EXHIBIT 14
TRUST DEED
DRAWN UP AND SIGNED IN TEL-AVIV ON OCTOBER 14, 2009
BETWEEN:
SCAILEX CORPORATION LTD.
Public company no. 00-000000-0
of 00 Xxx-Xxxxxx Xxxxx Xxxxxx, Xxxxxx-Xxxxx 00000 Israel
(hereinafter - "THE COMPANY")
OF THE FIRST PART;
AND:
CLAL FINANCE TRUST 2007 LTD.
Private company no. 00-000000-0
of 00 Xxxxxxxx Xxxxx Xxxx, Xxx-Xxxx, Xxxxxx
(hereinafter - "THE TRUSTEE")
OF THE SECOND PART;
WHEREAS on August 18, 2009, the Company and the Trustee signed a Trust
Deed ("THE FIRST TRUST DEED") in relation to a shelf prospectus
published by the Company on August 21, 2009 ("THE SHELF
PROSPECTUS") under which the Company may issue, inter alia,
Series D Bonds of the Company ("SERIES D BONDS");
AND WHEREAS the Company intends to publish a shelf offering report pursuant
to the Shelf Prospectus, under which, inter alia, the Company
shall offer Series D Bonds for the first time ("THE SHELF
OFFERING REPORT");
AND WHEREAS the parties desire to supplement the particulars of the Series D
Bonds with concrete conditions of the Series D Bonds, as shall be
expressed in the Shelf Offering Report that the Company shall
publish, and as specified hereunder, and to prescribe additions
and amendments that shall apply to the First Trust Deed, solely
in relation to the Series D Bonds, as specified hereunder in this
Deed;
AND WHEREAS a rating has been assigned to the Series D Bonds by a rating
company;
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WHEREFORE, THE PARTIES HEREBY AGREE, STIPULATE AND DECLARE AS FOLLOWS:
1. GENERAL
1.1 The provisions of the First Trust Deed, which is attached as APPENDIX
A to this Deed, constitute an integral part of this Deed, and they
shall apply to the relations between the parties and in relation to
the Series D Bonds. It is hereby clarified that, to the extent that
additional series shall be issued pursuant to the Shelf Prospectus,
the provisions of this Deed and the additions and/or amendments to the
First Trust Deed as specified hereunder, shall not apply to the
additional series.
1.2 All of the provisions of the First Trust Deed shall remain in effect,
unless otherwise expressly stated in this Deed.
1.3 In the event of a contradiction between the provisions of this Deed
and the provisions of the First Trust Deed, the provisions of this
Deed shall prevail.
2. THE FOLLOWING AMENDMENTS SHALL APPLY TO THE FIRST TRUST DEED, SOLELY IN
RELATION TO THE SERIES D BONDS:
2.1 A NEW CLAUSE 6.3 SHALL BE ADDED, AS FOLLOWS:
"6.3 In addition to and in accordance with that stated above in clause
6.2, the Company undertakes that if the transaction for the
acquisition of shares of Partner Communications Ltd. (hereinafter:
"PARTNER") from Advent Investments Pte Ltd. (hereinafter: "ADVENT"), a
Singapore corporation controlled by Xxxxxxxxx Telecommunications
International Limited, by the Company in accordance with the agreement
dated August 12, 2009 (hereinafter: "THE PARTNER SHARE ACQUISITION
Transaction") shall not be closed by March 31, 2010 (hereinafter: "THE
DEADLINE"), it shall call all of the Bonds for a forced early
redemption, and the provisions as specified hereunder shall apply. The
Partner Share Acquisition Transaction was reported by the Company in
the Company's Immediate Reports of August 12, 2009 (reference no.:
2009-01-194286), of August 13, 2009 (reference no.: 2009-01-195681),
of August 23, 2009 (reference no.: 2009-01-204756) and of September
21, 2009 (reference no.: 2009-01-236556). In this regard - "Closing of
the Partner Share Acquisition Transaction" - means a transfer of
shares representing at least 36% of Partner's issued and paid-up share
capital to the Company's ownership.
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The entire immediate net proceeds (i.e., net of commissions) that the
Company shall receive in respect of the issue of the Series D Bonds
shall be deposited in an escrow account that shall be opened in one of
the five major banks in Israel, and shall not be transferred to the
Company for its use until the conditions have been fulfilled for the
Closing of the Partner Share Acquisition Transaction, as stated, in
accordance with the following mechanism:
6.3.1 The Trustee shall open bank accounts under its name at one or
more of the five major banks in Israel, at its discretion,
provided that a bank as stated shall have a rating of at least
(AA), to which the Issue Coordinator shall transfer the total
immediate net proceeds that the Company shall receive in respect
of the issuance of the Series D Bonds, and this sum shall be
invested in shekel deposits or in shekel bonds issued by the
State of Israel or in short-term loans issued by the State of
Israel, according to the Company's instructions (hereinafter:
"THE ESCROW ACCOUNTS" and "THE DEPOSITS," respectively). The
Trustee shall have sole signatory rights in the Escrow Accounts
in relation to any operation in these accounts, including with
respect to the withdrawal of monies from these accounts. The
Trustee shall be allowed, but not obligated, to transfer, at the
request of the Company, the monies and securities deposited in an
Escrow Account at one bank to an Escrow Account at another bank
as stated. Notwithstanding that stated, it is clarified that the
policy for investing the funds in the Escrow Accounts for Series
D is the sole responsibility of the Company, and the Trustee for
Series D shall not be responsible for any loss or damage that
might be caused as a result of investment operations as stated
that shall be carried out according to the Company's
instructions.
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6.3.2 The funds, the securities being deposited in the Escrow
Accounts, and all of the Company's rights in the Escrow Accounts
shall be pledged in favor of the Trustee for the holders of the
Series D Bonds under a sole first-ranking fixed lien, and,
concurrent with the transfer of the Deposits to the Escrow
Accounts, the Company shall issue the following documents to the
Trustee:
6.3.2.1 original lien registration certificates from the
Registrar of Companies on the funds, the securities being
deposited in the Escrow Accounts and all rights of the
Company in the Escrow Accounts in favor of the Trustee; all
documents submitted to the Registrar of Companies for the
purpose of the registration of the liens, including the form
"Particulars of Mortgages and Liens," with the first page of
each document being stamped with the "received" stamp of the
Registrar of Companies; a summary of the particulars of the
Company's liens, subsequent to the registration of the
liens, which specifies the liens registered and every other
lien that the Company has; i.e., thus enabling the Trustee
to verify that no lien is registered with the Registrar of
Companies that contradicts the aforesaid liens. It is
clarified that the lien registration certificates as stated
shall be issued to the Trustee within 5 Business Days of the
signing date of the lien documents.
6.3.2.2 confirmation from the banks at which the Escrow Accounts
were opened acknowledging that the funds, the securities
being deposited in the Escrow Accounts and all of the
Company's rights in the Escrow Accounts are pledged in favor
of the Trustee, and that the bank shall not have any rights
of offset or lien in relation to the funds and securities
that are being held and that shall be held in the Escrow
Accounts.
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6.3.3 As long as the preconditions for the Closing of the Partner
Share Acquisition Transaction have not been fulfilled up until
the Deadline, the purpose of the Deposits is to guarantee the
repayment of the Principal of the Series D Bond to the
Bondholders, and this, in the event that the preconditions for
the Closing of the Partner Share Acquisition Transaction shall
not be fulfilled by the Deadline.
6.3.4 The Trustee shall operate the Deposit as follows: upon receiving
notification from the Company that all preconditions for the
Closing of the Partner Share Acquisition Transaction have been
fulfilled, then, subject to the signing of the lien document, as
specified hereunder in clause 3.5, the Trustee shall sign an
order to transfer the Deposits to the account specified by the
Company, inclusive of profits and after deducting tax and
expenses in respect of management of the Accounts, the Trustee's
fee, and expenses incurred in accordance with the Trust Deed, to
the extent accumulated up until that time. To dispel any doubt,
it is clarified that, for the purpose of approving the transfer
of the Deposits to the Company, the Trustee is relying solely on
the Company's notification that all preconditions have been
fulfilled for the Closing of the Partner Share Acquisition
Transaction by the Deadline, and the Trustee is not required to
verify whether the preconditions indeed had actually been
fulfilled. The Trustee shall be present at the time of the
Closing of the Partner Share Acquisition Transaction in order to
enable the performance of its operations in conformity with this
Trust Deed at that time. The Company shall notify the Trustee
three Business Days in advance of the expected transfer date of
the funds.
6.3.5 FORCED EARLY REDEMPTION OF ALL OF THE BONDS
The Company undertakes that, in the event that the Partner Share
Acquisition Transaction shall not be closed by the Deadline,
i.e., by March 31, 2010, it shall call the Bonds for forced early
redemption, and the following provisions shall apply.
