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Exhibit 10.48
 
EXCHANGE AGREEMENT
 
This Exchange Agreement (this “Agreement”), dated as of July 9, 2010, is entered
into by and among Jazz Technologies, Inc., a Delaware corporation (the
“Company”), the subsidiaries of the Company listed on Schedule A hereto (each a
“Guarantor”), Tower Semiconductor Ltd., company formed under the laws of Israel
(“Tower”), Zazove Associates, LLC, a Delaware limited liability company
(“Zazove”), and each of the holders listed on the Schedule of Holders referred
to below (each, a “Holder” and collectively, the “Participating Holders”).
 
RECITALS
 
A. In December 2006, the Company issued its 8% Convertible Senior Notes due 2011
in an initial aggregate original principal amount of $166.75 million (such notes
collectively, the “Old Notes ”); such Old Notes being in the form of beneficial
interests in a global note held by The Depository Trust Company (“DTC”) and
governed by an indenture, dated as of December 19, 2006, between the Company and
U.S. Bank National Association, as supplemented by a Supplemental Indenture,
dated as of April 3, 2007, pursuant to which the Company’s obligations were
guaranteed by the guarantors party thereto, and a Second Supplemental Indenture,
dated as of September 19, 2008 (such indenture, as the same has been modified or
supplemented through the date hereof, the “Old Indenture”).
 
B. The Old Notes were originally convertible into common stock of the Company.
Effective September 19, 2008, a wholly-owned subsidiary of Tower merged with and
into the Company, with the Company being the surviving corporation and a
wholly-owned subsidiary of Tower.  Pursuant to the terms of the Second
Supplemental Indenture, dated as of September 19, 2008, to the Old Indenture
entered into in connection with such merger, the Old Notes became convertible
for Tower Common Stock (defined below).
 
C. Through the date hereof, the Company has repurchased $43.42 million in
aggregate principal amount of Old Notes, leaving $123.33 million in aggregate
principal amount of Old Notes outstanding as of the date hereof.
 
D. Each Holder is the beneficial owner of Old Notes in the aggregate principal
amount set forth opposite such Holder’s name in column (2) of the Schedule of
Holders (the “Schedule of Holders”) attached hereto as Exhibit A (the “Original
Principal Amount”).
 
E. The Company and the Participating Holders desire to enter into this
Agreement, pursuant to which, among other things, on the Closing Date (as
defined below), each Holder shall exchange Old Notes in a principal amount equal
to the Original Principal Amount for such Holder for newly-issued (i) 8% senior
notes due 2015 issued by the Company (the “New Notes”) and guaranteed (the
“Guarantees”), jointly and severally, by the Guarantors in the principal amount
set forth in column (3) opposite such Holder’s name on the Schedule of Holders
(with respect to each Holder, the “Exchange Principal Amount”) and (ii) Series J
warrants (the “Tower Warrants”) to purchase a number of shares of Tower Common
Stock (collectively, the “Tower Warrant Shares”) as is set forth in column (4)
opposite such Holder’s name on the Schedule of Holders (with respect to each
Holder, the “Exchange Warrant Amount”).  The New Notes will be issued under and
governed by an indenture, dated as of the Closing Date, among the Company, the
guarantors from time to time party thereto and U.S. Bank National Association,
as trustee, in a form substantially similar to that attached hereto as Exhibit B
(the “New Indenture”), and the Tower Warrants will be issued under and governed
by a warrant agreement, dated as of the Closing Date, between Tower and American
Stock Transfer & Trust Company, as warrant agent, in a form substantially
similar to that attached hereto as Exhibit C (the “Warrant Agreement”).
 
 
 

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F. Pursuant to the terms and conditions of this Agreement, for each $1,000
Original Principal Amount exchanged, a Holder will be entitled to receive (i)
$1,175 in principal amount of New Notes and (ii) Tower Warrants to purchase
317.25 shares of Tower Common Stock.
 
G. An aggregate of at least $70 million Original Principal Amount shall be
exchanged for New Notes in the Exchange (defined below).
 
H. The exchange of Old Notes for New Notes and Tower Warrants by the
Participating Holders on the terms set forth in this Agreement (the “Exchange”)
is being made pursuant to Sections 3(a)(9) and/or 4(2) of the Securities Act of
1933, as amended (the “Securities Act”), Regulation D promulgated under Section
4(2) thereof and Regulation S promulgated under the Securities Act.
 
I.  As of the date of this Agreement, Zazove is acting as investment advisor
with discretionary authority with regard to certain of the entities listed on
the Schedule of Holders that hold $36,036,000 in aggregate principal amount of
the Old Notes (the “Zazove Accounts”).  Zazove will take action on behalf of,
and make representations and warranties on behalf of, the Zazove Accounts.
 
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and undertakings set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
 
1. Definitions. Unless the context otherwise requires, the following terms shall
have the      following meanings for all purposes of this Agreement:

“Action” has the meaning ascribed to it in Section 4(j).
 
“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person as such terms are used in and construed under Rule 144 under the
Securities Act.  With respect to the Holder, any investment fund or managed
account that is managed on a discretionary basis by the same investment manager
as the Holder will be deemed to be an Affiliate of the Holder.
 
“Agreement” has the meaning set forth in the preamble to this Agreement.
 
“Business Day” means any day except Saturday, Sunday, any day which shall be a
federal legal holiday in the United States and any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.
 
“Closing” has the meaning ascribed to it in Section 3.
 
“Closing Date” has the meaning ascribed to it in Section 3
 
“Commission” means the Securities and Exchange Commission.
 
“Common Stock” means the common stock, par value $0.0001 per share, of the
Company.
 
“Common Stock Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.
 
 
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“Company” has the meaning set forth in the preamble to this Agreement.
 
“Company Disclosure Materials” shall have the meaning ascribed to it in Section
4(h).
 
“Company Material Adverse Effect” means (i) a material adverse effect on the
legality, validity or enforceability of any Transaction Document to which the
Company or any Guarantor is a party, (ii) a material adverse effect on the
results of operations, assets, business, prospects or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole, or (iii) a
material adverse effect on the Company’s or any Guarantor’s ability to perform
in any material respect on a timely basis its obligations under any Transaction
Document to which it is a party.
 
“Company Registration Rights Agreement” means the Registration Rights Agreement,
dated as of the Closing Date, among the Company and the Participating Holders,
in the form of Exhibit D attached hereto.
 
“Disclosure Schedules” means the Disclosure Schedules of the Company and Tower
to this Agreement delivered concurrently herewith.
 
“DTC” has the meaning set forth in the “Recitals” section.

“Exchange” has the meaning set forth in the “Recitals” section.

“Exchange Principal Amount” has the meaning set forth in the “Recitals” section.

“Exchange Note Cash Payment” has the meaning ascribed to it in Section 2(c).

“Exchange Notes” has the meaning set forth in the New Indenture.

“Exchange Warrant Amount” has the meaning set forth in the “Recitals” section.

 “GAAP” has the meaning ascribed to it in Section 4(h).

“Guarantor” has the meaning set forth in the preamble to this Agreement.
 
“Holder” has the meaning set forth in the preamble to this Agreement.
 
“Intellectual Property Rights” has the meaning ascribed to it in Section 4(o).
 
“Letter Agreement” means the letter agreement, as of the Closing Date, among the
Company, the Guarantors, Tower and the Participating Holders.
 
“Letter of Intent” means the Letter of Intent, dated June 8, 2010, among the
Company, Tower and Zazove.
 
“Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.
 
“Material Permits” has the meaning ascribed to it in Section 4(m).
 
“New Indenture” has the meaning set forth in the “Recitals” section.
 
 
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“New Notes” has the meaning set forth in the “Recitals” section.

“Old Indenture” has the meaning set forth in the “Recitals” section.

“Old Notes” has the meaning set forth in the “Recitals” section.
 
           “Original Principal Amount” has the meaning set forth in the
“Recitals” section.

“Participating Holders” has the meaning set forth in the preamble to this
Agreement.

“Person” means an individual, corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.
 
“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
 
“Registration Statement” means a registration statement meeting the requirements
set forth in the Company Registration Rights Agreement or the Tower Registration
Rights Agreement, as applicable.
 
“Required Approvals” shall have the meaning ascribed to such term in Section
4(e).
 
“Schedule of Holders” has the meaning set forth in the “Recitals” section.

“Securities” means the New Notes, the Tower Warrants and the Tower Warrant
Shares.

“Securities Act” has the meaning set forth in the “Recitals” section.

“Subsidiary” means, with respect to the Company or Tower, any subsidiary of such
company as set forth on Schedule 4(a) for the Company or Schedule 5(a) for
Tower.
 
“Tower” has the meaning set forth in the preamble to this Agreement.
 
“Tower Action” has the meaning ascribed to it in Section 5(j).
 
“Tower Common Stock” means the ordinary shares of Tower, par value NIS 1.00 per
share, and any other class of securities into which such securities may
hereafter be reclassified or changed into.
 
“Tower Common Stock Equivalents” means any securities of Tower or its
Subsidiaries which would entitle the holder thereof to acquire at any time Tower
Common Stock, including, without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Tower Common Stock.
 
“Tower Disclosure Materials” has the meaning ascribed to it in Section 5(h).
 
“Tower Intellectual Property Rights” has the meaning set forth in Section 5(o).
 
 
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“Tower Material Adverse Effect” means (i) a material adverse effect on the
legality, validity or enforceability of any Transaction Document to which Tower
is a party, (ii) a material adverse effect on the results of operations, assets,
business, prospects or condition (financial or otherwise) of Tower and its
Subsidiaries, taken as a whole, or (iii) a material adverse effect on Tower’s
ability to perform in any material respect on a timely basis its obligations
under any Transaction Document to which it is a party.
 
“Tower Material Permits” has the meaning ascribed to it in Section 5(m).
 
“Tower Required Approvals” has the meaning ascribed to it in Section 5(e).
 
“Tower Registration Rights Agreement” means the Registration Rights Agreement,
dated as of the Closing Date, among the Company and the Participating Holders,
in the form of Exhibit E attached hereto.
 
“Tower SEC Reports” has the meaning ascribed to it in Section 5(h).
 
“Tower Warrants” has the meaning set forth in the “Recitals” section.

“Tower Warrant Shares” has the meaning set forth in the “Recitals” section.
 
“Trading Market” means the following markets or exchanges on which the Tower
Common Stock is listed or quoted for trading on the date in question:  the
American Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market,
the Nasdaq Global Select Market or the New York Stock Exchange.
 
“Transaction Documents” means this Agreement, the New Notes, the New Indenture,
the Guarantees, the Warrants, the Warrant Agreement, the Company Registration
Rights Agreement, the Tower Registration Rights Agreement, the Letter Agreement
and any other documents or agreements executed in connection with the
transactions contemplated hereunder.

“Warrant Agreement” has the meaning set forth in the “Recitals” section.

“Zazove” has the meaning set forth in the preamble to this Agreement.

2. The Exchange.
 
(a) Exchange of Old Notes for New Notes and Tower Warrants. Subject to the
satisfaction of the conditions set forth in Section 7 and Section 8 hereof, at
the Closing (i) each Holder (or in the case of the Zazove Accounts, Zazove on
behalf of each such Holder) agrees, severally and not jointly, to take such
action as is necessary to transfer and deliver to the Company by electronic
delivery via Deposit/Withdrawal at Custodian the Old Notes of such Holder in the
Original Principal Amount for such Holder, (ii) the Company shall issue and
deliver to each Holder New Notes in the Exchange Principal Amount for such
Holder plus cash in immediately available funds for any amount that would not be
an integral multiple of $1,000 as set forth opposite such Holder’s name in
column (3) of the Schedule of Holders (the “Exchange Note Cash Payment”) and
(iii) Tower shall issue and deliver to each Holder Tower Warrants in the
Exchange Warrant Amount for such Holder (which Exchange Warrant Amount reflects
rounding up to the next whole share any warrants to purchase any fractional
shares to which the Holder would otherwise be entitled). The Company and Tower
shall deliver the New Notes and Tower Warrants, as applicable, by causing DTC to
credit such securities to the account of each Holder’s DTC participant as set
forth in a direction substantially in the form of Schedule B hereto, or such
other DTC account as a Holder (or in the case of the Zazove Accounts, Zazove)
may direct in writing sufficiently in advance of the Closing Date against
delivery by such Holder of Old Notes in the Original Principal Amount for such
Holder.  Notwithstanding anything to the contrary in this Agreement, each of
Elevator Division Retirement Benefit Plan, Iowa Judicial Retirement System and
Painting Industry Annuity Fund have determined to, and agree that they will,
exchange their Old Notes for New Notes and the Exchange Note Cash Payment only
and are foregoing any right to receive any Tower Warrants in the Exchange.
 
 
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(b) Registration of New Notes and Tower Warrants. The New Notes will be
evidenced by one or more global note certificates and the Tower Warrants will be
evidenced by one or more global warrant certificates, in each case in definitive
form, registered in the name of Cede &Co., as nominee of DTC, and bearing such
legends as shall be required by the New Indenture or Warrant Agreement, as the
case may be.
 
(c) Accrued and Unpaid Interest on Old Notes.  In lieu of paying accrued and
unpaid interest on the Old Notes from the last date through which interest was
paid to, but excluding, the Closing Date, interest on the New Notes shall accrue
from the last date through which interest was paid.  Each Holder (or in the case
of the Zazove Accounts, Zazove on behalf of such Holder) acknowledges that upon
receipt of such Holder’s Exchange Principal Amount and Exchange Warrant Amount,
together with the Exchange Note Cash Payment payable to such Holder, the
Company’s obligations to pay such Holder principal and interest on the Old Notes
so exchanged by such Holder shall be satisfied.
 
3. Closing. The consummation of the transactions contemplated by this Agreement
(the “Closing”) shall occur at 10:00 a.m. (New York City local time), or at such
other time as the parties agree upon, on July 14, 2010 or, if the conditions to
Closing set forth in Section 7 and Section 8  hereof (other than conditions that
by their terms can only be satisfied on the Closing Date) have not been
satisfied or waived by such date, then on the second Business Day after the last
of such conditions to Closing has been satisfied or waived by the party entitled
to waive the same or on any such other date as to which the parties mutually
agree in writing (the “Closing Date”).

4. Representations and Warranties of the Company and the Guarantors. Except as
set forth under the corresponding section of the Disclosure Schedules, which
Disclosure Schedules shall be deemed a part hereof and to qualify such
corresponding representation or warranty otherwise made herein to the extent of
such disclosure, the Company and the Guarantors, jointly and severally, hereby
make the representations and warranties set forth below to each Holder and to
Zazove:
 
(a)           Subsidiaries.  All of the direct and indirect ownership of any
capital stock, or other equity interests owned or held by subsidiaries of the
Company are set forth on Schedule 4(a).  Except as set forth on Schedule 4(a),
the Company owns, directly or indirectly, all of the capital stock or other
equity interests of each of its Subsidiary free and clear of any Liens, and all
the issued and outstanding shares of capital stock of each of its Subsidiary are
validly issued and are fully paid, non-assessable and free of preemptive and
similar rights to subscribe for or purchase securities.
 
(b)           Organization and Qualification.  The Company and each of its
Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted.  No proceeding has been instituted for the dissolution
of the Company or any of its Subsidiaries.  Neither the Company nor any of its
Subsidiaries is in violation or default of any of the provisions of its
respective certificate or articles of incorporation, bylaws or other
organizational or charter documents.  Each of the Company and its Subsidiaries
is duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case may
be, could not have or reasonably be expected to result in a Company Material
Adverse Effect, and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such
power and authority or qualification.
 
 
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(c)           Authorization; Enforcement.  The Company and each Guarantor has
the requisite corporate or other power and authority to enter into and to
consummate the transactions contemplated by each of the Transaction Documents to
which it is a party and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery by the Company and each Guarantor of each
of the Transaction Documents to which it is a party and the consummation by it
of the transactions contemplated hereby and thereby have been duly authorized by
all necessary action on the part of the Company or such Guarantor and no further
action is required by the Company or any Guarantor or its respective board of
directors (or similar governing body) or its stockholders or members in
connection therewith.  Each Transaction Document to which the Company or any
Guarantor is a party has been (or upon delivery will have been) duly executed by
the Company and such Guarantor and, when delivered in accordance with the terms
hereof and thereof, will constitute the valid and binding obligation of the
Company and such Guarantor enforceable against the Company and such Guarantor in
accordance with its terms except (i) as limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.  On the Closing Date, the Exchange Notes (including the related Guarantees)
shall have been duly authorized by the Company and each of the Guarantors, as
applicable, and, when duly executed, authenticated, issued and delivered as
contemplated by the Company Registration Rights Agreement and in accordance with
the provisions of the New Indenture, will be duly and validly issued and
outstanding and will constitute valid and binding obligations of the Company and
such Guarantor enforceable against the Company and such Guarantor in accordance
with its terms except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.
 
