AGREEMENT
THIS AGREEMENT (this "Agreement") is entered into as of September
30th, 1999, by and between Formula Systems (1985) Ltd., an Israeli public
company ("Formula") and Shamrock Holdings of California Inc., a California
corporation ("Shamrock").
WITNESSETH
WHEREAS, Formula is the holder, directly or through wholly-owned
subsidiaries, of at least twenty-five percent (25%) of the equity of
various publicly traded and private companies (such companies to be
referred to herein individually as a "Formula Entity" and collectively as
the "Formula Group"). A list of a part of the entities included in the
Formula Group is attached hereto as Exhibit A;
WHEREAS, for a period commencing July 1, 1999 and terminating Xxxxx 0,
0000, Xxxxxxxx may acquire certain securities in the Formula Group (the
"Option Securities") pursuant to private placement agreement(s) or through
open market purchases; and
WHEREAS, in connection with the purchase of the Option Securities,
Formula wishes to grant to Shamrock and Shamrock wishes to receive from
Formula the right to exchange the Option Securities for certain shares in
Formula, pursuant to the terms and conditions set forth herein.
NOW THEREFORE, the parties hereto agree as follows:
1. Option.
------
1.1 With regards to each Formula Entity, Formula hereby grants to
Shamrock the right (the "Option"), during the Exercise Period (as defined
below), to cause Formula to purchase from Shamrock the Remainder (as
defined below) of the Option Securities held by Shamrock in such Formula
Entity on the date Shamrock exercises the Option. In consideration for such
Option Securities, Formula shall issue and allot to Shamrock, or cause one
of its subsidiaries or a third party to transfer to Shamrock, a number of
Formula's Ordinary Shares, nominal value NIS 1, freely tradable and
unrestricted for sale on the Tel Aviv Stock Exchange (the "Formula
Securities"), as determined in accordance with Section 5 of this Agreement.
1.2 For the purposes of this Agreement, the "Remainder", as to
each Formula Entity, means (b) the total number of Option Securities in
such Formula Entity held by Shamrock upon the issuance of the Notice of
Exercise with respect to such Option Securities (the "Subject Securities"),
minus (b) the total number of Subject Securities as to which Shamrock
indicates in the Notice of Exercise (as hereinafter defined) that Shamrock
intends to retain.
1.3 The Option may be exercised only once as to each Formula
Entity "Option Securities" shall include only the first $25,000,000 of
securities of the Formula Group purchased by Shamrock. Any securities in
the Formula Group purchased by Shamrock subsequent to such initial purchase
of $25,000,000 shall not be considered "Option Securities" and shall not be
subject to the Option. Any securities in the Formula Group purchased by
Shamrock subsequent to March 1st, 2000 shall not be considered "Option
Securities" and shall not be subject to the Option. Any securities in
private companies of the Formula Group purchased by Shamrock, following the
initial investment in such company, pursuant to exercise of its preemptive
rights, if any, in such a company, shall not be considered "Option
Securities" and shall not be subject to the Option, unless otherwise
specifically agreed by Formula in writing. In case of a merger,
consolidation or other reorganization of the Formula Entity in which the
shareholders of the Formula Entity receive securities of another entity,
the securities received will be treated as "Option Securities" for the
purpose of this Agreement. All calculations relating to the exercise of the
Option (including in case of share split consolidation etc.) shall be based
on the figures relating to the initial purchase of such Option Securities
by Shamrock.
2. Exercise Period. The Option may be exercised by Shamrock during the
following periods (the "Exercise Period"):
2.1 If the Option relates to Option Securities in a Formula
Entity which is a private company, then the Exercise Period shall commence
on the date which is twenty-seven (27) months following the date of
purchase by Shamrock of such Option Securities and continue for a period of
forty-five (45) days. In the event that such Opinion Securities were
purchased in a Series of transactions, then the Exercise Period with
respect to all Option Securities in such Formula Entity shall commence
twenty-seven (27) months following the date of the first transaction.
2.2 If the Option relates to Option Securities held by Shamrock
in a Formula Entity which is a publicly-traded company, then the Exercise
Period shall commence on the due hereof and continue for a period of
twenty-seven (27) months.
3. Exercise of Option.
------------------
3.1 As a condition precedent for the exercise of the Option,
within thirty (30) days of Shamrock's purchase of Option Securities on the
open market in a Formula Entity, which is a publicly traded company,
Shamrock shall deliver to Formula a written notice containing the following
information relating to the purchase of such Option Securities: (i) the
date of purchase of the Option Securities, (ii) the number of Option
Securities purchased; and (iii) the total purchase price paid by Shamrock
for the Option Securities.
3.2 The Option is exercisable by delivery of a written notice of
exercise to Formula in substantially the form attached hereto as Exhibit B
(the "Notice of Exercise"), such Notice of Exercise to be delivered to
Formula no Later than 8:00 p.m. (Israeli time) on the last day of the
relevant Exercise Period.
