Exhibit 1. Form of Stock Purchase Agreement.
6
SHARE PURCHASE AGREEMENT
------------------------
This Share Purchase Agreement (the "Agreement") is made and entered into on
_______ day of July, 2003, by and between:
Israel Aircraft Industries Ltd., an Israeli company, having its principal office
at Ben-Gurion International Airport, 00000, Xxxxxx (hereinafter the "Seller" or
"IAI")
of the first part
-----------------
and
Mira Mag Inc., a company incorporated in Liberia, having its principal office at
00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx (hereinafter: "Mira Mag")
of the second part
------------------
WHEREAS IAI is sole and lawful owner of 914,516 (nine hundred fourteen
thousand and five hundred and sixteen) Ordinary Shares of
Magal Security Systems Ltd. ("Magal" or the "Company"),
NIS.1.00 par value each, constituting 11.88% of the issued and
outstanding share capital of the Company (such 914,516
Ordinary Shares, the "Shares" or "IAI Shares"); and
WHEREAS Mira Mag, is the registered owner of 3,265,582 Ordinary Shares
of the Company, constituting 42.43% of the Company's issued
and outstanding share capital, part of which are being held
through third parties, and
WHEREAS IAI and Mira Mag are parties to Shareholders Agreement dated as
of May 1995 (the "Voting Agreement"), concerning, among other
things, voting agreement regarding the election of directors at
the Annual General Meeting of the Company, and
WHEREAS IAI desires to sell all IAI shares to Mira Mag and Mira Mag is
desirous to purchase the IAI Shares from IAI, as aforesaid,
"as is" (except as provided in Clause 3 hereunder), all in
accordance with and subject to the terms and conditions more
fully set forth in this Agreement;
NOW THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the parties hereby agree as follows:
1. The Preamble, Annexes & Headings
--------------------------------
1.1. The Preamble to this Agreement forms an integral part hereof and
shall be binding upon the parties as the Agreement itself.
1.2. The Annexes, Appendices, Schedules and any other Attachments to this
Agreement
7
shall constitute an integral part hereof.
1.3. The headings of the Sections in this Agreement are for convenience
of reference only and shall not affect or limit in any way the
interpretation or construction of the provisions of this Agreement.
2. Purchase of Shares
------------------
2.1. Subject to the terms and conditions hereof, IAI shall sell to Mira
Mag the Shares, and Mira Mag shall purchase from IAI the Shares, at
a price of Seven United States Dollars (US$7.-) per Share (the
"Price Per Share") so that the price for the Shares shall be
US$6,401,612. - (six million, four hundred and one thousand, six
hundred and twelve United States Dollars) (the "Purchase Price") all
to be paid in accordance with the provisions of this Agreement.
2.2. The Shares are being sold to Mira Mag "as is", i.e. notwithstanding
the condition of the Shares and/or of the Company and/or any other
matter except for those representations and warranties made by IAI
in Clause 3 hereunder.
2.3. It is hereby clarified, further, that the IAI Shares sold hereunder
include all of IAI's holdings in Magal, i.e. - the 887,880 ordinary
shares currently registered on the name of IAI with the Israeli
Companies' Registrar (the "Registrar"), the 26,636 Bonus Shares
that have been allotted by Magal to IAI but are not yet registered
with the Registrar in IAI's name, as mentioned in Clause 4.1.2
hereunder and all dividends, and other securities that may be
issued with respect to the IAI Shares upon any share split, share
dividend, recapitalization, merger, consolidation or similar
events (collectively, the "Related Distributions"). It is hereby
agreed that the Purchase Price shall not be changed as a result of
any issuance or payment of Related Distributions following the
date hereof.
2.4. It is hereby agreed that as of the payment of the respective portion
of the Purchase Price (including the Remainder Payments, as such
term is defined below) to IAI in accordance with Article 5.2.2(c)
below, all the respective rights and privileges attached to the
applicable respective portion of the IAI Shares and to the Related
distributions attributable thereto, including without limitations,
the voting rights and the right to receive dividends whether such
dividends are declared or undeclared shall belong to Mira Mag.
3. Representations and Warranties by IAI
-------------------------------------
Without derogating anything from Clause 44 below, IAI hereby
represents and warrants as follows:
3.1. Subject to Clauses 4.1.2 and 4.1.3 below, IAI is the sole lawful
owner, beneficially and of record, of all IAI Shares.
3.2. IAI Shares, including the Bonus Shares, are fully paid and non-
assessable.
