EXHIBIT 7
INDENTURE
DRAWN UP AND SIGNED IN TEL AVIV ON THE 18TH AUGUST, 2009
BETWEEN: SCAILEX CORPORATION LTD.
Company no. 520031808
00 Xxx Xxxx Xxxxx Xx. Xxxxx Xxxxx 00000
Telephone: 00-0000000
Fax: 00-0000000
(hereafter: "the company" or "Scailex")
as the first party
AND: CLAL FINANCE TRUSTS 2007 LTD.
Company no. 514046424
00 Xxxxxxx Xxxxx Xxx, Xxx Xxxx
Telephone: 00-0000000
Fax: 00-0000000
(hereafter: "the trustee")
as the second party
WHEREAS: The board of directors of the company resolved in principle on
the 2nd July 2009 to issue a shelf prospectus according to which,
the company is liable to issue, among other things, series of
bonds which will be termed Series A to J and Series 1-10
(hereafter together "the bonds"), as described in this indenture;
WHEREAS: The trustee declares that it is a company registered in Israel,
deals with trusteeships and conforms to the qualifications as
required by the Securities Law 1968 to serve as a trustee for
bonds;
WHEREAS: The company declares that there is no legal or contractual
impediment on its part to engage with the trustee in this
indenture;
WHEREAS: The trustee agreed to act as trustee for the bondholders
according to the conditions of this indenture as set out below;
WHEREAS: The trustee declares that there is no legal or contractual
impediment on its part to engage with the company in this
indenture;
THEREFORE IT IS AGREED, DECLARED AND STIPULATED BETWEEN THE PARTIES AS
FOLLOWS:
1. INTERPRETATION AND DEFINITIONS
1.1. The introduction to this indenture and its appendices constitute an
inseparable part of it.
1.2. The division of this indenture into paragraphs and the assignment of
headings are done for convenience and ease of reference only and may
not be used for the purposes of interpretation.
1.3. The meaning of any term or expression, apart from those expressly
defined in this indenture (in particular paragraph 1.6 hereunder)
shall be that which is given in the bond certificates (the wording of
which is attached in the first of the aforesaid appendices to this
indenture) unless the content or context of the text implies
otherwise.
1.4. Wherever it is written "subject to all law" (or a similar expression)
in this indenture the intention is subject to any unconditional legal
rule.
1
1.5. Any term in the plural may be understood also as singular and vice
versa and any term in the masculine gender may be understood also as
feminine and vice versa and any reference to a person may be
understood as a corporation except where there is an express or
implied instruction in this indenture to the contrary or where the
content or the context of the text require the terms to be understood
otherwise.
1.6. The terms specified below in this indenture shall have the meaning
indicated alongside them unless it may be otherwise understood by the
content or context of the text or if expressly indicated in this
indenture.
"THE INDENTURE" This indenture including the appendices
which constitute an inseparable part of
it;
"THE PROSPECTUS" OR
"SHELF PROSPECTUS" The shelf prospectus of the company
which will be published in respect of,
among other things, these bonds;
"SHELF OFFER REPORT"
OR "OFFER REPORT" A shelf offer report that will be
published according to the shelf
prospectus, in accordance with the
requirements of the Securities Law 1968,
and in which bonds from the relevant
series will be offered and which
determines the details specific to the
pertinent offer;
"THE INITIAL OFFER
REPORT OF THE
RELEVANT SERIES" The offer report according to which
bonds of the relevant series will be
offered for the first time;
"SERIES OF BONDS" OR
"THE RELEVANT SERIES" A series of bonds which shall be termed
Series A to J and/or Series 1 to 10 of
company bonds such that each one of
these bond series shall amount to a
total nominal value of not more than NIS
4,000,000,000 registered by name, of
which the conditions of each one of the
series is in accordance with the bond
certificate appertaining to the series
and the initial offer report of the same
series which shall be issued from time
to time by the company at its sole
discretion;
"THE BONDS OR "THE BOND" Bonds from any one of the bond series;
"THE TRUSTEE" Clal Finance Trusts 2007 Ltd. and/or
anyone who will act from time to time as
trustee of the bondholders according
to this indenture;
"THE REGISTER FOR THE
RELEVANT SERIES" The bondholders' register as per
paragraph 25
"BONDHOLDERS" AND/OR
"BOND OWNERS"
AND/OR "THE HOLDERS" Those who hold bonds;
"BOND CERTIFICATE" The bond certificate the wording of
which appears in the first appendix of
this indenture;
2
"SPECIAL RESOLUTION" The resolution that was passed at a
general meeting of the bondholders of
the relevant series at which holders of
at least fifty-five per cent (55%) of
the nominal value of bonds of that
series which are still in public hands
are present either in person or
represented by proxy, or at a deferred
meeting at which holders of at least ten
per cent (10%) of the bonds as defined
above are present either in person or
represented by proxy, and which was
passed (whether at the original meeting
or at the deferred meeting) by
a majority of at least seventy five per
cent (75%) of the votes cast apart from
abstentions.
"THE LAW" OR "THE
SECURITIES LAW" The Securities Law 1968 and the various
regulations made under the law from time
to time
"THE COMPANY LAW" The Company Law 1999
"THE PRINCIPAL" The nominal value of outstanding bonds
of the relevant series.
"TRADING DAY" Any day transactions are executed on the
Tel Aviv Stock Exchange.
"BUSINESS DAY" Any day that most Banks in Israel are
open for transactions.
"THE STOCK EXCHANGE" The Tel Aviv Stock Exchange.
"THE STOCK EXCHANGE
CLEARING HOUSE" The Tel Aviv Stock Exchange clearing
house.
2. BOND ISSUE AND THE APPLICATION OF THIS INDENTURE
2.1. The Company shall be entitled to issue within the reference of this
indenture not more than 10 series of bonds (Series A to J), such that
the nominal value each one of these bond series will amount to a total
of not more than NIS 4,000,000,000 and not more than 10 series of
bonds (Series 1 to 10) such that the nominal value each one of these
bond series will amount to a total of not more than NIS 4,000,000,000
and of which the bonds in each of the aforesaid series shall be
registered by name and shall and shall be redeemed (principal) by the
number of payments which will be paid at each date as specified in the
initial offer report of the above-mentioned series and subject to the
indexation terms in this paragraph as follows, but not more than once
("BONDS OF THE SERIES A-J" AND "BONDS OF THE SERIES 1-10"
RESPECTIVELY). The indexation basis (or absence of indexation) and
sort of interest (or absence of interest) which shall be borne by the
principal of the bonds of each one of the aforesaid series issued
shall be specified in the initial offer report of the relevant series.
The indexation bases and the sorts of interest that are possible under
this indenture are specified in paragraphs 3 and 4 of the conditions
stated on back side of the bond certificate. The rate of interest and
the margin over or under the basic rate of interest or absence of
interest which will be borne by the principal of the bonds in each one
of the aforesaid series, as required, shall be specified in the
initial offer report of the bonds in the relevant series or, in
respect to the bond series (Series A to J) only, shall be determined
by tender the results of which shall determine how their initial offer
shall be drafted. The interest, insofar as there is, on the principal
of the bonds in each one of the aforesaid series shall be paid each
year in one annual payment or in two half yearly payments or four
quarterly payments, all of which shall be specified in the initial
offer report of the bonds in the relevant series. The dates and number
of principal repayments, the indexation basis (or absence of
indexation) the sort of interest, the rate of interest or the method
of fixing the interest (or absence of interest) of the bonds in each
one of the aforesaid series, as specified in the initial offer report
of the bonds in the relevant series, shall be determined by the
company shortly before their initial offer. If, after the date of the
initial issue of bonds in any of the bond series, the company extends
the said bond series, holders of bonds issued consequent to the
extension of the said series shall not be entitled to receive payment
on account of the principal and/or interest in respect to the
aforesaid bonds of which the qualifying date falls before the
aforesaid date of issue.
3
2.2. In addition to all that is said above the bonds in the series 1 to 10
shall be convertible to ordinary shares of the company at a nominal
value of NIS 0.12 per share at times, at a conversion rate (subject to
adjustment as set out in paragraphs 7.3 and 7.4 of the conditions
stated on the back side of the bond certificate) in a way and under
conditions, all of which shall be specified in the initial offer
report of each one of the aforesaid bond series in accordance with the
determination of these items by the company shortly before the initial
offer of the bonds in the relevant series.
2.3. The company intends to publish a shelf prospectus in August 2009,
according to which the company shall be entitled to offer the bonds to
the public in shelf offer reports (without prejudicing the rights of
the company to offer bonds in other prospectuses and/ or in private
issues or in any other way.
2.4. The terms of this indenture in respect of one of the relevant series
are not conditional and not dependent on the terms of this indenture
in respect of another series.
2.5. Let it be clear that, if at the time of publishing any offer report
the trustee serves as trustee to another bond series of the company
and/or if the offer report relates to more than one bond series, the
possibility of the trustee acting as trustee to an additional series
of bonds, either partially or entirely, shall be reviewed in
accordance with Securities Authority's directions and/or law that
applies at the time. If another trustee is appointed to any bond
series as a result of the aforesaid condition the details of the same
trustee shall be included in the relevant offer report.
2.6. ADDITIONAL BOND PLACEMENTS
The company shall be entitled from time to time, without need to be
authorised by the trustee and/or by the existing holders at the time
to extend each one of the bond series and issue additional bonds from
the same series (whether as a private offer or consequent to a
prospectus, either according to a shelf offer report or any other way)
at any price and in any manner that seems proper to the company and,
accordingly, the discount or premium (including absence of discount or
absence of premium) different from those that were current (if at all)
at the time of other issues that have already taken place. Bonds in
the relevant series which are issued initially and additional bonds
from the same series that are subsequently issued as mentioned above
in this paragraph constitute (from the time of issue) one series for
all matters and purposes and the indenture for the same series shall
apply to additional bonds as mentioned above from the same series that
was issued by the company.
Without prejudice to the aforesaid conditions, the company reserves
the right to issue at any time additional bond series without need of
authorisation from the trustee and/or the existing holders at the
time, whether entitling conversion to company shares or without the
aforesaid entitlement and with conditions of repayment, interest,
indexation, security and other conditions as the company deems fit
whether they are preferential to the conditions of bonds from any
relevant series, equal to them, or inferior to them.
4
2.7. Bonds of any relevant series shall have the same status pari passu as
each other in respect to the liability of the company to according to
bonds of the same series without priority or preference of one over
the other
2.8. The terms of this indenture shall apply to the said bonds that are
issued in each one of the bond series which will be held from time to
time by any acquirer of the bonds including the public unless stated
otherwise.
3. ACQUISITION OF BONDS BY THE COMPANY AND/OR BY A RELATED COMPANY
3.1 The company reserves the right to acquire at any time and from time to
time, bonds from each one of the bond series that have been issued, at
any price that it deems fit, without prejudicing the obligation to
redeem bonds held by others than the company, and in the case of the
said acquisition the bonds acquired will be automatically annulled and
delisted from trading on the Stock exchange and the company shall not
be entitled to reissue them. In the event that bonds that bonds are
acquired in the course of their trading on the stock exchange, the
company shall request from the clearing house to withdraw the
certificates relating to the acquired bonds. The company shall
immediately submit a report on each acquisition of bonds in the
relevant series that was thus carried out and shall forthwith notify
the trustee in writing. A subsidiary company of the company and/or a
company controlled by the company and/or a holder of a controlling
interest in the company (directly or indirectly) and/or a company in
the control of a holder of a controlling interest of the company
(hereafter: a related company) shall be entitled to acquire and sell
at any time and from time to time, including by way of issue by the
company, bonds in the relevant series at their discretion (subject to
law). The aforesaid bonds that shall be held by the related company
shall be considered an asset of the related company, shall not be
delisted from trade on the Stock Exchange and shall be negotiable as
the other bonds of the company (subject to the terms of the indenture
and the bonds). Likewise bonds of the relevant series which are held
by a subsidiary company of the company and/or company controlled by
the company shall not entitle their holders to the right to vote at
general meetings of bondholders of the same series and shall not be
counted in the legal quorum at these meetings. The company shall
immediately submit a report on each acquisition and/or sale of bonds
in the relevant series that was carried out by the said related
company and shall forthwith notify the trustee for the relevant
series.
Nothing in the aforesaid paragraph 3.1 may be implied to oblige the
company or bondholders to acquire bonds or sell bonds in their
possession.
3.2 At the time of holding a meeting of holders of bonds in the relevant
series, the trustee for the said series shall review the existence of
conflicting interests among the bondholders of the said series in
accordance with the circumstances of the matter and the need to call a
class meeting in the cases where there exist different interests among
the bondholders of the said series in accordance with the
circumstances of the matter and his determination in the matter shall
be at his discretion. The company and the trustee shall act for the
convention of a class meeting of the bondholders of the relevant
series in accordance with the provisions of law, judicial decisions
and the provisions of the Securities Law and regulations and
directives ensuing from the Law as the trustee shall instruct to the
said series. The decision brought for the confirmation of the class
meeting shall require to be confirmed at each class meeting called for
the purpose of confirming the said decision and also the confirmation
of a general meeting of the of the said series all of which shall be
with a majority required by the terms of this indenture and subject to
the provisions of the law. The trustee is entitled, at his sole
discretion, to determine that the said decision does not require
confirmation of one or more particular class meetings or that a
particular class meeting shall not be called.
3.3 Wherever it is stated that one of the aforesaid meetings of the
bondholders shall be convened, and according to the law (including
judicial decisions and the directives of any authorised body) it is
required to convene class meetings the above paragraph shall apply to
class meetings of bondholders with changes as required.
5
4. THE LIABILITIES OF THE COMPANY
The company is hereby obliged to pay all amounts of principal, interest
(including interest on arrears if at all) and escalation payments, if at
all, that are paid according to the bonds and to fulfill the conditions and
other obligations imposed by the bonds and this indentures.
5. BOND GUARANTEES
The bonds may or may not be guaranteed by collateral, any form of charges
on assets or any other fashion. Details concerning the mechanism for
guaranteeing the bonds, if at all, by charges of any kind or in any other
fashion shall be published within the initial offer report of the bonds in
the relevant series.
