ASSET PURCHASE AGREEMENT BY AND AMONG Ampal Communication 2010 Ltd. as Purchaser AND as Seller AND Merhav Ampal Energy Ltd. as Guarantor Dated as of November 16, 2009
EXECUTION
COPY Exhibit
99.1
BY AND
AMONG
Ampal
Communication 2010 Ltd.
as
Purchaser
AND
012
Smile.Communications Ltd.
as
Seller
AND
Merhav
Ampal Energy Ltd.
as Guarantor
Dated
as of November 16, 2009
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THIS ASSET PURCHASE
AGREEMENT (this “Agreement”),
dated as of November 16, 2009 (the "Effective
Date"), is made by and among 012 Smile Communications
Ltd., a company incorporated in accordance with the laws of the
State of Israel (the “Seller”); Merhav Ampal Energy
Ltd. on behalf of Ampal Communication 2010
Ltd., a company in formation in accordance with the laws of the
State of Israel (the "Purchaser");
and Merhav Ampal Energy
Ltd., a company incorporated in accordance with the laws of the
State of Israel (the "Guarantor"). The
Seller, the Purchaser and the Guarantor are referred to herein
collectively, as “Parties”, and
each of them, separately, as a “Party”.
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RECITALS
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A.
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The
Seller is engaged in the Business (as defined
below).
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B.
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The
Purchaser wishes to acquire from the Seller, and the Seller wishes to sell
to the Purchaser, the Business and the Acquired Assets (as defined below),
and the Purchaser wishes to assume and the Seller wishes to transfer the
Assumed Liabilities (as defined below), all on the terms and subject to
the conditions and the conditions precedents hereinafter set
forth.
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C.
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The
Parties wish to set forth herein all of the terms and conditions that
shall govern the sale and purchase of the Acquired Assets and the
assumption of the Assumed
Liabilities.
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D.
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The
Parties are aware that the prompt consummation of the transactions
contemplated hereby is of the
essence.
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NOW, THEREFORE, in
consideration of the premises and the mutual promises herein made, and in
consideration of the representations, warranties, and covenants herein
contained, and intending to be legally bound hereby, the Parties agree as
follows:
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1.
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DEFINITIONS
AND INTERPRETATION
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1.1
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Definitions. In
this Agreement, the following terms shall have the following
meanings:
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“Accounts Receivable”
means all accounts receivable, notes receivable and other current rights to
payment of Seller.
“Acquired Assets”
shall mean all of Seller’s assets, properties, contracts, licenses and permits
and rights of every kind and description, tangible and intangible, including any
assets, properties and rights used in connection with the Business as it exists
(subject to Section 3.4) or shall exist on the Closing, wherever situated, and
excluding only the Excluded Assets. Without limiting the foregoing,
the Acquired Assets shall include:
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(a)
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the
Seller's holdings in 012 Telecom Ltd., the subsidiary of Seller, and the
Seller's interest in 012 Global, including shareholder
loans;
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(b)
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all
machinery, equipment and other tangible personal property and fixed assets
used to conduct the Business;
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(c)
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all
inventories of Seller related to the Business, including raw materials,
supplies, goods consigned to vendors or subcontractors, works in process,
finished goods and goods in
transit;
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(d)
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all
Accounts Receivable related to the
Business;
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(e)
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all
prepaid expenses related to the
Business;
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(f)
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all
rights and interests of Seller in and to the leases, subleases, licenses,
sublicenses, contracts, commitments, obligations or other agreements,
whether written or oral, or other similar agreements and rights
thereunder, including contracts for the purchase of supplies and services
and the sale of products and services, used to conduct the Business, and
including the Leases and leasehold improvements (“Contracts”);
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(g)
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the
business records, plans, notebooks, specifications, advertising and
promotional materials and campaigns, studies, reports, equipment repair,
maintenance or service records, in each case as used by Seller for
operating the Business; provided that Seller
shall be entitled to maintain (but, other than as required by law, shall
not use) one copy of any of such documents for the sole purpose of either
retention as required by any applicable Legal Requirement or litigation or
dispute of this Agreement;
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(h)
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all
Intellectual Property Rights related to the conduct of the Business,
including all registrations (and applications for registration) of
Intellectual Property Rights (collectively, the “Business Intellectual Property
Rights”);
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(i)
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all
Government Authorizations and other permits or licenses related to the
Business, including the Licenses (except in such case where the license,
permit or authorization is replaced or exchanged for a newly issued
License);
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(j)
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all
lists and records pertaining to customer accounts (whether past or
current), suppliers, distributors, personnel and agents of the
Business;
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(k)
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all
claims, deposits, prepayments, warranties, guarantees, refunds, causes of
action, rights of recovery, rights of set-off and rights of recoupment of
every kind and nature, whether liquidated or unliquidated, fixed or
contingent, that relate to the Business (in each case except for Tax items
that relate to periods ending on or before the Cutoff Date), including any
causes of action, claims and rights which Seller may have under any
insurance contracts or policies insuring the Acquired Assets;
and
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(l)
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the
Positive Cash Amount (as defined in Section
3.4).
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"Affiliate" shall mean
a person Controlling, Controlled by or under common Control with a person, and
if such person first stated above is a natural person, a relative of such
person.
"Antitrust Approval"
shall be as defined in Section 5.1(ii).
"Assumed Liabilities"
shall mean all of Seller's present or future liabilities and obligations of
every kind arising out of, relating to, in the nature of or caused by the
Business, including legal
claims of
third parties, regardless of whether such liabilities arise or become known
before or after the Effective Date, excluding only the Retained
Liabilities. Without limiting the foregoing, the Assumed Liabilities
shall include all liabilities of any kind relating to employees of the Seller or
the Business other than those employees who are not Assumed Employees (as set
forth in Section 9.1).
and shall include the replacement of any guarantees given by Seller with respect
to Acquired Assets.
"Bezeq" means Bezeq -
The Israeli Telecommunication Corporation Ltd.
"Bezeq Transaction"
means the acquisition of Bezeq shares from XX.XX.XX Holdings Ltd. ("APSBAR") pursuant to
that certain Share Purchase Agreement, dated October 25, 2009 by and between
Seller and APSBAR.
“Business” shall mean
all of the business of the Seller as conducted on the date of this Agreement
other than the Bezeq Transaction. Such Business shall include,
without limitation, as defined below, the International Telephony Business, the
Land Line Business, the ISP Business and the Other Business.
"Business Day" shall
mean any day on which banks are open for business in the State of
Israel.
“Closing” and “Closing Date” shall
be as defined in Section
4.
“Consent” shall mean
any regulatory consent, permit, approval, order, authorization, registration,
declaration, filing or exemption, to the extent required under applicable law
(but not as a matter of contract).
"Control" or "Controlled" or "Controlling" shall
mean the ability, directly or indirectly, to direct the activities of the
relevant entity, including, without limitation, the holding of (i) more than 50%
of the issued share capital, or (ii) such share capital as carries directly or
indirectly, more than 50% of the shareholder votes in a general meeting or the
ability to appoint or elect more than 50% of the directors or equivalent of such
entity.
"Cut-off Date" shall
mean December 31, 2009.
"Damages" shall mean
any liabilities, claims, injuries, losses, damages, settlements, judgments,
awards, penalties, fines, costs or expenses (including, without limitation,
reasonable legal fees and expenses), whether or not arising out of third party
claims.
“Dollar” or “$” means U.S.
Dollars.
"End Date" shall have
the meaning ascribed thereto in Section 10.1(b).
“Exchange Act” shall mean the U.S.
Securities Exchange Act of 1934, as amended.
"Excluded Assets"
shall mean (a) the corporate seal, charter documents, minute books, stock books,
tax returns, books of account or other records having to do with the corporate
organization of Seller, (b) the rights that accrue or may accrue to Seller under
this Agreement, (c) the Retained Cash (as defined in Section 3.4) and other
derivative instruments (forward USD contracts) of the Seller, (d) any additional
cash, cash equivalents and marketable securities that are obtained by Seller (or
any Subsidiary thereof), including by way of existing or future loans or
equity
investments
from Affiliates or third parties, not generated as part of the Business, (e) any
tax assets (including without limitation advance tax payments) relating to
periods prior to the Cutoff Date, (f) any assets related to the Bezeq
Transaction, as set forth on Schedule 1.1 hereto (which may
be amended by the Seller from time to time prior to the Closing); and (g)
certain components or possible components of the Excluded Assets as are set
forth in Schedule 1.1
hereto.
“Family Member” shall mean, in respect of a
natural Person, (i) a spouse of such Person; (ii) a descendant of such
Person or of such Person’s spouse; (iii) such Person’s brother or sister,
or (iv) a spouse of any of the Persons referred to in clauses (ii) or (iii)
above.
“Governmental
Authorization”
shall mean any permit, license, certificate, franchise, permission, clearance,
registration, approval, consent, qualification or authorization issued, granted,
given or otherwise made available by or under the authority of any Governmental
Entity or pursuant to any Legal Requirement.
“Governmental Entity”
shall mean any government, governmental department, ministry, cabinet,
commission, board, bureau, agency, tribunal, regulatory authority,
instrumentality, judicial, legislative or administrative body or entity,
domestic or foreign, federal, national, state, regional, provincial or local,
having or exercising jurisdiction over the matter or matters in
question.
"Initial End Date"
shall have the meaning ascribed thereto in Section 10.1(b).
"Intellectual Property
Rights” means
all intellectual property and proprietary rights throughout the world, including
(i) all trademark rights, trade dress, service marks and trade names; (ii) all
copyrights and all other rights associated therewith and the underlying works of
authorship; (iii) all patents and all proprietary rights associated therewith;
(iv) all inventions, mask works and mask work registrations, net lists,
schematics, enhancements, designs, improvements, know how, discoveries,
improvements, designs, trade secrets, computer software programs or applications
(in both source code and object code form), flow charts, diagrams, coding
sheets, listings and annotations, programmers' notes, information, work papers,
work product; and (v) all registrations of any of the foregoing, all
applications therefor, all documentation and all goodwill associated with any of
the foregoing.
“International Telephony
Business” shall mean the businesses of outgoing and incoming
international telephony services, of hubbing services, and of international
calling card services and any other operations and activities conducted by
Seller, including other data and other related services, pursuant to
Seller’s international services license dated June 2,
2004.
“ISP Business” shall
mean the businesses of the ADSL/cable/dial-up Internet and access services, the
value-added services and the WiFi services and any other operations and
activities, including all other related services, conducted by Seller pursuant
to its internet access license dated January 24, 2002.
"Knowledge" shall mean, with respect to
any Entity, with respect to any fact, circumstance, event or other matter in
question, the actual knowledge of the executive officers of the Entity after
reasonable and diligent inquiry.
