Exhibit 4
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L O A N A G R E E M E N T
This Loan Agreement (hereinafter; the "Agreement") is made as of the 30th day
of August, 2005, (hereinafter; the "Signing Date") between UNITED MIZRAHI BANK
LTD., a banking institution duly incorporated and existing under the laws of
the State of Israel, 7 Zabotinsky Street, Ramat Gan ISRAEL, (hereinafter; the
"Bank") and GMM Capital LLC, a company duly incorporated and existing under the
laws of the State of Delaware, U.S.A., having its registered office at 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (hereinafter; the "Borrower").
WHEREAS, the Borrower is a holding company having, as of the Signing Date,
assets in the aggregate amount of not less than $100,000,000 (One Hundred
Million US Dollars).
WHEREAS, on August 15, 2005 the Borrower entered into a share purchase
agreement with Xxxx Xxx International Corporation ("SLIC"), a Maryland
corporation, a copy of which is attached hereto as Appendix A, for the purchase
of 4,256,537 (Four Million Two Hundred and Fifty Six Thousand Five Hundred and
Thirty Seven) ordinary shares (hereinafter, the "Delta Shares") of Delta Galil
Industries Ltd., a public Israeli Company (company number 520025602),
(hereinafter, "Delta") for a price per share of $6.50 (Six US Dollars and Fifty
Cents), the closing of which (the "Closing") shall take place not later than
August 30, 2005 ("The SLIC Agreement").
WHEREAS, Delta is listed for public trading on both the Tel Aviv Stock Exchange
("TASE") and the Nasdaq Stock Market ("NASDAQ"), and its shares, including the
Delta Shares, are duly registered and freely tradable pursuant to an effective
registration statement on both TASE and NASDAQ.
WHEREAS the Borrower has requested that the Bank grant it a loan for the
leveraged financing of the Delta Shares in an amount not to exceed 70% (seventy
per cent) of the aggregate purchase price and overall amounts payable by the
Borrower on account of the Delta Shares which is, in the aggregate, the amount
of US$19,367,243.35 (Nineteen Million Three Hundred and Sixty Seven Thousand
Two Hundred and Forty Three United States Dollars and Thirty Five Cents),
payable with interest, commissions and expenses in accordance with the terms
and conditions set forth below (hereinafter; the "Loan");
WHEREAS the Bank is prepared to grant the Borrower the Loan upon the terms and
conditions hereinafter stipulated;
NOW, THEREFORE, IT IS HEREBY AGREED AND DECLARED BETWEEN THE PARTIES AS
FOLLOWS:
1. The Preamble hereto and the representations contained therein
constitute an integral part hereof and the parties enter into this
Agreement in reliance thereon.
2. Subject to the conditions set forth herein, the Bank hereby agrees to
grant to the Borrower and the Borrower hereby agrees to borrow from
the Bank, the Loan the principal of which is in the aggregate amount
of US$19,367,243.35 (Nineteen Million Three Hundred and Sixty Seven
Thousand Two Hundred and Forty Three United States Dollars and Thirty
Five Cents) (the "Principal") payable with interest, commissions and
expenses in accordance with the terms and conditions set forth below.
3. (a) The Bank shall make the Loan available to the Borrower upon
Closing of the Agreement with SLIC; provided that:
(i) the obligations and conditions set forth in Clauses 9 and
10 hereof have been fulfilled to the satisfaction of the
Bank prior to and upon the Closing, and
(ii) that none of the Events of Default set forth in Clause 11
shall have occurred, and
(iii) that all the representations, warranties and covenants
set forth herein shall be valid, binding and accurate.
The date on which the conditions specified in Clause 3 (a) (i) -
(iii) shall occur shall be referred to hereinafter as the
"Effective Date".
(b) The Loan shall be deemed to have been made available and granted
to the Borrower upon the crediting of account number 122222
maintained at the 495 branch of the Bank (the "Account") in the
aggregate amount of the Principal.
(c) The Principal may not be withdrawn by the Borrower from the
Account without the prior written consent of the Bank and then,
only for the purchase of the Delta Shares. The Bank shall not be
required to release or enable the use of any of the funds in the
Account unless it has been provided with assurances which are
satisfactory to the Bank, in its sole discretion, that the full
amount of the Principal shall only be used for the purchase of
the Delta Shares in accordance with the terms hereof and only
after the deposit in the Account by the Borrower of the
difference between the Principal and the aggregate purchase
price of the Delta Shares, in the amount of not less than
US$8,300,247.15 (Eight Million Three Hundred Thousand Two
Hundred and Forty Seven United States Dollars and Fifteen Cents)
(the "Equity Purchase Price"). The Bank may also determine the
manner of enabling the Borrower to withdraw funds from the
Account as it deems appropriate to ascertain that the Principal
and the Equity Purchase Price, such as to require the Borrower
to effect a wire transfer to the Xxxx Xxx Account (as defined
below) or to draw a Cashier's Check to the order of Xxxx Xxx
International Corporation.