To remove all doubt it is hereby declared that there is no obligation for
the trustee to examine and the trustee has not examined the need to provide
securities and guarantees for payments to bondholders from said series.
That trustee was not requested and did not carry out an economic, financial
or legal due diligence investigation as to the commercial situation of the
company or its subsidiaries. By his engagement as per this indenture and
the agreement of the trustee to serve as trustee for the holders of the
bonds of the said series the trustee does not express his opinion expressly
or implicitly as to the ability of the company to honour its obligations
towards the holders of bonds from the said series. Notwithstanding this
does not detract from the obligation of the trustee (insofar as such an
obligation is required of the trustee by law) is to review the effects of
changes in the company from the date of the prospectus and thereafter
insofar as they affect the ability of the company to honour its obligations
to the detriment of the holders of the bonds of the said series.
While it is not determined otherwise in the initial offer report of bonds
in any relevant series, the company shall be entitled to mortgage all or
part of its assets in any way in favour of whom it deems fit, without
limitation at all and at any degree, including guaranteeing bonds (or any
bond series) or other liabilities without the need for agreement on the
part of trustee or the bondholders of any series. Moreover the company
shall be entitled to sell, lease, deliver or otherwise transfer part or all
of its property in favour of whom it deems fit, without the need to obtain
agreement on the part of the trustee or bondholders.
6. EARLY REDEMPTION
6.1 EARLY REDEMPTION AT THE INITIATIVE OF THE STOCK EXCHANGE
If the Stock Exchange decides to delist the bonds of any one of the
series A to J because the value of the series is less than the minimal
amount that was determined in the rules and the directives of the
Stock Exchange concerning delisting and/or if the Stock Exchange
decides to delist the convertible bonds of any one of the series 1 to
10 because the value of the series is less than the minimal amount
that was determined in the rules and the directives of the Stock
Exchange concerning delisting, the company shall act as follows:
6.1.1 Within forty-five (45) days from the date of the Stock
Exchange's decision on the aforesaid delisting the company shall
notify as to the date of the early redemption in which the
bondholder shall be entitled to redeem his bonds. The notice of
early redemption shall be published in two (2) daily newspapers
with a broad circulation in the Hebrew language.
6.1.2 The date of the early redemption of the bonds in the series E to
I in the event of an aforesaid early redemption shall not fall
less than seventeen (17) days from the date of publishing the
notice and not more than forty-five (45) days from publishing the
said notice, but not in the period between the qualifying date
for interest and the date of its payment.
6
6.1.3 The date of the early redemption of the bonds of the series 1 to
10 in the event of an aforesaid early redemption shall not fall
less than thirty (30) days from the date of publishing the notice
and not more than forty-five (45) days from the said notice, but
not in the period between the qualifying date for interest and
the date of its payment.
6.1.4. On the date of the early redemption the company shall redeem
the bonds in the same series belonging to those bondholders who
sought to redeem them according to the nominal value outstanding
together with escalation payments, if at all, and interest which
accrued on the principal such that the interest shall be
calculated relatively for the period beginning from the day after
the previous qualifying date until the date of the actual early
redemption (calculation of interest for part of the year shall be
on the basis of 365 days to a year).
6.1.5. Determination of the aforesaid early redemption shall not
detract from the fixed rights of redemption for the bonds of the
same series, for bondholders who do not redeem them on the date
of the aforesaid early redemption and in the case of convertible
bonds shall not detract from the rights of conversion stipulated
in them, but the bonds shall be delisted from trading on the
Stock Exchange and that shall affect, among other things,
taxation status.
6.1.6. The aforesaid early redemption of bonds shall not entitle
holders of bonds from the same series who have redeemed their
bonds as specified above to the payment of interest for the
period after the date of redemption.
6.2. The company shall be entitled to schedule bonds of any one the bond
series that are offered according to the shelf offer report, for early
redemption, on the conditions, at the price, with the mechanism, with
the schedules and other conditions that must be published in
accordance with the provisions of the rules and directives of the
Stock Exchange as they will be at the time, as is determined in the
initial offer report of the bonds in the relevant series and including
the case in which an event as defined in the shelf offer report will
not happen and provided that the bonds have been traded at least 30
trading days.
7. CALL FOR IMMEDIATE REDEMPTION
7.1 In the event that one or more of the following occurrences enumerated
below happens it shall be possible call the bonds in the relevant
series for immediate redemption and the provisions of paragraph 7.2 of
this indenture shall apply.
7.1.1 If the company does not repay any amount due from it in respect
of bonds in the relevant series within forty-five (45) days from
the date of repayment.
7.1.2 If the court appoints a temporary liquidator or a valid
resolution which is conclusive and final to dissolve the company
(apart from dissolution in order to merge with another company
and/or change in the company structure) and the said appointment
or the said resolution is not cancelled within ninety (90)
business days from the date of appointment or resolution as
applicable.
7.1.3 If a lien is imposed, or a mortgage is realised, or there is an
execution of judgment all of which are on the principal assets of
the company and the lien is not removed or the realisation or
execution is not cancelled within ninety (90) business days of
imposing the lien or realising the mortgage or executing the
judgment, and it is reasonable to suppose that there is a
tangible risk to the possibility of repayment of any amount that
is due from the company in respect of bonds in the relevant
series from the said lien, realisation or execution.
7
7.1.4 If a receiver or temporary receiver is appointed for the
principal assets of the company and the appointment is not
cancelled within ninety (90) business days, and it is reasonable
to suppose that there is a tangible risk to the possibility of
repayment of any amount that is due from the company in respect
of bonds in the relevant series from the said appointment.
7.1.5 If the company ceases or announces that it intends to cease the
payment of its debts in a way that it is reasonable that in any
of these instances there is a risk to the bondholders of the
relevant series.
7.1.6 If the company ceases operations and/or ceases managing its
operations as there may be from time to time and/or informs the
trustee of is intention to cease continuing with its operations
as may be from time to time
7.1.7 If the company infringes or does not fulfill all the conditions
included in the bonds of the relevant series or in the indenture,
in away that it is reasonable to suppose that the rights of the
bondholders of the said series have been significantly
prejudiced.
In this paragraph "THE PRINCIPAL ASSETS OF THE COMPANY" has the
meaning of assets which constitute most of the assets within the
total as disclosed on the consolidated balance sheet of the
company which was published aforesaid relevant instance.
7.2 In the aforesaid instances the following provisions shall apply
7.2.1. In the event of the instances set out in paragraphs 7.1.1 to
7.1.6 (inclusive) above the trustee shall be obliged to call a
meeting of the holders of bonds of the relevant series.
7.2.2. In the event of an instance as set out in paragraph 7.1.7 above
the trustee shall be entitled (but not obliged) and any one of
the bondholders who hold ten per cent (10%) or more of the bonds
of the relevant series shall be entitled to call a meeting of the
holders of bonds of the relevant series.
7.2.3. The date of convening the meeting of the holders of bonds of
the relevant series of which the agenda shall be a resolution
concerning the immediate redemption of all outstanding balance of
bonds of the relevant series as a result of any of the
occurrences that are set out in paragraph 7.1 above shall be
thirty (30) days from the date of calling the meeting (or sooner
in accordance with the provisions of paragraph 7.2.6 to this
indenture).
7.2.4. In the event that by the date of convening the aforesaid
meeting any of the instances set out in paragraph 7.1 above is
not cancelled or annulled and the resolution at the aforesaid
meeting of the holders of the aforesaid bonds concerning the call
for their immediate redemption was accepted as an special
resolution, the trustee shall be obliged, within reasonable time
to call for immediate redemption of the outstanding balance of
bonds of the relevant series.
7.2.5. A copy of the notice calling the aforesaid meeting shall be
sent by the person requesting to the company immediately on
publishing the notice calling the meeting and shall constitute an
advance and written notice to the company of his intention to act
as said and the company shall immediately publish a report
concerning calling of the said meeting.
7.2.6. The trustee shall be entitled, at his discretion, to shorten
the thirty (30) day period as stated in paragraph 7.2.3. to this
indenture in the event that the trustee is of the opinion that
any delay in calling the bonds of the relevant series for
redemption endangers or is liable to endanger the rights of the
holders of the bonds of the same series but anyway the trustee
shall not do so without giving advance notice to the company, all
of which shall be according to the circumstances of the matter.
8
7.2.7. The trustee shall be responsible to report to the holders of
the bonds of the relevant series about the occurrence of any of
the instances set out in paragraph 7.1 above whether by strength
of items which the company published openly or whether in
accordance with paragraph 23 below.
7.2.8. It is hereby clarified that the liabilities of the trustee
under paragraph 7, are subject to his actual knowledge of the
existence of the facts, events, the circumstances and the
occurrences specified in it. Nothing in the aforesaid disclaimer
shall be understood to detract from the liabilities of the
trustee under the law on condition that nothing shall be
understood to detract from the trustee's rights.
To remove all doubt it is clarified that the trustee for the bonds is
not entitled to call for immediate redemption on the strength of his
own opinion alone.
8. CLAIMS AND LEGAL PROCESSES AT THE TRUSTEE'S DISPOSAL
8.1. At any time after the bonds of the relevant series are called for
immediate redemption as stated in paragraph 7 to this indenture, the
trustee shall be entitled, at his discretion, to implement any
process, including legal process, as he deems fit and subject to the
law for the purpose of enforcing the liabilities of the company under
this indenture and in order to realise the rights of the holders of
bonds of the relevant series according to this indenture. Subject to
the provisions of this paragraph, after bonds of the relevant series
are called for immediate redemption as per paragraph 7 to this
indenture the trustee shall be obliged to act as in the said paragraph
if required to do so by the special resolution of the holders of bonds
of the relevant series unless the trustee saw that in the
circumstances of the matter the thing is not justified and/or
unreasonable to do thus, and requested to receive instructions
regarding the matter from the appropriate court at the earliest
possible time.
8.2. The trustee is entitled before he has implemented the aforesaid
processes, to convene a meeting of the holders of the bonds of the
relevant series in order that it be decided by the aforesaid holders
in a special resolution which processes to implement to realise their
rights under this indenture, and provided that the meeting shall be
convened at the earliest possible time and the resulting delay shall
not endanger the rights of the aforesaid holders. Moreover, the
trustee shall be entitled to convene further meetings of the aforesaid
holders for the purpose of receiving instructions concerning the
management of the aforesaid processes in accordance with what is said
above.
8.3. Subject to the provisions of this indenture, the trustee is entitled
but not obliged, to convene at any time, a general meeting of the
holders of bonds of the relevant series in order to discuss and/or
receive its instructions in any matter concerned with this and
provided that the convening of the meeting at the earliest possible
time and the resulting delay shall not endanger the rights of the
aforesaid holders. The trustee shall be obliged to call a meeting at
the earliest possible time at the request of holders of at least ten
per cent (10%) of the principal of the bonds of the same series that
are still outstanding.
8.4. The trustee is entitled, at his sole discretion, to delay the
execution of any action on his part under this indenture, for the
purpose of approaching the meeting of the holders of the bonds of the
relevant series and/or approaching the court until he has received
instructions from the meeting of the holders of the bonds of the
relevant series and/or instructions from the court how to act provided
that the convening of the meeting or the approach to the court were
done at the earliest possible time.
9
8.5. To remove doubt it is hereby clarified that nothing in the provisions
specified above shall prejudice or detract from the right of the
trustee, hereby vested in him, at his sole discretion to approach even
before bonds of the relevant series are called for immediate
redemption, and afterwards for the purpose of receiving any writ as to
the matters of the trust.
9. TRUSTEESHIP OVER MONIES RECEIVED
All the monies that shall be received by the trustee in any way including
but not only those as a result of processes that he shall take , if he
takes, against the company shall be held in trust and shall be used by him
for the following aims and in the following priority:
Firstly for the defrayment of expenses, payments, levies and commitments
that were spent by the trustee, imposed on him, or caused in the course of
or as a result of activities in executing the trusteeship or otherwise in
respect of this indenture, most of all his fees. Secondly- to pay the
bondholders the arrears of interest due to them according to the conditions
of the bonds pari passu and relative to the total arrears of interest due
to each one of them without preference or priority regarding any one of
them; Thirdly- to pay the bondholders the amounts of the principal due to
them according to the bonds held by them pari passu whether the date of
repayment of the principal has arrived or not and relative to the amounts
due to them without any preference in respect of the order in time that the
bonds were issued by the company or any other way; and the trustee shall
pay any surplus, that there is, to the company or its substitutes whichever
is applicable.
Payment of the amounts by the trustee to the aforesaid bondholders from the
monies that he has received is subject to the rights of other creditors of
the company in accordance with the provisions of law.
The trustee is entitled to instruct the company in writing to transfer to
the trustee any payment that the company owes to holders. The company shall
act according to the trustee's notice and the company shall be deemed as
having fulfilled its commitments towards holders if it has transferred the
entire amount of the debt to the credit of the account specified in the
trustee's notice. The trustee is entitled to offset, subject to the
provisions of the law, any amount that the company owes and/or the holders
owe to the trustee by strength of this indenture.
10. AUTHORITY TO DELAY DISTRIBUTION OF FUNDS
In spite of what is stated in article 9 above, if the monetary sum received
as a result of undertaking the proceedings mentioned in article 9 above,
standing at any given time for distribution among the bond holders from the
relevant series, as stated in said article, would be less than 3,000,000
NIS, the trustee would not be obligated to his share and would be allowed
to invest the said sum, in whole or in part, in the investments allowed
according to this bond.
When said investments along with their profits reach, together with
additional funds that reach the trustee for their payment to the holders of
bonds from the relevant series, if they reach, an amount sufficient to pay
at least 3,000,000 NIS, the trustee would be obligated to distribute the
said amount to the holders of bonds from the relevant series.
In spite of what is stated in article 10 above, holders of bonds from the
same series are allowed, by special decision they arrive at, to instruct
the trustee to pay them the funds received by the trustees and those
standing for distribution as stated in article 9 above, even if their sum
stands at less than 3,000,000 NIS.
11. NOTIFICATION OF DISTRIBUTION
11.1. The trustee would notify the holders of the date and place where any
payment out of the payments mentioned in articles 9 and 10 above is
made, this in a prior notification of fourteen (14) days delivered in
the manner determined in article 23 below.
