EXHIBIT 2
CONFORMED COPY
SHARE PURCHASE AGREEMENT
BY AND BETWEEN
ADVENT INVESTMENTS PTE LTD
AND
SCAILEX CORPORATION LTD.
DATED: 12 AUGUST, 2009
TABLE OF CONTENTS
SECTION 1 - DEFINITIONS
Section 1.1 Definitions ............................................. 4
Section 1.2 Construction ............................................ 12
Section 1.3 Headings ................................................ 12
Section 1.4 Exhibits ................................................ 12
Section 1.5 No Strict Construction .................................. 13
SECTION 2 - PURCHASE AND SALE OF THE PURCHASE SHARES
Section 2.1 Agreement to Purchase and Sell .......................... 13
Section 2.2 Purchase Price .......................................... 13
Section 2.3 Deposit ................................................. 14
Section 2.4 Closing ................................................. 15
Section 2.5 Conditions to Closing ................................... 17
Section 2.6 Tax Withholding ......................................... 18
Section 2.7 Sale On "As Is" Basis ................................... 19
SECTION 3 - REPRESENTATIONS AND WARRANTIES OF THE SELLER
Section 3.1 Organisation and Authority .............................. 20
Section 3.2 Capitalisation .......................................... 20
Section 3.3 Consents and Approvals; No Conflict ..................... 21
Section 3.4 Litigation .............................................. 21
Section 3.5 Related Party Transactions .............................. 21
Section 3.6 Disclaimer of Other Representations and Warranties ...... 21
SECTION 4 - REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Section 4.1 Organisation and Authority .............................. 21
Section 4.2 Capitalisation .......................................... 22
Section 4.3 Consents and Approvals; No Conflict ..................... 22
Section 4.4 Brokers ................................................. 22
Section 4.5 Litigation .............................................. 22
Section 4.6 Financing ............................................... 23
Section 4.7 Additional Assurances ................................... 23
Section 4.8 Investment Matters ...................................... 23
Section 4.9 Other Information ....................................... 24
Section 4.10 Licences and Related Regulations ........................ 25
Section 4.11 Condition of the Company ................................ 25
Section 4.12 Acknowledgement ......................................... 25
SECTION 5 - COVENANTS
Section 5.1 Interim Covenants ....................................... 25
Section 5.2 Capitalisation of the Purchaser ......................... 27
Section 5.3 Announcements ........................................... 27
Section 5.4 Insurance Arrangements .................................. 29
Section 5.5 Further Assurance ....................................... 29
Section 5.6 Financing ............................................... 31
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SECTION 6 - LIMITATIONS ON LIABILITIES
Section 6.1 Survival ................................................ 31
Section 6.2 Limitations on Liability of the Seller .................. 31
Section 6.3 Time Limits ............................................. 32
Section 6.4 Net Losses and Subrogation .............................. 33
SECTION 7 - TERMINATION
Section 7.1 Right of Parties to Terminate ........................... 33
Section 7.2 Procedure Upon Termination .............................. 34
Section 7.3 Effect of Termination ................................... 34
Section 7.4 Specific Performance .................................... 36
SECTION 8 - MISCELLANEOUS
Section 8.1 Parties in Interest; Assignment ......................... 36
Section 8.2 Notices ................................................. 37
Section 8.3 Successors and Assigns .................................. 38
Section 8.4 Expenses ................................................ 38
Section 8.5 Delays or Omissions; Waiver ............................. 38
Section 8.6 Amendment ............................................... 39
Section 8.7 Entire Agreement ........................................ 39
Section 8.8 Severability ............................................ 39
Section 8.9 Counterparts; Facsimile Signatures ...................... 39
Section 8.10 Governing Law; Jurisdiction ............................. 39
Section 8.11 No Third-Party Beneficiaries ............................ 39
EXHIBITS AND SCHEDULES
Exhibit A - Form of Resignation Letter
Schedule 2.2 - Debt Instrument
Schedule 2.4(a)(ii) - Non-resigning Directors
Schedule 3 - Seller Disclosure Schedule
Schedule 3.2(a) - Company's capitalisation table
Schedule 4.2 - Any issue of Purchaser's shares or other Equity
Securities
Schedule 5.1(c) - Related party agreements which shall remain intact
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SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT is made and entered into as of 12 August, 2009, by
and between:
(1) ADVENT INVESTMENTS PTE LTD, a corporation duly organised under the laws of
Singapore, having its registered office at 0 Xxxxxxx Xxxxxx, #00-00,
Xxxxxxxx Xxxxx, Xxxxxxxxx 00000 (the "SELLER"); and
(2) SCAILEX CORPORATION LTD., a corporation duly organised under the laws of
Israel, having its registered office at 48 Ben- Zion Galis St., Segula
Industrial Park, Petach Tikva, Israel 49277 (the "PURCHASER").
The Seller and the Purchaser are referred to herein collectively, as "PARTIES",
and each of them, separately, as a "PARTY".
WHEREAS:
(A) On the date hereof, the Seller is the sole legal and beneficial owner of
78,940,104 ordinary shares, par value NIS 0.01 each in Partner
Communications Company Ltd., a public company organised and existing under
the laws of the State of Israel (the "COMPANY"), whose securities are
listed on The NASDAQ Global Market and on the Tel Aviv Stock Exchange, and
such shares representing, on the date hereof, approximately 51.31% of the
issued and outstanding share capital of the Company which, for the
avoidance of doubt, shall exclude all treasury shares of the Company (the
"PURCHASE SHARES").
(B) Upon the terms and subject to the conditions set forth herein, the Seller
wishes to sell the Purchase Shares to the Purchaser and the Purchaser
wishes to purchase the Purchase Shares from the Seller, all in accordance
and subject to the terms herein.
(C) The Parties agree that the Purchaser is purchasing the Purchase Shares on
an "as is" basis and that the Seller makes no representations or warranties
with respect to the Company, its Subsidiaries (as defined below) or their
respective condition, other than those representations and warranties
expressly set forth in Section 3 herein.
(D) The Parties wish to set forth herein all of the terms and conditions that
shall govern the sale and purchase of the Purchase Shares hereunder.
NOW THEREFORE, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties, and covenants
herein contained, and intending to be legally bound hereby, the Parties agree as
follows:
1. DEFINITIONS
1.1 DEFINITIONS. In addition to the terms defined in the preamble and the
recitals above, the following terms shall have the following meanings:
AFFILIATE A Person Controlling, Controlled by or under
common Control with a Person, and if such
Person first stated above is a natural
person, a Relative of such person.
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ALLOWED DISTRIBUTIONS As defined in SECTION 2.1.
ANTITRUST APPROVAL As defined in SECTION 2.5(a)(ii).
AGREEMENT This Share Purchase Agreement, as may be
amended and/or restated from time to time,
including all schedules, exhibits and
annexes attached hereto or referenced
hereby.
BASE PURCHASE PRICE As defined in SECTION 2.2.
BOARD The Board of Directors of the Company.
BUSINESS DAYS Any day on which banks are open for business
in the State of Israel, Singapore and New
York City.
CASH CONSIDERATION As defined in SECTION 2.2.
CELLCOM BUSINESS Any distribution or related business of
Purchaser or any of its Affiliates with
Cellcom Israel Ltd. or any of its Affiliates
(including, without limitation, those assets
and liabilities acquired by the Purchaser or
any of its Affiliates pursuant to that
certain asset purchase agreement dated
August 21, 2008, as such assets and
liabilities are in existence as of such
date).
CERTIFICATE OF TAX As defined in SECTION 2.4(a)(iv).
EXEMPTION
CLAIMING PARTY As defined in SECTION 6.3.
CLOSING As defined in SECTION 2.4.
CLOSING DATE As defined in SECTION 2.4.
CLOSING PURCHASE PRICE As defined in SECTION 2.2
AMOUNT
COMPANY As defined in RECITAL (A).
CONTRACT With respect to any Party, all agreements,
undertakings, contracts, arrangements,
understandings and/or commitments (i) to
which such Party is a party, (ii) under
which such Party has any rights, (iii) under
which such Party has any liability or (iv)
by which such Party, or any of the assets or
properties owned or used by such Party, is
bound.
CONTROL OR CONTROLLED OR The ability, directly or indirectly, to
CONTROLLING direct the activities of the relevant
entity, including, without limitation, the
holding of (i) more than 50% of the issued
share capital, or (ii) such share capital as
carries directly or indirectly, more than
50% of the shareholder votes in a general
meeting or the ability to appoint or elect
more than 50% of the directors or equivalent
of such entity.
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DEBT INSTRUMENT As defined in SECTION 2.2.
DEPOSIT As defined in SECTION 2.3.
DISTRIBUTIONS The payment, directly or indirectly, of any
dividend or the transfer of any asset given
by the Company to a shareholder of the
Company by virtue of his or her right as a
shareholder, whether in cash, shares or
other securities of the Company, or in any
other manner, or the cancellation of
indebtedness of a shareholder of the Company
owed to the Company.
DUE DILIGENCE MATERIALS Any of the information set forth in (i)
materials made available to the Purchaser or
its Affiliates or Representatives in any
"data room" (virtual or otherwise),
including financial projections or other
projections, (ii) management presentations
relating to the Company made available to
the Purchaser or its Affiliates or
Representatives, (iii) responses provided by
or on behalf of the Seller, the Company or
their respective Affiliates or
Representatives to questions submitted by or
on behalf of the Purchaser or its Affiliates
or Representatives, whether orally or in
writing, and (iv) materials prepared by or
on behalf of the Seller or the Company or
their respective Affiliates or
Representatives and provided in writing to
the Purchaser or its Affiliates or
Representatives, in each case, in
expectation or furtherance of the
transactions contemplated by this Agreement.
END DATE As defined in SECTION 7.1(c).
EQUITY SECURITIES Warrants, options, convertible securities,
convertible debt and any other instrument or
security convertible into shares or other
capital securities of an entity.
EXCHANGE INFORMATION As defined in SECTION 4.8(f).
GOVERNMENTAL AUTHORITY In any jurisdiction, including the State of
Israel, the United States and Singapore, any
(i) national, federal, state, local, foreign
or international government, (ii) court,
arbitral or other tribunal, (iii)
governmental or quasi-governmental authority
of any nature (including any political
subdivision, instrumentality, branch,
department, official or entity), or (iv)
agency, commission, authority or body
exercising, or entitled to exercise, any
administrative, executive, judicial,
legislative, police, regulatory or taxing
authority or power of any nature.
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HK LISTING RULES Rules Governing the Listing of Securities on
HKSE.
HKSE The Stock Exchange of Hong Kong Limited.
HOSTILE STATE Any of the following states: Iran, Syria,
Lebanon, North-Korea, Libya, Saudi-Arabia,
Sudan, Pakistan, Iraq, Yemen, and any other
state that does not maintain diplomatic
relations with the State of Israel.
HTIL SHAREHOLDERS As defined in SECTION 2.5(c)( iii).
APPROVAL
INITIAL END DATE As defined in SECTION 7.1(c).
INTEREST PAYMENT As defined in SECTION 2.2.
INTERESTED PARTY In respect of any Person (other than a
natural person), any Person holding at least
5% any of type of means of control of that
Person (namely, the right to vote in the
general meeting of shareholders of a
corporation or in the equivalent body of an
entity that is not a corporation; the right
to appoint a director or the chief executive
officer or an equivalent position; the right
to participate in the distribution of the
profits of that Person; and the right to
participate in the distribution of the
surplus assets of that Person upon
liquidation).
For the purpose of this definition,
"holding" shall mean, the holding, whether
directly or indirectly, alone or with
others, including through others, including
a trustee or agent, or by means of a right
vested by agreement, including an option to
hold that does not stem from convertible
securities, or in any other manner.
INTERIM PERIOD As defined in SECTION 5.1(a).
JSDA The Japan Securities Dealers Association.
KLFB Kanto Local Finance Bureau, Japan.
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LIBOR In relation to any amount due and payable
under this Agreement to accrue interest at,
or at a rate by reference to, LIBOR, the
interest rate published by the British
Bankers Association (the "LIBOR PUBLISHER")
for successive periods of one month
commencing on the Rate Fixing Day as being
the average at several banks of the "LIBOR
Rate" offered in the Inter-Bank Market in
London for loans in US$ for an amount equal
to then outstanding amount and for a period
of one month (1 month). The said average
shall be determined in accordance with the
rules of the LIBOR Publisher for selection
of banks and computing of average on the
Rate Fixing Day. The said average shall be
rounded upward up to one-eighth of a per
cent and the result shall constitute LIBOR
for purposes of this Agreement. For the
purpose of this definition, the Rate Fixing
Date shall mean (x) for purpose of SECTION
2.2., the date of this Agreement, and (y)
for purpose of SECTION 7.3(D), the date on
which an amount was due but unpaid.
