Exhibit F
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TRANSLATION OF THE AMENDED SHAREHOLDERS AGREEMENT
[TRANSLATED FROM THE HEBREW ORIGINAL]
[Marked to show changes from 27 December 2004 original]
SHAREHOLDERS AGREEMENT
Made in Tel Aviv this 27th day of December 2004
as amended on 6 July 2005
BETWEEN Koor Industries Ltd. whose address for the purpose of this Agreement is
14 Hamalacha Street, Afek Industrial Park, Rosh Ha'ayin 48091 ("Koor") of the
one part AND
1. Federmann Enterprises Ltd. ("Federmann Enterprises")
2. Heris Aktiengesellschaft ("Heris") whose address solely for the purpose
of this Agreement is 00 Xxxxxxxx Xxxxxx, Xxx Xxxx (Federmann
Enterprises and Heris are hereinafter jointly and severally referred to
as "Federmann") of the other part (hereinafter the "Parties") WHEREASon
the date of signing this Agreement Federmann is the holder of
19,915,448 Ordinary Shares of 1 NIS par value each of Elbit Systems Ltd
. , a public company whose Shares are traded on the Tel - Aviv Stock
Exchange and on Nasdaq in the United States (hereinafter the " Company
"), of which Federmann Enterprises is owner of 16,078,990 Ordinary
Shares of 1 NIS par value each of the Company and Heris is the owner of
3,836,458 Ordinary Shares of 1 NIS par value each of the Company (those
specific Shares and bonus Shares that are in future issued in respect
of them, if at all, excluding the Koor Shares, as defined below, are
hereinafter the " Federmann Shares ");
AND WHEREAS in accordance with a -Share Transfer Deed between Federmann
Enterprises and Koor, together with the appendices thereto, including its
amendments, of which this Agreement constitutes Appendix 10.7 (herein the " Deed
of Sale "), Federmann Enterprises and Koor have agreed upon the sale of 4,000
3,160 ,000 ( four three million one hundred and sixty thousand ) Ordinary Shares
of 1 NIS par value each of the Company from Federmann Enterprises to Koor,
subject to various conditions precedent and in two stages, in the first stage
2,160,000 (two million one hundred and sixty thousand) Ordinary Shares of 1 NIS
par value each of the Company being sold to Koor, and in the second stage an
additional 1,840000,000 (one million eight hundred and forty thousand) Ordinary
Shares of the Company being sold to Koor, all subject to and in accordance with
the provisions of the Deed of Sale (the specific Shares that are to be
transferred to Koor from Federmann Enterprises pursuant to the Deed of Sale and
bonus Shares issued in respect of them, if at all, are herein referred to as the
"Koor Shares");
AND WHEREAS the Parties wish to set forth their relationship with respect to
their holdings of the Company's Shares. NOW THEREFORE THE PARTIES HEREBY
WARRANT, PROVIDE AND AGREE BETWEEN THEM AS FOLLOWS:
1. Preamble and Interpretation
1.1 The preamble and appendices hereto constitute an integral part hereof
and are as binding as the other terms hereof.
1.2 The Clause headings herein are solely for the sake of convenience and
are not to be applied in the interpretation hereof.
2. Definitions
In this Agreement the following terms shall have the meanings ascribed
to them, unless expressly stated otherwise:
2.1 "Heris" means Heris Aktiengesellschaft (Company No. 56-002196-6);
2.2 "Independent Director" means a director who meets all the independence
criteria in accordance with the Foreign Law;
2.3 "Stock Exchange" means the Tel - Aviv Stock Exchange Ltd. or the Nasdaq
National Market or any other stock exchange on which the Company's
Shares are listed for trade;
2.4 "External Director" means as defined in the Companies Law;
2.5 "Foreign Law" means the law applicable in the United States regarding
securities, including the provisions of the Sarbanes Oxley Act and the
rules and regulations that have been and are in future issued by virtue
thereof, and including the rules of the Nasdaq National Market;
2.6 "Agreement" means this Agreement together with the appendices hereto ,
including its amendments ;
2.7 "Company" means Elbit Systems Ltd. (Public Company No. 520043027);
2.8 "First Minimum Quantity" means 3,050,000 (three million fifty thousand)
Ordinary Shares, together with all bonus Shares that are issued in
respect of them, if any, and together with all the Shares that are
issued to Koor by virtue of rights that are vested in Koor solely in
respect of the Koor Shares in the context of a rights offering of the
Company to its shareholders, if any, all from the time of signing this
Agreement;
2.9 "Second Minimum Quantity" means 2,050,000 (two million fifty thousand)
Ordinary Shares, together with all bonus Shares that are issued in
respect of them, if any, and together with all the Shares that are
issued to Koor by virtue of rights that are vested in Koor solely in
respect of the Koor Shares in the context of a rights offering of the
Company to its shareholders, if any, all from the time of signing this
Agreement;
2.10 "Transfer" means a sale, gift, realization of a lien (but not the
creation of a lien), loan and any other transfer whatsoever of a Share
and/or any right vested in the Share's owner and/or holder, whether or
not for consideration and whether voluntary or involuntary;
2.11 "Companies Law" means the [Israeli] Companies Law, 5759-1999;
2.12 "First Minimum Percentage" means 6.45% of the Company's issued share
capital at the time of computation;
2.13 "Second Minimum Percentage" means 4.32% of the Company's issued share
capital at the time of computation;
2.14 "Business Day" means a day on which the two major banks in Israel are
open for business, other than Fridays and holiday eves, which shall not
be treated as a Business Day;
2.15 "Koor" means Koor Industries Ltd. (Public Company No. 520014143);
2.16 "First Closing Date" means as defined in the Deed of Sale;
2.17 "Second Closing Date" means as defined in the Deed of Sale;
2.18 "Stock Exchange Sale" means a sale in the context of trading on the
Stock Exchange or a sale in a transaction outside the Stock Exchange by
means of a distributor to buyers whose identity is unknown to the
seller or a sale to trust funds in Israel or abroad or to provident
funds or to provident fund management companies;
2.19 "Koor Shares" means as stated in the preamble hereto;
2.20 "Federmann Shares" means as stated in the preamble hereto;
2.21 "Ordinary Shares", "Shares" or the "Company's Shares" means Ordinary
Shares of 1 NIS par value each in the Company;
2.22 "Federmann Enterprises" means Federmann Enterprises Ltd. (Private
Company No. 512278391);
2.23 "Officer" means as defined in the Companies Law;
2.24 "Free and Clear" means free and clear of any charge, pledge,
attachment, levy, debt, lien, claim, right of pre-emption, right of
refusal, option, lock-up arrangement or any further or other third
party right whatsoever, other than restrictions in respect of the
Transfer and/or negotiability of Shares that are imposed pursuant to
the Foreign Law (Shares which are not registered under U.S. securities
laws);
2.25 "Federmann" means as stated in the preamble hereto;
2.26 "Acquisition" means acquisition, purchase, receipt of a gift and any
receipt of a Transfer, in any way whatsoever, of a Share and/or right
vested in the owner and/or holder of the Share, whether or not for
consideration;
2.27 "Deed of Sale" means as stated in the preamble hereto;
2.28 "Direct Control" means Control deriving from holding Shares alone and
not together with others;
2.29 "Control" means as the term is defined in the [Israel] Securities Law,
5728-1968;
2.30 "Qualification Conditions" means all the requirements in accordance
with applicable law and pursuant to the Company's documents of
incorporation for a person to serve as a director of the Company,
including security clearance as required in Israel for the purpose of
such service, but excluding the conditions for an Independent Director.
