Exhibit 1
SHARE PURCHASE AGREEMENT
BY AND BETWEEN
GMM CAPITAL LLC
AND
XXXX XXX INTERNATIONAL CORPORATION
August 15, 2005
TABLE OF CONTENTS
1. Definitions................................................................2
2. Purchase and Sale of Target Shares.........................................4
3. Representations and Warranties of the Seller Concerning the Transaction....5
4. Representations and Warranties of the Buyer Concerning the Transaction.....7
5. Pre-Closing Covenants......................................................9
6. Post-Closing Covenants....................................................10
7. Conditions to Obligation to Close.........................................11
8. Remedies for Breaches of this Agreement...................................13
9. Termination...............................................................15
10. Dispute Resolution........................................................16
11. Miscellaneous.............................................................16
EXECUTION COPY
SHARE PURCHASE AGREEMENT
This Agreement is entered into on August 15, 2005, by and
between GMM Capital LLC, a Delaware limited liability company (the "Buyer"),
and Xxxx Xxx International Corporation, a Delaware corporation (the "Seller").
The Buyer and the Seller are referred to collectively herein as the "Parties"
and each is referred to herein as a "Party"
WHEREAS, the Seller in the aggregate owns 4,256,537 ordinary
shares, par value NIS 1.00 per share (the "Target Shares"), of Delta Galil
Industries Ltd., an Israeli company (the "Target"); and
WHEREAS, this Agreement contemplates a transaction in which
the Buyer will purchase from the Seller, and the Seller will sell to the Buyer,
all of the Target Shares in return for payment of the Purchase Price (as
defined below), upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises
and the representations, warranties and covenants herein contained, and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, and intending to be legally bound hereby, the Parties
agree as follows.
1. Definitions
In this Agreement, each of the following terms shall bear the meaning
assigned to it below:
1.1. "Affiliate" shall mean, as to any Person, any other Person
which, directly or indirectly, is in control of, is
controlled by or is under common control with such Person.
The term "control," as applied to any Person, means the
possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of such
Person, whether through the ownership of voting securities or
other ownership interest, by contract or otherwise.
1.2. "Accredited Investor" has the meaning set forth in Rule
501(a) of Regulation D promulgated under the Securities Act.
1.3. "Adverse Consequences" means all actions, suits, proceedings,
arbitrations, hearings, investigations, charges, complaints,
claims, demands, injunctions, judgments, orders, decrees,
rulings, damages, dues, penalties, fines, costs, reasonable
amounts paid in settlement, liabilities, obligations, taxes,
liens, losses, expenses, and fees, including court costs and
reasonable attorneys' fees and expenses.
1.4. "Applicable Rate" means the corporate base rate of interest
publicly announced from time to time by X.X. Xxxxxx Xxxxx
Bank N.A.
1.5. "Buyer" has the meaning set forth in the preface above.
1.6. "Closing" has the meaning set forth in section 2.3 below.
1.7. "Closing Date" has the meaning set forth in section 2.3
below.
1.8. "Confidential Information" means any information concerning
the businesses and affairs of the Target that is not already
generally available to the public.
1.9. "Dispute" has the meaning set forth in section 10.1 below.
1.10. "Governmental Entity" shall mean any national, federal,
state, local or foreign judicial, legislative, executive,
regulatory or administrative authority, self-regulatory
organization or arbitrator.
1.11. "ICC" has the meaning set forth in section 10.1 below.
1.12. "ICC Rules" has the meaning set forth in section 10.1 below.
1.13. "Indemnified Party" has the meaning set forth in section
8.4.1 below.
1.14. "Indemnifying Party" has the meaning set forth in section
8.4.1 below.
1.15. "Law" shall mean any federal, state, foreign or local
constitution, law, statute, ordinance, rule, regulation,
order, judgment or decree, administrative or judicial order,
decree, decision, ruling or charge, and any other executive,
legislative, regulatory or administrative proclamation.
1.16. "Material Adverse Effect" shall mean any fact, change, event,
development or circumstance which, individually or in the
aggregate, has had or would be reasonably expected to have a
material adverse effect on the business, condition (financial
or otherwise), results of operations, assets or liabilities
of the Target and its Subsidiaries, taken as a whole;
provided, however, that the term Material Adverse Effect
shall exclude any adverse effect to the extent resulting from
(i) changes in general worldwide economic or Israeli
political or geostrategic conditions which do not materially
disproportionately affect the Target as compared to others in
the industry in which it operates or (ii) changes in Target's
stock price or trading volume, in and of itself.
1.17. "Ordinary Course of Business" means the ordinary course of
business consistent with past custom and practice (including
with respect to quantity and frequency).
1.18. "Party" and "Parties" have the meanings set forth in the
preface above.
