Document:

20-F

Exhibit 4.85  

A M E N D I N G  A G R E E M E N T  

TO THE FACILITY
AGREEMENT  

	 	
THIS
AMENDING AGREEMENT IS MADE AND ENTERED INTO AS OF THE 25TH DAY OF SEPTEMBER, 2008, BY
AND BETWEEN: 

	 	(1)	TOWER
SEMICONDUCTOR LTD. (“THE BORROWER”)  

	 	
AND  

	 	(2)	BANK
HAPOALIM B.M. AND BANK LEUMI           LE – ISRAEL B.M. (“THE
BANKS”)  

	WHEREAS:  		THE
BORROWER, ON THE ONE HAND, AND THE BANKS, ON THE OTHER HAND, ARE PARTIES TO A
FACILITY AGREEMENT DATED JANUARY 18, 2001, AS AMENDED AND RESTATED
ON AUGUST 24, 2006 AND AS FURTHER AMENDED BY AMENDMENT NO.1 THERETO
DATED SEPtember 10, 2007 ("the Facility Agreement"); and  

	WHEREAS:  		the
 Borrower  has  requested  that  changes be made to  various  provisions  of the
 Facility                      Agreement,  including  the  conversion  of a portion  of
the Loans  into  capital  notes to be                      issued by the  Borrower to the
Banks and the  postponement  of the  Borrower's  obligation  to                      make
repayments of principal with respect to the Loans; and 

	WHEREAS:  		the
Borrower and the Banks have agreed to amend the Facility  Agreement,  subject to the
terms                      and conditions set out in this Amending Agreement below, 

NOW, THEREFORE, IT IS
HEREBY AGREED AS FOLLOWS: 

	1.  	INTERPRETATION  

	 	1.1. 	In
this Agreement, including the Exhibits hereto: 

	 	1.1.1.	"Amending Agreement" 	–	means this Amending Agreement; 

	 	1.1.2.	 "Amendment Closing Date"  	–	 means September 29, 2008, provided the Banks are
satisfied that by September 25, 2008 ("the Completion
Date") all the conditions precedent referred to in
clause 3 below shall have been fulfilled in form and
substance reasonably satisfactory to the Banks and
that all of the documents, matters and things referred
to in clause 5 below shall have been performed on or
prior to the Completion Date; 

	 	1.1.3. 	"Restated Facility Agreement"  	–	 means the Facility Agreement, as amended and restated
by this Amending Agreement, the terms of which are set
out in Exhibit 1 hereto and initialled, for the
purposes of identification, by the parties hereto. 

	 	1.2. 	Terms
and expressions defined in the Facility Agreement shall have the same
                    meanings when used in this Amending Agreement and all provisions of
the Facility                     Agreement concerning matters of construction and
interpretation shall apply to                     this Amending Agreement. 

	 	1.3. 	All
references in this Amending Agreement to clauses and paragraphs of the
                    Facility Agreement are references to clauses and paragraphs in the
Facility                     Agreement in its form prior to this Amending Agreement. 

	2.  	AMENDMENT
AND RESTATEMENT OF THE FACILITY AGREEMENT

	 	
With
effect from the Amendment Closing Date and upon all activities to be performed on or
before the Completion Date being completed (or waived, the Banks being under no obligation
whatsoever to grant any waiver), the Facility Agreement (including the Schedules attached
thereto) shall automatically be amended and restated so that it shall be read and
construed for all purposes as set forth in Exhibit 1 hereto and, thereupon,
Exhibit 1 shall, for the avoidance of doubt, constitute the definitive and binding
version of the Facility Agreement as amended by this Amending Agreement. For the avoidance
of doubt, all Schedules to the Facility Agreement not amended, deleted or replaced under
this Amending Agreement shall remain unamended. 

	3.  	CONDITIONS
PRECEDENT

	 	3.1. 	This
Amending Agreement is subject to the conditions precedent that the Banks
                    shall have received, by no later than September 25, 2008, all of
the                     following documents, matters and things in form and substance
satisfactory to                     the Banks: 

	 	3.1.1. 	a
copy, certified a true copy by the external legal counsel of the Borrower, of
                    the updated Certificate of Incorporation, Memorandum and Articles of
Association                     of the Borrower;  

	 	3.1.2. 	copies
of resolutions of the Board of Directors of the Borrower, its audit
                    committee and shareholders, approving the execution, delivery and
performance of                     this Amending Agreement and all agreements and acts to
be performed by the                     Borrower as conditions precedent to, or otherwise
in connection with, this                     Amending Agreement, including: (a) the
issue of capital notes, and of the                     shares issuable upon conversion
thereof, of the Borrower to the Banks or their                     respective nominees as
contemplated in clause 5.4 below; (b) the                     execution of
amended and restated registration rights agreements, between the
                    Borrower and each of the Banks or their respective nominees as
referred to in                     clause 5.5 below; (c) the investment by TIC
of US$20,000,000 (twenty                     million United States Dollars) in cash in
capital notes of the Borrower as                     referred to in clause 5.2 below
and the issue of capital notes of the                     Borrower to TIC as contemplated
in clauses 5.1 and 5.2 below; (d) the                     execution by the
Borrower and TIC of the conversion agreement referred to in                     clause 5.6
below; and (e) the execution by TIC and the Borrower of the
                    “TIC Safety Net Undertaking” referred to in clause 5.7
below, as                     well as a resolution of the Board of Directors of the
Borrower authorising a                     named officer of the Borrower to execute,
deliver and perform this Agreement and                     such other agreements and
acts, and to give all notices and take all such other                     action required
to be given or taken by the Borrower under this Amending                     Agreement or
in connection therewith;  

	 	3.1.3. 	Amending
Agreement fee letters with each of the Banks, both executed as of the
                    date hereof by the Borrower;  

	 	3.1.4. 	an
opinion of Yigal Arnon & Co., Advocates, the Borrower’s external
                    legal counsel, addressed to the Banks;  

	 	3.1.4A. 	an
opinion of Gornitzky & Co., TIC’s external legal counsel, addressed
                    to the Banks;  

	 	3.1.5. 	an
opinion of reputable U.S. legal counsel, to the effect that, based upon their
                    review of United States federal or New York State statutes, rules and
                    regulations which, in their opinion, based on their experience, are
normally                     applicable to transactions of the types contemplated by this
Amending Agreement                     (“United States Applicable Laws”):
(a) subject to the                     effectiveness of an appropriate registration
statement to be filed by the                     Borrower, no consent, approval,
authorization, order, registration or                     qualification of or with any
United States federal or New York State court or                     governmental agency
or body is required for the sale in the United States                     (including
through the Nasdaq Stock Market) by the Banks of the ordinary shares
                    issuable upon conversion of the capital notes (“the New
Capital                     Notes”) to be issuedto the Banks (or their
respective nominees)                     pursuant to clause 5.4 below in the United
States (“New                     Shares”), provided that no opinion need
be expressed with respect to                     state securities or Blue Sky laws; (b) the
acquisition and indefinite                     holding of the New Capital Notes and/or
New Shares and the indefinite holding of                     all Capital Notes currently
held by the Banks and of any shares issuable upon                     conversion of any
such current capital notes by the Banks is permissible under                     United
States Applicable Laws, including under the Bank Holding Company Act of
                    1956, as amended; and (c) the acquisition and holding of the New
Capital                     Notes and/or New Shares will not be subject to the
notification and filing                     requirements under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as                     amended. Such opinion may be
based upon and subject to reasonable assumptions                     and limitations;  

	 	3.1.6. 	all
of the Borrower’s representations and warranties given pursuant to this
                    Amending Agreement shall be accurate in all material respects as of
the                     Amendment Closing Date, as if made on the Amendment Closing Date;  

	 	3.1.7. 	an
updated report of the Insurance Adviser;  

	 	3.1.8. 	the
Borrower shall have received and provided to the Banks, written
                    confirmations of the receipt of all corporate and third party
approvals,                     including Israeli and foreign Governmental Body, and
relevant stock exchange,                     approvals with respect to the transactions
contemplated by this Amending                     Agreement and all transactions referred
to herein including, for the removal of                     doubt, with respect to TIC,
such written confirmations to be in form and                     substance satisfactory
to the Banks;  

	 	3.1.9. 	without
derogating from clause 3.1.8 above, the consent of the Investment
                    Centre to the issue of the New Capital Notes, and of the New Shares
issuable                     upon conversion of the capital notes, to the Banks (or their
respective                     nominees) as contemplated under clause 5.4 below;  

	 	3.1.10. 	without
derogating from clause 3.1.8 above, the approval of the ILA under
                    the Existing ILA Leases to the issue of the New Capital Notes, and of
the New                     Shares issuable upon conversion of the capital notes, to the
Banks (or their                     respective nominees) as contemplated under clause 5.4
below;  

	 	3.1.11. 	an
updated Schedule 1.1.101 to the Facility Agreement, listing all Material
                    Contracts which are still in effect;  

	 	3.1.12. 	confirmation
that all Material Contracts shall be in full force and effect and
                    shall not have been breached by the Borrower (save for any breach
which:                     (a) is not material; and (b) cannot constitute
(including with the                     passage of time or the giving of notice) a cause
of action permitting                     termination of any such Material Contract or any
variation thereof adverse to                     the Borrower);  

	 	3.1.13. 	a
Supplement to the Debenture shall be executed relating to all shares of the
                    Borrower in Jazz, all equipment, Material Contracts, registered
Intellectual                     Property Assets and other assets and rights required
under the Debenture to be                     pledged by way of first-ranking fixed
charge in favour of the Banks, but not as                     yet specifically included
in the Debenture and such Supplement shall be                     perfected and duly
registered with the Registrar of Companies and the Registrar                     of
Pledges and the Borrower shall deliver all documents as referred to in
                    clause 3.2 of the Debenture (mutatis mutandis) and shall
sign all                     other documents and forms required for the purposes of the
aforegoing;  

	 	3.1.14. 	a
list (and copies (save with respect to Permitted Financial Indebtedness of
                    Jazz or its Subsidiaries), certified by the Borrower’s external
legal                     counsel) of all the trust deeds, indentures and prospectuses
relating to                     Permitted Subordinated Debt issued by the Borrower and
Permitted Financial                     Indebtedness of any Subsidiary of the Borrower
(including Jazz) and outstanding;  

	 	3.1.15. 	the
updated Schedules set forth in Annex A to this Amending
                    Agreement;  

	 	3.1.16. 	a
certificate of the Chief Financial Officer of the Borrower certifying that, as
                    of the last day of the calendar month prior to the Amendment Closing
Date, the                     Borrower has no Indebtedness, save for Permitted Financial
Indebtedness;  

	 	3.1.17. 	notices
of assignment by way of charge of all Material Contracts (other than
                    those referred to in clauses 1.1.36(c)(i) and (ii) of the
Facility                     Agreement) entered into since September 28, 2006; and  

	 	3.1.18. 	the
Borrower or a wholly-owned Subsidiary of the Borrower shall have acquired
                    all of the shares of Jazz, such that Jazz shall have become a
wholly-owned                     Subsidiary of the Borrower and the Borrower shall have:
(a) delivered a                     certificate of the Chief Executive Officer of
the Borrower certifying that the                     merger pursuant to which Jazz was
acquired has occurred and that all conditions                     precedent and other
actions required in order to effectuate said merger have                     been
fulfilled or taken, as the case may be; and (b) executed in favour of
                    the Banks and there shall have been registered, both in the USA and
in Israel, a                     first-ranking fixed pledge and charge over all shares to
be acquired by the                     Borrower in Jazz and the Banks shall have received
legal opinions, in form and                     substance satisfactory to the Banks,
addressed to them by the Borrower’s                     external Israeli and US
legal counsel regarding such acquisition and pledge.  

	 	3.2. 	In
the event that the aforegoing conditions precedent are not all fulfilled by
                    the Completion Date, or in the event that they shall have been
fulfilled, but                     the closing of this Amending Agreement shall not be
fully performed in                     accordance with clause 5 below by the
Completion Date, then, save for                     clauses 7, 8 and 9 below, this
Amending Agreement shall no longer be of any                     force or effect and the
Facility Agreement shall remain unaltered and in full                     force and
effect and, save as aforesaid, no party shall have any claim arising
                    out of or in connection with this Amending Agreement. The Banks
undertake that                     promptly following the fulfilment to the satisfaction
of the Banks of all the                     conditions precedent referred to in clause 3.1
above, the Banks shall                     confirm to the Borrower in writing that the
conditions precedent have been                     fulfilled and the conditions for
closing shall have been fulfilled as at the                     Completion Date. 

	4.  	REPRESENTATIONS
AND WARRANTIES

	 	4.1. 	The
Borrower acknowledges that the Banks have agreed to this Amending Agreement
                    in full reliance on all of the representations and warranties set
forth in the                     Restated Facility Agreement, all of which
representations and warranties are                     deemed to have been made on the
date hereof and repeated on the Amendment                     Closing Date. 

	 	4.2. 	For
the removal of doubt, the term “Finance Documents” when referred
                    to in the representations and warranties set out in clause 15 of
the                     Restated Facility Agreement, includes also references to this
Amending Agreement                     and to the Restated Facility Agreement. 

	5.  	AMENDMENT
CLOSING

	 	
Subject
to the fulfilment of the conditions precedent set out in clause 3 above, all of the
acts, including all of the following documents, matters and things, in form and substance
satisfactory to the Banks, set out in this clause 5 (or in the case of
clauses 5.3, 5.4, 5.5 and 5.9 below, in form and substance satisfactory to the Bank
entering into such amendment or agreement) below shall be performed, on or prior to the
Completion Date, each such act to be deemed to have been performed immediately after the
other. In the event that any of such acts are not so performed, all of the acts which were
performed shall be of no force and effect, and this Amending Agreement shall not have been
closed: 

	 	5.1. 	the
Borrower and TIC shall enter into a securities purchase agreement, relating
                    to the investment referred to in clause 5.2 below (for the
removal of                     doubt, in form and substance satisfactory to the Banks, as
aforesaid); 

	 	5.2. 	the
Borrower shall present to the Banks a certificate by the Auditors, mutatis mutandis,
in the form of Schedule 16.1.1(v)B to the Facility
                    Agreement, confirming that TIC has, on, or immediately prior to, the
Completion                     Date, invested in cash (new funds) an amount of at least US $20,000,000
                    (twenty million United States Dollars), in capital notes of the
Borrower (in                     form and substance satisfactory to the Banks)
convertible into 28,169,014                     (twenty-eight million one hundred and
sixty-nine thousand and fourteen) ordinary                     shares of the Borrower; 

	 	5.3. 	the
Borrower and each Bank (or each Bank’s nominees) shall enter into a
                    conversion agreement (for the removal of doubt, each in form and
substance                     satisfactory to such Bank, as aforesaid), relating to the
capital notes (and                     shares issuable thereunder) to be issued to such
Bank (or such Bank’s                     nominees) pursuant to clause 5.4
below, the conversions thereunder to be                     effected as of the Amendment
Closing Date; 

	 	5.4. 	the
Borrower shall issue to each of the Banks (or their respective nominees)
                    convertible capital notes (for the removal of doubt, in form and
substance                     satisfactory to the Banks, as aforesaid) against the
delivery by each such Bank                     to the Borrower of confirmation that the
amounts of:                     (a) US $85,000,000 (eighty-five million United
States Dollars) less                     the amount of US$220,390 (two hundred and twenty
thousand three hundred and                     ninety United States Dollars) constituting
interest accrued on such Bank’s                     Equipment Facility Loan from June 30,
2008 until the Amendment Closing Date (“the Accrued Unpaid Equipment
Facility Loan Interest”)                     of the principal of the Loans owed
to such Bank; and                     (b) US $15,220,390 (fifteen million two
hundred and twenty thousand                     three hundred and ninety United States
Dollars) constituting the amount of the                     principal of the Equipment
Facility Loan by such Bank plus the Accrued Unpaid                     Equipment Facility
Loan Interest, shall, as of the Amendment Closing Date, be                     converted
into such capital notes, which capital notes for each Bank are
                    convertible into 70,422,535 (seventy million four hundred and
twenty-two                     thousand five hundred and thirty-five) shares (subject to
adjustments to changes                     in capital structure, stock splits, etc.)
of the Borrower, such capital                     notes being fully convertible, at any
time, in whole or in part and freely                     transferable, at any time, in
whole or in part. For the avoidance of doubt, the                     conversion of the
Loans and the Equipment Facility Loans described in this                     clause 5.4
shall not take place, or be deemed to have taken place, prior to                     the
effectiveness of the Restated Facility Agreement on the Amendment Closing
                    Date pursuant to clause 2 above; 

	 	5.5. 	the
Borrower shall have entered into an amended and restated registration rights
                    agreement with each of the Banks with respect to all shares
underlying the                     current capital notes, warrants (including, in the
case of Bank Hapoalim, B.M.,                     warrants held by an Affiliate of Bank
Hapoalim B.M.) and the New Capital Notes                     of such Bank; 

	 	5.6. 	the
Borrower and TIC shall enter into a conversion agreement (for the removal of
                    doubt, in form and substance satisfactory to such Bank, as aforesaid)
pursuant                     to which TIC shall have converted the Borrower’s
Indebtedness to TIC of:                     (a) US $30,000,000 (thirty million
United States Dollars) of equipment                     facility loans pursuant to the
Equipment Facility Agreement dated                     September 10, 2007 between
the Borrower and TIC, and interest thereon                     accrued and not yet paid
(such interest to be added to principal owing to TIC                     under the
Equipment Facility Agreement and converted as aforesaid); and                     (b) US $20,000,000
(twenty million United States Dollars), comprising:                     (i) such
part of the principal of the convertible debentures of the                     Borrower
held by TIC that together with the accrued interest thereon as of the
                    date of the Debt Conversion aggregates US $20,000,000 (twenty
million                     United States Dollars); and (ii) such accrued interest,
into capital notes                     of the Borrower, in form and substance
satisfactory to the Banks, the Borrower                     and TIC which shall, in the
aggregate, be convertible into, a maximum of                     35,211,271 (thirty-five
million two hundred and eleven thousand two hundred and                     seventy-one)
ordinary shares of the Borrower. The conversion of the Indebtedness
                    referred to in paragraph (b) above shall be implemented by the
Borrower                     acquiring from TIC the relevant convertible debentures
(against issue of the                     capital notes referred to in paragraph (b)
above). The Borrower hereby                     undertakes to the Banks that such
convertible debentures as aforesaid shall at                     all times be held by the
Borrower or shall be cancelled by the Borrower and                     shall not be
reissued, such that the Borrower shall at no time have any
                    Indebtedness in respect of such convertible debentures; 

	 	5.7. 	TIC
shall have executed and delivered to the Banks a TIC Safety Net Undertaking
                    in favour of the Borrower (in the form of Schedule 1.1.139A to
the Restated                     Facility Agreement); 

	 	5.8. 	TIC
shall have entered into amendments to the Tag Along Agreements, dated
                    September 28, 2006, between TIC and each of the Banks so as to
include the                     New Capital Notes and the shares issuable upon conversion
thereof within the                     tag-along right granted to each Bank by TIC; 

	 	5.9. 	the
Borrower shall deliver to the Banks a capitalisation table reflecting all
                    shareholdings and holdings of securities (including capital notes,
warrants,                     options and convertible debentures) in the Borrower, as at
the Amendment Closing                     Date, certified as correct by the Chief
Financial Officer of the Borrower; and 

	 	5.10. 	the
Borrower shall pay all fees payable on or before the Amendment Closing Date
                    in accordance with the Amending Agreement fee letters referred to in
                    clause 3.1.3 above. 

	6.  	DISCLOSURE

	 	
The
Borrower hereby undertakes to make full, complete and correct disclosure as to the letter
of intent dated August 19, 2008 between the Borrower and the Banks and as to this
Amending Agreement to all relevant authorities (including the SEC) and in any disclosures
made or to be made by the Borrower pursuant to the Securities Act of 1933 or the
Securities Exchange Act of 1934 (all such disclosures not to contain any untrue statement
of material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading) 

	7.  	GOVERNING
LAW AND JURISDICTION  

	 	
This
Amending Agreement shall be governed by and shall be construed in accordance with Israeli
law and the competent court of Tel-Aviv-Jaffa shall have exclusive jurisdiction to hear
any matters, provided that the Banks shall be entitled to sue the Borrower in any
jurisdiction in which it has an office or holds assets. 

	8.  	GENERAL

	 	8.1. 	Clauses 26,
27 and 29 of the Facility Agreement shall apply to this                     Amending
Agreement, provided that clause 27.2.1 shall be amended as set
                    forth in Exhibit 1 hereto. Nothing in this Amending Agreement,
                    Exhibit 1 hereto, or the Restated Facility Agreement shall
constitute or be                     construed as a revocation, withdrawal or
cancellation of each waiver, approval                     or consent given to the
Borrower by the Banks prior to the date hereof, but only                     to the
extent as such waiver, approval or consent shall be set forth in Exhibit 2 to
be attached hereto on the Amendment Closing Date                     (provided that such
exhibit is in form and substance satisfactory to the Banks)                     and each
such waiver, approval or consent shall continue to be in effect
                    following the date hereof in accordance with the respective terms
thereof. 

	 	8.2. 	For
the avoidance of doubt, this Amending Agreement shall constitute a Finance
                    Document. 

IN WITNESS WHEREOF, the parties
have signed this Amending Agreement effective as of the date first mentioned above. 

the BORROWER: 

			 
			 
			 
			 
			 
	for	TOWER SEMICONDUCTOR LTD. 	 
	 
	By:	 	 
		 
	 
	 
	Title:	 	 
		 
	 

the BANKS: 

				
				
				
				
				
	for	BANK HAPOALIM B.M. 	for	BANK LEUMI LE-ISRAEL B.M. 
	 
	By:	 	By:	 
		
		

	 
	Title:	 	Title:	 
		
		

A N N E X  A  

List of Updated
Schedules to be

attached on the Amendment
Closing Date

		
		
		
		
		
	SCHEDULES 1.1.2(A)-(B)	Accounts of the Borrower
	 
	SCHEDULE 1.1.16	Business Plan (solo and consolidated)
	 
	SCHEDULE 1.1.79	List of Intellectual Property Assets
	 
	SCHEDULE 1.1.101	List of Material Contracts
	 
	SCHEDULE 1.1.105	List of Named Officers and Directors
	 
	SCHEDULE 1.1.115(C)	Description of certain exempt Financial Indebtedness of the Group
	 
	SCHEDULE 1.1.115(l)	Other Permitted Financial Indebtedness
	 
	SCHEDULE 1.1.139A	Form of TIC Safety Net Undertaking
	 
	SCHEDULE 1.1.147	List of Warrants issued by the Borrower to the Banks
	 
	SCHEDULE 15.4	Non-conflict
	 
	SCHEDULE 15.6	Consents required to be obtained from any person or Governmental Body
	 
	SCHEDULE 15.10	Exceptions to representations as to good and marketable title to assets and rights
	 
	SCHEDULE 15.13	Listed details and copies of all trust deeds, indentures and other instruments reflecting the terms and conditions of all existing Permitted Subordinated Debt and all Permitted Financial Indebtedness of the Subsidiaries of the Borrower existing as at the Amendment Closing Date

		
		
		
		
		
	SCHEDULE 15.17.1	Exceptions to compliance with law representation
	 
	SCHEDULE 15.17.2	Exceptions to Governmental Authorizations
	 
	SCHEDULE 15.18	Description of Proceedings pending against the Borrower or any Subsidiary
	 
	SCHEDULE 16.1.1(IV)	Form of report setting out a comparison of actual results with projected results of the Borrower
	 
	SCHEDULE 16.1.1(V)B	Form of certificate of the Auditors setting out the amounts invested in the relevant Quarter by way of Paid-in Equity, capital notes and Permitted Subordinated Debt
	 
	SCHEDULE 16.29	Financial Undertakings

- 2 -20-F

Exhibit 4.86

RESTATED
FACILITY AGREEMENT

Originally made on 18
January 2001

Between

TOWER SEMICONDUCTOR LTD.

as the Borrower

and

BANK HAPOALIM B.M.

BANK LEUMI LE–ISRAEL B.M.

as the Banks

 (as amended and
restated by the 

parties through September 29, 2008)

TABLE OF CONTENTS

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 CLAUSE NO.

 	
  

 	
 PAGE

 
	

 

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 1.

 	
 Interpretation

 	
 2

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 1.1.

 	
 Definitions

 	
 2

 	
  

 
	
  

 	
 1.2.

 	
 Clause Headings/Table of Contents

 	
 53

 	
  

 
	
  

 	
 1.3.

 	
 Interpretation

 	
 53

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2.

 	
 The Loans

 	
 56

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2.1.

 	
 Loans to the Borrower

 	
 56

 	
  

 
	
  

 	
 2.2.

 	
 Banks’ Obligations Several

 	
 57

 	
  

 
	
  

 	
 2.3.

 	
 Limits on Yen, Euro and Pound Sterling
 Credits–Intentionally Deleted

 	
 57

 	
  

 
	
  

 	
 2.4.

 	
 Banks’ Rights Separate

 	
 57

 	
  

 
	
  

 	
 2.5.

 	
 Separate Enforcement by Banks

 	
 57

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.

 	
 Purpose–Intentionally Deleted

 	
 57

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.1.

 	
 Purpose of Advances and Loans–Intentionally
 Deleted

 	
 57

 	
  

 
	
  

 	
 3.2.

 	
 Purpose of L/Cs–Intentionally Deleted

 	
 57

 	
  

 
	
  

 	
 3.3.

 	
 Purpose of Permitted Hedging Transactions–Intentionally
 Deleted

 	
 57

 	
  

 
	
  

 	
 3.4.

 	
 No Obligation to Monitor–Intentionally
 Deleted

 	
 58

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 4.

 	
 Conditions Precedent–Intentionally Deleted

 	
 58

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 5.

 	
 Availability Of Credits–Intentionally Deleted

 	
 58

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 5.1.

 	
 Availability–Intentionally Deleted

 	
 58

 	
  

 
	
  

 	
 5.2.

 	
 Advances–Intentionally Deleted

 	
 58

 	
  

 
	
  

 	
 5.3.

 	
 Letters of Credit–Intentionally Deleted

 	
 58

 	
  

 
	
  

 	
 5.4.

 	
 Hedging–Intentionally Deleted

 	
 58

 	
  

 
	
  

 	
 5.5.

 	
 Applications to All Banks–Intentionally
 Deleted

 	
 58

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 6.

 	
 Repayment

 	
 58

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 6.1.

 	
 Repayment of Loans

 	
 58

 	
  

 
	
  

 	
 6.2.

 	
 Payment of all other Sums Due on the Final
 Maturity Date

 	
 58

 	
  

 
	
  

 	
 6.3.

 	
 Repayment in US Dollars

 	
 59

 	
  

 
	
  

 	
 6.4.

 	
 Repayments to Payments Accounts

 	
 59

 	
  

 
	
  

 	
 6.5.

 	
 No Reborrowing

 	
 59

 	
  

 
	
  

 	
 6.6.

 	
 No Commitments

 	
 59

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 7.

 	
 Voluntary Prepayment

 	
 60

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 7.1.

 	
 Voluntary Prepayment

 	
 60

 	
  

 
	
  

 	
 7.2.

 	
 Notice of Prepayment

 	
 60

 	
  

 
	
  

 	
 7.3.

 	
 No Other Prepayments

 	
 60

 	
  

 
	
  

 	
 7.4.

 	
 No Reborrowing

 	
 60

 	
  

 
	
  

 	
 7.5.

 	
 Prepayment Commissions

 	
 60

 	
  

 
	
  

 	
 7.6.

 	
 Prepayment to Payments Account

 	
 61

 	
  

 
	
  

 	
 7.7.

 	
 Prepayments together with Interest and
 Other Sums Owed

 	
 61

 	
  

 
	
  

 	
 7.8.

 	
 Cancellation–Intentionally Deleted

 	
 61

 	
  

 
	
  

 	
 7.9.

 	
 Limits on Prepayment–Intentionally Deleted

 	
 61

 	
  

 
	
  

 	
 7.10.

 	
 Currency for Prepayment

 	
 61

 	
  

 
	
  

 	
 7.11.

 	
 Selection of Instalments for Voluntary
 Prepayment

 	
 61

 	
  

 
	
  

 	
 7.12.

 	
 Prepayment Pursuant to Clause 6.1.1–Intentionally
 Deleted

 	
 61

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.

 	
 Mandatory Prepayment

 	
 61

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.1.

 	
 Mandatory Prepayment

 	
 61

 	
  

 
	
  

 	
 8.2.

 	
 No Reborrowing of Mandatory Prepayment

 	
 62

 	
  

 
	
  

 	
 8.3.

 	
 Account of Mandatory Prepayment

 	
 63

 	
  

 
	
  

 	
 8.4.

 	
 Mandatory Prepayment together with Interest
 and Other Sums Owed

 	
 63

 	
  

 
	
  

 	
 8.5.

 	
 Currency for Mandatory Prepayment

 	
 63

 	
  

 
	
  

 	
 8.6.

 	
 Schedule for Mandatory Prepayment

 	
 63

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 9.

 	
 Interest

 	
 64

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 9.1.

 	
 Interest Rate

 	
 64

 	
  

 
	
  

 	
 9.2.

 	
 Accrual of Interest

 	
 64

 	
  

 
	
  

 	
 9.3.

 	
 Payment of Interest

 	
 64

 	
  

 
	
  

 	
 9.4.

 	
 Certain Compensatory Payments

 	
 64

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 10.

 	
 Substitute Interest Rates

 	
 67

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 11.

 	
 Commissions, Fees And Expenses

 	
 68

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 11.1.

 	
 Front End Fee–Intentionally Deleted

 	
 68

 	
  

 
	
  

 	
 11.2.

 	
 Commitment Commission–Intentionally
 Deleted

 	
 68

 	
  

 
	
  

 	
 11.3.

 	
 Legal and Other Costs

 	
 68

 	
  

 
	
  

 	
 11.4.

 	
 Consultants

 	
 69

 	
  

 
	
  

 	
 11.5.

 	
 Stamp Duties and Like Taxes

 	
 69

 	
  

 
	
  

 	
 11.6.

 	
 Other Commissions, Fees and Expenses

 	
 69

 	
  

 
	
  

 	
 11.7.

 	
 Currency for Payment

 	
 69

 	
  

 
	
  

 	
 11.8.

 	
 VAT

 	
 70

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 12.

 	
 Taxes

 	
 70

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 12.1.

 	
 Taxes

 	
 70

 	
  

 
	
  

 	
 12.2.

 	
 Notification of Taxes

 	
 70

 	
  

 
	
  

 	
 12.3.

 	
 Payment and Submission of Receipt

 	
 70

 	
  

 
	
  

 	
 12.4.

 	
 Tax Saving

 	
 71

 	
  

 
	
  

 	
 12.5.

 	
 VAT

 	
 71

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 13.

 	
 Increased Costs

 	
 72

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 13.1.

 	
 Increased Costs

 	
 72

 	
  

 
	
  

 	
 13.2.

 	
 Exceptions

 	
 73

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 14.

 	
 Illegality

 	
 73

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 15.

 	
 Representations And Warranties

 	
 74

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 15.1.

 	
 General

 	
 74

 	
  

 
	
  

 	
 15.2.

 	
 Status

 	
 75

 	
  

 
	
  

 	
 15.3.

 	
 Legal Validity

 	
 75

 	
  

 
	
  

 	
 15.4.

 	
 Non-Conflict

 	
 75

 	
  

 
	
  

 	
 15.5.

 	
 No Default

 	
 76

 	
  

 
	
  

 	
 15.6.

 	
 Consents

 	
 76

 	
  

 
	
  

 	
 15.7.

 	
 Share Capital

 	
 76

 	
  

 
	
  

 	
 15.8.

 	
 SEC Documents; Financial Statements

 	
 77

 	
  

 
	
  

 	
 15.9.

 	
 Business Plan

 	
 78

 	
  

 
	
  

 	
 15.10.

 	
 Title to Properties; Encumbrances

 	
 78

 	
  

 
	
  

 	
 15.11.

 	
 Condition and Sufficiency of Assets–Intentionally
 Deleted

 	
 78

 	
  

 
	
  

 	
 15.12.

 	
 Customers and Suppliers–Intentionally
 Deleted

 	
 78

 	
  

 
	
  

 	
 15.13.

 	
 Permitted Financial Indebtedness

 	
 78

 	
  

 
	
  

 	
 15.14.

 	
 Financial Indebtedness–Intentionally
 Deleted

 	
 78

 	
  

 
	
  

 	
 15.15.

 	
 Taxes–Intentionally Deleted

 	
 79

 	
  

 
	
  

 	
 15.16.

 	
 No Material Adverse Change–Intentionally
 Deleted

 	
 79

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 15.17.

 	
 Compliance with Laws; Governmental
 Authorisations

 	
 79

 	
  

 
	
  

 	
 15.18.

 	
 Legal Proceedings; Orders

 	
 80

 	
  

 
	
  

 	
 15.19.

 	
 Absence of Certain Changes and Events–Intentionally
 Deleted

 	
 80

 	
  

 
	
  

 	
 15.20.

 	
 Contracts; No Defaults–Intentionally
 Deleted

 	
 80

 	
  

 
	
  

 	
 15.21.

 	
 Insurance

 	
 80

 	
  

 
	
  

 	
 15.22.

 	
 Environmental Matters–Intentionally
 Deleted

 	
 80

 	
  

 
	
  

 	
 15.23.