3. The Parties' Warranties
3.1 Federmann hereby warrants that Federmann Enterprises is a limited
company, duly registered in Israel and that Heris is a foreign company,
duly registered in Liechtenstein.
3.2 Koor hereby warrants that it is a limited company, duly registered in
Israel.
3.3 Each of the Parties warrants that it is empowered to enter into this
Agreement and perform all its obligations pursuant hereto and that its
signatories hereto are duly empowered to obligate it.
3.4 Each of the Parties hereto warrants and undertakes that there is no
legal impediment and/or no impediment pursuant to its incorporation
documents and/or applicable law and/or any order or direction of a
court and/or any contract, understanding or agreement to which it is a
party, to its entering into this Agreement and performing all its
obligations pursuant hereto.
3.5 Except as set out in this Agreement, each of the Parties hereby
warrants that it is in possession of all the approvals and consents
necessary for the purpose of signing and performing this Agreement.
3.6 Each of the Parties further warrants that it is not a party to any
agreement, arrangement or obligation that is contrary to and/or impairs
its ability to perform all its obligations pursuant hereto.
4. Voting Agreement--Board of Directors
4.1 From the Second Closing Date until such time as Koor's holdings of the
Koor Shares fall below the First Minimum Percentage or until such time
as Koor's holdings of the Koor Shares fall below the First Minimum
Quantity, whichever is earlier, Federmann shall vote by virtue of all
its holdings in the Company's Shares in favor of the election to the
Company's Board of Directors of such number of candidates as are
nominated to office by Koor, which is the greater of: (1)two directors;
or (2)a number of directors equal to 20% of the number of the Company's
directors, including External Directors and including the directors who
are elected as aforesaid in accordance with Koor's nomination, rounded
up to the nearest whole number. It is hereby agreed that if it is
required in accordance with the Foreign Law that a majority of the
Company's directors are Independent Directors, Koor undertakes that at
least one half of the directors who are elected to office in accordance
with its nomination as aforesaid, that number being rounded up to the
nearest whole number, will fulfil the conditions required in respect of
Independent Directors.
4.2 After the Second Closing Date, from such time as Koor's holdings of the
Koor Shares fall below the First Minimum Percentage or from such time
as Koor's holdings of the Koor Shares fall below the First Minimum
Quantity, whichever is earlier, until such time as Koor's holdings of
the Koor Shares fall below the Second Minimum Percentage or until such
time as Koor's holdings of the Koor Shares fall below the Second
Minimum Quantity, whichever is earlier, Federmann shall vote by virtue
of all its holdings in the Company's Shares in favor of the election of
one director who has been nominated by Koor, provided that the
candidate fulfils all the Qualification Conditions.
4.3 From the First Closing Date until: (i)the Second Closing Date; or
(ii)to the extent that the Second Closing Date does not occur, until
such time as Koor's holdings of the Koor Shares fall below the Second
Minimum Percentage or until such time as Koor's holdings of the Koor
Shares fall below the Second Minimum Quantity, whichever is earlier;
Federmann shall vote by virtue of all its holdings in the Company's
Shares in favor of the election of one director who has been nominated
by Koor, provided that the candidate fulfils all the Qualification
Conditions.
4.4 From the First Closing Date, so long as Federmann holds 20% or more of
the Company's issued share capital and so long as Koor holds the
Company's Shares, Koor shall vote by virtue of all its holdings in the
Company's Shares:
4.4.1 In favor of the election of all the directors of the Company
whose candidacy for office has been nominated by Federmann,
except for the directors for whose election Federmann has
undertaken to vote as provided in Clauses 4.1 or 4.2 or 4.3,
as the case may be, except for a candidate who does not fulfil
the Qualification Conditions.
4.4.2 Without derogating from the generality of Clause 4.4.1 above,
in favor of the appointment of all the external directors
whose candidacy is nominated by Federmann.
4.4.3 In favor of the appointment of the chairperson of the board of
directors who has been nominated for office by Federmann,
provided that if at the time of the General Meeting at which
the appointment of the chairperson of the Company's board of
directors is raised for discussion and vote, Koor is entitled
to the restricted right described in Clause 6.3 below, then at
the time of the General Meeting there shall serve one of the
directors who has been elected to office in accordance with
Koor's nomination as provided in Clause 4.1 above, who is
nominated by Koor as Vice chairperson of the Company's board
of directors.
4.5 In Clauses 4.6 to 4.8 below, "Proposing Party" means the Party on whose
nomination, as provided in Clauses 4.1 or 4.2 or 4.3 or 4.4 above, a
particular candidate has been appointed as a director of the Company.
4.6 If a Proposing Party wishes to replace or terminate the office of a
director elected in accordance with its nomination, the Parties shall
act, to the extent necessary, to hold a General Meeting of the Company
and vote in favor of a proposal to remove said director from office and
in favor of the appointment of another director in his place whose
candidacy is nominated by the Proposing Party and who fulfils all the
Qualification Conditions.
4.7 The Parties shall vote against a proposal to remove from office a
director whose candidacy was nominated by Koor or Federmann, unless the
Proposing Party otherwise instructs in writing and in advance.
