EXHIBIT 99.6
AMENDING AGREEMENT
TO THE FACILITY AGREEMENT
THIS AMENDING AGREEMENT is made and entered into as of the 24th day of
August, 2006, by and between:
(1) TOWER SEMICONDUCTOR LTD. ("THE BORROWER")
and
(2) BANK HAPOALIM B.M. and BANK LEUMI LE-ISRAEL B.M. ("THE BANKS")
WHEREAS: the Borrower, on the one hand, and the Banks, on the other hand, are
parties to a Facility Agreement dated January 18, 2001, as amended from
time to time, the last amendment being the Fifteenth Amendment dated
June 14, 2006 ("THE FACILITY AGREEMENT"); and
WHEREAS: the Borrower has received all Loans under the Facility and all
Commitments have been cancelled and the Borrower has requested that
changes be made to various provisions of the Facility Agreement,
including the conversion of a portion of the Loans into equity in the
Borrower and the postponement of the Borrower's obligation to make
repayments of principal with respect to the Loans; and
WHEREAS: the Borrower and the Banks have agreed to amend the Facility Agreement,
subject to the terms and conditions set out in this Amending Agreement
below,
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. INTERPRETATION
1.1. In this Agreement, including the Exhibits hereto:
1.1.1. "AMENDING AGREEMENT" - means this Amending Agreement;
1.1.2. "AMENDMENT - means the 2nd (second) Business Day
CLOSING DATE" following the date on which the Banks
are satisfied that all the conditions
precedent referred to in clause 3 below
have been fulfilled in a form and
substance reasonably satisfactory to the
Banks ("THE CONDITIONS SATISFACTION
DATE"), provided that if the Conditions
Satisfaction Date is September 28, 2006,
the Amendment Closing Date shall be
September 29, 2006 (or such other
Business Day as the Banks and the
Borrower may agree);
1.1.3. "RESTATED - means the Facility Agreement, as amended
FACILITY AGREEMENT" and restated by this Amending Agreement,
the terms of which are set out in
EXHIBIT 1 hereto and initialled, for the
purposes of identification, by the
parties hereto.
1.2. Terms and expressions defined in the Facility Agreement shall have the
same meanings when used in this Amending Agreement and all provisions
of the Facility Agreement concerning matters of construction and
interpretation shall apply to this Amending Agreement.
1.3. All references in this Amending Agreement to clauses and paragraphs of
the Facility Agreement are references to clauses and paragraphs in the
Facility Agreement in its form prior to this Amending Agreement.
2. AMENDMENT AND RESTATEMENT OF THE FACILITY AGREEMENT
With effect from the Amendment Closing Date and upon all activities to be
performed on or before the Amendment Closing Date being completed (or
waived, the Banks being under no obligation whatsoever to grant any
waiver), the Facility Agreement (including the Schedules attached thereto)
shall automatically be amended and restated so that it shall be read and
construed for all purposes as set forth in Exhibit 1 hereto and, thereupon,
Exhibit 1 shall, for the avoidance of doubt, constitute the definitive and
binding version of the Facility Agreement as amended by this Amending
Agreement.