11.2. After the date set in the notification the holders would be entitled
to interest according to the rate set in the bonds of the same series,
only for the remainder of the capital sum (of there is one) after the
deduction of the sum paid or offered to be paid as stated.
10
12. ABSTENTION FROM PAYMENT FOR REASONS NOT DEPENDENT ON THE COMPANY
12.1. A certain amount which the holder of bonds from the relevant series
deserves and has not actually paid at the date determined for payment,
for reasons not dependent on the company, while it was prepared to pay
it ("THE HINDRANCE"), will no longer carry interest and linkage
differentials from the said date and the holder would be entitled only
to those sum he was entitled to at the date determined for redemption
of that payment on account of the capital, linkage differentials or
interest.
12.2. If said amount was not paid within fourteen (14) days from the date
set for payment, on the fifteenth (15) day after the date set for
payment the company will transfer (and in case this is not a business
day then on the first business day following it) that same sum to the
trustee, who will hold on to the sum in trust for the bond holder, and
this said holding would be considered as payment of that amount to the
holder, as subject to article 12.3 of this deed. If the said sum is
the final payment the transference of that sum into the hands of the
trustee in trust would be seen as redemption of said bonds, as subject
to article 12.3 of this deed. The trustee would deposit in the bank
any amount held in trust for the holders of the bonds from the same
series and invest it in his name or at his directive in accordance
with what is stated in article 15 of this deed. After receiving
notification from the holder on a lack of hindrance, the trustee would
transfer the funds accumulated for the deposit and derived from
realizing their investment to the holder, deducting all expenses,
trust account management fees, and taxes by law. The payment would be
made against presentation of the same proofs, acceptable to the
trustee, regarding the holder's right to receive it.
12.3. A year following the final date for redemption of the bonds from the
relevant series, the trustee will transfer the sums he has accumulated
into the hands of the company, deducting his expenses, and the company
would hold them in trust and invest them as stated in article 12.2
above, for the holder for a period of up to seven (7) years from the
date of the final redemption of bonds from the same series, and would
not make any use of them throughout this period. Regarding sums
transferred to the company by the trustee as stated above, the company
would be subject to what is stated above in article 12 of this deed,
with the necessary changes. After the sums are transferred to the
company the trustee would not owe the holders of bonds from the same
series any sort of payment for the sum he held as stated above.
12.4. The company will provide written approval to the trustee for the
transference of said sums into its hands and their acceptance in trust
for the holder of bonds from the same series as stated, and will
compensate the trustee for any damage he may incur for said
transference of funds, given that he has acted reasonably. Said sums
that remain unclaimed from the company by the holder of bonds from the
same series for seven (7) years after the final date of redemption
would be handed over to the company's possession and it would be
allowed to use the remaining funds for whatever goal it sees fit.
13. RECEIPT FROM BOND HOLDERS
13.1. A receipt from a holder for the capital and/or interest sums paid to
him by the trustee for bonds from the relevant series would release
the trustee completely from anything related to payment of the sums
stated in the receipt.
13.2. A receipt from the trustee regarding the deposit of the capital and
interest sums with him in credit of the bond holders as stated in
article 12 above would be considered as a receipt from the holder of
bonds from the relevant series in relation to what is stated in
article 3.11above.
11
13.3. The funds distributed as stated in article 11 above would be
considered as payment on account of the redemption.
14. APPLICATION OF THE SECURITIES PROVISIONS LAW
In any issue not mention in this deed and also in any case there is
contradiction between the regulation of the securities provision laws
(which are unconditional) and this deed, the sides will act according to
the regulations of the securities provisions law.
15. INVESTMENT OF FUNDS
ALL THE FUNDS THAT THE TRUSTEE IS ALLOWED TO INVEST ACCORDING TO THIS DEED
WOULD BE INVESTED BY HIM, IN HIS NAME OR BY HIS INSTRUCTION, ACCORDING TO
HIS JUDGMENT, IN GOVERNMENTAL BONDS OR DAILY BANK PLEDGES AT ONE OF THE
FIVE LARGE BANKS.
16. THE COMPANY'S OBLIGATIONS TOWARDS THE TRUSTEE
The company takes upon itself, towards the trustee, the following
obligations, as long as the bonds from the relevant series are not yet
redeemed in full:
16.1. To persistently conduct the company's business in an orderly and
appropriate manner.
16.2. To hold and guard its assets (as they are from time to time) in a
good and sound status.
16.3. To provide, and to instruct its accountants to provide the trustee
and his accountants, lawyers or other advisors on his behalf, any
information reasonably required to protect the holders regarding all
the data related to the company's businesses or assets (as subject to
any provision of law and their signing a commitment to maintain the
company's confidentiality).
16.4. To manage neat account registries in accordance with the accounting
principles accepted for public Israeli companies, and to keep the
registries including documents used as their written support in its
offices.
16.5. To notify the trustee in writing, as soon as the company learns of
it, of the occurrence of one or more of the incidents entitling a
right to immediate redemption, as detailed in article 7 of the trust
deed.
16.6. To allow the trustee to be present at general assemblies of the
company's stockholders (without the right to participate or vote).
16.7. To give the trustee the reports and updates as detailed in article 28
of the trust deed.
16.8. To deliver the trustee, by his request, an affidavit and/or
declarations and/or documents and/or details and/or information, as
they are reasonably requested by the trustee, in accordance with his
exclusive judgment, for the implementation and activation of the
authorities, controls and permissions of the trustee and/or his
representatives according to the trust deed.
The trustee is hereby obligated to keep any information received from the
company in secret, excluding the transference of information to the
assembly of holders convened for delivering a report and/or for reaching a
decision regarding their rights according to the bonds of the relevant
series, as long as the said transference is subject to the instructions of
any law and that said transference would not harm the company's legitimate
interests.
12
17. ADDITIONAL OBLIGATIONS
After the bonds of the relevant series have been made immediately payable
in accordance with Section 7 above, the company shall perform from time to
time and at any time on demand by the trustee any reasonable actions to
enable the trustee to exercise the authority vested in the trustee and, in
particular, the company shall act as follows:
17.1 Make statements and sign all documents and carry out or bring about
any actions necessary or required by law to permit exercise of the
trustee's authority, power and mandate.
17.2 Issue any announcements, commands and instructions considered
beneficial by the trustee and demand them in a reasonable manner for
implementation of the provisions of this deed of trust.
For the purposes of this Section, a written announcement signed by the
trustee, confirming that an action demanded by him, within the scope of his
authority, is a reasonable action, shall constitute prima facie evidence
thereof.
18. OTHER AGREEMENTS
Subject to legal provisions, performance of the trustee's duty under this
deed, or his very standing as a trustee, shall not prevent him from
engaging with the company by means of various contracts or from carrying
out transactions with it in the normal course of his business.
19. THE TRUSTEE'S FEE
The company shall pay the trustee his fee and expenses in connection with
this deed as agreed upon between them in writing from time to time. At the
time of signing this deed, the trustee's fee shall be as follows:
19.1 Shelf prospectus: Because of the legal work involved in filing a shelf
prospectus, the trustee shall be paid a single sum of NIS 10,000 on
the date of filing the shelf prospectus.
19.2 Issuance of the first bond series: On the date of issuance of the
first bond series in accordance with the shelf prospectus, the trustee
shall be paid a fee in respect of the first year of trusteeship in the
amount of NIS 18,000.
From the second year of trusteeship, the trustee shall be paid in
respect of this series an annual fee in the amount of NIS 15,000. This
amount shall be linked to the consumer price index known on the date
of issuance.
19.3 Issuance of additional bond series: In respect of any additional
series issued according to the prospectus, the trustee shall be paid
an annual fee of NIS 12,500 for each year of trusteeship.
19.4 The trustee shall also be entitled to payment for special actions
taken by him, which derive from violation of this deed of trust by the
company, or in respect of making the bond immediately payable and in
respect of other special actions he will be required to perform, if
required, for performance of his duty in accordance with this deed,
all this without derogating from the generality of what is stated in
this Section 19 (hereinafter: "SPECIAL ACTIONS").
It is herewith agreed between the parties that the trustee shall be
entitled to a fee in the amount of NIS 400 for every hour needed by
him as aforesaid.
19.5 For participation in the general meeting of the company's
shareholders, the trustee shall be paid an amount of NIS 400.
19.6 The annual fee shall be paid to the trustee for the period of time to
the end of the trusteeship period in accordance with this deed, even
if a receiver and/or a managing receiver has been appointed and/or
trusteeship under this deed is managed under the supervision of a
court. The trustee shall not be entitled to payment of his fee from
the date of expiry of his office as trustee, as stated in Section 26
below, or by virtue of the holders' decision under Section 27 below.
Should the trustee's office expire during the year of trusteeship,
then the fee paid for the months the trustee did not serve as the
company's trustee shall be returned.
13
20. SPECIAL POWERS
20.1 The trustee shall have the right to deposit all deeds and documents
that prove, represent and/or determine his right in connection with
any asset held by him at that time, in a safe-deposit box and/or any
other place chosen by him, with a banker and/or a banking company
and/or a lawyer.
20.2 Within the scope of carrying out the trusteeship business in
accordance with this deed, the trustee shall have the right to seek
the opinion and/or advice of any lawyer, accountant, assessor,
estimator, surveyor, broker or any other expert and to act in
accordance with its conclusions whether the opinion and/or the advice
was prepared at the request of the trustee and/or the request of the
company.
20.3 Any such advice and/or opinion can be provided, sent or received by
letter, telegram, facsimile and/or any other electronic means for
transmission of information in writing.
20.4 Subject to the provisions of this deed, the trustee shall have the
right to convene, at any time, a general meeting of holders of the
bonds of any relevant series in order to discuss and/or obtain its
directives regarding any matter concerning this deed, and he shall
have the right to reconvene it.
20.5 The trustee shall not be obligated to notify any party of the signing
of this deed and shall not be entitled to interfere in any way in the
management of the company's activities or business, unless his powers
according to this deed allow it, or as agreed (if agreed upon in the
future) between the company and the trustee and/or between the company
and the holders of bonds of the relevant series.
20.6 The trustee shall exercise for the trusteeship the power, authority
and mandate granted him in accordance with this deed at his absolute
discretion.
21. THE TRUSTEE'S AUTHORITY TO EMPLOY AGENTS
The trustee shall have the right to appoint, within the scope of
trusteeship management, (an) agent(s), whether layers or others, to act for
him, to carry out or to take part in special actions that have to be
performed in connection with the trusteeship and, without derogating from
the generality of the aforesaid, to take legal action, provided that the
trustee has notified the company of the appointment of said agent. The
trustee shall also have the right to pay, at the company's expense, such an
agent's reasonable fee in respect of proceedings for or following the
making of bonds immediately payable, and at his first demand the company
shall immediately repay the trustee these expenses, all this on condition
that the company was notified in advance by the trustee of the appointment
of said agents. The appointment of an agent shall not release the trustee
from any liability imposed on him if powers were not delegated and/or
derogate from the trustee's liabilities in respect of his actions or
actions of his agents. The company shall have the right to oppose the
appointment of a certain said agent on any reasonable basis, including a
case where the agent constitutes a competitor or is involved in a conflict
of interests, whether directly or indirectly, with regard to the company's
business.
22. INDEMNIFICATION OF THE TRUSTEE
22.1 The trustee shall be entitled to an indemnification from holders of
the bonds of the relevant series in respect of reasonable expenses he
has incurred and/or will incur in connection with actions he has
performed or has to perform with regard to the series concerned
because of his duty under the conditions of this deed and/or according
to law and/or a directive of a competent authority and/or any legal
rule and/or a demand of holders of the bonds (with the exclusion of
expenses in connection with actions, as aforementioned, in accordance
with the company's demands, in which case he shall be entitled to
indemnification by the company). Despite the aforesaid, it is herewith
clarified and agreed that:
14
22.1.1 The trustee shall not have the right to claim said
indemnification in advance with regard to an urgent matter
(without derogating from the trustee's right to indemnification
after the event concerning the same matter, if his right has been
established).
22.1.2 The trustee shall be entitled to indemnification in respect of
liability for damages if found liable by a final judgment or a
concluded compromise with regard to a third party that does not
hold bonds of the series concerned.
22.2 The right to indemnification, as stated in Section 22.1, shall be
subject to the following conditions:
22.2.1 The expenses on account of liability for damages are
reasonable.
22.2.2 The trustee acted in good faith, and this action was taken
within the scope of his duty, in accordance with legal provisions
and under this deed of trust.
22.3 Without derogating from rights to compensation and indemnification
granted to the trustee by law and/or according to commitments of the
company and the holders of bonds in accordance with this deed, the
trustee, his representative, a manager, an agent or any other person
appointed by the trustee in accordance with this deed shall be
entitled to receive, from the moneys received by the trustee from
procedures conducted by him and/or in some other way in accordance
with this deed, an indemnification concerning their undertakings,
concerning their expenses in connection with the trusteeship or in
connection with actions considered by them necessary for the
abovementioned activity and/or in connection with exercise of
authority and mandate based on this deed as well as in connection with
different kinds of legal proceedings, opinions and consultation with
lawyers and other experts, negotiations, discussions, expenses, claims
and demands with regard to any subject and/or matter performed and/or
not performed in some manner, all this in relation to the relevant
series, and the trustee shall be allowed to detain the moneys in his
possession and pay the sums necessary for said indemnification. All
said amounts shall have preference over claims by holders of the bonds
of the same series, subject to any legal rule, provided that the
trustee acted in good faith and in accordance with his duties and any
legal rule and in accordance with this deed.
22.4 Whenever the trustee is obliged, in accordance with the conditions of
the deed of trust and/or the law and/or directives of a competent
authority and/or any legal rule and/or a demand by holders of bonds of
the relevant series and/or a demand by the company, to take any action
relating to the series concerned, including, but not limited thereto,
initiation of proceedings or filing of suits as demanded by holders of
bonds of the series concerned, as stated in this deed of trust, the
trustee shall have the right to refrain from taking any such action
until he receives a satisfactory letter of indemnity from holders of
bonds of the series concerned or from one of them and, if the action
is taken on demand of the company, from the company, in respect of any
liability for damages and/or expenses that the trustee or the company
or one of them may incur as a result of said action. It is made clear
that the aforesaid does not release the trustee from taking an urgent
action required to prevent fundamental damage to the rights of holders
of the bonds of the series concerned.