1.19. "Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock
company, a trust, a joint venture, an unincorporated
organization, any other incorporated entity or a governmental
entity (or any department, agency, or political subdivision
thereof).
1.20. "Purchase Price" has the meaning set forth in section 2.2
below.
1.21. "Securities Act" means the US Securities Act of 1933, as
amended.
1.22. "Security Interest" means any mortgage, pledge, lien,
encumbrance, charge, claim to title, option, warrant,
purchase right, right of first refusal, restriction on use or
transfer under any instrument or agreement, or any other
security interest of any nature whatsoever.
1.23. "Seller" has the meaning set forth in the preface above.
1.24. "Seller's Account" means the Seller's account at Wilmington
Trust Bank, in Wilmington, DE with the following details:
Bank: Wilmington Trust
Address: Wilmington, DE
ABA#: 000-000-000
Swift: WITCUS31XXX
Acct. Number: 2290-1133
Acct. Name: Xxxx Xxx International Corporation.
1.25. "Shareholders Agreement" means that certain shareholders
agreement made and executed as of December 31, 1998, by and
between the Seller, Xxxx Xxx Corporation, N.D.R.L.
Investments (1998) Ltd., Nichsei Adinoam Ltd. and Xxx
Xxxxxxx.
1.26. "Subsidiary" of any Person shall mean any legal entity of
which such Person (either alone or through or together with
any other subsidiary) owns, directly or indirectly, 50% or
more of the stock or other equity interests, the holders of
which are generally entitled to vote for the election of the
board of directors or other governing body of such entity.
1.27. "Target" has the meaning set forth in the preface above.
1.28. "Target Share" means an Ordinary Share, nominal value NIS
1.00, of the Target.
1.29. "Third Party Claim" has the meaning set forth in section
8.4.1 below.
2. Purchase and Sale of Target Shares
2.1. Basic Transaction. On and subject to the terms and conditions
of this Agreement, at the Closing, the Buyer shall purchase
from the Seller, and the Seller shall sell, convey, transfer,
assign and deliver to the Buyer, all of the Target Shares,
free and clear of all Security Interests, for the
consideration specified below in section 2.2.
2.2. Purchase Price. The Buyer agrees to pay to the Seller at the
Closing US$27,667,490.50 (twenty seven million six hundred
sixty seven thousand four hundred ninety U.S. dollars and
fifty U.S. cents) (the "Purchase Price") by delivery of cash
for the full Purchase Price, by wire transfer to the Seller's
Account. The Purchase Price shall be adjusted to reflect
appropriately the effect of any forward or reverse stock
split, stock dividend (including any dividend or distribution
of securities exercisable or exchangeable for or convertible
into Target Shares), cash dividend, stock issuance or sale,
reorganization, recapitalization, reclassification,
combination, exchange of shares or other similar change with
respect to the Target Shares occurring on or after the date
hereof and prior to the Closing.
2.3. The Closing. On and subject to the terms and conditions of
this Agreement, the closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the
offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, at Xxxx
Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, commencing at 11:00 a.m.
local time on August 30, 2005, or such other date as the
Buyer and the Seller may mutually determine (the "Closing
Date").
2.4. Deliveries at the Closing. At the Closing:
2.4.1. the Seller will deliver to the Buyer the various
certificates, instruments, and documents referred to
in section 7.1.6 below;
2.4.2. the Buyer will deliver to the Seller the various
certificates, instruments, and documents referred to
in section 7.2.4 below;
2.4.3. the Seller will deliver to the Buyer a stock
certificate representing all of the Target Shares
owned by the Seller, duly endorsed in blank or
accompanied by a duly executed stock power endorsed
in blank;
2.4.4. the Buyer will deliver to the Seller the
consideration specified in section 2.2 above; and
2.4.5. each Party will deliver to the other Party all such
other certificates, documents and instruments as
reasonably requested by such other Party in
connection with the consummation of the transactions
contemplated hereby.
3. Representations and Warranties of the Seller Concerning the
Transaction
The Seller hereby represents and warrants to the Buyer the following
in this section 3, except as set forth in Annex I attached hereto
(each disclosure set forth in Annex I is identified by reference to a
specific section or subsection of this Agreement):
3.1. Organization of Seller. The Seller is duly organized, validly
existing, and in good standing under the laws of the State of
Delaware.
3.2. Authorization of Transaction. The Seller has full power and
authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly executed
and delivered by the Seller and constitutes the valid and
legally binding obligation of the Seller, enforceable in
accordance with its terms and conditions. The Seller need not
give any notice, make any filing, or obtain any
authorization, consent, exemption, waiver or approval from
any Governmental Entity in order to execute and deliver this
Agreement, perform its obligations hereunder and consummate
the transactions contemplated hereby.