(d) The Loan shall be provided for an 84 (eighty four) month period,
and shall be repaid in accordance with the provisions set forth
below.
4. (a) On August 29, 2005, the Borrower paid to the Bank an amount
equal to 0.25% (Point twenty five per cent) of the Principal in
the aggregate amount of $48,418 (Forty Eight Thousand Four
Hundred and Eighteen US Dollars) which is non-refundable and not
contingent on the occurrence of any event or the provision of
the Loan by the Bank to the Borrower and was paid solely as an
incentive to the Bank to agree to execute and deliver this
Agreement for the grant of the Loan to the Borrower in
accordance herewith.
(b) The Borrower shall repay the Principal to the Bank as follows:
(i) during the first 12 month period following the Effective
Date, no payment on account of the Principal shall be
required unless otherwise provided for hereunder.
(ii) following the first 12 month period, the Principal shall
be repaid to the Bank in 24 (twenty four) equal,
successive, quarterly payments, on the last day of every
calendar quarter. Any outstanding and unpaid Principal
shall be repaid to the Bank by the Borrower not later
than August 30, 2012.
5. (a) The Borrower shall pay interest as calculated on a daily
basis by the Bank on the outstanding balance of the Loan
including without limitation the outstanding Principal and any
due but unpaid commissions, interest or expenses at a rate
(hereinafter the "Interest Rate") of LIBOR + 2.5% (Two Point
Five per cent) per annum (the "Interest");
In the event the Delta Shares are removed or otherwise cease to
be listed for trade on either NASDAQ or TASE (a "Delisting
Event"), and, as a result of such Delisting Event, the average
daily trading volume of the shares of Delta on the remaining
exchange market, as calculated over the 30 (thirty) day period
following or any time thereafter such Delisting Event is below
NIS 500,000 (Five Hundred Thousand New Israeli Shekels), the
Bank shall be entitled, by written notice, to:
(i) increase the Interest Rate up to LIBOR + 4% (Four per
cent) for such period of time until the Borrower provides
additional collateral to the Bank as specified in
sub-paragraph (ii) below ; or,
(ii) require the Borrower to provide to the Bank additional
collateral and security for the repayment of the Loan and
any other payment hereunder or under the Ancillary
Agreements, as the Bank may deem appropriate.
(b) The Interest shall be payable on the last day of every calendar
quarter following the Effective Date (hereinafter; the "Loan
Interest Payment Date"). The first Loan Interest Payment Date
shall be September 30, 2005.
(c) The Interest Rate in respect of the principal amount and any due
and unpaid Interest and other accruals (if any) on the Loan
shall be determined once every three months in advance,
depending on availability, by reference to the LIBOR, on the
respective Date of Determination, as hereinafter defined, and
shall be calculated on the balance thereof from time to time
outstanding during the next period of three months (each such
period hereinafter; a "Loan Interest Period").
(d) For the purpose of determining and calculating the Interest
Rate, "LIBOR" shall mean the annual rate of interest on the Date
of Determination offered in the London Interbank Market for
deposits in US Dollars for a period equal to the Loan Interest
Period as used by the Bank in the ordinary course of business
and as determined by the Bank in its sole discretion.
(f) "Date of Determination" shall mean the Business Days prior to
the commencement of any Loan Interest Period.
(g) For the purposes hereof, the term "Business Day" shall mean a
day of the year other than a Saturday or Sunday or a day on
which banks in Israel or London are authorized or required to
remain closed.
(h) All computations of interest hereunder including, without
limitation, the Interest, shall be made by the Bank on the basis
of a 360 day (90 day quarters) year, for the actual number of
days elapsed (including the first day but excluding the last
day) occurring in the period for which such interest is payable
(i) Whenever any payment to be made hereunder shall be stated to be
due, or whenever the last day of any Loan Interest Period would
otherwise occur on a day other than a Business Day, such
payments shall be made, and the last day of such Loan Interest
Period shall occur, on the next succeeding Business Day. Any
such change in time of payment shall be taken into account in
the computation of payment of interest.
6. (a) Giving not less than 30 (thirty) Business Days' prior written
notice, the Borrower may prepay all or any part of the Principal
on any Loan Interest Payment Date or all, subject to the payment
of a penalty, equal to (i) the difference between the Bank's
cost of funds at the repayment date and the Interest Rate at
that time, multiplied by the principal amount being prepaid and
multiplied further by the (average) remaining period of the Loan
granted; plus (ii) a fixed fee at the rate of 0.2% flat of the
amount of Principal that has been repaid on the prepayment date.
Each prepayment made pursuant to this Agreement may not be
borrowed again hereunder and any notice of prepayment given by
the Borrower shall be irrevocable and the Borrower shall be
bound to prepay in accordance with such notice. An example of
the calculation of the foregoing penalty is as set forth in
Schedule A attached hereto.
