EXHIBIT 2
ALTERNATIVE AGREEMENT
THIS AGREEMENT is made on February 7, 2005
BETWEEN:
(1) MATAV CABLE SYSTEMS MEDIA LTD. and MATAV INVESTMENTS LTD., both of whose
principal office is at 00 Xxxxxx Xxxxxx, Xxxxx Xxxxxxxxxx Xxxx, Xxxxxxx
00000, Xxxxxx (together, "MATAV");
(2) ELBIT LTD. (successor in ownership to Xxxxx.XXX Ltd.) whose principal
office is 3 Azrieli Center, Triangle Building, 42nd Floor, Tel Aviv 67023,
Israel ("ELBIT");
(3) EUROCOM COMMUNICATIONS LTD. whose principal office is at 2 Xxx Xxxxxxxx
Street, Ramat Gan, Israel ("Eurocom");
(4) POLAR COMMUNICATIONS LTD. (formerly known as Hapoalim Electronic
Communication Limited), whose principal office is at 00 Xx'xxxx'xx Xx., Xxx
Xxxx 00000, Xxxxxx ("POLAR"); and
(5) XXXXXXXXX TELECOMMUNICATIONS (NETHERLANDS) B.V. whose registered office is
Xx Xxxxxxxxx 0 XxxxxxxX; 0000 XX Xxxxxxxxx, Xxxxxxxxxxx ("XXXXXXXXX")
(and together referred to hereinafter as the "PARTIES" and individually a
"PARTY").
IT IS AGREED as follows:
1 INTERPRETATION
In this Agreement, including the Schedules, unless the context otherwise
requires, the provisions in this Clause 1 apply:
1.1 DEFINITIONS
"BUSINESS DAY" means a day on which banks are open for business in both
Hong Kong and Tel Aviv (excluding Saturdays, Sundays and public holidays);
"BUY BACK" means the proposed purchase by the Company of 33,317,932 Shares
from the Israeli Shareholders, or in the event that Matav does not
participate, 31,718,205 Shares;
"CALL OPTION means the Call Option granted to Xxxxxxxxx as set out in
Clause 3.2 below;
"COMPANY" means Partner Communications Company Ltd.;
"CREDIT FACILITY" means the senior credit facility between the Company and
the participating lending banks, dated August 13, 1998, as amended;
"ENCUMBRANCE" means any claim, charge, mortgage, security, lien, option,
equity, power of sale, hypothecation or other third party rights, retention
of title, right of pre-emption, right of first refusal or security interest
of any kind;
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"EFFECTIVE DATE" means any one of the following occurrences or dates, but
not otherwise: (A) in the event that (i) any directors nominated by
Xxxxxxxxx (or Advent Investments Pte Ltd. ("Advent") vote against the Buy
Back at the meeting of Company's Board of Directors (without prejudice to
their fiduciary duties) to be held within 21 days from the date hereof or
(ii) no commitment to the financing of the Buy Back is obtained by the
Company within 41 days from the date hereof or (iii) the Company does not
publish a notice convening an EGM to approve the Buy Back within 41 days
from the date hereof unless the failure to publish such notice is a
consequence of either (I) the price per share, based on the three (3)
trading day VWAP prior to the last Business Day preceding said 41st day
being below NIS 32.59326 or (II) any of the conditions set forth in Clauses
6.1.2, 6.1.3 or 6.1.4 not being satisfied prior to said 41st day or (iv)
Xxxxxxxxx (or Advent) shall have breached Clause 8.3(a) hereof; or (B) the
date on which the Company announces the cancellation of the EGM to approve
the Buy Back after notice of the EGM has been published or the postponement
of such EGM to a date later than 71 days of the date hereof; or (C) the
date on which the Company's shareholders do not approve the Buy Back at the
EGM to be held within 71 days from the date hereof; whichever is the
earliest, Provided however that in the event that any one of the above
occurrences or dates shall have occurred, the Israeli Shareholders, in
their sole discretion, may notify Xxxxxxxxx by notice in writing within
three (3) Business Days thereof that they do not wish the Effective Date to
occur, whereupon the Effective Date shall be deemed retroactively not to
have occurred;
"GOVERNMENTAL BODY" means any governmental ministry, regulatory body, or
quasi-governmental authority of any nature (including any governmental
division, department, agency, commission, instrumentality, official,
organization, unit, body or entity and any court or other tribunal);
"ISRAELI SHAREHOLDERS" means Matav, Elbit, Eurocom and Polar;
"LEGAL REQUIREMENT" shall mean any law, statute, resolution, ordinance,
code, edict, decree, rule, regulation, ruling or requirement issued,
enacted, adopted, promulgated, implemented or otherwise put into effect by
or under the authority of any Governmental Body;
"LICENCE" means a licence dated 7 April 1998 granted by the Minister of
Communications to the Company, as such licence has been amended from time
to time, including the Permit, as that term is defined in the Relationship
Agreement;
"NIS" means New Israeli Shekels, the lawful currency of the State of
Israel;
"RELATIONSHIP AGREEMENT" means an agreement dated 10 October 1999 and made
between (1) Advent (2) Matbit (3) Matav (4) Elbit and (5) Tapuz Cellular
Systems Limited Partnership (as amended);
"REQUIRED ISRAELI PERCENTAGE" means the minimum holding of Shares by
Israeli persons or entities under the Licence as may be in effect from time
to time;
"REQUIRED FOUNDERS PERCENTAGE" means the minimum holding by the Company's
founders' group under the Licence as may be in effect from time to time;
"RIGHT OF FIRST REFUSAL" means the right of first refusal granted to
Xxxxxxxxx as set out in Clause 3.3 below;
"SHARES" means the issued Ordinary Shares of NIS 0.01 each in the share
capital of the Company;
"SHARE PLEDGE" means any pledge of the Shares granted by the Israeli
Shareholders to the participating lending banks in connection with the
Credit Facility; and
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"VWAP" means Volume Weighted Average Price/VWAP of the Company on the Tel
Aviv Stock Exchange (as determined by Bloomberg) immediately preceding the
last trading date.