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If the Company shall not publish an Immediate Report regarding
the Closing of the Partner Share Acquisition Transaction by the
Deadline, the Company shall effect a full forced early redemption
of all of the Series D Bonds (hereinafter: "EARLY REDEMPTION"),
according to the following mechanism:
6.3.5.1 On April 1, 2010, the Company shall publish an Immediate
Report that the Partner Share Acquisition Transaction was
not closed, and about the effecting of an Early Redemption
to the holders of the Series D Bonds, with a copy to the
Trustee, with the determinant date for the implementation
thereof to be specified in the Immediate Report, which shall
be no less than 30 days and no more than 45 days prior to
the implementation of the Early Redemption. In other words,
the Company shall publish an Immediate Report, which
includes a notice that the Early Redemption will be
executed, and which specifies the execution date of the
Early Redemption, a date which shall occur no earlier than
30 days and no later than 45 days after the publication date
of the said Immediate Report. The date of the Early
Redemption shall not occur during the period between the
determinant date for the payment of interest in respect of
the Series D Bonds and the actual payment date of the
interest. The Company shall also report the interest that
accrued up until the date of the Early Redemption in the
Immediate Report.
6.3.5.2 On the date of the Early Redemption, the Company shall
pay the sum of the principal of the Series D Bonds, plus the
accrued interest and linkage differentials in respect of the
outstanding balance of the Series D Bonds up until the date
of the Early Redemption (hereinafter: "THE OBLIGATORY
VALUE").
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The sum of the Early Redemption shall be paid to the holders
of the Bonds by the Trustee, by way of the execution of a
bank transfer to the Nominee Company of Israel Discount Bank
Ltd., according to the particulars that the Company shall
issue to the Trustee as stated hereunder, out of the funds
deposited in the Escrow Accounts, according to the written
instructions that shall be received from the Company, which
shall include the date for transfer of the funds, the
destination thereof, as well as any other particular that
shall be required in order to enable the Trustee to carry
out the transfer, attaching a calculation of the sum that
must be paid, as specified above in clause 6.3.5(b). In the
event that the balance of the funds in the Escrow Accounts
shall be less than the Obligatory Value of the Bonds, the
Company shall transfer to the Escrow Accounts the sum
equivalent to the difference between the Obligatory Value of
the Bonds and the funds in the Escrow Accounts at that time.
The Trustee and the Company shall transfer the funds
required for the purpose of the forced Early Redemption to
the Nominee Company in conformity with the bylaws of the
TASE Clearing House. The Company shall provide any
assistance to the Trustee that might be required in order to
enable it to render the payment in its entirety and on time,
including the timely transfer to the Trustee of details of
the sums, the dates and any other detail that is required in
order to effect the forced Early Redemption as stated.
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6.3.6 If all of the preconditions stated above in clause 6.3.4 shall
be fulfilled regarding the release of all of the funds from the
Escrow Accounts in respect of the Series D Bonds, the holders of
the Series D Bonds are hereby instructing the Trustee for Series
D, by way of an irrevocable instruction, to transfer the entire
balance of funds of the Deposits to the Company, and for this
purpose, to sign all documents required for the removal of the
liens on the Escrow Accounts and for the transfer of the funds of
the Deposits to the Company. Shortly after the transfer of the
funds as stated, the Trustee shall take action to close the
Escrow Accounts.
6.3.7 To dispel any doubt, it is hereby clarified that the Trustee is
under no obligation to examine, and in fact, the Trustee did not
examine, the economic value of the collateral that was provided
and/or that shall be provided (if any) to guarantee the payments
to the holders of the Series D Bonds. Upon engaging in the Trust
Deed and consenting to serve as the Trustee for the holders of
the Series D Bonds, the Trustee is not expressing its opinion,
whether explicitly or implied, regarding the economic value of
the collateral that was provided and/or shall be provided (if
any) by the Company. Furthermore, the Trustee is not expressing
its opinion regarding the Company's ability to fulfill its
undertakings towards the holders of the Series D Bonds. That
stated shall in no way derogate from the Trustee's obligations by
law and/or pursuant to the Trust Deed, and shall in no way
derogate from the Trustee's duty (to the extent that such duty
applies to the Trustee pursuant to any law) to examine the impact
of changes in the Company as of the date of this Shelf Offering
Report and thereafter, to the extent that any such changes might
adversely affect the Company's ability to fulfill its
undertakings towards the holders of the Series D Bonds. That
stated shall in no way derogate from the Trustee's obligations by
law and/or pursuant to the Trust Deed."
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2.2 THE FOLLOWING PARAGRAPH SHALL BE ADDED UNDER CLAUSE 4 OF THE FIRST
TRUST DEED:
"The Company also undertakes that it shall distribute dividends, as
long as Series D Bonds are in circulation, solely out the profits
suitable for distribution that accrued during the four (4) quarters
that preceded the dividend distribution date.
Furthermore, the Company undertakes that even should it cease to be a
reporting corporation, as this term is defined in the Securities Act,
the Company shall prepare and issue interim and annual financial
statements to the Trustee and in the format compulsory for public
companies at that time."
2.3 Under subclause 7.1.1 of the First Trust Deed - the words "forty-five
(45) days" and be replaced by "thirty (30) days."
2.4 In subclauses 7.1.2, 7.1.3 and 7.1.4 of the First Trust Deed, every
reference to "ninety (90) Business Days" shall be replaced by
"forty-five (45) Business Days."
2.5 In subclause 7.1.5 of the First Trust Deed, after the words "or shall
notify of its intention to stop paying its debts" shall be added "or
should there be a substantive concern that the Company shall cease to
pay its debts."
2.6 IN CLAUSE NUMBER 7 OF THE FIRST TRUST DEED (IMMEDIATE PAYMENT), THE
FOLLOWING CHANGE AND ADDITION SHALL BE MADE IN RELATION TO THE CAUSES
FOR CALLING SOLELY THE SERIES D BONDS FOR IMMEDIATE PAYMENT:
Causes for calling the Series D Bonds for immediate payment shall be
added, as follows:
"7.1.8 if the Series D Bonds shall cease to be rated by a rating
company, to the extent that they are rated. To dispel any doubt,
it is clarified that if the Series D Bonds shall be rated by a
number of rating companies, for the purposes of this clause,
"cease to be rated" means cessation of rating by all of the
rating companies. The Company undertakes that, to the extent that
the matter is under its control, it shall take action so that the
Series D Bonds shall at all times be under monitoring watch by a
rating company until the end of the period of the Series D Bonds.
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7.1.9. if the Company's holding ratio of Partner shall fall below 26%
of Partner's issued and paid-up share capital.
7.1.10 if the Company shall not publish financial statements by the
end of 45 days after the date prescribed for doing so in the
Securities Act and in the regulations pursuant thereto.
7.1.11 if the Company shall cease to be a reporting corporation.
7.1.12 if the Company shall effect material real investments; i.e.,
long-term investments (other than financial investments) in
assets and corporations other than in the communications sector
before 24 months have elapsed since the issue date of the Series
D Bonds. For the purposes of this clause "material' means more
than 20% of the Company's total balance sheet according to the
Company's consolidated financial statements for the quarter
preceding the quarter in which the investment was effected."
2.7 Clause 7.2.7 of the First Trust Deed shall be deleted in its entirety.
2.8 The following sentence shall be added to clause 19.4 of the First
Trust Deed: "It is hereby clarified that examination of the Company's
meeting of its liabilities in relation to the distribution of a
dividend, as stated above in clause 4, and in relation to transactions
constituting a cause for immediate payment, as stated above in clause
7.1.12, shall be deemed special assignments."
2.9 CLAUSE 20.1 OF THE FIRST TRUST DEED SHALL BE REPLACED BY AN AMENDED
CLAUSE 20.1 AS FOLLOWS:
"20.1 The Trustee shall be allowed to deposit all of the bills and
documents that testify, represent and/or determine its right in
relation to any asset held at that time in its possession, in a
safe and/or in any other place to be chosen by it, in any of the
five major banks in Israel."
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2.10 SUBCLAUSES SHALL BE ADDED TO CLAUSE 20 OF THE FIRST TRUST DEED, AS
FOLLOWS:
"20.7 Within the scope of its trusteeship, the Trustee may rely on any
written document, including a letter of instructions,
notification, application, consent or confirmation, which appears
to have been signed or issued by any person or body that the
Trustee believes in good faith to have been signed or issued by
it.
20.8 The Company and the holders of the Series D Bonds hereby release
the Trustee in a final and absolute release from any liability
for any damage and/or loss and/or expense that might be caused to
them and/or that they might be required to bear due to any act
and/or omission of the Trustee, including as a result of an error
in judgment, a fault that occurred during a transfer of funds or
a failure to transfer funds to the Nominee Company in their
entirety and on time according to the Company's instructions, all
according to the provisions of this Deed and/or according to any
other instruction that shall be duly received by the Trustee from
them, and by virtue of the powers granted to the Trustee pursuant
thereto.
20.9 Any release from liability being issued to the Trustee pursuant
to the provisions of this Deed is contingent upon the act (or
omission) of the Trustee, including an exercise of its judgment,
in relation to which the release is being given, being performed
with BONA FIDES and provided that it has not been committed with
negligence and in a breach of a fiduciary duty or with MALA
FIDES."
