EXHIBIT 2
AGREEMENT
DRAFTED AND EXECUTED ON THIS 10TH DAY OF APRIL, 2008
BETWEEN: 1. ISRAEL PETROCHEMICAL ENTERPRISES LTD.
2. PETROCHEMICAL HOLDINGS LTD.
(Both, jointly and severally, hereinafter: "THE SELLER")
OF THE FIRST PART
AND BETWEEN: SUNY ELECTRONICS LTD.
(Hereinafter: "THE PURCHASER")
OF THE SECOND PART
WHEREAS The Seller is the owner of 19,112,255 ordinary shares with nominal
value of 0.12 NIS each, which constitute an Effective Holding Rate (as
defined below) of 49.987% of the Company's (as defined below) shares;
and
WHEREAS The Company is the owner of all the outstanding and paid up share
capital in Petroleum Capital Holdings Ltd (hereinafter: "PETROLEUM
SHARES" and "PETROLEUM", respectively) which holds 15.76% of the share
capital of Oil Refineries Ltd. (hereinafter: "ORL"), as well as the
owner of certain capital notes of Petroleum (hereinafter: "PETROLEUM'S
CAPITAL NOTES"), and the owner, together with Petroleum, according to
an irrevocable undertaking by the Israel Corporation Ltd. to contract
with it and with Petroleum, at certain conditions, in an agreement for
joint control together with ORL (hereinafter: "THE COMPANY'S RIGHTS
VIS A VIS THE IC"), and simultaneously with signing this Agreement an
agreement was signed between the Seller and the Company whereby, upon
the fulfillment of certain conditions, the Company will sell to the
Seller and the Seller will purchase from the Company all of
Petroleum's Shares, Petroleum's Capital Notes and the Company's Rights
vis a vis the IC, as well as the Company's rental rights in real
property (hereinafter: "THE PETROLEUM AGREEMENT"); and
WHEREAS The Seller is interested in selling to the Purchaser the Sale Shares,
as defined below, and the Purchaser is interested in purchasing the
Sale Shares from the Seller, all according to the terms and conditions
set forth in this Agreement below, and subject to the completion of
the transaction subject of the Petroleum Agreement;
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THEREFORE THIS AGREEMENT INDICATES AS FOLLOWS:
1. PREAMBLE, DECLARATIONS AND ANNEXES
1.1 The preamble to this Agreement, the Parties' declarations and the
annexes attached hereto constitute an integral part hereof.
1.2 The division of this Agreement into chapters and articles and the
headings appearing herein are solely for ease and shall not be used
for its interpretation.
2. DEFINITIONS
In this Agreement, and unless the wording of the Agreement necessitates
otherwise the following terms will bear the meaning alongside them:
2.1 "THE STOCK EXCHANGE" - The Tel Aviv Stock Exchange Ltd.
2.2 "DOLLAR" - the US dollar.
2.3 "LAW" - as defined in the Interpretation Law, 1981.
2.4 "THE COMPANY" - Scailex Corporation Ltd (Public Company 52-003180-8).
2.5 "SUBSIDIARIES" - all the companies that the Company controls, directly
or indirectly, except for Petroleum.
2.6 "THE SELLER" - as defined in the preface of this Agreement.
2.7 "THE GENERAL DIRECTOR" - the general director of the Israeli Antitrust
Authority by virtue of the Anti-Trust Law, 1988.
2.8 "THE SOLD SHARES" - 19,112,255 shares of the Company which entitle the
Seller, at the time of signing this Agreement, an effective holding
rate of 49.987% of the Company's shares.
2.9 "THE DISKASH AGREEMENT" - the agreement executed on 29.5.2006 between
the Seller and between Discount Investments Company Ltd., Clal
Industries and Investments Ltd. and Clal Electronic Industries Ltd.,
whereby the Seller purchased the control in the Company, and the
operational date was 18 July 2006. The Diskash Agreement is attached
hereto as ANNEX 2.9.
2.10 "THE PURCHASER" - as defined in the preface of this Agreement.
2.11 "THE REPRESENTATIVE RATE" - the representative rate of the US dollar
as opposed to the NIS, which was last published by the Bank of Israel
and which was known at the time of the relevant payment, or if the
Bank of Israel should cease to publish the Representative Rate for any
reason whatsoever, the average of the sale and purchase rates of the
US dollar of Bank HaPoalim, on the last date of trade before the time
of the relevant payment.
2.12 "FINANCIAL OBLIGATIONS" - the sum of the following items, insofar and
to the extent that they appear in the books of the Company and the
Subsidiaries at the relevant time: short-term and long-term credit,
suppliers and creditors, any obligations to employees and officers
(net, that is less the severance pay fund) and taxes for payment, but
less accruals for tax exposure.
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2.13 "THE COMPANIES LAW" - the Companies Law, 1999, and all the regulations
enacted by virtue thereof.
2.14 "THE SECURITIES LAW" - the Securities Law, 1968, and all the
regulations enacted by virtue thereof.
2.15 "SHARE" or "SHARES" - a ordinary share or shares, as the case may be,
with the nominal value of 0.12 NIS each, in the outstanding and paid
up share capital of the Company.
2.16 "FINANCIAL ASSETS" - the sum of the following items, insofar and to
the extent that they appear in the books of the Company and the
Subsidiaries at the relevant time: cash and cash equivalent (and to
dispel doubt, at the Closing Date, including the consideration for the
sale of the Shares from Petroleum to the Seller), debtors, advance
expenses, as well as the amounts that the Company would have received
had all the Company's convertible securities which were taken into
consideration in calculating the Effective Holding Rate for the
Company's Shares been converted at that time.
2.17 "CLEAN AND FREE" - that is, clean and free of any debt, attachment,
lien, pledge, mortgage or any other third party right including option
rights or rights of first refusal.
