Exhibit 4.5
(MAIN AGREEMENT)
FINAL VERSION
AGREEMENT
MADE AND ENTERED INTO IN TEL AVIV ON THIS 22ND DAY OF THE MONTH OF NOVEMBER IN
THE YEAR 2006
BY AND BETWEEN FEDERMANN ENTERPRISES LTD. (PRIVATE CO. NO. 512278391)
of 00 Xxxxxxxx Xxxxxx, Xxx Xxxx (hereinafter:
"FEDERMANN")
OF THE FIRST PART
AND KOOR INDUSTRIES LTD. (PUBLIC CO. NO. 520014143)
Azrieli Center, Triangle Tower (43rd floor), Tel Aviv,
67023
(hereinafter: "KOOR")
OF THE SECOND PART
(hereinafter: the "PARTIES")
WHEREAS Koor holds 3,160,000 (Three Million One Hundred Sixty Thousand)
ordinary shares in the issued and paid-up share capital of Elbit
Systems Ltd., a public company duly incorporated in Israel, whose
number at the Registrar of Companies is public company no. 520043027
(hereinafter: the "COMPANY") which Federmann acquired pursuant to a
share transfer deed dated December 27, 2004 (as amended on July 6,
2005); and
WHEREAS Koor wishes to sell and transfer to Federmann the Sold Shares, all
subject and pursuant to the following provisions of this Agreement;
and
WHEREAS Federmann is interested in acquiring from Koor the Sold Shares, all
subject and pursuant to the provisions of this Agreement; and
WHEREAS the Parties wish to rescind the shareholders agreement executed
between themselves and Heris Aktiengesellschaft ("HERIS") on
December 27, 2004 (as amended on July 6, 2005) in connection with
their holdings in the Company (the "SHAREHOLDERS AGREEMENT"), all
pursuant to the following provisions of this Agreement.
NOW THEREFORE THE PARTIES HERETO AGREE AS FOLLOWS:
1. PREAMBLE, APPENDICES AND INTERPRETATION
1. The Preamble to this Agreement and its Appendices constitute an
integral part hereof.
1.2 The section headings in this Agreement are for convenience of
reference only and shall not affect its interpretation.
2. DEFINITIONS
2.1 In this Agreement, the following terms shall have the meaning
appearing alongside each term, unless expressly stated otherwise:
The "DEBENTURE" A debenture in the form attached hereto as
APPENDIX 2.1 (A) of this Agreement in
connection with a first lien, unlimited in
amount, in favor of Koor, on the Trust Shares
and the rights deriving therefrom set forth in
the Debenture, excluding dividend rights on
account thereof, but including the Surplus
Amounts. The Debenture includes a page with
mortgage and lien particulars and a notice of
pledge to be executed by Federmann on the
Closing Date of the Transaction.
"UNITED STATES DOLLAR" or "$"
or "DOLLAR" United States dollars.
The "SURPLUS AMOUNTS" Should the Company declare dividends in
connection to any calendar quarter whatsoever,
in an aggregate amount per share during this
quarter exceeding 0.20 Dollar, this part of the
dividends over and above 0.20 Dollar per share
for the Trust Shares (as they may be on the
actual date of the dividend distribution) shall
constitute the "Surplus Amounts", and for the
removal of any doubt - the part of the
dividends up to 0.20 Dollar per share in
connection with the calendar quarter for the
Trust Shares shall not constitute Surplus
Amounts.
The "COMPANY" as defined in the Preamble to this Agreement.
The "SHAREHOLDERS AGREEMENT" as defined in the Preamble to this Agreement.
"TRUST AGREEMENT" the trust agreement to be executed on the date
of execution of this Agreement between
Federmann, Koor and the Trustee, and attached
as APPENDIX 2.1 (B) of this Agreement.
The "COMPANIES LAW" the Companies Law, 5759-1999.
"BUSINESS DAY" a day on which the two large banks in Israel
are open for business in United States Dollars,
excluding Fridays and the eves of festivals,
which shall not be regarded as a Business Day.
"KOOR" as defined in the Preamble to this Agreement.
"CLOSING DATE OF THE TRANSACTION" the First Payment Date.
"PAYMENT DATE" each of the following dates: (a) the earlier
date of the following (1) a date to fall on a
Business Day to be determined by Federmann in a
written notice to Koor at least 2 (two)
Business Days in advance, or (2) December 26,
2006 (the "FIRST PAYMENT DATE"); (b) March 26,
2007; (c) June 26, 2007; (d) September 26,
2007; and (e) December 26, 2007. To the extent
that one of the Payment Dates set forth above
does not fall on a Business Day, such Payment
Date shall be regarded as falling on the first
Business Day after the date in question.
"ORDINARY SHARE" or "ORDINARY SHARES" ordinary shares of NIS 1 par value each of
the issued equity capital of the Company.
The "SOLD SHARES" 2,300,000 (Two Million Three Hundred Thousand)
Ordinary Shares registered in the name of Koor
in the books of the Company, the numbers of
which are from 1,755,449 to 4,055,448
INCLUSIVE, as appearing in the share
certificates, a copy of which is attached to
this Agreement as APPENDICES "7.8(A)" and
"7.8(B)" of this Agreement, subject to the
adjustments as stated in section 10 below.
The "TRUST SHARES" 1,840,000 (One Million Eight Hundred Forty
Thousand) Ordinary Shares out of the Sold
Shares, the numbers of which are 2,215,449 to
4,055,448 inclusive, as this quantity of shares
may be reduced each Payment Date by the number
of Shares Released on the Payment Date, subject
to the adjustments as stated in section 10
below.
The "SHARES RELEASED ON THE PAYMENT DATE" 460,000 (Four Hundred Sixty Thousand)
Ordinary Shares out of the Trust Shares, the
numbers of which are as follows:
respecting the Shares Released on the Second
Payment Date - 2,215,449 to 2,675,448
inclusive,
respecting the Shares Released on the Third
Payment Date - 2,675,449 to 3,135,448
inclusive,
respecting the Shares Released on the Fourth
Payment Date - 3,135,449 to 3,595,448
inclusive,
respecting the Shares Released on the Fifth
Payment Date - 3,595,449 to 4,055,448
inclusive,
and all subject to the adjustments as stated in
section 10 below.
The "SHARES ON THE FIRST PAYMENT DATE" 460,000 (Four Hundred Sixty Thousand)
Ordinary Shares out of the Sold Shares, the
numbers of which are 1,755,449 to 2,215,448
inclusive, subject to the adjustments as stated
in section 10 below.
The "TRUSTEE" G.L.E. Trust Services Ltd. [trust company of
Xxxxxxxx Xxxx Xxxx & Co.].
"FREE AND CLEAR" free and clear of any encumbrance, pledge,
attachment, levy, debt, lien, claim, priority
right, right of refusal, option, blocked
arrangement, or any other or additional third
party right whatsoever of any kind or category,
excluding restrictions on transfer of and/or
trading in shares which are not registered
under U.S. securities laws, excluding the lien
on the Trust Shares pursuant to the provisions
of this Agreement with reference to the Trust
Shares only.
"FEDERMANN" as defined in the Preamble to this Agreement.
"INTEREST RATE" the three-month LIBOR rate, as it may be at
Bank Leumi Leisrael Ltd. on any actual Payment
Date whatsoever with respect to the interest
period commencing on that Payment Date and
terminating on the following Payment Date and
with respect to the period prior to the First
Payment Date - the three-month LIBOR rate as it
is at Bank Leumi Leisrael on the date of
execution of this Agreement.
"AGREEMENT" or "THIS AGREEMENT" this share sale agreement, inclusive of all its
appendices.
The "CONSIDERATION" $30.6 (00 Xxxxxx Xxxxxx Dollars and 60 cents)
for each of the Sold Shares and a total of
$70,380,000 (Seventy Million Three Hundred
Eighty Thousand United States Dollars).
The "PAYMENT ON THE PAYMENT DATE" $30.6 (00 Xxxxxx Xxxxxx Dollars and 60 cents)
for each of the Shares Released on the Payment
Date, and a total of $14,076,000 (Fourteen
Million Seventy Six Thousand United States
Dollars) plus interest on the Payment Date and
VAT on the interest, to be paid by Federmann
against delivery of a duly drawn up tax
invoice.
The "PAYMENT ON THE FIRST PAYMENT DATE" $30.6 (00 Xxxxxx Xxxxxx Dollars and 60
cents) for each of the shares on the First
Payment Date, and a total of $14,076,000
(Fourteen Million Seventy Six Thousand United
States Dollars) plus interest on the Payment
Date and VAT on the interest, to be paid
against delivery of a duly drawn up tax
invoice.
The "INTEREST ON THE PAYMENT DATE" an amount to be paid together with any
payment whatsoever on account of the
Consideration and to be calculated as follows:
(a) respecting the First Payment Date - the
amount of the Unpaid Balance on that date,
multiplied by the relevant Interest Rate,
to be calculated (on the basis of 360 days
per annum) proportionately to the period
commencing on the date of execution of this
Agreement and terminating on the actual
Payment Date of the entire payment on the
First Payment Date;
(b) respecting any other Payment Date - the
amount of the Unpaid Balance on that date,
multiplied by the relevant Interest Rate,
to be calculated (on the basis of 360 days
per annum) proportionately to the period
commencing on the actual Payment Date
preceding the Payment Date in question and
terminating on the actual Payment Date of
the entire payment on the date in question.
The "UNPAID BALANCE" the balance of the Consideration not yet paid
immediately prior to any Payment Date
whatsoever, including immediately prior to the
First Payment Date, whether or not the date for
payment due has been reached.
3. KOOR DECLARATIONS AND UNDERTAKINGS
Koor hereby declares and undertakes to Federmann as follows:
3.1 It is a duly incorporated public company, its number at the
Registrar of Companies is as appears at the head of this Agreement
and no measures have been initiated or there is no threat that
measures or proceedings will be initiated for dissolution,
liquidation, winding up, receivership or such similar action
against it.
3.2 On the date of execution of this Agreement and on the Closing Date
of the Transaction it is and shall be the exclusive owner of the
Sold Shares and that on the date of transfer of the Sold Shares to
Federmann they shall be Free and Clear.
3.3 The transactions forming the subject matter of this Agreement were
duly approved by Koor's Board of Directors and Koor has no need to
obtain any further approvals whatsoever by any of its organs to
enter into this Agreement and perform all its undertakings
hereunder.
3.4 The persons on behalf of Koor signing this Agreement and
accompanying documents are competent to sign in Koor's name on
this Agreement and its accompanying documents and/or those
documents required for the purpose of performance thereof, and to
bind Koor by their signature and this Agreement inclusive of all
its provisions binds Koor to all intents and purposes.
3.5 It has been a shareholder of the Company for several years, its
representative sits on the Board of Directors of the Company and
it decided to sell the Sold Shares as a strategic decision, with
full knowledge of the state of the Company, its assets, plans and
prospects and it is aware that Xxxxxxxx'x agreement to enter into
this Agreement and the Consideration for the Sold Shares is based
on this representation of Koor's.
4. FEDERMANN DECLARATIONS AND UNDERTAKINGS
Federmann hereby declares and undertakes to Koor as follows:
4.1 It is a duly incorporated private company, its number at the
Registrar of Companies is as appears at the head of this Agreement
and no measures or proceedings have been initiated or there is no
threat that measures or proceedings will be initiated for
dissolution, liquidation, winding up, receivership or such similar
action against it.
4.2 It has the capability and means for the full and timely
fulfillment of its undertakings under this Agreement, and it has
the financial resources to enable full payment of the
Consideration (plus interest) on the dates as set forth in this
Agreement.
4.3 The transactions forming the subject matter of this Agreement were
duly approved by Federmann's Board of Directors and Federmann has
no need to obtain any further approvals whatsoever by any of its
organs to enter into this Agreement and perform its undertakings
hereunder.
4.4 The persons on behalf of Federmann signing this Agreement and its
accompanying documents are competent to sign in Federmann's name
on this Agreement and its accompanying documents and/or those
documents required for the purpose of its performance, and to bind
Federmann by their signature, and this Agreement inclusive of all
its provisions binds Federmann to all intents and purposes.
4.5 It has been a shareholder of the Company for several years and its
representatives sit on the Board of Directors of the Company, and
subject to the declarations and representations of Koor in section
3 of this Agreement only, the Sold Shares are acquired, as are the
state of the Company and its assets, in an As Is state, without
any further representations or declarations whatsoever from Koor
or any person on its behalf, and the Consideration for the Sold
Shares, as agreed between the Parties, was also determined taking
into account the fact that the acquisition is on an As Is basis
only, as stated above.