4.8 If the post of a director is vacated for any reason, the Parties shall
act, to the extent necessary, to hold a General Meeting of the Company
and vote for the appointment as a director of such candidate as
nominated by the Proposing Party in place of the director whose post
has become vacant, provided that such candidate meets all the
Qualification Conditions.
4.9 Before holding any General Meeting of the Company, on the agenda of
which is the appointment of directors, notice shall be given by the
Company or by Federmann to Koor in connection with holding the General
Meeting and, in accordance with applicable law and the Company's
incorporation documents, each Party shall give the Company three
Business Days' prior written notice, with a copy to the other, of the
candidates nominated by it for the office of a director in the Company,
as provided in this Clause 4 above.
4.10 Should Koor's holdings of the Koor Shares fall below the First Minimum
Percentage or should Koor's holdings of the Koor Shares fall below the
First Minimum Quantity, whichever is earlier, Koor shall use its best
efforts, subject to applicable law, in order to procure that all the
directors who have been appointed to office on Koor's nomination as
provided in Clause 4.1 above, other than one director, will immediately
resign from their office as directors of the Company.
4.11 Should Koor's holdings of the Koor Shares fall below the Second Minimum
Percentage or should Koor's holdings of the Koor Shares fall below the
Second Minimum Quantity, whichever is earlier, Koor shall use its best
efforts, subject to applicable law, to procure that the director
appointed to office on its nomination, as provided in Clauses 4.2
and/or 4.3 above, shall immediately resign from his office as a
director.
5. General Voting Agreement
5.1 From the First Closing Date and subject to the provisions of Clause 4
above, Koor undertakes to vote by virtue of all its holdings in the
Company's Shares, on every matter and proposed resolution that is put
to the Company's General Meeting for decision and/or for a resolution
of the Company's shareholders in any manner whatsoever, in accordance
with written instructions that are given to it by Federmann at least
seven Business Days in advance before the time of the relevant General
Meeting or the time of passing the relevant resolution, as the case may
be. Solely for the purpose of this Clause 5.1, Koor shall not be deemed
holder of the Company's Shares that are exclusively owned by related
private companies that are not companies under Koor's Control and by
related public companies of Koor. At Federmann's request and subject to
applicable law, Koor shall make a recommendation to those companies to
vote in accordance with such instructions as have been given to Koor by
Federmann as aforesaid.
5.2 The provisions of Clause 5.1 above shall not apply: (i)as regards
approval by the Company's General Meeting of transactions that are to
be approved by reason of the fact that Federmann, Federmann's
controlling shareholders or the officers of any of them have a personal
interest in them; and (ii)in connection with a proposal to alter the
Company's Articles of Association that is such as to affect Koor's
rights in accordance with the Company's Articles of Association in a
manner that is prejudicial to Koor in comparison with Federmann.
5.3 For the performance of the provisions of Clauses 4 and 5 above, the
Parties undertake to attend every General Meeting of the Company and do
all acts necessary, at the times prescribed therefor, so that their
voting in the General Meeting by virtue of all their holdings in the
Company will be valid and effective in accordance with applicable law
and pursuant to the Company's incorporation documents.
6. Other Non-Transferable Rights
6.1 Koor undertakes to give Federmann written notice immediately after it
learns that members of Xxxxxxx Xxxxxxxx'x family and/or trusts for the
benefit of Xxxxxxx Xxxxxxxx'x family have ceased being Koor's
controlling shareholders. Federmann may, in its discretion, give
written notice to Koor within 90 days of the date on which it receives
Koor's written notice as aforesaid that it has decided to bring to an
end the additional non-transferable rights set out in Clause 6.3 below
(the date on which Federmann's written notice is received by Koor being
referred to below in this Clause as the "Termination Date").
6.2 The provisions of Clauses 6.3 to 6.8 below shall only apply in the
period between the Second Closing Date and the earlier of the following
two dates:
6.2.1 such time as the number of the Koor Shares that are
exclusively owned by Koor falls below the First Minimum
Percentage or such time as the number of the Koor Shares that
are exclusively owned by Koor falls below the First Minimum
Quantity, whichever is earlier. For the avoidance of doubt,
Shares owned by a person or entity that is not Koor shall not
be deemed as Shares that are exclusively owned by Koor, even
if Koor is deemed to hold them by virtue of Clause 17.6 below;
or
6.2.2 the Termination Date, as defined in Clause 6.1 above.
6.3 The Parties shall act, subject to applicable law, for the appointment
of one of the directors who have been elected to office on the
nomination of Koor as provided in Clause 4.1 above, who shall be
nominated by Koor, as Vice Chairperson of the Company's Board of
Directors.
6.4 The Parties shall act, subject to applicable law, so that on every one
of the Company's Board of Directors' committees there shall be a member
one of the directors elected for office on Koor's nomination as
provided in Clause 4.1 above, who shall be nominated by Koor.
6.5 The Parties shall act, subject to applicable law, so that there shall
be established in the Company a board of directors' committee for
strategic planning, its members being: one of the directors elected for
office on Koor's nomination as provided in Clause 4.1 above, who shall
be nominated by Koor, at least one of the external directors and such
other directors as determined by the Company's board of directors
(hereinafter the "Strategic Planning Committee"). The function of the
Strategic Planning Committee shall be to assist and make
recommendations to the Company's board of directors on the strategic
planning of the Company's business activity.
6.6 When the tenure of Xx Xxxxxx Xxxxxxxx (hereinafter " Xx. Xxxxxxxx ") as
President and CEO of the Company comes to an end, the Parties shall
act, subject to the provisions of applicable law, so that the Company's
board of directors establishes a special search committee, the
composition of which shall include the Chairperson of the board of
directors, the Vice Chairperson of the board of directors, a director
elected to office on the nomination of Federmann as provided in Clause
4.4.1 above and a director elected to office on the nomination of Koor,
as provided in Clause 4.1 above (hereinafter the " Search Committee ").
The Search Committee shall act for 30 days in an attempt to identify a
candidate for the post of the Company's CEO, who is agreed by all the
members of the Committee and it shall make a recommendation to the
Company's board of directors to elect that candidate to the post of the
Company's CEO. In any event, even if the Search Committee has been
unable to locate a candidate agreed by all the members of the Search
Committee within 30 days as aforesaid, the Company's CEO shall be
elected by the Company's board of directors. For the avoidance of
doubt, it is clarified that the Company's President and CEO is
currently Xx Xxxxxxxx, and that the Company's board of directors may
extend Xx Xxxxxxxx'x tenure as it deems fit, and that the Search
Committee mentioned above shall not be established for that purpose.