2.18 "CLOSING DATE" - the seventh day from the day of fulfillment of the
last of either the conditions precedent specified in Article 8 below
or those prior conditions precedent specified in Article 6 of the
Petroleum Agreement (save for completion of the transaction subject of
the Petroleum Agreement), which shall be completed together and
simultaneously with the transaction subject of this Agreement and the
transaction subject of the Petroleum Agreement.
2.19 "CONTROL PREMIUM" - the amount of 128,000,000 NIS (one hundred and
twenty eight million new shekels).
2.20 "EFFECTIVE HOLDING RATE" - the rate of 49.987%, calculated by
dividing: I. the number the Company's Shares owned by the Seller
(19,112,255 Shares), by II. the number of outstanding paid up Shares
of the Company (43,579,388 Shares), diluted by options for 56,000
Shares (out of 71,500 existing options), and less the number of the
Company's outstanding Shares held by the Company's Treasury which
constitute dormant Shares (5,401,025 Shares).
2.21 "THE INTERIM PERIOD" - the period, commencing on the date of signing
this Agreement and concluding at the Closing Date.
It is hereby clarified and agreed that the terms: "Interested Party",
"Controlling Party" and "Control" shall be interpreted according to the
definitions accorded them in the Securities Law.
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3. ANNEXES
The following annexes are attached to the Agreement and constitute an
integral part thereof:
ANNEX 2.8 - The Diskash Agreement
ANNEX 4.3 - Details of the securities which may be converted to Company
Shares which are valid as of the date of signing this
Agreement.
ANNEX 4.5 - Details of the liens applying to the Sold Shares.
ANNEX 4.10 - Details regarding the agreements between the Company and the
Seller and /or other Interested Parties in the Company
(except the managing director of the Company)
ANNEX 7.1 - Calculation of the consideration, correct as of the date of
signing of this Agreement.
4. SELLER'S DECLARATIONS AND UNDERTAKINGS
The Seller declares and undertakes vis a vis the Purchaser as of the date
of signing this Agreement and the Closing Date, as follows:
4.1 The Company is registered in Israel, it is a public company limited by
shares, which was incorporated in Israel on 2.11.1971, and it number
at the Registrar of Companies is 00-000000-0.
4.2 The Company's registered capital is 7,200,000 NIS, and it is divided
into 60,000,000 Shares.
4.3 As of the date of signing this Agreement the outstanding and paid up
capital of the Company is 43,579,388 Shares with nominal value of 0.12
NIS each. All the Shares which constitute the entire registered,
outstanding and paid up capital of the Company are of equal rights.
5,401,025 outstanding Shares are dormant and are held by the Company
Treasury. Neither the Company n or the Seller nor either one of them
nor anyone on their behalf has undertaken, granted or given to any
person and / or other entity any right to purchase Shares (including
the Sold Shares), including right of first refusal, option rights,
securities which may be converted to Shares n or any other similar
right that is valid on the date of signing this Agreement, except
those options distributed to the Company's directors, as detailed in
ANNEX 4.3.
4.4 The Seller is the owner and sole possessor of all the Sold Shares
which constitute at the time of signing of this Agreement and
Effective Holding Rate of 49.987% of the Company.
4.5 All of the Sold Shares are : (a) completely paid up; (b) registered
for trade on the Stock Exchange and the "Over the Counter" (OTC)
Exchange in the US without restriction of their negotiable nature,
except as such derives from the US Federal and state law; and (c)
Clean and Free, except for those liens specified in ANNEX 4.5 of this
Agreement, which the Seller shall act to revoke and remove until the
Closing Date, subject to fulfillment of the conditions precedent
specified in Article 8 below, so that the Sold Shares shall transfer
to the ownership of the Purchaser Clean and Free.
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4.6 The Seller has full authority to engage in this Agreement and to carry
out all its obligations therein, and subject to fulfillment of the
conditions precedent specified in Article 8 below, there is no legal,
contractual or other obstacle to prevent the Seller from engaging in
this Agreement and to carry out its undertakings therein.
4.7 This Agreement, when signed by the Seller, constitutes a binding and
valid undertaking on its part, subject only to fulfillment of the
conditions precedent.
4.8 The Company did not give to any third parties and / or to the Seller
any guarantees of any kind which are valid as of the date of signing
this Agreement and did not undertake to indemnify any third parties
regarding any of the Seller's undertakings, and it will not give any
such guarantees and / or indemnifications until the Closing Date.
4.9 Since 31.12.2007, the Company has not contracted in any engagement
with any Interested Party in the Company.
4.10 Between the Seller and the Company, are the agreements specified in
ANNEX 4.10 of this Agreement, as of the signing of this Agreement.
4.11 Upon the conclusion of the transaction which is the subject of the
signing of this Agreement, the Seller nor any one on its behalf shall
have any claim and / or contention and / or demand of any kind vis a
vis the Company on the basis of the above agreements and / or for any
other reason and the Seller undertakes to indemnify the Purchaser for
any claim which shall be submitted by it and /or any one on its behalf
against the Company contrary to the representation made by it in this
article above, whose cause of action is in the period until the
Closing Date.
4.12 The calculation of the Consideration as defined in Article 7 below, to
the day of signing this Agreement which is attached hereto as ANNEX
7.1, is correct, to the Seller's best knowledge. Except as may derive
from changes in the rate of exchange, from the payment of a dividend
which was announced in the Company but not yet paid, from the ongoing
management of the Company and from the realization of an arrangement
which is expected to be signed before the Closing Date whereby Scailex
Vision Ltd. might receive an amount of approximately 6.2 million
dollars due to release of monies from trust, the Seller shall make
best efforts in order to bring about that the amount of Consideration
as of the Closing Date shall not vary materially in relation to the
said amount, except with the Purchaser's prior written consent.