(d)           No Conflicts.  The execution, delivery and performance by the
Company and each Guarantor of the Transaction Documents to which it is a party,
the issuance and sale of the New Notes (including the related Guarantees) and
the consummation by the Company and the Guarantors of the other transactions
contemplated hereby and thereby do not and will not (i) conflict with or violate
any provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company or any of its Subsidiaries,
or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or any of its
Subsidiaries’ debt or otherwise) or other understanding to which the Company or
any of its Subsidiaries is a party or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected, or (iii) subject to the
Required Approvals, conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company or any of its Subsidiaries
is subject (including U.S. federal and state securities laws and regulations),
or by which any property or asset of the Company or any of its Subsidiaries is
bound or affected; except in the case of each of clauses (ii) and (iii), such as
could not have or reasonably be expected to result in a Company Material Adverse
Effect.
 
 
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(e)           Filings, Consents and Approvals.  Other than as set forth on
Schedule 4(e), neither the Company nor any Guarantor is required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other U.S. federal, state, local or
other governmental authority or other Person in connection with the execution,
delivery and performance by the Company and each Guarantor of the Transaction
Documents to which it is a party, other than (i) filings required pursuant to
Section 7(g) of this Agreement, (ii) the filing with the Commission of the
Registration Statement, (iii) the filing of Form D with the Commission and such
filings as are required to be made under applicable state securities laws, and
(iv) those made or obtained prior to Closing (collectively, the “Required
Approvals”).
 
(f)           Issuance of the New Notes.  The New Notes are duly authorized and,
when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens imposed by the Company other than restrictions on
transfer provided for in the Transaction Documents.
 
(g)           Capitalization.  The capitalization (including convertible
debentures) of the Company as of one (1) Business Day prior to the date hereof
is as set forth on Schedule 4(g).  No Person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in
the transactions contemplated by the Transaction Documents.  There are no
outstanding options, warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any shares of Common Stock, or
contracts, commitments, understandings or arrangements by which the Company or
any of its Subsidiaries is or may become bound to issue additional shares of
Common Stock or Common Stock Equivalents. The issuance and sale of the New Notes
will not obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Participating Holders) and will not
result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under any of such securities. All of the
outstanding shares of capital stock of the Company are validly issued, fully
paid and nonassessable, have been issued in compliance with all U.S. federal and
state securities laws, and none of such outstanding shares was issued in
violation of any preemptive rights or similar rights to subscribe for or
purchase securities.  No further corporate approval or authorization of any
stockholder, the Board of Directors of the Company or any Guarantor or others is
required for the issuance and sale of the New Notes and the related
Guarantees.  Except as disclosed on Schedule 4(g), there are no stockholders
agreements, voting agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or, to the knowledge of
the Company, between or among any of the Company’s stockholders.
 
(h)           SEC Reports; Financial Statements.  The Company’s reports,
schedules, forms, statements and other documents filed by it under the
Securities Act or the Exchange Act for the three years preceding the date hereof
(the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, “Company SEC Reports”; together with the
Company Disclosure Schedules, the “Company Disclosure Materials”), when filed
(or if amended or superseded by a filing prior to the date hereof, then on the
date of such filing), complied in all material respects with the requirements of
the Securities Act and the Exchange Act, as applicable, and none of the Company
SEC Reports, when filed (or if amended or superseded by a filing prior to the
date hereof, then on the date of such filing), contained any untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.  The financial
statements of the Company included in the Company SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of
filing (or if amended or superseded by a filing prior to the Closing Date, then
on the date of such filing).  Such financial statements have been prepared in
accordance with accounting principles generally accepted in the United States
applied on a consistent basis during the periods involved (“GAAP”), except as
may be otherwise specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial
position of the Company and its consolidated subsidiaries as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.
 
 
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(i)           Material Changes; Undisclosed Events, Liabilities or
Developments.  Since the date of the latest audited financial statements of the
Company included in a report filed on Form 10-K and except as specifically
disclosed in the Company Disclosure Materials, (i) there has been no event,
occurrence or development that has had or that could reasonably be expected to
result in a Company Material Adverse Effect, (ii) the Company has not incurred
any liabilities (contingent or otherwise) other than trade payables and accrued
expenses incurred in the ordinary course of business consistent with past
practice, (iii) the Company has not altered its method of accounting, and (iv)
the Company has not declared or made any dividend or distribution of cash or
other property to its stockholders or purchased, redeemed or made any agreements
to purchase or redeem any shares of its capital stock.  The Company does not
have pending before the Commission any request for confidential treatment of
information.  Except for the entering into of this Agreement and the
transactions contemplated hereby or as set forth in the Company Disclosure
Materials, no event, liability or development has occurred or exists with
respect to the Company or its Subsidiaries or their respective business,
properties, operations or financial condition, that would be required to be
disclosed by the Company under applicable securities laws at the time this
representation is made that has not been publicly disclosed at least 1 Business
Day prior to the date that this representation is made.
 
(j)           Litigation.  Except as set forth on Schedule 4(j) and in the
Company Disclosure Materials, there is no action, suit, inquiry, notice of
violation, proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company, any of its Subsidiaries or
any of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (U.S. federal,
state, county, local or foreign) (collectively, an “Action”) which (i) adversely
affects or challenges the legality, validity or enforceability of any of the
Transaction Documents or the New Notes (including the related Guarantees) or
(ii) could have or reasonably be expected to result in a Company Material
Adverse Effect.  Neither the Company nor any of its Subsidiaries, nor any
director or officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under U.S. federal or state securities laws
or a claim of breach of fiduciary duty.
 
(k)           Labor Relations.  No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company which could reasonably be expected to result in a Company Material
Adverse Effect.  Except as disclosed on Schedule 4(k), none of the Company’s or
its Subsidiaries’ employees is a member of a union that relates to such
employee’s relationship with the Company, and neither the Company or any of its
Subsidiaries is a party to a collective bargaining agreement, and the Company
and its Subsidiaries believe that their relationships with their employees are
good.  No executive officer, to the knowledge of the Company, is, or is now
expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other contract or agreement or any restrictive
covenant, and, to the knowledge of the Company, the continued employment of each
such executive officer does not subject the Company or any of its Subsidiaries
to any liability with respect to any of the foregoing matters.  The Company and
its Subsidiaries are, to their knowledge, in compliance with all, U.S. federal,
state, local and foreign laws and regulations relating to employment and
employment practices, terms and conditions of employment and wages and hours,
except where the failure to be in compliance could not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse
Effect.  The severance pay due to the Company’s employees is fully funded or
provided for in accordance with GAAP, consistently applied.
 
 
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(l)           Compliance.  Except as set forth in the Company Disclosure
Materials, neither the Company nor any of its Subsidiaries (i) is in default
under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by the
Company or any of its Subsidiaries under), nor has the Company or any of its
Subsidiaries received notice of a claim that it is in default under or that it
is in violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its
properties is bound (whether or not such default or violation has been waived),
(ii) is in violation of any order of any court, arbitrator or governmental body,
(iii) is in violation of its charter or bylaws or similar organizational
document or (iv) is or has been in violation of any statute, rule or regulation
of any governmental authority, including without limitation all foreign, U.S.
federal, state and local laws applicable to its business and all such laws that
affect the environment, except in each case as could not have or reasonably be
expected to result in a Company Material Adverse Effect.
 
(m)            Regulatory Permits.  The Company and its Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate U.S. federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the Company Disclosure Materials, except
where the failure to possess such permits could not have or reasonably be
expected to result in a Company Material Adverse Effect (“Material Permits”),
and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material Permit.
 
(n)           Title to Assets.  Except as set forth on Schedule 4(n), the
Company and its Subsidiaries have good and marketable title in fee simple to all
real property owned by them that is material to the business of the Company and
its Subsidiaries and good and marketable title in all personal property owned by
them that is material to the business of the Company and its Subsidiaries, in
each case free and clear of all Liens, except for Liens that do not materially
affect the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and its
Subsidiaries and Liens for the payment of U.S. federal, state or other taxes,
the payment of which is neither delinquent nor subject to penalties.  Any real
property and facilities held under lease by the Company and its Subsidiaries are
held by them under valid, subsisting and enforceable leases with which the
Company and its Subsidiaries are in compliance.
 
(o)           Patents and Trademarks.  To the knowledge of the Company, the
Company and its Subsidiaries own, or have legally enforceable rights to use, all
patents, patent rights, patent applications, trademarks, trademark applications,
service marks, trade names, copyrights, maskworks trade secrets, inventions,
know-how, licenses and other similar rights necessary or material for use in
connection with their respective businesses as described in the Company
Disclosure Materials and which the failure to so have could have a Company
Material Adverse Effect (collectively, the “Intellectual Property
Rights”).  Except as set forth on Schedule 4(o), neither the Company nor any of
its Subsidiaries has received a written notice that has not been revoked or has
knowledge that the Intellectual Property Rights used by the Company or any of
its Subsidiaries violates or infringes, or allegedly violates or allegedly
infringes, upon the rights of any Person.  To the knowledge of the Company, all
such Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property Rights.  The
Company and its Subsidiaries have taken reasonable security measures to protect
the secrecy, confidentiality and value of all Intellectual Property Rights,
except where failure to do so could not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
 
(p)           Insurance.  The Company and its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which the
Company and its Subsidiaries are engaged, including, but not limited to,
directors and officers insurance coverage.  To the best knowledge of the
Company, such insurance contracts and policies are accurate and
complete.  Neither the Company nor any of its Subsidiaries has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business without a significant increase in
cost.
 
 
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(q)           Transactions With Affiliates and Employees.  Except as set forth
on Schedule 4(q) and in the Company Disclosure Materials, none of the officers
or directors of the Company and, to the knowledge of the Company, none of the
employees of the Company is presently a party to any transaction with the
Company or any of its Subsidiaries (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner, in each case in excess
of $120,000 other than (i) for payment of salary, director fees or consulting
fees for services rendered, (ii) reimbursement for expenses incurred on behalf
of the Company and (iii) for other employee benefits, including reasonable
severance pay plans of the Company or bonuses.  Except as described above or in
the Company Disclosure Materials, none of the officers, directors or, to the
best of the Company’s knowledge, key employees or stockholders of the Company or
any members of their immediate families, are indebted to the Company or any of
its Subsidiaries, individually in excess of $120,000.  Except as set forth in
the Company Disclosure Materials, neither the Company nor any of its
Subsidiaries is a guarantor or indemnitor of any indebtedness of any other
person, firm or corporation.
 
(r)           Sarbanes-Oxley; Internal Accounting Controls.  The Company is in
material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which
are applicable to it as of the Closing Date.  The Company and its Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management’s general or specific authorization, and (iv)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. The Company has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under
the Exchange Act is recorded, processed, summarized and reported, within the
time periods specified in the Commission’s rules and forms.  The Company’s
certifying officers have evaluated the effectiveness of the Company’s disclosure
controls and procedures as of the end of the period covered by the Company’s
most recently filed periodic report under the Exchange Act (such date, the
“Evaluation Date”).  The Company presented in its most recently filed periodic
report under the Exchange Act the conclusions of the certifying officers about
the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date.  Since the Evaluation Date, there have
been no changes in the Company’s internal control over financial reporting (as
such term is defined in the Exchange Act) that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over
financial reporting, and no significant deficiencies or material weaknesses in
internal controls over financial reporting, or other factors that could
significantly affect the Company’s internal controls over financial reporting,
have been identified.
 
(s)           Certain Fees.  Except as disclosed on Schedule 4(s), no brokerage
or finder’s fees or commissions are or will be payable by the Company to any
broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by
the Transaction Documents.  Except for fees incurred by or on behalf of such
Holder, no Holder shall have any obligation with respect to any fees or with
respect to any claims made by or on behalf of other Persons for fees as
contemplated in this Section that may be due in connection with the transactions
contemplated by the Transaction Documents.
 
 
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(t)           Private Placement. Assuming the accuracy of each Holder’s
representations and warranties set forth in Section 6, no registration under the
Securities Act is required for the offer and sale of the New Notes by the
Company and the related Guarantees by the Guarantors to the Participating
Holders as contemplated hereby.
 
(u)           Investment Company. The Company is not, and is not an Affiliate
of, and immediately after receipt of payment for the Securities and consummation
of the Exchange, will not be or be an Affiliate of, an “investment company”
within the meaning of the Investment Company Act of 1940, as amended.  The
Company shall conduct its business in a manner so that it will not become
subject to the Investment Company Act.
 
(v)           Registration Rights.  Except as disclosed on Schedule 4(v), other
than each of the Participating Holders and any registered broker-dealer
receiving compensation in the form of equity in connection with the transactions
contemplated by this Agreement, no Person has any right to cause the Company to
effect the registration under the Securities Act of any securities of the
Company.
 
(w)            No Listing.  The Company’s Common Stock is not registered
pursuant to Section 12(b) or 12(g) of the Exchange Act.
 
(x)           Disclosure.  Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the
Company confirms that, neither it nor to the knowledge of the Company any other
Person acting on its behalf has provided any Holder or its agents or counsel
with any information that constitutes or might constitute material, non-public
information.  The Company understands and confirms that each Holder will rely on
the foregoing representation in effecting transactions in securities of the
Company.  All disclosure furnished by or on behalf of the Company to the
Participating Holders regarding the Company, its business and the transactions
contemplated hereby, including the Disclosure Schedules to this Agreement, with
respect to the representations and warranties made herein, together with the
Company Disclosure Materials, when taken as whole, are true and correct with
respect to such representations and warranties and do not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.  The Company acknowledges and agrees that
no Holder has made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
Section 6 hereof.
 
(y)           No Integrated Offering. Assuming the accuracy of each Holder’s
representations and warranties set forth in Section 6, neither the Company, nor
any of its affiliates, nor any Person acting on its or their behalf has,
directly or indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would cause this
offering of the New Notes (and the related Guarantees) to be integrated with
prior offerings by the Company for purposes of the Securities Act.
 
(z)           Solvency.  The Company has no knowledge of any facts or
circumstances which lead it to believe that it or any of its Subsidiaries will
file for reorganization or liquidation under the bankruptcy or reorganization
laws of any jurisdiction within one year from the Closing Date.  The Company
Disclosure Materials reflect as of the dates thereof all outstanding secured and
unsecured indebtedness of the Company and its Subsidiaries, or for which the
Company or any of its Subsidiaries has commitments.
 
 
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(aa)           Tax Status.  Except for matters that would not, individually or
in the aggregate, have or reasonably be expected to result in a Company Material
Adverse Effect, the Company and each of its Subsidiaries has filed all necessary
federal, state and foreign income and franchise tax returns and has paid or
accrued all taxes shown as due thereon, and the Company has no knowledge of a
tax deficiency which has been asserted or threatened against the Company or any
of its Subsidiaries.
 
(bb)           No General Solicitation.  Neither the Company, nor any of its
affiliates nor any person acting on behalf of the Company has offered or sold
any of the New Notes (or the related Guarantees) by any form of general
solicitation or general advertising or through any directed selling efforts (as
defined in Regulation S under the Securities Act).  The Company has offered the
New Notes (and the related Guarantees) for sale only to the Participating
Holders who are either (i) “qualified institutional buyers” within the meaning
of Rule 144A under the Securities Act, (ii) institutional “accredited investors”
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act
or (iii) not “U.S. Persons” within the meaning of Regulation S under the
Securities Act in an “offshore transaction” within the meaning of Regulation S
under the Securities Act.  The Company has implemented the “offering
restrictions” as defined in Regulation S under the Securities Act.
 
(cc)           Foreign Corrupt Practices.  Neither the Company, nor any of its
Subsidiaries nor any agent or other person acting on behalf of the Company or
any of its Subsidiaries, has (i) directly or indirectly, used any funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related
to foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any foreign or
domestic political parties or campaigns from corporate funds, (iii) failed to
disclose fully any contribution made by the Company or any of its Subsidiaries
(or made by any person acting on their behalf of which the Company or any of its
Subsidiaries is aware) which is in violation of law, or (iv) violated in any
material respect any provision of the Foreign Corrupt Practices Act of 1977, as
amended.
 
(dd)           Embargoed Person.  None of the funds or other assets of the
Company or any of its Subsidiaries shall constitute property of, or shall be
beneficially owned, directly or indirectly, by any person subject to trade
restrictions under United States law, including but not limited to, the
International Emergency Economic Powers Act, 50 U.S.C. §1701 et seq., The
Trading with the Enemy Act, 50 U.S.C. App. 1 et seq. and any Executive Orders or
regulations promulgated under any such United States laws (each, an "Embargoed
Person"), with the result that the investments evidenced by the New Notes are or
would be in violation of law. None of the funds or other assets of the Company
shall be derived from any unlawful activity with the result that the investments
evidenced by the New Notes are or would be in violation of law.
 
(ee)           Trust Indenture Act.  Assuming the accuracy of the
representations of each Holder and its compliance with its respective agreements
with the Company, and so long as the New Notes are not registered under the
Securities Act, it is not necessary in connection with the offer, sale and
delivery of the New Notes in the manner contemplated by this Agreement to
qualify the New Indenture under the Trust Indenture Act of 1939, as amended.
 
(ff)           Accountants.  The Company’s accountants are Brightman Almagor
Zohar & Co., Certified Public Accountant, a member firm of Deloitte Touche
Tohmatsu.  To the knowledge of the Company, such accountants are a registered
public accounting firm as required by the Exchange Act and registered with the
Public Company Accounting Oversight Board.  The Company expects such accountants
to consent to the inclusion of their report on the Company’s financial
statements into any registration statement and the prospectus which forms a part
thereof that may be required to be filed under the Company Registration Rights
Agreement.