4.6 Subject to the declarations and undertakings of Koor in section 3
above, on the Closing Date of the Transaction, it will be the sole
owner of the Sold Shares and the Sold Shares shall be Free and
Clear on the date of transfer thereof to the Trustee.
5. THE TRANSACTION
5.1 On the Closing Date of the Transaction INTER ALIA all the
following integrated acts shall take place:
5.1.1 Koor shall sell and transfer to Federmann the Sold
Shares, Free and Clear;
5.1.2 Federmann shall transfer the payment to Koor on the
First Payment Date;
5.1.3 Federmann shall transfer to the Trustee the Trust
Shares, Free and Clear. The Shares shall be held by the
Trustee pursuant to the provisions of the Trust
Agreement and the Trustee shall deliver a general power
of attorney and instruction to Federmann in connection
with dividends, as set forth in sections 6 and 7 below;
5.1.4 Federmann shall impose a lien in favor of Koor on the
Trust Shares in the form of a fixed first lien and
fixed first pledge, pursuant to the provisions of the
Debenture; and
5.1.5 The Shareholders Agreement shall be irrevocably
rescinded as stated in section 11 below.
5.2 At each further Payment Date (after the First Payment Date) all
the integrated acts set forth in section 8 below shall be
performed.
5.3 Without derogating from any other relief available to Koor under
the provisions of any law, where Federmann delays in making any
payment whatsoever (or any part thereof) on any relevant Payment
Date whatsoever and fails to make such payment within 14
(fourteen) days of the Payment Date in question:
5.3.1 Arrearage interest at an annual rate of 3-month LIBOR
interest shall be added to each delayed amount
(including amounts on account of delayed interest
accumulated up to the relevant Payment Date) commencing
on the relevant Payment Date until the actual Payment
Date, as it shall be at Bank Leumi Leisrael Ltd. on the
relevant Payment Date plus 2% ("ARREARAGE INTEREST").
5.3.2 Koor shall be entitled to render due and payable the
entire Consideration on the delayed Payment Dates,
together with any Interest and Arrearage Interest
accumulated on account thereof and other assured
amounts (as defined in the Debenture) and/or
immediately realize the Trust Shares, as they may at
that time (the "REALIZED Shares").
5.3.3 Alternatively, Koor shall be entitled to rescind this
Agreement upon 14 days prior written notice to
Federmann, and should Federmann fail to pay the payment
on the delayed Payment Date, plus Arrearage Interest
within the aforesaid 14 days - to recover possession of
the Trust Shares, as they were on the date of
rescission (the "RETURNED SHARES"). For the removal of
any doubt, Koor shall not be obligated to wait 14 days
as stated in the opening part of this section 5.3,
prior to giving the aforesaid written notice, as stated
in this section 5.3.3. It is agreed that any rescission
of this Agreement after the Closing Date of the
Transaction shall not be incidental to or cause the
return by Federmann to Koor of any of the Sold Shares
which are not Trust Shares on the date of rescission,
or the return by Koor to Federmann of any part of the
Consideration (plus interest) paid to Koor on account
of the Sold Shares up to the date of rescission, or the
rescission of the Shareholders Agreement as stated in
section 11 below.
5.4 DIVIDENDS ON THE SOLD SHARES
Federmann shall be entitled to receive any dividend to be paid by
the Company after the Closing Date of the Transaction for each of
the Sold Shares (apart from the Surplus Amounts on the Trust
Shares transferred to the Trustee), including a dividend for the
Sold Shares declared by the Company in connection with the third
calendar quarter for 2006 on November 13, 2006 and where the
effective date for which is November 28, 2006 (the "DIVIDEND
DECLARED"), even if the Sold Shares have not yet been transferred
to Federmann and/or the Trustee (the Trust Shares), and even if
the X day or effective date in connection with these dividends
falls prior to the Sold Shares having been transferred to
Federmann and/or the Trustee (the Trust Shares), provided that
respecting the Dividend Declared - Federmann's right to obtain
such dividend is contingent on the fact that the Closing Date of
the Transaction is performed by the end of the day on December 10,
2006. Where the Closing Date of the Transaction has not been
completed by the end of the day on December 10, 2006, and for any
reason whatsoever the Dividend Declared is paid to Federmann,
Federmann shall reimburse within 7 days of the date of Koor's
written demand, the amounts of the Dividend Declared paid to it as
aforesaid plus interest at the Interest Rate on the amounts as
aforesaid commencing on the date of actual receipt of the dividend
by Federmann until the date of its return to Koor. Where Federmann
fails to pay the full dividend amounts plus interest within the
seven aforesaid days, Arrearage Interest shall be added to these
amounts commencing at the end of the aforesaid 7 days until the
date of actual payment. On the date of execution of this Agreement
Koor shall sign a notice to the Company in the form attached to
this Agreement as APPENDIX 5.4, instructing the Company to pay any
such dividend directly to Federmann and it shall be delivered to
Federmann for delivery to the Company.
Where the Closing Date of the Transaction is completed by the end
of the day on December 10, 2006, and for any reason whatsoever the
Dividend Declared was paid directly to Koor, Koor shall pay
Federmann within 7 days of the date of Federmann's written
request, amounts of the Dividend Declared and paid to it as
aforesaid, plus interest at the Interest Rate on the aforesaid
amounts commencing on the date of actual receipt of the Dividend
by Koor until the date of payment to Federmann. Where Koor fails
to pay the entire amounts of the Dividend plus interest within the
aforesaid seven days, Arrearage Interest shall be added to these
amounts commencing at the end of the seven days until the date of
actual payment.
Notwithstanding the aforesaid, if and to the extent that the
Company distributes dividends including the Surplus Amounts, the
Surplus Amounts shall be paid to the Trustee and shall be released
to Federmann together with the Released Shares on the Payment Date
on account of which they were distributed.
5.5 In each of the events set forth in sections 5.3.2 or 5.3.3 above,
Federmann shall pay Koor all the dividend amounts paid to
Federmann (for the removal of any doubt, not including the Surplus
Amounts) from the date of execution of this Agreement until the
date of realization of the Trust Shares or their return to Koor,
in connection with all the Realized Shares or the Returned Shares,
as the case may be. The aforesaid dividend amounts shall be paid
to Koor within 7 days of its written demand plus interest at the
Interest Rate commencing on the date of actual receipt thereof by
Federmann until the date of transfer thereof to Koor. Where
Federmann fails to pay the full dividend amounts plus interest
within the aforesaid 7 days, Arrearage Interest shall be added to
these dividend amounts commencing upon the expiration of the
aforesaid 7 days until the date of actual payment.
6. THE TRUST ARRANGEMENT
6.1 The Trust Shares shall be held by the Trustee in trust to secure
payment of any payment on the Payment Date (and Arrearage
Interest, if any), pursuant to the provisions of the Trust
Agreement which shall include, INTER ALIA, the following
arrangements:
6.1.1 On the Closing Date of the Transaction, the Trustee
shall sign a general power of attorney for voting on
the Trust Shares in favor of Federmann in the form
attached to the Trust Agreement and shall transfer it
to Federmann (the "POWER OF ATTORNEY"). Should
Federmann delay in making any payment on any Payment
Date whatsoever (or any part thereof) or fail to pay
such payment within 14 (fourteen) days, Koor shall
deliver to Federmann by means of Federmann's legal
representative - M. Firon & Co. Law Offices
("FEDERMANN'S LEGAL REPRESENTATIVE") and to the
Trustee, a written notice in which the breach alleged
by Federmann shall be set forth, supported by an
affidavit of a senior officer of Koor (who shall
declare, INTER ALIA, that he is a senior officer of
Koor), such notice including a demand for revocation of
the Power of Attorney (the "DEFAULT NOTICE").
Immediately after receipt of the Default Notice, the
Trustee shall transfer a true copy thereof to
Federmann's Legal Representative. Upon the expiration
of 10 (ten) days after the date on which a true copy of
the Default Notice was delivered to Federmann's Legal
Representative by the Trustee, and if no injunction
from a court reaches the Trustee by the expiration of
the aforesaid 10 (ten) days prohibiting it from doing
so, the Trustee shall deliver to Federmann, Koor and
the Company a notice revoking the Power of Attorney.
6.1.2 To the extent that no Default Notice has been received,
any dividend, apart from the Surplus Amounts (which
shall be transferred to the Trustee pursuant to the
provisions of the Trust Agreement) to be distributed
for each of the Trust Shares shall be transferred
directly to Federmann on the date on which it is
distributed. On the Closing Date of the Transaction,
the Trustee shall sign an appropriate notice to the
Company in connection therewith in the form of APPENDIX
6.1.2 of this Agreement, and shall deliver it to
Federmann for delivery thereof to the Company. Upon
receipt of the Default Notice the Trustee shall notify
the Company that any dividend to be paid by the Company
commencing on that date on account of the Trust Shares
in its possession shall be paid to the Trustee until
receipt of a new notice on behalf of the Trustee.
6.1.3 The Trust Agreement shall set forth the circumstances
in which the Trustee shall return the Trust Shares to
Federmann or transfer them to Koor.
7. ACTS TO PERFORM ON THE CLOSING DATE OF THE TRANSACTION
The Parties, Company and Trustee shall convene on the Closing Date of the
Transaction at a place to be determined by the Parties and the Company
and shall perform the following integrated acts simultaneously:
7.1 Koor shall deliver to the Company a letter signed by Xxxxxxx
Xxxxxx informing of his resignation from the Board of Directors of
the Company commencing on the Closing Date of the Transaction.
7.2 The Trustee shall sign a general power of attorney (the Power of
Attorney as defined in section 6.1.1 above) and shall deliver it
to Federmann.
7.3 The Trustee shall sign the notice to the Company in the form in
APPENDIX 6.1.2 of this Agreement and shall deliver it to Federmann
for delivery thereof to the Company.
7.4 Federmann shall deliver the Debenture to Koor, duly signed by
Federmann.
7.5 The Parties shall deliver the Debenture and particulars of the
mortgages and liens for registration to the Registrar of Companies
and the Debenture and notice of pledge to the Registrar of Pledges
and they shall receive a "received" stamp from them.
7.6 Federmann shall transfer from a bank whose identity shall be
delivered to Koor in writing at least 2 Business Days prior to the
Closing Date of the Transaction (the "BANK") the payment on the
First Payment Date in United States Dollars to Koor's bank account
at the same bank, the details of which shall be delivered to it in
writing by Koor by the relevant Payment Date (in this section 7,
the "KOOR ACCOUNT").
7.6A Koor shall receive confirmation from the Bank that the aforesaid
amount was received in the Koor Account.
7.7 The Parties and the Trustee shall sign share transfer deeds in the
form attached as APPENDIX 7.7(A) and APPENDIX 7.7(B) of this
Agreement in connection with: (a) transfer of all the Sold Shares
from Koor to Federmann; and (b) transfer of the Trust Shares from
Federmann to the Trustee and the aforesaid share transfer deeds
shall be delivered to the Company.
7.8 Koor shall deliver to the Company the share certificates including
all the Sold Shares, a copy of which is attached hereto as
APPENDIX 7.8(A) and APPENDIX 7.8(B) of this Agreement.
7.9 The Company: (a) shall record in the books of the Company the
updated holdings of Koor, Federmann and the Trustee in the Company
shares immediately after the Closing Date of the Transaction. The
record of the Trustee in the books of the Company shall be
accompanied by a note that it is the Trustee; and (b) shall issue
to each of Federmann, Koor and the Trustee new share certificates
in the form customary at the Company, reflecting the holdings of
the Parties and the Trustee in the Company immediately after the
Closing Date of the Transaction, with the Trustee being issued 4
share certificates, one for the part of the Trust Shares numbered
2,215,449 to 2,675,448 inclusive, second for the part of the Trust
shares numbered 2,675,449 to 3,135,448 inclusive, third for the
portion of the Trust Shares numbered 3,135,449 to 3,595,448
inclusive, and fourth for the part of the Trust Shares numbered
3,595,449 to 4,055,448 inclusive, each share certificate in the
name of the Trustee shall mention the fact that it is Trustee.
7.10 The Shareholders Agreement shall become irrevocably null and void
as set forth in section 11 below.
7.11 Koor shall present Federmann with a duly drawn up tax invoice in
connection with VAT on the interest included in the payment on the
First Payment Date.
