EXHIBIT 5
TRANSLATION FROM THE HEBREW
Date: 28.10.09
To:
BANK MIZRAHI TEFAHOT LTD.
In accordance with the account opening documents, including the "application for
opening an account and/or changes in the account" as well as the "general terms
for management of an account" and the "general terms for the credit activity",
which were signed by us, and to which this Agreement, including all of its
appendixes, constitutes an appendix (hereinafter: the "MANAGEMENT TERMS"), and
in respect of credit facilities to be provided to us thereunder (as defined
below), all as set forth below in this Agreement, we hereby agree and undertake
that the credit facilities will also be subject to all the terms provided in
this Agreement below, which will constitute an integral part of the Management
Terms.
1. DEFINITIONS
In this Agreement, the terms set forth below shall have the meaning set out
opposite them:
"MEANS OF CONTROL", - Including inflections, within the
"SECURITIES" meaning of such terms in the
Securities Law, 5728 - 1968.
"CREDIT FACILITIES" OR - All credit facilities to be provided
"CREDIT" to the Borrower by the Bank 1. for the
purpose of financing the purchase of
part of the Purchased Shares in the
sum of up to NIS 320 M (principal) 2.
For the finance of current activity in
the sum of up to NIS 200 M (principal)
(hereinafter: the "CURRENT CREDIT") 3.
For finance of activity in foreign
trade (documentary credit, suppliers,
guarantees etc., and derivatives in a
total amount of up to NIS 200 M
(principal) (hereinafter: the "CREDIT
FOR FOREIGN TRADE AND DERIVATIVES")
and any credit facility to be provided
by the Bank for the purpose of the
settlement of such Credit Facilities,
in whole or in part, if provided, and
all in accordance with the provisions
of clause 4 of this Agreement (in this
definition: the "RELEVANT CREDIT
FACILITIES"), all including linkage
differentials, rate differentials,
interest, arrears interest,
commissions, bank charges, various
expenses including realization
expenses, lawyers' fee, insurance
costs and other payments due and/or to
be due by the Borrower to the Bank in
connection with the Relevant Credit
Facilities, whether the due date
thereof has fallen due, whether their
due date falls in the future, whether
they are due or to be due pursuant to
any contingent liability whatsoever or
any other liability whatsoever,
irrespective of whether or not such
amounts, in whole or in part, have
been consolidated in a judgment of a
court or a tribunal.
"REVOKING EVENT" - As defined in clause 6.1.3 below.
"STOCK EXCHANGE" - Tel Aviv Stock Exchange Ltd.
"SECURITY INTERESTS" - The liens and guarantees defined in
clause 6 of this Agreement as well as
other liens and guarantees as shall be
provided in accordance with the
provisions of this Agreement.
THE "BANK" - Bank Mizrahi Tefahot Ltd.
"BANK LEUMI" - Bank Leumi Le Israel Ltd.
"STAKEHOLDER" - Including inflections thereof, within
the meaning of this term in the
Companies Law.
The "PROVISIONS OF THE - Any provision of any law or statute,
LAW", the "LAW" either in Israel or any place outside
of Israel, as well as directives of
the Bank of Israel, the Commissioner
of Restrictive Trade Practices, the
Ministry of Communication, the
Securities Authority and any other
competent authority, including
understandings between the Bank and
the Bank of Israel or between the Bank
and any other competent authority and
further including new legal provisions
which shall take effect after the
execution of this Agreement.
"PERMITS AND APPROVALS" - All terms, permits and approvals
required in accordance with any law
and pursuant to and under the
provisions of the law, for the
Borrower's entering into the Credit
Agreement and the fulfillment of
everything stated therein, including
the provision of the credit and the
encumbrance in favor of the Bank of
the Security Interests and all Permits
and Approvals required for the
realization of the Security Interests,
including by way of appointment of a
receiver on behalf of the Bank
pursuant to a decision of a competent
court for the sale of the Pledged
Shares, the shares pledged in favor of
Bank Mizrahi and the shares to be
pledged in accordance with the
provisions of the Credit Agreement,
including pursuant to clause 3.6, to a
third party which will obtain, to this
end, all Permits and Approvals as
required under any law.
THE "CREDIT AGREEMENT" - This Agreement, and the "Applications
for a Loan" to be executed by the
Borrower in connection with the Credit
Facility and the Management Terms.
"SHAREHOLDERS' - A founders' agreement, an agreement
AGREEMENTS" dated October 28, 2009 between Partner
and the shareholders therein in
connection with the rights of listing
Partner's shares for trading and
additional agreements among
shareholders in Partner which are
attached as part of Appendix 2.18.
"FOUNDERS AGREEMENT" - An agreement dated April 20, 2005,
among Partner's founding shareholders
to which the Borrower shall join by
the closing date, IN LIEU OF the
Seller, and a copy of which, as well
as a copy of the aforesaid joining
documents, is attached as part of
Appendix 2.18 hereto, as shall be
amended from time to time.
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"BANK LEUMI'S FINANCING - The financing agreement dated October
AGREEMENT" 28, 2009, which was signed by the
Borrower and Bank Leumi, in connection
with credit for the financing of the
acquisition of part of the Purchased
Shares in a sum of up to NIS 480 M,
including all its appendixes.
"SALE AGREEMENT" - An agreement dated August 12, 2009
between the Seller and the Borrower
for the acquisition of the Purchased
Shares, a copy of which is attached as
APPENDIX A hereto, as amended from
time to time.
"NOMINEE COMPANY" - The Nominee Company of Bank Leumi
Le-Israel Ltd. (Hevra Le-Rishumim of
Bank Leumi Le-Israel Ltd.)
"COMPANIES LAW" - The Companies Law, 5759 - 1999
including any amendments thereto from
time to time.
"BORROWER'S ACCOUNT - Account no. 274007 at branch 461 at
AT THE BANK" Bank Leumi, in the Borrower's name.
"BORROWER'S ACCOUNT - Account no. 73523/21 in branch 800 at
AT BANK LEUMI" Bank Leumi, in the Borrower's name.
"CLOSING DAY" OR - The day of the provision of the credit
"CLOSING DATE" in accordance with the terms of this
Agreement, and, in any event, not
later than February 16, 2010.
"BUSINESS DAY" - As defined in the MANAGEMENT TERMS.
"THIS AGREEMENT" - This Agreement, including all its
appendixes.
THE "BORROWER" - Scailex Corporation Ltd., Public Co.
Reg. No. 00-000000-0, a company duly
incorporated in Israel.
"INDEX" - The Consumer Price Index published by
the Central Bureau of Statistics, or
any other index IN LIEU THEREOF.
THE "SELLER" - Advent Investments Pte Ltd., a
corporation duly incorporated in
Singapore.
"NOTEHOLDERS" - Holders of Series A to D Notes which
were issued by the Borrower.
"MERGER OR SPIN-OFF" - Any of the acts set forth below in
respect of the Borrower and Partner -
(1) Merger and/or spin-off within the
meaning of Part E(2) of the Income Tax
Ordinance (New Version) or merger
within the meaning thereof in the
Companies Law or in any other legal
provision, or in any legal provision
IN LIEU THEREOF; and/or
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(2) Transfer of assets in consideration of
shares and/or rights in the Borrower
or in Partner; and/or
(3) Settlement and/or arrangement in
accordance with sections 350 and 351
of the Companies Law or any other
legal provision IN LIEU THEREOF or any
corresponding or similar provision in
accordance with another law; and/or
(4) Voluntary liquidation;
"SALE OR ACQUISITION - Each of the activities set forth
OF A SUBSTANTIAL ASSET" below:
- (a) A sale and/or any act resulting in a
sale of the Pledged Shares, the shares
pledged in favor of Bank Leumi and the
shares to be pledged in accordance
with the provisions of the Credit
Agreement, including pursuant to
clause 3.6 and/or any act resulting
in a reduction in the number of the
Pledged Shares, the shares pledged in
favor of Bank Leumi and the shares to
be pledged in accordance with the
provisions of the Credit Agreement,
including pursuant to clause 3.6 or a
decrease in the rate thereof on the
date of this Agreement (with full
dilution, without taking account of
treasury shares), out of Partner's
issued share capital, and/or out of
the total means of control in Partner,
including due to the sale of treasury
shares in Partner and other than due
to the issue of shares in Partner
under market terms or the sale of
treasury shares in Partner at an
aggregate rate of up to 5% of
Partner's issued and paid up capital
on the date of the execution of the
Credit Agreement and so long as no
Event of Default has occurred;
(b) A purchase and/or any act resulting in
a purchase of any asset/s and/or
activity performed by the Borrower for
an aggregate amount exceeding NIS 70 M
per calendar year;
(c) Transactions in securities including
swap transactions, lending
transactions, futures transactions,
hedge transactions and other similar
transactions on the part of the
Borrower, whereof the credit
exposures, as calculated by the
relevant bank, exceed an aggregate
amount of NIS 100 M, at any time,
apart from transactions for protection
of exchange rate in connection with
the transaction forming the subject of
the sale agreement;
(d) Exceptional transaction or
transactions entered into by the
Borrower for an aggregate amount per
calendar year exceeding NIS 10 M;
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(e) A transaction of the Borrower with a
stakeholder in the Borrower or in
which such stakeholder has a personal
interest;
(f) An adverse effect on the rights of the
Pledged Shares, the shares pledged in
favor of Bank Leumi and the shares to
be pledged in accordance with the
provisions of the Credit Agreement,
including pursuant to clause 3.6;
(g) An issue of shares in Partner and/or
any other change in its share capital
(including an increase in registered
capital) and/or in the rights attached
to the shares in Partner, apart from:
(1) Issue of shares in Partner under
market terms at an aggregate rate of
up to 5% of Partner's issued and paid
up capital on the date of the
execution of the Credit Agreement and
so long as no Event of Default has
occurred and (2) An increase in
registered capital for the purpose of
compliance with a regulatory
requirement applicable to Partner;
(h) An exceptional transaction entered
into by Partner, apart from a
transaction or transactions in the
field of communications and save for
any transaction or transactions that
are not in the field of communications
in an aggregate amount per calendar
year of up to USD 50 M;
(i) A transaction of Partner with a
stakeholder in the Borrower or in
which such stakeholder has a personal
interest;
For the purpose of this definition:
"Purchase and/or act" - including a
series of purchases and/or acts which
in fact constitute one acquisition or
act;
"SALE AND/OR ACT" - including
encumbrance or allocation or issue or
vesting any right or other benefit
whatsoever in any asset, and including
a series of sales and/or acts which in
effect constitute one sale;
"SHARES" - Including securities, rights and
options convertible into shares.
THE "FREE SHARES" - All the shares in Partner which are in
the Borrower's possession from time to
time and which are not encumbered,
which on the Closing Day amount to
17,225,739 Ordinary Shares of NIS 0.01
par value each in Partner,
constituting 10.78% of Partner's
issued and paid up share capital (with
full dilution, without taking account
of treasury shares).
THE "PLEDGED SHARES" - 4,774,338 Ordinary Shares of NIS 0.01
par value each in Partner,
constituting 2.99% of Partner's issued
and paid up share capital (with full
dilution, without taking account of
treasury shares), as well as other
shares to be issued in respect thereof
and which will be pledged in favor of
the Bank.
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THE "SHARES PLEDGED IN - All the shares in Partner which are
FAVOR OF THE NOTEHOLDERS" owned by the Borrower and which are
pledged from time to time in favor of
Series A, B, C, and D Noteholders,
which were issued by the Borrower,
which on the Closing Day amount to
22,934,238 Ordinary Shares of NIS 0.01
par value each in Partner,
constituting 14.35% of Partner's
issued and paid up share capital (with
full dilution, without taking account
of treasury shares).
THE "SHARES PLEDGED IN - All the shares in Partner which are
FAVOR OF THE SELLER" owned by the Borrower and which are
pledged from time to time in favor of
the Seller, and which on the Closing
Day amount to 17,142,858 Ordinary
Shares of NIS 0.01 par value each in
Partner, constituting approx. 10.73%
of Partner's issued and paid up share
capital (with full dilution, without
taking account of treasury shares).
THE "SHARES PLEDGED IN - 7,161,507 Ordinary Shares of NIS 0.01
FAVOR OF BANK LEUMI" par value each in Partner,
constituting 4.48% of Partner's issued
and paid up share capital (with full
dilution, without taking account of
treasury shares), other shares to be
issued in respect of the Shares
Pledged in favor of Bank Leumi and
other shares to be pledged in favor of
Bank Leumi in accordance with Bank
Leumi's Financing Agreement.
THE "PURCHASED SHARES" - 78,940,104 Ordinary Shares of NIS 0.01
par value each in Partner,
constituting approx. 49.41% of
Partner's issued and paid up share
capital (with full dilution, without
taking account of treasury shares).
THE "MARKED SHARES" - As such term is defined in clause 3.12
below.
THE "NOTES DOCUMENTS" - The documents formalizing the terms of
Series 1 and Series A to D Notes which
were issued by the Borrower and which
are attached as Appendix 2.10,
including their appendixes.
THE "SELLER'S FINANCE - The documents formalizing the terms of
DOCUMENTS" the finance provided to the Borrower
by the Seller for the purchase of part
of the Purchased Shares and which are
attached as Appendix 2.11, including
their appendixes.
"EVENT OF DEFAULT" - Any event giving rise to a ground
according to which the Bank may
declare the credit immediately due and
payable in accordance with the Credit
Agreement. To remove any doubts, it is
clarified that the period for
rectification, if determined with
respect to such Event of Default in
clause 9 of this Agreement, shall not
postpone the date or the occurrence of
the Event of Default, unless the Bank
has given a waiver or an extension in
writing with respect to such Event of
Default.
"TRUSTEE FOR THE NOTES" - CLAL FINANCE TRUSTS 2007 LTD.
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THE SELLER'S SECURITY - Chadfield Limited, a company
TRUSTEE incorporated in the British Virgin
Islands, which is wholly owned
by the Seller.
"TRUSTEE FOR THE SELLER" - Hermetic Trust (1975) Ltd., a company
duly incorporated in Israel.
"FREE AND CLEAR" - Free and clear of any encumbrance
and/or pledge and/or attachment and/or
lien and/or debt and/or claim and/or
any other right of any nature or type
whatsoever of any third party.
"EXCEPTIONAL TRANSACTION" - Within the meaning of this term in the
Companies Law;
"PARTNER" - Partner Communications Ltd., Public
Co. Reg. No. 520044314, a company duly
incorporated in Israel.
