SALE AGREEMENT Made and entered into at Tel Aviv on the 2nd day of August 2007 Between:
Exhibit
4.36
Made
and entered into at Tel Aviv on the 2nd
day of August 2007
Between:
XXXXX
XXX & XXXXXXX ASSETS LTD.
a
company
duly-registered in Israel
Priv.
Co.
00-000000-0
of
7
Menahem Begin Street, Ramat Gan
(hereinafter:
“the
Seller”)
of
the one part;
And:
KFAR
HASHA’ASHUIM CENTRAL WAREHOUSE LTD.
a
company
duly-registered in Israel
Priv.
Co./Publ. Co. 00-000000-0
of
Kibbutz Nir Eliyahu, D.N. Xxxxxx Xxxxxx
(“the
Purchaser”)
of
the other part
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WHEREAS:
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Naaman
Porcelain Ltd., Publ. Co. 00-000000-0 (“the
Company”)
is a public company whose securities include: (a) ordinary shares
of NIS 1
par value each and (b) Debentures (Series A) convertible into ordinary
shares of NIS 1 par value each, and (c) Warrants (Series 2) exercisable
for ordinary shares of NIS 1 par value each, all of which are traded
on
the Tel Aviv Stock Exchange Ltd.;
and
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WHEREAS:
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The
Seller declares that at the date of signing of this Agreement it
is the
owner of the securities of the Seller and at the date of closing
it will
be the owner of the shares sold and of the warrants sold, and at
the date
of closing it will transfer control (as defined in the Securities
Law) in
the Company to the Purchaser against payment of the consideration
in
accordance with this Agreement; and
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WHEREAS:
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The
Seller declares that simultaneous with its signing this Agreement
it has
entered into a legally binding agreement with the other shareholders
for
acquisition of the shares of the other shareholders, and the other
shareholders have undertaken directly to the Purchaser to sell and
transfer the shares of the other shareholders to the Seller in a
manner
whereby at the date of closing the Seller will be the owner of the
shares
sold (confirmation by the shareholders is attached to this Agreement
as
Appendix D), subject to payment of the consideration by the Purchaser;
and
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WHEREAS:
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The
Seller wishes to sell and transfer control in the Company to the
Purchaser
by way of the purchase of the shares sold and the warrants sold,
and the
Purchaser wishes to purchase and receive transfer from the Seller
of
control in the Company by way of purchasing the shares sold and the
warrants sold, all on the conditions and subject to the provisions
of this
Agreement; and
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WHEREAS:
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The
parties wish to stipulate and entrench in the scope of the provisions
of
this Agreement the legal relationship between them in connection
with the
transaction for the sale of the shares sold, as also of the warrants
sold,
all under the terms and conditions and subject to the provisions
of this
Agreement;
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Now
therefore it is agreed, declared and stipulated by the parties as
follows:
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1.
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Preamble
and interpretation
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1.1
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The
preamble and the appendices to this Agreement constitute an integral
part
hereof.
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1.2
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The
division of this Agreement into clauses and the insertion of headings
to
the clauses have been done as place-finders and for sake of convenience
only and no use shall be made thereof for purposes of the interpretation
of this Agreement.
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1.3
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In
this Agreement words appearing in the singular shall also include
the
plural, and vice
versa,
as the case may be, unless otherwise expressly
stated.
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2.
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Definitions
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In
this
Agreement each of the terms mentioned below will have the meaning set opposite
it, unless the context necessitates a different meaning:
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“Convertible
debentures of the Company”:
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NIS
14,205,760 par value Debentures (Series A) which were issued
by the
Company pursuant to a prospectus dated May 30, 2005. The debentures
are
convertible at a conversion rate of NIS 9.72 par value Debentures
(Series
A) for each ordinary share of NIS 1 par value of the
Company.
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“Material
non-conformity”:
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1.
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A
non-conformity in the equity capital reflected in the financial
statements
in a sum exceeding NIS 2,000,000. It is clarified and agreed
as exclusive
exceptions to what is stated at the head of this definition
that
adjustments that may be required by virtue of the due diligence
examination in connection with (ii) the appraisal of value
of Malibu Ltd.;
(iii) liabilities of the Mayo family (as defined below) will
not be
included in the scope of the amount, of two million new shekels
as
aforesaid, and/or
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2.
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Tax
exposure to a high degree of certainty, in the opinion of the
arbiter, in
an amount for payment to the tax authorities which exceeds
NIS 3.25 (three
and a quarter) million.
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“Non-material
non-conformity”:
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1.
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A
non-conformity in the equity capital reflected in the financial
statements
in a sum lower than NIS 2,000,000. It is clarified and agreed
as exclusive
exceptions to what is stated at the head of this definition
that
adjustments that may be required by virtue of the due diligence
examination in connection with (ii) the appraisal of value
of Malibu Ltd.;
(iii) liabilities of the Mayo family (as defined below) will
not be
included in the scope of the amount, of two million new shekels
as
aforesaid, and/or
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2.
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Tax
exposure to a high degree of certainty, in the opinion of the
arbiter, in
an amount for payment to the tax authorities of less than NIS
3.25 (three
and a quarter) million.
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“Stock
Exchange”:
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The
Tel Aviv Stock Exchange Ltd.
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“The
regulatory approvals”:
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An
approval from the Commissioner of Restrictive Trade Practices
for a
“merger of companies” pursuant to the provisions of the Restricted Trade
Practices Law, 5748-1988 (hereinafter: “the
Commissioner’s Approval”),
and any other permit or approval of any other competent authority,
if and
to the extent that it is required according to the provisions
of any law
for purposes of implementing the sale transactions of the shares
sold as
well as of the options sold.
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“The
financial statements”:
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The
audited annual financial statements of the Company and the
consolidated
financial statements as at December 31, 2006 and the quarterly
reviewed
and unaudited reports of the Company and the consolidated financial
statements as at March 31, 2007 and as at June 30, 2007. The
financial
statements are attached to this Agreement as Appendices
A(1), A(2) and A(3).
The financial statements as at June 30, 2007 will be attached
on the date
of closing.
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“The
existing capital of the Company”:
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The
issued and paid-up share capital of the Company as at the date
of signing
of this Agreement, namely: 7,900,908 ordinary shares of NIS
1 par value of
the Company.
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“The
Company’s capital on the basis of a full
dilution”:
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The
issued and paid-up share capital of the Company immediately
after
conversion of all the convertible debentures of the Company
series A (if
same are converted) and after exercise of all the warrants
of the Company
(if same are exercised), including taking cognizance of distributions
which are mentioned in Clause 7.1 of the Agreement, in other
words: the
Company’s capital on the basis of a full dilution, including the existing
capital of the Company plus all the shares that will be created
as a
result of the conversion of all the convertible debentures
of the Company
and exercise of all the warrants of the Company. For the sake
of
illustration, as at the date of signing of this Agreement,
the Company’s
capital on the basis of a full dilution is 9,813,512.9 shares
of the
Company.
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“Obligations
of the Mayo family”:
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Severance
pay obligations according to law (over and above the moneys
that have
accumulated in the managers insurance in respect of the severance
pay
component, as stated in Clause 15.8 of the employment agreements
dated
April 18, 2005 between the Company and Israel (Xxx Xxxxxxx)
Xxxx and
Xxxxxx Xxxx (Xxx Xxxxxx), which do not receive full expression
in the
financial statements.
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“The
mediator”:
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An
attorney whose identity will be determined with the written
consent of the
parties up to the date of closing, and in the absence of such
agreement
his identity will be determined by the Tel Aviv District
Court.
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“The
index”:
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The
price index known by the name of “the Consumer Price Index” (the general
index) including fruit and vegetables, which is published by
the Central
Bureau of Statistics and including such index even if it is
published by
another official body or institution, and including any official
index
that may come in its stead, whether or not it is structured
on the same
data as the data on which the existing index is
structured.
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“The
arbiter”:
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Xx.
Xxxxx Xxxxx, C.P.A., of Xxxx, Fohrer and Gabbai, and if he
is unable or
unwilling for any reason to be an arbiter he will be replaced
in his
absence by Mr. Hagit Niv of Xxxx Xxxxxx and Xxxxxx.
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“The
conditions precedent”:
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The
conditions precedent as stated in Clause 11 of this
Agreement.
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“The
nominee company”:
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The
Bank Leumi le-Israel Nominee Company Ltd.
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“The
Companies Law”:
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The
Companies Law, 5759-1999.
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“The
Securities Law”:
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The
Securities Law, 5728-1968.
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“Business
day”:
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Mondays
to Thursdays in each week provided they are not a Jewish holiday,
festival, hol
hamoed,
festival eve and/or public holiday or a day on which no business
is
conducted in the normal course for any reason at banks in
Israel.
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“The
Company’s warrants”:
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As
at the date of signing of the Agreement, 451,107 Warrants (Series
2), of
which 151,107 were issued by the Company pursuant to a prospectus
dated
May 30, 2005, and 300,000 Warrants (Series 2) were issued by
the Company
to the Company’s employees by way of a private placement. The terms and
conditions of the warrants that were issued pursuant to the
prospectus and
the terms and conditions of the warrants that were issued to
the Company’s
employees are identical. The Warrants (Series 2) are exercisable
for
shares of the Company up to May 31, 2009 in consideration for
a sum of NIS
7.78, linked to the index in respect of the month of April
2005.
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“The
warrants sold”:
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77,302
warrants of the Company which are exercisable for 77,302 shares
of the
Company which as at the date of signing of this Agreement represent
approximately 0.78% of the Company’s capital on the basis of a full
dilution.
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“The
closing date”:
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Up
to five (5) business days after the date on which all the conditions
precedent are fulfilled, provided that the closing date shall
not be later
than 90 days from the date of signing of the Agreement, or
any other date
that may be agreed between the parties. However it is clarified
that the
Purchaser, in its sole discretion and at its election, may
demand that the
closing date shall under no circumstances be before the elapse
of 50 days
from the date of signing of this Agreement and the Seller undertakes
to
accept the Purchaser’s demand in this connection provided that the
specific date will be coordinated in advance with the
Seller.