6.7 To the extent requested to do so by Koor, Federmann shall vote in the
Company's General Meeting by virtue of all its holdings in the Company
in order to pass a resolution of the Company approving the Company's
entering into a Registration Rights Agreement with Koor, which will
vest Koor, so long as it holds 5% or more of the Company's issued share
capital, with one demand right on the same conditions, mutatis
mutandis, ("Registration Right") as those detailed in the
Registration Rights Agreement dated 5 July 2000 among the Company,
Elron Electronic Industries Ltd. and Federmann (the "Registration
Rights Agreement"). Federmann hereby undertakes that to the extent
that pursuant to the Registration Rights Agreement it is vested with
more than one demand right and to the extent that the Company so
requires for the purpose of granting the Registration Right to Koor,
Federmann shall, without any consideration or compensation, relinquish
one demand right that is vested in it pursuant to the Registration
Rights Agreement.
6.8 Should officers or controlling shareholders of Federmann serve as
directors of any subsidiary of the Company, the Parties shall act,
subject to applicable law, so that the Company also appoints as a
director of that subsidiary one of the directors of the Company who has
been appointed to office on Koor's nomination as provided in Clause 4
above. The foregoing shall not apply if there is any legal restriction
to the appointment of more than one director, who is a director of the
Company, to the subsidiary's board of directors as aforesaid.
7. For the avoidance of doubt, it is clarified that the rights granted to
Koor pursuant to Clause 6 above, in all its sub-clauses, are personal
(non-transferable) rights that are not attached to the Koor Shares that
are held by Koor. Said rights are not assignable and/or transferable to
any third party, either together with a Transfer of all or any of the
Koor Shares in the Company or otherwise.
8. Restrictions on Transfer of Shares
8.1 From the First Closing Date, Koor shall not Transfer all or any of the
Koor Shares, including in the event of a forced sale due to
receivership, execution proceedings or winding-up proceedings, except
subject to and in accordance with the provisions of Clauses 10, 11 and
12 below.
8.2 From the First Closing Date, Federmann shall not Transfer all or any of
the Federmann Shares, including in the event of a forced sale due to
receivership, execution proceedings or winding-up proceedings, except
subject to and in accordance with the provisions of Clauses 9 and 12
below.
9. Koor's Tag-Along Right on a Sale of the Federmann Shares
9.1 Should Federmann wish to Transfer any of the Federmann Shares that
constitute more than half the Federmann Shares that are held by
Federmann for the time being to a third party (in this Clause 9 the
"Third Party"), Federmann shall provide Koor written notice detailing
the number of Shares that it intends to Transfer to the Third Party (in
this Clause "the Offered Shares"), the identity of the Third Party,
the identity of all the Third Party's ultimate interested parties or,
to the extent that the Third Party wishes to receive a Transfer of the
Offered Shares indirectly through a trustee and/or another person
and/or another entity in any manner whatsoever, the identity of every
such trustee and other person and entity as aforesaid and the identity
of the third party beneficiary and all its ultimate interested parties,
the number of Shares that are held by Federmann at the time of giving
the notice, all to the level of detail for which the Company and/or the
Third Party would be obligated, in accordance with Israeli securities
laws, for reporting the identity of the said entities and persons, were
the Third Party an interested party in the Company, and the
consideration that the Third Party has undertaken to pay Federmann for
the Offered Shares, the payment terms and all the other material
conditions of the transaction, including the transaction's conditions
precedent (hereinafter in this Clause the " Sale Notice ").
9.2 By the end of a period of 7 Business Days starting on the date of
Koor's receipt of the Sale Notice (hereinafter the "Tag-Along Notice
Period"), Koor may provide Federmann written notice that it wishes to
sell to the Third Party the Koor Shares that it holds at that time or a
portion thereof together with the Offered Shares and at the price and
on the payment terms and other conditions specified in the Sale Notice
(in this Clause 9 the "Tag-Along Notice"). In the Tag-Along Notice,
which will be provided during the Tag-Along Notice Period, Koor shall
specify the quantity of Shares, solely out of the Koor Shares, that
Koor wishes to sell the Third Party as aforesaid.
9.3 Should Koor provide a Tag-Along Notice during the Tag-Along Notice
Period, Federmann shall be entitled to Transfer its Shares to the Third
Party, provided that the Third Party also purchases from Koor, at the
price and on the payment terms and other conditions specified in the
Sale Notice, and at the same time, the Koor Shares specified by Koor in
the Tag-Along Notice. If the number of Offered Shares, together with
the number of the Koor Shares specified in the Tag-Along Notice,
exceeds the quantity of Shares that the Third Party is willing to
purchase, the quantity of Shares that is purchased by the Third Party
shall be apportioned pro rata between Federmann and Koor in the ratio
between the number of the Federmann Shares that are held by Federmann
prior to completing the Share Transfer to the Third Party and the
number of the Koor Shares that are held by Koor prior to completing the
Share Transfer to the Third Party.
9.4 Should Koor not provide a Tag-Along Notice during the Tag-Along Notice
Period, Federmann may Transfer the Offered Shares to the Third Party
for consideration and on payment terms and other conditions no better
to Federmann than those detailed in the Sale Notice, provided that an
Agreement for the Transfer of the Offered Shares is signed by Federmann
and the Third Party within 30 Business Days of the end of the Tag-Along
Notice Period and the Transfer of the Offered Shares pursuant thereto
is completed within 180 days of the end of the Tag-Along Notice Period,
all subject to the provisions of Clauses 12.1 to 12.3 below.
9.5 For the avoidance of doubt, to the extent that a transaction for the
Transfer to the Third Party of the Offered Shares is not signed by the
expiration of 30 Business Days from the end of the Tag-Along Notice
Period or the transaction for the Transfer of the Offered Shares is not
completed within 180 days of the end of the Tag-Along Notice Period,
Federmann may only Transfer the Offered Shares after again providing a
Tag-Along Notice to Koor as provided above in this Clause 9.