"DYNAMIC'S ACTIVITY" - Any distribution activity and any
related activity of the Borrower or
its related parties with Cellcom
Israel Ltd. or its related parties,
including the assets and liabilities
purchased by the Borrower or its
related parties in accordance with the
agreement dated August 21, 2008.
"SUNY'S ACTIVITY" - Any distribution activity and any
related activity of the Borrower or
its related parties of Samsung
cellular equipment, including the
assets and liabilities purchased by
the Borrower or its related parties in
accordance with the agreement dated
August 21, 2008.
"PRIME" - As defined in the MANAGEMENT TERMS.
"CONTROL", "HOLDING", - Including inflections, within the
"PURCHASE", meaning of these terms in the
"DISTRIBUTION, Companies Law, unless another express
"DIVIDEND", meaning is attributed to them in any
"TRANSACTION", specific clause in this Agreement.
"RELATIVE", "TREASURY Concerning "distribution" and
SHARES", "OFFICER" "dividend" - including distributions
within the framework of and by way of
reduction of capital.
"RECTIFICATION PERIOD" - As this term is defined in clause 10.1
of this Agreement.
2. GENERAL REPRESENTATIONS
The Borrower hereby declares and undertakes to the Bank as follows:
2.1. It is an active public company duly incorporated, registered and
existing in Israel.
2.2. The Borrower has the legal powers, authorizations and rights to
enter into the Credit Agreement and to implement all its
provisions and terms.
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2.3. The Borrower has obtained all approvals, authorizations and
consents required under its documents of incorporation, in
connection with the execution of the Credit Agreement, as well as
for the purpose of the implementation of the Borrower's
obligations thereunder, including the creation of the Security
Interests, and it is not required to obtain any other consents
and/or approvals whatsoever.
2.4. All the Borrower's obligations pursuant to and/or within the
framework of and/or in connection with the Credit Agreement are
legal, effective, valid, binding and enforceable on the Borrower
in accordance with the terms thereof.
2.5. The Sale Agreement, the Credit Agreement and the Security
Interests Documents and the fulfillment of the Borrower's
obligations under each of them, do not conflict with any
obligations whatsoever of either the Borrower or Partner
VIS-A-VIS third parties (and, in respect of Partner, apart from
any conflict not tantamount to a material adverse effect on
Partner's position) and/or confer on any person or any entity
whatsoever any right and/or ground for demanding the declaration
as immediately due and payable of the debts and obligations of
either the Borrower or Partner.
2.6. There neither is nor shall there be any impediment and/or
limitation by law and/or pursuant to the provisions of any
agreement whatsoever to which the Borrower is a party and/or the
Borrower's documents of incorporation and/or any other impediment
or limitation to the grant of the Security Interests under this
Agreement and including the encumbrance of the Pledged Shares,
the shares pledged in favor of Bank Leumi and the shares to be
pledged in accordance with the provisions of the Credit
Agreement, including pursuant to clause 3.6 in favor of the Bank
by means of a first fixed charge and there shall be no limitation
on holding them nor shall there be any limitation on the
realization thereof, either by the Borrower or by the Bank, as
the case may be, and in respect of the realization thereof,
subject to the approval of the Minister of Communications, to the
extent required pursuant to the provisions of Partner's licenses
and licenses of corporations under its control. It is hereby
agreed that this clause will not apply to a breach of the future
obligations included in this clause due to any act or omission on
the part of the Bank.
2.7. All permits and approvals have been obtained, as are required for
the pledging of the Pledged Shares, the shares pledged in favor
of Bank Leumi and the shares to be pledged in accordance with the
provisions of the Credit Agreement, including pursuant to clause
3.6, in favor of the Bank and for the grant of the Security
Interests as provided in this Agreement. Such permits and
approvals include no stipulations, prohibitions or restrictions
hindering the possibility of encumbering the Pledged Shares, the
shares pledged in favor of Bank Leumi, the shares to be pledged
in accordance with the provisions of the Credit Agreement,
including pursuant to clause 3.6, in favor of the Bank and the
other Security Interests pursuant to the terms in this Agreement
and in the appendixes hereto and/or the possibilities to exercise
them, including by way of the appointment of a receiver on behalf
of the Bank pursuant to a decision of a competent court for the
sale thereof to a third party which obtains permits, approvals
and authorizations as required under any law, and in respect of
their enforceability subject to the approval of the Minister of
Communications, to the extent required, pursuant to the
provisions of Partner's licenses and the licenses of corporations
under its control and/or the possibility of distribution of
dividends in respect of Partner's shares and/or the creation of
all other Security Interests under this Agreement.
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2.8. There is no legal proceeding, claim, arbitration, litigation or
administrative proceeding pending against the Borrower, and, to
the best of its knowledge, there is no such proceeding threatened
against it which is likely to have a material adverse effect on
its ability to fulfill its obligations under the Credit
Agreement.
2.9. The Borrower's documents of incorporation which are attached
hereto as APPENDIX 2.9, are the up-to-date and binding documents
of incorporation of the Borrower and no change has occurred
therein.
2.10. The Notes Documents which are attached hereto as APPENDIX 2.10,
are the up-to-date and binding documents and no change has
occurred therein.
2.11. The Seller's Finance Documents which are attached hereto as
APPENDIX 2.11, are the up-to-date and binding documents and no
change has occurred therein.
2.12. The audited or reviewed financial statements of the Borrower, as
the case may be, as at December 31, 2008 and as at June 30, 2009,
consisting, INTER ALIA, of a balance sheet, statement of
operations and statement of cash flows, which are attached to
this Agreement as APPENDIX 2.12, have been prepared in accordance
with generally accepted accounting principles and present fairly,
the Borrower's financial position, its assets, debts and
liabilities for the period covered thereby. Since such date no
material adverse change has occurred in the Borrower's business
position.
2.13. No owner's loans were provided to the Borrower and no capital
notes were issued by the Borrower to its shareholders
(hereinafter: the "OWNERS' LOANS TO SCAILEX"). Without derogating
from the provisions of this Agreement, to the extent that the
Owners' Loans to Scailex are provided, they will be subordinate
to the Credit, they will not be settled, in whole or in part,
prior to the settlement of the Credit in full, and also not by
way of offset.
2.14. The Sale Agreement was duly signed by the Borrower and to the
best of its knowledge, also by the Seller, and it is valid in all
respects and is binding on the Borrower, and, to the best of its
knowledge, also on the Seller, in accordance with its terms.
Further, all consents, powers, and approvals have been obtained
as required under any law and pursuant to the documents of
incorporation of the Borrower and to the best of the Borrower's
knowledge, also in accordance with the Seller's documents of
incorporation in connection with the execution of the Sale
Agreement and the fulfillment of all the obligations of the
parties thereto. Apart from the Sale Agreement and the Seller's
Finance Documents, there are no other agreements or
understandings between the parties to the Sale Agreement,
pertaining, directly or indirectly, to the issues formalized in
the Sale Agreement and in the Seller's Finance Document. The
Borrower will not agree to any amendment and/or revision and/or
cancellation of any of the provisions of the Sale Agreement,
amounting to a waiver of and/or prejudice to any of its rights
under the Sale Agreement and/or will not waive any breach against
it, all unless it has obtained the Bank's approval. The Borrower
undertakes to comply with all its undertakings pursuant to the
Sale Agreement and it is unaware of any right and/or claim and/or
demand whatsoever in respect of the rescission of the Sale
Agreement.
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2.15. The Borrower's obligations in accordance with and pursuant to the
provisions of the Sale Agreement are not in contravention of the
Borrower's obligations in accordance with and pursuant to the
provisions of the Credit Agreement in such manner as may prevent
and/or adversely affect the fulfillment of the Borrower's
obligations VIS-A-VIS the Bank in accordance with the Credit
Agreement, in full and in a timely fashion, including, without
limitation, preventing and/or adversely affecting the settlement
of the Credit Facilities, in full and in a timely fashion.
2.16. Partner is a public company which was duly incorporated and
registered in Israel and it is active and existing.
2.17. Partner's registered, issued and paid up capital is as follows:
Registered - NIS 158,600,346; issued and paid up - 154,132,356
Ordinary Shares of NIS 0.01 par value each. The Purchased Shares
will be owned by the Borrower on the Closing Day.
2.18. Apart from Partner's documents of incorporation and shareholders
agreements attached as APPENDIX 2.18, a sale agreement as well as
a general license granted to Partner Communication Ltd. for the
provision of cellular phone radio services employing the cellular
method and additional licenses to Partner and corporations under
its control, no other document or agreement whatsoever exists on
the date of the execution of this Agreement, determining and/or
formalizing the rights attached to Partner's shares and/or which
are related, directly or indirectly, to their holding or which
confer additional rights or limit such rights. Furthermore, after
the execution of this Agreement, no revision whatsoever will be
introduced to the documents of incorporation and/or the
shareholders agreements which adversely affects or hinders the
rights attached and/or related to the Pledged Shares and/or which
is liable to have a material adverse effect on the Bank's rights
in accordance with the Credit Agreement, other than with the
Bank's prior written approval.
2.19. To the best knowledge of the Borrower, there is no legal
proceeding, claim, arbitration, litigation or administrative
proceeding pending against Partner which is likely to have a
material adverse effect on the Borrower's ability to fulfill its
obligations under the Credit Agreement, and it is not aware of
any such proceeding threatened against Partner which is liable to
have a material adverse effect on the Borrower's ability to
fulfill its obligations under the Credit Agreement.
2.20. To the best knowledge of the Borrower, the audited or reviewed
financial statements of Partner, as the case may be, as at
December 31, 2008 and as at June 30, 2009, consisting, INTER
ALIA, of a balance sheet, statement of operations and statement
of cash flows, which are attached to this Agreement as APPENDIX
2.20, were prepared in accordance with generally accepted
accounting principles and present fairly, Partner's financial
position, its assets, debts and liabilities for the period
covered thereby. Since such date no material adverse change has
occurred in Partner's business position.
2.21. All the information provided by the Borrower to the Bank in
writing in respect of the Borrower is accurate and all the
information provided by the Borrower to the Bank in writing in
respect of Partner is accurate to the best knowledge of the
Borrower. Further, the Borrower has no information which was not
provided to the Bank, and which, had it been brought to its
knowledge, would have reasonably resulted in the Bank's
reluctance to enter into this Agreement and to provide the Credit
in accordance with the terms of this Agreement.
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2.22. The Borrower is not aware of the occurrence of any event and/or
circumstances constituting or which are most probably likely to
constitute in the future or after the giving of a notice or a
warning, an event allowing the Bank to declare immediately due
and payable any Credit whatsoever in accordance with the terms of
the Credit Agreement.
2.23. As of the date of the execution of this Agreement, all the
conditions and all the representations provided herein which
refer to the date preceding its execution, have been satisfied,
and, in the event of terms scheduled to be fulfilled subsequently
pursuant to this Agreement and prior to the provision of the
Credit, then the Borrower will act to obtain them and it is aware
that the receipt and the implementation thereof in full and in a
timely fashion, will constitute a condition precedent for the
provision of the Credit in accordance with this Agreement.
3. UNDERTAKINGS
The Borrower hereby declares and undertakes to the Bank that up to the date
of the full and final settlement of the Credit and so long as the Borrower
does not receive the Bank's prior written approval to act otherwise, the
following provisions will apply:
3.1. The Pledged Shares, the shares pledged in favor of Bank
Leumi, the shares to be pledged in accordance with the
provisions of the Credit Agreement, including pursuant
to clause 3.6, in favor of the Bank, the Borrower's
rights to receive dividends in respect of the shares in
Partner which are in its possession from time to time,
as well as the other assets and rights to be encumbered
in favor of the Bank in accordance with this Agreement,
are free and clear, and will retain such status, apart
from liens in accordance with this Agreement and the
following liens:
3.1.1. A second fixed charge in favor of Bank Leumi on the
Pledged Shares, provided it is in the format attached
as APPENDIX 3.1.1.
3.1.2. A first fixed charge in favor of Bank Leumi on the
Pledged Shares, in favor of Bank Leumi;
3.1.3. A first fixed charge in favor of Bank Leumi on 60% of
the rights to receive dividend in respect of the Free
Shares;
3.1.4. A first fixed charge in favor of the Seller on the
rights to receive dividend in respect of the shares
pledged in favor of the Seller.
3.1.5. A first fixed charge in favor of the Noteholders, to
receive dividend in respect of the shares pledged in
favor of the Noteholders.
3.2. The Borrower will not provide in the future any new loans and/or
guarantees of any nature or type whatsoever to any person or any
other entity whatsoever, apart from guarantees in the ordinary
course of business, the aggregate balance of which at all times
will not exceed NIS 20 M.
-11-
3.3. The Borrower undertakes not to obtain any credit or loans of any
nature or type whatsoever from any person or any other entity
whatsoever, including by means of extending an existing series of
Notes or issue of Notes pursuant to an existing shelf prospectus
and not to encumber by means of any lien whatsoever or at any
level whatsoever (other than liens in favor of the Bank in
accordance with the provisions of the Credit Agreement), nor
sell, assign, transfer or grant any right of any nature
whatsoever in its assets, shares or rights in corporations owned
by it directly and/or to be owned by it directly from time to
time (or any part thereof) (including Partner's Free Shares) to
any third party whatsoever, including any lien, sale or grant of
any right in the Borrower's assets which are encumbered in favor
of third parties, including by way of a negative lien, on the
date of this Agreement (if any) after the release thereof from
the lien and/or the negative lien incumbent thereon, in any
manner whatsoever or for any purpose whatsoever and will not
undertake to implement such transactions, all other than:
3.3.1. Raising credit which will serve in effect on account of
settlement of the Credit and the Credit under Bank
Leumi's Financing Agreement which served for the
purpose of financing the acquisition of part of the
Purchased Shares at a ratio of 40% to the Bank and 60%
to Bank Leumi.
3.3.2. Raising of unsecured credit which will be subordinate
to the Credit and will not be settled (principal or
interest), including not by prepayment or immediate
payment prior to the settlement of the Credit, provided
that the provider of the Credit has signed an
appropriate subordination letter addressed to the Bank,
in a format to the Bank's satisfaction.
3.3.3. Sales expressly permitted in accordance with the
provisions of the Credit Agreement.