4. Closing. The exchange of the Option Securities for the Formula
Securities shall take place at a closing (the "Closing") to be held at the
offices of Formula, at 10:00 am. local time on 0 Xxxxxxx Xxxx., Xxxxxxx,
three (3) business days following the fulfillment of the conditions set
forth in Section 4.1 herein, or such other date, time and place as Formula
and Shamrock shall mutually agree, but in any case, not later than fourteen
(14) days following the issuance of the Notice of Exercise.
4.1 Transactions at Closing. At the Closing, the following
transactions shall occur, which transactions shall be deemed to take place
simultaneously and no transaction shall be deemed to have been completed or
any document delivered until all such transactions have been completed and
all required documents delivered:
4.1.1 Shamrock shall deliver to Formula, in case of Option
Securities in a private company, One or more signed share transfer deeds in
substantially the form attached hereto as Exhibit C (the "Share Transfer
Deeds"), duly executed by Shamrock as transferor, together with one or more
share certificates representing the relevant Option Securities, if
available, and, in case of Option Securities in a public company, shall
transfer to Formula the relevant Option Securities;
4.1.2 Formula shall issue and allot to Shamrock, or cause one of
its subsidiary or a third party to transfer to Shamrock, the number of
Formula Securities determined in accordance with this Agreement, or,
subject to Section 6 of this Agreement, transfer to Shamrock bank account,
by wire transfer of an immediately available funds, the Amount (as
hereinafter defined).
4.1.3 Formula shall have obtained, within seven (7) business
days of receipt by Formula of the Notice of Exercise, all documents and
instruments necessary to effect the transfer of the Option Securities to
Formula, including, without limitation, in the case of Option Securities in
a private company, the following documents:
(One) True and correct copies of resolutions of the Board of
Directors of the relevant Formula Entity authorizing the
transfer of the Option Securities to Formula.
(Two) Written waivers by all existing shareholders of the
relevant Formula Entity of any rights, including, without
limitation, preemptive rights, rights of first refusal,
blocking and co-sale rights with respect to the transfer of
the Options Securities, or other satisfactory proof of such
waiver.
4.2 The delivery of the Share Transfer Deeds to Formula at the Closing
shall constitute a representation and warranty by Shamrock that as of the
Closing Shamrock is the record and beneficial owner of, and has good and
valid title to, the Option Securities described therein, free and clear of
all liens, encumbrances, pledges, charges, or any other third party rights
(subject to the waivers described in 4.1.3(b) above). The issuance or
transfer of the Formula Securities to Shamrock shall constitute a
representation and warranty by Formula that as of the Closing the
transferor is the record and beneficial owner of, and has good and valid
title to, the Option Securities described therein, and that the Formula
Securities are free and clear of all liens, encumbrances, pledges, charges,
or any other third party rights.
4.3 If any governmental or administrative authority consent is
required for the transfer of the Option Securities to Formula, Shamrock
shall make reasonable efforts to assist Formula in obtaining such
approvals.
5. Formula Shares Calculation. The number of Formula Securities
issuable upon an exercise of the Option with respect to each Formula Entity
shall be determined as follows (the "Exercise Price"):
FS = W * X
-----
N
where: FS = The number of Formula Securities to which
Shamrock shall be entitled pursuant to the Option;
W = The Remainder divided by the total number of
Option Securities in such Formula Entity purchased
by Shamrock;
X = The total amount of United States Dollars paid
by Shamrock as consideration for the Option
Securities of the Formula Entity prior to the
issuance of the Notice of Exercise with respect to
such Option Securities, plus interest thereon at
an annual rate of five percent (5%) from the date
of the purchase of the relevant Option Securities
through the date of delivery of the Notice of
Exercise minus any gross cash dividend previously
received by Shamrock with respect to the relevant
Option Securities; and
N = The average closing price of Formula's
securities on the Tel Aviv Stock Exchange for a
period of fourteen (14) business days commencing
fourteen (14) business days prior to delivery of
the Notice of Exercise, converted on each day into
United States dollars at the Representative Rate
of Exchange announced on such day by the Bank .of
Israel.
An illustration of the Formula Securities Calculation is attached
hereto as Exhibit D
6. Alternatives to Allotment of Formula Securities.
-----------------------------------------------
6.1 In the event that Shamrock delivers a Notice of Exercise to
Formula then Formula, in its sole discretion, shall be entitled, in lieu of
issuing Formula Securities in exchange for Option Securities, to cause the
Option Securities to be purchased for the amount equal to W*X (as set forth
in clause 5 above, the "Amount").
6.2 With respect to each Formula Entity, Formula shall be
required to pay the Amount in lieu of issuing Formula Securities in
exchange for Option Securities, if:
6.2.1 Such exchange would be impossible due to legal
restrains; or
6.2.2 Formula is unable to complete such exchange within 14
days from the date of the Notice of Exercise.