15
22.5 Despite all the aforesaid in this Section 22, whenever the trustee may
think fit, in order to protect and/or realize the rights of holders of
the bonds of the relevant series and/or if obliged, in accordance with
the conditions of this deed and/or the law and/or directives of a
competent authority and/or any legal rule and/or a demand by the
company and/or a demand by holders of bonds of the series concerned,
to take legal action, the company shall deposit with the trustee a
sum, reasonably determined by the trustee as the expected sum of the
trustee's expenses in connection with the proceedings. In case the
company does not deposit the abovementioned sum on the date requested
by the trustee and the trustee doubts the ability of the company to
cover the expenses involved in conducting legal proceedings by the
trustee, the trustee shall immediately convene a meeting of holders of
the bonds of the series concerned in order to confirm their
responsibility for covering of the expenses involved in the
proceedings to be initiated by the trustee. In case the holders of the
bonds of the series concerned refuse to bear the expenses involved in
conducting legal proceedings by the trustee, the trustee shall not be
obliged to conduct said legal proceedings. It is herewith made clear
that agreement by the holders of said bonds does not release the
company from its obligations to bear and to cover all expenses
involved in taking said legal actions. In addition, any monies
received from realization procedures shall also serve for
reimbursement and return of expenses that holders of said bonds have
undertaken to bear. It is made clear that the aforesaid does not
release the trustee from taking urgent action that is required in
order to prevent fundamental damage to the rights of holders of the
bonds.
23. NOTICES
23.1 Any notice on behalf of the company and/or the trustee to holders of
the bonds of the relevant series shall be given as follows:
23.1.1 By reporting in the Electronic Full Disclosure System (EFDS) of
the Securities Authority (the trustee shall have the right to
instruct the company, and the company shall be obliged to
immediately report in the EFDS in the name of the trustee any
report as phrased by him, as transmitted by the trustee to the
company);
and
23.1.2 by advertising in two (2) daily newspapers with a wide
circulation, published in Israel in the Hebrew language. The
advertisement published in the newspapers shall be considered as
having been delivered to the holder on the date of publication.
23.2 Copies of the notices given by the company to the holders of the
relevant series shall also be sent by it to the trustee of the series
concerned, and copies of the notices given by the trustee to the
holders of the series concerned shall be sent by him to the company.
23.3 Any notice or demand on behalf of the trustee to the company may be
given by means of a letter sent by registered mail or by means of a
messenger to the address detailed in the deed of trust, or to another
address provided by the company to the trustee in writing and in
advance, or by sending by facsimile to the fax number of the company.
Any notice or demand sent by registered mail to said address shall be
considered as received by the company three (3) business days after
its delivery for sending by mail. Any notice or demand sent by means
of a messenger to said address shall be considered as received by the
company on the first business day after delivery to the company or the
day it was offered to the company, as the case may be. Any notice or
demand sent by facsimile to said fax number (ascertaining by phone
that it was received) shall be considered as received by the company
on the first business day after the dispatch.
23.4 Any notice or demand on behalf of the company can be given by means of
a letter sent by registered mail or by means of a messenger to the
address detailed in the deed of trust or to another address provided
by the trustee to the company in writing and in advance, or by sending
by facsimile to the fax number of the trustee. Any notice or demand
sent by registered mail to said address shall be considered as
received by the trustee three (3) business days after its delivery for
sending by mail. Any notice or demand sent by means of a messenger to
said address shall be considered as received by the trustee on the
first business day after delivery to the trustee or the day it was
offered to the trustee, as the case may be. Any notice or demand sent
by facsimile to said fax number (ascertaining by phone that it was
received) shall be considered as received by the trustee on the first
business day after the dispatch.
16
As long as no other written notice from the trustee has been received
by the company, the contact person of the trustee with regard to this
deed and the bonds shall be Xxxxx Xxxxxx, Attorney, fax no. 03 -
6274849, E-mail: XXXXXXXX@XXXX-XXX.XX.XX
24. WAIVERS, COMPROMISES AND/OR CHANGES IN THE DEED OF TRUST
24.1 Subject to the provisions of any legal rule, the company and the
trustee shall have the right, whether before or after the date of
maturity of the principal of the bonds of the relevant series, to
change the deed of trust and/or the terms of the bonds of the series
concerned, if one of the following conditions is fulfilled:
24.1.1 Excluding a change in the due dates in accordance with the
terms of the bonds of the series concerned, in its interest rate,
in the grounds for making them immediately payable and reports
that the company has to submit to the trustee, if the trustee has
been convinced that the change does not fundamentally hurt the
holders of bonds of the series concerned.
24.1.2 A meeting of the holders of bonds of the series concerned has
approved the change by a special decision.
24.2 In addition to the aforesaid in Section 24.1 and subject to the
provisions of any legal rule:
24.2.1 Excluding due dates in accordance with the terms of the bonds
of the series concerned, its interest rate, the grounds for
making them immediately payable and reports that the company has
to submit to the trustee for the series concerned, the trustee
for the series concerned shall have the right to waive any
violation or nonfulfillment of any of the terms of the deed of
trust by the company.
24.2.2 The trustee shall have the right, following prior approval in
the form of a special decision of a meeting of the holders of
bonds of the series concerned, to conclude a compromise with the
company in connection with any of their rights or claims and to
waive any of their rights or claims against the company in
accordance with the deed of trust and the bonds of the relevant
series. If the trustee concludes a compromise with the company
after obtaining the prior approval of the holders of the
abovementioned bonds, the trustee shall be free from any
responsibility in respect of this action.
24.3 The company and/or the trustee shall give all holders of bonds of the
relevant series a written notice with regard to any change and/or
waiver, as stated in subsections 24.1.1 and 24.2.1 above concerning
the series concerned, soonest after it becomes valid.
24.4 In any case of exercising the trustee's right in accordance with this
Section regarding any relevant series, the trustee shall have the
right to demand that the holders of bonds of the series concerned
provide him or the company with bond certificates of the series
concerned for entering a note with regard to any waiver, compromise,
change or amendment and, at the trustee's demand, the company shall
enter said note on the bond certificates given to it.
24.5 In addition to the aforesaid, changes in the terms of the bonds shall
be permitted within the scope of an arrangement or compromise that was
approved by the court, in accordance with Section 350 of the Companies
Act.
17
25. REGISTER OF BOND HOLDERS
The company shall keep, at its head office, a register of bond holders,
separately for each relevant series ("THE REGISTER FOR THE RELEVANT
SERIES"), in which all registered holders of the bonds of the series
concerned shall be entered, according to their status from time to time;
also, their addresses, details of the bank accounts for deposition of
payments relating to the principal and interest and the nominal value of
the bonds of the series concerned, as registered in their name, according
to their status from time to time, shall be entered. The register for the
relevant series shall also include other holders, if any, following a bond
split or conveyance with regard to bonds of the series concerned, if such
actions are carried out in accordance with Sections 10 and 11 of the terms
stated overleaf on the bond certificate.
The company shall have the right to close the register for the relevant
series from time to time for a period or periods not exceeding a total of
thirty (30) days a year.
The holder of bonds of the relevant series shall have the right to view the
register for the series concerned at any reasonable time as long as he
holds bonds of the series concerned. In addition, the trustee shall have
the right to view the register for the series concerned at any reasonable
time.
26. APPOINTMENT OF A NEW TRUSTEE AND EXPIRY OF THE TRUSTEE'S TERM OF OFFICE
26.1 The trustee's term of office shall expire in the cases mentioned in
Section 35(14) of the Securities Act and in accordance with its terms
and conditions.
26.2 If the trustee's term of office expires or if the trustee is
substituted as a result of the Securities Authority's demand that the
trustee stop serving as trustee for a number of series of bonds of the
company, the company shall see to it that a new trustee is appointed,
i.e. a trust company of one of the six large Israeli banks, or any
other trustee approved by a meeting of the holders of bonds by a
majority of holders of bonds of the relevant series. In case of an
appointment of a new trustee that is not a trust company of an Israeli
bank and is presented for approval by a meeting of holders of bonds of
the relevant series, the company shall provide, when convening the
meeting, details of its equity and the insurance arrangements it has
made in connection with fulfillment of its duty as trustee for the
holders of bonds of the relevant series.
26.3 The trustee shall transfer to the new trustee all documents and sums
accumulated in the trustee's office in connection with the trusteeship
that forms subject of the deed of trust for the relevant series, and
shall sign all required documents. Any new trustee shall have the same
powers, duties and authority and shall be able to act, to all intents
and purposes, as if it were appointed trustee from the outset.
27. MEETINGS OF HOLDERS
Meetings of holders of each relevant series shall be conducted as stated in
the SECOND SUPPLEMENT to this deed.
28. REPORTING TO THE TRUSTEE
As long as the bonds of any relevant series are in circulation and have not
yet been fully repaid, the company shall provide the trustee with the
following:
28.1 Audited annual financial reports of the company and reviewed quarterly
financial reports of the company, immediately following their
publication.
28.2 Within four (4) business days after a payment to holders of bonds of
the relevant series, the company shall pass to the trustee a duly
signed letter, confirming the payment to the bond holders and the
balance of the nominal value of the bonds of this series that are
still in circulation on the date of confirmation.
18
28.3 Within ten (10) days after the end of the calendar year, while this
deed is still valid, the company shall pass to the trustee a duly
signed letter, stating that to the best of its knowledge that no
violation of this deed has taken place, unless otherwise indicated.
28.4 Not later than thirty (30) days after issuance of a bond series within
the scope of a shelf offer report in accordance with the shelf
prospectus, the company shall pass to the trustee an amortization
schedule for payment of the bonds (principal and interest) of the
issued series, concentrated in an Excel file.
28.5 The company shall notify the trustee immediately in writing of any
reasonable worry of the company that all or part of the events
detailed in Section 7.1 above may take place with reasonable certainty
and that all or part of the events detailed in Section 7.1 have taken
place.
29. REPORTING BY THE TRUSTEE
29.1 The trustee shall prepare within three months of the end of a
trusteeship year an annual report concerning trusteeship matters ("THE
ANNUAL REPORT").
29.2 The annual report shall detail the following subjects: Current details
of the course of trusteeship matters during the past year; reporting
exceptional events in connection with the trusteeship that took place
during the past year.
29.3 Holders of bonds shall have the right to view the annual report at the
trustee's offices during regular working hours and shall be entitled
to a copy of the report on demand. A copy of the report shall be
delivered to the company at the same time as it is made ready for
viewing by the bond holders.
29.4 The trustee shall give the bond holders a notice, as provided in
Section 23 of this deed, about the date of submission of said annual
report. If the trustee learns of a fundamental violation of the deed
of trust by the company, he shall notify the bond holders of the
violation and on the measures taken in order to prevent it or to
ensure fulfillment of the company's obligations, as the case may be.
29.5 The trustee's obligations under this Section shall be in addition to
the trustee's reporting obligations in accordance with any legal rule.
30. APPLICABLE LAW AND JURISDICTION
The law applicable to this deed of trust, including its appendices, shall
be the Israeli law. The courts in the city of Tel Aviv - Yafo shall have
unique and sole jurisdiction over any controversy concerning this deed.
31. EFDS AUTHORIZATION
The trustee authorizes, by signing this deed, any senior company official
to report in the trustee's name to the EFDS system about his engagement in
this deed and his signature.
IN WITNESS WHEREOF THE PARTIES SET THEIR HANDS:
STAMP + /S/ YAHEL SHACHAR;
/S/ SHACHAR RACHIM /S/
--------------------------------------- -----------------------------------
Scailex Corporation Ltd. Clal Finances Trusteeships 2007 Ltd.
Signed by: Messrs. Yahel Shachar and Shachar Rachim
19
CERTIFICATION BY ATTORNEY
I, the undersigned, Xxxx Xxxxxxx Naveh, Attorney, certify that this deed was
duly signed by Messrs. Yahel Shachar and Shachar Rachim, senior company
officials of Scailex Corporation Ltd.
/s/ Xxxx Xxxxxx Xxxxx
---------------------
Xxxx Xxxxxxx Naveh, Attorney
20
SCAILEX CORPORATION LTD.
FIRST APPENDIX
BOND CERTIFICATES FROM SERIES A TO J AND BOND CERTIFICATES FROM SERIES 1 TO 10
A bond certificate is hereby issued for redemption in __ payments from the year
___ to ____ (including), [which carries/ does not carry] [an annual interest /
linkage differentials] as stated above.
BONDS REGISTERED IN THE NAME OF
Certificate number: ______
Annual interest rate: ____%
Stated value of this bond: ______ NIS
The registered holder of this bond:_______
1. This certificate attests that Scailex Corporation Ltd. ("THE COMPANY") will
pay [on the day of____/on the dates____] of each year from ____ to ____
(including) ____% of the stated value of this bond, to the holder (as
defined in the terms detailed overleaf) registered on the bond at the
determining date for that payment, all dependent on the terms detailed
overleaf and the trust deed from the day 11 August 2009 between the company
on one hand and Clal Finance Loyalties 2007 Ltd. and/or whomever serves
occasionally as a trustee for the bond holders according to the trust deed
("THE TRUSTEE" and "THE TRUST DEED" respectively)
2. This bond carries an interest at the rate of the annual interest rate
mentioned above, which will be paid at the dates, all in accordance to the
terms stipulated overleaf.
3. This bond will be [index linked/ non index linked] (capital and interest),
all in accordance to the terms stipulated overleaf.
4. This bond is issued as part of series ____ of bonds whose terms are
identical to the terms of this bond ("THE RELEVANT SERIES"), in accordance
to the terms stipulated overleaf and on the trust deed. It is made clear
that the instructions for the trust deed are an inseparable part of this
bond, and obligate the company and the holders of the bonds included in the
aforementioned series.
5. Bonds from the relevant series [will be/will not be] insured by securities,
any form of collateral or in any other manner, all as specified in the
company's proposal report from ____ according to which the bonds from the
relevant series were first offered to the public ("FIRST PROPOSAL REPORT").