 
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5. Representations and Warranties of Tower. Except as set forth under the
corresponding section of the Tower Disclosure Schedules, which Tower Disclosure
Schedules shall be deemed a part hereof and to qualify such corresponding
representation or warranty otherwise made herein to the extent of such
disclosure, Tower hereby makes the representations and warranties set forth
below to each Holder and to Zazove:
 
(a)           Subsidiaries.  All of the direct and indirect ownership of any
capital stock, or other equity interests owned or held by subsidiaries of Tower
are set forth on Schedule 5(a).  Except as set forth on Schedule 5(a), Tower
owns, directly or indirectly, all of the capital stock or other equity interests
of each of its Subsidiaries free and clear of any Liens and all the issued and
outstanding shares of capital stock of each such Subsidiary are validly issued
and are fully paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities.
 
(b)           Organization and Qualification.  Tower and each of its
Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted.  No proceeding has been instituted by the Registrar of
Companies in Israel for the dissolution of Tower.    Neither Tower nor any of
its Subsidiaries is in violation or default of any of the provisions of its
respective certificate or articles of incorporation, memorandum of association,
bylaws or other organizational or charter documents.  Each of Tower and its
Subsidiaries is duly qualified to conduct business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in a Tower
Material Adverse Effect, and no Proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.
 
(c)           Authorization; Enforcement.  Tower has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents to which it is a party and
otherwise to carry out its obligations hereunder and thereunder.  The execution
and delivery by Tower of each of the Transaction Documents to which it is a
party and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the part of Tower
and no further action is required by Tower, its board of directors or its
stockholders in connection therewith.  Each Transaction Document to which Tower
is a party has been (or upon delivery will have been) duly executed by Tower
and, when delivered in accordance with the terms hereof and thereof, will
constitute the valid and binding obligation of Tower enforceable against Tower
in accordance with its terms except (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.
 
(d)           No Conflicts.  The execution, delivery and performance by Tower of
the Transaction Documents to which it is a party, the issuance and sale of the
Tower Warrants and Tower Warrant Shares and the consummation by Tower of the
other transactions contemplated hereby and thereby do not and will not (i)
conflict with or violate any provision of Tower’s or any of its Subsidiaries
certificate or articles of incorporation, bylaws or other organizational or
charter documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, result
in the creation of any Lien upon any of the properties or assets of Tower or any
of its Subsidiaries, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing a Tower or
Subsidiary debt or otherwise) or other understanding to which Tower or any of
its Subsidiaries is a party or by which any property or asset of Tower or any of
its Subsidiaries is bound or affected, or (iii) subject to the Tower Required
Approvals, conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which Tower or any of its Subsidiaries is subject
(including Israeli, U.S. federal and state securities laws and regulations), or
by which any property or asset of Tower or any of its Subsidiaries is bound or
affected; except in the case of each of clauses (ii) and (iii), such as could
not have or reasonably be expected to result in a Tower Material Adverse Effect.
 
 
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(e)           Filings, Consents and Approvals.  Tower is not required to obtain
any consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other Israeli, U.S. federal, state,
local or other governmental authority or other Person in connection with the
execution, delivery and performance by Tower of the Transaction Documents to
which it is a party, other than (i) filings required pursuant to Section 7 and
Section 8 of this Agreement, (ii) the filing with the Commission of the
Registration Statement, (iii) the filing of Form D with the Commission and such
filings as are required to be made under applicable state securities laws, (iv)
the filings, consents and approvals listed on Schedule 5(e) and (v) those made
or obtained prior to Closing (collectively, the “Tower Required Approvals”).
 
(f)           Issuance of the Tower Warrants and the Tower Warrant Shares.  The
Tower Warrants are duly authorized and, when issued and paid for in accordance
with the applicable Transaction Documents, will be duly and validly issued,
fully paid and nonassessable, free and clear of all Liens imposed by Tower other
than restrictions on transfer provided for in the Transaction Documents.  The
Tower Warrant Shares are duly authorized and, when issued and paid for in
accordance with the Warrant Agreement, will be duly and validly issued, fully
paid and nonassessable, free and clear of all Liens imposed by Tower other than
restrictions on transfer provided for in the Transaction Documents.  Tower has
reserved from its duly authorized capital stock the maximum number of shares of
Tower Common Stock issuable pursuant to the Tower Warrants.  There is no tax,
levy, impost, duty, fee, assessment or other governmental charge, or any
deduction or withholding, imposed by any governmental agency or authority in or
of Israel either (A) by virtue of the execution or delivery by Tower of the
Transaction Documents to which it is a party, (B) the issuance of the Tower
Warrants or the Tower Warrant Shares or (C) on any payment to be made by Tower
pursuant to the Transaction Documents.  Assuming the truth and accuracy in all
material respects of the representations and warranties made by each Holder in
this Agreement, Tower is not required to publish or deliver a prospectus in
Israel under the Israeli Securities Law – 1968 in connection with the offer and
issuance of the Tower Warrants and the Tower Warrant Shares.
 
(g)           Capitalization.  The capitalization of Tower as of one Business
Day prior to the date hereof is as set forth on Schedule 5(g).  Except as
disclosed on Schedule 5(g), no Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents.  Except as disclosed in
the Tower Disclosure Materials, there are no outstanding options, warrants,
scrip rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or
exercisable or exchangeable for, or giving any Person any right to subscribe for
or acquire, any shares of Tower Common Stock, or contracts, commitments,
understandings or arrangements by which Tower or any of its Subsidiaries is or
may become bound to issue additional shares of Tower Common Stock or Tower
Common Stock Equivalents.  The issuance and sale of the Tower Warrants will not
obligate Tower to issue shares of Tower Common Stock or other securities to any
Person (other than the Participating Holders) and will not result in a right of
any holder of Tower securities to adjust the exercise, conversion, exchange or
reset price under any of such securities. All of the outstanding shares of
capital stock of Tower are validly issued, fully paid and nonassessable, have
been issued in compliance with all Israeli, U.S. federal and state securities
laws, and none of such outstanding shares was issued in violation of any
preemptive rights or similar rights to subscribe for or purchase securities.  No
further corporate approval or authorization of any stockholder, the Board of
Directors of Tower or others is required for the issuance and sale of the Tower
Warrants and the Tower Warrant Shares issuable upon exercise thereof.  Except as
disclosed on Schedule 5(g), there are no stockholders agreements, voting
agreements or other similar agreements with respect to Tower’s capital stock to
which Tower is a party or, to the knowledge of Tower, between or among any of
Tower’s stockholders.
 
 
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(h)           SEC Reports; Financial Statements.  Tower has filed all reports,
schedules, forms, statements and other documents required to be filed by it
under the Securities Act and the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof, for the three years preceding the date hereof (or such
shorter period as Tower was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to herein as the
“Tower SEC Reports”; together with the Tower Disclosure Schedules, the “Tower
Disclosure Materials”), on a timely basis or has received a valid extension of
such time of filing and filed such materials prior to the expiration of such
extension, and such materials, when filed, complied in all material respects
with the requirements of the Securities Act and the Exchange Act, as
applicable.  As of their respective dates (or if amended or superseded by a
filing prior to the date hereof, then on the date of such filing), the SEC
Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act, as applicable, and none of the Tower SEC
Reports contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.  The financial statements of Tower included in the SEC
Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in
effect at the time of filing (or if amended or superseded by a filing prior to
the Closing Date, then on the date of such filing).  Such financial statements
have been prepared in accordance with GAAP, except as may be otherwise specified
in such financial statements or the notes thereto and except that unaudited
financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of Tower and its
consolidated subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.
 
(i)           Material Changes; Undisclosed Events, Liabilities or
Developments.  Since the date of the latest audited financial statements of
Tower included in a report filed on Form 20-F and except as specifically
disclosed in the Tower Disclosure Materials, (i) there has been no event,
occurrence or development that has had or that could reasonably be expected to
result in a Tower Material Adverse Effect, (ii) Tower has not incurred any
liabilities (contingent or otherwise) other than trade payables and accrued
expenses incurred in the ordinary course of business consistent with past
practice, (iii) Tower has not altered its method of accounting, (iv) Tower has
not declared or made any dividend or distribution of cash or other property to
its stockholders or purchased, redeemed or made any agreements to purchase or
redeem any shares of its capital stock and (v) Tower has not issued any equity
securities to any officer, director or Affiliate, except pursuant to existing
Tower stock plans or arrangements.  Tower does not have pending before the
Commission any request for confidential treatment of information.  Except for
the entering into of this Agreement and the transactions contemplated hereby or
as set forth in the Tower Disclosure Materials, no event, liability or
development has occurred or exists with respect to Tower or its Subsidiaries or
their respective business, properties, operations or financial condition, that
would be required to be disclosed by Tower under applicable securities laws at
the time this representation is made that has not been publicly disclosed at
least 1 Business Day prior to the date that this representation is made.
 
 
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(j)           Litigation.  Except as disclosed in the Tower Disclosure
Materials, there is no action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of Tower, threatened against or
affecting Tower, any of its Subsidiaries or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency or
regulatory authority (Israeli, U.S. federal, state, county, local or foreign)
(collectively, a “Tower Action”) which (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction Documents or (ii)
could have or reasonably be expected to result in a Tower Material Adverse
Effect.  Neither Tower nor any of its Subsidiaries, nor any director or officer
thereof, is or has been the subject of any Tower Action involving a claim of
violation of or liability under Israeli or U.S. federal or state securities laws
or a claim of breach of fiduciary duty.  There has not been, and to the
knowledge of Tower, there is not pending or contemplated, any investigation by
the Commission involving Tower or any of its Subsidiaries or any current or
former director or officer of Tower or any of its Subsidiaries with respect to
their capacities as a director or officer of Tower or such Subsidiary.  The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by Tower or any of its
Subsidiaries under the Exchange Act or the Securities Act and no proceeding for
that purpose has been initiated or threatened by the Commission.  There are no
disagreements of any kind presently existing, or reasonably anticipated by Tower
or any of its Subsidiaries to arise, between accountants and lawyers formerly or
presently engaged by Tower or any of its Subsidiaries and Tower and each of its
Subsidiaries are current with respect to any fees owed to its accountants and
lawyers.
 
(k)           Labor Relations.  No material labor dispute exists or, to the
knowledge of Tower, is imminent with respect to any of the employees of Tower or
its Subsidiaries which could reasonably be expected to result in a Tower
Material Adverse Effect.  Except as disclosed on Schedule 5(k), none of Tower’s
or its Subsidiaries’ employees is a member of a union that relates to such
employee’s relationship with Tower, and neither Tower nor any of its
Subsidiaries is a party to a collective bargaining agreement, and Tower and its
Subsidiaries believe that their relationships with their employees are good.  No
executive officer, to the knowledge of Tower, is, or is now expected to be, in
violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition agreement, or
any other contract or agreement or any restrictive covenant, and, to the
knowledge of Tower, the continued employment of each such executive officer does
not subject Tower or any of its Subsidiaries to any liability with respect to
any of the foregoing matters.  Tower and its Subsidiaries are, to their
knowledge, in compliance with all, Israeli, U.S. federal, state, local and
foreign laws and regulations relating to employment and employment practices,
terms and conditions of employment and wages and hours, except where the failure
to be in compliance could not, individually or in the aggregate, reasonably be
expected to have a Tower Material Adverse Effect.  The severance pay due to
Tower’s employees is fully funded or provided for in accordance with GAAP,
consistently applied.  Neither Tower nor any of its Subsidiaries is subject to,
nor do any of its employees benefit from, whether pursuant to applicable
employment laws, regulations, extension orders (“tzavei harchava”) or otherwise,
any agreement, arrangement, understanding or custom with respect to employment
(including, without limitations, termination thereof) other than the minimum
benefits and working conditions required by law to be provided pursuant to the
rules and regulations of the Histadrut (General Federation of Labor), the
Coordinating Bureau of Economic Organization and the Industrialist’s Association
or extension orders that apply to all employees in Israel or to all employees in
the Company’s industry in Israel.
 
(l)           Compliance.  Except as set forth in the Tower Disclosure
Materials, neither Tower nor any of its Subsidiaries (i) is in default under or
in violation of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by Tower or any of
its Subsidiaries under), nor has Tower or any of its Subsidiaries received
notice of a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (whether or
not such default or violation has been waived), (ii) is in violation of any
order of any court, arbitrator or governmental body, (iii) is in violation of
its charter or bylaws or similar organizational document or (iv) is or has been
in violation of any statute, rule or regulation of any governmental authority,
including without limitation all foreign, Israeli, U.S. federal, state and local
laws applicable to its business and all such laws that affect the environment,
except in each case as could not have or reasonably be expected to result in a
Tower Material Adverse Effect.
 
 
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(m)            Regulatory Permits.  Tower and its Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate Israeli, U.S.
federal, state, local or foreign regulatory authorities necessary to conduct
their respective businesses as described in the Tower Disclosure Materials,
except where the failure to possess such permits could not have or reasonably be
expected to result in a Tower Material Adverse Effect (“Tower Material
Permits”), and neither Tower nor any of its Subsidiaries has received any notice
of proceedings relating to the revocation or modification of any Tower Material
Permit.  Except as set forth in the Tower Disclosure Materials, (i) Tower is in
compliance in all material respect with all conditions and requirements
stipulated by the instruments of approval granted to it with respect to the
“Approved Enterprise” status of Tower’s facilities by Israeli laws and
regulations relating to such “Approved Enterprise” status and other tax benefits
received by Tower; and Tower has not received any notice of any proceeding or
investigation relating to revocation or modification of any “Approved
Enterprise” status granted with respect to Tower’s facilities.  All information
supplied by Tower or any of its Subsidiaries with respect to applications
submitted in connection with such approval was true, correct and complete in all
material respects when supplied to the appropriate authorities.  Tower is not in
violation of any condition or requirement stipulated by the instruments of
approval granted to Tower by the Office of the Chief Scientist in the Israeli
Ministry of Industry and Trade (the “OCS”) or any applicable laws and
regulations with respect to any research and development grants given to it by
such office that the OCS has not confirmed as having been closed that could be
expected to result in a Tower Material Adverse Effect.  All information supplied
by Tower with respect to such applications was true, correct and complete in all
material respects when supplied to the appropriate authorities.  Schedule 5(m)
provides a correct and complete list of the aggregate amount of pending and
outstanding grants from the OCS, net of royalties paid.  Tower’s contingent
liabilities to the OCS are disclosed in the notes to the financial statements of
Tower contained in Tower’s Annual Report on Form 20-F for the year ended
December 31, 2009.
 
(n)           Title to Assets.  Except as set forth on Schedule 5(n), Tower and
its Subsidiaries have good and marketable title in fee simple to all real
property owned by them that is material to the business of Tower and its
Subsidiaries and good and marketable title in all personal property owned by
them that is material to the business of Tower and its Subsidiaries, in each
case free and clear of all Liens, except for Liens as do not materially affect
the value of such property and do not materially interfere with the use made and
proposed to be made of such property by Tower and its Subsidiaries and Liens for
the payment of Israeli, U.S. federal, state or other taxes, the payment of which
is neither delinquent nor subject to penalties.  Any real property and
facilities held under lease by Tower and its Subsidiaries are held by them under
valid, subsisting and enforceable leases with which Tower and its Subsidiaries
are in compliance.
 
(o)           Patents and Trademarks.  To the knowledge of Tower, Tower and its
Subsidiaries own, or have legally enforceable rights to use, all patents, patent
rights, patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, maskworks trade secrets, inventions, know-how, licenses
and other similar rights necessary or material for use in connection with their
respective businesses as described in the Tower Disclosure Materials and which
the failure to so have could have a Tower Material Adverse Effect (collectively,
the “Tower Intellectual Property Rights”).  Except as set forth on Schedule
5(o), neither Tower nor any of its Subsidiaries has received a written notice
that has not been revoked or has knowledge that the Tower Intellectual Property
Rights used by Tower or any of its Subsidiaries violates or infringes, or
allegedly violates or allegedly infringes, upon the rights of any Person.  To
the knowledge of Tower, all such Tower Intellectual Property Rights are
enforceable and there is no existing infringement by another Person of any of
the Tower Intellectual Property Rights.  The Company and its Subsidiaries have
taken reasonable security measures to protect the secrecy, confidentiality and
value of all of Tower Intellectual Property Rights, except where failure to do
so could not, individually or in the aggregate, reasonably be expected to have a
Tower Material Adverse Effect.
 
 
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(p)           Insurance.  Tower and its Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which Tower and its
Subsidiaries are engaged, including, but not limited to, directors and officers
insurance coverage.  To the best knowledge of Tower, such insurance contracts
and policies are accurate and complete.  Neither Tower nor any of its
Subsidiaries has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business without a significant increase in cost.
 
(q)           Transactions With Affiliates and Employees.  Except as set forth
in the Tower Disclosure Materials, none of the officers or directors of Tower
and, to the knowledge of Tower, none of the employees of Tower is presently a
party to any transaction with Tower or any of its Subsidiaries (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of Tower, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner, in each case in excess of $120,000 other than (i) for payment of
salary, director fees or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of Tower and (iii) for other
employee benefits, including reasonable severance pay plan of Tower or
bonuses.  Except as described above or in the Tower Disclosure Materials, none
of the officers, directors or, to the best of the Tower’s knowledge, key
employees or stockholders of Tower or any members of their immediate families,
are indebted to Tower or any of its Subsidiaries, individually in excess of
$120,000.  Except as set forth in the Tower Disclosure Materials, the neither
Tower nor any of its Subsidiaries is a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.
 