9.6 For the purpose of the foregoing provisions of Clause 9, there shall be
deemed as a single Transfer (1) a number of transactions for the
Transfer of Shares that are effected with a single Third Party during a
six-month period and for such purpose a "Transaction for the Transfer
of Shares" includes the grant, Transfer or sale of any option or right
to acquire or receive Shares; and the "Single Third Party" includes any
related company (as defined in the Securities Law, 5728-1968) of the
Third Party and any interested party (as defined in the Securities Law,
5728-1968) in any of them and includes anyone acting with the Third
Party, in cooperation under an agreement, whether written or oral, and
also (2) a transaction for the Transfer of Shares (as defined above) in
the scope of which there are Transferred in any manner
whatsoever--including as a result of a Transfer of Control in Heris
from Federmann Enterprises to a Third Party or Third Parties and/or in
other subsidiaries of Federmann from Federmann to any Third Party or
Third Parties and/or a Transfer of actual economic control of the
Federmann Shares that are owned by Heris and/or other subsidiaries of
Federmann from Federmann to any Third Party or Third Parties--Shares of
Federmann, from Federmann to any Third Party or Third Parties, in a
percentage of more than 50%of the Federmann Shares that are then held
by Federmann.
9.7 For the avoidance of doubt, the foregoing shall not preclude Federmann
from entering into an agreement to Transfer the Offered Shares to the
Third Party before giving the Sale Notice, provided that such does not
preclude Koor from tagging along in the sale of the Offered Shares to
the Third Party in accordance with the provisions of this Clause 9.
9.8 Without derogating from and in addition to the provisions of Clause
9.6, the provisions of Clauses 9.1 to 9.7 above shall not apply, and
Koor shall not have a Tag-Along Right, in respect of a Transfer of any
of the Federmann Shares from Federmann Enterprises to Heris and vice
versa. Nevertheless, if Federmann Enterprises sells Control of Heris
and at the time of the sale Heris holds more than 50% of the Federmann
Shares, Federmann shall xxxxx Xxxx the Tag-Along Right as provided in
Clauses 9.1 to 9.7 above, mutatis mutandis. To the extent that at the
time of the Transfer of Control of Heris, Heris holds other assets, in
addition to the Federmann Shares, the value of the Federmann Shares
that are held by Heris at that time shall be determined by an appraiser
agreed between the Parties, and in the absence of such agreement, then
by the chairperson of the accounting firm of Somekh Xxxxxxx (KPMG), who
may also appoint himself.
9.9 It is agreed that the foregoing provisions of Clauses 9.1 to 9.8 shall
not apply and Koor's Tag-Along Right shall expire from such time as
Koor's holdings of the Koor Shares fall below the Second Minimum
Percentage or from such time as Koor's holdings fall below the Second
Minimum Quantity, whichever is earlier.
10. Non-Transfer of Shares by Koor Koor shall not Transfer the Koor Shares
or any of them during the period commencing on the date of signing this
Agreement and ending at the later of the following two dates:
10.1 on the expiration of 12 months after the First Closing Date; or
10.2 if the performance of Stage 'B' of the Transaction pursuant to the Deed
of Sale is completed--the expiration of nine months after the Second
Closing Date; (hereinafter the "Prohibited Sales Period").
11. Federmann's Right of First Refusal
11.1 Subject to the provisions of Clause 10 above and Clause 12 below, if
Koor wishes to Transfer any of the Koor Shares to a Third Party, it may
only do so if it first enters into an agreement with a specific Third
Party for the Transfer of those Shares, the agreement being subject to
the Right of First Refusal vested in Federmann pursuant to this
Agreement, and subject to the following provisions. Koor shall provide
Federmann written notice within 2 Business Days of entering the
agreement with the Third Party, in which it shall notify Federmann that
it has entered into a binding agreement for the Transfer of Shares from
the Koor Shares to a Third Party (in this Clause 11 the "Third Party"),
subject to the Right of First Refusal vested in Federmann pursuant to
this Clause 11, and in the notice it shall detail the number of Shares
that it has undertaken to Transfer to the Third Party (in this Clause
the "Offered Shares"), the identify of the Third Party and the identity
of all the Third Party's ultimate interested parties or to the extent
that the Third Party wishes to receive a Transfer of the Offered Shares
indirectly through a trustee and/or other person and/or entity in any
manner, then the identity of every such trustee and other person and
entity as aforesaid, the identity of the Third Party beneficiary and of
all its ultimate interested parties, the number of the Shares held by
the Third Party on the date of providing the notice, all to the same
level of detail for which the Company and/or the Third Party would be
obligated, in accordance with Israeli securities laws, for reporting
the identity of the said entities and persons, were the Third Party an
interested party in the Company, and the consideration that the Third
Party has under taken to pay to Koor for the Offered Shares (which
shall only be cash consideration),the payment terms and all the other
material conditions of the transaction, including all the conditions
precedent of the transaction (hereinafter in this Clause the "Sales
Notice").
11.2 Until the end of a period of 21 Business Days commencing on the date of
Federmann's receipt of the Sales Notice (hereinafter in this Clause 11
the "Acceptance Notice Period"), Federmann may give Koor written notice
that it has decided to purchase the Offered Shares for the
consideration and on the payment terms and other conditions detailed in
the Sales Notice (hereinafter the "Acceptance Notice").
11.3 In the event of Acceptance Notice being provided, Koor shall Transfer
to Federmann and Federmann shall take a Transfer from Koor of all the
Offered Shares, Free and Clear, for the consideration and on the terms
and conditions detailed in the Sale Notice, within 7 Business Days of
the date on which all the approvals and permits necessary for such
transaction as aforesaid in accordance with applicable law are obtained
and in any event not later than the expiration of 60 days from the date
the Acceptance Notice is provided (hereinafter the "Completion
Period"). The Parties shall cooperate in order to obtain all the
approvals and permits necessary for the transaction as aforesaid as
soon as possible.
11.4 Should Federmann not provide Koor an Acceptance Notice in writing by
the end of the Acceptance Notice Period or should Federmann provide an
Acceptance Notice but the transaction mentioned in Clause 11.3 above
not be completed by the end of the Completion Period other than due to
a breach of this Agreement by Koor, Koor may Transfer the Offered
Shares to the Third Party for the consideration and on the payment
terms and other conditions detailed in the Sales Notice, provided that
the transaction for the sale to the Third Party of the Offered Shares
is completed by the expiration of 120 days from the end of the
Acceptance Notice Period or from the end of the Completion Period, as
the case may be (hereinafter the " Maximum Sales Period "), all subject
to the provisions of Clauses 12.1 to 12.3 below.