As long as it has not been stipulated otherwise in the first proposal
report for the bonds of the relevant series, the company is allowed to use
all and/or part of its assets as collateral, in any attachment and any
manner whatsoever, towards whomever it finds suitable, without any
limitation whatsoever, and to any degree, including for securing some bonds
(or some series of bonds) or other commitments, without requiring approval
of the trustee and/or the holders of bonds from every series. Likewise, the
company is allowed to sell, lease, hand over or transfer in any manner its
assets, in full or partially, in any method, to whomever it deems right,
without requiring any sort of approval from the trustee and/or holders of
bonds from every series
6. All bonds from the relevant series will stand at equal ranking among
themselves in relation to the company's commitments according to the bonds
from this series, without preferences or priorities of one over the other.
SIGNED BY THE COMPANY ON ___________
___________________________________
SCAILEX CORPORATION LTD.
21
THE CONDITIONS LISTED OVERLEAF
1. GENERAL
In this bond (series____) the following phrases will have to following
meanings, unless a different intention arises from context:
"THE COMPANY" and/or
"THE ISSUER" Scailex Corporation Ltd.
"THE TRUST DEED" The trust deed signed between the company and
the trustee on 11 of august 2009, including
its appendixes which are an inseparable part
of it;
"THE PROSPECTUS" or
"THE SHELF PROSPECTUS" A shelf prospectus of the company which will
be published for the bonds, among others;
"PROSPECTUS REPORT" or
"SHELF PROSPECTUS REPORT" A shelf offer which would be published
according to the shelf prospectus,
in accordance with the securities provisions
law 1968, wherein bonds from the relevant
series would be offered while stating all the
details unique to that offer;
"FIRST PROPOSAL REPORT
FOR THE RELEVANT SERIES" An offer report according to which bonds from
the relevant series would first be offered;
"THE BONDS SERIES" or
"THE RELEVANT SERIES" A series of bonds, planned series A to J and/
or series 1 to 10 of the company's bonds,
when each one of these bond series would be
at the total specified sum of up to
4,000,000 NIS, written in name,
wherein the condition of each is according to
bond certificate of that series and the first
proposal report for the bonds from the same
series, which will be issued from time to
time by the company at its exclusive
discretion;
"THE BONDS" or "THE BOND" Bonds, from each of the bonds series;
"THE TRUSTEE" Clal Finance Loyalties 2007 Ltd. and/or
whomever serves occasionally as a trustee
for the bond holders according to this trust
deed;
"THE REGISTRY FOR
THE RELEVANT SERIES" The registry of bond holders from the same
series as stated in article 25 of the trust
deed;
"THE BOND HOLDERS" and/or
"THE BOND OWNERS" and/or the
"HOLDERS" Whoever is holding the bonds;
"SPECIAL DECISION" A decision reached at a general assembly of
bond holders of the relevant series, where
those present, in person or represented by
their agents, hold at least fifty five
percent (55%) of the remainder of the stated
value of the bonds in circulation from the
same series, or in a postponed assembly where
those present, in person or represented by
their agents, hold at least ten percent (10%)
of said remainder, and which was accepted
(be it the original or postponed assembly)
a majority of at least seventy five percent
(75%) of all the participants' votes, not
including those abstaining;
22
"BOND CERTIFICATE" Bond certificates from the relevant series
whose wording appears in the first appendix
to the trust deed;
"THE LAW" or "THE
SECURITIES PROVISIONS
LAW" The securities provisions law 1968, and the
regulations according to it, as they will be
from time to time;
"THE COMPANIES LAW" The companies law 1999;
"THE CAPITAL" The stated value of the bond from the
relevant series which has yet to be redeemed;
"TRADING DAY" Any day when there is commerce at the Tel
Aviv Stock exchange Ltd.;
"BUSINESS DAY" or
"BANK BUSINESS DAY" Any day when the majority of banks in Israel
are open for business;
"BUSINESS DAY ABROAD" Any day when a quote is set for a prime
interest rate regarding foreign currency
published in the Reuters news service or any
other source of information detailed in the
first proposal report for bonds from the
relevant series;
"THE STOCK EXCHANGE" The Tel Aviv Stock exchange Ltd.;
"THE CONSUMER PRICE INDEX"
or "THE INDEX" The price index known as "the consumer price
index" which includes fruit and vegetables
and is published by the Central Bureau of
Statistics and Economic Research, including
the same index even it is published by some
other official organization or institute,
and also including any official index that
might replace it, whether it is based on the
same data which the current index is based
on, or not. If a different index were to
replace it, published by an institute or
organization as stated above, and that
institute or organization has not determined
the ratio between the new index and the index
being replaced, this ratio would be
determined by the Central Bureau of
Statistics, and in case that ratio is not
determined as above, then it would be
determined by the trustee for the relevant
series, in consultation with economic experts
chosen by him;
"THE KNOWN INDEX" at a
specific date The last known index before the same date;
"THE PRIME INDEX" for the
whole relevant series The known index on a certain day, which would
be detailed in the first proposal report of
the same relevant series;
"THE PAYMENT INDEX" The known index on the day determined for any
sort of payment for the capital and/or
interest
If it is detailed in the first proposal
report of the relevant series that it is
index linked and that the capital and/or
interest of the bonds would be protected, in
case the known index at the determined date
of the relevant payment is lower than the
prime index, the payment index would be the
prime index.
23
If it is detailed in the first proposal
report of the relevant series that it is
index linked and that the capital and/or
interest of the bonds would not be protected
as stated, the payment index would be the
known index at the determined date of the
relevant payment, even if this index is lower
than the prime index;
"THE REGISTERING COMPANY" The registering company of Israel Discount
Bank Ltd.;
"FOREIGN CURRENCY" No more than one foreign currency for each
relevant series, as detailed in the first
proposal report of the bonds from the
same series;
"FOREIGN CURRENCY RATE" The representative rate of foreign currency
as published by the Bank of Israel, or any
official exchange rate of foreign currency to
Israeli currency which might replace said
representative rate and at the same time
apply to governmental bonds linked to said
foreign currency rate;
"THE KNOWN RATE" at a
specified date The latest foreign currency rate determined
by the Bank of Israel before that date.
However, at a period when the Bank of Israel
does not tend to determine a representative
rate, the known rate at a specific date
would be the last rate determined before that
date by the Finance Minister together with
the Governor of the Bank of Israel for
governmental foreign currency rate linked
bonds;
"THE PRIME RATE" for the
whole relevant series The known rate on a certain day, which would
be detailed in the first proposal report of
the same relevant series;
"THE PAYMENT RATE" The known rate on the actual day of payment;
"BANK OF ISRAEL INTEREST" The interest rate for non-linked New Israeli
Shekels which the Governor of the Bank of
Israel declares from time to time as the
stated interest rate of the Bank of Israel or
any interest rate determined by some
qualified authority in place of the stated
rate;
"TELBOR RATE" The interest rate for inter-bank loans in
NIS, calculated by interest offers offered by
several banks in Israel, for a period
specified in the first proposal report of the
relevant series, as it appears on the sample
day (if it is on Monday to Thursday - at
13:00 or near it, and if it is on Friday - at
12:00 or near it) at the Reuters information
distribution system or other source of
information as detailed in the first proposal
offer of bonds from the relevant series;
"LIBOR RATE" The interest rate offered in the London
inter-bank market for deposits in US dollars
for a period specified in the first proposal
report of the relevant series (for a week, a
month, six months, etc.), as quoted on the
sample day, at 11:00 London time, or closely
following it, on the Libor01 page published
by Reuters news service or if this page is
exchanged for a different page then as quoted
on the sample day at the stated hour or
following it on said different page;
24
"EURIBOR RATE" The interest rate offered in the inter-bank
market for deposits in Euros for a period
specified in the first proposal report of the
relevant series (for a week, a month, six
months, etc.), as quoted on the sample day,
at 11:00 Central European Time (CET), or
closely following it, on the Euribor01 page
published by Reuters news service (or if this
page is exchanged for a different page then
as quoted at the stated hour or following it
on said different page) or some other source
of information as specified in the first
proposal offer of bonds from the relevant
series;
"SHORT-TERM LOAN" Bonds issued in series by the State of Israel
for the purpose of short term loans which the
State of Israel lends in accordance with the
short term lending provision of law 1984
and/or any law that replaces it and/or is
added to it, which are registered for trading
at the Tel Aviv Stock Exchange Ltd. and which
are tendered by the Bank of Israel and do not
carry interest and/or linkage differentials.
"SHORT TERM LOAN FOR A YEAR" A series of short term loans in circulation
whose term of redemption is determined for
the period closest to a period of 12 months
from the sample day (as defined below) as
long as its date of redemption is at least 10
months from the sample day. In case there is
no short term loan on the sample day as
stated the short term loan for a year would
be a series of different governmental bonds
which do not carry linkage differentials,
registered for trading in the Tel Aviv stock
Exchange and whose redemption date is set to
a period closest to 12 months from the sample
day. The relevant series of short term loans
and its date of redemption would be detailed
in the first shelf proposal report of the
bonds.
"VARIABLE INTEREST
GOVERNMENT BONDS" A series of governmental bonds with changing
interest issued by the state's lending
regulations (governmental bonds - changing
interest) 2006, as published by the
governmental debt management department of
the accountant general. The governmental bond
series and its date of redemption would be
specified in the first shelf proposal report
of the bond certificates from the same
series.
"PRIME RATE" The Libor rate or the Telbor rate or the
Euribor rate or the Bank of Israel rate or
the Prime rate or the yield of the short term
loan for a year, or the interest carried by a
variable rate governmental bond, as
determined in the first proposal report of
the relevant series;
25
"SAMPLE DAY" for a
specified interest period In relation to the Libor rate or the Euribor
rate - the business day abroad which comes
two (2) business days before the first day of
the same rate period; in relation to the
Telbor rate - the bank business day which
comes two (2) business days before the first
day of the same rate period; in relation to
the Bank of Israel rate - the first day of
the same rate period. In relation to short
term loan for a year or variable rate
governmental bonds or prime rate - the
bank business day which comes two (2)
business days before the first day of the
same rate period.
"THE STOCK EXCHANGE
CLEARING HOUSE" The clearing house at the Tel Aviv Stock
Exchange Ltd.
This bond is one of a series of bonds (series A to J) or of bonds (series 1
to 10), registered in name, of a total specified sum of up to 4,000,000 NIS
for each relevant series. The bonds from this series will stand at an equal
ranking amongst themselves, without preferences or priorities of one over
the other.
This bond stands for redemption (capital) in a number of payments which
would be made at each of the dates as specified in the first proposal
report according to which the bond would be offered and subject to the
linkage terms in article 3 below, but at no more than one period per
quarter. The basis for linkage (or the lack of linkage) and the type of
interest (or lack of interest) carried by the capital bond issued will be
detailed in the proposal report according to which the bond would first be
offered. The interest rate carried by the capital bond issued or the space
above or below the prime rate carried by the capital bond, or the lack of
interest carried by the capital bond, as the case may be, will be detailed
in the proposal report according to which the bond would first be offered.
The interest, whatever it may be, will apply to the capital bond, paid
yearly in a single annual payment or in two bi-annual payments or in four
quarterly payments, all in accordance with what is specified in the
proposal report according to which the bond would first be offered. The
dates and number of capital payments, the basis for linkage (or the lack of
linkage), the type of interest, the rate of interest, or the way it is
determined and the dates of interest payment (or lack of interest) carried
by the bond, as specified in the proposal report according to which the
bond would first be offered, will be determined by the company on the eve
of the bond's first offering.
2. THE DATE OF CAPITAL BONDS REDEMPTION
This bond is redeemable (capital) in several payments, which would be made
at each of the dates specified in the first proposal report according to
which the bond would be offered and subject to the linkage terms in article
3 below, but at no more than one date per quarter.
3. THE BASIS FOR CAPITAL BONDS LINKAGE
The capital for the bonds from the relevant series may by linked to any of
the linkage bases detailed below or not linked, all in accordance to what
is detailed in the first proposal report of the same series, while
referring to the linkage bases definitions specified in articles 3.1 to 3.4
below:
3.1. INDEX-LINKED
If it is decided in the conditions of the relevant series that the
bond's capital and interest of the same series are index-linked then
the linkage of capital and interest to the index would be made in such
a manner that if at some date of payment made from capital and/or
interest for these bonds it is found that the index of payment is
higher than the prime index, then the company would pay the same
payment of capital and/or interest, where it is increased in relation
to the rate of increase in the payment index as compared to the prime
index. If the index of payment is lower than the prime index, see the
definition of "payment rate" in article 1 above.
26
The interest paid for the bonds of the same series would be a fixed
rate interest as stated in article 4.1.1 below or a variable interest
rate (Bank of Israel rate or Telbor rate, or prime rate or short-term
loan for a year yield, or the interest carried by variable interest
rate governmental bonds, as determined in the first proposal report of
the relevant series, with the addition or subtraction from the profit
specified in the aforementioned proposal report or as determined by
bid) as stated in article 4.1.2 below.
3.2. FOREIGN CURRENCY LINKED
If it is decided in the conditions of the relevant series that the
bond's capital and interest of the same series are foreign currency
linked then their linkage to the foreign currency would be made in
such a manner that if at some date of payment made from capital and/or
interest for these bonds it is found that the rate of payment is
higher than the prime rate, then the company would pay the same
payment of capital and/or interest, where it is increased in relation
to the rate of increase in the payment rate as compared to the prime
rate. If the payment rate is lower than the prime rate, the company
would then be allowed to determine in the first proposal report of
that series whether the capital and/or interest of the bonds would be
protected (meaning, if the payment rate is lower than the prime rate,
the payment rate would be the prime rate) or would not be protected as
stated (meaning, the payment rate would be the known rate at the time
of payment, even if this rate is lower than the prime rate). The
existence of protection, as stated, is reserved for cases where the
payment rate is lower than the prime rate detailed in said first
proposal report.
The interest paid for bonds from the same series would be a fixed rate
interest as stated in article 4.3.1 below or a variable rate interest
(Libor rate or Euribor, as determined in the first proposal report of
the relevant series, with the addition or subtraction from the profit
specified in said proposal report or determined by bid) as stated in
article 4.3.2 below.
3.3. UNLINKED BONDS
In case the terms of the relevant series do not determine any basis
for linkage of capital bonds from the same series, the capital would
be stated in NIS and not linked to any sort of index or currency. In
this case, the interest for the bonds from that series would also not
be linked to any sort of index or currency.