(r)           Sarbanes-Oxley; Internal Accounting Controls.  Tower is in
material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which
are applicable to it as of the Closing Date. Tower and its Subsidiaries maintain
a system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. Tower has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for Tower and designed
such disclosure controls and procedures to ensure that information required to
be disclosed by Tower in the reports it files or submits under the Exchange Act
is recorded, processed, summarized and reported, within the time periods
specified in the Commission’s rules and forms.  Tower’s certifying officers have
evaluated the effectiveness of Tower’s disclosure controls and procedures as of
the end of the period covered by Tower’s most recently filed annual report under
the Exchange Act (such date, the “Tower Evaluation Date”).  Tower presented in
its most recently filed annual report under the Exchange Act the conclusions of
the certifying officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Tower Evaluation Date.  Since
the Tower  Evaluation Date, there have been no changes in Tower’s internal
control over financial reporting (as such term is defined in the Exchange Act)
that has materially affected, or is reasonably likely to materially affect,
Tower’s internal control over financial reporting, and no significant
deficiencies or material weaknesses in internal controls over financial
reporting, or other factors that could significantly affect Tower’s internal
controls over financial reporting, have been identified.
 
 
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(s)           Certain Fees.  Except as disclosed on Schedule 5(s), no brokerage
or finder’s fees or commissions are or will be payable by Tower to any broker,
financial advisor or consultant, finder, placement agent, investment banker,
bank or other Person with respect to the transactions contemplated by the
Transaction Documents.  Except for fees incurred by or on behalf of such Holder,
no Holder shall have any obligation with respect to any fees or with respect to
any claims made by or on behalf of other Persons for fees as contemplated in
this Section that may be due in connection with the transactions contemplated by
the Transaction Documents.
 
(t)           Private Placement. Assuming the accuracy of each Holder’s
representations and warranties set forth in Section 6, no registration under the
Securities Act is required for the offer and sale of the Tower Warrants or Tower
Warrant Shares by Tower to the Participating Holders as contemplated
hereby.  The issuance and sale of the Tower Warrants and the Tower Warrant
Shares does not contravene the rules and regulations of the Trading
Market.  Tower has not distributed and will not distribute prior to the Closing
Date any offering material in connection with this offering and sale of Tower
Warrants and Tower Warrant Shares other than the Transaction Documents.
 
(u)           Investment Company. Tower is not, and is not an Affiliate of, and
immediately after consummation of the Exchange, will not be or be an Affiliate
of, an “investment company” within the meaning of the Investment Company Act of
1940, as amended.  Tower shall conduct its business in a manner so that it will
not become subject to the Investment Company Act.
 
(v)           Registration Rights.  Except as disclosed on Schedule 5(v), other
than the Participating Holders, no Person has any right to cause Tower to effect
the registration under the Securities Act of any securities of Tower.
 
(w)            Listing and Maintenance Requirements.  The Tower Common Stock is
registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and Tower has
taken no action designed to, or which to its knowledge is likely to have the
effect of, terminating the registration of the Tower Common Stock under the
Exchange Act nor has Tower received any notification that the Commission is
contemplating terminating such registration.  Tower Common Stock is listed on
The Nasdaq Global Market and on the Tel Aviv Stock Exchange under the symbol
“TSEM”.  Tower has not, in the 12 months preceding the date hereof, received
notice from any Trading Market on which the Tower Common Stock is or has been
listed or quoted to the effect that Tower is not in compliance with the listing
or maintenance requirements of such Trading Market. Tower is, and has no reason
to believe that it will not in the foreseeable future continue to be, in
compliance with all such listing and maintenance requirements.
 
(x)           Application of Takeover Protections.  Tower and its Board of
Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under Tower’s certificate of incorporation (or similar
charter documents) or the laws of its jurisdiction of incorporation that is or
could become applicable to the Participating Holders as a result of the
Participating Holders and Tower fulfilling their obligations or exercising their
rights under the Transaction Documents, including, without limitation, as a
result of Tower’s issuance of the Tower Warrants and the Tower Warrant Shares
upon exercise thereof and the Participating Holders’ ownership of the Tower
Warrants and Tower Warrant Shares.
 
(y)           Tower Disclosure.  Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, Tower
confirms that, neither it, nor any of its Subsidiaries, nor to the knowledge of
Tower any other Person acting on their behalf has provided any Holder or its
agents or counsel with any information that constitutes or might constitute
material, non-public information.  Tower understands and confirms that each
Holder will rely on the foregoing representation in effecting transactions in
securities of Tower.  All disclosure furnished by or on behalf of Tower to the
Participating Holders regarding Tower, its business and the transactions
contemplated hereby, including the Disclosure Schedules to this Agreement, with
respect to the representations and warranties made herein, together with the
Tower Disclosure Materials, when taken as whole, are true and correct with
respect to such representations and warranties and do not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.  Tower acknowledges and agrees that no
Holder has made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
Section 6 hereof.
 
 
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(z)           No Integrated Offering. Assuming the accuracy of each Holder’s
representations and warranties set forth in Section 6, neither Tower, nor any of
its affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Tower Warrants or Tower Warrant Shares to be integrated with prior offerings by
Tower for purposes of the Securities Act.
 
(aa)           Solvency.  Tower has no knowledge of any facts or circumstances
which lead it to believe that it or any of its Subsidiaries will file for
reorganization or liquidation under the bankruptcy or reorganization laws of any
jurisdiction within one year from the Closing Date.  The Tower Disclosure
Materials reflect as of the dates thereof all outstanding secured and unsecured
indebtedness of Tower and its Subsidiaries, or for which Tower or any of its
Subsidiaries has any commitment.
 
(bb)           Tax Status.  Except for matters that would not, individually or
in the aggregate, have or reasonably be expected to result in a Tower Material
Adverse Effect, Tower and each of its Subsidiaries has filed all necessary
federal, state and foreign income and franchise tax returns and has paid or
accrued all taxes shown as due thereon, and Tower has no knowledge of any tax
deficiency which has been asserted or threatened against Tower or any of its
Subsidiaries.
 
(cc)           No General Solicitation.  Neither Tower nor any person acting on
behalf of Tower has offered or sold any of the Tower Warrants by any form of
general solicitation or general advertising or through any directed selling
efforts (as defined in Regulation S under the Securities Act).  Tower has
offered the Tower Warrants for sale only to the Participating Holders who are
either (i) “qualified institutional buyers” within the meaning of Rule 144A
under the Securities Act, (ii) “institutional accredited investors” within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act or (iii) not
“U.S. Persons” within the meaning of Regulation S under the Securities Act in an
“offshore transaction” within the meaning of Regulation S under the Securities
Act.  The Tower Warrants and Tower Warrant Shares issued in reliance on
Regulation S are eligible for “Category 1” thereunder pursuant to Section
903(b)(1)(i) of Regulation S.
 
(dd)           Foreign Corrupt Practices.  Neither Tower, nor any of its
Subsidiaries, nor any agent or other person acting on behalf of Tower or any of
its Subsidiaries, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to
foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any foreign or
domestic political parties or campaigns from corporate funds, (iii) failed to
disclose fully any contribution made by Tower or any of its Subsidiaries (or
made by any person acting on their behalf of which Tower or any of its
Subsidiaries is aware) which is in violation of law) or (iv) violated in any
material respect any provision of the Foreign Corrupt Practices Act of 1977, as
amended.
 
(ee)           Accountants.  Tower’s accountants are Brightman Almagor Zohar &
Co., Certified Public Accountant, a member firm of Deloitte Touche Tohmatsu.  To
the knowledge of Tower, such accountants are a registered public accounting firm
as required by the Exchange Act and registered with the Public Company
Accounting Oversight Board.  Tower expects such accountants to consent to the
inclusion of their report on Tower’s financial statements into any registration
statement and the prospectus which forms a part thereof that may be required to
be filed under the Tower Registration Rights Agreement.
 
 
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(ff)           Manipulation of Price.  Tower has not, and to its knowledge, no
one acting on its behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation of the price
of any security of Tower to facilitate the sale or resale of the Tower Warrants
or the Tower Warrant Shares, (ii) sold, bid for, purchased, or paid any
compensation for soliciting purchases of, any of the Tower Warrants or the Tower
Warrant Shares, or (iii) paid or agreed to pay to any person any compensation
for soliciting another to purchase any other securities of Tower.
 
(gg)           U.S. Real Property Holding Corporation.  Tower is not, has never
been, nor shall become while any Tower Warrants are held by any Participating
Holder, a U.S. real  property holding corporation within the meaning of Section
897 of the Internal Revenue Code of 1986, as amended, and Tower shall so certify
upon any Holder’s request.
 
(hh)           Taxes.  No tax, levy, impost, duty, fee, assessment or other
governmental charge or any deduction or withholding imposed by any governmental
agency or authority in or of the State of Israel is payable by or on behalf of
any Holder or any assignee of such Holder (i) as a result of the execution,
delivery or performance by Tower, the Company or any Guarantor of the
Transaction Documents to which it is a party, including, but not limited to, the
issuance by Tower of the Tower Warrants and the Tower Warrant Shares, (ii) with
respect to such Holder if it is a US person, who holds less than 10% of Tower’s
issued and outstanding Tower Common Stock and does not maintain a permanent
establishment in Israel through which the Tower Warrants or Tower Warrant Shares
are held, or (iii) in connection with any resale by such Holder of the Tower
Warrants in accordance with the terms thereof.
 
(ii)           Form F-3 Eligibility; Foreign Private Issuer Status.  Tower is
eligible to register the resale by the Participating Holders of the Tower
Warrants and the Tower Warrant Shares on a Registration Statement on Form F-3
under the Securities Act.  Tower qualifies as a “foreign private issuer” as such
term is defined in the Exchange Act.
 
(jj)           Embargoed Person.  None of the funds or other assets of Tower
shall constitute property of, or shall be beneficially owned, directly or
indirectly, by any person subject to trade restrictions under United States law,
including but not limited to, the International Emergency Economic Powers Act,
50 U.S.C. §1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et
seq. and any Executive Orders or regulations promulgated under any such United
States laws (each, an "Embargoed Person"), with the result that the investments
evidenced by the Tower Warrants or the Tower Warrant Shares are or would be in
violation of law. None of the funds or other assets of Tower shall be derived
from any unlawful activity with the result that the investments evidenced by the
Tower Warrants or the Tower Warrant Shares are or would be in violation of law.
 
(kk)           Nasdaq.  With respect to the transactions contemplated hereby,
Tower has satisfied the home country practice requirements of The Nasdaq Global
Market pursuant to Rule 5615(a)(3) of the Nasdaq listing rules or has otherwise
complied with the Nasdaq rules.
 
 
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6. Representations and Warranties of the Holder. Each Holder (or in the case of
the Zazove Accounts, Zazove on behalf of itself or such Holder, as applicable)
hereby, for itself and no other Holder, represents and warrants to the Company
and Tower as follows (it being understood that each of Elevator Division
Retirement Benefit Plan, Iowa Judicial Retirement System and Painting Industry
Annuity Fund make no representation or warranty with respect to the Tower
Warrants or the Tower Warrant Shares):
 
(a)            Organization; Authority. Such Holder (or in the case of any
Zazove Account, Zazove) is duly organized or established, validly existing and
in good standing under the laws of the jurisdiction of its organization and has
all requisite corporate, partnership, limited liability company or other, as
applicable, power and authority to enter into this Agreement and to carry out
the transactions contemplated hereby and to perform its obligations hereunder,
and in the case of Zazove, to act on behalf of the Zazove Accounts in connection
with the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.
 
(b)            Governmental Authorization. The execution, delivery and
performance by such Holder (or in the case of any Zazove Account, Zazove) of
this Agreement does not and shall not require, on the part of such Holder (or
Zazove, as applicable), any registration or filing with, the consent or approval
of, notice to, or any other action with respect to, any federal, state or other
governmental authority or regulatory body.
 
(c)             Title and Ownership.  Such Holder is the beneficial owner of the
Old Notes in the Original Principal Amount set forth opposite such Holder’s name
on the Schedule of Holders.  Such Holder’s Old Notes are owned by such Holder
free and clear of any liens, encumbrances, equities or claims and the transfer,
assignment and delivery of such Old Notes in accordance with this Agreement will
convey to the Company good title to such Old Notes, free and clear of liens,
claims, equities and encumbrances created by such Holder.
 
(d)            Restricted Securities. Such Holder (or in the case of any Zazove
Account, Zazove on behalf of such Holder) acknowledges that (i) none of the New
Notes, the Tower Warrants nor Tower Warrant Shares have been registered under
the Securities Act and that, as such, such securities are deemed “restricted
securities” within the meaning of Rule 144 under the Securities Act and (ii)
such securities may be offered or sold only in accordance with the registration
requirements of the Securities Act or an available exemption therefrom.
 
(e)            No Brokers. Such Holder has not engaged any broker, finder or
other entity acting under the authority of such Holder or any of its affiliates
that is entitled to any commission or other fee in connection with the Exchange.
 
(f)           Holder’s Knowledge and Experience. Such Holder (or in the case of
the Zazove Accounts, Zazove on behalf of such Holder) has the requisite
knowledge and experience in financial and business matters so that it is capable
of evaluating the merits and risks of the Exchange and acquiring the New Notes
and Tower Warrants and, in connection therewith, such Holder (or in the case of
the Zazove Accounts, Zazove on behalf of such Holder) acknowledges that (i) the
Company makes no representation regarding the value of the Old Notes, the New
Notes or the Tower Warrants, and (ii) such Holder has independently, and without
reliance upon the Company or its representatives, made its own analysis and
decision to enter into the Exchange and exchange the Old Notes for the New Notes
and Tower Warrants.
 
(g)           Investor Status. Such Holder is (i) a “Qualified Institutional
Buyer” as defined in Rule 144A under the Securities Act, (ii) an institutional
“accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act or (iii) not a “U.S. person” as defined in Regulation S under the
Securities Act, as applicable, in each case as reflected by the insertion of
“144A”, “IAI” or “Regulation S” with respect to such Holder in the “CUSIP” line
on Schedule B.  If “Regulation S” is reflected on the CUSIP line with respect to
any Holder, such Holder represents and warrants that it is not committing to
purchase securities for the account of any U.S. Person (as defined in Regulation
S under the Securities Act) and that the New Notes, the Tower Warrants and the
Tower Warrant Shares have not been offered to such Holder in the United States
of America.
 
(h)           No Public Sale or Distribution. Such Holder is acquiring the New
Notes and Tower Warrants for its own account and not with a view towards, or for
resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered or exempt from registration under the Securities
Act. Such Holder is acquiring the New Notes and Tower Warrants hereunder in the
ordinary course of its business. Such Holder does not presently have any
agreement or understanding, directly or indirectly, with any Person to
distribute any of such securities or the Tower Warrant Shares.
 
 
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(i)           Reliance on Exemptions. Such Holder (or in the case of the Zazove
Accounts, Zazove on behalf of such Holder) understands that the New Notes and
Tower Warrants are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal and state
securities laws, including Section 3(a)(9) and/or 4(2) of the Securities Act,
and that the Company is relying in part upon the truth and accuracy of, and such
Holder’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Holder set forth herein in order to
determine the availability of such exemptions and the eligibility of such Holder
to acquire the Securities.
 
(j)           Information. Such Holder and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and Tower and materials relating to the transactions contemplated
hereby which have been requested by such Holder. Such Holder and its advisors,
if any, have been afforded the opportunity to ask questions of the Company and
Tower. Neither such inquiries nor any other due diligence investigations
conducted by such Holder or its advisors, if any, or its representatives shall
modify, amend or affect such Holder’s right to rely on the Company’s and Tower’s
representations and warranties contained herein. Such Holder understands that
its investment in the New Notes and Tower Warrants involves a high degree of
risk. Such Holder (or in the case of the Zazove Accounts, Zazove on behalf of
such Holder) has sought such accounting, legal and tax advice as it has
considered necessary to make an informed investment decision with respect to its
acquisition of such securities.
 
(k)           No Governmental Review. Such Holder understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the New Notes and
Tower Warrants or the fairness or suitability of the investment in the such
securities nor have such authorities passed upon or endorsed the merits of the
offering of such securities.
 
(l)           Validity; Enforcement. This Agreement, the Company Registration
Rights Agreement and the Tower Registration Rights Agreement have been duly and
validly authorized, executed and delivered on behalf of such Holder and shall
constitute the legal, valid and binding obligations of such Holder enforceable
against such Holder in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity) or by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation and other similar laws
relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies and insofar as indemnification and contribution provisions
may be limited by applicable law.
 
(m)           Residency. Such Holder is a resident of that jurisdiction
specified on the Schedule of Holders. 
 