3.3. At and as of the Closing, and at and as of the payment of each of
the Remainder Payment and the delivery of the applicable portion of
the Deposited Shares and the
8
Related Distributions in respect thereto the IAI Shares shall be
free and clear of any options, first refusal rights, voting trust
and other voting agreements, and of all liens, claims, charges,
encumbrances and/or other third party rights of any kind whatsoever.
3.4. This Agreement, when executed and delivered by IAI, will
constitute the valid, binding and enforceable obligations
of IAI.
3.5. The execution, delivery and performance of the
obligations of IAI hereunder have been (or will be at the
Closing Date or prior thereto) duly authorized by all
necessary corporate action of IAI.
4. Representation and Warranties by Mira Mag
-------------------------------------------
4.1. Mira Mag hereby represents and warrants as follows:
(a) Save as stipulated in Clause 3 above, Mira Mag hereby waives any
right to receive any representation and/or warranty from IAI, and
is entering into this Agreement solely in reliance on the
information and data known to it based on its acquaintance of and
involvement with the Company's business, activities, prospects,
condition and standing (both legal and financial). In this
regard, it is clarified that Mira Mag: (i) is directly and
indirectly, the holder of about 42.43% of the Company's issued
and outstanding share capital; and, (ii) has designated 2 (two)
representatives who are acting as Directors in the Board of
Directors of the Company; and thus, Mira Mag is acquainted and
well informed and updated with the Company's business, activities
and valuation.
(b) Mira Mag is aware that the Company has issued and allotted bonus
shares to its shareholders pursuant to a resolution of the Board
of Directors of the Company dated May 7, 2002 and the approval of
the shareholders of the Company on July 17, 2002, (in this
Agreement, the "Bonus Shares") which have not been registered
with the Registrar. Thus, said registration does not reflect the
current holdings of IAI in the Company. However, IAI does not
warrant nor makes any representation or undertaking as to the
allotment and/or registration of said Bonus Shares, except that
it holds share certificate representing such Bonus Shares and
that it is aware, as a shareholder of the Company that has one
(1) representative nominated as a member of the Board of
Directors of the Company, that such allotment was duly approved
by the Board of Directors of the Company and its shareholders.
(c) In addition, Mira Mag is aware that the Company has purchased all
the deferred shares from its shareholders and thus, the current
registration of the ownership of the deferred shares by the
Company's shareholders at the Registrar, including IAI, does not
reflect the actual shareholdings of IAI, and such deferred shares
are not included in the IAI Shares.
(d) No consent, approval, order, license, permit, action by, or
authorization
9
of or designation, declaration, or filing with any governmental
authority or other persons or entity is required that has not
been, or will not have been, obtained by Mira Mag prior to the
Closing in order to effect the valid execution, delivery and
performance of this Agreement.
(e) This Agreement, when executed and delivered by Mira Mag will
constitute the valid, binding and enforceable obligations of Mira
Mag.
(f) The execution, delivery and performance of the obligations of
Mira Mag hereunder have been (or will be at the Closing Date or
prior thereto) duly authorized by all necessary corporate action
of Mira Mag.
5. Closing of Purchase
-------------------
5.1. Closing
The transfer of the Shares from IAI to Mira Mag, the purchase
thereof by it and the registration of the Shares in the name of Mira
Mag, in the register of members of the Company, shall take place at
a closing (the "Closing") to be held at such place, time and date as
shall be mutually agreed by the parties (the "Closing Date"),
provided however, that the Closing Date shall be no later than
August 15, 2003, unless all the parties have otherwise agreed. Each
party shall make its best efforts to cause the receipt of all the
documents and the adoption of all resolutions required for the
Closing as soon as possible in order to antedate the Closing Date.
5.2. Acts and Deeds at Closing
At the Closing, the acts and deeds hereinafter set forth shall take
place, which acts and deeds shall be deemed to take place
simultaneously and no act or deed by any Party shall be deemed to
have been completed or any document delivered until all such acts
and deeds have been completed and all required documents delivered.
(a) At the Closing IAI shall:
(a) Deliver to Mira Mag a duly executed "medallion guaranteed" share
transfer deed covering 743,088 Shares (the "First Shares", in the
form attached hereto as Schedule 5.2.1(a).
(b) Surrender to the Company the Shares Certificate in respect of the
First Shares, which were issued by the Company to IAI.
(c) Deliver to the Company a letter of resignation signed by Xx.
Xxxxx Xxxx ("IAI's Director") according to which he resigns from
his office as a Director of the Company in effect from the
Closing Date, in the form attached hereto as Schedule 5.2.1(c).
