.
TRANSFER OF THIS WARRANT OR SHARES ISSUABLE ON EXERCISE HEREOF
 
 
(a)
With respect to any offer, sale or other disposition of this Warrant, the Holder will give written notice to the Company prior thereto, describing briefly the manner thereof, together with, if reasonably requested by the Company, a written opinion of such Holder's counsel, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect); provided, however, that no legal opinion shall be required if the transfer will be effected on TASE and the Holder represents to the Company that the applicable conditions under Regulation S under the Securities Act have been satisfied and applicable statutory lock-ups under the Israeli Securities Law do not apply or are being or have been satisfied or unless sold pursuant to Rule 144 of the Securities Act.  If the proposed transfer is intended to rely on a Regulation D exemption under the Securities Act, such opinion letter and all such transferees must warrant and represent that they are an “accredited” investor as that term is defined under Regulation D of the Securities Act.  Promptly, as practicable, upon receiving such written notice and opinion and warranties and representations, if so requested, the Company, as promptly as practicable, shall deliver to the Holder one or more replacement Warrant certificates on the same terms and conditions as this Warrant for delivery to the transferees.  Each Warrant thus transferred and each certificate representing the securities thus transferred shall bear legend(s) as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act.  The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.  Any provision of this Warrant to the contrary notwithstanding, the Holder may not offer, sell or otherwise dispose of this Warrant to any third party, other than: (i) to a wholly owned subsidiary of Bank Leumi or (ii) to any other transferee approved by the Company in writing with such approval not to be unreasonably withheld.
 
 
(b)
In the event that the Company or its shareholders receive an offer to transfer all or substantially all of the shares in the Company, or to effect a merger or acquisition or sale of all or substantially all of the assets of the Company, then the Company shall promptly inform the Holder in writing of such offer.
 
9.         REGISTRATION RIGHTS
 
The Company covenants and agrees to provide the Holder the registration rights provided in the registration rights agreement between the Company and Bank Leumi Le-Israel B.M., dated September 28, 2006, as amended and restated by the parties on September 25, 2008, as further amended on October 13, 2009, a copy of which is attached hereto as Appendix A, and as such agreement may be  further amended from time to time (“the Registration Rights Agreement”).  Such registration rights may be assigned by the Holder pursuant to and in accordance with the terms of the Registration Rights Agreement but only to a transferee or assignee of this Warrant pursuant to and in accordance with Section 8 of this Warrant.
 
10.
REPRESENTATIONS, WARRANTIES AND COVENANTS
 
 
The Company represents, warrants and covenants to the Holder as follows:
 
 
(a)
this Warrant has been duly authorized and executed by the Company and is a valid and binding obligation of the Company enforceable in accordance with its terms;
 
 
(b)
the Warrant Shares are duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms hereof, will be validly issued, fully paid and non-assessable and not subject to any pre-emptive rights;
 
 
(c)
the execution and delivery of this Warrant are not, and the issuance of the Warrant Shares upon exercise of this Warrant in accordance with the terms hereof will not be, inconsistent with the Company’s Certificate of Incorporation, Memorandum of Association or Articles of Association, do not and will not contravene any law, governmental rule or regulation, judgment or order applicable to the Company and, except for consents that have already been obtained by the Company, do not and will not conflict with or contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other instrument of which the Company is a party or by which it is bound or require the consent or approval of, the giving of notice to, the registration with or the taking of any action in respect of or by, any federal, state or local governmental authority or agency or other person;
 
 
(d)
that it shall, upon the request of the Holder, procure the approvals required in order to list the Warrant Shares for trading on TASE; and
 
 
(e)
the representations and warranties set forth in Section 3.8 of the Conversion Agreement, dated September 28, 2006, between the Company and the Holder are true and correct on the date hereof as if made on the date hereof, the Company acknowledging that the Holder is acquiring the Warrant in full reliance upon the representations and warranties made by the Company in this Warrant, including this Section 10(e).
 
 
11.
MISCELLANEOUS
 
 
In this Warrant:
 
 
(a)
Words importing the singular shall include the plural and vice versa and words importing any gender shall include all other genders and references to persons shall include partnerships, corporations and unincorporated associations.
 
 
(b)
Any reference in this Warrant to a specific form or to any rule or regulation adopted by the SEC shall also include any successor form or amended or successor rule or regulation subsequently adopted by the SEC, all as the same may be in effect at the time.
 
 
(c)
Any reference in this Agreement to a statute, act or law shall be construed as a reference to such statute, act or law as the same may have been, or may from time to time be, amended or reenacted.
 
 
(d)
A “person” shall be construed as a reference to any person, firm, company, corporation, government, state or agency of a state or any association or partnership (whether or not having separate legal personality) or two or more of the aforegoing.
 
 
(e)
“Including” and “includes” means, including, without limiting the generality of any description preceding such terms.
 
 
(f)
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
 
12.
LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT
 
Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of any Warrant or Shares certificate, and in case of loss, theft or destruction, of indemnity, or security reasonably satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of such Warrant or Shares certificate, if mutilated, the Company will make and deliver a new Warrant or Shares certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or Shares certificate, provided that if this Warrant has been amended, at the request of the Holder, the Company shall issue an amended and restated Warrant certificate reflecting such amendment or amendments. In addition, but without derogating from the aforesaid, if this Warrant has been amended, the Holder shall have the right, at the option of the Holder, at any time and, if applicable, from time to time, to surrender this Warrant certificate and receive an amended and restated Warrant certificate reflecting any such amendment or amendments.
 
13.       NOTICES
 
Any notice or other communication hereunder shall be in writing and shall be deemed to have been given upon delivery, if personally delivered or 3 (three) business days after deposit if deposited in the mail for mailing by certified mail, postage prepaid, and addressed as follows:
 
If to the Holder:
Bank Leumi Le-Israel B.M.
Special Credits Division
13 Ahad Ha’am Street
Tel-Aviv
Attention:Head of Special Credits Division
Facsimile:(03) 514 7092
with a copy to:
 
(which shall not
constitute notice)
Leumi Partners
5 Azrieli Center, The Square Tower
Tel Aviv
Israel
Attention:General Counsel
Facsimile:(03) 514 1255
   
If to the Company:
Tower Semiconductor Ltd.
P.O. Box 619
Ramat Gabriel Industrial Zone
Migdal Haemek 23105
Israel
Attention:Chief Financial Officer
Facsimile:(04) 604 7242
   
with a copy to:
Yigal Arnon & Co.
1 Azrieli Center
Tel Aviv
Israel
Attention:David H. Schapiro, Adv.
Facsimile:(03) 608 7714
 
Each of the above addressees may change its address for purposes of this paragraph by giving to the other addressees notice of such new address in conformance with this paragraph.
 