 	
 Intellectual Property–Intentionally
 Deleted

 	
 81

 	
  

 
	
  

 	
 15.24.

 	
 Grants, Incentives and Subsidies–Intentionally
 Deleted

 	
 81

 	
  

 
	
  

 	
 15.25.

 	
 Disclosure–Intentionally Deleted

 	
 81

 	
  

 
	
  

 	
 15.26.

 	
 Relationships with Related Persons–Intentionally
 Deleted

 	
 81

 	
  

 
	
  

 	
 15.27.

 	
 Documents–Intentionally Deleted

 	
 81

 	
  

 
	
  

 	
 15.28.

 	
 Ranking of Securities

 	
 81

 	
  

 
	
  

 	
 15.29.

 	
 Shareholdings–Intentionally Deleted

 	
 81

 	
  

 
	
  

 	
 15.30.

 	
 Repetition

 	
 81

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.

 	
 Undertakings

 	
 81

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.1.

 	
 Financial Information

 	
 82

 	
  

 
	
  

 	
 16.2.

 	
 Accounts and Auditors

 	
 87

 	
  

 
	
  

 	
 16.3.

 	
 Purpose–Intentionally Deleted

 	
 88

 	
  

 
	
  

 	
 16.4.

 	
 Negative Pledge

 	
 88

 	
  

 
	
  

 	
 16.5.

 	
 No Financial Indebtedness

 	
 88

 	
  

 
	
  

 	
 16.6.

 	
 Pari Passu Ranking

 	
 88

 	
  

 
	
  

 	
 16.7.

 	
 Distributions

 	
 88

 	
  

 
	
  

 	
 16.8.

 	
 Intellectual Property Assets

 	
 89

 	
  

 
	
  

 	
 16.9.

 	
 Environmental Matters

 	
 90

 	
  

 
	
  

 	
 16.10.

 	
 Insurance

 	
 90

 	
  

 
	
  

 	
 16.11.

 	
 Mergers and Amalgamations

 	
 93

 	
  

 
	
  

 	
 16.12.

 	
 Consents

 	
 94

 	
  

 
	
  

 	
 16.13.

 	
 Material Contracts

 	
 94

 	
  

 
	
  

 	
 16.14.

 	
 Auditors

 	
 94

 	
  

 
	
  

 	
 16.15.

 	
 Acquisitions

 	
 95

 	
  

 
	
  

 	
 16.16.

 	
 Access

 	
 95

 	
  

 
	
  

 	
 16.17.

 	
 Capital Expenditure–Intentionally Deleted

 	
 96

 	
  

 
	
  

 	
 16.18.

 	
 Organisational Documents

 	
 96

 	
  

 
	
  

 	
 16.19.

 	
 Project–Intentionally Deleted

 	
 96

 	
  

 
	
  

 	
 16.20.

 	
 Business Plan–Intentionally Deleted

 	
 96

 	
  

 
	
  

 	
 16.21.

 	
 Hedging

 	
 96

 	
  

 
	
  

 	
 16.22.

 	
 Transactions with Related Persons

 	
 97

 	
  

 
	
  

 	
 16.23.

 	
 Sale and Leaseback

 	
 97

 	
  

 
	
  

 	
 16.24.

 	
 Disposals

 	
 97

 	
  

 
	
  

 	
 16.25.

 	
 Notification of Default

 	
 98

 	
  

 
	
  

 	
 16.26.

 	
 Compliance with Laws

 	
 98

 	
  

 
	
  

 	
 16.27.

 	
 Investments in the Borrower

 	
 98

 	
  

 
	
  

 	
 16.28.

 	
 Taxation–Intentionally Deleted

 	
 99

 	
  

 
	
  

 	
 16.29.

 	
 Financial Undertakings

 	
 100

 	
  

 
	
  

 	
 16.30.

 	
 Change of Business

 	
 101

 	
  

 
	
  

 	
 16.31.

 	
 Bank Accounts

 	
 101

 	
  

 
	
  

 	
 16.32.

 	
 Prohibition on Change of Ownership

 	
 103

 	
  

 
	
  

 	
 16.33.

 	
 Utilisation of Excess Cash Flow

 	
 104

 	
  

 
	
  

 	
 16.34.

 	
 Safety Net Undertaking

 	
 104

 	
  

 
	
  

 	
 16.35.

 	
 Outside Investment

 	
 104

 	
  

 
	
  

 	
 16.36.

 	
 Interest Payment Loans; Additional
 Investment Undertakings–Intentionally Deleted

 	
 105

 	
  

 
	
  

 	
 16.37.

 	
 Undertakings with Respect to Jazz

 	
 106

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 17.

 	
 Default

 	
 106

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 17.1.

 	
 Events of Default

 	
 106

 	
  

 
	
  

 	
 17.2.

 	
 Non-Payment

 	
 107

 	
  

 
	
  

 	
 17.3.

 	
 Breach of Obligations

 	
 107

 	
  

 
	
  

 	
 17.4.

 	
 Misrepresentation/Breach of Warranties

 	
 107

 	
  

 
	
  

 	
 17.5.

 	
 Invalidity

 	
 107

 	
  

 
	
  

 	
 17.6.

 	
 Cross Acceleration

 	
 108

 	
  

 
	
  

 	
 17.7.

 	
 Insolvency and Rescheduling

 	
 109

 	
  

 
	
  

 	
 17.8.

 	
 Winding-Up

 	
 110

 	
  

 
	
  

 	
 17.9.

 	
 Execution or Other Process

 	
 110

 	
  

 
	
  

 	
 17.10.

 	
 Material Contracts

 	
 110

 	
  

 
	
  

 	
 17.11.

 	
 Proceedings

 	
 110

 	
  

 
	
  

 	
 17.12.

 	
 Consents

 	
 111

 	
  

 
	
  

 	
 17.13.

 	
 Material Adverse Effect

 	
 111

 	
  

 
	
  

 	
 17.14.

 	
 Fab 2

 	
 111

 	
  

 
	
  

 	
 17.15.

 	
 Completion of Fab 2–Intentionally
 Deleted

 	
 111

 	
  

 
	
  

 	
 17.16.

 	
 Construction Contract–Intentionally
 Deleted

 	
 111

 	
  

 
	
  

 	
 17.17.

 	
 Government Action

 	
 112

 	
  

 
	
  

 	
 17.18.

 	
 Illegality

 	
 112

 	
  

 
	
  

 	
 17.19.

 	
 Investment Centre Fab 2 Grants

 	
 112

 	
  

 
	
  

 	
 17.20.

 	
 Default by the Borrower under any
 Qualifying Wafer Prepayment Contract–Intentionally Deleted

 	
 112

 	
  

 
	
  

 	
 17.20A.

 	
 Prohibited Payment under the Permitted
 Subordinated Debt

 	
 112

 	
  

 
	
  

 	
 17.20B.

 	
 Outside Investment Undertaking

 	
 112

 	
  

 
	
  

 	
 17.20C.

 	
 TIC Safety Net Undertaking

 	
 113

 	
  

 
	
  

 	
 17.21.

 	
 Acceleration

 	
 113

 	
  

 
	
  

 	
 17.22.

 	
 Loans Due on Demand

 	
 115

 	
  

 
	
  

 	
 17.23.

 	
 Collection

 	
 115

 	
  

 
	
  

 	
 17.24.

 	
 Indemnity

 	
 115

 	
  

 
	
  

 	
 17.25.

 	
 Termination of Commitment–Intentionally
 Deleted

 	
 115

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 18.

 	
 Default Interest

 	
 116

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 18.1.

 	
 Default Rate Periods

 	
 116

 	
  

 
	
  

 	
 18.2.

 	
 Default Interest

 	
 116

 	
  

 
	
  

 	
 18.3.

 	
 Payment of Default Interest

 	
 116

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 19.

 	
 Broken Funding Indemnity

 	
 116

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 19.1.

 	
 Broken Funding

 	
 116

 	
  

 
	
  

 	
 19.2.

 	
 Failure to Draw Advance–Intentionally
 Deleted

 	
 117

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 20.

 	
 Payments

 	
 117

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 20.1.

 	
 Payments by Borrower

 	
 117

 	
  

 
	
  

 	
 20.2.

 	
 Payments by Banks to Borrower–Intentionally
 Deleted

 	
 117

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 21.

 	
 Set-Off

 	
 118

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 21.1.

 	
 Conditions for Set-Off

 	
 118

 	
  

 
	
  

 	
 21.2.

 	
 Debit or Credit of Accounts

 	
 118

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 22.

 	
 Application Of Payments

 	
 119

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 22.1.

 	
 Insufficient Payment

 	
 119

 	
  

 
	
  

 	
 22.2.

 	
 Currency Conversion

 	
 119

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 23.

 	
 Calculations And Evidence Of Debt

 	
 119

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 24.

 	
 Sharing Between Banks

 	
 120

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 25.

 	
 Assignments And Transfers

 	
 120

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 26.

 	
 Remedies And Waivers

 	
 121

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 27.

 	
 Notices

 	
 122

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 27.1.

 	
 Notices in Writing

 	
 122

 	
  

 
	
  

 	
 27.2.

 	
 Addresses

 	
 122

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 28.

 	
 Amendments

 	
 123

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 29.

 	
 Counterparts

 	
 123

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 30.

 	
 Governing Law And Jurisdiction

 	
 123

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 31.

 	
 Entire Agreement

 	
 123

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 32.

 	
 Confidentiality

 	
 123

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 33.

 	
 Banks Representation

 	
 124

 	
  

 

	
  

 	
  

 	
  

 
	
 SCHEDULES

 	
  

 	
 DESCRIPTION

 
	

 

 	
  

 	

 

 
	
  

 	
  

 	
  

 
	
 Schedules 1.1.2(A)-(B)

 	
  

 	
 Accounts of the Borrower

 
	
  

 	
  

 	
  

 
	
 Schedule 1.1.16

 	
  

 	
 Business Plan

 
	
  

 	
  

 	
  

 
	
 Schedule 1.1.36

 	
  

 	
 Form of
 Debenture

 
	
  

 	
  

 	
  

 
	
 Schedule 1.1.53

 	
  

 	
 Floating Charge securing Grants made by the Investment Centre in
 respect of Fab 1

 
	
  

 	
  

 	
  

 
	
 Schedule 1.1.64

 	
  

 	
 Deleted

 
	
  

 	
  

 	
  

 
	
 Schedule 1.1.79

 	
  

 	
 List of Intellectual Property Assets

 
	
  

 	
  

 	
  

 
	
 Schedule 1.1.101

 	
  

 	
 List of Material Contracts

 
	
  

 	
  

 	
  

 
	
 Schedule 1.1.104

 	
  

 	
 Deleted

 
	
  

 	
  

 	
  

 
	
 Schedule 1.1.105

 	
  

 	
 List of Named Directors and Officers

 
	
  

 	
  

 	
  

 
	
 Schedule 1.1.114

 	
  

 	
 Details of
 equipment and other assets subject to certain Permitted Encumbrances

 
	
  

 	
  

 	
  

 
	
 Schedule 1.1.115(c)

 	
  

 	
 Description
 of certain exempt Financial Indebtedness of the Group 

 
	
  

 	
  

 	
  

 
	
 Schedule 1.1.115(l)

 	
  

 	
 Other
 Permitted Financial Indebtedness

 
	
  

 	
  

 	
  

 
	
 Schedule 1.1.118

 	
  

 	
 June 6, 2007
 Consent 

 
	
  

 	
  

 	
  

 
	
 Schedule 1.1.139A

 	
  

 	
 Form of TIC Safety
 Net Undertaking

 
	
  

 	
  

 	
  

 
	
 Schedule 1.1.147

 	
  

 	
 List of Warrants issued by the Borrower to the Banks 

 
	
  

 	
  

 	
  

 
	
 Schedule 15.2

 	
  

 	
 Deleted

 
	
  

 	
  

 	
  

 
	
 Schedule 15.4

 	
  

 	
 Non-conflict

 
	
  

 	
  

 	
  

 
	
 Schedule 15.6

 	
  

 	
 Consents
 required to be obtained from any person or Governmental Body

 
	
  

 	
  

 	
  

 
	
 Schedule 15.7

 	
  

 	
 Deleted

 
	
  

 	
  

 	
  

 
	
 Schedule 15.10

 	
  

 	
 Exceptions to representations as to good and marketable title to
 assets and rights

 
	
  

 	
  

 	
  

 
	
 Schedule 15.11

 	
  

 	
 Deleted

 
	
  

 	
  

 	
  

 
	
 Schedule 15.12

 	
  

 	
 Deleted

 
	
  

 	
  

 	
  

 
	
 Schedule 15.13

 	
  

 	
 Listed details and copies of all trust deeds, indentures and other
 instruments reflecting the terms and conditions of all existing Permitted
 Subordinated Debt and all Permitted Financial
 Indebtedness of the Subsidiaries of the Borrower existing as at the Amendment
 Closing Date

 
	
  

 	
  

 	
  

 
	
 Schedule 15.15.1

 	
  

 	
 Deleted

 
	
  

 	
  

 	
  

 
	
 Schedule 15.17

 	
  

 	
 Exceptions to compliance with law representation

 

	
  

 	
  

 	
  

 
	
 Schedule 15.18

 	
  

 	
 Description of Proceedings pending against the Borrower or any
 Subsidiary

 
	
  

 	
  

 	
  

 
	
 Schedule 15.19

 	
  

 	
 Deleted

 
	
  

 	
  

 	
  

 
	
 Schedule 15.20

 	
  

 	
 Deleted

 
	
  

 	
  

 	
  

 
	
 Schedule 15.22

 	
  

 	
 Deleted

 
	
  

 	
  

 	
  

 
	
 Schedule 15.23.2

 	
  

 	
 Deleted

 
	
  

 	
  

 	
  

 
	
 Schedule 15.23.3

 	
  

 	
 Deleted

 
	
  

 	
  

 	
  

 
	
 Schedule 15.23.5

 	
  

 	
 Deleted

 
	
  

 	
  

 	
  

 
	
 Schedule 15.24

 	
  

 	
 Deleted

 
	
  

 	
  

 	
  

 
	
 Schedule 15.26

 	
  

 	
 Deleted

 
	
  

 	
  

 	
  

 
	
 Schedule 15.29

 	
  

 	
 Deleted

 
	
  

 	
  

 	
  

 
	
 Schedule 16.1.1(iv)

 	
  

 	
 Form of
 report setting out a comparison of actual results with projected results of
 the Borrower

 
	
  

 	
  

 	
  

 
	
 Schedule 16.1.1(v)A

 	
  

 	
 Deleted

 
	
  

 	
  

 	
  

 
	
 Schedule 16.1.1(v)B

 	
  

 	
 Form of
 certificate of the Auditors setting out the amounts invested in the relevant
 Quarter by way of Paid-in Equity, capital notes and Permitted Subordinated
 Debt

 
	
  

 	
  

 	
  

 
	
 Schedule 16.1.1(v)C

 	
  

 	
 Form of
 certificate of the Auditors setting out amounts received under the Investment
 Centre Fab 2 Grants in the relevant Quarter

 
	
  

 	
  

 	
  

 
	
 Schedule 16.1.1(v)D

 	
  

 	
 Form of
 certificate of the Auditors confirming that there has been no breach of the
 financial covenants

 
	
  

 	
  

 	
  

 
	
 Schedule 16.10.6(a)

 	
  

 	
 Form of endorsement clause to be inserted into each Insurance Policy
 taken out by the Borrower

 
	
  

 	
  

 	
  

 
	
 Schedule 16.10.6(d)

 	
  

 	
 Types of Insurance Policies taken out by the Borrower which need not
 be assigned by way of charge 

 
	
  

 	
  

 	
  

 
	
 Schedule 16.27

 	
  

 	
 Deleted

 
	
  

 	
  

 	
  

 
	
 Schedule 16.29

 	
  

 	
 Financial Undertakings 

 
	
  

 	
  

 	
  

 
	
 Schedule 16.35.1

 	
  

 	
 Form of Outside Investment Undertaking

 

THIS AGREEMENT was made on the 18th day of January, 2001 and amended and restated
by the parties through September 29, 2008,

BETWEEN:

	
  

 	
  

 
	
 (1)

 	
 TOWER SEMICONDUCTOR LTD., a company incorporated under the laws of Israel (company no.
 52–004199–7), whose registered office is at P.O. Box 619, Industrial Area,
 Migdal Haemek 23105, Israel

 
	
  

 	
  

 
	
  

 	
 (“the Borrower”);

 
	
  

 	
  

 
	
 AND

 	
  

 
	
  

 	
  

 
	
  (2)

 	
 BANK HAPOALIM B.M. and BANK LEUMI LE–ISRAEL B.M.

 
	
  

 	
  

 
	
 IT IS HEREBY AGREED AS FOLLOWS:

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 1.

 	
 INTERPRETATION

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 1.1.

 	
 Definitions

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 In this
 Restated Facility Agreement (“this
 Agreement”), the following terms have the meanings given to them
 in this clause 1.1:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.1.

 	
  “Accounting Period”

 	
 -

 	
 means any
 period of one Quarter or a Fiscal Year for which Accounts are prepared;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.2.

 	
  “Accounts”

 	
 -

 	
 means, at
 any time and from time to time:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 the audited
 non-consolidated annual financial statements of the Borrower (including, for
 the removal of doubt: (i) a profit and loss statement which reflects the operating
 profit or loss; (ii) cash flow statement; (iii) sources and uses statement;
 and (iv) a balance sheet reflecting current assets, current liabilities and
 fixed assets);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (b)

 	
 the reviewed
 non-consolidated quarterly financial statements of the Borrower (including,
 for the removal of doubt: (i) a profit and loss statement which reflects the
 operating profit or loss; (ii) cash flow statement; (iii) sources and uses
 statement; and (iv) a balance sheet reflecting current assets, current
 liabilities and fixed assets);

 

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 (c)

 	
 the audited
 consolidated annual financial statements of the Borrower; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (d)

 	
 the reviewed
 consolidated quarterly financial statements of the Borrower,

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (e)

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 all of the
 Accounts referred to in paragraphs (a) and (c) (inclusive) above to be in the
 format set out in Schedule 1.1.2(A)
 hereto (being the December 31, 2007 financial statements of the Borrower) and
 all of the Accounts referred to in paragraphs (b) and (d) above to be in the
 format set out in Schedule 1.1.2(B)
 hereto (being the June 30, 2008 financial statements of the Borrower).

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 For the
 removal of doubt, should any of the statements referred to in paragraphs (a)
 and (b) of this clause 1.1.2 above not be required by GAAP, any reference in
 this Agreement to the delivery of such Accounts shall also include the
 supplemental delivery of such statements;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.3.

 	
  “Acquisition”

 	
 -

 	
 means the
 acquisition, directly or indirectly (whether by one transaction or by a
 series of related transactions) of any interest whatsoever in the share
 capital (or equivalent) or the business or undertaking or assets constituting
 a separate business or undertaking of any company or other person;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.3A.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.3B.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.3C.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.3D.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.4.

 	
 [Intentionally Deleted]

 

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 1.1.5.

 	
  “Alliance”

 	
 -

 	
 means
 Alliance Semiconductor Corporation, a corporation incorporated under the laws
 of Delaware, USA;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.6.

 	
  “Amendment

 Closing Date”

 	
 
-

 	
 
means
 September 29, 2008;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.7.

 	
  “Auditors”

 	
 -

 	
 means
 Brightman–Almagor & Co., or another leading firm of independent Israeli
 auditors affiliated to one of the big four internationally recognised firms
 of auditors;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.8.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.9.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.9A.

 	
  “Bank Adviser”

 	
 -

 	
 shall bear
 the meaning assigned to such term in clause 16.16.3 below;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.10.

 	
  “Bank Hapoalim”

 	
 -

 	
 means Bank
 Hapoalim B.M.;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.11.

 	
  “Bank Leumi”

 	
 -

 	
 means Bank
 Leumi Le–Israel B.M.;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.12.

 	
  “Bank” or “Banks”

 	
 -

 	
 means Bank
 Hapoalim, Bank Leumi, either of such Banks and any other bank or financial
 institution, if any, which becomes a party to this Agreement pursuant to
 clause 25.3 below;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.13.

 	
  “Borrower”

 	
 -

 	
 means Tower
 Semiconductor Ltd.;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.13A.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.14.

 	
  “Business”

 	
 -

 	
 means the
 business of an independent “foundry” manufacturer of semiconductor integrated
 circuits and a provider of related design services, as well as other
 activities ancillary to such business;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.15.

 	
  “Business Day”

 	
 -

 	
 means:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 with respect
 to payment, purchase or any other transaction in, or determination of LIBOR
 for, or performance of, calculations in, sums denominated in US Dollars, a
 day on which: (i) the Banks are open for trading in Israel in US Dollars; and
 (ii) banks generally are open for trading in US Dollars in London and New
 York; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (b)

 	
 [Intentionally Deleted]

 

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 (c)

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (d)

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (e)

 	
 in all other
 cases, as a reference to a day (other than Saturday) on which banks generally
 are open for business in Israel;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.16.

 	
  “Business Plan”

 	
 -

 	
 means the
 business plan of the Borrower which has been approved by the Board of
 Directors of the Borrower on September 16, 2008 and provided to the Banks, as
 such business plan may be updated from time to time, a copy of which business
 plan is attached hereto as Schedule 1.1.16;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.17.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.18.

 	
  “a Change of Ownership”

 	
 -

 	
 shall occur
 in the event that at any time during the period commencing on the Amendment
 Closing Date and ending prior to the date that all amounts payable by the
 Borrower under the Finance Documents shall have been paid in full, any of the
 following occurs:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 the Lead
 Investors shall, directly or indirectly through Subsidiaries, cease to
 nominate, in aggregate, more than 50% (fifty percent) of the Board of
 Directors of the Borrower (excluding, for this purpose, external directors (Dahaz), 1 (one) independent director
 under Nasdaq Marketplace Rules, officers of the Borrower who are ex-officio
 directors of the Borrower and any directors appointed by a purchaser of the
 Banks’ shares), it being recorded that the chief executive officer (or one of
 the co-chief executive officers, as the case may be) may at all times be a
 director; or

 

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 (b)

 	
 TIC shall
 cease to hold (directly or indirectly through Subsidiaries) in the aggregate
 at least 48,164,483 (forty-eight million one hundred and sixty-four thousand
 four hundred and eighty-three) ordinary shares (and/or capital notes
 convertible into such ordinary shares), which represents on the Amendment
 Closing Date 10% (ten percent) of the issued and outstanding ordinary share
 capital of the Borrower (assuming conversion, of all capital notes of the
 Borrower).

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 For the
 purposes of this clause 1.1.18, adjustments shall be made to the number of
 shares referred to in paragraph (b) above to reflect all stock dividends or
 distributions (including issues of bonus shares), subdivisions of shares,
 combinations of shares into a smaller number of shares, reclassification of
 shares or other change in the share capital of the Borrower, such that each
 number of shares specified as aforesaid shall equal that number of shares
 which a shareholder holding only the relevant number of shares of the
 Borrower specified in the aforesaid paragraph (b) would have held after any
 such stock dividends or distributions (including issues of bonus shares),
 subdivisions of shares, combinations of shares into a smaller number of
 shares, reclassification of shares or other change in the share capital of
 the Borrower, assuming that such shareholder had exercised all rights issued
 to it pursuant to any of the aforegoing and had not, save by way of exercise
 of such rights, sold or acquired any shares of the Borrower. For the
 avoidance of doubt, this paragraph shall not apply to rights offerings
 conducted by the Borrower not in connection with any of the aforegoing;

 

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 1.1.19.

 	
  “Charged Accounts”

 	
 -

 	
 means:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 (i)

 	
 account
 number 545454__ at Bank
 Hapoalim, Migdal Haemek Branch No. 728, in the name of the Borrower, into
 which account: (1) all repayments and prepayments of Loans to Bank Hapoalim
 will be made; (2) all other payments to Bank Hapoalim under this Agreement
 are to be made pursuant to this Agreement; (3) gross revenues from the
 Project (or other sources of revenue) are to be paid pursuant to this
 Agreement; (4) Grants from the Investment Centre shall be paid or transferred
 pursuant to this Agreement; (5) subject to (b) below, the proceeds of all
 Paid-in Equity and Permitted Subordinated Debt are to be paid pursuant to
 this Agreement; and (6) proceeds of insurance, nationalisation, expropriation, or requisition for
 title or use, all amounts (including liquidated damages) paid to the Borrower
 arising out of or in connection with any Contracts entered into by the
 Borrower and all proceeds of any sale, transfer or licence of assets
 (including Intellectual Property Assets) used in connection with the Project,
 are to be paid pursuant to this Agreement (“the
 Hapoalim Project Account”); and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (ii)

 	
 account number13030062 at Bank Leumi, Haifa Branch, in
 the name of the Borrower into which account: (1) all repayments and
 prepayments of Loans to Bank Leumi will be made; (2) all other payments to
 Bank Leumi under this Agreement are to be made pursuant to this Agreement;
 (3) gross revenues from the Project (or other sources of revenue) are to be
 paid pursuant to this Agreement; (4) Grants from the Investment Centre shall
 be paid or transferred pursuant to this Agreement; (5) subject to (b) below,
 the proceeds of all Paid-in Equity and Permitted Subordinated Debt are to be
 paid pursuant to this Agreement; and (6) proceeds of insurance, nationalisation, expropriation, or requisition for title or use, all amounts
 (including liquidated damages) paid to the Borrower arising out of or in
 connection with any Contracts entered into by the Borrower and all proceeds
 of any sale, transfer or licence of assets (including Intellectual Property
 Assets) used in connection with the Project, are to be paid pursuant to this
 Agreement (“the BLL Project Account”)
 (the Hapoalim Project Account and the BLL Project Account shall mean the “Project Accounts”) and the Borrower
 shall be entitled to determine the allocation as between each of the Project
 Accounts of the funds described in each of (i) and (ii)(3)–(6) above;

 

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 (b)

 	
 an account
 or accounts to be opened at a branch or Subsidiary of Bank Leumi and/or Bank
 Hapoalim outside of Israel into which (if the Borrower so elects by written
 notice to the Banks), any Paid-in Equity or amount on account of Permitted
 Subordinated Debt received by the Borrower from non-Israeli investors shall
 be deposited, provided, for the removal of doubt, that such account or
 accounts are first duly pledged in favour of the Banks by way of a
 first-ranking fixed pledge and charge, in a manner satisfactory to the Banks,
 as security for the Borrower’s obligations under the Finance Documents (such
 account or accounts, “the Foreign Paid-in
 Equity Account”);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (c)

 	
 in the event
 that there shall be a New Bank (as referred to in clause 20.1 below), an
 account to be opened at Bank Leumi or Bank Hapoalim for the purposes of
 payments to and from such New Bank pursuant to this Agreement, all as
 referred to in clause 20.1 below; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (d)

 	
 accounts
 opened and/or to be opened at Bank Hapoalim and Bank Leumi in accordance with
 clause 1.1.118(e) below (“the Reserve
 Accounts”);

 

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 1.1.20.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.21.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.22.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.23.

 	
  “Consent”

 	
 -

 	
 means any
 approval, consent, permit, ratification, waiver, licence, exemption, filing,
 registration or authorisation (including any Governmental Authorisation);

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.24.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.25.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.26.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.27.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.28.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.29.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.30.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.31.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.32.

 	
  “Contracts”

 	
 -

 	
 means any
 agreement, contract, obligation, promise or undertaking, whether oral or
 written, that is legally binding;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.33.

 	
  “Contribution”

 	
 -

 	
 means, in
 relation to a Bank at any time, that amount of the Total Outstandings at the
 time that is owing to such Bank;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.34.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.35.

 	
  “Currency Hedging

 Transaction”

 	
 
-

 	
 
includes any
 foreign exchange transaction, currency swap transaction, cross currency rate
 swap transaction, currency option, collar transaction or other similar
 transaction (including any option with respect thereto and any combination in
 respect thereof);

 

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 1.1.36.

 	
  “Debenture”

 	
 -

 	
 means the
 debenture in the form of Schedule 1.1.36
 hereto between the Borrower and the Banks, pursuant to which, subject to the
 terms and conditions thereof, the Borrower shall grant to the Banks:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 a
 first-ranking floating charge over all of the Borrower’s undertaking, rights,
 assets and property whatsoever and wheresoever located, both present and
 future, not otherwise effectively pledged, charged or assigned as a
 first-ranking fixed pledge and charge;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (b)

 	
 a
 first-ranking fixed pledge and charge over, inter
 alia, the following assets, from time to time, of the Borrower:
 all immovable property, all rights of the Borrower under development
 agreements and/or lease agreements with the ILA relating to immovable
 property; all machinery and equipment; all moneys; all bank accounts
 (including the Charged Accounts), including the investments therein and the
 debts represented thereby; accounts receivable; goodwill; uncalled share
 capital; subject to clause 16.15.2, shares and securities (including all
 shares, rights and securities of the Borrower (with respect to securities
 held as of January 18, 2001, to the extent the pledge thereof is not expressly
 prohibited by the terms pursuant to which Borrower acquired shares in such
 companies) in Azalea Microelectronics Corporation and Tower USA, Inc.,
 subject to the right of the Borrower to sell shares in Azalea
 Microelectronics Corporation as contemplated by clause 16.24 below); all
 Intellectual Property Assets and other rights of the Borrower. For the
 avoidance of doubt, the pledge referred to in this paragraph (b) shall not
 apply to reserves for employee social benefits which have been reserved for
 at third party funds, which may not be pledged under law and/or contract;

 

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 (c)

 	
 a
 first-ranking fixed pledge and charge (assignment by way of charge) over all
 rights and interest of the Borrower under all Material Contracts, from time
 to time, as well as under all ancillary documentation relating thereto,
 including under all performance bonds, sureties, collateral and other
 securities to the obligations of the counterparties to any of the aforegoing
 Material Contracts, as well as an assignment by way of charge of all sums to
 be paid to the Borrower pursuant to any of the above, but excluding only:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (i)

 	
 those
 Material Contracts in force as of January 18, 2001 which under the express
 terms of the Material Contract as interpreted by the law governing such
 Material Contract prohibit the pledging of such Material Contract, provided
 that this paragraph (i) shall not apply to those Material Contracts which
 were required to be pledged pursuant to clause 4 of the original Facility
 Agreement as a condition precedent to the closing of the original Facility
 Agreement; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (ii)

 	
 those
 Material Contracts to be entered into after January 18, 2001 which, by the
 express terms of the Material Contract as interpreted by the law governing
 such Material Contract prohibit the pledging of such Material Contract
 despite the best efforts of the Borrower to have such agreement provide
 otherwise, provided that this paragraph (ii) shall not apply to any lease
 agreement to be signed between the Borrower and ILA which shall be pledged
 for the benefit of the Banks; and

 

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 (d)

 	
 a
 first-ranking fixed pledge and charge (assignment by way of charge) over all
 rights, title and interest of the Borrower under all Insurance Policies
 (including in respect of all sums payable to the Borrower pursuant thereto)
 (other than Insurance Policies in respect of the liability of the Borrower to
 third parties or of liability of the Borrower for the damage to property of
 third parties);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.37.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.38.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.39.

 	
  “Default”

 	
 -

 	
 means any
 Event of Default or any event which with the giving of notice or lapse of
 time, or the making of any determination hereunder, or the satisfaction of
 any other condition (or any combination thereof) would constitute an Event of
 Default;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.40.

 	
  “Distribution”

 	
 -

 	
 means the
 declaration or payment of any dividend or distribution on or in respect of
 any shares of any class of capital stock; the purchase, redemption or other
 retirement, or the giving of any financing for the purchase, redemption or
 retirement, of any shares of any class of capital stock (including redeemable
 shares) or of Permitted Subordinated Debt (save to the extent permitted under
 the approved terms thereof in accordance with clause 1.1.118 below), directly
 or indirectly through a Subsidiary or otherwise; the return of equity capital
 by any person to its shareholders; or any other distribution (within the
 meaning of such term as defined in Section 1 of the Companies Law, 1999) on
 or in respect of any shares of any class of capital stock; or any undertaking
 to do any of the aforegoing;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.41.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.42.

 	
 [Intentionally Deleted]

 

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 1.1.42A.

 	
  “EBITDA

 (Borrower only)”

 	
 -

 	
 means:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (1)

 	
 for any
 Quarter commencing from the fourth Quarter of 2009 and for any Fiscal Year
 thereafter, the following in respect of the period of 4 (four) consecutive
 Quarters ending on the last day of such Quarter or Fiscal Year (“the Four-Quarter Period”):

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 the sum of
 the following, in respect of such Four-Quarter Period:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (i)

 	
 the
 operating profit of the Borrower, plus Employee and Other Option Costs. “Employee and Other Option Costs” shall
 mean costs and expenses already deducted in
 determining operating profit, (as determined in accordance with GAAP), resulting from the grant or
 issuance to employees, officers, service providers, suppliers (including the
 Banks) or directors of the Borrower or its Subsidiaries, of options or
 warrants to purchase shares of the Borrower, all as reflected in the Accounts
 and which, prior to 2006, were not required to be
 deducted in accordance with GAAP; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (ii)

 	
 any
 amortisation and depreciation reflected in the Accounts.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 All items
 referred to above shall be taken from the Borrower’s relevant
 non-consolidated Accounts, being:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (A)

 	
 in the event
 that such Four-Quarter Period constitutes a Fiscal Year, the Borrower’s
 non-consolidated annual Accounts for such Fiscal Year; and

 

13

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (B)

 	
 in the event
 that such Four-Quarter Period shall not constitute a Fiscal Year, the
 non-consolidated quarterly Accounts of the Borrower for each Quarter falling
 within such Four-Quarter Period;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (2)

 	
 for the
 first Quarter of 2009, the items referred to in paragraphs (i) and (ii) above
 in respect of such Quarter only, multiplied by 4 (four);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (3)

 	
 for the
 second Quarter of 2009: (x) the items referred to in paragraphs (i) and (ii)
 above in respect of the first Quarter of 2009; plus (y) the items referred to
 in paragraphs (i) and (ii) above in respect of the second Quarter of 2009,
 multiplied by 3 (three); and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (4)

 	
 for the
 third Quarter of 2009: (x) the items referred to in (paragraphs (i) and (ii)
 above in respect of the first 2 (two) Quarters of 2009; plus (y) the items
 referred to in paragraphs (i) and (ii) above in respect of the third Quarter
 of 2009, multiplied by 2 (two);

 

14

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.43.