7. Taxes. Each party shall be solely liable for the full amount of tax
liability incurred by it in both Israel and the United States in connection
with any exercise of the Option. Formula shall be entitled to withhold any
applicable withholding taxes due and required to be withheld under any
applicable law upon the issuance of any Formula Securities or any payment
under Section 6 of this Agreement.
8. Right of First Offer. Any transfer of the Option Securities by
Shamrock until the end of the respective Exercise Period, shall be subject
to the following:
8.1 With respect to each Formula Entity which is not a
publicly-traded company:
8.1.1 In the event that Shamrock proposes to transfer any or
all of the Option Securities (the "Private Offered
Securities"), Shamrock shall first, by written notice (the
"Private Offer"), offer such Securities, on the terms of the
proposed transfer, to Formula. The Offer shall state the
number of Private Offered Securities to be sold and the
proposed terms of sale of the Offered Securities. Formula
may accept the Private Offer in respect of all of the
Private Offered Securities by giving Shamrock notice to that
effect within seven (7) business days after receiving the
Private Offer.
8.1.2 In the event that Formula does not accept the Private
Offer, then Shamrock, at the expiration of the seven (7)
days period, shall be entitled to transfer all (but not less
than all) of the Private Offered Securities to any
transferees, provided, however, that in no event shall
Shamrock transfer the same on terms more favorable than
those stated in the Private Offer, and provided further that
any of the Private Offered Securities not transferred within
ninety (90) days after the expiration of such seven (7) day
period shall again be subject to the provisions of this
Section 8,
8.2 With respect to each Formula Entity which is a
publicly-traded company:
8.2.1 In the event that Shamrock proposes to transfer any or
all of the Option Securities (the "Public Offered
Securities"), Shamrock shall first, by written notice (the
"Public Offer"), offer such securities, on the terms of the
proposed transfer, to Formula. The Public Offer shall state
the number of Public Offered Securities to be sold and the
proposed terms of sale of the Public Offered Securities.
Formula may accept the Public Offer in respect of all of the
Public Offered Securities by giving Shamrock notice to that
effect within seventy-two (72) hours after receiving the
Public Offer.
8.2.2 In the event that Formula does not accept the Public
Offer, then Shamrock, at the expiration of the seventy-two
(72) hour period, shall be entitled to sell the Public
Offered Securities, provided, that any of the Public Offered
Securities not transferred within Forty five (45) days after
the expiration of such seventy-two (72) hour period shall
again be subject to the provisions of this Section 8.
8.3 In the event that the Private Offered Securities or the
Public Offered Securities are transferred or sold in accordance with this
Section 8, upon transfer or sale such Private Offered Securities or Public
Offered Securities shall not be considered Option Securities and shall not
be subject to this Agreement.
8.4 Option Securities which are transferred to Certain
Transferees (as defined in Section 10,4 hereof) or to Permitted Assignees
(as defined in Section 10.3 below) shall remain, following their transfer,
subject to the provisions of this Agreement.
9. Accelerated Exercise.
--------------------
9.1 With respect to each Formula Entity which is not a
publicly-traded company, in the event that within six (6) months of the
closing of the purchase of the Option Securities, Shamrock is able to make
a valid claim of breach of warranty contained in the private placement
agreement governing the purchase of such Option Securities from such
Formula entity (the "PPA"), Shamrock shall have the right to either:
(i) Assert a claim for indemnification by the relevant
Formula Entity, in which event the Option with respect to
such Formula Entity shall immediately and automatically
expire upon the making of such claim; or
(ii) In the event that the claim is for a breach of any of
the "Organization", "Capitalization", "Authorization" or
"Transaction with Affiliates" warranties contained in the
PPA, then Shamrock may immediately exercise the Option with
respect to such Formula Entity (and in which case the
Securities issued pursuant to the Option will be subject to
all applicable clauses herein) provided that Formula has not
rectified such breach within 30 days following a written
notice thereon.
9.2 With respect to each Formula Entity that its Option
Securities were purchased from such entity, in the event that (i) the
shareholders of such Formula Entity voluntarily wind-up such Formula
Entity; or (ii) an application is filed for the winding-up, dissolution or
liquidation of such Formula Entity or for the appointment of a receiver
over substantially all of such Formula Entity's assets and such application
is not withdrawn within ninety (90) days, or (iii) the relevant Option
Securities are finally agreed to be replaced for cash or assets in any form
of reorganization of the relevant Formula Entity, then Shamrock shall have
the right to immediately exercise the Option with respect to such Formula
Entity.
10. Miscellaneous.
-------------
10.1 Further Assurances. Each of the parties hereto shall perform
such further acts and execute such further documents as may reasonably be
necessary to carry out and give full effect to the provisions of this
Agreement and the intentions of the parties as reflected thereby.