7.12 Koor shall present Federmann with a valid certificate from the tax
authorities on an exemption (full or partial) from the duty to
deduct tax at source, as stated in section 13.2 below or
alternatively, and at its sole discretion, it shall notify
Federmann in writing that it has no such certificate in its
possession. Wherever a valid certificate is not presented on full
exemption from the duty to deduct tax at source - tax shall be
duly deducted at source, and the deduction shall be treated as a
payment to Koor for all intents and purposes.
All the above acts in this section 7 shall be deemed to have been
performed simultaneously, no single act shall be deemed complete and no
single document shall be deemed to have been delivered until all the acts
have been completed at the same time and all the documents delivered.
8. ACTS TO PERFORM AT EACH OF THE OTHER PAYMENT DATES
At each relevant Payment Date (apart from the First Payment Date) the
Parties, the Trustee and the Company shall convene at a place to be
determined by the Parties and the Company and the following integrated
acts shall be performed simultaneously:
8.1 Federmann shall transfer from a Bank whose identity shall be
delivered to Koor in writing at least 2 Business Days prior to the
relevant Payment Date (for the purposes of this section 8 only,
the "BANK") the payment on the relevant Payment Date in United
States Dollars to the Koor Account at the same Bank, details of
which shall be delivered to Federmann in writing by Koor prior to
the relevant Payment Date.
8.1A Koor shall receive confirmation from the Bank that the aforesaid
amount was received in the Koor Account stated in section 8.1
above.
8.2 Koor and Federmann shall sign an amending document to the
Debenture including a page on the particulars of the mortgages and
liens and a pledge notice in the form attached to this Agreement
as APPENDIX 8.2, under which the application of the lien and
pledge registered under the Debenture at the Registrar of
Companies and Registrar of Pledges shall be removed from the
Shares Released on the relevant Payment Date (the "AMENDMENT TO
THE DEBENTURE").
8.3 The Parties shall deliver to the Registrar of Companies and the
Registrar of Pledges the Amendment to the Debenture including the
page on the particulars of the mortgages and liens and the pledge
notice, signed as stated in section 8.2 above, and they will
receive a "received" stamp from them.
8.4 Koor shall transfer an irrevocable and unconditional instruction
in writing to the Trustee to transfer the Shares Released on the
relevant Payment Date together with securities, dividends,
including the Surplus Amounts, monies and/or other rights
transferred and/or issued and/or allotted to the Trustee in
connection therewith or in consideration therefor (if transferred
and/or issued and/or allotted to the Trustee) to Federmann or to
its order.
8.5 The Trustee and Federmann shall sign a share transfer deed in the
form attached as APPENDIX 8.5 of this Agreement in connection with
the transfer of the Shares Released on the relevant Payment Date
to Federmann and shall deliver the share transfer deed to the
Company.
8.6 The Trustee shall deliver to the Company the share certificates on
account of the Shares Released on the relevant Payment Date.
8.7 The Company: (a) shall record in the books of the Company the
updated holdings of the Trustee and Federmann in the shares of the
Company as at the Payment Date; and (b) shall cancel the share
certificate returned by the Trustee and shall issue to Federmann
new share certificates in the customary form at the Company,
reflecting the holdings of the Trustee and Federmann in the
Company at the same Payment Date.
8.8 Koor shall provide Federmann with a duly drawn up tax invoice in
connection with the VAT on the interest included in the payment on
the Payment Date.
8.9 Koor shall provide Federmann with a valid certificate from the tax
authorities on an exemption (full or partial) from the duty to
deduct tax at source, as stated in section 13.2 below or,
alternatively and at its sole discretion, it shall notify
Federmann in writing that it is not in possession of such a
certificate. Wherever a valid certificate is not presented on full
exemption from the duty to deduct tax at source - tax shall be
duly deducted at source, and the deduction shall be treated as
payment to Koor for all intents and purposes.
All the acts stated in this section 8 above shall be deemed to have been
performed simultaneously, no single act shall be deemed as complete, and
no single document shall be deemed to have been delivered until all the
acts have been completed at the same time and all the documents
delivered.
9. RIGHT TO EARLY PAYMENT
9.1 Federmann may, upon prior written notice to be delivered to Koor
and the Trustee, at least 7 days prior to the date to be
determined in this notice (provided that it is a Business Day)
advance the Payment Date of the balance of payments on the payment
dates that have not been paid up to that date, in whole or in part
(and in the case of "in part", it shall set forth in its notice
the payments on the Payment Dates whose payment date has been
advanced) ("EARLY PAYMENT NOTICE"), provided that no Early Payment
Notice is delivered for an amount lower than $5,000,000 (Five
Million Dollars).
9.2 Where an Early Payment Notice has been delivered as stated in
section 9.1 above, all the provisions of section 8 above with
respect to early payment determined in the Early Payment Notice as
aforesaid, shall apply MUTATIS MUTANDIS, with reference to the
amount of the balance of payments on the payment dates that have
not been paid prior to such date, whose payment shall be advanced
as stated in the Early Payment Notice.
10. ADJUSTMENTS ON ACCOUNT OF DISTRIBUTION OF BONUS SHARES OR CHANGES IN
SHARE CAPITAL
10.1 To the extent that during the period from the date of execution of
this Agreement until each of the Payment Dates one or more of the
events set forth below occurs, the number of Shares Released on
the relevant Payment Date shall be adjusted according to the
following provisions:
10.1.1 Where the Company distributes bonus shares to its
shareholders prior to any Payment Date whatsoever, as
the case may be, the payment shall not be adjusted on
the Payment Date, but the bonus shares shall be
attached to the Shares Released on the Payment Date on
account of the Shares Released on the Payment Date Free
and Clear, without Federmann being required to pay a
further payment on account thereof. At the time of
distribution of the bonus shares as aforesaid on
account of the Trust Shares, the aforesaid bonus shares
shall be allotted to the Trustee and shall be deemed
part of the Trust Shares and the first lien within the
scope of the Debenture shall also apply thereto.
10.1.2 If the Company performs with its share capital any
consolidation, reduction, distribution or any other act
of similar effect, the number of Shares Released on the
Payment Date (on any Payment Date) shall be adjusted
according to the ratio of the consolidation or
distribution and the (total) Consideration on the
Payment Date shall not alter (although the price per
share sold will vary accordingly).
10.2 If the Company offers the shareholders rights to acquire any
securities whatsoever ("RIGHTS"), then to the extent that the
final date for realization of the Rights is later than the date of
release of the Shares Released on the Payment Date (or if it falls
on the same date) - such Rights shall also be held in trust and
shall be subject to the lien under the Debenture and shall be
released to Federmann or Koor (pursuant to the provisions of this
Agreement) together with the Shares Released on the Payment Date
with respect to which they were offered.
If the date for realization of the aforesaid Rights is prior to
the date for release of the Shares Released on the Payment Date on
account of which the Rights were offered - Federmann shall be
entitled to realize the aforesaid Rights, in whole or in part, by
a transfer of the Consideration on account thereof to the Company
with a note that the Consideration is paid on account of the
Rights offered in connection with the Rights Released on the
Payment Date, or any part thereof. Securities allotted for
Federmann under the aforesaid realization shall be held in trust
and shall be subject to the lien and shall be released, subject to
the following provisions, to Federmann together with the Shares
Released on the Payment Date on account of which the Rights were
allotted. Should, under the Trust Agreement, Koor be entitled to
receive the Shares Released on the Payment Date on account of
which the Rights were allotted, Koor shall be entitled, at its
sole discretion, to pay Federmann on the date of receipt of the
Shares Released on the Payment Date the amount for realization of
the Rights, plus interest at the Interest Rate from the date on
which Federmann paid the amount to realize the Rights until
payment of the amount to Federmann and to receive together with
the Shares Released on the Payment Date the securities to be
allotted on account thereof by virtue of the realization of the
Rights or to notify the Trustee that it may transfer the realized
Securities to Federmann, and in such circumstances the realized
Securities shall be transferred to Federmann.
10.3 All rights, monies or assets of any kind whatsoever to reach or to
be offered by any entity whatsoever in lieu of the Trust Shares or
in consideration therefor, including securities in any other
corporation (within the scope of any merger, exchange of shares or
any other event) shall be transferred to the Trustee's possession
and shall be encumbered pursuant to the provisions of the
Debenture, and the provisions of this Agreement, the Trust
Agreement and the Debenture shall apply thereto MUTATIS MUTANDIS,
as if they were the Trust Shares.
11. RESCISSION OF THE SHAREHOLDERS AGREEMENT
The parties irrevocably agree that on the Closing Date of the Transaction
the Shareholders Agreement, inclusive of all its clauses and appendices
shall be null and void VIS-A-VIS any of the Parties thereto. Rescission
of the Shareholders Agreement inclusive of all its clauses pursuant to
the aforesaid prevails over any other provision included in the
Shareholders Agreement, insofar as such provision exists. Without
derogating from the generality of the aforesaid, it is hereby clarified
that upon rescission of the Shareholders Agreement, Koor shall be free,
at any time, to vote for Company shares remaining in its possession after
the Closing Date of the Transaction (as well as for Trust Shares to be
returned to it, if returned or realized, pursuant to the provisions of
section 5.3 above) on any matter to be put on the agenda, at its sole
discretion, and it shall also be entitled to all the rights deriving
therefrom and it may perform any transaction therein, at its sole
discretion. For the removal of doubt, it is clarified that rescission of
this Agreement at any time after the Closing Date of the Transaction
shall not bring with it any re-entry into force of the Shareholders
Agreement, or any of its clauses or appendices.
12. REPORTING
The Parties shall coordinate in advance, if and wherever possible,
subject to the provisions of any law and the timetables dictated under
the provisions of any law, the text of any report, letter, notice or
account published by any of the Parties in connection with their entering
into this Agreement, fulfillment of the conditions hereunder and
performance hereof.
13. TAXES AND COMPULSORY PAYMENTS
13.1 Unless stated elsewhere in this Agreement, each Party shall bear
liability for the compulsory payments and taxes applying (if any)
to it under the provisions of any law on sale or acquisition of
the Sold Shares under this Agreement.
13.2 Should a duty to deduct tax at source apply to any payment
whatsoever paid pursuant to the provisions of this Agreement, tax
shall duly be deducted at source by the paying party, unless the
Party receiving monies presents a valid certificate from the tax
authorities on exemption from the duty to deduct tax at source.
13.3 Each Party shall bear its own expenses, including attorneys' fees
in connection with the drafting and performance of this Agreement.
13.4 Should any amount paid by one Party to the other Party under the
provisions of this Agreement be liable to VAT under the provisions
of any law, the paying party shall pay the other party the VAT
amount simultaneously upon payment of such amount and in the same
manner, at the legal rate, against receipt of a duly drawn up tax
invoice.
13.5 At any date on which Federmann pays Koor interest, Koor shall
deliver to Federmann a duly drawn up tax invoice for VAT on the
interest.
14. MISCELLANEOUS
14.1 The Parties hereby waive any right of first refusal, right of
first proposal, right of participation, priority right or any
other right to which they are entitled in connection with transfer
of the Sold Shares either by virtue of the Shareholders Agreement
or by virtue of any other right or agreement.
14.2 This Agreement shall be governed by the law of the State of
Israel. Exclusive jurisdiction in all matters in connection with
this Agreement shall be vested solely in the courts within the
jurisdiction of the district court of the city of Tel Aviv -
Jaffa, and there shall be no jurisdiction vested in any other
court.
14.3 No modification, amendment or addition, waiver, extension,
concession or failure to exercise any right under this Agreement
shall be valid unless made in an express document signed by all
the Parties to the Agreement and they shall apply solely to the
event expressed in the document as aforesaid and shall not
derogate from the other rights of any Party whatsoever under this
Agreement.
14.4 The Parties to this Agreement may extend or shorten any date
stipulated in this Agreement and waive performance of any
provision whatsoever in this Agreement, either on a one-time basis
or on several occasions, by means of written notice signed by two
senior officers of each of Federmann and Koor, without the
necessity for further approval.
14.5 This Agreement fully encompasses, embodies, unifies, expresses and
exhausts all the agreements of the Parties to the Agreement with
respect to the matters included herein. Any promises, guarantees,
written or verbal agreements, undertakings or representations with
respect to the subject matter of this Agreement given or made by
the Parties prior to entering into this Agreement, verbally or in
writing and not expressly mentioned herein shall not add to,
derogate from or alter the obligations and rights determined in
this Agreement and the Parties shall not be bound by them, if any,
commencing on the date of this Agreement. Without derogating from
the generality of the aforesaid, the exchange of documents between
the Parties prior to execution of this Agreement, including the
drafts exchanged between them shall not affect the interpretation
of this Agreement.