1.2 CLAUSES, SCHEDULES ETC.
References to this Agreement include any Recitals and Schedules to it and
references to Clauses and Schedules are to Clauses of and Schedules to this
Agreement.
1.3 INFORMATION
Any reference to information means information in any form including paper,
electronically stored data, magnetic media, film and microfilm.
1.4 HEADINGS
Headings shall be ignored in construing this Agreement.
1.5 ADJUSTMENTS
All share numbers and prices herein shall be adjusted to reflect dividends,
stock splits, rights offerings, etc. occurring after the date hereof.
1.6 SHARE COMPUTATIONS
All references in this Agreement to percentages of the outstanding Shares
of the Company shall be computed on a fully diluted basis.
2 COMMENCEMENT OF AGREEMENT
2.1 This Agreement shall only come into force and effect on the Effective Date,
save for Clauses 3.5, 8.1, 8.2, 8.3 and 10, which come into effect (except
to the extent specified therein) on the date hereof, regardless of whether
the Effective Date shall have occurred. If the Effective Date does not
occur, the provisions of this Agreement (save for those specified in the
preceding sentence) shall be deemed null and void.
3. SALES OF SHARES; OPTIONS
Subject to Clause 2 above and Clauses 5 and 6 below:
3.1 From the Effective Date, the Israeli Shareholders shall be entitled to sell
as a group, pro rata based upon their respective ownership percentages of
the outstanding Shares, as set forth opposite their respective names on
SCHEDULE A hereto, in one or more transactions, up to an aggregate of
approximately 9.71% of the Shares outstanding on the applicable sale dates,
to any third parties at a price per share not lower than 90% of the
30-trading day VWAP immediately preceding the last trading date prior to
the applicable sale, but not otherwise. As detailed on said Schedule A, the
percentage of each Israeli Shareholder, permitted to be sold pursuant to
this Clause 3.1 shall vary depending on whether or not Matav exercises its
option pursuant to Clause 4 below.
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3.2 From the Effective Date, the Israeli Shareholders, severally but not
jointly, and pro rata based upon their respective ownership percentage of
outstanding Shares, xxxxx Xxxxxxxxx a Call Option to purchase from them an
aggregate of 2% of the Shares, as of the date of the exercise of the Call
Option, as detailed on SCHEDULE B hereto. As detailed on said Schedule B,
each Israeli Shareholder's percentage of outstanding Shares subject to the
Call Option shall vary depending on whether or not Matav exercises its
option pursuant to Clause 4 below to sell any Shares pursuant to Clause 3.
If any Israeli Shareholder shall default on its obligations under this
Clause 3.2, then, within five (5) Business Days of such default, any or all
of the non-defaulting Israeli Shareholders shall be entitled to remedy such
default by selling to Xxxxxxxxx additional Shares to ensure compliance with
this Clause 3.2. Such action shall be without prejudice to the rights and
remedies of the non-defaulting Israeli Shareholders against the defaulting
Israeli Shareholder(s).
The price per share of such Call Option shall be the weighted average sale
price per share achieved for the final 5.48% of the Shares sold in
accordance with Clause 3.3 (including the 12% discount referenced below).
Xxxxxxxxx shall be entitled to exercise the Call Option within 10 (Ten)
Business Days from the Effective Date, and the closing of this Call Option
transaction shall be five (5) Business Days subsequent to the condition
precedent set out in Clause 6.2 below being fulfilled. In the event that
the final 5.48% of said Shares are not all sold by the date for closing of
the Call Option, the payment for said 2% of the Shares shall be as follows:
The payment at said closing will be the price per share calculated in
accordance with the formula set out in Clause 3.3.1 below with the closing
date being the closing date of the Call Option transaction, subject to an
adjustment in Xxxxxxxxx'x favour only should the weighted average price per
share for the first sale of Shares pursuant to Clause 3.3.1 below (whether
to Xxxxxxxxx or a third party) be lower than the price per share calculated
at the closing of the Call Option transaction. If this occurs, each selling
Israeli Shareholder, severally and not jointly, shall make a payment to
Xxxxxxxxx for an amount equal to the difference between said prices per
share multiplied by the Shares sold by it at the closing of the Call Option
transaction. Such payments shall be paid by wire transfer to Xxxxxxxxx, to
a bank account notified to the Israeli Shareholders, within five (5)
Business Days from date of said first sale of said Shares.
For so long as no Shares shall have been sold by any Israeli Shareholders
pursuant to Clause 3.3, then, within six months from the closing of the
Call Option transaction, Xxxxxxxxx will have the right, exercisable by
written notice to the Israeli Shareholders, to sell back the Shares
purchased pursuant to the Call Option to the respective Israeli Shareholder
sellers, severally and not jointly, at the price equal to the purchase
price paid by Xxxxxxxxx, plus interest at the rate of 90-day LIBOR per
annum. Any Shares so sold back by Xxxxxxxxx shall be free from any
Encumbrances and shall thereafter be unrestricted and free and clear from
any transfer restrictions or limitations. Closing of this put option
transaction shall be ten (10) Business Days from the date of exercise
thereof.
3.3 Subsequent to the sale of all the Shares permitted to be sold by the
Israeli Shareholders under Clause 3.1 above, if any or all such Israeli
Shareholders seek to sell, in one or more transactions, any additional
number of Shares up to 7.48% (or up to 5.48% in the event of exercise of
the Call Option set out in Clause 3.2 above) of the outstanding share
capital of the Company, allocated pro-rata to their respective ownership
percentage of the outstanding Shares, as detailed on SCHEDULE C hereto,
they shall only be entitled to sell such Shares according to the procedure
set forth below in this Clause 3.3. As detailed on said Schedule C, the
percentage of each Israeli Shareholder, permitted to be sold pursuant to
this Clause 3.3 shall vary depending on whether or not Matav exercises its
option pursuant to Clause 4 below to participate in the sales of Shares
pursuant to Clauses 3.1 and 3.3.