10.2 Governing Law; Jurisdiction. This Agreement shall be
exclusively governed by and construed according to the laws of the State of
Israel, without regard to the conflict of laws provisions thereof. Any
dispute arising under or in relation to this Agreement shall be resolved
exclusively in the competent court for Tel Aviv-Jaffa district, and each of
the parties hereby submits irrevocably to the jurisdiction of such court.
10.3 Successors and Assigns; Assignment. Except as otherwise
expressly limited herein, the provisions hereof shall inure to the benefit
of, and be binding upon, the successors assigns, heirs, executors, and
administrators of the panics hereto. None of the rights, privileges, or
obligations set forth in, arising under, or created by this Agreement may
be assigned or transferred without the prior consent in writing of each
party to. this Agreement. Notwithstanding the above, Shamrock shall be
permitted to assign any of its rights and interests in the Option
Securities and the corresponding obligations under this Agreement, whether
prior or subsequent to the purchase of the Option Securities, to (i) any
entity which 50% or more of its voting or equity securities are owned,
directly or indirectly, by Shamrock, any executive officers of Shamrock,
and/or any member of the Xxx X. Xxxxxx family (or any trust for his/her
benefit), or (ii) any entity in which Shamrock or any of the foregoing
referenced in (i) serves as a general partner or manager ("Permitted
Assignees"), provided. however, that on Formula request, Shamrock will act
as administrative representative of the relevant Permitted Assignee. In
order to exercise the Option, the transferee must qualify as a Permitted
Assignee also on the date of the issuance of the Notice of Exercise.
10.4 Certain Transferees. I n the event that Shamrock transfers
the Option Securities or any part thereof to General Electric Pension
Trusts and/or Bank X. Xxxxxxxx & Co. AG or its affiliates (the "Certain
Transferees"), then in the event that Shamrock subsequently re-acquires
such Option Securities, Shamrock shall have the right to exercise the
Option with regards to such re-acquired Option Securities, provided, that
all calculations relating to the exercise of the Option shall be based on
the figures relating to the initial purchase of such Option Securities by
Shamrock. Shamrock shall notify Formula in writing on each transfer to the
Certain Transferees, within 14 days following the transfer.
10.5 Entire Agreement; Amendment and Waiver. This Agreement and
the Exhibits hereto constitute the full and entire understanding and
agreement between the parties with regard to the subject matters hereof and
thereof, Any term of this Agreement may be amended and the observance of
any term hereof may be waived (either prospectively or retroactively and
either generally or in a particular instance) only with the written consent
of all of the parties to this Agreement.
10.6 Notices, etc. All notices and other communications required
or permitted hereunder to be given to a party to this Agreement shall be in
writing and shall be telecopied or mailed by registered or certified mail,
postage prepaid, or otherwise delivered by hand or by messenger, addressed
to such party's address as set forth below or at such other address as the
party shall have furnished to each other party in writing in accordance
with this provision:
If to Formula: Formula Systems (1985) Ltd.
Xxxxxxx Xxxxxxxxx 0
Xxxxxxxx 00000
Xxxxxx
Attention: Xxxxxx Xxxxx-Xxxxxxxxxx
Facsimile: (00)-000-0000
if to Shamrock: Shamrock Holdings of California Inc.
c/o Zellermayer & Pelossof Advocates
Xxxxxx Xxxxx
00 Xxxx Xxxxx Xxxx.
Xxx Xxxx 00000
or such other address with respect to a party as such party shall notify
each other party in writing as above provided. Any notice sent in
accordance with this Section 10.6 shall be effective (i) if mailed, seven
(7) business days after mailing, (ii) if sent by messenger, upon delivery,
and (iii) if sent via telecopier, upon transmission and electronic
confirmation of receipt or (if transmitted and received on a non-business
day) on the first business day following transmission and electronic
confirmation of receipt (provided, however, that any notice of change of
address shall only be valid upon receipt).
10.7 Delays or Omissions. No delay or omission to exercise any
right, power, or remedy accruing to any party upon any breach or default
under this Agreement, shall be deemed a waiver of any other breach or
default theretofore or thereafter occurring. Any waiver, permit, consent,
or approval of any kind or character on the part of any party of any breach
or default under this Agreement, or any waiver on the part of any party of
any provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or otherwise,
afforded to any of the parties, shall be cumulative and not alternative.
10.8 Severability. If any provision of this Agreement is held by
a court of competent jurisdiction to be unenforceable under applicable law,
then such provision shall be excluded from this Agreement and the remainder
of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms; provided,
however, that in such event this Agreement shall be interpreted so as to
give effect, to the greatest extent consistent with and permitted by
applicable law, to the meaning and intention of the excluded provision as
determined by such court of competent jurisdiction.