14.6 No conduct on the part of any of the Parties shall be deemed a
waiver of any of its rights under this Agreement or under the
provisions of any law, or as a waiver or consent on its part to
any breach or non-fulfillment of the terms of this Agreement by
the other Party or as granting a postponement or extension or as a
modification, cancellation or addition to any term whatsoever,
unless expressly made in writing.
14.7 The Parties to this Agreement may not, unless expressly stated
otherwise in the body of this Agreement, assign or transfer their
rights or obligations under this Agreement to any third party
whatsoever or perform this Agreement by means of any third party
whatsoever unless it has obtained the prior written consent of the
other Party to the Agreement, and nothing in this Agreement shall
grant any right whatsoever to any person not a party to the
Agreement.
14.8 Where any of the Parties failed to enforce or delayed enforcement
of any right whatsoever granted to it under this Agreement or
under the provisions of any law in a particular instance or in a
series of instances, this shall not be deemed a waiver of the
aforesaid right or of any other rights whatsoever.
14.9 The Parties shall cooperate between themselves for the purpose of
realizing the provisions of this Agreement and they shall assist
each other as is reasonable and necessary, including signing any
reasonable document, application or approval that may be required
for this purpose.
14.10 Notices under this Agreement shall be delivered in writing to the
addresses of the Parties as set forth at the head of this
Agreement or to other addresses about which the Parties notified
pursuant to the provisions of this section. Any notice sent by one
Party to the other Party by registered mail shall be deemed to
have reached its addressee upon the expiration of three days after
the date of being handed in at the post office; a notice sent by
personal delivery up to 17:00 hours on any Business Day whatsoever
shall be deemed to have been received immediately upon delivery,
and where it is delivered after 17:00 hours on any Business Day
whatsoever it shall be deemed to have been received on the first
Business Day after delivery thereof.
IN WITNESS WHEREOF THE PARTIES HERETO HAVE HEREUNTO SET THEIR HANDS AND SEALS:
/s/ Xxxxxx Xxxxx /s/ Xxxxxxx Xxxxxxxxx
/s/ Xxxxxx Xxxxxx /s/ Dov Ninveh
---------------------- ---------------------------
KOOR INDUSTRIES LTD. FEDERMANN ENTERPRISES LTD.
By Messrs. Xxxxxx Xxxxx By Messrs. Xxxxxxx Xxxxxxxxx
and Xxxxxx Xxxxxx and Dov Ninveh
I, the undersigned, Heris Aktiengesellschaft hereby unconditionally certify my
consent to the above provisions of this Agreement, including revocation of the
Shareholders Agreement as defined above, as stated in section 11 above, and I
hereby waive any right of first refusal or right of proposal which I am likely
to have in connection with the transactions forming the subject matter of this
Agreement.
/s/ Xxxxxxx Xxxxxxxxx
--------------------------------
HERIS AKTIENGESELLSCHAFT
by Xx. Xxxxxxx Xxxxxxxxx
FINAL
APPENDIX 2.1(A)
DEBENTURE
MADE AND ENTERED INTO ON THIS __ DAY OF THE MONTH OF _______, 2006
WHEREAS THE UNDERSIGNED, FEDERMANN ENTERPRISES LTD. (PRIVATE CO. NO. 512278391)
("FEDERMANN")
entered into an agreement with Koor Industries Ltd. ("Koor") dated November 22,
2006 (hereinafter: the "SALE AGREEMENT") under which Federmann undertook to pay
Koor the consideration (the "CONSIDERATION") plus interest (the "INTEREST") in
several deferred payments for 1,840,000 shares in Elbit Systems Ltd. (the
"SHARES" and the "COMPANY" respectively) which were transferred by Federmann on
the closing date for the transaction forming the subject matter of the Sale
Agreement to G.L.E. Trust Services Ltd. (the "TRUSTEE") in trust, all pursuant
to the Sale Agreement.
NOW THEREFORE it was agreed that to secure full and exact payment of all the
amounts that Federmann would owe Koor on account of, on the basis of or in
connection with the Sale Agreement, including the Consideration for the Shares,
Interest on the Consideration as aforesaid, arrearage interest, currency rate
differentials and expenses of any kind whatsoever, including (but without
derogating from the generality of the aforesaid) expenses, indemnities and
Trustee fees, reasonable attorneys' fees and any other expense incidental to
initiating realization and execution office proceedings in the case of
non-timely payment of the Consideration and to secure performance of all
Federmann's other undertakings to Koor under the Sale Agreement (hereinafter
jointly referred to as the "SECURED AMOUNTS"), Federmann shall encumber in favor
of Koor by a first fixed lien, unlimited in amount, as a condition for the
transfer of the Shares and until full and final payment of the Secured Amounts,
the Shares and any rights deriving from the Shares set forth in APPENDIX A of
this Debenture (hereinafter: the "ENCUMBERED PROPERTY" or the "SECURITY"), all
pursuant to the following terms.
NATURE OF THE DEBENTURE
1. This Debenture has been drawn up to secure full and exact payment of the
Secured Amounts owed and/or to be owed to Koor from Federmann in the
future, payable prior to realization of the Securities to which this
Debenture applies and/or thereafter, owed absolutely and/or
conditionally, directly and/or indirectly WITHOUT ANY LIMITATION ON
AMOUNT.
PLEDGE AND LIEN
2. As security for the full and exact payment of all the Secured Amounts,
Federmann hereby encumbers in favor of Koor and its successors by a first
lien and pledge of the Encumbered Property. The pledge and lien created
under this Debenture shall apply to any right to damages and/or
indemnification available to Federmann on account of the Encumbered
Property.
FEDERMANN'S DECLARATIONS
3. Federmann hereby declares:
3.1 The Encumbered Property is not encumbered, pledged or attached in
favor of any other persons.
3.2 The Encumbered Property is and shall remain, to the extent that
this Debenture has not been cancelled and the lien fully paid off
finally and absolutely, in the exclusive possession of the Trustee
or any Trustee in lieu thereof upon the consent of the parties to
the Sale Agreement.
3.3 There is not, nor shall there be, to the extent that the Debenture
and lien on the Encumbered Property are not cancelled and the lien
paid off finally, any restriction or condition under the
provisions of any law or under any agreement applying to the
transfer of the Encumbered Property or the encumbrance thereof,
except for restrictions on transfer of and/or trading in the
Shares imposed on shares which are not registered under U.S.
securities laws.
3.4 To the extent that this Debenture has not been cancelled or the
lien fully paid off finally and absolutely, the Shares
constituting the Encumbered Property shall not be transferred to
the ownership of any third party whatsoever and they shall be paid
up in full, free and clear of any debt, encumbrance, pledge, right
of lien, attachment, levy, claim, option or any other third party
right of any kind whatsoever, including (without derogating from
the generality of the aforesaid) a right of first refusal, a right
of first proposal, right of participation or any other right,
except for restrictions on transfer of and/or trading in the
Shares imposed on shares which are not registered under U.S.
securities laws.
3.5 It has authority to encumber the Encumbered Property.
FEDERMANN'S UNDERTAKINGS
4. Federmann hereby undertakes the following, to the extent that the Secured
Amounts have not been paid off:
4.1 Not to sell, transfer, assign, endorse or deliver all or part of
the Encumbered Property, not to undertake to perform any of the
acts stipulated above, not to permit any other to use the
Encumbered Property in any manner whatsoever and not to permit any
other to perform any act mentioned above without Koor's prior
written consent thereto.
4.2 To immediately notify Koor in the event of the imposition of an
attachment, the initiation of any execution office proceedings or
the filing of a petition for the appointment of a receiver over
all or part of the Encumbered Property. Furthermore, to
immediately notify the person imposing the attachment, the bailiff
or the receiver of the lien in favor of Koor and to immediately
and without delay, at its expense, initiate any measures to remove
the attachment, cancel the execution office act or the appointment
of the receiver, as the case may be.
4.3 Not to encumber or pledge in any mode or manner all or part of the
Encumbered Property, including by a current lien, with rights
equal, prior to or later than Koor's rights, and not to assign any
right whatsoever which Federmann possesses in all or part of the
Encumbered Property without obtaining Koor's prior written
consent.
4.4 To fulfill any undertaking imposed on a shareholder under the
provisions of any law and under the documents of incorporation of
Elbit Systems Ltd., including, but not limited to timely payment
of all taxes and compulsory payments imposed on the Encumbered
Property or on the income derived therefrom, and to submit to
Koor, at its demand, all receipts for the aforesaid payments. If
Federmann fails to pay any of the aforesaid payments on time, Koor
may (but is not obligated to), after having notified Federmann as
far as possible and if in its discretion this is not sufficient to
prejudice its rights, make the payment at its expense and charge
it for reimbursement plus its actual Expenses and Arrearage
Interest (as this term is defined in the Sale Agreement). These
payments shall constitute an integral part of the Secured Amounts
under this Debenture.
4.5 Not to initiate any action whatsoever and not to oppose the
performance of any action and to do its utmost to prevent others
from performing any action in connection with Federmann and/or the
Encumbered Property which is likely to prejudice Koor's ability to
realize the Encumbered Property under this Debenture.
5. Federmann undertakes to notify Koor immediately of:
5.1 Any of the acts mentioned in section 7 below within 48 hours of
the date of becoming aware of such act.
5.2 Any case of any claim of any right whatsoever with respect to all
or part of the Encumbered Property or of any execution office
proceedings or other measures to realize all or part of the
Encumbered Property;
5.3 Any petition filed for winding up of Federmann's business or
receivership of its assets or execution office proceedings against
its assets and any resolution with respect to any change in
Federmann's company structure or any intention whatsoever to do
so.
5.4 Any change of address.
PAYMENT DATES
6. Federmann hereby undertakes to pay Koor the Secured Amounts, or any part
thereof, exactly on their payment dates, as determined in the Sale
Agreement.
RENDERING IMMEDIATELY PAYABLE AND REALIZATION OF THE ENCUMBERED PROPERTY
7. Koor may render the Secured Amounts immediately payable in the event of
any breach by Federmann of any of its undertakings or representations
under the Sale Agreement or this Debenture which is not remedied within
14 days of the date Koor delivered to Federmann a written warning with
respect thereto (hereinafter: the "BREACH") and in the event of any delay
of 14 or more days on Federmann's part in the timely payment of any of
the Secured Amounts under the Sale Agreement. Koor may render the Secured
Amounts immediately payable after having given 3 Business Days written
notice, without Koor being required to provide Federmann with any further
time (unless expressly determined otherwise), as well as in each of the
following events (which shall also be deemed a Breach for the purposes of
this Debenture). Koor's written notice shall set forth the circumstances
in which the specific event applies from the following circumstances on
which Koor is relying:
7.1 Federmann adopted a resolution on voluntary winding up, or an
order was given for its winding up or receivership of its assets,
or a stay of proceedings against it, or it applied to court for
protection against its creditors, or a Trustee or special manager
was appointed under the Companies Ordinance or under the
provisions of any other law, or its name was expunged from the
Companies Register, or if a resolution was adopted or a similar
act performed to any of the aforesaid resolutions or acts or an
application was filed to commence any proceeding concerned with
adopting a resolution or performing any such act (and the
proceeding was not cancelled within 15 days of the date of its
commencement or filing the application for its commencement, if
not filed by Federmann), or if Federmann performed any other act
to liquidate its activities or business or sold or transferred to
any third party whatsoever a significant part of its assets, or it
failed to repay its loans or other obligations or a significant
part thereof or it failed to pay Interest on account thereof, or
it failed to meet any pecuniary obligation whatsoever which it
owed under an absolute and final judgment;
7.2 Any attachment whatsoever was imposed (including an interim
injunction, conditional attachment, permanent attachment or final
attachment) or any execution office activity was initiated against
any of Federmann's assets or against a significant part thereof or
on the Securities provided to secure Federmann's undertakings and
the execution office activities were not absolutely terminated or
absolutely removed within 15 days of the date of imposition of the
attachment or from the date of performing the execution office
activity, as the case may be.
7.3 Where an attachment has been imposed on the Encumbered Property or
Koor's rights therein have been harmed or reduced in any other
manner related to Federmann.
7.4 A significant deterioration in the economic state or business
state of Federmann occurred in such manner as to throw into
significant doubt Federmann's ability to pay the Secured Amounts.