LICENCES The following licences granted by the MoC to
the Company or any of its Subsidiaries, as
amended and/or restated from time to time:
(a) the mobile telephone licence,
dated April 7, 1998 (the "MOBILE
TELEPHONE LICENCE");
(b) the domestic fixed-line licence,
dated January 15, 2007;
(c) the internet access licence, dated
April 8, 2008; and
(d) the network end-point licence,
dated January 31, 2007.
LICENCES AND RELATED The Licences, and any regulations,
REGULATIONS licences, and governmental approvals,
authorisations, consents and
permits promulgated by the MoC from time to
time with respect to or in connection with
the telecom sector in Israel (including
mobile telephony; international telephony;
domestic fixed- line telephony; internet
access; transmission or data
communications), to the extent such
regulations, licences, or governmental
approvals apply to the Company or any of its
Subsidiaries, or the Purchaser.
LOSS OR LOSSES Any and all losses, liabilities,
obligations, costs, claims, damages, awards,
judgments and expenses (including reasonable
attorney fees).
MoC The Israeli Ministry of Communications.
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MoC APPROVAL As defined in SECTION 2.5(a)(i).
NEW INSURANCE POLICIES As defined in SECTION 5.4.
NIS New Israeli Shekels, the lawful currency of
the State of Israel
NDAs Non-Disclosure Agreement dated July 2, 2009
and entered into between the Seller and the
Purchaser (the "SELLER NDA") and the
Non-Disclosure Undertaking given on July 20,
2009 by the Purchaser in favour of the
Company
NYSE New York Stock Exchange, Inc.
MATERIAL ADVERSE EFFECT any event, occurrence or development having
a material adverse effect on the business,
financial condition or results of operations
of the Company or on the ability to obtain
financing for transactions of similar nature
and size; PROVIDED, HOWEVER, that an
adverse effect on the business of the
Company that results from any one or more of
the following shall not constitute a
"Material Adverse Effect" and shall not be
considered in determining whether a
"Material Adverse Effect" has occurred: (i)
changes in political conditions in general;
(ii) any natural disaster or any acts in the
State of Israel of massive military action
or war (whether or not declared), and other
acts of hostility of similar nature and
magnitude, whether or not occurring or
commenced before or after the date of this
Agreement, (iii) changes in laws or orders
or interpretations thereof or changes in
accounting requirements or principles; (iv)
the announcement or pendency of the
transactions contemplated by this Agreement
or other communication by the Purchaser or
any of its Affiliates of its plans or
intentions (including in respect of
employees) with respect to any business of
the Company, including, without limitation,
losses or threatened losses of employees,
customers, suppliers, distributors or others
having relationships with the Company; (v)
the consummation of the transactions
contemplated by this Agreement or any
actions by the Purchaser or Seller taken
pursuant to this Agreement or in connection
with the transactions contemplated thereby;
(vi) any failure by the Company to meet any
internal projections or forecasts and
seasonal changes in the results of
operations of the Company; or (vii) any
matter of which the Purchaser has actual
knowledge on the date of this Agreement.
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ORGANISATIONAL DOCUMENTS In respect of any entity, the memorandum of
association, articles of association,
certificate of incorporation, by-laws,
certificate(s) of designation or other
constitutional documents of any type.
PERSON Any individual, firm, corporation (including
any nonprofit corporation), general or
limited partnership, limited liability
company, joint venture, estate, trust,
association, organisation (including
unincorporated organisation), other entity
or governmental authority.
PLEDGE RELEASE As defined in SECTION 2.5(c)(iv)
PURCHASER As defined in the Preamble.
PURCHASER INTERESTED (a) As of the date hereof, each Person which
PARTY would be an Interested Party in the Company
by virtue of its direct or indirect interest
in the Purchaser, assuming solely for such
purpose, that Closing had occurred on the
date of this Agreement, and (b) as of the
Closing, each Person which would be an
Interested Party in the Company by virtue of
its direct or indirect interest in the
Purchaser, immediately following the
Closing. For the avoidance of doubt, such
Person shall include, without limitation,
each of the Purchaser's controlling
shareholders.
PURCHASE PRICE As defined in SECTION 2.2.
PURCHASE SHARES As defined in paragraph (A) of the Recitals,
and any further shares or other Equity
Securities issued in respect of the Purchase
Shares in the framework of, or in connection
with, a share combination or subdivision,
share split, reverse share split, share
dividend, distribution of bonus shares or
any other reclassification, reorganisation
or recapitalisation of the Company's share
capital on or after the date of this
Agreement and prior to the Closing Date.
PURCHASER DIRECTORS As defined in SECTION 2.4(c).
REASONABLE CONDITION As defined in SECTION 5.5(c).
REGULATION S As defined in SECTION 4.8(c).
RELATIVE Spouse, sibling, parent, parent's parent,
offspring or the spouse's offspring and the
spouse of each of these.
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RELATIONSHIP AGREEMENT The restatement of relationship agreement,
dated April 20, 2005, by and among the
"Founding Shareholders or their Substitutes"
(as such expression is defined in Section
21.8 of the Mobile Telephone Licence).
REPRESENTATIVES Of any Person, such Person's directors,
managers, members, officers, employees,
agents, advisors and representatives
(including, without limitation, legal
advisors, accountants, consultants,
financial advisors, financing sources and
any representatives of such advisors or
financing sources).
RESPONSIBLE PARTY As defined in SECTION 6.3.
SAMSUNG BUSINESS Any distribution or related business of
Purchaser or any of its Affiliates of
"Samsung" cellular equipment (including,
without limitation, those assets and
liabilities acquired by the Purchaser or any
of its Affiliates pursuant to that certain
asset purchase agreement dated August
21, 2008, as such assets and liabilities are
in existence as of such date).
SECURITIES ACT The U.S. Securities Act of 1933, as amended
from time to time.
SECURITY INTERESTS All trusts, liens, mortgages, charges,
attachments, judgments, pledges, options,
rights of first refusal, rights of
possession, restrictions on transfer, voting
agreements, sale/leasebacks or similar
arrangements, security interests or other
rights or claims of others or restrictions
or encumbrances of any character whatsoever.
SELLER As defined in the Preamble.
SELLER DEPOSIT ACCOUNT Account number 000-000000-000 at The
Hongkong and Shanghai Banking Corporation
Limited, Singapore Branch, in the name of
the Seller.
SELLER DIRECTORS As defined in SECTION 2.4(a)(ii).
SELLER DISCLOSURE As defined in SECTION 3.
SCHEDULE
SELLER KNOWLEDGE The actual knowledge, without inquiry or
investigation of any of the Seller
Directors.
SHARE TRANSFER DEED As defined in SECTION 2.4(a)(i).
SPECIAL FIXED-LINE As defined in SECTION 4.10.
REGULATIONS
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SUBSIDIARIES Any entity in which the Company holds: (i)
more than 50% of the issued share capital or
participation interests; (ii) such share
capital as carries directly or indirectly,
more than 50% of the shareholder votes in a
general meeting; or (iii) the ability to
appoint or elect more than 50% of the
directors or equivalent of such entity.
TAXES All taxes, charges, fees, duties, levies or
other assessments which are imposed by any
Governmental Authority, including any
interest, penalties or additions
attributable thereto.
THRESHOLD AMOUNT As defined in SECTION 6.2(b).
US$ US dollars, the lawful currency of the
United States of America
WITHHOLDING CONFIRMATION As defined in SECTION 2.4(b)(viii).
1.2 CONSTRUCTION.
In this Agreement, unless the context otherwise requires:
(a) words and defined terms expressed in the singular number shall
include the plural and vice versa, and words expressed in the
masculine shall include the feminine and neuter gender and vice
versa;
(b) the term "including" shall be interpreted to mean "including
(without limitation)" whenever such term appears in this
Agreement (and the terms "include" and "includes" shall be
similarly interpreted);
(c) the term "law" shall include any by-law, rule, regulation,
executive orders, judgment, order, ruling, issued or given by any
Governmental Authority and/or stock exchange, applicable to a
Party; and
(d) the words "hereof", "herein", "hereto" and "hereunder" and words
of similar import, when used in this Agreement, shall refer to
this Agreement as a whole and not to any particular provision of
this Agreement.
1.3 HEADINGS.
The paragraph headings are for the sake of convenience only and shall
not affect the interpretation of this Agreement.
1.4 EXHIBITS.
The recitals, schedules, appendices, annexes and exhibits hereto form
an integral part of this Agreement. When a reference is made in this
Agreement to a Recital, a Section, an Exhibit or Schedule, such
reference shall be to a Recital of, a Section of, or an Exhibit or
Schedule to, this Agreement unless otherwise indicated.
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1.5 NO STRICT CONSTRUCTION.
The Parties agree that they have been represented by counsel during
the negotiation and execution of this Agreement and, therefore, waive
the application of any law, holding or rule of construction providing
that ambiguities in an agreement or other document shall be construed
against the Party drafting such agreement or document.
2. PURCHASE AND SALE OF THE PURCHASE SHARES
2.1 AGREEMENT TO PURCHASE AND SELL.
Subject to the terms and conditions of this Agreement, at and subject
to the Closing, the Seller hereby agrees to sell, transfer, assign and
deliver to the Purchaser, and the Purchaser hereby agrees to purchase
from the Seller, all of the Purchase Shares, free and clear of any
Security Interests, together with all rights attaching or accruing to
them (except for the quarterly Distribution declared by the Company to
be paid on 13 October 2009, the right to which shall remain with the
Seller ("ALLOWED DISTRIBUTION") but including the right to receive all
other Distributions declared by reference to (a) a record date falling
between the date hereof and the Closing Date, or (b) a record date
falling on or after the Closing) provided however that if the Closing
occurs after 1 December 2009 (other than as a result of any reason
solely attributable to the Seller in which case such date shall be
delayed until such time as such reason shall cease to exist, the right
to the quarterly Distribution to be declared by the Company ("Q3 2009
DISTRIBUTION") shall be apportioned between the Purchaser and the
Seller such that (i) the Seller shall be entitled to a factor of the
Q3 2009 Distribution the numerator of which is the number of days
which elapse between the Closing Date and 13 October 2009 (both days
inclusive) and the denominator of which is the number of days which
elapse between 13 October 2009 and the date of payment of Q3 2009
Distribution ("SELLER Q3 2009 DISTRIBUTION ENTITLEMENT"); and (ii) the
Purchaser shall be entitled to the balance of such Q3 2009
Distribution.
2.2 PURCHASE PRICE.
In full consideration for the purchase by the Purchaser of the
Purchase Shares, the Purchaser shall pay to the Seller and the Seller
shall receive NIS 5,290,960,470.60 (which is based on a US$17.50 per
Purchase Share on an agreed exchange rate of US$1.00=NIS3.83) (the
"BASE PURCHASE PRICE"). The Base Purchase Price shall be payable in
either NIS or, at the request of the Seller, United States dollars as
to such portion of the Base Purchase Price and to be acquired (the
conversion commission for which will be borne by the Purchaser) from
such local bank(s) as directed by the Seller. The Base Purchase Price
shall be paid by the Purchaser to the Seller as follows: (a) NIS
4,141,960,470.60 in cash (the "CASH CONSIDERATION"); and (b) Three
Hundred Million United States dollars (US$300,000,000) by way of
delivery, or procuring that it is delivered, to the Seller a secured
debt instrument of Purchaser made payable to or to order of Seller,
its Affiliate to be nominated prior to the Closing Date, or its
permitted assignee(s), in the principal amount of Three Hundred
Million United States Dollars (US$300,000,000) otherwise in form and
substance reasonably acceptable to the Parties and substantially on
the terms set forth in SCHEDULE 2.2 attached hereto and such other
terms and conditions as are customary in vendor loan documentation of
similar size (the "DEBT INSTRUMENT"). The Base Purchase Price shall
accrue interest at a rate of LIBOR from the date hereof until the
Closing Date (the "INTEREST PAYMENT", and together with the Base
Purchase Price, the "PURCHASE PRICE").