10.9 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original and enforceable
against the parties actually executing such counterpart, and all of which
together shall constitute one and the same instrument.
10.10 No Joint Venture. Nothing contained in this Agreement will
be deemed or construed as creating a joint venture or partnership between
any of the parties hereto. No party is by virtue of this Agreement
authorized as an agent, employee or legal representative or any other
party. No party will have the power to control the activities and
operations of any other and their status is, and at all times, will
continue to be, that of independent contractors with respect to each other.
No party will have any power or authority to bind or commit any other. No
party will hold itself out as having any authority or relationship in
contravention of this Section.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the undersigned have caused this Agreement to
be executed by their duly authorized representatives as of the date first
written above.
FORMULA SYSTEMS (1985) LTD. SHAMROCK HOLDINGS OF
CALIFORNIA INC.
By: /s/ Xxx Xxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------- ------------------------------
Its: Xxx Xxxxxxxxx Xxxxxx X. Xxxxxxxxx
------------------------------
Its: Its: Executive Vice President
------------------------------ -------------------------------
LIST OF EXHIBITS
----------------
A. List of Formula Entities
B. Notice of Exercise
C. Share Transfer Deed
D. Illustration of Formula Shares Calculation
EXHIBIT A
-------------------------------------------------------------------------------
Private Company Montania 05 Ltd. (the parent company of Intersystems)
-------------------------------------------------------------------------------
Private Company E.S.I. Expert Solutions International Ltd.
-------------------------------------------------------------------------------
Private Company Transtech Control Ltd.
-------------------------------------------------------------------------------
Private Company Applicom Software Industries Ltd.
-------------------------------------------------------------------------------
Private Company Sintec Advanced Technologies Ltd.
-------------------------------------------------------------------------------
Private Company Forsoft Ltd.
-------------------------------------------------------------------------------
Private Company Crystal Systems Solutions Ltd.
-------------------------------------------------------------------------------
EXHIBIT B
NOTICE OF EXERCISE
To: FORMULA SYSTEMS (1985) LTD.
The undersigned hereby elects to exercise the Option with respect to _____
[fill in number] of _____ [fill in type of Option Security (e.g. Ordinary
Shares)] in _____________________ [fill in name of Formula Entity],
pursuant to the terms of the Option Agreement, dated __________, 1999, by
and between Formula Systems (1985) Ltd. and Shamrock Holdings of California
Inc. The undersigned further confirms that the undersigned intends to
retain _______ Option Securities in the Company which are not included in
the above number of Option Securities.
Shamrock Holdings of California Inc.
------------------------------------
(Date)
By:
--------------------------------
Its:
-------------------------------
EXHIBIT C
SHARE TRANSFER DEED
The undersigned Shamrock Holdings of California Inc (hereinafter the
"Transferor"), hereby transfers to [__________________] (the "Transferee")
__________ [fill in number] of _______ [fill in class of shares] shares of
a nominal value of ______ each, numbered ______to ______ inclusive,
registered in the name of the Transferor in the company known as
_______________ to hold unto the Transferee and the heirs, executors,
administrators, successors and assigns of the Transferee, on the same
conditions as the Transferor held the same immediately prior to the
transfer thereof. And the Transferee hereby accepts transfer of such shares
subject to said conditions.
IN WITNESS WHEREOF the Transferor and the Transferee have executed this
instrument this ___ day of ____________, 19__.
----------------------------------- ---------------------------------
Signature of Witness Signature of Transferor
Name:
------------------------------
Address:
---------------------------
----------------------------------- ---------------------------------
Signature of Witness Signature of Transferee
Name:
------------------------------
Address:
---------------------------
EXHIBIT D
ILLUSTRATION OF FORMULA SHARES CALCULATION
Assume that Shamrock purchased 100 securities in Formula Entity "A", a
private company, on August 1, 1999 for an aggregate amount of US$1000, and
purchased additional 50 securities in Formula Entity "A" on August 15, 1999
for an aggregate amount of US$750. In such event, the Exercise Period
commences on November 1, 2001. Assume that on November 8, 2001, Shamrock
delivers to Formula a Notice of Exercise, in which Shamrock indicates that
it intends to retain 50 securities in Formula Entity "A", and exercises the
Option for the remaining 100 securities. Assume that the average closing
price of Formula's Securities on the Tel Aviv Stock Exchange for a period
of 14 business days commencing 14 business days prior to the Notice of
Exercise, converted on each day into United States dollars at the
Representative Rate of Exchange announced on such day by the Bank of
Israel, is $30 per share. In such event, without considering accumulated
interest, the number of Formula Securities is 39, calculated as follows:
FS = (100/150)($1750) = 39(38.88)
----------------
$30
ADDENDUM
to Agreement dated as of September 30th, 1999 ("the Agreement)
between
FORMULA SYSTEM (1985) LTD. ("Formula")
And
SHAMROCK HOLDINGS OF CALIFORNIA, INC. ("Shamrock")
1. Section 2.2 to the Agreement shall be null and void, and the following
shall constitute the new Section 2.2:
"2.2 If the option relates to Option Securities held by Shamrock in
a Formula Entity which is a publicly traded company, then the
Exercise Period shall commence 27 months following the date
hereof and shall continue for a period of forty-five (45)
days."