3.3.4. Encumbrance of additional Partner shares in favor of
the Noteholders as provided in clauses 10.2 to 10.3 of
the Certificates of the Series A, B, C and D Notes
which were issued by the Borrower, in connection with
the reduction of capital in Partner.
3.3.5. Encumbrance of other Partner shares in favor of the
Seller as provided in section 4k of the Terms and
Conditions of the Notes dated October 28, 2009 which
were performed within the framework of the partial
financing provided by the Seller for the acquisition of
the Purchased Shares, in connection with the reduction
of capital in Partner.
3.3.6. Credit Facilities to be provided by Bank Leumi to the
Borrower pursuant to Bank Leumi's Financing Agreement
and encumbrance of assets in favor of Bank Leumi
pursuant to Bank Leumi's Financing Agreement.
3.3.7. Encumbrance of bank accounts in favor of the Trustee
for the Notes and the Noteholders and the Trustee for
the Seller and the Buyer, where the dividends in
respect of the shares pledged in favor of the Notes and
in respect of the shares pledged in favor of the Seller
will be deposited, upon the declaration as immediately
due and payable of the Credit Facilities provided by
such parties, respectively.
-12-
3.4. The rate of the Free Shares in the Borrower's possession will not
fall below 9.78% (with full dilution, not taking account of
treasury shares), of the issued and paid up share capital of
Partner. Notwithstanding the foregoing, the Borrower will be
entitled to sell shares of the Free Shares even if after such
sale the rate of the Free Shares in the Borrower's possession
falls below the rate as aforesaid, provided that with respect to
each sale of any of the Free Shares, all the following conditions
have been fulfilled in full:
3.4.1. 40% of the sale proceeds of the shares sold out of the
Free Shares will be transferred to the Borrower's
account at the Bank and will serve for settlement on
account of the Credit in accordance with the provisions
set forth in clause 4.1.4 below;
3.4.2. The selling price of the shares as aforesaid will not
fall below the price of their purchase as agreed under
the Sale Agreement or the share market value as defined
in clause 3.6 on the same date, whichever is lower,
provided that the selling price does not fall below 90%
of the market value; and
3.4.3. The Borrower will do its best to first sell the Marked
Shares; and
3.4.4. The sale will not cause a breach of the provisions of
clause 3.23 concerning the minimum holding of the
Borrower in Partner.
To remove any doubts, it shall be clarified that the conditions
set forth in clause 3.4 above, will also apply in the event of a
sale of Free Shares, in consequence of which their rate has not
fallen below 9.78% (with full dilution, not taking account of
treasury shares), as aforesaid.
3.5. The Borrower undertakes that if it sells Suny's Activity and/or
Dynamics' Activity, the total sale proceeds will be transferred
to the Borrower's account at the Bank and will serve for
settlement (including prepayment) on account of the Credit in
accordance with the provisions set forth in clause 4.1.4 below.
-13-
3.6.
3.6.1 The Borrower undertakes that: In the event that the
ratio between the market value of the Pledged Shares
and the unsettled balance of the Credit for the
purchase of the Shares falls below 0.9 (even where the
ratio increases subsequently), or where the Borrower
has pledged additional shares in Partner in favor of
Bank Leumi in accordance with clause 3.6 of Bank
Leumi's Financing Agreement and subject to the
provisions of this Agreement, whichever is earlier, the
Borrower will give immediate notice thereof to the
Bank, will promptly pledge in favor of the Bank, by
means of a first fixed charge, additional securities to
the satisfaction of the Bank, or additional Partner
shares out of the Free Shares, but not more than 40% of
the Free Shares (unless Bank Leumi's approval for a
greater portion is obtained), being free and clear
(hereinafter, in this sub-clause: The "ADDITIONAL
PLEDGED SHARES (S/L)"). The number of the Additional
Pledged Shares (S/L) will be equal to the product
attained from dividing (a) The aggregate market value
of the shares pledged in favor of the Bank on that date
and the Additional Pledged Shares (S/L), by: (b) The
unsettled balance of the Credit for the finance of the
shares on that date, so that the outcome equals 1.1.
The encumbrance of the Additional Pledged Shares (S/L)
will be performed in a format similar to the pledge
documents in respect of the Pledged Shares, together
with an opinion and other related documents, including
a blank share transfer deed, signed by the Borrower, as
set forth in clause 6 below, all to the satisfaction of
the Bank.
In this sub-clause the term "MARKET VALUE" means the
average of closing prices of Partner's shares during
the last 10 trading days on the Stock Exchange that
preceded the relevant date of examination of the
relevant quantity of shares, as the case may be.
Encumbrance of additional shares pursuant to this
sub-clause, will first be performed out of the Free
Shares that are not the Marked Shares.
3.6.2 The Borrower undertakes that should it encumber
additional Partner shares in favor of Bank Leumi as set
forth in clause 3.3.6, the Borrower will give notice
thereof in writing to the Bank and will pledge such
shares in favor of the Bank to secure the Credit by
means of a second fixed charge, being free and clear
apart, from any such pledge to Bank Leumi. The
encumbrance of the shares will be performed in
accordance with pledge documents in a format similar to
the second fixed charge documents in respect of the
shares pledged in favor of Bank Leumi, together with an
opinion and other related documents, as set forth in
clause 6 below, all to the satisfaction of the Bank. In
the event of the occurrence of a Revoking Event, the
said pledge will become a first fixed charge, and the
Borrower will attend to transferring to the Bank, from
Bank Leumi, share certificates and blank share transfer
deeds, in connection with the pledge of the said
shares, if any are deposited with Bank Leumi.
-14-
3.7 The Borrower undertakes that all payments and dividends in
respect of the Pledged Shares, the shares pledged in favor of
Bank Leumi, the shares to be pledged in accordance with the
Credit Agreement, including pursuant to clause 3.6, the Free
Shares, the shares pledged in favor of the Noteholders (so long
as no Event of Default has occurred pursuant to the Notes
Documents and in respect of the relevant Note series wherein the
Event of Default occurred) and the shares pledged in favor of the
Seller, will be transferred in accordance with the provisions of
clause 6.2 (so long as the Event of Default pursuant to the
Seller's Finance Documents has not occurred). The Borrower
further undertakes to update, where necessary, the irrevocable
instructions attached as appendixes to clause 6.2 so that they
apply at any time with respect to additional shares to be pledged
in accordance with the Credit Agreement, including pursuant to
clause 3.6 in favor of the Bank and additional shares which will
be incorporated after the Closing Date and will be deemed as part
of the shares pledged in favor of Bank Leumi, the Free Shares,
the shares pledged in favor of the Noteholders and the shares
pledged in favor of the Seller. Furthermore, the Borrower
undertakes to amend the relevant pledge documents which are
attached hereto as Appendix 6, respectively.
3.8 On the occurrence of a Revoking Event, the Borrower undertakes to
act as follows:
3.8.1 To encumber in favor of the Bank, by a first fixed
charge, and by means of a first assignment by way of
encumbrance, unlimited in amount, as security for the
Credit, 60% of all the Borrower's rights VIS-A-VIS
Partner to receive dividend in respect of the Free
Shares, being clear and free, in addition to the
encumbrance as set forth in clause 6.1.4 below.
The aforesaid encumbrance of the rights will be
performed in accordance with encumbrance documents in a
format similar to the encumbrance documents set forth
in clause 6.1.4 below, together with an opinion and
other related documents, as set forth in clause 6
below, all to the satisfaction of the Bank.
3.8.2 100% of all dividends and payments made and/or granted
for all the Borrower's shares in Partner will be
transferred directly to the Borrower's account at the
Bank while dividends and payments in respect of the
shares pledged in favor of the Noteholders will be paid
so long as no Event of Default has occurred in
accordance with the Notes Documents (and with respect
to the relevant Note Series in which the Event of
Default occurred) while dividends and installments in
respect of the shares pledged in favor of the Seller
will be paid so long as no Event of Default has
occurred pursuant to the Seller's Finance Documents
3.9 The Borrower undertakes that no revision and/or amendment and/or
cancellation will take place of any of the provisions of Bank
Leumi's Financing Agreement and the documents prepared by virtue
thereof, the Notes Documents and the Seller's Finance Documents,
to the extent that they are likely to have a material adverse
effect on the Bank's rights, either directly or indirectly, and
will further report to the Bank of any revision introduced to the
said documents, immediately upon the introduction thereof.
-15-
3.10 The Borrower undertakes not to agree that any other person should
limit its capability or discretion as to the amendment of the
Credit Agreement, apart from: (1) Restrictions existing under the
Credit Agreement; (2) limitation in favor of the Seller made
within the framework of the Seller's Finance Documents provided
that such limitation will restrict the Borrower's discretion as
to whether such revision shall have a material adverse effect on
the Seller's rights, either directly or indirectly; and (3) A
restriction in favor of Bank Leumi made within the framework of
Bank Leumi's Financing Agreement, provided that such restriction
shall limit the Borrower's discretion as to whether such
revisions shall have a material adverse effect on Bank Leumi's
rights, either directly or indirectly.
3.11 The Borrower undertakes to conduct, at the Bank's demand from
time to time (but not more than once every calendar year), a
valuation of Partner, which shall be conducted by an independent
appraiser whose identity will be designated by the Bank. The cost
of the valuation will be paid by the Borrower.
3.12 The Pledged Shares, the shares pledged in favor of Bank Leumi,
the shares to be pledged in accordance with the provisions of the
Credit Agreement, including pursuant to clause 3.6, in favor of
the Bank and the Free Shares, will at all times be listed for
trading on the Stock Exchange. Furthermore, these shares, apart
from the Free Shares which constitute 6.65% of Partner's issued
and paid up capital (with full dilution, without taking account
of treasury shares, hereinafter: the "MARKED SHARES") will not
constitute a part of the minimum holdings of "founder
shareholders or their alternates" or part of the minimum holdings
of "Israeli entities", as prescribed in section 22A of the
General License to Partner Communication Ltd. for the provision
of cellular phone radio services employing the cellular method or
any other section coming IN LIEU THEREOF.
3.13 The Borrower undertakes not to perform on its own initiative,
early redemption and/or prepayment of Notes issued by it and of
any other credit taken by it (apart from prepayment as provided
in clause 4.4 of Bank Leumi's Financing Agreement) and/or not to
perform self acquisitions of Notes issued by it and/or of any
other credit taken by it.
3.14 The Borrower undertakes that it will not pay, either directly or
indirectly, in any manner or form whatsoever, to the Stakeholders
in the Borrower, and/or to a company controlled by the
Stakeholders in the Borrower, or controlled by any of them and/or
to relatives of the Stakeholders in the Borrower, or to any of
them and/or to anyone acting on their behalf, any amount
whatsoever, including dividends, distribution, repayment of
owners' loans, remuneration, expenses, management fee,
consultation fee, participation fee and/or commissions, or any
amount payable and/or to be payable to them on any other ground,
either in money or in money equivalent, apart from, so long as no
Event of Default has occurred, a distribution of dividend in an
aggregate amount of up to NIS 50 M per calendar year and in the
event that the unsettled balance of the Credit has decreased by
at least 60% compared with the Credit amount on the Closing Date,
up to NIS 100 M per calendar year as well as payments of
remuneration, expenses and management fee in accordance with the
terms of the agreements existing on the date of the Credit
Agreement, all up to the settlement of the Credit Facilities in
full, finally and absolutely.
-16-
3.15 The Borrower will neither undertake nor agree to the undertaking
of any measure which shall adversely affect the Borrower's rights
in the Pledged Shares, in the shares pledged in favor of Bank
Leumi and in the shares to be pledged in accordance with the
provisions of the Credit Agreement, including pursuant to clause
3.6 and/or adversely effect the Bank's rights as a pledgee of the
Pledged Shares, the shares pledged in favor of Bank Leumi and the
shares to be pledged in accordance with the Credit Agreement,
including pursuant to clause 3.6 and the Bank's rights in
accordance with this Agreement.
3.16 The Borrower hereby undertakes that no cancellation and/or
revision whatsoever will take place in the provisions prescribed
in its documents of incorporation which are attached hereto as
Appendix 2.9 liable to have a material adverse effect on the
Bank's rights in accordance with the Credit Agreement, other than
with the Bank's prior written approval.
3.17 The Borrower will grant no exemption, insurance, indemnity
undertaking or indemnification pursuant to an indemnify
authorization, to the officers in the Borrower, apart from the
purchase of officeholders' liability insurance and apart from
granting indemnity to officers, all in accordance with the
agreements existing on the date of the Credit Agreement.
3.18 The Borrower undertakes to comply with the terms and the
requirements prescribed in the Permits and the Approvals granted
and to be granted to it in connection with the Credit Agreement
and the Sale Agreement, to uphold at all times all the
requirements and terms applicable to it which are prescribed in
the licenses granted to Partner and to corporations under its
control and to exercise its controlling power in Partner so that
Partner and the corporations under its control will at all times
fulfill all the requirements and the terms with respect to
Partner and its corporations, as the case may be.
3.19 The Borrower undertakes to meet the financial covenants as
provided in clause 9.9 of this Agreement.
3.20 The Borrower undertakes to exercise its power as the controlling
shareholder in Partner, so that Partner shall not pay, either
directly or indirectly, in any manner or form whatsoever, to the
Stakeholders in the Borrower, and/or to a company controlled by
the Stakeholders in the Borrower, or controlled by any of them
and/or to relatives of the Stakeholders in the Borrower, or to
any of them and/or to anyone acting on their behalf, any amount
whatsoever, and will not allow them to withdraw repayment of
owners' loans, remuneration, expenses, management fee,
consultation fee, participation fee and/or commissions, or any
amount payable and/or to be payable to them on any other ground,
either in money or in money equivalent, apart from, so long as no
Event of Default has occurred, payments to directors and officers
as is customary in public companies of a similar scale, all up to
the settlement of the Credit Facilities in full, in a final and
absolute manner
3.21 None of the shares in Partner which shall be in the Borrower's
possession from time to time, will be a treasury share, and they
will confer on their holders all the rights arising therefrom.
3.22 Up to the date of the full and final settlement of the Credit and
so long as the Bank's prior written approval for acting otherwise
is not obtained, no merger or spin-off or sale or purchase of a
substantial asset will be carried out, as per the definition of
these terms in clause 1 above.