Xxxxxxxxx shall first be given seven (7) days' prior written notice of such
intention, which intention shall have no legal effect, and in the event
that such notice of intention is followed by delivery to Xxxxxxxxx of a
formal notice signed by the relevant Israeli Shareholder(s) of such
decision:
Page 38 of 55 pages
3.3.1. Xxxxxxxxx will then have the right, exercisable by written notice to
the relevant Israeli Shareholders within three (3) Business Days to
purchase all or a portion of such Shares from such Israeli Shareholders at
a price equal to a discount of 12% of the price per share which is the
average of the price per share of:
a) the one-day VWAP on the trading day immediately prior to the closing
date, and
b) the three-day VWAP immediately prior to the closing date and ending on
the closing date;
Provided, however, that if required for the exercise of the Right of First
Refusal and such exercise shall result in consolidation of the Company's
accounts in the accounts of Xxxxxxxxx Telecommunications International
Limited (hereinafter, "HTIL") and HTIL is not able to obtain a waiver from
the need to convene a meeting of shareholders of HTIL, then Xxxxxxxxx, by
notice to the Israeli Shareholders, shall be entitled to postpone the
closing of the Right of First Refusal by forty-five (45) additional days.
If approval of HTIL's shareholders at such meeting of shareholders shall
not be obtained by such date, then the Israeli Shareholders shall be free
to sell such Shares pursuant to Clause 3.3.2 below.
3.3.2 If Xxxxxxxxx does not exercise such right in full within such period,
the Israeli Shareholders shall be entitled, during the next 90 (Ninety)
days, to sell the unexercised portion of such shares to any third parties
in one or more transactions provided that the price per share for each sale
shall not be less than the price determined pursuant to Clause 3.3.1 above
(including said 12% discount).
3.3.3 In the event that the Israeli Shareholders are not able to sell such
Shares for a price per share not less than the price set out in Clause
3.3.2 above, the provisions of this Clause 3 shall apply for any future
proposed sale(s) of such Shares until either Xxxxxxxxx purchases the Shares
pursuant to this Section 3.3 or they are sold by such Israeli Shareholders
in accordance with Clause 3.3.2.
3.4 Notwithstanding anything to the contrary, the Israeli Shareholders, save
for Matav unless it exercises its option pursuant to Clause 4 below to
participate in any sale of Shares pursuant to Clause 3, severally but not
jointly, based on their respective ownership percentage of the outstanding
Shares, as detailed on SCHEDULE D hereto, agree to ensure that the number
of Shares contained in the Call Option and the Right of First Refusal shall
enable Xxxxxxxxx to hold more than 50% of the Shares, upon full exercise of
its rights hereunder and assuming no sales of Shares by Xxxxxxxxx and no
dilution as a result of public or private equity offerings by the Company.
3.5 In the event that Matav does not exercise its option under Clause 4 to sell
Shares pursuant to Clause 3, Matav shall be solely responsible for
maintaining the Required Israeli Percentage. In the event that Matav
exercises its option under Clause 4 to sell Shares pursuant to Clause 3,
each of the Israeli Shareholders hereby undertakes and agrees, severally
and not jointly, at all times, to hold pro rata a sufficient number of
Shares to comply with the Required Israeli Percentage, as detailed on
SCHEDULE D hereto. Notwithstanding the foregoing, subject to fulfillment of
Clauses 3.2 to 3.4, any Israeli Shareholder shall be entitled to sell
Shares to an Israeli resident who undertakes to comply with the Required
Israeli Percentage in respect of such Shares and to enter into the
Relationship Agreement.
3.6 Notwithstanding Clause 2.1 above, from the closing of the Buy Back or the
Effective Date, whichever is applicable, Xxxxxxxxx shall have the
additional pro rata obligations of a member of the founder group under the
Licence as a result of any Shares sold by the Israeli Shareholders pursuant
to the Buy Back or Clause 3.3 of this Agreement, as the case may be, to the
extent necessary to comply with the Required Founders Percentage LESS the
Required Israeli Percentage.
Page 39 of 55 pages
4. MATAV OPTION
4.1 Matav shall have the same right as the other Israeli Shareholders to sell
Shares pursuant to Clauses 3.1, 3.2 and 3.3, pro rata as set forth in the
Schedules thereto. The other Israeli Shareholders shall notify Matav of
each scheduled sale of Shares pursuant to Clause 3.1, 3.2 or 3.3 at least
four (4) Business Days prior thereto. Matav shall be entitled to exercise
such right, in whole but not in part, by the end of the second Business Day
following such notice.
4.2 In the event that Matav shall not have exercised the right set forth in
Clause 4.1, then, for a period of 90 days from the closing of any sale of
Shares pursuant to Clause 3.1, 3.2 or 3.3, Matav shall have the option to
sell to the other Israeli Shareholders, severally and not jointly, the
number of Shares that would cause all the Israeli Shareholders to have sold
the respective percentages of Shares that they would have sold had Matav
originally participated in the transactions contemplated in Clauses 3.1,
3.2 and 3.3 (the "Matav Put Option"). The Matav Put Option, if exercised,
must be exercised in full in respect of all past sales of Shares pursuant
to Section 3.1, 3.2 and 3.3 and any future sales of Shares thereunder. The
price per share of the Matav Put Option shall equal the actual prices of
the applicable sales made by the Israeli Shareholders, plus the interest
accrued on the escrowed amount described below. In the event that Matav
shall not have exercised the right set forth in Clause 4.1, then, promptly
following the closing of any sales made pursuant to Clauses 3.1, 3.2 or
3.3, the other Israeli Shareholders, severally and not jointly, shall
deposit with G.L.E. Trust Services Ltd., as escrow agent, an amount equal
to the difference between the amount of proceeds received by such Israeli
Shareholder and the amount of proceeds that such Israeli Shareholder would
have received had Matav participated in such sale. As soon as practicable
after the date hereof, the Israeli Shareholders shall negotiate in good
faith to enter into an Escrow Agreement with said escrow agent.
5. REPRESENTATIONS AND WARRANTIES
Each of the Israeli Shareholders hereby represents and warrants with
respect to itself, severally and not jointly, to and for the benefit of
Xxxxxxxxx, the representations and warranties set forth below. All such
representations and warranties shall be true and correct as of the date
hereof and shall remain true and correct as of the closing of each
transaction contained in this Agreement, as if made at such time.