4.13 The Seller received the approval of the Seller's Board of Directors
for the transaction contemplated by this Agreement and the sale of the
Sold Shares to the Purchaser.
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5. PURCHASER'S DECLARATIONS AND UNDERTAKINGS
The Purchaser declares and undertakes as follows:
5.1 The Purchaser is a public company limited by shares, which was
incorporated in Israel 1991, and it number at the Registrar of
Companies is 520040759.
5.2 At the Closing Date the Purchaser shall have sufficient financial
means for payment of the Consideration (as defined below) in full
according to the terms of this Agreement.
5.3 The Purchaser is an Interested Party in the Company. Xx. Xxxxx Xxxx,
was appointed by the Seller to the Board of Directors according to the
Purchaser's recommendation and serves thereon since 14.11.2007.
5.4 The Purchaser has knowledge and experience in financial and commercial
matters which allow it to evaluate the investment in the Sold Shares
and the risks inherent therein and to protect its interests.
5.5 It is clear to it, and it agrees, that except for the representations
included specifically in Article 4 above, the Seller did not nor does
not make any representations, neither explicit nor implied, regarding
the Company, the Sold Shares or the transaction which is the subject
of this Agreement, and the Purchaser is not relying on any other
representation as aforesaid, and it is purchasing the Sold Shares from
the Seller in their present state ("AS IS"), without any warranty or
representation on the Seller's part besides the correctness of the
Seller's representations as specified in Article 4 above.
5.6 It is purchasing the Sold Shares not as an agent or representative and
without the intention of distributing them to the public, and it knows
that the Seller is an "Affiliate" of the Company, as this term is
defined in The United States Securities Act of 1933 and in Rule 144,
and that the Sold Shares are considered "Restricted Securities"
according to the said Rule. The Purchaser is not a U.S. Person as the
meaning of this term in the framework of Regulation S according to the
said Act.
5.7 The Purchaser is aware that for the purpose of voiding the liens that
are on the Sold Shares approval is required by a majority of more than
50% of the holders of bonds Series B and C which were issued by the
Seller, in general meetings of the Series B and Series C bond holders
(separately) as well as the consent of the trustee of the said bonds,
and that there is no certainty that such approvals will be obtained.
5.8 Upon conclusion of the transaction which is the subject of this
Agreement, the Purchaser nor any one on its behalf - and to the
Purchaser's best knowledge, neither Mr. Ilan Ben Dov nor any company
controlled, directly or indirectly by him and / or anyone on his
behalf (hereinafter: "RELATED ENTITIES") - shall have any claim nor
contention nor demand of any kind vis a vis the Company and the
Purchaser undertakes to indemnify the Seller for any claim which shall
be submitted by it and /or any one on its behalf and / or by the
Related Entities against the Company, whose cause is in the period
until the Closing Date.
5.9 The Purchaser has full authority to engage in this Agreement and to
carry out all its obligations therein, and subject to fulfillment of
the conditions precedent specified in Article 8 below, there is no
legal, contractual nor other obstacle to prevent the Purchaser from
engaging in this Agreement nor to carry out its undertakings therein.
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5.10 This Agreement, when signed by the Purchaser, constitutes a binding
and valid undertaking on its part, subject only to fulfillment of the
conditions precedent specified in Article 8 below.
5.11 All the approvals of all the Purchaser's authorized organs required
for the Purchaser's engagement in this Agreement and the purchase of
the Sold Shares thereby have been obtained, save for the approval of
the general meeting of the Purchaser's shareholders.
6. UNDERTAKING TO SELL THE SOLD SHARES
The Seller undertakes that at the Closing Date, together with the
performance of the Petroleum Agreement, and subject to fulfillment of the
conditions precedent specified in Article 8 below, it shall sell and
transfer to the Purchaser's ownership, in a transaction outside of the
Stock Exchange, all the Sold Shares against payment of the Consideration
specified in Article 7 below, with the Sold Shares being Clean and Free,
and the Purchaser undertakes, that subject to the provisions of this
Agreement above and below, it will purchase and accept ownership of the
Sold Shares.
7. THE CONSIDERATION
7.1 In consideration for the Sold Shares and the Seller's other
obligations in this Agreement, the Purchaser undertakes to pay the
Seller consideration which shall be calculated as follows:
An amount in NIS equal to the total amount of the Financial Assets
that shall be owned by the Company at the Closing Date LESS the amount
equal to the Company's Financial Obligations which shall be at the
Closing Date, where the RESULT that shall be achieved shall be
MULTIPLIED by the Seller's Effective Holding Rate of the Company's
Shares, as specified in Article 2.8 above, with the ADDITION of the
Control Premium (the amount that shall be the product of the above
calculation shall be called above and below: "THE CONSIDERATION").
All the above amounts shall be calculated according to the Company's
books, as of the Closing Date. Amounts noted in dollars shall be
converted to NIS according to the Representative Rate.
As of the time of signing this Agreement, the amount of the
Consideration is (assuming that the Petroleum Agreement would have
been performed at the time of signing this Agreement, and considering
the expected estimate of the cost of runoff insurance) approximately
741 million NIS, as specified in the calculation in ANNEX 7.1. In
order to dispel doubt, it is hereby clarified that the calculation in
the said Annex is for illustration purposes only, and it shall be
updated at the Closing Date, so that the Consideration according to
this Agreement shall be calculated correctly to the Closing Date.
At the Closing Date, the Parties will jointly calculate the
Consideration, according to the illustration in said ANNEX 7.1, and a
copy of the agreed calculation of the Consideration signed by both
Parties shall be submitted to each of the Parties at the Closing Date
(hereinafter: "THE AGREED CALCULATION OF THE CONSIDERATION"). In the
event that a dispute should arise between the Parties regarding the
Agreed Calculation of the Consideration (hereinafter: "THE DISPUTE"),
the Purchaser shall deposit the amount in Dispute in escrow with a
trustee whose identity shall be agreed between the Parties in writing.