2. Following Section 9.1 of the Agreement, a new Section 9.1A will be
added and shall read as follows:
"9.1A. With respect to each Formula Entity which is a publicly-traded
company, in the event that within six (6) months of the
closing of the purchase of the Option Securities, Shamrock is
able to make a valid claim of breach of warranty contained in
the share subscription agreement governing the purchase of
such Option Securities from such Formula Entity (the "SSA"),
Shamrock shall have the right to either:
(i) Assert a claim for indemnification by the relevant
Formula Entity, in which event the Option with respect to
such Formula Entity shall immediately and automatically
expire upon the making of such claim;
or
(ii) In the event that the claim is for a breach of any of the
"Effect of Transaction", "Capitalization" or
"Incorporation and Authorization" warranties contained in
the SSA, then Shamrock may immediately exercise the
Option with respect to such Formula Entity (and in which
case the Securities issued pursuant to the Option will be
subject to all applicable clauses herein) provided that
Formula has not rectified such breach within 30 days
following a written notice thereon."
3. This addendum shall constitute an integral part of the Agreement.
/s/ Xxx Xxxxxxxxx /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------- -------------------------------------
FORMULA SYSTEMS (1985) LTD. SHAMROCK HOLDINGS OF CALIFORNIA, INC.
ADDENDUM NUMBER 2
to Agreement dated as of September 30th, 1999 ("the Agreement")
between
Formula Systems (1985) Ltd. ("Formula")
and
Shamrock Holdings of California, Inc. ("Shamrock")
1. Following Section 10.3 of the Agreement, a new Section 10.3A will
be added and shall read as follows:
"10.3A. Notwithstanding Section 10.3 above, Shamrock may pledge
its rights and privileges under this Agreement, as well
as the Option Securities, to one of the five major banks
in Israel. Formula agrees to sign such further documents
as may be reasonably necessary to carry out and give full
effect to such pledges. The above shall not derogate from
Shamrock's obligations hereunder."
2. This addendum shall constitute an integral part of the Agreement.
/s/ Xxx Xxxxxxxxx /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------- -------------------------------------
Formula Systems (1985) Ltd. Shamrock Holdings of California, Inc.
ADDENDUM NUMBER 3
to Agreement dated as of September 30th, 1999 ("the Agreement")
between
FORMULA SYSTEMS (1985) LTD. ("Formula")
AND
SHAMROCK HOLDINGS OF CALIFORNIA, INC.
Via its current assignee
Trefoil Israel FSL, L.P. ("Shamrock")
1. Section 1.3 of the Agreement, is hereby amended by replacing the
amount $25,000,000 on the 2nd and 4th lines with the amount
$28,000,000 in both places.
2. This addendum shall constitute an integral part of the Agreement.
/s/ Xxx Xxxxxxxxx TREFOIL ISRAEL FSL, L.P.
---------------------------------------
FORMULA SYSTEMS (1985) LTD.
TREFOIL ISRAEL FSL, INC.
ITS GENERAL PARTNER
BY: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
ADDENDUM NUMBER 4
to an Agreement dated September 30, 1999 (the "AGREEMENT")
by and between
FORMULA SYSTEMS (1985) LTD., an Israeli public company ("FORMULA"); and
SHAMROCK HOLDINGS OF CALIFORNIA INC., a California corporation
Via its assignee under the Agreement
TREFOIL ISRAEL FSL L.P. ("SHAMROCK")
The undersigned, mutually agree, that the Agreement is hereby amended as
follows:
1. A new Section 2.3 will be added and will be read as follows:
"Notwithstanding the above, it is agreed that Shamrock's Option with
respect to the Option Securities of Transtech Control Ltd.
("Transtech"), Airport Intersystems Technologies Ltd. ("Intersystems")
and Crystal Systems Solutions Ltd. ("Crystal") is exercised on
November 27, 2001 ("the Early Exercise").
The beginning of the Exercise Periods for the Option Securities of ESI
Expert Solution International Ltd. (or of ESI Subsidiaries, as defined
below) and Sintec Advanced Technologies Ltd. are postponed as detailed
in Appendix C."
