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United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
May 5, 1998 1-12261
Date of Report Commission File Number
(Date of earliest event reported)
Superior TeleCom Inc.
(Exact name of registrant as specified in its charter)
Delaware 58-2248978
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
1790 Broadway
New York, New York 10019-1412
(Address of Principal Executive Offices) (Zip Code)
(212) 757-3333
(Registrant's telephone number, including area code)
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<PAGE>
Item 2. Acquisition or Disposition of Assets.
On May 5, 1998, a subsidiary of Superior TeleCom Inc.
("Superior") acquired 51% of the issued and outstanding shares of
common stock of Zion Cables United Works Ltd., an Israeli
corporation ("COZ"), from CLAL Industries and Investments Ltd.
and ISAL Holland B.V. (the "COZ Stockholders") for consideration
of approximately U.S. $24,000,000 in cash. In connection
with the acquisition, Superior obtained a two-year option to
purchase all or a portion of the COZ Stockholders' remaining 19%
interest in COZ at the same purchase price per share in cash.
The financing for the acquisition was obtained from Superior's
existing credit facility with Bankers Trust Company.
The terms of the acquisition, including the amount of
consideration paid in connection therewith, were the result of
arms-length negotiation among Superior and the COZ Stockholders.
For further information with respect to the acquisition,
reference is made to the Share Purchase Agreement, dated as of
May 5, 1998, among the COZ Stockholders and Halachoh Hane'eman
Hashivim Veshmona Ltd., which is Exhibit 1 hereto and which is
incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(a), (b)
In accordance with Instruction 4 of this Item 7, financial
statements required by this Item will be filed by an amendment to
this initial report on Form 8-K not later than 60 days after the
date hereof.
(c) Exhibits
Exhibit 1 - Share Purchase Agreement, dated as of May 5,
1998, among CLAL Industries and Investments Ltd., ISAL Holland
B.V. and Halachoh Hane'eman Hashivim Veshmona Ltd.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
Dated: May 19, 1998 SUPERIOR TELECOM INC.
By: /s/ Stewart H. Wahrsager
Stewart H. Wahrsager
Secretary<PAGE>
EXHIBIT INDEX
Exhibit Description
1 Share Purchase Agreement, dated as of May 5, 1998,
among CLAL Industries and Investments Ltd., ISAL
Holland B.V. and Halachoh Hane'eman Hashivim
Veshmona Ltd.
EXHIBIT 1
SHARE PURCHASE AGREEMENT
This Agreement is made as of the 5th day of May, 1998
by and between
Clal Industries and Investments Ltd. ("Clal")
ISAL Holland B.V., and ISAL (AMLAT) Ltd. (both referred to herein
as ISAL), of "Clas House", 5 Druyanov st., Tel-Aviv, Israel
of the first party
and
Halachoh Hane'eman Hashivim Veshmona Ltd.
(To be changed to "Superior Cable Ltd.")
of Europe House, 37 Shaul Hamelech Blvd., Tel-Aviv, Israel
("Purchaser")
of the second party
<PAGE>
W I T N E S S E T H
WHEREAS Sellers are the holders of no less than 69% of the
entire issued and outstanding share capital of Cables
of Zion United Works Ltd. (the "Company"), an Israeli
company, the shares of which are traded on the TASE (as
hereinafter defined), and
WHEREAS the Company designs, develops, manufactures, markets
and sells cables and certain other products; and
WHEREAS Purchaser wishes to purchase from Sellers and Sellers
desire to sell to Purchaser a controlling block of
shares of the Company constituting at least 51% of the
entire issued share capital of the Company, and up to
all of the shares of the Company held by Sellers and
certain affiliates thereof, under the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual premises and
conditions herein contained, the parties hereto hereby agree as
follows:
1. Definitions
"Affiliate" shall mean an entity Controlling,
under Control or under common
Control with the entity in
question.
"Benchmark Book Value" shall mean NIS 184,118,000.
"Business Day" shall mean a day that both Israeli
and United States banks are open
for business transactions for their
customers.
"Closing Statements" shall mean the Company's audited
financial statements prepared in
accordance with Section 13.1 below,
but dated as of the date of the
Closing.
"Control" shall mean the direct or indirect
power, either by itself or in
concert with others, to direct or
orient the activities and
functioning of a corporation.
"Director" shall mean a member of the board of
directors of the Company.
"Encumbrances" shall mean liens, claims, charges,
security interests, options or
other legal or equitable
encumbrances of whatever kind or
nature or third party's rights
whatsoever.
"Financial Statements" shall mean the audited consolidated
financial statements of the Company
as of December 31, 1997.
"First Offer Period" shall mean the period beginning
upon the expiration of the Lock-up
Period and terminating thirty six
(36) months thereafter, provided
however that the First Offer Period
shall terminate immediately once
the Remaining Shares decrease to
less than the Sellers Minimum
Interest.
"Lock-up Period" shall mean the period beginning at
the Closing and expiring twenty
four (24) months thereafter.