5.1 Authority; Binding Nature of Agreement. Such selling Israeli Shareholder
has the right, power and authority to enter into and to perform its
obligations under this Agreement and the execution, delivery and
performance by such Israeli Shareholder has been duly authorized by all
necessary corporate action on the part of such Israeli Shareholder. This
Agreement constitutes the legal, valid and binding obligation of such
Israeli Shareholder, enforceable against such Israeli Shareholder in
accordance with its terms, subject to (i) laws of general application
relating to bankruptcy, insolvency and the relief of debtors, and (ii)
rules of law governing specific performance, injunctive relief and other
equitable remedies.
5.2 No Encumbrances. Such Israeli Shareholder owns and holds the Shares to be
purchased by Xxxxxxxxx pursuant to Clause 3.2 and 3.3 free and clear of any
Encumbrances other than the Share Pledge (which shall, prior to closing, be
released with respect to the Shares) and any rights set forth in the
Relationship Agreement or the Company's Articles of Association.
Page 40 of 55 pages
5.3 Consents and Approvals. No filing or registration with, no notice to and no
permit, authorization, waiver, consent or approval of, any third party or
any Governmental Body is necessary for the consummation by such Israeli
Shareholder of the transaction contemplated by this Agreement other than
(i) the release of the Share Pledge, (ii) as required by the License and
(iii) the approval of the Controller of Restrictive Trade Practices, to the
extent required by law.
5.4 No Violation. Neither (1) the execution, delivery or performance of this
Agreement, nor (2) the consummation of the transactions contemplated by
this Agreement, will contravene, conflict with or result in a violation of
(i) any of the provisions of the Memorandum of Association or Articles of
Association of such Israeli Shareholder, (ii) any Legal Requirement or any
order, writ, injunction, judgment or decree to which such Israeli
Shareholder is subject, except as set forth in Clause 5.3 above, or (iii)
any agreement or arrangement to which such Israeli Shareholder is party.
5.5 Brokers. No broker, finder or investment banker, is entitled to any
brokerage, finder's or other fee or commission on behalf of such Israeli
Shareholder in connection with the transaction contemplated by this
Agreement and for which Xxxxxxxxx may be liable.
5A. REPRESENTATIONS AND WARRANTIES
Xxxxxxxxx hereby represents and warrants to and for the benefit of the
Israeli Shareholders, the representations and warranties set forth below.
All such representations and warranties shall be true and correct as of the
date hereof and shall remain true and correct as of the closing of each
transaction contained in this Agreement, as if made at such time.
5A.1 Authority; Binding Nature of Agreement. Xxxxxxxxx has the right, power and
authority to enter into and to perform its obligations under this Agreement
and the execution, delivery and performance by it has been duly authorized
by all necessary corporate action on its part. This Agreement constitutes
the legal, valid and binding obligation of Xxxxxxxxx, enforceable against
it in accordance with its terms, subject to (i) laws of general application
relating to bankruptcy, insolvency and the relief of debtors, and (ii)
rules of law governing specific performance, injunctive relief and other
equitable remedies.
5A.2 Consents and Approvals. No filing or registration with, no notice to and no
permit, authorization, waiver, consent or approval of, any third party or
any Governmental Body is necessary for the consummation by Xxxxxxxxx of the
transaction contemplated by this Agreement other than (i) the release of
the Share Pledge, (ii) as required by the Licence, (iii) the approval of
the Controller of Restrictive Trade Practices, to the extent required by
law and (iv) shareholder approval of HTIL (as described in Clause 3.3.1).
5A.3 No Violation. Neither (1) the execution, delivery or performance of this
Agreement, nor (2) the consummation of the transactions contemplated by
this Agreement, will contravene, conflict with or result in a violation of
(i) any of the provisions of the Memorandum of Association or Articles of
Association of Xxxxxxxxx, (ii) any Legal Requirement or any order, writ,
injunction, judgment or decree to which it is subject, except as set forth
in Clause 5A.2 above, or (iii) any agreement or arrangement to which it is
party.
5A.4 Brokers. No broker, finder or investment banker, is entitled to any
brokerage, finder's or other fee or commission on behalf of Xxxxxxxxx in
connection with the transaction contemplated by this Agreement and for
which any Israeli Shareholder may be liable.
Page 41 of 55 pages
6. CONDITIONS TO CLOSING.
6.1 Each and both of the transactions contained in Clause 3.1 and 3.3 above are
conditional upon satisfaction of all the following conditions on or prior
to their respective closing:
6.1.1 Receipt of the consent from the Company's lending banks to
release the secured guarantees (and related Share Pledges) of all the
Parties;
6.1.2 Approval of the Israeli Ministry of Communications of the
transfer of 10% or more of the Company's means of control pursuant to the
License, to the extent required;
6.1.3 Amendment to the Licence reducing the Required Founders
Percentage from 30% to no more than 26%, provided, however, that to the
extent that the Required Founders Percentage shall not be reduced to 26%,
then the aggregate percentage transferable pursuant to Clause 3.1 shall be
reduced by the product of the Israeli Shareholders' pro rata share of the
Required Founders Percentage multiplied by the difference between 26% and
the approved (new) Required Founders Percentage as of the closing of each
sale of Shares pursuant to Clause 3.1 (subject to the reduction caused by
this Clause 6.1.3 and Clause 6.1.4 not exceeding 9.71%), in which case this
condition shall be deemed to have been satisfied;
6.1.4 Amendment to the Licence reducing the Required Israeli
Percentage from 20% to no more than 5%, provided, however, that to the
extent that the Required Israeli Percentage shall not be reduced to 5%,
then the aggregate percentage transferable pursuant to Clause 3.1 shall be
reduced by the difference between 5% and the approved (new) Required
Israeli Percentage as of the closing of each sale of Shares pursuant to
Clause 3.1 (subject to the reduction caused by this Clause 6.1.4 and Clause
6.1.3 not exceeding 9.71%), in which case this condition shall be deemed to
have been satisfied;
6.1.5 Approval of the Israeli Controller of Restrictive Trade
Practices to HTIL and its affiliates controlling more than 50% of the
Company as a result of the exercise of the Call Option and the Right of
First Refusal; and
6.1.6 If the Call Option shall have been exercised, the Israeli
Shareholders, collectively, shall have enabled Xxxxxxxxx to close the Call
Option transaction in full.