-17-
3.23 Without limitation to the provisions of this Agreement, up to the
date of the full and final settlement of the Credit and so long
as the Bank's prior written approval for acting otherwise is not
obtained, the Borrower will have a direct holding over some 37%
(with full dilution, not taking account of treasury shares) of
the issued and paid up share capital and of all the means of
control in Partner and will control it while Mr. Ilan Ben Dov
will control the Borrower, directly or indirectly.
3.24 The Borrower undertakes not to initiate resolutions at the
general meeting at Partner on one of the issues set forth in
clause 9.14 below and that if any of the said issues is brought
before the general meeting at Partner, the Borrower will vote
against the resolution on this issue. The Borrower agrees in
advance that the Bank will be entitled to apply to the competent
instance so as to receive any relief, including a mandatory
injunction in order to enforce this undertaking on the part of
the Borrower and the Borrower undertakes not to object to any
such relief.
3.25 Without limitation to the provisions of the Credit Agreement, the
Borrower undertakes not to create any debt of its own vis-a-vis
Partner which is offsettable or subject to a lien vis-a-vis or in
respect of its rights by virtue of shares in Partner, as shall be
in its possession from time to time.
3.26 The Borrower undertakes to act, as of the Closing Date, as a
controlling shareholder in Partner, so that an approval from the
Ministry of Communications is obtained promptly for the
registration of the Pledged Shares and additional shares to be
pledged in favor of the Bank in accordance with the Credit
Agreement, including pursuant to clause 3.6, in the name of Trust
Company of Mizrahi Tefahot Bank or in the name of any other
trustee, at the Bank's option, and so as to enter into all
arrangements customary at the Bank in connection with the holding
of shares in trust as aforesaid. The Borrower undertakes to sign,
immediately upon obtaining the approval, if granted, all
documents required to this end, including any amendment to pledge
agreements, amendment to irrevocable instructions and a trust
agreement. In any event, if and to the extent that other Pledged
Shares in Partner are registered in the name of a trustee in
favor of the Seller and/or the Noteholders or deposited in a
securities deposit in the name of a trustee as aforesaid, then
the registration of the Pledged Shares and the additional shares
in the name of Trust Company of Mizrahi Tefahot Bank or in the
name of any other trustee, as aforesaid, will take place not
later than such date.
3.27 All the terms and undertakings set forth in the Credit Agreement
as well as the Security Interests set forth therein, will be in
full force and effect so long as not all the amounts payable and
to be payable to the Bank pursuant to the Credit Agreement have
been settled, all subject to the contents of the other provisions
of this Agreement.
4. THE CREDIT AND THE TERMS THEREOF
4.1 The Credit for the purchase of the Shares will be subject to the
following terms:
4.1.1 On the Closing Day, the total amount of the Credit will
be provided as an NIS loan (unlinked) for a period of
one month to three months, at the Borrower's option,
bearing Prime interest.
-18-
4.1.2 At the end of the term of this loan and at the end of
the term of each subsequent loan, the Borrower will be
entitled to take from the Bank from time to time, NIS
loans (unlinked) for a period of one month to three
months, at the Borrower's option, bearing Prime
interest. Each loan will serve for settlement of the
balance of the principal of the preceding loan less
amounts settled on such date. The last loan provided as
aforesaid will be for a period ending on May 31, 2011,
and on such date the total unsettled balance of the
Credit principal will be settled.
4.1.3. Furthermore, the following provisions will apply to the
said loans:
4.1.3.1 As a condition for the provision of the
loans, the Borrower will advise the bank in
writing, 7 business days in advance, prior to
the provision of each loan, of the term of
the loan selected by it.
4.1.3.2 As a condition for the provision of the
loans, the Borrower will sign applications
and loan documents as are customary at the
Bank, and will declare that no Event of
Default has occurred.
4.1.4 All dividends payable by virtue of the Pledged Shares,
the shares pledged in favor of Bank Leumi (in the event
of the occurrence of an Event of Default), the shares
to be pledged in accordance with the provisions of the
Credit Agreement, including pursuant to clause 3.6 and
the irrevocable instructions as set forth in clause
6.2, will serve in full, on any date on which they are
received (hereinafter: the "DATE OF RECEIPT"),
according to the following sequence:
4.1.4.1 Settlement of interest and other payments
that have fallen due up to (inclusive) the
Date of Receipt, or up to (inclusive) 45 days
after such date, in accordance with the
provisions of the Credit Agreement. The
amount to serve for settlement of interest
and other payments up to (inclusive) 45 days
after the Date of Receipt will be deposited
in the Borrower's account in the Bank being
clear and free, in a deposit encumbered by
means of a first fixed charge, in favor of
the Bank, as security for the Borrower's
obligations under the Credit Agreement, up to
the next due date, at which time the funds
deposited in such deposit (including the
accruals thereon), will serve for settlement
on account of such repayment. The aforesaid
deposit of the rights will be performed in
accordance with encumbrance documents in a
format similar to the encumbrance documents
in connection with the Borrower's account at
the Bank, together with other related
documents, as set forth in clause 6 below,
all to the satisfaction of the Bank. The said
deposit will be subject to the terms
customary at the Bank in respect of financial
deposits of the same type and in the same
currency, with similar amounts and for
similar periods;
4.1.4.2 Settlement of 40% (and after the occurrence
of a Revoking Event, 100%) of the interest
installments that have fallen due up to
(inclusive) the Date of Receipt, to the
Seller or up to (inclusive) 45 days after the
Date of Receipt in accordance with the
Seller's Finance Documents and to the Holders
of Series 1 and Series A to D Notes issued by
the Borrower, in accordance with the Notes
Documents, so long as no Event of Default has
occurred;
-19-
4.1.4.3 The deposit of any amount in the Borrower's
account at the Bank, being free and clear, in
a deposit encumbered by means of a first
fixed charge, in favor of the Bank, as
security for the Borrower's obligations to
the Bank under the Credit Agreement, so that
at all times the amount in such deposit shall
not fall below the total amount of NIS 20 M.
The aforesaid deposit of the rights will be
performed in accordance with encumbrance
documents in a format similar to the
encumbrance documents in connection with the
Borrower's account at the Bank, together with
other related documents, as set forth in
clause 6 below, all to the satisfaction of
the Bank. The said deposit will be subject to
the terms customary at the Bank in respect of
financial deposits of the same type and in
the same currency, with similar amounts and
for similar periods.
4.1.4.4 The balance will serve for settlement
(including prepayment) on account of the
Credit Facilities and the loans provided to
the Borrower as aforesaid.
The Bank's total share in the sale proceeds of the Free
Shares as stated in clause 3.4 and the total proceeds
from the sale of Suny's Activity and/or Dynamic's
Activity as provided in clause 3.5 will fully serve on
any date on any date on which they are received for
settlement (including prepayment) on account of the
Credit Facilities and the loans provided to the
Borrower as aforesaid. The Bank [sic].
4.1.5 Furthermore, the Borrower will pay interest on any date
of termination of the relevant loan term (one month to
three months), as well as on the date of the last
payment on account of the Credit principal, in respect
of the balance of the unsettled Credit principal, on
any interest payment date, for the relevant loan term.
4.1.6 It is hereby agreed that in the event that any due date
does not fall on a business day, such date will be
postponed to the immediately subsequent business day.
4.1.7 The Credit will bear interest at the following rate:
4.1.7.1 Any loan to be provided as aforesaid will
bear interest at an annual rate equal to
Prime interest plus a margin at a rate equal
to 1.8%, or plus any other annual rate as set
forth in the table below:
THE INCREMENT IN THE ANNUAL RATE
THE INCREMENT IN IN THE TO THE PRIME IS 1.8% OR
ANNUAL RATE TO THE REVERTING TO 1.8%, IF ON THE
PRIME WILL BE AS SET EFFECTIVE DATE THE UNSETTLED
IF ON THE FORTH BELOW AS OF THE BALANCE OF THE CREDIT PRINCIPAL
EFFECTIVE DATE EFFECTIVE DATE IN NIS M, FALLS BELOW THE AMOUNT
THE UNSETTLED (INCLUSIVE) UP TO THE SET FORTH BELOW AS OF THE
BALANCE OF THE SUBSEQUENT EFFECTIVE EFFECTIVE DATE UP TO (INCLUSIVE)
CREDIT PRINCIPAL DATE (EXCLUSIVE) OR UP THE SUBSEQUENT EFFECTIVE DATE
IN NIS M IS AS TO THE DATE STATED IN (EXCLUSIVE) OR UP TO THE DATE
EFFECTIVE DATE FOLLOWS: THE TABLE: SET FORTH IN THE TABLE:
---------------- ----------------- ------------------------- -----------------------------------
31.3.2010 From 250 4.5% 250
(inclusive) to
285 (exclusive)
Exceeding 285 5%
(inclusive)
30.9.2010 From 185 4% 185
(inclusive) to
220 (exclusive)
Exceeding 220 5%
(inclusive)
1.1.2011 From 95 3.5% (up to 31.3.2011) 95 (the increment in the annual
(inclusive) to rate to Prime is, or reverts
125 (exclusive) to,1.8%, as the case may be, up
Exceeding 125 5% (up to 31.3.2011) to 31.3.2011).
(inclusive)
-20-
Furthermore, if on March 31, 2011, the unsettled
balance of the Credit principal falls below NIS 60 M,
the increment in annual rate to Prime will be 1.6% and
where it exceeds NIS 60 M (inclusive), the increment in
the annual rate to Prime will be 1.8%, all up to the
date of the settlement in full of the Credit.
4.1.7.2 Notwithstanding that stated in clause
4.1.7.1, if and to the extent that the Credit
or any part thereof is classified as Credit
under special supervision or as credit which
does not generate income or as a doubtful
debt or as a debt that was reorganized or as
a debt that it was resolved to reorganize or
as a debt temporarily in arrears or any other
problematic debt (as such terms are defined
in the provisions of the law) (each of these
events, hereinafter: "SPECIAL
CLASSIFICATION"), then, the Bank will be
entitled, at its exclusive discretion, to
collect additional interest at a rate
exceeding 1% (one percent) up to 3% (three
percent) as the case may be, and in
accordance with the Bank's exclusive
discretion, over the interest rate prescribed
in clause 4.1.7.1 of this Agreement.
4.2 The Credit for ongoing finance will be subject to the following
terms:
4.2.1 A loan facility in the sum of up to NIS 200 M will be
provided to the Borrower for current finance, which may
be used after the fulfillment of all the conditions
precedent as set forth in clause 13 below (hereinafter:
the "CONDITIONS PRECEDENT") up to and not later than
November 30, 2010. The loan amount to be actually
provided will be in accordance with the Borrower's
application but not more than the balance of its
accounts receivable for a period not exceeding 180 days
together with the value of the balance of inventory, as
all set forth in the confirmation of the Borrower's CFO
which will be addressed to the Bank and presented to it
at the beginning of each month (hereinafter: the "CFO'S
CONFIRMATION').
4.2.2 All loans will be in NIS (unlinked), bearing interest
on the basis of Prime and will be provided for a period
of one month.
4.2.3 At the end of the loan term the Borrower will be
entitled to take from the Bank from time to time
additional loans in accordance with the amount set
forth in the CFO's Confirmation, with each loan serving
for settlement of the balance of the principal of the
previous loan.
4.2.4 As a condition for the provision of the loans, the
Borrower will provide to the Bank the CFO's
Confirmation and will sign an application for credit
and loan agreements as are customary at the Bank and
will further declare that no Event of Default has
occurred.
-21-
4.2.5 Any loan provided out of this Credit Facility will bear
interest at a rate equal to Prime plus a margin at a
rate equal to 1% per annum.
4.2.6 Loans to be provided out of this Credit Facility will
be subject to the provisions of clauses 4.1.4, 4.1.5,
4.1.6 and 4.1.7.2.
4.2.7 The term of the Credit Facility will be up to December
31, 2010 and any Credit in respect thereof will be
repaid by such date, unless it was agreed with the
Borrower to extend the Credit Facility for another
period.
4.3 The Credit for Finance of Foreign Trade and Derivatives will be
subject to the following terms:
4.3.1 A facility for finance of foreign trade will be
provided to the Borrower (documentary credit,
suppliers' credit, guarantees, etc.) and derivatives in
a total amount of up to NIS 200 M, which will be
realizable upon fulfillment of all the Conditions
Precedent up to and not later than November 30, 2010.
4.3.2 Suppliers' credit will be provided in foreign currency
under the terms customary at the Bank and as will be
agreed with the Borrower. Documentary credit and
guarantees will be provided to the Borrower under terms
which are customary at the Bank and as will be agreed
with the Borrower.
4.3.3 It will be possible to utilize part of this facility
for activity as set forth in sub-clause (c) for the
definition of "sale or purchase of a substantial asset"
provided that the exposure of the Credit in connection
therewith will not exceed NIS 100 M.
4.3.4 The term of the Credit facility will be up to December
31, 2010 and any credit in respect thereof will be
repaid by such date unless agreed with the Borrower on
the extension of the facility.
4.4 On the occurrence of an Event of Default, the following
provisions shall apply:
4.4.1 In the course of the Rectification Period, if any, the
Bank will be entitled, at its sole discretion, to
collect additional interest at a rate exceeding by 1.5%
(one and a half percent) the relevant interest rate
("RISK INTEREST").
4.4.2 As of the date on which the Bank became entitled to
declare the Credit immediately due and payable and so
long as the breach has not been rectified (provided it
has been rectified prior to declaring the Credit
immediately due and payable), including in the event
that a waiver is given by the Bank in respect of the
Event of Default, the Bank will be entitled, at its
exclusive discretion, to collect arrears interest at a
rate exceeding by 3% (three percent) the interest rate
in respect of the relevant Credit (hereinafter: the
"ARREARS INTEREST"), irrespective of whether or not the
Bank has declared the Credit immediately due and
payable.
4.4.3 The foregoing in clause 4.4.1 above will not apply to
an Event of Default in accordance with the provisions
of clause 9.1 of this Agreement, in respect of which
the provisions of clause 4.4.2 above will apply as of
the date on which the Event of Default occurred, in
connection with the amount in arrears, including the
total amount which was declared due and payable in
accordance with the provisions of the Credit Agreement,
if declared.
-22-
4.4.4 To remove any doubts, in the event that the Credit is
declared immediately due and payable in accordance with
the provisions of the Credit Agreement, arrears
interest will be paid to the Bank up to the date of the
full and final settlement of the unsettled balance of
the Credit. The Bank will give notice to the Borrower,
in writing, of the increase in the interest pursuant to
this clause 4.4, immediately after the date of the
increase in the interest as aforesaid.