3.3. No Contravention. Neither the execution, delivery or
performance by the Seller of this Agreement, nor the
consummation of the transactions contemplated hereby, will:
3.3.1. violate or conflict with any Law or other
restriction of any Governmental Entity to which the
Seller is subject or any provision of its charter or
bylaws; or
3.3.2. conflict with, result in a breach of, constitute a
default (or an event which, with notice or lapse of
time or both, would constitute a default) under,
result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or
cancel, or require any notice under any agreement,
contract, lease, license, instrument or other
arrangement to which the Seller is a party or by
which it is bound or to which any of its assets is
subject.
3.4. Brokers' Fees. The Seller has no liability or obligation to
pay any fees or commissions to any broker, finder or agent
with respect to the transactions contemplated by this
Agreement for which the Buyer could become liable or
obligated.
3.5. Target Shares.
3.5.1. The Seller holds of record and owns beneficially
4,256,537 (four million two hundred fifty-six
thousand five hundred thirty-seven) Target Shares.
No other Target Shares are held of record or owned
beneficially by the Seller or its Affiliates. The
Seller has a good and valid title, right and
interest to such Target Shares, free and clear of
any Security Interests (other than restrictions
under U.S. federal, applicable State, and Israeli
securities laws).
3.5.2. There are no options, warrants, calls, rights,
commitments or agreements of any kind to which the
Seller is a party or by which the Seller (or the
Target Shares owned by it) is bound which contain
any obligations of the Seller, relating to the sale,
issuance or the granting of rights to acquire, any
of the Seller's Target Shares or evidencing the
right to purchase any of the Seller's Target Shares
or obligating the Seller to grant, extend or enter
into any such option, warrant, call, right,
commitment or agreement. The Seller has not entered
into any options, warrants, calls, rights,
commitments or agreements of any kind on behalf of
the Target relating to the sale, issuance or voting
of, or the granting of rights to acquire, any of the
Target Shares.
3.6. Voting of Target Shares. The Seller is not a party to, and
neither the Seller nor the Target Shares owned by it is bound
by, any voting trust, proxy, or other agreement or
understanding with respect to the manner it which it may or
should vote of any of the Target Shares.
3.7. Shareholders Agreement. The Shareholders Agreement has not
been amended, modified or supplemented since December 31,
1998.
3.8. Disclaimer of Other Representations and Warranties. Except as
expressly set forth in this section 3, the Seller makes no
representation or warranty, express or implied, at law or in
equity, in respect of itself or the Target or any of their
respective assets, liabilities or operations, including,
without limitation, with respect to merchantability or
fitness for any particular purpose, or the Target Shares, and
any such other representations or warranties are hereby
expressly disclaimed.
4. Representations and Warranties of the Buyer Concerning the Transaction
The Buyer hereby represents and warrants to the Seller the following
in this section 4, except as set forth in Annex II attached hereto
(each disclosure set forth in Annex II is identified by reference to a
specific section or subsection of this Agreement):
4.1. Organization of the Buyer. The Buyer is a limited liability
company duly organized, validly existing, and in good
standing under the laws of Delaware.
4.2. Authorization of Transaction. The Buyer has full power and
authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly executed
and delivered by the Buyer and constitutes the valid and
legally binding obligation of the Buyer, enforceable in
accordance with its terms and conditions. The Buyer need not
give any notice, make any filing, or obtain any
authorization, consent, exemption, waiver or approval from
any government or Governmental Entity in order to execute and
deliver this Agreement, perform its obligations hereunder and
consummate the transactions contemplated hereby.
4.3. No Contravention. Neither the execution, delivery or
performance by the Buyer of this Agreement, nor the
consummation of the transactions contemplated hereby, will:
4.3.1. violate or conflict with any Law or other
restriction of any Governmental Entity to which the
Buyer is subject or any provision of its certificate
of formation or limited liability company agreement;
or
4.3.2. conflict with, result in a breach of, constitute a
default (or an event which, with notice or lapse of
time or both, would constitute a default) under,
result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or
cancel, or require any notice under any agreement,
contract, lease, license, instrument or other
arrangement to which the Buyer is a party or by
which it is bound or to which any of its assets is
subject.
4.4. Brokers' Fees. The Buyer has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this
Agreement for which the Seller could become liable or
obligated.