"NIS" shall mean New Israeli Shekels.
"Post Closing
Adjustment" shall mean the Post Closing
Adjustment of the Purchase Price
and of the Option Purchase Price as
provided in Section 13 below.
"Purchaser" shall mean Superior Cable Ltd.
(No. 51-248430-4) which name is
subject to Company Registrar
approval and currently is Halachoh
Hane'eman Hashivim Veshmona Ltd.
"Remaining Shares" shall mean shares and rights to
shares in the Company held from
time to time by or for the Sellers
and direct or indirect wholly owned
subsidiaries thereof, including
without limitation any such shares
purchased or otherwise received
after the Closing. The number of
Remaining Shares is 6,381,026.
"Sellers" shall mean Clal and ISAL, jointly
and severally, subject to Section
14.4 below.
"Sellers Minimum
Interest" shall mean 10.00% of the Company's
issued share capital at any
relevant time.
"Shares" shall mean 17,293,720 ordinary
shares of the Company, each having
a nominal value of NIS 1.00,
constituting no less than 51% of
the entire issued share capital of
the Company.
"Subsidiaries" shall mean the subsidiaries of the
Company as specified in Section 8.8
below, but excluding H.T. Cable
Ltd., Rishon Business Center Ltd.
and inactive companies as specified
in Exhibit 8.8.
"TASE" shall mean the Tel-Aviv Stock
Exchange.
2. Sale and Transfer of Shares
Subject to the terms and conditions set forth below, and on
the basis of Sellers' representations, warranties, and
covenants hereunder and Purchaser's payment of the Purchase
Price as hereinafter defined, at the Closing (as defined
below), the Sellers shall transfer the Shares to Purchaser,
and Purchaser shall purchase and acquire the Shares, free
and clear of all Encumbrances and restrictions on transfer
and duly listed and registered for trade on the TASE, in
consideration of the Purchase Price set forth in Section 4
hereof.
3. Approval of Transaction
Sellers and Purchasers represent that the execution of this
Agreement and the consummation of the transactions
contemplated hereby have been authorized by their respective
Boards of Directors. Copies, certified by the secretaries
of the respective parties, of minutes or resolutions of the
governing bodies of each of the parties, which shall not
have been rescinded or modified, authorizing the execution
of this Agreement and the consummation of the transactions
contemplated hereby are attached hereto as Exhibit 3.
4. Consideration
The total consideration to be paid by Purchaser to Sellers
for the Shares shall be NIS 88,281,765.00 (Eighty eight
million two hundred and eighty one thousand and seven
hundred and sixty five) (the "Purchase Price"), by two
transfers of NIS 44,140,882.5 each, made to Bank Hapoalim,
branch number 689, one made to account number 97700 of
Central Financing For Industries (1962) Ltd. (a Clal wholly
owned subsidiary and one made to account number 215355 of
ISAL Holland B.V.
5. Lock-up Period Option
5.1 During the Lock-up Period Purchaser shall have the
option to acquire all or part of the Remaining Shares
from Sellers as specified in Section 5.2 below (the
"Option").
5.2 The Option hereunder may be exercised at any time
during the Lock-up Period on one or more occasions upon
delivery by Purchaser of an irrevocable written notice
to that effect to both Sellers (the "Exercise Notice"),
specifying the number of Remaining Shares to be
purchased under the Option (the "Options Shares"). The
Options Shares covered under the Exercise Notice will
constitute no less than one third of the Remaining
Shares held by Sellers at the Closing as adjusted under
the circumstances contemplated in Section 5.4 below,
provided however that an Exercise Notice may cover a
smaller number of Option Shares in the event that it
covers all of the Remaining Shares.
5.3 A closing of a transaction for a sale of Option Shares
by the Seller(s) to the Purchaser (an "Option Closing")
shall take place and be consummated on the Fifteenth
(15th) Business Day following the date upon which the
Exercise Notice is delivered (whether or not such
Option Closing is within the Lock-up Period). At such
closing, the Seller shall, subject to section 5.4
below, sell and transfer the Option Shares to Purchaser
against the payment of an amount equal to the Option
Share Purchase Price (as defined in Section 5.4 below)
multiplied by the number of Option Shares sold and
transferred to Purchaser. The Option Share Purchase
Price will be paid by Cashier's Checks payable to the
Seller(s) or by wire transfer to (an) account(s)
designated thereby confirmed by the transferring bank.
If no such account is designated by the Seller in
question in writing within seven (7) days following the
date upon which the Exercise Notice is delivered,
Purchaser may make the transfer to the respective
account specified in Section 4 above.
5.4 Subject to Section 13.6.2 below, the initial Option
Purchase Price shall be NIS 5.104845 per each Remaining
Share.