Xxxxx Xxxxx of the office of E & Y, and if he should be prevented from
doing so, another accountant whose identity shall be agreed between
the Parties (hereinafter: "THE ADJUDICATOR") shall settle the Dispute
as an adjudicator, and not as an arbitrator, and his judgment shall be
binding on the Parties for all intents and purposes without any
appeal, and the Parties and the trustee undertake to act according to
it.
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7.2 The Purchaser shall pay the Consideration to the Seller at the Closing
Date against transfer of the Sold Shares to the Purchaser's ownership,
with them being Clean and Free as provided in Article 9 below.
7.3 The Parties agree to a mechanism to modify the Consideration, as
follows:
7.3.1 In this Article 7.3, the following terms will bear the meaning
alongside them:
"RELEVANT The payment that the Company and / or the Subsidiaries
PAYMENT" actually paid during the Relevant Period, whose cause was
in the period beginning 18 July 2006 and until the Closing
Date, and which does not appear and was not taken into
consideration as part of the Financial Obligations in the
Agreed Calculation of the Consideration, for any reason
whatsoever.
"RELEVANT The amount received that the Company and / or the
AMOUNT Subsidiaries actually received during the Relevant Period,
RECEIVED" whose cause was in the period beginning 18 July 2006 and
until the Closing Date, and which does not appear and was
not taken into consideration as part of the Financial
Assets in the Agreed Calculation of the Consideration, for
any reason whatsoever (and in order to dispel doubt,
including net amounts held in escrow for the Company and /
or the Subsidiaries and which were released to them).
"RELEVANT Regarding payments to tax authorities in Israel and amounts
PERIOD" received from them - 5 years from the Closing Date, and
regarding payments to tax authorities abroad and amounts
received from them - 7 years from the Closing Date.
"AGREED Interest in shekels at the annual rate of Prime as is
INTEREST" customary in Bank HaPoalim.
7.3.2 The Seller undertakes to pay the Purchaser, for each Relevant
Payment, the amount equal to the Relevant Payment multiplied by
the Seller's Effective Holdings Rate in the Company on the date
of signing this Agreement, subject to the following conditions:
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a. The Purchase will notify the Seller in advance and in
writing of any demand for Relevant Payment before its time
of payment, and the Seller will be entitled, but not
obliged, to handle the defense in the Company's name against
such demand, with the purpose of canceling or reducing it.
If the Seller decided to handle the defense as aforesaid,
the Purchaser shall cause the Company to cooperate fully
with the Seller. In order to dispel doubt, it is clarified
that in the event that the Seller paid the Purchaser for
such a claim which was paid by the Company, and subsequently
the monies were refunded to the Company for that same
payment, the Seller shall be entitled for a refund of its
portion of the monies which were refunded as aforesaid, with
no limitation as to time (that is, even if the monies were
refunded after end of the Relevant Period). The expenses of
handling the defense will be borne by the Seller.
b. The Relevant Payment is not due to demands and / or claims
of the Purchaser and / or affiliated entities and / or
anyone on their behalf.
7.3.3 The Purchaser undertakes to pay to the Seller, for any Relevant
Amount Received, an amount equal to the Relevant Amount Received
multiplied by the Seller's Effective Holdings Rate in the Company
on the date of signing this Agreement.
7.3.4 The settling of the account according to this Article 7.3 shall
be conducted commencing from the Closing Date, upon the
conclusion of every six month period (hereinafter: "THE ACCOUNT
SETTLING PERIOD"), in the following manner: The Purchaser will
cause the Company to deliver to the Parties, within 30 days from
the end of each Account Settling Period, full details of all the
Relevant Payments and the Relevant Amounts Received during the
Account Settling Period, where each Relevant Payment or Relevant
Amount Received, bears interest at the rate of the Agreed
Interest from the time of payment or of receipt, as the case may
be, and until the end of the Account Settling Period
(hereinafter: "DETAILS OF ACCOUNT SETTLING"). Amounts which are
not in Dispute shall be paid by the relevant party within 14 days
of receiving the Details of Account Settling, and they shall bear
interest at the rate of the Agreed Interest from the end of the
Account Settling Period and until actual payment.
7.3.5 In order to guarantee the Seller's rights according to this
Article 7.3, and upon the Seller's request from time to time, the
Purchaser shall make the Company's books available for the
Seller's examination and / or examination of professional
consultants on the Seller's behalf subject to confidentiality
undertakings as is customary.
7.3.6 Any differences of opinion which shall arise between the Parties
regarding the mechanism to modify the Consideration in this
Article 7.3, its interpretation, performance, implementation and
/ or any other matter related thereto, shall be submitted to the
decision of Adv. Xxxxxx Xxxxxx as a sole arbitrator. In the event
that for any reason whatsoever Adv. Xxxxxx Xxxxxx to serve as
arbitrator, another arbitrator with the Parties' agreement shall
be appointed, and in the absence of such agreement, within 30
days from either Party's demand to appoint an arbitrator, a sole
arbitrator who is an attorney with commercial experience shall be
appointed by the head of the Israel Bar Association. The
arbitrator shall be exempt from the rules of procedure and the
laws of evidence but shall be subject to the provisions of the
material Law in Israel and will be obliged to provide reasoning
for his judgment. This article shall be deemed as a valid
arbitration agreement according to the Arbitration Law, 1968.