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The Cash Consideration shall be reduced by (i) the net amount of the
Distributions (other than any Allowed Distributions and any Seller Q3
2009 Distribution Entitlement) of the Company received by the Seller
during the period commencing on the date hereof and ending on the date
immediately preceding the Closing Date, and (ii) any amount of the
Deposit actually paid to Seller pursuant to the terms hereof
(including any interest accrued thereon up to the date immediately
prior to the Closing Date in accordance with the terms of SECTION 2.3
hereunder) (the Cash Consideration as so reduced plus the Interest
Payment "CLOSING PURCHASE PRICE AMOUNT"). At the Closing Date and
subject to Closing occurring, the Purchaser shall pay to the Seller
the Closing Purchase Price Amount in cash by wire transfer of
immediately available funds to the account(s) the details of which
shall be designated in writing, no later than two (2) Business Days
prior to the Closing Date, by the Seller to the Purchaser.
2.3 DEPOSIT
Upon execution of this Agreement, the Purchaser shall deposit an
amount in cash equal to Twenty Five Million United States dollars
(US$25,000,000) in the Seller Deposit Account (the "DEPOSIT"). The
Deposit shall be held and disposed by the Seller to the credit of
either the Seller or the Purchaser, in accordance with the terms and
conditions of this Agreement. Any interest accruing on the Deposit
shall be to the credit of the Party that ultimately will receive the
Deposit in accordance with the terms of this Agreement. At Closing,
the Deposit and the interest earned thereon shall be released to the
Seller promptly pursuant to the terms hereof and be applied to and
credited against the Purchase Price in accordance with SECTION 2.2.
If Closing does not occur, the Deposit (including any interest accrued
thereon) shall be payable in full to the Seller in the circumstances
set forth in SECTIONS 7.3(b) and 7.3(d) or to the Purchaser in the
circumstances set forth in SECTION 7.3(c). If the circumstances do not
result in the full payment of the Deposit to the Seller pursuant to
SECTIONS 2.3, 7.3(b) or 7.3(d), the Deposit (including any interest
accrued thereon) shall be released to the Purchaser promptly after
termination of this Agreement.
To the extent that the Seller shall be required to release the Deposit
to the Purchaser after termination of this Agreement, the Seller will
be entitled to withhold and deduct from the payment of any Deposit
(including any interest accrued thereon), the maximum amount required
to be withheld and deducted under any applicable law and/or any and
all taxes which are payable on such Deposit (including any interest
accrued thereon). To the extent that amounts are so withheld by the
Seller, they shall be treated for all purposes of this Agreement as
having been paid to the Purchaser.
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2.4 CLOSING.
The closing of the transactions contemplated hereby, including, the
purchase and sale of the Purchase Shares and the payment of the
Purchase Price (the "CLOSING"), shall take place at the offices of the
Seller's Israeli counsel in connection with the transactions
contemplated hereby, Xxxxxx, Xxx & Xxxxxx, Xxxx Xxxxx, 0 Xxxxxxxx
Xxxxxx, Xxx Xxxx, Xxxxxx, two (2) Business Days after the satisfaction
of the last of the conditions precedent set forth in SECTION 2.5
(other than those conditions which by their terms must be satisfied at
the Closing, which such conditions shall be satisfied at Closing) or
on such other date and at such other time and place as is mutually
agreed by the Parties (such date, the "CLOSING DATE").
At the Closing, the following actions and occurrences will take place,
all of which shall be deemed to have occurred simultaneously and no
action shall be deemed to have been completed and no document or
certificate shall be deemed to have been delivered, until all actions
are completed and all documents and certificates delivered:
(a) The Seller will deliver, or cause to be delivered, to the
Purchaser the following documents:
(i) A share transfer deed in respect of the Purchase Shares,
validly executed by the Seller as transferor of the Purchase
Shares, in accordance with the Company's Organisational
Documents (the "SHARE TRANSFER DEED");
(ii) Written letters of resignations in respect of all existing
directors of the Company and its Subsidiaries (other than
the directors listed on SCHEDULE 2.4(a)(ii)) (such resigning
directors, the "SELLER DIRECTORS"), effective as of the
Closing Date, in the form attached hereto as EXHIBIT A;
(iii) A certificate signed on behalf of the Seller by a duly
authorised officer of the Seller, dated as of the Closing
Date, certifying as to the satisfaction of the conditions
set forth in SECTION 2.5(b);
(iv) Subject to SECTION 2.6 and to the extent issued to the
Seller by the Israeli Tax Authority, a certificate which
provides for an exemption from withholding or a reduced
withholding rate in respect of the payment of the Base
Purchase Price or the Purchase Price, as the case may be
(the "CERTIFICATE OF TAX EXEMPTION");
(v) The Debt Instrument validly executed by the Seller or its
nominee;
(vi) A capitalisation table of the Company in accordance with
Section 3.2(a) as of the date as close as possible to the
Closing Date, but in any event no later than five (5)
Business Days prior to the Closing Date.
(b) The Purchaser shall deliver, or cause to be delivered, to the
Seller the following documents:
(i) The Share Transfer Deed validly executed by the Purchaser as
transferee of the Purchase Shares;
(ii) Payment of the Closing Purchase Price Amount by wire
transfer of immediately available funds to one or more bank
account(s) designated by the Seller in accordance with
SECTION 2.2;
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(iii) The Debt Instrument and all documentation ancillary thereto
(all in form and substance which the Seller shall reasonably
consider necessary with respect to the granting of the loan
under the Debt Instrument and in respect of the creation,
registration, and perfection of the collateral to be granted
under the Debt Instrument) validly executed by the Purchaser
and all other relevant parties;
(iv) A duly executed copy of the Relationship Agreement or any
similar undertaking by the Purchaser in form satisfactory to
both the Seller and the Purchaser for the replacement of the
Seller as a party under the Relationship Agreement;
(v) All information and documentation in the possession of the
Purchaser, required by the Company to comply with any of the
requirements set forth in the Company's Organisational
Documents with respect to the transfer of the Purchase
Shares hereunder;
(vi) A certificate signed on behalf of the Purchaser by a duly
authorised officer of the Purchaser, dated as of the Closing
Date, certifying as to the satisfaction of the conditions
set forth in SECTION 2.5(c);
(vii) A capitalisation table in the form and substance provided
for in SCHEDULE 4.2 hereof, describing the direct ownership
interests in the Purchaser, any Purchaser Interested Party,
and the ultimate controlling shareholders in the Purchaser
at the Closing Date; and
(viii) To the extent that the Purchaser is required to withhold
any taxes according to SECTION 2.6 of this Agreement: Either
(A) (x) a valid confirmation, to the full satisfaction of
the Seller, that all the amounts that should have been
withheld by the Purchaser in accordance with SECTION 2.6 of
this Agreement have been actually paid to the Israeli Tax
Authority; and (y) a valid certificate of payment to the
Israeli Tax Authority, on Form 0857, to the full
satisfaction of the Seller, which refers to: (A) the amounts
that were paid to the Seller by the Purchaser, and (B) the
amount of tax that was withheld from the payment to the
Seller (the "WITHHOLDING CONFIRMATION"). Purchaser shall
deliver the Withholding Confirmation on the Closing Date, or
(B) a banker's cheque for the benefit of the Israeli Tax
Authority for the amount of the required withholding which
shall be deposited in escrow with Seller's counsel and be
payable to the Israeli Tax Authority by the representatives
of both Parties on the day of the Closing or on the first
Business Day thereafter. For purposes of this section a
Business Day shall mean a day on which payments to the
Israeli Tax Authority can be made.
(c) No later than fourteen (14) days after the date hereof, the
Purchaser shall provide the Seller with the names and other
required data of all persons recommended by the Purchaser to
serve as the directors of the Company immediately following the
Closing (the "PURCHASER DIRECTORS"); PROVIDED, that (i) the
number of the appointed Purchaser Directors shall not exceed the
number of Seller Directors; and (ii) subject to and taking into
consideration the identity and classification of the directors of
the Company (other than the Seller Directors), the persons
recommended by the Purchaser to serve as the Purchaser Directors
comply, in all respects with the requirements and qualifications
provided for in the Company's Organisational Documents, the
Israeli Companies Law of 1999 and any other applicable law,
including, without limitation, the rules and regulations of the
NASDAQ Stock Market. Subject to the Purchaser providing the
Seller with the details of the Purchaser Directors, the Seller
shall use commercially reasonable efforts to either: (x) propose
that the Board adopts a resolution that effective of the Closing
Date, the Purchaser Directors shall be appointed to serve on the
Board immediately after the Closing; or (y) call a meeting of the
shareholders of the Company to be held by no later than 15
November 2009 and vote its shares in the Company in favour of the
adoption of a resolution that effective of the Closing Date, the
Purchaser Directors shall be appointed to serve on the Board
immediately after the Closing.
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(d) At the Closing, the Seller and the Purchaser shall provide the
Company with the fully executed Share Transfer Deed and return to
the Company the share certificates representing the Purchase
Shares issued by the Company on the name of the Seller, and use
commercially reasonable efforts to procure that the Company will
perform the following actions: (x) record the transfer of the
Purchase Shares to the Purchaser in the shareholders' register of
the Company; and (y) deliver to the Purchaser a new share
certificate in respect of the Purchase Shares under the name of
the Purchaser in lieu of the share certificates described in
SUB-SECTION 2.4(d)(i) above.
(e) Promptly after the Closing, the Purchaser shall use commercially
reasonable efforts to procure that the Company will make all
public filings required under any applicable law in connection
with the transaction contemplated hereby in a timely manner. It
is acknowledged by the Seller, that performances by the Company
of the actions specified under SUB-SECTION 2.4(d)(i) THROUGH
2.4(d)(ii) above, shall be made concurrently with the payment of
the Closing Purchase Price Amount by the Purchaser to the Seller
and as a preliminary condition for such payment.
2.5 CONDITIONS TO CLOSING.
(a) JOINT CONDITION TO CLOSING. Each Party's obligation to consummate
the purchase and sale of the Purchase Shares hereunder is subject
to the fulfilment, prior to or at the Closing, of each of the
following conditions:
(i) Approval of the MoC of the transactions contemplated hereby,
including the purchase of the Purchase Shares pursuant to
this Agreement under the Licences (the "MoC APPROVAL").
(ii) Approval of the Israeli Antitrust Commissioner of the
transactions contemplated hereby (to the extent such
approval is required) (the "ANTITRUST APPROVAL").
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(b) CONDITIONS TO THE PURCHASER'S OBLIGATION TO CLOSE. The
Purchaser's obligation to consummate the purchase of the Purchase
Shares hereunder is subject to the fulfilment, prior to or at the
Closing, of each of the following conditions:
(i) The representations and warranties of the Seller were true
and correct in all material respects when made and shall be
true and correct in all material respects at the Closing as
though made again at the Closing Date (except to the extent
such representations and warranties expressly relate to an
earlier date, including the date hereof, in which case such
representations and warranties shall be true and correct in
all material respects on and as of such earlier date).
(ii) The Seller shall have performed and complied with all
obligations and covenants required by this Agreement to be
performed or complied with by it prior to or at the Closing
in all material respects.
(iii) An unconditional release of any charge or pledge over the
Purchase Shares shall have been obtained prior to Closing
(the "PLEDGE RELEASE").
(c) CONDITIONS TO THE SELLER'S OBLIGATION TO CLOSE. The Seller's
obligation to consummate the sale of the Purchase Shares
hereunder is subject to the fulfilment, prior to or at the
Closing, of each of the following conditions:
(i) The representations and warranties of the Purchaser were
true and correct in all material respects when made and
shall be true and correct in all material respects at the
Closing as though made again at the Closing Date (except to
the extent such representations and warranties expressly
relate to an earlier date, including the date hereof, in
which case such representations and warranties shall be true
and correct in all material respects on and as of such
earlier date).
(ii) The Purchaser shall have performed and complied with all
obligations and covenants required by this Agreement to be
performed or complied with by it prior to or at the Closing
in all material respects.
(iii) A resolution at a general meeting of the shareholders of
HTIL to approve the sale of the Purchase Shares hereunder
(the "HTIL SHAREHOLDERS APPROVAL") shall have been passed.
(iv) All closing conditions to the Debt Instrument becoming
effective in accordance with its terms shall have been
satisfied or waived by the Seller.
2.6 TAX WITHHOLDING.
(a) If, at or prior to the Closing, the Seller provides the Purchaser
with a Certificate of Tax Exemption which provides for a complete
exemption from withholding, then the Purchaser shall pay the
Seller the Purchase Price in its entirety in accordance with
SECTION 2.2 and shall not deduct or withhold any amounts from the
Purchase Price.