4.5 If after the provision of the Credit to the Borrower, the Bank
incurs any additional cost or damage in connection therewith,
which did not exist on the date of the provision thereof, due to:
(a) Various restrictions arising from the provisions of the law
applicable and/or to be applicable to all commercial banks in
Israel in respect of customers and credits of the same type and
scale, or (b) in consequence of the breach of reporting duties on
the part of the Borrower or breach of any other duties incumbent
on the Borrower and where due to the breach thereof an additional
cost is levied in accordance with the provisions of the law, the
Borrower will pay to the Bank additional amounts to the extent
required for such additional cost or damage. The Borrower will be
entitled to prepay Credits due to which it was charged additional
costs as aforesaid in this clause.
4.6 To remove any doubts, Credit that is settled will not be
re-provided.
5. PREPAYMENT
5.1 The Borrower will be entitled to prepay, in whole or in part, at
any time, the unsettled balance of the Credit, by giving a prior
written notice of seven business days (without payment of a
prepayment charge);
5.2 A notice of prepayment will be deemed to be irrevocable in
respect of the total amount stated therein.
5.3 To remove any doubts, no amount of the Credit provided as set
forth in clause 4 above which is settled by means of prepayment
will be re-provided.
6. SECURITY INTERESTS
The pledges, securities and liabilities set forth in clause 6 will serve as
security for the full and exact settlement of the Credit (hereinafter: the
"PLEDGES AND SECURITIES"). The Pledges and Securities will be created, by
or on the Closing Day, as set forth in this Agreement, and, at any rate, as
a condition for the provision of the Credit pursuant to this Agreement, and
the Borrower hereby undertakes to furnish any approval and/or consent,
including an attorney's opinion, addressing, INTER ALIA, the validity of
this Agreement and the obligations hereunder, as well as to the validity of
the Pledges and Securities and their enforceability, and all through
documents in the formats attached hereto as APPENDIX 6. All the foregoing
will take place under such conditions as are required by the Bank, in order
to secure, to the Bank's satisfaction, the ownership of the Borrower in the
Pledged Shares, and their validity and level of priority as set forth in
the provisions of the Credit Agreement of the Pledges and Securities, being
duly registered as well as their enforceability in accordance with the
provisions of the Credit Agreement. The Pledges and the Securities will be
issued in respect of the assets and rights set forth in this clause 6,
being free and clear, unless otherwise expressly stated in this Agreement.
-23-
The Borrower undertakes to do everything required so as to register the
Pledges and Securities in the respective registers, including the Registrar
of Companies, within two business days from the Closing Day.
THE PLEDGES AND SECURITIES ARE AS FOLLOWS:
6.1 As security for the full and exact settlement of the Credit, the
following securities will be provided:
6.1.1 First pledge and assignment by way of a lien, unlimited
in amount, in respect of all the Borrower's present or
future rights in the Borrower's account at the Bank,
including the funds, the deposits, the securities and
the rights that will be in the account and all accruals
on credit balances in the account as they shall be from
time to time, if there are any such accruals.
The Borrower hereby gives irrevocable instructions to
the Bank to charge the Borrower's account at the Bank
with any amount as may be required for fulfillment of
all its obligations under the Credit Agreement, in a
timely fashion, for the purpose of the settlement of
the Credit.
6.1.2 A first fixed charge, and first assignment by way of
encumbrance, unlimited in amount, of the Pledged
Shares, their accruals, their proceeds and all the
rights vested and to be vested in respect and/or by
virtue thereof, including the rights, the options, the
funds and the assets owing or to be issued IN LIEU OF
the Pledged Shares or in respect or by virtue thereof,
including bonus shares, preference rights, rights to
securities of any nature whatsoever in any corporation
incorporated or otherwise, as well as all dividends in
money or in kind, to be granted and/or made payable in
respect thereof, all the Borrower's present or future
rights, arising from such shares as the law and/or
Partner's documents of incorporation and/or any other
agreement whatsoever confer on their holder.
6.1.3 A second fixed charge, and second assignment by way of
encumbrance, unlimited in amount, of the shares pledged
in favor of Bank Leumi, their accruals, their proceeds
and all the rights vested and to be vested in respect
and/or by virtue thereof, including the rights, the
options, the funds and the assets owing or to be issued
IN LIEU OF the shares pledged in favor of Bank Leumi or
in respect or by virtue thereof, including bonus
shares, preference rights, rights to securities of any
nature whatsoever in any corporation incorporated or
otherwise, as well as all dividends in money or in
kind, to be granted and/or made payable in respect
thereof.
The Bank will not be entitled to realize the said
encumbrance, so long as Bank Leumi has not confirmed
that the Credit provided by it pursuant to Bank Leumi
's Financing Agreement has been settled in full
(hereinafter: "REVOKING EVENT").
Notwithstanding the foregoing, in the event of
realization of the first charge on the assets set forth
in this sub-clause in favor of Bank Leumi (in whole or
in part), the Bank will also be entitled to immediately
realize the encumbrance registered in its favor as
aforesaid, without derogating from the provisions of
clause 11.
Upon the occurrence of a Revoking Event, the said
encumbrance will become a first fixed charge.
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6.1.4 A first fixed charge and first assignment by way of
encumbrance, unlimited in amount, of 40% of all the
Borrower's rights vis-a-vis Partner, to receive
dividends for the Free Shares.
6.1.5 A first fixed charge and first assignment by way of
encumbrance, unlimited in amount, of 40% of all the
rights and amounts owing to the Borrower pursuant to
the Sale Agreement, and in accordance with the
Contracts Law (Remedies for Breach of Contract),
5731-1970.
6.1.6 A first fixed charge and first assignment by way of
encumbrance, unlimited in amount, of 40% of all the
rights and amounts owing to the Borrower pursuant to
the shareholders agreements, and in accordance with the
Contracts Law (Remedies for Breach of Contract),
5731-1970.
6.1.7 Without derogating from the provisions of the Credit
Agreement, a first fixed charge and first assignment by
way of encumbrance, unlimited in amount, of 40% of the
Borrower's rights to repayment of the owners' loans
provided (if any) and/or to be provided (if any) by the
Borrower to Partner, as well as 40% of the Borrower's
rights to receive amounts pursuant to the capital notes
issued (if issued) and/or to be issued (if any) by
Partner to the Borrower.
6.2.
6.2.1 Share certificates in respect of the Pledged Shares
will be transferred to the name of the Nominee Company
and the Pledged Shares will be deposited in the
Borrower's account at the Bank, all by the Closing Day.
To this end, the Borrower and the Nominee Company will
sign a share transfer deed in the format attached
hereto as APPENDIX 6.2.1. Furthermore, the share
certificates in respect of additional Partner shares to
be encumbered in favor of the Bank after the Closing
Day as set forth in this Agreement, including pursuant
to clause 3.6, will be transferred concurrently with
the encumbrance of the additional pledged shares as
aforesaid to the name of the Nominee Company and such
additional pledged shares will be deposited in the
Borrower's account at the Bank or in the event that
such shares are Marked Shares, the shares will be in
the Borrower's name and the share certificates in
respect thereof will be deposited in the Borrower's
account at the Bank. Upon the occurrence of a Revoking
Event as defined in the Bank Leumi 's Financing
Agreement, the Pledged Shares and additional shares to
be pledged in favor of the Bank as aforesaid, or share
certificates in respect thereof (as the case may be)
will be deposited in the Borrower's account at Bank
Leumi.
6.2.2 Share certificates in respect of the shares pledged in
favor of Bank Leumi will be transferred to the name of
the Nominee Company and will be deposited in the
Borrower's account at Bank Leumi, all by the Closing
Day. To this end, the Borrower and the Nominee Company
will sign a share transfer deed in the format attached
hereto as APPENDIX 6.2.2. Furthermore, the share
certificates in respect of additional Partner shares to
be encumbered in favor of Bank Leumi after the Closing
Day, will be transferred concurrently with the
encumbrance of the additional pledged shares as
aforesaid to the name of the Nominee Company and such
additional pledged shares will be deposited in the
Borrower's account at Bank Leumi or in the event that
such shares are Marked Shares, the shares will be in
the Borrower's name and the share certificates in
respect thereof will be deposited in the Borrower's
account at Bank Leumi. Upon the occurrence of a
Revoking Event, the shares pledged in favor of Bank
Leumi and additional shares to be pledged in favor of
Bank Mizrahi as aforesaid, or share certificates in
respect thereof (as the case may be) will be deposited
in the Borrower's account at the Bank.
-25-
6.2.3 The shares pledged in favor of the Noteholders will be
in the name of the Borrower and the share certificates
in respect thereof will be deposited with the Trustee
for the Notes, all by the Closing Day. Furthermore,
additional Partner shares to be encumbered in favor of
the Noteholders after the Closing Day as set forth in
clause 3.3.4 of this Agreement, will be in the
Borrower's name and the share certificates in respect
thereof will be deposited immediately after their
encumbrance by the Trustee for the Notes.
6.2.4 The shares pledged in favor of the Seller will be in
the name of the Borrower and the share certificates in
respect thereof will be deposited with the Trustee for
the Seller, by the Closing Day, and if and where the
approval of the Minister of Communications is given in
this context, the shares pledged in favor of the Seller
will be in the name of the Seller's Security Trustee.
Furthermore, additional Partner shares to be encumbered
in favor of the Seller after the Closing Day as set
forth in clause 3.3.5 of this Agreement and pursuant to
its provisions, will be in the name of the Borrower and
the share certificates in respect thereof will be
deposited immediately after their encumbrance with the
Trustee for the Seller, and if and where the approval
of the Minister of Communications is given in this
context, the shares pledged in favor of the Seller will
be in the name of the Seller's Security Trustee.
6.2.5 The share certificates in respect of 40% of the Free
Shares, apart from the Marked Shares, will be
transferred to the name of the Nominee Company and the
said shares will be deposited in the Borrower's account
at the Bank, all by the Closing Day. To this end, the
Borrower and the Nominee Company will sign a share
transfer deed in the format attached hereto as APPENDIX
6.2.5.A. Furthermore, the share certificates in respect
of 40% of Partner's shares included in the definition
of "Free Shares" after the Closing Day, apart from the
Marked Shares, will be transferred concurrently with
their inclusion as aforesaid to the name of he Nominee
Company and the additional Free Shares as aforesaid
will be deposited in the Borrower's account at the
Bank.
It is agreed that the said Free Shares, apart from the
dividend rights in respect of such shares, will be
excluded from the lien on the Borrower's account at the
Bank in favor of the Bank, and the Borrower will be
entitled to act as an owner with respect to these
shares, all in accordance with the provisions of the
Credit Agreement. Such exclusion will terminate on the
date on which the Borrower is to encumber the said Free
Shares in favor of the Bank, in accordance with the
provisions of the Credit Agreement (in whole or in
part), in respect of such shares that the Borrower is
to encumber.
After the occurrence of a Revoking Event as defined in
Bank Leumi's Financing Agreement, the Free Shares which
are deposited at that time in the bank account, will be
deposited in the Borrower's account at Bank Leumi.
-26-
Share certificates in respect of 40% of the Marked
Shares, will be transferred to the name of the Borrower
and will be deposited in the Bank, all by the Closing
Day. To this end, a share transfer deed in the format
attached hereto as APPENDIX 6.2.5.B. will be signed.
Furthermore, the share certificates in respect of 40%
of the Marked Shares which are included in the
definition of "Free Shares" after the Closing Day, will
be in the name of the Borrower and the share
certificates in respect thereof will be deposited in
the Bank.
After the occurrence of a Revoking Event as defined in
the Bank Leumi's Financing Agreement, the share
certificates in respect of the said Marked Shares will
be deposited in Bank Leumi.
6.2.6 Share certificates in respect of 60% of the Free
Shares, apart from the Marked Shares, will be
transferred to the name of the Nominee Company and the
said shares will be deposited in the Borrower's account
at Bank Leumi, all by the Closing Day. Furthermore, the
share certificates in respect of 60% of Partner's
shares included in the definition of "Free Shares"
after the Closing Day, apart from the Marked Shares,
will be transferred concurrently with their inclusion
as aforesaid to the name of he Nominee Company and the
additional Free Shares as aforesaid will be deposited
in the Borrower's account at Bank Leumi.
It is agreed that the said Free Shares, apart from the
dividend rights and other payments in respect of such
shares, will be excluded from the lien in favor of Bank
Leumi on the Borrower's account at Bank Leumi and the
Borrower will be entitled to act as an owner with
respect to such shares, all subject to the provisions
of Bank Leumi's Financing Agreement. Such exclusion
will terminate on the date on which the Borrower is to
encumber the said Free Shares in favor of Bank Leumi,
in accordance with the provisions of Bank Leumi's
Financing Agreement (in whole or in part), in respect
of such shares as the Borrower has to encumber.
After the occurrence of a Revoking Event, the Free
Shares which are deposited at that time in the
Borrower's account at Bank Leumi, will be deposited in
the Borrower's account at the Bank. The share
certificates for 60% of the Marked Shares will be
transferred to the name of the Borrower and deposited
in Bank Leumi, all by the Closing Day. Furthermore, the
share certificates for 60% of the Marked Shares falling
within the definition of "Free Shares" after the
Closing Day, will be in the name of the Borrower and
the share certificates in respect thereof will be
deposited in Bank Leumi.
After the occurrence of a Revoking Event, The share
certificates in respect of such Marked Shares, will be
deposited in the Bank.
6.2.7 All dividends and payments, shares and rights paid
and/or granted in respect of the Pledged Shares will be
transferred to the Borrower's account at the Bank. For
the purpose of implementing the foregoing, the Borrower
will sign, by the Closing Date, irrevocable
instructions to the Nominee Company in the format
attached as APPENDIX 6.2.7 hereto which will be
approved by it. Upon the occurrence of a Revoking Event
as defined in Bank Leumi's Financing Agreement, all
dividends and payments, shares and rights paid and/or
granted in respect of the said shares will be
transferred to the Borrower's account at Bank Leumi and
the Borrower undertakes to give revised irrevocable
instructions to the Nominee Company, respectively,
which will be approved by it.