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“The
Company’s shares”:
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Ordinary
shares of NIS 1 par value each in the issued and paid-up share
capital of
the Company.
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“The
shares sold”:
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A
quantity of ordinary shares of NIS 1 par value each of the
Company which
together with the warrants sold (on the assumption that they
will be
exercised) will at the date of closing represent 51.5% of the
Company’s
capital on the basis of a full dilution. For the sake of illustration,
on
the date of signing of the Agreement 4,976,658 ordinary shares
of NIS 1
par value each of the Company which together with the warrants
sold
(77,302) constitute 51.5% of the Company’s capital on a the basis of a
full dilution at the date of signing.
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“Purchase
price” or “the consideration”:
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An
amount of NIS 97,000,000 (ninety-seven million) in respect
of the control
in the Company which is being transferred by way of purchasing
all the
Shares Sold and all the Warrants Sold.
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“Increment
to consideration”:
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An
amount of NIS 3,000,000 (three million), which will be paid
subject to the
fulfillment of the conditions set forth in Clause 6.2 below
of this
Agreement.
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“Officer”:
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As
this term is defined in the Securities Law and including the
secretary of
the Company.
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“Securities”:
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As
this term is defined in the Securities
Law.
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“The
Seller’s securities”:
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3,742,922
ordinary shares of NIS 1 par value each of the Company, which
as at the
date of signing of this Agreement represent approximately 47.37%
of the
existing capital of the Company and 38.14% of the Company’s capital on the
basis of a full dilution (on the date of signature) and 77,302
warrants of
the Company which are exercisable for 77,302 shares of the
Company which
as at the date of signing of this Agreement constitute approximately
0.78%
of the Company’s capital on the basis of a full
dilution.
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“The
other shareholders”:
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Xxxxxxx
Investments Ltd., Xxxxxxx Xxxxxxx and Xxxx Xxxxxxx Xxx-Dor,
Xxxxxx
Xxxx.
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“The
shares of the other shareholders”:
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1,389,813
ordinary shares of NIS par value each of the Company, which
as at the date
of signing of this Agreement represent approximately 17.59%
of the
existing capital of the Company and 14.16 [%] of the Company’s capital on
the basis of a dilution.
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“Free
and clear”:
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With
respect to securities – free and clear of any pledge, charge,
attachment, debt, lien or any third party right and including
same being
free of any blockage arrangement and/or restriction in regard
to
transferability or marketability.
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“The
Companies Ordinance”:
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The
Companies Ordinance [New Version], 5743-1983
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“Third
party”:
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Any
person or body corporate who is not a party to this
Agreement.
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“The
interim period”:
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The
period from the date of signing of this Agreement and up to
the date of
closing or up to the date of expiration of this Agreement,
whichever is
the earlier.
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“Payment”:
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Any
payment that requires to be made in accordance with this Agreement
shall
be paid up to the end of the relevant business
day.
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3.
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Objects
of the Agreement
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The
objects of the Agreement are to stipulate and entrench the legal
relationship between the parties in connection with the transaction
for
the sale of the Shares Sold as well as of the Warrants
Sold.
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4.
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Declarations
and undertakings of the
Seller
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The
Seller hereby declares and undertakes to the Purchaser
that:
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4.1
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The
Company is a public company, which was duly incorporated on July
30, 1972
as a private company in accordance with the Companies Ordinance,
and
commencing from November 1999 all the Company’s securities are traded on
the Stock Exchange. A copy of the updated memorandum and articles
of
association of the Company are attached to this Agreement as Appendices
B(1) and B(2),
respectively.
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4.2
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As
at the date of the signing of this Agreement the authorized capital
of the
Company is NIS 20,000,000, divided into 20,000,000 ordinary shares
of NIS
1 par value each, and the issued and paid-up capital of the Company
as at
the date of signing of this Agreement is NIS 7,900,908 divided into
7,900,908 ordinary shares of NIS 1 par value each. The entire issued
capital of the Company has been fully paid
out.
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4.3
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In
2005 the Company issued NIS 32,000,000 par value debentures (Series
A)
which are convertible into shares of the Company, as well as 1,175,000
warrants (Series 2) which are exercisable for shares of the
Company.
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4.4
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As
at the date of the signing of this Agreement there are NIS 14,205,760
par
value debentures (Series A) of the Company (which have not yet been
repaid) that are convertible into 1,461,497.9 shares of the
Company.
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4.5
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As
at the date of signing of this Agreement there are 451,107 warrants
of the
Company (that have not yet been exercised) which are exercisable
for
451,107 shares of the Company.
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4.6
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All
the Company’ securities1,
including the shares sold and the warrants sold are duly listed for
trading and are traded on the Stock Exchange and there is no restriction
and/or prohibition and/or bar according to the provisions of any
law,
regulations of the Stock Exchange and its directives to the sale
and
transfer of the Shares Sold and the Warrants Sold to the Purchaser,
or to
the Purchaser of any additional securities in the Company, and the
Sellers
are not aware of any intention and/or grounds for expunging the Company’s
securities from trading on the Stock Exchange and/or preventing continued
trading in the Company’s
securities.
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4.7
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The
Company has properly regulated accounting – and it keeps books as
required according to any law. The financial statements are drawn
according to accepted accounting principles and standards, which
are
applied consistently, on the basis of all the accounting statements
and
the accounting standards that are in force and in accordance with
the
Securities Regulations, and same fully, correctly and properly reflect
the
condition of the Company, including the state of its liabilities,
assets
and rights as at the date on which they were
drawn.
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| 1 |
Except
300,000 warrants (Series 2) which were issued to employees of the
Company
in the scope of a private placement report dated August 30, 2005,
which
are registered warrants.
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4.8
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To
the best of its knowledge, the full provisions in relation to liabilities
in respect of the Company’s employees and/or service providers have been
made in accordance with and pursuant to accepted accounting principles
and
standards, which are consistently applied, on the basis of all the
accounting statements and the accounting standards which are in force
and
in accordance with the Securities Regulations, and there are no
liabilities in connection with the Company’s employees which do not
receive full expression in the financial statements, apart from
liabilities of the Mayo family as defined above. For the avoidance
of
doubt it is clarified that if the Purchaser is of the opinion that
provisions should be made in respect of the obligations of payments
to
Xxxxxx Xxxx, to Xxxxxx Xxxx (before Avraham) and Xxxxxx Xxxx (Xxx
Xxxxxx)
in connection with the undertaking for non competition upon termination
of
the employer-employee relationships in accordance with Clause 11.2
of an
agreement with Xxxxxx Xxxx and Clause 16.3 of the employment agreements of
Xxxxxx Xxxx (Xxx Xxxxxxx) and Xxxxxx Xxxx (Xxx Xxxxxx), then without
derogating from the remaining provisions of this Agreement, the matters
aforesaid will not constitute a breach of the representations stated
in
this clause.
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4.9
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To
the best of its knowledge, the full tax and the other payments that
have
been demanded from the Company by the tax authorities up to the date
of
this Agreement or which the Company is liable for according to returns
and
reports it has lodged, have been paid in full, except for payments
in
respect of the 2006 tax year. The returns and reports that have been
lodged by the Company with the various tax authorities were lodged
on due
date and are, to the best of its knowledge, true and
accurate.
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4.10
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The
last annual return that was lodged by the Company with the income
tax
authorities relates to the 2005 tax year. Final tax assessments have
been
issued to the Company in respect of income tax up to and including
the
year 2001.
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4.11
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Commencing
from March 31, 2007, and except as stated in Appendix
C,
the Company acted in all its activities in accordance with and in
the
course of its ordinary business and to the best of its knowledge,
except
as stated in Appendix C, according to any law and/or agreement which
applies to it, and there has not
been:
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4.11.1
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A
material change in its assets, liabilities, condition (financial
or
otherwise) or in its businesses as compared with what is reflected
in the
financial statements;
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4.11.2
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Any
damage or loss, whether or not covered by insurance, which have a
materially adverse effect on the assets, the property, the condition
(financial or otherwise), on the business results or on its prospects
or
businesses;
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4.11.3
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Any
waiver by the Company of a valuable right or of a material debt which
is
owed to the Company;
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4.11.4
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Any
attachment, charge or claim, or a waiver of payment that is due to
the
Company, except those that were made in the ordinary course of business
and which do not, separately or cumulatively, adversely affect the
assets,
property, condition (financial or otherwise), the business results
or the
businesses of the Company;
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4.11.5
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Any
change or amendment to a material agreement or arrangement under
which the
Company or any asset or other property thereof is bound or to which
same
are subject;
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4.11.6
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Any
material change in any payment arrangement or agreement with any
employee
or officer;
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4.11.7
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Any
loans the Company has given to its directors, employees, officers
or
consultants;
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4.11.8
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Any
sale, transfer or lease (except in the ordinary course of business),
pledge or charge of any asset of the
Company;
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4.11.9
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Any
event or circumstances that are likely to have a materially adverse
effect
on the assets, the property, the condition (financial or otherwise),
of
the Company, or on the business results, the prospects or the businesses
of the Company.
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4.12
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Simultaneous
with the signing of this Agreement it entered into a binding agreement
with the other shareholders for the purchase of the shares of the
other
shareholders, and the other shareholders have undertaken directly
to the
Purchaser to sell and transfer the shares of the other shareholders
to the
Seller in a manner whereby on the date of closing the Seller will
be the
owner of the Shares Sold and the Seller would be able to fulfill
its
obligations to the Purchaser, including with regard to the sale of
control
in the Company to the Purchaser (confirmation by the shareholders
is
attached to this Agreement as Appendix
D);
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4.13
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The
Seller is the owner of the Seller’s securities and up to the date of
closing and the completion thereof it will be the owner of the Shares
Sold
and the Warrants Sold, which will on the date of closing constitute
at
least 51.5% of the Company’s capital on the basis of a full dilution. It
is clarified that the number of Shares Sold and the Warrants Sold
includes
the quantity of the Seller’s
securities.