In the event that the number of the Remaining Shares is
increased or decreased through a subdivision of shares,
the distribution of bonus shares, recapitalization of
shares of the Company or consolidation of shares of the
Company, the number of Option Shares otherwise received
in consideration of the same Option Purchase Price as
aforesaid shall be decreased or increased, as the case
may be, in the same manner that the number of Remaining
Shares is decreased or increased.
In the event of a spin-off without consideration
payable by the Company's shareholders, the Option
Purchase Price shall not be adjusted as aforesaid but
upon exercise of the Option Sellers shall deliver
together with the Option Shares in question any and all
benefits received thereby by virtue of said Option
Shares and in connection with the spin-off, at no
additional cost to Purchaser.
In the event of a "Rights Issuance" by the Company and
if Sellers do not exercise said rights but trade them,
than the consideration received by Sellers for such
trading of rights shall be deducted on a per share
basis from the Option Purchase Price payable
respectively.
In the event of a "Rights Issuance" by the Company and
if Sellers exercise said rights, than the exercise
price paid per security issued under said rights shall
be added to the Option Purchase Price payable and upon
exercise of the Option Sellers shall deliver together
with the Option Shares in question the respective
number of Company securities received by virtue of the
exercise of said rights, at no additional cost to
Purchaser.
In addition, in the event that the Company distributes
one or more dividends following the Closing and before
the delivery of the Exercise Notice ("Period") the
Option Purchase Price shall be decreased by the excess
of the total annualized and CPI adjusted dividends per
Option Share distributed during the Period ("Total
Dividends") over the Annual Average Dividend
("Excess"). For the purpose hereof, the Annual Average
Dividend shall be the average of the annualized
dividends per share distributed by the Company in 1996
and 1997 and CPI adjusted to December 1997.
Example:
Period from Closing to Delivery of Exercise Notice =18
months
Total dividends distributed per share during the
period=6 Agorot
Annualized Average Dividend=3 Agorot
Excess=6.3*18/12=1.5
It is further agreed that notwithstanding anything to
the contrary in Section 15.6 below, the payment of CPI
linkage differentials on the Option Purchase Price
pursuant to said Section 15.6 ("Linking") shall be
limited so that only Linkage in excess of the Total
Dividends be added to the Option Purchase Price
payable.
5.5 Without derogating from any other provision of this
Agreement, Sellers shall promptly notify Purchaser in
writing of any change in the number of Remaining Shares
held thereby, unless such notice was provided to the
Company in writing in accordance with the requirements
of the Securities Law.
5.6 Option Shares shall be sold and transferred to the
Purchaser at an Option Closing free and clear from all
Encumbrances and restrictions on transfer.
5.7 Upon exercise of the Option, Purchaser will not be
entitled to set off from the payment of the Option
Purchaser Price amounts demanded by Purchaser with
respect to a breach of covenant, warranty or
representation hereunder or otherwise which demands may
be pursued by any other means.
6. Management of the Company
6.1 All the Directors (except two Directors from the
Public) shall be appointed by the Purchaser. A board
of directors meeting shall be convened at the day of
the Closing, at which all of the incumbent Directors
(except the Directors from the Public and the two
directors referred to in Section 6.2(ii) below) will
resign, and Purchaser's nominees shall be elected in
their stead.
6.2 The chairman of the board of directors will be Mr.
Steven S. Elbaum. Without derogating from Section 6.1
above, until the later of (i) the expiry of a period of
12 months as of the Closing, and (ii) the date at which
the Sellers hold less than the Sellers Minimum
Interest, Purchaser shall vote all its shares in the
Company for the appointment of two Directors designated
by Sellers, who shall be Clal's and ISAL AMLAT's CEOs.
Should Purchaser transfer the Shares to a company
Controlled by Superior TeleCom Inc. such company shall
undertake to observe the provisions of this Section
6.2. For the removal of doubt other transfers are not
be limited.
6.3 Except for the management agreement attached hereto as
Exhibit 6.3 (the "Management Agreement"), any and all
management or similar agreements with the Company to
which any of the Sellers or their Affiliates are a
party shall be terminated, and Sellers and their
affiliates shall not be entitled to any other payment
in connection therewith.
It is agreed that Sellers shall be and/or have been
paid by the Company under the Management Agreement the
amount due thereunder for 1998 which shall not exceed a
maximum of NIS 2,300,000 (the "Management Fee").
Purchaser and the Sellers shall take all necessary
steps so that the Management Agreement will terminate
on December 31, 1998. Furthermore, Sellers hereby
irrevocably renounce and waive any right they may have
in connection with the Management Agreement effective
as of January 1, 1999. Sellers shall not exercise any
power they may have in connection with the management
of the Company under the Management Agreement except at
the specific written request of the Purchaser, through
the Company.
7. Closing
The closing of the transactions contemplated hereby (the
"Closing") shall occur at 10:00 A.M. on May 5th 1998, at the
offices of Zellermayer and Pelossof, Advocates, 37 Shaul
Ha'Melech Blvd., Tel-Aviv, Israel, provided that the
conditions set forth in Section 12 hereof have been
satisfied or waived, or at such other time and place as
Purchaser and Sellers may agree in writing.