2. Anything to the contrary in the Agreement notwithstanding, the shares
in E.S.I. Expert Industries Ltd., Clockwork Ltd. and Intent Ltd. (the
"ESI SUBSIDIARIES"), issued and/or transferred upon conversion of a
certain loan, under the Reorganization as the term defined in Section
2 to the Investment-Loan Agreement by and among ESI Expert Solutions
International Ltd. ("ESI International"), Argotec Ltd., Formula,
Shamrock, Israel Mezzanine Fund and Israel Discount Bank Ltd., dated
November 28, 2001 (the "NEW ESI AGREEMENT") shall be treated as Option
Securities for the purpose of the Agreement and ESI International or
ESI Subsidiaries shall be treated as Formula Entity for the purpose of
the Agreement. The date of purchase for purpose of calculating the
interest under Section 5 of the Agreement on the securities in the ESI
Subsidiaries received on the conversion of the loan under the New ESI
Agreement shall be the date of this addendum and with respect to the
securities in the ESI Subsidiaries attributed to the original
investment in ESI International, shall be the original purchase date
of the ESI International's shares.
3. After Section 6.2.2 a new Section 6.2.3 will be added and will read as
follow:
"6.2.3. If Formula's net equity on the date of the Notice of Exercise
is less than US$ 100,000,000."
4. After Section 9.2 a new Section 9.3 will be added and read as follow:
"9.3 Shamrock shall have the right to immediately exercise the Option
with respect to the Option Securities in each of the Formula Entities,
in the event that Formula's net equity is less than US$ 75,000,000."
5. Notwithstanding anything to the contrary in the Agreement, the parties
agree as follows with respect to the Early Exercise:
5.1 On November 28, 2001 (the "INITIAL CLOSING") Formula will allot
or cause the transfer to Shamrock of one million Formula
Securities (the "Shares") and shall pay Shamrock in cash an
amount of $ 1,200,000 (the "First Amount") as described in
APPENDIX A hereto, and Shamrock will deliver to Formula the
Option Securities of Transtech and Intersystems. The terms of
Section 4 of the Agreement shall apply to the Initial Closing.
5.2 On the SECOND CLOSING, as defined below, Formula shall pay
Shamrock the Cash Remainder as described in APPENDIX A plus an
annual interest of 5% for a period commencing on the Initial
Closing and ending on the Second Closing, on the amount equal to
the Total Investment minus the First Amount (all as defined in
Appendix A); the Balancing Payment (as defined below), shall be
paid from the liable party to the other; (together, the
"Adjustment Payments") and Shamrock shall deliver to Formula the
Option Securities of Crystal. For the purpose of this Agreement,
the SECOND CLOSING shall occur - (i) one (1) business day
following the sale of all the Shares by Shamrock in the framework
of a Tender Offer (or in case Shamrock does not tender the Shares
- one (1) business day following the date all such Shares would
have been sold if tendered by Shamrock), or (ii) in case of a
Third Party Offer, as defined below, one (1) business day
following the date on which all the Shares are sold to such third
party or (iii) as specified in the last paragraph of Section 5.3
below.
5.3 Until January 31st, 2002 Shamrock will not conduct any
transactions in the Shares on the Stock Exchange. The period
between the Initial Closing and January 31st, 2002 shall be
referred to herein as the "Period".
Notwithstanding the foregoing, if during the Period a Tender
Offer is consummated with respect to Formula's shares (the
"Tender Offer"), for the purpose of calculating the Balancing
Payment at the Second Closing, as described in the following
paragraph, it will be deemed that Shamrock has tendered the
Shares under the Tender Offer (regardless of Shamrock's actual
response to such Tender Offer). If no such Tender Offer is
consummated, and an offer in cash for the purchase of the Shares
by third party at a price per Share higher than the Conversion
Price (the "Third Party offer") will be submitted to Shamrock and
consummated during the Period, Shamrock undertakes to respond to
the Third Party offer for the sale of the Shares.
The Balancing Amount - If the price per share paid under the
Tender Offer or paid to Shamrock under the Third Party Offer, as
the case may be (the "OFFER PRICE") is different from the
Conversion Price (as defined in APPENDIX A), then upon the Second
Closing, the Balancing Amount will be calculated and paid as
follows: If the Offer Price is higher than the Conversion Price,
then Shamrock will refund Formula a Balancing Amount equal to the
Offer Price minus the Conversion Price, multiplied by the number
of Sold Shares (as defined below), net of any taxes paid or
payable by Shamrock as a result of such sale; and if the price
per share paid under the Tender Offer is lower than the
Conversion Price, then Formula will pay Shamrock a Balancing
Amount equal to the Conversion Price minus the Offer Price,
multiplied by the number of Sold Shares under such Tender Offer.
For the purpose of this Agreement, the term SOLD SHARES shall
mean - such number of Shares sold by Shamrock under the Tender
Offer (or in case Shamrock has not tendered the Shares - such
number of Shares which Shamrock would have sold if tendered all
the Shares under the Tender Offer) or, the actual number of
Shares sold by Shamrock under the Third Party Offer-as the case
may be.