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8. CONDITIONS PRECEDENT TO COMPLETE THE SALE
8.1 Completion of the transaction and the sale of the Sold Shares
according to this Agreement, is conditional upon the fulfillment of
the following conditions and each of them until the Closing Date:
8.1.1 Obtaining the approval of the General Director, if and to the
extent that it is required. The Parties shall cooperate to obtain
the approval of the General Director as soon as possible.
8.1.2 Approval of the transaction subject of this Agreement by the
general meeting of the Purchaser's shareholders which shall meet
according to Law, with the majority required to lawfully approve
it as an exceptional transaction with a Controlling Party. The
Purchaser undertakes to act as soon as possible, and no later
than seven days from the date of signing this Agreement, to
convene the Purchaser's shareholders' meeting, in order to
approve the transaction subject of this Agreement as an
exceptional transaction with a Controlling Party, according to
the provisions of the Securities Law and the Companies Law.
8.1.3 Cancellation of all the liens specified in ANNEX 4.5 above and /
or any other and / or additional lien which shall pertain to the
Sold Shares and /or any part thereof in such a way so that at the
Closing Date all the Sold Shares shall transfer Clean and Free to
the Purchaser's ownership. The Seller undertakes to act in good
faith and to do all that is reasonably necessary in order to
release the liens pertaining to the Shares to the benefit of the
Seller's Series B and C bond holders.
8.1.4 Any other approval required according to Law for the transaction
subject of this Agreement, and which is not noted specifically,
if and to the extent that it is required.
8.1.5 Fulfillment of all the prior conditions precedent specified in
Article 6 of the Petroleum Agreement (except for the completion
of the transaction subject of this Agreement).
8.1.6 Completion of the transaction subject of the Petroleum Agreement
simultaneously, and concurrently, with the completion of the
transaction subject of this Agreement.
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8.2 If one (or more) of the said conditions precedent should not be
fulfilled, for any reason whatsoever, within 90 days from the date of
signing this Agreement, or a longer period of time as shall have been
agreed in writing between the two Parties (hereinafter: "THE
EXPIRATION PERIOD") this Agreement shall be null and void, except for
Articles 13.9 and 13.11 (Waiver of Claims, Notices, Law and
Jurisdiction) which shall continue to be valid between the Parties,
and the Parties shall have no claim against each other regarding this
Agreement, the negotiations leading to its execution and its
termination as aforesaid.
9. PERFORMANCE OF COMPLETION OF THE SALE
9.1 At the Closing Date the Parties (including the representative of the
Company, and a representative of Bank Igud Ltd.'s trust company who is
the trustee for the Series B and C bonds, the Sellers shall cause that
they be invited for the Closing Date) shall convene, in the Company's
offices, for the purpose of completing the sale of the Sold Shares. At
the Closing Date, all the following actions shall be carried out by
the Parties, simultaneously:
9.1.1 The Seller will transfer all the Sold Shares to the Purchaser's
ownership with the Sold Shares being registered for trade on the
Stock Exchange and "Over the Counter" (OTC) in the US and without
any restriction of their negotiable nature, except as such
derives from the US Federal and state law, and with them being
redeemed in full and Clean and Free.
If the Sold Shares should be registered in the name of a
registering company and / or deposited in a bank, the Seller will
sign a notification to the registering company and / or the bank
where the Sold Shares are deposited instructing the registering
company to transfer the Sold Shares to the Purchaser's bank
account, details of which will be provided by the Purchaser, and
this after the registering company and / or the bank confirmed in
advance and in writing that the Sold Shares are in their hands,
and that they will transfer them to the Purchaser immediately
upon receipt of the Seller's instructions, concurrently with the
transfer of the Petroleum Shares to the Seller and / or anyone on
its behalf, according to the Petroleum Agreement. It is clarified
and agreed that the trustee for the bonds that the Seller issued
might make his consent to release the lien on the Sold Shares and
their transfer to the Purchaser, conditional on receiving and /
or registering a lien on the ORL Shares which will be received in
the framework of the Petroleum Agreement, in whole or in part.
9.1.2 The Seller shall present to the Purchaser a certificate of
exemption of deduction of tax at source for the purpose of
receiving the Consideration as well as an officer's certificate
(the Company secretary) of the Company certifying that the
Purchaser was registered in the Company's register of
shareholders as the owner of the Sold Shares.
9.1.3 The Purchaser shall pay the Seller the amount of the
Consideration according to the provisions of Article 7 above, by
bank check. It is clarified that in the event that the Seller
shall not present to the Purchaser a certificate of exemption of
deduction of tax at source, the Purchaser shall deduct the tax at
source from the Consideration according to law and shall remit it
to the tax authorities.
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9.1.4 The Seller shall present to the Company's representative, with a
copy to the Purchaser, irrevocable letters of resignation from
the Company's board of directors, which shall become valid at the
Closing Date, signed by all the directors of the Company, except
for Xx. Xxxxx Xxxx, Xx. Xxxx Xxxxxxxx and Xxxx Xxxxx, whereby the
said directors confirm that they have no claim and / or
contention and / or demand vis a vis the Company.
9.1.5 Each of the Parties shall receive a copy of the Agreed
Calculation of the Consideration, signed by both Parties.
9.2 All the actions for completion detailed in this article shall be
carried out simultaneously as one, and they shall not be valid unless
they were all carried out in their entirety.
9.3 The Seller undertakes to effect that a resolution by the Company's
board of directors shall be passed and become effective at the Closing
Date to appoint additional directors to the Company's board of
directors who shall be recommended by the Purchaser in writing, at
least three days before the Closing Date. The appointment of the
additional directors shall be carried out by way of filling in
vacancies in the Company's board of directors, according to the
provisions of the Company's regulations.