At the Closing:
7.1 Sellers shall deliver the following to the Purchaser:
7.1.1 The share certificates No. 10,012 to 10,018,
10,080, 10,095, 10,019, 10,094, 10,079,
10,031 and 10,099 representing 14,165,121
shares, registered in the name of Sellers;
and
7.1.2 Bank's written confirmation to Purchaser's
reasonable satisfaction that the balance of
the Shares i.e., 3,128,599 shares has been
deposited in Purchaser's securities account
No. 265064 at Bank Hapoalim B.M. (No. 12),
Beit Asia Branch No. 567, Tel-Aviv, Israel;
and
7.1.3 Share transfer deeds, duly signed and
endorsed to Purchaser, with respect to the
Shares; and
7.1.4 the secretary of the respective Seller, of
minutes or resolutions of the relevant
governing bodies of each of the Sellers,
which shall not have been rescinded or
modified, authorizing the execution of this
Agreement and the consummation of the
transactions contemplated hereby; and
7.1.5 A certificate, duly signed by the Secretary
of the Company, evidencing the entry of
Purchaser's name in the Register of Members
of the Company with respect to the Shares as
of the date of the Closing; and
7.1.6 A copy, certified by the secretary of the
Company, of a resolution of the meeting of
the Board of Directors, which shall not have
been rescinded or modified, under which
Purchaser's nominees to the Board of
Directors, namely Messrs. David S. Aldridge,
Steven L. Elbaum, Justin F. Deedy, Jr.,
Stephen Johnson, Bragi F. Schut, and Stewart
Wahrsager, Esq. are appointed in accordance
with Section 6.1 above and Mr. Steven Elbaum
is also appointed Chairman and copies of
resignation letters of all of the directors
of the Company (except the directors from the
public and the two directors referred to in
Section 6.2(ii), effective as of the
completion of the; and
7.1.7 A copy, certified by the secretary of the
Company, of a special resolution of an
Extraordinary Shareholders Meeting of the
Company Shareholders, which shall not have
been rescinded or modified, under which the
Articles of Association of the Company are
replaced by the Articles of Association
attached hereto as Exhibit 7.1.7.
7.1.8 Termination notices for any and all
management or similar agreements with the
Company to which any of the Sellers or their
affiliates are party except for the
Management Agreement; and
7.1.9 Irrevocable renunciation and waiver letter
with respect to Sellers rights under the
Management Agreement in the form attached
hereto as Exhibit 7.1.9; and
7.1.10 7.1.10 The certificate in accordance with
Section 12.1 hereof; and
7.1.11 Documents, reasonably satisfactory to
Purchaser and its counsel, evidencing that
the approvals specified in Exhibit 8.3, have
in fact been obtained.
7.2 Purchaser shall deliver the following to Sellers:
7.2.1 A certificate by the secretary of Purchaser
confirming that the resolution of the Board
of Directors of Purchaser authorizing the
execution of this Agreement and the
consummation of the transactions contemplated
hereby as mentioned in Section 3 has not been
rescinded or modified; and
7.2.2 Confirmation that the wire transfers were
made to Sellers' accounts in accordance with
Section 4 above.
8. Representations and Warranties by Sellers
Sellers hereby represent and warrant to Purchaser as
follows:
8.1 Incorporation and Authorization
8.1.1 The Company is a public company, duly
incorporated and validly existing under the
laws of the State of Israel, and its shares
are duly registered and traded on the TASE.
The Company has full power and authority to
own all of its properties and assets and to
carry on its business as it is now being
conducted.
8.1.2 Each of the Subsidiaries, as defined in
Section 8.8 below, is duly incorporated and
validly existing under the laws of its state
of incorporation, and has full power and
authority to own all of its properties and
assets and to carry on its business as it is
now being conducted.
8.2 Effect of Transactions
8.2.1 The relevant governing bodies of Sellers have
authorized the execution and delivery of this
Agreement and the consummation of the
transactions contemplated hereby and no other
corporate action is necessary for Sellers to
authorize such execution, delivery and
consummation.
8.2.2 This Agreement contains valid and binding
obligations of Sellers, enforceable in
accordance with its terms. No provisions of
Sellers' or the Company's corporate documents
or any agreement to which Sellers, the
Company and/or any Subsidiary, except
Lev-Offir Group Ltd. ("LO"), is a party or
any obligation by which it is bound, have
been or will be violated by the execution and
delivery of this Agreement or the performance
or satisfaction of any agreement or condition
herein contemplated to be satisfied.
No provisions of LO's corporate documents or,
to the best of Sellers' knowledge, any
agreement to which LO is a party or any
obligation by which it is bound have been or
will be violated by the execution and
delivery of this Agreement or the performance
or satisfaction of any agreement or condition
herein contemplated to be satisfied.