(b) Whenever the Borrower is overdue in repaying any of the payments
due and payable by it under this Agreement, the Bank shall
charge the Borrower with respect to any such overdue payment, in
addition to the Interest, interest with arrears at two percent
(2%) above the Interest Rate determined pursuant to Clause 5
herein for the first 30 (thirty) days the payment is overdue and
at five percent (5%) above the Interest Rate determined pursuant
to Clause 5 herein for the period thereafter. Interest with
Arrears may be capitalized by the Bank periodically once every
month, as determined by the Bank at its sole discretion.
7. (a) The Borrower's obligation to repay the Principal, any amount of
Interest and/or commissions and/or other amounts in connection
with the Loan shall be absolute and unconditional, regardless of
any law, regulation or decree now or hereafter in effect in any
country or other jurisdiction (including, without limitation,
restrictions on payments in any currency) which might render
invalid or unenforceable, or otherwise alter or affect in any
manner, any of the terms and conditions of the Loan granted
pursuant to this Agreement or any rights or obligations
hereunder, and all payments by the Borrower shall be made in
full without set-off or counterclaim.
(b) All payments required to be made under this Agreement shall be
made to the Bank free of any taxes, deductions or charges and
without set-off or counterclaim, in lawful and freely
transferable currency and in funds available to the Bank or at
any other place nominated by the Bank. All payments made to the
Bank on account of the Loan shall be in the same currency as the
Loan shall be provided by the Bank.
(c) If the Borrower is prevented by law or the operation of law from
effecting payment, free of any deduction, taxes, duties, fees,
costs or other charges, or from paying, causing to be paid or
remitting the same, the payment of Interest under this Agreement
shall be increased to such amount as is necessary to yield and
remit to the Bank interest at the rate specified in this
Agreement after provision for payment of such deduction, taxes,
duties, fees, costs or other charges. The Borrower shall, at the
request of the Bank, execute and deliver to the Bank such
instruments as may be necessary or desirable to give full force
and effect to such increase in any Interest Rate.
(d) In the event that any law or regulation shall be interpreted by
any governmental authority charged with the administration
thereof to:
(i) Subject the Bank to any form of tax payable in respect of
this Agreement or to any tax with respect to payments of
the Principal or the Interest or to change the basis of
taxation of payments to the Bank of the Principal or the
Interest (except for taxes on the overall income of the
Bank); or
(ii) Impose, modify or deem applicable any reserve
requirements over and above those currently prevailing,
if any, against assets held by, or deposits on or for the
account of, or loans received by the Bank; or
(iii) Impose, modify or deem applicable any withholding tax
against Interest payable by the Bank on deposits or loans
received by the Bank other than as applicable as of the
Signing Date; or
(iv) Impose on the Bank any other condition with respect to
this Agreement,
and the result of any of the foregoing shall, in the opinion of
the Bank, be to increase the cost to the Bank of proving and
maintaining the Loan by an amount which the Bank deems to be
material, then, upon demand being made to the Borrower by the
Bank, the Borrower shall pay to the Bank that amount which shall
compensate the Bank for such additional cost in respect of the
Loan. The Bank shall use its best efforts promptly to notify the
Borrower of any event which may entitle the Bank to payment
pursuant to the preceding sentence but failure by the Bank to
give any such notification shall in no way prejudice its rights
hereunder. A certificate by a duly authorised officer of the
Bank, setting forth the amount of such payment and the basis
therefor shall be sent by the Bank to the Borrower and shall,
except in the case of manifest error, be prima facie evidence of
such amount.
8. In addition to any other payment payable hereunder or otherwise
payable by the Borrower to the Bank, the Borrower hereby undertakes
and agrees to pay the Bank an Upside Fee in accordance with and
subject to the Upside Fee Agreement attached hereto as Appendix B (the
"Upside Fee Agreement"); The Upside Fee Agreement shall remain in full
force and effect notwithstanding the repayment of the Loan.
9. (a) The Borrower hereby undertakes to fulfill all the following
preconditions and to furnish to the Bank the following
securities, upon or prior to the Effective Date and/or as
security for the full and punctual payment of all sums now or
hereafter to become due to the Bank by the Borrower:
(i) A first ranking charge and pledge, unlimited in amount,
on the Delta Shares as security for the repayment of the
Loan. Such charge and pledge on the Delta Shares shall
also apply to any dividend or other distributions paid on
account of such shares.
(ii) The Delta Shares shall be transferred from SLIC to the
Borrower at the Closing, including the endorsement of the
Share Certificate by SLIC to the Borrower. Concurrent
therewith, the Borrower shall deliver the share
certificate representing the Delta Shares as endorsed by
SLIC to the Borrower to Delta for cancellation and Delta
shall issue a new share certificate in the name of the
Borrower representing the Delta Shares as held by the
Borrower, which shall then be deposited with the Bank.
The foregoing shall, for all intents and purposes, be
deemed to have taken place and occurred simultaneously
and no single event shall have been deemed to occur until
the other has occurred.
(iii) The Borrower shall irrevocably instruct Delta to transfer
and hereby agrees that all dividends and distributions on
account of the Delta Shares shall be paid solely to the
Account.