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(b) If, at or prior to the Closing, the Seller provides the Purchaser
with a Certificate of Tax Exemption which provides for a reduced
withholding rate in respect of the payment of the Purchase Price,
then the Purchaser shall deduct and withhold from the Purchase
Price an amount which is equal to the amount which reflects the
reduced withholding rate specified in the Certificate of Tax
Exemption.
(c) If, at or prior to the Closing, the Seller has not provided the
Purchaser with a Certificate of Tax Exemption, then the Purchaser
shall deduct and withhold from the Purchase Price the applicable
amount required to be deducted and withheld pursuant to Israeli
law.
(d) Without derogating from the generality of the above, the
Purchaser undertakes to comply with any reasonable conditions and
instructions that may be required by the Israeli Tax Authority in
the Certificate of Tax Exemption.
To the extent that (i) all required amounts under this SECTION 2.6 are
so withheld by the Purchaser; and either (ii) the amounts so withheld
are actually paid to the Israeli Tax Authority; and the Purchaser
provides the Seller at Closing with all the confirmations required
under SECTION 2.4(b)(viii) or (iii) provides the Seller at Closing
with a banker's cheque and pays promptly, but no later than One
Business Day after] the Closing the required amount to the Israeli Tax
Authority in accordance with the mechanism of section 2.4(b)(viii),
then such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the Seller.
For the purposes of this subsection 2.6 the definition of a Business
Day shall mean a day on which payment s to the Israeli Tax Authority
can be made.
2.7 SALE ON "AS IS" BASIS.
THE PARTIES AGREE THAT THE PURCHASE SHARES ARE PURCHASED BY THE
PURCHASER ON AN "AS IS" BASIS, NAMELY ON THE BASIS OF THE CONDITION OF
THE COMPANY AND THE SUBSIDIARIES ON THE CLOSING DATE, WHETHER OR NOT
ANY FACT, ACT OR CIRCUMSTANCE OF ANY NATURE WHATSOEVER RELATING TO THE
COMPANY OR ITS SUBSIDIARIES IS KNOWN, DISCLOSED OR DISCUSSED, AND
REGARDLESS OF ANY INVESTIGATION, INQUIRY OR DISCLOSURE THAT WAS OR
COULD HAVE BEEN MADE, AND WHETHER OR NOT ANY FACT OR CIRCUMSTANCE IS
DIFFERENT THAN EXPECTED BY THE PURCHASER, SUBJECT ONLY TO THE
REPRESENTATIONS MADE BY THE SELLER IN SECTIONS 3.1 THROUGH 3.5.
WITHOUT DEROGATING FROM THE REPRESENTATIONS MADE BY THE SELLER IN
SECTIONS 3.1 THROUGH 3.5, ANY DUE DILIGENCE MATERIALS MADE AVAILABLE
TO THE PURCHASER OR ITS AFFILIATES OR REPRESENTATIVES, DO NOT,
DIRECTLY, OR INDIRECTLY, AND SHALL NOT BE DEEMED TO, DIRECTLY OR
INDIRECTLY, CONTAIN REPRESENTATIONS OR WARRANTIES OF THE SELLER, THE
COMPANY OR ANY OF THEIR RESPECTIVE AFFILIATES OR REPRESENTATIVES.
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3. REPRESENTATIONS AND WARRANTIES OF THE SELLER
As an inducement to the Purchaser to enter into this Agreement, the Seller
hereby represents and warrants to the Purchaser (subject to the exceptions
and qualifications set forth in the disclosure schedule attached hereto as
SCHEDULE 3 (the "SELLER DISCLOSURE SCHEDULE") the paragraphs of which shall
qualify each representation and warranty to which such disclosure is
ostensibly relevant):
3.1 Organisation and Authority.
(a) The Seller duly and validly exists under the laws of Singapore
and has all necessary company power and authority to enter into
this Agreement, to carry out its obligations hereunder and to
consummate the transactions contemplated hereby.
(b) Subject to the conditions specified under SECTION 2.5(c)(iii),
the execution and delivery of this Agreement by the Seller, the
performance by the Seller of its obligations hereunder and the
consummation by the Seller of the transactions contemplated
hereby have been duly authorised by all requisite corporate
action on the part of the Seller and its shareholders.
(c) This Agreement has been duly executed and delivered by the
Seller, and (assuming due authorisation, execution and delivery
by the Purchaser and subject to the conditions set under SECTIONS
2.5(a), 2.5(c)(iii) AND 2.5(c)(iv)) this Agreement constitutes a
legal, valid and binding obligation of the Seller enforceable
against the Seller in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganisation or similar laws in effect
that affect the enforcement of creditors' rights generally, and
by equitable limitations on the availability of specific remedies
and by principles of equity.
3.2 CAPITALISATION.
(a) Based solely on confirmation provided by the Company, SCHEDULE
3.2(a) hereof accurately describes the authorised share capital
of the Company as of the date hereof, the number of issued and
outstanding ordinary shares of the Company, and the direct
ownership interests in the Company of shareholders holding 5% or
more of the outstanding share capital of the Company (including
the Seller) on a fully diluted basis.
(b) Save for the Organisational Documents, the Licences and the
Relationship Agreement, there are no other Contracts to which the
Seller is a party, relating to or governing the terms and
conditions upon which the Purchase Shares may be transferred by
the Seller.
(c) At Closing, the Purchase Shares shall be free and clear of any
charge, pledge, third party's right and all other Security
Interests (other than the Relationship Agreement).
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3.3 CONSENTS AND APPROVALS; NO CONFLICT.
Other than as specifically provided for in this Agreement (including
the receipt of the MoC Approval, the Antitrust Approval, any Pledge
Release and the HTIL Shareholders Approval, to the extent such
approvals are required by law to be obtained by the Seller), the
execution and delivery of this Agreement by the Seller, the
performance by the Seller of its obligations hereunder and the
consummation by the Seller of the transactions contemplated hereby do
not conflict with and will not result in a breach or violation of, or
a default under, or give rise to any other right which may adversely
affect the consummation of the transaction contemplated under this
Agreement or the Company under (i) the Organisational Documents of the
Seller, and to the Seller Knowledge, the Company's Organisational
Documents; (ii) any material Contract to which the Seller is a party
(including, for this purpose, the Relationship Agreement); (iii)
assuming that all required regulatory approvals have been obtained,
any material law to which the Seller is subject, and to the Seller
Knowledge, to which the Company is subject; and (iv) any right of
other shareholders in the Company, to the extent granted by the Seller
to such shareholders.
3.4 LITIGATION.
There is no injunction, judgment, decree, order or other restrictive
legal proceeding against the Seller (and to the Seller Knowledge and
as of the date hereof against the Company) that prevents, enjoins, or
materially alters or delays the sale of the Purchase Shares by the
Seller under this Agreement and the consummation of the transaction
contemplated herein.
3.5 RELATED PARTY TRANSACTIONS.
Other than as set forth in SECTION 3.5 of the Seller Disclosure
Schedule, neither the Seller nor any of its Affiliates nor any of the
Seller Directors is a party to any agreement or engages in any
transaction with the Company or any of its Subsidiaries, other than
any such agreements or transactions that were entered into in the
ordinary course of business of the Company or were made on an arm's
length basis.
3.6 DISCLAIMER OF OTHER REPRESENTATIONS AND WARRANTIES.
The representations and warranties made by the Seller in this SECTION
3 are the exclusive representations and warranties made by the Seller
in connection with the transactions contemplated hereby, including,
without limitation, with respect to the Seller, any of its Affiliates
(including the Company and any of its Subsidiaries) and their
respective assets and liabilities. The Seller hereby disclaims any
other express or implied representations or warranties with respect to
the Seller or any of its Affiliates (including the Company and any of
its Subsidiaries) or any of its Subsidiaries or any of their
respective assets or liabilities.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As an inducement to the Seller to enter into this Agreement, the Purchaser
hereby represents and warrants to the Seller:
4.1 ORGANISATION AND AUTHORITY.
(a) The Purchaser duly and validly exists under the laws of its
jurisdiction of incorporation or organisation and has all
necessary company power and authority to enter into this
Agreement, to carry out its obligations hereunder and to
consummate the transactions contemplated hereby.
21
(b) The execution and delivery of this Agreement by the Purchaser,
the performance by the Purchaser of its obligations hereunder and
the consummation by the Purchaser of the transactions
contemplated hereby have been duly authorised by all requisite
corporate action on the part of the Purchaser. No shareholders'
approval of the Purchaser or any of its Affiliates is required in
order to consummate any transaction contemplated by this
Agreement (including the securing of financing for such
transaction).
(c) This Agreement has been duly executed and delivered by the
Purchaser, and (assuming due authorisation, execution and
delivery by the Seller and subject to the conditions specified
UNDER SECTIONS 2.5(a) AND 2.5(b)) this Agreement constitutes a
legal, valid and binding obligation of the Purchaser, enforceable
against the Purchaser in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganisation or similar laws in effect
that affect the enforcement of creditors' rights generally, and
by equitable limitations on the availability of specific remedies
and by principles of equity.
4.2 CAPITALISATION.
Other than as set forth in SCHEDULE 4.2, the Purchaser has not
promised to issue or undertaken an obligation to issue any shares or
any other Equity Securities in the Purchaser.
4.3 CONSENT AND APPROVALS; NO CONFLICT.
Other than as specifically provided for in this Agreement (including
the receipt of the MoC Approval and the Antitrust Approval), the
execution and delivery of this Agreement by the Purchaser, the
performance by the Purchaser of its obligations hereunder and the
consummation by the Purchaser of the transactions contemplated hereby
do not conflict and will not result in a breach or violation of, or a
default under, or give rise to any other right which may adversely
affect the consummation of the transaction contemplated under this
Agreement under (i) the Organisational Documents of the Purchaser;
(ii) any material Contract to which the Purchaser is a party; or (iii)
assuming that all required regulatory approvals have been obtained,
any material law to which the Purchaser is subject.
4.4 BROKERS.
No broker, finder or investment banker is entitled to any brokerage,
finder's fee or other fee in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on
behalf of the Purchaser or any of its Affiliates for which the Seller
or any of its Affiliates (including the Company and its Subsidiaries)
shall be liable.
4.5 LITIGATION.
There is no injunction, judgment, decree, order or other restrictive
legal proceeding against the Purchaser that prevents, enjoins, or
materially alters or delays the purchase of the Purchase Shares by the
Purchaser under this Agreement and the consummation of the transaction
contemplated herein.
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4.6 FINANCING.
At the Closing, the Purchaser will have sufficient funds in the
aggregate to pay in cash the Cash Consideration and any and all other
amounts to the extent necessary to consummate the payments and
transactions contemplated hereby, including the purchase of the
Purchase Shares and payment of all anticipated expenses in connection
therewith, save for the amounts to be paid through the Debt
Instrument, in accordance with the terms of Section 2.2 above.
4.7 ADDITIONAL ASSURANCES.
(a) Save and except for Purchaser owning and/or operation the Cellcom
Business and the Samsung Business, in respect of which the
Purchaser hereby undertakes to take such steps as described in
SECTION 5.5(c) below to the extent prescribed by the MoC or the
Israeli Antitrust Commissioner as a condition to the grant of
their respective approval with the intention that such steps will
result in the MoC Approval and the Antitrust Approval being
obtained, to the Purchaser's knowledge, there are no facts as of
the date hereof, which if known to the MoC or the Israeli
Antitrust Commissioner, would be reasonably likely to result in
the denial or material delay of the Purchaser's application to
obtain the MoC Approval and the Antitrust Approval or in any
material conditions or stipulations on any of the Parties or
their Affiliates (to the extent such approval is required) with
respect to the transactions contemplated hereby. As of the date
hereof, the Purchaser has no reason to expect that the MoC
Approval and the Antitrust Approval (to the extent such approval
is required) will not be timely obtained.
(b) None of the Purchaser, any Purchaser Interested Party, any Person
in which the Purchaser is an Interested Party, any Person an
Interested Party in which is an Interested Party in the
Purchaser, holds a licence in Israel for the provision of telecom
services, mobile or fixed line telephony, international calls,
internet access, transmission or data communications.
(c) Neither the Purchaser, any Purchaser Interested Party, nor any
Person an Interested Party in which is an Interested Party in the
Purchaser is (x) a citizen or a resident of a Hostile State, or
(y) a Person registered or incorporated in any Hostile State.