14.
APPLICABLE LAW; JURISDICTION
 
This Warrant shall be governed by and construed in accordance with the laws of the State of Israel as applicable to contracts between two residents of the State of Israel entered into and to be performed entirely within the State of Israel.  Any dispute arising under or in relation to this Warrant shall be resolved in the competent court for Tel Aviv-Jaffa district, and each of the parties hereby submits irrevocably to the jurisdiction of such court.
 
 
Originally Dated:
September 10, 2007
 
 
Restated:
September 1, 2010
     
   
for           TOWER SEMICONDUCTOR LTD.

 
 
By:
/s/
Oren Shirazi
  
By:
/s/
Yoram Glatt
               
 
Name:
  
Oren Shirazi
  
Name:
  
Yoram Glatt
               
 
Title
  
V.P. & CFO
  
Title
  
Treasurer


 
 
 
Exhibit 7


 
NOTICE OF EXERCISE
 
 
To:
 
[________________]
 
 
[1.
The undersigned hereby elects to purchase ______ (________) Ordinary Shares of Tower Semiconductor Ltd., pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price for such shares in full.
 
 
[OR
 
The undersigned hereby elects to exchange the attached Warrant for ______ (____________) [insert number of Warrant Shares] Ordinary Shares of Tower Semiconductor Ltd. on a Net Exercise basis, pursuant to Section 3(b) of the attached Warrant and the other terms and conditions contained therein.]
 
 
2.
In exercising this Warrant, the undersigned hereby confirms and acknowledges that the Ordinary Shares are being acquired solely for the account of the undersigned and not as a nominee for any other party, or for investment, and that the undersigned will not offer, sell or otherwise dispose of any such Ordinary Shares except under circumstances that will not result in a violation of the Securities Act of 1933, as amended, or any state securities laws.
 
 
3.
Please issue a certificate representing said Ordinary Shares in the name of the undersigned.
 
 
4.
Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned.

     
(Date)
  
(Print Name)
     
     
     
   
(Signature)

 
 
 


Appendix A
Intentionally Omitted


(See Exhibit 3 and Exhibit 4
to this  Statement on Schedule 13D)
 
 
 
 EX-8.1 6 exhibit8.htm EXHIBIT 8 Unassociated Document
Exhibit 8

THIS WARRANT HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (“THE ACT”), OR ANY U.S. STATE OR OTHER JURISDICTION’S SECURITIES LAWS. THIS WARRANT, AND THE SECURITIES ISSUABLE PURSUANT THERETO, MAY NOT BE SOLD, OFFERED FOR SALE OR PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT UNDER THE ACT WITH RESPECT TO THIS WARRANT OR THE SECURITIES ISSUABLE PURSUANT THERETO OR AN OPINION OF COUNSEL (REASONABLY SATISFACTORY TO THE COMPANY) THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF THE ACT OR ON THE TEL-AVIV STOCK EXCHANGE IN COMPLIANCE WITH REGULATION S UNDER THE ACT.

 
AMENDED AND RESTATED
 
WARRANT TO PURCHASE ORDINARY SHARES
 
(Reflecting First Amendment dated August 16, 2010)

Tower Semiconductor Ltd., an Israeli company (“the Company”), whose shares are currently traded on Nasdaq and the Tel-Aviv Stock Exchange (“TASE”) hereby grants to BANK LEUMI LE-ISRAEL B.M. (“the Holder”), the right to purchase from the Company the number of Ordinary Shares of the Company, nominal value NIS. 1.00 (one New Israel Sheqel) (“the Ordinary Shares”) specified below, subject to the terms and conditions set forth below, effective as of October 1, 2009 (“the Effective Date”).
 
1.
NUMBER OF ORDINARY SHARES AVAILABLE FOR PURCHASE
 
 
This Warrant may be exercised to purchase 563,996 (five hundred and sixty three thousand, nine hundred and ninety six) of the Company's Ordinary Shares, with each Ordinary Share having a value calculated as set forth in Section 2 below, subject to adjustment under Section 7 of this Warrant (“the Warrant Shares”).
 
2.
EXERCISE PRICE
 
 
The exercise price for each Warrant Share purchasable hereunder shall be, subject to adjustment under Section 7 of this Warrant, US $0.88653 (zero point eight eight six five three) (but not less than NIS. 1.00 per share) per share (“the Warrant Price”).
 
2A.
TERM
 
 
This Warrant may be exercised in whole during the period beginning from the Effective Date and ending on December 31, 2015 (“the Expiration Date”).
 
3.
EXERCISE OF WARRANT
 
 
This Warrant may be exercised in whole or in part, on one or more occasions during its term. The Warrant may be exercised by the surrender of the Warrant to the Company at its principal office together with the Notice of Exercise annexed hereto duly completed and executed on behalf of the Holder.
 

 
(a)
Exercise for Cash
 
To exercise for cash, the Notice of Exercise must be accompanied by payment in full of the amount of the aggregate purchase price of the Warrant Shares being purchased upon such exercise in immediately available funds.
 
 
(b)
Net Exercise
 
In lieu of the payment method set forth in Section 3(a) above, the Holder may elect to exchange the Warrant for a number of Warrant Shares equal to the increase in value of the Warrant Shares otherwise purchasable hereunder on the date of exchange.  If the Holder elects to exchange this Warrant as provided in this Section 3(b), the Holder shall tender to the Company the Warrant along with the Notice of Exercise and the Company shall issue to the Holder the number of Warrant Shares computed using the following formula:
 
where:
 
 
X
=
Y (A–B)
A
  

 
X
=
the number of Warrant Shares to be issued to the Holder;
 
 
Y
=
the number of Warrant Shares purchasable under this Warrant (as adjusted to the date of such calculation, but excluding those Ordinary Shares already issued under this Warrant or Warrant Shares purchasable under this Warrant but not being exercised);
 
 
A
=
the Fair Market Value (as defined below) of 1 (one) Ordinary Share; and
 
 
B
=
Warrant Price (as adjusted to the date of such calculation).

“Fair Market Value” of an Ordinary Share shall mean:
 
 
(i)
if the Ordinary Shares are listed on a national securities exchange or are quoted on the Nasdaq Global Market (NASDAQ/NGS) (“NASDAQ”), then the closing or last sale price, respectively, reported on the last trading day immediately preceding the exercise date, as reported by NASDAQ or the principal national securities exchange upon which the Ordinary Shares are listed or traded; provided that, if the Ordinary Shares are listed on NASDAQ and another national securities exchange, the applicable price shall be the price reported by NASDAQ;
 
 
(ii)
if the Ordinary Shares are not listed on a national securities exchange or quoted on NASDAQ, but are traded in the over-the-counter market, then the mean of the closing bid and asked prices as reported on the last trading day immediately preceding the exercise date;
 
 
(iii)
if the Ordinary Shares are not publicly traded, then as determined by the Company’s Board of Directors in good faith.
 