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4.14
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The
Seller’s securities are free and clear and will be in such condition as
on
the date of closing, apart from a charge of Excellence Nessuah Stock
Exchange Services Ltd. (hereinafter: “Excellence”).
An approval from Excellence to release the charge is attached to
this
Agreement as Appendix
E.
The Seller undertakes that at the date of closing the Shares Sold
as also
the warrants will be free and clear. The Seller has no obligation
to sell
and/or to transfer the Shares Sold and/or the Warrants Sold, in whole
or
in part, to any third party, and the Seller has not granted and will
not
grant a right to purchase the Shares Sold and/or the Warrants Sold,
in
whole or in part, to any third party, and no third party has a right
of
first refusal in connection with the purchase of the Shares Sold
and/or of
the Warrants Sold, in whole or in part, apart from a right of first
offer,
a tag-along right and a tag-along obligation which the Seller granted
in
accordance with the shareholder’s agreement, as described below. As at the
date of signing of this Agreement the Seller is not conducting any
negotiations in regard to the sale and/or transfer of the Seller’s
securities, in whole or in part, to any third
party.
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Included
in this, the Seller declares and undertakes that as at the date of
closing, the Agreement entered into between Keren and Adi Properties
Ltd.,
Eitan Eldar, Xxx Xxx and Xxxxxx Xxxx (hereinafter: “Mayo”)
on April 18, 2005, as amended on September 18, 2005, which is attached
as
Appendix
F
(“the
Shareholders Agreement”)
will lapse and become duly null and void, and therefore the Shares
Sold
and the Warrants Sold will not be subject to a right of first offer,
a
tag-along right and a tag-along obligation which were granted in
the
Shareholders Agreement to Mayo.
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4.15
|
The
Company has delivered to all the authorities, including the Securities
Authority and the Stock Exchange, all the financial statements, the
periodic reports, the immediate reports and any other report and/or
information it was obliged to deliver to these authorities in accordance
with any law, and did so on the date on which it was obliged to do
so, and
the information contained in each of the aforesaid reports that were
delivered by the Company was correct and full at the date on which
it was
delivered.
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4.16
|
Subject
to the fulfillment of all the conditions precedent, there is no
restriction and/or prohibition and/or bar according to the documents
of
incorporation of the Seller and/or pursuant to the provisions of
an
agreement or any law in regard to its entering into the framework
of the
provisions of this Agreement and in regard to the performance of
its
obligations pursuant to the provisions hereof, and that its entering
into
the framework of the provisions of this Agreement and performance
of its
obligations pursuant to the provisions hereof have been duly approved
by
all its competent organs and same do not constitute and will not
constitute a breach of an undertaking, prohibition or any restriction
on
the Seller and/or its shareholders and/or its
officers.
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4.17
|
To
the best of its knowledge, the Company’s activities are in accordance with
the provisions of any law which applies to it, and the Company complies
with the provisions of any law which applies to it, including taking
cognizance of the fact of it being a public company, including the
Securities Law and being the regulations thereunder and it complies
with
all the instructions of the Tel Aviv Stock Exchange, except as described
in Appendix C, and apart from breaches which do not have a material
effect
on the Company’s activities. In this regard it is agreed that a breach
which constitutes a contravention of a statute shall be deemed to
be a
breach which does have a material effect on the Company’s
activities.
|
|
4.18
|
Except
as described in Appendix C, there is no shortfall in any license
and/or
permit and/or approval that are required by the Company for purposes
of
its lawful activities which could have a materially adverse effect
on the
Company’s activities. In this regard the Seller declares that the Company
has an approval from the Fire Brigade Authorities for the Company’s
warehouse in Ramle and that the Company has applied orally to the
Ramle
Municipality with a request to receive a business license for the
warehouse as it has been told verbally that in accordance with the
provisions of the law there is no necessity for a business license
for the
warehouse.
|
|
4.19
|
The
Company has rights of lease in respect of the land as described in
Appendix
G
to
this Agreement (hereinafter: “the
Lease Agreements”).
Apart from the Lease Agreements mentioned above, the Company does
not have
rights of any nature in land. The Lease Agreements are in force.
No
warning has been received about a breach of the agreements on the
part of
the Company and the Company is not aware of any reason or ground
for the
cancellation of the Lease Agreements by any of the parties thereto,
except
as described in Appendix C.
|
|
4.20
|
A
list of all the material agreements and arrangements to which the
Company
is a party is attached to this Agreement as Appendix
H.
Apart from the agreements mentioned in Appendix H, the Company and/or
the
Seller is not a party to an agreement, correspondence, arrangement
or
understanding, verbal or in writing, of whatsoever nature the effect
of
which on the business of the Company is material or is likely to
have such
effect thereon, and all the agreements described as aforesaid are,
as at
the date of signing of the agreement, in full force. The Company
and/or
the Seller have not breached any of them and to the best of the Seller’s
knowledge there are no grounds for the cancellation or termination
thereof.
|
|
4.21
|
All
the agreements and/or arrangements of whatsoever nature to which
the
Company or subsidiaries are a party and which are likely to be affected
as
a result of the change of control in the Company in accordance with
this
Agreement, or which necessitate the consent of any third party to
a change
in control in the Company according to this Agreement are: (a) Those
that
are particularized in Clause 11.1.3 and 11.1.4 below; (b) Some of
the
Lease Agreements require the consent of the lessor to transfer of
control;
(c) The business license in Ramle which will lapse on the date of
transfer
of control to the Seller; (d) The Company’s holdings in Domo, which on the
date of transfer of control in the Company to the Blue Square Group
or to
any interested party therein or to the Supersol Group or any interested
party therein, the obligation will mature of Tiv Taam to purchase
the
Company’s holdings in Domo.
|
|
4.22
|
The
intellectual property rights of any sort that are owned by the Company,
including patents, designs, trademarks and copyrights, whether registered
or in the process of registration, are set forth in the schedule
attached
to this Agreement as Appendix
I.
|
|
To
the best of the Seller’s knowledge and except as stated in the printout
from the Register of Companies in respect of the Company, the Company
is
the owner of the full rights in all the Company’s assets and these assets
are free and clear of any charge and/or attachment and/or any third
party
right, and there are no allegations by any third party in regard
to the
Company’s rights as aforesaid and the force and validity thereof. To the
best of the Seller’s knowledge, there is no impediment to the continued
existence and operations of the Company’s material assets after the date
of closing. The Seller declares that if is claimed by any of the
state
authorities in regard to the obligations secured by charge No. 5
which
appears in the printout from the Registrar of Companies in respect
of the
Company, the Company has been given indemnity in respect thereof
by Koor
Industries Ltd. and Koor Chemicals Ltd. For the avoidance of doubt
it is
clarified that the inability to expunge charge No. 5 which appears
in the
Registrar of Companies printout will not constitute a non-fulfillment
of
the Seller’s undertaking and/or non-cooperation as referred to in the last
part of Clause 6.4 below.
|
|
4.23
|
The
Company’s assets and its liabilities are covered by insurances which, to
the best of the Seller’s knowledge, are, in the circumstances of the
matter, full and adequate.
|
|
4.24
|
There
are no legal proceedings or claims of any sort which are pending
against
the Company, no judgments have been given against it which have not
been
executed and no attachments have been imposed on its assets, and
the
Sellers are not aware of any specific cause of action for the institution
of a claim against the Company and/or to involve the Company in legal
proceedings, except as described in Appendix
J
and to the best of the Seller’s knowledge no letters of demand have been
received at the Company, except as stated in Appendix
J.
|
|
Likewise,
the Company is not a party to any arbitration proceedings, and as
at the
date of signing of this Agreement no legal proceedings are pending
that
were taken by the Company or claims that were instituted by it, except
as
described in Appendix
J.
For purposes of this sub-clause “legal proceedings” – includes civil
proceedings, criminal proceedings, private complaints, administrative
proceedings, arbitrations and quassi-judicial proceedings of any
sort. To
the best of its knowledge, no investigations and other examinations
are
being conducted against the Company or the Seller and/or the officers
of
the Company, by competent authorities which pertain to the affairs
of the
Company, and no proceedings are pending against the Seller which
could
affect the Company’s business.
|
|
4.25
|
To
the best of its knowledge, the officers of the Company and the
corporations controlled by the officers, have no allegations and/or
demands and/or claims of any sort against the Company, directly or
indirectly. The Company is not indebted to the Seller, to the officers
therein, or to corporations controlled by them, for any amounts,
save and
except in accordance with the employment agreements and the counseling
agreements which are mentioned in Appendix
H.
|
|
4.26
|
All
the agreements, whether verbal or in writing, between the Company
and any
of its shareholders or a corporation controlled by any of its
shareholders, or the directors of the Company, or the officers of
the
Company, are as described in Appendix H to this Agreement. It is
clarified
for the avoidance of doubt that the agreements mentioned in Appendix
H
above, include all the payments which are payable by the Company
to any of
its shareholders in respect of services of any sort that are provided
to
the Company by such shareholder. Apart from the matters stated above,
there are no additional agreements or additional understandings,
verbal or
in writing, between the Company and any of its shareholders. The
Seller
declares that as at the date of the signing of this Agreement, it
has
received everything due to it from the Company as at the date of
signing
of the Agreement and it has no monetary or other allegation or claim
in
connection with the providing of services to the Company in excess
of the
payments that are due to it according to the counseling agreement
attached
hereto in Appendix H to this Agreement, up to the date of
closing.
|
|
4.27
|
A
list of all the franchise agreements to which the Company is a party
as at
the date of signing of this Agreement, whether verbal or in writing,
is
attached to this Agreement as Appendix
K.