4.8 INVESTMENT MATTERS.
(a) The Purchase Shares are being sold to the Purchaser in reliance
upon an exemption from the registration requirements of the
Securities Act and are not registered under the Securities Act.
(b) The Seller is relying upon the truth and accuracy of, and
Purchaser's compliance with, the representations, warranties,
agreements, acknowledgements and understandings of the Purchaser
set forth herein in order to determine the availability of such
exemptions and the eligibility of the Purchaser to acquire the
Purchase Shares.
23
(c) The Purchaser is not a U.S. person (as such term is defined in
Regulation S under the Securities Act ("REGULATION S")) and is
located outside the United States.
(d) The Purchaser is not acquiring the Purchase Shares with a view to
the resale, distribution or other disposition thereof to a U.S.
person in violation of the registration requirements of any
securities laws, including the U.S. securities laws.
(e) The Purchaser has not entered into any contractual arrangement
with any distributor (as such term is defined in Regulation S)
with respect to the distribution of the Purchase Shares to a U.S.
person.
(f) The Purchaser hereby acknowledges that (i) the Company's shares
are listed on the NASDAQ Stock Market and the Tel Aviv Stock
Exchange, (ii) the Company is subject to the Securities Act, the
U.S. Securities Exchange Act of 1934, as amended, and the Israeli
Securities Law or 1968, as amended, (iii) the Company is
therefore required to publish certain business and financial
information in accordance with such laws as well as the rules and
practices of such exchanges (the "EXCHANGE INFORMATION"), which
includes, among other things, a description of the Company's
principal activities and balance sheet, income statement and cash
flow statement and any information relating to the Company and
its Subsidiaries which is necessary to enable the holders of the
shares of capital stock of the Company and the public to appraise
the position of the Company and its Subsidiaries, and that it is
able to obtain or access the Exchange Information without undue
difficulty; (iv) this Agreement and the transactions contemplated
hereby are subject to the HTIL Shareholders Approval required
under the listing requirements of the HKSE; (v) it has such
knowledge and experience in financial and business matters that
it is capable of evaluating the merits and risks of the
prospective investment in the Purchase Shares and (vi) it has
made its own investment decision regarding the Purchase Shares
based on its own knowledge (and information it may have or which
is publicly available) with respect to the Purchase Shares and
the Company.
4.9 OTHER INFORMATION.
None of the information provided by the Purchaser or its Affiliates or
Representatives to be included in any materials filed by the Seller or
any of its Affiliates (including the Company) with any Governmental
Authority or stock exchange (including, without limitation, any
filings with the Israeli Securities Authority, the Tel Aviv Stock
Exchange, the NASDAQ Stock Market, the NYSE, the HKSE, the JSDA and
KLFB) will, at the time it is filed with the applicable Governmental
Authority or stock exchange, or at the time it is first mailed to the
shareholders of the Seller or its Affiliates (including the Company)
or at the time of the meeting of the shareholders of HTIL to obtain
the HTIL Shareholders Approval, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
24
4.10 LICENCES AND RELATED REGULATIONS.
The Purchaser and its Affiliates and Representatives have had adequate
opportunity to review the Licences and Related Regulations, including,
without limitation, the Mobile Telephone Licence and have received all
information (legal, financial and otherwise) required by them
concerning the Licences and Related Regulations and all of the terms
and conditions thereto, including, without limitation, the Israeli
ownership provisions set out in the section 22A of the Mobile
Telephone Licence and in section 11 of the Communications Regulations
(Telecommunications and Broadcasting), (Procedures and Conditions for
Granting a General Specific Licence) 2004 (the "SPECIAL FIXED-LINE
REGULATIONS").
4.11 CONDITION OF THE COMPANY.
Notwithstanding anything contained in this Agreement to the contrary,
the Purchaser acknowledges and agrees that neither the Seller, the
Company, its Subsidiaries nor any of their respective Affiliates or
Representatives is making any representations or warranties
whatsoever, express or implied, beyond those expressly given by Seller
in SECTIONS 3.1 THROUGH 3.5, including as to projections, forecasts or
forwards-looking statements provided to the Purchaser or its
Affiliates or Representatives or the accuracy or completeness of the
Due Diligence Materials.
4.12 ACKNOWLEDGEMENT.
The Purchaser acknowledges that it has voluntarily decided to enter
into this Agreement, to purchase the Purchase Shares from the Seller
and to consummate the transactions contemplated herein. The Purchaser
hereby confirms that (i) it has had adequate opportunity to select and
consult with its financial, tax, accounting and legal advisors
regarding the terms, conditions, rights and obligations set forth in
this Agreement and (ii) it and its Affiliates and Representatives have
had full access to the Due Diligence Materials and it had the
opportunity to receive information (legal, financial and otherwise)
concerning the business and financial condition of the Company and its
Subsidiaries.
5. COVENANTS
5.1 INTERIM COVENANTS.
(a) From the date of this Agreement until the Closing Date (the
"INTERIM PERIOD"), the Seller undertakes, subject to the duties
of the Seller under applicable law as a controlling shareholder
in the Company, in its capacity as a shareholder of the Company
to exercise its voting rights as a shareholder of the Company, to
object to the passing of any shareholders' resolution of the
Company with respect to the following matters: (i) any amendment
and/or change and/or alteration of the Company's Organisational
Documents, unless any such amendment or change or alteration is
required by law; (ii) voluntarily liquidation of the Company or
any of the Company's Subsidiaries, and/or the engagement in any
arrangement with all, or a class of, the creditors of the Company
and/or of the Company's Subsidiaries; (iii) any related party
transaction by and between the Company or any of its
Subsidiaries, on the one hand, and the Seller or any of its
Affiliates (other than the Company or any of its Subsidiaries),
on the other hand, which requires the approval of the Company's
shareholders; (iv) any merger and/or any other change in the
corporate structure of the Company and/or any of the Company's
Subsidiaries which requires the approval of the Company's
shareholders; and (v) any other material transaction and/or
action which is not in the ordinary course of the Company and/or
of the Company's Subsidiaries which requires the approval of the
Company's shareholders.
25
(b) The Seller shall not dispose of any interest in the Purchase
Shares or any of them or grant any option over or create after
the date hereof any Security Interest over the Purchase Shares or
any of them. The Seller shall use all means required in order to
obtain the Pledge Release.
(c) Subject to the duties of the Seller under applicable law as a
controlling shareholder in the Company, the Seller shall use
commercially reasonable efforts to procure (x) a meeting of the
audit committee to adopt a resolution granting, at Closing,
registration rights to the Purchaser for a period of five (5)
years following the Closing Date on terms and conditions similar
to the terms and conditions of that certain registration rights
agreement, dated October 26, 1999, by and among the Seller, the
Company and the other parties thereto (the "REGISTRATION RIGHTS
RESOLUTION"); (y) a meeting of the Board to adopt the
Registration Rights Resolution; and (z) in the event that the
audit committee of the Company and the Board adopt the
Registration Rights Resolution, a meeting of the shareholders of
the Company and to vote in favour of the Registration Rights
Resolution.
(d) Nothing in this SECTION 5.1 shall inhibit or otherwise restrict
the Company or any of its Subsidiaries from conducting its
business during the Interim Period either (A) in the ordinary
course of business, including, taking any of the following
actions: (i) obtaining financing required for the ongoing
business activity of the Company or any of its Subsidiaries,
including issuance of bonds; (ii) purchasing, selling or leasing
or the granting any other third party rights or security
interests in or over the non-material assets of the Company or
any of its Subsidiaries; (iii) declaring, setting aside or paying
any Distribution with respect to any shares of the Company or any
of its Subsidiaries; PROVIDED, that any Distributions of the
Company to its shareholders shall be in accordance with the
Company's stated dividend policy as of the date hereof; (iv)
agreeing to or performing any retention bonus plan or scheme for
the benefit of certain members of the management of the Company
or any of its Subsidiaries in an amount not in excess of
US$12,000,000; (v) submission of bids to acquire MIRS
Communications Limited; (vi) granting of share options pursuant
to the terms of its existing share option plan or issuing shares
pursuant to exercise of options granted or to be granted pursuant
to such option plan; and (vii) obtaining and maintaining any
licences and permits required for the business activity of the
Company or any of its Subsidiaries, or (B) subject to SECTION
5.1(e), in anticipation of and/or in preparation for the
consummation of the sale and purchase of the Purchase Shares
contemplated by this Agreement, including agreeing to any
variation or termination of any of the outstanding arrangements
or transactions made between the Seller or any of its Affiliates
(other than the Company or any of its Subsidiaries) and the
Company or any of its Subsidiaries whether or not set forth in
SECTION 3.5 of the Seller Disclosure Schedule and on terms
approved by the Board.
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(e) In respect of the agreements enumerated in Schedule 5.1(c), the
Seller shall use its reasonable commercial endeavours after the
date of this Agreement and prior to Closing to assist and
facilitate the Company in its discussions and negotiations with
the respective counterparties to these agreements
("Counterparties") with a view to securing for the Company after
Closing (a) the novation to the Company of the rights and
obligations of the Company under the relevant agreements, where
such novation is contemplated by the terms of the Related Party
Transactions, or (b) where no such novation is contemplated by
the agreements, the benefits, rights and obligations (subject to
similar limitations and restrictions) on no less favourable terms
as those applicable to the Company under the relevant agreements
as if were a subsidiary of HTIL (and HTIL remains a subsidiary of
Xxxxxxxxx Whampoa Limited) or as an entity named in the relevant
agreements as being entitled to take the benefit of the
agreements (the "COMMERCIAL BENEFITS"). The Purchaser
acknowledges that the Seller does not exercise Control over any
of the Counterparties and the final terms and conditions upon
which any Commercial Benefits are conferred on the Company will
reflect the arm's length negotiations to be undertaken by the
Company's management.
5.2 CAPITALISATION OF THE PURCHASER.
From the date of this Agreement until the Closing Date, the Purchaser
shall not issue or promise to issue or undertake any obligation to
issue any shares or any other Equity Securities in the Purchaser, if
any such action would reasonably be expected to materially delay or
impede any of the Parties' ability to consummate the transactions
contemplated by this Agreement (including, without limitation, the
Purchaser's ability to obtain the MoC Approval and the Antitrust
Approval).
5.3 ANNOUNCEMENTS.
(a) Neither Party nor any of its Subsidiaries shall (and each Party
shall use all reasonable efforts to procure that none of its
Affiliates (other than the Company and its subsidiaries) issue
any press release or public announcement concerning this
Agreement or the transactions contemplated hereby without
obtaining the prior written approval of the other Party, which
approval will not be unreasonably conditioned, withheld or
delayed, unless disclosure is otherwise required by applicable
law or by the applicable rules of or listing agreement with any
stock exchange on which the securities of a Party or its
Affiliates are traded securities (including, without limitation,
any filings with the Israeli Securities Authority, the Tel Aviv
Stock Exchange, the NASDAQ Stock Market, the NYSE, the HKSE, the
JSDA and KLFB).
(b) Without derogating from the generality of SECTIONS 5.3(a) above
and 5.3(e) below, the Purchaser undertakes to promptly provide
the Seller and its Affiliates (including the Company and any of
its Subsidiaries) with all information requested by the Seller or
any of its Affiliates (including by or in respect of the Company
and any of its Subsidiaries) concerning the Purchaser, its
Subsidiaries, directors, officers and, direct or indirect,
shareholders, including, without limitation, with regard to (a)
the ownership interests in the Purchaser, (b) the identity of the
ultimate controlling shareholders in the Purchaser and the
percentage of their direct or indirect holdings in the Purchaser)
and (c) such other matters as may be reasonably necessary or
advisable at the reasonable discretion of the Seller or any its
Affiliates (including by or in respect of the Company and any of
its Subsidiaries) in connection with the HTIL Shareholders
Approval or any other statement, filing, notice or application
made by or on behalf of the Seller or any of its Affiliates
(including by or in respect of the Company and any of its
Subsidiaries) to any third party and/or any Governmental
Authority (including for the purpose of obtaining the MoC
Approval, the Antitrust Approval, the Certificate of Tax
Exemption and/or to comply with the rules or regulations of any
securities law or listing agreement with any stock exchange
applicable to the Seller or any of its Affiliates) in connection
with the transactions contemplated by this Agreement.