“Land Line Business”
shall mean the businesses of local telephony using VoB access and local
telephony using dedicated lines based on PRI services and any other operations
and activities conducted by Seller and its subsidiary pursuant to the domestic
fixed-line license, dated December 15, 2005, of 012 Telecom
Ltd.
"Leases" shall mean all of Seller’s
right, title and interest in each of that certain Real Estate Lease
Agreements including the right to any security deposits and other
amounts and instruments deposited by or on behalf of Seller
thereunder.
“Legal Proceeding” shall mean any action,
suit, litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving, any court or other Governmental Entity or any
arbitrator or arbitration panel.
“Legal
Requirement”
shall mean any federal, state, local, municipal, foreign or other law, statute,
constitution, principle of common law, resolution, ordinance, code, edict,
decree, rule, order, judgment, regulation, ruling or requirement issued,
enacted, adopted, promulgated, implemented or otherwise put into effect by or
under the authority of any Governmental Entity.
"Licenses" shall mean
the following licenses granted by the MoC (as defined below) to the Seller
and/or its Affiliates, as amended from time to time:
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(a)
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International
telephony license (general license)
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(b)
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VoB
and DFL license (general specific
license)
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(c)
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ISP
license (specific license)
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(d)
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Endpoint
Network Services
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(e)
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VoBoC
experimental license
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"MoC" shall mean the
Israeli Ministry of Communications.
"NIS" means New
Israeli Shekels.
“Other Businesses”
shall mean the businesses related to end-point network services (and any other
operations and activities conducted by Seller pursuant to the network end-point
licence, dated December 30, 2007, of Seller), and the VoBoC and WiFi
experimental services of Seller and 012 Telecom Ltd.
“Permitted Liens”
means: (A) statutory liens for taxes not yet due and payable; (B)
statutory liens to secure obligations to landlords, lessors or renters under
leases or rental agreements which obligations are not yet due; (C) deposits or
pledges made in connection with, or to secure payment of, workers’ compensation,
unemployment insurance or similar programs mandated by applicable law; (D)
statutory liens in favor of carriers, warehousemen, mechanics and materialmen,
to secure claims for labor, materials or supplies and other like liens incurred
in the ordinary course of business and not yet due; (E) liens in favor of
customs and revenue authorities arising as a matter of law to secure payments of
customs duties in connection with the importation of goods not yet due and
payable; (F) non-exclusive object code licenses of software by Seller in the
ordinary course of its business consistent with past practice; and (G) rights of
third parties that are inherent to assets being transferred (such as software
licenses, leased cars, contractual rights, etc.); provided, however, that
Permitted Liens shall not, for the avoidance of doubt, include liens created for
the benefit of financial institutions.
"Person" shall mean
any individual, firm, corporation (including any nonprofit corporation), general
or limited partnership, limited liability company, joint venture, estate, trust,
association, organisation (including unincorporated organisation), other entity
or governmental authority.
“Purchaser
Indemnitees” means any of Purchaser and its Representatives, successors
and assigns.
“Representatives” means officers, directors,
employees, agents, attorneys, accountants, advisors and
representatives.
"Retained Liabilities"
shall mean obligations and liabilities resulting from, arising out of, relating
to, in the nature of or caused by (a) any indebtedness of Seller under its
Series A Debentures; (b) any other borrowings of the Seller from any third party
financial institution or other financial lenders including Affiliates (including
from its direct or indirect parent company); (c) any liabilities in connection
with the Bezeq Transaction; (d) all liabilities for Taxes for periods ending on
or before the Cut-off Date; (e) Excluded Asset; (f) certain employment and
employee benefits-related claims, obligations and liabilities for employees who
are not Assumed Employees as set forth in Section 9 hereof, (g) fees,
costs or expenses incurred by Seller in connection with the preparation,
negotiation, execution, delivery and performance of this Agreement and the other
transactions contemplated hereby; (h) other derivative instruments (forward USD
contracts) of the Seller; and (i) as set forth in Schedule 1.2
hereto.
“Security Interest”
shall mean any mortgage, charge, lien, trust, encumbrance, pledge, assignment,
title retention, claim, right of first refusal, preemptive right or any other
encumbrance of whatever nature, kind or description.
“Seller
Indemnitees”
means any of Seller and its Representatives, successors and
assigns.
"Subsidiary" shall
mean a corporation, partnership, limited liability company, or other entity of
which an entity directly or indirectly owns or Controls (i) a majority of the
voting securities; or (ii) interests that are sufficient to elect or appoint a
majority of the Board of Directors or other comparable organ of such
Person.
"Tax" or “Taxes” shall mean
federal, state, local or foreign net or gross income, gross receipts, social
security, national health insurance, capital gains, license, payroll,
employment, excise, severance, stamp, occupation, premium, customs duties,
capital stock, franchise, profits, withholding, unemployment, disability, real
property, personal property, sales, use, offer, registration, value added,
alternative or add-on minimum, estimated or other tax, governmental fee or like
assessment or charge of any kind whatsoever, including any interest, penalty or
addition thereto, whether disputed or not.
“Tax Returns” shall
mean all reports, returns, declarations, statements, claim for refund, or
information return or statement relating or other information required to be
supplied to a taxing authority in connection with Taxes, including any schedule
or attachment thereto, and including any amendments thereof.
“U.S. GAAP” means generally accepted
accounting principles in the United States of America.
1.2 General Interpretation.
The paragraph headings are for the sake of convenience only and shall not
affect the interpretation of this Agreement. The recitals, schedules,
appendices, annexes and exhibits hereto form an integral part of this Agreement.
The Parties agree that they have been represented by counsel during the
negotiation and execution of this Agreement and, therefore, waive the
application of any law, holding or rule of construction providing that
ambiguities in an agreement or other document shall be construed against the
Party drafting such
agreement
or document. The words “include,” “includes” and "including" when used herein
shall be deemed in each case to be followed by the words "without
limitation."
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2.
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ACQUISITION
OF ASSETS; ASSUMPTION OF
LIABILITIES
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2.1 Purchase of Assets.
Subject to the terms and conditions of this Agreement, at the Closing, the
Seller shall, and the Seller shall cause its Affiliates (to the extent
necessary) to, sell, assign, transfer and convey to the Purchaser, and the
Purchaser shall purchase and acquire, assume and accept, all right, title and
interest of Seller or its Affiliates in and to all of the Acquired Assets, free
and clear from any Security Interests (for the avoidance of doubt, including
necessary consents from financial institutions), other than Permitted
Liens.
2.2. Assumed Liabilities.
Subject to the terms and conditions of this Agreement, at the Closing, the
Purchaser shall assume and agree to pay, discharge or perform, as appropriate,
the Assumed Liabilities and the Seller shall have no other obligations in
connection therewith.
2.3 Excluded Assets and Retained
Liabilities. The Seller shall not transfer, or be deemed to transfer, the
Excluded Assets and the Purchaser shall not assume, or be deemed to have
assumed, the Retained Liabilities.
2.4 Non-Transferable
Assets. To the extent that Seller’s rights to any
Acquired Assets may not be sold or assigned to the Purchaser without the consent
of another person that has not been obtained at or prior to Closing or if such
sale or assignment would constitute a violation of any contract constituting or
relating to an Acquired Asset, or a violation of any Legal Requirement, this
Agreement shall not constitute an agreement to sell or assign the same, and such
Acquired Asset shall remain in the Seller’s ownership and shall not be sold,
assigned, transferred, conveyed or delivered hereunder, nor shall any liability
constituting or relating to such Acquired Asset be assumed by Purchaser. Any
such Acquired Asset shall be referred to herein as a “Non-Transferable
Asset”. In such event:
2.4.1 Both
before and after the Closing Date, the parties shall exercise their reasonable
best efforts to obtain any consents so as to transfer each such Non-Transferable
Asset to Purchaser without modifying, amending or burdening such
Non-Transferable Asset in any material respect.
2.4.2 To
the extent that on the Closing Date there is any Non-Transferable Asset
outstanding, the Seller shall, from and after the Closing Date, use its
reasonable commercial efforts to obtain any such required consents as promptly
as possible, with any expenses involved to be borne by the Party handling the
matter. If any such Consent shall not be obtained or if any attempted assignment
would be ineffective in whole or in part, Seller shall cooperate with Purchaser
in any reasonable and lawful arrangement designed to provide the Purchaser the
benefits and use of such asset for which the consent was not obtained. Such
arrangements may include, with the consent of Purchaser, terminating the
Non-Transferable Asset between the Seller and the relevant third party and the
entry into a new contract by Purchaser with such third party on substantially
the same terms or a subcontract of the Non-Transferable Asset to
Purchaser. In particular, with regard to contracts which are
Non-Transferable Assets, Seller will, to the extent practicable and subject to
applicable law: (i) provide to the Purchaser all of the benefits of the
applicable contract; (ii) cooperate in any reasonable and lawful arrangement
designed to provide such benefits to the Purchaser; and (iii) enforce at the
request of the Purchaser and for the account of Purchaser, any rights of the
Seller arising from any such contract. In addition, with regard to
liabilities falling
within
the definition of Assumed Liabilities that cannot be assigned or assumed,
Purchaser shall indemnify Seller for all such liabilities as set forth in Section 12
hereto.
2.4.3 In
the event that Purchaser is provided all of the benefits received by the Seller
under any contract pursuant to the foregoing paragraph, the Purchaser shall
perform and discharge when due the obligations, and assume the liabilities of
the Seller under such contract to the extent arising out of relating to the
Business.
2.4.4 For
the avoidance of doubt, the Non-Transferable Assets, if any, shall not include
any of the consents that are required closing conditions set forth in Section 5.
2.5 Further
Assurances. From time to time after the Closing, Seller shall
execute and deliver such other instruments of transfer and documents related
thereto and take such other action as may be necessary or reasonably requested
by Purchaser in order to more effectively transfer to Purchaser, and to place
Purchaser in possession and control of, the Acquired
Assets. Purchaser shall take such actions as may be necessary or
reasonably requested by Seller in order to assure Purchaser’s assumption of the
Assumed Liabilities.
2.6 Effect of Absence of
Consent. Other than the closing conditions set forth in Section 5 (including without
limitation Section 5.2)
and without derogating from Section 2.4 and Section 6.8, the absence of
any consent, approval or authorization of any third party for the transaction
contemplated hereby shall not constitute a condition precedent for Closing, a
ground for terminating or not consummating this Agreement or the transactions
contemplated hereby, or a breach of this Agreement, and the Purchaser fully
accepts upon itself all risks in connection with the absence of any such
consent, approval or authorization.