4.5. Investment. The Buyer:
4.5.1. understands that the Target Shares:
4.5.1.1. are being offered and sold in reliance upon
exemptions for transactions not involving a
public offering (including exemptions from
the registration requirements of the
Securities Act and certain US state
securities laws);
4.5.1.2. are "restricted securities" under the
Securities Act; and
4.5.1.3. may not be re-offered or resold except
through a valid and effective registration
statement or pursuant to valid exemptions
for transactions not involving a public
offering (including exemption from the
registration requirements under the
Securities Act and applicable US state
securities laws); and
4.5.2. is acquiring the Target Shares for investment
purposes for its own account only and not with a
view to, or for sale in connection with, any
distribution of all or any part thereof in violation
of the applicable (including US federal, US state
and Israeli) securities laws and has no intention of
selling such Target Shares in a public distribution
in violation of such securities laws;
4.5.3. is an Accredited Investor; and
4.5.4. is a sophisticated investor with knowledge and
experience in business and financial matters; is
able to bear the economic risk and lack of liquidity
inherent in holding the Target Shares; and
acknowledges that the Target Shares are speculative
investments that involve a substantial degree of
risk of loss of its entire investment therein and
understands and takes full cognizance of the risks
related to the acquisition thereof.
4.6. Due Diligence. The Buyer has conducted due diligence to the
Buyer's satisfaction in connection with the Target and its
assets and businesses. In the course of such due diligence,
the Buyer has obtained minutes of all Target Board of
Director meetings held over least the last two years and
director preparatory material in connection therewith.
5. Pre-Closing Covenants
The Parties agree as follows with respect to the period between the
execution of this Agreement and the Closing:
5.1. General. Each of the Parties will use its reasonable best
efforts to take all action and to do, and to assist and
cooperate with the other Party in doing, all things
necessary, proper, or advisable to consummate and make
effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing
conditions set forth in section 7 below).
5.2. Notices and Consents. Each of the Parties will give any
notices to, make any filings with, and use its reasonable
best efforts to obtain any authorizations, consents, and
approvals of Governmental Entities in connection with the
transactions contemplated hereby (including the matters
referred to in sections 3.2 and 4.2 above), as promptly as
practicable following the date hereof. Each Party will
cooperate in all respect with the other Party in connection
with the foregoing, keep the other Party informed of any
communications (including meetings and conferences) with
Governmental Entities regarding the transactions contemplated
hereby and, to the extent practicable, permit the other Party
to review any such communication.
5.3. Notice of Developments. Each Party will give prompt written
notice to the others upon becoming aware of any material
adverse development causing a breach of any of its own
representations and warranties in sections 3 or 4 above, as
applicable, or of any failure by such Party to comply in any
material respect with any of its covenants or agreements
hereunder. No disclosure by any Party pursuant to this
section 5.3 shall be deemed to amend or supplement Annex I,
Annex II, or to prevent or cure any misrepresentation or
breach of warranty, covenant or agreement.
5.4. Ownership of Target Shares; Exclusivity.
5.4.1. The Seller will retain beneficial and record
ownership of all of the Target Shares owned by it on
the date hereof, free and clear of any Security
Interest, during the period from the date hereof and
continuing until the earlier of the Closing or the
termination or expiration of this Agreement pursuant
to its terms.
5.4.2. The Seller will not, and will not authorize any of
its Affiliates, officers or directors or any other
Person on its behalf to, directly or indirectly,
solicit or initiate the submission of any proposal
or offer from any Person (other than the Seller and
its Affiliates) relating to the acquisition of all
or substantially all of the Target Shares owned by
it provided, however, without limiting the Seller's
obligations under sections 2.1 and 5.4.1, that the
Seller or its Affiliates, officers, directors or
other Person on its behalf, or its nominees to the
Target's board of directors will remain free to
participate in any discussions or negotiations
regarding, furnish any information with respect to,
assist or participate in, or facilitate in any other
manner any effort or attempt by any Person to do or
seek any of the foregoing, to the extent they
reasonably believe, based on the advice of outside
legal counsel, that their fiduciary duties to the
Target or its stockholders (other than the Seller)
so require.
5.4.3. The Seller shall notify the Buyer promptly (and
provide material details reasonably requested by the
Buyer) if the Seller or any of its Affiliates is
approached or solicited, directly or indirectly, by
any Person with respect to any matter described in
section 5.4.2 above, provided, however, that the
Seller may refrain from so notifying (or so
providing details) to the extent the Seller
reasonably believes, based on the advice of outside
legal counsel, that its fiduciary duties to the
Target or its stockholders (other than the Seller)
so require.
6. Post-Closing Covenants
The Parties agree as follows with respect to the period following the
Closing:
6.1. General. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of
this Agreement, each of the Parties will take such further
action (including the execution and delivery of such further
instruments and documents) as any other Party reasonably may
request, all at the sole cost and expense of the requesting
Party (unless the requesting Party is entitled to
indemnification therefor under section 8 below).
