Exhibit 4.5
SHAREHOLDERS AGREEMENT
This Shareholders Agreement (the
“Agreement”) is made as of this 21st day of February 2006 by
and between (i) M.S.N.D. Real Estate Holdings Ltd.
(“Mivtach”); (ii) Nir Alon (“Nir”); (iii) Nir
Alon Holdings GmbH, a company formed under the laws of Austria (“Nir Alon
Holdings” and, together with Nir, “Nir Alon”); (iv) Elbit
Ltd., a company formed under the laws of the State of Israel
(“Elbit”); and (v) M.S. Master Investments (2002) Ltd., a company
formed under the laws of the State of Israel (“MS”). (Nir Alon, Elbit and
MS will be referred to collectively as the “Founders”) (Founders,
together with Mivtach, each, a “Shareholder” and, collectively, the
“Shareholders”).
RECITALS
| A. |
The
Founders are shareholders of Elbit Vision Systems Ltd. (the “Company”),
an Israeli public company whose shares are traded on the OTC Bulletin
Board in N.Y, hold approximately 38 % of the Company’s issued share
capital; |
| B. |
Mivtach-Shamir
Holdings Ltd. (“Mivtach Holdings”) is entering into an
Agreement (the “Agreement”) with the Company, pursuant to
which Mivtach Holdings shall lend to the Company the sum of three million
Dollars convertible into 6,000,000 Ordinary Shares of the Company subject
to the terms and conditions of a Convertible Note and the Company shall
grant to Mivtach Holdings a right (which has been assigned to Mivtach) to
purchase from the Company up to an aggregate of 4,000,000 Ordinary Shares
of the Company for a purchase price of $0.5 per share pursuant to the
terms and conditions of a Warrant, everything as defined in the Agreement (“CN
& W Agreement”); |
| C. |
Concurrently
with the CN & W Agreement, Mivtach Holdings is entering into a Share
Purchase Agreement with certain shareholders of the Company (the “SPA”),
pursuant to the SPA and a letter dated February 21, 2006, Mivtach shall
purchase 2,939,192 Ordinary Shares of the Company (the “Purchased
Shares”) representing approximately 8% of the Company’s
issued share capital; |
| D. |
Concurrently
with, and contingent upon, the closing of the CN & W Agreement, the
closing of the SPA and the termination of an existing shareholders agreement
dated March 28, 2001 as amended on September 8, 2004 (the “Old
Shareholders Agreement”) (collectively, the “Closing”),
the parties hereto wish this Agreement to become effective upon the terms
more fully set forth herein; |
IT IS HEREBY AGREED AS FOLLOWS:
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1.1 |
Following
both (i) acquisition by Mivtach of Ordinary Shares of the Company upon full conversion of
its debt under the Convertible Note, and (ii) notice by Mivtach within twenty four (24)
months from the consummation of the CN&W Agreement (the “Conversion Period”)
that this Agreement is effective, the Shareholders hereby agree to vote all of the
Ordinary Shares now or hereafter owned by them, for the election to the Company’s
Board of Directors of: (i) two members designated by Mivtach, one of whom shall be
nominated Chairman, (ii) one member designated by Nir Alon, (iii) one member designated
by Elbit, (iv) one member designated by MS and (iv) subject to applicable law, two
external directors whom the parties shall mutually recommend, provided that the
designating Shareholder continues to hold or, with regards to MS, has the proxy to vote,
7.5% or more of the Company’s issued share capital on a Fully Diluted Basis (the “7.5%
Threshold”). Notwithstanding the foregoing, a reduction in a Shareholder’s
holdings below the 7.5% Threshold shall not be deemed to have occurred unless such
reduction results from such Shareholder or, with regards to MS, MS or a holder of
Remaining Shares, selling Ordinary Shares of the Company. |
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If
a Shareholder fails to meet the 7.5% Threshold (the “Decreasing Shareholder”),
such Decreasing Shareholder’s right to nominate directors to the Board of Directors
shall be terminated and the right to nominate the same number of directors owned by the
Decreasing Shareholder shall be granted to the Shareholder who at such time shall hold
the largest number of shares of the Company. |
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A
Fully Diluted Basis in this Agreement shall mean – a theoretical increase of the
Company’s issued share capital assuming the exercise and/or conversion of the
Convertible Note, the Warrant and all outstanding securities, options and warrants
exercisable into shares of the Company. |
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Remaining
Shares in this Agreement shall mean – 1,080,944 shares of the Company held by S.R.