Apart from the aforesaid contracts and agreements, the Company is
not a
party to an agreement or understanding, verbal or in writing, in
connection with the grant or receipt of a franchise, of whatsoever
nature.
The Seller is not aware of any breach, or anticipated breach of any
of the
franchisee agreements or on any impediment and/or difficulty of any
of the
franchisees to comply with their obligations to the Company which
could
lead to a termination of the contractual arrangement with the franchisee
or to a substantial financial loss for the
Company.
|
|
4.28
|
All
the representations set forth above in Clauses 4.7, 4.8, 4.9, 4.15,
4.17,
4.18, 4.24, 4.25 and 4.26 also apply to the Company’s subsidiary
companies, in all respects, mutatis
mutandis.
Without derogating from the foregoing, the list of the Company’s
subsidiaries and the Seller’s declarations in regard to them are as set
forth in Xxxxxxxx
X0.
|
|
4.29A
|
To
the best of the Seller's knowledge and examination, all the
representations pursuant to this Agreement are correct, full and
accurate
and there is no misleading particular in
them.
|
|
4.29B
|
There
is no material information in the possession of the Seller and/or
the
Company which the Seller and/or the Company have failed to devolve
to the
Purchaser.
|
|
4.30
|
Prior
to the date of the shareholder’s agreement (i.e., April 18, 2005) the
Seller held more than 45% of the voting rights in the
Company.
|
|
4.31
|
The
shareholders agreement was ratified and duly
reported.
|
|
4.32
|
The
shareholders agreement is in full force commencing from the date
of its
signature and will continue to be in force up to the date of
closing.
|
|
4.33
|
It
and Xxxxxx Xxxx (hereinafter – “Mayo”)
are the holders (as the term holding is defined in the Securities
Law)
jointly of shares in the Company, and that at the date of signing
of this
Agreement and up to the date of closing the Seller, either jointly
with
Mayo (and/or his relatives – this term is defined in the Companies
Law and/or his nephew) or itself, (by virtue of acquisition of Mayo’s
shares) will uninterruptedly hold more than 45% of the voting rights
in
the Company and will not fall below this percentage. It is clarified
that
if a transfer is made of Mayo’s holdings to his relative and/or to his
nephew, such transfer will be subject to the agreement of the transferee
that the provisions of the shareholders agreement will apply to him
and he
will be deemed to be a party to the shareholders
agreement.
|
|
All
the declarations and undertakings set forth in this Clause 4, except
those
mentioned in sub-clauses 4.2, 4.4 and 4.5, which are likely to change
solely by virtue of changes which arise (if same arise) from the
conversion of the Company’s convertible debentures (if same are converted)
and/or from the exercise (there is an exercise) of the Company’s warrants
(which will be updated at the date of the closing), will also be
correct
as at the date of closing.
|
|
5.
|
Declarations
and undertakings by the
Purchaser
|
|
The
Purchaser hereby declares and undertakes to the Seller
that:
|
|
5.1
|
It
has the financial ability and monetary means which enable it to abide
by
all its obligations pursuant to the provisions of this Agreement
and that
its obligations pursuant to the provisions of this Agreement will
remain
in full force without any reference to any change in the Purchaser’s
commercial condition.
|
|
5.2
|
It
is aware that Sheshet Chain of Stores for Household Utensils Ltd.
(a
subsidiary of the Purchaser) is at the date of signing of this Agreement
a
material customer of the Company, and that the company Sheshet Chain
of
Stores for Household Utensils Ltd. has been engaged in the field
of
household utensils for some 7
years.
|
|
5.3
|
The
Purchaser is aware that the Seller is entering into this Agreement
with it
in reliance on the Purchaser’s representations, declarations and
obligations as set forth in this
Agreement.
|
|
5.4
|
Subject
to the fulfillment of all the conditions precedent, there is no
restriction and/or prohibition and/or impediment according to the
Purchaser’s corporation documents and/or according to the provisions of an
Agreement or any law with regard to its contracting in the scope
of the
provisions of this Agreement and with respect to performing its
obligations pursuant to the provisions
hereof.
|
|
5.5
|
The
Purchaser’s obligations under this Agreement do not constitute and will
not constitute a breach of an undertaking, prohibition or any restriction
on the Purchaser and/or the shareholders and/or its
officers.
|
|
5.6
|
14
days from the signing of this Agreement, the Purchaser’s entering into the
Agreement and performing its obligations pursuant hereto will be
brought
for due approval by its competent organs and this Agreement is subject
to
such approval.
|
|
5.7
|
Subject
to obtaining the approvals as mentioned in Clause 5.6 above, this
Agreement will constitute a binding and valid legal undertaking of
the
Purchaser, and will be enforceable against it in accordance with
the terms
and conditions hereof.
|
|
5.8
|
All
the declarations and undertakings set forth in this Clause 5 will
also be
correct as at the date of closing.
|
6. The
sale transaction and the consideration
|
6.1
|
On
the date of closing and subject to fulfillment of all the conditions
precedent, the Seller undertakes to sell and transfer to the Purchaser,
and the Purchaser undertakes to purchase and to accept transfer from
the
Seller of all the Shares Sold and all the Warrants Sold, including
any
right and/or benefit connected with the Shares Sold and with the
Warrants
Sold, where same are free and clear, which will be against payment
of the
consideration.
|
|
6.2
|
If
it should become apparent according to the Company’s consolidated and
audited financial statements for the year 2007 that in the period
commencing from July 1, 2007 until December 31, 2007, the Company’s gross
profit exceeded a sum of NIS 27,000,000 (hereinafter – “the
Total Gross Profit”),
the Purchaser will pay the Seller an increment to the consideration
within
30 days from publication of the Company’s consolidated and audited
financial statements for the year 2007. If it should become apparent
according to the aforesaid statements that the gross profit for the
aforesaid period (commencing from July 1, 2007 until December 31,
2007)
did not exceed the Total Gross Profit, the Purchaser will not be
entitled
to receive the increment to the consideration and/or any other increment.
It is agreed that in the event of a war during the aforesaid period,
the
arbiter will neutralize the effect of the war and will rule on what
would
have been the Total Gross Profit had it not been for the
war.
|
|
6.3
|
For
the avoidance of doubt it is clarified that the amount of the
consideration and/or the increment to the consideration are not linked
to
the index and/or to any other linkage
mechanism.
|
|
6.4
|
The
parties will act in good faith and in cooperation in order to agree
on a
precise mechanism for the encumbrance of the Shares Sold and/or the
Warrants Sold against payment of the consideration, in the course
of
taking cognizance of the demands of the financial institution on
behalf of
the Purchaser in the event that same are demanded. Notwithstanding
the
foregoing, the obtaining of financial funding will not have the effect
of
releasing the Purchaser from its obligations to purchase the Shares
Sold
and the Warrants Sold and/or have the effect of postponing the date
of
closing (beyond what is stipulated in the definition of the date
of
closing), unless receipt of the finance was delayed and/or prevented
by
virtue of the non-fulfillment of the Seller’s obligations under this
Agreement and/or its refusal to cooperate with the demands of the
financial institution.
|
7. Dividends
and other distributions
|
The
Seller undertakes in its capacity as controlling shareholder in the
Company that the Company will not distribute dividends or make any
other
distribution during the course of the interim period, save and except
the
distribution of the dividend of May 10, 2007, and the amount of the
distribution in accordance with the approval of distribution dated
July
19, 2007, as described in Appendix C to this Agreement, which will
be
declared not later than within 15 days from the signing of this Agreement.
It is clarified that the making of the distribution in accordance
with the
approval for the distribution as aforesaid will not lead to a reduction
in
the amount of the consideration.
|
|
For
the avoidance of doubt it is clarified that nothing in the foregoing
shall
derogate from the Seller’s undertaking to sell the Shares Sold to the
Purchaser on the date of closing, which will constitute 51.5% of
the
Company’s capital on the basis of a full
dilution.
|
|
8.
|
Due
diligence
|
|
The
parties hereby confirm that the Purchaser has not yet performed a
due
diligence accounting examination (including a tax examination) of
the
Company and of all the Company’s subsidiaries (hereinafter –
“the
Due Diligence Examination”)
and it is agreed that the Purchaser will complete the performance
of the
Due Diligence Examination as aforesaid within 30 days from the date
of
signing of this Agreement. The Seller undertakes to cooperate with
the
Purchaser in all matters connected with performing the Due Diligence
Examination, and to furnish the Purchaser and its professional consultants
with any document or information which may be requested from it for
purposes of performing the Due Diligence Examination, but subject
to the
provisions of any law and to the obligation for confidentiality as
set
forth in Clause 30 below.
|
|
9.
|
Adjustments
in respect of non-conformity in the financial
statements
|
|
9.1
|
In
the event that the Purchaser should find in the Due Diligence Examination
a non-material non-conformity, the amount of the consideration will
be
reduced to an extent equivalent to a multiplication of the difference
between the equity capital reflected by the financial statements
and the
equity capital found in the Due Diligence Examination, multiplied
by the
percentage which the Shares Sold constitute of the Company’s issued and
paid up capital on a full dilution.
|
|
9.2
|
If
the Purchaser finds a material non-conformity in the course of performing
the Due Diligence Examination, each party will be entitled to demand
that
this Agreement be annulled and voided and in such case neither party
will
obtain any right or cause of action by virtue thereof. If the parties
elect to perform the Agreement, the amount of the consideration will
be
reduced to an extent equivalent to a multiplication of the difference
between the equity capital reflected by the financial statements
and the
equity capital which is found in the Due Diligence Examination multiplied
by the percentage which the Shares Sold constitute of the Company’s issued
and paid up capital on a full
dilution.