2.11 CLAUSE 21 OF THE FIRST TRUST DEED SHALL BE REPLACED BY AN AMENDED
CLAUSE 21 AS FOLLOWS:
"The Trustee shall be allowed, within the scope of management of the
affairs of the trusteeship, to appoint an agent/agents to act in its
stead, whether an advocate or otherwise, in order to perform or
participate in the performance of special operations that must be
performed in relation to the trusteeship, and, without derogating from
the general purport of that stated above, in the instituting of legal
proceedings, provided that the Trustee gave notice to the Company
regarding the appointment of such an agent. The Trustee shall also be
allowed to clear the reasonable fee of any such agent (including in
advance) at the Company's expense, and the Company shall immediately
reimburse the Trustee for these expenses, upon its first request, all
under the condition that the Trustee issued prior notice to the
Company regarding the appointment of agents as stated. The Company
shall be allowed to object to the appointment of a particular agent as
stated for any reasonable reason, including in the event that the
agent is a competitor or is in a conflict of interests, whether
directly or indirectly, with the Company's businesses, and provided
that the Company forwarded its reasonable reasons to the Trustee
within 3 days of the date of receipt of the notice of the appointment
of the agent."
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2.12 THE FOLLOWING AMENDMENTS SHALL BE MADE IN CLAUSE 22 OF THE FIRST TRUST
DEED:
a) The first paragraph of subclause 22.1 shall be replaced with a
new subclause as follows:
"The Trustee shall be entitled to indemnification from the
Company, including in advance, and, if it shall not be
indemnified by the Company within a reasonable length of time
after the Trustee's demand to the Company to do so, from the
holders of the Bonds, this in respect of any damage and/or loss
and/or reasonable expenses that were incurred and/or that shall
be incurred and reasonable costs that it bore or shall be
required to bear in relation to operations that it performed or
is required to perform by virtue of its duty pursuant to the
conditions of this Deed, and/or by law and/or order of a
competent authority and/or any statute and/or pursuant to a
lawful demand from the holders of the Bonds and/or pursuant to a
lawful demand from the Company."
b) Under clause 22.3, after the words "indemnification concerning
undertakings that they assumed," the following words shall be
added: "damage and/or loss that they bore within the framework of
the trusteeship or in relation thereto."
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c) Subclause 22.6 shall be added, as follows: "any indemnity that
shall be given to the Trustee pursuant to the provisions of this
Deed is contingent upon the act (or omission) of the Trustee,
including an exercise of its judgment, in relation to which the
indemnity is being given, being performed with BONA FIDES and
provided that it has not been committed with negligence and in a
breach of a fiduciary duty or with MALA FIDES."
2.13 Under subclause 24.1.1 of the First Trust Deed, the words "materially"
shall be deleted.
2.14 A NEW CLAUSE 26.4 SHALL BE ADDED TO THE FIRST TRUST DEED, WORDED AS
FOLLOWS:
"26.4 Notwithstanding that stated above, in the event that the Trustee
shall be replaced, the identity of the new trustee is subject to
the prior written approval of the Minister of Communications."
2.15 SUBCLAUSES SHALL BE ADDED TO CLAUSE 28 OF THE FIRST TRUST DEED
(REPORTING TO THE TRUSTEE), AS SPECIFIED HEREUNDER:
"28.6 The Company shall notify the Trustee about any change in the
rating of the Series D Bonds by a rating company no later than
two (2) Business Days after having received written notice at its
registered office from the rating company about the rating change
as stated. For the purpose of this clause 28.6, a notice from the
rating company, as shall be published in an immediate report in
"Magna," shall constitute notice to the Trustee and to the
holders of the Series D Bonds pursuant to the conditions of this
clause, and the Company shall be released from issuing a written
notice to the Trustee as stated.
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28.7 On December 31 of each year, and for as long as this Deed is in
effect: a confirmation signed by the senior officeholder for
financial affairs in the Company regarding the execution of
payments of interest and/or payment on account of the principal,
in relation to the Series D Bonds, when the payment due date
thereof occurred prior to the date of the confirmation, and the
payment date, as well as the balance of the par value of the
Series D Bonds that are still in circulation on the determinant
date for the payment.
28.8 A copy of any document that the Company forwards to its
shareholders or to the Bondholders, and particulars of any
information that the Company forwards to them in any other
fashion, and any additional information, at the reasonable
request of the Trustee.
28.9 Any explanation, document, calculation or information pertaining
to the Company, its businesses and/or assets, within a reasonable
length of time, to the Trustee and/or to those people that it
shall so instruct, which shall be reasonably required, at the
Trustee's discretion, for the sake of examinations being
conducted by the Trustee for the purpose of protecting the
Bondholders.
28.10 Immediate notice, upon the Company becoming informed of any
instance whereby an attachment is imposed on its assets, in whole
or in part, as well as in any instance whereby a receiver shall
be appointed for its assets, in whole or in part, as well as to
immediately institute all reasonable measures, at its expense,
that are necessary in order to remove such attachment or
receiver.
28.11 Notification, within 7 Business Days of the publication of the
Company's quarterly financial statements during the 24 months
subsequent to the issuance of the Series D Bonds, of the fact
that no material real investments were executed, as stated above
in clause 7.1.12.
28.12 Two Business Days after the publication date of an Immediate
Report containing a declaration of the distribution of a
dividend, the Company shall deliver an accountant's confirmation
to the Trustee that the said distribution of the dividend
complies with the Company's undertakings as stated above in
clause 4."
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3. IN ADDITION TO THAT STATED ABOVE, THE SERIES D BONDS, INCLUDING THE
CONDITIONS IN THE OVERLEAF, SHALL INCLUDE THE FOLLOWING CONCRETE DETAILS:
3.1 Registered Series D Bonds of NIS 1 par value each. The Principal of
the Series D Bonds, which is linked to the consumer price index in
respect of the month of August 2009, as published on September 15,
2009, shall be paid in four annual payments on October 30 of each of
the years 2012 through 2015 (inclusively). The first payment of the
principal shall be paid on October 30, 2012 and the last payment of
the principal shall be paid on October 30, 2015.
3.2 The Series D Bonds bear annual interest at the rate to be determined
in the tender (which shall not exceed 6.2% per annum). The interest on
the Series D Bonds shall be paid in biannual payments, on the balance
of the outstanding principal, on April 30 and on October 30 of each of
the years 2010 through 2015 (inclusively), in respect of the six-month
period ending on the last day prior to every interest payment date.
The first interest payment on the Series D Bonds shall be paid on
April 30, 2010 for the period as of the day after the tender date
pursuant to the Shelf Offering Report and ending on April 29, 2010 and
shall be calculated on the basis of 365 days per year, according to
the number of days in the said period. Subsequent interest payments
shall be at the annual interest rate divided by the number of interest
payments in the year.
3.3 The Principal and the interest of the Series D Bonds are linked to the
consumer price index in respect of the month of August 2009, which was
published on September 15, 2009 (hereinafter: "THE BASE INDEX"), under
the following conditions:
Should it become clear, on any payment date on account of the
Principal and/or the interest of the Bonds, that the index last
published prior to the payment date (hereinafter: "THE PAYMENT INDEX")
is higher than the Base Index, the Company shall pay that payment of
Principal or interest, being increased relative to the rate of the
rise in the Payment Index compared with the Base Index; however,
should it become clear that the Payment Index is the same as or lower
than the Base Index, the Company shall pay that payment of Principal
or interest being calculated on the basis of the Base Index.
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3.4 To secure the payment of the principal and the interest that the
Company is required to pay to the holders of the Series D Bonds, and
to secure the complete fulfillment of all of its other undertakings
pursuant to the conditions of the Series D Bonds, the Company shall
create a sole first-ranking fixed lien in favor of the Trustee,
immediately after the release of the funds as stated above in clause
6.3.4, which shall be registered with the Registrar of Companies,
within two Business Days after the said date, on the following pledged
assets:
3.4.1 Ordinary shares of NIS 0.01 par value each of Partner
Communications Ltd. ("PARTNER"), which are owned by the Company,
with the market value thereof on the date of the monetary
clearance of the proceeds of the issue of the Series D Bonds
("THE BOND ISSUE DATE") being equivalent to 100% of the par value
of the Series D Bonds, including a lien on all of the rights
attached to these shares, and including the right to a dividend
in cash or in kind and any other distribution in respect of these
shares, as well as rights to be issued by Partner in respect of
and/or in relation to these shares, bonus shares, a preemptive
right or rights to receive other securities in respect thereof of
any class whatsoever (hereinafter: "THE PLEDGED SHARES"). When
creating the lien on the Pledged Shares in favor of the Trustee,
the Pledged Shares shall remain registered in Partner's register
of shareholders under the name of the Company and under its
ownership. When creating the lien, the Company shall sign a blank
share transfer deed for the transfer of the Pledged Shares to a
third party (hereinafter: "THE SHARE TRANSFER DEED"), and the
Share Transfer Deed, along with the share certificates to be
issued in respect of the Pledged Shares under the Company's name
shall be deposited with the Trustee, who shall hold these
documents in trust for the Company and for the Holders of the
Series D Bonds,
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On the date that the share certificates in respect of the Pledged
Shares are issued to the Trustee, the Company shall issue a
confirmation to the Trustee, specifying that the market value of
the deposited Pledged Shares on the financial clearing date of
the proceeds of the issue of the Series D Bonds is equivalent to
100% of the par value of the Series D Bonds. It is hereby
clarified that, if expansions of the Series D Bonds shall be
effected, the calculation shall be performed in relation to each
of the actual financial clearing dates of the Series D Bonds, and
the par value of the Bonds issued at that time.