6.2. Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any action, suit,
proceeding, hearing, investigation, charge, complaint, claim,
or demand in connection with (i) any transaction contemplated
under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or
transaction on or prior to the Closing Date involving the
Target, the other Party shall use its reasonable best
efforts, subject to applicable Law, to cooperate with it and
its counsel in the defense or contest, make available their
personnel, and provide such testimony and access to their
books and records as shall be reasonably necessary in
connection with the defense or contest, all at the sole cost
and expense of the contesting or defending Party (unless the
contesting or defending Party is entitled to indemnification
therefor under section 8 below).
6.3. Other Acquisitions/Dispositions of Shares. If, prior to the
date that is six months following the Closing Date, the Buyer
or any of its Affiliates acquires any ordinary shares of
Target from Xxx Xxxxxxx, N.D.R.L. Investments (1998) Ltd. or
Nischei Adinoam Ltd. (or any of their respective Affiliates),
or makes a tender offer to purchase the ordinary shares of
Target from Target's shareholders, in either case at a price
per share that is higher than US$6.50 per share, then Buyer
shall pay to the Seller, at the time of consummation of such
acquisition or tender offer, an amount equal to the product
of (i) the excess of the price per share paid in such
acquisition or tender offer over US$6.50 per share and (ii)
the number of Target Shares.
7. Conditions to Obligation to Close
7.1. Conditions to Obligation of the Buyer. The obligation of the
Buyer to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction at or
prior to the Closing of the following conditions:
7.1.1. the representations and warranties set forth in
section 3 above shall be true and correct in all
material respects on and as of the Closing Date with
the same force and effect as if made on the Closing
Date; provided, however, that the representations
and warranties contained in sections 3.2, 3.5 and
3.6 shall be true and correct in all respects on and
as of the Closing Date;
7.1.2. the Seller shall have performed and complied with
all of its covenants and agreements hereunder in all
material respects through the Closing;
7.1.3. there shall not be any Law in effect making any of
the transactions contemplated by this Agreement
illegal or otherwise preventing (whether temporarily
or permanently) the consummation of any of the
transactions contemplated by this Agreement;
7.1.4. all members of the board of directors of the Target
nominated by the Seller shall have resigned from
such board effective as of the Closing;
7.1.5. since the date hereof, there shall have been no
Material Adverse Effect with respect to the Target;
7.1.6. the Seller shall have delivered to the Buyer a
certificate from an executive officer of the Seller
to the effect that each of the conditions specified
above in section 7.1.1 through section 7.1.5 is
satisfied in all respects;
7.1.7. the Parties shall have received all required
authorizations, consents, and approvals of
Governmental Entities in connection with the
transactions contemplated hereby (including the
matters referred to in sections 3.2 and 4.2 above);
7.1.8. the relevant parties shall have entered into the
side agreement in form and substance as set forth in
Exhibits A through B attached hereto and the same
shall be in full force and effect; and
7.1.9. all actions to be taken by the Seller in connection
with consummation of the transactions contemplated
hereby and all certificates, instruments, and other
documents required to effect the transactions
contemplated hereby will be reasonably satisfactory
in form and substance to the Buyer.
The Buyer may waive any condition specified in this section 7.1 if it
executes a writing so stating at or prior to the Closing.
7.2. Conditions to Obligation of the Seller. The obligation of the
Seller to consummate the transactions to be performed by it
in connection with the Closing is subject to satisfaction at
or prior to the Closing of the following conditions:
7.2.1. the representations and warranties set forth in
section 4 above shall be true and correct in all
material respects on and as of the Closing Date with
the same force and effect as if made on the Closing
Date; provided, however, that the representations
and warranties contained in section 4.2 shall be
true and correct in all respects, as of the Closing
Date;
7.2.2. the Buyer shall have performed and complied with all
of its covenants and agreements hereunder in all
material respects through the Closing;
7.2.3. there shall not be any Law in effect making any of
the transactions contemplated by this Agreement
illegal or otherwise preventing (whether temporarily
or permanently) the consummation of any of the
transactions contemplated by this Agreement;
7.2.4. the Buyer shall have delivered to the Seller a
certificate from an officer of the Buyer to the
effect that each of the conditions specified above
in section 7.2.1 through section 7.2.3 is satisfied
in all respects;
7.2.5. the Parties shall have received all required
authorizations, consents, and approvals of
Governmental Entities in connection with the
transactions contemplated hereby (including the
matters referred to in sections 3.2 and 4.2 above);
7.2.6. the relevant parties shall have entered into the
side agreement in form and substance as set forth in
Exhibits A through B attached hereto and the same
shall be in full force and effect; and
7.2.7. all actions to be taken by the Buyer in connection
with consummation of the transactions contemplated
hereby and all certificates, instruments, and other
documents required to effect the transactions
contemplated hereby will be reasonably satisfactory
in form and substance to the Seller.