7.5 Where any permit, approval, license or consent whatsoever on the
part of Federmann for the purpose of execution of the Sale
Agreement by the parties and performance of Federmann's
undertakings thereunder, have been breached or are apparently
absent.
7.6 Where any undertaking whatsoever on the part of Federmann
VIS-A-VIS any other entity whatsoever entitling such entity to
render Federmann's significant debts and/or undertakings
immediately payable has been breached.
7.7 The Sale Agreement was duly rescinded, in whole or in part, by
Koor following breach thereof by Federmann.
8. Cancelled with consent.
9. Any receipt or consideration obtained from realization of the Encumbered
Property (to the extent that it is realized by means of a sale of all or
part of the Encumbered Property) shall be credited according to an
arrangement to be chosen by Koor, on account of the Consideration and/or
on account of the Interest and/or on account of the Arrearage Interest
and/or collection expenses and/or on account of other amounts owed and/or
to be owed to Koor under this Agreement and the Sale Agreement, as Koor
shall determine at its sole discretion.
10. Without derogating from the other provisions of this Debenture, no
waiver, extension, discount, silence and/or the refraining from any act
("WAIVER") on the part of Koor with respect to non-fulfillment or partial
or incorrect fulfillment of any undertaking whatsoever on the part of
Federmann under this Debenture and/or any other undertaking VIS-A-VIS
Koor within the scope of the Sale Agreement shall be deemed a Waiver on
the part of Koor of any right whatsoever, merely a limited consent in the
specific and limited circumstances in which it was given.
11. Wherever the amounts were rendered immediately payable as stated in this
Debenture and not paid by Federmann, Koor may exercise at any time any
measures it deems fit to collect the Secured Amounts and realize its
rights under this Debenture, including by realization of all or part of
the Encumbered Property, and applying the proceeds thereof to pay off the
Secured Amounts, without Koor being under any obligation to first realize
other guarantees or securities, if any. For the purpose of the aforesaid,
Koor may, by a court or the execution office, realize the Encumbered
Property, INTER ALIA by realization in kind (subject to the provisions of
any law) or by the appointment of a receiver or a receiver and manager on
its behalf who may, among other powers, have authority:
11.1 To receive possession of all or part of the Encumbered Property.
11.2 To sell or agree to the sale of all or part of the Encumbered
Property, to transfer or agree to the transfer thereof in any
other manner whatsoever, under the conditions it deems fit.
11.3 To act and perform any act necessary to obtain an exemption from
payment of any tax, fee, levy, compulsory payment or any other
payment applying or to apply, imposed or to be imposed under the
provisions of any law, and to sign any declaration and/or document
in connection therewith.
11.4 To make any other arrangement with respect to all or part of the
Encumbered Property, as it deems fit.
NATURE OF SECURITY
12. The Security provided to Koor under this Debenture is perpetual and shall
remain in force until Koor confirms in writing that this Debenture is
cancelled. Koor shall grant its consent to the cancellation of this
Debenture upon full and final payment of the Secured Amounts pursuant to
the provisions of the Sale Agreement. The Security is not dependent on
any other security which Koor received or shall receive from Federmann or
from any other person or entity to secure Federmann's undertakings and
payment of the Secured Amounts, and it shall not affect or be affected by
any other such security. Notwithstanding the aforesaid, on each Payment
Date (as defined in the Sale Agreement) the Security shall be removed
from the Shares Released on the Payment Date (with reference to the same
Payment Date) and from any part of the Encumbered Property that was
transferred, allotted and/or distributed in connection therewith or in
consideration therefor, all as stated in the Sale Agreement.
13. If Koor reaches a compromise or grants an extension or concession to
Federmann, or any of Federmann's undertakings in connection with the
Secured Amounts is varied - this shall not alter the nature of the
Security to which this Debenture applies, and in any event Federmann's
Security and the undertakings to which this Debenture applies shall
remain fully in force.
14. Koor may register all or part of the Security at any competent authority
under the provisions of any law and/or in any public register (including
but not limited to the Registrar of Companies and the Registrar of
Pledges).
15. Federmann and Koor shall deposit the Security delivered under this
Debenture with the Trustee pursuant to the provisions of the Sale
Agreement. The Trustee shall sign and transfer to Federmann a general
power of attorney for voting on the Shares pursuant to the provisions of
the Sale Agreement.
NOTICES AND WARNINGS
16. Any notice sent by one party to this Debenture to the other party by
registered mail shall be deemed to have reached its destination three
Business Days after its registration at the post office for despatch; in
the case of delivery by courier service, it shall be deemed delivered on
the day of delivery.
THE SUBSTANTIVE LAW AND JURISDICTION
17. This Debenture shall be governed by the laws of the State of Israel.
18. Any dispute or disagreement between the parties in connection with the
term, interpretation, performance, enforcement, breach or rescission of
this Debenture shall be heard in the competent courts in the district of
Tel Aviv - Jaffa, and no other court shall have jurisdiction.
IN WITNESS WHEREOF FEDERMANN HAS DULY SIGNED:
---------------------------------
FEDERMANN ENTERPRISES LTD.
(APPENDIX TO DEBENTURE)
APPENDIX A - DESCRIPTION OF THE ENCUMBERED PROPERTY
1,840,000 ordinary shares of NIS 1 par value each in Elbit Systems Ltd. (public
company no. 520043027) numbered in the Company books from 2,215,449 to 4,055,448
inclusive (hereinafter: the "ENCUMBERED SHARES") were registered in trust in the
name of G.L.E. Trust Services Ltd. and with whom share certificates in respect
thereof were deposited.
The lien shall also apply to:
A. All shares and securities of any kind whatsoever convertible into
or realizable as shares actually allotted from time to time in
respect of the Encumbered Shares (including - and without
derogating from the generality of the aforesaid - bonus shares of
any kind and Rights (as defined in the Sale Agreement) and
securities realized in consequence of realization of the aforesaid
Rights); in addition to -
B. All rights, monies, shares or assets of any kind whatsoever
reaching or offered by any entity whatsoever in lieu of or in
consideration for the Encumbered Shares, including securities in
any other corporation (in the framework of a merger, exchange of
shares or any other event) and any other right in connection with
the Encumbered Shares not expressly vested in Federmann in the
acquisition agreement.
C. The Surplus Amounts, as defined in the Sale Agreement.
FINAL VERSION
APPENDIX 2.1 (B)
A TRUST AGREEMENT
Made and entered into in Tel Aviv on the 22nd day of November 2006
BETWEEN:
FEDERMANN ENTERPRISES LTD.
(A PRIVATE COMPANY NO.512278391)
of 00 Xxxxxxxx Xxxxxx, Xxx Xxxx
("FEDERMANN")
OF THE FIRST PART
-----------------
AND:
KOOR INDUSTRIES LTD.
(A PUBLIC COMPANY NO.520014143)
Azrieli Center, Xxxxxxxxxx Xxxxx (00xx Xxxxx)
Tel Aviv 67023
("KOOR")
OF THE SECOND PART
------------------
AND:
G.L.E. TRUST SERVICES LTD.
(A PRIVATE COMPANY NO.511493587)
of 0 Xxxxxxxx Xxxxxx (Xxxxxx-Xxxxxx Xxxxx)
Xxx Xxxx 00000
("THE TRUSTEE")
OF THE THIRD PART
-----------------
(Hereinafter: "THE PARTIES")
WHEREAS: Koor and Federmann have, on the date of
signature of this agreement, signed an agreement
("THE SALE AGREEMENT") in which Koor will sell
to Federmann, 2,300,000 Ordinary Shares of Elbit
Systems Ltd.
(hereinafter: "THE COMPANY");
AND WHEREAS: As part of the sale agreement the
parties have agreed that in order to assure
payment to Koor for sale of 1,840,000 Ordinary
Shares of the Company ("THE TRUST SHARES "), the
trust shares will be held by the Trustee and
will be released in accordance with the
provisions of this Trust Agreement ("THE
TRUST");
AND WHEREAS: The parties wish to settle their relationships
in the context of the trust, and all in the
manner set forth in detail in this agreement and
subject to the provisions herein contained;
IT HAS ACCORDINGLY BEEN DECLARED, AGREED AND STIPULATED
BETWEEN THE PARTIES AS FOLLOWS:
1. INTERPRETATION
Unless stated otherwise, the terms appearing in this agreement but which
have not been defined herein, shall have the meanings assigned to them in
the sale agreement.
"THE SURPLUS AMOUNTS" In the event of the Company declaring, in
relation to any calendar quarter, dividends of
an amount per share accruing over the period of
such quarter, which exceed 0.20 dollars, such
portion of the dividends as is over and above
0.20 dollars per share in respect of the trust
shares (as per the quantity thereof on the
actual date of distribution of the dividends),
shall constitute "surplus amounts", and for the
removal of doubt - such portion of the dividends
of up to 0.20 dollars per share in reference to
a calendar quarter in respect of the trust
shares shall not constitute surplus amounts.
2. APPOINTMENT OF THE TRUSTEE
Federmann and Koor hereby irrevocably appoint the Trustee to act as
Trustee commencing from the date of completion of the transaction and in
accordance with the provisions of this agreement in relation to the trust
shares (and in relation to all such securities and rights as have been
allotted or assigned to the Trustee in connection with them or the
proceeds thereof as stated hereunder in Section 5, as well as such
dividends as have been distributed to the Trustee in respect of them, in
so far as any have been distributed, and the profits of the trust that
have accrued because of them, in so far as any have accrued). For the
removal of doubt, Federmann and Koor may at any time, in a joint written
instruction to the Trustee, terminate the trust under this agreement and
in such a notification they may give it instructions as to whom the trust
shares are to be transferred to as well as the additional assets (as such
are defined below in Section 6.2).
3. TRANSFER OF THE TRUST SHARES TO THE TRUSTEE; ACTIONS ON THE DATE OF
COMPLETION OF THE TRANSACTION.
On the date of completion of the transaction the following combined
actions will occur (as part of the actions on the completion date in
accordance with the sale agreement):
3.1 Federmann will deliver the debenture to Koor it having been duly
executed by Federmann.
3.2 Federmann and the Trustee will execute a share transfer deed, in
connection with transfer of the trust shares from Federmann to the
Trustee, in the form attached hereto as Appendix 7.7(b) to the
sale agreement and which is for convenience attached to this
agreement AS APPENDIX 3.2, and Federmann will deliver the said
share transfer deed to the Company.
3.3 On the same date Koor will deliver to the Company the share
certificates that are in its possession, which include INTER ALIA,
all the sold shares, a copy of which is attached to the sale
agreement as Appendix 7.8(a) and Appendix 7.8(b).
3.4 The Company:
3.4.1 Will register in the Company's books, all the up to
date holdings of Koor, Federmann and the Trustee in the
Company's shares immediately following the transaction
completion date. Registration of the Trustee in the
Company's books will be accompanied by a notation to
the effect of it being Trustee of the trust shares; and
-
3.4.2 Will issue new share certificates to each of Federmann,
Koor and the Trustee, in the Company's usual form,
reflecting the holdings of Koor, Federmann and the
Trustee in the Company immediately after the completion
date of the transaction, when 4 share certificates will
be issued to the Trustee, one for the portion of the
trust shares the numbers of which are from 2,215,449 to
2,675,448 INCLUSIVE, the second for the portion of the
trust shares ----------- ---------- the numbers of
which are from 2,675,499 to 3,135,448 INCLUSIVE, the
third for the portion ----------- ---------- of the
trust shares the numbers of which are from 3,135,449 to
3,595,448 INCLUSIVE, and the --------- --------- fourth
for the portion of the trust shares the numbers of
which are from 3,595,449 to --------- 4,055,448
inclusive.
Every share certificate in the name of the Trustee
shall mention the fact that it is the Trustee in
respect of the trust shares.
3.5 The Trustee shall execute a general power of attorney, a copy of
which is hereby attached as Appendix 3.5 and shall deliver it to
Federmann.
3.6 The Trustee shall sign the notification to the Company, a copy of
which is hereby attached as Appendix 3.6 and shall deliver it to
Federmann for delivery to the Company. It is clarified that the
Trustee need not examine whether the Company is performing all the
provisions in terms of the notice and as to whether the amounts
being remitted to it as dividends, if any, come within the
definition of surplus amounts. In so far as such amounts are
remitted to the Trustee, the Trustee will treat them as surplus
amounts other than if the Trustee receives a written instruction
from Federmann and Koor directing it otherwise.
3.7 Koor and Federmann will furnish the Trustee with written
confirmation that all such terms and conditions in the sale
agreement that were supposed to have been satisfied on the date of
completion of the transaction have been satisfied, except for such
terms and conditions as have been waived by Koor and Federmann.