(d) Execute a termination notice of the Voting Agreement in the form
attached hereto as Schedule 5.2.1(d) (the "Termination Notice").
(e) Sign and execute the Escrow Agreement (as defined below), cause
the Escrow Agent (as such term is defined below) to execute such
Escrow Agreement and deliver the executed Escrow Agreement to
Mira Mag.
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(f) Deposit with the Escrow Agent, three (3) "medallion Guaranteed"
Share Transfer Deeds with respect to the Deposited Shares (as
such term is defined below), each in the form attached as
Schedules (a)(a) hereto, duly executed by IAI as the transferor;
(b) At the Closing Mira Mag shall:
(a) Execute the share transfer deed in respect of the First Shares as
the transferee thereof (Schedule (a)(a) hereunder).
(b) Execute the Termination Notice.
(c) Pay to IAI the price for the First Shares, in the amount of US$
5,201,616 (five million, two hundred and one thousand, six
hundred and sixteen United States Dollars) by wire transfer or
banker's check, as shall be mutually agreed between IAI and Mira
Mag prior to the Closing, in freely transferable United States
Dollars, and subject to the provisions of Section 8 hereof,
without making any reduction for any withholding or other taxes
or charges of any kind.
The remainder of the Purchase Price in the amount of $1,200,000.-
(one million and two hundred thousand United States Dollars) (the
"Remainder") shall be paid in three consecutive payments as
follows: US$ 300,000 on 31.12.03 (the "First Payment"), US$
300,000 on 30.4.04 (the "Second Payment") and US$ 600,000 on
31.7.04 (the "Third Payment" and together with the First Payment
and the Second Payment, the "Remainder Payments"). Each of the
said Remainder Payments shall be made by wire transfer, in freely
transferable United States Dollars and subject to the provisions
of Section 8 hereof, without making any reduction for any
withholding or other taxes or charges of any kind, against the
deposit of the applicable Deposited Certificate and Share
Transfer Deed with a bank designated in writing by Mira Mag (or
any third party nominated by Mira Mag) immediately prior to such
payment, against and subject thereto.
(d) Execute the Escrow Agreement.
(e) Deliver to IAI a duly completed and executed notice of the
transfer of the First Shares as described herein to the Registrar
in the form attached hereto as Schedule 5.2.3(e), prepared for
immediate filing thereof with the Registrar.
(f) Deliver to IAI a duly completed and executed notice to the
Registrar of the change in the Company's Board of Directors
according to which IAI's Director has resigned from his office as
such in the form attached hereto as Schedule 5.2.3(f), prepared
for immediate filing with the Registrar.
6. The Escrow Agent
----------------
6.1. In order to secure the payment of the Remainder by Mira Mag, the
share certificates and the share transfer deeds relating to 171,428
(one hundred seventy one thousand,
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four hundred and twenty eight) shares out of the Shares (in this
Agreement, the "Deposited Shares") shall be deposited, at the
Closing, by IAI, and held in trust by Xx. Xxxxxx Xxxxxxx, Adv.,
IAI's V.P. & General Counsel, who shall act as Escrow Agent for IAI
and Mira Mag (in this Agreement, the "Escrow Agent"). Pursuant to
the above, at the Closing IAI shall transfer and deposit with the
Escrow Agent: (i) three (3) Share Certificates with respect to the
Deposited Shares, two (2) of which representing 42,857 (forty two
thousand eight hundred and fifty seven) Shares each and one (1)
representing 85,714 (eighty five thousand, seven hundred and
fourteen) Shares (each a "Deposited Certificate" and collectively,
the "Deposited Certificates"); and (ii) Three (3) "medallion
guaranteed" Share Transfer Deeds regarding the Deposited Shares duly
executed by IAI.
6.2. The Escrow Agent shall act with regard to the Deposited Certificates
and the above mentioned Share Transfer Deeds in accordance with the
provisions of the Escrow Agreement attached as Schedule 6.2 hereto
(the "Escrow Agreement"), which shall include, inter alia, the
following provisions:
(a) Against the payment of each Remainder Payment made in accordance
with Clause 5.2.2(c) above, the Escrow Agent shall deliver to
Mira Mag (or in accordance with Mira Mag's instructions): (i) the
respective Deposited Certificate and any dividends (if any)
and/or certificates and/or other documents representing the
Related Distributions (if any) received by IAI in connection with
the Deposited Shares represented by such Deposited Certificate;
(ii) the applicable Share Transfer Deed in respect of the
applicable Deposited Shares and all Related Distributions paid in
connection thereto (if any); and (iii) a Compliance Certificate
in the form attached as Schedule 6.2.1 hereto, in respect of the
applicable Deposited Shares, duly executed by IAI.