6.2 The transaction contained in Clause 3.2 is conditional upon receipt of the
consent from the Company's lending banks to release the Secured Pledge over
the relevant Shares on or prior to closing.
7. CLOSING
7.1 PLACE
7.1.1 Closing of the transactions set out in Clauses 3.2 and 3.3.1
shall take place at the offices of Xxxxx Xxxxx & Co at 1 Azrieli Center,
Tel Aviv.
7.1.2 Closing of the transactions set out in Clause 4.2 shall take
place at the offices of Goldfarb, Levy, Eran & Co., 0 Xxxxxxxx Xxxxxx, Xxx
Xxxx.
7.2 OBLIGATIONS ON COMPLETION
7.2.1 On closing of the transactions set out in Clauses 3.2 and 3.3.1,
the Parties shall procure that their respective obligations specified in
Schedule 1 are fulfilled.
Page 42 of 55 pages
7.2.2 On closing of the transaction set out in Clause 3.1 in respect
of the total number of Shares transferable pursuant thereto, and subject to
Clause 8.1(d), the Israeli Shareholders shall deliver to the Company's
secretary written resignation of their respective directors of the Company
to take effect on the date of the closing of the said transaction with an
acknowledgement signed by each director, in a form satisfactory to
Xxxxxxxxx, to the effect that each director has no claim against the
Company for compensation for loss of office. Thereafter, subject to the
obligation of Israeli Shareholders under Clause 8.1(d), Xxxxxxxxx shall use
its best efforts, for so long as it owns more than 50% of the Shares, to
maintain the number of Israeli members of the Company's Board of Directors
that may be required under the License from time to time.
7.3 PAYMENT OF PRICE
At closing of each of the transactions set out in Clauses 3.2 and 3.3.1,
Xxxxxxxxx shall pay the purchase price as calculated pursuant to the
provisions hereof for the relevant Shares, by means of wire transfer of
immediately available New Israeli Shekels, to the bank account of the
respective Israeli Shareholders, the details of which shall be delivered to
Xxxxxxxxx in writing prior to the applicable closing.
8. MUTUAL OBLIGATIONS
8.1 The Parties shall use diligent efforts to agree to the form of the
amendment to the Relationship Agreement reflecting the following matters
within 30 days of the date hereof:
(a) Cancellation of the voting arrangements for the nomination of directors
set out in Sections 6.1.2, 6.1.4, 6.1.16, 6.5.2, and 6.5.3 therein;
(b) Cancellation of the Parties' respective guarantee obligations and
undertakings set out in Section 14 therein;
(c) Modifications to reflect any amendments that shall be made to the
Licence from time to time, including Sections 8.1.3 and 11.2 of the
Relationship Agreement - such amendments to take effect upon the applicable
amendment to the Licence, whether or not the events below in (A) or (B) in
the paragraph following Sub-Clause (d) immediately below shall occur; and
(d) To the extent required by law (including the Licence or Articles of
Association of the Company), a requirement that the Israeli Shareholders
who retain Shares (or their respective transferees in accordance with
Clause 3.5) (i) appoint and retain, from time to time, at least 10% of the
directors of Partner via a right to be included in an amendment to
Partner's Articles of Association who shall be Israeli and comply with the
relevant provision of the Licence and (ii) retain responsibility for
complying with the Required Israeli Percentage, as set forth in Clause 3.5
above - such obligations shall be binding on the Israeli Shareholders from
the date of the applicable amendment to the Licence whether or not the
events below in (A) or (B) immediately below shall occur.
The Parties shall use diligent efforts to amend the Relationship Agreement
as aforesaid, effective as of the earlier to occur of (A) the closing of
Xxxxxxxxx'x Call Option in which the Israeli Shareholders collectively sell
to Xxxxxxxxx 2% of the Shares or the expiration of the Call Option
unexercised, but subject to satisfaction of the conditions set forth in
Clauses 6.1.3 and 6.1.4, or (B) the closing of the Buy Back. If the event
described in either (A) or (B) shall have occurred and the Relationship
Agreement shall not yet have been amended as aforesaid, then the
Relationship Agreement automatically shall be deemed to be amended
immediately in accordance with this Clause 8.1.
Page 43 of 55 pages
If and when the Relationship Agreement shall terminate in relation to
Eurocom pursuant to Section 16.3 thereof Tapuz Cellular Systems Ltd., an
affiliate of Eurocom that owns one Share, shall also be released from all
its obligations and restrictions thereunder.
8.2 From the date hereof, the Parties agree to assist the Company to procure
(a) the reduction of the Required Founders Percentage in the Licence from
30% to no more than 26%, (b) the reduction of the Required Israeli
Percentage in the Licence from 20% to no more than 5% and (c) the release
of the secured guarantees (and related Share Pledges) of all the Parties in
favour of the Company's lending banks, all the above to be upon reasonable
terms and conditions.
8.3 (a) Each Party shall vote all its Shares in favour of the Buy Back (and any
related resolutions) in the applicable shareholders meeting of the Company.
(b) On the date hereof, the Parties shall enter into the form of agreement
attached as SCHEDULE 2 hereto to assist Matav and its shareholders in being
released from the "borrowers group" limitations, as defined under the rules
issued by the Bank of Israel in November 2003 regarding "Limitations on the
liability of a borrower and/or group of borrowers".
9. [RESERVED]
10. OTHER PROVISIONS
10.1 ANNOUNCEMENTS
No announcement or circular in connection with the existence or the subject
matter of this Agreement shall be made or issued by or on behalf of the
Parties without the prior written approval of all the Parties. This shall
not affect any announcement or circular by or on behalf of any Party
required by law or any regulatory body or the rules of any recognised stock
exchange, but the Party with an obligation to make an announcement or issue
a circular shall consult with the other Parties insofar as is reasonably
practicable before complying with such an obligation.