8.3 Approvals, Permits and Consents
The execution and performance of this Agreement and the
consummation of the transactions contemplated hereunder
and related thereto will not result in a breach of, nor
do they constitute, or will constitute after passage of
time or giving of notice or both, a default under any
agreement, including employment agreements, to which
Sellers, the Company and/or any Subsidiary, except LO,
is a party or a violation of any applicable law, nor
will such execution and performance permit any party to
any such agreement to cancel, terminate, or effect any
automatic expiration or change adverse to the Company
in, any such agreement.
To Sellers' best knowledge, the execution and
performance of this Agreement and the consummation of
the transactions contemplated hereunder and related
thereto will not result in a breach of, nor do they
constitute, or will constitute after passage of time or
giving of notice or both, a default under any
agreement, including employment agreements, to which LO
is a party, nor will such execution and performance
permit any party to any such agreement to cancel,
terminate, or effect any automatic expiration or change
adverse to LO in, any such agreement.
No approval, permit or consent of, or filing with, any
governmental body, official authority or any other
third party is required in connection with the
execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby by
the Sellers, including, without limitation, the
transfer of title to the Shares or the grant of the
Option and the transfer of the Remaining Shares in the
names of the Purchaser and the registration of the
Shares or any of the Remaining Shares in the names of
the Purchaser in the Registration of Members of the
Company, except as specified in Exhibit 8.3 attached
hereto, all of which shall be obtained and all filings
be performed on or prior to the Closing, or - with
respect to the Remaining Shares on or prior to their
transfer to Purchaser.
8.4 Compliance with Law
The Company has complied with all laws, statutes,
ordinances, rules, regulations and orders applicable to
its business and has obtained all certificates,
consents, permits, license approvals, orders or
authorizations of, and has made or given all notices,
registrations, declarations, reports or filings
(collectively, "Permits") with, any governmental
agency, instrumentality or authority (each, a
"Governmental Agency"), that are required for or in
connection with the lawful operation of its current
business, including, without limitation, all such
Permits as may be required to permit lawful use,
storage, treatment, handling and disposal of any
hazardous waste or materials stored, used or generated
by the Company, all the above except as otherwise would
not have a material adverse affect on the Company, its
shareholders and/or officers. Except as set forth in
Exhibit 8.4 hereto, all of such Permits are in full
force and effect and are unaffected by the sale of the
Shares contemplated hereby. Except as set forth in
Exhibit 8.4, none of such Permits will expire or is
subject to renewal within one year. The Company has
complied and is in compliance in all material respects
with all conditions or requirements imposed by any of
such Permits and has no reason to believe that any
Governmental Agency intends to cancel, terminate or
modify any such Permit or to require additional
Permits, notices, filings or reports with respect to
the operation of the Company's business or that valid
grounds for any such cancellation, termination or
modification exist.
The Company is in compliance with all environmental
laws applicable to the conduct of its business relating
to emissions, discharges and releases of hazardous
materials into land, soil, ambient air, water and
atmosphere; the Company is in compliance with all
environmental laws applicable to the conduct of its
business relating to the generalization, treatment,
storage, transportation and disposal of hazardous
materials; and there exists no hazardous materials on
or in the Company's facilities or real properties.
References to the Company in this subsection include
also its Subsidiaries except that with respect to
Subsidiaries the representations and warranties
included therein shall be limited to Sellers' best
knowledge.
8.5 Corporate Documents
Attached hereto as Exhibit 8.5 true and complete copies
of the Certificate of Incorporation and the Memorandum
and Articles of the Company, as amended heretofore,
including all pertinent corporate resolutions from
January 1, 1996.
8.6 Capitalization
8.6.1 The Company's entire authorized share capital
is and immediately prior to the Closing will
be NIS 40,000,000, divided into 40,000,000
ordinary shares, each having a nominal value
of NIS 1.0.
8.6.2 The Company's entire issued share capital is
and immediately prior to the Closing will be
NIS 33,909,255, comprised of 33,909,255
ordinary shares, all of which are validly
issued, fully paid and owned by their
respective holders.
8.6.3 The balance of the Company's outstanding
convertible securities, including employees
option plans, is attached hereto as Exhibit
8.6.3.
Except as expressly provided in this
Agreement and in Exhibit 8.6.3 there are no,
and at the Closing there will be no,
outstanding or enforceable subscriptions,
calls, demands, obligations, convertible
securities, options, rights, warrants, liens,
claims, charges or any agreements,
arrangements or commitments of any character
or nature whatsoever with respect to any
right or interest in the Company under which
the Company is or may become obligated to
issue, sell, assign or transfer any of its
securities.
8.6.4 The Shares and the Remaining Shares are
validly issued by the Company, fully paid and
duly registered on the Company's Register of
Members in the name of Sellers or direct or
indirect wholly owned subsidiaries thereof.