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3. CONDITIONS PRECEDENT
3.1. This Amending Agreement is subject to the conditions precedent that
the Banks shall have received, by no later than the 2nd (second)
Business Day prior to October 31, 2006, all of the following
documents, matters and things in form and substance satisfactory to
the Banks:
3.1.1. a copy, certified a true copy by the external legal counsel of
the Borrower, of the updated Certificate of Incorporation,
Memorandum and Articles of Association of the Borrower;
3.1.2. copies of resolutions of the Board of Directors of the
Borrower, its audit committee and shareholders, approving the
execution, delivery and performance of this Amending Agreement
and all agreements and acts to be performed by the Borrower as
conditions precedent to, or otherwise in connection with, this
Amending Agreement, including: (a) the issue of capital notes,
and of the shares issuable upon conversion thereof, of the
Borrower to the Banks or their respective nominees as
contemplated in clause 5.4 below and the execution of investment
and registration rights agreements between the Borrower and the
Banks or their respective nominees as referred to in clause 5.3
below; and (b) the issue of capital notes and of the shares
issuable upon conversion thereof, of the Borrower to TIC as
contemplated in clause 5.2 below and the execution of investment
and registration rights agreements between the Borrower and TIC,
as referred to in clause 5.1 below, as well as a resolution of
the Board of Directors of the Borrower authorising a named
officer of the Borrower to execute, deliver and perform this
Agreement and such other agreements and acts, and to give all
notices and take all such other action required to be given or
taken by the Borrower under this Amending Agreement or in
connection therewith;
3.1.3. Amending Agreement fee letters with each of the Banks, both
executed as at the date hereof by the Borrower;
3.1.4. an opinion of Xxxxx Xxxxx & Co., Advocates, the Borrower's
external legal counsel, addressed to the Banks;
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3.1.5. an opinion of Mayer, Brown, Xxxx & Maw, U.S. legal counsel for
the Banks, to the effect that, based upon their review of United
States federal or New York State statutes, rules and regulations
which, in their opinion, based on their experience, are normally
applicable to transactions of the types contemplated by this
Amending Agreement ("UNITED STATES APPLICABLE LAWS"): (i) subject
to the effectiveness of the registration statement to be filed by
the Borrower pursuant to the registration rights agreement with
each of the Banks (or their respective nominees), no consent,
approval, authorization, order, registration or qualification of
or with any United States federal or New York State court or
governmental agency or body is required for the sale in the
United States (including through the Nasdaq Stock Market) by the
Banks of the ordinary shares issuable upon conversion of capital
notes to be issued to the Banks (or their respective nominees)
pursuant to clause 5.4 below in the United States ("SHARES"),
provided that no opinion need be expressed with respect to state
securities or Blue Sky laws; (ii) the acquisition and indefinite
holding of the capital notes and/or Shares by the Banks is
permissible under United States Applicable Laws, including under
the Bank Holding Company Act of 1956, as amended; and (iii) the
acquisition and holding of the capital notes and/or Shares will
not be subject to the notification and filing requirements under
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended. Such opinion may be based upon and subject to reasonable
assumptions and limitations;
3.1.6. an updated certificate by the Auditors confirming the aggregate
investments made in accordance with clauses 16.27.2 and 16.36 of
the Facility Agreement from August 1, 2005 through and as of the
Amendment Closing Date;
3.1.7. all of the Borrower's representations and warranties given
pursuant to this Amending Agreement shall be accurate in all
material respects as of the Amendment Closing Date, as if made on
the Amendment Closing Date;
3.1.8. an updated report of the Insurance Adviser;
3.1.9. confirmation of the Controller of Restrictive Trade Practices
("THE CONTROLLER") that no approval is required with respect to
the transactions contemplated under this Amending Agreement under
the Restrictive Trade Practices Law or, if any such approval is
considered by the Controller to be required, the unconditional
receipt of same;
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3.1.10. the consent of the Investment Centre to the issue of the
capital notes, and of the shares issuable upon conversion of the
capital notes, to the Banks (or their respective nominees) as
contemplated under clause 5.4 below;
3.1.11. the approval of the XXX under the Existing XXX Leases to the
issue of the capital notes, and of the shares issuable upon
conversion of the capital notes, to the Banks (or their
respective nominees) as contemplated under clause 5.4 below;
3.1.12. an updated Schedule 1.1.101 to the Facility Agreement, listing
all Material Contracts entered into since January 29, 2001 which
are still in effect, as well as copies of such Material
Contracts;
3.1.13. confirmation that all Material Contracts shall be in full
force and effect and shall not have been breached by the Borrower
(save for any breach which: (a) is not material; and (b) cannot
constitute (including with the passage of time or the giving of
notice) a cause of action permitting termination of any such
Material Contract or any variation thereof adverse to the
Borrower);
3.1.14. a Supplement to the Debenture shall be executed relating to
all equipment, Material Contracts, registered Intellectual
Property Assets and other assets and rights required under the
Debenture to be pledged by way of first-ranking fixed charge in
favour of the Banks, but not as yet specifically included in the
Debenture and such Supplement shall be perfected and duly
registered with the Registrar of Companies and the Registrar of
Pledges and the Borrower shall deliver all documents as referred
to in clause 3.2 of the Debenture (MUTATIS MUTANDIS) and shall
sign all other documents and forms required for the purposes of
the aforegoing;
3.1.15. a list (and copies, certified by the Borrower's external legal
counsel) of all the trust deeds, indentures and prospectuses
relating to Permitted Subordinated Debt issued by the Borrower
and outstanding;
3.1.16. the updated Schedules set forth on ANNEX A to this Amending
Agreement;
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3.1.17. a certificate of the Chief Financial Officer of the Borrower
certifying that, as of the last day of the calendar month prior
to the Amendment Closing Date, the Borrower has no Indebtedness,
save for Permitted Financial Indebtedness;
3.1.18. notices of assignment by way of charge of all Material
Contracts (other than those referred to in clauses 1.1.36(c)(i)
and (ii) of the Facility Agreement);
3.1.19. notices of assignment by way of charge to, and acknowledgments
by, Bank Leumi and Bank Hapoalim, respectively, with respect to
the Reserve Accounts; and
3.1.20. notices to insurers and acknowledgments of such notices, as
referred to in clause 3.2 of the Debenture (other than under
Insurance Policies in respect of liability of the Borrower to
third parties or of liability of the Borrower for damage to
property of third parties or of the type listed in Schedule
16.10.6(d) to the Restated Facility Agreement).