(a) Until the occurrence of an event vesting the Trustee and/or
the Holders of the Series D Bonds with the right to call for
the immediate payment of the Series D Bonds, pursuant to the
conditions prescribed in the Trust Deed, the Company shall
enjoy all of the rights, funds and assets due in respect of
and/or in relation to the Pledged Shares, and, inter alia,
accordingly: (1) the Company shall be entitled to directly
receive all dividends and all other distributions that might
be distributed in respect of and/or in relation to the
Pledged Shares; (2) the Company shall be allowed to
participate and vote in respect of the Pledged Shares at all
of Partner's assemblies of shareholders (general and
extraordinary) as the owners of the Pledged Shares for all
intents and purposes; and (3); the Company shall be allowed
to pass any resolution, at its sole discretion, regarding
the exercise or non-exercise of rights that Partner shall
issue in respect of the Pledged Shares and/or the sale
thereof, and the shares that shall be acquired as a result
of an exercise of the rights, shall be owned solely by the
Company, and any proceeds that shall be received as a result
of the sale of the rights, shall be transferred to the
Company.
17
(b) When exercising the lien on the Pledged Shares, and subject
to the lien exercise proceedings pursuant to the law, and
after obtaining the prior written approval of the Minister
of Communications, the Trustee shall be allowed, subject and
according to the orders of the competent court regulating
the lien exercise proceedings, to deliver the aforesaid
Share Transfer Deed for signing by the third party that is
purchasing the Pledged Shares under the lien exercise
proceedings as the transferee, and to return the share
certificates to Partner, which shall issue new share
certificates in respect of the Pledged Shares under the name
of the aforesaid third party. Furthermore, with every
partial release of the Pledged Shares as prescribed in the
Trust Deed, the aforesaid share certificate and Share
Transfer Deed held by the Trustee in respect of the Pledged
Shares shall be replaced, at the request of the Company,
with a new share certificate and a new blank Share Transfer
Deed, which the Company shall sign, which reflects the
number of Pledged Shares subsequent to the relevant partial
release, and the Company shall act without delay to register
the amendment to the lien in the records of the Registrar of
Companies.
The Company shall exercise means of control over Partner, subject
to any law, so that Partner shall record the matter of the lien
on the Pledged Shares in favor of the Trustee in its books, and
so that Partner shall undertake not to issue an alternate share
certificate in respect of the Pledged Shares and/or in lieu of
the certified issued under the Company's name, not to split the
aforesaid share certificates and/or to effect any disposition of
the Pledged Shares, without receiving the Trustee's prior written
consent thereto.
18
As of the pledge date of the Pledged Shares and until the full
and final payment of the Principal of the Series D Bonds, and the
interest, if Partner shall effect a "distribution," as this term
is defined in section 1 of the Companies Act, 5759 - 1999, which
shall be effected other than from "profits," as this term is
defined in section 302(b) of the said Act (hereinafter: "SPECIAL
DISTRIBUTION"), then the Company shall issue additional sureties
to the Trustee, within five Business Days of the date of the
Special Distribution, by way of a lien of additional Partner
shares, at the quantity equal to the number of Pledged Shares in
the quotient that shall be obtained by dividing: (1) the
inclusive sum of the Special Distribution (in NIS) in respect of
all of the shares in Partner's issued and paid-up share capital
(hereinafter: "ALL OF PARTNER'S SHARES") by (2) the market value
(in NIS) of All of Partner's Shares on the eve of the
distribution.
3.4.2 For the purpose of this clause 3.4, "market value" means the
average of the closing prices of Partner's shares during the last
five Trading Days on the TASE that preceded the relevant
examination date.
3.4.3 With every buy-back of the principal of the Series D Bonds by
the Company, a portion of the Pledged Assets shall be released,
within two Business Days, subject to the written instruction of
the Company, and according to that stated in that instruction, in
such manner that, subsequent to the repayment as stated, a
relative portion shall be removed from the Pledged Shares
according to the par value of the Series D Bonds that were
repurchased by the Company, and they shall cease to be part of
the Pledged Shares. If a share certificate has been deposited
with the Trustee, the time constraint of two Business Days
specified above shall not apply, and the Trustee shall take
action within two Business Days to effect a release of the
relative portion of the shares; however, the actual release shall
be effected once all of the operations for splitting and issuing
the share certificates as required shall have been completed.
19
3.4.4 On the payment date of the last payment in respect of the
Principal and interest in respect of the Series D Bonds, and
subject to their repayment in full, the Trustee shall release the
balance of the Pledged Shares to the Company, as they shall be in
the Escrow Account at that time, this within two Business Days,
and subject to the receipt of written instructions.
3.4.5 In the event that the Company shall desire to expand the series
of Series D Bonds, then the proceeds of the issuance of the
additional Series D Bonds shall be transferred to an Escrow
Account that shall be opened for this purpose, according to the
mechanism prescribed in clause 6.3 of the Trust Deed. The Trustee
shall transfer the net proceeds of the issuance of the Series D
Bonds (after deducting commissions) to the Company, this after
the Company shall have issued additional sureties to the Trustee
by way of a pledge of additional shares of Partner, the value of
which and/or the market value of which, as the case may be, shall
cause the market value of the additional sureties to reflect the
par value of the Series D Bonds issued within the scope of the
expansion of the series of Series D Bonds.
3.4.6 To dispel any doubt, it is hereby clarified that a release
and/or addition of sureties shall be effected as stated above,
even if the market value of the Pledged Shares shall be less than
or higher than 100% of the par value of the Series D Bonds at
that time, and the Trustee is not obligated to examine the market
value of the Pledged Shares relative to the par value of the
Series D Bonds when the time comes to approve the actions
specified above.
3.5 An exercise of the lien on the Pledged Shares, including the identity
of the receiver or any other functionary who might be appointed by the
Court at the request of the Trustee in connection with an exercise of
the Pledged Shares, including any transfer of the Pledged Shares, in
whole or in part, to any third party, and including any change in the
identity of the Trustee pursuant to the Trust Deed, and including the
exercise of any other rights deriving from the Pledged Shares, shall
require the prior written consent of the Minister of Communications
and shall be subject to any other approval to the extent required by
law.
20
3.6 Attached is the version of the certificate of the Series D Bonds,
which includes the aforesaid particulars, which shall be issued
pursuant to the Shelf Offering Report.
3.7 Other than the updating of the concrete conditions of the Series D
Bonds and the amendments and additions as stated above in clauses 2
and 3, no change occurred whatsoever in the rest of the conditions of
the First Trust Deed, and the First Trust Deed and the provisions
thereof shall continue to apply between the parties in relation to the
Series D Bonds.
4. By signing this agreement, the Trustee authorizes each of the authorized
signatories of the Company to report on its behalf in the Magna network
about its engagement in this agreement and its signing of it.
IN WITNESS WHEREOF, THE PARTIES HAVE HEREUNTO SIGNED:
Stamp + /s/ Yahel Shachar; /s/ Shachar Rachim
--------------------------------------------- ----------------------------
SCAILEX CORPORATION LTD. CLAL FINANCE TRUST 2007 LTD.
ATTORNEY'S CONFIRMATION
I, the undersigned, Xxxx Xxxxxxx Naveh, the attorney of Scailex Corporation
Ltd., hereby confirm that this addendum was duly signed by the authorized
signatories of Scailex Corporation Ltd., Messrs. Yahel Shachar and Shachar
Rachim.
/s/ Xxxx Xxxxxxx Naveh
----------------------
XXXX XXXXXXX NAVEH, ADV.
21
SCAILEX CORPORATION LTD.
FIRST ADDENDUM
CERTIFICATE OF SERIES D BONDS
Issued herewith is a Bond, which is payable in four equal payments during the
years 2012 through 2015 (inclusively), which bear annual interest linked to the
consumer price index in respect of the month of August 2009, as specified
hereunder:
REGISTERED BONDS.
Certificate number: _______.
Annual interest rate: ___%.
Par value of this Bond: NIS ______.
The registered holder of this Bond: _________________.
THIS CERTIFICATE attests that Scailex Corporation Ltd. ("THE COMPANY") shall pay
25% of the par value of this Bond on October 30 of each of the years 2012
through 2015 (inclusively) to whomever shall be the registered "holder" (as this
term is defined in the Conditions in the Overleaf) of the Bond on the
determinant date for that payment, all being subject to that specified in the
Conditions in the Overleaf and the Trust Deed dated August 18, 2009 (including
amendments thereto) between the Company on the one hand and Clal Finance Trust
2007 Ltd. and/or any party that shall serve from time to time as a trustee of
the Bondholders pursuant to the Trust Deed ("THE TRUSTEE" and "THE TRUST DEED,"
respectively).