3. CONSIDERATION
AND PAYMENT
3.1. Purchase Price. As
consideration for the sale of the Acquired Assets and the assumption of the
Assumed Liabilities by Purchaser, at the Closing, the Purchaser shall pay to the
Seller, by wire transfer of immediately available funds to an account designated
in writing by Seller, NIS 1,200,000,000 (One Billion Two Hundred Million New
Israeli Shekels) (the "Purchase
Price").
3.2 VAT. VAT shall be
added to the Purchase Price, as applicable, and shall be paid by Purchaser
against an invoice issued by the Seller. The parties will use commercially
reasonable efforts to cooperate with each other to obtain any available
reduction or exemption from such VAT or other Taxes (including, by way of
example, assistance with regard to production of any applicable resale
certificate, resale purchase exemption certificate or other certificate or
document of exemption required or appropriate to reduce or eliminate such VAT or
other Taxes) or any available refund of such VAT or other Taxes. For the
avoidance of doubt, obtaining any such reduction or exemption shall not be a
condition to the Closing.
3.3 Tax Withholding.
Purchaser shall be entitled to deduct and withhold from any consideration
payable or otherwise deliverable pursuant to this Agreement to Seller such
amounts as may be required to be deducted or withheld therefrom under any
applicable law, including the Israeli Tax Ordinance, unless Purchaser received
from Seller a certificate or ruling from the ITA providing for an exemption or
other reduction from such withholding or deduction which can be relied upon by
Purchaser and which is presented at least seven days prior to the time that the
applicable payment of consideration is due to be made. To the extent such
amounts are so deducted or withheld, such amounts shall be treated for all
purposes of this Agreement as having been
delivered
and paid to Seller and Purchaser shall provide to Seller reasonably requested
documentation evidencing such deduction or withholding.
3.4 Cash Adjustments.
Cash, cash equivalents and marketable securities and derivative instruments
(collectively, "Cash") of the Seller
and its Subsidiaries as of the Cut-off Date shall be retained by Seller as part
of the Excluded Assets (the "Retained
Cash"). Any income or losses, including Cash, of the Business
after the Cut-off Date shall be for the account of the
Purchaser. Without derogating from the foregoing, the Purchaser (i)
understands that outside of the operations in the ordinary course of the
Business, the Seller will continue to collect cash, cash equivalents and
marketable securities and derivative instruments for the purpose of consummating
the Bezeq Transaction, including, without limitation, through shareholder loans,
shareholder investments and financial loans, (ii) acknowledges that it has no
rights to any such assets (and has no liability for any liabilities related
thereto), and (iii) all such assets shall be part of the Excluded
Assets.
If during the period from the Cut-off
Date until the Closing the Business generates a positive Cash amount, then the
Seller shall transfer such positive amount to the Purchaser as part of the
Acquired Assets ("Positive Cash
Amount"). If during the period from the Cut-off Date until the
Closing the Business generates a negative Cash amount and hence such amounts
were financed by the Seller during such period, the Purchaser will transfer such
amount to the Seller within 14 days after the Closing. At Purchaser's
request, if the Acquired Assets include cash of less than NIS 10,000,000, the
Seller will provide Purchaser at Closing with a non-interest bearing loan of up
to an amount required to bring such cash to NIS 10,000,000 ("Seller Loan"), and
such loan shall be repaid by Purchaser to Seller within fourteen (14) days after
Closing.
For the
avoidance of doubt, this Section 3.4 shall not be
deemed to derogate from Seller's obligation under Section 6.1(xi).
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4.
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CLOSING
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4.1 Closing. Unless
earlier terminated pursuant to Section 10 hereof, the closing of the
transactions contemplated hereby, including the purchase and sale of the
Acquired Assets and the payment of the Purchase Price (the “Closing”), shall take
place at the offices of Seller on December 31, 2009, provided that the
conditions set forth in Section 5 shall have been satisfied or waived prior
thereto, other than those conditions that are to be satisfed at the Closing;
provided, however, if such conditions have not been waived or satisfied by
December 31, 2009, the Closing shall take place on the fifth (5th)
business day immediately following the satisfaction or waiver (by the applicable
party) of the conditions set forth in Section 5, other than those conditions
that by their terms are to be satisfied at the Closing, or on such other date
and at such other time and place as is mutually agreed by the Parties (such
date, the “Closing
Date”). For the avoidance of doubt, nothing in this Section 4.1 shall
derogate from section 10.1.
4.2. Closing Deliveries.
At the Closing, the following actions and occurrences will take place, all of
which shall be deemed to have occurred simultaneously, and no action shall be
deemed to have been completed and no document or certificate shall be deemed to
have been delivered, until all actions are completed and all documents and
certificates delivered:
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4.2.1
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The
Seller deliver to the Purchaser the
following:
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(a) Possession
of the Acquired Assets (to the extent applicable).
(b) Such
duly executed bills of sale, endorsements, assignments and other instruments of
transfer and conveyance necessary to vest in the Purchaser the rights, title and
interests of the Seller in and to the Acquired Assets, free and clear of all
Security Interests other than Permitted Liens.
(c) A
certificate executed by the CEO or CFO of the Seller (without personal liability
therefor), or alternatively by another officer duly authorized by the Seller's
Board of Directors confirming the satisfaction of the conditions set
forth in Section 5.1 and
5.2.
(d) Seller's
balance sheet for the Cut-off Date (a draft of which shall be delivered at least
five (5) business days prior to the Closing, but in no event prior to January
15, 2010) (the "Cut-off Date Statement").
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4.2.2
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The
Purchaser shall deliver to the Seller the
following:
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(a) The
Purchase Price.
(b) Such
duly executed bills of sale, endorsements, assignments and other instruments of
transfer and conveyance necessary to vest in the Purchaser the rights, title and
interests of the Seller in and to the Acquired Assets, free and clear of all
Security Interests other than Permitted Liens.
(c) Undertakings
duly executed by Purchaser, in form and substance reasonably satisfactory to the
Seller, whereby Purchaser assumes and agrees to discharge when due the Assumed
Liabilities.
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(d) A
certificate executed by an officer duly authorized by the Purchaser's Board of
Directors confirming the satisfaction of the conditions set forth in Section 5.1.
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5.
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CONDITIONS
PRECEDENT
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5.1 Conditions to Obligations of
Each Party. Each Party’s obligation to consummate the transactions
contemplated hereunder is subject to the fulfilment, prior to or at the Closing,
of each of the following conditions:
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(i)
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Approval
of the MoC of the transactions contemplated hereby, either by the transfer
of the existing Licenses to the Purchaser or the grant of new licenses
that permit the Business to continue to be operated (the "MoC
Approval")
shall have been duly obtained and shall be in full force and effect on the
Closing Date.
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(ii)
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Approval
of the Israeli Antitrust Commissioner of the transactions contemplated
hereby (to the extent such approval is required) (the "Antitrust
Approval")
shall have been duly obtained and shall be in full force and effect on the
Closing Date.
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(iii)
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Any
other material Governmental Authorization necessary to effect the
transaction contemplated by this Agreement shall have been duly obtained
and shall be in full force and effect on the Closing
Date.
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(iv)
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No
temporary restraining order, preliminary or permanent injunction, judgment
or other order issued by any court of competent jurisdiction or other
legal or regulatory restraint or prohibition preventing the consummation
of the transactions contemplated hereby shall be in
force.
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5.2 Additional Condition to
Obligations of Purchaser. The obligations of Purchaser to consummate the
transactions contemplated by this Agreement shall be subject to the satisfaction
at or prior to the Closing of the following condition, which may be waived
exclusively in writing by Purchaser: All of the consents listed on Schedule 5.2
(the "Required
Consents") that are
required shall have been duly obtained and delivered to Purchaser (or shall have
been replaced in a manner that does not adversely affect Purchaser) and shall be
in full force and effect on the Closing Date.
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6.
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COVENANTS;
OTHER AGREEMENTS
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6.1
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Ordinary
Course.
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(a)
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From
the date of this Agreement until the Closing Date (the “Interim Period”), and
subject to any limitations under the Israeli Antitrust Law, with respect
to the Business, other than (i) with the prior written consent of the
Purchaser (such consent not to be unreasonably withheld, conditioned or
delayed) or (ii) as expressly contemplated
hereunder:
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(i) Seller
shall conduct the Business in the usual, regular and ordinary course and in
substantially the same manner as the Business has been conducted prior to the
date of this Agreement;
(ii) Seller
shall comply with all legal requirements and contractual liabilities in all
material respects applicable to the operation of the Business and pay all
applicable Taxes as and when due and payable;
(iii) Seller
shall use reasonable commercial efforts to keep available the service of the
Employees and to preserve intact its current business organization and maintain
its relations with all material suppliers, customers, landlords, creditors, and
other Persons having business relationships with Seller, all in the ordinary
course of business;
(iv) Seller
shall not make any sale, assignment, transfer, abandonment or other conveyance
of a material part of the Acquired Assets, except transactions pursuant to the
existing Contracts or transactions in the ordinary course of business consistent
with past practice to unaffiliated third Persons;
(v) Seller
shall not enter into any material new customer, supplier, lease, reseller or
distributor agreement other than in the ordinary course of business consistent
with past practice;
(vi) Seller
shall not materially change the business practices of the Business as presently
conducted, in regard to customer credit terms, accounts receivable and
payable;
(vii) Seller
shall not sell, lease, license, or otherwise dispose of or grant any license to
any material Business Intellectual Property Rights, other than non-exclusive
licenses or leases granted to customers in the ordinary course of
business;
(viii) Seller
shall not subject any of the Acquired Assets, or any part thereof, to any Lien
or suffer such to exist other than Permitted Liens and other than such
non-material Liens as may arise in the ordinary course of business consistent
with past practice or by operation of law;
(ix) Seller
shall not purchase, lease or otherwise acquire any material asset for the
Business outside the ordinary course of business;
(x) Seller
shall not change the terms of any employment agreements or compensation
practices with senior employees of the Business or make
across-the-board changes in employment agreements or compensation practices or
enter into any new (or amend any existing) employee benefit plan, program or
arrangement, except in accordance with pre-existing contractual
provisions;
(xi) Seller
shall not materially change its policies and practices with respect to
collection of accounts receivable, payment of accounts payable or the grant of
discounts or rebates;
(xii) Seller
shall not enter, modify or amend in any material respect or terminate any
contract that is material to the Business or announce or commence any material
offering or campaign to customers if such action would have an adverse effect on
the Business;
(xiii) Seller
shall not solicit or enter into any transaction to sell the Business or a
substantial part thereof, directly or indirebtly other than as contemplated by
this Agreement;
(xiv) Seller
shall not waive, cancel, compromise, settle or release any rights or claims of
material value, outside the ordinary course of business, that are Acquired
Assets;
(xv) Seller,
solely through its CEO, shall confer on a regular and reasonable basis with
Representatives of Purchaser to report on operational matters and the general
status of ongoing operations of the Business; and
(xvi) Seller
shall not agree or commit to take any of the actions described
above.