|
|
9.3
|
If
the parties fail to agree on the amount of the material non-conformity
or
the non-conformity which is not material, and/or for purposes of
determining whether there was a deviation between the equity capital
reflected by the financial statements and the actual situation and/or
whether there is an exposure to tax as stated in the definition of
a
material non-conformity or a non-conformity which is not material,
the
arbiter will determine whether there has been a material non-conformity
or
a non-conformity which is not material, and he shall fix the amount
and
the extent of the non-conformity.
|
|
10.
|
The
Sellers’ obligations during the Interim Period
|
The
Seller hereby undertakes that during the Interim Period and until the Date
of
Closing:
|
10.1
|
It
will not exercise the Warrants
Sold.
|
|
10.2
|
In
its capacity as a holder of securities of the Seller it will act
in order
that the Company be managed and conducted in the ordinary course
of
business according to law and in keeping with the Company’s policy prior
to the signing of this Agreement, that no material resolutions will
be
passed in the Company which have the effect of materially altering
the
state of affairs of the Company as compared with the conditions on
the
date of signing of this Agreement (including and without derogating
from
the generality of the foregoing, extending an agreement of sublease),
that
it will not perform any act which is not in the ordinary course of
the
Company’s business, including and inter
alia
and without derogating from the generality of the foregoing, a
distribution of dividends, bonus shares or other rights, apart from
completing the operations as described in Appendix C, provided that
the
best interests of the Company will not be adversely affected by virtue
of
this undertaking (but in relation to this last qualification, without
this
derogating from the obligations of the Seller and from the rights
of the
Purchaser pursuant to this
Agreement).
|
|
10.3
|
In
its capacity as a shareholder they [sic] will take steps in order
that the
Company will not materially alter its cadre of employees or the terms
of
their employment.
|
|
10.4
|
The
Company will not pay any payments (a) to their shareholders or to
interested parties therein (except in accordance with the provisions
of
the existing agreements with them at the date of signing of this
Agreement) and (b) to the officers (except according to the provisions
of
the existing agreements with them at the date of signing of this
Agreement).
|
|
10.5
|
In
its capacity as a shareholder it will act in order that no change
will
take place in the structure of the Company’s capital (apart from an
allotment of shares as a result of a conversion of the convertible
debentures or as a result of the exercise of warrants and except
pursuant
to the approval for distribution dated July 19, 2007 as described
in
Appendix C to this Agreement), unless this is required by virtue
of the
provisions of a law.
|
|
10.6
|
It
will continue to pass on to the Purchaser all the information, the
data,
the documents and the material particulars required by the Purchaser
in
order to verify that between the date of signing of this Agreement
and the
Date of Closing there have been no materially adverse changes and
the
activities of the Company or in its financial and/or business condition
and/or in the Seller’s rights in and to the Shares Sold and/or in and to
the Warrants Sold.
|
|
10.7
|
It
will not conduct negotiations with any third party for executing
a
transaction which conflicts with the transaction which is the subject
of
this Agreement and will not enter into any contractual arrangement
which
has the effect of preventing consummation of the transaction which
is the
subject of this Agreement.
|
|
10.8
|
It
will take steps in order to obtain the consents of third parties
which are
required for the transfer of control in the Company, including consents
of
lessors to the extent necessary. It is clarified that the failure
to
obtain consents from lessors shall not be deemed to be a breach of
this
Agreement, except the failure to obtain the consent of the lessor
Shmei
Bar (F.R.) 1993 Ltd. and Nesher Israel Cement Works Ltd. pursuant
to an
agreement dated September 20, 2000 and the addendums thereto, which
will
constitute a material breach.
|
|
10A
|
The
parties undertake to file merger notices for purposes of the obtaining
the
approval of the Commissioner to the transaction that is the subject
of
this Agreement by not later than August 16, 2007, provided that the
conditions precedent specified in Clause 11.1.7 is fulfilled, and
without
this constituting an extension of the time prescribed in that
clause.
|
|
11.
|
Conditions
precedent
|
|
11.1
|
The
validity of this Agreement is contingent upon the fulfillment of
all the
conditions precedent set forth in this Clause 11, as follows:
|
|
11.1.1
|
No
material non-conformity (as defined above) will be discovered in
the due
diligence examination which the Purchaser will
conduct.
|
|
11.1.2
|
Obtaining
of all the regulatory approvals, which will not be contingent upon
conditions or exceptions. If the Commissioner’s approval is made subject
to conditions, the parties will act in order to fulfill the conditions,
provided that compliance with such conditions shall not adversely
affect
or alter the businesses of any of the parties and/or of their obligations
to third parties. For these purposes the Purchaser’s side will also be
deemed to include the group to which the Purchaser belongs or any
of the
bodies corporate included in that group. If the transaction is approved
by
the Commissioner subject to qualifications, which do not have the
effect
of materially altering this transaction or of adversely affecting
or
altering the businesses of any of the parties and/or of their obligations
to third parties, the parties will perform this Agreement subject
to such
conditions or qualifications. If the approval is made subject to
conditions which in the opinion of the Purchaser are onerous on the
parties or on the Company, then and in such event the parties will
do
their best to achieve the cancellation of such onerous conditions,
which
shall be done by not later than the deferred date for fulfillment
of the
conditions precedent. If the parties do not succeed in canceling
the
onerous conditions by not later than the deferred date for fulfillment
of
the conditions precedent, then and in such event, this Agreement
shall be
treated as null and void and none of the parties will derive any
right or
cause of action on the strength of this
Agreement.
|
|
11.1.3
|
Written
approval has been received from Bank Otzar Hahayal Ltd. and the Israel
Discount Bank Ltd. for the transfer of control in the
Company.
|
|
11.1.4
|
Written
approval has been obtained from Excellence for removal of the charge
from
the Shares Sold and from the Warrants Sold which are owned by
Assets.
|
|
11.1.5
|
Obtaining
consent of the Lessor Shmei Bar (F.R.) 1993 Ltd. and Nesher Israel
Cement
Works Ltd. pursuant to an agreement dated September 20, 2000 together
with
the addendums thereto, for the transfer of control in the Company
in
accordance with this Agreement.
|
|
11.1.6
|
No
adverse material change has occurred in the business of the Company
and/or
in its assets and/or in its activities (hereinafter: “Adverse Material
Change”) of the existence of which the Purchaser, after the matter has
been brought to its attention by the Seller, has not pardoned.
|
|
11.1.7
|
Obtaining
due approval of the Purchaser’s competent organs to its entering into this
Agreement and performing its obligations in accordance with the provisions
hereof, at the latest within 14 days from the date of signing of
this
Agreement.
|
|
11.2
|
The
parties will act diligently and industriously in order to obtain
the
approvals set forth in sub-clauses 11.1.1 – 11.1.6 above within sixty
(60) days from the date of signing of this Agreement (hereinafter:
“the
Date for Fulfillment of the Conditions Precedent”).
|
|
11.3
|
Notwithstanding
the contents of Clause 11.1.7 above, if confirmation in writing is
not
delivered to the Seller stating that approval has been obtained from
the
Purchaser’s competent organs to its entering into this Agreement and
performing its obligations pursuant to the provisions hereof within
14
days from the date of the signing of this Agreement, then the Agreement
will be cancelled and no party will have any complaint and/or demand
against the other.
|
|
11.4
|
If
notwithstanding the efforts of the parties all the conditions precedent
are not fulfilled up to the Date for Fulfillment of the Conditions
Precedent, then and in that event the Date for Fulfillment of the
Conditions Precedent will be postponed for an additional period of
thirty
(30) days (“the
Deferred Date for the Fulfillment of the Conditions Precedent
”).
|
|
11.5
|
If
notwithstanding the efforts of the parties all the conditions precedent
are not fulfilled up to and not later than the Deferred Date for
the
Fulfillment of the Conditions Precedent, then and in such event,
this
Agreement shall be treated as null and void and none of the parties
will
obtain any right or cause of action on the strength of this Agreement.
Notwithstanding the foregoing, in the case of a conflict between
the
Deferred Date for the Fulfillment of the Conditions Precedent and
the Date
of Closing, and vice
versa,
this Agreement will lapse on the later of the aforesaid
dates.
|
|
12.
|
Actions
by the parties on the Date of Closing
|
|
12.1
|
On
the Date of Closing at 10:00 a.m. the parties will meet at the office
of
attorneys Xxxxxxx, Luchtenstein & Co., at Azrieli Center,
38th
floor of the Circular Tower, and will at one and the same time act
to
perform all the following
operations:
|
|
12.1.1
|
All
the approvals referred to in Clause 11 above will be exhibited to
the
parties.
|
|
12.1.2
|
A
calculation shall be made of the Shares Sold in order to verify that
they
represent 51.5% of the Company’s capital on the basis of a full
dilution.
|
|
12.1.3
|
The
shareholders agreement as mentioned in Clause 4.14 above will be
cancelled
and a confirmation of the parties to the shareholders agreement to
the
effect that the shareholders agreement has been cancelled shall be
exhibited.
|
|
12.1.4
|
A
non-competition undertaking of Xxxxxx Xxxx in the text of Appendix
M
to
this Agreement shall be delivered.
|
|
12.1.5
|
The
Seller shall cause a situation that the Shares Sold will be transferred
from the Seller’s securities account to the Purchaser’s securities account
the details of which it will furnish to the Seller not later than
three
(3) days before the Date of
Closing.
|
|
12.1.6
|
The
Purchaser shall pay the Seller the amount of the Consideration by
way of a
bank check or a bank transfer (confirmed) to the Seller’s bank account,
the details of which the Seller will furnish to the Purchaser not
later
than three (3) days before the Date of
Closing.
|
|
12.1.7
|
The
Seller shall deliver to the Purchaser and the Purchaser shall deliver
to
the Seller resolutions of its competent
bodies.
|
|
12.1.8
|
The
Seller shall furnish a written approval regarding cancellation of
the
management agreement between it and the Company dated January 1,
2005,
commencing from the Date of Closing, which contains confirmation
in regard
to there being no claims and demands in connection with the aforesaid
agreement.