 	
  “EBITDA

 (Consolidated)”

 	
 -

 	
 means:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (1)

 	
 for any
 Quarter commencing from the fourth Quarter of 2009 and for any Fiscal Year
 after 2009, the following in respect of the period of 4 (four) consecutive
 Quarters ending on the last day of such Quarter or Fiscal Year (“the Four-Quarter Period”):

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 the sum of
 the following, in respect of such Four-Quarter Period:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (i)

 	
 the
 operating profit of the Borrower, plus Employee and Other Option Costs. “Employee and Other Option Costs” shall
 mean costs and expenses already deducted in
 determining operating profit, (as determined in accordance with GAAP), resulting from the grant or
 issuance to employees, officers, service providers, suppliers (including the
 Banks) or directors of the Borrower or its Subsidiaries, of options or
 warrants to purchase shares of the Borrower, all as reflected in the Accounts and which, prior to 2006, were not required to be deducted in
 accordance with GAAP; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (ii)

 	
 any
 amortisation and depreciation reflected in the Accounts.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 All items
 referred to above shall be taken from the Borrower’s relevant consolidated
 Accounts, being:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (A)

 	
 in the event
 that such Four-Quarter Period constitutes a Fiscal Year, the Borrower’s
 consolidated annual Accounts for such Fiscal Year; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (B)

 	
 in the event
 that such Four-Quarter Period shall not constitute a Fiscal Year, the
 consolidated quarterly Accounts of the Borrower for each Quarter falling
 within such Four-Quarter Period;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (2)

 	
 for the
 first Quarter of 2009, the items referred to in paragraphs (i) and (ii) above
 in respect of such Quarter only, multiplied by 4 (four);

 

15

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (3)

 	
 for the
 second Quarter of 2009: (x) the items referred to in paragraphs (i) and (ii)
 above in respect of the first Quarter of 2009; plus (y) the items referred to
 in paragraphs (i) and (ii) above in respect of the second Quarter of 2009,
 multiplied by 3 (three); and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (4)

 	
 for the
 third Quarter of 2009: (x) the items referred to in (paragraphs (i) and (ii)
 above in respect of the first 2 (two) Quarters of 2009; plus (y) the items
 referred to in paragraphs (i) and (ii) above in respect of the third Quarter
 of 2009, multiplied by 2 (two);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.44.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.45.

 	
  “Encumbrance”

 	
 -

 	
 means:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 any
 mortgage, charge (whether fixed or floating), pledge, lien, assignment,
 security interest, title retention or other encumbrance of any kind securing,
 or any right conferring a priority of payment in respect of, any obligation
 of any person;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (b)

 	
 any
 arrangement under which moneys or claims to, or the benefit of, a bank or
 other account may be set-off or made subject to a combination of accounts so
 as to effect payments of sums owed or payable to any person; or

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (c)

 	
 any other
 type of preferential arrangement having similar effect;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.46.

 	
  “Environment”

 	
 -

 	
 means the
 environment, including ambient air, ground water, surface water, land
 (surface and sub-surface strata);

 

16

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.47.

 	
  “Environmental Claim”

 	
 -

 	
 means any
 claim, action, cause of action, administrative proceeding, investigation,
 notice or other Proceeding by any person or Governmental Body alleging
 potential liability (including potential liability for investigative costs,
 cleanup costs, governmental response costs, natural resources damages,
 property damages, personal injuries, or penalties) arising out of, based on
 or resulting from: (a) the presence, or Release, of any Materials of
 Environmental Concern at any location, whether or not owned, leased,
 controlled or occupied by the Borrower or its Subsidiaries; or (b)
 circumstances or conditions forming the basis of any violation, or alleged
 violation, of any Environmental Law. For the purpose of the aforegoing, “Release” means any spilling, leaking,
 pumping, pouring, emitting, discharging, injecting, escaping, leaching,
 dumping or disposing into the Environment, including the abandonment or
 discarding of barrels, containers and other closed receptacles containing
 Materials of Environmental Concern;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.48.

 	
  “Environmental Laws”

 	
 -

 	
 means all
 laws (including regulations, ordinances, codes, rules, Orders, decrees,
 directives and standards) relating to pollution or protection of human health
 or the Environment (including relating to the manufacture, processing,
 distribution, use, treatment, storage, transport, planning and building or
 handling of Materials of Environmental Concern);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.49.

 	
  “Environmental

 Permits”

 	
 
-

 	
 
means any
 permits, licences, authorisations, Consents, approvals and registrations
 required pursuant to the Environmental Laws;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.49A

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.50.

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.51.

 	
  “Event of Default”

 	
 -

 	
 means any of
 the events or circumstances described in clauses 17.2–17.20C (inclusive)
 below;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.52.

 	
  “Excess Cash Flow”

 	
 -

 	
 for any
 Fiscal Year, means the cash flow from operating activities for such Fiscal
 Year, as reflected in the Borrower’s Accounts for such Fiscal Year, or
 Quarter, as the case may be, determined in accordance with GAAP and expressed
 in US Dollars;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.53.

 	
 “Existing

 Encumbrance”

 	
 
-

 	
 
means that
 floating charge, ranked subordinate to the charge under the Debenture, in
 favour of the State of Israel and securing Grants made by the Investment
 Centre in respect of Fab 1, a copy of which is attached hereto as Schedule 1.1.53;

 

17

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.54.

 	
  “Existing ILA Leases”

 	
 -

 	
 means the
 long-term lease agreements between the Borrower and the ILA: (a) dated
 September 10, 1990 (the rights under which were assigned to the Borrower on
 February 28, 1992) with regard to the land on which Fab 1 is situated (being
 parts of plots 19–27 (inclusive), 32–35 (inclusive) and 63 in Block 17453,
 Migdal Haemek), the area of which is approximately 54,766 square meters; and
 (b) dated June 24, 2003 with regard to the land on which Fab 2 is situated
 (being certain parts of plots 19–35 (inclusive) and plot 63, all in Block
 17453 not already included in the lease described in paragraph (a) above and
 parts of plot 12 of Block 17454, all in Migdal Haemek, the area of which is
 approximately 27,037 square metres;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.55.

 	
  “Fab 1”

 	
 -

 	
 means the
 Borrower’s Fab facility which was already operating as at January 18, 2001,
 located in Migdal Haemek;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.56.

 	
  “Fab 2”

 	
 -

 	
 means the
 Borrower’s Fab facility which began operating in 2003, located in Migdal
 Haemek;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.57.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.58.

 	
  “Facility”

 	
 -

 	
 means the
 credit facility which was granted to the Borrower by the Banks pursuant to
 this Agreement;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.59.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.60.

 	
  “Final Maturity Date”

 	
 -

 	
 means June
 30, 2012;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.61.

 	
  “Finance Documents”

 	
 -

 	
 means this
 Agreement, the Debenture, the Jazz Share Pledge, any other Security
 Documents, any L/Cs (as defined in clause 1.1.115(j) below) issued by any
 Bank on account of the Borrower, any other agreement between the Borrower and
 any Bank in respect of any other Permitted Financial Indebtedness, if any,
 made available by such Bank to the Borrower and any other agreement or
 document executed pursuant to any of the aforegoing to which the Borrower is
 a party, and designated by the Banks as a Finance Document;

 

18

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.62.

 	
  “Financial Indebtedness”

 	
 -

 	
 means any
 Indebtedness in respect of or pursuant to:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 moneys
 borrowed;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (b)

 	
 any amount
 raised by acceptance under any credit facility;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (c)

 	
 any amount
 raised pursuant to any note, purchase facility or the issue of bonds, notes,
 debentures, bills, loan stock or any similar instrument (including any debt
 security convertible, but not at the relevant time converted, into share
 capital) having the commercial effect of borrowing (including, moneys raised
 by the sale of invoices, bills or notes or other financial assets on terms
 that recourse may be had to the vendor in the event of non-payment of such
 invoices, bills or financial assets when due);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (d)

 	
 the amount
 of any liability in respect of any lease contract (including any sale and
 lease back, sale and repurchase and similar agreements and instruments) which
 would, in accordance with GAAP, be treated as a financial or capital lease;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (e)

 	
 receivables
 sold or discounted;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (f)

 	
 any amount
 raised under any other transaction having the commercial effect of borrowing
 (other than transactions specifically referred to in the other paragraphs of
 this clause 1.1.62);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (g)

 	
 the
 acquisition cost of assets or services to the extent payable on deferred
 payment terms;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (h)

 	
 moneys
 received in consideration for the supply of goods and/or services to the
 extent received before the due date for such supply where the receipt as
 aforesaid is arranged primarily as a method of raising finance;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (i)

 	
 any Hedging
 Transaction or any other derivative transaction entered into in connection
 with protection against or benefit from fluctuation in any rate or price;

 

19

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (j)

 	
 any
 counter-indemnity obligation in respect of a guarantee, indemnity, bond,
 standby or documentary letter of credit or any other instrument issued by a
 bank or financial institution;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (k)

 	
 the amount
 of any liability in respect of any guarantee, indemnity or other legally
 binding instrument to assure payment of, or against loss in respect of
 non-payment of, any of the items referred to in paragraphs (a)–(j) above;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.63.

 	
  “Fiscal Year”

 	
 -

 	
 means a
 calendar year;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.64.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.65.

 	
  “GAAP”

 	
 -

 	
 means
 generally accepted accounting principles, in force from time to time, and
 applicable to Israeli companies the shares of which are listed for trading on
 the Tel-Aviv Stock Exchange and NASDAQ (being, for purposes of this
 Agreement, United States generally accepted accounting principles);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.66.

 	
  “Governmental Authorisation”

 	
 -

 	
 means any
 approval, exemption, notification, licence, permit, waiver, other
 authorisation issued, granted, given or otherwise made available by or under
 the authority of any Governmental Body or pursuant to any law;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.67.

 	
  “Governmental Body”

 	
 -

 	
 means any
 Israeli (and, for purposes of clauses 1.1.109, 1.1.119, 9.4.6, 16.1.3(ii),
 25.4 and 32.3 only, foreign) governmental, national, state, local, municipal
 or other government, governmental or quasi-governmental authority of any
 nature (including any governmental agency, branch, ministry, department,
 official or entity and any court or other tribunal), or body exercising or
 entitled to exercise any administrative, executive, judicial, legislative,
 police, regulatory or taxing authority or power of any nature.
 Notwithstanding the aforegoing, “Governmental
 Body” when used in this Agreement in connection with Jazz or any
 of its Subsidiaries (including with reference to Governmental
 Authorisations), shall bear the meaning set out in this clause 1.1.67 above,
 save that “Israeli” shall be replaced by “United States”;

 

20

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.68.

 	
  “Grants”

 	
 -

 	
 means all
 pending and outstanding grants from each Governmental Body of the State of
 Israel, or from any other Governmental Body, to the Borrower or any
 Subsidiary;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.69.

 	
  “Group”

 	
 -

 	
 means the
 Borrower, any Subsidiary and any other entity the accounts of which are in
 accordance with GAAP to be consolidated with the consolidated Accounts of the
 Borrower;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.70.

 	
  “Hedging Transaction”

 	
 -

 	
 means any
 Interest Rate Hedging Transaction and any Currency Hedging Transaction;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.71.

 	
  “ILA”

 	
 -

 	
 means the
 Israel Lands Authority;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.72.

 	
  “Indebtedness”

 	
 -

 	
 means any
 obligation (whether incurred as principal or surety or guarantor) for the
 payment or repayment of money, whether actual or contingent;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.73.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.74.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.75.

 	
  “Insurance Adviser”

 	
 -

 	
 means M.M.I.
 Risk Management Consultants Ltd., who is retained by the Borrower as
 insurance adviser to the Banks and the Borrower for the purposes of this
 Agreement, as such person may, on the request of the Banks, be replaced by
 another firm acceptable to the Banks and the Borrower, the Borrower’s consent
 not to be unreasonably withheld;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.76.

 	
  “Insurance Policies”

 	
 -

 	
 means all
 insurance policies to be maintained or effected, from time to time, by the
 Borrower in accordance with clause 16.10 below;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.77.

 	
  “Insurance Report”

 	
 -

 	
 means the
 insurance report dated September 2008 prepared by the Insurance Adviser and
 addressed to the Banks and the Borrower, including all revisions thereto in
 the form to be prepared by the Insurance Adviser and addressed to the Banks
 and the Borrower;

 

21

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.78.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.79.

 	
  “Intellectual Property Assets”

 	
 -

 	
 means all
 such rights set forth in paragraphs (a)–(e) below and all know-how, trade
 secrets, confidential information, customer lists, software, technical
 information, data, process technology, plans, drawings and blue prints
 (collectively, “Trade Secrets”);
 owned, used or licensed by the Borrower as licensee or licensor which are, in
 each case, used in or are necessary for the conduct of the Business as now
 conducted and as approved by its Board of Directors to be conducted,
 including for the design, construction and operation of Fab 2 in accordance
 with the Business Plan. Schedule 1.1.79
 hereto sets forth a list of the Intellectual Property Assets, other than
 Trade Secrets and unregistered Copyrights:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 trade names,
 registered and unregistered trademarks, service marks and applications
 (collectively, “Marks”);

 

22

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (b)

 	
 all patents,
 patent applications and inventions and discoveries that may be patentable
 (collectively, “Patents”);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (c)

 	
 all
 copyrights, registered and unregistered in both published works and
 unpublished works (collectively, “Copyrights”);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (d)

 	
 all domain
 names; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (e)

 	
 all mask
 works, including rights in the topography of integrated circuits;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.80.

 	
  “Intercreditor Agreement”

 	
 -

 	
 means the
 intercreditor agreement entered into between the Banks;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.81.

 	
  “Interest”

 	
 -

 	
 means:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 interest and
 amounts in the nature of interest (including the interest element of finance
 leases, linkage differentials with respect to such interest and any similar
 payment in respect of indexation with respect to such interest);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (b)

 	
 prepayment
 penalties or premiums incurred in repaying or prepaying any Financial
 Indebtedness (including, for the avoidance of doubt, amounts payable pursuant
 to clause 19 below); and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (c)

 	
 discount
 fees and acceptance fees payable or deducted in respect of any Financial
 Indebtedness (including all commissions payable in connection with any letter
 of credit);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.82.

 	
  “Interest Determination Date”

 	
 -

 	
 in relation
 to any Interest Period, means the Business Day falling 2 (two) Business Days
 prior to the first day of such Interest Period;

 

23

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.83.

 	
  “Interest Payment Date”

 	
 -

 	
 means the
 last Business Day of each Quarter;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.83A.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.83B.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.84.

 	
  “Interest Periods”

 	
 -

 	
 means
 consecutive periods of 1 (one) Quarter; provided that, notwithstanding the
 aforegoing:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 if any
 Interest Period would otherwise end on a day which is not a Business Day,
 such Interest Period shall end on the immediately preceding Business Day;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (b)

 	
 each
 Interest Period (other than the first Interest Period) shall commence on the
 expiry of the Interest Period preceding such Interest Period and, for the
 removal of doubt, shall, subject to (a) above, end on the last day of the
 Quarter following such preceding Interest Period;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (c)

 	
 [Intentionally Deleted]

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (d)

 	
 no Interest
 Period may extend later than the Final Maturity Date; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (e)

 	
 with respect
 to Unpaid Sums, “Interest Period” shall bear the meaning assigned to such
 term in clause 18.1 below;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.85.

 	
  “Interest Rate Hedging Transaction”

 	
 -

 	
 includes any
 rate swap transaction, basis swap, forward rate transaction, commodity swap,
 commodity option, equity or equity index swap, equity or equity index option,
 Interest rate option, knock-out transaction, cap transaction, floor
 transaction, collar transaction or other similar transaction (including any
 option with respect thereto and any combination in respect thereof);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.86.

 	
  “Investment Centre”

 	
 -

 	
 means the
 Investment Centre established under the Encouragement of Capital Investments
 Law, 1959;

 

24

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.87.

 	
  “Investment Centre Fab 2 Grants”

 	
 -

 	
 means those
 grants made and to be made under the Encouragement of Capital Investments
 Law, 1959, in respect of Fab 2;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.87A.

 	
  “Investments (Borrower only)”

 	
 -

 	
 means actual
 investments in property and equipment and in other assets and intangible
 assets, as appearing in the non-consolidated financial statements of the
 Borrower for the relevant Fiscal Year;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.87B.

 	
  “Investments (Consolidated)”

 	
 -

 	
 means actual
 investments in property and equipment and in other assets and intangible
 assets, as appearing in the consolidated financial statements of the Borrower
 for the relevant Fiscal Year;

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.88.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.89.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.89A

 	
  “Jazz”

 	
 -

 	
 means Jazz
 Technologies, Inc., a Delaware corporation;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.90.

 	
  “Knowledge”

 	
 -

 	
 the Borrower
 will be deemed to have “Knowledge” of a particular fact or other matter if
 any individual who is serving as a Named Director and Officer has, or at any
 time had, knowledge of such fact or matter;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.91.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.92.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.93.

 	
  “Lead Investors”

 	
 -

 	
 means TIC,
 Sandisk, Alliance and Macronix;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.94.

 	
  “LIBOR”

 	
 -

 	
 means, with
 respect to each Interest Period, the rate per annum rounded upward, if
 necessary, to the nearest whole multiple of 1/16%
 (one-sixteenth of a percent) for Euro–Dollar deposits for a period of 3
 (three) months (or if such Interest Period is less than a Quarter, then for
 the number of weeks of such Interest Period, rounded-up for part of a week),
 offered in the London Interbank market, as quoted at or about 11:00 a.m.
 (London time) on the Interest Determination Date for such Interest Period on
 the composite display designated as LIBOR 01 áFrasettñ
 (in the case of Euro–Dollars) to subscribers of the REUTERS service (“Reuters”) or, in the absence of such
 page or pages, or if Reuters shall, for any reason whatsoever, amend, change
 or otherwise alter the data basis or the reference banks used by it on the
 Amendment Closing Date, for quotations under said composite display, the rate
 of Interest as quoted at or about 11:00 a.m. London time on the relevant
 Interest Determination Date on such other page or pages of Reuters as shall
 be determined by the Banks for a period of 3 (three) months or, as the case
 may be, that number of weeks comprising such Interest Period, rounded-up, as
 aforesaid (rounded upward, if necessary, to the nearest whole multiple of 1/16%
 (one-sixteenth of a percent)). In the event that the Reuters service ceases
 to be available, the Banks may specify another service (and the relevant page
 thereof) displaying the appropriate LIBOR rate;

 

25

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.95.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.96.

 	
  “Loans”

 	
 -

 	
 means, at
 any time, the loans which were granted under this Agreement or, as the case
 may be, the aggregate principal amount of any such loan outstanding at such
 time, it being recorded that, as at the Amendment Closing Date, the aggregate
 principal amount (excluding, for the removal of doubt, accrued Interest and
 any other amounts owing under the Finance Documents) of the loans is US
 $202,779,814 (two hundred and two million seven hundred and seventy-nine
 thousand eight hundred and fourteen United States Dollars), of which US
 $101,391,517 (one hundred one million three hundred and ninety-one thousand
 five hundred and seventeen United States Dollars) is owed to Bank Hapoalim
 and US $101,388,297 (one hundred and one million three hundred and
 eighty-eight thousand two hundred and ninety-seven United States Dollars) is
 owed to Bank Leumi; “Loans” shall be construed to mean each of them respectively;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.97.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.98.

 	
  “Macronix”

 	
 -

 	
 means
 Macronix International Co. Ltd., a company incorporated under the laws of
 Taiwan;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.99.

 	
 [Intentionally Deleted]

 	
  

 	
  

 

26

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.100.

 	
  “Material Adverse Effect”

 	
 -

 	
 means any
 effect which is or is likely to be materially adverse to: (a) the business or
 financial condition of the Borrower; (b) the successful implementation of the
 Project in accordance with the Business Plan; or (c) the ability of the
 Borrower to perform its obligations under any of the Finance Documents;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.101.

 	
  “Material Contracts”

 	
 -

 	
 means all of
 the Contracts currently in existence as specified in Schedule 1.1.101 hereto
 or types of Contracts to be entered into in the future, as specified in
 Schedule 1.1.101 hereto;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.102.

 	
  “Materials of Environmental
 Concern”

 	
 -

 	
 means any
 hazardous chemicals, pollutants, contaminants, hazardous wastes, radioactive
 or electromagnetic waste, toxic substances, hazardous substances (as
 “hazardous substances” is defined under applicable Environmental Laws) or any
 other substance defined or regulated pursuant to Environmental Laws,
 including fluoride, asbestos, PCBs, petroleum or petroleum derived
 substances;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.103.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.103A.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.103B.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.103C.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.104.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.105.

 	
  “Named Directors and Officers”

 	
 -

 	
 means those
 persons from time to time holding the offices in the Borrower listed in
 Schedule 1.1.105 hereto;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.106.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.107.

 	
 “Net
 Proceeds”

 	
 -

 	
 means the
 aggregate consideration received by the Borrower in respect of a sale,
 transfer, loan or other disposal (“disposal”) of assets (including shares) as
 referred to in clause 8.1.5 below by the Borrower to any third party after
 deduction of:

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 all amounts
 paid or provided for or on account of Taxes applicable to, or to any gain
 resulting from, the disposal as aforesaid or the discharge of any liability
 secured on the relevant assets (including VAT); and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (b)

 	
 all costs,
 fees, expenses and the like properly incurred by the Borrower in arranging
 and effecting such disposal;

 

27

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.107A.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.107B.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.107C.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.108.

 	
  “OCS”

 	
 -

 	
 means the
 Office of the Chief Scientist in the Ministry of Industry, Commerce and
 Labour;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.109.

 	
  “Order”

 	
 -

 	
 means any
 award, decision, injunction, judgment, order, ruling, subpoena or verdict
 entered, issued, made or rendered by any court, administrative agency or
 other Governmental Body or by any arbitrator;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.110.

 	
  “Ordinary Course of Business”

 	
 -

 	
 an action
 taken by a person will be deemed to have been taken in the “Ordinary Course
 of Business” only if:

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 such action
 is consistent with the past practices of such person and is taken in the
 ordinary course of the normal day-to-day operations of such person; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (b)

 	
 such action
 is similar in nature and magnitude to activities customarily taken in the
 ordinary course of the normal day-to-day operations of other persons that are
 in the same line of business as such person;

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.111.

 	
  “Organisational Documents”

 	
 -

 	
 means the
 certificate of incorporation, Memorandum of Association, Articles of
 Association, by-laws or other documents of incorporation of any person being
 a corporation;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.111A.

 	
  “Outside Investment Undertaking”

 	
 -

 	
 shall bear
 the meaning assigned to such term in clause 16.35.1 below;

 

28

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.112.

 	
  “Paid-in Equity”

 	
 -

 	
 means the
 aggregate amount paid-up in cash in respect of irredeemable ordinary share
 capital of the Borrower or in respect of the sale of warrants by the Borrower
 where the purchase price of such warrants is registered as owners’ equity and
 is non-refundable and the purchaser or holder of such warrants shall not be
 entitled to claim refund of such purchase price (or any part thereof) under
 any circumstances whatsoever. For the removal of doubt: (i) for the purposes
 of this Agreement, any credit, prepayment or other entitlement granted to any
 person in respect of any amount paid-up in cash in respect of the
 irredeemable share capital of the Borrower or in respect of the sale of any
 warrant pursuant to agreements with such person shall not be regarded as
 Paid-in Equity and shall be deducted from the amount of such equity; (ii) the
 subsequent application of the debt of the Borrower represented by such
 credit, prepayment or other entitlement on account of the purchase price for
 shares of the Borrower shall not be considered Paid-in Equity at the time of
 such application; and (iii) the net amount credited in the books of the
 Borrower as irredeemable share capital as a consequence of the conversion of
 convertible debentures or any other securities of the Borrower issued or
 which may be issued by the Borrower shall not be considered Paid-in Equity at
 the time of such conversion;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.113.

 	
 [Intentionally Deleted]

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.114.

 	
  “Permitted Encumbrances”

 	
 -

 	
 means:

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 any
 Encumbrance constituted or evidenced
 by the Security Documents;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (b)

 	
 the Existing
 Encumbrance;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (c)

 	
 a
 second-ranking floating charge in favour of the State of Israel (Investment
 Centre) or in favour of a bank through which the Investment Centre Fab 2
 Grant is made, such floating charge securing obligations in respect of such
 Investment Centre Fab 2 Grants as aforesaid and to be subordinated to the
 Encumbrances referred to in paragraph (a) above, such floating charge to be
 in the customary, standard form required by the Investment Centre;

 

29

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (d)

 	
 those
 first-ranking fixed charges over certain equipment and other assets granted
 by the Borrower in favour of each of:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (i)

 	
 Matsushita
 Electronic Industrial Co. Ltd. (“MEI”), pursuant to a pledge dated October
 31, 2002, entered into in connection with the Joint Development and Cross-License
Agreement between the Borrower and MEI, dated May 28, 2002 (as such charge remains in effect
pursuant to that Termination Agreement between the Borrower and MEI entered into as of April 5, 2005);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (ii)

 	
 Siliconix
 Technology C.V., pursuant to a pledge dated August 5, 2004, entered into in
 connection with that Foundry Agreement dated May 12, 2004 by and among the
 Borrower, Siliconix Incorporated, and Siliconix Technology C.V.; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (iii)

 	
 Sandisk,
 pursuant to that consent dated August 7, 2006 by and between the Borrower and
 the Banks,

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 full details
 of the equipment and other assets respectively pledged under each such pledge
 being set out in Schedule 1.1.114
 hereto; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (e)

 	
 Encumbrances
 granted by Jazz and its Subsidiaries;

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.115.

 	
  “Permitted Financial Indebtedness”

 	
 -

 	
 means:

 
	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 Financial
 Indebtedness arising pursuant to this Agreement;

 

30

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (b)

 	
 Permitted
 Subordinated Debt;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (c)

 	
 Financial
 Indebtedness in respect of a credit facility obtained from a bank or other
 financial institution to be applied with respect to Fab 1 and which, together
 with all other Financial Indebtedness of the Group (other than the Borrower),
 other than those matters described in Schedule 1.1.115(c) hereto shall at no
 time exceed, in aggregate, US $22,500,000 (twenty-two million five hundred
 thousand United States Dollars) or its equivalent. For the removal of doubt,
 the Banks shall be under no obligation whatsoever to provide such financing
 or to continue to provide such financing if they shall at any time do so;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (d)

 	
 Financial
 Indebtedness in respect of operating leases of up to US $10,000,000 (ten
 million United States Dollars) in aggregate relating to Fab 2. In addition,
 such additional Financial Indebtedness in respect of operating leases
 relating to the purchase of equipment for use in Fab 2 to the extent the
 Banks shall (on a case-by-case basis), give their prior consent to such
 operating leases (the Banks, for the removal of doubt, being entitled to
 withhold such consent in their sole discretion or, if they shall give same,
 being entitled to impose such conditions in respect thereof as they shall see
 fit);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (e)

 	
 Financial
 Indebtedness comprising guarantees or other contingent Indebtedness in
 respect of any obligations of a person, other than the Borrower, incurred in
 the Ordinary Course of Business in an aggregate amount not exceeding at any
 time US $5,000,000 (five million United States Dollars) or its equivalent.
 For the removal of doubt: (i) nothing in this clause 1.1.115(e) shall
 derogate from the provisions of clause 16.37 below; and (ii) for the purposes
 of this clause 1.1.115(e), “guarantees” shall not include “independent”
 guarantees by the Borrower for its own obligations;

 

31

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (f)

 	
 the acquisition
 cost of assets or services to the extent payable on deferred payment terms,
 provided that the aggregate Interest actually paid by the Borrower to the
 supplier or provider of such assets or services in respect of all such assets
 or services shall not exceed US $2,000,000 (two million United States
 Dollars) in any calendar year;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (g)

 	
 moneys
 received in consideration for the supply of goods and/or services to the
 extent received before the due date for such supply provided to the extent
 such sums bear interest, they shall not exceed the borrowing costs of the
 Loan made hereunder;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (h)

 	
 receivables
 sold or discounted; provided that: (i) the maximum recourse to the Borrower
 under each invoice representing receivables sold or discounted shall not
 exceed 15% (fifteen percent) of the amount of such invoice; and (ii) the
 consideration for such sale or discounting shall be received on the date of
 such sale or discounting in cash;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (i)

 	
 Indebtedness
 under Hedging Transactions entered into by the Borrower (if any), in each
 case, with the Banks, without derogating from clause 16.21 below;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (j)

 	
 Indebtedness
 under standby or documentary letters of credit or bank guarantees
 (collectively, “L/Cs”) issued for the account of the Borrower, provided that
 the aggregate Indebtedness in respect of all such L/Cs shall at no time
 exceed US $10,000,000 (ten million United States Dollars). For the removal of
 doubt, no Bank shall be obligated to issue any L/C for the account of the
 Borrower;

 

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 (k)

 	
 Financial
 Indebtedness of Jazz and its Subsidiaries; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (l)

 	
 Financial
 Indebtedness otherwise as permitted pursuant to paragraphs (a)–(k)
 (inclusive) above created or subsisting as set forth in Schedule 1.1.115(l)
 hereto or as set forth on Schedule 1.1.115(c) hereto or otherwise with the
 prior written consent of the Banks;

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.116.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 
	
  

 	
  

 	
 1.1.116A.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 
	
  

 	
  

 	
 1.1.117.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 
	
  

 	
  

 	
 1.1.118.