10. THE INTERIM PERIOD
10.1 The Seller undertakes to effect that during the Interim Period, the
Company shall not adopt any resolution regarding payment of cash
dividend or in kind or regarding allocation of any stock dividend, and
also shall not pay in fact any cash dividend (except for a dividend
that at the date of signing this Agreement was declared but not yet
paid), shall not allocate any stock dividend except with the
Purchaser's prior written approval, and shall not pay any management
fees or any other payments to Interested Parties, except according to
the agreements specified in ANNEX 4.10, will not engage in any
transaction with an Interested Party and will not carry out any other
activity which is not in the course of normal business. The Purchaser
undertakes not to propose for a vote and / or will not support any
resolution which is contrary to the foregoing.
10.2 At the Closing Date all the agreements that exist between the Company
and between the Seller and / or other Interested Parties in the
Company (except for the Company's managing director) as specified in
ANNEX 4.10, shall be terminated, beginning from the Closing Date.
11. OBLIGATIONS AFTER THE TIME OF COMPLETION
11.1 The Purchaser undertakes vis a vis the Seller, to fulfill the
obligations that the Seller took upon itself in the framework of the
Diskash Agreement, which are specified in Articles 7.1 - 7.4, 10.2 and
10.7 of the Diskash Agreement, and without derogating from the
generality of the foregoing, to present to the Sellers as defined in
the Diskash Agreement (hereinafter: "THE DISKASH GROUP") and / or to
the Seller in order that it may present to the Diskash Group, all the
information and data to which they are entitled according to the
Diskash Agreement.
12
11.2 The Purchaser undertakes vis a vis the Seller, to present to the
Seller, and to cause the Company to present to the Seller, all the
information and data which the Seller requires, in order to realize
the Seller's rights vis a vis the Diskash Group by virtue of the
Diskash Agreement, and without derogating from the generality of the
foregoing, by virtue of Article 4.6 of the Diskash Agreement.
11.3 The Purchaser undertakes to cause the Company to purchase officers'
liability insurance (runoff), so that the extent of coverage and the
limit of liability according to the insurance policy will not be less
that is customary in the market regarding companies whose shares are
traded on the Stock Exchange and in the US, which will cover liability
of the directors and the officers who serve in the Company, in
Subsidiaries and in Petroleum at the time of signing this Agreement
(hereinafter: "CURRENT OFFICERS"), for their acts and omissions in the
period prior to the Closing Date, and this for a period of 7 years
from the Closing Date, and shall cause the Company to fulfill its
undertakings according to the indemnification documents which were
issued to the Current Officers. It is agreed and clarified that a
decision to purchase insurance as aforesaid, subject to the completion
of the transaction subject of this Agreement, shall be brought to the
confirmation of the Company's general meeting together with the
Petroleum Agreement. It is also agreed that in the event that an
obligation due to the purchase of the foregoing insurance as aforesaid
should be registered in the Company's books after the Closing Date,
the said obligation shall be considered a Relevant Payment for the
purpose of Article 7.3 above.
11.4 The Seller undertakes to pay the Purchaser any amount that the Seller
shall receive from the Diskash Group according to the Diskash
Agreement after the Closing Date, and the Purchaser undertakes to pay
the Seller any amount that the Seller shall pay the Diskash Group
according to the Diskash Agreement after the Closing Date, and this
within 7 days of receipt of the amount from the Diskash Group or
payment to the Diskash Group, as the case may be.
12. TAXES AND PAYMENTS
12.1 Each Party shall bear solely its expenses pertaining to this Agreement
and anything deriving therefrom, including and without derogating from
the generality of the foregoing, payment for attorneys' and
consultants' fees.
12.2 Value added tax, that shall apply, to the extent that it should apply,
on any payment set in this Agreement and / or deriving and / or
entailed therefrom, shall apply on the paying Party and will be paid
at the same time as the obligation to pay to the VAT authorities,
against a tax invoice drawn up according to Law which will be issued
by the Party receiving the payment.
12.3 Income tax and / or capital gains tax that shall apply, to the extent
that it should apply, on the sale of the Sold Shares to the Purchaser
according to this Agreement, shall apply to the Seller and be paid by
it.
12.4 Payments and obligations according to this Agreement are not subject
to set-off.
13
13. GENERAL
13.1 The provisions of this Agreement constitute all that was agreed
between the Parties and they revoke any agreement, understanding or
undertaking, verbal or written, which were made, if at all, before its
signature.
13.2 Any change or amendment to this Agreement shall not be valid unless
effected in writing and signed lawfully by all the Parties to this
Agreement. This Agreement may be signed by the Parties separately in
several identical copies, which together will constitute one complete
copy of the Agreement.
13.3 Any delay or abstention in exercising any right by a Party to this
Agreement will not be considered as a waiver of any rights according
to this Agreement or according to any Law, or as a waiver or consent
on his part to any breach or non-fulfillment of any condition of this
Agreement by the other Party or a change, cancellation or amendment of
any condition whatsoever, unless effected in writing and signed
lawfully by the same Party.
13.4 In the event that any additional deeds should be required in order to
perform this Agreement, the Parties undertake to perform any such
deed, including to sign any document, to appear before any entity and
to perform any deed that should be required according to the
reasonable discretion of the Parties' legal counsels in order to carry
out the transaction subject of this Agreement (hereinafter: "THE
ADDITIONAL DEEDS"). In order to dispel doubt, the Additional Deeds are
not nor will they be considered conditions precedent for this
Agreement, unless the Parties should explicitly agree so in writing.
13.5 PUBLIC NOTICE
The Parties will mutually agree to any publicity or notice or
disclosure to the public regarding the provisions of this Agreement or
the transactions subject of the Agreement unless the disclosure is
required by Law, and in such case, the notifying Party will inform the
other Parties and will provide them with the wording of the
publication or notification allowing them to reasonably comment on
such disclosure.