In case a Tender Offer (or Third Party Offer) is not consummated
within the Period, or in case the results of a Tender Offer or
the Third Party Offer are such that only part of the tendered
Formula's shares were purchased by the offeror (the "PARTIAL
PURCHASE OFFER"), then, on the first business day following the
end of the Period Formula will, directly or indirectly, purchase
(or will cause a third party to purchase) all the Shares from
Shamrock (and in case of a Partial Purchase Offer - purchase of
all the Shares other than the Sold Shares ("the Unsold Shares")),
in consideration for cash amount per Share equal to the
Conversion Price (multiplied by the number of Unsold Shares )
plus the Adjustment Payments, and this shall be treated as the
Second Closing. In case the above shall not be possible or is not
performed for any reason whatsoever, the transfer of the Shares
or the Unsold Shares, as applicable, shall be rescinded and the
parties agree that in such case Formula shall pay Shamrock the
Conversion Price multiplied by the number of Shares or such
number of Unsold Shares, as applicable, in cash, in lieu of the
Shares or Unsold Shares, as applicable, and in addition the
Adjustment Payments. This shall occur 2 business days following
the end of the Period.
6. Formula hereby represents and warrants to Shamrock that all corporate
actions on the part of Formula, and its directors and shareholders,
required for the authorization, execution, delivery and performance by
the Company of this Addendum and the consummation of the transactions
contemplated herein have been duly taken. This Addendum contains the
valid and binding obligation of Formula, enforceable in accordance
with its terms.
THIS ADDENDUM SHALL CONSTITUTE AN INTEGRAL PART OF THE AGREEMENT AND
ADDENDUM NUMBER 1 TO ADDENDUM NUMBER 3 TO IT.
FORMULA SYSTEMS (1985) LTD. TREFOIL ISRAEL FSL L.P. By its
General Partner, Trefoil Israel
FSL, Inc.
By: Xxx Xxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------- ----------------------------
Name: Xxx Xxxxxxxxx Name: Xxxxxx X. Xxxxxxxxx
Its: CEO Its: Vice President
APPENDIX C
----------
2.3 Notwithstanding any of the aforesaid in Section 2.1 and 2.2,
the commencement date of the Exercise Period in connection with share
holdings in the following Formula Entities will be as follows:
--------------------------------------------------------------------------------
SECURITIES HELD IN A FORMULA ENTITY COMMENCE DATE TOTAL INVESTMENT
OF EXERCISE AMOUNT IN SUCH
PERIOD FORMULA ENTITY (US$)
--------------------------------------------------------------------------------
Shares in Sintec Advanced Technologies June 30, 2003 2,770,000
Ltd. purchased under a Share Purchase
Agreement by and between Sintec
and Shamrock dated December, 1999
--------------------------------------------------------------------------------
Any shares in E.S.I. Expert Solutions October 18, 2003 2,999,850
International Ltd. ("ESI INTERNATIONAL")
OR (as applicable):
--------------------------------------------------------------------------------
Shares in E.S.I. Expert Industries October 18, 2003 4,200,450
Ltd., Clockwork Ltd. and Intent ltd.
(the "ESI SUBSIDIARIES"), issued
and/or transferred under the New ESI
Agreement, provided that the Exercise
of such Option Securities in the
ESI Subsidiaries may only be
exercised jointly.
--------------------------------------------------------------------------------
APPENDIX A
----------
A. TOTAL INVESTMENT BY SHAMROCK IN INTERSYSTEMS, TRANSTECH AND CRYSTAL:
--------------------------------------------------------------------------------
AMOUNT OF THE INVESTMENT DATE AMOUNT OF THE COMPANY
INVESTMENT PLUS 5% INVESTMENT
ANNUAL INTEREST FROM $
THE INVESTMENT DATE
UNTIL 30.11.2001
--------------------------------------------------------------------------------
6,660,125 30.9.1999 6M Intersystems
--------------------------------------------------------------------------------
5,468,750 8.2.2000 5M Transtech
--------------------------------------------------------------------------------
2,774,991 15.12.1999 2,532,070 Crystal
--------------------------------------------------------------------------------
TOTAL INVESTMENT $: 14,903,866
--------------------------------------------------------------------------------
B. AVERAGE PRICE PER FORMULA SHARE ("CONVERSION PRICE"):
The average price of the Formula Shares on the Tel Aviv Stock Exchange
in the 14 days preceding notice of exercise of the options: $ 12.81 [54.4
NIS, 4.246$]
C. VALUE OF ONE MILLION FORMULA SHARES:
1,000,000 x the Conversion Price: $12,810,000
D. THE CASH AMOUNT
Total Investment less the value of one million Formula Shares: $2,093,866
The First Amount: $ 1,200,000
The Cash Remainder:
(The Cash Amount minus the First Amount) $893,866