(b) If Mira Mag shall fail to pay one or more of the Remainder
Payments within 14 days of the due date thereof, the Escrow Agent
shall transfer, after such 14 days period, all the Deposited
Shares held by him at such time to IAI or in accordance to its
instruction.
(c) As long as the Escrow Agent holds the Deposited Certificates and
the Deposited Shares' Share Transfer Deeds in trust for Mira Mag,
IAI shall vote with such Deposited Shares in accordance with the
recommendation of the Board of Directors of the Company.
6.3. It is hereby expressly agreed that the transfer of the Deposited
Shares (or any part thereof, as may be applicable) by the Escrow
Agent to IAI pursuant to the provisions of the Section 6.2.2 above
and the Escrow Agreement is the sole remedy that IAI shall have in
the event that Mira Mag shall fail to pay one or more of the
Remainder Payments and IAI shall not be entitled to take any other
action or receive any other remedy (including without limitations,
any and all actions and remedies provided by any applicable law)
against Mira Mag for recovery of such unpaid Remainder Payments.
12
7. Conditions of Closing
---------------------
The obligations of the parties to act as specified in Sections 5 and 6
hereof, are subject to the fulfillment at or before the Closing of the
following conditions precedent, any one or more of which may be waived in
whole or in part by all parties' consent. Each party will use all
reasonable efforts to arrange for the satisfaction of each of the
following conditions that are within its control:
7.1. All covenants, agreements, conditions contained in this Agreement to
be performed or complied with by the parties prior to the Closing
shall have been performed or complied with by them prior to or at
the Closing.
7.2. The parties shall have secured all permits, consents and
authorizations that shall be necessary or required lawfully to
consummate this Agreement and to transfer the Shares to be purchased
by Mira Mag at or after the Closing (in accordance with Article
5.2(b)(c) above).
7.3. All of the documents to be delivered pursuant to Section 5 above
shall have been delivered. 7.4. All corporate and other proceedings
in connection with transactions contemplated by this Agreement,
have been obtained prior to the Closing.
8. Taxation
--------
All taxes, impositions and other duties whatsoever that shall be due
as a result of and/or in connection with this Agreement and/or the
transaction contemplated herein (if any), shall be borne and paid by the
party obliged to pay same in accordance with the applicable law.
At or before the Closing IAI shall deliver to Mira Mag a certificate
issued by the Israeli. Tax Authorities approving that the payment of the
Purchase Price is not subject to withholding tax and/or that Mira Mag is
excused from its duty to deduct withholding tax from said payments (in any
wording of similar import). Subject to the receipt of the abovementioned
certificate by Mira Mag, the Purchase Price shall be paid by Mira Mag to
IAI in full, free and clear of any and all deductions, withholding taxes,
other taxes, levies, duties, assessments, or charges.
If Mira Mag shall not receive the abovementioned Tax Authorities'
certificate at or before the Closing, it shall pay the Purchase Price to
IAI while deducting or withholding such withholding tax or other
deductions as shall be required by the applicable law.
9. Miscellaneous
-------------
9.1. Further Assurances
Each of the parties hereto shall perform such further acts and execute
such further documents as may reasonably be necessary to carry out and
give full effect to the provisions of this Agreement and the intentions
of the parties as reflected thereby.
Mira Mag undertakes to overlook and make its best efforts to cause the
Company to timely make all reports and filings resulting from the
transactions contemplated herein
13
as may be required under any applicable law (including such reports and
filings required by and/or on behalf of IAI and/or Mira Mag) and that
the cost of making such reports and filing shall be borne solely by the
Company.
9.2. Entire Agreement; Amendment and Waiver
(a) This Agreement and the Schedules hereto constitute the
full and entire understanding and agreement between the
parties with regard to the subject matters hereof and
thereof. Any term of this Agreement may be amended and
the observance of any term hereof may be waived (either
prospectively or retroactively and either generally or in
a particular instance) only with the written consent of
both of the parties to this Agreement.
(b) The provisions of this Agreement shall govern the
relationship between the parties thereto and in any case
of non-compatibility with any other instrument, including
the Company's Articles of Association, the parties shall
be bound by the provisions of this Agreement.