Master Investment (2002) Ltd., 700,540 shares of the Company held by R.D. Master
Investment (2002) Ltd. and 182,405 shares of the Company held by Xxxxx Xxxxxxx.
1,963,889 Company’s shares in total. |
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1.2 |
Following
both (i) expiration of the Conversion Period without Mivtach’s having converted the
debt under the Convertible Note into Ordinary Shares of the Company, and (ii) notice by
Mivtach prior to the expiration of the Conversion Period that this Agreement is
effective, the Shareholders hereby agree to vote all of the Ordinary Shares now or
hereafter owned by them, for the election to the Company’s Board of Directors of: (i) two
members designated by Nir Alon, one of whom shall be nominated Chairman, (ii) one member
designated by Mivtach, (iii) one member designated by Elbit, (iv) one member designated
by MS and (iv) subject to applicable law, two external directors whom the parties shall
mutually recommend, provided that the designating Shareholder continues to hold or, with
regards to MS, has the proxy to vote, 5% or more of the Company’s issued share
capital on a Fully Diluted Basis (the “5% Threshold”). Notwithstanding
the foregoing, a reduction in a Shareholder’s holdings below the 5% Threshold shall
not be deemed to have occurred unless such reduction results from such Shareholder or,
with regards to MS, MS or a holder of Remaining Shares (as this term is defined in the
SPA), selling Ordinary Shares of the Company. |
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If
a Shareholder fails to meet the 5% Threshold (the “Decreasing Shareholder”),
such Decreasing Shareholder’s right to nominate directors to the Board of Directors
shall be terminated and the right to nominate the same number of directors owned by the
Decreasing Shareholder shall be granted to the Shareholder who at such time shall hold
the largest number of shares of the Company. |
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1.3 |
Notwithstanding
the foregoing, it is further agreed that if at any time prior to May 14, 2008, being the
expiry date of the Elbit warrant period of the warrants granted to Elbit on May 14, 2004,
Elbit shall hold less than the 7.5% Threshold or the 5% Threshold, as the case may be,
excluding any reductions in Elbit’s holdings as a result of sales of the Company’s
shares by Elbit, Elbit shall maintain its right to designate one member of the Board,
until May 14, 2008. For the avoidance of doubt, the aforegoing shall in no way derogate
from Elbit’s right, at any time during the term of this Agreement (i.e. even after
May 14, 2008) to nominated a director to the Company’s Board pursuant to Sections
1.1 and 1.2 above. |
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1.4 |
For
the purpose of applying the 7.5% Threshold or 5% Threshold to MS, it is agreed that MS
shall be considered to be the holder of all Ordinary Shares of the Company which are
either held by MS or are Remaining Shares in respect of which MS shall be granted a proxy
by such other shareholders to exercise their voting rights. |
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1.5 |
No
Shareholder, or any officer, director, shareholder or employee of such Shareholder, makes
any representation or warranty as to the fitness or competence of the nominee of any
other Shareholder to the Company’s Board of Directors by virtue of its execution of
this Agreement or by voting in accordance with the provisions of this Agreement. For the
avoidance of doubt, each Shareholder (and the directors designated by it) shall be solely
responsible for its compliance or the compliance of its designee(s) with the requirements
and provisions of applicable law. |
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1.6 |
The
voting of Ordinary Shares of the Company pursuant to this Agreement may be effected in
person, by proxy, by written consent or in any other manner permitted by applicable law. |
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1.7 |
In
the event of any share split, share dividend, recapitalization, reorganization or
combination, the provisions of this Agreement shall apply also to any Ordinary Shares
issued to the Shareholders with respect to, or in replacement of, their existing
shareholdings in the Company. |
| 2. |
Right
of First Offer; Tag-Along |
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2.1. |
Any
Shareholder (the “Selling Party”) wishing to sell or
otherwise transfer Ordinary Shares of the Company to a person or
entity who is not a Permitted Transferee, as defined hereinafter,
shall be required to first make an offer to the other Shareholders
(each an “Offeree”), as set forth below. |
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2.2. |
The
Selling Party shall send each Offeree a written offer in which the Selling
Party shall specify the following information (the “Offer”):
(i) the number of Ordinary Shares that the Selling Party proposes to
sell or transfer (the “Offered Shares”); (ii) a
representation and warranty that the Offered Shares are free and
clear of all pledges, debts, security interests and other third party