 
The exchange of this Warrant as provided in this Section 3(b) may not be utilized on more than 3 (three) occasions.
 
 
(c)
Issuance of Shares on Exercise
 
The Company agrees that the Warrant Shares so purchased shall be issued as soon as practicable thereafter, and that the Holder shall be deemed the record owner of such Warrant Shares as of and from the close of business on the date on which this Warrant shall be surrendered, together with payment in full as required above.  In the event of a partial exercise, the Company shall concurrently issue to the Holder a replacement Warrant on the same terms and conditions as this Warrant, but representing the number of Warrant Shares remaining after such partial exercise.
 
4.
FRACTIONAL INTEREST
 
 
No fractional shares will be issued in connection with any exercise hereunder, but in lieu of such fractional shares, the Company shall make a cash payment therefor upon the basis of the current market price of such shares then in effect as determined in good faith by the Company’s Board of Directors.
 
5.
WARRANT CONFERS NO RIGHTS OF SHAREHOLDER
 
 
Except as otherwise set forth in this Warrant, the Holder shall not have any rights as a shareholder of the Company with regard to the Warrant Shares prior to actual exercise resulting in the purchase of any Warrant Shares.
 
6.
INVESTMENT REPRESENTATION
 
 
Neither this Warrant nor the Warrant Shares issuable upon the exercise of this Warrant have been registered under the Securities Act, or any other securities laws.  The Holder acknowledges by acceptance of the Warrant that (a) it has acquired this Warrant for investment and not with a view to distribution; (b) it has either a pre-existing personal or business relationship with the Company, or its executive officers, or by reason of its business or financial experience, it has the capacity to protect its own interests in connection with the transaction; and (c) it is an accredited investor as that term is defined in Regulation D promulgated under the Securities Act.  The Holder agrees that any Warrant Shares issuable upon exercise of this Warrant will be acquired for investment and not with a view to distribution and that such Warrant Shares may have to be held indefinitely unless they are subsequently registered or qualified under the Securities Act and applicable state securities laws, or based on an opinion of counsel reasonably satisfactory to the Company, an exemption from such registration and qualification is available.  The Holder, by acceptance hereof, consents to the placement of legend(s) on all securities hereunder as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act.  The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.
 
7.
ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES
 
 
The number and kind of securities purchasable initially upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows:
 
 
(a)
Adjustment for Shares Splits and Combinations
 
   
If the Company at any time or from time to time effects a subdivision of the outstanding Ordinary Shares, the number of Warrant Shares issuable upon exercise of this Warrant immediately before the subdivision shall be proportionately increased, and conversely, if the Company at any time or from time to time combines the outstanding Ordinary Shares, the number of Warrant Shares issuable upon exercise of this Warrant immediately before the combination shall be proportionately decreased.  Any adjustment under this Section 7(a) shall become effective at the close of business on the date the subdivision or combination becomes effective.
 
 
(b)
Adjustment for Certain Dividends and Distributions
 
   
In the event the Company at any time, or from time to time, makes or fixes a record date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in additional shares of Ordinary Shares, then and in each such event, the number of Ordinary Shares issuable upon exercise of this Warrant shall be increased as of the time of such issuance or, in the event such a record date is fixed, as of the close of business on such record date, by multiplying the number of Ordinary Shares issuable upon exercise of this Warrant by a fraction: (i) the numerator of which shall be the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of Ordinary Shares issuable in payment of such dividend or distribution; and (ii) the denominator of which is the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date; provided, however, that if such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed thereof, the number of Ordinary Shares issuable upon exercise of this Warrant shall be recomputed accordingly as of the close of business on such record date and thereafter the number of Ordinary Shares issuable upon exercise of this Warrant shall be adjusted pursuant to this Section 7(b) as of the time of the actual payment of such dividends or distribution.
 
 
(c)
Adjustments for Other Dividends and Distributions
 
   
In the event the Company at any time or from time to time makes, or fixes a record date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in securities of the Company other than Ordinary Shares, then in each such event provision shall be made so that the Holder shall receive upon exercise of this Warrant, in addition to the number of Ordinary Shares receivable thereupon, the amount of securities of the Company that the Holder would have received had this Warrant been exercised for Ordinary Shares immediately prior to such event (or the record date for such event) and had the Holder thereafter, during the period from the date of such event to and including the date of exercise, retained such securities receivable by it as aforesaid during such period, subject to all other adjustments called for during such period under this Section and the Company’s Articles of Association with respect to the rights of the Holder.
 
 
(d)
Adjustment for Reclassification, Exchange and Substitution
 
   
If the Ordinary Shares issuable upon the exercise of this Warrant are changed into the same or a different number of shares of any class or classes of shares, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination of shares or shares dividend or a reorganization, merger, consolidation or sale of assets, provided for elsewhere in this Section), then and in any such event the Holder shall have the right thereafter to exercise this Warrant into the kind and amount of shares and other securities receivable upon such recapitalization, reclassification or other change, by holders of the number of shares of Ordinary Shares for which this Warrant might have been exercised immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein and under the Company’s Articles of Association.
 
 
(e)
Reorganization, Mergers, Consolidations or Sales of Assets
 
   
If at any time or from time to time there is a capital reorganization of the Ordinary Shares (other than a recapitalization, subdivision, combination, reclassification or exchange of shares as provided for elsewhere in this subsection), or a merger or consolidation of the Company with or into another corporation, or the sale of all or substantially all of the Company’s properties and assets to any other person, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant, the number of shares or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation or sale, to which a holder of Ordinary Shares deliverable upon conversion would have been entitled on such capital reorganization, merger, consolidation or sale.  In any such case (except to the extent any cash or property is received in such transaction), appropriate adjustment shall be made in the application of the provisions of this subsection and the Company’s Articles of Association with respect to the rights of the Holder after the reorganization, merger, consolidation or sale to the end that the provisions of this subsection and the Company’s Articles of Association (including adjustment of the number of Ordinary Shares issuable upon exercise of this Warrant) shall be applicable after that event and be as nearly equivalent to the provisions hereof as may be practicable.
 
 
(f)
Other Transactions
 
   
In the event that the Company shall issue shares to its shareholders as a result of a split-off, spin-off or the like, then the Company shall only complete such issuance or other action if, as part thereof, allowance is made to protect the economic interest of the Holder either by increasing the number of Warrant Shares or by procuring that the Holder shall be entitled, on economically proportionate terms, to acquire additional shares of the spun-off or split-off entities.
 