9.3. Delays or Omissions
No delay or omission to exercise any right, power, or remedy accruing
to any party upon any breach or default under this Agreement, shall be
deemed a waiver of any rights, powers or remedies accruing in
connection with any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent, or approval of any kind or
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective
only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded
to any of the parties, shall be cumulative and not alternative.
9.4. Severability
If any provision of this Agreement shall be found or be held to be
invalid or unenforceable, the meaning of such provision shall be
construed, to the extent feasible, so as to render the provision
enforceable, and if no feasible interpretation would save such
provision, it shall be severed from the remainder of this Agreement,
which shall remain in full force and effect unless the severed
provision is essential and material to the rights or benefits received
by any party hereto. In such event, the parties shall use their best
efforts to negotiate in good faith, a substitute, valid and enforceable
provision or agreement, which most nearly effectuates the parties'
intent in entering into this Agreement.
9.5. Governing Law and Jurisdiction
14
This Agreement shall be governed by and construed according to the
laws of the State of Israel, without regard to the conflict of laws
provisions thereof. Any dispute arising under or in relation to this
Agreement shall be resolved solely and exclusively in the Tel Aviv -
Jaffa competent Courts, and each of the parties hereby submits
irrevocably to the jurisdiction of such court.
9.6. Counterparts
This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original and enforceable against the
parties actually executing such counterpart, and all of which
together shall constitute one and the same instrument.
10. Termination prior to Closing
---------------------------\
The parties hereto agree, that this Agreement may be terminated, and the
transactions contemplated hereby abandoned, if by September 30, 2003, the
Closing will not have been completed (provided, however, that such failure
was not directly caused by any act or default of either party). Upon
termination of this Agreement under this Clause 10, the parties shall be
released from all obligations arising under this Agreement.
11. Notices
-------
All notices and other communications required or permitted hereunder to be
given to a party to this Agreement shall be in writing in the English
language and shall be mailed by registered mail, or otherwise delivered by
air courier, by hand or by messenger, addressed to such party's address as
set forth in the Preamble of this Agreement or at such other address as
the party shall notify each other party in writing as provided below.
Any notice sent in accordance with this Section shall be effective (i) if
mailed, seven (7) business days after mailing; (ii) if sent by air
courier, two (2) business days after being sent; and (iii) if sent by
messenger, upon delivery. Notwithstanding anything to the contrary above,
any notice of change of address shall only be valid upon receipt.
THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK
15
IN WITNESS WHEREOF the parties have signed this Agreement as of the date first
hereinabove set forth:
ISRAEL AIRCRAFT INDUSTRIES LTD.
Name: _________________
Title: _____________________
Signature: _________________
Name: _________________
Title: _____________________
Signature: _________________
MIRA MAG INC.
Name: _________________
Title: _____________________
Signature: _________________
16
Schedule 5.2(a)(a)
------------------
SHARE TRANSFER DEED
-------------------
FOR THE
-------
FIRST SHARES
------------
We, Israel Aircraft Industries Ltd., of Ben-Gurion International Airport, 70100
Israel, hereby transfer to Mira Mag Inc. of _________________, (hereinafter
called the "Transferee"), 743,088 (seven hundred and forty three thousand, and
eighty eight) Ordinary Shares having a nominal value of NIS 1.00 in the Company
called Magal Security Systems Ltd., Reg. No. 00-000000-0, to hold unto the said
transferee, its executors, administrators, and assigns, subject to the several
conditions on which we held the same at the time of the execution hereof; and
we, the said Transferee, do hereby agree to take the said shares subject to the
conditions aforesaid.
As witness we have hereunto set our hands the ____ day of _______, 2003.
--------------------- ------------------------
Mira Mag Inc. Israel Aircraft Industries Ltd.
(Transferee) (Transferor)
---------------------- ------------------------
Witness to the transferee's Witness to the transferor's
signature signature
------------------- ------------------------
Address of Witness Address of Witness
17
Schedule 5.2.1(c)
-----------------
RESIGNATION LETTER
------------------
Magal Security Systems Ltd.
00 Xxxxxxx Xx.,
X.X.Xxx 00,
Xxxxx 00000,
Xxxxxx
Dear Sirs,
Re: Resignation from Office as a Director
1. Please be advised that I, Xxxxx Xxxx, hereby resign from my office as a
director in the board of directors of your company (Magal Security Systems
Ltd., Reg. No. 52-003892-8).