 	
  “Permitted Subordinated Debt”

 	
 -

 	
 means:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Indebtedness
 of the Borrower in respect of convertible debentures (bonds) issued by the
 Borrower for the purposes only of additional financing for Fab 2, subject to
 all of the following conditions:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 the
 principal amount of Indebtedness in respect of such convertible debentures
 shall at no time exceed US $150,000,000 (one hundred and fifty million United
 States Dollars) in aggregate; provided that the net amount that is actually
 received by the Borrower in respect of such convertible debentures (after
 deducting all discounts, costs, commissions, fees, expenses and other
 issuance costs) shall be no less than 85% (eighty-five percent) of the principal
 amount of the convertible debentures;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (b)

 	
 the
 Indebtedness in respect of such convertible debentures is subordinated to the
 rights of the Banks under this Agreement and under all other Finance
 Documents in all respects, including with respect to payments of principal
 and Interest and all other amounts payable to the Banks under this Agreement
 and under all other Finance Documents and shall not be secured by any
 collateral whatsoever and, save in accordance with the provisions of this
 clause 1.1.118 below, no amount, whether in respect of principal, Interest or
 any other amount, shall be payable by the Borrower on account of such
 Indebtedness, prior to the date on which: (i) all amounts payable by the
 Borrower under the Finance Documents shall have been paid in full; and (ii)
 no Bank shall be under any obligation under any Finance Document to provide
 any Financial Indebtedness to the Borrower;

 

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 (c)

 	
 the terms
 and conditions (including financial covenants, if any) of such convertible
 debentures and of all instruments governing such convertible debentures
 (other than those terms expressly set out in paragraphs (d)-(i) below) shall
 be subject to the prior written approval of the Banks, provided that the
 approval of the Banks shall not be required with respect to those convertible
 debentures that meet the conditions set forth in paragraph (g)(ii) and
 paragraph (g)(iii) below;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (d)

 	
 the terms
 and conditions of such convertible debentures (and all instruments governing
 such convertible debentures) shall:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (i)

 	
 provide that
 an event of default under such convertible debentures shall occur only in the
 event that:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (1)

 	
 there shall
 occur in respect of the Borrower an Event of Default as referred to in clause
 17.8 below; or

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (2)

 	
 the Borrower
 shall fail to pay an amount of principal or Interest in respect of the
 convertible debentures within 14 (fourteen) Business Days of due date
 therefor; or

 

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 (3)

 	
 such other
 events of default, if any, as the Banks may consent to, in their sole
 discretion;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 provided
 that, notwithstanding the aforegoing, the holders of the convertible
 debentures and anybody acting on their behalf (including any trustee) shall
 not be entitled to take any action against the Borrower in the event of any
 event of default as aforesaid, unless the Borrower shall not have remedied
 such event of default within a period of not less than 39 (thirty-nine) days
 after the date of receipt by the Borrower of a demand to cure such default, a
 copy of which demand shall have been served on the Banks on the same day as
 service of same on the Borrower as aforesaid; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (ii)

 	
 provide
 that, in the event of any event of default under the convertible debentures,
 no amount of whatsoever nature shall be payable by the Borrower in respect of
 the convertible debentures (whether in respect of principal, Interest or any
 other amount), until all amounts owing by the Borrower under the Finance
 Documents shall have been paid in full;

 

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 (e)

 	
 the Borrower
 shall procure that, at all times, an amount equal to 20% (twenty percent) of
 the outstanding principal amount of all convertible debentures, or, with
 respect to convertible debentures listed in Part B of Schedule 15.13), an
 amount equal to 20% (twenty percent) of the outstanding principal amount (net
 of discounts) of such convertible debentures (as may be increased from time
 to time through the issuance of additional convertible debentures and as may
 be decreased from time to time through repayment by the Borrower of
 outstanding principal of some or all of the convertible debentures) is
 deposited in the Reserve Accounts (50% (fifty percent) in each Reserve
 Account) which accounts are duly pledged in favour of the Banks, by way of a
 first-ranking fixed charge under the Debenture, as security for the payment
 of all amounts by the Borrower under the Finance Documents; provided that, if
 the amounts so deposited in the Reserve Accounts as aforesaid shall exceed
 the amount of the aggregate Interest payable in respect of all such
 convertible debentures during the 2 (two) year period following December 28,
 2005, then the amount of such excess over the aggregate Interest for such 2
 (two) year period as aforesaid shall be released; provided that, subject to
 there at all times being on deposit in the Reserve Accounts, duly pledged, as
 aforesaid, an amount equal at least to the sum of 20% (twenty percent) of the
 outstanding principal of the convertible debentures (other than the
 convertible debentures, listed in Part B of Schedule 15.13) and 20% (twenty
 percent) of the outstanding principal (net of discounts) of the convertible
 debentures, listed in Part B of Schedule 15.13, the following amounts may be
 released in the aggregate from the Reserve Accounts: (1) on the dates for
 payment of Interest in respect of the convertible debentures, an amount equal
 to the aggregate Interest payable on such date in respect of the convertible
 debentures shall be released from the Reserve Accounts and applied in respect
 of such Interest only, and (2) an amount equal to amounts converted into
 equity upon conversion of the convertible debentures;

 

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 (f)

 	
 the rate of
 Interest to be paid on such convertible debentures shall be no higher than
 the rate of Interest payable as at the date of issue of the convertible
 debentures on bonds issued by the State of Israel, which bonds are
 denominated in the same currency and have the same linkage conditions (if
 any) as the convertible debentures and the period of which State of Israel
 bonds is the same as, or closest to, the average duration (taking into
 account repayments) of the convertible debentures;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (g)

 	
 no amount
 shall be payable on account of the principal of any convertible debentures at
 any time on or prior to the Final Maturity Date, save only for: (i) amounts
 not to exceed the amounts of principal repayable on account of those
 convertible debentures existing as at the Amendment Closing Date (which
 amounts and the times for repayment of which are set out in Schedule 15.13
 hereto); (ii) an amount in respect of convertible debentures issued after
 September 28, 2006 and to be subject to identical (save for the later
 issuance of such convertible debentures) terms and conditions to those
 applicable to the convertible debentures issued by the Borrower pursuant to
 the prospectus dated June 21, 2006 (as set out in Part A of Schedule 15.13
 hereto), which shall not exceed NIS 39,000,000 (thirty-nine million New
 Israel Sheqels) linked to the Israeli consumer price index which may be
 issued upon the exercise of options to purchase convertible debentures, which
 options were issued by the Borrower pursuant to the prospectus dated June 21,
 2006, as set out in Part A of Schedule 15.13 hereto, and which shall be paid
 not earlier than December 2011; and (iii) an amount (principal, interest and
 all other amounts) in respect of convertible debentures which may be issued by
 the Borrower (in its discretion) after September 28, 2006 and to be subject
 to identical (save for adjustments to reflect the later issuance of such
 convertible debentures) terms and conditions to those applicable to the
 convertible debentures issued by the Borrower pursuant to the prospectus
 dated June 21, 2006 not to exceed US $40,000,000 (forty million United States
 Dollars) and which, shall be paid not earlier than December 2011;

 

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 (h)

 	
 any
 variation of the terms of the Finance Documents, including increase (if any)
 of the amount of the Facility or the provision of any other credit facilities
 by the Banks or any of them to the Borrower shall not require the consent of
 the holders of the convertible debentures or anyone acting on their behalf,
 nor shall it constitute a default under the terms of the convertible
 debentures;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (i)

 	
 no payment
 of principal or Interest shall be made in respect of the convertible
 debentures unless, as at the date of any such payment: (i) all amounts due
 and payable under the Finance Documents as of such date have been paid in
 full; and (ii) no Default exists and is continuing under any of the Finance
 Documents;

 

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 (j)

 	
 with respect
 to those convertible debentures referred to in paragraph (g)(i)-(iii) above
 (including convertible debentures existing as at September 28, 2006) (“the Equity Convertible Debentures”), the
 provisions of this clause 1.1.118 above (other than paragraph (i) above)
 shall apply in all respects, subject only to the express provisions set out
 in this paragraph (j) below:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (i)

 	
 each payment
 of Interest in respect of the Equity Convertible Debentures (to the extent
 permitted under this clause 1.1.118) may be made only on 1 (one) Business Day
 falling in the month immediately following a day which is a day for payment
 of Interest under this Agreement and each payment of principal in respect of
 the Equity Convertible Debentures (to the extent permitted under this clause
 1.1.118) shall be made only on 1 (one) Business Day falling in the month
 immediately following a day which is a day for repayment of principal under
 this Agreement (any date for payment of Interest or for repayment of
 principal to the Banks under this Agreement, hereinafter “a Bank Payment Date”);

 

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 (ii)

 	
 in the event
 of the existence on any Bank Payment Date (“a
 Default Bank Payment Date”) of a Default under any of the Finance
 Documents, then no payment of principal or Interest shall be made in respect
 of the Equity Convertible Debentures and the holders of the Equity
 Convertible Debentures and anybody acting on their behalf (including any
 trustee) shall not be entitled to take any action against the Borrower in the
 event of any non-payment as aforesaid, unless such non-payment shall continue
 for a period of more than 6 (six) months commencing from the Bank Payment
 Date falling immediately prior to the date of the first scheduled payment in
 respect of the Equity Convertible Debentures due immediately after the
 Default Bank Payment Date; provided that:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (1) in the
 event that during any such 6 (six) month period (“the Relevant Six-Month Period”), the Borrower shall make
 any payment to the Banks on account of Interest or principal under the
 Finance Documents, then the Borrower shall be entitled on or after the date
 of such payment to the Banks (“the Payment
 Date”) to make a payment on account of Interest or principal (as
 the case may be) then outstanding in respect of the Equity Convertible
 Debentures, such payment to comprise the same percentage of the Interest or
 principal (as the case may be) due and payable under the Equity Convertible
 Debentures as of the date scheduled for payment on the Equity Convertible
 Debentures which falls during the Relevant Six-Month Period as the payment to
 the Banks as aforesaid comprises of the Interest or principal (as the case
 may be) due and payable under the Finance Documents as of the Payment Date;
 and

 

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 (2) in the
 event that the Borrower and the Banks shall during the Relevant Six-Month
 Period reach an agreement (the Banks being under no obligation whatsoever to
 negotiate or reach any such agreement):

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (A)

 	
 regarding a
 rescheduling of payments by the Borrower to the Banks under the Finance
 Documents, such rescheduling (whether of principal or Interest) shall apply
 pro rata also to payments of principal and/or Interest, as the case may be,
 in respect of the Equity Convertible Debentures, mutatis mutandis, and the holders of the Equity
 Convertible Debentures shall be bound by such rescheduling agreement;
 provided that, any such rescheduling agreement shall apply only to payments
 (of principal and Interest) scheduled to be made under the Equity Convertible
 Debentures and under this Agreement during the period of 12 (twelve) months
 from the Default Bank Payment Date and shall postpone each such scheduled
 payment under the Equity Convertible Debentures to a date falling not more
 than 12 (twelve) months after the scheduled date for such payment pursuant to
 the terms of the Equity Convertible Debentures (all payments, whether of
 Interest or principal, in respect of the Equity Convertible Debentures
 rescheduled under any such rescheduling agreement, hereinafter “the Rescheduled ECD Payments” and all
 payments, whether of Interest or principal under this Agreement, rescheduled
 under such rescheduling agreement, hereinafter “the Rescheduled Facility Payments”). Pursuant to any such
 rescheduling agreement, the Borrower shall be entitled, on any date for
 payment of any Rescheduled ECD Payment (“Rescheduled
 ECD Payment Date”), to pay, in respect of the Rescheduled ECD
 Payments, an aggregate amount (of principal and/or Interest) which, together
 with the aggregate of all payments (of principal and/or Interest) actually
 made prior to such Rescheduled ECD Payment Date in respect of the Rescheduled
 ECD Payments under such rescheduling agreement, comprises the same percentage
 of the aggregate Rescheduled ECD Payments rescheduled under such rescheduling
 agreement as the aggregate Rescheduled Facility Payments under such
 rescheduling agreement actually made prior to such Rescheduled ECD Payment
 Date comprise of the aggregate Rescheduled Facility Payments rescheduled
 under such rescheduling agreement; or

 

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 (B)

 	
 pursuant to
 which, to the extent relating to the Equity Convertible Debentures, payments
 of principal and Interest on account of the Equity Convertible Debentures
 shall, with effect from the termination of the Relevant Six-Month Period be
 made to the holders of the Equity Convertible Debentures in accordance with
 the original schedule under the terms of the Equity Convertible Debentures,
 provided that amounts not paid during the Relevant Six-Month Period, or prior
 thereto, as the case may be, shall be postponed to be paid pro rata to those
 payments not made to the Banks during the Relevant Six-Month Period or prior
 thereto, mutatis mutandis, in
 accordance with the provisions of paragraph (ii)(2)(A) of this clause
 1.1.118(j)above and the holders
 of the Equity Convertible Debentures shall be bound by such an agreement.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 For the
 removal of doubt, in the event of the existence of a Default under any of the
 Finance Documents during or after any Rescheduling Period (including
 non-payment on due date of any amount of principal or Interest, whether
 pursuant to any rescheduling agreement or otherwise), the provisions of this
 paragraph (ii) shall again apply, mutatis
 mutandis (all without derogating from paragraph (iii) below);

 

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 (iii)

 	
 for the
 removal of doubt, notwithstanding anything to the contrary in this paragraph
 (j):

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (1)

 	
 in the event
 that:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (A) the
 holders of the Equity Convertible Debentures (or anybody acting on their
 behalf, including the trustee) shall institute any Proceedings against the
 Borrower, save only for Excluded Proceedings. “Excluded Proceedings” shall
 mean any of the following:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (I) Proceedings
 where the sole claim of the holders of the Equity Convertible Debentures is
 in respect of failure by the Borrower to make a payment permitted to be paid
 by the Borrower to the holders of the Equity Convertible Debentures in
 accordance with paragraph (ii)(1) above (in the event of a payment to the
 Banks pursuant to paragraph (ii)(1) above) or failure by the Borrower to make
 a payment under a rescheduling agreement which payment is permitted to be
 paid by the Borrower to the holders of the Equity Convertible Debentures in
 accordance with paragraph (ii)(2) above, subject, in either case above, to
 the holders of the Equity Convertible Debentures not being entitled to
 receive under any such claim any amount in excess of the relevant permitted
 payment not made as aforesaid;

 

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 (II)
 Proceedings where the sole claim of the holders of the Equity Convertible
 Debentures is in respect of failure by the Borrower to make a scheduled
 payment to the holders of the Equity Convertible Debentures due to the
 operation of the opening paragraph of (ii) above and the Relevant Six-Month
 Period referred to in such opening paragraph has expired without such
 scheduled amount being either paid in full pursuant to subparagraph (1) above
 or made subject to rescheduling under paragraph (ii)(A) or (B) above, subject
 to the holders of the Equity Convertible Debentures not being entitled to
 receive under any such claim any amount in excess of such scheduled payment
 not made as aforesaid); or

 

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 (III)
 Proceedings instituted which relate only to a material misleading fact (“Prat Mateh”) in such prospectus;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 In the case
 of subparagraph (I) or (II) above, for the further removal of doubt, subject
 to the Banks receiving 39 (thirty-nine) days’ prior notice as required
 pursuant to clause 1.1.118(d) above before institution of any such
 Proceedings; or

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (B) a
 Default occurs pursuant to clause 17.7 (save for a Default referred to
 therein comprising only the commencement of negotiations by the Borrower with
 individual suppliers of the Borrower to make an adjustment or rescheduling of
 its Indebtedness to such suppliers), 17.8 or 17.9 (save for a Default
 referred to therein where the amount being the subject of the relevant
 execution, attachment, sequestration or other process does not exceed US
 $2,500,000 (two million five hundred thousand United States Dollars)) below
 (including the granting of an order of receivership, winding-up or any
 similar order against or in respect of the Borrower or any of its assets); or

 

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 (C) the
 Banks shall have declared the Loans to be due and payable pursuant to clause
 17.21 or 17.22 below (for the further removal of doubt, including where any
 such declaration is made following an Event of Default constituted by
 Proceedings as referred to in subparagraph (A)(I), (II) or (III) of this
 paragraph (iii) above,

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 then no
 amount of whatsoever nature shall be payable by the Borrower in respect of
 the Equity Convertible Debentures (whether in respect of principal, Interest
 or any other amount) until all amounts owing by the Borrower under the
 Finance Documents shall have been paid in full and in the event that,
 contrary to the above, the holders of the Equity Convertible Debentures (or,
 as applicable, any person acting on their behalf, including a trustee) shall
 receive any payment, distribution or benefit, the recipient thereof shall be
 deemed to hold same on trust for the Banks and shall forthwith pay or
 transfer to the Banks any payment, distribution or benefit so received;

 

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 (2)

 	
 the Borrower
 shall not be entitled at any time after the expiry of any Relevant Six-Month
 Period as referred to in paragraph (ii)(1) above (including in the event of
 any Proceedings as referred to in subparagraph (1)(A)(II) of this paragraph
 (iii) above) to make any payment in respect of any scheduled payment to the
 holders of the Equity Convertible Debentures not made during such Relevant Six-Month
 Period due to the operation of the opening paragraph of (ii) above unless all
 amounts then due and payable under the Finance Documents shall have been paid
 in full or a final judgment shall have been given in favour of the holders of
 the Equity Convertible Debentures in respect of such scheduled payment; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 (3)

 	
 nothing
 contained in this paragraph (j) shall be construed as in any way obliging the
 Banks to refrain from exercising, or to delay exercising, any right or remedy
 which the Banks may have against the Borrower, as a consequence of the
 occurrence of a Default.

 
	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 All
references in this clause 1.1.118 to “convertible debentures” and “Equity
Convertible Debentures” shall be deemed to apply to those non-convertible debentures
issued by the Borrower in accordance with the consent, dated June 6, 2007,
given by the Banks, a copy of which
is attached as Schedule 1.1.118 hereto; 

 

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 1.1.119.

 	
  “Proceeding”

 	
 -

 	
 means any
 action, arbitration, audit, hearing, investigation, litigation or suit
 (whether civil, criminal, administrative, investigative or informal)
 commenced, brought, conducted or heard by or before or otherwise involving,
 any Governmental Body, arbitrator or mediator;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.120.

 	
  “Project”

 	
 -

 	
 means the
 project for the design, construction and operation of Fab 2 and the operation
 of Fab 1 and all activities necessary for, or ancillary to, any of the
 aforegoing, all as contemplated by the Business Plan;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.121.

 	
  “Proportion”

 	
 -

 	
 means, in
 relation to a Bank at any time, the proportion borne by its Contribution at
 such time to the aggregate Contributions at such time;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.122.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.123.

 	
  “Quarter Day”

 	
 -

 	
 means 31
 March, 30 June, 30 September and 31 December in any year and “Quarter Day” means any of them;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.124.

 	
  “Quarters”

 	
 -

 	
 means each
 period commencing on the day after a Quarter Day and ending on the next
 following Quarter Day;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.125.

 	
  “QuickLogic”

 	
 -

 	
 means
 QuickLogic Corporation, a corporation incorporated under the laws of
 Delaware, USA;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.126.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.127.

 	
  “Representative Rate”

 	
 -

 	
 means, with
 respect to any currency other than NIS, the representative rate of exchange
 of the NIS and such currency, last published by the Bank of Israel
 immediately prior to the relevant date of payment or calculation (as the case
 may be) and, if the Bank of Israel shall cease to publish a representative
 rate, then any other rate of exchange of the NIS and such currency,
 officially published, which comes in place of such representative rate, last
 published immediately prior to the relevant date of payment or calculation
 (as the case may be) and, in the absence of any such official rate, then the
 average of the selling and buying rates of exchange of such currency, for NIS
 (for cheques and remittances) prevailing at Bank Hapoalim and Bank Leumi at
 the end of the last Business Day prior to the relevant date of payment or
 calculation (as the case may be);

 

48

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.127A.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.127B.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.127C.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.127D.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.127E.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.127F.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.127G.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.128.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.129.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.130.

 	
  “Sandisk”

 	
 -

 	
 means
 Sandisk Corporation, a corporation incorporated under the laws of Delaware,
 USA;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.131.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.132.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.133.

 	
  “Security Documents”

 	
 -

 	
 means:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 the
 Debenture;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (b)

 	
 each
 mortgage, pledge or assignment by way of charge to be executed by the
 Borrower in favour of the Banks in accordance with the provisions of the
 Debenture;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (c)

 	
 each security
 agreement entered into pursuant to the provisions of the Debenture;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (d)

 	
 all
 acknowledgments and consents required to be delivered pursuant to the
 documents referred to above;

 

49

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (e)

 	
 a
 first-ranking fixed pledge and charge under New York law over all shares or
 other securities in Jazz held by the Borrower or any Subsidiaries of the
 Borrower, from time to time (“the Jazz
 Share Pledge”);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (f)

 	
 the TIC
 Safety Net Undertaking;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (g)

 	
 the Outside
 Investment Undertakings; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (h)

 	
 any other
 agreement or deed from time to time entered into by the Borrower in favour of
 the Banks for the purposes of securing any obligations and liabilities of the
 Borrower under the Finance Documents and in respect of any other Permitted
 Financial Indebtedness, if any, made available by the Banks to the Borrower; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.133A.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.133B.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.134.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.135.

 	
  “Tax on Overall
Net Income”

 	
 
-

 	
 
means an
 income tax or capital gains tax including income tax on interest;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.136.

 	
  “Taxes”

 	
 -

 	
 means all
 income and other taxes, including, taxes or charges on capital gains,
 profits, value-added taxes and all other taxes of whatsoever nature and
 levies, imposts, duties (including stamp duty), charges, deductions and
 withholdings in the nature of or on account of tax, together with Interest
 thereon and penalties and fees with respect thereto, if any, and any payments
 made on or in respect thereof and “Tax”
 and “Taxation” shall be
 construed accordingly;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.137.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.138.

 	
  “Threatened”

 	
 -

 	
 a claim,
 Proceeding, dispute, action or other matter will be deemed to have been
 “Threatened” if either: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 any demand
 or statement has been made in writing or any notice has been given in writing
 or any other event has occurred or any other circumstance exists, that leads
 any Named Officer and Director actually to believe that such a claim will be
 filed or otherwise pursued in the future; or 

 

50

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (b)

 	
 any demand
 or statement has been made in writing or orally or any notice has been given
 in writing or orally to the effect that such a claim, Proceeding, dispute,
 action or other matter will be asserted, commenced, taken or otherwise
 pursued in the future;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.139.

 	
  “TIC”

 	
 -

 	
 means Israel
 Corporation Ltd., a company incorporated under the laws of Israel;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.139A.

 	
  “TIC Safety Net
Undertaking”

 	
 
-

 	
 
means the
 undertaking in the form of Schedule
 1.1.139A hereto given by TIC in favour of the Borrower;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.140.

 	
  “Toshiba”

 	
 -

 	
 means
 Toshiba Corporation, a company incorporated under the laws of Japan;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.141.

 	
  “Toshiba Licence Agreement”

 	
 -

 	
 means the
 Technology Licence Agreement effective as at April 7, 2000 between the
 Borrower and Toshiba;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.142.

 	
 “Total Debt

 (Borrower only)”

 	
 
-

 	
 
means, for
 any Quarter, the sum of:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 the Total
 Outstandings, as at the last day of such Quarter;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (b)

 	
 the balance
 on the last day of such Quarter of all Permitted Financial Indebtedness of
 the Borrower under clauses 1.1.115(b), (c) and (d) above, and under clause
 1.1.115(f) above (with respect to (f), for periods of over 180 (one hundred
 and eighty) days, but including all Interest payable on Permitted Financial
 Indebtedness referred to in clause 1.1.115(f) (including in respect of
 periods of 180 (one hundred and eighty) days or less) and any Interest or
 other amounts payable on account of such Permitted Financial Indebtedness,
 all of the above amounts as determined and certified as correct by: (i) the
 CFO of the Borrower, if with respect to any of the first 3 (three) Quarters
 of each Fiscal Year; and (ii) the Auditors, with respect to the last Quarter
 of any Fiscal Year (that is the Quarter ending December 31st);

 

51

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.142A.

 	
 “Total Debt

 (Consolidated)”

 	
 
-

 	
 
means, for
 any Quarter, the sum of:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (a)

 	
 the Total
 Outstandings, as at the last day of such Quarter;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (b)

 	
 the balance
 on the last day of such Quarter of all Permitted Financial Indebtedness of
 the Group under clauses 1.1.115(b), (c) and (d) above, and under clause
 1.1.115(f) and clause 1.1.115(k) above (with respect to (f), for periods of
 over 180 (one hundred and eighty) days, but including all Interest payable on
 Permitted Financial Indebtedness referred to in clause 1.1.115(f) (including
 in respect of periods of 180 (one hundred and eighty) days or less) and any
 Interest or other amounts payable on account of such Permitted Financial
 Indebtedness,

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 all of the above amounts as determined and certified as correct
 by: (i) the CFO of the Borrower, if with respect to any of the first 3 (three)
 Quarters of each Fiscal Year; and (ii) the Auditors, with respect to the last
 Quarter of any Fiscal Year (that is the Quarter ending December 31st);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.143.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.144.

 	
  “Total Outstandings”

 	
 -

 	
 means, at
 any time, the sum in Dollars of the Loans at such time;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.145.

 	
  “Unpaid Sum”

 	
 -

 	
 shall bear
 the meaning assigned to such term in clause 18.1 below;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.146.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.147.

 	
  “Warrants”

 	
 -

 	
 means those
 warrants to acquire shares of the Borrower issued by the Borrower to the
 Banks (or their respective nominees or Affiliates) as listed in Schedule 1.1.147 hereto as well as any
 other warrants to acquire shares of the Borrower issued by the Borrower to
 the Banks (or their respective nominees or Affiliates) from time to time.

 

52

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.1.148.

 	
 [Intentionally Deleted]

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 1.2.

 	
 Clause Headings/Table of Contents

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Clause
 headings and the table of contents are inserted for convenience of reference
 only and shall be ignored in the interpretation of this Agreement.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 1.3.

 	
 Interpretation

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 In this
 Agreement, unless the context otherwise requires:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.3.1.

 	
 references
 to clauses and Schedules are to be construed as references to the clauses of,
 and Schedules to, this Agreement and references to this Agreement include its
 Schedules. For the removal of doubt,
 Schedules to this Agreement which have not been deleted and which are not
 attached (whether on the date hereof or on the Amendment Closing Date) to
 this Agreement shall remain effective in their respective forms as applicable
 immediately prior to the Amendment Closing Date;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.3.2.

 	
 references
 to (or to any specified provision of) this Agreement or any other document
 shall be construed as references to this Agreement, that provision or that
 document as in force for the time being and as amended in accordance with the
 terms thereof, or, as the case may be, with the agreement of the relevant
 parties;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.3.3.

 	
 words
 importing the plural shall include the singular and vice versa; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.3.4.

 	
  “Affiliate” means, with
 respect to any person, mean any company which controls, is controlled by, or
 under common control with, such person; “control”
 shall in this clause 1.3.4 and in clause 1.3.10 below bear the meaning
 assigned to such term in Section 1 of the Securities Law, 1968;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.3.5.

 	
  “Banks” shall be construed
 so as to include any subsequent permitted successors, transferees and
 permitted assigns of a Bank in accordance with their respective interests
 pursuant to clause 25 below;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.3.6.

 	
 the “equivalent” on any given date in one
 currency (the “first currency”)
 of an amount denominated in another currency (the “second currency”) means the amount of the first currency
 which could be purchased with the amount of the second currency at: (i) in
 the case that one of the two relevant currencies is NIS, the Representative
 Rate for the other currency; or (ii) in the case that neither of the relevant
 currencies is NIS, the rate equal to a fraction, the numerator of which is
 the Representative Rate of the second currency and the denominator of which
 is the Representative Rate of the first currency;

 

53

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.3.7.

 	
  “including” and “includes” means including, without
 limiting the generality of any description preceding such terms;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.3.8.

 	
 a “law” includes any Israeli statute, law,
 regulation, treaty, rule, official directive, request or guideline of any
 governmental, fiscal, monetary or regulatory body, agency, department or
 regulatory, self-regulatory or other authority or organisation, including,
 the position (guidelines) of the Examiner of Banks with respect to proper
 conduct of bank affairs (“Hora’ot Nihul
 Bankai Takin”) or any interpretation of any of the aforegoing by
 the Examiner of Banks (all the above whether or not having the force of law,
 but if not having the force of law, being one with which it is the practice
 of banks to comply). Notwithstanding
 the aforegoing, “law” when used
 in this Agreement in connection with Jazz or any of its Subsidiaries
 (including in the definition of “Environmental Laws”), shall bear the meaning
 set out in this clause 1.3.8 above, save that “Israeli” shall be replaced by
 “United States federal, state, county, municipal or other local”;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.3.9.

 	
 a “person” shall be construed as a
 reference to any person, firm, company, corporation, government, state or
 agency of a state or any association or partnership (whether or not having
 separate legal personality) or two or more of the aforegoing;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.3.10.

 	
  “Subsidiary” of a person
 means any company which is directly or indirectly controlled by such person;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.3.11.

 	
  “US $”, “United States Dollars”, “US Dollars” and “Dollars” denote the lawful currency of
 the United States of America; and “NIS”
 and “New Israel Sheqels” denote
 the lawful currency of Israel;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.3.12.

 	
  “VAT” shall be construed as
 a reference to Israeli value added tax, including any similar Israeli Tax
 which may be imposed in place thereof from time to time;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.3.13.

 	
 the “winding-up”, “dissolution” or “administration”
 of a company or corporation shall be construed so as to include any
 equivalent or analogous Proceedings under the law of the jurisdiction in which
 such company or corporation is incorporated or any jurisdiction in which such
 company or corporation carries on business, including the seeking of
 liquidation, winding-up, reorganisation, dissolution, administration,
 arrangement, adjustment, protection or relief of debtors;

 

54

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.3.14.

 	
 all
 accounting expressions which are not otherwise defined herein shall be
 construed in accordance with GAAP.
 Save as expressly stated otherwise, each of “EBITDA (Consolidated)”,
 “Excess Cash Flow”, “Total Debt (Consolidated)” and “Investments
 (Consolidated), for any period, shall be determined from the consolidated
 Accounts and “EBITDA (Borrower only)”, “Total Debt (Borrower only)” and
 “Investments (Borrower only)”, for any period, shall be determined from the
 Borrower’s non-consolidated Accounts, in each case, for the relevant period
 or for the periods comprising such period, or, if not included in the
 relevant Accounts, shall be determined from a certificate signed by the
 Auditors delivered to the Banks together with the relevant Accounts; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1.3.15.

 	
 any
 reference in this Agreement to a law shall be construed as a reference to
 such law as the same may have been, or may from time to time be, amended or
 re-enacted.

 

55

	2.  	THE
LOANS  

	 	2.1. 	Loans
to the Borrower  

	 	
The
principal amount of the Loans outstanding immediately prior to the conversions referred to
below taking place on the Amendment Closing Date was US $368,693,001 (three hundred
and sixty-eight million six hundred and ninety-three thousand and one United States
Dollars). The principal amount of the Loans outstanding and owing by the Borrower to the
Banks as at the Amendment Closing Date (after conversion by each Bank of
US $84,779,610 (eighty-four million seven hundred and seventy-nine thousand six
hundred and ten United States Dollars) (amount being US $85,000,000 (eighty-five
million United States Dollars) less the accrued unpaid Interest on the Equipment Facility
Loan made to the Borrower by each Bank as referred to below (“the Accrued
Unpaid Equipment Facility  Interest”) of its Loans to the Borrower and the
amount of US $15,220,390 (fifteen million two hundred and twenty thousand three
hundred and ninety United States Dollars) (i.e.,  US $15,000,000 (fifteen
million United States Dollars) plus the Accrued Unpaid Equipment Facility Loan Interest,
being the full amount owed under the Equipment Facility Loan Agreements respectively
entered into by the Banks with the Borrower on September 10, 2007)) into
US $100,000,000 (one hundred million United States Dollars) of capital notes
convertible into 70,422,535 (seventy million four hundred and twenty-two thousand five
hundred and thirty-five) shares) (subject to the adjustments set forth in the capital
notes) is US $202,779,814 (two hundred and two million seven hundred and seventy-nine
thousand eight hundred and fourteen United States Dollars) of which US $101,391,517
(one hundred and one million three hundred and ninety-one thousand five hundred and
seventeen United States Dollars) is owed to Bank Hapoalim and US $101,388,297 (one
hundred and one million three hundred and eighty-eight thousand two hundred and
ninety-seven United States Dollars) is owed to Bank Leumi. 

	 	
A
Bank may, in technically implementing the foregoing on the Amendment Closing Date, elect
to record in its books that it has granted a “new loan” in the amount of the
Loan outstanding on the Amendment Closing Date (that is, the amount of
US $101,391,517 (one hundred and one million three hundred and ninety-one thousand
five hundred and seventeen United States Dollars), in the case of Bank Hapoalim, or the
amount of US $101,388,297 (one hundred and one million three hundred eighty-eight
thousand two hundred and ninety-seven United States Dollars), in the case Bank Leumi),
which “new loan” will be applied automatically on the Amendment Closing Date in
repayment of the Loan outstanding on the Amendment Closing Date, such new loan, for the
avoidance of doubt, to constitute the Loan of such Bank hereunder and to be subject to all
the terms and conditions of this Agreement, including as to the Interest and repayment, as
in effect from the Amendment Closing Date. The Borrower hereby authorises and instructs
either of the Banks making an election as aforesaid to debit the Borrower’s relevant
Charged Account with the amount of such “new loan” and to apply same in
immediate repayment of the Loan on the Amendment Closing Date. For the avoidance of doubt,
the foregoing in this paragraph does not in fact create a new loan, but is simply a
technical method for implementing the changes with respect to the terms and conditions of
the Loans which are to be effective from the Amendment Closing Date. 

56

	 	2.2. 	Banks’Obligations
Several  

	 	
The
obligations of each of the Banks under this Agreement shall be several; accordingly, the
failure of a Bank to perform its obligations under this Agreement shall not result in:
(1) the obligations of any other Bank being increased; nor (2) the Borrower
being discharged (in whole or in part) from its obligations under this Agreement towards a
Bank (without derogating from rights and remedies the Borrower may have against the Bank
in breach) and in no circumstances shall a Bank have any responsibility for a failure of
another Bank to perform its obligations under this Agreement. 

	 	2.3. 	Limits
on Yen, Euro and Pound Sterling Credits  

	 	
[Intentionally
Deleted] 

	 	2.4. 	Banks’ Rights
Separate  

	 	
The
rights of each Bank under or in connection with the Finance Documents are separate and
independent rights and any debt arising under the Finance Documents to a Bank from the
Borrower shall be a separate and independent debt. 

	 	2.5. 	Separate
Enforcement by Banks  

	 	
A
Bank may, except as otherwise stated in the Finance Documents, separately enforce its
rights under the Finance Documents. 

	3.  	PURPOSE – Intentionally
Deleted  

	 	3.1. 	Purpose
of Advances and Loans  

	 	
[Intentionally
Deleted] 

	 	3.2. 	Purpose
of L/Cs  

	 	
[Intentionally
Deleted] 

	 	3.3. 	Purpose
of Permitted Hedging Transactions  

	 	
[Intentionally
Deleted] 

57

	 	3.4. 	No
Obligation to Monitor  

	 	
[Intentionally
Deleted] 

	4.  	CONDITIONS
PRECEDENT – Intentionally Deleted  

	 	
[Intentionally
Deleted] 

	5.  	AVAILABILITY
OF CREDITS – Intentionally Deleted  

	 	5.1. 	Availability  

	 	
[Intentionally
Deleted] 

	 	5.2. 	Advances  

	 	
[Intentionally
Deleted] 

	 	5.3. 	Letters
of Credit  

	 	
[Intentionally
Deleted]  

	 	5.4. 	Hedging  

	 	
[Intentionally
Deleted]  

	 	5.5. 	Applications
to All Banks  

	 	
[Intentionally
Deleted]  

	6.  	REPAYMENT  

	 	6.1. 	Repayment
of Loans  

	 	
The
Borrower shall repay to each Bank its Proportion of the Loans (together with all Interest
accrued thereon and added to principal in accordance with clause 9.3(i) below) by way
of 8 (eight) equal consecutive quarterly instalments, payable on the last Business Day of
each Quarter, the first such instalment in respect of the Loans to be paid on
September 30, 2010 and the last such instalment to be paid on the Final Maturity
Date. 