The Seller may waive any condition specified in this section 7.2 if it
executes a writing so stating at or prior to the Closing.
8. Remedies for Breaches of this Agreement
8.1. Survival of Representations and Warranties. The
representations and warranties of the Parties contained in
this Agreement shall survive the Closing until the first
anniversary of the Closing Date; provided, however, that the
representations and warranties contained in section 3.5 shall
survive the Closing until the third anniversary of the
Closing Date. In the event notice of any claim for
indemnification under section 8.2 or section 8.3 hereof shall
have been given pursuant to section 11.7 within the
applicable survival period, the representations, warranties,
covenants and agreements that are the subject of such
indemnification claim shall survive until such time as such
claim is finally resolved.
8.2. Indemnification Provisions for Benefit of the Buyer. In the
event the Seller breaches any of its representations,
warranties, covenants or agreements contained herein, and
provided that the Buyer makes a written claim for
indemnification against the Seller pursuant to section 11.7
below within the applicable survival period, then the Seller
shall indemnify the Buyer from and against any Adverse
Consequences suffered by the Buyer that was caused
proximately by any such breach; provided, however, that the
Seller shall not have any obligation to indemnify the Buyer
from and against any Adverse Consequences resulting from any
breach of any representation or warranty (other than those
contained in section 3.5) of the Seller: (A) until the Buyer
has suffered Adverse Consequences by reason of all such
breaches of such representations and warranties in excess of
a US$250,000 aggregate deductible (after which point the
Seller will be obligated only to indemnify the Buyer from and
against further such Adverse Consequences) or thereafter or
(B) to the extent the Adverse Consequences the Buyer has
suffered by reason of all such breaches of such
representations and warranties does exceed an aggregate
ceiling equal to the Purchase Price (after which point the
Seller will have no obligation to indemnify the Buyer from
and against further such Adverse Consequences).
8.3. Indemnification Provisions for Benefit of the Seller. In the
event the Buyer breaches any of its representations,
warranties, covenants or agreements contained herein, and
provided that the Seller makes a written claim for
indemnification against the Buyer pursuant to section 11.7
below within the applicable survival period, then the Buyer
shall indemnify the Seller from and against any Adverse
Consequences suffered by the Seller that was cause
proximately by any such breach; provided, however, that the
Buyer shall not have any obligation to indemnify the Seller
from and against any Adverse Consequences resulting from the
breach of any representation or warranty of the Buyer: (A)
until the Seller has suffered Adverse Consequences by reason
of all such breaches of such representations and warranties
in excess of a US$250,000 aggregate deductible (after which
point the Buyer will be obligated only to indemnify the S
from and against further such Adverse Consequences) or
thereafter or (B) to the extent the Adverse Consequences the
Seller has suffered by reason of all such breaches of such
representations and warranties does exceed an aggregate
ceiling equal to the Purchase Price (after which point the
Buyer will have no obligation to indemnify the Seller from
and against further such Adverse Consequences).
8.4. Matters Involving Third Parties.
8.4.1. If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a
"Third Party Claim") which may give rise to a claim
for indemnification against any other Party (the
"Indemnifying Party") under this section 8, then the
Indemnified Party shall promptly (and in any event
within five business days after receiving notice of
the Third Party Claim) notify each Indemnifying
Party thereof in writing; provided that the failure
to give such notice as provided herein shall not
relieve the applicable Indemnifying Party of its
obligations under this section 8.4, except to the
extent that such Indemnifying Party is materially
prejudiced by such failure to give notice.
8.4.2. Any Indemnifying Party shall have the right at any
time to assume and conduct the defense of a Third
Party Claim with counsel of its choice at such
Indemnifying Party's own expense; provided, however,
that the Indemnified Party shall have the right to
employ one separate counsel reasonably satisfactory
to the Indemnifying Party to represent such
Indemnified Party if the defendants in any such
Third Party Claim include both the Indemnifying
Party (or its Affiliates or their respective
officers, directors, partners, members, employees,
agents, representatives, successors and assigns) and
the Indemnified Party and, in such party's
reasonable judgment, a conflict of interest between
such party and the Indemnifying Party exists in
respect of such claim. In such event, the reasonable
fees and expenses of such separate counsel shall
also be paid by the Indemnifying Party.
8.4.3. Unless and until an Indemnifying Party assumes the
defense of the Third Party Claim as provided in
section 8.4.2 above, however, the Indemnified Party
may defend against the Third Party Claim in any
reasonable manner.
8.4.4. Neither the Indemnified Party nor the Indemnifying
Party may admit any liability, consent to the entry
of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior
written consent of the Indemnifying Party or the
Indemnified Party, respectively, not to be withheld
unreasonably.