10.2 CONFIDENTIALITY
10.2.1 Subject to Clause 10.2.2 below, each of the Parties shall treat as
confidential and not disclose or use any information received or obtained
as a result of entering into this Agreement (or any agreement entered into
pursuant to this Agreement) which relates to:
(i) the provisions of this Agreement and any agreement entered into
pursuant to this Agreement; or
(ii) the negotiations relating to this Agreement (and such other
agreements).
10.2.2 Clause 10 shall not prohibit disclosure of any information if and to
the extent:
(i) the disclosure or use is required by law, any regulatory body or
the rules and regulations of any recognised stock exchange;
(ii) the disclosure or use is required to vest the full benefit of
this Agreement in the Parties;
(iii) the disclosure or use is required for the purpose of any
judicial proceedings arising out of this Agreement or any other
agreement entered into under or pursuant to this Agreement or the
disclosure is reasonably required to be made to a taxation
authority in connection with the taxation affairs of the
disclosing Party;
Page 44 of 55 pages
(iv) the disclosure is made to professional advisers of the Parties,
provided that such professional advisers are informed of the
provisions of Clause 10 in respect of such information, in which
case the Party retaining such adviser shall be held responsible
for any breaches by such adviser of the restrictions set forth in
Clause 10;
(v) the information becomes publicly available (other than by breach
of this Agreement); or
(vi) the other Parties have given prior written approval to the
disclosure or use;
provided that prior to disclosure or use of any information pursuant
to paragraphs (ii) or (iii) (except in the case of disclosure to a
taxation authority), the Party concerned shall promptly notify the
other Parties of such requirement with a view to providing the other
Parties with the opportunity to contest such disclosure or use or
otherwise to agree the timing and content of such disclosure or use.
10.3 SUCCESSORS AND ASSIGNS
10.3.1 No Party may, without the prior written consent of the other
Parties, assign the benefit of all or any of its obligations under
this Agreement, provided, however, that Matav shall be entitled to
transfer to its lending banks (namely, Bank Hapoalim, Bank Leumi, Bank
Discount and First International Bank of Israel) the number of Shares
that it is entitled to sell pursuant to this Agreement together with
an assignment of its rights under Clause 4.
10.3.2 Notwithstanding anything to the contrary, Xxxxxxxxx, by serving
notice on the other Parties, shall have the right to nominate an
affiliate (that is, a directly or indirectly wholly owned entity of
Xxxxxxxxx or a directly or indirectly wholly owned entity of the
ultimate owner of Xxxxxxxxx) to assume any or all of the rights and
obligations of Xxxxxxxxx under this Agreement, without relieving
Xxxxxxxxx of its obligations under this Agreement, and Xxxxxxxxx shall
procure that such affiliate complies with all obligations of Xxxxxxxxx
under this Agreement as if such affiliate were a party to this
Agreement.
10.4 FURTHER ASSURANCES
At any time after the date of this Agreement, the parties shall take all
reasonable actions in good faith to cause the conditions set forth in
Clause 6 to be fulfilled as soon as practicable. In addition, the Parties
shall and shall use their best endeavours to procure that any necessary
third party shall execute such documents and do such acts and things as any
Party may reasonably require for the purpose of giving to such Party the
full benefit of all the provisions of this Agreement.
10.5 COSTS
The selling Israeli Shareholders, on the one hand, and Xxxxxxxxx, on the
other hand, shall each bear one-half of all stamp duty and transfer taxes
payable in connection with the transactions contained in this Agreement, to
the extent applicable.
Page 45 of 55 pages
10.6 NOTICES
10.6.1 Any notice or other communication in connection with this Agreement
or with any legal proceedings under this Agreement shall be in writing in
English (a "NOTICE") and shall be sufficiently given or served if delivered
or sent:
in the case of an Israeli Shareholder, at such Israeli
Shareholder's address or facsimile number set forth on Schedule A
hereto, with a copy (which shall not constitute notice) to Goldfarb,
Levy, Eran & Co., 0 Xxxxxxxx Xxxxxx, Xxx Xxxx 00000, Xxxxxx, facsimile
number: x000-0-000-0000, Attention: Xxxx Xxxx, Adv. and Xxxx X. Xxxxx,
Adv.; and
in the case of Xxxxxxxxx to:
Xx Xxxxxxxxx 0 XxxxxxxX; 0000 XX
Xxxxxxxxx, Xxxxxxxxxxx
Attention: Legal Department
With a copy to HTIL at 18/F Two Harbourfront 00 Xxx Xxxx Xxxxxx,
Xxxxxxx, Xxxxxxx, Xxxx Xxxx, fax: x000 0000 0000, attention: Legal
Department.
10.6.2 Notice may be delivered by hand or sent by fax. Without prejudice to
the foregoing, any Notice shall conclusively be deemed to have been
received upon the first Business Day following transmission and electronic
confirmation of receipt), if sent by fax, or at the time of delivery, if
delivered by hand.
10.7 INVALIDITY
If any term in this Agreement shall be held to be illegal, invalid or
unenforceable, in whole or in part, under any enactment or rule of law,
such term or part shall to that extent be deemed not to form part of this
Agreement but the legality, validity or enforceability of the remainder of
this Agreement shall not be affected.
10.8 COUNTERPARTS
This Agreement may be entered into in any number of counterparts, all of
which taken together shall constitute one and the same instrument. Any
Party may enter into this Agreement by executing any such counterpart.
10.9 GOVERNING LAW AND SUBMISSION TO JURISDICTION
10.9.1 This Agreement and the documents to be entered into pursuant to it,
shall be governed by and construed in accordance with the laws of the State
of Israel.
10.9.2 All the Parties irrevocably agree that the courts of Tel Aviv/Jaffo
are to have exclusive jurisdiction to settle any dispute which may arise
out of or in connection with this Agreement and the documents to be entered
into pursuant to it. All the Parties irrevocably submit to the jurisdiction
of such courts and waive any objection to proceedings in any such court on
the ground of venue or on the ground that proceedings have been brought in
an inconvenient forum.