The Shares and the Remaining Shares are and
will be owned as aforesaid free and clear
from any calls, demands, obligations,
options, rights, warrants, Encumbrances or
commitments of any character or nature
whatsoever with respect to any right or
interest thereunder which any of holder is or
may become obligated to sell, assign or
transfer any of same, and the Shares and the
Remaining Shares are and will be free from
restrictions on transfer (other than an
arrangement between the Sellers which will
not effect the Purchaser's rights). The
Shares and the Remaining Shares are duly
listed and registered for trade on the TASE.
8.7 Directors from the Public
The incumbent Directors from the Public are due to
vacate their post, Mr. Elchanan Pass on July 5th, 1998,
with respect to which vacancy the Company requested
further time to submit nominees, and Mr. Asher Viner on
July 20th, 1999. Sellers shall not, and shall do their
utmost that the Company will not, take any action
towards the appointment of any Directors from the
Public without the prior consent of Purchaser, as to
the identity of the Directors from the Public.
8.8 Subsidiaries
The Company does not presently own or control, directly
or indirectly, any interest in any subsidiary or other
corporation, partnership, joint venture, association or
other business entity except as specified in Exhibit
8.8 hereto ("Subsidiaries").
8.9 Affiliate Holdings
Attached hereto as Exhibit 8.9 is a true and complete
detailed table of the number of shares and other
convertible securities of the Company held by any of
the Sellers' Affiliates. For the purposes of this
paragraph of Section 8.9, Sellers' Affiliates shall
mean an entity under the control or common control of
Sellers and Control shall mean the holding, directly or
indirectly, of 50% or more of the voting rights of an
entity.
Sellers are not aware that any other Affiliate of
Sellers has any holdings in the Company.
8.10 Financial Statements
8.10.1 True, complete and correct copies of the
audited consolidated financial statements of
the Company as of December 31, 1997 are
attached hereto as Exhibit 8.10.1.
8.10.2 The Financial Statements which were audited
by Kesselman & Kesselman, the Company's
independent public accountant, are true,
correct and complete and fairly and
accurately present, in all material respects,
the financial position, assets, liabilities
and results of operations included therein
for the periods and as of the dates therein
set forth, all in accordance with generally
accepted Israeli accounting principles and
practices applied on a consistent basis.
8.10.3 To Sellers' best knowledge, the books and
records of the Company as of the date hereof
are accurate and complete in all material
respects and there are no matters for which
entry has not been made in such books and
records.
8.10.4 The net book value (shareholders equity) as
shall be reflected in the Company's financial
statements as of March 31, 1998 to be
reviewed by Kesselman & Kesselman, the
Company's independent public accountant in
accordance with generally accepted Israeli
accounting principles and practices applied
on a consistent basis shall not fall below
the Bench Mark Book Value by more than 10%.
8.11 Filings
8.11.1 The Company has duly complied with all
material regulatory requirements applicable
to a publicly held company having its issued
securities traded on the TASE, including
without limitation, all material filing,
report and publication requirements
stipulated in the Securities Act, 1968 and
the regulations promulgated thereunder (the
"Filings"), and there are no lawsuits,
actions, claims, arbitration's or other
proceedings or investigations pending or any
notice in respect thereof has been received
or, to Sellers' knowledge, threatened against
the Company with respect to an alleged
violation thereof.
8.11.2 To Sellers' best knowledge, the Filings made
during the calendar years 1995, 1996, 1997
and through to the Closing, contain all
statements required to be included therein
and such Filings (i) were prepared in
accordance with applicable law and
regulations, (ii) do not include any untrue
statement of a material fact or omit to state
any material fact required to be stated
therein or necessary to make the statements
therein not misleading, and (iii) do not
include any untrue statement of a material
fact or omit to state a material fact
required to be stated therein or necessary in
order to make the statements therein, in
light of the circumstances under which they
were made, not misleading.
8.12 Litigation and Investigations
Except as disclosed in Exhibit 8.12, there arc no
lawsuits, actions, arbitrations or other proceedings or
investigations pending or, to Sellers' best knowledge,
threatened against the Company or any of its
Subsidiaries including LO; nor are there any judgments
or outstanding orders, injunctions, decrees or awards
(whether rendered by a court, an administrate body or
by arbitration) against the Company or any of its
Subsidiaries including LO, other than non material
litigation none of which individually or in the
aggregate might be materially adverse to the Company
and/or any Subsidiary.
Exhibit 8.12 describes those of the aforesaid legal
proceedings with an exposure to the Company of at least
US$l00,000.
8.13 Employees
8.13.1 Attached hereto as Exhibit 8.13.1(i) is a
true and complete detailed list of the
employment terms of the key personnel of the
Company and Subsidiaries, including the net
and gross salary and the overall cost to the
Company, broken down by employee.
Attached hereto as Exhibit 8.13.1(ii) is a
true and complete description of all
agreements between the Company and its
employees to which the Company is subject
with respect to any of its employees.
As a result of the shut-down of the Rishon-
Lezion and Sderot plants, the Company paid
compensation to its employees whose
employment was terminated as a result
thereof, as specified in Exhibit 8.13.1(ii).