All the foregoing actions specified in Section 3 herein, and in Section 7
of the sale agreement, shall be deemed to have been carried out
contemporaneously; no isolated action shall be deemed to be complete and
no single document shall be deemed to have been delivered, until all the
actions are completed on the same occasion, and all the documents have
been delivered.
4. EXERCISE OF RIGHTS ARISING FROM THE TRUST SHARES
4.1 Commencing from the date of completion of the transaction and for
as long as the Trustee is holding the trust shares or any part of
them:
4.1.1 If Federmann is late in making any payment on time (or
any part of such payment), and has not paid it within
14 (fourteen) days, Koor will serve written notice on
Federmann through Federmann's Attorney - the firm of M.
Firon and Co.("FEDERMANN'S ATTORNEY") whose address is
at 16 Abba Hillel Silver Road, Ramat Gan, and on the
Trustee, and in which Federmann's alleged breach shall
be set out in detail, and supported by an affidavit of
a senior officer of Koor (who shall make a declaration
therein, INTER ALIA, that he is a senior officer in
Koor) with such notice including a demand for
revocation of the power of attorney ("THE NOTICE OF
BREACH"). Shortly after receipt of the Notice of Breach
the Trustee shall deliver a true copy thereof to
Federmann's Attorney. Within 10 (ten) days from the
date on which a true copy of the Notice of Breach has
been delivered to Federmann's Attorney by the Trustee,
and provided that within such 10 (ten) days it has not
received a Court Injunction prohibiting it from doing
so, the Trustee shall give notice to Federmann, Koor
and the Company, whose address is at Matam Industrial
Zone, Haifa, to the effect that the power of attorney
has been revoked. It is clarified that in the case of
revocation of the power of attorney the Trustee shall
not exercise the voting rights attaching to the trust
shares.
4.1.2 For as long as no Notice of Breach has been received by
the Trustee, any dividend, except for the surplus
amounts that are remitted to the Trustee, which is
being distributed in respect of each of the trust
shares, shall be remitted direct to Federmann on the
date on which it is distributed. Upon receipt of the
Notice of Breach the Trustee shall notify the Company
in writing at the address stated above in Section
4.1.1, that any dividend paid by the Company starting
from such date in respect of the trust shares in its
possession shall be paid to the Trustee until receipt
of further notice on behalf of the Trustee. Dividends
that are received by the Trustee shall be held in the
manner stated hereunder in Section 4.4.
4.1.3 Unless the Trustee is lawfully prohibited from doing
so, any notice that reaches the Trustee in relation to
the trust shares shall be forwarded by it to Federmann
and to Koor.
4.2 It is clarified that the Trustee shall bear no liability in
connection with the exercise by Federmann of rights in respect of
the trust shares (and including voting rights). The parties hereby
instruct the Trustee to refrain from exercising any discretion in
relation to the exercise of or realization of rights arising from
the trust shares and the Trustee shall refrain from exercising any
right arising from the trust shares and it shall be absolved from
any liability in relation to refraining from doing so, including
liability as a shareholder.
4.3 For as long as no notice of breach has been received by the
Trustee, all the additional assets (defined hereunder in Section
6.2, with the exception of dividends but including surplus
amounts) that are received by the Trustee by virtue of the trust
shares, if any are received, shall be held, deposited or invested,
as the case may be, in accordance with explicit and clear written
instructions of Federmann and Koor. In the absence of such
instructions or in the absence of agreement between Koor and
Federmann the Trustee shall deposit, invest, or hold them at its
exclusive discretion and without any of the parties having any
complaint in the matter, or, in so far as concerns sums of money,
they shall be invested in dollar or shekel deposits upon such
terms and conditions and for such periods, as are at the exclusive
discretion of the Trustee and without any of the parties having
any claim in the matter. Profits that accumulate in respect of the
foregoing, if any, shall be remitted (after deduction of any
commission, tax and other expenses that apply in respect of their
management and holding by the Trustee) ("THE PROFITS") in
accordance with the provisions of this agreement, together with
the amounts and/or rights in respect of which they have
accumulated.
4.4 In the case of a Notice of breach being received by the Trustee,
all the additional assets (as defined hereunder in Section 6.2)
which are received by the Trustee by virtue of the trust shares,
in so far as any are received - shall be held, deposited or
invested, as the case may be, in accordance with explicit and
clear written instructions of Federmann and Koor. In the absence
of such instructions or in the absence of agreement between Koor
and Federmann the Trustee shall deposit, invest, or hold them at
its exclusive discretion and without any of the parties having any
claim in the matter, or, in so far as concerns sums of money, they
shall be invested in dollar or shekel deposits upon such terms and
conditions and for such periods, as are at the exclusive
discretion of the Trustee and without any of the parties having
any complaint in the matter. Profits that accumulate in respect of
the additional assets, if any, shall be remitted (after deduction
of any commission, tax and other expenses that apply in respect of
their management and holding by the Trustee) (together with the
profits, "PROFITS OF THE TRUST") in accordance with the provisions
of this agreement, together with the additional assets in respect
of which they have accumulated.
4.5 The Trustee shall not be under an obligation to report any of the
affairs of the trust to any of the parties, save where this has
been expressly provided in this agreement. The Trustee will not be
entitled to benefits from any amount that it holds in trust under
this agreement but it will be entitled to set off commissions,
taxes and any other expense or payment due to it in accordance
with the provisions of this trust agreement for management of the
trust shares (and any securities and rights which have been
allotted or have been transferred to the Trustee in relation
thereto or in consideration thereof as provided above [SIC] in
Section 5, as well as such dividends as have been distributed to
the Trustee in respect of them, in so far as any have been
distributed, and the profits of the trust that have accumulated in
respect of them, in so far as any have accumulated).
4.6 The Trustee shall not bear any liability for tax, commission,
levy, fee or any other expense or payment in connection with the
performance of its obligations under this agreement, including in
connection with the receipt, holding and transfer of the trust
shares, the dividends and the profits of the trust, and Federmann
and Koor shall jointly and severally indemnify the Trustee
immediately upon its first demand in respect of any such liability
that is imposed on it by any party or in respect of any expense or
payment incurred.
4.7 In so far as the Trustee is legally liable to deduct tax at
source, the Trustee shall make the required deduction unless it is
furnished to its satisfaction with an exemption from deduction of
tax at source.
5. ADJUSTMENTS
5.1 In so far as during the period from the date of signature of this
agreement and until each of the payment days, one or more of the
events specified hereunder occurs, the number of trust shares and
the number of shares being released on the relevant payment date
shall be adjusted in accordance with the following provisions:
5.1.1 If the Company distributes bonus shares to its
shareholders prior to any payment date, as the case may
be, there shall be added to the shares being released
on such payment date, the bonus shares in respect of
the shares being released on such payment date
(whatever the payment date may be), they being free and
unencumbered, and such bonus shares shall be deemed to
be part of the shares being released on such payment
date. At the time of distribution of the bonus shares
in respect of the trust shares, the said bonus shares
shall be allocated to the Trustee and share
certificates shall be issued to the Trustee in respect
thereof (according to the number of such share
certificates in his possession at that time) and the
Trustee shall be registered in the Company's books as
holding the said bonus shares in trust; in the case of
a distribution of bonus shares as aforesaid, Federmann
and Koor will serve a joint notice on the Trustee in
which the total amount shall be specified of the bonus
shares that are being allotted to the Trustee as well
as the number of bonus shares included in such total
amount as are to be released on any payment date.
5.1.2 If the Company carries out a consolidation of,
reduction in or division of its share capital or any
other action of similar effect, the number of trust
shares and the number of shares being released on the
payment date (whenever such payment date may occur),
shall be adjusted PRO RATA to such consolidation or
division, and the Company shall issue a share
certificate to the Trustee instead of the old share
certificate reflecting the revised number of trust
shares.
5.2 If the Company offers its shareholders rights for the acquisition
of any securities ("RIGHTS") in such a case in so far as the last
date for the exercise of such rights is later than the date of
release of the shares being released on the payment date (or if it
falls on the same day) such rights shall be vested even though
they are in trust and shall be subject to the mortgage pursuant to
the debenture and shall be released to Federmann or to Koor
together with the shares being released on the payment date in
respect of which they were offered in accordance with the
provisions of Section 6 hereunder. Koor and Federmann shall give
written notice regarding such rights and the shares being released
to which such rights must be attributed.
If the date of exercise of the said rights is prior to the date of
release of the shares being released on the payment date in
respect of which such rights were offered, Federmann will be
entitled to exercise the said rights, either wholly or partially,
by remitting the consideration for them to the Company stating
that the consideration is being paid for the rights that have been
offered in relation to the shares being released on the payment
date, or any part thereof. The securities that are to be allotted
for Federmann by virtue of such exercise of rights shall be
allotted to the Trustee and shall be held by it in trust and shall
be released, subject to what is stated hereunder, to Federmann
together with the shares being released on the payment date in
respect of which they were allotted. The Trustee shall act in
accordance with a written notice from Federmann and Koor in which
the number of shares that have been allotted shall be specified as
well as the date of payment on which such shares are to be
released to Federmann.
If in accordance with the provisions of Section 6.2 hereunder, the
Trustee transfers to Koor, the shares being released on the
payment date in respect of which such rights were allotted, in
that event the Trustee shall proceed in accordance with one of the
two instructions that are stated in the written notice that is
given to it and to Federmann's Attorney, by Koor: [a] to transfer
to Koor, together with the shares being released on the payment
date, the securities that have been issued in respect thereof; or
- [b] to transfer the securities that have been issued to
Federmann.
5.3 All such rights, moneys or assets of any kind as are due or are
offered by any party instead of the trust shares or in
consideration for them, including securities in any other
corporate body (as part of a merger, exchange of shares or any
other event) shall be transferred to the disposal of the Trustee
and shall be charged in accordance with the provisions of the
debenture and the provisions of the trust agreement shall apply to
them MUTATIS MUTANDIS as if they had been trust shares. Where the
Trustee has requested instructions regarding the way in which a
particular asset is to be kept and/or held, which is not a
security, Federmann shall give the Trustee instructions as to the
manner in which it is to be held and shall bear all expenses of
holding it.
6. TRANSFER OF THE TRUST SHARES TO FEDERMANN OR KOOR
6.1 TRANSFER OF THE TRUST SHARES TO FEDERMANN.
On any relevant payment date (except for the first payment date)
and subject to: (1) Koor not having previously furnished the
Trustee with an authenticated decision of a Court or Execution
Office by virtue of which a receiver has been appointed to realize
the trust shares under the debenture; or - (2) the obligation of
the Trustee to transfer the trust shares to Koor in accordance
with the provisions of Section 6.2.2 hereunder, not having arisen,
or - (3) Koor not having previously furnished the Trustee with an
authenticated decision of a Court by virtue of which the Trustee
is prohibited from transferring the trust shares to Federmann, the
following combined actions shall be carried out simultaneously (as
part of the actions on any relevant payment date in accordance
with the sale agreement):
6.1.1 Koor and Federmann will sign a document amending the
debenture including the page containing particulars of
mortgages and charges and notice of mortgage in the
form attached to the sale agreement as Appendix "8.2",
according to which the legal effect of the mortgage and
charge registered in accordance with the debenture with
the Registrar of Companies and with the Registrar of
Pledges, shall be removed from the shares being
released on the relevant payment date.
6.1.2 Koor will deliver an irrevocable and unconditional
written instruction to the Trustee to transfer the
shares being released on the relevant payment date,
together with securities, dividends, including the
surplus amounts, moneys and/or any other rights that
have been transferred and/or allotted and/or
distributed to the Trustee in connection with them or
in consideration for them (if any have been transferred
to and/or allotted and/or distributed to the Trustee),
to Federmann or to its order. Any such notice on behalf
of Koor shall specify the number of shares that are to
be transferred on such payment date and the amount, in
so far as it is relevant, that is to be transferred to
Federmann or to its order on such payment date. If on
such payment date additional assets are also to be
transferred, the notice shall specify the additional
assets that are to be transferred to Federmann or to
its order. The Trustee shall proceed solely in
accordance with the instructions contained in such
notice.
6.1.3 The Trustee and Federmann shall execute a share
transfer deed in the form attached as Appendix 8.5 to
the Sale Agreement, and which for convenience is
attached to this Agreement AS APPENDIX 6.1.3, and
Federmann shall deliver such share transfer deed to the
Company.