The interest paid for bonds for the same series will be a fixed rate
interest as stated in article 4.2.1 below or a variable rate interest
(Bank of Israel rate or Telbor rate, as determined in the first
proposal report of the relevant series, with the addition or
subtraction from the profit specified in the aforementioned proposal
report or as determined by bid) as stated in article 4.2.2 below.
3.4. `Subject to the stock exchange's regulations and instructions, the
method of linkage would not be change for the duration of the bonds
period, and the linkage of each series would relate to no more than on
basis for linkage, as far as bonds are linked to some linkage basis.
4. THE INTEREST OF BONDS FROM SERIES A TO J AND FROM SERIES 1 TO 10 WHICH
WOULD BE OFFERED ACCORDING TO THE SHELF PROSPECTUS
The capital for the bonds of the relevant series will carry an interest as
determined in the first proposal report of the same series, and according
to whichever of the interest calculation mechanisms detailed below, as
specified in that same proposal report while referring to the interest
mechanisms below:
4.1. INTEREST ON INDEX-LINKED CAPITAL
The bonds' capital, if they are linked to the consumer price index,
will carry a linked interest as stated, when the interest is of a
fixed rate or a variable rate, as specified below:
27
4.1.1. FIXED RATE INTEREST - fixed rate interest as determined in the
first proposal report of the same series and/or in a bid
according to said proposal report.
4.1.2. VARIABLE RATE INTEREST WHEN THE SPACE ABOVE OR BELOW THE PRIME
INTEREST WOULD BE DETAILED IN THE FIRST PROPOSAL REPORT OF THE
RELEVANT SERIES OR DETERMINED IN A BID ACCORDING TO IT, AND WHEN
THE PRIME RATE IS THE BANK OF ISRAEL RATE OR THE TELBOR RATE -
the interest rate for the bond's whole interest period will be
determined in accordance with the prime interest rate as stated
(Bank of Israel rate or Telbor rate, as specified in said
proposal report), as quoted on sample day. The company will
submit an immediate report within four (4) days of sample day for
the interest rate determined as stated.
4.2. INTEREST ON UNLINKED CAPITAL
The bonds' capital, if they are not linked to any index or currency,
will carry a fixed rate interest or variable rate interest, as
specified below:
4.2.1. FIXED NIS INTEREST - a fixed rate interest determined in the
first proposal report of the same series and/or in a bid
according to said proposal report.
4.2.2. VARIABLE RATE INTEREST WHEN THE SPACE ABOVE OR BELOW THE PRIME
INTEREST WOULD BE DETAILED IN THE FIRST PROPOSAL REPORT OF THE
RELEVANT SERIES OR DETERMINED IN A BID ACCORDING TO IT, AND WHEN
THE PRIME RATE IS THE BANK OF ISRAEL RATE OR THE TELBOR RATE -
the interest rate for the bond's whole interest period will be
determined in accordance with the prime interest rate as stated
(Bank of Israel rate or Telbor rate, as specified in said
proposal report), as quoted on sample day. The company will
submit an immediate report within four (4) days of sample day for
the interest rate determined as stated.
4.3. INTEREST ON FOREIGN CURRENCY LINKED CAPITAL
The bonds' capital, if they are linked to foreign currency, will carry
a linked interest as stated, wherein the interest is of a fixed rate
or a variable rate, as specified below:
4.3.1. FIXED FOREIGN CURRENCY LINKED INTEREST - a fixed rate interest
determined in the first proposal report of the same series and/or
in a bid according to said proposal report.
4.3.2. VARIABLE RATE INTEREST WHEN THE SPACE ABOVE OR BELOW THE PRIME
INTEREST WOULD BE DETAILED IN THE FIRST PROPOSAL REPORT OF THE
RELEVANT SERIES OR DETERMINED IN A BID ACCORDING TO IT, AND WHEN
THE PRIME RATE IS THE LIBOR RATE OR THE EURIBOR RATE - the
interest rate for the bond's whole interest period will be
determined in accordance with the prime interest rate as stated
(Libor rate or Euribor rate, as specified in said proposal
report), as quoted on sample day. The company will submit an
immediate report within four (4) days of sample day for the
interest rate determined as stated.
4.4. The interest rate for the first period of interest for bonds from the
relevant series would be detailed in the first proposal report of the
same series and/or in a report published by the company regarding the
outcome of the bid in relation to the interest rate, as the case may
be.
4.5. It is made clear that in relation to the bonds which carry a variable
rate interest as stated in articles 4.1.2, 4.2.2, and 4.3.2 of this
note, it is expected that the interest rate paid for the whole
interest period would be a different rate as detailed above.
4.6. The interest rate determined for each relevant series would be a
yearly rate. As long as the bonds' terms dictate that the interest
they incur will be paid at more than one period during the year, the
payment of interest made at every payment period would be calculated
according to the annual interest rate divided into the number of
annual payments determined by the terms of the bonds from the relevant
series and all as it is detailed in the shelf prospectus report
according to which the bonds would first be offered.
28
4.7. The interest for the bonds from the relevant series would be paid
annually [in one annual payment/in two bi-annual payments/in four
quarterly payments] [on the day____/days____] of each year from____ to
____, all as detailed in the first proposal report of the same series,
for the interest period [the twelve months/six months/three months, as
the case may be] which ended on the last day before the date of
payment (henceforth: "THE INTEREST PERIOD"). The first interest period
for the bonds from the relevant series will begin on the first trading
day after the date when the signature list is closed as detailed in
the aforementioned proposal report and ending on the last day before
the first date of payment for the interest. Any additional interest
period for the bonds from the relevant series would begin on the first
day following the end of the nearest interest period prior to it, and
end on the last day before the nearest payment date following its
first day. The interest for the first interest period would be
calculated by the number of days in this period on the basis of 365
days per year.
4.8. The interest on the capital for the bonds from the relevant series
would be calculated starting from the first day of the first interest
period. On this day the company would submit an immediate report
detailing the interest rate paid for the first interest period,
calculated as stated above.
4.9. The last payment for the interest on the capital for the bonds from
the relevant series would be paid along with the last payment for the
capital account for the bonds from the relevant series, against
delivery of the bonds from the same series into the company's hands.
5. CAPITAL AND INTEREST PAYMENTS FOR THE BONDS
5.1. The payments for the interest account and/or the capital for bonds
from the relevant series that would be offered according to the shelf
prospectus would be paid to individuals whose names would be listed in
a registry for the same series at dates specified in the first
proposal report of the same series in accordance with the stock
exchange's regulation as they stand at that time ("THE DETERMINING DAY
OF THE RELEVANT SERIES"), excluding the final payment of capital and
interest which would be made against delivery of the bonds from the
same series into the company's hands, at its registered office or any
other location the company decides upon no later that five (5)
business days prior to the last date of payment.
It is made clear that whomever is not listed in the registry for the
relevant series on the determining day of the relevant series would
not be entitled to interest payment for the interest period beginning
prior to that date.
5.2. In any case where the date for redemption of payment for interest
and/or capital account falls on a day that isn't a business day, the
date of payment would be postponed to the first business day following
it without additional payment, and the "determining day" to determine
entitlement for redemption or interest will not change because of it.
5.3. Any payment for interest and/or capital account which is delayed by
more than seven (7) business days from the predetermined payment date
according to the stated conditions of the bonds, for reasons dependent
on the company, would carry an arrears interest (as defined below)
starting from the date determined for payment and up to the date of
actual payment. In this matter, an arrears interest means an annual
interest equal to the bond's interest, as stated in article 4 above,
with an addition of 2%. In case of a delay in payment as detailed
above, the company would announce the rate of interest, including the
arrears interest as stated, in an immediate report two (2) trading
days before the actual date of payment.
5.4. The payment of capital and interest would be made subject to the terms
of linkage as stated in article 4 above, as the case may be.
29
5.5. Payment for those entitled would be made by check or bank transfer to
the bank accounts belonging to the individuals whose names are listed
in the registry for the relevant series and which would be mentioned
in the details given to the company in time, in accordance with
article 5.6 below. If the company cannot pay any amount to those
entitled to it, for reasons not dependent on it, the instructions of
article 12 of the trust deed would come into effect.
5.6. The holder of the bonds from the relevant series would supply the
company with the details of the bank account to which the payments
would be credited for said holder for the bonds from the same series
as stated above, or notify of changes in the said account's details or
his address, as the case may be, in written message sent by registered
mail to the company. The company would have to act according to the
holder's message regarding said change within fifteen (15) business
days from the day the holder's message reached the company.
5.7. In case the bond holder entitled to the aforementioned payment did not
supply the company with the details of his bank account in time, each
payment for the capital account and interest would be made by check
sent by registered mail to his most recent address listed in the
registry for the relevant series. The delivery of the check to the
entitled individual by registered mail would be considered as payment
of the amount stipulated in it on the date of delivery by mail for all
intents and purposes, given that it was cashed with its presentation
as proof of this.
5.8. Any obligatory payments would be deducted out of every payment for the
bonds form the relevant series, as required by law.
6. GENERAL INSTRUCTIONS
6.1. The capital and interest sums would be paid to every bond holder
regardless of any beneficiary rights or deduction rights or any
counter claim existing or that would exist between the company and the
aforementioned holder.
6.2. The company would not be obligated to enter into the registry for the
relevant series any declaration regarding trusteeship, mortgaging and
attachment of any kind or type, or any beneficiary right or any other
right in relation to the holder's ownership of the bond.
6.3. Anyone who has become entitled to the bond as a result of bankruptcy
or as a result of the holder's dismantlement proceedings would have
the right, when presenting the evidence required by the company, to be
listed in the registry for the relevant series as the holder of the
bonds.
7. CONVERSION RIGHTS FOR BONDS FROM SERIES 1 TO 10 INTO STOCKS ("EXCHANGEABLE
BONDS")
7.1. TERMS OF CONVERSION
7.1.1. On every trading day from the first day that each of the series
of exchangeable bonds are registered for trading in the stock
exchange and up to a number of days before the end of the period
for the bonds from the same series, in accordance with the stock
exchange's instructions as they would be at the date of the first
proposal report of the same series and as detailed in the said
proposal report ("THE EXCHANGE PERIOD", and every said trading
day would henceforth be called "THE EXCHANGE DATE", and the last
day of the exchange period would henceforth be called "THE END OF
THE EXCHANGE PERIOD"), excluding a number of days before the
determining date for partial redemption in accordance with the
stock exchange's regulations and instructions as they would be on
the date of said proposal report and up to the date when the
partial redemption is executed, the remainder capital of the
exchangeable bonds form the same series that are in circulation
at that time are exchangeable to regular stocks written in the
name, totally 0.12 NIS each, fully redeemed by the company ("THE
EXCHANGE STOCKS"), according to the exchange rate which would not
decrease from the stated value of the company's regular stocks at
the time of said proposal report ("EXCHANGE RATE"), subject to
suitability as detailed below, and in the manner and conditions,
all as detailed in said proposal report.
30
7.1.2. Any holder of the exchangeable bonds from any series who wishes
to exchange the remainder of stated value of the exchangeable
bonds capital from the same series he is holding to exchange
stocks ("THE EXCHANGER"), would submit directly to the company at
its registered office (in case those bonds are registered in the
name of the exchanger in the registry of the same series) or
through a member of the stock exchange (in case those bonds are
held by the exchanger through the same member of the stock
exchange) on the exchange dates and in any case before the end of
the exchange period relating to that series, a written request
filled out on a form, as determined by the company, accompanied
by the exchangeable bond certificates which the request relates
to ("THE EXCHANGE NOTICE").
7.1.3. In one exchange notice the exchange of the remainder of the
stated value of the capital of several bonds from the same series
registered in the name of the same holder may be requested, and
in such a case all the exchangeable bond certificates which the
exchange notice relates to must be attached.
7.1.4. In the case of exchanging exchangeable bonds for stocks in
accordance with this article regarding only part of the stated
value of the exchangeable bonds registered on one certificate,
the exchangeable bond certificate must first be split into the
required number of bond certificates in a manner that the total
stated value sum of the bonds registered in them would be equal
to the stated value of the bonds to be thus split.
7.1.5. The exchange notice forms can be obtained at the company's
registered office as well as wherever else the company announces.
7.1.6. The exchanger would sign at any time whatever document he would
be required to by law and according to the company's instructions
for the allocation of the exchange stocks. The day the company
receives an exchange notice directly from the exchanger (for
bonds held directly), or the stock exchange clearing house
receives a notice from a stock exchange member regarding the
exchange of the exchangeable bonds (for bonds held through the
registering company) which fulfills all of the terms detailed
above, as the case may be, would be considered the exchange day
("THE DATE OF EXCHANGE").
7.1.7. If the exchanger did not meet all the terms for exchanging the
exchangeable bonds fully, the exchange notice would be considered
void, and the bond certificate attached to the exchange notice
would be returned to the requestor.
7.1.8. An exchange notice delivered to the company cannot be cancelled
or changed.
7.1.9. The exchanger is not entitled to the allocation of part of one
exchange stock, but all the fractions of the exchange stock
created during exchange, if they are created, would be sold at
the stock exchange by a trustee appointed to this goal by the
company within thirty (30) days after such fractions have
accumulated into whole stocks in an amount which can reasonably
be sold in the stock exchange, considering the costs involved,
and the net gain from their sale would be distributed among those
entitled to them correspondingly within fifteen (15) days from
the date of sale. A single said benefactor would not receive a
check for less than 50 NIS and he may receive said amount by
coming to the company's offices to receive this said amount
within twelve (12) months from the date of sale, or else he would
forfeit his right to the sum.
31
7.1.10. Exchange stocks would entitle their owners full participatory
rights for each dividend or other division, where the determining
date for their reception is the exchange date or after it, and
would be equal in rights in all aspects to regular stocks with a
stated value of 0.12 NIS, which would exist in the company's
capital at that time.
7.1.11. The exchangeable bonds that have been exchanged would be
removed from circulation on the date of their exchange and would
be null and void, retroactively for the date of their exchange,
from the day exchange stocks were allocated for them, and would
not entitle any rights for interest after the last date of
interest payment which the determining date for occurred before
the date of exchange and likewise would not entitle any rights
for linkage differentials which have accumulated for the capital
sum according to the linkage terms stated in article 3 above (and
which were supposed to be paid together with the bonds capital,
if the requestor had not realized his right to exchange the
exchangeable bonds to stocks as stated above).