2. My resignation shall become effective on ______, 2003.
Signature: ____________
Date: ________________
18
Schedule 5.2.1 (c)
------------------
SHAREHOLDERS AGREEMENT TERMINATION NOTICE
-----------------------------------------
Made and entered into on _______ day of _____________, 2003, by and between:
Israel Aircraft Industries Ltd., an Israeli company, having its principal office
at Xxx-Xxxxxx Xxxxxxxxxxxxx Xxxxxxx, 00000, Xxxxxx (hereinafter: "IAI")
of the first part
-----------------
and
Mira Mag Inc., a company incorporated in Liberia, having its principal office
at _______________ (hereinafter: "Mira Mag")
of the second part
------------------
Whereas during 1995 IAI and Mira Mag have entered into a Shareholders Agreement
(the "Shareholders Agreement") regarding their mutual rights and
obligations as shareholders of Magal Security Systems Ltd.(hereinafter:
"Magal"); and
Whereas IAI is selling all its holdings in Magal to Mira Mag, and in the
frame of the above transaction the parties have agreed to terminate
the Shareholders Agreement;
NOW THEREFORE, the parties hereby agree as follows:
1. The Shareholders Agreement is hereby terminated.
2. Upon signing of this termination notice, the Shareholders Agreement
becomes null and void and shall have no affect whatsoever.
3. Neither party has no claim nor demand of any kind whatsoever towards the
other party in connection with and/or as a result of the cancellation and
termination of the Shareholders Agreement.
4. Each party hereby irrevocably waives any and all of its rights (if and to
the extant applicable) under said Shareholders Agreement, including,
without limitation, rights of first refusal, pre-emptive rights,
anti-dilution rights and/or any other right of whatever kind and nature.
IN WITNESS WHEREOF the parties have signed this termination notice this __
day of ______ 2003:
19
ISRAEL AIRCRAFT INDUSTRIES LTD.
By: ______________________
Title: _____________________
Signature: _________________
By: ______________________
Title: _____________________
Signature: _________________
MIRA MAG INC.
By: ______________________
Title: _____________________
Signature: _________________
20
Schedule 5.2.1(f)
-----------------
SHARE TRANSFER DEED
-------------------
FOR THE
-------
DEPOSITED SHARES
----------------
We, Israel Aircraft Industries Ltd., of Ben-Gurion International Airport, 00000
Xxxxxx, hereby transfer to ________________________ of _____________
______________, (hereinafter called the "Transferee"), ________
(_________________) Ordinary Shares having a nominal value of NIS 1.00 in the
Company called Magal Security Systems Ltd., Reg. No. 00-000000-0, to hold unto
the said transferee, its executors, administrators, and assigns, subject to the
several conditions on which we held the same at the time of the execution
hereof; and I, the said Transferee, do hereby agree to take the said shares
subject to the conditions aforesaid.
As witness we have hereunto set our hands at the date stipulated below:
------------------------ ------------------------
Israel Aircraft Industries Ltd.
(Transferee) (Transferor)
Date: _____________. Date: July ____, 2003.
---------------------- ------------------------
Witness to the transferee's Witness to the transferor's
signature signature
------------------- ------------------------
Address of Witness Address of Witness
21
Schedule 5.2.2(e)
-----------------
NOTICE OF TRANSFER OF SHARES
----------------------------
22
Schedule 5.2.2(f)
-----------------
NOTICE OF CHANGE IN THE COMPANY'S BOARD OF DIRECTORS
----------------------------------------------------
23
Schedule 6.2
------------
ESCROW AGREEMENT
----------------
24
Schedule 6.2.1
--------------
COMPLIANCE CERTIFICATE
----------------------
____________, 200_
To Mira Mag Inc., the purchaser of IAI Shares in Magal Security Systems
Ltd. (the "Company"), pursuant to the Share Purchase Agreement made as of
July ___, 2003 (the "Agreement").
Gentlemen:
Pursuant to Section 6.2.1 of the Agreement, Israel Aircraft Industries Ltd.
("IAI") hereby certifies that as of the date hereof:
1. The representations and warranties made by IAI in Article 3 of the
Agreement, as far as same are relating to the applicable portion of
the Deposited Shares (as such term is defined in the Agreement)
being transferred to you as of the date hereof, are true and correct
with the same force and effect as though the same were made on and
as of the date hereof.
2. All covenants, agreements, acts, undertakings and conditions
contained in the Agreement to be performed or complied with by IAI
at or prior to Closing have been duly performed or complied with in
all respects.
Very truly yours,
--------------------------
Israel Aircraft Industries Ltd.
25
