Registration Rights Agreement (2001)Full Document 

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                         REGISTRATION RIGHTS AGREEMENT

     This  REGISTRATION  RIGHTS  AGREEMENT  (this  "Agreement"),  is  made as of
January  18,  2001,  by  and  between  Tower   Semiconductor  Ltd.,  an  Israeli
corporation (the "Company" or "T"), SanDisk Corporation,  a Delaware corporation
("S"),  Alliance  Semiconductor  Corp.  a  Delaware  corporation   ("Alliance"),
Macronix  International  Co., Ltd., a Taiwanese  corporation  (together with its
affiliates  referred  to as  "Macronix"),  QuickLogic  Corporation,  a  Delaware
corporation   ("QuickLogic")   and  The  Israel  Corporation  Ltd.,  an  Israeli
corporation ("TIC").

     WHEREAS, the Company and S entered into a Share Purchase Agreement dated as
of July 4, 2000 (the  "SPA") and an  Additional  Purchase  Obligation  Agreement
dated as of July 4, 2000 (the "Additional Purchase Obligation Agreement");

     WHEREAS,  the Company and Alliance entered into a Share Purchase  Agreement
dated as of August  29,  2000  (the  "Alliance  SPA"),  which  includes  certain
provisions  of the  Additional  Purchase  Obligation  Agreement  (the  "Alliance
Additional Purchase Obligation Agreement");

     WHEREAS,  the Company and Macronix entered into a Share Purchase  Agreement
dated as of December  12, 2000 (the  "Macronix  SPA"),  which  includes  certain
provisions  of the  Additional  Purchase  Obligation  Agreement  (the  "Macronix
Additional Purchase Obligation Agreement");

     WHEREAS, the Company and QuickLogic entered into a Share Purchase Agreement
dated as of December 12, 2000 (the  "QuickLogic  SPA"),  which includes  certain
provisions of the Additional  Purchase  Obligation  Agreement  (the  "QuickLogic
Additional Purchase Obligation Agreement");

     WHEREAS,  it is a condition  precedent  to the closing of the  transactions
contemplated  in the SPA, the Alliance SPA, the Macronix SPA and the  QuickLogic
SPA that the parties hereto execute and deliver this Agreement;

     NOW  THEREFORE,  in  consideration  of the  premises,  mutual  promises and
covenants  contained in this  Agreement and intending to be legally  bound,  the
parties hereto hereby agree as follows:

1.   DEFINITIONS
1.
2.   For purposes of this Agreement:
3.
4.   1.1   The term "Holder" shall mean a member of the
           Purchaser Group and/or TIC, as the case may be.
5.
6.         1.2 The term "Ordinary  Shares" means the ordinary shares,  par value
           NIS1.00  each of the Company (as may be adjusted for any stock split,
           stock  combination,  reclassification  or any other  recapitalization
           event).
7.
8.   1.3   The term "Closing" means Closing as such term is
           defined in the SPA.
9.
10.        1.4  The  term  "Purchaser   Group"  means  S,  Alliance,   Macronix,
           QuickLogic and any additional  parties that enter into share purchase
           agreements with T prior to the Closing and that close  simultaneously
           with  the  SPA or  any  successors  thereto  or  permitted  assignees
           thereof.
11.
12.        1.5 The term  "Registrable  Securities"  means  the  Purchaser  Group
           Registrable Securities and/or the TIC Registrable Securities,  as the
           case may be,  and any  securities  issued as a  dividend  on or other
           distribution  with respect to, or in exchange for or  replacement  of
           such secutities.
13.
14.  1.6   The term "Purchaser Group Registrable
           Securities" means the Ordinary Shares (a)
           purchased at the Closing under the SPA by S, (b)
           purchased at the closing under the Alliance SPA
           by Alliance, (c) purchased at the closing under
           the Macronix SPA by Macronix, (d) purchased at
           the closing under the QuickLogic SPA by
           QuickLogic, (e) purchased by any additional
           members of the Purchaser Group at the closing of
           any additional share purchase agreements with T
           that close simultaneously with the Closing of
           the SPA, (f) purchased by S pursuant to the
           Additional Purchase Obligation Agreement, (g)
           purchased by Alliance pursuant to the Alliance
           Additional Purchase Obligation Agreement, (h)
           purchased by Macronix pursuant to the Macronix
           Additional Purchase Obligation Agreement, (i)
           purchased by QuickLogic pursuant to the
           QuickLogic Additional Purchase Obligation
           Agreement, (j) purchased by any additional
           members of the Purchaser Group pursuant to an
           additional purchase obligation agreement entered
           into, prior to the Closing of the SPA, between T
           and such additional members of the Purchaser
           Group, (k) otherwise issued by the Company to S
           pursuant to the terms of the SPA or the
           Additional Purchase Obligation Agreement, (l)
           otherwise issued by the Company to Alliance
           pursuant to the terms of the Alliance SPA or the
           Alliance Additional Purchase Obligation
           Agreement, (m) otherwise issued by the Company
           to Macronix pursuant to the terms of the
           Macronix SPA or the Macronix Additional Purchase
           Obligation Agreement, (n) otherwise issued by
           the Company to QuickLogic pursuant to the terms
           of the QuickLogic SPA or the QuickLogic
           Additional Purchase Obligation Agreement, and
           (o) otherwise issued by the Company to any
           additional member of the Purchaser Group
           pursuant to the terms of any additional share
           purchase agreements with T that close
           simultaneously with the Closing or any
           additional purchase obligation agreement entered
           into, prior to the Closing of the SPA, between T
           and such additional members of the Purchaser
           Group. As to any particular Registrable
           Securities, such shares shall cease to be

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