-27-
6.2.8 All dividends and payments, shares and rights paid
and/or granted in respect of the Pledged Shares in
favor of Bank Leumi, will be transferred to the
Borrower's account at Bank Leumi. For the purpose of
implementing the foregoing, the Borrower will sign, by
the Closing Date, irrevocable instructions to the
Nominee Company in the format attached as APPENDIX
6.2.8 hereto which will be approved by it. Upon the
occurrence of a Revoking Event, all dividends and
payments, shares and rights paid and/or granted in
respect of the said shares will be transferred to the
Borrower's account at the Bank and the Borrower
undertakes to give revised irrevocable instructions to
the Nominee Company, respectively, which will be
approved by it.
6.2.9 40% of all dividends and payments, paid and/or granted
in respect of the Free Shares, the shares pledged in
favor of the Noteholders and the shares pledged in
favor of the Seller, will be transferred directly to
the Borrower's account at the Bank. To this end, the
Borrower will sign, by the Closing Date, irrevocable
instructions to Partner or to the Nominee Company, as
the case may be, in the format attached as APPENDIX
6.2.9.A. hereto which will be approved by them.
If and when the approval of the Minister of
Communications is given for the shares pledged in favor
of the Seller being in the name of the Seller's
Security Trustee, then the Borrower will procure that
concurrently with the transfer of the shares to the
name of the Seller's Security Trustee as aforesaid, the
Seller's Security Trustee will give instructions to
Partner, to transfer all such dividends and payments in
accordance with the Borrower's instructions to Partner
and the Borrower will give irrevocable instructions to
Partner to transfer such dividends and payments to the
Borrower's account at the Bank, and all in the formats
attached hereto as APPENDIX 6.2.9.B which will be
approved by it.
Upon the occurrence of a Revoking Event as defined in
Bank Leumi's Financing Agreement, all such dividends
and payments will be transferred to the Borrower's
account at Bank Leumi and the Borrower undertakes to
give revised irrevocable instructions to Partner or to
the Nominee Company, as the case may be, respectively,
which will be approved by them or to procure the
revision of instructions given to Partner whose
revision shall be approved by it, as the case may be.
6.2.10 60% of all dividends and payments, paid and/or granted
in respect of the Free Shares, the shares pledged in
favor of the Noteholders and the shares pledged in
favor of the Seller, will be transferred directly to
the Borrower's account at Bank Leumi.
Upon the occurrence of a Revoking Event, all such
dividends and payments will be transferred to the
Borrower's account at the Bank and the Borrower
undertakes to give revised irrevocable instructions to
Partner or to the Nominee Company, as the case may be,
respectively, which will be approved by them or to
procure the revision of instructions given to Partner
whose revision shall be approved by it, as the case may
be.
-28-
6.2.11 The financial income transferred to the Borrower's
account at the Bank as aforesaid will be subject to the
provisions prescribed in clause 4.1.4 above.
6.3 As security for the exact and full settlement of the current
credit, the following Security Interests will be provided (which
will secure all the Credit Facilities), all in addition to the
other Security Interests to be provided pursuant to this
Agreement, and all in accordance with a Debenture to be agreed
with the Bank and together with relevant minutes and attorney
confirmations as customary.
6.3.1 First floating charge unlimited in amount on the entire
inventory of the Borrower, of any nature or type and on
all present or future rights, to receive funds of any
nature or type from the Borrower's customers.
6.3.2 A first fixed charge unlimited in amount on all present
or future rights, to receive funds: from Partner
Communications Ltd., including under the document
concerning principles for activity dated November 17,
2005, which was assigned to the Borrower and all the
orders as they shall be from time to time, from Cellcom
Israel Ltd., including pursuant to the MOU dated April
21, 2005, the extension of the contract dated September
21, 2008 and a technical appendix that were assigned to
the Borrower and all orders as they shall be from time
to time and from Pelephone Communications Ltd.
including under the agreement dated July 10, 2008, and
all orders as they shall be from time to time.
6.3.3 Assignments of rights and irrevocable instructions will
be presented to the Bank, addressed to Partner
Communications Ltd., Cellcom Israel Ltd. and Pelephone
Communications Ltd., approved by them, for the transfer
of all receipts payable to the Borrower, to the
Borrower's account at the Bank, all in the format
acceptable to the Bank.
6.3.4 First floating charge unlimited in amount on all the
rights and assets, of any nature or type, relating to
the activity of Dynamics and to Suny's Activity as well
as a fixed charge on all the goodwill in connection
with these activities.
6.4 As security for the accurate settlement in full of the Credit for
finance of foreign trade and derivatives the following Security
Interests will be provided (which will secure all the Credit
Facilities), all in addition to the other Security Interests to
be provided under this Agreement and all in accordance with a
Debenture as shall be agreed with the Bank and together with
relevant minutes and attorney confirmation as customary at the
Bank.
6.4.1 First lien unlimited in amount on all documents and
negotiable documents provided and/or to be provided to
the Bank and/or which the Bank is holding or which were
prepared in its name.
6.4.2 First fixed charge on all securities, rights, funds and
deposits in the Borrower's accounts at the Bank as they
shall be form time to time.
7. CHARGES AND EXPENSES
7.1 The Borrower will pay to the Bank the charges set forth below, in
addition to other customary charges that are usual at the Bank.
-29-
The charges are as follows:
CHARGE AMOUNT / RATE DUE DATE NOTES
---------------------- ------------------ -------------------- ----------------------------
Transaction charge NIS 2,600,000 One fifth of the One fifth of the charge to
charge on the be paid on the date of the
execution day of execution of this Agreement
this Agreement and will not be refunded to the
the balance on the Borrower in the event that
Closing Day. no closing takes place in
accordance with this
Agreement.
Charge for undertaking 1.5% per annum The charge will be The charge will be
to provide the Credit paid one month in calculated on the basis of
if the Closing Date advance. the actual number of days
occurs after November that pass between the date
30, 2009 of the execution of this
Agreement and the Closing
Day
Legal expenses Up to NIS 60,000 Will be paid on an Will be paid to the Bank's
(not including ongoing basis attorney directly, even if
VAT), for legal pursuant to invoices the Credit is not actually
services to be to be sent and in provided, as specified in
provided up to the any event will be the letter to Bank Leumi
Closing Date. For paid in full on the dated September 21, 2009.
legal services to Closing Date Further, the Bank attorney's
be provided after fee will be paid for his
the Closing Date - handling in respect of
as stated in the everything connected to and
Notes column. arising from this Credit
Agreement after the
provision of the Credit and
up to its final settlement,
revision and consultation in
respect thereof, on the
basis of the work hours
actually invested and on the
basis of the tariffs
specified in the letter to
Bank Leumi dated September
21, 2009.
Non-usage fee 1% Will be charged For unused amounts out of
every quarter for the current Credit facility
unused balances in and trade transactions and
the previous derivatives.
quarter, on the
basis of a daily
computation.
7.2 Additional charges will be collected in the event of revisions in
the Credit Agreement, after the execution thereof, if there are
any from time to time, and in such amount as shall be agreed
between the Bank and the Borrower. Further, the Borrower will pay
to the Bank from time to time, additional charges, as is
customary at the Bank in accordance with the tariffs to be
concluded with the Borrower for ordinary business activity.
-30-
7.3 By signing this Agreement, the Borrower hereby instructs the
Bank, by means of irrevocable instructions, to debit, whenever it
has to pay any charge, the Borrower's account at the Bank with
the amount of such charge, as the case may be.
8. REPORTS
In this clause, the term "FINANCIAL STATEMENTS" shall have the meaning as
follows:
The financial statements consisting of, INTER ALIA, a balance sheet,
statement of operations, statement of cash flows and any other statement as
may be required by the competent authorities, being prepared in accordance
with generally accepted accounting principles, and audited by one of the
accounting firms belonging to the four leading accounting firms in Israel
(Big Four).
The Borrower undertakes to comply with the requirements prescribed under
any law for preparation and submission of financial statements in full and
in a timely fashion and it further undertakes to meet the timeframes
prescribed in the directives of the Bank of Israel which are binding on the
Bank. Without derogating from the generality of the foregoing, the Borrower
undertakes to submit to the Bank the following reports in writing:
8.1 PERIODIC REPORTS
8.1.1 Annual financial statements of the Borrower and of
Partner on a consolidated and non-consolidated basis
(separately, including notes), as at December 31 of the
preceding year, immediately upon the execution thereof,
and not later than March 31 of every year.
8.1.2 Quarterly financial statements of the Borrower and of
Partner on a consolidated and non-consolidated basis
(separately, including notes), immediately upon the
execution thereof, and not later than two months from
the end of each quarter.
8.1.3 At the Bank's demand from time to time, a forecast will
be submitted and presented as to the Borrower's
anticipated cash flows as well as additional
information, where required, relating to the Borrower's
solvency.
8.2 IMMEDIATE REPORTS
8.2.1 Without derogating from the provisions of this
Agreement, a report of the dividends distributed by the
Borrower and Partner, immediately after their
declaration and a report on the issue of shares at
Partner.
8.2.2 Without derogating from the provisions of this
Agreement, a written report of any general meeting of
the Borrower about to be held, not later than seven
days prior to the date designated therefor, giving a
full account of the issues on the agenda, and if there
is a proposal on the agenda at the general meeting to
adopt a resolution as to a change in the documents of
incorporation, merger or spin-off, a sale transaction
or acquisition of a substantial asset, approval of
activities and transactions with officers or a
controlling shareholder or with corporations which are
stakeholders therein, distribution, distribution
undertaking, changes in the structure of incorporation
and/or changes in the essence of the Borrower's
activities - also furnishing to the Bank the form of
the proposed resolution not later than seven days prior
to the holding of the meeting. Immediately after the
holding of each general meeting of the Borrower, to
submit to the Bank the minutes of the meeting,
consisting of all the resolutions adopted therein.
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8.2.3 Without derogating from the provisions of this
Agreement, a written report of any general meeting of
Partner about to be held, not later than seven days
prior to the date designated therefor, giving full
account of the issues on the agenda, and if there is a
proposal on the agenda at the general meeting to adopt
a resolution as to a change in the documents of
incorporation, merger or spin-off, a sale transaction
or acquisition of a substantial asset, approval of
activities and transactions with officers or a
controlling shareholder or with corporations which are
stakeholders therein, or changes in the capital
including an increase in the registered share capital
or a decrease in capital, distribution, distribution
undertaking, changes in the structure of incorporation
and/or changes in the essence of Partner's activities -
also furnishing to the Bank the form of the proposed
resolution not later than seven days prior to the
holding of the meeting. Immediately after the holding
of each general meeting of Partner, to submit to the
Bank the minutes of the meeting, consisting of all the
resolutions adopted therein.
8.2.4 The Borrower will submit to the Bank a copy of each
approval, notice, report or any other document which
the Borrower is obliged to submit to the Registrar of
Companies and/or to any other authority pursuant to any
law, in Israel or overseas, or which it received from
them, immediately after the submission thereof to the
Registrar of Companies and/or any other authority
pursuant to any law as aforesaid or receipt thereof
from them, provided that the issues in question are
material to the Borrower or that they are liable to
have a material adverse effect on the Bank's rights in
accordance with the Credit Agreement. With respect to
issues liable to have any criminal implication
whatsoever, all correspondence will be submitted to the
Bank.
8.2.5 The Borrower will submit to the Bank a copy of any
confirmation, notice or report in accordance with the
Sale Agreement and of any demand, claim or contention
with respect to the Sale Agreement which the Borrower
receives from the Seller or anyone acting on its behalf
or which the Borrower submitted to the Seller or to
anyone on its behalf, all immediately after the receipt
of submission thereof, as the case may be.
8.2.6 Subject to and in accordance with the provisions of any
law, any additional information and additional
documents required by the Bank in connection with the
transactions and financial position, of either the
Borrower and/or Partner, as the case may be, from time
to time.
8.2.7 In the event that the Notes issued by the Borrower have
been rated, the Borrower will report of any reduction
of the rating of the Notes, immediately after such
rating reduction.
8.2.8 In the event that a creditor of the Borrower and/or a
trustee for such creditor gave notice that there is a
ground for declaring immediately due and payable any
credit provided by such creditor and/or that an Event
of Default has occurred with respect to such credit,
all immediately after receipt of such notice, together
with a copy of such notice.
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8.2.9 The Borrower undertakes to report to the Bank, in
writing, immediately upon learning of the occurrence of
any Event of Default or of any change as set forth in
clause 4.9.
9. DECLARATION AS IMMEDIATELY DUE AND PAYABLE
The Bank will be entitled to declare as immediately due and payable, the
unsettled balance of the Credit, in whole or in part, on the occurrence of
any one or more of the following events:
9.1 If the Borrower fails to pay to the Bank any amount whatsoever
pursuant to the Credit Agreement. The Borrower will be entitled
to rectify such Event of Default within seven days from the date
of the occurrence thereof.
9.2 If the Borrower is in breach of any of its undertakings to the
Bank, whether included in the Credit Agreement or included in any
other document signed and/or to be signed on its part by virtue
of the Credit Agreement, or should it turn out that any statement
or confirmation issued by it is inaccurate, or if Partner should
violate the irrevocable instructions set forth in clause 6.2
which are approved by it, the Borrower and Partner, as the case
may be, will be entitled to rectify the Event of Default as
aforesaid in respect of any undertaking or statement on their
part within 20 days or within another period, if another period
of rectification has been prescribed for the breach of the
undertaking. Furthermore, in the event of a breach of any
obligation whatsoever vis-a-vis the Bank pursuant to the Security
Interests Documents, and the Event of Default has not been
rectified within 20 days.
9.3 If the Borrower has breached its obligation under clause 3.6.1.
9.4 If one of the Security Interests and/or the other documents
submitted to the Bank in accordance with clause 6 above,
including the irrevocable instructions, is found to be invalid
and/or unenforceable and/or where the contents thereof are not
implemented and/or the Security Interests and/or the documents do
not confer the level of encumbrance which they are purported to
confer in accordance with this Agreement.
9.5 If a resolution is adopted at the Borrower or at Partner,
concerning a merger or spin-off and/or a resolution concerning
the sale or purchase of a substantial asset, as per the
definition of these terms in clause 1, without obtaining the
Bank's prior written approval, and such resolution is not
cancelled within seven days.
9.6 If a resolution is passed at the Borrower or at Partner
concerning voluntary liquidation without obtaining the Bank's
prior written approval.