interests; and (iii) the price that the Selling Party intends to
receive in respect of the Offered Shares, which shall be stated in
cash, together with the requested terms of payment thereof. |
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The
Offer shall constitute an irrevocable offer made by the Selling Party to sell to each
Offeree the Offered Shares or to have such Offeree participate in such sale, on a pro-rata basis all upon the terms specified in the Offer and as described below. |
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For
the purpose of this Section 2, the pro-rata portion of each Offeree shall mean a fraction
of the Offered Shares of which the aggregate number of shares which are held by such
Offeree immediately prior to the Offer, on an outstanding basis, shall be the numerator,
and the aggregate number of shares which are held at that time by all the Offerees, on an
outstanding basis shall be the denominator. |
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2.3. |
If
the Offer specifies that it is contingent upon the purchase of all of the
Offered Shares, the Selling Party shall be entitled to refuse to
transfer the Ordinary Shares pursuant to the Offer to an Offeree if,
following compliance with Section 2.5 below, the Offerees do not wish
to purchase all of the Offered Shares. |
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2.4. |
Each
Offeree will notify the Selling Party whether it (i) wishes to purchase all
or any portion of such Offeree’s pro-rata portion of the Offered
Shares, (ii) wishes to participate in the sale to the third party, or
(ii) does not wish to either purchase the Offered Shares or
participate in the sale thereof. Such Offeree response must be
received by the Selling Party within ten (10) days after receipt of
the Offer by such Offeree (“Offeree’s Notice”). |
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2.5. |
If
the aggregate number of Offered Shares accepted by the Offerees is less than
the number of Offered Shares, then the Selling Party shall send a
notice to the Offerees who accepted to purchase all the Shares
offered to them that shall state the number of Offered Shares for
which no acceptances were delivered (“Notice of Remaining Offered Shares”).
The Offerees who received a Notice of Remaining Offered Shares, may
exercise an option to purchase any of the Offered Shares for which no
acceptances were delivered upon the terms of the Offer. Acceptances
for purchasing remaining Offered Shares must be received by the
Selling Party within ten (10) days after receipt by the relevant
Offerees of the Notice of Remaining Offered Shares. |
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2.6. |
If
the number of Offered Shares for which there are acceptances is, in the
aggregate, equal to the number of Offered Shares, then each of the
accepting Offerees shall acquire the number of shares for which he
delivered notice of acceptance. |
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2.7. |
If
the number of Offered Shares for which there are acceptances is, in the
aggregate, more than the number of Offered Shares, then each of the
accepting Offerees shall acquire the number of shares for which he
delivered notice of acceptance, and each Offeree who sent acceptance
to the Notice of Remaining Offered Shares (the “Accepting
Offeree”) shall acquire such number of the Remaining Offered
Shares that is equal to the Remaining Offered Shares multiplied by a
fraction in which the number of shares held by such Accepting Offeree
immediately prior to the Offer, on an outstanding basis, shall be
numerator, and the aggregate number of shares which are held at that time by
all Accepting Offerees on an outstanding basis shall be the
denominator. |
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2.8. |
The
Offered Shares shall become the property of each Offeree who agreed to
purchase the Offered Shares on the terms specified in the Offer,
against payment of the consideration as specified in the Offer. If
there remain any Ordinary Shares that have not been acquired by an
Offeree and the Selling Party has not exercised its right to refuse
to transfer any of the Offered Shares pursuant to the Offer (as set
forth in Section 2.3), then subject to the Offeree’s right under
Section 2.9 below, the Selling Party may sell such remaining Ordinary
Shares or, if it has exercised its right under Section 2.3, all Offered
Shares to a third party, provided that such sale is consummated (i)
in a bona fide transaction; (ii) at a price that is not lower than
that specified in the Offer; (iii) subject to payment terms that are
no more favorable to the purchaser than those specified in the Offer,
all within a 90 day period from the expiry of the ten (10) day
period; and (iv) provided that, if the sale is not carried out on the
market and the transferee following such purchase will hold shares
representing three percent (3%) or more of the Company’s issued and
outstanding share capital, the transferee of the Offered Shares shall
become party to this Agreement. |