 
(g)
Rights Offerings
 
   
If the Company, at any time and from time to time, shall fix a record date for, or shall make a distribution to, its shareholders of rights or warrants to subscribe for or purchase any security (collectively, “Rights”), then, in each such event, the Company will provide the Holder, concurrently with the distribution of the Rights to its shareholders, identical rights, having terms and conditions identical to the Rights (for the avoidance of doubt, exercisable at the same time as the Rights), in such number to which the Holder would be entitled had the Holder exercised this Warrant in full immediately prior to the record date for such distribution, or if no record date shall be fixed, then immediately prior to such distribution, as applicable.  Nothing in this Section 7 shall require the Company to complete any such distribution of Rights to its shareholders, including following the record date thereof, unless required pursuant to the terms of such distribution and, if such distribution of Rights to its shareholders is not completed in conformity with the terms of such distribution, then the Company shall be entitled not to complete the provision of rights to the Holder pursuant to this Section 7(g) above.
 
 
(h)
General Protection
 
   
The Company will not, by amendment of its Articles of Association or other charter document or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder, or impair the economic interest of the Holder, but will at all times in good faith assist in the carrying out of all the provisions hereof and in taking of all such actions and making all such adjustments as may be necessary or appropriate in order to protect the rights and the economic interests of the Holder against impairment.
 
 
(i)
Notice of Capital Changes
 
   
If at any time the Company shall offer for subscription pro rata to the holders of Ordinary Shares any additional shares of any class, other rights or any equity security of any kind, or there shall be any capital reorganization or reclassification of the capital shares of the Company, or consolidation or merger of the Company with, or sale of all or substantially all of its assets to another company or there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Company, or other transaction described in this Section 7, then, in any one or more of the said cases, the Company shall give the Holder written notice, by registered or certified mail, postage prepaid, of the date on which: (i) a record shall be taken for such subscription rights; or (ii) such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up shall take place, as the case may be.  Such notice shall also specify the date as of which the holders of record of Ordinary Shares shall participate in such subscription rights, or shall be entitled to exchange their Ordinary Shares for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, as the case may be.  Such written notice shall be given at least 14 (fourteen) days prior to the action in question and not less than 14 (fourteen) days prior to the record date in respect thereto.
 
 
(j)
Adjustment of Warrant Price
 
   
Upon each adjustment in the number of Ordinary Shares purchasable hereunder, the Warrant Price shall be proportionately increased or decreased, as the case may be, in a manner that is the inverse of the manner in which the number of Ordinary Shares purchasable hereunder shall be adjusted.
 
 
(k)
Notice of Adjustments
 
   
Whenever the Warrant Price or the number of Ordinary Shares purchasable hereunder shall be adjusted pursuant to Section 7 hereof, the Company shall prepare a certificate signed by the chief financial officer of the Company setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Warrant Price and the number of Ordinary Shares purchasable hereunder after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder.
 
8.
TRANSFER OF THIS WARRANT OR SHARES ISSUABLE ON EXERCISE HEREOF
 
 
(a)
With respect to any offer, sale or other disposition of this Warrant, the Holder will give written notice to the Company prior thereto, describing briefly the manner thereof, together with, if reasonably requested by the Company, a written opinion of such Holder's counsel, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect); provided, however, that no legal opinion shall be required if the transfer will be effected on TASE and the Holder represents to the Company that the applicable conditions under Regulation S under the Securities Act have been satisfied and applicable statutory lock-ups under the Israeli Securities Law do not apply or are being or have been satisfied or unless sold pursuant to Rule 144 of the Securities Act.  If the proposed transfer is intended to rely on a Regulation D exemption under the Securities Act, such opinion letter and all such transferees must warrant and represent that they are an “accredited” investor as that term is defined under Regulation D of the Securities Act.  Promptly, as practicable, upon receiving such written notice and opinion and warranties and representations, if so requested, the Company, as promptly as practicable, shall deliver to the Holder one or more replacement Warrant certificates on the same terms and conditions as this Warrant for delivery to the transferees.  Each Warrant thus transferred and each certificate representing the securities thus transferred shall bear legend(s) as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act.  The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.  Any provision of this Warrant to the contrary notwithstanding, the Holder may not offer, sell or otherwise dispose of this Warrant to any third party, other than: (i) to a wholly owned subsidiary of Bank Leumi or (ii) to any other transferee approved by the Company in writing with such approval not to be unreasonably withheld.
 
 
(b)
In the event that the Company or its shareholders receive an offer to transfer all or substantially all of the shares in the Company, or to effect a merger or acquisition or sale of all or substantially all of the assets of the Company, then the Company shall promptly inform the Holder in writing of such offer.
 
9.
REGISTRATION RIGHTS
 
 
The Company covenants and agrees to provide the Holder the registration rights provided in the registration rights agreement between the Company and Bank Leumi Le-Israel B.M., dated September 28, 2006, as amended and restated by the parties on September 25, 2008, as further amended on October 13, 2009, a copy of which is attached hereto as Appendix A, and as such may be further amended from time to time (“the Registration Rights Agreement”).  Such registration rights may be assigned by the Holder pursuant to and in accordance with the terms of the Registration Rights Agreement but only to a transferee or assignee of this Warrant pursuant to and in accordance with Section 8 of this Warrant.
 
10.
REPRESENTATIONS, WARRANTIES AND COVENANTS
 
 
The Company represents, warrants and covenants to the Holder as follows:
 
 
(a)
this Warrant has been duly authorized and executed by the Company and is a valid and binding obligation of the Company enforceable in accordance with its terms;
 
 
(b)
the Warrant Shares are duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms hereof, will be validly issued, fully paid and non-assessable and not subject to any pre-emptive rights;
 
 
(c)
the execution and delivery of this Warrant are not, and the issuance of the Warrant Shares upon exercise of this Warrant in accordance with the terms hereof will not be, inconsistent with the Company’s Certificate of Incorporation, Memorandum of Association or Articles of Association, do not and will not contravene any law, governmental rule or regulation, judgment or order applicable to the Company and, except for consents that have already been obtained by the Company, do not and will not conflict with or contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other instrument of which the Company is a party or by which it is bound or require the consent or approval of, the giving of notice to, the registration with or the taking of any action in respect of or by, any federal, state or local governmental authority or agency or other person; and
 
 
(d)
that it shall, upon the request of the Holder, procure the approvals required in order to list the Warrant Shares for trading on TASE.
 
 
(e)
the representations and warranties set forth in Section 3.8 of the Conversion Agreement, dated September 25, 2008, between the Company and the Holder are true and correct on the date hereof as if made on the date hereof, the Company acknowledging that the Holder is acquiring the Warrant in full reliance upon the representations and warranties made by the Company in this Warrant, including this Section 10(e).
 
11.
MISCELLANEOUS
 
 
In this Warrant:
 
 
(a)
Words importing the singular shall include the plural and vice versa and words importing any gender shall include all other genders and references to persons shall include partnerships, corporations and unincorporated associations.
 
 
(b)
Any reference in this Warrant to a specific form or to any rule or regulation adopted by the SEC shall also include any successor form or amended or successor rule or regulation subsequently adopted by the SEC, all as the same may be in effect at the time.
 