3.2. In the event that the aforegoing conditions precedent are not all
fulfilled by the 2nd (second) Business Day prior to October 31, 2006,
or in the event that they shall have been fulfilled, but the closing
of this Amending Agreement shall not be fully performed in accordance
with clause 5 below by October 31, 2006, then, save for clauses 6 and
7 and the second sentence of clause 9 below, this Amending Agreement
shall no longer be of any force or effect and the Facility Agreement
shall remain unaltered and in full force and effect and, save as
aforesaid, no party shall have any claim arising out of or in
connection with this Amending Agreement. The Banks undertake that
promptly following the fulfilment to the satisfaction of the Banks of
all the conditions precedent referred to in clause 3.1 above, the
Banks shall confirm to the Borrower in writing that the conditions
precedent have been fulfilled.
4. REPRESENTATIONS AND WARRANTIES
4.1. The Borrower acknowledges that the Banks have agreed to this Amending
Agreement in full reliance on all of the representations and
warranties set forth in the Restated Facility Agreement, all of which
representations and warranties are deemed to have been made on the
date hereof and repeated on the Amendment Closing Date.
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4.2. For the removal of doubt, the term "Finance Documents" when referred
to in the representations and warranties set out in clause 15 of the
Restated Facility Agreement, includes also references to this Amending
Agreement and to the Restated Facility Agreement.
5. AMENDMENT CLOSING
Subject to the fulfilment of the conditions precedent set out in clause 3
above, all of the acts, including all of the following documents, matters
and things, in form and substance satisfactory to the Banks, set out in
this clause 5 (or in the case of clauses 5.3, 5.6, 5.8 and 5.9 below, in
form and substance satisfactory to the Bank entering into such amendment or
agreement) below shall be performed, on or prior to the Amendment Closing
Date, each such act to be deemed to have been performed immediately after
the other. In the event that any of such acts are not so performed, all of
the acts which were performed shall be of no force and effect, and this
Amending Agreement shall not have been closed:
5.1. the Borrower and TIC shall enter into an investment and registration
rights agreement, relating to the investment referred to in clause 5.2
below (for the removal of doubt, in form and substance satisfactory to
the Banks, as aforesaid);
5.2. the Borrower shall present to the Banks a certificate by the Auditors,
MUTATIS MUTANDIS, in the form of Schedule 1.1.1(v)B to the Facility
Agreement, confirming that TIC has, on, or immediately prior to, the
Amendment Closing Date, invested in the irredeemable paid-up share
capital of the Borrower, an amount of at least US $100,000,000 (one
hundred million United States Dollars), against the issue by the
Borrower to TIC of an equity convertible capital note, which capital
note is convertible into 65,789,474 (sixty-five million, seven hundred
and eighty-nine thousand, four hundred and seventy-four) shares
(subject to adjustments to changes in capital structure, stock splits,
ETC.), such capital note being fully convertible, at any time, in
whole or in part and freely transferable, at any time, in whole or in
part (for the removal of doubt, in form and substance satisfactory to
the Banks, as aforesaid). For the avoidance of doubt, the capital
notes issuable hereunder shall not entitle TIC to Interest, dividends,
early redemption rights (for the removal of doubt, no conversion of
capital notes by TIC into shares shall be deemed a redemption or
pre-payment of the capital note), anti-dilution rights, or any
adjustments due to changes to Interest rates, the market price of the
Borrower shares or indexation of any kind, but shall entitle TIC, as a
capital note holder, to participate in rights offerings and shall be
subject to certain adjustments, including share splits, combinations
and other adjustments, MUTATIS MUTANDIS, as referred to in clause 7 of
the Warrants dated August 4, 2005;
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5.3. the Borrower and each Bank (or each Bank's nominees) shall enter into
an investment agreement and a registration rights agreement (for the
removal of doubt, each in form and substance satisfactory to such