6.1.4 The Trustee shall deliver the share certificate to the
Company in respect of the shares being released on the
relevant payment date.
6.1.5 The Company:
6.1.5.1 Will register in the Company's books the
revised up to date holdings of the Trustee
and Federmann in the Company's shares as at
such payment date. Registration of the
Trustee in the Company's books shall be
accompanied by a note that it is the Trustee
of the Trust shares; and-
6.1.5.2 The share certificate that has been returned
by the Trustee shall be cancelled and new
share certificates, in the Company's usual
form, shall be issued to Federmann,
reflecting the holdings of Federmann and the
Trustee in the Company on such payment date.
The share certificate in the name of the
Trustee shall state the fact that it is the
Trustee in respect of the trust shares.
6.1.6 Koor and Federmann shall furnish the Trustee with
written confirmation that all the terms and conditions
under the sale agreement that were supposed to be
satisfied on the relevant payment date, have been
satisfied, except such terms and conditions as have
been waived by Koor and Federmann; they shall also
confirm in writing that all the actions under Section
6.1 herein and in Section 8 of the Sale Agreement have
been completed and that the Trustee is obliged to act
in accordance with Koor's instruction as stated above
in Section 6.1.2.
All the foregoing actions specified above in Section 6.1 herein,
shall be deemed to be taken simultaneously, together with the
further actions mentioned in Section 8 of the Sale Agreement; no
isolated action shall be deemed as being complete and no single
document shall be deemed to have been delivered until all such
actions are completed on the same occasion and all the documents
are delivered.
If Federmann gives notice of early payment to Koor, in accordance
with the provisions of Section 9 of the Sale Agreement, a copy
thereof shall also be delivered to the Trustee and all the
foregoing provisions of Section 6.1 shall apply, MUTATIS MUTANDIS,
with regard to the date of early payment stipulated in such notice
of early payment. In such early payment notice Federmann shall
specify in detail the early payment date and the quantity of
shares that is to be transferred to Federmann out of the trust
shares at that date; if on that date no balance of the trust
shares is being transferred, such notice shall specify the next
date on which the trust shares will be released to Federmann and
the number of shares that will be released at any time.
In the event of early payment, the share certificates held by the
Trustee shall be replaced in order to reflect the revised up to
date number of sold shares that are to be transferred on any
payment date in view of such early payment. Furthermore, the
amount of shares in the share transfer deeds shall be revised
accordingly.
6.2 TRANSFER OF THE TRUST SHARES TO KOOR
Without derogating from any other legal right available to Koor,
the Trustee shall transfer the trust shares in its possession
together with such securities and rights as have been allotted or
transferred to the Trustee in connection with them or in
consideration for them as provided above in Section 5, as well as
such dividends and/or surplus amounts as have been distributed to
the Trustee in respect of them, in so far as any have been
distributed, and the profits of the trust that have accumulated in
respect of them, in so far as any have accumulated ("tHE
ADDITIONAL assets"):
6.2.1 To a receiver appointed by a Court or Execution Office
to realize the trust shares and the additional assets -
in accordance with such instruction as the Trustee
receives from the Court or the Execution Office,
whichever is applicable, to transfer the trust shares
and the additional assets to the receiver; or-
6.2.2 To Koor - in each of the following instances: (1) where
Koor has given notice to the Trustee and to Federmann'
s Attorney in writing in which it is alleged that
Federmann has committed a breach of the sale agreement
by failing to make any one of the payments payable
pursuant thereto on time on any relevant payment date
concerning it, and the Trustee has not received from
Federmann, within 14 days of the service of Koor's
notice on Federmann's Attorney, written notice
supported by an Affidavit of a senior officer of
Federmann (in which a declaration is to be made INTER
ALIA, that he is a senior officer of Federmann) and
which is duly certified by an Attorney, that Federmann
has made the payment on the relevant date including
late payment interest and which specifies the mode of
and the date of payment, (and for the removal of doubt
the Trustee will not be under an obligation to
investigate the veracity of the Affidavit and/or its
details including the details concerning the mode of
payment, the amount of the payment and the date
thereof); or the Trustee has not, within the said 14
days, been furnished with a duly authenticated Court
Decision prohibiting it from transferring the trust
shares and the additional assets; or (2) in accordance
with a duly verified Court Decision, ordering the
Trustee to transfer the trust shares and the additional
assets to Koor.
7. LIMITATION OF LIABILITY AND INDEMNIFICATION
7.1 Following transfer of all the trust shares (together with all such
securities and rights as have been allotted to or transferred to
the Trustee in connection with them or in consideration for them
as provided above in Section 5, as well as such dividends and/or
surplus amounts as have been distributed to the Trustee in respect
of them, in so far as any have been distributed, and profits of
the trust that have accumulated in respect of them, in so far as
any have accumulated), the Trustee will be under no further
obligation in relation to this agreement including in relation to
the trust shares, the additional amounts, the dividends and
profits of the trust held by it.
7.2 The Trustee shall act in connection with the Trust shares (and in
connection with all such securities and rights as have been
allotted to or transferred to the Trustee in connection with them
or in consideration for them as provided above in Section 5, as
well as such dividends and/or surplus amounts as have been
distributed to the Trustee in respect of them, in so far as any
have been distributed, and profits of the trust that have
accumulated in respect of them, in so far as any have
accumulated), only in accordance with this agreement or in
accordance with a further agreement (in so far as there is one)
that it receives, it being duly signed by it, by Federmann and by
Koor
7.3 The Trustee will be entitled at its sole and absolute discretion
to apply to a Court, Tribunal, Execution Office or any other
competent authority in order to obtain instructions or
clarifications regarding any action that it is required to take or
to refrain from taking, under this agreement. Federmann and Koor
shall between them bear such expenses as are involved in such an
application in equal shares.
7.4 Federmann and Koor hereby instruct the Trustee to act in
accordance with any instruction order or judgment of a Court,
Arbitrator, Execution Office, or any other jurisdiction, or any
instruction or order of a governmental authority in relation to an
action that the Trustee is required to take or to refrain from
taking under this agreement or in connection with the trust
shares, the dividends, the surplus amounts and/or the profits of
the trust, and neither Federmann nor Koor shall have any
complaint, claim or demand against the Trustee, if it has acted in
accordance with such an order or instruction even if it was
opposed to such order or instruction and even where it becomes
evident EX POST FACTO that such instruction or order was made or
given without due authority.
7.5 Where the Trustee has been given notice on behalf of one of the
representatives enumerated hereunder, or has been given an
instruction in accordance with this agreement by such
representatives, it shall not be under any obligation to examine
such notice or instruction or its veracity or the veracity of what
is stated therein, or the veracity of the identity of the
signatories of such notice or instruction, or the authority of the
signatories to sign or send such notice or instruction, or whether
what is stated therein correctly reflects the facts or the
provisions contained in the sale agreement. Notice to the Trustee
under this agreement may be given by furnishing copies of letters
or other documents and the Trustee shall not be under any
obligation to examine the veracity of such a copy. Federmann's
representatives for the purposes of this agreement shall be: Xx.
Xxxxxxx Xxxxxxxxx or Mr. Dov Nineveh or Federmann's Attorney and
Koor's representatives for the purposes of this agreement shall
be: Xxxxxx Xxxxx or Xxxxxx Xxxxxx or Herzog, Fox, Xxxxxx and Co.,
Koor's Attorneys.
It is accordingly hereby clarified that notification of Koor or
notification of Federmann in accordance with this agreement shall
only be deemed due notice if it is signed by Federmann's
representative or Koor's representative, as the case may be, who
are specified above.
It is agreed that Koor or Federmann, as the case may be, may give
the Trustee notice as to a change of their representatives
provided that such notice is signed by the representative that
preceded the new representative or by the Chairman of the Board of
Directors of Koor or of Federmann, as the case may be.
7.6 Federmann and Koor hereby exempt the Trustee, its employees,
managers, officers and anyone acting on its behalf, from liability
for any act or omission committed by any of them under this
agreement, except for an act or omission of the Trustee committed
in bad faith, willfully or with gross negligence. Subject to the
foregoing provisions of this Section 7.6, Federmann and Koor both
undertake, jointly and severally, (in equal shares - having regard
to the context of the relationships between them), to indemnify
the Trustee within 7 days of receipt of the Trustee's written
demand, in respect of any damage or expense of any kind, and
without limitation of the amount of such damage or expense caused
to or incurred by the Trustee, any of its employees, managers,
officers and/or anyone acting on its behalf in all matters
pertaining to this agreement or to its implementation.
8. MATTERS RELATING TO THE TRUST - MISCELLANEOUS.
8.1 The liabilities and obligations of the Trustee shall be those that
are expressly stipulated in this Trust Agreement, and the Trustee
shall not be under any liability or obligation that is not
explicitly enumerated in this Trust Agreement. The Trustee will
not be bound to take any action that is not explicitly stipulated
in this Trust Agreement.
8.2 The Trustee may, appoint an agent/agents to act instead of it,
whether an Attorney at law or otherwise, in order to take or to
participate in the taking of actions that are required to be taken
in relation to the trust in accordance with this agreement,
including, and without derogating from the generality of the
foregoing, the taking of legal proceedings. Federmann and Koor
undertake, jointly and severally, (in equal shares - having regard
to the context of the relationships between them), to bear the
reasonable professional fees of any such agent.
8.3 The Trustee may, in the implementation of matters relating to the
trust, proceed in accordance with the professional expert opinion
and/or advice of any Lawyer, Accountant or any other expert, and
the Trustee shall not be liable for any loss or damage caused as a
result of any action and/or omission committed by it in reliance
on such professional opinion or advice unless the Trustee has
acted in bad faith, willfully or with gross negligence. Federmann
and Koor undertake, jointly and severally, (in equal shares -
having regard to the context of the relationships between them),
to bear the reasonable professional fees of any such experts.
8.4 The Trustee will not be bound to take any action that imposes any
financial obligation on it unless cover for such financial
obligation on its part is assured to its complete satisfaction.
8.5 The Trustee will not be under any obligation to defend any legal
proceeding that is instituted against it due to and/or as a result
of the performance of its function under this Trust Agreement. The
Trustee shall notify Koor and Federmann's Attorney of any such
legal proceeding shortly after becoming aware of it.
9. TERMINATION OF THE TRUST
9.1 All the Trustee's obligations under this agreement shall come to
an end upon transfer of all the trust shares (and together with
all such securities and rights as have been allotted to or
transferred to the Trustee in connection with them or in
consideration for them as provided above in Section 5, as well as
all the dividends and/or the surplus amounts, that have been
distributed to the Trustee, in so far as any have been
distributed, and profits of the trust that have accumulated in
respect of them , in so far as any have accumulated).
9.2 The Trustee may at any time transfer its rights and obligations
under this agreement together with the trust shares (and together
with all such securities and rights as have been allotted to or
transferred to the Trustee in connection with them or in
consideration for them as provided above in Section 5, as well as
all the dividends and/or the surplus amounts, that have been
distributed to the Trustee, in so far as any have been
distributed, and profits of the trust that have accumulated in
respect of them, in so far as any have accumulated), to another
Trustee whose identity shall be approved in writing by Koor and
Federmann, provided that the aforementioned approval of Koor and
of Federmann shall not be withheld other than because of the
existence of a material conflict of interests between either of
them and the other Trustee or on other reasonable grounds. If the
aforementioned approval of Koor and Federmann is not forthcoming
within 7 days from the date of the Trustee's written request to
Koor and Federmann as aforesaid, and Koor and Federmann have not
proposed an alternative Trustee agreed by them within the said
period of seven days, the Trustee may transfer his rights and
obligations under this agreement together with the trust shares
(and together with all such securities and rights as have been
allotted to or transferred to the Trustee in connection with them
or in consideration for them as provided above in Section 5, as
well as all the dividends and/or the surplus amounts, that have
been distributed to the Trustee, in so far as any have been
distributed, and profits of the trust that have accumulated in
respect of them , in so far as any have accumulated), to another
Trustee at its discretion.
9.3 In addition to the foregoing, the Trustee may rescind this
agreement at its sole discretion if a date for completion of the
transaction has not occurred by June 30, 2007 and the parties
shall have no claim in relation thereto.
10. THE TRUSTEE'S PROFESSIONAL FEE
10.1 The Trustee's professional fee shall be on an hourly basis and
according to the usual hourly tariff, as shall be charged from
time to time, by the firm of Goldfarb, Levy, Eran, Meiri and Co.