(n)           No Transactions in Company Securities. Other than with respect to
the transactions contemplated herein, during the period commencing with the time
that such Holder was first contacted by the Company regarding the Exchange
contemplated by this Agreement through such time as the transactions
contemplated by this Agreement are first publicly announced, neither such Holder
nor any affiliate of such Holder which had knowledge of the transactions
contemplated hereby, has engaged, directly or indirectly, in any trading
transaction in the securities of the Company or involving the Company’s
securities in violation of applicable securities laws.
 
 
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(o)           Affiliate Status. Such Holder represents and warrants that such
Holder is not an “affiliate” of the Company or Tower within the meaning of
Rule 144 under the Securities Act nor has such Holder been an affiliate of the
Company during the past 90 days.
 
(p)            Evaluation. Such Holder (or in the case of the Zazove Accounts,
Zazove on behalf of such Holder) has evaluated the Exchange in light of such
Holder’s financial situation and such Holder has relied on such Holder’s own
investment, tax and other advisors in reaching a decision to enter into the
Exchange.  Neither the Company, the Guarantors, Tower or any of their respective
representatives have made any representation to such Holder regarding the tax
treatment of the Exchange on such Holder, and such Holder has independently, and
without reliance on the Company, the Guarantors, Tower or their respective
representatives, reached its own conclusion regarding such tax treatment (it
being understood that the parties have agreed to certain tax matters set forth
in the Letter Agreement).
 
7. Conditions to the Company’s and Tower’s Obligations. The obligations of the
Company and Tower at the Closing are subject to the satisfaction of each of the
following conditions, provided that these conditions are for the sole benefit of
the Company and may be waived by the Company at any time in its sole discretion
by providing the Participating Holders and Zazove with prior written notice
thereof:
 
(a)           Execution of the Agreement. The Participating Holders (or in the
case of the Zazove Accounts, Zazove on behalf of such Holders) shall have
executed this Agreement and delivered the same to the Company and Tower.
 
(b)           Transfer of the Old Notes. Each Holder shall take such action as
is necessary to have duly and validly transferred and delivered the Old Notes
owned by the Holder representing the Original Principal Amount for such Holder
to the Company or its order in accordance with the terms of Section 2  hereof.
 
(c)           Minimum Exchange.  An aggregate of at least $70 million principal
amount of Old Notes shall be exchanged for New Notes in the Exchange.
 
(d)           Registration Rights Agreement.  The Company and the Participating
Holders (or in the case of the Zazove Accounts, Zazove on behalf of such
Holders) shall have entered into the Company Registration Rights
Agreement.  Tower and the Participating Holders (or in the case of the Zazove
Accounts, Zazove on behalf of such Holders) shall have entered into the Tower
Registration Rights Agreement.
 
(e)           Representations and Warranties. The representations and warranties
of the Participating Holders and Zazove in this Agreement shall be true and
correct as of the date when made and as of the Closing Date as though made at
that time.
 
(f)           No Prohibition. No litigation, statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of
competent jurisdiction or any self-regulatory organization having authority over
the matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement. 
 
(g)           Necessary Filings. Except as contemplated by Section 11(i), the
Company and Tower, as the case may be, shall have made all filings under all
applicable federal and state securities laws, Israeli securities laws and rules
of Nasdaq necessary to consummate the issuance of the New Notes and the Tower
Warrants pursuant to this Agreement in compliance with such laws and
requirements and shall have obtained all authorizations, approvals and
acceptances necessary to consummate the transactions contemplated hereby and
such authorizations, approvals and acceptances shall be effective as of the
Closing Date.
 
 
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8. Conditions to the Holder’s Obligations. The respective obligations of each
Holder and Zazove at the Closing are subject to the satisfaction of each of the
following conditions, provided that these conditions are for the sole benefit of
each Holder and may be waived by such Holder (solely as to itself) (or in the
case of the Zazove Accounts, Zazove on behalf of such Holder) at any time in its
sole discretion by providing the Company and Tower with prior written notice
thereof:
 
(a)           Execution of the Agreement, New Indenture and Warrant Agreement.
The Company, the Guarantors and Tower shall have executed this Agreement and
delivered the same to each Holder.  The Company, the Guarantors and the New
Indenture Trustee shall have executed and delivered the New Indenture and the
New Notes.  Tower and the Warrant Agent shall have executed and delivered the
Warrant Agreement and the Tower Warrants.
 
(b)           Delivery of the New Notes and Tower Warrants. The Company shall
have caused the New Notes and Tower Warrants to be delivered to each Holder
against delivery by such Holder of the Holder’s Old Notes in accordance with the
terms of Section 2 hereof.
 
(c)            Minimum Exchange.  An aggregate of at least $70 million principal
amount of Old Notes shall be exchanged for New Notes in the Exchange.
 
(d)            Registration Rights Agreements.  The Company and the
Participating Holders (or in the case of the Zazove Accounts, Zazove on behalf
of such Holders) shall have entered into the Company Registration Rights
Agreement. Tower and the Participating Holders (or in the case of the Zazove
Accounts, Zazove on behalf of such Holders) shall have entered into the Tower
Registration Rights Agreement.
 
(e)            CUSIP.  The Company and Tower shall have obtained appropriate
Committee on Uniform Securities Identification Procedures numbers (CUSIP
numbers) for the New Notes and Tower Warrants.
 
(f)           Representations and Warranties. The representations and warranties
of each the Company, the Guarantors and Tower in this Agreement shall be true
and correct as of the date when made and as of the Closing Date as though made
at that time.  The statements of the Company, Tower and the Guarantors and their
respective officers made in any certificate delivered pursuant to this Agreement
shall be true and correct on and as of the Closing Date.
 
(g)            No Prohibition. No litigation, statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of
competent jurisdiction or any self-regulatory organization having authority over
the matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.
 
(h)           No Material Adverse Effect.  No event or condition constituting a
Company Material Adverse Effect or a Tower Material Adverse Effect shall have
occurred or exist.
 
(i)           Company Officer’s Certificate.  Each Holder and Zazove shall have
received on and as of the Closing Date a certificate of an executive officer of
the Company who has specific knowledge of the Company’s and the Guarantor’s
financial matters and is satisfactory to such Holder (or in the case of the
Zazove Accounts, Zazove on behalf of such Holders) (i) confirming that such
officer has carefully reviewed the Company Disclosure Materials and, to the
knowledge of such officer, the representations and warranties in Section 4(h)
and 4(i) are true and correct, (ii) confirming that the other representations
and warranties of the Company and the Guarantors in this Agreement are true and
correct and that the Company and the Guarantors have complied in all material
respects with all agreements and satisfied all conditions on their part to be
performed or satisfied by it on or prior to the Closing Date and (iii) to the
effect set forth in paragraphs (g) and (i) above.
 
 
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(j)           Tower Officer’s Certificate.   Each Holder and Zazove shall have
received on and as of the Closing Date a certificate of an executive officer of
Tower who has specific knowledge of Tower’s financial matters and is
satisfactory to such Holder (or in the case of the Zazove Accounts, Zazove on
behalf of such Holders) (i) confirming that such officer has carefully reviewed
the Tower Disclosure Materials and, to the knowledge of such officer, the
representations and warranties in Section 5(h) and 5(i) are true and correct,
(ii) confirming that the other representations and warranties of Tower in this
Agreement are true and correct and that Tower has complied in all material
respects with all agreements and satisfied all conditions on its part to be
performed or satisfied by it on or prior to the Closing Date and (iii) to the
effect set forth in paragraphs (g) and (i) above.
 
(k)           Secretary’s Certificates.  Each Holder and Zazove shall have
received on and as of the closing date a certificate of the secretary or
assistant secretary of each of Tower, the Company and each Guarantor certifying
(i) a copy of the resolutions of the board of directors or members, as
applicable, evidencing approval of the Transaction Documents to which it is a
party and the consummation of the transaction contemplated therein and the other
matters contemplated thereby, (ii) a copy of the certificate of incorporation,
certificate of formation or other comparable charter document of such Person,
(iii) copies of all documents evidencing other necessary corporation or other
action or governmental or third party approvals, if any, with respect to the
transactions contemplated by this Agreement and (iv) the names, titles and
signatures of the officers of such Person authorized to sign the Transaction
Documents and the documents or certificates to be delivered in connection
therewith, together with the true signatures of each such officer.
 
(l)           Opinions.  Each Holder and Zazove shall have received on and as of
the Closing Date an opinion of Eilenberg & Krause LLP, special counsel for the
Company and special U.S. counsel for Tower in form and substance satisfactory to
such Holder (or in the case of the Zazove Accounts, Zazove on behalf of such
Holders) to the effect set forth on Exhibit F hereto.  Each Holder and Zazove
shall have received on and as of the Closing Date an opinion of Yigal Arnon &
Co., Israeli counsel for Tower, in form and substance satisfactory to such
Holder (or in the case of the Zazove Accounts, Zazove on behalf of such Holders)
to the effect set forth on Exhibit G hereto.  Each Holder and Zazove shall have
received on and as of the Closing Date an opinion of Allen Grogan, Chief Legal
Officer of the Company, in form and substance satisfactory to such Holder (or in
the case of the Zazove Accounts, Zazove on behalf of such Holders) to the effect
set forth on Exhibit H hereto.
 
(m)           DTC.  The New Notes and the Tower Warrants shall be eligible for
clearance and settlement through DTC on or prior to the Closing Date.
 
(n)           Good Standing.  Such Holder and Zazove shall have received on and
as of the Closing Date satisfactory evidence of the good standing of Tower, the
Company and the Guarantors in their respective jurisdictions of formation and
their good standing in such other jurisdictions as such Holder or Zazove may
reasonably request, in each case in writing dated within 15 days of the Closing
Date from the appropriate governmental authorities of such jurisdictions.
 
(o)           Trading.  From the date hereof to the Closing Date, (i) trading in
the Tower Common Stock shall not have been suspended by the Commission or
Tower’s principal Trading Market and (ii) trading in securities generally shall
not have been suspended or limited, or minimum prices shall not have been
established on securities whose trades are reported by Bloomberg Financial
Markets, nor shall a banking moratorium have been declared by either the United
States of America or New York State authorities nor shall there have occurred
any material outbreak or escalation of hostilities or other national or
international calamity of such magnitude in its effect on, or any material
adverse change in, any financial market which, in each case, in the reasonable
judgment of such Holder (or in the case of the Zazove Accounts, Zazove on behalf
of such Holder) makes it impracticable or inadvisable to exchange Old Notes for
the New Notes or the Tower Warrants at Closing.
 
 
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(p)           Wachovia Consent.  The Company shall have obtained consent to the
transactions contemplated hereby under the Second Amended and Restated Loan and
Security Agreement, dated as of September 19, 2008, by and among Jazz
Semiconductor, Inc. and Newport Fab, LLC, as borrowers, the Company, as
guarantor, the lenders from time to time party thereto, Wachovia Capital
Markets, LLC, as lead arranger, bookrunner and syndication agent, and Wachovia
Capital Finance Corporation (Western), as agent, which consent shall be in form
and substance satisfactory to such Holder.
 
(q)           Listing of Tower Warrant Shares.  The Tower Common Stock shall be
listed on the Nasdaq Global Market and shall not have been suspended from
trading on the Nasdaq Global Market.  Tower shall have submitted to Nasdaq a
listing application for the Tower Warrant Shares.
 
(r)           Exchange Note Cash Payment.  Such Holder shall have received the
Exchange Note Cash Payment payable to it.
 
(s)           Necessary Filings.  Except as contemplated by Section 11(i), the
Company and Tower, as the case may be, shall have made all filings under all
applicable federal and state securities laws, Israeli securities laws and rules
of Nasdaq necessary to consummate the issuance of the New Notes and the Tower
Warrants pursuant to this Agreement in compliance with such laws and
requirements and shall have obtained all authorizations, approvals and
acceptances necessary to consummate the transactions contemplated hereby and
such authorizations, approvals and acceptances shall be effective as of the
Closing Date.  Without limiting the foregoing, Tower shall have obtained the
consent of, and made all necessary filings with, the Tel Aviv Stock Exchange for
the issuance of the Tower Warrants and Tower Warrant Shares.
 
(t)           Registration Rights Waiver.  Tower shall have obtained the waiver
of Israel Corporation Ltd. of any rights it may have to include securities of
Tower in any registration statement that may be filed by Tower under the Tower
Registration Rights Agreement.
 
(u)           Additional Documents.  Tower, the Company and the Guarantors shall
have furnished to such Holder such further certificates and documents as such
Holder may reasonably request.
 
9. Fees and Expenses. Each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement, except as otherwise agreed in
writing, including as agreed in the Letter of Intent.
 
10. Reserved.
 
11. Certain Covenants.
 
(a)           Company Information.  While the New Notes remain outstanding and
are “restricted securities” within the meaning of Rule 144(a)(3) under the
Securities Act, the Company and each Guarantor will, during any period in which
the Company is not subject to and in compliance with Section 13 or 15(d) of the
Exchange Act, furnish to the holders of the New Notes and prospective purchasers
of the New Notes designated by such holder, upon the request of such holders or
such prospective purchasers, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
 
 
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(b)           Tower Information.  While the Tower Warrants or the Tower Warrant
Shares remain outstanding and are “restricted securities” within the meaning of
Rule 144(a)(3) under the Securities Act, Tower will, during any period in which
Tower is not subject to and in compliance with Section 13 or 15(d) of the
Exchange Act, furnish to the holders of the Tower Warrants or the Tower Warrant
Shares and prospective purchasers of the Tower Warrants or the Tower Warrant
Shares designated by such holder, upon the request of such holders or such
prospective purchasers, the information required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act.
 
(c)           No Resales.  Until the earlier of the one year anniversary of the
Closing Date and the completion of the exchange offer contemplated by the
Company Registration Rights Agreement, the Company will not, and will not permit
any of its affiliates (as defined in Rule 144 under the Securities Act) to,
resell any of the New Notes that may have been acquired by any of them, except
for sales of the New Notes purchased by the Company or any of its affiliates and
resold in a transaction registered under the Securities Act.  Until the one year
anniversary of the Closing Date, Tower will not, and will not permit any of its
affiliates (as defined in Rule 144 under the Securities Act) to, resell any of
the Tower Warrants or Tower Warrant Shares that may have been acquired by any of
them, except for sales of the Tower Warrants or Tower Warrant Shares purchased
by Tower or any of its affiliates and resold in a transaction registered under
the Securities Act.
 
(d)           No Integration.  Neither the Company, nor Tower nor any of their
respective affiliates (as defined in Rule 501(b) of Regulation D) will, directly
or through any agent, sell, offer for sale, solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Securities Act), that is
or will be integrated with the sale of the New Notes or the Tower Warrants in a
manner that would require registration of the New Notes or the Tower Warrants
under the Securities Act.
 
(e)           No General Solicitation.  None of the Company, Tower or any of
their respective affiliates or any other person acting on its or their behalf
will solicit offers for, or offer to sell, the New Notes or the Tower Warrants
by means of any form of general solicitation or general advertising within the
meaning of Rule 502(c) of Regulation D or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.
 
(f)           No Stabilization.  Neither the Company, nor any Guarantor nor
Tower will take, directly or indirectly, any action designed to or that could
reasonably be expected to cause or result in any stabilization or manipulation
of the prices of the New Notes or the Tower Warrants.
 
(g)           Securities Law Disclosures.  Tower and the Company shall as soon
as practicable, and in any event no later than 9:00 a.m. on the trading day
immediately following the date hereof, issue a Current Report on Form 8-K or
6-K, as applicable, reasonably acceptable to the Participating Holders
disclosing the material terms of the transactions contemplated hereby.  Tower,
the Company and the Participating Holders shall consult with each other in
issuing any press releases with respect to the transactions contemplated
hereby.  From and after the filing of such Current Report on Form 8-K or 6-K, as
applicable, no Holder shall be in possession of any material, nonpublic
information received from Tower, the Company or any of their respective
Subsidiaries or any of their respective officers, directors, employees or
agents.
 
(h)           Shareholder Rights Plan.   No claim will be made or enforced by
Tower or, with the consent of Tower, any other Person that any Holder is an
“acquiring person” under any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or similar
anti-takeover plan or arrangement in effect or hereafter adopted by Tower, or
that any Holder could be deemed to trigger the provisions of any such plan or
arrangement by virtue of receiving the Tower Warrants or the Tower Warrant
Shares under the Transaction Documents.
 
 
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(i)           Required Approvals.  Tower shall obtain as soon as possible after
Closing the consent and approval of the Israel Land Administration, the Israel
Office of the Chief Scientist and the Israel Investment Center with respect to
the issuance of the Tower Warrants and Tower Warrant Shares.
 
12. Notices. All notices, requests, demands, claims and other communications
hereunder shall be in writing and shall be (a) transmitted by hand delivery,
(b) mailed by first class, registered or certified mail, postage prepaid,
(c) transmitted by overnight courier, or (d) transmitted by facsimile, and in
each case,
 
if to the Company or the Guarantors, to:

Jazz Technologies, Inc.
4321 Jamboree Road
Newport Beach, California 92660
Attention: Allen Grogan, Senior Vice President and Chief Legal Officer
Facsimile: (949) 315-3811

if to Tower to:

Tower Semiconductor Ltd.
Ramat Gavriel Industrial Park
Hamada Avenue
Migdal Haemek, Israel 23105
Attention:  Tziona Shriky, Vice Chief Financial Officer
Facsimile: 972-4-654-6510
 
in each case with a copy to (which shall not constitute notice):
 
Eilenberg & Krause  LLP
11 East 44th Street
New York, New York
Attention: Sheldon Krause, Esq.
Facsimile: (212) 986-2399
 
if to the Holder, to the address of the Holder set forth on the Schedule of
Holders:
 
Notices mailed or transmitted in accordance with the foregoing shall be deemed
to have been given upon receipt by the addressee.
 