(b) Without
derogating from the foregoing, nothing in this Section 6.1 is intended to
inhibit or otherwise restrict the Seller from conducting its business during the
Interim Period in the ordinary course of business or from taking actions in
furtherance of the Bezeq Transaction. Nothing contained in this Agreement is
intended to give Purchaser, directly or indirectly, the right to control or
direct the Company’s operations prior to the Closing Date or vice versa. Prior
to the Closing, each of the Parties shall exercise, consistent with the terms
and conditions of this Agreement, complete control and supervision over its and
its subsidiaries respective operations.
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6.2
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Public
Announcements.
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(a) Neither
Party nor any of its Affiliates shall issue any press release or public
announcement concerning this Agreement or the transactions contemplated hereby
without obtaining the prior written approval of the other Party, which approval
will not be unreasonably withheld or delayed, unless disclosure is otherwise
required by applicable law or by the applicable rules of or listing agreement
with any stock exchange on which the securities of a Party or its Affiliates are
traded securities, in which case the disclosing party shall consult with the
other party prior thereto.. The Purchaser shall not,
and shall cause its Affiliates not to, make public announcements concerning
concrete business plans with respect to the Business without Seller's prior
written approval.
(b) Nothing
in Section 6.2(a) shall:
(i) prevent the Parties from providing any of their Affiliates or their
shareholders, attorneys, accountants or advisors any details or information
regarding this Agreement, the transaction contemplated hereby, the identity of
the other Party and its direct and indirect shareholders to the extent that such
details or information are required for the approval of this Agreement and the
transaction contemplated herein; or (ii) prevent the Purchaser from providing
any lenders, institutions and other entities which will provide loans/credit to
the Purchaser for the purpose of the consummation of the transactions provided
in this Agreement (including by means of issuance of bonds and/or prospectus),
any details or information regarding this Agreement and the transaction
contemplated herein to the extent that such details or information are required
for the purpose of financing the transactions contemplated hereby.
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6.3
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Filings and
Consents.
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(a) The
Purchaser shall, and shall cause its Affiliates to, and the Seller shall, (i)
file all applications legally required of such Person with the Israeli Antitrust
Commissioner in connection with obtaining the Antitrust Approval, within 14 days
of the date hereof, and (ii) provide all information required by the Israeli
Antitrust Commissioner in connection with such filings in a timely
manner.
(b) The
Purchaser shall, and shall cause its Affiliates to, (i) file within 14 days of
the date hereof all applications legally required of such Person with (y) the
MoC in connection with obtaining the MoC Approval, and (z) any other
governmental authority required by law to effect the transaction contemplated
hereby ((y) and (z), together with the Antitrust Approval, collectively the
"Regulatory
Approvals”), and (ii) provide all information required by the MoC or
other Governmental Authority in connection with such filings in a timely
manner. In the event the any such filings are to be made by the
Seller, it shall do the same, except that with respect to the MoC Approval or
other governmental approval as relevant, (i) Seller shall provide Purchaser
relevant information concerning Seller that is in Seller's possession, (ii)
Purchaser shall prepare such filings in full, (iii) Seller's sole responsibility
(other than with respect to information that it provides) shall be to deliver
such filings to the MoC or other relevant governmental authority, (iv) the
content of such filings with the MoC (other than with respect to information
concerning the Seller) shall remain the responsibility of Purchaser, and
Purchaser shall retain liability for the contents thereof.
(c) Upon
the terms and subject to the conditions set forth in this Agreement, the
Purchaser agrees to use best efforts to obtain the Regulatory Approvals as soon
as possible, to make such filings and notifications and respond to any requests
for additional information made by an authority in a timely, complete and
correct manner, and to comply with all applicable law and all
requirements
applicable to it of the MoC or the Israeli Antitrust Commissioner or other
applicable agencies or regulatory authorities, as the case may be, to effect the
transactions contemplated by this Agreement. The Purchaser undertakes not to,
and shall exercise best efforts to cause any of its controlling shareholders and
its Affiliates not to, take any action that would adversely affect its ability
to effect the Closing in a timely manner or that would reasonably be expected to
materially delay, impede or prevent receipt of any necessary Regulatory
Approvals.
(d) Without
limiting the generality of the foregoing, while the Purchaser does not foresee
the same, in order to facilitate the issuance of any Regulatory
Approval:
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(i)
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The
Purchaser shall take such actions including with respect to its assets
(including without limitation the sale or other disposition of such assets
or the transfer of certain of its operations and activities to
subsidiaries), as and to the extent required to obtain such
Approval.
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(ii)
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The
Purchaser shall not object to any condition or stipulation (regardless of
whether such condition or stipulation is burdensome) from the MoC or the
Israeli Antitrust Commissioner or other relevant regulatory authority
stipulated as a condition to the MoC Approval or the Antitrust Approval or
any other Regulatory Approval as the case may
be.
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(iii)
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The
Purchaser shall take any other action required to facilitate the issuance
of any Regulatory Approval.
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(e) The
Seller shall use reasonable efforts to assist and to cooperate with the
Purchaser in obtaining the approvals required under Section 6.3(a) and (b) above and shall
use reasonable efforts to cause the conditions to Closing set forth in Section 5 (to the extent that
the approvals provided for in Section 5 are required by law
to be obtained by the Seller) to be satisfied as promptly as practicable, it
being understood that any action or omission to act by the Seller taken in
connection with effectuation of the Bezeq Transaction shall not be deemed a
breach by Seller of this Section 6.3(e) or grounds for
any failure of the Purchaser to satisfy its obligations hereunder.
(f) The
Purchaser shall provide the Seller with all material correspondence (including
e-mail correspondence) and material relevant information with respect to
Regulatory Approvals; provided that any trade secrets or other confidential
information shall be redacted from such updates and shall be provided to a third
party trustee for safekeeping. The Purchaser shall promptly notify
the Seller of any material written communication (including e-mail
correspondence) made to or received by such party or its Affiliates from the MoC
or the Israeli Antitrust Commissioner or any other regulatory body regarding any
of the transactions contemplated hereby, and permit the Seller to review in
advance any proposed written communication (including e-mail correspondence) to
the MoC or the Israeli Antitrust Commissioner and incorporate the Seller’s
reasonable comments, not agree to participate in any substantive meeting or
discussion with or in the MoC or the Israeli Antitrust Commissioner in respect
of any filing, investigation or inquiry concerning this Agreement or the
transactions contemplated hereby unless, to the extent reasonably practicable
and lawful, it consults with the Seller in advance and, to the extent permitted,
gives the Seller the opportunity to attend, and furnish the Seller with copies
of all correspondence, filings and written communications between them on one
hand and the MoC or the Israeli Antitrust Commissioner or its respective staff
on the other hand, with respect to this Agreement and the transactions
contemplated hereby. This provision shall apply to Seller, mutatis mutandis, in regard
to the transaction contemplated hereby.
(g) Without
derogating from the foregoing, the Purchaser shall use its best efforts to cause
the conditions to Closing set forth in Section 5.1 (Regulatory
Approvals) to be satisfied and to comply with any and all of its
obligations and covenants hereunder as promptly as practicable.
6.4 "012 Smile" Name and
Operations. At the Closing of the Agreement, in connection
with the transfer of the Acquired Assets, (i) Seller shall execute the
assignment to Purchaser of the "012 Smile" trademarks and name used by the
Business and (ii) Seller shall procure that Internet Gold – Golden Lines Ltd.
shall execute the assignment to Purchaser of the "012 Smile" logo used by the
Business. Immediately after the Closing, and not later than 60 days
thereafter, the Seller shall change its name from 012 Smile.Communications Ltd.
to another name which bears no similarity to its current name.
6.5 Wrong Pocket; Tax
Accounting. In the event that receivables relating to the
Business are received by the Seller after the Closing Date, it shall forward
such receivables to the Purchaser. Any Assumed Liability addressed to
the Seller after the Closing shall be assumed by the Purchaser. The
Purchaser and the Seller shall perform a reconciliation of claims on a monthly
basis and any net amounts due from one Party to the other shall be paid within 7
days of such reconciliation. The Parties will also effect similar
reconciliations with respect to Tax payments, refunds and other items effected
by Seller prior to the Cut-off Date and Tax payments, refunds and other items
effected by Purchaser after the Cut-off Date.
6.6 Accounting Books and
Records. The Seller shall retain all of the accounting books
and records for purpose of reporting the transactions contemplated hereby but
shall cooperate with the Purchaser with respect to such
reporting. The Seller shall also retain its accounting books and
records for periods prior to Closing but shall provide the Purchaser access and
information with respect thereto to the extent necessary for Purchaser's
reasonable business needs.
6.7 Notification of Certain
Matters. During the Interim Period, Seller shall promptly notify
Purchaser, and Purchaser shall promptly notify Seller, in writing of the
discovery of any of the following: (i) any event, condition, fact or
circumstance that occurred or existed on or prior to the date of this Agreement
and that caused or constitutes a material inaccuracy in or breach of any
representation or warranty made by the relevant party in this Agreement; (ii)
any event, condition, fact or circumstance that occurs, arises or exists after
the date of this Agreement and that causes or constitutes, or could reasonably
be seen as likely to cause or constitute, a material inaccuracy in or breach of
any representation or warranty made by the relevant party in this Agreement;
(iii) any breach of any material covenant or obligation of the relevant party;
and (iv) any event, condition, fact or circumstance that would make the timely
satisfaction of any of the conditions set forth in Section 5
impossible, unlikely or postponed.
6.8 Reasonable Efforts.
During the Interim Period, the Seller shall use its reasonable efforts to cause
the conditions set forth in Section 5.2 (Required Consents) to be satisfied on a
timely basis, and Purchaser shall reasonably cooperate with Seller in connection
therewith.
6.9 Non–solicitation. Seller shall not, at all
times from the Closing Date until the first (1st)
anniversary of the Closing Date, without the prior written consent of Purchaser:
encourage or solicit any officer or key employee of Purchaser to leave their
employment; provided, however, that this provision shall not limit Seller's
ability to make generalized solicitations of employment. Seller acknowledges
that the covenants of Seller in this Section 6.9 are reasonably necessary for
the protection of Purchaser’s interests under this Agreement and are not unduly
restrictive upon Seller.