1. This Bond bears interest at the annual interest rate specified above, which
shall be paid at the appointed times, all as specified in the Conditions in
the Overleaf.
2. This Bond shall be linked, all as specified in the Conditions in the
Overleaf.
3. This Bond is being issued as part of Series D of Bonds, the conditions of
which are identical to the conditions of this Bond ("THE RELEVANT SERIES"),
being subject to the Conditions specified in the Overleaf and in the Trust
Deed. It is hereby clarified that the provisions of the Trust Deed shall
constitute an integral part of the provisions of this Bond, and shall be
binding upon the Company and upon the Holders of the Bonds included in the
aforesaid series.
22
4. The Bonds of the Relevant Series are secured by sureties, all as specified
in the Offering Report of the Company dated October 14, 2009, under which
Bonds of the Relevant Series were offered for the first time to the public
("THE INITIAL OFFERING REPORT"), and as specified hereunder in clause 8.
5. To the extent not prescribed otherwise in the Initial Offering Report of
the Bonds of the Relevant Series, the Company shall be allowed to pledge
all of its assets and/or a portion thereof, in any lien and in any other
manner, in favor of any party that it shall deem fit, without any
restriction, and at any ranking, including for the securing of any bonds
(or any series of bonds) or other liabilities, and without the need for the
consent of the Trustee and/or of the holders of the Bonds of any series.
Furthermore, the Company shall be allowed to sell, lease, deliver or
transfer by any other means, its property, in whole or in part, in any
manner, to the favor of any party that it shall deem fit, without the need
for any consent of the Trustee and/or the holders of the Bonds in any
series.
7. All of the Bonds of the Relevant Series shall be PARI PASSU, INTER SE, in
relation to the Company's liabilities pursuant to the Bonds of this Series,
and without any preferential or preferred right of one over the other.
SIGNED BY THE COMPANY ON __________________
STAMP + /S/ YAHEL SHACHAR; /S/ SHACHAR RACHIM
---------------------------------------------
SCAILEX CORPORATION LTD.
23
THE CONDITIONS RECORDED IN THE OVERLEAF
1. GENERAL
The following expressions shall have the following meanings in this Series
D Bond, unless the context dictates otherwise:
"THE COMPANY" and/or "THE ISSUER" Scailex Corporation Ltd.;
"THE TRUST DEED" Trust deed signed between the Company
and the Trustee on August 18, 2009,
including the addenda, amendments and
supplements thereto, which constitute
an integral part thereof;
"THE PROSPECTUS" or
"THE SHELF PROSPECTUS" Shelf prospectus of the Company dated
August 21, 2009, which was published,
inter alia, in respect of the Bonds;
"SHELF OFFERING REPORT"
or "OFFERING REPORT" Shelf offering to be published
pursuant to the Shelf Prospectus, in
conformity with the provisions of the
Securities Act, 5728 - 1968, in which
Bonds of the Relevant Series shall be
offered, while prescribing all of the
special particulars for that offering;
"REPORT OF THE INITIAL
OFFERING OF THE RELEVANT
SERIES" An offering report under which Bonds
of the Relevant Series shall be
offered for the first time;
"THE BONDS" or "THE BOND" Series D Bonds;
24
"THE TRUSTEE" Clal Finance Trust 2007 Ltd. and/or
any party that shall serve from time
to time as a trustee of the
Bondholders pursuant to this Deed;
"THE PARTNER SHARE ACQUISITION
TRANSACTION" Transaction for the acquisition of
shares of Partner Communications Ltd.
from Advent Investments Pte Ltd. by
the Company pursuant to the agreement
dated August 12, 2009;
"THE REGISTER FOR THE
RELEVANT SERIES" Register of the holders of the Bonds
of the same series, as stated in
clause 25 of the Trust Deed;
"HOLDERS OF THE BONDS"
and/or "THE BONDHOLDERS"
and/or "THE HOLDERS" Any party holding the Bonds;
"SPECIAL RESOLUTION" Resolution passed during a general
assembly of Bondholders of the
Relevant Series, during which Holders
of at least fifty-five percent (55%)
of the balance of the par value of
the Bonds in circulation of that
series are present, either in person
or by proxy, or during a postponed
assembly during which Holders of at
least ten percent (10%) of the said
balance are present, either in person
or by proxy, which was passed (whether
during the original assembly or during
the postponed assembly) by a majority
of at least seventy-five percent (75%)
of all votes of the voters, excluding
abstentions;
25
"THE BOND CERTIFICATE" Bond certificate of the Relevant
Series, the version of which appears
in the First Addendum to the Trust
Deed;
"THE LAW" or "THE SECURITIES ACT" The Securities Act, 5728 - 1968, and
the regulations instituted pursuant
thereto from time to time;
"THE COMPANIES ACT" The Companies Act, 5759 - 1999;
"PRINCIPAL" The outstanding par value of the Bonds
of the Relevant Series;
"TRADING DAY" Any day on which transactions are
carried out on the Tel-Aviv Stock
Exchange Ltd.;
"BUSINESS DAY" or
"BANKING BUSINESS DAY" Any day that the banks in Israel are
open for business;
"BUSINESS DAY ABROAD" Any day on which a quotation of base
interest is determined, relating to
foreign currency, which is published
in the Reuters information service,
or any other source of information
that shall be specified in the Initial
Offering Report of the Bonds of the
Relevant Series;
"THE TASE" The Tel-Aviv Stock Exchange Ltd.;
"THE NOMINEE COMPANY" The Nominee Company of Israel Discount
Bank Ltd.;
"THE TASE CLEARING HOUSE" The clearing house of the Tel-Aviv
Stock Exchange Ltd.
"THE KNOWN INDEX"
on any given date The last index known prior to that
date;
"THE BASE INDEX" The index in respect of July 2009, as
published on August 14, 2009;
"THE PAYMENT INDEX" The index known on the determinant
date for any payment on account of the
Principal and/or interest.
26
2. This Bond is one of a Series of registered Series D Bonds at the inclusive
nominal sum of up to NIS 4,000,000,000 for any relevant series. The Bonds
in This Series shall be issued PARI PASSU, INTER SE, without any
preferential or preferred right of one over the other.
3. This Bond is payable (Principal) in a number of payments, which shall be
paid on each of the dates as shall be specified in the Initial Offering
Report, under which the Bond shall be offered, but on not more than one
date per quarter. The type of interest on the Principal of the Series D
Bonds to be issued shall be specified in the Offering Report under which
the Bond shall be offered for the first time. The interest rate on the
Principal of the Bond shall be determined during a tender, pursuant whereto
its initial offering shall be conducted. The interest on the Bond Principal
shall be paid annually in two biannual payments, all as shall be specified
in the Offering Report under which the Bond shall be offered for the first
time. The dates and number of payments of the Principal, the absence of
linkage, the type of interest, the interest rate or method for determining
it, and the interest payment dates of the Bond, as shall be specified in
the Offering Report under which the Bond shall be offered for the first
time, shall be determined by the Company prior to the initial offering of
the Bond.
4. The Company undertakes that, in the event that the Partner Share
Acquisition Transaction shall not be closed by March 31, 2010, it shall
call the Bonds for a forced early redemption and the provisions specified
hereunder in clause 6 shall apply.
5. The total immediate net consideration (i.e., net of commissions) that the
Company shall receive in respect of the issuance of the Series D Bonds
shall be deposited in escrow accounts, which shall be opened at one or more
of the five major banks in Israel and shall not be transferred to the
Company for its use until the conditions for the Closing of the Partner
Share Acquisition Transaction as stated have been fulfilled, according to
the following mechanism:
27
5.1 The Trustee shall open bank accounts under its name at one or more of
the five major banks in Israel, at its discretion, provided that a
bank as stated shall have a rating of at least (AA), to one of which
the Issue Coordinator shall transfer the total immediate net proceeds
that the Company shall receive in respect of the issuance of the
Series D Bonds, and this sum shall be invested in shekel deposits or
in shekel bonds issued by the State of Israel or in short-term loans
issued by the State of Israel, according to the Company's instructions
(hereinafter: "THE ESCROW ACCOUNTS" and "THE DEPOSITS," respectively).
The Trustee shall have sole signatory rights in the Escrow Accounts in
relation to any operation in these accounts, including with respect to
the withdrawal of monies from these accounts. The Trustee shall be
allowed, but not obligated, to transfer, at the request of the
Company, the monies and securities deposited in an Escrow Account at
one bank to an Escrow Account at another bank as stated.
Notwithstanding that stated, it is clarified that the policy for
investing the funds in the Escrow Accounts for Series D is the sole
responsibility of the Company, and the Trustee for Series D shall not
be responsible for any loss or damage that might be caused as a result
of investment operations as stated that shall be carried out according
to the Company's instructions.