11.5 For the avoidance of doubt, should the transaction for the sale of the
Offered Shares to the Third Party not be completed by the end of the
Maximum Sales Period, Koor may only Transfer the Offered Shares after
again providing a Right of First Refusal to Federmann as provided above
in this Clause 11.
11.6 From the end of the Prohibited Sales Period, the provisions of Clauses
11.1 to 11.5 above shall not apply with respect to a Stock Exchange
sale of the Koor Shares by Koor in aggregate quantities not exceeding
in any 12-month period 2% of the Company's issued share capital.
11.7 Notwithstanding the provision of Clause 11.6 above, Koor may not
Transfer, pursuant to Clause 11.6 above, in the aggregate, more than
950 300 ,000 of the Koor Shares that are held by it:
11.7.1 1unless Federmann Transfers any more than 650,000 of the
Federmann Shares, except on a Transfer subject to Koor's
Tag-Along Right pursuant to Clause 9 above, and except for a
Transfer to a person or entity, the Shares held by which are
deemed as held by Federmann in accordance with the provisions
of Clause 17.6 below; or
11.7.2 unless the quantity of the Federmann Shares together with the
Koor Shares falls below 45% of the Company's issued share
capital, other than as a result of a breach of this Agreement
by Koor.
12. Transfer of Shares and Obligations Pursuant to the Agreement Without
derogating from the other provisions of this Agreement, including
Clause 7 above, it is agreed that on any Transfer of the Federmann
Shares by Federmann that is subject to Koor's Tag-Along Right under
Clause 9 above, and on any Transfer of the Koor Shares by Koor that is
subject to Federmann's Right of First Refusal under Clause 11 above
(hereinafter in this Clause 12 the "Shares Being Transferred", and Koor
and Federmann being respectively the "Transferor Party"), the following
provisions shall apply:
12.1 If the Transferor Party wishes to Transfer all the Federmann Shares or
all the Koor Shares, as the case may be, the Transferor Party may not
do so and such a Transfer shall be ineffective unless the Transferor
Party Transfers and assigns to the transferee the Shares Being
Transferred (in this Clause 12 the "Purchaser"), together with the
Transfer of the Shares Being Transferred, all the rights and
obligations of the Transferor Party pursuant to this Agreement, and the
Purchaser and the Transferor Party so confirm in writing to the other
Party as provided in Clause 12.3 below. On completion of the assignment
and Transfer of all the Transferor Party's rights and obligations as
aforesaid, the Transferor Party shall cease being a Party to this
Agreement and shall be succeeded by the Purchaser.
12.2 If the Transferor Party wishes to Transfer only a portion of the
Federmann Shares or only a portion of the Koor Shares, as the case may
be, then the Transferor Party may not do so and such a Transfer shall
be ineffective, unless, together with the Transfer of the Shares being
Transferred, the Purchaser assumes all the obligations of the
Transferor Party jointly and severally with the Transferor Party and
confirms said obligation in writing to the other Party as provided in
Clause 12.3 below. For the avoidance of doubt, it is clarified that the
Transferor shall continue to be entitled as against the other Party to
all the rights vested in the Federmann Shares or the Koor Shares, as
the case may be, that are held by it.
12.3 In the event that Koor is the Transferor Party, Koor shall provide
Federmann, together with the Sales Notice as mentioned in Clause 11.1
above, the written confirmation of Koor and the Purchaser as provided
in Clause 12.1 above or the written confirmation of the Purchaser as
provided in Clause 12.2 above, as the case may be, duly signed by the
Purchaser and/or Koor, as the case may be. In the event that Federmann
is the Transferor Party, Federmann shall provide Koor, within 2
Business Days of signing an agreement with the Purchaser for the
Transfer of the Offered Shares, as provided in Clause 9.4 or Clause 9.7
above, the written confirmation of the Purchaser, as provided in Clause
12.1 above or the written confirmation of Federmann and the Purchaser,
as provided in Clause 12.2 above, as the case may be, duly signed by
the Purchaser and/or Federmann, as the case may be.
12.4 In addition to the foregoing, even in a case or cases in which
Federmann Transfers any of the Federmann Shares that are held by it,
the Transfer of which is not subject to Koor's Tag-Along Right pursuant
to Clause 9 above, Federmann may, if it so desires, assign and Transfer
its obligations pursuant to this Agreement or any of them so that the
transferee of the Shares and Federmann shall be jointly and severally
liable to Koor for all the obligations pursuant to this Agreement or a
portion of them, in such proportion as determined between Federmann and
the transferee of the Shares. For the avoidance of doubt, Federmann may
exercise its right to assign and Transfer all or any of its obligations
as provided in this Clause 12.4 together with a Transfer of any of the
Federmann Shares, once or several times, in its discretion.
13. Limitation on Restrictions and Rights The limitations imposed with
respect to a Share Transfer and the rights vested in the Parties in
connection with a Share Transfer pursuant to Clauses 9 to 12above only
apply to the Federmann Shares and the Koor Shares, and those
limitations and rights shall not apply with respect to other Shares in
the Company that may be held by Federmann or Koor, as the case may be.
14. Tag-Along Right to Purchase Should a Party to this Agreement (in this
Clause 14 the "Purchasing Party") directly or indirectly, including
through subsidiaries and/or any trustee, acquire Shares of the Company
for total consideration in excess of US$ 25million (in this Clause 14
the "Purchased Shares") from a Single Third Party, as defined in Clause
9.6 above (in this Clause 14the "Seller"), whether or not on the Stock
Exchange (in this Clause 14 the "Purchase Transaction"), the other
Party to the Agreement (in this Clause 14 the "Other Party") shall have
a right to tag along on such Acquisition as aforesaid, on the terms of
the Purchase Transaction, and to acquire a portion of the securities
that are being purchased (in this Clause 14 the "Purchase Tag-Along
Right") in accordance with the provisions set out below:
14.1 The Purchasing Party shall provide the other Party written notice
within 3 Business Days of the completion of the Purchase Transaction,
detailing the terms of the Purchase Transaction that it has made,
including the quantity of additional Shares, the price (which shall
only be cash consideration), the payment terms, the Seller's identity
and every other material condition (in this Clause 14 the "Seller's
Notice").