 
(c)
Any reference in this Agreement to a statute, act or law shall be construed as a reference to such statute, act or law as the same may have been, or may from time to time be, amended or reenacted.
 
 
(d)
A “person” shall be construed as a reference to any person, firm, company, corporation, government, state or agency of a state or any association or partnership (whether or not having separate legal personality) or two or more of the aforegoing.
 
 
(e)
“Including” and “includes” means, including, without limiting the generality of any description preceding such terms.
 
 
(f)
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
 
12.
LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT
 
 
Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of any Warrant or Shares certificate, and in case of loss, theft or destruction, of indemnity, or security reasonably satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of such Warrant or Shares certificate, if mutilated, the Company will make and deliver a new Warrant or Shares certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or Shares certificate, provided that if this Warrant has been amended, at the request of the Holder, the Company shall issue an amended and restated Warrant certificate reflecting such amendment or amendments. In addition, but without derogating from the aforesaid, if this Warrant has been amended, the Holder shall have the right, at the option of the Holder, at any time and, if applicable, from time to time, to surrender this Warrant certificate and receive an amended and restated Warrant certificate reflecting any such amendment or amendments.
 
13.
NOTICES
 
 
Any notice or other communication hereunder shall be in writing and shall be deemed to have been given upon delivery, if personally delivered or 3 (three) business days after deposit if deposited in the mail for mailing by certified mail, postage prepaid, and addressed as follows:
 
 
 
If to the Holder:
Bank Leumi Le-Israel B.M.
Special Credits Division
13 Ahad Ha’am Street
Tel-Aviv
Attention:    Head of Special Credits Division
Facsimile:    03) 514-7092
 
 
with a copy to:
 
(which shall not
constitute notice)
Leumi Partners
5 Azrieli Center, The Square Tower
Tel Aviv
Israel
Attention:   General Counsel
Facsimile:    (03) 514-125
     
 
If to the Company:
Tower Semiconductor Ltd.
P.O. Box 619
Ramat Gabriel Industrial Zone
Migdal Haemek 23105
Israel
Attention:    Oren Shirazi
       Chief Financial Officer
Facsimile:    (04) 604-7242
     
 
with a copy to:
Yigal Arnon & Co.
1 Azrieli Center
46th Floor, The Round Tower
Tel Aviv, Israel
Attention:   David H. Schapiro, Adv.
Facsimile:   (03) 608-7714

Each of the above addressees may change its address for purposes of this paragraph by giving to the other addressees notice of such new address in conformance with this paragraph.
 
14.
APPLICABLE LAW; JURISDICTION
   
 
This Warrant shall be governed by and construed in accordance with the laws of the State of Israel as applicable to contracts between two residents of the State of Israel entered into and to be performed entirely within the State of Israel.  Any dispute arising under or in relation to this Warrant shall be resolved in the competent court for Tel Aviv-Jaffa district, and each of the parties hereby submits irrevocably to the jurisdiction of such court.
 
 
 
Originally Dated:
October 13, 2009
 
 
Restated:
September 1, 2010
     
   
for           TOWER SEMICONDUCTOR LTD.
 



 
By:
/s/
Oren Shirazi
  
By:
/s/
Yoram Glatt
  
                 
 
Name:
  
Oren Shirazi
  
Name:
  
Yoram Glatt
  
                 
 
Title
  
V.P. & CFO
  
Title
  
Treasurer
  
 
 
 
 
 

 
 
NOTICE OF EXERCISE


 
TO:
 
[________________]


[1.
The undersigned hereby elects to purchase ______ (________) Ordinary Shares of Tower Semiconductor Ltd., pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price for such shares in full.
 
 
[OR
 
The undersigned hereby elects to exchange the attached Warrant for ______ (____________) [insert number of Warrant Shares] Ordinary Shares of Tower Semiconductor Ltd. on a Net Exercise basis, pursuant to Section 3(b) of the attached Warrant and the other terms and conditions contained therein.]
 
2.
In exercising this Warrant, the undersigned hereby confirms and acknowledges that the Ordinary Shares are being acquired solely for the account of the undersigned and not as a nominee for any other party, or for investment, and that the undersigned will not offer, sell or otherwise dispose of any such Ordinary Shares except under circumstances that will not result in a violation of the Securities Act of 1933, as amended, or any state securities laws.
 
3.
Please issue a certificate representing said Ordinary Shares in the name of the undersigned.
 
4.
Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned.
 
 
 
     
(Date)
  
(Print Name)
     
     
     
   
(Signature)
 

 
 
 
 
Appendix A


 

 
Intentionally Omitted

(See Exhibit 3 and Exhibit 4
to this Statement on Schedule 13D)
 EX-9.1 7 exhibit9.htm EXHIBIT 9 Unassociated Document

 
Exhibit 9

THIS WARRANT HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (“THE ACT”), OR ANY U.S. STATE OR OTHER JURISDICTION’S SECURITIES LAWS. THIS WARRANT, AND THE SECURITIES ISSUABLE PURSUANT THERETO, MAY NOT BE SOLD, OFFERED FOR SALE OR PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT UNDER THE ACT WITH RESPECT TO THIS WARRANT OR THE SECURITIES ISSUABLE PURSUANT THERETO OR AN OPINION OF COUNSEL (REASONABLY SATISFACTORY TO THE COMPANY) THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF THE ACT OR ON THE TEL-AVIV STOCK EXCHANGE IN COMPLIANCE WITH REGULATION S UNDER THE ACT.
 
 
WARRANT TO PURCHASE ORDINARY SHARES
 
Tower Semiconductor Ltd., an Israeli company (“the Company”), whose shares are currently traded on Nasdaq and the Tel-Aviv Stock Exchange (“TASE”) hereby grants to BANK LEUMI LE-ISRAEL B.M. (“the Holder”), the right to purchase from the Company the number of Ordinary Shares of the Company, nominal value NIS. 1.00 (one New Israel Sheqel) (“the Ordinary Shares”) specified below, subject to the terms and conditions set forth below, effective as of September 1, 2010 (“the Effective Date”).
 
1.           NUMBER OF ORDINARY SHARES AVAILABLE FOR PURCHASE
 
This Warrant may be exercised to purchase 563,996 (five hundred and sixty three thousand, nine hundred and ninety six) of the Company's Ordinary Shares, with each Ordinary Share having a value calculated as set forth in Section 2 below, subject to adjustment under Section 7 of this Warrant (“the Warrant Shares”).
 
2.           Exercise Price
 
The exercise price for each Warrant Share purchasable hereunder shall be, subject to adjustment under Section 7 of this Warrant, US $0.88653 (zero point eight eight six five three) (but not less than NIS. 1.00 per share) per share (“the Warrant Price”).
 
2A.        TERM
 
This Warrant may be exercised in whole during the period beginning from the Effective Date and ending on December 31, 2015 (“the Expiration Date”).
 