8.13.2 Except as provided in Exhibit 8.13.2 the
Company and its Subsidiaries have not
experienced for the past three years any
strikes, grievances, claims of unfair labor
practices, or other collective bargaining
disputes, nor was it threatened by or on
behalf of any labor union.
8.14 Absence of Change
Since January 1, 1998 and except as detailed in Exhibit
8.14, the business of the Company and its Subsidiaries
has been conducted in the ordinary course; and
(a) there has not been any material adverse change in
the condition (financial or otherwise), business,
assets, liabilities, operations or prospects of
the Company or any of its Subsidiaries;
(b) there has not been any damage, destruction or loss
materially and adversely affecting the business or
properties of the Company or any of its
Subsidiaries;
(c) the business of the Company and its Subsidiaries
has been conducted in the ordinary course;
(d) there has not been any sale, transfer or other
disposition of any material asset of the Company
or of any of its Subsidiaries, other than sales
from inventory in the ordinary course of business;
(e) there has not been any appropriation or
condemnation by a governmental authority of any
material asset of the Company or of any of its
substantial Subsidiaries, and the Company has not
received written notice, nor have Sellers actual
knowledge, that any such proceedings have been
instituted or are pending;
(f) there has not been any loan or advance to or from
the Company or a Subsidiary, to or from any of the
officers, directors of Sellers, of the Company or
any Affiliate of such officers, directors or
Sellers;
(g) there has not been any increase in the rate of
compensation payable or to become payable to any
of the key officers or employees of the Company or
a Subsidiary, otherwise than in the ordinary
course of business consistent with past practice;
(h) there has not been any change in the accounting
methods or accounting principles or practices
employed by the Company and the Subsidiaries; and
(i) There has been no dividend or distribution of any
kind declared, paid or made by the Company on its
share capital;
(j) there has been no payment of any management or
similar fees, except as otherwise specifically
provided in Section 6.3 above;
(k) there has been no change in the authorized or
issued shares of the Company and the Subsidiaries
which is not reflected in Exhibit 8.8 and no
change in the governing documents of the Company
and the Subsidiaries;
(l) there have been no related party transactions;
(m) Sellers did not, directly or indirectly, solicit,
negotiate, enter into or execute any agreement
with third parties for the sale of any of Sellers'
shares or interests or for the purchase of any
shares or interests in the Company in off exchange
and exchange transactions (including the tendering
of shares in a purchase offer);
(n) the Company and the Subsidiaries have not pursued
any transaction such as a merger, a sale of the
majority of its assets, a reorganization, a
substantial allotment or another transaction which
may impede the transactions contemplated herein.
With respect to LO, the representations in this Section
8.14 shall be limited to Sellers' best knowledge.
8.15 Full and Correct Disclosure
Without derogating in any way from any other
representation, warranty or covenant hereunder, each
exhibit, schedule and any other document attached
hereto is true, correct and complete in all material
respects. Taking into consideration that the Purchaser
had an opportunity to conduct business, financial and
legal due diligence of the Company and to receive
information and documents from the Company, and
understands the cable business and is generally aware
of the business environment in Israel, Sellers are not
aware of any material fact regarding the Company which
has not been disclosed to the Purchaser and that, had
it been disclosed, might have materially affected the
terms of the transaction contemplated herein.
8.16 Brokers and Finders
Subject to Section 15.5 below, Sellers have not
employed, nor are subject to any claim of any broker,
finder, consultant or other intermediary in connection
with the transactions contemplated by this Agreement
who might be entitled to a fee or commission upon the
consummation of the transactions contemplated hereby.
8.17 Continuing Representations and Warranties
The representations and warranties of Sellers shall be
true and correct, and shall be deemed to have been made
again, on and as of the Closing.
9. Representations and Warranties by Purchaser
Purchaser hereby represent and warrant to Sellers as
follows:
9.1 Effect of Transactions
9.1.1 The relevant governing bodies of Purchaser
have authorized the execution and delivery of
this Agreement and the consummation of the
transactions contemplated hereby at meetings
duty called and held, and no other corporate
action is necessary for Purchaser to
authorize such execution, delivery and
consummation.
9.1.2 This Agreement contains valid and binding
obligations of Purchaser, enforceable in
accordance with its terms. No provisions of
Purchaser's corporate documents or any
agreement to which Purchaser is a party or
any obligation by which it is bound have been
or will be violated by the execution and
delivery of this Agreement or the performance
or satisfaction of any agreement or condition
herein contemplated to be satisfied.
9.2 Approvals, Permits and Consents
The execution and performance of this Agreement and the
consummation of the transactions contemplated hereunder
and related thereto will not result in a breach of, nor
do they constitute, or will constitute after passage of
time or giving of notice or both, a default any
agreement, to which Purchaser is a party or a violation
of Israeli law.