|
|
12.1.9
|
All
the directors, apart from the external directors, shall resign from
their
office as members of the board of directors of the Company and shall
confirm in writing that they do not have and will not have claims
or
allegations of any sort against the Company, and directors who will
be
proposed by the Purchaser will be appointed in their stead to the
Company’s board of directors.
|
|
12.1.10
|
The
Seller shall deliver to the Purchaser a document in the text of
Appendix
L
pursuant to which the Seller will confirm and declare that to the
best of
its knowledge no adverse material changes have taken place in the
Company
and/or in its businesses and/or in its activities and/or in its financial
condition and/or in its assets in the period from the date of signing
of
this Agreement and up to the Date of Closing, and that all the Seller’s
representations are correct as at the Date of Closing as if given
at that
date.
|
|
12.1.11
|
All
the relevant notices and reports which the parties and the Company
are
obliged to file in accordance with the provisions of any law will
be
submitted. The text of the notices will be coordinated in advance
by the
parties.
|
|
12.2
|
All
the acts that will be performed on the Date of Closing will be deemed
to
have been performed simultaneously. No separate act will be deemed
to have
been perfected, and no single document will be deemed to have been
delivered, until all the acts at that time have been completed and
all the
documents delivered.
|
|
13.
|
Indemnity
obligation
|
|
13.1
|
The
Seller undertakes to indemnify the Purchaser and/or the Company and
to
hold them harmless in respect of any damage and/or loss and/or shortage
and/or deficit and/or expenses that may be incurred by the Purchaser
and/or the Company, as the case may be, with this being after the
obtaining of an absolute judgment on which there is no appeal
(hereinafter: “Damage”)
(where the identity of the indemnified party will be according to
the
Purchaser’s decision in writing) in respect of one or more of the
following events:
|
|
General
breach of
representations
|
|
13.1.1
|
Any
breach and/or inaccuracy in any of the representations and/or the
declarations of the Seller.
|
|
Breach
of financial statements
representations
|
|
13.1.2
|
In
every case in which it transpires, but not later than the end of
33 months
from the Date of Closing and subject to Clause 13.5 below, that the
financial statements and/or the financial statements of the Company’s
subsidiaries (hereinafter: “the
Expanded Financial Statements”)
are incorrect and/or are inaccurate and/or are incomplete according
to the
law and in accordance with the accounting principles which applied
/ apply
at the time they were drawn up, and excluding adjustments that will
be
made in the Expanded Financial Statements for purposes of their being
drawn up in accordance with international accounting standards (IFRS),
and
including in an event in which monetary debts and/or monetary payments
have been imposed on the Company which originate and/or the cause
of
action for which preceded the Date of Closing and in respect of which
full
provision was not made in the Expanded Financial Statements or there
was
no separate express disclosure thereof in this Agreement or in the
appendices hereto. The principle for indemnity in accordance with
this
sub-clause shall be restoration of the Company (on a consolidated
basis)
and/or the Purchaser to the position in which they would have been
had the
Expanded Financial Statements been correct and
complete.
|
|
13.1.3
|
If
the parties do not agree on the amount of the deviation, and for
purposes
of determining whether a conflict exists between the Expanded Financial
Statements and the actual situation and the extent thereof, the arbiter
shall decide whether there is a non-conformity as between the Expanded
Financial Statements and the Expanded Financial Statements that there
ought to have been, and if there was such non-conformity, the monetary
extent thereof and the financial significance of each non-conformity
shall
be calculated separately, and the cumulative amounts of the deviation
shall be referred to above and below as “Amount
of the Deviation”.
|
General
|
13.2
|
The
amounts of the indemnity that will be paid to the Purchaser and/or
to the
Company in respect of Damage and/or loss and/or shortage and/or deficit
and/or an expense incurred by the Purchaser and/or the Company, shall
be
paid according to the Purchaser’s pro
rata
percentage holdings of the issued and paid-up share capital of the
Company
at the Date of Closing. In addition, if as a result of any grounds
for
indemnity as set forth above, the Purchaser is obliged to compensate
and/or indemnify third parties to whom the Purchaser has transferred
shares in the Company, the Sellers shall, severally and not jointly,
indemnify the Purchaser in addition in the full amount of the indemnity
to
the third parties.
|
|
13.3
|
The
Seller declares and undertakes that under all circumstances it will
not be
entitled to any right of recourse against the Company with any claim
and/or allegation in respect of the indemnity required from it in
accordance with the provisions of this Clause
13.
|
|
13.4
|
It
is agreed that in the event that any of the amounts of indemnity
for which
the Seller is liable pursuant to this Agreement is covered and/or
actually
paid by an insurance company and/or any third party, the Seller will
not
be required to pay those portions which are actually paid by an insurance
company and/or any third party, provided that the Seller has not
conferred
on the insurance company and/or the third party a right of subrogation
or
of recourse to the purchasing party and/or the Company. The amount
of the
indemnity as stated in this Agreement is an additional layer to the
insurance cover. It is agreed, that prior to an approach being made
to the
Seller pursuant to this Agreement, the Seller and/or the Company
will
apply to the insurance company for purposes of their damage being
made
good, but it shall be sufficient for the Seller’s claim being rejected by
the insurance company in order to enable the Seller [sic – the
Purchaser] to demand indemnity from the Seller without the necessity
for
conducting legal proceedings against the insurance
company.
|
|
13.5
|
It
is agreed that if the cumulative damage does not exceed NIS 500,000,
the
Purchaser will not be entitled to any payment in accordance with
this
clause.
|
|
13.6
|
It
is hereby clarified that the validity of the Seller’s representations
above will be in force for a period of 33 months only from the Date
of
Closing. After the elapse of this period, this clause will not apply
to
such representations, and the Purchaser will derive no right to indemnity
in respect thereof. Notwithstanding the foregoing, the validity of
the
Seller’s representations in Clauses 4.1, 4.6, 4.12, 4.13, 4.16, 4.25,
4.29B, 4.30, 4.31, 4.32 and 4.33 all the Seller’s remaining
representations will be in force according to any
law.
|
|
13.7
|
Notwithstanding
anything stated in this Clause 13, it is clarified that the amounts
of
indemnity that will be paid to the Purchaser (if and to the extent
that
same are paid) by the Seller, shall under no circumstances exceed
the
amount of the Consideration.
|
|
14.
|
Insurance
arrangements and indemnity
|
|
14.1
|
Commencing
from the Date of Closing, the Purchaser in its capacity as the holder
of
control in the Company and subject to the provisions of any law,
shall
cause a situation that during a period of up to the end of seven
(7) years
from the Date of Closing, the officers as defined in the Companies
Law who
have served in the Company at any time during the 7 years which preceded
the Date of Closing (“Officers
who have Retired”)
will be insured in the scope of the officers liability insurance
in
respect of claims that are instituted for the first time against
any of
them during the insurance period (“claims made”) in connection with acts
performed by them in the scope of their function as officers during
a
period of seven years preceding the Date of Closing in a valid policy
for
insurance of liability of officers (“the
Insurance Policy”),
or in a run-off insurance policy, at the election of the Company,
the
extent of the cover pursuant to which shall not be less than the
extent of
the insurance cover in the policy for insurance of liability of officers
that exists at the date of signing of this Agreement or to an extent
of
cover which is not less than the extent of the insurance cover which
will
be effected in respect of the liability of officers who serve in
the
Company after the Date of Closing – at the election of the Company
(provided that the limits of liability in the insurance that will
be
effected shall not be less than 5,000,000 US dollars), including
cover for
a retroactive period of seven (7) years previous. At the Seller’s request
copies of the Insurance Policies will be delivered to
it.
|
For
the
avoidance of doubt it is hereby clarified that the Purchaser is entitled to
effect such insurance together with officers liability insurance that is
effected by it in respect of the liability of its officers and/or of other
companies under its control and/or of the Purchaser’s parent company and/or of
officers of the Company subsequent to the Date of Closing. Likewise, it is
hereby clarified that the insurance that will be effected as aforesaid will
not
apply to claims that are instituted by virtue of circumstances in which a notice
was given pursuant to any previous officers liability insurance or by virtue
of
circumstances that are likely to serve as grounds for a claim and were known
at
the Date of Closing.
|
14.2
|
Commencing
from the Date of Closing, the Purchaser, in its capacity as holder
of
control in the Company and subject to the provisions of any law,
undertakes to cause a situation that the deeds of indemnity that
have been
given by the Company to Officers who have Retired, will not be altered
and
will not be cancelled and that the Company will act in accordance
with the
provisions of the deeds of indemnity, to the extent that same relate
to
events that occurred prior to the Date of
Closing.
|
|
14.3
|
The
status of the provisions of this Clause 14 shall have the status
of the
creation of a right in favor of a third party, namely: the Officers
who
have Retired.
|
|
15.
|
Agreed
compensation
|
It
is
agreed between the parties that without derogating from any remedy available
to
any of the parties according to any law, a material breach of this Agreement
which has not been cured after prior written notice of 30 days from the
aggrieved party to the defaulting party, will entitle the aggrieved party to
agreed pre-estimated liquidated damages in a sum of NIS 6,000,000 (hereinafter:
“the
Agreed Damages”).