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to the
principles of conflicts of law thereof. Each party hereby irrevocably submits to
the non-exclusive jurisdiction of the state and federal courts sitting in The
City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
 
 
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14. Appointment of Agent for Service of Process.  Tower hereby designates and
appoints the Company, having an address at 4321 Jamboree Road, Newport Beach,
California 92660, as its authorized agent upon which service of process may be
served in any legal suit, action or proceeding arising out of or relating to
this Agreement or any other Transaction Document, and further:
 
(a)           agrees that service of process upon such agent, and written notice
of said service to Tower by the Person serving the same, shall be deemed in
every respect effective service of process upon Tower in any such suit, action
or proceeding, and irrevocably consents, to the fullest extent it may
effectively do so under applicable law, to the service of process of any of the
courts referred to in Section 13 in any such suit, action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
the above-mentioned authorized agent or successor authorized agent, as the case
may be, such service to become effective 30 days after such mailing;
 
(b)           agrees that a final action in any such suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other lawful manner;
 
(c)           designates as its domicile, the domicile of the Company specified
above and any domicile the Company may have in the future as its domicile to
receive any notice hereunder (including any service of process);
 
   (d)           agrees to take any and all action, including the execution and
filing of all such instruments and documents, as may be necessary to continue
such designation and appointment in full force and effect for so long as the
Tower Warrants remain outstanding, or until the designation and irrevocable
appointment of a successor authorized agent and such successor’s acceptance of
such appointment;
 
(e)           agrees that if for any reason the Company (or any successor agent
for this purpose) shall cease to act as agent for service of process as provided
above or shall no longer have a domicile in the United States of America, Tower
will promptly appoint a successor agent for this purpose reasonably acceptable
to the warrant agent party to the Tower Warrant Agreement; and
 
(f)           agrees that nothing herein shall affect the right of the Holder to
serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against Tower in any jurisdiction.
 
If Tower has or may hereafter acquire sovereign immunity or any other immunity
from jurisdiction or legal process or from the attachment in aid of execution or
from execution with respect to itself or its property, it hereby irrevocably
waives to the fullest extent permitted under applicable law such immunity in
respect of its obligations under the Transaction Documents in any action that
may be instituted in the state and federal courts sitting in The City of New
York, Borough of Manhattan.  This waiver is intended to be effective upon the
execution hereof without any further act by any of the parties hereto, before
any such court, and the introduction of a true copy of this Agreement into
evidence in any such court shall, to the fullest extent permitted by applicable
law, be conclusive and final evidence of such waiver.
 
15. Termination.  This Agreement may be terminated by any Holder as to such
Holder’s obligations only hereunder, and without any effect whatsoever on the
obligations between the Company, the Guarantors, Tower and the other
Participating Holders, by written notice to the other parties hereto if the
Closing has not been consummated on or before July 30, 2010.  This Agreement may
be terminated by the Company, the Guarantors and Tower by written notice to the
Participating Holders if the Closing has not been consummated on or before July
30, 2010.
 
 
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16. Acknowledgment Regarding the Holder’s Acquisition of Securities.  Each of
the Company and Tower acknowledges and agrees that each Holder (or in the case
of the Zazove Accounts, Zazove) is acting solely in the capacity of an arm’s
length investor with respect to the Transaction Documents and the transactions
contemplated thereby.  Each of the Company and Tower further acknowledges that
no Holder is (or in the case of the Zazove Accounts, Zazove is not) acting as a
financial advisor or fiduciary (or similar capacity) of the Company or Tower
with respect to the Transaction Documents and the transactions contemplated
thereby and no advice was given by any Holder to the Company or Tower in
connection with the Transaction Documents or the transactions contemplated
thereby.  Each of the Company and Tower further represents to each Holder (or in
the case of the Zazove Accounts, Zazove) that the decision of each of the
Company and Tower to enter into this Agreement and the other Transaction
Documents has been based solely on the independent evaluation of the
transactions contemplated hereby Tower, the Company and their representatives.
 
17. Entire Agreement. This Agreement constitutes the entire agreement among the
parties pertaining to the Exchange and supersedes the parties’ prior agreements,
understandings, negotiations and discussions, whether oral or written, on such
matters (other than paragraph 3 of the Letter of Intent), and this Agreement
shall not be amended, changed, supplemented, waived or otherwise modified or
terminated except by instrument in writing signed by each of the parties hereto.
 
18. Amendments; Waivers.  Except as expressly set forth herein, no provision of
this Agreement may be waived or amended except in a written instrument signed,
in the case of an amendment by the Company, the Guarantors, Tower and the
Participating Holders holding Old Notes representing at least 66% of the
Original Principal Amount of all Participating Holders or, in the case of a
waiver, by the party against whom enforcement of any such waived provision is
sought.  No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of such right.
 
19. Independent Nature of Participating Holders’ Obligations and Rights.  The
obligations of each Holder under this Agreement are several and not joint or
joint and several with the obligations of any other Holder, and no Holder shall
be responsible in any way for the performance or non-performance of the
obligations of any other Holder under this Agreement.  Nothing contained in this
Agreement or any other Transaction Document, and no action taken by any Holder
pursuant thereto, shall be deemed to constitute the Participating Holders as a
partnership, an association, a joint venture or any other kind of group or
entity, or create a presumption that the Participating Holders are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents.  Each Holder shall be
entitled to independently protect and enforce its rights, and it shall not be
necessary for any other Holder to be joined as an additional party in any
proceeding for such purpose.

    20. Obligations Limited. A copy of the Agreement and Declaration of Trust of
each of Putnam Convertible Income-Growth Trust, Putnam High Yield Trust, Putnam
High Yield Advantage Fund, Putnam High Income Securities Fund, Putnam Variable
Trust, Putman Asset Allocation Funds and Putnam Funds Trust (each, a "Trust") is
on file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of each
such Trust as Trustees and not individually and that the obligations of or
arising out of this instrument are not binding on any of the Trustees, officers
or shareholders individually, but are binding only upon the trust property of
the Trust. Furthermore, notice is given that the trust property of each series
of Putnam Variable Trust, Putnam Asset Allocation Funds and Putnam Funds Trust
is separate and distinct and that the obligations of each such Trust under or
arising out of this Agreement with respect to the series on behalf of which such
Trust has executed this Agreement are separate and several and not joint or
joint and several.
 
 
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21. Miscellaneous. The representations, warranties, covenants and agreements
contained in this Agreement shall survive the execution and delivery of this
Agreement and the closing of the transactions contemplated hereby and shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any party hereto. This Agreement is intended to bind and
inure to the benefit of the signatories to this Agreement and their respective
successors, permitted assigns, heirs, executors, administrators and
representatives. None of the Company, the Guarantors or Tower may assign any
rights or obligations under this Agreement without the prior written consent of
each Participating Holder.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page by facsimile or as an attachment to an electronic mail message in
PDF or similar format shall be as effective as delivery of a manually executed
counterpart. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby. This Agreement shall be solely
for the benefit of the signatories to this Agreement, and no other person or
entity shall be a third-party beneficiary hereof. No failure or delay by any
party in exercising any right, power or privilege under this Agreement shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
 
[Remainder of Page Intentionally Left Blank] 
 
 
33

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be duly
executed on its behalf as of the date first written above.
 
JAZZ TECHNOLOGIES, INC.
  
       
By:  
/s/ SUSANNA BENNETT
   /s/ RAFI MOR
       
Name: 
Susanna Bennett
   Rafi Mor
       
Title:
Chief Financial Officer
   Principal Executive Officer
                     
TOWER SEMICONDUCTOR LTD.
 
 
       
By:  
/s/ ITZHAK EDREI
   /s/ OREN SHIRAZI
/s/ RUSSELL ELLWANGER
     
Name: 
Itzhak Edrei, Ph.D.
   Oren Shirazi, C.P.A.
Russell Ellwanger
     
Title:  
Executive VP Business Units & Product Development
   Vice President and Chief Financial Officer
Chief Executive Officer
     

 
NEWPORT FAB, LLC
 
By: /s/ SUSANNA BENNETT
Name:  Susanna Bennett
Title:    Chief Financial Officer

JAZZ SEMICONDUCTOR, INC.
 
By: /s/ SUSANNA BENNETT
/s/ RAFI MOR
Name:  Susanna Bennett
Rafi Mor
Title:    Chief Financial Officer
General Manager

 
[Signature page to Exchange Agreement]
 
 
 

--------------------------------------------------------------------------------

 

QUATTRO FUND, LTD.
 
By: /s/ BRIAN SWAIN
Name:  Brian Swain
Title:  Director
 
QUATTRO DISTRESSED OPPORTUNITIES FUND, LP
 
By: /s/ BRIAN SWAIN
Name:  Brian Swain
Title:  Principal
 
[Signature page to Exchange Agreement]
 
 
 

--------------------------------------------------------------------------------

 
 
 
ELEVATOR DIVISION RETIREMENT BENEFIT PLAN

HY-VEE EMPLOYEES' TRUST

IOWA JUDICIAL RETIREMENT SYSTEM

MEIJER

PAINTING INDUSTRY ANNUITY FUND

PRINCIPAL FUNDS, INC. - BOND & MORTGAGE SECURITIES FUND

PRINCIPAL GLOBAL INVESTORS FUND – HIGH YIELD FUND

PRINCIPAL GLOBAL INVESTORS TRUST - HIGH YIELD FIXED INCOME FUND

PRINCIPAL LIFE INSURANCE COMPANY ON BEHALF OF ONE OR MORE SEPARATE ACCOUNTS
(PRINCIPAL LIFE INSURANCE COMPANY, DBA BOND & MORTGAGE SEPARATE ACCOUNT)

PRINCIPAL LIFE INSURANCE COMPANY ON BEHALF OF ONE OR MORE SEPARATE ACCOUNTS
(PRINCIPAL LIFE INSURANCE COMPANY, DBA ULTRA LONG SEPARATE ACCOUNT)

PRINCIPAL VARIABLE CONTRACT FUNDS, INC. BALANCED

PRINCIPAL VARIABLE CONTRACTS FUNDS, INC. - BOND & MORTGAGE SECURITIES ACCOUNT

By: Principal Global Investors, LLC,

 
a Delaware limited liability company,

 
its authorized signatory

 
By: /s/ COLIN PENNYCOOKE
Name:  Colin Pennycooke
Title:    Counsel

By: /s/ JAMES C. FIFIELD
Name:  James C. Fifield
Title:    Assistant General Counsel
 
PRINCIPAL FUNDS, INC. – HIGH YIELD FUND
 
By: /s/ MARK DENKINGER
Name:  Mark Denkinger
Title:    Portfolio Manager
 
[Signature page to Exchange Agreement]
 
 
 

--------------------------------------------------------------------------------

 

 
Putnam Convertible Income-Growth Trust
Putnam High Yield Trust
Putnam High Yield Advantage Fund
Putnam High Income Securities Fund
Putnam Variable Trust, on behalf of its series:
Putnam VT High Yield Fund
Putnam VT Global Asset Allocation Fund
Putnam Asset Allocation Funds, on behalf of its series:
Putnam Asset Allocation: Growth Portfolio
Putnam Asset Allocation: Balanced Portfolio
Putnam Asset Allocation: Conservative Portfolio
Seasons Series Trust (Sun America) -Asset Allocation: Diversified Growth
Portfolio
Putnam Funds Trust, on behalf of its series:
Putnam Income Strategies Fund
Putnam Investment Holdings, LLC - PPAM SMA High Yield Convertible Managed
Portfolio
Ohio Tuition Trust Authority - Ohio Variable College Savings Trust Fund – Putnam
CollegeAdvantage GAA Conservative Portfolio
Ohio Tuition Trust Authority - Ohio Variable College Savings Trust Fund – Putnam
CollegeAdvantage GAA Growth Portfolio
Ohio Tuition Trust Authority - Ohio Variable College Savings Trust Fund – Putnam
CollegeAdvantage GAA Balanced Portfolio
 
By: Putnam Investment Management, LLC, as investment manager
 
By:  /s/ ROBERT L. SALVIN
Name:  Robert L. Salvin
Title:    Managing Director

 
Putnam High Yield Fixed Income Fund, LLC
Putnam World Trust - Putnam Global High Yield Bond Fund
Marsh & McLennan Companies, Inc. U.S. Retirement Plan - High Yield
LGT Multi Manager Bond High Yield (USD)
LGT Capital Invest (SC3) Limited - U.S. High Yield Convertible
Interpolis Pensioenen Global High Yield Pool
Stichting Pensioenfonds voor Fysiotherapeuten
 
By: The Putnam Advisory Company, LLC, as investment manager
 
By: /s/ ROBERT L. SALVIN
Name:  Robert L. Salvin
Title:    Managing Director

 
[Signature page to Exchange Agreement]

 
 
 

--------------------------------------------------------------------------------

 

Putnam Retirement Advantage GAA Balanced Portfolio
Putnam Retirement Advantage GAA Conservative Portfolio
Putnam Retirement Advantage GAA Growth Portfolio
Putnam Retirement Advantage GAA Income Strategies Portfolio
 
By: Putnam Fiduciary Trust Company, as investment manager
 
By: /s/ ROBERT L. SALVIN
Name:  Robert L. Salvin
Title:    Managing Director

 
[Signature page to Exchange Agreement]
 
 
 

--------------------------------------------------------------------------------

 
 
ROCKVIEW TRADING LTD.
 
By: /s/ ALAN BLUESTINE
Name:  Alan Bluestine
Title:    COO, Rockview Management, LLC, Investment Manager for Rockview Trading
Ltd.
 
ROCKVIEW SHORT ALPHA FD LTD.
 
By: /s/ ALAN BLUESTINE
Name:  Alan Bluestine
Title:    COO, Rockview Management, LLC, Investment Manager for Rockview Short
Alpha FD Ltd.
 
[Signature page to Exchange Agreement]
 
 
 

--------------------------------------------------------------------------------

 
 
SPM OPPORTUNITY MASTER FUND, L.P.
 
By: /s/ WARD J. MCGRAW
Name:  Ward J. McGraw
Title:     CFO
 
[Signature page to Exchange Agreement]
 
 
 

--------------------------------------------------------------------------------

 

 
TENNENBAUM MULTI-STRATEGY MASTER FUND
By:  Tennenbaum Capital Partners, LLC
Its:  Investment Advisor

By: /s/ HUGH STEVEN WILSON
Name:  Hugh Steven Wilson
Title:    Managing Partner
 
[Signature page to Exchange Agreement]
 
 
 

--------------------------------------------------------------------------------

 
 
ZAZOVE ASSOCIATES, LLC

By: /s/ STEVEN M. KLEIMAN
Name:  Steven M. Kleiman
Title:  Chief Operating Officer
 
[Signature page to Exchange Agreement]
 
 
 

--------------------------------------------------------------------------------

 
 
SCHEDULE A

GUARANTORS

Newport Fab, LLC, a Delaware limited liability company
Jazz Semiconductor, Inc., a Delaware corporation
 
 
 

--------------------------------------------------------------------------------

 
 
SCHEDULE B

DTC INSTRUCTIONS
 
Name of Holder
DTC Direction
Century National Insurance Company
Existing Notes Principal Amount:  $2,420,000
New Notes Principal Amount:  $2,843,000
Warrants:  767,745
CUSIP: 144A
DTC Participant: Union Bank of California
DTC #2145
For Credit to Account #:  240002130-04
Contact:  Denise Wong
415-705-7326
Denise.Wong@unionbank.com
Elevator Division Retirement Benefit Plan
Existing Notes Principal Amount:  $5,000
New Notes Principal Amount:  $5,000
CUSIP:  144A
DTC Participant: Amalgamated Bank
DTC #2352
For Credit to Account #: 1000236.2
Contact: Peter Ng
212-895-4951 ext.4904
peter.ng@amalgamatedbank.com
Hy-Vee Employees’ Trust
Existing Notes Principal Amount:  $35,000
New Notes Principal Amount:  $41,000
Warrants:  11,104
CUSIP:  144A
DTC Participant: Northern Trust
DTC #2669
For Credit to Account #: 26-11177
Contact: Kelly Amouzou
312-630-6423
ka43@ntrs.com
Interpolis Pensioenen Global High Yield Pool
Existing Notes Principal Amount:  $430,000
New Notes Principal Amount:  $505,000
Warrants:  136,418
CUSIP:  Regulation S
DTC Participant:  BNY Mellon
DTC #954
For Credit to Account #:  TTWFZ002002
Contact:  Alexander Boatman
315-414-3681
alexander.boatman@bnymellon.com

 
 
 
 

--------------------------------------------------------------------------------

 
 