Bank, as aforesaid), relating to the capital notes (and shares
issuable thereunder) to be issued to such Bank (or such Bank's
nominees) pursuant to clause 5.4 below and the shares or capital notes
to be issued pursuant clause 9.4 of the Restated Facility Agreement;
5.4. the Borrower shall issue to each of the Banks (or their respective
nominees) equity equivalent convertible capital notes (for the removal
of doubt, in form and substance satisfactory to the Banks, as
aforesaid) against the delivery by each such Bank to the Borrower of
confirmation that the amount of US $79,000,000 (seventy-nine million
United States Dollars) of the principal of the Loans owed to such Bank
shall be converted into such capital notes (at the rate of US $2.00
(two United States Dollars) of the principal amount of such converted
Loans) to constitute US $1.00 (one United States Dollar) of the
principal of such capital notes, which capital notes are each
convertible into 25,986,842 (twenty-five million, nine hundred and
eighty-six thousand, eight hundred and forty-two) shares (subject to
adjustments to changes in capital structure, stock splits, ETC.), such
capital notes being fully convertible, at any time, in whole or in
part and freely transferable, at any time, in whole or in part. For
the avoidance of doubt, the conversion of the Loans described in this
clause 5.4 shall not take place, or be deemed to have taken place,
prior to the effectiveness of the Restated Facility Agreement on the
Amendment Closing Date pursuant to clause 2 above. For the avoidance
of doubt, the capital notes issuable hereunder shall not entitle the
Banks to Interest, dividends, early redemption rights (for the removal
of doubt, no conversion of capital notes by a Bank into shares shall
be deemed a redemption or pre-payment of the capital note),
anti-dilution rights, or any adjustments due to changes to Interest
rates, the market price of the Borrower shares or indexation of any
kind, but shall entitle the Banks, as capital note holders, to
participate in rights offerings and shall be subject to certain
adjustments, including share splits, combinations and other
adjustments, MUTATIS MUTANDIS, as referred to in clause 7 of the
Warrants dated August 4, 2005;
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5.5. the Borrower shall deliver to the Banks a capitalisation table
reflecting all shareholdings and holdings of securities (including
warrants, options and convertible debentures) in the Borrower, as at
the Amendment Closing Date, certified as correct by the Chief
Financial Officer of the Borrower;
5.6. the Borrower and each Bank shall execute amendments (for the removal
of doubt, in form and substance satisfactory to each Bank, as
aforesaid) to each of the Warrants issued to such Bank (or its
nominees or Affiliates) prior to the date hereof, extending the
respective expiry dates to a date falling 5 (five) years after the
Amendment Closing Date;
5.7. the Borrower shall pay all fees payable in accordance with the fee
letters referred to in clause 3.1.3 above;
5.8. each of the Banks and TIC shall enter into an agreement (for the
removal of doubt, in form and substance satisfactory to such Bank, as
aforesaid) providing that in the event of any sale by TIC, through one
or a series of related transactions, to a third party and/or such
third party's Affiliates (other than non-prearranged sales of shares
into the market executed on any stock exchange on which the Borrower's
shares are then listed or submitted for quotation), such that,
immediately following any such sale, TIC would cease to be the largest
shareholder of: (a) the Borrower's then issued and outstanding shares
(for the avoidance of doubt, not taking into account any securities
convertible into or exercisable for shares ("CONVERTIBLE
SECURITIES")); or (b) the Borrower's shares on a fully diluted basis,
taking into account all Convertible Securities, such Bank shall have
the "tag-along" right to sell, in, and on the same terms and
conditions as, any such sale or sales by TIC, such percentage of its
shares (including, for the avoidance of doubt, shares acquired upon
exercise of Warrants) and/or capital notes (calculated, in the case of
capital notes on the basis of the number of shares into which the
capital notes are then convertible) in the Borrower (but, for the
avoidance of doubt, not including any Warrants held by such Bank or