6.10 Cooperation re Credit
Agreements/Financing. Seller shall reasonably cooperate with
Purchaser's requests for information that Purchaser requires for purposes of
obtaining financing for the transaction contemplated hereby, including (in the
event that the Closing does not occur upon a quarter-end) providing required
comparative historical financial data, subject to customary indemnities, at
Purchaser's expense and sole responsibility.
6.11 Coordination. Purchaser
shall coordinate all contacts with the Seller or any of its employees or
Representatives through the Chief Executive Officer of the Seller or such other
persons as the Seller may designate from time to time.
6.12 Pro Forma Financial
Statement. Within three (3) business days of the date of
this Agreement, the Seller shall provide the Purchaser with a pro forma
financial statement as of September 30, 2009 with respect to the Business, which
shall be treated as a representation under Section 7 hereof when it is
provided.
6.13 Senior
Management. Within fourteen (14) days of the date of
this Agreement, the Seller shall provide the Purchaser with a chart showing the
principal components of the terms of employment of senior
management.
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7.
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REPRESENTATIONS AND
WARRANTIES OF THE SELLER
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The
Seller hereby represents and warrants to the Purchaser that, subject to the
exceptions set forth in the disclosure schedule (the "Seller Disclosure Schedule")
delivered by Seller, on the date hereof:
7.1 Organization and
Authority
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(a)
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The
Seller duly and validly exists under the laws of Israel and, subject to
the conditions specified under Section 5, has all
necessary company power and authority to enter into this Agreement, to
carry out its obligations hereunder and to consummate the transactions
contemplated hereby.
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(b)
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The
execution and delivery of this Agreement and all such other agreements
delivered pursuant hereto (collectively, the "Transaction Documents")
by the Seller, the performance by the Seller of its obligations hereunder
and thereunder and the consummation by the Seller of the transactions
contemplated hereby have been duly authorised by all requisite corporate
action on the part of the Seller and no further shareholder or other
organ's approval is required.
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(c)
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This
Agreement has been duly executed and delivered by the Seller, and
(assuming due authorisation, execution and delivery by the Purchaser and
subject to the conditions set under Section 5) this Agreement
constitutes a legal, valid and binding obligation of the Seller
enforceable against the Seller in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting the
enforcement of creditors' rights in general or by general principles of
equity.
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(d)
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Except
for 012 Telecom Ltd., an Israeli company, which is wholly owned by the
Seller, the Seller has no Subsidiaries. Other than the Subsidiary of the
Seller, neither the Company nor its Subsidiary owns any material
Subsidiary.
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7.2
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No
Conflict.
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Other
than Regulatory Approvals and without derogating from Section 2.4, the execution,
delivery and performance by Seller of this Agreement and the Transaction
Documents and the consummation by Seller of the transactions contemplated hereby
and thereby do not and will not violate or conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default, or give rise
to a right of termination, cancellation or acceleration of any obligation or
loss of any benefit (any such event, a “Seller Conflict”) under (i)
the corporate documents of Seller, and (ii) any Legal Requirement or any order
of any court or other Governmental Entity by which Seller or any of its material
properties or assets is or are bound, other than in a manner that would not have
a material adverse effect on Purchaser.
7.3 Litigation. Except
as set forth in the Financial Statements (as defined below) or in Schedule 7.3, there are no
actions, suits or proceedings pending, or to the Seller's knowledge, threatened
in writing against, the Seller involving the Business or the Acquired Assets,
which would have a material adverse effect on Seller. Neither the
Business nor the Acquired Assets is subject to any order, writ, judgment, award,
injunction or decree of any Governmental Entity or arbitrator, domestic or
foreign, that materially adversely affects the Business or the Acquired
Assets.
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7.4
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Compliance with Laws;
Governmental Authorizations.
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(a)
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To
Seller's Knowledge, Seller has complied with and is in compliance with all
Legal Requirements (except where any such non-compliance shall not have a
material adverse effect on the Business) in all material
respects.
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(b)
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To
Seller's Knowledge the Seller holds all permits, licenses (including the
Licenses), certificates, registrations and other authorizations necessary
to conduct the Business as currently conducted (except where the absence
of such permits, licenses, certificates, registrations and othe
authorizations would not have a material adverse effect on the
Business). The Licenses are in the name of Seller or its
Subsdiary and Seller is not aware of any material procedures that in
Seller's opinion would be reasonably likely to cause the cancellation or
withdrawal of the Licenses, except as set forth in
Schedule7.4(b).
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7.5
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Financial Statements;
Seller Public Filings.
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(a) The
audited financial statements of the Seller for the period ended December 31,
2008 and the unaudited and unreviewed financial statements for the period ended
September 30, 2009 (the "Financial
Statements"), copies of which are attached hereto as Schedule 7.5, are complete and
accurate in all material respects, fairly represent the financial position and
results of operations of the Seller as of the dates and for the periods
indicated, and have been prepared in conformity with US GAAP applied on a basis
consistent with prior years.
(b) Seller's
Form 20-F for the year ended December 31, 2008 was prepared in accordance with
the requirements of applicable law and does not contain any material untrue
statement of fact.
7.6 Absence of Certain
Changes
Since
September 30, 2009, the Business has not suffered any change, event or condition
that is materially adverse to (i) the Business (other than changes, events or
conditions occurring in the ordinary course of business), or (ii) the
transactions contemplated by this Agreement.
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7.7
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Employees.
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(a)
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Seller
is in compliance in all material respects with applicable Legal
Requirements (including any national, industry or company collective
agreement, order or award) and agreements relating (i) to the employment
of the Employees, and (ii) to the proper withholding and remission to the
proper tax authorities or to the proper withholding or contribution and
remission to the proper pension or provident, life insurance, disability
insurance, continuing education or other similar funds of all sums
required to be withheld, contributed or remitted, legally or
contractually.
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(b)
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Seller
is not a member in any employers’ organization, and no claim or request
has been made of Seller by any employers’ organization. Seller
is not a party to, or bound by, any collective bargaining agreement or
arrangement or union contract or extension order (excluding such extension
orders that may apply to all employers or employees in Israel in general)
and no such collective bargaining agreement is being negotiated by
Seller. No labor union or other representative organization has
otherwise been certified or recognized as the collective bargaining
representative of any employees of Seller or has applied to represent such
employees or, to Seller’s Knowledge, is attempting to represent such
employees.
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7.8 Tax. As of
the Closing, there shall be no Tax liens on any Acquired Asset with respect to
the period prior to the Cut-off Date.
7.9 Title to
Assets.
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(a)
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The
Seller has (and will, at the Closing, have) good title to all of the
Acquired Assets, free and clear of all Security Interests other than
Permitted Liens. Seller does not own any real
property.
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(b)
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The
Acquired Assets, collectively, comprise all of the assets, rights and
services used by Seller for the operation of the Business as currently
conducted. All material machinery, equipment and other tangible assets
included in the Acquired Assets are in good and sufficient operating
condition and in a state of reasonable maintenance and repair for the
continued conduct of the Business on a basis consistent with past
practice, ordinary wear and tear
excepted.
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7.10 Brokers and Finders.
As a result of the transaction contemplated hereby, Purchaser shall not be
required to pay any brokerage commission, finders’ fees or similar consideration
based on any arrangement or agreement made by Seller.
7.11 Related Party
Transactions. Except as set forth in Seller's Form 20-F for
the year ended December 31, 2008 and except for transactions in the ordinary
course of business at arm's length, to Seller’s
Knowledge: (a) no Related Party has any direct or indirect
interest in any
Acquired
Asset used in or otherwise relating to the Business; (b) no Related Party
is indebted to Seller in connection with the Business; and (c) no Related
Party has entered into any material contract, transaction or business dealing
related to the Business.. For purposes of this Section 7.11 each
of the following shall be deemed to be a “Related
Party”: (i) each Person that, directly or indirectly, has an
equity interest in Seller; (ii) each individual who is an officer or director of
Seller; (iii) each Family Member of each of the individuals referred to in
clauses "(i)" and "(ii)" above.
7.12 Intellectual
Property. The Seller does not have material Intellectual
Property Rights except for trademarks and rights under third party license
agreements. To the knowledge of the Seller, such Intellectual
Property Rights do not infringe, misappropriate or otherwise violate the
Intellectual Property Rights of a third party in a manner that would have a
material adverse effect on the Business.
7.13
Contracts. Each
contract that is the subject of a Required Consent is in full force and effect
and is not subject to any material default on the part of Seller, and to the
knowledge of the Seller, no other party to such contracts is in material default
with respect thereto.
7.14
Selected
Information. The information set forth in part 1 of Schedule 7.14 is true and
accurate in all material respects.
7.15 Insurance. The
Seller has insurance coverage for the Business at a level that is reasonably
adequate in view of the size and scope of the Business.
7.16 Insolvency. The
Seller is not insolvent or unable to pay its debts as they fall
due. No order has been made, petition presented, resolution passed or
meeting convened for the winding up of the Seller. No receiver (including an
administrative receiver) liquidator, trustee, administrator, custodian or
similar official has been appointed in any jurisdiction in respect of the whole
or any part of the business or assets of the Seller and no step has been taken
for or with a view to the appointment of such a person.
7.17
Disclosure. Seller
acknowledges and agrees that Purchaser does not make and has not made any
representations or warranties with respect to the trasnsactions contemplated
hereby other than those specifically set forth in Section 8 hereof, including as
to projections, forecasts or forward-looking statements. The Seller
is aware of the significance of the transaction contemplated hereby to the
Purchaser and acknowledges that time is of the essence in consummating the
transaction contemplated hereby.
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8.
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REPRESENTATIONS
AND WARRANTIES OF THE
PURCHASER
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The
Purchaser hereby represents and warrants to the Seller that on the date
hereof:
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8.1
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Organization and
Authority.
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(a)
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The
Purchaser duly and validly exists under the laws of Israel and, subject to
the conditions specified under Section 6, has all
necessary company power and authority to enter into this Agreement, to
carry out its obligations hereunder and to consummate the transactions
contemplated hereby.
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(b)
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The
execution and delivery of this Agreement and all such other agreements
delivered pursuant hereto (collectively, the "Transaction Documents")
by the Purchaser, the performance by the Purchaser of its obligations
hereunder
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and
thereunder and the consummation by the Purchaser of the transactions
contemplated hereby have been duly authorised by all requisite corporate action
on the part of the Purchaser and no further shareholder or other organ's
approval is required.
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|
(c)
|
This
Agreement has been duly executed and delivered by the Purchaser, and
(assuming due authorisation, execution and delivery by the Seller and
subject to the conditions set under Section 6) this
Agreement constitutes a legal, valid and binding obligation of the
Purchaser enforceable against the Purchaser in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting the
enforcement of creditors' rights in general or by general principles of
equity.