In addition the Trustee shall be entitled to cover for all such
expenses and payments as it is obliged to incur or make, as the
case may be, in connection with the performance of its function as
Trustee under this Trust Agreement.
10.2 The foregoing payments shall be made monthly, and VAT shall be
added to them as required by law.
10.3 Federmann and Koor will bear the foregoing payments between them
in equal shares.
11. GENERAL
11.1 In the event of conflict between the provisions of this agreement
and the provisions of the sale agreement, then solely as regards
the relationships between Koor and/or Federmann and the Trustee,
the provisions of this agreement shall prevail. It is clarified
that the Trustee will only act in accordance with the provisions
of this agreement and will not be subject to the sale agreement.
11.2 Koor and Federmann acknowledge that the agreement of the Trustee
to serve as Trustee and act in accordance with this agreement was
given at their request and on the basis of their obligations VIS A
VIS the Trustee as stated in this agreement.
11.3 Koor and Federmann hereby undertake VIS A VIS the Trustee to fully
bear all its expenses incurred in relation to all matters
involving the fulfillment of its function as Trustee and in all
that pertains to this agreement and to its implementation and
furthermore they permit the Trustee to deduct its expenses and
professional fee from any amount held by it on their behalf.
11.4 Israeli Law shall apply to the provisions of this agreement. The
exclusive place of jurisdiction in respect of any matter connected
with its written provisions shall lie with the competent courts in
the Tel Aviv -Jaffa District, and no other court shall have
jurisdiction.
12. NOTIFICATIONS
12.1 Notifications in accordance with this agreement shall be given in
writing at the addresses of the parties as specified at the head
of this agreement or at such other addresses as are notified by
the parties in accordance with the provisions of this section. Any
notification that is sent by one party to another by registered
mail shall be deemed to have come to the knowledge of the
addressee after three days have elapsed from the date of its
delivery to the Post Office, and notification that is delivered
personally by 5 p.m. on any business day - shall be deemed to have
been received immediately upon its delivery, and if delivered
after 5 p.m. on any business day - shall be deemed to have been
delivered on the first day following its delivery.
12.2 This agreement may be signed in the form of several copies and all
copies of this agreement shall together constitute one agreement.
AND IN WITNESS WHEREOF WE HAVE DULY SIGNED:
(-) (-)
----------------------------- ------------------------
KOOR INDUSTRIES LTD. FEDERMANN ENTERPRISES LTD.
BY: BY: MESSRS. XXXXXXX XXXXXXXXX
AND DOV NINEVEH
-----------------------------
G. L. E. TRUST SERVICES LTD.
APPENDIX 8.5 TO THE SALE AGREEMENT
APPENDIX 6.1.3 TO THE TRUST AGREEMENT
[SHARE TRANSFER DEED FROM THE TRUSTEE TO FEDERMANN]
SHARE TRANSFER DEED
I, the undersigned G.L.E. TRUST SERVICES LTD., (private company 511493587),
hereby transfer to FEDERMANN ENTERPRISES LTD . (private company no. 512278391)
(hereinafter: the "TRANSFEREE") 460,000 ORDINARY SHARES OF NIS 1 PAR VALUE EACH
marked by numbers ___________ to ___________ inclusive in ELBIT SYSTEMS LTD.,
PUBLIC COMPANY NO. 520043027, to be held by the said Transferee, its executors,
administrators, attornies and transferees, under all the conditions according to
which I held them at the time of execution of this deed.
And I, the Transferee, agree to accept the aforementioned shares under the above
conditions.
In witness whereof we have duly signed at
--------------------
Date:
--------------------
Signature of Transferor:
---------------------------
G.L.E. TRUST SERVICES LTD.,
Witness to Signature:
---------------------------
Signature of Transferee:
---------------------------
. FEDERMANN ENTERPRISES LTD
Witness to Signature:
---------------------------
APPENDIX 5.4
[NOTICE FROM KOOR TO THE COMPANY TO PAY ALL DIVIDENDS DIRECT
TO FEDERMANN]
APPENDIX 5.4 TO SALE AGREEMENT
Date: 22.11.2006
To:
Elbit Systems Ltd ("THE COMPANY")
Dear Sir/Madam
Re: NOTICE AS TO PAYMENT OF DIVIDEND
--------------------------------
Further to the Shares Sale Agreement dated November 22, 2006 made and executed
between us and Federmann Enterprises Ltd ("FEDERMANN") ("SALE AGREEMENT") , we
hereby instruct the Company to transfer and pay the full dividend declared by
the Company on 13.11.06, for the third calendary quarter for the year 2006, and
for which the determining date is 28.11.2006, this being on account of 2,300,000
ordinary shares in the Company with a par value of NIS 1.00 each numbered from
1,755,449 to 4,055,448 inclusive (THE "SHARES SOLD"), whether or not the shares
sold have been transferred into the name of Federmann, and provided solely that
the shares sold will be transferred into the names of the transferees by
10.12.06 inclusive. If the shares sold have not been transferred into the names
of the transferees by 10.12.06 the said dividend shall be transferred to us.
We do not have and in the future will not have any claims against the Company in
regard to the remission of the dividends to Federmann as provided herein in our
letter.
Yours truly,
Koor Industries Ltd.
APPENDIX 6.1.2
[TRUSTEE'S NOTICE TO THE COMPANY TO PAY ANY DIVIDEND DIRECT TO
FEDERMANN]
APPENDIX 6.1.2 TO THE SALE AGREEMENT
APPENDIX 3.6 TO THE TRUST AGREEMENT
To:
Elbit Systems Ltd ("THE COMPANY")
Dear Sir/Madam
Re: NOTICE AS TO PAYMENT OF DIVIDEND
--------------------------------
Further to the Shares Sale Agreement dated November 22, 2006 made and executed
between Koor Industries Ltd ("Koor") and Federmann Enterprises Ltd.
("FEDERMANN") ("THE SALE AGREEMENT") and a Trust Agreement dated November 22,
2006, made and executed between Koor, Federmann and ourselves, and pursuant to
which there will be held by us and registered in our name, up to 1,840,000
Ordinary Shares each of NIS 1 nominal value in the Company, numbered from
2,215,449 to 4,055,448 inclusive ("THE TRUST SHARES"), we hereby instruct the
Company that if it pays a dividend in respect of the Trust Shares, which
includes surplus amounts (as such are defined hereunder), it shall remit and pay
such dividend as follows:
- Direct to Federmann - the whole dividend except for the surplus amounts.
And also
- Direct to us - the surplus amounts.
For the purposes of this letter -
"THE SURPLUS AMOUNTS" In the event of the Company declaring, in
relation to any calendar quarter, dividends of
an amount per share accruing over the period of
such quarter, which exceed 0.20 dollars, such
portion of the dividends as is over and above
0.20 dollars per share in respect of the trust
shares (as per the quantity thereof on the
actual date of distribution of the dividends),
shall constitute "surplus amounts", and for the
removal of doubt - such portion of the dividends
of up to 0.20 dollars per share in reference to
a calendar quarter in respect of the trust
shares shall not constitute surplus amounts.
We do not have and in the future will not have any claims against the Company in
regard to the remission of the dividends to Federmann as provided herein in our
letter. This instruction shall remain in force until the earlier of the
following: (a) December 27, 2007; or (b) on receipt of notification in a letter
from us canceling this instruction, after which it shall be null and void and
invalid.
Yours truly,
G.L.E. Trust Services Ltd.
APPENDIX 7.7(A)
[SHARE TRANSFER DEED FROM KOOR TO FEDERMANN]
SHARE TRANSFER DEED
-------------------
I, the undersigned, KOOR INDUSTRIES LTD. (public company no. 520014143) hereby
transfer to FEDERMANN ENTERPRISES LTD. (private company no. 512278391)
(hereinafter: the "TRANSFEREE") 2,300,000 ORDINARY SHARES OF NIS 1 PAR VALUE
EACH marked by numbers 1,755,449 to 4,055,448 inclusive in ELBIT SYSTEMS LTD.,
PUBLIC COMPANY NO. 520043027, to be held by the said Transferee, its executors,
administrators, attornies and transferees under all the conditions according to
which I held them at the time of execution of this deed.
And I, the Transferee, agree to accept the aforementioned shares under the above
conditions.
As witness to the signature in
--------------------
Date:
--------------------
Signature of Transferor:
---------------------------
KOOR INDUSTRIES LTD.
Witness to Signature:
---------------------------
Signature of Transferee:
---------------------------
Federmann Enterprises Ltd.
Witness to Signature:
---------------------------
APPENDIX 7.7.(B) TO THE SALE AGREEMENT
APPENDIX 3.2 TO THE TRUST AGREEMENT
[SHARE TRANSFER DEED FROM FEDERMANN TO THE TRUSTEE]
SHARE TRANSFER DEED
I, the undersigned FEDERMANN ENTERPRISES LTD . (private company no. 512278391)),
hereby transfer to G.L.E. TRUST SERVICES LTD., (private company 511493587
(hereinafter: the "TRANSFEREE") 1,840,000 ORDINARY SHARES OF NIS 1 PAR VALUE
EACH marked by numbers 2,215,449 to 4,055,448 inclusive in ELBIT SYSTEMS LTD.,
PUBLIC COMPANY NO. 520043027, to be held by the said Transferee, its executors,
administrators, attornies and transferees, under all the conditions according to
which I held them at the time of execution of this deed.
And I, the Transferee, agree to accept the aforementioned shares under the above
conditions.
In witness whereof we have duly signed at
-----------------
Date:
-------------------
Signature of Transferor:
---------------------------
FEDERMANN ENTERPRISES LTD
Witness to Signature:
---------------------------
Signature of Transferee:
---------------------------
G.L.E. TRUST SERVICES LTD.,
Witness to Signature:
---------------------------
APPENDIX 8.2
[DEBENTURE AMENDMENT DEED]
DEED OF AMENDMENT OF A DEBENTURE
MADE AND EXECUTED ON THE ____DAY OF ____ 2007
AMENDING A DEBENTURE WHICH WAS EXECUTED ON THE ___ DAY OF _____ 2006
BY
XXXXXXXX ENTERPRISES LTD.
(A PRIVATE COMPANY NO.512278391)
of 00 Xxxxxxxx Xxxxxx, Xxx Xxxx
((hereinafter: "XXXXXXXX")
IN FAVOR OF:
KOOR INDUSTRIES LTD.
(A PUBLIC COMPANY NO.520014143)
Triangle Tower (43rd Xxxxx) Xxxxxxx Xxxxxx
Xxx Xxxx 00000
((hereinafter: "KOOR")
WHEREAS: A debenture was executed by Xxxxxxxx on the ___
day of ____ in favor of Koor (hereinafter: "THE
DEBENTURE"), by virtue of which 1,840,000 (one
million, eight hundred and forty thousand) NIS 1
par value ordinary shares numbered from
2,215,449 up to and including 4,055,448
(hereinafter: "THE SHARES") in Elbit Industries
Ltd (hereinafter: "THE COMPANY") were mortgaged
and charged in favor of Koor;
AND WHEREAS: A mortgage (hereinafter: "the Mortgage")
numbered _______ over the shares pursuant to the
Debenture was registered with the Registrar of
Companies on the ______day of ________.
AND WHEREAS: A Charge (hereinafter: "the Charge ") numbered
_______ over the shares pursuant to the
Debenture was registered with the Registrar of
Pledges on the ______day of ________.
AND WHEREAS: The parties to the Debenture wish to amend it as
is specified hereunder.
NOW THEREFORE THE PARTIES HERETO AGREE AS FOLLOWS:
1. GENERAL
In this amendment the terms and expressions appearing herein shall have
the meanings assigned to them in the Debenture in so far as such terms
and expressions have not been expressly defined otherwise in this
amendment.
2. AMENDMENTS
The Debenture, the Mortgage and the Charge are amended to the effect that
commencing from the date of execution of this Deed of Amendment of the
Debenture, the following shall be released from the effect of the
Mortgage and Charge: (1) 460,000 NIS 1 nominal value ordinary shares in
the Company, whose numbers are _________ up to and including
_____________; and (2) any part of the mortgaged property that has been
transferred, allotted or distributed to the Trustee in connection with
them and all as stated in the Sale Agreement as defined in the Debenture.
3. For the removal of doubt, except for the amendments specified above, no
other change in the Debenture, Mortgage or Pledge shall be valid.
AND IN WITNESS WHEREOF THE PARTIES HAVE DULY SIGNED
THIS ______DAY OF ________:
------------------------- ------------------------
XXXXXXXX ENTERPRISES LTD KOOR INDUSTRIES LTD