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(c) Without derogating from the generality of SECTIONS 5.3(a) above
AND 5.3(e) below, the Seller undertakes to promptly provide the
Purchaser and its Affiliates with all information requested by
the Purchaser or any of its Affiliates concerning the Seller, its
Subsidiaries, directors and officers as may be reasonably
necessary or advisable at the reasonable discretion of Purchaser
or any its Affiliates in connection with any statement, filing,
notice or application made by or on behalf of the Purchaser or
any of its Affiliates to any third party and/or any Governmental
Authority (including for the purpose of obtaining the MoC
Approval, the Antitrust Approval and/or to comply with the rules
or regulations of any securities law or listing agreement with
any stock exchange applicable to the Purchaser or any of its
Affiliates) in connection with the transactions contemplated by
this Agreement.
(d) Nothing in SECTIONS 5.3(a) above AND 5.3(e) below shall: (i)
prevent the Parties from providing any of their Affiliates
(including, the Company and any of its Subsidiaries) or their
shareholders, any details or information regarding this
Agreement, the transaction contemplated hereby, the identity of
the other Party and its, direct and indirect, shareholders to the
extent that such details or information are required for the
approval of this Agreement and the transaction contemplated
herein by any of them; and (ii) prevent the Purchaser from
providing any lenders, institutions and other entities which will
provide loans/credit to the Purchaser for the purpose of the
consummation of the transactions provided in this Agreement
(including by means of issuance of bonds and/or prospectus), any
details or information regarding this Agreement and the
transaction contemplated herein to the extent that such details
or information shall be required for the purpose of financing the
purchase of the Purchase Shares by the Purchaser.
(d) Nothing in this SECTION 5.3 shall prevent the Seller or any of
its Affiliates (including the Company and any of its
Subsidiaries), or the Purchaser or any of its Affiliates, from
providing the Israeli Antitrust Commissioner, the MoC (or to any
other Governmental Authority whose consent shall be required in
respect of the consummation of the transactions under this
Agreement) any details or information regarding this Agreement,
the transaction contemplated hereby, the identity of the Parties
and their, direct and indirect, shareholders, the Company, their
respective business and operations or any other information, to
the extent that such details or information are required for the
obtaining of the abovementioned approvals and authorisations.
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(e) The Parties acknowledge and agree that the NDAs shall not be
terminated as a result or by virtue of Closing.
5.4 INSURANCE ARRANGEMENTS.
The Purchaser acknowledges and agrees that, upon Closing, all
insurance coverage provided in relation to the Company and its
Subsidiaries pursuant to policies maintained by the Seller or its
Affiliates (other than the Company and its Subsidiaries) shall cease
and terminate, and no further coverage shall be available to the
Company and its Subsidiaries under any such policies. The Purchaser
shall use reasonable commercial efforts to procure the Company and its
Subsidiaries to engage in insurance policies covering the Company and
its Subsidiaries currently or previously maintained by the Seller or
its Affiliates (the "NEW INSURANCE POLICIES"), in effect as of the
Closing. For the avoidance of doubt, after the Closing, none of the
Purchaser or any of its Affiliates (including, the Company and its
Subsidiaries) shall be entitled to any recovery whatsoever under any
part of any insurance policy maintained by the Seller or any of its
Affiliates.
5.5 FURTHER ASSURANCE.
(a) The Purchaser shall file all applications with and provide all
information to (x) the Israeli Antitrust Commissioner in
connection with obtaining the Antitrust Approval, and (y) the MoC
in connection with obtaining the MoC Approval.
(b) The Seller shall use its commercially reasonable efforts to cause
the Company to file all applications with and provide all
information to (x) the Israeli Antitrust Commissioner in
connection with obtaining the Antitrust Approval and (y) the MoC
in connection with obtaining the MoC Approval.
(c) Upon the terms and subject to the conditions set forth in this
Agreement, and to applicable laws, the Purchaser agrees to take,
or cause to be taken, all actions necessary, and to do, or cause
to be done, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner
practicable, the transaction contemplated by this Agreement,
including the following: (i) taking all commercially reasonable
actions requested by the MoC or the Israeli Antitrust
Commissioner, as the case may be, or necessary to resolve any
objections that may be asserted by the MoC or the Antitrust
Commissioner with respect to the transactions contemplated by
this Agreement; (ii) taking all commercially reasonable acts
necessary to cause the conditions to Closing as set forth in
SECTION 2.5(a) (subject to the immediately subsequent paragraph)
and SECTIONS 2.5(c)(i) and 2.5(c)(ii) to be satisfied as promptly
as practicable; (iii) providing any available information
requested by the Seller, the Company, any of their respective
Affiliates, the MoC and/or the Israeli Antitrust Commissioner in
connection with the MoC Approval and the Antitrust Approval; and
(iv) taking all commercially reasonable efforts to obtain all
other necessary waivers, consents and approvals from Governmental
Authorities and other third parties and making all necessary
registrations and filings and taking all commercially reasonable
steps as may be necessary to obtain such approval or waiver from
or to avoid an action or proceeding by any such Governmental
Authorities or third party.
29
Without limiting the generality of the foregoing and for the
avoidance of doubt, the Purchaser shall accept and perform in a
timely manner any commercial reasonable condition or stipulation
from the MoC or the Israeli Antitrust Commissioner speculated or
otherwise imposed as a condition to the MoC Approval or the
Antitrust Approval as the case may be. It is hereby agreed that
any condition or stipulation of the MoC or the Israeli Antitrust
Commissioner with respect to: (1) divestiture, sale or transfer
of the Cellcom Business or any portion thereof prior to Closing
or any reasonable time thereafter; or (2) any condition regarding
the business behavior of the Purchaser, any of its Affiliates or
associated with respect to the operation of the Samsung Business
or corporate separation of the Samsung Business to be
accomplished prior to Closing or any reasonable time thereafter;
shall be all deemed commercial reasonable condition or
stipulation and the Purchaser shall take all actions necessary to
comply with such condition or stipulation in a timely manner
(such conditions or stipulations set forth in clauses (1) and
(2), a "REASONABLE CONDITION").
Without limiting the generality of the foregoing, the Purchaser
and its Affiliates shall: (A) comply with and be obligated to
accept any and all conditions pertaining to the minimal required
holdings of the Company's Israeli Shareholders (as such term is
defined in the Mobile Telephone Licence and the Special
Fixed-Line Regulations), unless such condition was waived by the
MoC, (B) comply with and be obliged to accept all terms and
conditions which apply to the Seller in the Relationship
Agreement, including in order to satisfy the terms and conditions
of section 22A of the Mobile Telephone Licence, and execute the
Relationship Agreement or any similar agreement and/or an
undertaking for the replacement for the Seller thereunder, (C) at
the sole cost of the Purchaser and its Affiliates, comply with
all reasonable restrictions and conditions, if any, imposed or
requested by the MoC and the Antitrust Commissioner imposed on
the Seller in connection with granting any necessary approvals
for the consummation of the transaction contemplated hereby as
further detailed in the two preceding paragraphs of this
SUBSECTION 5.5(c), and (D) oppose fully and vigorously any
request for, the entry of, and seek to have vacated or
terminated, any order, judgment, decree, injunction or ruling of
any Governmental Authority that could restrain, prevent or delay
the Closing, all to the extent such actions are not prohibited
under any applicable law.
(d) The Seller shall use its commercially reasonable efforts to
assist and to cooperate with the Purchaser and the Company in
obtaining the approvals required under SECTIONS 5.5(a) and (b)
above and shall use its commercially reasonable efforts to cause
the conditions to Closing set forth in SECTIONS 2.5(a) (to the
extent that the approvals provided for in that SECTION 2.5(a) are
required by law to be obtained by the Seller) AND 2.5(b) to be
satisfied as promptly as practicable.
(e) The Seller shall use its commercially reasonable efforts to
procure that (i) a circular in relation to the sale of the
Purchase Shares by the Seller is despatched to HTIL shareholders,
such circular to include a recommendation from the directors of
HTIL that shareholders vote in favour of the resolution to
approve the sale of the Purchase Shares on terms consistent with
the terms hereof (provided only that to do so is not inconsistent
with their fiduciary duties under applicable law), and (ii) an
extraordinary general meeting of the shareholders of HTIL is
convened to seek the approval of its shareholders for the sale of
the Purchase Shares. The Seller shall procure that an undertaking
by the shareholders of over 50% of HTIL's issued shares to vote
in favour of the sale of the Purchase Shares to the Purchaser on
and subject to the terms of this Agreement is supplied to the
Purchaser no later than (10) Business Days after the date of this
Agreement.
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(f) Each of the Parties shall promptly notify the other Party of any
written communication made to or received by such party or its
Affiliates from the MoC or the Israeli Antitrust Commissioner
regarding any of the transactions contemplated hereby, and,
subject to applicable law, if practicable, permit the other Party
to review in advance any proposed written communication to the
MoC or the Israeli Antitrust Commissioner and incorporate the
other Party's reasonable comments, not agree to participate in
any substantive meeting or discussion with or in the MoC or the
Israeli Antitrust Commissioner in respect of any filing,
investigation or inquiry concerning this Agreement or the
transactions contemplated hereby unless, to the extent reasonably
practicable, it consults with the other Party in advance and, to
the extent permitted by the MoC or the Israeli Antitrust
Commissioner, gives the other Party the opportunity to attend,
and subject to applicable law, furnish the other Party with
copies of all correspondence, filings and written communications
between them and their Affiliates and their respective
Representatives on one hand and the MoC or the Israeli Antitrust
Commissioner or its respective staff on the other hand, with
respect to this Agreement and the transactions contemplated
hereby.
5.6 FINANCING.
Without prejudice to or in any qualifying the representation and
warranty given by the Purchaser under SECTION 4.6, the Purchaser shall
promptly notify the Seller of any fact or development which may
adversely affect in any material way the ability of the Purchaser to
obtain any of the financing in connection with this Agreement and the
transactions contemplated herein in timely manner.
6. LIMITATIONS ON LIABILITIES
6.1 SURVIVAL.
All representations and warranties of the Parties contained herein
shall survive for a period of twenty four (24) months after the
Closing Date, excluding the representations and warranties contained
in SECTIONS 3.1, 3.2(a) and (b) and 4.1 which shall survive for seven
(7) years from the Closing Date. All covenants, agreements and
obligations contained in this Agreement shall survive until performed
or complied with in full.
6.2 LIMITATIONS ON LIABILITY OF SELLER.
(a) Notwithstanding any other provisions of this Agreement to the
contrary, the Seller shall not have any liability under or in
connection with this Agreement or the transactions contemplated
hereby for any Losses with respect to any individual claim (as
the case may be) unless and until such Losses claimed exceed
Three Million United States dollars (US$3,000,000) ("DE MINIMIS
AMOUNT"); PROVIDED, HOWEVER, that such limitation shall not apply
to any breach by the Seller of the representations and warranties
set forth in SECTION 3.2.
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(b) Notwithstanding any other provisions of this Agreement to the
contrary, the Seller shall not have any liability under or in
connection with this Agreement or the transactions contemplated
hereby, unless and in each case only to the extent that, the
Purchaser shall have incurred or suffered aggregate Losses in
excess of Fifteen Million United States dollars (US$15,000,000)
(the "THRESHOLD AMOUNT") disregarding any individual claim that
does not exceed the De Minimis Amount, and then to the extent the
amount of Purchaser's Losses exceeds the Threshold Amount, the
Purchaser shall be entitled to recover the Threshold Amount, as
well as the amount of Losses in excess of the Threshold Amount.
(c) Notwithstanding any other provision of this Agreement to the
contrary, the Seller shall not have any liability under or in
connection with this Agreement or the transactions contemplated
hereby in excess of the Purchase Price.
(d) Each of the Seller and the Purchaser will only be liable for
actual direct Losses, and in no event shall either Party have any
liability for special, speculative, punitive, indirect,
consequential or multiple-based damages or for lost profits or
lost business opportunities, with regard to any claims hereunder.
(e) Each Party shall take all steps to mitigate any Losses it would
otherwise suffer upon becoming aware of any event which would
reasonably be expected to, or does, give rise to Losses,
including incurring costs only to the extent reasonably necessary
or appropriate to remedy the breach which gives rise to the
Losses.
(f) In calculating amounts of any Losses payable to a Party
hereunder, the amount of any Losses shall be determined without
duplication of any other Losses for which such Party claim has
been made under any other representation, warranty, covenant, or
agreement.