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|
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(d)
|
The
ultimate control of the Purchaser is held by an Israeli citizen and
resident in the manner required to receive the International Telephony
License as set forth in detail in Schedule
8.1(d).
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|
|
(e)
|
The
Purchaser is an entity being formed under the laws of the State of Israel
for the purpose of holding an international long-distance telephony
license.
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|
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8.2 Consent and Approvals; No
Conflict. Other than Regulatory Approvals, the execution, delivery and
performance by Purchaser of this Agreement and the Transaction Documents and the
consummation by Purchaser of the transactions contemplated hereby and thereby do
not and will not violate or conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default, or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of any
benefit (any such event, a “Purchaser Conflict”) under (i)
the Corporate Documents of Purchaser, (ii) any Legal Requirement or any order of
any court or other Governmental Entity by which Purchaser or any of its material
properties or assets is or are bound, other than in a manner that would not have
a material adverse effect on Purchaser's ability to consummate the transaction
contemplated hereby.
8.3 Litigation. There
is no judgment, decree or order against the Purchaser that prevents, enjoins, or
materially alters or delays the purchase of the Acquired Assets or the
assumption of the Assumed Liabilities by the Purchaser under this Agreement and
the consummation of the transactions contemplated herein.
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|
8.4
|
Financial
Capability
|
The
Purchaser has access to, and at the Closing shall have, sufficient funds or
commitments to pay in cash any and all amounts necessary to consummate the
payments and transactions contemplated hereby, including the purchase of the
Acquired Assets, and the Purchaser acknowledges that any failure to obtain the
financing necessary to consummate the transaction contemplated hereby shall not
constitute a defence or condition precedent to its obligations hereunder. The
Purchaser will provide the Seller with copies of all credit agreements,
financing commitments and other arrangements with banks and other entities
providing financing to the Purchaser for purposes of funding its obligations
hereunder (collectively "Credit Agreements"),
or a letter from the lending bank confirming the terms of such Credit
Agreements, shortly after such documents are made available to the Purchaser and
such copies shall be complete and accurate; provided, however, that the
Purchaser may redact trade secrets and other confidential
commercial
information
which shall be provided to a third party trustee for safekeeping. The Purchaser
undertakes to take all actions necessary to fulfill all of its obligations set
forth in such Credit Agreements in a prompt and timely manner.
8.5 The MoC Approval and
Antitrust Approval. The Purchaser has examined the Business of the
Purchaser and the Acquired Assets and the Assumed Liabilities (including the
Licenses as set forth in Section 8.6 below), and has
taken into consideration the Purchaser's and its Affiliates' operations, and has
conferred with counsel and it is not aware of any reason, and to the best of its
knowledge, there is no reason for the denial or material delay of the
Purchaser's application to obtain the MoC Approval and the Antitrust Approval
and any other Regulatory Approval (to the extent such approval is required) with
respect to the transactions contemplated hereby.
8.6 Licences and Related
Regulations. The Purchaser and its Affiliates and Representatives have
had adequate opportunity to review the Licences and related regulations, and
have received all information (legal, financial and otherwise) required by them
concerning the Licences and related regulations and all of the terms and
conditions thereto.
8.7 Brokers and Finders.
As a result of the transaction contemplated hereby, Seller shall not be required
to pay any brokerage commission, finders’ fees or similar consideration based on
any arrangement or agreement made by Purchaser.
8.8 Acknowledgement.
Without derogating from the representations of Seller herein, the Purchaser
acknowledges that it has voluntarily decided to enter into this Agreement, to
consummate the transactions contemplated herein and hereby confirms that (i) it
is familiar with the Business and the industry sectors in which it operates,
(ii) it has had adequate opportunity to select and consult with its financial,
tax, accounting and legal advisors regarding the terms, conditions, rights and
obligations set forth in this Agreement, and (iii) it received all information
(legal, financial and otherwise) concerning the business and financial condition
of the Seller that it requested. The Purchaser is aware of the significance of
the transactions contemplated hereby to the Seller and acknowledges that time is
of the essence in consummating the transaction contemplated hereby.
8.9 Disclosure. Purchaser
acknowledges and agrees that Seller does not make and has not made any
representations or warranties with respect to the trasnsactions contemplated
hereby other than those specifically set forth in Section 7 hereof, including as
to projections, forecasts or forward-looking statements. Without derogating from
Seller's representations under Section 7 hereof or from
Seller's indemnification under Section 11 hereof, the
Purchaser agrees that the Acquired Assets, Assumed Liabilities and the Business
are purchased and assumed by the Purchaser at the condition of the Acquired
Assets, Assumed Liabilities and the Business on the Closing Date, whether or not
any fact, act or circumstance of any nature whatsoever relating to the company
is known, disclosed or discussed, and regardless of any investigation, inquiry
or disclosure that was or could have been made, and whether or not any fact or
circumstance is different than expected by the purchaser, subject only to the
representations made by the Seller in section 7.
Without
derogating from Section 7, any materials and presentations made available to the
Purchaser or its affiliates or representatives, do not, directly, or indirectly,
and shall not be deemed to, directly or indirectly, contain representations or
warranties of the Seller, or any of its respective Affiliates or
Representatives.
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8A.
|
REPRESENTATIONS
AND WARRANTIES OF THE
GUARANTOR
|
The
Guarantor hereby represents and warrants to the Seller that on the date
hereof:
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|
8A.1
|
Organization and
Authority.
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|
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(a)
|
The
Guarantor duly and validly exists under the laws of Israel and, subject to
the conditions specified under Section 5, has all
necessary company power and authority to enter into this Agreement, to
carry out its obligations hereunder and to consummate the transactions
contemplated hereby.
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|
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(b)
|
The
execution and delivery the Transaction Documents by the Guarantor, the
performance by the Guarantor of its obligations hereunder and thereunder
and the consummation by the Guarantor of the transactions contemplated
hereby have been duly authorised by all requisite corporate action on the
part of the Guarantor and no further shareholder or other organ's approval
is required.
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|
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(c)
|
This
Agreement has been duly executed and delivered by the Guarantor, and
(assuming due authorisation, execution and delivery by the Seller and
subject to the conditions set under Section 5) this
Agreement constitutes a legal, valid and binding obligation of the
Guarantor enforceable against the Guarantor in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting the
enforcement of creditors' rights in general or by general principles of
equity.
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|
9.
|
EMPLOYEE
MATTERS
|
9.1 Promptly
following the date hereof, Purchaser shall make an offer of continued employment
(‘haavara beretzef’ in Hebrew),
effective as of the Closing Date, to each of the Seller Employees that Purchaser
desires to retain (other than to those employees set forth in Schedule 9.1 who shall
continue to be employed by the Seller), in the form to be agreed between the
Parties (such form and any ancillary document thereto shall be hereinafter
referred to as the “EmployeeNotice”). The
Employees who receive such Employee Notice (and do not lawfully object thereto
or, at the request of either Party, countersign such Notice) are hereinafter
referred to as “Assumed
Employees.” The Seller shall use its reasonable commercial efforts to
assist the Purchaser in retaining such Assumed Employees.
9.2 At
Closing, Seller shall (a) consent to the transfer of each of the Assumed
Employees to Purchaser and each such employee shall become an employee of
Purchaser, and (ii) transfer and assign to Purchaser, for the benefit of the
Assumed Employees, all education funds (keren hishtalmut), managers’ insurance
policies (bituach menahalim) and/or pension funds, severance pay
funds and any other funds, that have been reserved or contributed by
Seller (whether required by applicable law, custom or agreement) with respect to
any of such Employees (the “Seller Existing Funds”) and
all of Sellers’ rights with regard thereto, and subject to the following
sentence, the Seller shall not have any obligation to complete any such Funds.
It is hereby acknowledged and agreed that to the extent that any of the Seller
Existing Funds at Closing are not sufficient to cover all such funds to which
any Assumed Employee who has chosen not to continue his employment with the
Purchaser is entitled through the Closing Date (by applicable law
or
agreement),
Seller shall, without any consideration or adjustment of the Purchase Price,
transfer cash equal to the balance required to complete any such funds to the
Seller Existing Funds. Prior to the Closing, Purchaser shall make
(and Seller shall cooperate with Purchaser to the extent required) the
appropriate filings with the ITA for the transfer of the Seller Existing Funds
from Seller to Purchaser and Seller shall submit all required documents to the
Assumed Employees’ funds and insurance policies. Promptly following
its receipt of all requisite approvals from the ITA, and after the Closing,
Seller will transfer to Purchaser all its rights and interests in and to the
Seller Existing Funds.
9.3 The
employment agreements of the Assumed Employees and their Funds shall be assigned
from Seller to Purchaser, and the Assumed Employees shall transfer to Purchaser,
as applicable, with continuity of rights, and whilst taking their employment
with Seller in account for purposes of the calculation of their rights and
entitlements.
9.4 Notwithstanding
any non-compete obligations of any Assumed Employee to Seller, or any Affiliates
thereof, all Assumed Employees shall be permitted, on and after the Closing
Date, to engage in the Business only on behalf of Purchaser and its
Affiliates.
9.5 Purchaser
shall assume all obligations and liabilities (including any and all prior notice
payments and other employment and severance and termination benefits as is
required by applicable Law, custom or agreement, as well as liability with
respect to any accrued but unpaid vacation pay or benefits, any withholding or
employment Taxes, any other mandatory payments to social security or otherwise)
concerning the Assumed Employees, whereas Seller shall retain all such
liabilities concerning any other employees and will be liable for all severance
expenses of Assumed Employees who resign and are entitled to receive such
severance due to the transaction..
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10.
|
TERMINATION
|
10.1 Right of Parties to
Terminate. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned, at any time prior to the
Closing:
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|
(a)
|
by
mutual written consent of the
Parties;
|
|
|
(b)
|
by
either Party, by written notice to the other Party, if the Closing has not
occurred on or prior to the close of business on February 15, 2010 (the
“Initial End
Date"); provided,
however, that either Party may extend the Initial End Date until
February 22, 2010, and provided further that the Seller, in its sole
discretion, may extend the Initial End Date by up to four one-month
periods, until not later than June 22, 2010 (the "End Date") by
written notice to the Purchaser to be issued not later than February 22,
2010 and each subsequent one-month anniversary thereof; provided, further,
that if a Party is in breach and such breach prevented the closing from
occurring shall not be permitted to terminate the Agreement pursuant to
this section 10.1(b).