its Affiliate) as shall equal the percentage that the: (i) shares
being sold by TIC represent of all of TIC's shares in the Borrower, in
the event only (a) above is applicable; or (ii) shares and Convertible
Securities being sold by TIC represent of all of TIC's shares and
Convertible Securities in the Borrower, in the event (b) above is (or,
for the avoidance of doubt, both (a) and (b) above are) applicable;
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5.9. each of the Banks and the Lead Investors shall enter into an agreement
(for the removal of doubt, in form and substance satisfactory to such
Bank, as aforesaid) pursuant to which the Lead Investors would be
obligated towards any one (and not more than one) acquirer of 5% (five
percent) or more of the then outstanding issued share capital of the
Borrower from such Bank (including, for the avoidance of doubt,
through acquisition of capital notes from such Bank and conversion by
such acquirer of capital notes into shares) to vote for the nominee of
such acquirer to be appointed as a director of the Borrower, subject
to the Lead Investors being entitled to object to any particular such
nominee on reasonable grounds; and
5.10. the parties shall insert in clause 1.1.6A of Exhibit 1 hereto the
date, being the Amendment Closing Date and, without derogating from
clause 2 above, shall confirm Exhibit 1 again by signing it on the
Amendment Closing Date.
6. GOVERNING LAW AND JURISDICTION
This Amending Agreement shall be governed by and shall be construed in
accordance with Israeli law and the competent court of Tel-Aviv-Jaffa shall
have exclusive jurisdiction to hear any matters, provided that the Banks
shall be entitled to xxx the Borrower in any jurisdiction in which it has
an office or holds assets.
7. GENERAL
Clauses 26, 27 and 29 of the Facility Agreement shall apply to this
Amending Agreement, provided that clause 27.2.1 shall be amended as set
forth in Exhibit 1 hereto. Nothing in this Amending Agreement, Exhibit 1
hereto, or the Restated Facility Agreement shall constitute or be construed
as a revocation, withdrawal or cancellation of each waiver, approval or
consent given to the Borrower by the Banks prior to the date hereof, but
only to the extent as such waiver, approval or consent shall be set forth
in EXHIBIT 2 to be attached hereto on the Amendment Closing Date (provided
that such exhibit is in form and substance satisfactory to the Banks) and
each such waiver, approval or consent shall continue to be in effect
following the date hereof in accordance with the respective terms thereof.
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8. INTERIM DETERMINATION OF LIBOR
Notwithstanding clause 1.1.94 of the Facility Agreement, should the
Amendment Closing Date take place on September 30, 2006 or thereafter, the
Banks shall have the option (but not the obligation) to determine LIBOR on
the basis of daily Eurodollar deposits (rather than 3 (three) month or
weekly deposits) for the period between September 30, 2006 and the
Amendment Closing Date.
9. EXERCISABILITY OF WARRANTS ON AMENDMENT CLOSING DATE
For the avoidance of doubt, the Borrower and each Bank confirm that,
pursuant to Section 2A of the Warrant dated August 4, 2005, granted by the
Borrower to such Bank, the Second Tranche Exercisability Date (as defined
in such Warrant) shall occur upon the signature by the Banks and the
Borrower of the Restated Facility Agreement on the Amendment Closing Date
pursuant to clause 5.10 above. Should the Restated Facility Agreement not
become effective in accordance with clause 2 above and, accordingly not
signed pursuant to clause 5.10 above, nothing in this clause 9 shall
derogate from the Second Tranche Exercisability Date occurring upon the
signature of another agreement by the Banks and the Borrower to reschedule
the repayment dates of the Interest Payment Loans as contemplated by said
Section 2A.
IN WITNESS WHEREOF, THE PARTIES HAVE SIGNED THIS AMENDING AGREEMENT EFFECTIVE AS
OF THE DATE FIRST MENTIONED ABOVE.
THE BORROWER:
for TOWER SEMICONDUCTOR LTD.
By: _____________________________
Title: _____________________________
THE BANKS:
for BANK HAPOALIM B.M. for BANK LEUMI LE-ISRAEL B.M.
By: _____________________________ By: _____________________________
Title: _____________________________ Title: _____________________________
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