6.3 TIME LIMITS.
Any right to seek remedy for any breach of this Agreement shall only
apply to Losses with respect to which the Seller or the Purchaser, as
the case may be (the "CLAIMING PARTY") shall have notified in writing
the Purchaser or the Seller, as the case may be (the "RESPONSIBLE
PARTY") within the applicable time period set forth in SECTION 6.1.
Further, if any claim is timely asserted under SECTION 6.1, the
Claiming Party shall only have the right to bring an action, suit or
proceeding with respect to such claim within six months after first
giving the Responsible Party notice thereof.
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6.4 NET LOSSES AND SUBROGATION.
(a) Notwithstanding anything contained herein to the contrary, the
amount of any Losses incurred or suffered by any Claiming Party
shall be based on actual Losses incurred and shall be calculated
after giving effect to: (i) any insurance proceeds received by
the Claiming Party from any insurance policy provided or
maintained by or on behalf of the Company, any of its
Subsidiaries, the Seller, the Purchaser or any of their
respective Affiliates with respect to such Losses; (ii) any net
Tax benefit realised by the Claiming Party arising from the facts
or circumstances giving rise to such Losses; and (iii) any
recoveries obtained by the Claiming Party (or any of its
Affiliates) from any other third party.
(b) Each Claiming Party shall exercise commercially reasonable
efforts to obtain such proceeds, benefits and recoveries, and to
take all reasonable actions to mitigate the amount of any Losses
incurred or suffered by such Claiming Party.
(c) If any such proceeds, benefits or recoveries are received by a
Claiming Party with respect to any Losses after an Responsible
Party has made a payment to the Claiming Party with respect
thereto, the Claiming Party shall promptly, but in any event no
later than ten (10) Business Days after the receipt, realization
or recovery of such proceeds, benefits or recoveries, pay to the
Responsible Party the amount of such proceeds, benefits or
recoveries (up to the amount of the Responsible Party's payment).
(d) Upon making any payment to a Claiming Party in respect of any
Losses, the Responsible Party will, to the extent of such
payment, be subrogated to all rights of the Claiming Party
against any third party in respect of the Losses to which such
payment relates. Such Claiming Party and Responsible Party will
execute upon request all instruments reasonably necessary to
evidence or further perfect such subrogation rights.
7. TERMINATION
7.1 RIGHT OF PARTIES TO TERMINATE.
This Agreement may be terminated and the transactions contemplated
hereby may be abandoned, at any time prior to the Closing:
(a) by mutual written consent of the Parties;
(b) by the Seller, if the Seller has knowledge, through SECTION 5.6
or otherwise, of any fact, circumstance or development which
would reasonably be expected to have a material adverse effect on
the Purchaser's ability to obtain sufficient financing to pay the
Purchase Price pursuant to this Agreement in timely manner;
PROVIDED, that the Purchaser has not cured any such matter within
twenty (20) Business Days following receipt by the Purchaser of
written notice of such matter;
(c) by the Seller by written notice to the Purchaser, if the Closing
has not occurred on or prior to the close of business on December
16, 2009 (the "INITIAL END DATE"); PROVIDED, HOWEVER, that the
Seller may by written notice to the Purchaser served prior to the
Initial End Date, request to extend the Initial End Date on one
or more occasions through and including February 16, 2010 (the
"END DATE"), in that case no Party may terminate this Agreement
according to this SECTION 7.1(c) prior to such extended date; and
33
(d) by the Purchaser by written notice to the Seller, if the Closing
has not occurred on or prior to the close of business on the
Initial End Date PROVIDED HOWEVER, that the Purchaser may only
extend the Initial End Date up to twice, i.e. to 16 January 2010
and 16 February 2010 and on each occasion the extension notice is
accompanied by a payment of an Additional Deposit in the amount
of US$10 million each in the Seller Deposit Account, in that case
no Party may terminate this Agreement according to this SECTION
7.1(c) prior to such extended date. Any Additional Deposit paid
pursuant to the foregoing shall be treated in the same way as the
Deposit paid pursuant to Clause 2.3, MUTATIS MUTANDIS.
The right of a Party to terminate this Agreement pursuant to this
SECTION 7.1 shall not be available to the Party whose failure to
fulfil or cause to be fulfilled, in any manner, any obligation under
this Agreement has contributed to the failure of the Closing to have
occurred by the Initial End Date (or, if the Party extends the Initial
End Date pursuant to this SECTION 7.1(c) or 7.1(d), by such Initial
End Date or End Date), whether such failure was caused by such Party's
intentional failure, by its omission or failure to act or otherwise
through any fault of such Party.
7.2 PROCEDURE UPON TERMINATION.
In the event the Purchaser or the Seller, or both, elect to terminate
this Agreement pursuant to SECTION 7.1, written notice thereof shall
be given to the other Party, and following compliance with SECTION 7.3
below, this Agreement shall terminate without further action of the
Parties.
7.3 EFFECT OF TERMINATION.
(a) If either Party validly terminates this Agreement pursuant to
SECTION 7.1, following compliance with SECTIONS 7.3(b), 7.3(c),
7.3(d) or 7.3(e) below (as applicable), the Parties shall be
released from all liabilities and obligations arising under this
Agreement with respect to the matters contemplated by this
Agreement and this Agreement shall terminate and become void and
have no effect and, subject to compliance with SECTIONS 7.3(b),
7.3(c) OR 7.3(d) below (as and to the extent applicable), the
Deposit and all interest accrued thereon shall be returned by the
Seller to the Purchaser; PROVIDED, that the obligations of the
Parties set forth in SECTION 5.3 (ANNOUNCEMENTS), SECTION 7.2
(PROCEDURE UPON TERMINATION), this SECTION 7.3 (EFFECT OF
TERMINATION), SECTION 8.2 (NOTICES), SECTION 8.4 (EXPENSES),
SECTION 8.7 (ENTIRE AGREEMENT), and SECTION 8.10 (GOVERNING LAW;
JURISDICTION) shall survive any such termination and shall be
enforceable hereunder; PROVIDED further, that nothing in this
SECTION 7.3(a) shall relieve the Purchaser or the Seller of any
liability for fraud or wilful breach of this Agreement.
(b) The Parties agree that if this Agreement is terminated pursuant
to:
(i) SECTION 7.1(b), save where such termination by the Seller is
as a result of a Material Adverse Effect;
(ii) SECTION 7.1(c) and all the conditions to closing set forth
in SECTION 2.5 shall have been satisfied and the Purchaser
shall have failed to consummate the transaction contemplated
hereby at Closing for any reason in a timely manner, save
where such failure is as a result of the occurrence of a
Material Adverse Effect; or
34
(iii) SECTION 7.1(c) and the joint conditions for Closing set
forth in SECTION 2.5(a) above or the Seller conditions for
Closing set forth in section 2.5(c) above shall have failed
to be satisfied due to any acts and/or omissions made by the
Purchaser deliberately, wilfully or by negligence, and/or
due to non-compliance by the Purchaser of any of the
Purchaser's obligations hereunder with respect to the MoC
Approval and the Antitrust Approval (including
non-compliance with Section 5.5(c)), (for the avoidance of
any doubt any failure of the Purchaser to fully comply with
any Reasonable Condition, shall be deemed to constitute a
fault of the Purchaser and not a fault of the Seller or a
breach by the Seller),
then and only then, in view of the difficulty of estimating with
exactness the damages to the Seller which will result from any
such termination, the Parties agree as liquidated damages, and
not as a penalty, that (x) the Seller shall keep and have full
title of the full amount of the Deposit and all interest accrued
thereon and the Purchaser shall have no title or claim in the
Deposit; and (y) the Purchaser shall pay to the Seller, no later
than the third (3rd) Business Day following such termination an
amount in cash equal to the difference between ten percent (10)%
of the Purchase Price and the amount of the Deposit required by
the Seller pursuant to clause (x) above, as an exclusive remedy,
without however, having the need to prove any actual damages
incurred by the Seller, and the Parties hereby acknowledge that
such liquidated damages are reasonable to cover such potential
damages in respect thereby, and the Purchaser hereby waives any
right or claim in respect thereto.
(c) The Parties agree that if this Agreement is terminated pursuant
to:
(i) SECTION 7.1(c) and all the conditions to closing set forth
in SECTION 2.5 shall have been satisfied and the Seller
shall have failed to consummate the transactions
contemplated hereby at Closing for any reason); or
(ii) SECTION 7.1(b) and the Seller conditions for Closing set
forth in section 2.5(c)(iii) or (iv) above shall have failed
to be satisfied due any failure to obtain the HTIL
Shareholders Approval or the Pledge Release;
then and only then, in view of the difficulty of estimating with
exactness the damages to the Purchaser which will result from any
such termination, the Parties agree as liquidated damages, and
not as a penalty, that (x) the Seller shall release the Deposit
to the Purchaser and the Purchaser shall have full title of the
full amount of the Deposit and Seller shall have no title or
claim in the Deposit; and (y) the Seller shall pay to the
Purchaser, no later than the third (3rd) Business Day following
such termination an amount in cash equal to ten percent (10)% of
the Purchase Price, as an exclusive remedy, without however,
having the need to prove any actual damages incurred by the
Purchaser, and the Parties hereby acknowledge that such
liquidated damages are reasonable to cover such potential damages
in respect thereby, and the Seller hereby waives any right or
claim in respect thereto.
35
(d) The Parties agree that if this Agreement is terminated pursuant
to:
(i) SECTION 7.1(c) and the joint conditions for Closing set
forth in SECTION 2.5(a) above have failed to be satisfied,
for any reason other than due to any fault or breach on the
part of any Party;
(ii) SECTION 7.1(d) and all the conditions to Closing set forth
in SECTION 2.5 shall have been satisfied and the Purchaser
shall have failed to consummate the transaction contemplated
hereby at Closing as a result of the occurrence of a
Material Adverse Effect; or
then and only then, in view of the difficulty of estimating with
exactness the damages to the Seller which will result from any
such termination, the Parties agree as liquidated damages, and
not as a penalty, that the Seller shall keep and have full title
of the full amount of the Deposit, any Additional Deposit and all
respective interest accrued thereon and the Purchaser shall have
no title or claim in the Deposit or any Additional Deposit, and
such retention of the Deposit and any Additional Deposit shall be
an exclusive remedy, without however, having the need to prove
any actual damages incurred by the Seller, and the Parties hereby
acknowledge that such liquidated damages are reasonable to cover
such potential damages in respect thereby, and the Purchaser
hereby waives any right or claim in respect thereto.
(e) If any Party fails to pay any amount payable by it under this
Agreement (including under this SECTION 7.3) when such amount is
due, such Party shall pay interest on all amounts outstanding
hereunder at the rate of three percent (3%) per annum over LIBOR
from time to time, calculated by reference to the actual number
of days elapsed for the period from the date such amount was due
up to and including the date of actual payment (after as well as
before judgment) and on the basis of a 360-day year in full to
the other Party.
7.4 SPECIFIC PERFORMANCE.
It is hereby clarified, that, subject to SECTIONS 7.3(b), (c), AND (d)
above, nothing in this SECTION 7 shall be deemed in any way as
preventing the Parties from seeking specific performance of this
Agreement.
8. MISCELLANEOUS
8.1 PARTIES IN INTEREST; ASSIGNMENT.
(a) This Agreement is binding upon and is solely for the benefit of
the Parties and their respective successors, legal
representatives and permitted assigns. No Party may assign this
Agreement or any portion thereof without the written consent of
the other Party. Any attempted assignment not in compliance with
the terms of this Agreement is null and void.
36
(b) Notwithstanding SECTION 8.1(a) above but without prejudice to the
restrictions contained therein, the Purchaser may: (i) subject to
any necessary approvals of any Governmental Authority (including
the MoC), pledge all or any part of its rights under this
Agreement to any bank and/or other financial institutions which
shall provide full or partial funding for the Purchaser in
respect of the purchase of the Purchase Shares under this
Agreement; and (ii) have the right to enter into any Contract
with respect to the sale of any Purchase Shares; PROVIDED that
(x) the Purchaser shall remain the holder of no less than 36% of
the Company's issued shares immediately following the
consummation of any such sale, (y) the consummation of such sale
may not occur prior to Closing; and (z) any such Contract
(including the entering into of such Contract) would not
reasonably be expected to materially delay or impede the
Purchaser's ability to consummate the transactions contemplated
by this Agreement in a timely manner.