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|
|
(c)
|
without
derogating from the provisions of Section 11.5, by either Party, if the
other Party has materially breached any covenant or agreement contained in
this Agreement; provided, however, that the non-breaching Party may not
terminate this Agreement pursuant to this Section 10.1(c) unless
such breach would cause any of the conditions specified in Section 5 not
to be satisfied and any such breach has not been cured within fifteen (15)
Business Days after written notice by the non-breaching Party to the
breaching Party
|
informing
the breaching Party of such breach, it being understood and agreed that no cure
period shall be required for a breach which by its nature cannot be cured;
provided further, that the terminating Party may not terminate this Agreement
pursuant to this Section
10.1(c) if it is then in material breach of the terms of this
Agreement.
10.2 Procedure upon
Termination. In the event the
Purchaser or the Seller, or both, as the case may be, elect to terminate this
Agreement pursuant to Section
10.1, written notice thereof shall be given to the other Party, and
following compliance with Section 10.3 below, this
Agreement shall terminate without further action of the Parties.
10.3 Effect of
Termination.
In the event of termination of this Agreement as provided in Section
10.1, this Agreement shall forthwith become void and all further obligations and
liabilities of each party to the other party under this Agreement shall
terminate; provided,
however, that (a) neither party shall be relieved of any obligation or
liability arising from any prior willful and material breach of any
representation, warranty, covenant or agreement in this Agreement that occurred
prior to the date of termination; and (b) the parties shall, in all events,
remain bound by and continue to be subject to Sections 7.2 (Announcements), Section 10.2 (Procedure upon
Termination), this Section
10.3 (Effect of Termination), and Section 15 shall survive any
such termination and shall be enforceable hereunder.
10.4 Undertaking to
Consummate. The Parties acknowledge and agree that, except as otherwise
provided herein, their obligation to consummate the transactions contemplated
hereby constitutes an unconditional obligation to procure performance and
consummation of the transaction. It is hereby clarified, that nothing in this Section 10 shall be deemed in
any way as preventing the Seller from seeking specific performance of this
Agreement.
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11.
|
SELLER'S
INDEMNIFICATION
|
11.1 The
representations and warranties made by Seller (i) in Section 7 (other than
the Fundamental Representations (as defined below)) or in any other Transaction
Document shall survive the Closing and shall expire eighteen (18) months
following the Closing Date and (ii) in Sections 7.1, 7.5, and 6.12
(collectively, the “Fundamental
Representations”) shall survive the Closing and shall expire twenty-four
(24) months following the Closing Date (as applicable, the “Termination Date”); provided, however, that if,
at any time prior to the applicable Termination Date, any Purchaser Indemnitee
delivers to Seller a written notice alleging a breach of any of the
representations and warranties made by it (and setting forth in reasonable
detail the basis for its belief that such an incompleteness, inaccuracy or
breach may exist) and asserting a claim for recovery under this Section 11,
then the claim asserted in such notice shall survive the Termination
Date.
11.2 The
Seller shall defend, indemnify, and hold the Purchaser and its affiliates and
their respective employees, directors, officers, shareholders and agents (the
“Purchaser
Indemnitees”) harmless from and against, and reimburse the Purchaser
Indemnitees with respect to, any Damages incurred by the Purchaser Indemnitees
by reason of or arising out of or in connection with (i) any breach or
inaccuracy of representation made by the Seller as set forth in Section 7 or in any other
Transaction Document, (ii) any failure to comply with or breach of any covenant
or obligation of Seller hereunder or in any other Transaction Document; or (iii)
any claims against Purchaser with respect to any of the Excluded Assets or the
Retained Liabilities, regardless of when or with respect to which period
incurred.
11.3 Notwithstanding
any other provision in this Section 11 but solely with
respect to clauses 11.2 (i) and (ii) above, the Purchaser Indemnitees shall be
entitled to indemnification only if the aggregate indemnifiable amounts exceed
25,000,000 (Twenty Five Million) New Israeli Shekels (the “Threshold Amount”)
whereupon indemnification may be sought by the Purchaser Indemnitees from the
first NIS.
11.4 Notwithstanding
any other provisions of this Section 11 (including Section 11.3), with respect
to the matters addressed in part I of Schedule 11,4, the compensation provisions
set forth in Schedule 11.4 will apply. For the avoidance of doubt, if
a matter would give rise to a right of indemnification by Purchaser under
Section 11 and a right of compensation under Schedule 11.4, only the
compensation provisions of Schedule 11.4 will apply.
11.5 The
Indemnification set forth in this Section 11 shall be the
Purchaser's sole and exclusive remedy for the Damages for any breach of
representation. For the avoidance of doubt, breach of a
representation by Seller under Section 7 shall not be grounds
for termination or delay of consummation of this Agreement.
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12.
|
PURCHASER'S
INDEMNITY
|
12.1 The
representations and warranties made by Purchaser (i) in Section 8 (other
than the Fundamental Representations (as defined below)) or in any other
Transaction Document shall survive the Closing and shall expire eighteen (18)
months following the Closing Date and (ii) in Sections 8.1 and 8A.1
(collectively, the “Fundamental
Representations”) shall survive the Closing and shall expire twenty-four
(24) months following the Closing Date (as applicable, the “Termination Date”); provided, however, that if,
at any time prior to the applicable Termination Date, any Seller Indemnitee
delivers to Purchaser a written notice alleging a breach of any of the
representations and warranties made by it (and setting forth in reasonable
detail the basis for its belief that such an incompleteness, inaccuracy or
breach may exist) and asserting a claim for recovery under this Section 12,
then the claim asserted in such notice shall survive the Termination
Date.
12.2 Without
derogating from any other provision herein, including Section 12.3, in the event the
Closing occurs, the Purchaser will indemnify, defend and hold harmless the
Seller, its Affiliates and each of their respective shareholders, directors,
officers, employees, agents, successors and permitted assigns (collectively, the
“Seller
Indemnitees”) from and against (i) any breach or inaccuracy of
representation made by the Purchaser or Guarantor as set forth in Section 8 or Section 8A or in any other
Transaction Document, (ii) any failure to comply with or breach of any covenant
or obligation of Purchaser hereunder or in any other Transaction Document; or
(iii) any claims against Seller with respect to any of the Acquired Assets or
the Assumed Liabilities, regardless of when or with respect to which period
incurred.
12.3 Notwithstanding
any other provision in this Section 12 but solely with
respect to clauses 12.2 (i) and (ii) above, the Seller Indemnitees shall be
entitled to indemnification only if the aggregate indemnifiable amounts exceed
the Threshold Amount whereupon indemnification may be sought by the Purchaser
Indemnitees from the first NIS. For the avoidance of doubt, any
default on the Seller Loan shall not be deemed to be subject to the Threshold
Amount.
12.4 The
Indemnification set forth in this Section 12 shall be the
Seller's sole and exclusive remedy for the Damages for any breach of
representation. For the avoidance of doubt,
breach of
a representation by Purchaser or Guarantor under Section 8 or 8A shall not be
grounds for termination or delay of consummation of this Agreement.
|
13.
|
INDEMNIFICATION
PROCEDURE; EXCLUSIVE REMEDY
|
|
|
13.1
|
If
a Party seeks indemnity under Section 11 or Section 12 (the "Indemnified
Party"), it will give written notice (a “Claim Notice”)
to the other party (the “Indemnifying
Party”). The Claim Notice must contain (i) a
description and, if known, estimated amount (the “Claimed
Amount”) of any Damages incurred or reasonably expected to be
incurred by the Indemnified Party, (ii) a reasonable explanation of
the basis for the Claim Notice to the extent of facts then known by the
Indemnified Party, and (iii) a demand for payment of those
Damages.
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|
|
13.2
|
Response to Notice of
Claim. Within 30 days after delivery of a Claim Notice,
the Indemnifying Party will deliver to the Indemnified Party a written
response (the “Response”) in
which the Indemnifying Party will
either:
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(a)
|
agree
that the Indemnified Party is entitled to receive all of the Claimed
Amount, and, within five business days of the Indemnified Party’s receipt
of the Response, the Indemnifying Party will pay the Claimed Amount to the
Indemnified Party in accordance with a payment and distribution method
reasonably acceptable to the Indemnified
Party;
|
|
(b)
|
agree
that the Indemnified Party is entitled to receive part, but not all, of
the Claimed Amount (such portion, the “Agreed
Portion”), and, within five Business Days of the Indemnified
Party’s receipt of the Response, the Indemnifying Party will pay the
Agreed Portion of the Claimed Amount to the Indemnified Party in
accordance with a payment and distribution method reasonably acceptable to
the Indemnified Party; or
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|
(c)
|
dispute
that the Indemnified Party is entitled to receive any of the Claimed
Amount.
|
|
|
13.3
|
If
no Response is delivered by the Indemnifying Party to the Indemnified
Party within such 30-day period, the Indemnifying Party is deemed to have
agreed that an amount equal to the entire Claimed Amount will be payable
to the Indemnified Party within five business days after the expiration of
such 30-day period in accordance with a payment and distribution method
reasonably acceptable to the Indemnified
Party.
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|
|
13.4
|
Contested
Claims. In the event that the Indemnifying Party
disputes the Claimed Amount (or the portion of the Claimed Amount not
comprising the Agreed Portion), such dispute will be governed by, and
subject to the terms of, [Section 15.10]
hereof.
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13.5
|
Third Party
Claims.
|
|
(a)
|
In
the event that the Indemnified Party receives notice or otherwise learns
of the assertion of any claim with respect to which the Indemnifying Party
may be obligated to provide indemnification under Section 11 or 12 (a “Third Party
Claim”), the Indemnified Party will provide a Claim Notice to the
Indemnifying Party as soon as practicable but in no event later than
five business days thereafter. Such Claim Notice will be
accompanied by reasonable supporting
documentation
|
submitted
by such third party (to the extent then in the possession of the Indemnified
Party) and will describe in reasonable detail the facts constituting the basis
for such suit or proceeding and the amount of the claimed damages (in each event
to the extent known or reasonably ascertainable by the Indemnified Party); provided, however, that no
delay or deficiency on the part of the Indemnified Party in so notifying the
Indemnifying Party will relieve the Indemnifying Party of any liability or
obligation hereunder except if such delay or deficiency materially prejudices
the defense of such claim or otherwise materially and adversely affects the
rights of the Indemnifying Party with respect thereto, and then in each such
case only to the extent of such material prejudice. Within 20 days
after delivery of such notification, the Indemnifying Party may, upon written
notice to the Indemnified Party, assume control of the defense of such suit or
proceeding with counsel reasonably satisfactory to the Indemnified Party,
strictly at its own cost and expense; provided, however, that the
Indemnifying Party may not assume control of the defense of a suit or proceeding
(A) involving criminal liability or (B) to the extent the suit or proceeding
seeks an injunction or equitable relief against the Indemnified
Party. If the Indemnifying Party does not so assume control of such
defense, the Indemnified Party will control such defense.