(iv) A first ranking charge and pledge, unlimited in amount,
on the Account as security for the repayment of the Loan.
(the pledges referenced in Section 9 (a) above shall
hereinafter be referred to as the "Pledge").
(v) The Borrower shall deposit and maintain for the term of
the Loan, in an account designated by the Bank other than
the Account, cash, stocks and debentures tradable without
restriction on major stock markets (including the Xxxxx
shares owned by the Borrower which are traded on the Tel
Aviv Stock Exchange) in net value of at least $5,000,000
(Five Million US Dollars) and they shall at times be free
and clear of any liens, charges, encumbrances, pledges or
surety. The determination of the value of cash
equivalents for the purpose hereof shall be at the sole
and independent discretion of the Bank and may be altered
from time to time.
(vi) Xx. Xxxxx Xxxxx, passport number xxxx, of xxxx, New
York, New York, the Managing Director of the Borrower,
shall execute and deliver to the Bank an undertaking
letter in the form attached hereto as Appendix C (the
"Xxxxx Letter").
The fulfilling of such preconditions and the furnishing of all
securities shall be deemed a prerequisite for the granting of
the Loan by the Bank to the Borrower.
(b) The full and punctual payment of all sums currently due, or
hereafter due and payable to the Bank from the Borrower
hereunder, shall be secured by any and all securities given or
to be given to the Bank from time to time by the Borrower and/or
for the Borrower.
(c) The Borrower shall execute and deliver to the Bank the
Securities Pledge Deed in the form attached hereto as Appendix D
(the "Securities Pledge Deed") and the Account Pledge Deed in
the form attached hereto as Appendix E (the "Account Pledge
Deed").
(d) The Borrower shall execute and deliver to the Bank the Upside
Fee Agreement.
10. The Loan shall be granted by the Bank to the Borrower subject to the
occurrence and fulfillment of all the following preconditions by the
Borrower, to the satisfaction of the Bank;
(a) The creation and perfection of the Pledge pursuant to the
Securities Pledge Deed and the perfection of the pledge of the
Account pursuant to the Account Pledge Deed;
(b) The market value of the Delta Shares shall not be less than
US$27,667,490.5 (Twenty Seven Million Six Hundred and Sixty
Seven Thousand Four Hundred and Ninety United States Dollars and
Fifty Cents) on the Effective Date.
The Delta Shares shall be pledged in accordance with Israeli law
at the Israeli Registrar of Pledges and in any other manner
required pursuant to any other laws applying to the Borrower as
pledgor of such shares, and to the shares in the sole discretion
of the Bank. Upon the registration of the Delta Shares for
trade, they shall be deposited in the Account and secured under
the Account Pledge Deed and the Securities Pledge Deed.
(c) The receipt by the Bank of the Xxxxx Letter duly executed by Xx.
Xxxxx.
(d) The receipt by the Bank of a certificate from the Accountants of
the Borrower listing all the assets, liabilities and
undertakings of the Borrower and representing that the aggregate
net assets of the Borrower is not less than $100,000,000 (One
Hundred Million United States Dollars).
(e) The receipt by the Bank of a certificate from the Borrower
confirming that the SLIC Agreement attached hereto as Appendix A
is a true copy of the original executed agreement and that no
other consideration in any form has been paid or undertaken to
be paid by the Borrower or its affiliates to SLIC or its
affiliates, except as provided in the agreement with SLIC.
(f) The Borrower shall furnish the Bank with an up-to-date certified
copy of its incorporation documents together with a legal
opinion in the form attached hereto as Appendix F with respect
to the Borrower, confirming that the Delta Shares and the
Account have been duly and validly pledged by the Borrower to
the Bank, that the Upside Fee Agreement, the Pledge, the
Securities Pledge Deed, the Account Pledge Deed, the SLIC and
all other Ancillary Agreements are valid, binding and
enforceable against the Borrower and that the Xxxxx Letter is a
valid and binding undertaking of Xx. Xxxxx and enforceable
against Xx. Xxxxx in accordance therewith.
(g) The receipt by the Bank of irrevocable instructions given by the
Borrower to Delta to deposit all the dividends and distributions
in connection with Delta Shares in the Account only, such
irrevocable instructions to be confirmed and approved by Delta.
(h) The deposit of the Equity Purchase Price into the Account by the
Borrower.
(i) At the Closing the Bank shall receive from Delta a share
certificate in the name of the Borrower, for the Delta Shares,
duly executed by the authorized signatories of Delta, in the
name of the Borrower (the "Share Certificate"), to be held as
collateral and surety for the full and timely repayment of the
Loan, the Interest, the Upside Fee and any other payment payable
hereunder.
(j) The Borrower shall execute in blank and deliver to the Bank 5
(five) share transfer deeds, in the form attached hereto as
Appendix G, for use by the Bank upon the realization of the
Pledge.
