SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT (the "Agreement") dated as of April 20, 2005, by
and among Elbit Ltd. ("Elbit"), Eurocom Communications Ltd. ("Eurocom"),
Polar Communications Ltd. ("Polar"), and Matav Cable Systems Media Ltd. and
Matav Investments Ltd. (together,"Matav").
RECITALS
WHEREAS, on February 7, 2005, the parties hereto have sent a Letter Agreement
(the "Buyback Agreement") to Partner Communications Company Ltd. ("Partner")
offering to sell to Partner ordinary shares of Partner (the "Buyback Offer" and
the "Shares", respectively), which was accepted by Partner on February 28, 2005;
and
WHEREAS, on the date hereof, the parties hereto, together with Tapuz Cellular
Systems Ltd., Advent Investments Pte Limited and Xxxxxxxxx Telecommunications
(Netherlands) B.V., have signed a Restatement of the Relationship Agreement
among them and/or their respective predecessors dated October 10, 1999 (the
"Restated Relationship Agreement"); and
WHEREAS, pursuant to Section 2.3 of the Restated Relationship Agreement, as
required by law (including Partner's license granted by the Israeli Ministry of
Communications (the "License") and the articles of association of Partner (the
"Articles")), the parties hereunder have the obligation to appoint at least 10%
of the members the board of directors of Partner (the "Israeli Directors"); and
WHEREAS, the parties wish to establish among them the procedures and their
respective rights and obligations regarding the appointment of the Israeli
Director(s);
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Appointments by Rotation. (a) The Israeli Director(s) shall be nominated in
rotation among Elbit, Eurocom and Matav as follows:
(i) Commencing on the date of the closing of the Buyback Offer, and for a
period of one (1) year thereafter (the "Elbit Nominee Term"), one Israeli
Director shall be nominated by Elbit, which shall be entitled during such
one-year term to replace such Israeli Director. The notice of the
appointment of such Israeli Director shall be delivered in writing to the
Secretary of Partner by Elbit and Matav.
(ii) At the expiration of the Elbit Nominee Term and for a period of one
(1) year thereafter (the "Eurocom Nominee Term"), one Israeli Director
shall be nominated by Eurocom, which shall be entitled during such one-year
term to replace such Israeli Director. The notice of the appointment of
such Israeli Director to be nominated by Eurocom shall be delivered in
writing to the Secretary of Partner by Elbit and Eurocom.
(iii) At the expiration of the Eurocom Nominee Term and for a period of one
(1) year thereafter (the "Matav Nominee Term"), one Israeli Director shall
be nominated by Matav, which shall be entitled during such one-year term to
replace such Israeli Director. The notice of the appointment of such
Israeli Director to be nominated by Matav shall be delivered in writing to
the Secretary of Partner by Eurocom and Matav.
(b) At the expiration of the Matav Nominee Term, a new rotation cycle shall
commence in the manner described in subsections 2(i), (ii) and (iii) above.
Such rotation cycle shall be automatically renewed for so long as this Agreement
s in effect.
(c) Notwithstanding the foregoing, any notice to the Secretary of Partner
regarding appointment or removal of an Israeli Director pursuant to Article
23.2.6 of the Articles shall be given in writing by the party having the right
to nominate such Israeli Director at such time pursuant to this Agreement and by
the party that previously had such right.
(d) Notwithstanding the foregoing, if the Founding Israeli Shareholders
(as defined in the Articles) shall have the right or the obligation to appoint
more than one Israeli Director, then each additional Israeli Director shall be
appointed by the next party in the foregoing rotation, and the balance of the
provisions hereof shall apply, mutatis mutandis, such that no party shall be
entitled to nominate more than one Israeli Director, except to the extent that
the number of Israeli Directors exceeds the number of parties entitled to
appoint Israeli Directors.
(e) The party appointing any Israeli Director shall ensure that such
Israeli Director qualifies as such under the License and the Articles.
2. Term.
(a) This Agreement shall be in full force and effect as long as the License and
the Articles provide that the Founding Israeli Shareholders shall appoint one or
more Israeli Director(s).
(b) Should a material change occur either to (i) the License or the Articles
with respect to the appointment of Israeli Director(s) or (ii) to the holding of
Shares among the parties hereto, then all parties agree to negotiate in good
faith an amendment to this Agreement.
3. Transfers.
(a) If any party hereto shall transfer any Shares in accordance with
Section 2.1 of the Restated Relationship Agreement, it shall promptly notify the
other parties hereto in writing (which shall specify the number of Shares so
transferred and the transferee's address for delivery of notices) and deliver to
them the undertaking of the transferee to be bound by this Agreement, upon which
such transferee shall deemed to be a party hereto. If the transferee shall have
acquired all of the transferor's Shares, then the transferee shall replace the
transferor for purposes of Section 1 hereof. If the transferee shall have
acquired less than all of the transferor's Shares, then the transferee shall not
have any rights or obligations under Section 1, unless the transferor and the
transferor jointly notify the other parties hereto that the transferee shall so
replace the transferor or share the transferor's rights and obligations under
Section 1.
(b) Notwithstanding the foregoing, no transfer restrictions shall apply to
any transfer of Shares permitted under Section 2.1(b) of the Restated
Relationship Agreement ("Unrestricted Transfers").