	 	6.2. 	Payment
of all other Sums Due on the Final Maturity Date  

	 	
On
the Final Maturity Date, the Borrower additionally shall pay to the Banks all other sums
then outstanding under the Finance Documents. 

58

	 	6.3. 	Repayment
in US Dollars  

	 	
For
the removal of doubt, each Loan, as well as all Interest thereon, shall be repaid in
US Dollars. 

	 	6.4. 	Repayments
to Payments Accounts  

	 	
Subject
to clause 20.1 below, all repayments as aforesaid shall be made by transfer to each
Bank to their respective Project Accounts. 

	 	6.5. 	No
Reborrowing  

	 	
The
Borrower shall not be entitled to reborrow any part of the Loan which is repaid.  

	 	6.6. 	No
Commitments  

	 	
For
the removal of doubt, the Borrower has no rights to borrow any amount, nor to obtain any
other form of credit or Indebtedness from the Banks (whether in respect of Hedging
Transactions, letters of credit or in any other form) under this Agreement. 

59

	7.  	VOLUNTARY
PREPAYMENT  

	 	7.1. 	Voluntary
Prepayment  

	 	
Subject
to clause 7.9 below, the Borrower may, in the manner and subject to the terms and
conditions set out in this clause 7 below, if it has given to the Banks not less than
25 (twenty-five) Business Days’ advance written notice to such effect, make a
prepayment to each Bank of its Proportion of the Loans, in each case on an Interest
Payment Date, provided that, the aggregate amount of each such prepayment (principal) (for
all Banks), shall not be less than US $10,000,000 (ten million United States
Dollars). 

	 	7.2. 	Notice
of Prepayment  

	 	
Any
notice of prepayment given by the Borrower pursuant to clause 7.1 above shall be
irrevocable, shall specify the Interest Payment Date upon which such prepayment is to be
made and the amount of such prepayment and shall oblige the Borrower to make such
prepayment on such date. A prepayment of any Loan shall be made in the currency of the
Loan. 

	 	7.3. 	No
Other Prepayments  

	 	
The
Borrower shall not prepay any part of any Loan except in accordance with the aforegoing in
this clause 7 or clause 8 below. 

	 	7.4. 	No
Reborrowing  

	 	
The
Borrower shall not be entitled to reborrow any amount repaid or prepaid on account of any
Loan. 

	 	7.5. 	Prepayment
Commissions  

	 	
The
Borrower shall pay to the Banks, in their respective Proportions, on the date of
prepayment in accordance with this clause 7 above, a commission of 0.25% (nought
point two five percent) of the amount (principal) prepaid, unless the prepayment is of the
entire Total Outstandings, in which event the commission shall be 0.125% (nought point one
two five percent) of the amount (principal) prepaid. 

60

	 	7.6. 	Prepayment
to Payments Account  

	 	
Subject
to clause 20.1 below, all prepayments as aforesaid shall be made by transfer to each
Bank to their respective Project Accounts (Hapoalim Project Account or BLL Project
Account) their respective Proportions of each such prepayment. 

	 	7.7. 	Prepayments
together with Interest and Other Sums Owed  

	 	
All
prepayments shall be made together with all accrued Interest on the amount prepaid and all
other sums due in respect of the amount prepaid. 

	 	7.8. 	Cancellation  

	 	
[Intentionally
Deleted]  

	 	7.9. 	Limits
on Prepayment  

	 	
[Intentionally
Deleted]  

	 	7.10. 	Currency
for Prepayment  

	 	
A
prepayment of a Loan shall be made in the currency of such Loan.  

	 	7.11. 	Selection
of Instalments for Voluntary Prepayment  

	 	
Any
prepayment shall be applied to those repayment instalments in respect of the Loans as
selected by the Borrower in the relevant prepayment notice given pursuant to
clause 7.1 above; for the removal of doubt, the prepayments to each of the Banks
shall be applied to the same instalments of the Loans for each Bank. 

	 	7.12. 	Prepayment
Pursuant to Clause 6.1.1  

	 	
[Intentionally
Deleted]  

	8.  	MANDATORY
PREPAYMENT  

	 	8.1. 	Mandatory
Prepayment  

	 	
Unless
the Banks shall, in any particular case, otherwise direct in writing, subject to the last
sentence of this clause 8.1, all the following amounts shall be deposited in a
Project Account immediately on receipt thereof (such deposit not to be withdrawn) and
shall be applied in mandatory prepayment to each Bank of its Proportion of the Loans on
the first Interest Payment Date after receipt of such amounts by the Borrower: 

61

	 	8.1.1. 	all
proceeds from time to time received under the Insurance Policies, in excess
                    of US $5,000,000 (five million United States Dollars) in
aggregate (other                     than under Insurance Policies in respect of
liability of the Borrower to third                     parties or of liability of the
Borrower for damage to property of third                     parties), unless such
proceeds are received in respect of damage to Fab 1                     or Fab 2
or any other equipment used in Fab 1 or Fab 2 and may be
                    applied, through utilisation of such proceeds, to repair the Fab 1
or                     Fab 2 buildings, as applicable, or to repair or replace such
equipment or                     otherwise purchase equipment or technology for Fab 1 or
Fab 2 in accordance                     with the Business Plan, without resulting in
a Material Adverse Effect.  

	 	8.1.2. 	[Intentionally
Deleted]  

	 	8.1.3. 	all
proceeds from time to time received by the Borrower in connection with the
                    nationalisation, expropriation or requisition for title of Fab 2
or any                     other part of the Borrower’s assets;  

	 	8.1.4. 	[Intentionally
Deleted]  

	 	8.1.5. 	without
derogating from clause 16.24 below, if the Borrower sells,
                    transfers, lends, leases, licenses or otherwise disposes of any of
its assets                     (including Intellectual Property Assets and/or securities
the Borrower holds                     (directly or indirectly) in any Subsidiary (other
than assets of Jazz or                     securities or assets of Jazz’s
Subsidiaries) or other corporation (for the                     removal of doubt, subject
to any such disposal being permitted under the Finance                     Documents)),
the Borrower shall prepay an amount equal to the Net Proceeds
                    resulting from such sale, transfer, loan, lease, licence or disposal
(provided                     such Net Proceeds are greater than US $5,000,000 (five
million United                     States Dollars) or its equivalent and, when aggregated
with any other Net                     Proceeds received during the Fiscal Year in which
the relevant Net Proceeds are                     received, exceed an aggregate amount
equal to US $10,000,000 (ten million                     United States Dollars) or
its equivalent). The provisions of this                     clause 8.1.5 shall not
apply in respect of amounts derived from the sale of                     worn-out,
obsolete, un-utilized or out-of-service assets of the Borrower, which
                    amounts the Borrower, when requesting release from the Debenture of
such assets                     to be sold in accordance with clause 16.24 below,
confirms in writing to                     the Banks, are to be applied in respect of the
purchase of machinery, tools,                     spare parts or materials for the
Project in accordance with the Business Plan                     (including in bringing
forward the making of investments which, in accordance                     with the
Business Plan, are to be made at future dates).  

	 	8.2. 	No
Reborrowing of Mandatory Prepayment

	 	
The
Borrower shall not be entitled to reborrow any amount mandatorily prepaid in accordance
with this clause 8 above. 

62

	 	8.3. 	Account
of Mandatory Prepayment  

	 	
Subject
to clause 20.1 below, all mandatory prepayments as aforesaid shall be made by
transfer thereof to the respective Project Accounts (Hapoalim Project Account or BLL
Project Account). 

	 	8.4. 	Mandatory
Prepayment together 
with Interest and Other Sums Owed  

	 	
Any
mandatory prepayment shall be made together with all accrued Interest on the amount
prepaid and all other sums due in respect of the amount prepaid. 

	 	8.5. 	Currency
for Mandatory Prepayment  

	 	
A
mandatory prepayment on account of an instalment of a Loan shall be made in the currency
of such Loan. 

	 	8.6. 	Schedule
for Mandatory Prepayment  

	 	
Any
prepayment shall be applied to the repayment instalments in respect of the Loans in
reverse order (that is, shall be deemed first to be made on account of the last repayment
instalment, then the second last, and so on and so forth). 

63

	9.  	INTEREST  

	 	9.1. 	Interest
Rate  

	 	
The
rate of Interest applicable to the Loans in respect of each Interest Period shall be the
sum of: (a) the rate per annum determined by the Banks to be LIBOR on the Interest
Determination Date for such Interest Period; and (b) 2.5% (two point five percent)
per annum. Subject to the effectiveness of the amendment and restatement of this Agreement
on the Amendment Closing Date the rate of Interest set forth in (b) above, as it applies
to the principal amount of the Loans outstanding immediately prior to the conversions
referred to in clause 2.1 (“the Loan Conversion”), shall take effect
from the Amendment Closing Date. 

	 	9.2. 	Accrual
of Interest  

	 	
Interest
as aforesaid in clause 9.1 above in respect of the Loans shall accrue from day to day
and shall be calculated on the basis of the actual number of days elapsed and a 360 (three
hundred and sixty) day year. 

	 	9.3. 	Payment
of Interest  

	 	
All
Interest accrued as aforesaid in clause 9.2 above on the Loans: (a) with respect
to the Interest Payment Date falling on September 29, 2008, has been added to and
become part of the principal of the Loans, and is included in the amount of the Loans set
forth in clause 2.1 above; (b) with respect to each of the Interest Payment
Dates falling on December 31, 2008, March 31, 2009 and June 30, 2009, shall
be added to and become part of the principal of the Loans, and such Interest shall be paid
by the Borrower (together with Interest thereon) as part of the principal; and
(c) with respect to each other Interest Payment Date, shall be paid on each such
Interest Payment Date and on the Final Maturity Date. Subject to clause 20.1 below,
the Borrower shall pay to each Bank all Interest payable as aforesaid into such
Bank’s Project Account. 

	 	9.4. 	Certain
Compensatory Payments  

	 	
The
parties record that during the period from May 17, 2006 until the Amendment Closing
Date, the rate of Interest applicable to the Loans (in the principal amount thereof as was
applicable during said period) was reduced by 1.4% (one point four percent) (the
difference between 2.5% (two point five percent) and 1.1% (one point one percent)). As
compensation to the Banks for the said reduction in the rate of Interest the Borrower
agrees as follows: 

64

	 	9.4.1. 	If
every reported closing share price of the Borrower’s shares on the
                    Nasdaq Stock Market (or on such other stock exchange or quotation
system in the                     United States on which the Borrower’s shares are
listed or admitted for                     quotation in the event the Borrower’s
shares are not listed on the Nasdaq                     Stock Market (“a Sale
Price”)) on every trading day during the                     six month period
commencing on July 1, 2010 and ending on December 31,                     2010 (“the
Determination Period”) exceeds US $3.49 (three                     United
States Dollars and forty-nine cents), as such price shall be adjusted to
                    take into account all subdivisions of shares (including stock splits)
and                     combinations of shares into a smaller numbers of shares
(including reverse stock                     splits) (“the Minimum Price”),
the Borrower shall,                     within 30 (thirty) days of the end of the
Determination Period, subject to                     clause 9.4.6 below: (a) issue
and allot to the Banks (or their                     respective nominees), the aggregate
number of shares of the Borrower that equals                     US $6,043,330 (six
million forty-three thousand three hundred and thirty                     United States
Dollars) (“the Clause 9.4.1 Amount”) divided                     by
the average closing price of the Borrower’s shares on the Nasdaq Stock
                    Market (or on such other stock exchange or quotation system in the
United States                     on which the Borrower’s shares are listed or
admitted for quotation in the                     event the Borrower’s shares are
not listed on the Nasdaq Stock Market)                     during the fourth Quarter of
2010 (“the Average Closing Price”)                     with each Bank
(or its nominee) receiving its Proportion of such shares; or                     (b) at
the election of any Bank not wishing to receive shares, issue to                     such
Bank (or its nominee) equity equivalent convertible capital notes in a
                    principal amount equal to such Bank’s Proportion of the Clause 9.4.1
                    Amount and in the form, mutatis mutandis, of the capital note
issued to                     such Bank or its nominee on or about September 28,
2006, which capital                     notes are convertible into such number of shares
of the Borrower as shall be                     equal to such Bank’s Proportion of
the Clause 9.4.1 Amount divided by                     the Average Closing Price,
subject to the adjustments set forth in the capital                     note, such
capital notes being fully convertible, at any time, in whole or in
                    part, and fully transferable, at any time, in whole or in part.
Whenever the                     Minimum Price is required to be adjusted pursuant to
this clause 9.4.1 or                     clause 9.4.2 below, the Borrower shall
promptly prepare a certificate, in                     form and substance satisfactory to
the Banks, signed by the Chief Financial                     Officer of the Borrower,
setting forth, in reasonable detail, the event                     requiring the
adjustment, the amount of the adjustment, the method by which such
                    adjustment was calculated and the Minimum Price after giving effect
to such                     adjustment.  

	 	9.4.2. 	Should
any Sale Price during the Determination Period not exceed the Minimum
                    Price, the Borrower shall, within 30 (thirty) days following the end
of the                     Determination Period, subject to clause 9.4.6 below: (a) issue
and                     allot to the Banks (or their respective nominees) the aggregate
number of shares                     of the Borrower that equals US $12,086,670
(twelve million eighty-six                     thousand six hundred and seventy United
States Dollars) (“the                     Clause 9.4.2 Amount”)
divided by the Average Closing Price, with                     each Bank (or its nominee)
receiving its Proportion of such shares; or                     (b) at the election
of any Bank not wishing to receive shares, issue to                     such Bank (or its
nominee) equity equivalent convertible capital notes in a                     principal
amount equal to such Bank’s Proportion of the Clause 9.4.2
                    amount in the form, mutatis mutandis, of the capital note
issued to such                     Bank (or its nominee) on or about September 28,
2006 which capital notes                     are convertible into such number of shares
of the Borrower as shall be equal to                     such Bank’s Proportion of
the Clause 9.4.2 Amount divided by the                     Average Closing Price,
subject to the adjustments set forth in the capital note,                     such
capital notes being fully convertible, at any time, in whole or in part,
                    and fully transferable, at any time, in whole or in part.  

65

	 	9.4.3. 	If
any Sale Price during the Determination Period shall not exceed the Minimum
                    Price, the Borrower shall promptly, but not later than 3 (three)
Business Days                     after the end of the Determination Period, give written
notice thereof to the                     Banks.  

	 	9.4.4. 	If
every Sale Price on every trading day during the Determination Period exceeds
                    the Minimum Price, the Borrower shall provide the Banks, by no later
than 5                     (five) days after the end of the Determination Period, a table
setting forth the                     Sale Price of the Borrower’s shares on every
trading day during the                     Determination Period, certified as correct by
the Chief Financial Officer of the                     Borrower, who shall further
certify that the Sale Price on every trading day                     during the
Determination Period exceeded the Minimum Price, all in form and
                    substance satisfactory to the Banks.  

	 	9.4.5. 	No
fractional shares will be issued in connection with any share issuance
                    pursuant to clause 9.4.1 or 9.4.2 above, but in lieu of such
fractional shares,                     the Borrower shall make a cash payment therefor on
the basis of the Average                     Closing Price.  

	 	9.4.6. 	Notwithstanding
anything to the contrary in this clause 9.4, it shall be a
                    condition to the Borrower’s issuance of shares (or, at the
election of any                     Bank, capital notes) to the Banks pursuant to clause 9.4.1
or 9.4.2 above                     that: (a) no Default or Event of Default has
occurred; (b) no law                     (including foreign laws or interpretations
by foreign Governmental Bodies)                     prohibits any Bank from acquiring its
Proportion of such shares or capital notes                     or restricts such Bank’s
ability to indefinitely hold such shares or                     capital notes; and (c) all
of the Borrower’s agreements with each of                     the Banks or their
respective nominees with respect to such Bank’s                     investment in
the shares, or in securities convertible into or exercisable for
                    shares, of the Borrower, including any investment and registration
rights                     agreements (collectively, “the Equity Documents”),
shall be in                     full force and effect and the Borrower shall not be in
default of any of its                     obligations under any of the Equity Documents.
In the event that any of the                     above conditions shall not be met, then,
instead of issuing shares (or capital                     notes), the Borrower shall pay
the Clause 9.4.1 Amount or the                     Clause 9.4.2 Amount, as
applicable (as the same may be adjusted pursuant to                     clause 9.4.7
below, if applicable) in cash by paying each Bank’s                     Proportion
of such aggregate amount into such Bank’s Project Account on the
                    30th (thirtieth) day following the end of the
Determination Period.  

66

	 	9.4.7. 	Notwithstanding
anything to the contrary in this clause 9.4, in the event                     that:
(i) clause 9.4.2 shall apply; and (ii) at any time prior to the
                    end of the Determination Period a Bank (or its nominee) shall sell
shares of the                     Borrower issued to such Bank (or its nominee) pursuant
to the Loan conversion                     which occurred on September 28, 2006 (“the
Conversion                     Shares”) at a price per share that exceeds the
Minimum Price                     (“the Sold Shares”), then the
compensation payable to such Bank                     under this clause 9.4 shall be
as follows: (a) with respect to the                     compensation payable to such
Bank under clause 9.4.2 above, the                     Clause 9.4.2 Amount
shall be deemed to be an amount equal to the                     Clause 9.4.2 Amount
multiplied by a percentage equal to 100 (one hundred)                     minus the
Percentage Sold; and (b) notwithstanding that clause 9.4.2
                    is applicable, the Bank shall also be entitled to compensation under
                    clause 9.4.1, provided that the Clause 9.4.1 Amount shall
be deemed to                     be an amount equal to the Clause 9.4.1 Amount
multiplied by the Percentage                     Sold. As used in this clause 9.4.7
the term “Percentage                     Sold” means the Sold Shares
expressed as a percentage of the Conversion                     Shares, as the Sold
Shares and the Conversion Shares shall be adjusted to                     reflect any
subdivisions or combinations of shares occurring between                     September 28,
2006 and the end of the Determination Period. For the                     avoidance of
doubt, sales by a Bank of shares that are not Conversion Shares,
                    including shares issuable upon the exercise of any Warrants granted
or to be                     granted to any Bank or its nominee or shares issuable upon
conversion of any                     capital notes issued on or about the Amendment
Closing Date, shall not be taken                     into account for the purposes of
this clause 9.4.7.  

	 	9.4.8. 	All
issuances of shares or capital notes, as the case may be, in accordance with
                    this clause 9.4 above, shall be made in accordance with the
terms of the                     respective Equity Documents and, without limiting the
generality of the                     foregoing, all Governmental Authorisations, third
party consents, certificates                     and legal opinions to be delivered and
all such other actions to be taken by the                     Borrower under the Equity
Documents in connection with the issue of such shares                     or capital
notes, as the case may be, shall be so delivered and taken by the
                    Borrower by not later than 30 (thirty) days after the end of the
Determination                     Period.  

	10.  	SUBSTITUTE
INTEREST RATES

	 	
If
and whenever, at any time prior to the commencement of any Interest Period:  

67

	 	10.1. 	by
reason of changes affecting the Eurodollar Interbank market, the Banks shall
               have determined that, due to circumstances beyond their control, adequate
means                do not exist for ascertaining LIBOR during such Interest Period; or 

	 	10.2. 	deposits
in US Dollars are not available to any of the Banks in the London
               Interbank market in the Ordinary Course of Business in sufficient amounts
to                fund the Loans for such Interest Period or there shall be no objective
               possibility for the Banks to fund the then outstanding balance of the
Loans or                any of them in US Dollars, 

	 	
the
Banks shall forthwith give notice (“a Determination Notice”) of such
event to the Borrower (a Determination Notice to contain particulars of the relevant
circumstances giving rise to its issue) and, notwithstanding the provisions of
clause 9 above, the Banks shall offer the Borrower an alternative basis (“the
Substitute Basis”) for the determination of the relevant Interest rate for such
Interest Period, the Substitute Basis to be binding upon the Borrower and to take effect
in accordance with its terms from the commencement of the relevant Interest Period. If the
Borrower determines that it does not wish to continue the relevant Loans under the
Substitute Basis, it shall so notify the Banks within 90 (ninety) days of receipt of the
Banks’ notice specifying such Substitute Basis, whereupon the outstanding balance of
the principal amount of the relevant Loans, together with all accrued Interest thereon, as
well as all other amounts in respect thereof, shall become immediately due and payable. 

	11.  	COMMISSIONS,
FEES AND EXPENSES  

	 	11.1. 	Front
End Fee  

	 	
[Intentionally
Deleted]  

	 	11.2. 	Commitment
Commission  

	 	
[Intentionally
Deleted]  

	 	11.3. 	Legal
and Other Costs  

	 	
The
Borrower shall pay to the Banks on demand:  

	 	11.3.1. 	all
costs and expenses (including legal fees for external counsel and
                    out-of-pocket expenses) incurred by the Banks in connection with: (i) the
                    performance of all legal due diligence inquiries as the Banks have
required or                     shall require with respect to the Project and the
proposed transactions in                     connection therewith; (ii) the
negotiation, preparation and execution of                     this Agreement and the
other Finance Documents and the completion of the                     transactions herein
contemplated; and (iii) assignment or participation                     pursuant to
clause 25 below; all subject, with respect to legal fees, to
                    such limits and/or tariffs as have been or may be agreed, from time
to time,                     between the Banks and the Borrower in writing;  

68

	 	11.3.2. 	all
expenses (including legal fees and out-of-pocket expenses) incurred by the
                    Banks (or any of them) in contemplation of, or otherwise in
connection with, the                     enforcement of, or preservation of any rights
under, this Agreement or any of                     the other Finance Documents or
otherwise in respect of the moneys owing under                     this Agreement,
together with Interest at the rate referred to in clause 18
                    below from the date on which the payment of such expenses was
demanded by the                     Banks until the date of payment (after as well as
before judgment).  

	 	11.4. 	Consultants

	 	
The
Borrower shall, in accordance with the letters of engagement with each of the Insurance
Adviser and Bank Adviser, retain the following experts: the Insurance Adviser and the Bank
Adviser, to advise and act on behalf of the Banks and the Borrower in respect of the
Project, including to perform on behalf of the Banks such financial, insurance and
technical due diligence inquiries, review, analysis and monitoring as the Banks may
require in connection with the Project, as well as, in the case of the Insurance Adviser,
to provide the Insurance Report and, in the case of the Bank Adviser, to monitor, review
and analyse the financial information received by the Banks from the Borrower pursuant to
this Agreement and any of the Finance Documents. The Borrower shall pay all fees of such
experts, such fees to be payable in accordance with the tariffs agreed to between the
Borrower and such experts. 

	 	11.5. 	Stamp
Duties and Like Taxes  

	 	
The
Borrower shall pay all stamp, documentary, registration or other like duties or Taxes
(including any such duties or Taxes payable by the Banks) imposed on or in connection with
this Agreement, the Facility and any of the Finance Documents. 

	 	11.6. 	Other
Commissions, Fees and Expenses  

	 	
Nothing
in this clause 11 shall be construed as derogating from the obligations of the
Borrower to pay the Banks other commissions, fees and reasonable expenses usually payable
to banks in connection with regular, day-to-day banking transactions performed in
connection with the Facility and which are not specifically provided for herein. 

	 	11.7. 	Currency
for Payment  

	 	
All
sums payable by the Borrower under this clause 11 shall be payable in the currency in
which such sums were incurred by the relevant Bank. 

69

	 	11.8.	VAT

	 	
All
fees and expenses referred to in this clause 11 are exclusive of any VAT or any other
Taxes which might be charged in connection with such fees and expenses. If any VAT or
other such Tax is so chargeable, it shall be paid by the Borrower at the same time as it
pays the relevant fees and expenses. 

	12.  	TAXES  

	 	12.1. 	Taxes  

	 	
All
payments to be made by the Borrower to the Banks shall be made free and clear of and
without deduction for or on account of Tax, unless the Borrower is required by law to make
such payment subject to the deduction or withholding of Tax, in which case (save where
such deduction or withholding is in respect of Tax on Overall Net Income of a Bank and the
Borrower shall have delivered to such Bank a receipt as referred to in clause 12.3
below, simultaneously with the making of the payment from which such Tax deduction has
been made) the sum payable by the Borrower in respect of which such deduction or
withholding is required to be made shall be increased, to the extent necessary, to ensure
that after the making of the required deduction or withholding, such Bank receives and
retains (free from any liability in respect of any such deduction or withholding), a net
sum equal to the sum which it would have received and so retained had no such deduction or
withholding been made or required to be made, provided that the aforesaid shall not apply
with respect to any Taxes (including, for the removal of doubt, Tax on Overall Net Income)
of the Banks in connection with the issuance of any shares, Warrants or capital notes of
the Borrower or the exercise or conversion thereof. 

	 	12.2. 	Notification
of Taxes  

	 	
If,
at any time, the Borrower is required by law to make any deduction or withholding from any
sum payable by it hereunder, the Borrower shall, as soon as reasonably practicable, notify
the relevant Bank. 

	 	12.3. 	Payment
and Submission of Receipt  

	 	
If
the Borrower makes any payment hereunder in respect of which it is required to make any
deduction or withholding, it shall pay the full amount required to be deducted or withheld
to the relevant taxation or other authority within the time allowed for such payment under
applicable law and shall deliver to the relevant Bank, as soon as reasonably practicable
after it has made such payment to the applicable authority, an original receipt (or a
certified copy thereof) issued by such authority evidencing the payment to such authority
of all amounts so required to be deducted or withheld in respect of such payment. 

70

	 	12.4. 	Tax
Saving

	 	12.4.1. 	In
the event that following the imposition of any Tax on any payment by the
                    Borrower in consequence of which the Borrower is required, under
                    clause 12.1, to pay any additional amount in respect thereof,
any Bank                     shall, in its sole opinion and based on its own
interpretation of any relevant                     laws or regulations (but acting in
good faith), receive or be granted a                     repayment of Tax, or a credit
against, or remission for, or deduction from, or                     in respect of, any
Tax payable by it (any of the aforegoing, to the extent so                     reasonably
identifiable and quantifiable, being referred to as “a                     saving”),
such Bank shall, to the extent that it can do so without                     prejudice to
the retention of the relevant saving and subject to the                     Borrower’s
obligation to repay the amount to such Bank, if the relevant                     saving
is subsequently disallowed or cancelled (which repayment shall be made
                    promptly on receipt of notice by the Borrower from such person of
such                     disallowance or cancellation), reimburse the Borrower promptly
after receipt of                     such saving by such Bank with such amount equal to
the lower of: (i) the                     additional amount paid by the Borrower in
respect of such Tax under                     clause 12.1 as aforesaid; and (ii) such
amount as such Bank shall, in                     its sole opinion but in good faith,
have concluded to be the finally determined                     amount or value of the
relevant saving.  

	 	12.4.2. 	Nothing
contained in this Agreement shall interfere with the right of any Bank
                    to arrange its Tax and other affairs in whatever manner it thinks fit
and, in                     particular, no Bank shall be under any obligation to claim
relief from Tax on                     its corporate profits, or from any similar Tax
liability, in respect of the Tax,                     or to claim relief in priority to
any other claims, reliefs, credits or                     deductions available to it or
to disclose details of its Tax affairs. No Bank                     shall be required to
disclose any confidential information relating to the                     organisation of
its affairs.  

	 	12.4.3. 	Each
Bank will notify the Borrower promptly of the receipt by such Bank of any
                    saving and of such Bank’s opinion as to the amount or value of
that saving.  

	 	12.5. 	VAT

	 	
The
Borrower shall pay to the Banks all VAT, if any, payable in respect of any payment to be
made by the Borrower to the Banks under this Agreement or under any other Finance
Document. 

71

	13.  	INCREASED
COSTS  

	 	13.1. 	Increased
Costs  

	 	
Subject
to clause 13.2 below, if by reason of any change in, or the introduction of, or any
change in the interpretation, administration or application by any Governmental Body of
any law or by reason of the interpretation, administration or application adopted or
declared by any Governmental Body in respect of any law (including of any official
directive or official request from, or the rules of, any governmental, fiscal, monetary or
regulatory (including self-regulatory) authority, organisation or agency (whether or not
having the force of law but, if not having the force of law, being a regulation, treaty,
official directive, official request or rule which it is the practice of banks in Israel
to comply with)) after the date of this Agreement which affects the Banks or compliance by
any of the Banks with any such change, introduction, adoption or declaration, including,
in each case, those relating to Taxation, reserves, special deposits, cash ratio,
liquidity, limits on provision of credit to single borrowers or groups of borrowers or
capital adequacy requirements or other forms of banking, fiscal, monetary or regulatory
controls: 

	 	13.1.1. 	any
of the Banks incurs a cost as a result of it having entered into and/or
                    performing and/or assuming and/or maintaining and/or funding its
obligations or                     commitments under, any Finance Document and/or
maintaining the outstanding                     balance of the Loans; or  

	 	13.1.2. 	any
Bank is unable to obtain the rate of return on its overall capital which it
                    would have been able to obtain but for it having entered into and/or
performing                     its obligations under any of the Finance Documents
(including maintaining the                     outstanding balance of the Loans); or  

	 	13.1.3. 	any
amount receivable by any of the Banks under any Finance Document is reduced
                    (save to the extent matched by a reduction in the cost of providing
the Loans or                     maintaining the outstanding balance of the Loans); or  

	 	13.1.4. 	any
of the Banks makes any payment or forgoes any Interest or other return on,
                    or calculated by reference to, any amount received or receivable by
it from the                     Borrower under any Finance Document; or  

	 	13.1.5. 	there
is any increase in the cost of any Bank of funding or maintaining all or
                    any other outstanding balances of the Loans  

	 	
and
such cost (or the relevant proportion thereof), reduction, payment, forgone Interest or
other return is not compensated for by any other provision of this Agreement, then and in
each such case:  

	 	(i) 	such
Bank shall notify the Borrower of that event promptly upon it becoming
                    aware of the event, including, in reasonable detail, particulars of
the event;                     and  

72

	 	(ii) 	within
30 (thirty) Business Days after receipt by the Borrower of a demand from
                    time to time by such Bank accompanied by a certificate of such Bank
specifying                     the amount of compensation claimed and setting out the
calculation of the amount                     in reasonable detail, the Borrower shall
pay to such Bank such amount as shall                     compensate such Bank for such
increased cost, reduction, payment or forgone                     Interest or other
return. Nothing in this clause 13 shall oblige such Bank                     to
disclose any confidential information relating to the organisation of its
                    affairs.  

	 	
The
Borrower may, after receipt of a demand as aforesaid in (ii) above, notify the Banks that
it will prepay, on the next following Interest Payment Date, the whole (but not part
only) of the Total Outstandings. Such notice shall be irrevocable and the Borrower shall
on such Interest Payment Date as aforesaid pay to the Banks, each in respect of its
participation in the Total Outstandings, together with all accrued Interest thereon and
all other amounts owing to the Banks under the Finance Documents (including pursuant to
clause 19 below). In the event of prepayment under this clause 13.1, the
provisions of clause 7.5 above requiring the payment of a prepayment commission in
respect of prepayments, shall not be applicable.  

	 	13.2. 	Exceptions  

	 	
Clause 13.1
shall not apply so as to oblige the Borrower to compensate such Bank for any increased
cost, reduction, payment or forgone Interest or other return resulting only from any
change in, or the introduction of, or any change in the interpretation or application of,
any law relating to, or any change in the rate of, Tax on Overall Income of such Bank or
change in the rate of VAT. For the purposes only of this clause 13, the term
“Finance  Documents” shall be deemed not to include Warrants or
capital notes issued by the Borrower to the Banks. 

	14.  	ILLEGALITY  

	 	
If
any change in or the introduction of any law, or any change in the interpretation,
administration or application of laws by a final decision of a competent court or the
relevant authority or agency or compliance by any of the Banks with any such change or
introduction of laws or change in interpretation, administration or application of laws or
by reason of the interpretation, administration or application adopted or declared by any
Governmental Body in respect of any law, shall make it unlawful or a breach of laws or
impracticable for such Bank to maintain the Loans under this Agreement or to give effect
to its obligations and exercise its rights as contemplated by this Agreement or any Bank
is requested to reduce the volume of its loans or credit to the Borrower, such Bank may,
by notice to the Borrower, declare that to the extent necessary to avoid any such
illegality or breach of laws or impracticability or to comply with such reduction, its
obligations to the Borrower under the Finance Documents shall be to the extent necessary
as aforesaid, terminated forthwith or, if later, on the latest date to which the
obligations may remain in effect without causing such Bank to be in breach of laws,
whereupon the Borrower will, by the earlier of: (i) the date on which the illegality
or breach or impracticability in question takes effect; and (ii) the Interest Payment
Date next following such notice from the Banks, prepay the Loans, to the extent necessary
as aforesaid. All such prepayments shall be made together with all Interest and other
charges accrued on all the aforegoing to the date of the prepayment (as well as all
amounts payable under clause 19 below and all other amounts payable to such Bank
under the Finance Documents). In the event of prepayment under this clause 14, the
provisions of clause 7.5 above requiring the payment of a prepayment commission in
respect of prepayments, shall not be applicable. 