13.6 ASSIGNMENT
This Agreement ay not be assigned by any Party without the prior
written consent of the other Party. In spite of the foregoing, it is
agreed that the Purchaser may assign its rights and / or obligations
according to this Agreement, in whole or in part, to any corporation
controlling it, under common control with it, or controlled by it
without having to obtain the Seller's consent, provided that the
Purchaser shall notify the Seller of such in writing, at least 7 days
in advance, and subject to that the Purchaser and any said assignee
shall be liable jointly and severally for all the Purchaser's
undertakings according to this Agreement.
14
13.7 LIABILITY AND INDEMNIFICATION
Each of the Parties undertakes to indemnify the other Party for any
damage and / or loss and / or expense caused to the other Party (and /
or obligation that should be imposed on the other Party), directly or
indirectly (hereinafter: "the Damage"), due to incorrect
representation and / or incomplete representation and / or
non-compliance and / or breach of a representation made to the other
Party in this Agreement, if and to the extent that the other Party is
not indemnified for the Damage by means of the mechanism to modify the
Consideration specified in Article 7.3 above. The said undertakings of
the Parties shall expire on 31.5.2009.
13.8 WAIVER OF CLAIMS
BEGINNING AT THE CLOSING DATE, each Party, in its name and in the name
of its directors and it officers and its affiliated companies,
irrevocably, finally and completely discharges, waives and exempts the
other Party, the Company and anyone on their behalf, including their
shareholders, directors and officers and all their employees and
consultants (except for the Controlling Party of the other Party),
from any contention and / or demand and / or claim of any kind, due
and / or pertaining to the management of the Company and / or its
affairs and / or the purchase and / or the holding of the Company's
Shares and / or regarding the relationship between the Parties as
shareholders in the Company, whose cause was born before the date of
signing this Agreement.
13.9 NOTIFICATIONS
Any notification and / or warning pertaining to any matter deriving
from this Agreement which shall be sent from one Party to the other by
registered mail, according to the addresses specified below (or any
other address which has been given by written notification to the
other Parties in accordance with the provisions of this Article 13.9),
shall be deemed as having been received by the addressee three (3)
business days from the time of its dispatch to the post office for
delivery by registered mail and on the first business day after its
transmission by means of facsimile (according to the facsimile numbers
specified below), and if delivered by hand - at the time of its
delivery.
THE SELLER:
Attention: Managing Director Israel Petrochemical Enterprises Ltd.
16 Shenkar, Herzelia Pituach
Fax: 000000000
Copy to Adv. Ran Rotman and Co.
35 Jabotinsky St., Ramat Gan
Fax: 00 0000000
THE PURCHASER:
Attention: Ilan Xxx-Xxx
00 Xxx Xxxx Xxxxxx Xx., Xxxxxx Xxxxx
Fax: 00 0000000
Copy to Adv. Xxxxx Xxxxxxx of Xxxxx Xxxxxxx, Arad and Co.
0 Xxxxxx Xxxxxx Xx., Xxx Xxxx
Fax: 00 0000000
15
13.10 UNENFORCEABLE / VOID PROVISIONS
If it should be determined that any of the provisions of this Agreement are
unenforceable and / or void for any reason, this shall not prejudice the
other provisions of this Agreement, and the Parties will act in order to
implement the Agreement as its spirit and its language, including replacing
the said unenforceable and / or void provision with an alternative
provision whose result and action are identical in essence and their
financial results identical from the perspective of the Parties to this
Agreement.
13.11 LAW AND JURISDICTION
The Laws of the State of Israel, solely and completely, shall apply to this
Agreement and any matter pertaining to it and deriving therefrom,
including, without derogating from the generality of the foregoing, its
interpretation and / or its performance and / or its breach and / or its
validity and / or its legality and / or its termination and the like.
The authorized courts in Tel Aviv - Yaffo and only the authorized courts in
Tel Aviv - Yaffo, shall have sole residual jurisdiction regarding any
matter that pertains to this Agreement.
13.12 COPIES; SIGNATURE BY FAX
This Agreement may be signed in several copies, including signature by
means of fax, where each one will be deemed an original copy but all of
them together will be deemed a single copy of the same document.
IN WITNESS WHEREOF THE PARTIES HAVE SET THEIR HANDS:
THE SELLER THE PURCHASER
------------------------------------- ---------------------
ISRAEL PETROCHEMICAL ENTERPRISES LTD. SUNY ELECTRONICS LTD.
I, the undersigned Xxx Xxxxxx, Adv. I, the undersigned Xxxxx Xxxxxxx,
confirm the signature of Mssrs. Xxxxx Adv. confirm the signature of Mssrs.
Gottenstein and Xxx Xxxxxx in the name Ilan Xxx-Xxx and Xxx Xxxxxxx in the
of Israel Petrochemical Enterprises Ltd. name of the Purchaser and that the
and that the above signature is the above signature is the lawful
lawful signature of the above company signature of the Purchaser which binds
which binds the company for every intent the Purchaser for every intent and
and purpose. purpose.
---------------- -------------------
Xxx Xxxxxx, Adv. Xxxxx Xxxxxxx, Adv.
16
---------------------------
PETROCHEMICAL HOLDINGS LTD.
I, the undersigned Xxx Xxxxxx, Adv.
confirm the signature of Mssrs.
Xxxxx Gottenstein and Xxx Xxxxxx in
the name of Petrochemical Holdings
Ltd. and that the above signature is
the lawful signature of the above
company which binds the company for
every intent and purpose.
----------------
Xxx Xxxxxx, Adv.