Iowa Judicial Retirement System
Existing Notes Principal Amount:  $10,000
New Notes Principal Amount:  $11,000
CUSIP:  144A
DTC Participant: Mellon Trust
DTC #954
For Credit to Account #: JR7F3000002
Contact: Stephanie Schweitzer
412-234-2033
pgh_caa_team@bnymellon.com
LGT Multi Manager Bond High Yield (USD)
Existing Notes Principal Amount:  $135,000
New Notes Principal Amount:  $158,000
Warrants:  42,829
CUSIP:  Regulation S
DTC Participant:  UBS
DTC #010
For Credit to Account #:  8050049
Contact:  Andreas Fuchs
011-41-44-405-97-81
LGT Capital Invest (SC3) Limited – U.S. High Yield Convertible
Existing Notes Principal Amount:  $893,000
New Notes Principal Amount:  $1,049,000
Warrants:  283,305
CUSIP:  Regulation S
DTC Participant:  UBS
DTC #010
For Credit to Account #:  4945317
Contact:  Nicholas Koelliker
011-44-44-236-94-31
Nicolas.koelliker@ubs.com
Lockheed Martin Corporation Master Retirement Trust
Existing Notes Principal Amount:  $1,870,000
New Notes Principal Amount:  $2,197,000
Warrants:  593,258
CUSIP:  144A
DTC Participant:  The Northern Trust Company
DTC # 2669
For Credit to Account #:  LMT43
Contact:  Ryan Payne
312-557-7739
rsp4@ntrs.com
Marsh & McLennan Companies, Inc. U.S. Retirement Plan – High Yield
Existing Notes Principal Amount:  $170,000
New Notes Principal Amount:  $199,000
Warrants:  53,933
CUSIP:  144A
DTC Participant:  The Northern Trust Company
DTC #2669
For Credit to Account #: 1705435
Contact: Bernard Laureus
312-557-3148
BL34@ntrs.com

 
 
 
 

--------------------------------------------------------------------------------

 
 
Meijer
Existing Notes Principal Amount:  $30,000
New Notes Principal Amount:  $35,000
Warrants:  9,518
CUSIP:  144A
DTC Participant:  Wells Fargo
DTC #2027
For Credit to Account #: 5800422
Contact: Cecile B. Johnson
704-427-1755
cecile.johnson@wellsfargo.com
National Railroad Retirement Investment Trust
Existing Notes Principal Amount:  $6,000,000
New Notes Principal Amount:  $7,050,000
Warrants:  1,903,500
CUSIP:  144A
DTC Participant:  The Northern Trust Company
DTC #2669
For Credit to Account #:  RRT29
Contact:  Ryan Payne
312-557-7739
rsp4@ntrs.com
Ohio Tuition Trust Authority – Ohio Variable College Savings Fund – Putnam
CollegeAdvantage GAA Conservative Portfolio
Existing Notes Principal Amount:  $36,000
New Notes Principal Amount:  $42,000
Warrants:  11,421
CUSIP:  144A
DTC Participant: State Street Bank & Trust Company
DTC #997
For Credit to Account #: 38VI
Contact: John Sontag
617-985-9242
jsontag@statestreet.com
Ohio Tuition Trust Authority – Ohio Variable College Savings Fund – Putnam
CollegeAdvantage GAA Growth Portfolio
Existing Notes Principal Amount:  $92,000
New Notes Principal Amount:  $108,000
Warrants:  29,187
CUSIP:  144A
DTC Participant: State Street Bank & Trust Company
DTC #997
For Credit to Account #:  38VJ
Contact:  John Sontag
617-985-9242
jsontag@statestreet.com
Ohio Tuition Trust Authority – Ohio Variable College Savings Fund – Putnam
CollegeAdvantage GAA Balanced Portfolio
Existing Notes Principal Amount:  $109,000
New Notes Principal Amount:  $128,000
Warrants:  34,581
CUSIP:  144A
DTC Participant: State Street Bank & Trust Company
DTC #997
For Credit to Account #:  38VL
Contact:  John Sontag
617-985-9242
jsontag@statestreet.com

 
 
 
 

--------------------------------------------------------------------------------

 
 
Painting Industry Annuity Fund
Existing Notes Principal Amount:  $25,000
New Notes Principal Amount:  $29,000
CUSIP:  144A
DTC Participant: Wells Fargo
DTC #2027
For Credit to Account #: 9546001262
Contact: Cecile B. Johnson
704-427-1755
cecile.johnson@wellsfargo.com
Principal Funds, Inc. – Bond & Mortgage Securities Fund
Existing Notes Principal Amount:  $1,090,000
New Notes Principal Amount:  $1,280,000
Warrants:  345,803
CUSIP:  144A
DTC Participant: Bank of New York
DTC #901
For Credit to Account #: 394373
Contact: Stephanie Schweitzer
412-234-2033
pgh_caa_team@bnymellon.com
Principal Funds, Inc. – High Yield Fund
Existing Notes Principal Amount:  $11,205,000
New Notes Principal Amount:  $13,165,000
Warrants:  3,554,787
CUSIP:  144A
DTC Participant: Bank of New York
DTC #901
For Credit to Account #: 394959
Contact: Stephanie Schweitzer
412-234-2033
pgh_caa_team@bnymellon.com
Principal Global Investors Fund – High Yield Fund
Existing Notes Principal Amount:  $55,000
New Notes Principal Amount:  $64,000
Warrants:  17,449
CUSIP:  144A
DTC Participant: Citibank
DTC #908
For Credit to Account #: 852070
Contact: Myra
813-604-1145
[email]
Principal Global Investors Trust – High Yield Fixed Income Fund
Existing Notes Principal Amount:  $75,000
New Notes Principal Amount:  $88,000
Warrants:  23,794
CUSIP:  144A
DTC Participant: Bank of New York
DTC #901
For Credit to Account #: 394967
Contact: Stephanie Schweitzer
412-234-2033
pgh_caa_team@bnymellon.com

 
 
 
 

--------------------------------------------------------------------------------

 
 
Principal Life Insurance Company On Behalf of One or More Separate Accounts
(Principal Life Insurance Company, DBA Bond & Mortgage Separate Account)
Existing Notes Principal Amount:  $2,310,000
New Notes Principal Amount:  $2,714,000
Warrants:  732,848
CUSIP:  144A
DTC Participant:  Citibank
DTC #908
For Credit to Account #: 847169
Contact: Valerie
813-604-1964
[email]
Principal Life Insurance Company On Behalf of One or More Separate Accounts
(Principal Life Insurance Company, DBA Ultra Long Separate Account)
Existing Notes Principal Amount:  $5,000
New Notes Principal Amount:  $5,000
Warrants:  1,587
CUSIP:  144A
DTC Participant: Citibank
DTC #908
For Credit to Account #: 851579
Contact: Valerie
813-604-1964
[email]
Principal Variable Contract Funds, Inc. Balanced
Existing Notes Principal Amount:  $5,000
New Notes Principal Amount:  $5,000
Warrants:  1,587
CUSIP:  144A
DTC Participant: Bank of New York
DTC #901
For Credit to Account #: 294321
Contact: Stephanie Schweitzer
412-234-2033
pgh_caa_team@bnymellon.com
Principal Variable Contracts Funds, Inc. – Bond & Mortgage Securities Account
Existing Notes Principal Amount:  $150,000
New Notes Principal Amount:  $176,000
Warrants:  47,588
CUSIP:  144A
DTC Participant: Bank of New York
DTC #901
For Credit to Account #: 294315
Contact: Stephanie Schweitzer
412-234-2033
pgh_caa_team@bnymellon.com
Putnam Convertible Income-Growth Trust
Existing Notes Principal Amount:  $3,422,000
New Notes Principal Amount:  $4,020,000
Warrants:  1,085,630
CUSIP:  144A
DTC Participant: State Street Bank & Trust Company
DTC #997
For Credit to Account #:  38QG
Contact:  John Sontag
617-985-9242
jsontag@statestreet.com

 
 
 

--------------------------------------------------------------------------------

 
 
Putnam High Yield Trust
Existing Notes Principal Amount:  $2,120,000
New Notes Principal Amount:  $2,491,000
Warrants:  672,570
CUSIP:  144A
DTC Participant: State Street Bank & Trust Company
DTC #997
For Credit to Account #:  38PD
Contact:  John Sontag
617-985-9242
jsontag@statestreet.com
Putnam High Yield Advantage Fund
Existing Notes Principal Amount:  $842,000
New Notes Principal Amount:  $989,000
Warrants:  267,125
CUSIP:  144A
DTC Participant: State Street Bank & Trust Company
DTC #997
For Credit to Account #:  38MI
Contact:  John Sontag
617-985-9242
jsontag@statestreet.com
Putnam High Income Securities Fund
Existing Notes Principal Amount:  $532,000
New Notes Principal Amount:  $625,000
Warrants:  168,777
CUSIP:  144A
DTC Participant: State Street Bank & Trust Company
DTC #997
For Credit to Account #:  38MJ
Contact:  John Sontag
617-985-9242
jsontag@statestreet.com
Putnam Variable Trust – Putnam VT High Yield Fund
Existing Notes Principal Amount:  $607,000
New Notes Principal Amount:  $173,000
Warrants:  192,571
CUSIP:  144A
DTC Participant: State Street Bank & Trust Company
DTC #997
For Credit to Account #:  38MN
Contact:  John Sontag
617-985-9242
jsontag@statestreet.com
Putnam Variable Trust – Putnam VT Global Asset Allocation Fund
Existing Notes Principal Amount:  $25,000
New Notes Principal Amount:  $29,000
Warrants:  7,932
CUSIP:  144A
DTC Participant: State Street Bank & Trust Company
DTC #997
For Credit to Account #:  38MO
Contact:  John Sontag
617-985-9242
jsontag@statestreet.com

 
 
 
 

--------------------------------------------------------------------------------

 
 
 
Putnam Asset Allocation: Growth Portfolio
Existing Notes Principal Amount:  $155,000
New Notes Principal Amount:  $182,000
Warrants:  49,174
CUSIP:  144A
DTC Participant: State Street Bank & Trust Company
DTC #997
For Credit to Account #:  38MX
Contact:  John Sontag
617-985-9242
jsontag@statestreet.com
Putnam Asset Allocation: Balanced Portfolio
Existing Notes Principal Amount:  $160,000
New Notes Principal Amount:  $188,000
Warrants:  50,760
CUSIP:  144A
DTC Participant: State Street Bank & Trust Company
DTC #997
For Credit to Account #:  38MY
Contact:  John Sontag
617-985-9242
jsontag@statestreet.com
Putnam Asset Allocation: Conservative Portfolio
Existing Notes Principal Amount:  $110,000
New Notes Principal Amount:  $129,000
Warrants:  34,898
CUSIP:  144A
DTC Participant: State Street Bank & Trust Company
DTC #997
For Credit to Account #:  38MZ
Contact:  John Sontag
617-985-9242
jsontag@statestreet.com
Putnam Income Strategies Fund
Existing Notes Principal Amount:  $20,000
New Notes Principal Amount:  $23,000
Warrants:  6,345
CUSIP:  144A
DTC Participant: State Street Bank & Trust Company
DTC #997
For Credit to Account #:  38PL
Contact:  John Sontag
617-985-9242
jsontag@statestreet.com

 
 
 

--------------------------------------------------------------------------------

 
 
 
Putnam Investment Holdings, LLC – PPAM SMA High Yield Convertible Managed
Portfolio
Existing Notes Principal Amount:  $4,000
New Notes Principal Amount: $4,000
Warrants:  1,269
CUSIP:  144A
DTC Participant: State Street Bank & Trust Company
DTC #997
For Credit to Account #:  38NZ
Contact:  John Sontag
617-985-9242
jsontag@statestreet.com
Putnam High Yield Fixed Income Fund, LLC
Existing Notes Principal Amount:  $11,000
New Notes Principal Amount:  $12,000
Warrants:  3,490
CUSIP:  144A
DTC Participant: State Street Bank & Trust Company
DTC #997
For Credit to Account #:  38S4
Contact:  John Sontag
617-985-9242
jsontag@statestreet.com
Putnam World Trust – Putnam Global High Yield Bond Fund
Existing Notes Principal Amount:  $485,000
New Notes Principal Amount:  $569,000
Warrants:  153,867
CUSIP: Regulation S
DTC Participant: State Street Bank & Trust Company
DTC #997
For Credit to Account #:  PWTI
Contact:  John Sontag
617-985-9242
jsontag@statestreet.com
Putnam Retirement Advantage GAA Balanced Portfolio
Existing Notes Principal Amount:  $15,000
New Notes Principal Amount:  $17,000
Warrants:  4,759
CUSIP:  144A
DTC Participant: State Street Bank & Trust Company
DTC #997
For Credit to Account #:  38UE
Contact:  John Sontag
617-985-9242
jsontag@statestreet.com

 
 
 
 

--------------------------------------------------------------------------------

 
 
 
Putnam Retirement Advantage GAA Conservative Portfolio
Existing Notes Principal Amount:  $5,000
New Notes Principal Amount:  $5,000
Warrants:  1,587
CUSIP:  144A
DTC Participant: State Street Bank & Trust Company
DTC #997
For Credit to Account #:  38UF
Contact:  John Sontag
617-985-9242
jsontag@statestreet.com
Putnam Retirement Advantage GAA Growth Portfolio
Existing Notes Principal Amount:  $15,000
New Notes Principal Amount:  $17,000
Warrants:  4,759
CUSIP:  144A
DTC Participant: State Street Bank & Trust Company
DTC #997
For Credit to Account #:  38UD
Contact:  John Sontag
617-985-9242
jsontag@statestreet.com
Putnam Retirement Advantage GAA Income Strategies Portfolio
Existing Notes Principal Amount:  $50,000
New Notes Principal Amount:  $58,000
Warrants:  15,863
CUSIP:  144A
DTC Participant: State Street Bank & Trust Company
DTC #997
For Credit to Account #:  38UG
Contact:  John Sontag
617-985-9242
jsontag@statestreet.com
Quattro Fund, Ltd.
Existing Notes Principal Amount:  $1,224,000
New Notes Principal Amount:  $1,438,000
Warrants:  388,314
CUSIP: 144A
DTC Participant:  Goldman Sachs
DTC #  005
For Credit to Account #:  002222123
Contact:  Cory Davis
212-357-6915
cory.davis@gs.com
Quattro Distressed Opportunities Fund, L.P.
Existing Notes Principal Amount:  $276,000
New Notes Principal Amount:  $324,000
Warrants:  87,561
CUSIP: 144A
DTC Participant:  Goldman Sachs
DTC #  005
For Credit to Account #:  002033165
Contact:  Cory Davis
212-357-6915
cory.davis@gs.com

 
 
 
 

--------------------------------------------------------------------------------

 
 
Qwest Occupational Health Trust
Existing Notes Principal Amount:  $450,000
New Notes Principal Amount:  $528,000
Warrants:  142,763
CUSIP:  144A
DTC Participant:  BNY Mellon
DTC # 954
For Credit to Account #: USVF70110002
Contact:  Andrew Rensko
412-236-0172
TTB_team@mellon.com
Qwest Pension Trust
Existing Notes Principal Amount:  $1,950,000
New Notes Principal Amount:  $2,291,000
Warrants:  618,638
CUSIP:  144A
DTC Participant:  BNY Mellon
DTC # 954
For Credit to Account #: USWF3530002
Contact:  Andrew Rensko
412-236-0172
TTB_team@mellon.com
RockView Short Alpha Fund Ltd.
Existing Notes Principal Amount:  $750,000
New Notes Principal Amount:  $881,000
Warrants:  237,938
CUSIP: 144A
DTC Participant:  JPMorgan Chase
DTC #0352
For Credit to Account #: 10236192
Contact:  Harbani Rana
212-272-4774
harabani.rana@jpmorgan.com
RockView Trading Ltd.
Existing Notes Principal Amount:  $3,225,000
New Notes Principal Amount:  $3,789,000
Warrants:  1,023,132
CUSIP:  144A
DTC Participant:  JPMorgan Chase
DTC #0352
For Credit to Account #:  10231112
Contact:  Harbani Rana
212-272-4774
harbani.rana@jomorgan.com

 
 
 
 

--------------------------------------------------------------------------------

 
 
RockView Trading Ltd.
Existing Notes Principal Amount:  $3,750,000
New Notes Principal Amount:  $4,406,000
Warrants:  1,189,688
CUSIP: 144A
DTC Participant: Goldman Sachs
DTC #0005
For Credit to Account #: 002220317
Contact:  Brendan Cavanaugh
212-357-7186
brendan.cavanaugh@gs.com
Seasons Series Trust (Sun America) – Asset Allocation: Diversified Growth
Portfolio
Existing Notes Principal Amount:  $20,000
New Notes Principal Amount:  $23,000
Warrants:  6,345
CUSIP:  144A
DTC Participant:
DTC #997
For Credit to Account #:  JUQA
Contact:  John Sontag
617-985-9242
jsontag@statestreet.com
SPM Opportunity Master Fund, L.P.
Existing Notes Principal Amount:  $5,800,000
New Notes Principal Amount:  $6,815,000
Warrants:  1,840,050
CUSIP:  144A
DTC Participant: Citigroup Global Markets, Inc.
DTC #0418
For Credit to Account #: 522-931D6-2-9
Contact: Oladokun Ajaiyeoba
212-723-4319
oladokun.ajaiyeoba@citi.com
San Diego County Employees Retirement Association
Existing Notes Principal Amount:  $2,060,000
New Notes Principal Amount:  $2,420,000
Warrants:  653,535
CUSIP:  144A
DTC Participant:  BNY Mellon
DTC #954
For Credit to Account #: SDOF30030802
Contact:  Andrew Rensko
412-236-0172
TTB_team@mellon.com
Stichting Pensioenfonds voor Fysiotherapeuten
Existing Notes Principal Amount:  $120,000
New Notes Principal Amount:  $141,000
Warrants:  38,070
CUSIP:  Regulation S
DTC Participant:  BNY Mellon
DTC #954
For Credit to Account #:  TTZFZ003002
Contact:  Alexander Boatman
315-414-3681
alexander.boatman@bnymellon.com