3.           EXERCISE OF WARRANT
 
This Warrant may be exercised in whole or in part, on one or more occasions during its term. The Warrant may be exercised by the surrender of the Warrant to the Company at its principal office together with the Notice of Exercise annexed hereto duly completed and executed on behalf of the Holder.
 
(a)           Exercise for Cash
 
To exercise for cash, the Notice of Exercise must be accompanied by payment in full of the amount of the aggregate purchase price of the Warrant Shares being purchased upon such exercise in immediately available funds.
 
(b)           Net Exercise
 
In lieu of the payment method set forth in Section 3(a) above, the Holder may elect to exchange the Warrant for a number of Warrant Shares equal to the increase in value of the Warrant Shares otherwise purchasable hereunder on the date of exchange.  If the Holder elects to exchange this Warrant as provided in this Section 3(b), the Holder shall tender to the Company the Warrant along with the Notice of Exercise and the Company shall issue to the Holder the number of Warrant Shares computed using the following formula:
 
where:
 
X
=
Y       (A–B)
          A
 
 
X
=
the number of Warrant Shares to be issued to the Holder;
       
 
Y
=
the number of Warrant Shares purchasable under this Warrant (as adjusted to the date of such calculation, but excluding those Ordinary Shares already issued under this Warrant or Warrant Shares purchasable under this Warrant but not being exercised);
       
 
A
=
the Fair Market Value (as defined below) of one (1) Ordinary Share; and
       
 
B
=
Warrant Price (as adjusted to the date of such calculation).

“Fair Market Value” of an Ordinary Share shall mean:
 
 
(i)
if the Ordinary Shares are listed on a national securities exchange or are quoted on the Nasdaq Global Market (NASDAQ/NGS) (“NASDAQ”), then the closing or last sale price, respectively, reported on the last trading day immediately preceding the exercise date, as reported by NASDAQ or the principal national securities exchange upon which the Ordinary Shares are listed or traded; provided that, if the Ordinary Shares are listed on NASDAQ and another national securities exchange, the applicable price shall be the price reported by NASDAQ;
 
 
(ii)
if the Ordinary Shares are not listed on a national securities exchange or quoted on NASDAQ, but are traded in the over-the-counter market, then the mean of the closing bid and asked prices as reported on the last trading day immediately preceding the exercise date;
 
 
(iii)
if the Ordinary Shares are not publicly traded, then as determined by the Company’s Board of Directors in good faith.
 
The exchange of this Warrant as provided in this Section 3(b) may not be utilized on more than 3 (three) occasions.
 
(c)           Issuance of Shares on Exercise
 
The Company agrees that the Warrant Shares so purchased shall be issued as soon as practicable thereafter, and that the Holder shall be deemed the record owner of such Warrant Shares as of and from the close of business on the date on which this Warrant shall be surrendered, together with payment in full as required above.  In the event of a partial exercise, the Company shall concurrently issue to the Holder a replacement Warrant on the same terms and conditions as this Warrant, but representing the number of Warrant Shares remaining after such partial exercise.
 
4.           FRACTIONAL INTEREST
 
No fractional shares will be issued in connection with any exercise hereunder, but in lieu of such fractional shares, the Company shall make a cash payment therefor upon the basis of the current market price of such shares then in effect as determined in good faith by the Company’s Board of Directors.
 
5.           WARRANT CONFERS NO RIGHTS OF SHAREHOLDER
 
Except as otherwise set forth in this Warrant, the Holder shall not have any rights as a shareholder of the Company with regard to the Warrant Shares prior to actual exercise resulting in the purchase of any Warrant Shares.
 
6.           INVESTMENT REPRESENTATION
 
Neither this Warrant nor the Warrant Shares issuable upon the exercise of this Warrant have been registered under the Securities Act, or any other securities laws.  The Holder acknowledges by acceptance of the Warrant that (a) it has acquired this Warrant for investment and not with a view to distribution; (b) it has either a pre-existing personal or business relationship with the Company, or its executive officers, or by reason of its business or financial experience, it has the capacity to protect its own interests in connection with the transaction; and (c) it is an accredited investor as that term is defined in Regulation D promulgated under the Securities Act.  The Holder agrees that any Warrant Shares issuable upon exercise of this Warrant will be acquired for investment and not with a view to distribution and that such Warrant Shares may have to be held indefinitely unless they are subsequently registered or qualified under the Securities Act and applicable state securities laws, or based on an opinion of counsel reasonably satisfactory to the Company, an exemption from such registration and qualification is available.  The Holder, by acceptance hereof, consents to the placement of legend(s) on all securities hereunder as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act.  The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.
 
7.           ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES
 
The number and kind of securities purchasable initially upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows:
 
(a)           Adjustment for Shares Splits and Combinations
 
If the Company at any time or from time to time effects a subdivision of the outstanding Ordinary Shares, the number of Warrant Shares issuable upon exercise of this Warrant immediately before the subdivision shall be proportionately increased, and conversely, if the Company at any time or from time to time combines the outstanding Ordinary Shares, the number of Warrant Shares issuable upon exercise of this Warrant immediately before the combination shall be proportionately decreased.  Any adjustment under this Section 7(a) shall become effective at the close of business on the date the subdivision or combination becomes effective.
 
(b)           Adjustment for Certain Dividends and Distributions
 
In the event the Company at any time, or from time to time, makes or fixes a record date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in additional shares of Ordinary Shares, then and in each such event, the number of Ordinary Shares issuable upon exercise of this Warrant shall be increased as of the time of such issuance or, in the event such a record date is fixed, as of the close of business on such record date, by multiplying the number of Ordinary Shares issuable upon exercise of this Warrant by a fraction: (i) the numerator of which shall be the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of Ordinary Shares issuable in payment of such dividend or distribution; and (ii) the denominator of which is the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date; provided, however, that if such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed thereof, the number of Ordinary Shares issuable upon exercise of this Warrant shall be recomputed accordingly as of the close of business on such record date and thereafter the number of Ordinary Shares issuable upon exercise of this Warrant shall be adjusted pursuant to this Section 7(b) as of the time of the actual payment of such dividends or distribution.
 
(c)           Adjustments for Other Dividends and Distributions
 
In the event the Company at any time or from time to time makes, or fixes a record date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in securities of the Company other than Ordinary Shares, then in each such event provision shall be made so that the Holder shall receive upon exercise of this Warrant, in addition to the number of Ordinary Shares receivable thereupon, the amount of securities of the Company that the Holder would have received had this Warrant been exercised for Ordinary Shares immediately prior to such event (or the record date for such event) and had the Holder thereafter, during the period from the date of such event to and including the date of exercise, retained such securities receivable by it as aforesaid during such period, subject to all other adjustments called for during such period under this Section and the Company’s Articles of Association with respect to the rights of the Holder.
 