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(b)
|
The
party not controlling such defense (the “Non-controlling
Party”) may participate therein at its own expense. The
party controlling such defense (the “Controlling
Party”) will keep the Non-controlling Party reasonably advised of
the status of such suit or proceeding and the defense thereof and will
consider in good faith recommendations made by the Non-controlling Party
with respect thereto. The Non-controlling Party will furnish
the Controlling Party with such information as it may have with respect to
such suit or proceeding (including copies of any summons, complaint or
other pleading which may have been served on such party and any written
claim, demand, invoice, billing or other document evidencing or asserting
the same) and will otherwise cooperate with and, at the request of the
Controlling Party, assist the Controlling Party in the defense of such
suit or proceeding.
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|
(c)
|
The
Indemnifying Party will not agree to any settlement of, or the entry of
any judgment arising from, any such suit or proceeding without the prior
written consent of the Indemnified Party, which will not be unreasonably
withheld, delayed or conditioned; provided, however, that
the consent of the Indemnified Party will not be required if the
Indemnifying Party agrees in writing to pay any amounts payable pursuant
to such settlement or judgment and such settlement or judgment includes a
full, complete and unconditional release of the Indemnified Party from
further Liability with respect to such claim. The Indemnified
Party will not agree to any settlement of, or the entry of any judgment
arising from, any such suit or proceeding without the prior written
consent of the Indemnifying Party, which will not be unreasonably
withheld, delayed or conditioned.
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|
(d)
|
Notwithstanding
anything else herein, in the event that Seller is sued for the breach of
the Bezeq Transaction, the Seller shall be entitled to defend such claim
independently without derogating from its rights as an Indemnified Party
hereunder.
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13.6 The
representations, warranties, covenants and obligations of Purchaser and Seller,
and the rights and remedies that may be exercised by Purchaser or Seller, as the
case may be, shall not be limited or otherwise affected by or as a result of
either (i) any waiver of Closing conditions by any of them, or
(ii) any information furnished to, or any investigation made by or
knowledge of, any of them.
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14.
|
[RESERVED]
|
|
15.
|
MISCELLANEOUS
|
|
|
15.1
|
Parties in Interest;
Assignment.
|
This
Agreement is binding upon and is solely for the benefit of the Parties and their
respective successors, legal representatives and permitted assigns. No Party may
assign this Agreement or any portion thereof without the written consent of the
other Party. Any attempted assignment not in compliance with the terms of this
Agreement is null and void.
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|
15.2
|
Notices.
|
All
notices or other communications hereunder shall be in writing and shall be given
in person, by registered mail (registered international air mail if mailed
internationally), by an overnight courier service which obtains a receipt to
evidence delivery, or by facsimile transmission (provided that written
confirmation of receipt is provided) with a copy by mail, addressed as set forth
below:
|
If
to the Seller:
|
012
Smile.Communications Ltd.
00
Xxxxxxx Xxxxxx
Xxxxxx
Xxxxx
Facsimile:
x000-00-000-0000
Attn.: Chief
Executive Officer
|
|
|
With
a copy to (which shall not
constitute
notice):
|
Xxxxxxx
Xxxxx Xxxx Well Orion & Co.
3
Xxxxxx Xxxxxx Xx.
Xxx
Xxxx 00000, Xxxxxx
Facsimile: x000-0-000-0000
Attn: Avraham
Well, Adv.
|
|
|
If
to the Purchaser or the Guarantor:
|
Xxxx
Xxxx 00
Xxxxxxxxxx
Xxxxx "X"
Xxxxxxx
Pituach 46733
Facsimile: x000-0-000-0000
Attn: Yoram
Firon, VP
|
|
|
With
a copy to (which shall not
constitute
notice):
|
Xxxxxxxx
Xxxx Xxxx Xxxxx Xxxxxxx & Co.
0
Xxxxxxxx Xxxxxx
Xxx Xxxx 00000
Attention: Xxxxxx
X. Xxxx, Adv.
Xxxx
Xxxxx, Adv.
Ido
X. Xxxxxx, Adv.
Facsimile: x000-0-000-0000
|
or such
other address as any Party may designate to the other in accordance with the
aforesaid procedure. All communications delivered in person or by courier
service shall be deemed to have been given upon delivery, those given by
facsimile transmission shall be deemed given on the Business Day following
transmission with confirmed answer back, and all notices and other
communications sent by registered mail (or air mail if the posting is
international) shall be deemed given five (5) Business Days after
posting.
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|
15.3
|
Successors and
Assigns.
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This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the Parties and their respective successors and permitted
assigns.
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15.4
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Delays or Omissions;
Waiver.
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The
rights of a Party may be waived by such Party only in writing and, specifically,
the conduct of any one of the Parties shall not be deemed a waiver of any of its
rights pursuant to this Agreement and/or a waiver or consent on its part as to
any breach or failure to meet any of the terms of this Agreement or an amendment
hereto. A waiver by a Party in respect of a breach by the other Party of its
obligations shall not be construed as a justification or excuse for a further
breach of its obligations.
No delay
or omission to exercise any right, power, or remedy accruing to any Party upon
any breach or default by the other under this Agreement shall impair any such
right or remedy nor shall it be construed to be a waiver of any such breach or
default, or any acquiescence therein or in any similar breach or default
thereafter occurring.
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15.5
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Amendment. This
Agreement may be amended or modified only by a written document signed by
all the Parties.
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15.6
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Entire
Agreement. This Agreement (together with the recitals, schedules,
appendices, annexes and exhibits hereto) contains the entire understanding
of the Parties with respect to its subject matter and all prior
negotiations, discussions, agreements, commitments and understandings
between them with respect thereto not expressly contained herein shall be
null and void in their entirety, effective immediately with no further
action required.
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15.7
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Severability.
If a provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect the validity or
enforceability in that jurisdiction of any other provision hereof or the
validity or enforceability in other jurisdictions of that or any other
provision hereof. Where provisions of any applicable law
resulting in such illegality, invalidity or unenforceability may be
waived, they are hereby waived by each Party to the full extent permitted
so that this Agreement shall be deemed valid and binding agreements, in
each case enforceable in accordance with its
terms.
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15.8
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Counterparts;
Facsimile Signatures. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original but all of
which together
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shall
constitute one and the same instrument. A signed Agreement received by a Party
via facsimile will be deemed an original, and binding upon the party who signed
it.
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15.9
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Governing Law;
Jurisdiction. The Agreement shall be governed by and construed in
accordance with the laws of the State of Israel, without giving effect to
the principles thereof relating to conflict of
laws.
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15.10
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Venue. Each
party hereby irrevocably submits to the exclusive jurisdiction of the
Central District Court for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or
discussed herein (including with respect to the enforcement of any of the
Transaction Documents) and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit,
action or proceeding is improper or inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at
the address in effect for notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by
law. in the Central District Court for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of
any of the Transaction Documents) and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of any such court, that such
suit, action or proceeding is improper or inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at
the address in effect for notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by
law.
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15.11
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No Third-Party
Beneficiaries. Except as expressly set forth in sections 11-13,
nothing in this Agreement shall create or confer upon any Person, other
than the Parties or their respective successors and permitted assigns, any
rights, remedies, obligations or
liabilities.
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15.12
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Taxes.
Except as expressly set forth herein, each Party shall bear any Taxes
applicable to it in connection with this Agreement. Any amount
stated herein, including, without limitation, with regard to the Purchase
Price, and including any payments for the Business, Acquired Assets and
Assumed Liabilities, will be exclusive of any VAT, but solely if a valid
VAT invoice is provided. The amount of any such VAT will be
borne by the Purchaser in addition to any payment due under this Agreement
at the time of payment against a proper tax invoice. In the
event that any such VAT is imposed upon or imposed against the Seller, the
Seller will promptly notify the Purchaser of the VAT amount on a valid VAT
invoice.
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15.13
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Expenses.
Except as otherwise expressly provided herein, whether or not the
transactions contemplated hereby are consummated, all fees and expenses
incurred in connection with this Agreement, including all legal,
accounting, financial advisory, consulting and all other fees and expenses
of third parties incurred by a party in connection with the negotiation,
preparation, effectuation, execution, delivery or performance of this
Agreement, shall be the obligation of the respective party incurring such
fees and expenses.
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15.14
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Execution by
Purchaser. Immediately upon its formation, the Purchaser
shall execute this Agreement and shall be treated as a Party for all
purposes as if it had executed this Agreement on the date
hereof.
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15.15
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Guarantee. The
Guarantor hereby irrevocably guarantees each and every representation,
warranty, covenant, agreement and obligation of the Purchaser and the full
and timely performance of its obligations under the provisions of this
Agreement and the Transaction Documents. This is a guarantee of
payment and performance, and the Guarantor acknowledges and agrees that
this guarantee is full and unconditional, and no relase or extinguishments
of the Purchaser's obligations or liabilities (other than in accordance
with the terms of this Agreement), whether by decree of bankruptcy or
otherwise, will affect the continuing validity and enforceability of this
guarantee. The Guarantor hereby waives, for the benefit of the
Seller, (a) any right to require the Seller as a condition of payment or
performance of the Guarantor to proceed against the Purchaser or pursue
any other remedies whatsoever and (b) to the fullest extent permitted by
law, any defenses or benefits that may be derived or afforded by law that
limit the liability of or exonerate guarantors or sureties, including
under the Israeli Law of Guarantees 1967 (but for the avoidance of doubt,
Guarantor does not waive any defenses that would otherwise be available to
Purchaser). The Guarantor shall have joint and several
liability with the Purchaser for all of Purchaser's obligations under this
Agreement, and Seller shall be entitled to take all steps to realize its
rights under this Agreement and the Transaction Documents, in whole or in
part, to the extent permissible by law and independently from any other
right or proceeding vis-à-vis the Purchaser, from the
Guarantor.
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(the
remainder of this page has intentionally been left blank)
SIGNATURE
PAGE - ASSET PURCHASE AGREEMENT
IN
WITNESS WHEREOF, the Seller and the Purchaser have executed this Agreement as of
the date first written above.
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_____________________
012
Smile.Communications Ltd.
By: Xxxxx
Xxxxxxxx
Title: Chairman
of the Board of Directors
By: Xxxxxx
Xxxxxxx
Title: Chief
Executive Officer
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_____________________
Merhav
Ampal Energy Ltd.
on
behalf of Ampal Communication (2010) Ltd. (in formation)
By: Yoram
Firon Xxxx
Xxxx
Title: Directors
--------------------------------------
Merhav
Ampal Energy Ltd. as Guarantor
By: Yoram
Firon Xxxx
Xxxx
Title: Directors
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