9.7 If receivership proceedings are instituted against the Borrower
or Partner, including where a permanent or temporary liquidator
is appointed or a temporary or permanent receiver or if
rehabilitation or settlement proceedings are instituted or a
creditors' composition and/or stay of proceedings pursuant to
sections 350 and/or 351 of the Companies Law or in accordance
with any additional or other law IN LIEU THEREOF or if the
Borrower's name or Partner's name are deleted or scheduled to be
deleted from the records of the Registrar of Companies (in the
event of any temporary proceeding). An Event of Default which is
the appointment of a temporary liquidator or a temporary receiver
or a special administrator or a trustee, EX PARTE, will be
rectifiable within 14 days from the occurrence thereof.
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9.8 Attachments:
9.8.1 If any attachment/s is/are imposed:
9.8.1.1 On any asset serving as security for the
Bank, including the rights to dividends and
the dividends in connection with Partner's
shares, all as set forth in clause 6 of this
Agreement;
9.8.1.2 On any other asset whatsoever of the
Borrower, in connection with debts exceeding
in aggregate NIS 100 M.
9.8.1.3 On any asset whatsoever of Partner, in
connection with debts exceeding in aggregate
NIS 350 M.
9.8.2 If any attachment/s is/are imposed as aforesaid in
clause 9.8.1 above, such Event of Default will be
rectifiable within 30 days from the date of the
occurrence thereof.
9.9 FINANCIAL COVENANTS:
If one or more of the financial covenants is/are not fulfilled.
9.9.1 In this Agreement, "the "FINANCIAL COVENANTS" - each of
the following, which will be examined by the Bank by
the final settlement date of the Credit in full, in
accordance with the quarterly and annual financial
statements of the Borrower and of Partner (as the case
may be), being audited or reviewed (as the case may
be), as at the examination date, on the effective date
for submission of the financial statements to the Bank
as provided in clause 8.1 above (hereinafter: the
"EXAMINATION DATE"):
9.9.1.1 The ratio between Partner's net financial
debt and Partner's EBITDA will not exceed 3.
9.9.1.2 The ratio between: (a) Partner's total net
financial debt plus the product attained by
the division of the total net financial debt
of the Borrower by the Borrower's holding
rate in Partner on the Examination Date, and:
Partner's EBITDA will not exceed:
9.9.1.2.1 Up to the end of the first quarter
of 2011 - 6.
9.9.1.2.2 As of the end of the first quarter
of 2011 onward - 5.
9.9.1.3 The ratio between: (a) The product of the
Borrower's holding rate in Partner on the
Examination Date times by Partner's net
income and: The total maturities (principal,
interest and linkage differentials in respect
thereof, less the Borrower's cash balances on
the Examination Date and less the sum of NIS
630 M) for the net financial debt (of the
Borrower for the four quarters subsequent to
the Examination Date (including the quarter
in which the Examination Date took place),
will not fall below:
9.9.1.3.1 In 2010 and in the first quarter of
2011 - 1.15.
9.9.1.3.2 As of the second quarter of 2011
onward - 1.3.
9.9.1.4 In this sub-clause:
"NET FINANCIAL DEBT" - an interest bearing
debt less a cash balance.
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"EBITDA" - the operation profit before
interest, tax, depreciation and amortization
expenses. The EBITDA in the examination
conducted pursuant to quarterly financial
statements, will be the sum of all the EBITDA
amounts for the four quarters ended prior to
the Examination Date.
"NET INCOME" - as set out in the relevant
financial statements. The Net Income in the
examination conducted pursuant to quarterly
financial statements, will be the sum of all
the Net Income amounts for the four quarters
ended prior to the Examination Date.
On any Examination Date, the Borrower will submit to
the Bank a detailed computation of each of the
financial covenants which will include a confirmation
from the Borrower's external accountants concerning
compliance with the financial covenants.
9.9.2 The financial covenants are based on accounting
standards, accounting principles, estimates and
accounting policy (hereinafter: "ACCOUNTING TREATMENT")
as applied in the most recent financial statements of
the Borrower and of Partner (as the case may be) as at
the date of this Agreement (hereinafter: the "MOST
RECENT FINANCIAL STATEMENTS"). An Accounting Treatment
which is different than that on the basis of which the
Most Recent Financial Statements were prepared, but not
only due to the application of the International
Financial Reporting Standards (IFRS), new / other / any
accounting standards whatsoever, either in Israel or
overseas, a change in estimates and/or change in
accounting policy (all the foregoing shall hereinafter
be referred to, jointly or severally: "NEW ACCOUNTING
TREATMENT"), is liable to result in changes having an
effect on the financial covenants. Accordingly, the
Borrower agrees as follows:
9.9.2.1 At any time that the Bank finds, at
its exclusive discretion, that
changes were introduced and/or are
about to be introduced to the
Borrower's financial statements or
Partner's financial statements, due
to a New Accounting Treatment, the
Bank will be entitled, upon
consultation with the Borrower, to
prescribe the required changes in
the financial covenants
(hereinafter: the "REVISED
FINANCIAL COVENANTS"), so as to
adjust them to such changes, with a
view to adapting them to the
original economic purpose pursuant
to which the covenants were
established.
9.9.2.2 Should the Bank give notice to the
Borrower of the Revised Financial
Covenants - they will bind the
Borrower as of the date of the
Bank's notice being given and this
Agreement will be deemed to
include, as of the date of the
giving of the Bank's notice, the
Revised Financial Covenants.
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9.10 ADVERSE EFFECT
9.10.1 ON THE OCCURRENCE OF ANY ADVERSE EFFECT.
9.10.2 In this Agreement, "ADVERSE EFFECT" - any one of the
following:
9.10.2.1 I an event has occurred or is expected to
occur, the outcome of which is a material
adverse effect on: (a) The businesses, the
financial position, the liquidity status and
the results of operations of the Borrower
and/or Partner; and (b) The Borrower's
ability to fulfill its obligations under the
Credit Agreement pursuant to their terms.
9.10.2.2 If the economic value of the Security
Interests as fallen in a manner liable to
jeopardize the repayment of the unsettled
balance of the Credit from the proceeds of
the realization thereof.
9.11 In the event of a decline in the holding rate and/or if the
control is terminated in contravention of the undertaking as set
forth in clause 3.23 and the Event of Default has not been
rectified within 7 days.
9.12. "CROSS EVENT OF DEFAULT"
9.12.1 On the occurrence of any event the outcome of which
entitles any entity/ies, either in Israel or overseas,
including the Seller, the Holders of the Notes issued
by the Borrower and Bank Mizrahi to the right to
declare immediately due and payable the Borrower's
debts and liabilities in an aggregate amount exceeding
NIS 100 M, or Partner's debts and liabilities, in an
aggregate amount exceeding NIS 350 M, all in the course
of a period of twelve calendar months and the Event of
Default has not been rectified within 30 days.
9.12.2 If any entity/ies, either in Israel or overseas,
including the Seller, the Holders of the Notes issued
by the Borrower and Bank Mizrahi has/have declared
immediately the debts and liabilities of Borrower due
and payable in an aggregate amount exceeding NIS 100 M,
or of Partner, in an aggregate amount exceeding NIS 350
M, all in the course of a period of twelve calendar
months.
9.13 If a general meeting of the Borrower is convened on the agenda of
which there is a proposed resolution adversely affecting its
rights as a creditor, including on any of the issues set froth
below: Change in the documents of incorporation, merger or
spin-off, sale or purchase transaction of any substantial asset,
approval of activities of and transactions with Stakeholders or
corporations in which it is a Stakeholder, distribution, other
than as prescribed in clause 3.14 above and/or distribution
and/or distribution undertaking, changes in the structure of
incorporation, changes in the essence of the Borrower's
operations and/or any other action on the part of the Borrower
that is liable to reduce the value of the Pledged Shares and/or
the shares pledged in favor of Bank Mizrahi and/or the shares to
be pledged in accordance with the provisions of the Credit
Agreement, including pursuant to clause 3.6 and/or to adversely
affect the Security Interests.
9.14. If a general meeting of Partner is convened on the agenda of
which there is a proposed resolution adversely affecting its
rights as a creditor, including on any of the issues set froth
below: A resolution concerning dilution of shares (apart from
such dilution as the Credit Agreements expressly permits),
changes in the rights conferred by the Shares, merger or
spin-off, sale or purchase transaction of a substantial asset,
approval of activities and businesses with Stakeholders or
corporations in which it is a Stakeholder or changes in capital,
including an increase in the registered share capital (apart from
an increase in the registered share capital as required for the
purpose of the issue of shares that the Credit Agreement
expressly permits or an increase in registered capital for the
purpose of compliance with any regulatory requirement applicable
to Partner), changes in the structure of incorporation, changes
in the essence of Partner's operations and/or any other action on
the part of Partner that is liable to reduce the value of the
Pledged Shares and/or the shares pledged in favor of Bank Mizrahi
and/or the shares to be pledged in accordance with the provisions
of the Credit Agreement, including pursuant to clause 3.6 and/or
to adversely affect the Security Interests.
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9.15 In the event of any material change in the area of activity of
the Borrower and/or of Partner.
9.16 If the Sale Agreement has expired or was rescinded or was
declared by a competent authority to be null and void, in whole
or in part.
9.17 If all or a substantial part of the assets of either the Borrower
and/or Partner are sold.
9.18 If trading in the Borrower's shares on the Stock Exchange is
suspended or ceased for a period exceeding 7 days and/or if
trading in Partner's shares on the stock exchange where they are
traded, is suspended or ceased for a period exceeding 7 days or
if the Borrower's shares are delisted from trading on the Stock
Exchange and/or if Partner's shares are delisted from the trading
on the stock exchange where they are traded as foresaid.
9.19 If one of the licenses granted to Partners and/or the entities
controlled by it for the purpose of their operations is suspended
or cancelled, and, in the event of suspension - where such
suspension is not cancelled within 30 days.
9.20 In the event of early redemption and/or prepayment which is
forced on the Borrower, of the Notes issued by it and/or any
other Credit taken by it.
9.21 If Partner performs a distribution to its shareholders not in
accordance with their PRO RATA share in Partner's issued and paid
up capital.
9.22 If one or more legal proceedings is/are instituted against the
Borrower and/or Partner, or if a decision or a judgment was
rendered in such proceedings, which, jointly or severally is
liable to have a material adverse effect on the Borrower's
ability to comply with its obligations under the Credit Agreement
in accordance with the terms thereof.
In any event that the Bank is entitled, in accordance with the
provisions of this Agreement, to declare the Credit immediately
due and payable, the Bank will be entitled to declare immediately
due and payable all or any part of the Credit, at its exclusive
discretion.
To remove any doubts, in the event of declaring the Credit
immediately due and payable (in whole or in part), arrears
interest will be paid to the Bank as set forth in clause 4.4
above.
To remove any doubts, it is hereby clarified that in addition to
the Bank's right to declare the Credit immediately due and
payable, the Bank will be entitled to adopt all measures it finds
fit for the purpose of protecting its rights under the Credit
Agreement, including its rights in the Pledged Shares, even
before a resolution is adopted as to the declaration as
immediately due and payable as aforesaid.
10. RECTIFICATION PERIOD
10.1 In this Agreement, "RECTIFICATION PERIOD" - means a period given,
if any, in clause 9 of this Agreement, for rectification of the
Events of Default entitling the Bank to declare all or any part
of the Credit immediately due and payable. In the event that
under the circumstances there will be more than one Event of
Default, the Rectification Period will be the shortest period of
the Rectification Periods prescribed in respect of the relevant
Events of Default, and if, regarding one of the Events of
Default, no Rectification Period has been prescribed, no
Rectification Period will apply at all.
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10.2 In any case of an event respecting which a Rectification Period
is prescribed, the Bank will give the Borrower a prior written
warning respecting the declaration of the Credit as immediately
due and payable, and the Bank will be entitled to declare the
Credit immediately due and payable only if the Event of Default
has not been rectified by the end of the Rectification Period.
However, if the Bank is of the opinion that its rights under the
Credit Agreement are liable to be materially adversely affected
in consequence of delaying its actions during the Rectification
Period or if another Event of Default occurs which is not of the
same nature, before the breach in respect of the previous Event
of Default has been rectified, then the Bank will be entitled to
declare the Credit immediately due and payable, immediately on
the occurrence of the Event of Default. To remove any doubts, the
Rectification Period will be counted from the date of the
occurrence of the Event of Default and not from the date of the
Bank's notice.
10.3 Furthermore, in respect of an Event of Default for which there is
no Rectification Period, and to the extent that the delay of the
declaration as immediately due and payable cannot, at the Bank's
exclusive opinion, cause real damage to the Bank, the Bank will
give a prior notice of the intention to declare the Credit
immediately due and payable 7 days in advance. The foregoing in
this clause will not apply to the occurrence of an Event of
Default as set forth in clause 9.3, in respect of which, at any
rate, the Bank will be entitled to declare the Credit immediately
due and payable and to exercise the Security Interests without
any prior notice, all subject to the provisions of clause 11.
11. EXERCISE OF THE SECURITY INTERESTS
In any event that the Bank has declared the Credit immediately due and
payable, the Bank will be entitled, but not obligated, to promptly realize
all or any part of the Security Interests (apart from the shares pledged in
favor of Bank Mizrahi, which will be exercised in accordance with the
provisions of the encumbrance documents creating a lien on such shares in
favor of the Bank), and to use the amounts received as aforesaid to reduce
the unsettled balance of the Credit, without derogating from all the Bank's
rights and/or from any other relief available to it by virtue of the
provisions of the Credit Agreement and the provisions of any law, all
subject to the approval of the Minister of Communications, to the extent
required, in accordance with the provisions of Partner's licenses and
licenses of corporations under its control. The end of this paragraph will
only be revised subject to the prior written approval of the Minister of
Communications.
Furthermore, the Borrower will pay to the Bank all the expenses and
reasonable charges paid by the Bank to attorneys and other consultants,
including valuation experts, to the extent that their hiring is required,
at the Bank's exclusive discretion, for the purpose of exercising the
Security Interests.
12. THE CLOSING
12.1 CONDITIONS PRECEDENT FOR PROVISION OF THE CREDIT
The Borrower is aware, and it agrees, that the coming into force
of this Agreement, including its appendixes, and the provision of
the Credit as per the provisions of this Agreement, is subject to
the following conditions, in addition to that stated in clauses 6
and 12.3 of this Agreement and without derogating from all other
terms of this Agreement.