73

	15.  	REPRESENTATIONS
AND WARRANTIES  

	 	15.1. 	General  

	 	
The
Borrower hereby makes the representations and warranties set out in this clause 15 to
the Banks. The Borrower acknowledges that the Banks have entered into this Agreement in
full reliance on the representations and warranties set out in this clause 15 below.
To the extent that representations and warranties set out below apply to Jazz and its
Subsidiaries (and only to Jazz and its Subsidiaries), such representations and warranties
are made by the Borrower: (a) on the basis of representations and warranties given by
Jazz to the Borrower as of May 19, 2008, being the date of signature of the Agreement
and Plan of Merger and Reorganization between the Borrower, Armstrong Acquisition Corp.
and Jazz (“the Merger Agreement”) and repeated as being accurate in all respects
on the closing of such merger agreement on September 19, 2008 (“the Merger
Closing Date”) other than the Company Excluded Representations (as defined
in the Merger Agreement), which were to be accurate in all material respects as of the
Merger Closing Date (except that any inaccuracies in such representations and warranties
(other than the Company Excluded Representations ) were disregarded if such inaccuracies
(considered collectively) did not have a Material Adverse Effect (as defined in the Merger
Agreement) on Jazz as of the Merger Closing Date); and (b) subject to the Borrower
giving a further representation and warranty that it has no Knowledge that any of such
representations or warranties are inaccurate. 

	 	15.2. 	Status  

	 	
The
Borrower is a corporation duly organised and validly existing under the laws of Israel,
with full corporate power and authority to conduct its business as it is now being
conducted and as currently approved by the Borrower’s Board of Directors to be
conducted in the future and to own or use its properties and assets. No event exists with
respect to it which would constitute an Event of Default under clause 17.7 below. 

74

	 	15.3. 	Legal
Validity  

	 	
The
Borrower has the absolute and unrestricted right, power, authority and capacity to execute
and deliver the Finance Documents and to perform its obligations under the Finance
Documents and has taken all corporate action necessary to consummate the transactions
contemplated hereby and thereby and to perform its obligations hereunder and thereunder.
Each Finance Document (including this Agreement and the Debenture) has been duly
authorised, executed and delivered by the Borrower and constitutes the legal, valid and
binding obligation of the Borrower, enforceable against the Borrower in accordance with
its terms. 

	 	15.4. 	Non-Conflict  

	 	
Neither
the execution and delivery of this Agreement or the Finance Documents nor the consummation
or performance of any of the aforegoing is or will, directly or indirectly (with or
without notice of lapse of time): 

	 	15.4.1. 	contravene,
conflict with, or result in a violation of (a) any provision of
                    the Organisational Documents of the Borrower or any Subsidiary, or (b) any
                    resolution adopted by the board of directors or the shareholders of
the Borrower                     or any Subsidiary; or  

	 	15.4.2. 	contravene,
conflict with, or result in a violation of, or give any Governmental
                    Body or other person the right to challenge or to exercise any remedy
or obtain                     any relief under, any law to which the Borrower or any of
the assets owned or                     used by the Borrower may be subject; or  

	 	15.4.3. 	contravene,
conflict with, or result in a violation of any of the terms or
                    requirements of, or give any Governmental Body the right to revoke,
withdraw,                     suspend, cancel, terminate or modify, any Governmental
Authorisation that is                     held by the Borrower or that otherwise relates
to the business of, or any of the                     assets owned or used by, the
Borrower; or  

	 	15.4.4. 	contravene,
conflict with, or result in a violation or breach of any provision
                    of, or give any person the right to declare a default or exercise any
remedy                     under, or to accelerate the maturity or performance of, or to
cancel, terminate,                     or modify, any Contract or instrument to which the
Borrower or any Subsidiary is                     a party; or  

	 	15.4.5. 	result
in the imposition or creation of any Encumbrance (other than an
                    Encumbrance under the Security Documents) upon or with respect to any
of the                     assets owned or used by the Borrower or any Subsidiary.  

	 	
Without
limiting the generality of the aforegoing, except as set forth in Schedule 15.4
 hereto, there is no restriction or prevention, legal or otherwise, on the creation of
the Encumbrances to be created pursuant to the Security Documents or on the realisation,
sale or assignment of any collateral continuing under any such Security Document in the
case of an Event of Default or on the application by the Banks of any proceeds of any such
realisation or sale. 

75

	 	15.5. 	No
Default  

	 	
No
Default is continuing which has not been waived.  

	 	15.6. 	Consents  

	 	
Except
as set forth in Schedule 15.6 hereto, no notice to, filing with or Consent
from any person or Governmental Body is or will be required to be made or obtained in
connection with the execution, delivery and validity of any of the Finance Documents, or
the consummation or performance of any of the transactions contemplated hereby or thereby
(save for registrations with the Registrar of Pledges and the Registrar of Companies and,
with respect to the Jazz Share Pledge, under the UCC). As at the Amendment Closing Date,
the Borrower shall have received all the Consents (including Governmental Authorisations)
listed in Schedule 15.6 hereto. All such Consents are, or shall, on or prior to the
date on which such Consents are required to have been obtained, be in full force and
effect, the Borrower is in compliance in all material respects with all provisions thereof
and such Consents (including Governmental Authorisations) are not the subject of any
pending, or, to the best of the Borrower’s Knowledge, threatened attack or revocation
by any competent authority. 

	 	15.7. 	Share
Capital  

	 	
The
authorised share capital of the Borrower consists of 1,100,000,000 (one billion one
hundred million) ordinary shares. The Borrower’s most recently filed Annual Report on
Form 20-F (“the Annual Report”), as filed with the United States
Securities and Exchange Commission (“the SEC”), sets forth, as of the
month ended immediately prior to the filing of the Annual Report, the number of shares
issued and outstanding, the approximate aggregate number of shares reserved for issuance
upon exercise of all outstanding warrants and options and conversion of all convertible
securities (without being required to take into account options, warrants or convertible
securities that are substantially “out of the money”) and sets forth the list of
all those persons which, to the Knowledge of the Borrower, as of the month ended
immediately prior to the filing of the Annual Report, are the beneficial holders of 5%
(five percent) or more of the issued and outstanding shares of the Borrower. All of the
outstanding ordinary shares have been duly authorised and validly issued. 

76

	 	15.8. 	SEC
Documents; Financial Statements

	 	15.8.1. 	The
Borrower has furnished to the Banks copies of the Borrower’s most
                    recent Annual Report as filed with the SEC. The Borrower represents
and warrants                     that: (a) the Annual Report has been duly filed
with the SEC and when filed                     was in compliance in all material
respects with the requirements of the Exchange                     Act and the rules and
regulations of the SEC applicable to such Annual Report;                     and (b) the
Annual Report was complete and correct in all material respects                     as of
its date and, as of its date, did not contain any untrue statement of
                    material fact or omit to state a material fact required to be stated
therein or                     necessary in order to make the statements made therein, in
light of the                     circumstances under which they were made, not
misleading. The Borrower has                     provided the Banks with a copy of each
document submitted to the SEC on Form 6-K                     since January 1, 2008 (“the
6K Reports”). The                     Borrower represents and warrants to
the Banks that: (i) the 6K Reports                     have been duly submitted
to the SEC and when submitted were in compliance in all                     material
respects with the requirements of law relating to the 6K Reports;
                    and (ii) the 6K Reports were complete and correct in all
material                     respects as of their respective dates and, as of such dates,
did not contain any                     untrue statement of material fact or omit to
state a material fact required to                     be stated therein or necessary in
order to make the statements made therein, in                     light of the
circumstances under which they were made, not misleading.  

	 	15.8.2. 	The
Borrower has delivered to the Banks: (a) audited consolidated Accounts
                    of the Borrower as at December 31 in each of the 2 (two) years
ended with                     the last Fiscal Year included in the Annual Report
(inclusive) (including the                     audited consolidated balance sheets,
consolidated statements of income, changes                     in shareholders’ equity
and cash flow for each of the Fiscal Years then                     ended, together with
the report thereon of the Auditors); and (b) unaudited                     reviewed
consolidated Accounts of the Borrower as at the Quarter included in the
                    most recently filed Report on Form 6-K containing quarterly financial
                    information (including the consolidated balance sheets, consolidated
statements                     of income, changes in shareholders’ equity and cash
flow for the period                     then ended, including in each case the notes
thereto). Such Accounts and notes                     truly and fairly present the
financial condition and the results of operations,                     changes in
shareholders’ equity and cash flow of the Borrower as at the
                    respective dates of and for the periods referred to in such Accounts,
all in                     accordance with GAAP, subject, in the case of interim
Accounts, to normal                     recurring year-end adjustments (the effect of
which will not, individually or in                     the aggregate, be materially
adverse); the Accounts referred to in this                     clause 15.8.2 reflect
the consistent application of such accounting                     principles throughout
the periods involved, except as stated in the Accounts and                     in the
explanation provided pursuant to clause 16.2.6 below.  

	 	15.8.3. 	The
Borrower has furnished to the Banks copies of the Borrower’s
                    registration statement on Form F-4 with respect to its acquisition of
Jazz. The                     Borrower represents and warrants that: (a) such
registration statement has                     been duly filed with the SEC and when
filed was in compliance in all material                     respects with the
requirements of the Securities Act of 1933 and the rules and
                    regulations of the SEC applicable to such registration statement; and
                    (b) the registration statement was complete and correct in all
material                     respects as of its effective date and, as of its effective
date, did not contain                     any untrue statement of material fact or omit
to state a material fact required                     to be stated therein or necessary
in order to make the statements made therein,                     in light of the
circumstances under which they were made, not misleading.  

77

	 	15.9. 	Business
Plan

	 	
The
Borrower believes that the opinions, assumptions and timetables contained in the Business
Plan (including both the alternate case assumptions and the base assumptions, as defined
therein) are reasonable. The financial, business and other projections set out in the
Business Plan (including both the alternate case assumptions and the base assumptions, as
defined therein) have been prepared with due diligence, care and consideration. 

	 	15.10. 	Title
to Properties; Encumbrances  

	 	
Except
for under the Security Documents, for the Existing Encumbrance and except as set forth in
Schedule 15.10 hereto, the Borrower and its Subsidiaries have good and
marketable title, free and clear of all Encumbrances (other than Encumbrances for current
Taxes not yet due) to all of the assets, real property, interests in real property,
rights, franchises, Intellectual Property Assets, licences and properties, tangible or
intangible, real or personal, wherever located which are used in the conduct of the
business conducted and as currently approved by the Borrower’s Board of Directors to
be conducted in the future by the Borrower, other than property that is leased or
licensed. Except as set forth in Schedule 15.10 hereto, the Borrower has valid and
enforceable leases or licences, as the case may be, with respect to assets consisting of
property that is leased or licensed, under which there exists no default, event of default
or event which, with notice or lapse of time or both, would constitute a default, except
for such defaults which could not have a Material Adverse Effect. 

	 	15.11. 	Condition
and Sufficiency of Assets  

	 	
[Intentionally
Deleted]  

	 	15.12. 	Customers
and Suppliers  

	 	
[Intentionally
Deleted]  

	 	15.13. 	Permitted
Financial Indebtedness  

	 	
A
complete and accurate list of, details of, and copies of all trust deeds, indentures and
other instruments reflecting the terms and conditions of, all Permitted Subordinated Debt
and all Permitted Financial Indebtedness of the Subsidiaries of the Borrower existing as
at the Amendment Closing Date are attached as Schedule 15.13 hereto. 

	 	15.14. 	Financial
Indebtedness  

	 	
[Intentionally
Deleted]  

78

	 	15.15. 	Taxes  

	 	
[Intentionally
Deleted]  

	 	15.16. 	No
Material Adverse Change  

	 	
[Intentionally
Deleted]  

	 	15.17. 	Compliance
with Laws; Governmental Authorisations

	 	15.17.1. 	Except
as set forth in Schedule 15.17.1 hereto, the Borrower and its
                    Subsidiaries are and at all times since December 31, 2004 have
been, in                     full compliance with each law that is or was applicable to
them or to the                     conduct or operation of their respective businesses or
the ownership or use of                     any of their respective assets, except for
such non-compliance which would not                     have a Material Adverse Effect.  

	 	15.17.2. 	Except
as set forth in Schedule 15.17.2 hereto, The Borrower and
                    each Subsidiary has all Governmental Authorisations necessary to
permit the                     Borrower and its Subsidiaries to lawfully conduct and
operate the Business, as                     currently conducted and as approved by the
respective Boards of Directors of the                     Borrower and its Subsidiaries
to be conducted in the future, except for such                     authorisations, the
failure to possess which would not have a Material Adverse                     Effect.
The Borrower and its Subsidiaries are and have been in full compliance
                    with all of the terms and requirements of each Governmental
Authorisation that                     is held by the Borrower and its Subsidiaries or
that otherwise relates to the                     Business as presently conducted and as
approved by the Borrower’s Board of                     Directors to be conducted in
the future, or to any of the assets owned or used                     by the Borrower and
its Subsidiaries, except for such non-compliance which would                     not have
a Material Adverse Effect.  

79

	 	15.17A 	Jazz
Closing  

	 	
The
merger (“Merger”) between the Borrower, Armstrong Acquisition Corp. and Jazz,
contemplated by the Merger Agreement, was closed on September 19, 2008. All conditions
precedent and other actions required in order to effectuate the Merger were fulfilled or
taken, as the case may be.  

	 	15.18. 	Legal
Proceedings; Orders

	 	15.18.1. 	Except
as set forth in Schedule 15.18 hereto, there is no pending
                    Proceeding or Proceeding Threatened in writing: (i) that has
been commenced                     by or against the Borrower or that otherwise relates
to or may affect the                     business of, or any of the assets owned or used
by, the Borrower or any                     Subsidiary which, if decided against the
Borrower, would have a Material Adverse                     Effect; or (ii) that
challenges, or that may have the effect of preventing,                     delaying,
making illegal, or otherwise interfering with, any of the transactions
                    contemplated under this Agreement or under any other Finance
Documents or with                     the implementation of the Business Plan.  

	 	15.18.2. 	[Intentionally
Deleted]  

	 	15.18.3. 	[Intentionally
Deleted]  

	 	15.18.4. 	[Intentionally
Deleted]  

	 	15.19. 	Absence
of Certain Changes and Events

	 	
[Intentionally
Deleted]  

	 	15.20. 	Contracts;
No Defaults  

	 	
[Intentionally
Deleted]  

	 	15.21. 	Insurance

	 	15.21.1. 	[Intentionally
Deleted]  

	 	15.21.2. 	All
factual information furnished by the Borrower or its respective advisors to
                    the Insurance Adviser and contained or referred to in the Insurance
Report was                     true in all material respects.  

	 	15.21.3. 	[Intentionally
Deleted]  

	 	15.22. 	Environmental
Matters

	 	
[Intentionally
Deleted]  

80

	 	15.23. 	Intellectual
Property  

	 	
[Intentionally
Deleted]  

	 	15.24. 	Grants,
Incentives and Subsidies  

	 	
[Intentionally
Deleted]  

	 	15.25. 	Disclosure  

	 	
[Intentionally
Deleted]  

	 	15.26. 	Relationships
with Related Persons  

	 	
[Intentionally
Deleted]  

	 	15.27. 	Documents  

	 	
[Intentionally
Deleted]  

	 	15.28. 	Ranking
of Securities  

	 	
The
security conferred by the Security Documents constitutes a priority security interest of
the type therein described (subject to statutory preferences which may rank ahead of the
security created thereunder and subject to those Permitted Encumbrances as referred to in
clause 1.1.114(d) above) over the security assets therein referred to, which are not
subject to any prior or other Encumbrances and is not liable to be set aside on insolvency
of the Borrower. 

	 	15.29. 	Shareholdings  

	 	
[Intentionally
Deleted]  

	 	15.30. 	Repetition  

	 	
The
representations and warranties set out in this clause 15 shall be deemed to be
repeated on the Amendment Closing Date. 

	16.  	UNDERTAKINGS  

	 	
The
Borrower undertakes to the Banks that so long as any sum remains payable by the Borrower
under any Finance Document or any Bank shall be under any obligation under any Finance
Document to provide any Financial Indebtedness to the Borrower: 

81

	 	16.1. 	Financial
Information  

	 	16.1.1.	The
Borrower shall furnish the Banks:  

	 	(i) 	as
soon as practicable (and, in any event, within 90 (ninety) days after the end
          of each Fiscal Year, the audited Accounts (consolidated and non-consolidated)
of           the Borrower for that Fiscal Year;  

	 	(ii) 	as
soon as practicable (and, in any event, within 60 (sixty) days after the end           of
each Quarter of each Fiscal Year, the reviewed Accounts (consolidated and
          non-consolidated) of the Borrower for that Quarter (or with respect to the
          second Quarter, for the relevant half-year;  

	 	(iii) 	[Intentionally
Deleted]  

	 	(iv) 	at
the same time as the Accounts are delivered pursuant to paragraphs (i)           and
(ii) above, a report, in the form and substance attached hereto as Schedule 16.1.1(iv)
comparing actual results with projected results           of the Borrower (including
separately for Fab 2);  

	 	(v) 	at
the same time as the Accounts are delivered pursuant to paragraphs (i)           and
(ii) above, a certificate of the Chief Financial Officer of the Borrower           which
shall be certified as accurate by the Auditors in a form reasonably
          satisfactory to the Banks: (a) setting out in reasonable detail, with
          respect to Accounts referred to in paragraph (i) above, computations
          establishing the Excess Cash Flow (if any) for that Fiscal Year;           (b) setting
out in reasonable detail computations establishing, as at the           date of such
Accounts, the following financial ratios for such Quarter or Fiscal           Year (as
the case may be): EBITDA (Consolidated), EBITDA (Borrower only),           Investments
(Consolidated), Investments (Borrower only), Total Debt           (Consolidated) divided
by EBITDA (Consolidated), Total Debt (Borrower only)           divided by EBITDA
(Borrower only), EBITDA (Consolidated) less Investments           (Consolidated) and
EBITDA (Borrower only) less Investments (Borrower only);           (c) [Intentionally
Deleted]; (d) a certificate of the Auditors           in the form of Schedule 16.1.1(v)B hereto
setting out the amounts           invested in such Quarter by way of Paid-in Equity,
capital notes and by way of           Permitted Subordinated Debt; (e) a certificate
of the Auditors in the form           of Schedule 16.1.1(v)C hereto setting
out the amounts received under           the Investment Centre Fab 2 Grants during
such Quarter; (f) for each           Quarter, a statement regarding ageing of
accounts receivable; and (g) a           certificate of the Auditors in the form of
Schedule 16.1.1(v)D          hereto confirming that the Auditors did not in
the course of their audit of the           Accounts come across any breach of the
financial covenants set forth herein;  

82

	 	(vi) 	at
the same time as the Accounts are delivered pursuant to paragraphs (i)           and
(ii) above, a certificate signed by the Chief Executive Officer (or one of           the
co-Chief Executive Officers) of the Borrower on its behalf setting out:  

	 	(1) 	in
reasonable detail computations establishing as at the date of such Accounts,
               whether each of the financial ratios set out in clause 16.29 below
were                complied with and certifying that:  

	 	(a) 	the
relevant Accounts fairly present (in relation to the relevant Accounting
          Period) the financial position of the Borrower;  

	 	(b) 	the
relevant Accounts were prepared in accordance with GAAP, consistently           applied;
and  

	 	(c) 	no
Default has occurred or, if it has occurred, specifying the Default and the
          steps, if any, being taken to remedy it;  

	 	(2) 	the
number of shares in the Borrower held by each of the Lead Investors and by
               each shareholder of the Borrower who, to the Knowledge of the Borrower,
holds at                least 5% (five percent) of the issued share capital of the
Borrower as at the                end of such Accounting Period; and  

	 	(3) 	a
certificate of compliance by the Borrower with the provisions of                clause 16.27
below, attaching documentation, confirming such compliance;  

	 	[(vii) 	[Intentionally
Deleted]] 

	 	(viii) 	by
not later than 7 (seven) days before the end of each Fiscal Year, a budget           for
the Borrower approved by the Board of Directors of the Borrower for each
          Quarter of the next Fiscal Year, in the format customary at the Borrower. The
          representations and warranties set forth in clause 15.9 above shall be
          deemed to have been repeated upon the furnishing of the budget to the Banks by
          the Borrower;  

	 	(ix) 	if
in the course of any Fiscal Year, the Borrower wishes to update or revise any
          of the assumptions underlying the projections under the Business Plan pursuant
          to paragraph (vii) above in any material respect, the Borrower shall
          furnish to the Banks such updated assumptions. The representations and
          warranties set forth in clause 15.9 above shall be deemed to be repeated with
          respect to such updated assumptions upon the furnishing thereof to the Banks by
          the Borrower.  

83

	 	16.1.2. 	The
Borrower will:  

	 	(i) 	[Intentionally
Deleted]  

	 	(ii) 	notify
the Banks immediately of details of any material default under any           Material
Contract or adverse claims against the Borrower by any party to any           Material
Contract or by any other person in connection with the Project or of           any other
material claim by a person against the Borrower, whether or not in           connection
with the Project;  

	 	(iii) 	notify
the Banks of details of any shut-down of the Project, any force majeure           event
under a Material Contract and any event which might interrupt Project
          construction or performance;  

	 	(iv) 	notify
the Banks of details of the occurrence of any Release or of any           Environmental
Claim.  

84

	 	16.1.3. 	The
Borrower shall furnish to the Banks:  

	 	(i) 	promptly,
all notices, reports or other documents required by law to be           despatched by the
Borrower to its shareholders generally (or any class of them)           or to the holders
of the Permitted Subordinated Debt and all notices, reports or           other documents
relating to the financial difficulties or debt obligations of           the Borrower
despatched by or on behalf of the Borrower to its creditors           generally or to any
class of its creditors;  

	 	(ii) 	promptly,
copies of notices or other filings made by the Borrower with the SEC           or any
other regulatory Governmental Body;  

	 	(iii) 	within
21 (twenty-one) days of the end of each calendar month, statements of           cash flow
(both on a consolidated basis for the Group and Borrower only) for           such month
in the format set out in the uses and sources statement included in           the
Business Plan;  

	 	(iv) 	[Intentionally
Deleted]  

	 	(v) 	as
soon as the same are instituted or, Threatened, details of any litigation,
          arbitration or other Proceedings involving it which, if adversely determined,
          would have a Material Adverse Effect; or which involves a liquidated claim or
          alleged liability which is likely to be in excess of US $2,500,000 (two
          million five hundred thousand United States Dollars) or its equivalent, or,
          together with any other claims or alleged liability, to be in excess of
          US $5,000,000 (five million United States Dollars) (or its equivalent) in
          aggregate;  

	 	(vi) 	promptly,
such further information regarding the Project or the Borrower’s           financial
condition, business and assets (including any requested amplification           or
explanation of any item in any Accounts, the Business Plan or other material
          provided by the Borrower hereunder) as the Banks may reasonably request from
          time to time;  

	 	(vii) 	without
derogating from clause 16.32 below, promptly, upon being notified           of the
same, details of the occurrence of a Change of Ownership or details of           any
proposed Change of Ownership of which it is aware;  

	 	(viii) 	promptly,
on request, certificates signed by the CEO (or one of the           co-CEO’s) of the
Borrower as to compliance by the Borrower with the Finance           Documents, including
Security Documents, as to the absence of any Default;  

85

	 	(ix) 	promptly,
notice of any Default and the steps being taken to remedy same;  

	 	(x) 	[Intentionally
Deleted];  

	 	(xi) 	promptly
after the execution thereof, any Contract which it reasonably considers           may
constitute a Material Contract and the Borrower shall promptly take all           steps
required by the Banks to duly pledge and assign by way of charge all           rights and
interest of the Borrower under such Material Contracts in accordance           with the
Debenture;  

	 	(xii) 	[Intentionally
Deleted]  

	 	(xiii) 	[Intentionally
Deleted]  

	 	(xiv) 	the
amounts of all deposits at each Bank; and  

	 	(xv) 	[Intentionally
Deleted].  

	 	16.1.4. 	As
soon as practicable (and, in any event, within 45 (forty five) days after the
                    end of each Quarter), the Borrower shall send to the Banks:  

	 	(a) 	a
certificate signed by the Borrower’s Chief Executive Officer (or one of
          the Co-Chief Executive Officers) and Chief Financial Officer certifying that
the           Borrower is in full compliance with all of the terms and conditions of the
          Finance Documents and if not so in compliance, specifying the relevant
          non-compliance and the steps, if any, being taken to remedy it;  

	 	(b) 	a
report certified by the CEO (or one of the Co-chief Executive Officers) and
          Chief Financial Officer of the Borrower detailing any Acquisition made or
          resolved to be made by the Borrower in an aggregate amount equal to or in
excess           of US $1,000,000 (one million) United States Dollars) during the
preceding           Quarter;  

	 	(c) 	a
resolution of any organ of the Borrower to make, or evidencing any intention           to
make, whether conditionally or unconditionally, preparations for the issuance
          of a prospectus and/or any offer to the public (whether or not any such offer
          requires the approval or publication of a prospectus), in any jurisdiction,
          relating to the sale or offer of any securities or debentures of the Borrower;  

	 	(d) 	details
of any loans (other than loans to employees in the ordinary course of           the
Borrower’s business) or guarantees made by the Borrower, exceeding in           each
case US $1,000,000 (one million United States Dollars) or loans or
          guarantees exceeding US $2,500,001 (two million five hundred thousand and
          one United States Dollars) in aggregate;  

86

	 	(e) 	any
disposal as referred to in clause 16.24 below, the Dollar amount (or,           if
denominated in a currency other than US Dollars, the Dollar equivalent)           of
the Net Proceeds of which equals or exceeds US $5,000,000 (five million
          United States Dollars) when aggregated with the Net Proceeds of all such other
          disposals in the Fiscal Year in which such Quarter occurs, equals or exceeds
          US $10,000,000 (ten million United States Dollars).  

	 	16.2. 	Accounts
and Auditors  

	 	
The
Borrower will ensure that:  

	 	16.2.1. 	the
annual Accounts (including the consolidated annual Accounts) to be delivered
                    to the Banks pursuant to clause 16.1 above are audited by the
Auditors and                     that the quarterly Accounts are, unless otherwise
indicated herein, reviewed by                     the Auditors (including the
consolidated Accounts);  

	 	16.2.2. 	the
Borrower shall at all times have duly appointed Auditors;  

	 	16.2.3. 	the
Borrower will not change its financial year-end without the prior written
                    consent of the Banks;  

	 	16.2.4. 	all
Accounts shall be prepared in accordance with GAAP (consistently applied) or
                    shall indicate in notes to or accompanying such Accounts (including
the                     consolidated financial statements) any material departures from
GAAP or (without                     derogating from clause 16.2.5 below) changes in
the accounting policy of                     the Borrower;  

	 	16.2.5. 	each
set of Accounts delivered to the Banks is prepared in the respective
                    formats attached as Schedules 1.1.2(A) and 1.1.2(B) hereto and
is prepared                     on substantially the same basis as was used in the
preparation of the Accounts                     previously delivered to the Banks,
subject to changes required by GAAP;  

	 	16.2.6. 	in
the event that any Accounts are delivered which are not prepared on a
                    substantially consistent basis to Accounts previously delivered
hereunder, such                     Accounts are accompanied by an explanation of any
changes to the accounting                     basis used in respect of the Business Plan;
and  

	 	16.2.7. 	all
Accounts shall fairly present in all material respects (subject to
                    adjustments which fall to be made at the end of the financial year in
accordance                     with GAAP), the financial position and results of
operations of its financial                     position and results of operations, as at
the end of and for the Accounting                     Period to which they relate.  

87

	 	16.3. 	Purpose

	 	
[Intentionally
Deleted]  

	 	16.4. 	Negative
Pledge  

	 	
The
Borrower shall not create or permit to subsist any Encumbrance on the whole or any part of
its, or any of its Subsidiaries’ present or future assets, business or undertaking,
save for the Encumbrances under the Security Documents and for the other Permitted
Encumbrances. 

	 	16.5. 	No
Financial Indebtedness  

	 	
Save
with the prior written consent of the Banks, the Borrower will not incur or have and will
procure that the Group will not incur or have any Financial Indebtedness, save for
Permitted Financial Indebtedness. Without limiting the generality of the aforegoing, the
Borrower will not and will procure that its Subsidiaries (other than Jazz and its
Subsidiaries) will not make any loans or give any guarantees or incur other contingent
Indebtedness, other than as referred to (and subject to the limits set out) in
clause 1.1.115(e). The Borrower will deliver to the Banks, within 60 (sixty) days of
the end of each Quarter during this Agreement, a certificate from the chief financial
officer of the Borrower confirming compliance by the Borrower with the provisions of this
clause 16.5. In addition, the Borrower shall not give any credit, save for customary
credits in the Ordinary Course of Business constituting credit to customers or loans to
employees. 

	 	16.6. 	Pari
Passu Ranking  

	 	
The
Borrower undertakes that its obligations under this Agreement rank and will at all times
rank at least pari passu in right and priority of payment and in priority of
security (save by reason of and to the extent of the security afforded thereto by the
Security Documents) with all its other present and future unsecured and unsubordinated
obligations, other than obligations which are mandatorily preferred by law applying to
companies generally. 

	 	16.7. 	Distributions  

	 	
The
Borrower will not, prior to the date that all amounts payable by the Borrower under the
Finance Documents shall have been paid in full: 

88

	 	16.7.1. 	make
or resolve to make any Distribution (other than payments with respect to
                    Permitted Subordinated Debt specifically permitted by clause 16.7.2
below);  

	 	16.7.2. 	make
or resolve to make any repayment, prepayment or payment (in cash or in
                    kind) of the principal of, or Interest (whether or not capitalised)
or other                     amount on or in respect of the Permitted Subordinated Debt,
save to the extent                     permitted under the approved terms thereof in
accordance with                     clause 1.1.118 above (including, for the removal
of doubt, all Permitted                     Subordinated Debt set forth on Schedule 15.13
hereto). For the removal of                     doubt, the Borrower shall not make or
resolve to make any other changes to or in                     respect of the Permitted
Subordinated Debt without the prior written consent of                     the Banks;  

	 	16.7.3. 	without
derogating from clause 16.22 below, make or resolve to make any
                    other payment or transfer of assets to or acquisition from any
shareholder of                     the Borrower or Affiliate of any shareholder, save for
payments in the Ordinary                     Course of Business and on market conditions
and prices and save for:  

	 	(a) 	payments
in connection with the Borrower’s indemnification obligation as
          contemplated by the undertaking from the Borrower to TIC dated November 11,
          2003 with respect to what was known as the Safety Net Undertaking, to the
extent           that such indemnification obligation is still applicable; and  

	 	(b) 	payments
to Sandisk in connection with the Loan Agreement between the Borrower           and
Sandisk, dated August 10, 2006,  

	 	
For
the avoidance of doubt, nothing herein contained shall be construed as prohibiting: (i) the
conversion of debt by the Borrower to TIC to be made on or about the Amendment Closing
Date; (ii) the payments by the Borrower to TIC of a fee aggregating US $300,000
(three hundred thousand United States Dollars) in connection with the agreements signed
between the Borrower and TIC on or about the Amendment Closing Date; or (iii) payments
or transfers to the Banks pursuant to: (1) the Finance Documents; or (2) any
other Permitted Financial Indebtedness. 

	 	16.8. 	Intellectual
Property Assets  

	 	
The
Borrower will:  

	 	16.8.1. 	make
or procure to be made such registrations and pay such fees and similar
                    amounts as are necessary to keep those registered Intellectual
Property Assets                     over which the Banks have been granted fixed security
pursuant to the Security                     Documents (if any), in force and to record
its interest in those Intellectual                     Property Assets;  

89

	 	16.8.2. 	[Intentionally
Deleted]  

	 	16.8.3. 	promptly
upon being required to do so by the Banks, comply with all proper
                    instructions of the Banks which the Banks are entitled to give under
the                     Security Documents in respect of its Intellectual Property Assets
referred to in                     clause 16.8.2 above.  

	 	16.8.4. 	[Intentionally
Deleted]  

	 	16.8.5. 	[Intentionally
Deleted]  

	 	16.9. 	Environmental
Matters

	 	
The
Borrower will, and will procure that each Subsidiary will:  

	 	16.9.1. 	(i) obtain
all Environmental Permits required for the operation of the                     business
of the Borrower as contemplated under the Business Plan by not later
                    than the date when such Environmental Permit is required to be
obtained;                     (ii) comply with the terms and conditions of all
Environmental Permits                     applicable to it; (iii) comply with all
applicable Environmental Laws;                     (iv) use its best endeavours to
prevent any Release of Materials of an                     Environmental Concern; and (v) remedy
all Environment damage caused in                     connection with the Project, in each
case where failure to do so would have a                     Material Adverse Effect; and  

	 	16.9.2. 	promptly
upon receipt of the same, notify the Banks of any claim, notice or
                    other communication served on it in respect of any alleged breach of
or                     corrective or remedial obligation or liability under any
Environmental Law.  

	 	16.10. 	Insurance

	 	16.10.1. 	Until
the date upon which all amounts payable by the Borrower under the Finance
                    Documents shall have been paid in full, the Borrower will insure and
keep                     insured all such properties and assets of the Borrower, with
reputable insurance                     companies or underwriters approved by the Banks,
to such extent, at such times                     and against such risks, as described in
the schedule to the Insurance Report                     (including with respect to
deductibles, exclusions and exceptions) (the                     Insurance Report to be
revised only at the recommendation of the Insurance                     Advisor and
subject to the consent of the Borrower and the Banks) and the
                    Borrower will procure that all the Insurance Policies required under
the                     Insurance Report as aforesaid shall, for so long as so required
in accordance                     with the Insurance Report, be in full force and effect
and legal, valid, binding                     and enforceable in accordance with their
respective terms. Without limiting the                     generality of the aforegoing,
the Borrower shall ensure that at all times the                     proceeds of all
Insurance Policies in force payable in the event of loss of                     Fab 2
or of the Project shall be equal to at least 110% (one hundred and
                    ten percent) of the Total Outstandings at such time.  