5.2 The funds, the securities being deposited in the Escrow Accounts, and
all of the Company's rights in the Escrow Accounts shall be pledged in
favor of the Trustee for the Holders of the Series D Bonds under a
sole first-ranking fixed lien, and, concurrent with the transfer of
the Deposits to the Escrow Accounts, the Company shall issue the
following documents to the Trustee:
5.2.1 original lien registration certificates from the Registrar of
Companies on the funds, the securities being deposited in the
Escrow Accounts and all rights of the Company in the Escrow
Accounts in favor of the Trustee; all documents submitted to the
Registrar of Companies for the purpose of registration of the
liens, including the form "Particulars of Mortgages and Liens,"
with the first page of each document being stamped with the
"received" stamp of the Registrar of Companies; a summary of the
particulars of the Company's liens, subsequent to the
registration of the liens, which specifies the liens that were
registered and every other lien that the Company has; i.e., thus
enabling the Trustee to verify that no lien is registered with
the Registrar of Companies that contradicts the aforesaid liens.
It is clarified that the lien registration certificates as stated
shall be issued to the Trustee within 5 Business Days of the
signing date of the lien documents.
28
5.2.2 Confirmation from the banks at which the Escrow Accounts were
opened acknowledging that the funds, the securities being
deposited in the Escrow Accounts and all of the Company's rights
in the Escrow Accounts are pledged in favor of the Trustee, and
that the bank shall not have any rights of offset or lien in
relation to the funds and securities that are being held and that
shall be held in the Escrow Accounts.
5.3 As long as the preconditions for the Closing of the Partner Share
Acquisition Transaction have not been fulfilled up until the Deadline,
the purpose of the Deposits is to guarantee the repayment of the
Principal of the Series D Bond to the Bondholders, and this, in the
event that the preconditions for the Closing of the Partner Share
Acquisition Transaction shall not be fulfilled by the Deadline.
5.4 The Trustee shall operate the Deposit as follows: upon receiving
notification from the Company that all preconditions for the Closing
of the Partner Share Acquisition Transaction have been fulfilled,
then, subject to the signing of the lien document, as specified
hereunder in clause 8, the Trustee shall sign the order to transfer
the Deposits to the account specified by the Company, inclusive of
profits and after deducting tax and expenses in respect of management
of the Accounts, the Trustee's fee, and expenses incurred in
accordance with the Trust Deed, to the extent accumulated up until
that time. To dispel any doubt, it is clarified that, for the purpose
of approving the transfer of the Deposits to the Company, the Trustee
is relying solely on the Company's notification that all preconditions
have been fulfilled for the Closing of the Partner Share Acquisition
Transaction by the Deadline, and the Trustee is not required to verify
whether the preconditions indeed had actually been fulfilled. The
Trustee shall be present at the time of the Closing of the Partner
Share Acquisition Transaction in order to enable the performance of
its operations in conformity with the Trust Deed at that time. The
Company shall notify the Trustee three Business Days in advance of the
expected transfer date of the funds.
29
5.5 FORCED EARLY REDEMPTION OF ALL OF THE BONDS
The Company undertakes that, in the event that the Partner Share
Acquisition Transaction shall not be closed by the Deadline, i.e., by
March 31, 2010, it shall call the Series D Bonds for forced early
redemption, and the following provisions shall apply.
If the Company shall not publish an Immediate Report regarding the
Closing of the Partner Share Acquisition Transaction by the Deadline,
the Company shall effect a full forced early redemption of all of the
Series D Bonds (hereinafter: "EARLY REDEMPTION"), according to the
following mechanism:
5.5.1 On April 1, 2010, the Company shall publish an Immediate Report
that the Partner Share Acquisition Transaction was not closed,
and about the effecting of an Early Redemption to the Holders of
the Series D Bonds, with a copy to the Trustee, with the
determinant date for the implementation thereof to be specified
in the Immediate Report, which shall be no less than 30 days and
no more than 45 days prior to the implementation of the Early
Redemption. The date of the Early Redemption shall not occur
during the period between the determinant date for the payment of
interest and the actual payment date of the interest. The Company
shall also report the interest that has accrued up until the date
of the Early Redemption in the Immediate Report.
30
5.5.2 On the date of the Early Redemption, the Company shall pay the
sum of the Principal of the Series D Bonds, plus the accrued
interest and linkage differentials in respect of the outstanding
balance of the Series D Bonds up until the date of the Early
Redemption (hereinafter: "THE OBLIGATORY VALUE").
5.5.3 The sum of the Early Redemption shall be paid to the Bondholders
by the Trustee, by way of the execution of a bank transfer to the
Nominee Company of Israel Discount Bank Ltd., according to the
particulars that the Company shall issue to the Trustee as stated
hereunder, out of the funds deposited in the Escrow Account,
according to the written instructions that shall be received from
the Company, which shall include the date for transfer of the
funds, the destination thereof, as well as any other particular
that shall be required in order to enable the Trustee to carry
out the transfer, attaching a calculation of the sum that must be
paid, as specified above in clause 5.4. In the event that the
balance of the funds in the Escrow Accounts shall be less than
the Obligatory Value of the Bonds, the Company shall transfer to
the Escrow Accounts the sum equivalent to the difference between
the Obligatory Value of the Bonds and the funds in the Escrow
Account at that time.
The Trustee and the Company shall transfer the funds required for
the purpose of the forced Early Redemption to the Nominee Company
in conformity with the bylaws of the TASE Clearing House. The
Company shall provide any assistance to the Trustee that might be
required in order to enable it to render the payment in its
entirety and on time, including the timely transfer to the
Trustee of details of the sums, the dates and any other detail
that is required in order to effect the forced Early Redemption
as stated.
31
5.6 If all of the preconditions stated above in clause 4.4 shall be
fulfilled regarding the release of all of the funds from the Escrow
Accounts in respect of the Series D Bonds, the Holders of the Series D
Bonds are hereby instructing the Trustee of Series A, by way of an
irrevocable instruction, to transfer the entire balance of funds of
the Deposits that shall be in the Escrow Accounts to the Company, and
for this purpose, to sign all documents required for the removal of
the liens on the Escrow Accounts and for the transfer of the funds of
the Deposits to the Company.
5.7 To dispel any doubt, it is hereby clarified that the Trustee is under
no obligation to examine, and in fact, the Trustee did not examine,
the economic value of the collateral that was provided and/or that
shall be provided (if any) to guarantee the payments to the Holders of
the Series D Bonds. Upon engaging in the Trust Deed and consenting to
serve as the Trustee for the Holders of the Series D Bonds, the
Trustee is not expressing its opinion, whether explicitly or implied,
regarding the economic value of the collateral that was provided
and/or shall be provided (if any) by the Company. Furthermore, the
Trustee is not expressing its opinion regarding the Company's ability
to fulfill its undertakings towards the Holders of the Series D Bonds.
That stated shall in no way derogate from the Trustee's obligations by
law and/or pursuant to the Trust Deed, and shall in no way derogate
from the Trustee's duty (to the extent that such duty applies to the
Trustee pursuant to any law) to examine the impact of changes in the
Company as of the date of this Shelf Offering Report and thereafter,
to the extent that any such changes might adversely affect the
Company's ability to fulfill its undertakings towards the Holders of
the Series D Bonds. That stated shall in no way derogate from the
Trustee's obligations by law and/or pursuant to the Trust Deed.
32
6. LINKAGE OF THE BOND PRINCIPAL AND INTEREST
The Principal and Interest on the Series D Bonds are linked to the consumer
price index in respect of the month of August 2009, which was published on
September 15, 2009 (hereinafter: "THE BASE INDEX"), under the following
conditions:
Should it become clear, on any payment date on account of the Principal
and/or the interest on the Bonds, that the index last published prior to
the payment date (hereinafter: "THE PAYMENT INDEX") is higher than the Base
Index, the Company shall pay that payment of Principal or interest, being
increased relative to the rate of the rise in the Payment Index compared
with the Base Index; however, should it become clear that the Payment Index
is the same as or lower than the Base Index, the Company shall pay that
payment of principal or interest being calculated on the basis of the Base
Index.
7. PAYMENT DATE OF THE BOND PRINCIPAL
The Principal of the Series D Bonds, which is linked to the consumer price
index, shall be paid in four annual payments on October 30 of each of the
years 2012 through 2015 (inclusively). The first payment of the principal
shall be paid on October 30, 2012 and the last payment of the principal
shall be paid on October 30, 2015.
The determinant date regarding payment of the Principal to the Holders of
the Series D Bonds shall be at the end of October 18 of each year, as the
case may be, immediately preceding the payment date of the Principal.
8. THE INTEREST ON THE SERIES D BONDS
8.1 The registered Series D Bonds of NIS 1 par value each, bear annual
interest at the rate to be determined in the tender, which shall not
exceed 6.2% per annum.
8.2 The interest on the Series D Bonds shall be paid in biannual payments,
on the balance of the outstanding Principal, on April 30 and on
October 30 of each of the years 2010 through 2015, in respect of the
six-month period ending on the last day prior to every interest
payment date. The first interest payment on the Series D Bonds shall
be paid on April 30, 2010 for the period as of the day after the
tender date pursuant to the Shelf Offering Report and ending on April
29, 2010, with the interest being calculated on the basis of 365 days
per year, according to the number of days in the said period. The
subsequent interest payments shall be calculated according to the
annual interest rate divided by the number of interest payments per
year. The last interest payment shall be rendered on October 30, 2015.