8.5. Determination of Adverse Consequences. The Parties shall make
appropriate adjustments for tax benefits and insurance
proceeds actually received and take into account the time
cost of money (using the Applicable Rate as the discount
rate) in determining Adverse Consequences for purposes of
this section 8. All indemnification payments under this
section 8 shall be deemed adjustments to the Purchase Price.
8.6. Exclusive Remedy. The Buyer and the Seller acknowledge and
agree that the foregoing indemnification provisions in this
section 8 shall be the exclusive remedy of the Buyer and the
Seller with respect to this Agreement, except in the case of
fraud by the other Party. This section 8.6 shall not limit
the Parties' rights for remedies under sections 10.3 and 11.8
below.
9. Termination.
9.1. Termination of Agreement. Each of the Parties may terminate
this Agreement as provided below:
9.1.1. the Buyer and the Seller may terminate this
Agreement by mutual written consent at any time
prior to the Closing;
9.1.2. the Buyer may terminate this Agreement by giving
written notice to the Seller at any time prior to
the Closing
9.1.2.1. in the event that the Seller has breached
any representation, warranty or covenant
contained in this Agreement in any material
respect, the Buyer has notified the Seller
of the breach, and the breach has continued
without cure for a period of 5 business
days after the notice of breach; or
9.1.2.2. if the Closing shall not have occurred on
or before the 28th calendar day following
execution of this Agreement by reason of
the failure of any condition precedent
under section 7.1 hereof (unless the
failure results primarily from the Buyer
itself breaching any representation,
warranty or covenant contained in this
Agreement); and
9.1.3. the Sel3ler may terminate this Agreement by giving
written notice to the Buyer at any time prior to the
Closing:
9.1.3.1. in the event that the Buyer has breached
any representation, warranty or covenant
contained in this Agreement in any material
respect, the Seller has notified the Buyer
of the breach, and the breach has continued
without cure for a period of 5 business
days after the notice of breach; or
9.1.3.2. if the Closing shall not have occurred on
or before the 28th calendar day following
execution of this Agreement by reason of
the failure of any condition precedent
under section 7.2 hereof (unless the
failure results primarily from the Seller
itself breaching any representation,
warranty or covenant contained in this
Agreement).
9.2. Effect of Termination. If any Party terminates this Agreement
pursuant to section 9.1 above, all rights and obligations of
the Parties hereunder shall terminate without any liability
of any Party to any other Party (except for any liability of
any Party then in material breach and except with respect to
sections 9.2, 10 and 11 which shall survive such
termination).
10. Dispute Resolution
10.1. Any differences or disputes arising from or related to this
Agreement, or the breach, termination or validity thereof,
and the transactions contemplated hereby (a "Dispute"), as
well as issues of arbitrability, shall be resolved
exclusively and finally by arbitration, which will be carried
out in conformity with the Rules of Conciliation and
Arbitration of the International Chamber of Commerce (the
"ICC") in effect on the date of the Agreement (the "ICC
Rules"), except as modified by this Agreement.
10.2. The arbitration will be carried out by a single arbitrator,
fluent in the English language, appointed by the ICC in
accordance with the ICC Rules. The arbitration will conducted
in the city of Tel Aviv, Israel, in the English language.
10.3. No court but the arbitrator shall be authorized to issue
temporary restraining orders or preliminary injunctions;
provided, however that prior the appointment of the
arbitrator any Party may obtain provisional injunctive relief
from a court of law with appropriate jurisdiction to maintain
the status quo or prevent irreparable harm, pending the
appointment of the arbitrator.
10.4. The arbitration shall be governed by Israel's Arbitration
Law, 1968, to the exclusion of any other Law of arbitration.
10.5. In determining the merits of any Dispute, the arbitrator
shall apply the governing Law of this Agreement as set forth
in section 11.9 below. The arbitrator shall have the
authority to award compensatory damages and any form of
temporary or permanent injunctive relief, including specific
performance, that is consistent with this Agreement and
applicable Law. The arbitrator shall not have any authority
to award consequential, punitive or treble damages or any
other form of enhanced damages. The arbitrator shall have no
authority to vary, alter, modify or change the terms of this
Agreement. Any award by the arbitrator shall be accompanied
by a written opinion setting forth the findings of fact and
conclusions of Law relied upon in reaching the decision. Any
decision or award of the arbitrator shall be binding upon the
Parties, and judgment upon any such arbitral award may be
entered in and enforced by any court of competent
jurisdiction.