14.2 Within 14 Business Days of receiving the Purchaser's notice, the Other
Party shall give the Purchasing Party written notice if it is tagging
along in the Purchase Transaction and of the quantity of Shares, out of
the additional Shares, that it wishes to purchase, not exceeding such
quantity the ratio between which it and the rest of the additional
Shares is equal to the ratio: (i) if Koor is the Other Party--between
the Koor Shares that are held by Koor on the date the Purchaser's
notice is given and the Federmann Shares that are held by Federmann on
the date the Purchaser's notice is given; (ii) if Federmann is the
Other Party--between the Federmann Shares that are held by Federmann on
the date the Purchaser's notice is given and the Koor Shares that are
held by Koor on the date the Purchaser's notice is given.
14.3 Should the Other Party give the Purchasing Party Tag-Along notice at
such time as mentioned in Clause 14.2 above, the Purchasing Party shall
Transfer to the Other Party Shares of the Company in the quantity
specified in the Tag-Along notice, Free and Clear, for the
consideration and on the terms detailed in the Purchaser's notice, all
within 7 Business Days of the date of giving the Tag-Along notice.
15. Term of the Agreement and Effect of the Agreement
15.1 This Agreement shall take effect on the First Closing Date. Should
Stage 'A' of the Transaction (as the term is defined in the Deed of
Sale) not be performed and completed by the end of 3 Business Days
after the Stage 'A' Completion Deadline (as defined in the Deed of
Sale), then this Agreement shall be null and void and ineffective,
without either of the Parties having any claim, complaint or demand
against the other.
15.2 This Agreement shall be in effect until the end of a period of 15 years
from the date on which it enters into effect as provided in Clause 15.1
above or until such time as Federmann's holdings of the Federmann
Shares together with Koor's holdings of the Koor Shares fall below 25%
of the Company's issued share capital, whichever is the earlier.
15.3 For the avoidance of doubt, it is clarified that this Agreement shall
not come to an end if Koor or Federmann ceases to hold Koor Shares or
the Federmann Shares, as the case may be, if together with a Transfer
of the remainder of the Federmann Shares or the Koor Shares, as the
case may be, the Transferor Party (as defined in Clause 12 above)
Transferred and assigned all its rights and obligations pursuant to
this Agreement to the Purchaser (as defined in Clause 12 above), and
the provisions of this Agreement shall continue to apply and obligate
the Purchaser and the Other Party.
16. Koor's Withdrawal from the Controlling Interest
16.1 Koor may at any time from October 1, 2008, provide written notice to
Federmann in which it shall inform Federmann of Koor's desire to bring
to an end its rights and obligations pursuant to Clauses 4, 6 (if Koor
is entitled to rights pursuant to Clause 6 at that time), 7, 8, 9, 10,
11 (except for Clauses 11.6 and 11.7), 12, 13 and 14 of this Agreement
(hereinafter in this Clause 16 the "Revoked Clauses"), and on the
expiration of 6 months from the date on which Federmann is given Koor's
written notice as aforesaid (hereinafter in this Clause 16 the
"Expiration Date"), all the Parties' rights and obligations pursuant to
the Revoked Clauses shall expire so that the sole rights and
obligations that will continue to obligate and entitle the Parties
pursuant to this Agreement shall be the rights and obligations in
Clause 5 above and this Clause 16, all without prejudice to either of
the Party's rights to any relief in respect of a breach of any of the
provisions of the Revoked Clauses that occurred prior to the Expiration
Date.
16.2 Should such notice be given by Koor and to the extent that Federmann so
wishes, the Parties shall discuss the possibility of Koor's Shares that
are held by Koor at that time being acquired by Federmann, alone or
together with others, without the provisions of this Clause being such
as to obligate either of the Parties to enter into such a purchase
agreement or to permit Koor to Transfer the Koor Shares otherwise than
in accordance with the provisions of Clauses 16.3 and 16.4 below.
16.3 As from the Expiration Date, Koor may Transfer all or any of the Koor
Shares that are held by it in any way, either by a Stock Exchange sale
or otherwise, including a distribution in kind to its shareholders,
subject nevertheless to Federmann's Right of First Offer as provided in
Clause 16.4 below or in accordance with the provisions of Clauses 11.6
and 11.7 above.
16.4 Federmann's Right of First Offer 16.4.1As of the Expiration Date, Koor
may not Transfer any of the Koor Shares unless it first gives Federmann
written notice detailing the quantity of the Koor Shares that it wishes
to transfer (hereinafter the " Offered Shares ").
16.4.1 Federmann may, but is not required to, within 14 Business Days
of receiving Koor's notice as aforesaid (hereinafter in this
Clause 16.4 the "Offer Period"), provide Koor written notice
(hereinafter in this Clause 16.4 "Federmann's Notice"),
informing Koor that it wishes to purchase from Koor the
Offered Shares or the portion of them as specified by
Federmann in Federmann's Notice (hereinafter in this Clause
16. the "Shares for Purchase") and the price per Share that
it is willing to pay for those Shares (hereinafter in this
Clause 16.4 the "Price Offered").
16.4.2 Within 7 Business Days of Koor's receiving Federmann's Notice,
Koor shall provide Federmann written notice (hereinafter in
this Clause 16.4 the "Koor's Notice") if it agrees or if it
does not agree to Transfer to Federmann the Shares for
Purchase at the Price Offered. Should Koor inform Federmann in
Koor's Notice that it agrees to Transfer to Federmann the
Shares for Purchase at the Price Offered, Koor shall Transfer
to Federmann and Federmann shall accept from Koor a Transfer
of the Shares for Purchase, and Federmann shall pay Koor the
Price Offered, all by the expiration of 21 Business Days from
the date Koor's Notice is received by Federmann (hereinafter
in this Clause 16.4 the "Completion Period").
16.4.3 Should Koor inform Federmann in Koor's Notice that it does not
agree to Transfer to Federmann the Shares for Purchase at the
Price Offered, Koor may Transfer the Shares for Purchase to a
Third Party or Third Parties, but only at a price greater than
the Price Offered on the same or more favorable payment terms
to Koor than those specified in Clause 16.4.3 above, without
any further obligation of Koor, all within 90 Business Days of
the date Koor's Notice is given. For the avoidance of doubt,
to the extent that the Shares for Purchase have not been
Transferred by Koor to a Third Party as aforesaid within 90
Business Days of the date of Koor's notice being provided,
Koor may only Transfer the Shares for Purchase after again
providing Federmann the Right of First Offer as provided in
this Clause 16.4.