(d)           Adjustment for Reclassification, Exchange and Substitution
 
If the Ordinary Shares issuable upon the exercise of this Warrant are changed into the same or a different number of shares of any class or classes of shares, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination of shares or shares dividend or a reorganization, merger, consolidation or sale of assets, provided for elsewhere in this Section), then and in any such event the Holder shall have the right thereafter to exercise this Warrant into the kind and amount of shares and other securities receivable upon such recapitalization, reclassification or other change, by holders of the number of shares of Ordinary Shares for which this Warrant might have been exercised immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein and under the Company’s Articles of Association.
 
(e)           Reorganization, Mergers, Consolidations or Sales of Assets
 
If at any time or from time to time there is a capital reorganization of the Ordinary Shares (other than a recapitalization, subdivision, combination, reclassification or exchange of shares as provided for elsewhere in this subsection), or a merger or consolidation of the Company with or into another corporation, or the sale of all or substantially all of the Company’s properties and assets to any other person, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant, the number of shares or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation or sale, to which a holder of Ordinary Shares deliverable upon conversion would have been entitled on such capital reorganization, merger, consolidation or sale.  In any such case (except to the extent any cash or property is received in such transaction), appropriate adjustment shall be made in the application of the provisions of this subsection and the Company’s Articles of Association with respect to the rights of the Holder after the reorganization, merger, consolidation or sale to the end that the provisions of this subsection and the Company’s Articles of Association (including adjustment of the number of Ordinary Shares issuable upon exercise of this Warrant) shall be applicable after that event and be as nearly equivalent to the provisions hereof as may be practicable.
 
(f)           Other Transactions
 
In the event that the Company shall issue shares to its shareholders as a result of a split-off, spin-off or the like, then the Company shall only complete such issuance or other action if, as part thereof, allowance is made to protect the economic interest of the Holder either by increasing the number of Warrant Shares or by procuring that the Holder shall be entitled, on economically proportionate terms, to acquire additional shares of the spun-off or split-off entities.
(g)           Rights Offerings
 
If the Company, at any time and from time to time, shall fix a record date for, or shall make a distribution to, its shareholders of rights or warrants to subscribe for or purchase any security (collectively, “Rights”), then, in each such event, the Company will provide the Holder, concurrently with the distribution of the Rights to its shareholders, identical rights, having terms and conditions identical to the Rights (for the avoidance of doubt, exercisable at the same time as the Rights), in such number to which the Holder would be entitled had the Holder exercised this Warrant in full immediately prior to the record date for such distribution, or if no record date shall be fixed, then immediately prior to such distribution, as applicable.  Nothing in this Section 7 shall require the Company to complete any such distribution of Rights to its shareholders, including following the record date thereof, unless required pursuant to the terms of such distribution and, if such distribution of Rights to its shareholders is not completed in conformity with the terms of such distribution, then the Company shall be entitled not to complete the provision of rights to the Holder pursuant to this Section 7(g) above.
 
(h)           General Protection
 
The Company will not, by amendment of its Articles of Association or other charter document or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder, or impair the economic interest of the Holder, but will at all times in good faith assist in the carrying out of all the provisions hereof and in taking of all such actions and making all such adjustments as may be necessary or appropriate in order to protect the rights and the economic interests of the Holder against impairment.
 
(i)            Notice of Capital Changes
 
If at any time the Company shall offer for subscription pro rata to the holders of Ordinary Shares any additional shares of any class, other rights or any equity security of any kind, or there shall be any capital reorganization or reclassification of the capital shares of the Company, or consolidation or merger of the Company with, or sale of all or substantially all of its assets to another company or there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Company, or other transaction described in this Section 7, then, in any one or more of the said cases, the Company shall give the Holder written notice, by registered or certified mail, postage prepaid, of the date on which: (i) a record shall be taken for such subscription rights; or (ii) such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up shall take place, as the case may be.  Such notice shall also specify the date as of which the holders of record of Ordinary Shares shall participate in such subscription rights, or shall be entitled to exchange their Ordinary Shares for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, as the case may be.  Such written notice shall be given at least 14 (fourteen) days prior to the action in question and not less than 14 (fourteen) days prior to the record date in respect thereto.
 
(j)            Adjustment of Warrant Price
 
Upon each adjustment in the number of Ordinary Shares purchasable hereunder, the Warrant Price shall be proportionately increased or decreased, as the case may be, in a manner that is the inverse of the manner in which the number of Ordinary Shares purchasable hereunder shall be adjusted.
 
(k)           Notice of Adjustments
 
Whenever the Warrant Price or the number of Ordinary Shares purchasable hereunder shall be adjusted pursuant to Section 7 hereof, the Company shall prepare a certificate signed by the chief financial officer of the Company setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Warrant Price and the number of Ordinary Shares purchasable hereunder after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder.
 
8.
TRANSFER OF THIS WARRANT OR SHARES ISSUABLE ON EXERCISE HEREOF
 
 
(a)
With respect to any offer, sale or other disposition of this Warrant, the Holder will give written notice to the Company prior thereto, describing briefly the manner thereof, together with, if reasonably requested by the Company, a written opinion of such Holder's counsel, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect); provided, however, that no legal opinion shall be required if the transfer will be effected on TASE and the Holder represents to the Company that the applicable conditions under Regulation S under the Securities Act have been satisfied and applicable statutory lock-ups under the Israeli Securities Law do not apply or are being or have been satisfied or unless sold pursuant to Rule 144 of the Securities Act.  If the proposed transfer is intended to rely on a Regulation D exemption under the Securities Act, such opinion letter and all such transferees must warrant and represent that they are an “accredited” investor as that term is defined under Regulation D of the Securities Act.  Promptly, as practicable, upon receiving such written notice and opinion and warranties and representations, if so requested, the Company, as promptly as practicable, shall deliver to the Holder one or more replacement Warrant certificates on the same terms and conditions as this Warrant for delivery to the transferees.  Each Warrant thus transferred and each certificate representing the securities thus transferred shall bear legend(s) as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act.  The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.  Any provision of this Warrant to the contrary notwithstanding, the Holder may not offer, sell or otherwise dispose of this Warrant to any third party, other than: (i) to a wholly owned subsidiary of Bank Leumi or (ii) to any other transferee approved by the Company in writing with such approval not to be unreasonably withheld.
 
 
(b)
In the event that the Company or its shareholders receive an offer to transfer all or substantially all of the shares in the Company, or to effect a merger or acquisition or sale of all or substantially all of the assets of the Company, then the Company shall promptly inform the Holder in writing of such offer.
 