The
Agreed Damages have been fixed by the parties after examination and
consideration of the damage likely to be caused to them as a consequence of
a
breach of the Agreement and/or non-consummation of this Agreement as a result
of
a breach hereof as aforesaid.
|
16.
|
General
undertaking to perform acts and to sign documents
|
The
parties undertake to perform all the acts and to sign all the documents, the
approvals, the forms and the declarations, to whatever extent may be required,
and which will be conducive for purposes of implementing the provisions of
this
Agreement. Without derogating from the generality of the foregoing, the parties
undertake to comply with all the reporting obligations required by the Stock
Exchange, the Securities Authority and the Registrar of Companies, to the extent
that same are connected with the implementation of this Agreement.
|
17.
|
Taxes
|
|
17.1
|
Any
tax or other levy, if and to the extent that same applies by virtue
of the
provisions of any law on a seller of securities, shall be borne by
the
Seller.
|
|
17.2
|
Any
tax or other levy, if and to the extent that same applies by virtue
of the
provisions of any law on a buyer of securities, shall be borne by
the
Purchaser.
|
|
18.
|
Good
faith
|
The
parties undertake to act reciprocally and in good faith in the proper, just
and
effective implementation of this Agreement.
|
19.
|
Headings
to clauses
|
The
headings to clauses, including the text thereof, have been devised and inserted
solely for the sake of convenience. The headings will not serve as any evidence
and the text thereof, the content and location thereof shall not bind either
of
the parties and/or have the effect of constituting evidence and/or grounds
and/or support for the interpretation of the Agreement as may be argued by
any
of the parties.
| 20. |
Drafts
and deletions
|
|
20.1
|
Drafts,
charts, presentations, declarations and other documents that have
been
exchanged between the parties prior to signing of this Agreement
shall be
deemed never to have been made and shall not serve in any manner
or form
as evidence or support for interpretation and/or for a
claim.
|
|
20.2
|
If
there are deletions in any of the provisions of this Agreement alongside
which the parties have signed, the words that are the subject of
the
deletions shall be deemed never to have been written and it shall
not be
possible in any circumstances, conditions and situation, to rely
on the
words that are the subject of the deletions, including for purposes
of
interpreting this Agreement.
|
|
21.
|
Non-waiver
of rights
|
No
conduct of any of the parties will be deemed to be a waiver of any of such
party’s rights under this Agreement and/or according to any law, or as a waiver
or acquiescence on its part to any breach or non-fulfillment of any of the
terms
and conditions of this Agreement by the other party, or as providing a
postponement or extension or as an alteration, cancellation or addition of
any
term and condition, unless made expressly and in writing.
|
22.
|
Alteration
and amendment of the Agreement
|
No
alteration, amendment and/or addition to this Agreement will be of any validity
and shall be deemed not to have been made unless drawn up in writing and signed
only by all the parties together. Verbal agreement in regard to cancellation
of
the provisions of this clause will be of no validity unless drawn up in writing
and duly signed by the parties.
|
23.
|
The
arbiter
|
The
arbiter shall serve as an expert on behalf of the parties and not as an
arbitrator, and his decision shall be binding on the parties without any right
of appeal or objection. Should the arbiter as defined in this Agreement be
prevented from serving as arbiter for any reason, then until such time as it
has
been mutually agreed on the identity of an alternative arbiter, the provisions
of this Agreement in connection with the arbiter shall lapse and expire and
the
general law shall apply.
|
24.
|
Mediation
|
|
24.1
|
Any
disputes that may arise between the parties in connection with the
interpretation, implementation, performance, validity, voidness,
enforcement of this Agreement and anything arising from this Agreement
which has not been referred for the decision of the arbiter, and
prior to
the parties referring to traditional tribunals, the parties will
take
steps to achieve a resolution of the disputes that may arise between
them
through the mediator.
|
|
24.2
|
The
parties undertake to cooperate with the mediator, to act in the ordinary
course and in good faith and to do everything in their power to achieve
an
agreed resolution of the disputes through the
mediator.
|
|
24.3
|
If
the parties do not succeed in reaching an agreed resolution of the
disputes through the mediator, the parties will be entitled to refer
to
the competent court as mentioned in Clause 25 below, which will have
sole
and exclusive jurisdiction to adjudicate and decide on the
lawsuit.
|
|
24.4
|
It
is clarified that referral by the parties to mediation and/or the
fact of
one of the parties applying to the court (in the event that the mediation
process is unsuccessful as aforesaid) does not release the parties
from
performance of their obligations in accordance with this
Agreement.
|
|
25.
|
Jurisdiction
|
Subject
to the contents of Clause 24 of this Agreement in regard to mediation,
jurisdiction on all matters pertaining to this Agreement and/or arising from
this Agreement is conferred on the competent courts of Tel Aviv and on those
courts only and not on other courts.
|
26.
|
Deductions
of tax at source
|
Every
payment that may be made pursuant to the provisions of this Agreement shall
be
paid subject to deductions of tax at source or against presentation of an
exemption from deductions of tax at source.
|
27.
|
Entire
agreement
|
This
Agreement and the appendices hereto contains, embodies and incorporates all
the
terms and conditions that are agreed between the parties. Any promises, written
or verbal agreements, undertakings or representations in connection with this
Agreement that were given or made by the parties prior to the signing of this
Agreement, and which have not received detailed expression herein, do not have
the effect of adding to the obligations and the rights of the parties as
stipulated in this Agreement or as arising herefrom, derogating herefrom or
altering this Agreement.
|
28.
|
Intertwined
stipulations
|
The
obligations of the parties pursuant to the provisions of this Agreement and
the
appendices hereto are in the nature of being reciprocal stipulations within
the
meaning thereof according to any law.
| 29. |
Prohibition
on transfer of rights and obligations
|
The
rights and obligations of the parties pursuant to the provisions of this
Agreement are not assignable or transferable, except in accordance with the
provisions hereof.
|
30.
|
Confidentiality
|
|
30.1
|
The
Purchaser undertakes, in the period until the Date of Closing, that
it,
its employees and anyone acting on its behalf, will not at any time
make
any use of any know-how or information of whatsoever nature, including
professional and/or trade secrets, which are connected with the Company,
except for the benefit of the
Company.
|
|
30.2
|
The
parties undertake to keep absolutely confidential all the conditions,
stipulations, agreements, restrictions, rights and obligations contained
in this Agreement, provided that each party will be entitled to disclose
same to its consultants and advisors. Notwithstanding the contents
of this
clause, the parties will be entitled to pass on and/or to disclose
any
know-how or information if they require same for purposes of instituting
legal proceedings and/or if they are called upon to do so in accordance
with the provisions of any law and in particular in accordance with
the
provisions of the Securities Law and/or if they are called upon to
do so
by a competent authority according to law, including the Securities
Authority and/or the Stock Exchange, all in relation to information
or
particulars required according to the provisions of the law and/or
which
are demanded from the party concerned by such authority, and to the
extent
to which it has been called upon to furnish or disclose
same.
|
|
30.3
|
Each
of the parties undertakes that if the contractual arrangement covered
by
this Contract is cancelled, then it, its employees and representatives
will maintain absolute secrecy and will refrain from divulging and/or
exhibiting and/or transferring in any manner, directly or indirectly,
whether themselves or through others, including anyone acting on
their
behalf, any professional, trade or other information, which is not
part of
the public domain and/or has not passed into the public domain, in
connection with the activities of the other party and/or any information
about the other party, and will not make any use of the aforesaid
information in any way whatever, unless disclosure of the information
is
demanded by virtue of the provisions of any law or according to a
demand
of a competent authority. In addition, all the documents, the
correspondence and any information of any sort that has been transferred
between the parties within the scope of this contractual arrangement,
shall be returned by each party to the other within 7 days from
cancellation of the contractual arrangement for any
reason.
|
|
31.
|
Non-competition
|
|
31.1
|
The
Seller undertakes that commencing from the Date of Closing and until
the
elapse of a period of two years from that date, it will not compete,
directly or indirectly, with the activities of the Company and/or
with any
of its businesses and/or with any of its activities as same apply
at the
date of signing of this Agreement.
|
|
31.2
|
Without
derogating from the contents of Clause 31.1 above, the Seller undertakes
that commencing from the Date of Closing and until the elapse of
three
years from that date, it will not contract, directly or indirectly,
with
Passabache and/or Vidro Ecologico for the supply of their products
in
Israel and that it will deliver to the Purchaser an identical undertaking
on the Date of Closing (with respect to Clause 31.2 only) as against
the
Company from Xx. Xxxxxx Xxxx which will be attached to this Agreement
as
Appendix
M.
|
|
32.
|
Notices
|
Any
notice that may be sent by one party to the other shall be deemed to have
reached the addressee party after four (4) days from the time of its posting
by
registered mail. Nothing in the foregoing shall derogate from the right of
the
party to deliver a notice to the other party in any other way, including,
without limitation, via facsimile, by telex, through a messenger, and so
forth.
| 33. |
Addresses
and changes
|
The
addresses of the parties for purposes of this Agreement are as set forth at
the
head of the Agreement. Each party will be entitled to change its address
provided that it furnishes its alternative address by way of notice by
registered letter of four (4) days in advance.
In
witness whereof the parties have hereunto signed
at
the place and on the date mentioned at the head hereof:
|
The
Seller:
|
(
- ) (
- )
|
The
Purchaser:
|
(
- ) Kfar Hasha'ashuim
Central
Warehouse Ltd.
|
||||
|
Xxxxx
Xxx & Xxxxxxx
Assets
Ltd.
|
Kfar
Hasha'ashuim
Central
Warehouse Ltd.
|
ADDENDUM
TO AGREEMENT DATED AUGUST 2, 2007
MADE
AND ENTERED INTO AT TEL AVIV ON THE 25TH
DAY OF SEPTEMBER 2007
BETWEEN:
XXXXX
XXX & XXXXXXX ASSETS LTD.
A
company
duly registered in Israel.
Pvte.
Co.
00-0000000
of
7
Xxxxxxxx Xxxxx Street, Ramat Gan
(hereinafter:
“Eldar
Assets”
or
“the
Seller”)
AND
KFAR
HASHA'AHUIM CENTRAL WAREHOUSE LTD.
A
company
duly registered in Israel
Pvte.
Co.
00-000000-0
of
Kibbutz Nir Eliyahu, X.X. Xxxxxx Tikun
(hereinafter:
“the
Purchaser”)
|
WHEREAS
|
on
August 2, 2007, the Seller and the Purchaser (hereinafter collectively:
“the
Parties”)
signed an agreement pursuant to which the Seller would sell to
the
Purchaser control in the company Naaman Porcelain Ltd., Publ.