16.4.4 Should Federmann not provide Federmann's Notice within the 14
Business Days mentioned in Clause 16.4.2 above or should
Federmann state in Federmann's Notice that it wishes to
acquire only some of the Offered Shares or if the Transfer of
the Shares for Purchase has not been completed by the end of
the Completion Period, otherwise than due to a breach of
contract by Koor, Koor may, within 90 Business Days of the
date on which Koor's Notice was provided as provided in Clause
16.4.3 above or from the end of the Completion Period, as the
case may be, sell the Offered Shares (if Federmann's Notice
has not been provided as aforesaid) or that portion of them
that are not included in the Shares for Purchase (if
Federmann's Notice is provided with respect to only a portion
of the offered Shares).
16.4.5 For the purpose of Clauses 16.4.3 and 16.4.5 above, a Transfer
of Shares by means of their distribution as a dividend in kind
by Koor to its shareholders shall be deemed as a Transfer of
Shares that is made on the date determining the rights to
receive the dividend in kind by Koor's shareholders, and such
Transfer as aforesaid shall be deemed as though made at the
average closing price of the Company's shares on the Tel Aviv
Stock Exchange in the 12 trading days before and in the 12
trading days after the date of giving Koor's written notice as
provided in Clause 16.4.1 above.
17. Miscellaneous
17.1 This Agreement may be signed in several separate copies and each copy
signed by one of the Parties shall be treated as an original and all
together they shall be treated as a single, complete document.
17.2 No conduct by either of the Parties shall be deemed a waiver of any of
its rights pursuant to this Agreement or by law or as its waiver of or
acquiescence to in any breach or non-performance of any condition,
unless the waiver, acquiescence, postponement, modification,
cancellation or addendum has been done expressly and in writing.
17.3 This Agreement contains, embodies, merges and expresses all the terms
and conditions agreed between the Parties on the matters mentioned
herein. Any promises, guarantees, agreements, whether written or oral,
undertakings or representations on the matters mentioned in this
Agreement that were given or made by the Parties prior to the making of
this Agreement that have not found specific expression herein shall not
be deemed to augment, derogate from or modify the rights and
obligations provided in this Agreement or deriving herefrom, and the
Parties shall not be bound by them from the date of this Agreement
(hereinafter " Revocation of the Obligations Preceding Signature "). It
is hereby expressly agreed that the Revocation of the Obligations
Preceding Signature shall be effective even in the event that this
Agreement is revoked or rescinded for any reason. The foregoing shall
not be such as to impair the effect of the Parties' rights and
obligations pursuant to the Sale [sic] Agreement.
17.4 For the avoidance of doubt, the provisions of the Shareholders
Agreement between Koor and the Company, including wording that is
different from the wording of this Agreement, shall not in any manner
be applied in the interpretation of this Agreement. Without prejudice
to the generality of the foregoing, the exchanges of documents between
the Parties prior to the signature of this Agreement, including the
drafts exchanged between them, shall have no significance in the
interpretation of this Agreement.
17.5 Except as otherwise provided in this Agreement, the Parties' rights and
obligations pursuant to this Agreement are not assignable and/or
transferable. The provisions of this Clause are not such as to affect
Federmann's right to exercise its right of first refusal as provided in
Clause 11 above by means of any third party and/or third parties.
17.6 In this Agreement any person or entity shall be deemed as holding all
the Shares held by it, directly or indirectly and, without prejudice to
the generality of the foregoing, all the Shares held, directly or
indirectly, by any related entity and by any member of his family, as
they are defined in the Securities Law, 5728-1968; and also all the
Shares that are held by any person and/or entity that is construed in
accordance with the provisions of the Securities Law, 5728-1968 as
holding Shares of the Company together with that person or entity and
also all the Shares held through a trustee and/or registration company,
and also all the Shares that are held by another shareholder of the
Company who is jointly and severally liable with a Party to this
Agreement for the obligations pursuant to this Agreement. Nevertheless,
a Party to this Agreement shall not, for the purpose of this Agreement,
be treated as holding Shares that are held by the other Party to this
Agreement.
17.7 This Agreement shall be governed by the laws of the State of Israel,
without taking into account its choice of law rules. Exclusive
jurisdiction on all matters relating to this Agreement or deriving
herefrom is vested in the competent courts in the City of Tel
Aviv-Jaffa and in them alone.
17.8 Each of the Parties to this Agreement shall bear the legal expenses
that it is charged in respect of this Agreement.
17.9 An obligation to vote by virtue of all of a Party's Shares in the
Company in connection with any resolution in any way also includes the
obligation to participate in the vote by virtue of all those Shares,
and not to vote for any further or other proposed resolution that is
such as to contradict, cancel or diminish said resolution.
17.10 Without being such as to impose any further limitations on the Transfer
of Shares other than that expressly provided in this Agreement, each of
the Parties undertakes to act in good faith towards the other and not,
by act or omission, to cause the frustration of this Agreement's
provisions or any of them and/or to make them unrealizable.
17.11 The Parties hereto may extend any time specified in this Agreement,
either once or several times, by written notice signed by two officers
of each Party to this Agreement, without any further approval being
necessary.
18. Notices
18.1 The Parties' addresses for the purpose of this Agreement are as set out
in the heading hereto or any other address in Israel of which one Party
gives the other written notice.
18.2 Any notice pursuant to this Agreement shall be in writing and be sent
by registered mail or personal delivery by messenger to the address of
the relevant Party, as mentioned in Clause 18.1 above, and that address
shall in all respects in connection with this Agreement also be the
address of that Party for the service of court process.
18.3 Notice that is sent shall be treated as having reached the addressee
and come to its knowledge within five Business Days if sent by
registered mail or, if delivered in person by messenger by 17:00 hours
on any Business Day, it shall be treated as received on the Business
Day after delivery.
IN WITNESS WHEREOF THE PARTIES HAVE EXECUTED THIS AGREEMENT:
(signed)
(signed) -----------------------------------------
Koor Industries Ltd.
Federmann Enterprises Ltd.
(signed) ----------------------
Heris Aktiengesellschaft