(k) The Borrower shall deliver to the Bank the resolution of the
Borrower executed by the manager of the Borrower approving this
Agreement and all the Ancillary Agreements and all the
transactions contemplated hereby, including the receipt of the
Loan, the grant of the Pledge and the payment of the upside fee
pursuant to the Upside Fee Agreement, in the form satisfactory
to the Bank.
11. Upon the occurrence of any one of the events specified below or the
occurrence of any event that, in the reasonable opinion of the Bank,
and at its sole discretion, may cause or is likely to lead to the
occurrence of any one of the events specified below, the Bank will be
entitled without thereby prejudicing any other right of the Bank under
this Agreement or any Ancillary Agreement, after having provided at
least fifteen (15) days advance notice to the Borrower (other than as
stipulated in the Securities Pledge Agreement) to declare the
outstanding amount of the Loan and any amount owing to the Bank from
the Borrower on account of the Loan or in accordance with other
liabilities or undertakings of the Borrower to the Bank, in whole or
in part, to be immediately due and payable, such declaration to be
effective immediately, shall thenceforth become immediately due and
repayable to the Bank until the repayment thereof in full:
(a) In the event any sum due from the Borrower to the Bank on
account of the Loan and/or other loan agreements which may be
entered into between the Borrower and the Bank is not paid when
due, and such sum is not paid within 5 (five) Business Days
after receipt by the Borrower of written notice from the Bank
with respect thereto; or
(b) In the event an order shall be made or a resolution passed for
the winding up of the Borrower or the shareholders of the
Borrower or if events occur which, at the sole discretion of the
Bank, may lead to the insolvency, liquidation or dissolution of
the Borrower and/or the shareholders and/or the beneficial
shareholders of the Borrower; or
(c) In the event a temporary or permanent receiver, trustee or
similar officer is appointed over any of the assets of the
Borrower and such appointment is not cancelled within 60 (sixty)
days; or
(d) In the event the Borrower commits an act of bankruptcy; enters
into a scheme or arrangement with its creditors; or convenes a
meeting for the purpose of entering into a scheme or arrangement
with its creditors; petitions a court for the purpose of
approving a scheme or arrangement with its creditors; or admits
its inability to pay its debts when due and such inability to
pay shall continue for a period of 60 (sixty) days and/or
immediately if the Borrower is declared bankrupt or is subject
to any insolvency, bankruptcy, receivership or composition
proceedings; or
(e) In the event any representation, warranty, statement or opinion
made by the Borrower pursuant to this Agreement is or proves to
have been incorrect or inaccurate when made, or ceases to be
correct and true thereafter for the duration of this Agreement,
or the Borrower is in breach of any undertaking, obligation or
agreement hereunder; or
(f) In the event any attachment or garnishee order is levied or
enforced against any property or rights of the Borrower or
execution proceedings be issued against the Borrower which shall
materially affect the ability of the Borrower to meet his
liabilities and shall not be discharged within 60 (sixty) days;
or
(g) In the event all or a significant majority of the collateral
that secures the Borrower's obligations to the Bank so that the
Bank holds collateral, the market value of which is less than
100% of the outstanding Principal of the Loan as a result of it
being (i) claimed or seized by a third party; (ii) destroyed;
(iii) materially diminished in value or liquidity; (iv) becomes
non-enforceable; (v) non-realizable in any manner; (vi)
nullified; or (vii) revoked; or, in the event of that the market
value of the Delta Shares are below the thresholds set forth in,
and subject to the provisions of, the Securities Pledge Deed ;
(h) In the event the Borrower stops payment in the ordinary course
of its business, or ceases or threatens to cease all or a
substantial part of its operations or transfers or disposes of
(otherwise than in the ordinary course of business) all or a
substantial part of its assets whether by one or a series of
transactions; or
(i) In the event there is a change in the ownership interest or
beneficial ownership interests or the persons with the authority
to control the actions of the Borrower without the prior written
consent of the Bank, or
(j) In the event the Borrower consolidates or amalgamates with, or
merges with or into, or transfers all or substantially all of
its assets to another entity without the prior written consent
of the Bank, or
(k) In the event, at any time, dividends or any other distributions
made by Delta to the Borrower or the beneficial owners of the
Borrower or any of its affiliates on account of or pursuant to
their entitlements to the Delta Shares are not paid into the
Account, or
(m) In the event the value of the Deposit, as determined by the
Bank, at its sole discretion, decreases or otherwise becomes
lower than $5,000,000 (Five Million United States Dollars) and
the Borrower does not cure such breach within 30 (thirty) days
of the commencement of such breach.
(n) In the event a criminal or administrative investigation shall be
commenced with respect to the external auditing firm of the
Borrower, unless the Borrower shall change the said external
auditing firm to another external auditing firm that is
acceptable to the Bank within a reasonable period of time.
(o) In the event any event or series of events take place that, at
the sole discretion of the Bank, may cause the Borrower to be
unable to fulfill its duties or obligations hereunder or to be
unable to repay any portion of the Loan, in a timely manner, in
accordance herewith.