7.1.12. each part of the exchangeable bonds from any series which is
not exchanged until the end of the exchange period relating to
that same series would no longer entitle its holder any right to
exchange it to exchange stocks, and the exchanging right for it
would be null and void after that date.
7.2. TIMETABLES FOR EXCHANGE
The exchange of exchangeable bonds would be subject to the bylaws of
the stock exchange clearing house as they stand at the actual time of
exchange.
Within one trading day of the date of exchange the company would
allocate each exchanger with certificates for the exchange stocks he
deserves, and after the approval of registration for the allocated
exchange stocks to be traded in the stock market, the company would
work towards registering the exchange stocks for trading in the market
within three (3) days of the date mentioned above.
7.3. INSTRUCTION FOR THE DEFENSE OF EXCHANGEABLE BOND HOLDERS DURING THE
EXCHANGE PERIOD.
7.3.1. DISTRIBUTION OF BONUS SHARES
If the company would distribute bonus shares from the date of the
first proposal report of a certain series of exchangeable bonds
and up to the end of the exchange period for that same series,
the rights of the exchangeable bond holders of the same series
would be maintained in the following manner:
7.3.1.1 Following the determining date for entitlement to
participation in the said distribution, the number of
conversion shares to which the holder of the convertible
bonds of the same series on their conversion will increase,
by means of adding to the number of shares to which the said
holder would have been entitled, as bonus shares, had the
convertible bonds been converted immediately prior to the
said determining date.
7.3.1.2 The holder of the convertible bonds shall not be entitled
to the allocation of part of the bonus shares as stated
above, however all fractional shares creat5ed at the time of
the conversion shall be accumulated into whole shares and
will be sold on the stock exchange, by a trustee appointed
for this purpose by the \Company, within thirty (30) days of
the said allocation, and the net proceeds (after deducting
the sale expenses and payments of mandatory payment and
imposts) shall be divided between the entitled parties
within fifteen (15) days of the sale date. A check in an
amount of less than 50 NIS shall not be sent to an entitled
party, and he will be entitled to receive the said amount at
the offices of the Company during normal working hours. If
within twelve (12) months of the sale date the said entitled
party does not appear at the Company's offices in order to
receive the said amount, his right to this amount will be
lost.
32
7.3.1.3 Subject to that set forth in the By-laws and in stock
exchange guidelines, the adjustment method cannot be
changed.
7.3.2 RIGHTS ISSUE
If the Company offer to its shareholders, between the date of the
initial offering report of any series of the convertible bonds
and until the end of the conversion period for that series,
securities of any kind by way of a rights issue, the number of
shares in respect of the conversion of convertible bonds of that
series which have yet to be converted into ordinary shares of the
Company, the right to purchase the securities offered under the
rights issue will be adjusted at the determining date, in
accordance with the bonus element in the rights, as expressed by
the relationship between market price of the Company's share at
the said determining date and the "ex-rights" base price. Subject
to that set forth in the Stock Exchange guidelines, the
aforementioned method of adjustment cannot be changed.
7.3.3 RECONCILIATION IN RESPECT OF DIVIDEND DISTRIBUTION
If the Company carries out a dividend distribution , as defined
in the Companies Law ("THE DISTRIBUTION"), where the effective
date for entitlement thereto ("DISTRIBUTION EFFECTIVE DATE") is
prior to the end of the conversion period, one of the provisions
set forth in sub-clauses 7.3.3.1 through 7.3.3.3 shall apply, all
as determined by the Company in the initial offering report of
the relevant series. The Company shall publish separately in the
said offering report the mode of reconciliation of the conversion
price and/or conversion ratio resulting from the distribution, in
accordance with its choice of one of the following alternatives.
7.3.3.1 The conversion price and/or conversion ratio will not be
adjusted as a result of a distribution by the Company
7.3.3.2 Commencing on the first day of trading, on which the
Company's shares are traded after the distribution effective
date (ex-dividend), the conversion price of the convertible
bonds of the relevant series, shall be equal to the previous
conversion price, as at the distribution effective date,
less the net distribution amount in respect of each
conversion share, with the conversion price being not lower
than face value of the Company's shares at that time (herein
"THE ADJUSTED CONVERSION PRICE").
"NET DISTRIBUTION AMOUNT PER SHARE" for this purpose is the
amount to be distributed by the Company in respect of each
share, less the amount of income tax to be deducted by the
Company form individuals who are Israel residents who are
not the holders of significant shares , as this term is
defined in Section 88 of the Income Tax Ordinance (New
Version), 5721-1961, as required by law.
33
7.3.3.3 Commencing on the first day of trading, on which the
Company's shares are traded after the distribution effective
date (ex-dividend), the conversion ratio of the convertible
bonds in circulation shall be adjusted by multiplying by the
ratio between the stock exchange price of the Company's
share, as set by the stock exchange as the price adjusted
for distribution (price ex-dividend), and the closing price
set by the stock exchange for the Company's share at the
distribution effective date. The Company will notify, by way
of immediate notification as to the said adjusted conversion
ratio, no later than the date on which the Company's share
is traded "ex-dividend".
Unless otherwise announced by the Company is the initial offering
notice of the convertible bonds of the relevant series, the
Company shall act in the manner set forth in sub-clause (1)
above.
7.4 ADDITIONAL PROVISIONS FOR PROTECTING THE HOLDERS OF CONVERTIBLE BONDS
DURING THE CONVERSION PERIOD
Commencing on the date of publication of the offering notice with
regard any series of convertible bonds and as long as all the
convertible bonds of that series have not been converted, but in any
case no later than the end of the conversion period for that series,
the following provisions shall apply:
7.4.1 The Company shall maintain a sufficient number of 0.12 NIS FV
ordinary shares of its registered share capital, in order to
ensure the allocation of all the shares that could derive from
the conversion of all the convertible bonds of the particular
series in circulation from time to time, and if necessary, the
Company shall cause an enlargement of its registered share
capital accordingly.
7.4.2 If the Company shall combine the 0.12 NIS face value ordinary
shares of the issued share capital into shares of a higher face
value or sub-divide them into shares with a lower face value -
the number of shares allocated as a result of conversion of the
convertible bonds of the same series, will be increase or
decrease accordingly, following the said action. In this case
Clause 7.1.9 above shall apply, with the necessary changes.
7.4.3 The Company, at its registered office, shall provide for
inspection by holders of convertible bonds of the particular
series during normal working hours, a copy of the aforementioned
periodic and interim financial statements of the Company. At the
written request of a holder of convertible bonds of the said
series, the Company will send a copy of the aforementioned
statements, to the holder of convertible bonds of the particular
series.
7.4.4 Within ten (10) days of any adjustment to the conversion price
or the number of shares in relation to the particular series of
convertible bonds, the Company shall publish a notice in two (2)
wide-circulation daily newspapers, published in Israel in the
Hebrew language, regarding the right of the holders of
convertible bonds of the particular series to convert them into
shares, stating the conversion period, the conversion price and
the number of conversion shares to which the holder of the
convertible bonds will be entitled as a result of conversion at
that time, and all - in relation to the said series.
7.4.5 In addition to the aforementioned notice, no later than three
(3) weeks and no earlier than four (4) weeks prior to the end of
the conversion period relating to the particular series, the
Company shall publish a notice in two (2) wide-circulation daily
newspapers, published in Israel in the Hebrew language, and shall
send notice in writing, with a copy to the stock exchange and to
the trustee of the particular series, to the holders registered
in the register of the said series, regarding the last date for
conversion of the convertible bonds of the particular series. The
notice will state the conversion price, the number of conversion
shares, and the number of bonus shares to which the holder of the
convertible shares will be entitled on conversion during the
period of time - regarding the said series.
34
7.4.6 The Company will not distribute and shall not offer to holders
of 0.12 NIS face value ordinary shares a cash dividend or bonus
shares or a rights offer for securities of any kind, unless the
effective date for their receipt is at least ten (10) trading
days after publication of the Company's notice regarding the
distribution or rights offer, as applicable.
7.4.7 The Company shall avoid any action, including the distribution
of bonus shares, which could lead to a reduction in the share
price below its face value.
7.4.8 In accordance with the by-laws and Stock Exchange guidelines as
in force at the date of the Trust Deed, the terms of the
convertible bonds cannot be altered with regard to the conversion
price, conversion dates and linkage method, but the Company shall
be permitted to change the conversion period and/or the
conversion price, on condition that this is done within the
framework of an arrangement or compromise approved by the courts,
pursuant to Section 350 of the Companies Law. In addition, in
accordance with the said By-laws and Stock Exchange guidelines,
the Company is permitted to alter the conversion price within the
framework of a Company split or merger of the Company, on
condition that the change shall include only the adjustments
required as a result of such a process.
In accordance with the said By-laws and Stock Exchange
guidelines, a "split process", for this purpose means - a process
whereby the Company transfers to its shareholders shares which it
holds in another Company, or a process whereby the Company
transfers assets and liabilities to new Company established for
the purpose of the split and the shareholders of the new Company
will also be the shareholders of the Company transferring the
assets and the liabilities, all on condition that the split is
carried out under equal conditions in respect of the Company's
shareholders. In accordance with the said By-laws and Stock
Exchange guidelines, a "merger process", for this purpose means -
a process whereby all of the Company's shares are transferred to
the ownership of a new Company or the ownership of another
registered Company the shares of which are registered for trading
on the Stock Exchange or a process whereby the Company transfers
all of its assets and its liabilities to the said other Company
and all on condition that the securities of the Company the
shares of which are to be so transferred, are deleted from
listing for trading on the Stock Exchange and the process is
carried out in an equitable manner with respect to the
shareholders of the Company.
Notwithstanding the aforementioned, in accordance with the said
By-laws and Stock Exchange guidelines, the Company is permitted
to alter the conversion price, on condition that this is done
within the framework of an offer by way of rights in the Company
or within the framework of a distribution of dividends in the
Company and that the change shall include only the adjustments
necessitated by the said process, as set forth in Clause 7.3
above.
35
7.5. VOLUNTARY LIQUIDATION
7.5.1 In the case of decision to voluntarily liquidate the Company,
the Company shall give written notice of same to all holders of
the convertible bonds in circulation at that time, who are
registered in the in register for the relevant series of
convertible bonds, and shall also publish a announcement on the
subject in two (2) wide-circulation daily newspapers published in
Israel in the Hebrew language. Each holder of the convertible
bonds shall be entitled, if he so wishes, to be deemed as if
having realized the right of conversion in respect thereof
immediately prior to the decision being passed, this being if he
gives notice in writing to the Company of his wishes in the
matter, within three (30 months of the said announcement by the
Company.
7.5.2 In this case, the holder of convertible bonds shall be entitled
to participate in the distribution of the Company's surplus
assets on liquidation (after settlement of all its debt), between
the shareholders, this being in the amount he would have received
on the liquidation of the Company had he been a shareholder of
the Company immediately prior to the decision being made as to
the liquidation, as a result of the convertible shares held by
him, in respect of which he gave the said notice, after deduction
of the interest amounts paid in respect of the convertible bonds
at the date of the decision or thereafter (except for interest
the payment date of which was prior to the date of the decision,
even if paid at the decision date or at a later date); and a
holder of convertible bonds shall not be entitled to any payment
in respect of them, where the due date for payment is after the
date of the decision.
8. BONDHOLDERS REGISTER
Regarding the maintenance of a bondholders register for the relevant
series, the provisions of Clause 25 of the Trust Deed shall apply.
9. PREVENTION OF PAYMENT FOR A REASON BEYOND THE CONTROL OF THE COMPANY
Regarding prevention of payment to a holder of bonds of the relevant series
for a reason which is beyond the control of the Company, the provisions of
Clause 12 of the Trust Deed shall apply.
10. TRANSFER OF BONDS
The bonds of any relevant series are transferable with respect to the their
full face value, and even with respect to part of it, on condition that it
is in complete new shekels. Any transfer of bonds (with the exception of a
transfer taking place by means of trading on the stock exchange), shall be
carried out by means of a transfer Deed in the usual format, properly
signed by the registered holder or his legal representatives and by the
recipient of the transfer or his representatives, to be delivered to the
Company at its registered offices together with the bond certificates to be
transferred in accordance therewith and also any other proof that may be
required by the Company as to the right of the transferor to transfer them.
If any tax or any other mandatory payment shall apply to the bond transfer
Deed, proof will be given to the Company to its satisfaction, as to their
having been paid. The provisions contained in the Articles of Incorporation
of the Company applying to the transfer of fully paid-up shares or their
assignment, shall apply, with the applicable changes, as applicable, with
respect to the method of the said transfer or assignment of the bonds. In
the case of the transfer of only part of the face value amount stated in
the bonds certificate, in accordance with the provisions of Clause 11 below
the split will initially be of the bonds certificate into the necessary
number of bond certificates, in such a manner that the total of all the
face value amounts recorded therein shall equal the face value amount of
the bonds registered in the said bonds certificate. On fulfillment of all
of these conditions, the transfer will be recorded in the register of the
relevant series, and the Company shall be permitted to demand that a note
regarding the matter be recorded on the certificate of the transferred
bonds, which will be delivered to the recipient of the transfer or will
issue in its place a new bond certificate, and the same conditions detailed
in the certificate of the transferred bonds shall apply to the transferee,
such that in any place where the word "holder" appears, shall be deemed as
if "the transferee" was stated, and he shall be considered to be the
"holder" for the purposes of the Trust Deed of the relevant series.
36
11. BOND CERTIFICATES AND THEIR SPLITTING
One bond certificate shall be issued in respect of the bonds held by a
single bondholder, or at his request, a reasonable number of bond
certificates will be issued to him, on condition that the face value of
each said certificate is in whole new shekels (the certificates referred to
in this Clause shall be referred to herein as : "THE CERTIFICATES").
Any bond certificate may be split into bond certificates, where the total
face value of the bonds recorded in them is equal to the amount of the face
value of the bonds recorded in the Certificate in respect of which the
split was requested, and on condition that the said certificates are issued
in a reasonable quantity. The split shall be carried out against
presentation of the bond certificate to the Company at its registered
offices for the purpose of execution of the split. All expense entailed in
the split, including taxes and imposts, should there be such, will be the
responsibility of the requester of the split.