90

	 	16.10.2. 	The
Borrower will promptly after becoming aware of the relevant requirement,
                    effect and maintain all insurances required by the terms of any
applicable law                     or any Contract binding on it.  

	 	16.10.3. 	The
Borrower will ensure that the Group has such insurance coverage in respect
                    of any risks or liabilities other than those specified in the
Insurance Report                     as would from time to time generally and customarily
be insured by a company                     carrying on a business similar to the
Business.  

	 	16.10.4. 	Subject
as hereinafter provided, the Borrower may, at its discretion at any
                    time, effect such other insurances in addition to or supplementing
those                     referred to in this clause 16.10 as it may think fit;
provided that, such                     supplementary insurance shall not adversely
affect any insured party’s                     rights or ability to recover under
the insurance referred to in this                     clause 16.10 and the Borrower
shall notify the Banks at least annually of                     any material insurances
effected since the previous such notification pursuant                     to this clause 16.10.  

	 	16.10.5. 	The
Borrower shall pay and, as applicable, procure that its Subsidiaries pay all
                    premiums on all Insurance Policies when due and the Borrower shall
maintain and                     comply with the provisions of the Insurance Policies and
the Borrower shall                     ensure that the Insurance Policies do not become
void or voidable. The Borrower                     will promptly supply to the Banks on
request evidence reasonably satisfactory to                     the Banks of payment of
all premiums and other amounts payable by it under and a                     certified
copy of, each insurance policy taken out and maintained by it pursuant
                    to this clause 16.10, together with such other information as to
the                     Insurance Policies taken out pursuant hereto (including regarding
renewals                     thereof) as the Banks may reasonably request.  

	 	16.10.6. 	The
Borrower shall ensure that, in respect of each Insurance Policy taken out
                    pursuant to clause 16.10.1 (except for third party insurances as
referred                     to in the schedule to the Insurance Report):  

	 	(a) 	a
clause is endorsed upon such policy in the form of Schedule 16.10.6(a)  hereto;  

91

	 	(b) 	an
undertaking is endorsed upon such policy by the insurer to notify the Banks
          promptly in writing if the premium or other moneys payable under such policy
are           not paid when due and to refrain from cancelling such policy by reason only
of           the non-payment of such moneys for a period of at least 120 (one hundred and
          twenty) days from the due date;  

	 	(c) 	a
provision is endorsed upon such policy to the effect that the relevant
          insurance company waives any rights of contribution arising against any other
          insurance taken out by the Banks in respect of payments made by it and any
          rights of subrogation arising in respect of the rights of the Banks under the
          Finance Documents;  

	 	(d) 	a
notice of assignment by way of charge in respect of all the Insurance Policies
          (other than under Insurance Policies in respect of liability of the Borrower to
          third parties or of liability of the Borrower for damage to property of third
          parties or of the type listed in Schedule 16.10.6(d)  attached
          hereto) is duly given to the relevant insurers in accordance with the Debenture
          and such insurers shall have given acknowledgments thereof, pursuant to which,
inter alia, all proceeds of the Insurance Policies are to be paid
          directly to the Banks by way of payment into the Project Account;  

	 	(e) 	the
Banks are joined as an additional insured (named insured) thereunder and the
          interests of the Banks are duly noted and endorsed upon all slips, cover notes,
          policies or other instruments of insurance issued or to be issued in connection
          therewith;  

	 	(f) 	the
insurers agree that the Banks are not liable for premiums or other policy
          obligations.  

	 	16.10.7. 	The
Borrower will ensure that (other than third party liability insurance (as
                    referred to in the schedule to the Insurance Report)) all of the
Insurance                     Policies required to be taken out and maintained by it
pursuant to                     clause 16.10.1 above shall be contain provisions
providing for payment in                     the manner described in clause 16.10.6(d)
above.  

	 	16.10.8. 	All
moneys received or receivable under any insurances in respect of property or
                    assets of the Borrower damaged or destroyed or otherwise shall be
paid into the                     Project Account and may, unless required to be prepaid
in accordance with                     clause 8.1.1 above, thereafter promptly be
applied: (i) subject to                     (ii) below, in repairing, replacing,
restoring or rebuilding the property or                     assets damaged or destroyed
or applied in respect of the Project or (in the case                     of third party
liability cover), in satisfaction of the third party liability in
                    question; or (ii) on and after the occurrence of a Default and
for so long                     as such Default is continuing, at the option of the
Banks: (A) to prepay                     the Loans in accordance with clause 7
above; or (B) in repairing,                     replacing, restoring or rebuilding
the property or assets damaged or destroyed                     or applied in respect of
the Project as the Banks reasonably see fit as                     permitted pursuant to
this Agreement or (in the case of third party liability                     cover) in
satisfaction of the third party liability in question.  

92

	 	16.10.9. 	The
Borrower shall promptly notify the Banks of any insurance claim where the
                    amount of such claim exceeds US $2,500,000 (two million five
hundred                     thousand United States Dollars) (or its equivalent, on the
date on which the                     claim is made, in the currency in which such claim
is made) and of any insurance                     claims which, in the aggregate, exceed
US $5,000,000 (five million United                     States Dollars) (or their
respective equivalents, as aforesaid).  

	 	16.11. 	Mergers
and Amalgamations

	 	
The
Borrower will not, and will procure that its Subsidiaries (other than Jazz and its
Subsidiaries) will not, enter into or resolve to approve any merger, consolidation,
amalgamation or scheme of reconstruction or in any way transfer its or their respective
businesses or part thereof, save with the prior written consent of the Banks. 

93

	 	16.12. 	Consents  

	 	
The
Borrower will obtain every Consent required to perform its obligations under this
Agreement, under any other Finance Document and ensure that: (a) none of the Consents
is revoked, cancelled, suspended, withdrawn, terminated, expires or is not renewed or
otherwise ceases to be in full force and effect; and (b) no Consent is modified and
that it does not commit any breach of the terms or conditions of any Consent (save for a
breach which cannot be a cause for revocation of such Consent or for variation thereof
materially adverse to the Borrower). The Borrower will promptly furnish to the Banks
certified copies of all Consents. 

	 	16.13. 	Material
Contracts

	 	16.13.1. 	The
Borrower shall comply with the terms of each of the Material Contracts, save
                    for any non-compliance which: (i) is not material; and (ii) cannot
                    constitute (including with the passage of time or the giving of
notice) a cause                     of action permitting cancellation of any such
Material Contract or any variation                     thereof materially adverse to the
Borrower).  

	 	16.13.2. 	[Intentionally
Deleted]  

	 	16.13.3. 	[Intentionally
Deleted]  

	 	16.13.4. 	[Intentionally
Deleted]  

	 	16.13.5. 	The
Borrower shall use its best efforts to procure that all Material Contracts
                    entered into after the date hereof are duly pledged to the Banks by
way of                     first-ranking fixed charge (assignment by way of charge) under
the Debenture and                     otherwise perfected in accordance with its terms.  

	 	16.14. 	Auditors

	 	16.14.1. 	If
the Borrower wishes to change its Auditors it will notify the Banks as to the
                    reasons for any such proposed change and if the Banks so request,
will instruct                     the audit partner of each of the outgoing firm of
Auditors and the replacement                     firm of Auditors to discuss the
financial position of the Borrower with the                     Banks.  

	 	16.14.2. 	The
Borrower will authorise the Auditors to discuss the Borrower’s
                    financial position with the Banks (and with the Bank Adviser) on the
Banks’                    reasonable request and after notice is provided to the
Borrower, at the expense                     of the Borrower.  

94

	 	16.15. 	Acquisitions

	 	16.15.1. 	The
Borrower shall not, without the prior written consent of the Banks, make any
                    Acquisition (including any investment of any kind in any Subsidiary
or other                     Affiliate), unless: (a) the aggregate amount of the
investment by the                     Borrower in all Acquisitions during the period of
this Agreement does not exceed                     US $5,000,000 (five million
United States Dollars); and (b) the                     Borrower shall not incur any
Indebtedness (contingent or otherwise) in                     connection with such
Acquisition, save for the amount invested as permitted                     under paragraph (a)
above.  

	 	16.15.2. 	The
Borrower’s ability to make any Acquisition pursuant to                     clause 16.15.1
above will be conditional upon the Borrower using its best                     efforts to
provide that such Acquisition is first capable of being pledged in
                    favour of the Banks by way of a first pledge and charge under the
Debenture or                     any other charge, in a form satisfactory to the Banks.  

	 	16.16. 	Access

	 	16.16.1. 	The
Borrower shall, subject to prior coordination with the Borrower of the time,
                    permit any professional adviser (including the Bank Adviser) to the
Banks or                     representative of the Banks to have access to the Group’s
corporate,                     financial and operational books, records, accounts,
documents, computer                     programmes, data or other information in the
possession of or available to it,                     subject to such adviser executing a
confidentiality undertaking in customary                     form reasonably acceptable
to the Banks and the Borrower and to take such copies                     as may be
considered appropriate by such representative or professional adviser
                    and to discuss the affairs, finances and Accounts of the Borrower
with the                     directors, officers and Auditors of the Borrower, all at
such reasonable times                     after giving written notice and as often as the
Banks may from time to time                     request. For the removal of doubt, the
Bank Adviser and such other professional                     advisors shall be entitled
to reveal to the Banks all confidential information                     regarding the
Group to which it has access.  

	 	16.16.2. 	[Intentionally
Deleted]  

	 	16.16.3. 	For
the avoidance of doubt, no information or access provided to any of the
                    Banks’ professional advisors, including, the adviser to the
Banks on                     financial and accounting matters (“the Bank Adviser”),
pursuant                     to this Agreement shall release the Borrower from its
obligations to make and                     provide, and to be fully responsible for, all
reports and notices as shall be                     required under this Agreement, or in
any way place any responsibility on the                     Banks with respect to the
Borrower or to any third parties with respect to such                     information and
access, including, any claim that any knowledge obtained by the                     Banks’ professional
advisors (including the Bank Advisor), constitutes any                     waiver of any
nature or acceptance by the Banks of any such matter or matters as                     to
which the Banks’ professional advisors (including the Bank Advisor)
                    obtain knowledge.  

95

	 	16.17. 	Capital
Expenditure

	 	16.17.1. 	[Intentionally
Deleted]  

	 	16.17.2. 	[Intentionally
Deleted]  

	 	16.18. 	Organisational
Documents

	 	
The
Borrower shall not amend its Articles of Association or other Organisational Documents in
any respect materially adverse to the interests of the Banks under the Finance Documents,
without the prior written consent of the Banks. For the purposes of this
clause 16.18, the term “Finance Documents” shall be deemed not to
include any shares, Warrants and capital notes issued by the Borrower to the Banks. 

	 	16.19. 	Project

	 	16.19.1. 	[Intentionally
Deleted]  

	 	16.19.2. 	[Intentionally
Deleted]  

	 	16.20. 	Business
Plan

	 	16.20.1. 	[Intentionally
Deleted]  

	 	16.20.2. 	[Intentionally
Deleted]  

	 	16.21. 	Hedging

	 	
The
Borrower shall not, and the Borrower shall procure that none of its Subsidiaries shall,
enter into any Hedging Transaction, other than Permitted Hedging Transactions.
“Permitted Hedging Transactions” shall mean: (i) forward
transactions, swap transactions, future transactions or other similar types of
transactions; or (ii) other Hedging Transactions in which the maximum financial
exposure is reasonable and the exact amount thereof may be calculated pursuant to the
Hedging Transaction agreement at the time such agreement is entered into, provided, in the
case of both (i) and (ii), such Hedging Transaction is not made for any speculative
purpose. 

96

	 	16.22. 	Transactions
with Related Persons  

	 	
Except
with the prior written consent of the Banks, the Borrower will not, directly or
indirectly, purchase, acquire or lease any property from, or sell, transfer or lease any
property to, or otherwise have any dealings or enter into any transaction after the date
of this Agreement with, any interested person (Baal Inyan), Affiliate or any
Subsidiary of the Borrower or with any Lead Investor or Affiliate of a Lead Investor,
except on terms no more favourable to such other person than would apply in the case of
arm’s length Contracts entered into in the Ordinary Course of Business, except for
transactions which are not material. 

	 	16.23. 	Sale
and Leaseback  

	 	
The
Borrower will not sell, transfer or otherwise dispose of any of its assets or any interest
therein on terms whereby such asset is or may be leased to or re-acquired or acquired by
the Borrower or any member of the Group in circumstances where the transaction is entered
into primarily as a method of raising finance or of financing the acquisition of an asset. 

	 	16.24. 	Disposals  

	 	
The
Borrower will not, and will procure that none of its Subsidiaries (other than Jazz and its
Subsidiaries) will, either in a single transaction or in a series of transactions whether
related or not and whether voluntarily or involuntarily, sell, transfer, lease or
otherwise dispose of all or any part of or interest in its respective assets or
undertaking to any person, save for: 

	 	16.24.1. 	disposals
in the Ordinary Course of Business;  

	 	16.24.2. 	disposals
of assets in exchange for or for investment in other assets performing
          substantially the same function which are comparable or superior as to type,
          value and quality;  

	 	16.24.3. 	(i) 	
disposals of shares of a Subsidiary on arm’s length terms where the
          business of that Subsidiary is not required for the efficient operation of the
          Business and such business has been, or is in the process of being, terminated;  

	 	(ii) 	disposals
of surplus, obsolete or redundant plant and equipment or other assets           or of
land or buildings in connection with the termination of any business or
          operation not required for the efficient operation of the Business, in each
case           on arm’s length terms; or  

97

	 	16.24.4. 	any
other disposal with the prior written consent of the Banks.  

	 	
Nothing
in this clause 16.24, however, will permit the disposal of and the Borrower shall not
dispose of: (i) any assets which are, or are intended to be, the subject of fixed
security created by any Security Document except in accordance with the relevant Security
Document; or (ii) any assets (including rights under Material Contracts) which, in
accordance with clause 1.1.36(c)(i) or (ii) above are not charged in favour of the
Banks under the Debenture. In the event that the Borrower shall wish to dispose of assets
as referred to in clause 16.24.2 or 16.24.3(ii) above, it shall request for the Banks to
release such assets from any fixed security under the relevant Security Document and,
provided no Default or Event of Default has occurred, the Banks shall consent to such
release, provided further that, with respect to the assets referred to in clause 16.24.2
above, such replacement assets are all duly pledged by fixed charge under the relevant
Security Document. Notwithstanding any other provision herein, the Borrower shall be
entitled to dispose of any shares or other securities or other similar rights of the
Borrower in or in connection with Azalea Microelectronics Corporation, without the prior
written consent of the Banks provided that the proceeds of any such disposal are invested
in the Project in accordance with the Business Plan. 

	 	16.25. 	Notification
of Default  

	 	
The
Borrower shall notify the Banks of any Default or Event of Default of which it is aware
(and the steps, if any, being taken to remedy such Default or Event of Default) promptly
upon becoming aware thereof. 

	 	16.26. 	Compliance
with Laws  

	 	
The
Borrower will, and will procure that each of its Subsidiaries will, comply in all respects
material to the Banks with all applicable laws and Orders. 

	 	16.27. 	Investments
in the Borrower  

	 	
The
Borrower shall procure the receipt by it by no later than December 31, 2009 of an
amount of at least US $20,000,000 (twenty million United States Dollars) in:
(a) Paid-in Equity; or (b) capital notes in form and substance the same as those
issued to TIC on or about the Amendment Closing Date. For the purposes of the aforegoing,
the Borrower’s obligation as aforesaid is in addition to the investment of
US $20,000,000 (twenty million United States Dollars) in capital notes made by TIC on
or about the Amendment Closing Date which shall not be taken into account for this
clause 16.27. For the avoidance of doubt, nothing contained in the TIC Safety Net
Undertaking shall in any way derogate from the Borrower’s obligations under this
clause 16.27. 

98

	 	16.27.1. 	[Intentionally
Deleted]  

	 	16.27.2. 	[Intentionally
Deleted]  

	 	16.27.3. 	[Intentionally
Deleted]  

	 	16.27.4. 	[Intentionally
Deleted]  

	 	16.28. 	Taxation

	 	
[Intentionally
Deleted]  

99

	 	16.29. 	Financial
Undertakings  

	 	
The
Borrower will procure that with effect from March 31, 2009 (including for the Quarter
ending on March 31, 2009), at all times during this Agreement, the Borrower and the
Group shall comply with the Financial Undertakings set out below: 

	 	16.29.1. 	[Intentionally
Deleted]  

	 	16.29.2. 	[Intentionally
Deleted]  

	 	16.29.3. 	[Intentionally
Deleted]  

	 	16.29.4. 	(a)	
for any Quarter, the ratio of: (i) Total Debt (Consolidated) to           (ii) EBITDA
(Consolidated) for such Quarter, shall not exceed the ratio for           such Quarter as
set out in Schedule 16.29 hereto;  

	 	(b) 	for
any Quarter, the ratio of: (i) Total Debt (Borrower only) to           (ii) EBITDA
(Borrower only) for such Quarter, shall not exceed the ratio           for such Quarter
as set out in Schedule 16.29 hereto;  

	 	16.29.5. 	[Intentionally
Deleted];  

	 	16.29.6. 	(a) 	
for any Fiscal Year and for any Quarter, EBITDA (Consolidated) for such           Fiscal
Year or for such Quarter shall not be less than the amount for such           Fiscal Year
or such Quarter as set out in Schedule 16.29 hereto;  

	 	(b) 	for
any Fiscal Year and for any Quarter, EBITDA (Borrower only) for such Fiscal
          Year or for such Quarter shall not be less than the amount for such Fiscal Year
          or such Quarter as set out in Schedule 16.29 hereto;  

	 	16.29.7. 	[Intentionally
Deleted];  

	 	16.29.8. 	[Intentionally
Deleted];  

	 	16.29.9. 	[Intentionally
Deleted];  

	 	16.29.10. 	[Intentionally
Deleted];  

	 	16.29.11. 	[Intentionally
Deleted];  

100

	 	16.29.12. 	(a) 	
for any Fiscal Year, Investments (Consolidated) shall not be greater than           the
amount for such Fiscal Year as set out in Schedule 16.29 hereto; and  

	 	(b) 	for
any Fiscal Year, Investments (Borrower only) shall not be greater than the
          amount for such Fiscal Year as set out in Schedule 16.29 hereto;  

	 	
and 

	 	16.29.13. 	(a) 	
for any Fiscal Year, EBITDA (Consolidated) less Investments for such Fiscal
          Year, shall not be less than the amount for such Fiscal Year as set out in
          Schedule 16.29 hereto; and  

	 	(b) 	for
any Fiscal Year, EBITDA (Borrower only) less Investments for such Fiscal           Year,
shall not be less than the amount for such Fiscal Year as set out in           Schedule 16.29
hereto.  

	 	
Schedule 16.29
attached hereto shall be binding unless the Banks and the Borrower agree in writing,
prior to December 31, 2008, to modify Schedule 16.29. For the avoidance of
doubt, the Banks shall be under no obligation to modify Schedule 16.29. 

	 	16.30. 	Change
of Business

	 	16.30.1. 	The
Borrower will not make or threaten to make any substantial change in the           nature
of its business.  

	 	16.30.2. 	The
Borrower will not and will procure that its Subsidiaries will not, carry on           any
business other than the Business.  

	 	16.31. 	Bank
Accounts

	 	16.31.1. 	So
long as any Loans are outstanding, the Borrower shall maintain in its own           name
all the Charged Accounts. The Borrower will not maintain any bank account           other
than the Charged Accounts and other bank accounts duly charged in favour           of the
Banks by way of a first-ranking fixed pledge and charge under the           Debenture.
Notwithstanding the foregoing, the Borrower shall be entitled to           continue to
maintain and shall not be required to pledge as aforesaid for the           benefit of
the Banks the bank account maintained for the purpose only of           employee option
exercises and shall be entitled to open and maintain bank           accounts with respect
to Permitted Financial Indebtedness referred to in           clauses 1.1.115(c) and
1.1.115(j) and shall not be required to pledge such           accounts as aforesaid for
the benefit of the Banks, provided that such accounts           shall only be used by the
Borrower for the purpose of receipt and payment of the           particular Permitted
Financial Indebtedness referred to in such clauses and for           no other purpose.  

101

	 	16.31.2. 	The
Borrower shall procure that all payments in connection with the Project,
          payments by the Borrower under the Finance Documents, investments of Paid-in
          Equity, investments by way of capital notes, proceeds of Permitted Subordinated
          Debt, proceeds from disposals and, subject to clause 16.31.3(i) below,
          Grants from the Investment Centre and all other payments directly or indirectly
          relating to the Project or Fab 2 shall be made, directly from the relevant
          payor, to the relevant Charged Accounts.  

	 	16.31.3. 	The
Borrower shall procure that all revenues from the Project (including from
          proceeds from disposals and other Material Contracts) and from authorised
          investments, as well as all proceeds of all Paid-In Equity subscriptions,
          investments by way of capital notes, Investment Centre Fab 2 Grants and
          Permitted Subordinated Debt, are paid direct to one of the Project Accounts (or
          in the case only of amounts received from non-Israeli investors, the Foreign
          Paid-in Equity Account); provided that: (i) if so required by the
          Investment Centre, the proceeds of the Investment Centre Fab 2 Grants may
          be allocated by banks or financial institutions other than the Banks (but to be
          transferred directly to either of the Project Accounts); (ii) proceeds
from           a public offering made on an exchange outside Israel may be placed on
deposit in           foreign banks until such time as the Borrower uses such proceeds;
provided           further that, in both cases, the accounts at such other banks or
financial           institutions are duly pledged under the Debenture by way of a
first-ranking           fixed pledge and charge in favour of the Banks. Except as
otherwise specified           above, no other sums shall be paid into either of the
Project Accounts or into           the Foreign Paid-in Equity Account without the prior
agreement of the Banks.  

	 	16.31.4. 	The
Borrower shall at the request of the Banks furnish the Banks with copy           invoices
or other evidence acceptable to the Banks with respect to any           withdrawal of
sums from the Project Account or into the Foreign Paid-in Equity           Account.  

	 	16.31.5. 	The
Borrower shall procure that: (a) the proceeds of all insurance claims
          under the Insurance Policies taken out by the Borrower with respect to
          Fab 1 and Fab 2 or any part of either, other than in respect of third
          party liabilities which are or are to be paid by the insurer or re-insurer
          direct to the third party claimant; (b) all proceeds of nationalisation,
          expropriation, or requisition for title or use; and (c) [Intentionally
          Deleted]; (d) all proceeds of any sale, transfer or licence of
          Intellectual Property Assets used in connection with the Project or other Net
          Proceeds, shall be paid directly to one of the Project Accounts.  

102

	 	16.31.6. 	Sums
standing to the credit of any of the Charged Accounts shall be placed on
          deposit and shall earn Interest at such rates as may be agreed from time to
time           by the Borrower and the relevant Bank at which such Charged Account is
held. All           Interest earned on the balance thereof to the credit of a Charged
Account shall           be credited to such Charged Account.  

	 	16.31.7. 	The
Borrower shall not create or permit to subsist any Encumbrance on all or any
          part of the Charged Accounts or any other account charged under the Debenture,
          other than any Encumbrance created by the Security Documents, nor assign,
          transfer or otherwise dispose of all or any part of its right or title to, or
          Interest in, the Charged Accounts or any other account charged under the
          Debenture.  

	 	16.31.8. 	(a)	
No amounts may be withdrawn or transferred from any of the Charged Accounts           and
the Borrower may not give any instructions in relation to any of the Charged
          Accounts, except in accordance with the express terms of this Agreement.  

	 	(b) 	The
Borrower shall ensure that all moneys paid to it from a Charged Account in
          response to any instruction given by it are applied only in discharging the
          obligations in respect of which they were paid from the relevant Charged
Account           (or as otherwise permitted under this Agreement).  

	 	16.31.9. 	The
Borrower agrees that each Bank may provide to any of the other Banks copies
                    of bank statements for any of the Charged Accounts and other
information                     relating to transactions effected or to be effected on
the Charged Accounts save                     for information regarding financial terms
such as interest rates, commissions,                     fees and terms of deposits.  

	 	16.31.10. 	The
Borrower acknowledges that neither any insufficiency of funds in the Charged
                    Accounts (or any of them), nor any inability to apply any fund in the
Charged                     Accounts (or any of them) against any or all amounts owing
under this Agreement,                     shall at any time limit, reduce or otherwise
affect the Borrower’s payment                     obligations under this Agreement.  

	 	16.31.11. 	Each
Bank may transfer sums from one Charged Account to another Charged Account
                    or to the Banks as required in order to meet payments and withdrawals
from the                     Charged Accounts, but without liability or responsibility as
a consequence of                     such application.  

	 	16.32. 	Prohibition
on Change of Ownership

	 	
Save
with the prior written consent of the Banks, there shall be no Change of Ownership.  

103

	 	16.33. 	Utilisation
of Excess Cash Flow  

	 	
All
Excess Cash Flow shall be invested only in accordance with the Business Plan, unless
otherwise agreed by the Banks in advance in writing or unless applied in prepayment (to
the extent permitted) in accordance with clause 7 above. 

	 	16.34. 	Safety
Net Undertaking  

	 	
The
Borrower shall procure that TIC provides the TIC Safety Net Undertaking.  

	 	16.35. 	Outside
Investment

	 	16.35.1. 	The
Borrower shall procure that each of the Lead Investors provide an
                    undertaking, in the form of Schedule 16.35.1 hereto (“the
                    Outside Investment Undertakings”), that obligates each such
Lead                     Investor to cooperate with an Outside Investment Offer, all
subject to the terms                     and conditions of Schedule 16.35.1. For
purposes of this clause 16.35 “an Outside Investment Offer” means a
binding offer by a person                     or persons (acceptable to the Banks in
their sole discretion) having sufficient                     assets, or having available
to it a binding financial commitment in an amount                     sufficient from one
or more reputable financial institutions, to make the                     Outside
Investment Offer (“the Outside Offeror”) to subscribe
                    for shares from the Borrower at a price specified in such offer,
which offer is:                     (a) made after the commencement and continuation
for 60 (sixty) days after                     the institution thereof of bankruptcy or
receivership proceedings against the                     Borrower which are ordered by a
court of competent jurisdiction or the prior                     determination of an
arbitrator, mutually appointed by the Banks and the                     Borrower, that a
bankruptcy or receivership order would be issued by a court                     against
the Borrower were a petition to be filed with a court of competent
                    jurisdiction or, an order providing for creditor protection in favour
of the                     Borrower pursuant to the request therefor by the Borrower is
issued by a court                     of competent jurisdiction shall have occurred and
be continuing (“the                     Triggering Event”); and (b) in
an amount sufficient, at least, to                     enable the Borrower (after
deduction of all attendant expenses) to cure and                     remedy the
Triggering Event.  

104

	 	16.35.2. 	Upon
the happening of a Triggering Event, the Borrower shall take all steps to
                    cooperate with any Outside Offeror (or potential Outside Offerors),
including,                     by permitting persons seeking to become an Outside Offeror
(and their                     representatives) the opportunity to conduct a due
diligence examination of the                     Borrower and of its assets, liabilities,
business and prospects (provided that                     such persons enter into a
confidentiality agreement in a reasonable and                     customary form with the
Borrower). If the Outside Investment Offer is made and                     accompanied by
an opinion of a reputable investment banking firm that the                     Outside
Investment Offer is fair to the Borrower, the Borrower shall procure
                    that a rights offering (“the Rights Offering”) be
made to its                     shareholders to invest up to 60% (sixty percent) of the
amount proposed to be                     invested by the Outside Offeror in the Borrower
at the same price per share and                     the other terms and conditions set
forth in the Outside Investment Offer.                     Notwithstanding the
aforegoing, if the Outside Investment Offer is conditioned                     on the
Outside Offeror acquiring at least 51% (fifty-one percent) of the shares
                    of the Borrower, the maximum number of shares that may be purchased
in the                     Rights Offering shall be limited to that number of offered
shares which,                     together with the number of then outstanding shares not
owned by the Outside                     Offeror, shall not exceed a maximum of 49%
(forty-nine percent) of the shares of                     the Borrower, unless the Lead
Investors agree to invest an amount at least equal                     to, and at a price
per share no less than, the Outside Investment Offer                     (“the
Alternative Outside Offer”) and further agree, in
                    addition to exercising all rights offered to them in the Rights
Offering, to                     exercise in a subsequent private placement all rights
not exercised by the other                     shareholders of the Borrower in such
rights offering, so as to ensure that the                     full amount of the Outside
Investment Offer is invested in the Borrower; in such                     case, the
Alternative Outside Offer shall be made the subject of the Rights
                    Offering and the Lead Investors shall ensure that the full amount of
the                     Alternative Outside Offer is invested in the Borrower and, to the
extent                     required, used to cure and remedy the Triggering Event.  

	 	16.35.3. 	For
the removal of doubt: (a) nothing in this clause 16.35 above (or
                    in the Outside Investment Undertakings) shall prevent the Banks from
enforcing                     any and all of their rights or remedies under this
Agreement (including in the                     case of the occurrence of a Triggering
Event) at any time, even if such                     enforcement does not permit, or in
any way adversely affects the possibility of,                     an Outside Investment
Offer, or an Alternative Outside Offer, as the case may                     be, to be
made, or if made, to be completed and, for the further removal of
                    doubt, even after an Outside Investment Offer has already been made;
and                     (b) in the event an Outside Investment Offer is conditional
on the Outside                     Offeror acquiring at least 51% (fifty-one percent) of
the shares of the Borrower                     and, pursuant thereto, the Outside Offeror
subscribes for shares from the                     Borrower as contemplated in clause 16.35.1
above and the shares subscribed,                     as aforesaid, confer on such Outside
Offeror at least 51% (fifty-one percent) of                     the shares of the
Borrower, then, with effect upon the occurrence of such event,                     clauses 16.1.3(vii)
and 16.32 above shall cease to have any effect.  

	 	16.36. 	Interest
Payment Loans; Additional Investment Undertakings

	 	
[Intentionally
Deleted]  

105

	 	16.37. 	Undertakings
with Respect to Jazz  

	 	
Without
derogating from the provisions of the letter, dated August 19, 2008, from the
Borrower to the Banks requesting the consent of the Banks to the acquisition of Jazz by
the Borrower, notwithstanding anything to the contrary in this Agreement, the Borrower
will: 

	 	16.37.1. 	ensure
that Jazz and its Subsidiaries (“the Jazz Group”) will
                    remain entities separate from the Borrower and the Borrower shall
adopt, and                     adhere to, an arm’s length structure and mechanism
(such adoption and                     adherence to be in accordance with legal advice of
reputable external US                     counsel), so as to assure that the Borrower
will continue to have no liability                     whatsoever (whether as principal,
surety, guarantor or otherwise) for any of the                     current or future
Indebtedness or other liabilities or obligations, in whole or                     in
part, of any of the Jazz Group, whether actual or contingent (“the
                    Jazz Indebtedness and Obligations”), whether before or after
                    consummation of the acquisition by the Borrower of the shares of
Jazz;  

	 	16.37.2. 	not
assume, guarantee or otherwise undertake to be liable or obligated for, or
                    grant any Encumbrances on any of the assets of the Borrower to
secure, any Jazz                     Indebtedness and Obligations; and  

	 	16.37.3. 	not
invest in, finance, loan or transfer any amounts to, any of the Jazz Group
                    or otherwise expend any funds of the Borrower in the operation of the
Jazz                     Group, save for payments to the Jazz Group for goods, services
and rights                     received on an arm’s length basis, provided that they
are in accordance                     with the aforesaid legal advice.  

	17.  	DEFAULT

	 	17.1. 	Events
of Default

	 	
Each
of the events set out in clause 17.2 to clause 17.20B is an Event of Default
(whether or not caused by any reason outside the control of the Borrower or of any other
person). 

106

	 	17.2. 	Non-Payment  

	 	
The
Borrower does not pay any amount payable by it under any Finance Document at the place and
in the funds expressed to be payable, within the earlier of: (i) 7 (seven) Business
Days; or (ii) 10 (ten) days, of the due date for payment. 

	 	17.3. 	Breach
of Obligations

	 	17.3.1. 	There
is any breach of: (i) the provisions of any of                     clauses 16.4–16.7
(inclusive); clauses 16.9.1, 16.10, 16.11,                     16.13.1, 16.15, 16.24
and clauses 16.31–16.33 (inclusive) and, if such                     default is
capable of remedy within such period, within 7 (seven) days after
                    receipt by the Borrower of written notice from the Banks requiring
the failure                     to be remedied, the Borrower shall have failed to cure
such default; or                     (ii) the provisions of any of clauses 16.25,
16.27, 16.29 or 16.37.  

	 	17.3.2. 	The
Borrower fails to comply with any undertaking or obligation contained in any
                    Finance Document (other than an undertaking referred to in clause 17.3.1
                    above) and, if such default is capable of remedy within such period,
within 14                     (fourteen) days after receipt by the Borrower of written
notice from the Banks                     requiring the failure to be remedied, the
Borrower shall have failed to cure                     such default. For the removal of
doubt, this clause 17.3 shall not be                     construed as derogating
from any other provision of this clause 17 and,                     without limiting
the generality of the aforegoing, the respective cure periods
                    specified in this clause 17.3 shall be applicable only with
respect to                     Defaults specified in clause 17.3.1(i) or this clause 17.3.2
(as                     applicable) and not to any other provision of this clause 17.  