Page 46 of 55 pages
10.10 AMENDMENTS AND WAIVERS
Except as expressly provided herein, neither this Agreement nor any term
hereof may be amended, waived, discharged or terminated other than by a
written instrument signed by the all Parties. In addition, any Party may
waive any right or condition of which such Party is the beneficiary.
10.11 ENTIRETY OF AGREEMENT
This Agreement, including the schedules attached hereto, constitute the
full and entire understanding and agreement among the parties with regard
to the subject matter hereof and thereof, and no Party shall be liable or
bound to any other party in any manner except as specifically set forth
herein.
IN WITNESS whereof this Agreement has been duly executed.
SIGNED by [ ]
on behalf of Matav Investments Ltd. in the
presence of:
SIGNED by [ ]
on behalf of Elbit Ltd
in the presence of:
SIGNED by [ ]
on behalf of Eurocom Communications Ltd.
in the presence of:
SIGNED by [ ]
on behalf of Polar Communications Ltd.
in the presence of:
SIGNED by [ ]
on behalf of Xxxxxxxxx Telecommunications
(Netherlands) B.V.
in the presence of:
WE, ADVENT INVESTMENTS PTE LTD., HEREBY AGREE TO COMPLY WITH THE PROVISIONS
OF CLAUSES 8.1 AND 8.3 OF THIS AGREEMENT.
___________________
ADVENT INVESTMENTS PTE LTD.
Page 47 of 55 pages
SIGNED by [ ]
on behalf of Matav Cable Systems Media Ltd. in
the presence of:
We, Tapuz Cellular Systems Ltd., hereby agree to comply with the provisions
of Clauses 8.1 and 8.3 of this Agreement.
_______________________
Tapuz Cellular Systems Ltd,
Page 48 of 55 pages
[ALTERNATIVE AGREEMENT]
SCHEDULE A
ISRAELI SHAREHOLDERS AND THEIR RESPECTIVE PERCENTAGES
OF OUTSTANDING SHARES TRANSFERABLE PURSUANT TO CLAUSE 3.1
PERCENTAGE
NAME AND ADDRESS OF ISRAELI SHAREHOLDER W/O MATAV WITH MATAV
--------------------------------------- --------- ----------
ELBIT LTD. 4.855204% 3.720974%
3 Azrieli Xxxxxx
Xxxxxxxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx 00000 Israel
Tel: x000-0-000-0000
Fax: x000-0-000-0000
Attention: Xx. Xxx Xxx (Director)
EUROCOM COMMUNICATIONS LTD. 3.560017% 2.728357%
2 Xxx Xxxxxxxx Xxxxxx
Xxxxx-Xxx 00000 Xxxxxx
Tel: x000-0-000-0000
Fax: x000-0-000-0000
Attention: Xxxxxx Xxxxxx, Adv. (VP & Legal Counsel)
POLAR COMMUNICATIONS LTD. 1.296749% 0.993814%
00 Xx'xxxx'xx Xxxxxx,
Xxx Xxxx 00000 Xxxxxx
Tel: x000-0-000-0000
Fax: x000-0-000-0000
Attention: Xxx Xxxx (Executive Vice President)
MATAV INVESTMENTS LTD. 0% 2.268826%
00 Xxxxxx Xxxxxx, Xxxxxxx
Tel: x000-0-000-0000
Fax: x000-0-000-0000
Attention: Ori Xxx Xxxx, General Counsel
TOTAL 9.711971% 9.711971%
======== ========
Page 49 of 55 pages
[ALTERNATIVE AGREEMENT]
SCHEDULE B
RESPECTIVE PERCENTAGES SUBJECT TO
XXXXXXXXX'X 2% CALL OPTION PURSUANT TO CLAUSE 3.2
PERCENTAGE
ISRAELI SHAREHOLDER W/O MATAV WITH MATAV
------------------- --------- ----------
Elbit Ltd. 0.999839% 0.766265%
Eurocom Communications Ltd. 0.733119% 0.561854%
Polar Communications Ltd. 0.267041% 0.204658%
Matav Investments Ltd. 0% 0.467223%
TOTAL 2% 2%
======== ========
Page 50 of 55 pages
[ALTERNATIVE AGREEMENT]
SCHEDULE C
RESPECTIVE PERCENTAGES SUBJECT TO
XXXXXXXXX'X RIGHT OF FIRST REFUSAL PURSUANT TO CLAUSE 3.3
PERCENTAGE
ISRAELI SHAREHOLDER W/O MATAV WITH MATAV
------------------- --------- ----------
Elbit Ltd. 2.740636% 2.100393%
Eurocom Communications Ltd. 2.009537% 1.540086%
Polar Communications Ltd. 0.731981% 0.560982%
Matav Investments Ltd. 0% 1.280693%
TOTAL 5.482154% 5.482154%
======== ========
Page 51 of 55 pages
[ALTERNATIVE AGREEMENT]
SCHEDULE D
RESPECTIVE PERCENTAGES OF
THE REQUIRED ISRAELI PERCENTAGE
PERCENTAGE
ISRAELI SHAREHOLDER W/O MATAV WITH MATAV
------------------- --------- ----------
Elbit Ltd. 0% 38.300%
Eurocom Communications Ltd. 0% 28.113%
Polar Communications Ltd. 0% 10.232%
Matav Investments Ltd. 100% 23.355%
TOTAL 100% 100%
---- ----
Page 52 of 55 pages
[ALTERNATIVE AGREEMENT]
SCHEDULE 1
COMPLETION OBLIGATIONS
1 ISRAELI SHAREHOLDERS RESPECTIVE OBLIGATIONS
On closing each selling Israeli Shareholder shall:
1.1 deliver or make available to Xxxxxxxxx:
1.1.1 evidence of the due fulfilment of the conditions specified in Clause
6.1 above; and
1.1.2 transfer deeds in the agreed terms for the transfer of the Shares
duly executed by the registered holders in favour of Xxxxxxxxx, or as
it may direct, accompanied by the relevant share certificates issued
by the Company. If the share certificates delivered by any Israeli
Shareholder to Xxxxxxxxx shall represent a number of Shares in excess
the number of Shares sold to Xxxxxxxxx hereunder, then the applicable
Parties shall cooperate in arranging for the issuance and delivery of
share certificates representing the applicable number of Shares.