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2.9. |
If
an Offeree wishes to sell or otherwise transfer any or all of such
Offeree’s Ordinary Shares together with the Offered Shares being
sold by the Selling Party, such Offeree (the “Tag Along
Shareholder”) shall, during such 10 day period, have the
right to notify the Selling Party of its intention to exercise its
Tag Along Right pursuant to this Section 2.9 (the “Tag Along
Notice”). Following the Tag Along Notice, the Tag Along
Shareholder shall add to the Ordinary Shares being sold by the Selling
Party to such proposed purchaser thereof (the “Proposed
Purchaser”) that number of Ordinary Shares which bears the
same ratio to the total number of Ordinary Shares held by the Tag
Along Shareholder, on an outstanding basis, as the ratio that the
number of the Offered Shares bears to the Selling Party’s total
number of Ordinary Shares of the Company, on an outstanding basis,
and upon the same terms and conditions under which the Selling Party’s
Ordinary Shares shall be sold. |
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In
the event that the Tag Along Shareholder exercises its rights hereunder, the Selling
Party must cause the Proposed Purchaser to add such Ordinary Shares to the Offered Shares
to be purchased by the Proposed Purchaser, as part of the sale agreement, or reduce the
number of Ordinary Shares that it proposes to sell to the Proposed Purchaser (in which
case, the Selling Party and the Tag Along Shareholder will contribute the identical
portion of Ordinary Shares relative to their total shareholdings in the Company,
calculated on an outstanding basis), and either conclude the transaction in accordance
with such revised structure or withdraw from completing the transaction. |
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Notwithstanding
the above said, this Section 2.9 shall not apply to sales by MS of its shares of the
Company. |
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2.10. |
Notwithstanding
the foregoing, the provisions of this Section 2 shall not apply to
any transfer of Ordinary Shares by a Shareholder to its Permitted
Transferees. For purposes of this Agreement, the term “Permitted
Transferees” shall mean an entity controlled by,
controlling, or under common control with the Selling Party. A
transferee by operation of law shall not be considered Permitted
Transferee. |
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Notwithstanding
anything set forth above, in the event that a banking institution realizes its pledge
over shares of the Company held by a Shareholder and wishes to sell any or all of such
shares, the other Shareholder whose shares of the Company are not being sold by such
banking institution shall be granted a Right of First Offer with respect to such shares
(in accordance with the provisions of Section 2.8 above) but shall not have the Tag-Along
Right set forth in Section 2.9 above. |
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2.11. |
Notwithstanding
anything to the contrary in this Section 2, the Parties acknowledge
that Elbit is under contractual obligation dated July 4, 1993 to
Xxxxxx Xxxxxx and Xxxxxx Xxxx (the “Other Parties”),
who are entitled to a right of first refusal with respect to any
transfer of Ordinary Shares of the Company by Elbit. Accordingly any
Offer made by Elbit to the Offerees, shall be made at the same time
by Elbit to the Other Parties. In the event the Other Parties
exercise such right, Elbit’s Offer to the Offerees shall be
deemed to be void. However, Elbit shall notify the Offerees of the
waiver of the right by the Other Parties or the expiration of the
notice period for such Other Parties to fully exercise such right and
failure by both to fully exercise such right (the “Elbit
Notice”), in either case within 2 business days of receipt
of such waiver or expiration of such notice period. Within 5 business
days of receipt of the Elbit Notice each Offeree shall be entitled to
exercise his option to purchased the Offered Shares either according
to his Pro Rata fraction of the Offered Shares or any Remaining
Offered Shares and the provisions of Section 2.8 shall apply. |
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2.12. |
Notwithstanding
the above, any sale/s of shares of the Company in the market in
accordance with Rule 144 of the Securities Act of 1933, shall not be
subject to any of the restrictions on transfer set forth in this
Section 2. |
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3.1. |
This
Agreement shall be signed at the Closing and shall enter into force upon
written notice by Mivtach to the other Shareholders. Notwithstanding
the above said, this Agreement shall be null and void and have no
effect in the event that Mivtach shall not have delivered such notice
prior to the expiration of the Conversion Period as defined in the CN
&W. |
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3.2. |
A
Shareholder whose holdings of Ordinary Shares of the Company (which holdings,
in the case of MS, shall including any holdings of Remaining Shares,
shall fall below 5% of the Company’s issued share capital on a