11. Miscellaneous
11.1. Press Releases and Public Announcements. No Party shall issue
any press release or make any public announcement relating to
the subject matter of this Agreement prior to the Closing
without the prior written approval of the other Party;
provided, however, that any Party may make any disclosure it
believes in good faith is required by applicable Law or any
listing or trading agreement concerning its publicly-traded
securities (in which case the disclosing Party will, prior to
making such disclosure, use its reasonable best efforts to
advise the other Party as promptly as practicable, allow the
other Party reasonable time to comment on such disclosure and
consider the views of the other Party in respect of such
disclosure, all unless impracticable). Notwithstanding the
foregoing, the Seller may notify the Target at any time of
the fact and content of this Agreement, without obtaining
approval of or advising the Buyer.
11.2. No Third-Party Beneficiaries. This Agreement shall not confer
any rights or remedies upon any Person other than the Parties
and their respective successors and permitted assigns.
11.3. Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement among
the Parties and supersedes any prior understandings,
agreements, or representations by or among the Parties,
written or oral, to the extent they have related in any way
to the subject matter hereof.
11.4. Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and
their respective successors and permitted assigns. No Party
may assign either this Agreement or any of its rights,
interests, or obligations hereunder without the prior written
approval of the other Party, except that the Buyer may assign
any of its rights under this Agreement (including the right
to purchase the Target Shares), in whole or in part, to any
of its Affiliates without obtaining the approval of the
Seller; provided that any such assignment shall not relieve
the Buyer of its obligations hereunder.
11.5. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but
all of which together will constitute one and the same
instrument.
11.6. Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any
way the meaning or interpretation of this Agreement.
11.7. Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice,
request, demand, claim, or other communication hereunder
shall be deemed duly given if (and then two business days
after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the
intended recipient as set forth below:
If to the Seller:
Xxxx Xxx Corporation
Attn: General Counsel
Three First Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Xxxxxx Xxxxxx of America
Fax: x0 (000) 000-0000
Copy to:
Xxxxxx Xxxxxxxx Xxxxx, Adv.
Caspi & Co.
00 Xxxxxx Xxxxxx
Xxx Xxxx 00000
Xxxxxx
Fax: x000 (0) 000-0000
If to the Buyer:
GMM Capital LLC
Attn: Xxxxx Xxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
United States of America
Fax: x0 (000) 000-0000
Copy to:
Xxxxxx Xxxxxxxxx, Esq.
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Four Times Square
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxx xx Xxxxxxx
Fax: x0 (000) 000-0000
Any Party may send any notice, request, demand, claim, or
other communication hereunder to the intended recipient at
the address set forth above using any other means (including
personal delivery, expedited courier, messenger service,
facsimile, telex, ordinary mail, or electronic mail), but no
such notice, request, demand, claim, or other communication
shall be deemed to have been duly given unless and until it
actually is received by the intended recipient. Any Party may
change the address to which notices, requests, demands,
claims, and other communications hereunder are to be
delivered by giving the other Parties notice in the manner
herein set forth.
11.8. Specific Performance. The Parties agree that if any of
sections 5.1 or 5.4 of this Agreement is not performed in
accordance with its specific terms or is otherwise breached,
irreparable damage would occur, no adequate remedy at Law
would exist and damages would be difficult to determine, and
that the injured Party shall be entitled to specific
performance of the terms hereof, in addition to any other
remedy at Law or equity.
11.9. Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Israel,
without giving effect to any choice or conflict of law
provision or rule that would cause the application of the
Laws of any jurisdiction other than the State of Israel.
11.10. Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing
and signed by the Buyer and the Seller. No waiver by any
Party of any default, misrepresentation, or breach of
warranty or covenant hereunder, whether intentional or not,
shall be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
11.11. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction
shall not affect the validity or enforceability of the
remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any
other situation or in any other jurisdiction.
11.12. Expenses. Each of the Party will bear its own costs and
expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions
contemplated hereby.
11.13. Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises,
this Agreement shall be construed as if drafted jointly by
the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship
of any of the provisions of this Agreement. Any reference to
any Law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context
requires otherwise. The word "including" shall mean including
without limitation. Any reference to "day" or "days" shall
refer to calendar day or calendar days, respectively, unless
otherwise noted.
11.14. Incorporation of Exhibits and Annexes. The Exhibits and
Annexes identified in this Agreement are incorporated herein
by reference and made a part hereof.
* * *
EXECUTION COPY
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement on the date first above
written.
GMM CAPITAL LLC
By: /s/ Xxxxx Xxxxx
----------------------------------------
Name: Xxxxx Xxxxx
Title: Executive Director
XXXX XXX INTERNATIONAL CORPORATION
By: /s/ Xxxxx X. Alt
----------------------------------------
Name: Xxxxx X. Alt
Title: Vice President and Assistant Secretary