(p) In the event of a material adverse change in the financial
condition, activities or businesses of the Borrower;
(q) In the event the aggregate value of the equity of the Borrower,
which is free and clear of any lien, pledge, charge or surety
shall decrease below $30,000,000 (Thirty Million US Dollars) or
the equity of the Borrower shall be less than 50% of the
aggregate assets of the Borrower for a period of more than 14
(fourteen) days
(r) In the event (i) the Delta Shares cease to be freely tradable;
or, (ii) of a Delisting Event as a result of the failure of
Delta to perform in accordance with the criteria of the relevant
market (i.e., NASDAQ or TASE); or, upon the occurrence of two
Delisting Events for whatever reason or cause.
No provision of this Clause 11 shall be construed to derogate
any other provisions set forth in this Clause 11 but shall be
deemed to be in addition thereto and cumulative thereupon.
12. The Borrower represents and warrants as follows:
(a) The Borrower is a limited liability company of good standing
duly incorporated, validly existing and in good standing under
the laws of the State of Delaware, U.S.A. and has the full
power, authority and legal right to assume the indebtedness and
other obligations provided for in this Agreement and to perform
and observe the terms and provisions thereof, and that this
Agreement constitutes the valid, binding and enforceable
obligations of the Borrower in accordance with the terms
thereof.
(b) The execution, delivery and performance by the Borrower of this
Agreement and of any agreement or instrument referenced herein
(the "Ancillary Agreements") including without limitation, the
Securities Pledge Agreement, the Account Pledge Agreement and
the Stop Loss Agreement, are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate
action, and do not contravene (i) the Borrower's incorporation
and constitutional documents; or, (ii) any law or any
contractual restriction binding on or affecting the Borrower.
(c) This Agreement, and each Ancillary Agreement, is a legal, valid
and binding obligation of the Borrower enforceable against the
Borrower according to its terms, and all obligations and
liabilities of the Borrower to third parties are and shall be
subordinate to the such obligation of the Borrower to the Bank
pursuant hereto.
(d) No authorization or approval (including any exchange control
approval) or any other action by, and no notice to or filing
with, any governmental authority or regulatory body is required
for the due execution, delivery and performance by the Borrower
of this Agreement or any Ancillary Agreement.
(e) No charges, pledges or encumbrances, floating or fixed, exist
over all or any part of the present or future revenues or assets
of the Borrower other than in accordance herewith, and subject
to the terms hereof the Delta Shares may be freely sold on the
NASDAQ and TASE and are free and clean of any third party rights
or claims.
(f) There is no pending or threatened action or proceeding affecting
the Borrower before any court, governmental agency or
arbitrator, which may materially adversely affect the financial
condition or operations of the Borrower.
(g) To ensure the legality, validity, enforceability or
admissibility in evidence of this Agreement and any Ancillary
Agreement in Israel and/or in the State of Delaware, U.S.A., it
is not necessary that this Agreement, any Ancillary Agreement or
any other document be filed or recorded with any court or other
authority in Israel or any stamp or similar tax be paid on or in
respect of this Agreement or any Ancillary Agreement. However,
in the event that it shall become necessary to submit this
Agreement or any Ancillary Agreement to any Israeli court of law
or if any other cause or obligation may arise for the payment of
stamp duty for this Agreement or any Ancillary Agreement, the
Borrower shall bear sole liability for and shall promptly pay
any such stamp duty and any fee, fines, penalties or other
payment in connection therewith.
(h) The holders of the direct and indirect ownership interest and
beneficial interest in the Borrower and the list of persons who
have, directly or indirectly, the authority to direct the
actions of the Borrower are as set forth in Appendix H as
attached hereto.
(i) The Equity Purchase Price shall be provided from the equity of
the Borrower and no other loans or indebtedness has been or
shall be assumed by the Borrower in the financing of the
purchase price of the Delta Shares.
(j) The Delta Shares are and, during the term of the Loan, shall
remain duly registered and freely tradable pursuant to an
effective registration statement on the TASE or NASDAQ and are
not and shall not be subject to any rights of first offer or
rights of first refusal or any third party rights other than in
favor of the Bank.
13. (a) The Bank shall have a lien and/or a first ranking pledge and/or
charge on all monies and/or securities and/or claims and/or
goods, and other property, assets and/or rights of the Borrower,
that shall be held by or maintained in the Account, until
payment in full of all amounts due from the Borrower to the Bank
hereunder. The provisions of this Clause 13 shall not derogate
from the provisions governing the Deposit or the Account.
(b) The Bank shall have the right to set off from any and all monies
and/or securities and/or claims and/or goods, and other
property, assets and/or rights of the Borrower, including,
without limitation, set off against securities, deposits,
foreign currency or savings and any other collateral and the
realization thereof that shall be held by or maintained at the
Bank, whether the same shall be held directly or indirectly by
the Borrower or in any company of which the Borrower is a
shareholder, any amounts due or payable hereunder or at the
earliest time as they may be from time to time due or payable.