Fully Diluted Basis, shall, as from the time of such change,
automatically cease to be a party to this Agreement. Any such event
shall have no effect on the validity of the Agreement between the
other Shareholders. |
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4.1. |
The
Preamble constitutes an integral part of this Agreement. |
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4.2. |
Each
Shareholder 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. |
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4.3. |
This
Agreement shall be governed by the laws of the State of Israel. Any dispute
arising under or with respect to this Agreement shall be resolved
exclusively in the appropriate court in Tel Aviv, Israel. |
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4.4. |
All
notices required or permitted hereunder to be given to a party pursuant to
this Agreement shall be in writing and shall be deemed to have been
duly given to the addressee thereof (i) if hand delivered, on the day
of delivery, (ii) if given by facsimile transmission, on the business
day on which such transmission is sent and confirmed, or (iii) if
delivered by air mail, five business days following the date it was
sent, to such party’s address as set forth below or at such
other address as such party shall have furnished to each other party
in writing in accordance with this provision: |
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if to Mivtach: |
Mivtach Holdings Ltd.
00 Xxxxxxxx Xx., Xxxxxx, Xxx-Xxxx 00000
Tel: 00-0000000
Fax: 00-0000000 |
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if to Nir Alon: |
Xxxxxxxxxxxxxxxxxxx 0/00 - 0000 Xxxxxx, Xxxxxxx
|
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|
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if to Elbit: |
3 Azrieli Center, 00xx Xxxxx, Xxxxxxxx Xxxxxxxx, Xxx Xxxx, 00000 |
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if to MS: |
0 Xxxxxxx Xxxxxx
Xxxx Xxxxxx 00000 |
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4.5. |
Nothing
contained in this Agreement shall be deemed to grant any right to any
person or entity that is not a party to this Agreement. |
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4.6. |
Whenever
possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law but 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. |
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4.7. |
Section
headings contained in this Agreement are inserted for convenience of
reference only, shall not be deemed to be a part of this Agreement
for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof. |
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4.8. |
This
Agreement, together with the documents expressly referred to herein,
constitute the entire agreement among the parties hereto with respect
to the subject matter contained herein and supersedes all prior
agreements and understandings among the parties with respect to such
subject matter. |
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4.9. |
No
modification, amendment or waiver (each, a “Modification”)
of any provision of this Agreement will be effective against any
party to this Agreement unless such Modification is approved in
writing by such party. The failure of any party to enforce any of the
provisions of this Agreement will in no way be construed as a waiver
of such provisions and will not affect the right of such party
thereafter to enforce each and every provision of this Agreement in
accordance with its terms. |
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4.10. |
This
Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which together shall
constitute one and the same document. |
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4.11. |
Subject
to Section 2 above, a Shareholder’s rights and obligations pursuant
to this Agreement may be transferred or assigned by such Shareholder
to the transferee or assignee to whom all of the shares of the
Company then held by such Shareholder are transferred or assigned in
one or more series of transactions, provided that such transferee
becomes party to the Agreement. |
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4.12. |
Elbit’s
holding in the Company held indirectly through Water Technologies
Ltd. shall be aggregated with those shares of the Company held
directly by Elbit for the purposes of this Agreement. |
IN WITNESS WHEREOF, the parties have
executed this Agreement one or more counterparts, as of the date first above written.
_________________________________
M.S.N.D. REAL ESTATE HOLDINGS LTD.
Name Xxxx Xxxxxx & Xxxxx Xxxxxx
Title Chairman & COO and Corporate Secretary
_____________________________
NIR ALON
|
____________________________
ELBIT LTD.
By____________________
Name__________________
Title___________________
|
_____________________________
NIR ALON HOLDINGS GMBH
By____________________
Name__________________
Title___________________
|
___________________________________
M.S. MASTER INVESTMENTS (2002) LTD.
By____________________
Name__________________
Title___________________
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