33
The Company shall publish the interest rate that shall be paid in the
first payment, and the interest rate to be paid in each of the
biannual payments after the first interest payment, in the Immediate
Report of the Results of the Issue pursuant to the Shelf Offering
Report.
8.3 The determinant date regarding the payment of interest to the Holders
of the Series D Bonds, shall be at the end of April 18 and October 18
of each year, as the case may be, immediately preceding the payment
date of the interest.
8.4 The last payment of interest on the Principal of the Series D Bonds
shall be paid, together with the last payment on account of the
Principal on the Series D Bonds, this against the delivery of the
Series D Bond Certificates to the Company.
9. THE PAYMENTS OF PRINCIPAL AND INTEREST OF THE BONDS
9.1 The payments on account of the interest and/or the Principal of the
Series D Bonds shall be paid to the persons whose names shall be
registered in the Register of Series D Bondholders on the dates as
shall be specified in the Initial Offering Report of the Series D
Bonds, in conformity with the provisions of the TASE regulations as
they shall be at that time ("THE DETERMINANT DATE"), except for the
last payment of the Principal and interest, which shall be rendered
against the delivery of the Series D Bond Certificates to the Company
at the Company's registered office, or at any other location that the
Company shall so instruct, no later than five (5) Business Days prior
to the final payment date.
It is hereby clarified that any party that is not registered in the
Register of the Series D Bondholders on the Determinant Date shall not
be entitled to a payment of interest in respect of the interest period
that began prior to that date.
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9.2 In any instance whereby the payment due date on account of Principal
and/or interest shall fall on a day other than a Business Day, the
payment date shall be postponed until the first subsequent Business
Day, without any additional payment, and "the Determinant Date" for
the purpose of determining entitlement to redemption or to interest
shall not change as a result.
9.3 Any payment on account of Principal and/or interest, which shall be
paid in arrears that exceeds seven (7) Business Days after the payment
due date according to the Series D Bond conditions, for reasons
depending upon the Company, shall bear arrears interest (as this term
is defined hereunder) as of the payment due date until the actual
payment date. To the extent that there are a number of arrears in
payments as stated, the total number of days in arrears (cumulatively)
during the period that the Series D Bonds are in circulation, in
respect whereof the Company shall not pay arrears interest, shall not
exceed 21 Business Days.
9.4 In this regard, the rate of the arrears interest means the maximum
interest rate that shall be in effect at that time at Bank Leumi
Le-Israel Ltd. in respect of debit balances in current loan accounts
or in current accounts in Israeli currency having no credit framework
in effect, whichever is higher, which shall be calculated according to
the number of days of the actual delay. In the event of arrears in
payment as state above, the Company shall announce the act interest
rate to be paid, which shall include the biannual interest plus the
arrears interest as stated, in an Immediate Report two (2) Trading
Days prior to the actual payment date.
9.5 The payment to those entitled shall be rendered by way of checks or
bank transfer to the credit of the bank account of those persons whose
names shall be listed in the Register for the Series D Bonds, and
which shall be specified in particulars to be timely delivered in
writing to the Company, according to that stated in clause 9.6
hereunder. If the Company shall be unable to pay any sum to those
entitled thereto, for a reason not dependent upon the Company, the
provisions of clause 12 of the First Trust Deed shall apply.
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9.6 A Holder of the Series D Bonds shall notify the Company of the bank
account details for crediting payments to that Holder according to the
Series D Bonds as stated above, or about any change in the said
account details or in its address, as the case may be, by written
notice sent by registered mail to the Company. The Company shall be
required to act according to the Holder's notice regarding a change as
stated, once fifteen (15) Business Days have elapsed since the arrival
of the Holder's notice to the Company.
9.7 If a Bondholder entitled to a payment as stated did not deliver
details about its bank account in timely fashion to the Company, any
payment on account of the Principal and the interest shall be rendered
by check, which shall be sent by registered mail to its last address
registered in the Register for the Series D Bonds. The mailing of a
check to an entitled Bondholder by registered mail as stated shall be
deemed, for all intents and purposes, to be payment of the sum quoted
therein on the date of its dispatch at the post office, provided that,
upon proper presentation for collection, it shall be paid.
9.8 Any compulsory payment, to the extent required by law shall be
deducted from any payment in respect of the Series D Bonds.
10. SURETY
To secure the payment of the Principal and the interest that the Company is
required to pay to the Holders of the Series D Bonds, and to secure the
complete fulfillment of all of its other undertakings pursuant to the
conditions of the Series D Bonds, the Company shall create a sole
first-ranking fixed lien in favor of the Trustee, immediately after the
release of the funds as stated in clause 6.3.4 of the Trust Deed, by way of
a deposit with the Trustee, as specified hereunder, which shall be
registered with the Registrar of Companies within two Business Days after
the said date, on the following pledged assets:
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10.1 Ordinary shares of NIS 0.01 par value each of Partner Communications
Ltd. ("PARTNER"), which are owned by the Company, with the market
value thereof on the date of the monetary clearance of the proceeds of
the issue of the Series D Bonds ("THE BOND ISSUE DATE") being
equivalent to 100% of the par value of the Series D Bonds, including a
lien on all of the rights attached to these shares, and including the
right to a dividend in cash or in kind and any other distribution in
respect of the Pledged Shares, as well as rights to be issued by
Partner in respect of and/or in relation to the Pledged Shares, bonus
shares, a preemptive right or rights to receive other securities in
respect thereof of any class whatsoever (hereinafter: "THE PLEDGED
SHARES"). When creating the lien on the Pledged Shares in favor of the
Trustee, the Pledged Shares shall remain registered in Partner's
register of shareholders under the name of the Company and under its
ownership. When creating the lien, the Company shall sign a blank
share transfer deed for the transfer of the Pledged Shares to a third
party (hereinafter: "THE SHARE TRANSFER DEED"), and the Share Transfer
Deed, along with the share certificates to be issued in respect of the
Pledged Shares under the Company's name shall be deposited with the
Trustee, who shall hold these documents in trust for the Company and
for the Holders of the Series D Bonds,
On the date that the share certificates in respect of the Pledged
Shares are issued to the Trustee, the Company shall issue a
confirmation to the Trustee, specifying that the market value of the
deposited Pledged Shares on the financial clearing date of the
proceeds of the issue of the Series D Bonds is equivalent to 100% of
the par value of the Series D Bonds. It is hereby clarified that, if
expansions of the Series D Bonds shall be effected, the calculation
shall be performed in relation to each of the actual financial
clearing dates of the Series D Bonds, and the par value of the Bonds
issued at that time.
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(a) Until the occurrence of an event vesting the Trustee and/or the
Holders of the Series D Bonds with the right to call for the
immediate payment of the Series D Bonds, pursuant to the
conditions prescribed in the Trust Deed, the Company shall enjoy
all of the rights, funds and assets due in respect of and/or in
relation to the Pledged Shares, and, inter alia, accordingly: (1)
the Company shall be entitled to directly receive all dividends
and all other distributions that might be distributed in respect
of and/or in relation to the Pledged Shares; (2) the Company
shall be allowed to participate and vote in respect of the
Pledged Shares at all of Partner's assemblies of shareholders
(general and extraordinary) as the owners of the Pledged Shares
for all intents and purposes; and (3); the Company shall be
allowed to pass any resolution, at its sole discretion, regarding
the exercise or non-exercise of rights that Partner shall issue
in respect of the Pledged Shares and/or the sale thereof, and the
shares that shall be acquired as a result of an exercise of the
rights, shall be owned solely by the Company, and any proceeds
that shall be received as a result of the sale of the rights
shall be transferred to the Company.
(b) When exercising the lien on the Pledged Shares, and subject to
the lien exercise proceedings pursuant to the law, and after
obtaining the prior written approval of the Minister of
Communications, the Trustee shall be allowed, subject and
according to the orders of the competent court regulating the
lien exercise proceedings, to deliver the aforesaid Share
Transfer Deed for signing by the third party that is purchasing
the Pledged Shares under the lien exercise proceedings as the
transferee, and to return the share certificates to Partner,
which shall issue new share certificates in respect of the
Pledged Shares under the name of the aforesaid third party.
Furthermore, with every partial release of the Pledged Shares as
prescribed in the Trust Deed, the aforesaid share certificate and
Share Transfer Deed held by the Trustee in respect of the Pledged
Shares shall be replaced, at the request of the Company, with a
new share certificate and a new blank Share Transfer Deed, which
the Company shall sign, which reflects the number of Pledged
Shares subsequent to the relevant partial release, and the
Company shall act without delay to register the amendment to the
lien in the records of the Registrar of Companies.
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The Company shall exercise means of control over Partner, subject to
any law, so that Partner shall record the matter of the lien on the
Pledged Shares in favor of the Trustee in its books, and so that
Partner shall undertake not to issue an alternate share certificate in
respect of the Pledged Shares and/or in lieu of the certified issued
under the Company's name, not to split the aforesaid share
certificates and/or to effect any disposition of the Pledged Shares,
without receiving the Trustee's prior written consent thereto.