Co.
520044389 (hereinafter: “Naaman”
and “the
Basic Agreement”)
and
|
|
WHEREAS
|
the
condition precedents for implementation of the Basic Agreement
which are
set forth in this Addendum have been fulfilled as at the date
of signing
of this Addendum; and
|
|
WHEREAS
|
the
Purchaser has completed the performance of the due diligence
examination
(as this term is defined in the Basic Agreement);
and
|
|
WHEREAS
|
in
accordance with the foregoing and subject to fulfillment of all
the
conditions precedent and the provisions set forth in this Addendum,
there
is no bar or impediment to the consummation of the sale transaction
and
fixing the date of closing; and
|
|
WHEREAS
|
the
parties wish to specify the conditions precedent and the actions
which
remain to be performed at the date of closing and to add a number
of
provisions to the existing provisions in the Basic Agreement,
as more
fully described below in this Addendum (hereinafter: “the
Addendum”);
|
Now
therefore it is agreed, declared and stipulated by the parties as
follows:
|
1.
|
Preamble
|
|
|
1.1
|
The
terms appearing in this Addendum will have the same meaning ascribed
to
them in the Basic Agreement.
|
|
|
1.2
|
The
provisions of the Basic Agreement will continue to apply to the
parties
and to the binding on them strictly according to the letter thereof,
except to the extent that same have been expressly altered in
this
Addendum and to the extent so altered.
|
|
|
2.
|
Due
Diligence Examination
|
|
|
2.1
|
The
Purchaser declares that it has completed the carrying out of
the due
diligence examination and it did not discover any material non-conformity,
but according to its contention it did discover a non-conformity
which is
not material, and the Purchaser waives the rights conferred on
it under
Clause 9.1 of the Basic Agreement in connection with the aforesaid
non-conformity which is not material.
|
|
|
2.2
|
Since
as stated in Clause 2.1 no material non-conformity was found
and the
Purchaser waives its rights in accordance with Clause 9.1 of
the Basic
Agreement in relation to the non-conformity which is not material
that was
found by it according to its contention, in the due diligence
examination,
the parties absolutely and irrevocably waive their rights as
set forth in
Clause 9 of the Basic Agreement.
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3.
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Additional
interest - purchase of additional
securities
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3.1
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In
addition to payment of the consideration, the Purchaser undertakes
to pay
interest at a rate equivalent to the rate of interest in the
finance
agreement between the Purchaser and an entity which provides
it with
finance for purposes of payment of the consideration (“the
Finance Agreement”)
in respect of the amount of the consideration (NIS 97,000,000),
for the
period from the date of signing of this Addendum and up to the
date of
closing (hereinafter: “Addition
of Interest”).
Notwithstanding the foregoing, it is agreed that if it is stipulated
in
the Finance Agreement that the finance will be linked to an index
and the
index goes down in the period from the date of signing of this
Addendum
and up to the date of closing, the Addition of Interest will
not be
effected thereby - in other words, the Addition of Interest will
be linked
to the index only if the index
rises.
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3.2
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In
addition and subject to the Purchaser’s notice that will be given not
later than 3 days before the date of closing, the Purchaser is
given an
option to purchase from the Seller an additional quantity of
123,646
ordinary shares of NIS 1 par value and 14,046 warrants (Series
2)
(hereinafter: “the
Additional Securities”)
in consideration for payment of a sum of NIS 2,753,840 (hereinafter:
“the
Option Consideration”),
all within the time and on the conditions set forth in this Addendum
(hereinbefore and hereinafter: “the
Option”).
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4.
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The
sale transaction and consideration
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4.1
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On
the date of closing the Seller undertakes to sell and transfer
to the
Purchaser and the Purchaser undertakes to purchase the quantity
of the
Shares Sold, including any right and/or benefit connected with
the
quantity of the Shares Sold, where same are free and clear, with
this
being against payment of the consideration and the Addition of
Interest.
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4.2
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If
the Purchaser exercises the option, then on the date of closing
the Seller
undertakes to sell and transfer to the Purchaser, and the Purchaser
undertakes to purchase the quantity of the Shares Sold and the
Additional
Securities, including any right and/or benefit connected with
the quantity
of the Shares Sold and the Additional Securities, where same
are free and
clear, against payment of the consideration, the Option Consideration
and
the Addition of Interest.
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5.
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Fulfillment
of conditions precedent
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5.1
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The
conditions precedent for implementation of the Basic Agreement
as set
forth below have been fulfilled at the date of signing of this
Addendum,
and are attached as appendices to this Addendum in accordance
with the
following details:
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5.1.1
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As
stated in Clause 2 above, no material non-conformity was discovered
in the
due diligence examination carried out by the Purchaser.
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5.1.2
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The
Purchaser declares that due approval has been obtained from the
competent
organs of the Purchaser for its entering into the Basic
Agreement.
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5.1.3
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Approval
from the Commissioner which is contingent upon the sale of all
Naaman’s
holdings in Domo Ltd. (“Domo”)
is attached as Appendix
A1.
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5.1.4
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Written
approval of Bank Otsar Hahayal Ltd. to the transfer of control
in Naaman,
is attached as Appendix
A2.
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5.1.5
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Written
approval of Excellence to the removal of the charge over the
Shares Sold
and over the Warrants Sold which are owned by the Seller, is
attached as
Appendix
A3.
In regard to this approval and implementation of the matters
stated
therein the parties will also act as stipulated in Clause 6.4
of the Basic
Agreement.
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5.1.6
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Consent
of the lessor Shmei Bar (F.R.) 1993 Ltd. and Nesher Israel Cement
Works
Ltd. in accordance with an agreement dated September 20, 2000,
and the
addendums thereto, to the transfer of control in Naaman, is attached
as
Appendix
A4.
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5.1.7
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A
letter of consent regarding cancellation of the shareholders
agreement
mentioned in Clause 4.14 of the Basic Agreement, is attached
as
Appendix
A5.
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5.1.8
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An
undertaking for non-competition from Xxxxxxx Xxxx valid from
the date of
closing, is attached as Appendix
A6.
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5.1.9
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Confirmation
regarding cancellation of the management agreement between the
Seller and
Naaman, in force from the date of closing, is attached as Appendix
A7.
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5.1.10
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A
resolution of the board of directors of the Seller is attached
as
Appendix
A8.
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6.
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The
conditions precedent required to be fulfilled up to the date
of closing
and actions by the parties at the date of closing
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The
conditions precedent, the actions and the obligations which remain
to be
performed at the date of closing are as follows:
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6.1
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The
Seller shall exhibit to the Purchaser written confirmation from
Naaman
evidencing the sale of all its holdings in Domo as required under
the
Commissioner’s approval.
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6.2
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The
Seller shall exhibit to the Purchaser confirmation from the Seller’s
attorneys that “Naaman” as defined in the Commissioner’s approval has
complied with the conditions set forth in the Commissioner’s
approval.
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6.3
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The
Purchaser shall exhibit to the Seller written confirmation that
commencing
from the date of closing, in its capacity as controlling shareholder
in
“Naaman”, it will comply with the conditions set forth in the
Commissioner’s approval.
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6.4
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A
calculation shall be made of the Shares Sold as specified in
Clause 12.1.2
of the Basic Agreement.
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6.5
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An
approval shall be furnished from Israel Discount Bank Ltd. (“Discount”)
for transfer of control in Naaman, within the framework of which
there
will be no restriction in connection with the Shares Sold, including
in
restriction on pledging of Shares Sold and consent will be given
to the
pledging thereof to another entity, except in the event that
at the date
of closing Naaman does not have accounts at Discount and the
deeds of
undertaking of Naaman and the Seller to Bank Discount will not
be in force
accordingly at the date of closing.
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6.6
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The
Purchaser shall pay the Seller the consideration, the Addition
of Interest
and if it exercises the Option then the Option Consideration
will be
payable, as stated in Clause 3 and 4 above. The payments will
be effected
by way of a deposit to account 44309 of the Seller which is conducted
at
Excellence Nessuah Stock Exchange Services Ltd.
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6.7
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The
Seller will cause a situation that the quantity of the Shares
Sold and the
Additional Securities (to the extent that the Purchaser exercises
the
Option as aforesaid) will be transferred from the Seller’s securities
account to the securities account of the Purchaser, the details
of which
the Purchaser will notify the Seller by not later than October
28,
2007.
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6.8
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All
the directors, apart from the external directors, shall resign
from their
office as members of the board of directors of Naaman and will
confirm in
writing that they do not have and will not have claims or allegations
against the Company, and in their place the directors who will
be proposed
by the Purchaser will be appointed to the board of directors
of Naaman
(hereinafter: “the
Proposed Directors”).
Without derogating from the foregoing, and in addition, the Purchaser
undertakes that after performing of the closing, it will act
in its
capacity as controlling shareholder in the Company so that the
agenda of
the general meeting (as this term is defined in the Companies
Law,
5759-1999) which will be called for the first time after the
date of
closing, will include the appointment of the Proposed
Directors.
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6.9
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The
Seller will deliver to the Purchaser a document in the text of
Appendix
L
to
the Basic Agreement (no adverse changes in Naaman).
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6.10
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All
the relevant notices and reports which apply to the parties will
be given
by way of prior co-ordination.
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7.
Date
of closing
In
accordance with Clause 2 of the Basic Agreement, it is agreed by the parties
that the date of closing will fall on October 31, 2007 or on such earlier
date
of which the Purchaser shall give notice.
In
witness whereof the parties have hereunto signed
at
the place and on the date written above.
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(-)
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(-)
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__________________________________
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_____________________
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Xxxxx
Xxx & Xxxxxxx Assets Ltd.
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Kfar
Hasha'ashuim Central
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Warehouse
Ltd.
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