2 XXXXXXXXX'X OBLIGATIONS
At closing, Xxxxxxxxx shall do as required or necessary for the execution,
delivery and performance of documents required to be executed by Xxxxxxxxx
for the contemplated transaction.
Page 53 of 55 pages
[ALTERNATIVE AGREEMENT]
SCHEDULE 2
The Matav Release Document
THIS AMENDMENT AGREEMENT NO. 2 to the Relationship Agreement is made on February
7, 2005
BETWEEN:
(1) ADVENT INVESTMENTS PTE LIMITED whose principal office is at 0 Xxxx Xxxxxx'x
Xxxxxx, #00-00 Xxxxx Xxxxxxxx, Xxxxxxxxx ("ADVENT");
(2) MATAV INVESTMENTS LTD whose principal office is at 00 Xxxxxx Xxxxxx, Xxxxx
Xxxxxxxxxx Xxxx, Xxxxxxx 00000, Xxxxxx ("MATAV");
(3) ELBIT LTD whose principal office is at 3 Azrieli Center, Xxxxxxxx Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx 00000Xxxxxx ("ELBIT");
(4) EUROCOM COMMUNICATIONS LTD whose principal office is at 0 Xxx Xxxxxxxx
Xxxxxx, Xxxxx Xxx, Xxxxxx ("EUROCOM");
(5) POLAR COMMUNICATIONS LTD (formerly known as Hapoalim Electronic
Communication Limited) whose principal office is at 00 Xx'xxxx'xx Xx.,
Xxx-Xxxx 00000, Xxxxxx ("POLAR");
(6) TAPUZ CELLULAR SYSTEMS LTD whose principal office is at 2 Xxx Xxxxxxxx
Street, Ramat Gan, Israel ("TAPUZ"); and
(7) XXXXXXXXX TELECOMMUNICATIONS (NETHERLANDS) B.V. whose registered office is
at De Boelelaan 7 Officia I; 0000 XX Xxxxxxxxx, Xxxxxxxxxxx ("XXXXXXXXX");
(and together referred to hereinafter as the "PARTIES" or individually as a
"PARTY").
WHEREAS: Delek Group Ltd. (and its Affiliates) (collectively - "DELEK"), Matav
and Matav Cable Systems Media Ltd. have notified the Parties that Bank Leumi
Le'Israel Ltd. (the "BANK") has notified them that, in light of the rules of the
Bank of Israel pertaining to "Limitations on the liability of a borrower and/or
group of borrowers (11/03) (the "RULES") from one hand and the provisions of the
Relationship Agreement from the other hand, the Company ("Partner"), together
with Matav, Matav Cable Systems Media Ltd.("MATAV CABLES") and Delek, are viewed
and treated by the Bank as one "group of borrowers" as defined in the Rules
("BANK LEUMI EVENT"), and therefore, the Bank is currently not willing to
provide Matav, Matav Cables and Delek with any additional credit; and
WHEREAS: At the request of Matav, Matav Cables and Delek Group Ltd., the Parties
have agreed to amend the Relationship Agreement, in accordance with and subject
to the provisions hereof, with the sole intent of assisting Delek and Matav to
solve and overcome the Bank Leumi Event.
It is hereby agreed as follows -
1. The Parties hereby agree to amend the Relationship Agreement, effective
from the date hereof, by adding new sub-clause 6.5.3(e) as follows:
"6.5.3(e). Notwithstanding the provisions of clause 6.5.3(d) above and
without derogating from the provisions of clause 6.5.2(a) above, the
provisions of clauses 6.5.2(b) and 6.5.3(a) above shall not apply to Matav
as long as such application might cause a Bank Leumi Event, but not
otherwise."
Page 54 of 55 pages
2. Matav hereby agrees to consider in good faith any relevant issues relating
to the Rules which may effect other Parties from time to time, including,
without limitation Xxxxxxxxx and Advent, whilst at all times using its best
efforts to preserve the existing rights of Xxxxxxxxx and Advent, including,
inter alia, Matav agreeing to, and signing, an amendment of the Articles of
Association of the Company and/or other amendments to the Relationship
Agreement. Matav agreement to sign any such documents will be subject to
the execution of these documents by all the other Parties and subject also
that the execution of any of the documents will not give rise to a Bank
Leumi Event.
3. Notwithstanding the terms of section 2 above, it is agreed and acknowledged
by the Parties that this Amendment No. 2 is made on an ad-hoc basis,
designated solely for the purpose of overcoming the Bank Leumi Event, shall
not serve as a precedent and shall not be interpreted as binding any of the
Parties to agree to any future request by any Shareholder of the Company to
make any other amendments to the Relationship Agreement in that respect.
Neither Party shall have any claim or demand against any of the other
Parties in the event that any of the other Parties shall not agree to make
any further amendments to the Relationship Agreement.
All other terms and conditions of the Relationship Agreement and of the
Amendment Agreement dated April 23, 2002, not specifically amended hereunder
shall remain unchanged. All terms not defined herein shall have the meaning as
in the Relationship Agreement and the Amendment Agreement.
This Amendment Agreement No. 2 is an integral part of the Relationship
Agreement, for any purpose.
IN WITNESS whereof this Amendment Agreement No. 2 has been duly executed.
SIGNED by
on behalf of Advent Investments Pte Limited in
the presence of:
SIGNED by
on behalf of Matav Investments Ltd
in the presence of:
SIGNED by
on behalf of Elbit Ltd
in the presence of:
SIGNED by
on behalf of Eurocom Communications Ltd in the
presence of:
SIGNED by
on behalf of Polar Communications Ltd in the
presence of:
SIGNED by
on behalf of Tapuz Cellular Systems Ltd in the
presence of:
SIGNED by
on behalf of Xxxxxxxxx Telecommunications
(Netherlands) B.V.
in the presence of:
Page 55 of 55 pages