8.2 NOTICES.
All notices or other communications hereunder shall be in writing and
shall be given in person, by registered mail (registered international
air mail if mailed internationally), by an overnight courier service
which obtains a receipt to evidence delivery, or by facsimile
transmission (provided that written confirmation of receipt is
provided) with a copy by mail, addressed as set forth below:
If to the Seller: Advent Investments Pte Ltd
0 Xxxxxxx Xxxxxx
#00-00 Xxx Xxxxxxx
Xxxxxxxxx
Facsimile: x00 0000 0000
Attn.: The Board of Directors
With a copy to (which shall c/o 22/F, Xxxxxxxxx House
not constitute notice): 00 Xxxxxxxx Xxxx,
Xxxx Xxxx
Facsimile: x000 0000 0000
Attn.: The Company Secretary
With a copy to (which shall Xxxxxx, Xxx & Xxxxxx
not constitute notice): Xxxx Xxxxx, 0 Xxxxxxxx Xxxxxx,
Xxx Xxxx 00000, Xxxxxx
Facsimile: x000 0 000 0000
Attn: Xxxx Xxxxx, Adv. & Xxxx Sol, Adv.
If to the Purchaser: Scailex Corporation Ltd.
48 Xxx Xxxx Galis St,
Segula Xxxxxxxxxx Xxxx,
Xxxxxx Xxxxx, Xxxxxx 00000
Facsimile: x000 0 000 0000
Attn.: CEO
With a copy to (which shall Gross, Kleinhendler, Hodak, Halevi,
not constitute notice): Xxxxxxxxx & Co.
One Azrieli Center
Xxx-Xxxx 00000, Xxxxxx
Facsimile: + 972 3 691 4177
Attn.: Xxxx Xxxxxxx Naveh, Adv.
37
or such other address as any Party may designate to the other in
accordance with the aforesaid procedure. All communications delivered
in person or by courier service shall be deemed to have been given
upon delivery, those given by facsimile transmission shall be deemed
given on the Business Day following transmission with confirmed answer
back, and all notices and other communications sent by registered mail
(or air mail if the posting is international) shall be deemed given
five (5) Business Days after posting.
8.3 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the Parties and their respective successors and
permitted assigns.
8.4 EXPENSES.
(a) Save as otherwise provided in this Agreement, each Party shall be
responsible for its own expenses in connection with this
Agreement and the negotiation, execution and consummation of the
transactions contemplated herein.
(b) Any stamp or other documentary or transaction duties shall be
borne by the Parties in equal parts. Each Party shall bear all
other taxes arising as a result or payable in respect of this
Agreement or its implementation all to the extent such taxes
apply on each Party under applicable law.
(c) The Seller shall pay or procure that it is paid to the Purchaser
(or as it may direct) upon request by the Purchaser on the first
and second anniversary of the Closing and against production of
supporting evidence for such payment by the Company, an aggregate
amount equal to 25.655% of the compensation, if any, which the
Company pays to members of the management pursuant to and in
accordance with retention bonus plan or scheme which has been
approved by the Seller prior to the date hereof.
8.5 DELAYS OR OMISSIONS; WAIVER.
The rights of a Party may be waived by such Party only in writing and,
specifically, the conduct of any one of the Parties shall not be
deemed a waiver of any of its rights pursuant to this Agreement and/or
a waiver or consent on its part as to any breach or failure to meet
any of the terms of this Agreement or an amendment hereto. A waiver by
a Party in respect of a breach by the other Party of its obligations
shall not be construed as a justification or excuse for a further
breach of its obligations.
No delay or omission to exercise any right, power, or remedy accruing
to any Party upon any breach or default by the other under this
Agreement shall impair any such right or remedy nor shall it be
construed to be a waiver of any such breach or default, or any
acquiescence therein or in any similar breach or default thereafter
occurring.
38
8.6 AMENDMENT.
This Agreement may be amended or modified only by a written document
signed by all the Parties.
8.7 ENTIRE AGREEMENT.
This Agreement (together with the recitals, schedules, appendices,
annexes and exhibits hereto) and the Seller NDA contain the entire
understanding of the Parties with respect to its subject matter and
all prior negotiations, discussions, agreements, commitments and
understandings between them with respect thereto not expressly
contained herein shall be null and void in their entirety, effective
immediately with no further action required.
8.8 SEVERABILITY.
If a provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect the validity
or enforceability in that jurisdiction of any other provision hereof
or the validity or enforceability in other jurisdictions of that or
any other provision hereof.
Where provisions of any applicable law resulting in such illegality,
invalidity or unenforceability may be waived, they are hereby waived
by each Party to the full extent permitted so that this Agreement
shall be deemed valid and binding agreements, in each case enforceable
in accordance with its terms.
8.9 COUNTERPARTS; FACSIMILE SIGNATURES.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original but all of which together shall
constitute one and the same instrument. A signed Agreement received by
a Party via facsimile will be deemed an original, and binding upon the
party who signed it.
8.10 GOVERNING LAW; JURISDICTION.
The Agreement shall be governed by and construed in accordance with
the laws of the State of Israel, without giving effect to the
principles thereof relating to conflict of laws. The Parties hereby
consent and submit to the exclusive jurisdiction of the competent
courts of Tel Aviv-Jaffa, Israel, which shall have jurisdiction to
hear all disputes arising in connection with this Agreement and no
other courts shall have any jurisdiction whatsoever in respect of such
disputes.
8.11 NO THIRD-PARTY BENEFICIARIES.
Nothing in this Agreement shall create or confer upon any Person,
other than the Parties or their respective successors and permitted
assigns, any rights, remedies, obligations or liabilities.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
39
[SIGNATURE PAGE OF SHARE PURCHASE AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered on the
date herein above set forth.
1. ADVENT INVESTMENTS PTE LTD
BY:
Signature: (sgd) (initialled)
------------------------------------
Name: Xxxxx Sng Canning Fok
Title: Director
2. SCAILEX CORPORATION LTD.
BY:
Signature: (sgd) (sgd)
------------------------------------
Name: Ilan Ben Dov Yahel Shachar
Title: Chairman Chief Executive Officer
40
EXHIBIT A
FORM OF RESIGNATION
RESIGNATION LETTER
The undersigned, [NAME OF THE SELLER APPOINTED DIRECTOR] (hereinafter, the
"SELLER DIRECTOR"), acting in his capacity as a director of [THE COMPANY]/
[APPLICABLE SUBSIDIARY], hereby agrees to the following:
The Seller Director hereby tenders his resignation as a director of [THE
COMPANY] / [APPLICABLE SUBSIDIARY] and as a director, officer, trustee, agent,
or fiduciary of any other corporation, partnership, joint venture, employee
benefit plan, trust, entity, or enterprise of any kind whatsoever that is an
Affiliate of the Company or any of its Subsidiaries.
All capitalised terms used but not otherwise defined herein shall have the
respective meanings set forth in the Share Purchase Agreement, dated as of
_______, 2009, by and between Advent Investments Pte Ltd. and [PURCHASER].
Date: _______________, 2009
____________________________
[NAME OF DIRECTOR]
41
SCHEDULE 2.2
DEBT INSTRUMENT
--------------------------------------------------------------------------------
Borrower: Scailex Corporation Ltd. ("Scailex")
--------------------------------------------------------------------------------
Purpose: Finance acquisition of Partner Shares
--------------------------------------------------------------------------------
Amount: US$300mm
--------------------------------------------------------------------------------
Currency: US$
--------------------------------------------------------------------------------
Ranking: Pari Passu with banks (subject to their agreement)
--------------------------------------------------------------------------------
Security: Stage 1 - Lien on 8,571,429 Partner Shares and 2nd Lien on
8,571,429 Partner shares
Stage 2 - Lien on 12,857,144 Partner Shares and 2nd
Lien on 4,285,714 Partner shares
Stage 3 until maturity: Lien on 17,142,858 Partner Shares
--------------------------------------------------------------------------------
Maturity: 4.5 years
--------------------------------------------------------------------------------
Coupon: Stage 1: 4% per annum, payable semi annually
Stage 2: 3% per annum, payable semi annually
Stage 3: 2% per annum until maturity, payable semi annually
--------------------------------------------------------------------------------
Call Protection: Non Call Life
--------------------------------------------------------------------------------
Covenants: Mandatory Prepayment to include, but not limited to, the
following:
o Change of Control
o Asset / Entire Company sale
--------------------------------------------------------------------------------
Listing: Ability to list Note on an agreed exchange on agreed terms
--------------------------------------------------------------------------------
Voting rights: None
--------------------------------------------------------------------------------
Governing Law: Israeli
--------------------------------------------------------------------------------
Other Terms: Right of first refusal
--------------------------------------------------------------------------------
42
SCHEDULE 2.4(a)(ii)
NON-RESIGNING DIRECTORS
DIRECTORS OF PARTNER COMMUNICATIONS COMPANY LTD.
1. Xxxxx Xxxxxx
2. Xxxx Xxxxxx
3. Uzia Galil
4. Xxxxxx Xxxxxx
5. Xx Xxxxxxx X Xxxxxx
DIRECTORS OF PARTNER FUTURE COMMUNICATIONS 2000 LTD.
1. Xxxxx Xxxxx
2. Xxxx Xxxxxx
DIRECTOR OF PARTNER NET LIMITED
Sole director: Partner Communications Company Ltd.
43
SCHEDULE 3
SELLER DISCLOSURE SCHEDULE
[Intentionally left blank]
44
SCHEDULE 3.2(a)
COMPANY'S CAPITALISATION TABLE
Authorised share capital of the Company: 235,000,000
Number of issued and outstanding ordinary shares of the Company (excluding all
treasury shares of the Company consisting of 4,467,990 ordinary shares):
153,848,431
The following is a list of all shareholders of the Company holding 5% or more of
the outstanding share capital of the Company:
PERCENTAGE OF THE OUTSTANDING AND
NUMBER OF ORDINARY ISSUED ORDINARY SHARES OF THE
NAME OF SHAREHOLDER SHARES OF THE COMPANY COMPANY (ON FULLY DILUTED BASIS)
------------------- --------------------- ---------------------------------
SELLER 78,940,104 Approximately 49.41%
OTHERS
TOTAL 100%
The Seller is not aware of shareholders holding 5% or more of the issued and
outstanding share capital of the Company. The Israeli founding shareholders hold
together approximately 5.23% of the issued and outstanding ordinary shares of
the Company (excluding treasury shares).
* FULLY DILUTED BASIS IS CALCULATED BASED ON THE ASSUMPTION THAT ALL OPTIONS
ISSUED TO THE DATE HEREOF ARE FULLY EXERCISED.
As of 11 August 2009 there are 5,920,900 options in issue and not yet exercised.
Therefore the percentage is based on the assumption that all options issued to
11 August 2009 are fully exercised, and accordingly the number of issued and
outstanding ordinary shares is 159,769,331 (153,848,431 + 5,920,900)
45
SCHEDULE 4.2
ANY ISSUE OF PURCHASER'S SHARES OR OTHER EQUITY SECURITIES
Scailex Employees Option Plans adopted in 2003 and 2009
46
SCHEDULE 5.1(e)
RELATED PARTY AGREEMENTS WHICH SHALL INTACT
PARTIES TO THE AGREEMENT/ARRANGEMENT DESCRIPTION
------------------------------------- --------------------------------------
1. Xxxxxxxxx Whampoa 3G IP S.arl. and Licence and Support and Maintenance
BEA Systems Limited Agreement dated 19 April 2002
------------------------------------- --------------------------------------
2. H3G Procurement Services Sarl and Framework Supply Agreement for supply
Nokia Corporation of 3G handsets dated 23 November 2004
------------------------------------- --------------------------------------
3. H3G Procurement Services Sarl and Framework Supply Agreement for supply
Sony Ericsson Mobile Communications of 3G handsets dated 9 May 2005
AB
------------------------------------- --------------------------------------
4. Xxxxxxxxx Whampoa 3G IP Sarl and Licence Agreement dated 4 February
Vidiator (Netherlands) B.V. 2003
------------------------------------- --------------------------------------
5. Xxxxxxxxx Whampoa 3G IP Sarl and Maintenance Agreement dated 4 February
Vidiator Technology (US) Inc. 2003
------------------------------------- --------------------------------------
6. Xxxxxxxxx Whampoa 3G IP Sarl and Framework Services Agreement dated 4
Vidiator Technology (US) Inc. February 2003
------------------------------------- --------------------------------------
7. Xxxxxxxxx International Limited and Xxxxxxxx Xx.0 to Oracle Licence and
Services Oracle Systems Hong Kong Agreement with effective date of 1
Limited. April 2006
47