14. The Bank shall be entitled to appropriate and/or to discharge any
amount owed by the Borrower pursuant to this Agreement, any amount had
or received by the Bank for or on account of the Borrower,
notwithstanding that any amount so had or received was intended by the
Borrower or any third party to be appropriated for or on account of
any other amount.
15. Without derogating from any obligation, undertaking or covenant set
forth herein, the Borrower hereby undertakes and covenants as follows:
(a) At the request of the Bank, the Borrower shall execute and
deliver to the Bank such instruments that in the sole opinion of
the Bank shall be necessary or desirable in order to give full
force and effect to any clause in this Agreement or as may be
required by any governmental agency or entity with authority.
(b) Not to create or have outstanding any charge, pledge or
encumbrance, fixed or floating, over any of its present or
future reserves or assets without the express written consent of
the Bank. Should the Borrower request that the Bank give its
consent as per the foregoing, the Bank shall be entitled to
require that the Borrower, prior to granting any charge, pledge
or encumbrance on any assets of the Bank in favor of any third
party, grant the Bank a first ranking perfected charge on such
assets and granting such third party a pledge, charge or
encumbrance which is secondary and subordinate to the Loan and
the first ranking perfected charge of the Bank.
(c) To furnish to the Bank, within 30 (Thirty) days following the
end of each fiscal quarter of the Borrower quarterly
(consolidated and reviewed but not audited) financial reports
and within 60 (Sixty) days following the end of the fiscal year
of the Borrower the annual (consolidated and audited) financial
reports of the Borrower.
(d) Any dividends and other distribution distributed in respect of
Delta Shares shall be paid to the Account only and may be
applied by the Bank to prepay the Loan and the Interest. The
Borrower hereby further agrees to apply any dividend or
distribution to repay any portion of the Loan when due or
prepayment regardless of whether on the date of the payment of
such dividend or distribution, the repayment date for any amount
of the Principal, Interest or other payments has occurred. In
the event of prepayment by way of applying the dividends
received into the Account, no prepayment penalty shall be due or
payable.
(e) The Borrower shall provide to the Bank within five (5) days
after the last day of each month a certificate of the Chief
Financial Officer of the Borrower listing in detail all of the
assets, undertakings and liabilities of the Borrower and
denoting the value of each asset, undertaking and liability as
of the date thereof.
(f) The value of the equity of the Borrower as determined in
accordance with US Generally Accepted Accounting Principles,
shall, at all times, be maintained above and shall not be less
than 50% (fifty per cent) of the aggregate value of the assets
of the Borrower and in any event shall not be less than
$30,000,000 (Thirty Million United States Dollars).
(h) No Transfer of or change in any ownership or beneficial interest
in the Borrower shall be undertaken, executed, granted or
performed without the prior written consent of the Bank.
"Transfer" shall mean the sale, assignment, encumbrance,
hypothecation, pledge, conveyance in trust, gift, transfer by
bequest, devise or descent, or other transfer or disposition of
any kind, including, but not limited to, transfers pursuant to
divorce or legal separation, transfers to receivers, levying
creditors, trustees or receivers in bankruptcy proceedings or
general assignees for the benefit of creditors, whether
voluntary, involuntarily or by operation of law, directly or
indirectly, of any of the membership units in the Borrower or
any of the economic consequences of ownership of membership
units in the Borrower.
(i) Promptly following the Closing, but in any event, no later than
30 days following the Closing, the Borrower shall cause that the
Delta Shares be registered in the name of the Hevrah Le`rishumim
Shel Bank Leumi Le`Israel Ltd., (Text in Hebrew), company number
51-009806-4) (the "Registration Agent"), for the benefit of the
Borrower and deposited in the Account, when they are free and
clear of any liens, pledges, attachments, encumbrances or any
third party rights other than in favor of the Bank. For the
avoidance of doubt, the parties hereby expressly agree and
consent, and notwithstanding anything to the contrary herein or
any Ancillary Agreement, the terms of the Securities Pledge Deed
shall apply to the Delta Shares as registered in the name of the
Borrower and, to equal extent, to the Delta Shares as registered
in the name of the Registration Agent on behalf of the Borrower.
16. Should any undertaking of the Borrower contained in this Agreement be
contrary to any applicable law, such undertaking shall be severable
from all remaining parts of this Agreement and the validity of the
remainder shall not be affected.
17. All administrative and legal expenses and all fees, taxes, levies,
stamp duties, costs and expenses arising from the granting of Loan
and/or the creation of the securities contemplated herein, their
drafting, execution and lawful registration in Israel and abroad shall
be paid by the Borrower upon the first written demand of the Bank and
the Bank shall be entitled to debit the Account for all such amounts.