10.2 As of the pledge date of the Pledged Shares and until the full and
final payment of the Principal of the Series D Bonds, and the
interest, if Partner shall effect a "distribution," as this term is
defined in section 1 of the Companies Act, which shall be effected
other than from "profits," as this term is defined in section 302(b)
of the said Act (hereinafter: "SPECIAL DISTRIBUTION"), then the
Company shall issue additional sureties to the Trustee, within five
Business Days of the execution date of the Special Distribution, by
way of a lien of additional Partner shares, at the quantity equal to
the number of Pledged Shares in the quotient that shall be obtained by
dividing: (1) the inclusive sum of the Special Distribution (in NIS)
in respect of all of the shares in Partner's issued and paid-up share
capital (hereinafter: "ALL OF PARTNER'S SHARES") by (2) the market
value (in NIS) of All of Partner's Shares on the eve of the
distribution.
10.3 For the purpose of this clause 8, "market value" means the average of
the closing prices of Partner's shares during the last five Trading
Days on the TASE that preceded the relevant examination date.
10.4 With every buy-back of the Principal of the Series D Bonds by the
Company, a portion of the Pledged Shares shall be released, within two
Business Days, subject to the written instruction of the Company, and
according to that stated in that instruction, in such manner that,
subsequent to the repayment as stated, a relative portion shall be
removed from the Pledged Shares according to the par value of the
Series D Bonds that were repurchased by the Company, and they shall
cease to be part of the Pledged Shares. If a share certificate has
been deposited with Trustee, the time constraint of two Business Days
specified above shall not apply, and the Trustee shall take action
within two Business Days to effect a release of the relative portion
of the shares; however, the actual release shall be effected once all
of the operations for splitting and issuing the share certificates as
required shall have been completed.
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10.5 On the payment date of the last payment in respect of the Principal
and interest in respect of the Series D Bonds, and subject to their
repayment in full, the Trustee shall release the balance of the
Pledged Shares to the Company, as they shall be in the Escrow Accounts
at that time, this within two Business Days, and subject to the
receipt of written instructions.
10.6 In the event that the Company shall desire to expand the series of
Series D Bonds, then the proceeds of the issuance of the additional
Series D Bonds shall be transferred to an Escrow Account that shall be
opened for this purpose, according to the mechanism prescribed in
clause 6.3 of the Trust Deed. The Trustee shall transfer the net
proceeds of the issuance of the Series D Bonds (after deducting
commissions) to the Company, this after the Company shall have issued
additional sureties to the Trustee by way of a pledge of additional
shares of Partner, the value of which and/or the market value of
which, as the case may be, shall cause the market value of the
additional sureties to reflect the par value of the Series D Bonds
issued within the scope of the expansion of the series of Series D
Bonds.
10.7 To dispel any doubt, it is hereby clarified that a release and/or
addition of sureties shall be effected as stated above, even if the
market value of the Pledged Shares shall be less than or higher than
100% of the par value of the Series D Bonds at that time, and the
Trustee is not obligated to examine the market value of the Pledged
Shares relative to the par value of the Series D Bonds when the time
comes to approve the actions specified above.
10.8 An exercise of the lien on the Pledged Shares, including the identity
of the receiver or any other functionary who might be appointed by the
Court at the request of the Trustee in connection with an exercise of
the Pledged Shares, including any transfer of the Pledged Shares, in
whole or in part, to any third party, and including any change in the
identity of the Trustee pursuant to the Trust Deed, and including the
exercise of any other rights deriving from the Pledged Shares, shall
be subject to the prior written consent of the Minister of
Communications and any other approval to the extent required by law.
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11. GENERAL PROVISIONS
11.1 Sums of the Principal and interest shall be paid to any Bondholder
without taking into consideration any equitable rights or any right of
offset or counterclaim that exists or that might exist between the
Company and the aforesaid Bondholder.
11.2 The Company shall not be obligated to record in the Register for the
Series D Bonds any notice regarding a trust, lien and pledge of any
kind and type, or any equitable right or any other right relating to
the Bondholder's ownership of the Bond.
11.3 Any party becoming entitled to the Bond as a result of bankruptcy or
as a result of liquidation proceedings of the Bondholder, shall have
the right, as soon as it shall present the evidence that the Company
shall require from it, to be registered in the Register for the Series
D Bonds as the Holder of the Bond.
12. REGISTER OF THE BONDHOLDERS
Regarding the keeping of a Register of Bondholders of the Series D Bonds,
the provisions of clause 25 of the Trust Deed shall apply.
13. PREVENTION FROM PAYING, FOR A REASON NOT DEPENDENT UPON THE COMPANY
Regarding prevention from paying a Bondholder of a Relevant Series, for a
reason not dependent upon the Company, the provisions of clause 12 of the
Trust Deed shall apply.
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14. TRANSFER OF THE BONDS
The Bonds are transferable in relation to the entire par value thereof, and
even regarding a portion thereof, provided that it shall be in whole New
Shekels. Any transfer of the Bonds (excluding a transfer being carried out
by way of trading on the TASE) shall be effected according to a transfer
deed in the customary version, properly signed by the registered Holder or
its legal representatives and by the recipient of the transfer or its legal
representatives, which shall be delivered to the Company at its registered
office, attaching the Bond Certificates being transferred pursuant thereto,
and any other proof that shall be required by the Company for the sake of
proving the transferor's right to transfer them. If tax or any other
compulsory payment shall apply to a transfer deed for the Bonds, proof of
the payment thereof must be delivered to the Company to the Company's
satisfaction. The provisions of the Company's Articles of Association
applicable to transfers of fully paid-up shares and on the assignment
thereof shall apply, MUTATIS MUTANDIS, as the case may be, on the mode of
transfer of the Bonds and the assignment thereof. In the event of a
transfer of only a portion of the par value of the Bonds registered in the
Bond Certificate, the Bond Certificates must be split, pursuant to the
provisions of clause 15 hereunder, first into the number of Bond
Certificates so required, in such manner that the total sums of the par
value registered therein shall be equal to the sum of the par value of the
Bonds registered in the said Bond Certificate. After the fulfillment of all
these conditions, the transfer shall be recorded in the Register for the
Relevant Series, and the Company shall be allowed to demand that a note
regarding the transfer as stated shall be recorded on the Certificate of
the Bonds being transferred, which shall be delivered to the transferee, or
that a new Bond Certificate shall be issued to the transferee, and all of
the conditions specified in the Certificate of the Bonds being transferred
shall apply to the transferee, so that, every reference to the "holder"
shall be deemed to mean "the transferee" and the transferee shall be deemed
the "holder" for the purposes of the Trust Deed for the Relevant Series.
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15. BOND CERTIFICATES AND SPLITTING THEREOF
One Certificate shall be issued in respect of the Bonds registered under
the name of a single Holder, or, at its request, a reasonable number of
Certificates shall be issued to it, provided that the total par value of
the Bonds registered in each Certificate as stated shall be in whole New
Shekels (the Certificates referred to in this clause shall be called
hereinafter: "THE CERTIFICATES").
All of the Bond Certificates may be split into Bond Certificates with the
total par value of the Bonds registered therein being equal to the total
par value of the Bonds registered in the Certificate being asked to be
split, provided that Certificates as stated shall not be issued other than
in a reasonable quantity. The split shall be effected against the delivery
of that Bond Certificate to the Company at its registered office for the
purpose of effecting the split. All expenses involved in the split,
including taxes and levies, if any, shall apply to the party requesting the
split.
16. EARLY REDEMPTION.
Regarding early redemption of the Bonds, the provisions of clause 6 of the
Trust Deed shall apply.
17. WAIVERS, COMPROMISES AND/OR CHANGES IN THE BOND CONDITIONS
In relation to the authority of the Company and/or the Trustee to effect a
waiver, compromise and changes in the conditions of the Bonds, the
provisions of clause 24 of the Trust Deed shall apply.
18. ASSEMBLIES OF BONDHOLDERS
The general assemblies of the Bondholders of the Relevant Series shall
convene and be conducted according to that stated in the second addendum to
the Trust Deed.
19. RECEIPTS AS PROOF
Without derogating from any other of these conditions, a receipt signed by
the Bondholder shall constitute proof of the full clearance of any payment
made by the Company in respect of the Bond.
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20. REPLACEMENT OF BOND CERTIFICATES
In the event that this Bond Certificate shall become worn, be lost or
destroyed, the Company shall issue a new Certificate in its place in
respect of this Bond and with the same conditions. Taxes and other levies,
as well as other expenses involved in the issuance of the new Certificate,
shall apply to the Bondholder requesting the said Certificate (including
expenses relating to proof of ownership of the Bonds, and relating to
indemnification and/or insurance coverage that the Company shall require,
if any, in relation thereto). In the event of wear and tear, the worn
Certificate shall be returned to the Company simultaneously and against the
issuance of the new Certificate.
21. APPLICABLE LAW AND JURISDICTION
The Courts in the city of Tel-Aviv - Jaffa shall have sole and exclusive
jurisdiction in any dispute concerning the Bonds, the Trust Deed and the
agreements by virtue whereof the Bonds were allotted, and solely the laws
of the State of Israel shall apply thereto.
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