 
 
 
 

--------------------------------------------------------------------------------

 
 
Tennenbaum Multi-Strategy Master Fund
Existing Notes Principal Amount:  $2,990,000
New Notes Principal Amount:  $3,523,000
Warrants:  951,433
CUSIP:  144A
DTC Participant:  BNP Paribas
DTC #2154
For Credit to Account #: 31301068
Contact: Kenneth Mak
415-772-1519
kenneth.mak@us.bnpparibas.com
Virginia Retirement System
Existing Notes Principal Amount:  $9,961,000
New Notes Principal Amount:  $11,704,000
Warrants:  3,160,128
CUSIP:  144A
DTC Participant:  BNY Mellon
DTC # 954
For Credit to Account #: VRSF46420002
Contact:  Andrew Rensko
412-236-0172
TTB_team@mellon.com
The Washington University
Existing Notes Principal Amount:  $2,780,000
New Notes Principal Amount:  $3,266,000
Warrants:  881,955
CUSIP:  144A
DTC Participant:   BNY Mellon
DTC # 954
For Credit to Account #: WUSF10180002
Contact:  Andrew Rensko
412-236-0172
TTB_team@mellon.com
Zazove Aggressive Growth Fund, L.P.
Existing Notes Principal Amount:  $4,330,000
New Notes Principal Amount:  $5,087,000
Warrants:  1,373,693
CUSIP:  IAI
DTC Participant:  Citigroup
DTC # 418
For Credit to Account #: 522-9075R
Contact:  Doreen Pappas
212-723-4270
Doreen.pappas@citi.com
Zazove High Yield Convertible Securities Fund, L.P.
Existing Notes Principal Amount:  $4,215,000
New Notes Principal Amount:  $4,952,000
Warrants:  1,337,209
CUSIP:  IAI
DTC Participant: Citigroup
DTC # 418
For Credit to Account #: 522-9075R
Contact:  Doreen Pappas
212-723-4270
Doreen.pappas@citi.com

 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT A
 
Schedule of Holders
 
(1) Name and Address of Holder
(2) Original Principal
Amount of Old Notes
(3) Exchange Principal Amount of New Notes/ Exchange Note Cash Payment
(4) Tower Warrant Shares
Century National Insurance Company(1)
Jurisdiction of Residency:  California
CUSIP No. of Old Notes exchanged: 47214EAA0
$2,420,000
$2,843,000
$500
767,745
Elevator Division Retirement Benefit Plan(3)
Jurisdiction of Residency:
CUSIP No. of Old Notes exchanged:
$5,000
$5,000
$875
0
 
Hy-Vee Employees’ Trust(3)
Jurisdiction of Residency:
CUSIP No. of Old Notes exchanged:
$35,000
$41,000
$125
11,104
 
Interpolis Pensioenen Global High Yield Pool(2)
Jurisdiction of Residency: The Netherlands
CUSIP No. of Old Notes exchanged:  47214EAA0
$430,000
$505,000
$250
136,418
 
Iowa Judicial Retirement System(3)
Jurisdiction of Residency:
CUSIP No. of Old Notes exchanged:
$10,000
$11,000
$750
0
LGT Multi Manager Bond High Yield (USD)(2)
Jurisdiction of Residency: Liechtenstein
CUSIP No. of Old Notes exchanged:  47214EAA0
$135,000
$158,000
$625
42,829
 
LGT Capital Invest (SC3) Limited – U.S. High Yield Convertible(2)
Jurisdiction of Residency: Liechtenstein
CUSIP No. of Old Notes exchanged:  47214EAA0 - $400,000; 00489AAA5 - $493,000
$893,000
$1,049,000
$275
283,305
 
Lockheed Martin Corporation Master Retirement Trust(1)
Jurisdiction of Residency:  Maryland
CUSIP No. of Old Notes exchanged: 47214EAA0
$1,870,000
$2,197,000
$250
593,258
 

 
 
 

--------------------------------------------------------------------------------

 
 
 
Marsh & McLennan Companies, Inc. U.S. Retirement Plan – High Yield(2)
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged:  47214EAA0 - $60,000;  00489AAA5 - $110,000
$170,000
$199,000
$750
53,933
 
Meijer(3)
Jurisdiction of Residency:
CUSIP No. of Old Notes exchanged:
$30,000
$35,000
$250
9,518
National Railroad Retirement Investment Trust(1)
Jurisdiction of Residency:  Established pursuant to Section 105 of the Railroad
Retirement and Survivor’s Improvement Act of 2001
CUSIP No. of Old Notes exchanged:  47214EAA0
$6,000,000
$7,050,000
1,903,500
Ohio Tuition Trust Authority – Ohio Variable College Savings Fund – Putnam
CollegeAdvantage GAA Conservative Portfolio(2)
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged:  00489AAA5
$36,000
$42,000
$300
11,421
Ohio Tuition Trust Authority – Ohio Variable College Savings Fund – Putnam
CollegeAdvantage GAA Growth Portfolio(2)
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged:  00489AAA5
$92,000
$108,000
$100
29,187
Ohio Tuition Trust Authority – Ohio Variable College Savings Fund – Putnam
CollegeAdvantage GAA Balanced Portfolio(2)
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged:  00489AAA5
$109,000
$128,000
$75
34,581
 
Painting Industry Annuity Fund(3)
Jurisdiction of Residency:
CUSIP No. of Old Notes exchanged:
$25,000
$29,000
$375
0
Principal Funds, Inc. – Bond & Mortgage Securities Fund(3)
Jurisdiction of Residency:
CUSIP No. of Old Notes exchanged:
$1,090,000
$1,280,000
$750
345,803
 
Principal Funds, Inc. – High Yield Fund(3)
Jurisdiction of Residency:
CUSIP No. of Old Notes exchanged:
$11,205,000
$13,165,000
$875
3,554,787
 

 
 
 
 

--------------------------------------------------------------------------------

 
 
Principal Global Investors Fund – High Yield Fund(3)
Jurisdiction of Residency:
CUSIP No. of Old Notes exchanged:
$55,000
$64,000
$625
17,449
 
Principal Global Investors Trust – High Yield Fixed Income Fund(3)
Jurisdiction of Residency:
CUSIP No. of Old Notes exchanged:
$75,000
$88,000
$125
23,794
 
Principal Life Insurance Company On Behalf of One or More Separate Accounts
(Principal Life Insurance Company,
DBA Bond & Mortgage Separate Account)(3)
Jurisdiction of Residency:
CUSIP No. of Old Notes exchanged:
$2,310,000
$2,714,000
$250
732,848
 
Principal Life Insurance Company On Behalf of One or More Separate Accounts
(Principal Life Insurance Company,
DBA Ultra Long Separate Account)(3)
Jurisdiction of Residency:
CUSIP No. of Old Notes exchanged:
$5,000
$5,000
$875
1,587
 
Principal Variable Contract Funds, Inc. Balanced(3)
Jurisdiction of Residency:
CUSIP No. of Old Notes exchanged:
$5,000
$5,000
$875
1,587
 
Principal Variable Contracts Funds, Inc. – Bond & Mortgage Securities Account(3)
Jurisdiction of Residency:
CUSIP No. of Old Notes exchanged:
$150,000
$176,000
$250
47,588
Putnam Convertible Income-Growth Trust(2)
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged:  00489AAA5
$3,422,000
$4,020,000
$850
1,085,630
Putnam High Yield Trust(2)
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged:  00489AAA5
$2,120,000
$2,491,000
672,570
Putnam High Yield Advantage Fund(2)
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged:  47214EAA0 - $20,000; 00489AAA5 - $822,000
$842,000
$989,000
$350
267,125
 
Putnam High Income Securities Fund(2)
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged:  00489AAA5
$532,000
$625,000
$100
168,777

 
 
 

--------------------------------------------------------------------------------

 
 
Putnam Variable Trust – Putnam VT High Yield Fund(2)
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged:  00489AAA5
$607,000
$713,000
$225
192,571
 
Putnam Variable Trust – Putnam VT Global Asset Allocation Fund(2)
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged:  47214EAA0
$25,000
$29,000
$375
7,932
 
Putnam Asset Allocation:  Growth Portfolio(2)
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged:  47214EAA0
$155,000
$182,000
$125
49,174
 
Putnam Asset Allocation:  Balanced Portfolio(2)
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged:  47214EAA0
$160,000
$188,000
50,760
Putnam Asset Allocation:  Conservative Portfolio(2)
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged:  47214EAA0
$110,000
$129,000
$250
34,898
 
Putnam Income Strategies Fund(2)
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged:  47214EAA0
$20,000
$23,000
$500
6,345
Putnam Investment Holdings, LLC – PPAM SMA High Yield Convertible Managed
Portfolio(2)
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged:  47214EAA0
$4,000
$4,000
$700
1,269
Putnam High Yield Fixed Income Fund, LLC(2)
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged:  47214EAA0 - $5,000; 00489AAA5 - $6,000
$11,000
$12,000
$925
3,490
 
Putnam World Trust – Putnam Global High Yield Bond Fund(2)
Jurisdiction of Residency: Ireland
CUSIP No. of Old Notes exchanged:  47214EAA0
$485,000
$569,000
$875
153,867
 

 
 
 

--------------------------------------------------------------------------------

 
 
Putnam Retirement Advantage GAA Balanced Portfolio(2)
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged:  47214EAA0
$15,000
$17,000
$625
4,759
Putnam Retirement Advantage GAA Conservative Portfolio(2)
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged:  47214EAA0
$5,000
$5,000
$875
1,587
 
Putnam Retirement Advantage GAA Growth Portfolio(2)
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged:  47214EAA0
$15,000
$17,000
$625
4,759
 
Putnam Retirement Advantage GAA Income Strategies Portfolio(2)
Jurisdiction of Residency:  United States of America
CUSIP No. of Old Notes exchanged:  47214EAA0
$50,000
$58,000
$750
15,863
 
Quattro Fund, Ltd.
Notice Address:
c/o Quattro Global Capital, LLC
546 Fifth Avenue, 19th Floor
New York, NY  10036
Attn:  Sherri Andrews
Phone:  (212) 201-8760
Fax:  (212)  201-8777
 
Jurisdiction of Residency:  Cayman Islands
CUSIP No. of Old Notes exchanged: 00489AAA5
$1,224,000
$1,438,000
$200
388,314
Quattro Distressed Opportunities Fund, L.P.
Notice Address:
c/o Quattro Global Capital, LLC
546 Fifth Avenue, 19th Floor
New York, NY  10036
Attn:  Sherri Andrews
Phone:  (212) 201-8760
Fax:  (212)  201-8777
 
Jurisdiction of Residency:  United States of America
CUSIP No. of Old Notes exchanged: 47214EAA0
$276,000
$324,000
$300
87,561
Qwest Occupational Health Trust(1)
Jurisdiction of Residency:  Plan sponsor is in Delaware with principal executive
offices in Colorado
CUSIP No. of Old Notes exchanged:  47214EAA0
$450,000
$528,000
$750
142,763
 

 
 
 

--------------------------------------------------------------------------------

 
 
Qwest Pension Trust(1)
Jurisdiction of Residency:  Plan sponsor is in Delaware with principal executive
offices in Colorado
CUSIP No. of Old Notes exchanged:  47214EAA0
$1,950,000
$2,291,000
$250
618,638
 
RockView Short Alpha Fund Ltd.
Notice Address:
RockView Capital
Metro Center
One Station Place, 7th Floor
Stamford, CT  06902
Attn:  Alan Bluestine
 
Jurisdiction of Residency: Cayman Islands
CUSIP No. of Old Notes exchanged:  47214EAA0
$750,000
$881,000
$250
237,938
 
RockView Trading Ltd.
Notice Address:
RockView Capital
Metro Center
One Station Place, 7th Floor
Stamford, CT  06902
Attn:  Alan Bluestine
 
Jurisdiction of Residency: Cayman Islands
CUSIP No. of Old Notes exchanged:  47214EAA0
$6,975,000
$8,195,000
$625
2,212,820
 
Seasons Series Trust (Sun America) – Asset Allocation:  Diversified Growth
Portfolio(2)
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged:  47214EAA0
$20,000
$23,000
$500
6,345
SPM Opportunity Master Fund, L.P.
Notice Address:
SPM Opportunity Master Fund, L.P.
c/o  Ward McGraw
Chief Financial Officer
2187 Atlantic Street, 4th Floor
Stamford, CT 06902
P: (203) 351-2877  
Fax: (203) 351-2879
 
Jurisdiction of Residency: United States of America
CUSIP No. of Old Notes exchanged: 47214EAA0
$5,800,000
$6,815,000
1,840,050
San Diego County Employees Retirement Association(1)
Jurisdiction of Residency:  California
CUSIP No. of Old Notes exchanged:  47214EAA0
$2,060,000
$2,420,000
$500
653,535

 
 
 

--------------------------------------------------------------------------------

 
 
Stichting Pensioenfonds voor Fysiotherapeuten(2)
Jurisdiction of Residency: The Netherlands
CUSIP No. of Old Notes exchanged:  47214EAA0
$120,000
$141,000
38,070
Tennenbaum Multi-Strategy Master Fund
Notice Address:
Tennenbaum Capital Partners LLC
2951 28th Street, Suite 1000
Santa Monica, CA  90405
Attn:  Sumit Sablok
Fax:  (310) 899-4994
 
Jurisdiction of Residency:  Cayman Islands
CUSIP No. of Old Notes exchanged: 47214EAA0
$2,999,000
$3,523,000
$825
951,433
 
Virginia Retirement System(1)
Jurisdiction of Residency:  Virginia
CUSIP No. of Old Notes exchanged:  47214EAA0
$9,961,000
$11,704,000
$175
3,160,128
 
The Washington University(1)
Jurisdiction of Residency:  Missouri
CUSIP No. of Old Notes exchanged:  47214EAA0
$2,780,000
$3,266,000
$500
881,955
Zazove Aggressive Growth Fund, L.P.(1)
Jurisdiction of Residency:  Cayman Islands
CUSIP No. of Old Notes exchanged:  47214EAA0
$4,330,000
$5,087,000
$750
1,373,693
 
Zazove High Yield Convertible Securities Fund, L.P.(1)
Jurisdiction of Residency:  Cayman Islands
CUSIP No. of Old Notes exchanged:  47214EAA0
$4,215,000
$4,952,000
$625
1,337,209
 
Total
$79,643,000
$93,556,000
$24,525
25,254,070

 
(1)Indicates Zazove Associates, LLC is acting as investment advisor with respect
to such Holder.
Notice Address:
Zazove Associates, LLC
1033 Skokie Blvd., Suite 310
Northbrook, IL  60062
Attn:  Steven M. Kleiman
Fax:  847.239.7101
Email:  skleiman@zazove.com
 
(2)Notice Address:
c/o Putnam Investments
One Post Office Square
Boston, MA  02106
Attn:  General Counsel
Fax:  (617) 760-1625
 
 
 

--------------------------------------------------------------------------------

 
 
(3)Notice Address:

Credit and Financials:
 
Eddie Vonnahme, CFA
Principal Global Investors, LLC
801 Grand Avenue G-26   
Des Moines, Iowa 50392-0800
Phone - 515-362-2018
Fax: 515-362-2326
vonnahme.eddie@principal.com
 
Credit and Financials:
 
Mark Denkinger
Principal Global Investors, LLC 
801 Grand Avenue G-26   
Des Moines, Iowa 50392-0800
Phone - 515-248-8016
Fax: 515-362-2326
Denkinger.Mark@principal.com
 
Administrative:
 
Luke Walker
Principal Global Investors, LLC
801 Grand Avenue    
Des Moines, Iowa 50392-0960
Phone: 515-235-1340
FAX :  1-866-508-8946
dlgaminvacctbankloan@exchange.principal.com
Legal:
 
Sally D. Sorensen, Paralegal Analyst
Principal Life Insurance Company
711 High Street, G-34
Des Moines, Iowa 50392-0301
Phone:  (515) 247-6986
Fax:           (866) 496-6527
sorensen.sally.d@principal.com

 
 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT B
 
Form of Indenture
 
 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT C
 
Form of Warrant Agreement
 
 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT D
 
Form of Company Registration Rights Agreement
 
 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT E
 
Form of Tower Registration Rights Agreement
 
 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT F
 
Form of Opinion of Eilenberg & Krause LLP
 
 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT G
 
Form of Opinion of Yigal Arnon & Co.
 
 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT H
 
Form of Opinion of Chief Legal Officer of Jazz Technologies, Inc.
 

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