On the Signing Date, the Borrower shall pay the Bank's reasonable
legal expenses including any reasonable external advisory fees in an
amount which shall not be more than $20,000 (Twenty Thousand US
Dollars) plus VAT plus any additional reasonable costs which may be
incurred by the Bank for US counsel (to the extent applicable). The
Borrower shall pay upon the Signing Date all the fees and commissions
agreed to herein with respect to granting the Loan or in any other
documents executed by the Borrower in connection with the Account, the
Deposit, the Pledge or otherwise, payment of which is due and payable
no later than the execution hereof or upon the granting of the Loan.
18. Any waiver on the part of either party hereto in favor of the other
party in respect of a previous breach or non-compliance of one or more
of such other party's obligations hereunder shall not be deemed to be
a justification or excuse for an additional breach or noncompliance of
any provision or obligation of the Agreement. The invalidity or
unenforceability of any provisions hereof shall not affect or impair
the validity or enforceability of any other provisions hereof. The
remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
19. (a) For the purpose of this Agreement, the expression "written" or
"in writing" shall mean "by letter, facsimile, SWIFT, cable or
telex".
(b) Any demand for payment of any amounts due and payable under this
Agreement and any notice in writing required or permitted to be
made hereunder shall, if made by letter, be deemed to be
sufficiently made if addressed as follows:
(i) In the case of a demand or notice to the Borrower at
the address set forth above; and:
GMM Capital LLC
Attention: Chief Financial Officer
Fax No: 000 (000) 000-0000
with a simultaneous copy to:
Shiboleth, Yisraeli, Roberts, Xxxxxx & Co.
00 Xxxxxxxxxx Xxxxxx
Xxx Xxxx 00000
Fax: 00-0000000
Att.: Xxxxxxx X. Xxxxxxx, Adv.
(ii) In the case of a demand or notice to the Bank, at
the address set forth in the preamble hereof.
and posted to them or served on them personally there or left
for them there and in proving such service in case of postage it
shall be sufficient to show that the letter containing such
demand or notice was properly addressed, stamped and posted by
registered airmail for service to be deemed to have been
effected within 7 (seven) days after the date of posting.
(c) Any demand for payment of any amount due and payable under the
Agreement and any notice in writing required or permitted to be
made hereunder shall, if made by cable, facsimile, SWIFT or
telex, be deemed to be sufficiently made if addressed as
follows:
GMM Capital LLC
Attention: Chief Financial Officer
Fax No: 001 (212)8268
with a copy to:
Xxxxxxx X. Xxxxxxx, Adv.
00 Xxxxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx 00000
Fax: 00-0000000
(ii) In the case of a demand or notice to the Bank:
United Bank Mizrahi Ltd.
Corporate Finance Division
0 Xxxxxxxxxx Xxxxxx,
Xxxxx Xxx, 00000, Israel
Fax No.: 000-0-000-0000
Attn: Xxxx Xxxxx
and any such facsimile, cable, SWIFT or telex properly addressed
and sent shall be deemed to have been received within 12
(twelve) hours after the time of sending.
(d) The Borrower hereby irrevocably designates, appoints and
empowers Xx. Xxxxxxx X. Xxxxxxx, of 00 Xxxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxxxxx, to receive for and on behalf of the Borrower and
Xx. Xxxxx, service of process issued out of the courts of the
State of Israel or by or on behalf of the Bank or in any other
manner in any legal action or proceedings arising out of or in
connection with this Agreement. (Letter of Acceptance of Service
of Process is hereby attached as Appendix I).
(e) If any process agent appointed pursuant to Clause 19(d) (or any
successor thereto) shall cease to exist for any reason where
process may be served, the Borrower will forthwith appoint
another process agent with an office in Israel where process may
be served and will forthwith notify the Agent thereof.
(f) Each of the parties hereto shall be entitled at any time and
from time to time to give the other party notice in writing of
any change in any of the addresses relating to the party giving
such notice, and paragraphs (b) and (c) of this Clause shall be
deemed modified by and in accordance with every such notice of
change.
20. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Israel.
21. The parties agree that the Courts of the City of Tel Aviv shall have
exclusive jurisdiction over any dispute arising from or in connection
with the existence, the interpretation, the performance, enforcement
or the termination of this Agreement, but nothing herein contained
shall derogate from the right of the Bank to institute, at its sole
choice and discretion, proceedings against the Borrower in any other
competent courts.
22. This Agreement shall enter into force as of the day and year first
above written after having been signed by both parties and shall inure
to the benefit of the parties and their permitted successor and
assigns; provided, however, that the Borrower shall not be entitled to
assign, transfer or otherwise dispose of any of its rights or
obligations hereunder without the prior written consent of the Bank.
The Borrower hereby gives its consent to the assignment and transfer
of its rights and obligations hereunder and under the Ancillary
Documents to third parties.
IN WITNESS WHEREOF, the Bank and the Borrower have caused this Agreement to be
duly executed at the respective places and on the respective dates below
written.
UNITED MIZRAHI BANK LIMITED GMM Capital LLC
By: /s/ Xxxxxx Messenbergh By: : /s/ Xxxxx Xxxxx
At:__________________________ At: _____________________________
This 30 day of August, 2005 This 30 day of August, 2005.