9.           REGISTRATION RIGHTS
 
The Company covenants and agrees to provide the Holder the registration rights provided in the registration rights agreement between the Company and Bank Leumi Le-Israel B.M., dated September 28, 2006, as amended and restated by the parties on September 25, 2008, as further amended on October 13, 2009, a copy of which is attached hereto as Appendix A, and as such may be further amended from time to time (“the Registration Rights Agreement”).  Such registration rights may be assigned by the Holder pursuant to and in accordance with the terms of the Registration Rights Agreement but only to a transferee or assignee of this Warrant pursuant to and in accordance with Section 8 of this Warrant.
 
10.         REPRESENTATIONS, WARRANTIES AND COVENANTS
 
The Company represents, warrants and covenants to the Holder as follows:
 
 
(a)
this Warrant has been duly authorized and executed by the Company and is a valid and binding obligation of the Company enforceable in accordance with its terms;
 
 
(b)
the Warrant Shares are duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms hereof, will be validly issued, fully paid and non-assessable and not subject to any pre-emptive rights;
 
 
(c)
the execution and delivery of this Warrant are not, and the issuance of the Warrant Shares upon exercise of this Warrant in accordance with the terms hereof will not be, inconsistent with the Company’s Certificate of Incorporation, Memorandum of Association or Articles of Association, do not and will not contravene any law, governmental rule or regulation, judgment or order applicable to the Company and, except for consents that have already been obtained by the Company, do not and will not conflict with or contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other instrument of which the Company is a party or by which it is bound or require the consent or approval of, the giving of notice to, the registration with or the taking of any action in respect of or by, any federal, state or local governmental authority or agency or other person; and
 
 
(d)
that it shall, upon the request of the Holder, procure the approvals required in order to list the Warrant Shares for trading on TASE.
 
 
(e)
the representations and warranties set forth in Section 3.8 of the Conversion Agreement, dated September 25, 2008, between the Company and the Holder are true and correct on the date hereof as if made on the date hereof, the Company acknowledging that the Holder is acquiring the Warrant in full reliance upon the representations and warranties made by the Company in this Warrant, including this Section 10(e).
 

11.         MISCELLANEOUS
 
In this Warrant:
 
 
(a)
Words importing the singular shall include the plural and vice versa and words importing any gender shall include all other genders and references to persons shall include partnerships, corporations and unincorporated associations.
 
 
(b)
Any reference in this Warrant to a specific form or to any rule or regulation adopted by the SEC shall also include any successor form or amended or successor rule or regulation subsequently adopted by the SEC, all as the same may be in effect at the time.
 
 
(c)
Any reference in this Agreement to a statute, act or law shall be construed as a reference to such statute, act or law as the same may have been, or may from time to time be, amended or reenacted.
 
 
(d)
A “person” shall be construed as a reference to any person, firm, company, corporation, government, state or agency of a state or any association or partnership (whether or not having separate legal personality) or two or more of the aforegoing.
 
 
(e)
“Including” and “includes” means, including, without limiting the generality of any description preceding such terms.
 
 
(f)
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
 
12.         LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT
 
Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of any Warrant or Shares certificate, and in case of loss, theft or destruction, of indemnity, or security reasonably satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of such Warrant or Shares certificate, if mutilated, the Company will make and deliver a new Warrant or Shares certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or Shares certificate, provided that if this Warrant has been amended, at the request of the Holder, the Company shall issue an amended and restated Warrant certificate reflecting such amendment or amendments. In addition, but without derogating from the aforesaid, if this Warrant has been amended, the Holder shall have the right, at the option of the Holder, at any time and, if applicable, from time to time, to surrender this Warrant certificate and receive an amended and restated Warrant certificate reflecting any such amendment or amendments.
 
13.         NOTICES
 
Any notice or other communication hereunder shall be in writing and shall be deemed to have been given upon delivery, if personally delivered or 3 (three) business days after deposit if deposited in the mail for mailing by certified mail, postage prepaid, and addressed as follows:
 
If to the Holder:
Bank Leumi Le-Israel B.M.
Special Credits Division
13 Ahad Ha’am Street
Tel-Aviv
Attention:  Head of Special
      Credits Division
Facsimile:  (03) 514-7092
   
with a copy to:
(which shall not
constitute notice)
Leumi Partners
5 Azrieli Center, The Square Tower
Tel Aviv
Israel
Attention:           General Counsel
Facsimile:          (03) 514-1255
   
If to the Company:
Tower Semiconductor Ltd.
P.O. Box 619
Ramat Gabriel Industrial Zone
Migdal Haemek 23105
Israel
Attention:          Oren Shirazi
         Chief Financial Officer
Facsimile:          (04) 604-7242
   
with a copy to:
Yigal Arnon & Co.
1 Azrieli Center
46th Floor, The Round Tower
Tel Aviv Israel
Attention:           David H. Schapiro, Adv.
Facsimile:          (03) 608-7714
   

 
 
 
Each of the above addressees may change its address for purposes of this paragraph by giving to the other addressees notice of such new address in conformance with this paragraph.
 
14.         APPLICABLE LAW; JURISDICTION
 
This Warrant shall be governed by and construed in accordance with the laws of the State of Israel as applicable to contracts between two residents of the State of Israel entered into and to be performed entirely within the State of Israel.  Any dispute arising under or in relation to this Warrant shall be resolved in the competent court for Tel Aviv-Jaffa district, and each of the parties hereby submits irrevocably to the jurisdiction of such court.
 
 
Dated:           September 1, 2010
 
for         TOWER SEMICONDUCTOR LTD.
 
 
By:
/s/
Oren Shirazi
  
By:
/s/
Yoram Glatt
  
                 
 
Name:
  
Oren Shirazi
  
Name:
  
Yoram Glatt
  
                 
 
Title
  
V.P. & CFO
  
Title
  
Treasurer
  

 
 
 

NOTICE OF EXERCISE
 
    To:
    [________________]
 
 
 
[1.
The undersigned hereby elects to purchase ______ (________) Ordinary Shares of Tower Semiconductor Ltd., pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price for such shares in full.
 
[OR
 
The undersigned hereby elects to exchange the attached Warrant for ______ (____________) [insert number of Warrant Shares] Ordinary Shares of Tower Semiconductor Ltd. on a Net Exercise basis, pursuant to Section 3(b) of the attached Warrant and the other terms and conditions contained therein.]
 
2.
In exercising this Warrant, the undersigned hereby confirms and acknowledges that the Ordinary Shares are being acquired solely for the account of the undersigned and not as a nominee for any other party, or for investment, and that the undersigned will not offer, sell or otherwise dispose of any such Ordinary Shares except under circumstances that will not result in a violation of the Securities Act of 1933, as amended, or any state securities laws.
 
3.
Please issue a certificate representing said Ordinary Shares in the name of the undersigned.
 
4.
Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned.
 
 
       
 (Date)       (Printed Name)  
             
       
       
     (Signature Name)  
 
 
 
 

Appendix A
 
Intentionally Omitted
 
(See Exhibit 3 and Exhibit 4
to this  Statement on Schedule 13D)