	 	17.3.3. 	No
breach in respect only of Permitted Financial Indebtedness as referred to in
                    clause 1.1.115(c) above shall constitute an Event of Default,
provided the                     conditions set forth in clauses 17.6.6(a) and (b) below
are met.  

	 	17.4. 	Misrepresentation/Breach
of Warranties

	 	
Any
representation or warranty made or repeated by or on behalf of the Borrower in any Finance
Document, or in any certificate or statement delivered by or on behalf of the Borrower or
under any Finance Document is incorrect or misleading in any material respect when made or
deemed to be made or repeated. 

	 	17.5. 	Invalidity  

	 	
Any
of the Finance Documents shall cease to be in full force and effect in any respect or
shall cease to constitute the legal, valid, binding and enforceable obligation of the
Borrower or in the case of any Security Document, fail to provide effective perfected
security in favour of the Banks over the assets over which security is intended to be
given by that Security Document. 

107

	 	17.6. 	Cross
Acceleration  

	 	17.6.1. 	Any
amount in respect of Financial Indebtedness of the Borrower or any
                    Subsidiary which aggregates US $20,000,000 (twenty million
United States                     Dollars) or its equivalent, or more at any one time
outstanding:  

	 	(a) 	becomes
prematurely due and payable;  

	 	(b) 	becomes
due for redemption before its normal maturity date;  

	 	(c) 	is
placed on demand,  

	 	
in
each such case by reason of the occurrence of an event of default (howsoever
characterised) or any event having the same effect resulting from a default by the
Borrower. 

	 	17.6.2. 	Any
amount in respect of such Financial Indebtedness which aggregates                     US $20,000,000
(twenty million United States Dollars) or its equivalent, or                     more,
are not paid when due (whether falling due by demand, at scheduled
                    maturity or otherwise) or within any applicable grace period provided
for in the                     document evidencing or constitute such Financial
Indebtedness.  

	 	17.6.3. 	Any
Encumbrances over any assets of any one or more members of the Group (taken
                    together, if more than one) securing an aggregate of US $20,000,000
(twenty                     million United States Dollars) or its equivalent, or more,
become enforceable                     and steps are taken to enforce the same.  

	 	17.6.4. 	The
Borrower or any Subsidiary fails to discharge in full any judgment debt
                    entered against it in excess of an aggregate amount of US $20,000,000
                    (twenty million United States Dollars) or its equivalent, within 30
(thirty)                     days of the relevant judgment being entered against it,
unless such judgment is                     being contested in good faith on reasonable
grounds following external legal                     advice.  

	 	17.6.5. 	Any
default under or breach of the terms and conditions of the Permitted
                    Subordinated Debt shall have occurred. For the removal of doubt, the
institution                     of Proceedings as referred to in clause 1.1.118(j)(iii)(1)(A)(I),
(II) or                     (III) above or the non-payment by the Borrower of amounts
payable by it in                     respect of the Equity Convertible Debentures
pursuant to                     clause 1.118(j)(ii)(1) or (2) above (including
pursuant to a rescheduling                     agreement) shall be deemed to constitute a
default under or breach of the terms                     and conditions of the Permitted
Subordinated Debt.  

108

	 	17.6.6. 	The
aforegoing in this clause 17.6 shall not be applicable in respect only
                    of Permitted Financial Indebtedness as referred to in clause 1.1.115(c)
                    above and only, and for so long as, the following 2 (two) conditions
are both                     met:  

	 	(a) 	such
Permitted Financial Indebtedness is to one or both of the Banks; and  

	 	(b) 	such
Permitted Financial Indebtedness is secured in full by deposits (in amounts           to
be not less than the amount of such Permitted Financial Indebtedness) placed
          with the relevant Banks and duly charged by first-ranking floating charge in
          favour of the Banks.  

	 	17.7. 	Insolvency
and Rescheduling  

	 	
The
Borrower or any material Subsidiary of the Borrower is unable to pay its debts as they
fall due or admits inability to pay its debts as they fall due, commences negotiations
with any one or more of its creditors with a view to the general readjustment or
rescheduling of its Indebtedness or makes a general assignment for the benefit of or a
composition with its creditors. 

109

	 	17.8. 	Winding-Up  

	 	
The
Borrower or any material Subsidiary of the Borrower takes any corporate action or other
steps are taken or Proceedings are started or are consented to or any Order is made for
its winding-up, liquidation, bankruptcy, dissolution, administration or re-organisation
(or for the suspension of payments generally or any process giving protection against
creditors) or for the appointment of a liquidator, receiver, administrator, administrative
receiver or similar officer of it or of all or any part of its revenues or assets or such
a person is appointed, which action, steps, Proceedings or Order are not cancelled or
withdrawn within 60 (sixty) days of the occurrence or institution thereof. 

	 	17.9. 	Execution
or Other Process  

	 	
Any
execution, attachment, sequestration or other process arising out of any claim by any
third party against the Borrower or any material Subsidiary of the Borrower, save where:
(a) the Borrower is in good faith on reasonable grounds, contesting the execution,
attachment, sequestration or other process by appropriate Proceedings diligently pursued;
(b) the Banks are satisfied that the ability of the Borrower to comply with its
respective obligations under the Finance Documents will not be adversely affected whilst
such distress, execution, attachment, diligence or other process is being so contested;
and (c) such process as aforesaid is cancelled or withdrawn not later than 45
(forty-five) days after the institution thereof. 

	 	17.10. 	Material
Contracts

	 	17.10.1. 	[Intentionally
Deleted]  

	 	17.10.2. 	Other
than as permitted under clause 16.13 above: (i) any of the Material
                    Contracts specified in Schedule 1.1.101 hereto shall cease to be
in full                     force and effect or shall cease to constitute the legal,
valid, binding and                     enforceable obligation of the Borrower or the
relevant counterparty thereto; or                     (ii) any change adverse to the
interests of the Borrower or the Banks is                     made to the terms of any of
such Material Contracts, without the prior written                     consent of the
Banks; or (iii) the specifications for Fab 2 are                     materially
varied.  

	 	17.10.3. 	[Intentionally
Deleted]  

	 	17.11. 	Proceedings

	 	
There
is current or pending any litigation, dispute, arbitration, administrative, regulatory or
other Proceedings or enquiry concerning or involving the Borrower or any Subsidiary of the
Borrower which is likely to have a Material Adverse Effect. 

110

	 	17.12. 	Consents  

	 	17.12.1. 	Any
Consent necessary for the Borrower to comply with its obligations under the
                    Finance Documents or to perform the Project in whole or in part:  

	 	(i) 	is
not obtained or is surrendered, terminated, withdrawn, suspended, cancelled           or
revoked or does not remain in full force and effect or otherwise expires and           is
not renewed prior to its expiry (in each case, without replacement by           permits,
consents or authorisations, as applicable, having equivalent effect);           or  

	 	(ii) 	is
modified in any material adverse respect or breached.  

	 	17.12.2. 	The
Borrower becomes aware of any event which is reasonably likely to give rise
                    to the revocation, termination, cancellation or suspension of the
Consents or                     any of them (without replacement) in such circumstance
where the Borrower is                     unable to demonstrate to the reasonable
satisfaction of the Banks within 30                     (thirty) days of such event
occurring that such termination, suspension or                     revocation will not
occur.  

	 	17.13. 	Material
Adverse Effect  

	 	
Any
event or series of events occur which, in the reasonable opinion of the Banks, after
discussion with the Borrower, is likely to have a Material Adverse Effect, including, any
material adverse change in the business or financial condition of the Borrower or in the
ability of the Borrower to perform its obligations under the Finance Documents or under
the Material Contracts or to complete the Project. 

	 	17.14. 	Fab 2  

	 	
Fab 2
or any other material equipment needed for the Project is destroyed or materially damaged
so as to render Fab 2 or a substantial portion thereof inoperable or declared by the
insurers to be a total loss or a constructive total loss. 

	 	17.15. 	Completion
of Fab 2  

	 	
[Intentionally
Deleted]  

	 	17.16. 	Construction
Contract  

	 	
[Intentionally
Deleted]  

111

	 	17.17. 	Government
Action  

	 	
Any
government or Governmental Body: (a) nationalises, seizes or expropriates all or any
substantial or material part of the assets of the Borrower, or its share capital, or
Fab 2 or any part thereof; or (b) assumes custody or control of such assets, or
of the business or operations of the Borrower, or of its share capital or of Fab 2;
or (c) takes any action for the dissolution of the Borrower, or (d) takes any
action that would prevent the Borrower or its officers from carrying on its business or
operations or a substantial or material part thereof, or the Project; or by or under the
authority of the government of Israel or any other competent Israeli Governmental Body any
law is introduced after the date hereof imposing restrictions on the free exchange of NIS
for Dollars or of Dollars for NIS. 

	 	17.18. 	Illegality  

	 	
It
is or becomes unlawful for the Borrower to perform any of its material obligations under
the Finance Documents or any of its material obligations under any of the Material
Contracts. 

	 	17.19. 	Investment
Centre Fab 2 Grants  

	 	
The
Borrower is in breach of any material condition of the approvals of the Investment Centre
Fab 2 Grants or the Israeli government cancels or reduces such Grants or any part
thereof (save to the extent that such Grants may be, and are in fact, replaced by Paid-in
Equity and/or equity equivalent capital notes). 

	 	17.20. 	Default
by the Borrower under any
 Qualifying
Wafer Prepayment Contract  

	 	
[Intentionally
Deleted]  

	 	17.20A. 	Prohibited
Payment under the Permitted Subordinated Debt  

	 	
The
Borrower shall make any payment (whether of principal, Interest or any other amount) in
respect of the Permitted Subordinated Debt, other than as permitted pursuant to the
provisions of clause 1.1.118 above. 

	 	17.20B. 	Outside
Investment Undertaking

	 	17.20B.1. 	[Intentionally
Deleted]  

	 	17.20B.2. 	(a)	
Any of the representations and warranties by any Lead Investor in any           Outside
Investment Undertaking to which it is a party are incorrect or           misleading in
any material respect when made or deemed to be made or repeated.  

112

	 	(b) 	Any
Lead Investor fails to comply with any undertaking or obligation contained           in
any Outside Investment Undertaking to which it is a party and, if such           default
is capable of remedy within such period, within 7 (seven) days after the
          earlier of the Lead Investor becoming aware of such default and receipt by the
          Lead Investor of written notice from the Banks requiring the failure to be
          remedied, that Lead Investor shall have failed to cure such default.  

	 	(c) 	Any
Outside Investment Undertaking shall cease to be in full force and effect in
          any material respect or shall cease to constitute the legal, valid, binding and
          enforceable obligation of any Lead Investor party to it or it shall be unlawful
          for any Lead Investor to perform any of its material obligations under any of
          the Outside Investment Undertakings, unless it expires in accordance with its
          terms.  

	 	(d) 	Any
Lead Investor repudiates the Outside Investment Undertaking to which it is a
          party.  

	 	17.20C. 	TIC
Safety Net Undertaking  

	 	17.20C.1. 	Any
of the representations and warranties by TIC in the TIC Safety Net
                    Undertaking is incorrect or misleading in any material respect when
made or                     deemed to be made or repeated.  

	 	17.20C.2. 	TIC
fails to comply with any undertaking or obligation contained in the TIC
                    Safety Net Undertaking and, if such default is capable of remedy
within such                     period, within 7 (seven) days after the earlier of TIC
becoming aware of such                     default and receipt by TIC of written notice
from the Borrower requiring the                     failure to be remedied, TIC shall
have failed to cure such default.  

	 	17.20C.3. 	The
TIC Safety Net Undertaking shall cease to be in full force and effect in any
                    material respect or shall cease to constitute the legal, valid,
binding and                     enforceable obligation of TIC or it shall be unlawful for
TIC to perform any of                     its material obligations under the TIC Safety
Net Undertaking, unless it expires                     in accordance with its terms.  

	 	17.20C.4. 	TIC
repudiates the TIC Safety Net Undertaking.  

	 	17.21. 	Acceleration

	 	
Upon
the occurrence of an Event of Default and at any time thereafter while the same is
continuing, the Banks may, by notice to the Borrower:  

113

	 	17.21.1. 	declare
that an Event of Default has occurred; and/or  

	 	17.21.2. 	declare
that the Loans together with all Interest accrued on all Loans and all
                    other amounts (including amounts due under clause 19, to the
extent                     applicable) payable by the Borrower under the Finance
Documents from time to                     time, shall thenceforth be repayable on demand
being made by the Banks (and in                     the event of any such demand, the
Loans, such Interest and such other amounts                     shall be immediately due
and payable); and/or  

	 	17.21.3. 	declare
the Loans immediately due and payable, whereupon they shall become
                    immediately due and payable, together with all Interest accrued on
the Loans and                     all other amounts payable by the Borrower or under the
Finance Documents                     (including, amounts due under clause 19, to
the extent applicable); and/or  

	 	17.21.4. 	[Intentionally
Deleted]  

114

	 	17.22. 	Loans
Due on Demand

	 	
If,
pursuant to clause 17.21.2 above the Banks declare the Loans to be due and payable on
demand, then and at any time thereafter, so long as any Event of Default is continuing or
has not been waived, the Banks may by written notice to the Borrower require repayment of
the Loans on such date as the Banks may specify in such notice (whereupon the same shall
become due and payable on such date together with accrued Interest thereon and any other
sums then owed by the Borrower hereunder) or withdraw such declaration with effect from
such date as they may specify in such notice. 

	 	17.23. 	Collection  

	 	
In
the event of acceleration of the Loans pursuant to clause 17.21.3 above or of a
written notice under clause 17.22 above, then, without derogating from any other
remedies or relief available to the Banks under law or under any of the Finance Documents,
the Banks shall be entitled to take all steps as they deem fit in order to collect all
sums owed by the Borrower to the Banks (including all sums referred to in
clause 17.21 above), including, to realise all or any of the assets secured under the
Security Documents, all at the expense of the Borrower and to utilise the sums received to
repay in part or in full all amounts owed by the Borrower hereunder. 

	 	17.24. 	Indemnity  

	 	
The
Borrower shall indemnify the Banks against any losses, charges or expenses which the Banks
may sustain or incur as a consequence of: 

	 	17.24.1. 	the
occurrence of any Event of Default or Default; or  

	 	17.24.2. 	the
operation of clauses 17.21, 17.22 or 17.23,  

	 	
including,
any losses, charges or expenses on account of funds acquired, contracted for or utilised
to fund any amount payable under this Agreement or any amount repaid or prepaid. A
certificate of the Banks as to the amount of any such loss or expense shall be prima
 facie evidence in the absence of manifest error. 

	 	17.25. 	Termination
of Commitment  

	 	
[Intentionally
Deleted]  

115

	18.  	DEFAULT
INTEREST  

	 	18.1. 	Default
Rate Periods  

	 	
If
any sum due and payable by the Borrower hereunder or under any other Finance Document is
not paid on the due date therefor in accordance with the provisions of this Agreement
(“Unpaid Sum”), the period beginning on such due date and ending on the
date upon which the obligation of the Borrower to pay the Unpaid Sum is discharged, shall
be divided into successive periods, each of which (other than the first) shall start on
the last day of such preceding period and the duration of each of which shall (except as
otherwise provided in this clause 18) be selected by the Banks (such periods selected
as aforesaid “Interest Periods”). 

	 	18.2. 	Default
Interest  

	 	
During
each such Interest Period as is mentioned in clause 18.1 above, an Unpaid Sum shall
bear Interest at the rate per annum which is the sum from time to time of: (a) 3%
(three percent); and (b) the Interest rate in respect of such Interest Period as
would have been determined in accordance with clause 9.1.1 above (provided that, if,
for any such Interest Period LIBOR cannot be determined, the rate of Interest applicable
to such Unpaid Sum shall be the rate per annum which is the sum of: (i) 3% (three
percent); and (ii) 2.5% (two point five percent) plus a rate as certified by the
Banks in accordance with clause 9 above. 

	 	18.3. 	Payment
of Default Interest  

	 	
Any
Interest which shall have accrued under clause 18.2 above in respect of an Unpaid Sum
shall be due and payable and shall be paid by the Borrower at the end of each Interest
Period by reference to which it is calculated or on such other dates as the Banks may
specify by written notice to the Borrower. 

	19.  	BROKEN
FUNDING INDEMNITY  

	 	19.1. 	Broken
Funding  

	 	
If
any Bank receives or recovers all or any part of the Loans otherwise than on the scheduled
date of repayment of the Loans, the Borrower shall on the first Interest Payment Date
following such repayment on demand pay to such Bank an amount equal to the amount (if any)
by which: (a) the additional amount of Interest which would, in accordance with the
terms of this Agreement, have been payable on the amount so received or recovered had it
been received or recovered on the following Interest Payment Date exceeds (b) the
amount of Interest which, in the opinion of such Bank, would have been payable to such
Bank on the last day of such Interest Period in respect of a deposit in the currency of
the Loans, of an amount equal to the amount so received or recovered, had such an amount
been placed by it with a prime bank in London for a period starting on the date of such
receipt or recovery and ending on the following Interest Payment Date. For the removal of
all doubt: (i) with respect to all or any part of the Loans received or recovered
otherwise than on the scheduled date of repayment of such amount relating to the Loans,
the payment set forth above shall only be made once; and (ii) voluntary or mandatory
prepayments made in accordance with clause 7 or 8, as the case may be, on an Interest
Payment Date shall not be subject to a payment of broken funding in accordance with this
clause 19.1. 

116

	 	19.2. 	Failure
to Draw Advance  

	 	
[Intentionally
Deleted]  

	20.  	PAYMENTS  

	 	20.1. 	Payments
by Borrower  

	 	
All
payments to be made by the Borrower to the Banks shall be made in same day funds to the
Project Accounts at such Bank or, in the event that there shall be any Bank other than
Bank Hapoalim or Bank Leumi (any such other Bank, “the New Bank”), to an
account in the name of the Borrower to be opened at Bank Hapoalim or Bank Leumi (such
account, “the New  Account”), which account shall be duly charged
in favour of the Banks by way of a first-ranking fixed pledge and charge under the
Debenture and shall, for all purposes under this Agreement, be a Charged Account. All
payments required to be made by the Borrower under the Finance Documents shall be
calculated without reference to any set-off or counterclaim and shall be made free and
clear of and without any deduction for or on account of, any set-off or counterclaim. Any
amount received by the Bank at which the New Account is opened (“the Account
Bank”) under this Agreement into the New Account for the account of a New Bank
shall be made available by the Account Bank to such New Bank by payment in same day funds
to such account as such New Bank may have notified to the Account Bank in writing not less
than 2 (two) Business Days prior to such distribution. Any amounts received by the Account
Bank on account of the New Banks generally shall be distributed by the Account Bank to the
New Bank or, if more than one, each New Bank, pro rata to the amounts which are due to the
New Banks under the Finance Documents. 

	 	20.2. 	Payments
by Banks to Borrower  

	 	
[Intentionally
Deleted]  

117

	21.  	SET-OFF  

	 	21.1. 	Conditions
for Set-Off  

	 	
Each
Bank may (but shall not be obliged to) set-off against any obligation of the Borrower due
and payable by it to or for the account of such Bank under the Finance Documents and not
paid on the due date or within any applicable grace period, any moneys held by such Bank
for the account of the Borrower at any office of such Bank anywhere and in any currency,
whether or not matured. For that purpose, such Bank may: (i) break or alter the
amounts of all or any deposit of the Borrower; or (ii) effect such currency exchanges
as are appropriate to implement the set-off and any usual charges in relation to such
currency exchanges shall be paid by the Borrower and such Bank shall not be liable to the
Borrower for any penalties, losses or other damage resulting from any such breakage,
alteration or currency exchange. The Banks shall give notice to the Borrower of any such
set-off on or prior to the date of making such set-off. 

	 	21.2. 	Debit
or Credit of Accounts  

	 	
Each
Bank shall be entitled (but not obliged): (i) to debit any of the Borrower’s
accounts at such Bank (even if not related to the Project) with any amount needed to pay
any amount payable by the Borrower to such Bank under this Agreement and whether such
account is credited or overdrawn or will become overdrawn as a result of such debiting;
and (ii) to credit any amount received from the Borrower or for its account to such
account of the Borrower at such Bank as it deems fit. 

118

	22.  	APPLICATION
OF PAYMENTS  

	 	22.1. 	Insufficient
Payment  

	 	
If
any Bank receives a payment insufficient to discharge all the amounts then due and payable
by the Borrower to it under the Finance Documents, such Bank shall apply that payment
towards the obligations of the Borrower under the Finance Documents in the following order
or in such other order as such Bank may deem fit: 

	 	22.1.1. 	firstly,
in or towards payment of any unpaid fees, costs and expenses of
                    such Bank or any Receiver (as defined in any Security Document) under
the                     Finance Documents; and  

	 	22.1.2. 	secondly,
in or towards payment of any other amount due to such Bank but
                    unpaid under this Agreement or any other Finance Document, other than
principal                     (including, Interest, damages, commissions, fees, broken
funding indemnity fees                     and all other costs), the above in such order
as such Bank deems fit; and  

	 	22.1.3. 	thirdly,
in or towards payment to such Bank on account of the principal                     of
the Loans.  

	 	22.2. 	Currency
Conversion

	 	
If,
notwithstanding the obligations of the Borrower under this Agreement (and without
derogating from such obligations), any sum is received by any Banks in a currency
(“the  first currency”) other than the currency (“the
second currency”) in which the relevant amount is to be paid pursuant to the
provisions of this Agreement, then such sum shall be converted into the second currency at
the buying rate of the second currency in the first currency prevailing at such Bank at
the close of business on the date of receipt thereof. 

	23.  	CALCULATIONS
AND EVIDENCE OF DEBT

	 	23.1. 	Each
Bank shall maintain in accordance with its usual practice accounts
               evidencing the amounts from time to time lent by and owing to it
hereunder. 

	 	23.2. 	In
any legal action or Proceeding arising out of or in connection with this
               Agreement the entries made in the accounts maintained pursuant to
               clause 23.1 above shall, in the absence of manifest or proven error,
be prima facie evidence of the existence and amounts of the specified
               obligations of the Borrower. 

	 	23.3. 	A
certificate of a Banks as to: (a) the amount by which a sum payable to it
               hereunder is to be increased under clause 12.1 above; or (b) the
               amount for the time being required to indemnify it against any such cost,
               payment or liability as is mentioned in clause 13.1 above shall, in
the                absence of manifest or proven error, be prima facie evidence of
the                existence and amounts of the specified obligations of the Borrower. 

119

	24.  	SHARING
BETWEEN BANKS

	 	
The
Borrower acknowledges that it has been or will be agreed between the Banks that, subject
to certain conditions, if a Bank (“the Sharing Bank”) receives or
recovers (including by way of set-off) any sum in respect of an amount due to it from the
Borrower under this Agreement or any of the other Finance Documents otherwise than by
payment by the Borrower in accordance with the terms of this Agreement or any of the other
Finance Documents: 

	 	24.1. 	the
Sharing Bank shall forthwith pay to each of the other Banks an amount equal
               to each other Bank’s Proportion of the sum so received or recovered.
The                Borrower hereby acknowledges and agrees that, subject to clauses 24.2
               below, upon such payment being made, as between the Borrower and the
Sharing                Bank, the Borrower shall remain indebted to the Sharing Bank under
this                Agreement in the amount paid by the Sharing Bank to such other Banks
as if the                Sharing Bank had not received or recovered the sum mentioned
above and each Bank                receiving a payment from a Sharing Bank shall treat
the amount paid to it by the                Sharing Bank as if it were a payment by the
Borrower on account of amounts due                from the Borrower under this Agreement;
and 

	 	24.2. 	any
payment made by the Sharing Bank under clause 24.1 above shall (whether
               or not stated to be so subject) be subject to the condition that, if all
or any                part of the amount paid by the Sharing Bank to such other Bank has
to be repaid                by the Sharing Bank to the Borrower or any other person,
whether under any                insolvency law or otherwise, each of the Banks (other
than the Sharing Bank)                which received any part of the Sharing Bank’s
payment shall repay to the                Sharing Bank the amount which the Sharing Bank
distributed to that Bank,                together with such amount (if any) as is
necessary to reimburse the Sharing Bank                the appropriate portion of any
Interest it was obliged to pay on the sum it                repaid to the Borrower or
other person concerned. 

	25.  	ASSIGNMENTS
AND TRANSFERS

	 	25.1. 	This
Agreement shall be binding upon and enure to the benefit of each party
               hereto and its or any subsequent permitted successors, transferees and
permitted                assigns. 

	 	25.2. 	The
Borrower shall not be entitled to assign or transfer all or any of its
               rights, benefits and obligations under any of the Finance Documents. 

120

	 	25.3. 	Any
Bank may, at any time, assign all or any of its rights, benefits and
               obligations under the Finance Documents to any Israeli bank, financial
               institution (including benefit funds) or Israeli authorised dealer under
the                Value Added Tax Law; or (iii) with the prior consent of the
Borrower (not                to be unreasonably withheld), any other banking corporation
or financial                institution; provided that: (a) [Intentionally Deleted];
               (b) the total number of Banks shall not exceed 8 (eight) at any time;
and                (c) in the event that any such Bank shall, in accordance with the
               aforegoing, wish to make an assignment as referred to in clause 25.3
above                to a foreign bank in respect of which the Borrower shall, under
clause 12.1                above be required to make an additional payment (which it
is not entitled                pursuant to clause 12.1, to deduct from payments to
such foreign bank), by                virtue of such bank being a foreign bank, then such
an assignment shall not be                permitted, unless: (1) such foreign bank
waives its rights under                clause 12 to receive such additional payment
as aforesaid; or (2) the                Bank making such assignment is doing so as a
result of Bank of Israel                requirements relating to the making of loans to,
or the making of reserves in                respect of loans to, a group of borrowers or
a single borrower. Any Bank may                also sell sub-participations in the Loans
to such bank or financial institution                as such Bank may deem fit. As a
condition to any assignment, the assignee shall                sign a written undertaking
which provides that the Borrower shall only be                required to interface with
the assigning Banks and all communications, notice                and other interactions,
or waivers, consents or other agreements relating to the                Borrower shall
only be facilitated by and on behalf of the assigning Bank. 

	 	25.4. 	The
Banks may at any time disclose to any actual or potential assignee or
               transferee or subparticipant (or other party entering into contractual
               arrangements to assume risks in relation to the Loans) in respect of the
Finance                Documents, such information about the Finance Documents, the
Project (including                Fab 2) and the Borrower as the Banks shall
consider appropriate but only                after having first obtained from such
potential assignee, transferee or                subparticipant or equivalent a
confidentiality undertaking equivalent in effect                to the confidentiality
agreements set out in clause 33 below in writing and                addressed to the
relevant Bank and the Borrower. The Banks may also disclose any                such
information to the Bank of Israel, the Supervisor of Banks and any person
               acting on their behalf or any other Governmental Body to which the Banks
are                subject, upon receipt by such Bank of a demand for such information
from any                such person or Governmental Body. 

	26.  	REMEDIES
AND WAIVERS

	 	
No
failure to exercise, nor any delay in exercising, on the part of the Banks, or of the
Borrower, of any right or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any right or remedy prevent any further or other
exercise thereof or the exercise of any other right or remedy. The rights and remedies
herein provided are cumulative and not exhaustive of any rights or remedies provided by
law. 

121

	27.  	NOTICES  

	 	27.1. 	Notices
in Writing  

	 	
Notices
to be given hereunder shall be in writing and may be given personally, by facsimile or, if
not available, as required by clause 27.2 below. Any notice to be given to a Bank or
by a Bank must be given during normal banking hours of such Bank to the person and at the
address designated below. If notice is sent by facsimile during normal banking hours as
aforesaid, it shall be deemed to have been served when confirmation of receipt by the
intended recipient has been received. All notices given by facsimile shall be confirmed by
letter despatched in the manner provided in clause 27.2 within 24 (twenty-four) hours
of transmission. 

	 	27.2. 	Addresses  

	 	
Any
other notices to be given hereunder shall be served on a party by prepaid express
registered letter (or nearest equivalent) to its address given below or such other address
as may from time to time be notified for this purpose and any notice so served shall be
deemed to have been served within 5 (five) days after the time at which such notice was
posted and in proving such service, it shall be sufficient to prove that the notice was
properly addressed and posted: 

				
				
				
				
				
		27.2.1.	to the Borrower at:	Tower Semiconductor Ltd.

P.O. Box 619

Migdal Haemek

Israel

Facsimile:    (04) 604 7242

Attention:    Oren Shirazi

                      Acting Chief

                      Financial Officer 

			
			
			
			
			
	 	with a copy to: 	Yigal Arnon & Co.

1 Azrieli Center

46th Floor, The Round Tower

Tel-Aviv, 67021

Facsimile:    (03) 608 7714

Attention:    David H. Schapiro, Adv.  

				
				
				
				
				
	 	27.2.2.	to Bank Hapoalim at:	Corporate Division

Migdal Levenstein

23 Menachem Begin Road

Tel-Aviv

Facsimile:    (03) 567 2995

Attention:    Head of

                      Corporate Division 

				
				
				
				
				
	 	27.2.3.	to Bank Leumi at:	Corporate Division

34 Yehuda Halevi Street

Tel-Aviv

Facsimile:    (03) 514 9278

Attention:    Manager of Hi-Tech

                      Industries Section 

122

	28.  	AMENDMENTS  

	 	
Any
addition, variation, modification or amendment to this Agreement shall not be effective
unless any such addition, variation, modification or amendment is in writing and signed by
the authorised signatories of all of the parties to this Agreement. 

	29.  	COUNTERPARTS  

	 	
This
Agreement may be executed in any number of counterparts and all of such counterparts taken
together shall be deemed to constitute one and the same instrument. 

	30.  	GOVERNING
LAW AND JURISDICTION  

	 	
This
Agreement shall be governed by and shall be construed in accordance with Israeli law and
the courts of Tel-Aviv-Jaffa shall have exclusive jurisdiction to hear any matters,
provided that the Banks shall be entitled to sue the Borrower in any jurisdiction in which
it has an office or holds assets. 

	31.  	ENTIRE
AGREEMENT  

	 	
This
Agreement constitutes the entire agreement between the parties with respect to the
subject-matter hereof and supersedes any prior agreement, or arrangement amongst the
parties. Any addition or amendment to this Agreement shall not be effective unless in
writing signed by the authorised signatories of both the parties. 

	32.  	CONFIDENTIALITY  

	 	
Subject
to clause 25.4 above, the Banks shall keep confidential all confidential
information received from the Borrower concerning the Borrower and its Business and will
not disclose any such information to any third party, including to any shareholders of the
Borrower, without the prior written consent of the Borrower unless such disclosure is: 

	 	32.1. 	made
in connection with any Proceedings arising out of or in connection with any
               Finance Document, to the extent that such a party reasonably considers it
               necessary to protect its interests; or 

	 	32.2. 	required
by an Order of a court of competent jurisdiction; or 

	 	32.3. 	made
or required pursuant to any law or Proceeding in accordance with which the
               relevant party concerned is required to act or otherwise required to be
               disclosed by any banking or other regulatory or examining authorities or
               enquirers (whether Governmental Body or otherwise); or 

123

	 	32.4. 	made
to its auditors for the purpose of enabling them to undertake any audit or
               to its legal advisers when seeking bona fide legal advice in
connection                with the Finance Documents or otherwise to any of its officers
and employees                considered to need to know the information concerned. 

	 	
The
restriction contained in this clause 32 shall continue to bind each Bank after
termination of, or after the termination of its participation in, the Facility, without
limit in time. 

	 	
For
the purpose of the above, “confidential information” shall exclude:  

	 	(i) 	information
which at the time of disclosure to any Bank (or any of its advisers)                is in
the public domain (other than through a breach of this clause 32 by
               such Bank); 

	 	(ii) 	information
which, prior to such disclosure, becomes generally available to                third
parties or otherwise in the public domain by publication or through no
               fault of any Bank; and 

	 	(iii) 	information
which is lawfully in the possession of any Bank prior to such                disclosure
or subsequently comes into its possession, other than by reason of                any
breach of any confidentiality undertaking in favour of the Borrower. 

	 	
Nothing
herein contained shall limit or restrict the liability or right of any Bank and any Bank
shall be entitled, to disclose to any other Bank, confidential information concerning the
Borrower, the Project, Fab 2 or any other matter relating to the Finance Documents
and the Material Contracts, including regarding the bank accounts of the Borrower. 

	33.  	BANKS
REPRESENTATION  

	 	
Each
of the Banks, with respect to itself only, hereby represents that the relevant committees
and other bodies of the Banks have passed all resolutions necessary to approve the Loans
granted to the Borrower under this Agreement. 

124

[Signature Page to
Amended and Restated Facility Agreement] 

the BORROWER: 

			 
			 
			 
			 
			 
	for	TOWER SEMICONDUCTOR LTD. 	 
	 
	By:	 	 
		 
	 
	 
	Title:	 	 
		 
	 

the BANKS: 

				
				
				
				
				
	for	BANK HAPOALIM B.M. 	for	BANK LEUMI LE-ISRAEL B.M. 
	 
	By:	 	By:	 
		
		

	 
	Title:	 	Title:	 
		
		

125

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