(c) Should there be an increase in the number of Shares that are freely
transferable by the parties hereto as a group (i.e., excluding Shares freely
transferable under Section 2.1(b)(ii) of the Restated Relationship Agreement)
for any reason, including without limitation a reduction of the "Required
Israeli Percentage" (as such term is defined in the License) or a reduction of
the number of Shares outstanding, then the number of Shares available for
transfer by each party hereto by means of Unrestricted Transfers shall increase
proportionally to its respective holding of Shares that are subject to transfer
restrictions under the License, the Articles and the Restated Relationship
Agreement.
(d) The parties undertake, severally and not jointly, to maintain at least
their respective percentages of the outstanding Shares out of the Required
Israeli Percentage as set forth opposite their respective names on Schedule A
hereto, which shall be calculated based on the number of Shares outstanding from
time to time up to a maximum of 160,922,344 Shares outstanding. Accordingly, the
parties hereto acknowledge that, upon the closing of the Buyback Offer, the
parties will own such number of Shares that are subject to the restrictions of
the Required Israeli Percentage and such number of Shares that are not so
restricted, as set forth opposite their respective names on Schedule B hereto.
In the case of any discrepancy between Schedule A and Schedule B, Schedule B
shall govern.
5. Cooperation Agreement. The Cooperation Agreement, dated as of February 7,
2005, among the parties hereto, is hereby terminated.
6. General.
(a) This Agreement shall be governed in all respects by the internal laws of the
State of Israel without regard to conflict of laws rules.
(b) The provisions of this Agreement shall inure to the benefit of, and be
binding upon, the respective successors of the respective parties hereto and to
transferees of Shares pursuant to Section 3 above.
(c) Except as expressly provided herein, neither this Agreement nor any term
hereof may be amended, waived, discharged or terminated other than by a written
instrument signed by the all parties hereto.
(d) All notices and other communications under this Agreement shall be in
writing and shall be delivered by hand or sent by facsimile directed to any
party, at such party's address or facsimile number set forth on Schedule C
hereto, with a copy (which shall not constitute notice) to Goldfarb, Levy, Eran
& Co., 0 Xxxxxxxx Xxxxxx, Xxx Xxxx 00000, Xxxxxx, facsimile number:
x000-0-000-0000, Attention: Xxxx Xxxx, Adv. And Xxxx X. Xxxxx, Adv. Any notice
sent in accordance with this section 6(d) shall be effective (A) if delivered by
hand, upon delivery or (B) if sent via facsimile, upon transmission and
electronic confirmation of receipt.
(e) The courts of Tel Aviv-Jaffo shall have exclusive jurisdiction to
settle any dispute which may arise out of or in connection with this Agreement.
(f) This Agreement may be entered into in any number of counterparts, all
of which taken together shall constitute one and the same instrument.
(g) All share numbers herein shall be adjusted to reflect stock dividends,
stock splits, reverse stock splits and the like which applies to all the Shares.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have executed this Shareholders Agreement on the
day, month and year first set forth above.
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ELBIT LTD. EUROCOM COMMUNICATIONS LTD.
By:_____________________________ By:_____________________________
Name: Name:
Title: Title:
----------------------------------------------------------- --------------------
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POLAR COMMUNICATIONS LTD. MATAV INVESTMENTS LTD.
By:_____________________________ By:_____________________________
Name: Name:
Title: Title:
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MATAV CABLE SYSTEMS MEDIA LTD.
By:_____________________________
Name:
Title:
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[SIGNATURE PAGE TO SHAREHOLDERS AGREEMENT]
SCHEDULE A
Respective Percentages of
the Required Israeli Percentage
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Israeli Shareholder Pro Rata Required Israeli Percentage
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Elbit Ltd. 38.313%
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Eurocom Communications Ltd. 28.093%
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Polar Communications Ltd. 10.233%
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Matav Investments Ltd. 23.361%
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Total 100%
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SCHEDULE B
Restricted and Unrestricted Shares
------------------------------------------- -------------------- ------------------------- -----------------------
Israeli Shareholder Restricted Shares Unrestricted Shares Total
------------------------------------------- -------------------- ------------------------- -----------------------
Elbit Ltd. 3,082,731 8,630 3,091,361
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Eurocom Communications Ltd. 2,260,373 6,328 2,266,701
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Polar Communications Ltd. 823,349 2,305 825,654
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Matav Investments Ltd. 1,879,664 5,262 1,884,926
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Total 8,046,117 22,525 8,068,642
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SCHEDULE C
Notices Information
Elbit Ltd.
3 Azrieli Xxxxxx
Xxxxxxxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx 00000 Israel
Tel: x000-0-000-0000
Fax: x000-0-000-0000
Attention: Xx. Xxx Xxx (Director)
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Eurocom Communications Ltd.
2 Xxx Xxxxxxxx Street
Ramat-Gan 00000 Xxxxxx
Tel: x000-0-000-0000
Fax: x000-0-000-0000
Attention: Xxxxxx Xxxxxx, Adv. (VP & Legal Counsel)
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Polar Communications Ltd.
00 Xx'xxxx'xx Xxxxxx
Xxx Xxxx 00000 Xxxxxx
Tel: x000-0-000-0000
Fax: x000-0-000-0000
Attention: Xxx Xxxx (Executive Vice President)
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Matav Cable Systems Media Ltd. &
Matav Investments Ltd.
00 Xxxxxx Xxxxxx, Xxxxxxx
Tel: x000-0-000-0000
Fax: x000-0-000-0000
Attention: Ori Gur Arieh, Adv. (General Counsel)
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