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12.1.1 There will be no impediment under the provisions of the
law, to the provision of the Credit under the terms set
forth in this Agreement and the provision of the Credit
pursuant to this Agreement will not cause a deviation
on the part of the Bank from the regulatory limitations
imposed on it, including with respect to holding, by
way of encumbrance, means of control, and from
limitations as to minimum capital ration, liability of
a "single borrower" and of a "group of borrowers" to
which the Borrower belongs (these terms will be
interpreted as per the definition thereof in the
directives on the various issues issued by the Bank
Commissioner at the Bank of Israel, as they shall be in
effect on the date of the provision of all or any part
of the Credit) and/or any other deviation due to which
the Bank is charged with payment of fines, and,
further, no adverse effect will occur in the
restrictions applicable to the Bank on the date of the
execution of this Agreement, due to any change in the
statutory provisions which in the opinion of the Bank
adversely affects the provision of the Credit under the
terms set forth in this Agreement.
12.1.2 No Event of Default has occurred and no circumstances
have taken place which, if not rectified by the end of
any Period of Rectification (if such is designated in
this Agreement) will become an Event of Default.
12.1.3 All the acts that are supposed to be performed in
accordance with this Agreement by or on the Closing
Date, will be performed.
12.1.4 Deposit in concentration account no. 73600/29 in branch
800 at Bank Leumi, in the Borrower's name (hereinafter:
the "CONCENTRATION ACCOUNT"), of a financial amount
which together with the Credit amount constitutes the
amount of the consideration for the purchase of the
shares purchased by the Borrower pursuant to the Sale
Agreement.
12.1.5 Compliance with all the conditions precedent in
accordance with the Sale Agreement and performing the
Closing thereunder, concurrently with the provision of
the Credit, including acquisition of the shares
purchased by the Borrower, being free and clear,
performance of the Closing pursuant to the Seller's
Finance Documents, performance of the Closing in
accordance with the Finance Agreement dated October 28,
2009 which was signed by and between Bank Leumi and the
Borrower and performing the Closing pursuant to
agreements for the sale of part of the Purchased Shares
to Bank Leumi and to other entities to whom the
Borrower undertook to sell shares in Partner on the
Closing Day, and all concurrently with the provision of
the Credit, as well as obtaining the Borrower's written
approval for the implementation of the foregoing.
12.1.6 In the Borrower's account at the Bank, such amounts
will be deposited as are sufficient to effect all
charges and payments as provided in clause 12.3.2.4.
12.1.7 Receipt of the Security Interests Documents, the
agreements, the irrevocable instructions and the
undertakings as set forth in clause 6, duly signed by
the relevant parties, as the case may be.
12.1.8 Receipt of the required approvals at Partner and/or by
Partner for the performance of the Borrower's
obligations in the Credit Agreement.
12.1.9 Receipt of legal opinions as to the validity of the
liabilities and the Security Interests in accordance
with the Credit Agreement.
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12.1.10 Receipt of a written notice from the Borrower, 7
business days prior to the Closing Date concerning the
term of the loan selected by it as provided in clause 4
above.
12.1.11 Receipt of "applications for provision of credit" and
loan agreement in accordance with the Credit terms as
provided in this Agreement, signed by the Borrower, in
the format customary at the Bank.
12.1.12 Receipt of a statement (Bring Down) from the Borrower
in the format attached hereto as APPENDIX 12.1.12 that:
12.1.12.1 All representations, declarations and
undertakings made by it pursuant to the
Credit Agreement are accurate and valid and
no material adverse effect has occurred
therein as at the Closing Day;
12.1.12.2 There is no need for receipt of
understandings and/or permits and/or
additional approvals for the provision of the
Credit, for the creation of the Security
Interests and for the enforceability thereof
and as for the enforceability thereof -
subject to the approval of the Minister of
Communications, to the extent required, in
accordance with the provisions of Partner's
licenses and licenses of corporations under
its control and to the performance of all the
obligations under the Credit Agreement.
12.2 If and to the extent that the Borrower find that any of the
conditions enumerated in this clause 12.1 is not about to be
fulfilled or is not fulfilled by the Closing Day, the Borrower
will give a written notice to that effect to the Bank,
immediately after it learns of the threatened failure or the
failure to fulfill such condition.
12.3 PERFORMANCE OF THE CLOSING
12.3.1 Up to and not later than the Closing Day (inclusive),
the Borrower will furnish to the Bank the following
documents, for the purpose of and in connection with
the provision of the Credit, in such manner and under
such terms as are prescribed in this Agreement:
12.3.1.1 Confirmation from Bank Leumi concerning
deposit of the amounts in the Concentration
Account as provided in clause 12.1.4.
12.3.1.2 Obtaining the Seller's confirmation that it
has received the amount of the consideration
for the acquisition of the shares purchased
by the Borrower pursuant to the Sale
Agreement concurrently with the performance
of the transfer as provided in clause
12.3.2.1.
12.3.1.3 The Borrower's confirmation concerning the
performance of the closings pursuant to the
agreements as provided in clause 12.1.5
concurrently with the provisions of the
Credit.
12.3.1.4 The Security Interests Documents as provided
in clause 6.
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12.3.1.5 Share certificates for the shares pledged in
the name of the Nominee Company as well as a
copy of the Register of the Shareholders of
Partner, compatible with such share
certificates and the undertaking included in
clause 3.12.
12.3.1.6 Receipt of a copy of the share certificates
in respect of the Shares encumbered in favor
of Bank Leumi, the Free Shares, the shares
pledged in favor of the Noteholders and the
shares pledged in favor of the Seller with
the registration therein being in accordance
with the provisions of clause 6 as well as a
copy of the register of Partner's
shareholders, in keeping with the said share
certificates and the undertaking included in
clause 3.12.
12.3.1.7 Approvals required as provided in clause
12.1.8.
12.3.1.8 Legal opinions as to the validity of the
liabilities and the Security Interests as
provided in clause 12.1.9.
12.3.1.9 "Applications for Credit" and loan agreement
as provided in clause 12.1.11.
12.3.1.10 Bring Down statement as provided in clause
12.1.12.
12.3.1.11 Minutes of the Borrower's competent organs,
approving the contractual engagement under
this Agreement and the performance of all the
obligations included therein and authorizing
the signatories to this Agreement to sign on
behalf of the Borrower as well as together
with an attorneys' confirmation as to the
validity of the resolutions under any law.
12.3.2 On the Closing Day and subject to the fulfillment of
the Conditions Precedent as provided in clause 12.1 and
in additional to the provisions of sections 6 and 12.3,
the following actions will be performed concurrently,
and the Borrower hereby instructs the Bank to perform
the following acts, all subject to and in accordance
with the provisions of the Credit Agreement:
12.3.2.1 The provision of the Credit in the Borrower's
account and the transfer thereof to the
Concentration Account.
12.3.2.2 The transfer of the funds deposited in the
Concentration Account to an account or
accounts in the name of the Seller or anyone
acting on its behalf, pursuant to the
Seller's instructions, the details of which
will be given to the Bank in writing by the
Seller.
12.3.2.3 Deposit of funds as provided in clause
12.1.6.
12.3.2.4 Charging the Borrower's account at the Bank
with charges due to the Bank as well as with
the Bank attorney's fees.
13. PRECONDITIONS FOR THE PROVISION OF THE CURRENT CREDIT AND THE CREDIT FOR
FOREIGN TRADE AND DERIVATIVES
13.1 The Borrower has furnished to the Bank all the securities as set
forth in this Agreement, the securities are valid and there is no
lien which has precedence over them.
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13.2 The CFO's Confirmation has been furnished to the Bank.
13.3 There is no legal impediment to it and it is not in conflict with
the provisions of the law and/or in contravention of the
directives of the Supervisor of Banks (including Proper Banking
Management Directive No. 311: "Minimum Capital Ratio", Directive
No. 312: "Transactions of a Banking Corporation with Related
Persons" and Directive No. 313: "Restrictions on Liability of a
Borrower and of a Group of Borrowers" and/or any similar
directive IN LIEU THEREOF) and/or it does not cause any deviation
therefrom.
14. MISCELLANEOUS
14.1 If the Closing does not take place by February 16, 2010, this
Agreement will be rescinded and the Bank will have no obligation
thereunder.
14.2 The Borrower agrees that the Bank will be entitled to transfer to
Bank Leumi or anyone acting on its behalf and to anyone IN LIEU
thereof all data and/or documents and/or information in
connection with the Credit Agreement.
14.3 Every document to be furnished and/or signed in favor of the Bank
will be in such format and under such terms as will be concluded
with the Bank, subject to obtaining an approval concerning the
adoption of an appropriate resolution by the relevant organ in
the corporation, that will sign the document and together with an
attorney's confirmation as to the validity of the resolutions in
accordance with any law.
14.4 Nothing in the provisions of this Agreement will vest in any
third party any rights whatsoever.
14.5 A waiver by either of the Parties of a previous breach or failure
to fulfill any one or more of the obligations to such Party
and/or failure to uphold any condition whatsoever under the
Credit Agreement, will not be deemed as justification for another
violation or another failure to uphold any such condition or
undertaking; and refraining on the part of either of the Parties
from using any right whatsoever granted to it under the Credit
Agreement or under any law will not be interpreted as a waiver of
such right, and the other party hereby waives any claim or demand
in connection therewith. No concession or waiver in respect of
any of these conditions on the part of either of the Parties
shall bind such Party and will not constitute a justification for
failure to uphold any of these conditions unless made in writing
by the other Party.
14.6 Upon fulfillment of the conditions prescribed therefor, the Bank
will be entitled to exercise all the Security Interests provided
to it under the Credit Agreement or only a part thereof. Further,
the Bank will be entitled to realize the said Security Interests
at once or one after the other, at the Bank's discretion, subject
to the provisions of clause 11.
14.7 The Borrower undertakes to collaborate and to exercise
controlling power in Partner in order to implement the provisions
of this Agreement, including the execution of documents and/or
confirmations as may be required to this end, obtaining permits
and approvals as may be required after the Closing Day, including
for the purpose of the creation of additional liens in accordance
with the provisions of the Credit Agreement and the transfer of
information and documents pursuant to the provisions of the
Credit Agreement and further undertakes not to adversely affect,
through any act or omission, the performance of any of the
obligations under the Credit Agreement and/or the Security
Interests to be provided thereunder.
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14.8 The Borrower's rights under the Credit Agreement and/or the
documents referred to therein or related thereto are not
assignable or transferable in any manner whatsoever.
14.9 The Bank will be entitled to sell participation in the Credit to
a banking corporation or to another entity laid down in the First
Schedule to the Securities Law, without requiring the Borrower's
approval. Furthermore, the Bank will be entitled to transfer or
assign rights in the Credit and/or the Security Interests
pursuant to the Credit Agreement to a banking corporation or to
another entity laid down in the First Schedule to the Securities
Law which has assumed the terms of this Agreement. Any transfer
or assignment of the Security Interests as aforesaid, will be
performed subject to the approval of the Minister of
Communications, to the extent required, pursuant to the
provisions of Partner's licenses and the licenses of corporations
under its control.
It is hereby agreed that for the purpose of the sale of
participation or the transfer and/or assignment of rights in the
Credit pursuant to this Agreement, the Bank will be entitled to
disclose to any entity that purchases participation or is a
potential transferee, any information in its possession with
respect to the Parties hereto, subject to the signing by the
recipient of the information (if it is not a banking
corporation), of a confidentiality undertaking, in a customary
format, which is also addressed to the Borrower (a copy of which
will be provided to the Borrower immediately after the execution
thereof).
14.10 Subject to the provisions of any law, the Borrower will not be
authorized to present this Agreement to any entity, apart from a
competent authority pursuant to the law and to the organs in
office at the Borrower and to the shareholders at the Borrower,
and subject to the signing of a confidentiality undertaking, to
whomsoever seeks to invest or purchase shares in the Borrower,
other than with the Bank's prior written approval.
14.11 All fees and reasonable expenses applicable, if any, in
connection with the Credit Agreement and other documents to be
signed in connection therewith or thereunder, including with
respect to their registration, will apply to and be paid by the
Borrower.
14.12 All the appendixes attached hereto constitute an inseparable part
hereof.
14.13 The section headings herein are for purposes of convenience only
and will not be used for its interpretation in any manner
whatsoever.
14.14 The management terms and the appendixes hereto (hereinafter: the
"OTHER DOCUMENTS") shall add to rather than derogate from the
contents of this Agreement. However, in any event of a conflict
between a provision laid down in the Other Documents as aforesaid
and a provision laid down in this Agreement, the provision in
this Agreement shall prevail. To remove any doubts it is hereby
clarified that the foregoing is limited to cases where there is
express reference to a particular issue, both in this Agreement
and in the Other Documents. It is further clarified that in any
event where there is a reasonable possibility to interpret the
conflicting provisions as cumulative provisions they will be
interpreted as such.
14.15 Any notice forwarded by registered mail by the Bank or by the
Borrower to their address as set out below or to any other
address of which they have given a written notice, will be deemed
to have reached its addressee within three days from its
dispatch, and if hand delivered - upon the delivery thereof and
if transmitted by facsimile - on the first business day after the
date of dispatch. The addresses are as follows:
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Borrower: Attn.: Mr. Yahel Shahar, 00 Xxx Xxxx Xxxxx Xx., Xxxxxx
Xxxxx 00000, fax no.: 00-0000000, with a copy to Xxxxx Xxxxxxx &
Co., Law Xxxxxxx, 0 Xxxxxx Xxxxxx Xx., Xxx Xxxx 00000, fax
no.:03-6963801..
The Bank: Attn.: Xxxx Xxxxx, 7 Jabotinsky St., Ramat Gan, fax
no.: 03-7559079.
IN WITNESS WHEREOF WE HAVE SIGNED:
(-Stamped & Signed-)
------------------------
SCAILEX CORPORATION LTD.
By: /s/ Yahel Shahar /s/ Xxxxxx Xxxxx
---------------------------------------
Position: CEO CFO
ATTORNEY'S AUTHENTICATION
I, the undersigned, Xxxxx Xxxxxxxxx, Advocate, hereby confirm that Mr. Yahel
Shahar and Xx. Xxxxxx Xxxxx signed this Agreement on October 28, 2009 on behalf
of Scailex Corporation Ltd.
28.10.09 (-Stamped & Signed-)
-------- --------------------
Date Name of Attorney
BANK'S CONFIRMATION
We hereby confirm our consent to this Agreement.
/s/ /s/ Date: 28.10.09
-------------------------
Bank Mizrahi Tefahot Ltd.
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