17
ANNEX 4.3
SECURITIES WHICH MAY BE CONVERTED TO COMPANY SHARES WHICH ARE
VALID AS OF THE DATE OF SIGNING THIS AGREEMENT
NUMBER OF EXISTING
OPTIONS IN CIRCULATION
TO THE END OF THE RANGE OF PRICE
PERIOD OF REALIZATION
------------------------ -----------------
56,000 3.70
6,500 10.00
9,000 11.69
- -
------------------------
71,500
18
ANNEX 4.5
LIENS APPLYING TO THE SOLD SHARES
IN ORDER TO GUARANTEE PAYMENT OF THE PRINCIPLE AND THE INTEREST OF THE BONDS
(SERIES B) PETROCHEMICAL HOLDINGS LTD., A WHOLLY OWNED AND CONTROLLED SUBSIDIARY
OF ISRAEL PETROCHEMICAL ENTERPRISES LTD. (HEREINAFTER: "PETROCHEMICAL HOLDINGS")
ATTACHED, FOR THE BENEFIT OF THE TRUSTEE, WITH A FIXED PRIMARY LIEN WITHOUT
LIMIT, 13,428,754 ORDINARY SHARES WHICH PETROCHEMICAL HOLDINGS OWNS IN SCAILEX
CORPORATION LTD. (HEREINAFTER: "SCAILEX"), INCLUDING STOCK DIVIDENDS WHICH SHALL
BE ISSUED FOR THESE SHARES.
IN ORDER TO GUARANTEE PAYMENT OF THE PRINCIPLE AND THE INTEREST OF THE BONDS
(SERIES C) PETROCHEMICAL HOLDINGS ATTACHED, FOR THE BENEFIT OF THE TRUSTEE, WITH
A FIXED PRIMARY LIEN WITHOUT LIMIT, 5,371,501 ORDINARY SHARES WHICH
PETROCHEMICAL HOLDINGS OWNS IN SCAILEX, INCLUDING STOCK DIVIDENDS WHICH SHALL BE
ISSUED FOR THESE SHARES.
19
ANNEX 4.10
AGREEMENTS BETWEEN THE COMPANY AND THE SELLER AND /OR OTHER
INTERESTED PARTIES IN THE COMPANY (EXCEPT THE MANAGING DIRECTOR OF THE COMPANY)
o MANAGEMENT SERVICES AGREEMENT - CHAIRMAN OF THE BOARD OF DIRECTORS -
ON 30 APRIL, 2007, AFTER THE AUDIT COMMITTEE AND THE BOARD OF
DIRECTORS GAVE THEIR APPROVAL, AN EXTRAORDINARY GENERAL MEETING OF THE
COMPANY APPROVED THE ENGAGEMENT OF THE COMPANY IN A MANAGEMENT
SERVICES AGREEMENT WITH GLOBECOM INVESTMENTS LTD., A PRIVATE COMPANY
CONTROLLED BY XX. XXXX XXXXXXXX, ACCORDING TO WHICH XX. XXXX
XXXXXXXX'X SERVICES AS AN ACTIVE DIRECTOR OF THE COMPANY WOULD BE
PROVIDED.
20
ANNEX 7.1
CALCULATION OF THE CONSIDERATION, CORRECT AS OF THE DATE OF
SIGNING OF THIS AGREEMENT
ASSETS IN SCAILEX CORPORATION AS OF 10.4.08
CALCULATION FOR
NIS $ ILLUSTRATION
---------------------------------------------------- ------------ ------------ ------------
Cash 4,259,852 64,766,119 238,259,840
Less dividend which was announced but not yet
distributed (150,000,000) (150,000,000)
Advance expenses - director's insurance 120,000 433,560
VAT to be received 177,037 177,037
---------------------------------------------------- ------------ ------------ ------------
TOTAL (145,563,111) 64,886,119 88,870,437
==================================================== ============ ============ ============
OBLIGATIONS IN SCAILEX CORPORATION AS OF 10.4.08
CALCULATION FOR
NIS $ ILLUSTRATION
---------------------------------------------------- ------------ ------------ ------------
Consultants and audit 392,000 1,416,296
Balance of payments for fixed assets 70,000 70,000
Estimate of cost of RunOff 600,000 2,167,800
For planes' deal 434,000 1,568,042
Rent, management fees and municipal taxes (May June) 72,260 72,260
accruals for salary, vacation and compensation 1,415,000 1,415,000
---------------------------------------------------- ------------ ------------ ------------
TOTAL
==================================================== ============ ============ ============
---------------------------------------------------- ------------ ------------ ------------
ASSETS LESS OBLIGATIONS (147,120,371) 63,460,119 82,161,039
==================================================== ============ ============ ============
ASSET VALUE OF SCAILEX CORPORATION AS OF 10.4.08
CALCULATION FOR
NIS $ ILLUSTRATION
---------------------------------------------------- ------------- ------------ -------------
Net asset value 82,161,039
PCH transaction 1,141,312,022 1,141,312,022
Less dividend which was announced in ORL and -
transferred to Purchaser
For Scailex head offices 2,909,000 - 2,909,000
Plus cash for realization of options (in cash) 207,200
---------------------------------------------------- ------------- ------------ -------------
TOTAL ASSET WORTH 1,144,221,022 207,200 1,227.130.674
==================================================== ============= ============ =============
Holding Rate fully diluted by the purchased Shares 49.987%
---------------------------------------------------- ------------- ------------ -------------
CONSIDERATION FOR THE PURCHASED SHARES
CALCULATION FOR
NIS $ ILLUSTRATION
---------------------------------------------------- ------------- ------------ -------------
Cost for the Company's assets 613,407,221 613,407,221
Premium for the Shares 128,000,000 128,000,000
---------------------------------------------------- ------------- ------------ -------------
TOTAL CONSIDERATION FOR THE PURCHASED SHARES 741,407,221 - 741,407,221
==================================================== ============= ============ =============
Exchange rate: 3.613
---------------------------------------------------- ------------- ------------ -------------
21