12. EARLY REPAYMENT
Regarding early repayment of the bonds, Clause 6 of the Trust Deed shall
apply.
13. WAIVERS, COMPROMISES AND/OR CHANGES IN THE TERMS OF THE BONDS
Regarding the authority of the Company and/or the Trustee to make any
waiver, compromise or changes in the terms of the bonds, Clause 24 of the
Trust Deed shall apply.
14. MEETINGS OF HOLDER OF THE BONDS
The general meetings of holders of bonds of the relevant series will
convene and will be managed in accordance with that set forth in the Second
Annex to the Trust Deed.
15. RECEIPTS AS PROOF
Without detracting form any other condition of these conditions, a receipt
signed by the bondholder shall be deemed proof of full settlement or any
payment made by the Company in respect of the bond.
16. REPLACEMENT OF BOND CERTIFICATES
In case of this bond certificate being damaged, lost or destroyed , the
Company will issue in its place a new certificate in respect of this bond,
under the same conditions. Taxes and other charges, and also other expenses
entitled in the issue of the new certificate, shall be the responsibility
of the requested of the said certificate (including expenses in respect of
proof of ownership of the bonds, in relation to indemnification and/or
insurance coverage requested by the Company, if it so requests, in respect
thereof). In case of fading, the faded certificate is to be returned to the
Company at the same time and against the issue of the new certificate.
17. APPLICABLE LAW AND JURISDICTION
The courts in the city of Tel Aviv-Yafo shall be the sole and only
jurisdiction in any dispute relating to the bonds, the Trust Deed and the
agreements by virtue of which the bonds were allocated, and the laws of the
State of Israel only shall apply to them.
37
SCAILEX CORPORATION LTD
SECOND ANNEX
MEETINGS OF HOLDERS OF THE BONDS OF SERIES A THOUGH J AND HOLDERS OF THE
BONDS OF SERIES 1 THOUGH 10
CONVENING OF MEETINGS OF BONDHOLDERS
1. The trustee of the Company is permitted to invite holders of bonds of the
relevant series to a meeting of the bondholder of that series. If the
Company convenes such a meeting, it is required to immediately send a
notice in writing to the Trustee as to the location, date and time the
meeting is to take place and also the matters to be discussed at the
meeting.
2. The Company shall be required to convene a meeting of all bondholders of
the relevant series at the written request of the Trustee or of the holders
of at least ten percent (10%) of the face value of the non-repaid principle
of the bonds in circulation of that series. The Trustee shall be required
to convene a meeting of all bondholders of the relevant series at the
written request of the Trustee of the holder of at least ten percent (10%)
of the face value of the non-repaid principle of the bonds in circulation
of that series. Where the requesters of convening the meeting are the
bondholders, the Company and/or the trustee, as applicable, are permitted
to request of the requesters indemnification for the reasonable expenses
entailed.
3. The holders of the bonds of the relevant series, the Trustee and the
Company, as applicable, shall be give written notice fourteen (14) days at
least in advance, stating the location, the date and the time of meeting
and setting forth in general terms the matters to be discussed at the
meeting. Where the purpose of the meeting is to discuss a proposal to pass
to special resolution, the said notice will be given at least twenty-one
(21) days in advance and the notice will set forth the date and starting
time of the meeting and also the main points of the proposed resolution.
The Trustee is permitted to shorten the period of the advance notice if he
feels that delaying the meeting is damaging or could result in damage to
the rights of the holders of the bonds of the particular series or a
legitimate interest of the Company. Notice of holding a meeting or a
postponed meeting, as applicable, will be reported by the Company also by
way of an Immediate Notice.
4. No resolution duly passed by the meeting (or postponed meeting, as
applicable) so convened shall be deemed invalid, as result of notice
mistakenly not having been given to all the holders of bonds of the
relevant series, or that the notice was not received by all of the holders
of the bonds in circulation of the particular series, on condition that
notice of holding of the meeting (or the postponed meeting, as applicable)
is reported by way of an Immediate Notice.
5. Any meeting of holders of bonds of the relevant series will take place at
the registered offices of the Company, at any other address announced by
the convener of the meeting.
6. In any instance where a different mechanism for convening bondholder
meeting is determined by law, including the By-laws and Stock Exchange
guidelines issued in accordance therewith, the said mechanism shall be
adapted automatically to the mechanism laid down by law, insofar are
required by the provisions of the said law.
38
PROOF OF OWNERSHIP OF THE BONDS
7. The holder of bonds of the relevant series shall submit to the Company at
its registered offices (or to the party convening the meeting to the
address set by that party), up to forty-eight (48) hours prior to the time
of the meeting of bondholders of that series or its postponed convening, as
applicable (or other date, as determined by the convener of the meeting in
the invitation to the meeting), confirmation by the Member of the Stock
Exchange, by means of which the bonds of that series are held, as to the
number of bonds of the particular series held by the said bondholder
correct as at the date set forth in the said confirmation. The holder of
the bonds of the particular series shall be permitted to vote at the
meeting of holders of bonds of the particular series, in respect of the
number of bonds included in the said Stock Exchange Member's confirmation,
as long as when voting, the holder continues holding the number of bonds in
respect of which the confirmation was given by the said Stock Exchange
Member. If there is a change in the holdings of the holder of bonds of the
particular series between the date of the said confirmation being given to
the Company and the date of the meeting of bondholders of the particular
series, the holder will be permitted to submit to the Company a
confirmation of proof by the Stock Exchange Member reflecting the holder's
holdings of bonds of the particular series correct as at the date of the
meeting.
BONDHOLDERS MEETINGS
8. The chairman of the meeting will be the person appointed by the Trustee. If
the Trustee does not appoint a chairman or if he is absent from the
meeting, the holders of the bonds of the relevant series present at the
meeting will choose a chairman form amongst their number. A meeting of
bondholders will commence on proof of the existence of the required legal
quorum at the start of the discussion. The resolutions included in the
meeting agenda will be voted on by the bondholders meeting, where the legal
quorum required for passing them exists.
9. The legal quorum at meetings of bondholders of the relevant series, except
regarding a special resolution, shall be the holders of bonds of the
relevant series present themselves or by means of a proxy, holding or
representing together at least ten percent (10%) of the non-repaid face
value of the bonds in circulation of that series.
10. If within half an hour of time set for the start of such a meeting a said
legal quorum is not present, the meeting will be postponed until the same
day one week later (and if that day is not a business day - to the next
business day immediately following it), at the same location and at the
same time (without need for an additional announcement), or at a different
date and/or location and/or time as may be determined by the trustee or the
Company (in accordance with the convener), on condition that they notify
the holders of the binds of the particular series by means of Immediate
Notice using the MAYA system of the Securities Authority and a notice to be
published in the press at least three (3) days in advance in the manner set
forth in Clause 23.1 of the Trust Deed.
The presence of any holder of bonds of the relevant series at the said
postponed meeting, regardless of face value of the particular series held
by him, shall represent a legal quorum.
11. Regarding a special resolution, the legal quorum of holders of bonds of the
relevant series present themselves or by means of their proxies, and
holding and representing together at least fifty-five percent (55%) of the
non-repaid balance of the face value of the bonds in circulation of the
particular series. If within half an hour of time set for the start of such
a meeting a said legal quorum is not present, the meeting will be postponed
in the manner set forth in Clause 10 of this Annex. At the said postponed
meeting, the presence of the holders or their proxies holding and
representing together at least ten percent (10%) non-repaid balance of the
face value of the bonds in circulation of the particular series, shall
represent a legal quorum.
12. Bonds of the relevant series owned by a subsidiary of the Company or owned
by a corporation controlled by the Company, shall not entitle the
subsidiary Company or the corporation controlled by the Company voting
rights at meetings of bondholders of the series and will not be included
for that purpose in the legal quorum.
39
13. The legal quorum for the purpose of holding a general meeting of
bondholders of the relevant series for the purpose of passing a resolution
for immediate repayment (as set forth in Clause 7.1 of the Deed), regarding
changes in the terms of the Trust Need or of bonds or regarding a waiver of
right of claim or compromise (as set forth in Clause 24 of the Trust Deed),
with respect to that series, and the quorum of voter for any of those
resolutions, shall not include the votes of bondholders of that series who
are controlling shareholders in the Company, companies controlled by
controlling shareholders of the Company and companies connected with the
Company, as these terms are defined in the Securities Law.
14. With the consent of the holders of the majority of the principle of the
bonds of the relevant series who are present (in person or by means of
their proxies), and a meeting at which a legal quorum is present, the
chairman is permitted and at the demand of the majority of those present,
is required to postpone the continued existence of the meeting from time to
time and from place to place, as decided by the meeting. In this case, a
notice will be given of the continued meeting, in the same manner as for
notification of the original meeting. The continuing meeting will discuss
only matters which could have been discussed at the meeting at which the
postponement decision was taken.
15. At each meeting of holders of bonds of the relevant series, each holder of
binds of that series present in person or by means of his proxy shall be
entitled to one vote for each 1 NIS face values of the principle of the
bonds of that series by virtue of which he is entitled to vote. The Trustee
participating in the meeting shall participate without a right to vote.
16. In the case of joint holders of bonds of the relevant series, the vote of
only the first of them recorded in the register of the particular series,
wishing to vote himself of by means of his proxy.
17. Each resolution to be voted on at the meeting of holders of bonds of the
relevant series shall be determined at the vote by a count of the votes.
18. The majority required for passing a regular resolution at a meeting of
bondholders is a regular majority of the votes of the participants in the
meeting, excluding the abstentions. The majority required in order to pass
a special resolution by a meeting of bondholders is majority of not less
than seventy-five percent (75%) of the total votes of the participants,
excluding abstentions.
19. The declaration by the chairman as to the passing of the resolution or its
rejection and its recording in the protocols book shall be deemed prima
facie evidence of this fact.
20. A bondholder is permitted to participate and vote in general meetings of
bondholders by means of a proxy. The instrument appointing a proxy shall be
in writing and will be signed by the appointer or by his representative who
has been give authority writing so to do. If the appointer is a corporate
entity, the appointment shall be made in writing stamped with the Company
stamp together with the signature of Company official or the representative
of the corporate entity who has power so to do.. The instrument of
appointment of a proxy shall be in the generally accepted format. The proxy
is not required himself to be a bondholder.
21. The instrument of appointment and the power of attorney in accordance with
which the appointment instrument is signed, or an authorized copy of such
power of attorney, shall be deposited at the registered offices of the
Company (or with party convening the meeting at the address determined by
the said entity), not less than forty-eight (48) hours prior to the time of
the meeting in respect of which the appointment instrument is given, unless
determined otherwise by the convener of the meeting in the notice convening
the meeting. The appointment instrument shall remain in effect also with
respect to any postponed meeting of the meeting to which the appointment
instrument relates, unless stated otherwise in the appointment instrument.
22. The vote taken in accordance with the terms of the document appointing the
proxy shall be effective even in the case of the appointed passing away or
being declared legally incapable or the appointment instrument is cancelled
or the bond in respect of which the vote is given having been transferred,
unless written notification is received prior to the meeting at the
registered offices of the Company (or with party convening the meeting at
the address determined by the said entity), as to the decease, decision as
to legal incapability, cancellation or transfer, as applicable.
40
23. The holder of the bond of the relevant series or his proxy are permitted to
vote in respect of part of his votes in favor of a particular resolution,
and in respect of another part, against, and in respect of another part to
abstain, as he shall see fit.
24. The Trustee shall ensure the drawing up of a protocol of all the
discussions and decisions of every general meeting of holders of bonds of
the relevant series, and its maintenance in a book of protocols of meetings
of holders of bonds of the particular series.
25. Protocols are to be prepared of all the discussions and decisions of every
such meeting and recorded in the book of protocols.
26. The holders of protocols of the relevant series shall be permitted to vote
at meetings of bondholders of the particular series by mans of voting
instruments, the format of which will be provided to those holders by the
Trustee and/or the Company, (as applicable) at the date of convening of the
meeting of bondholders of the particular series and/or published after
holding the meeting and prior to its closing by means of an Immediate
Notice via the MAYA system (all as decided by the convener of the meeting).
For the purpose of voting by means of a voting instrument, the voting
instrument, duly completed and signed together with the required documents,
is to be delivered at the registered offices of the Company (or with party
convening the meeting at the address determined by the said entity), up to
forty-eight (48) hours prior to the time of the meeting of holders of bonds
of the relevant series or at a time after holding the meeting and prior to
its closure as determined by the convener of the meeting as published by
way of an Immediate Notice in the MAYA system.
27. A person or persons appointed by the Trustee shall be permitted to be
present, but will not be entitled to vote at meetings of the holders of
bonds of the relevant series. The Secretary or other persons permitted by
the Company are permitted to be present but will not be entitled vote, at
meetings of bondholders convened by the Trustee.
28. When conducting a meeting of holders of bonds of the relevant series, the
Trustee will consider the existence of conflicts of interest of bondholders
of that series, in accordance with the circumstances, and the need for
convening them in a class meeting where different interests exist between
the bondholders of that series, in accordance with the circumstances, and
his ruling in this matter shall be at his discretion. The Company and the
Trustee shall act to convene class meetings of holders of bonds of the
relevant series, in accordance with the provisions of the law, decided
ruling, provision of the Securities Law and the Regulations and guidelines
enacted pursuant to them, as instructed by the Trustee of the particular
series. A resolution brought for the decision of a class meeting requires
the approval of all the class meetings called for the purpose of approving
that resolution, and also the approval of a meeting of all the holders of
bonds of the relevant series, all in accordance with the majority required
in accordance with the provisions of this deed and its Annexes and subject
to the provisions of any law. The Trustee is permitted, at his sole
discretion, to determine that the passing of the said resolution does not
require the approval of one or more of the convened class meetings, or that
a class meeting for a particular class will not be convened.
29. In any instance where is states that a meeting is to be convened of
bondholders, by law (including ruled judgment and instruction of any
qualified authority), that the convening of a class meeting is required,
the aforementioned regarding the meeting of a class of bondholders , shall
apply, with the necessary changes.
41