9.3 Brokers and Finders
Subject to Section 15.5 below, Purchaser has not
employed, nor is subject to any claim of any broker,
finder, consultant or other intermediary in connection
with the transactions contemplated by this Agreement
who might be entitled to a fee or commission upon the
consummation of the transactions contemplated hereby
from Purchasers or the Company.
9.4 Due Diligence
Without derogating in any way from Sellers'
responsibility and liability attaching to their
representations, warranties and covenants hereunder,
Purchaser hereby confirms that it had an opportunity to
conduct business, financial and legal due diligence of
the Company and its Subsidiaries and to receive
information and documents from the Company.
9.5 Continuing Representations and Warranties
The representations and warranties of Purchaser shall
be true and correct, and shall be deemed to have been
made again, at the Closing.
10. No Trade
10.1 Subject to Section 10.3 below, as of the date hereof
and until the end of the Lock-up Period the Sellers and
wholly owned affiliates thereof shall not deal in the
Company's securities (including without limitation the
Remaining Shares) in any way without Purchaser's prior
written consent.
10.2 Notwithstanding the aforesaid, should Purchaser issue a
tender offer for substantially all of the shares of the
Company, and Sellers elect not to tender their
Remaining Shares in the offer, then Sellers may sell
the Remaining Shares on the TASE subject to Purchaser's
right of first offer pursuant to Section 11 below.
Should Purchaser otherwise purchase such additional
number of shares of the Company so that the Company's
shares be delisted from the TASE or not be traded
thereat on a regular basis then Sellers may sell the
Remaining Shares, subject to Purchaser's right of first
offer pursuant to Section 11 below.
10.3 As of the date hereof and until the end of the Lock-up
Period, any of the Company's securities offered or made
available to the Sellers or any of their wholly owned
affiliates, except those offered or made available by
the Company, and to the extent Sellers intend to buy or
otherwise acquire such securities, shall be subject to
Purchaser's right of first refusal, as follows:
10.3.1 Sellers shall make a written offer to
Purchaser to purchase the aforementioned
securities. Such offer shall specify the
number of securities and the terms and
conditions upon which they were offered to
Sellers. Sellers shall use their best
efforts to make the offer within twenty four
(24) hours from the time the securities in
question are or made available to Sellers.
10.3.2 Purchaser shall notify Sellers within seven
(7) days from the date the offer is received
whether it accepts to purchase the securities
under the terms and conditions specified in
the notice.
10.3.3 Should Purchaser not exercise its right of
first refusal Sellers may purchase the
aforesaid securities on those terms offered
to Purchaser under the notice.
11. First Offer Right
Sellers undertake that during the First Offer Period any
transfer of the Remaining Shares shall be subject to a first
offer right as set forth below:
11.1 Should any holder of Remaining Shares (the "Offeror")
desire to sell, transfer, convey, assign or otherwise
dispose of any of the Remaining Shares (the "Offered
Shares") it shall first offer the Offered Shares for
sale, on such terms and in such manner as hereinafter
provided (the "Offer"), to Purchaser. Same terms shall
apply, mutatis mutandis, to any sale of Remaining
Shares pledged by their holders to the benefit of any
person and/or entity and/or as a result of a lien
thereon. Any purported transaction in the shares in
violation of the provisions of this Section 11.1 shall
be null and void.
11.2 The Offer to Purchaser shall be made in writing and
shall be provided in accordance with Section 15.12
below, to Purchaser, and a duplicate thereof shall be
sent to the Company.
11.3 The Offer shall specify the number of the Offered
Shares, their class, the consideration requested per
share and a detailed summary of other material terms of
the proposed Offer (including schedule of payments).
The consideration for the shares may only be monetary.
Seller shall affix on the Offer a distinct label
advising the recipient that the Offer is to be accepted
within 3 Business Days.
11.4 Purchaser shall have a period of three (3) Business
Days from the date the Offer is deemed received to
notify the Offeror of its desire to accept the Offer
and to purchase all and not less than all of the
Offered Shares in accordance with its terms (the
"Acceptance Notice").
Should Purchaser abstain from giving an Acceptance
Notice within the said 3-Business Day period it shall
be conclusively deemed to have rejected the Offer. A
partial, conditional or qualified acceptance of the
Offer shall not be deemed an acceptance of the Offer.
11.5 The closing of the transaction for the sale of the
Offered Shares by the Offeror to Purchaser shall take
place on the fifteenth (15) Business Day following the
last date upon which Purchaser may have served its
Acceptance Notice. At such closing, the Offeror shall
sell and transfer the Offered Shares to Purchaser
against payment of the consideration specified in the
Offer.
11.6 In the event that by the end of the period specified in
Section 11.4 above the Offeror shall not have received
an Acceptance Notice, the Offeror shall be free to sell
the Offered Shares to any third party upon terms which
will not be less favorable to Offeror provided that the
sale be consummated within seventy five (75) days
thereafter. The Offeror will provide Purchaser with a
certified copy of all documentation evidencing the sale
to the third party, including its terms and conditions,
within seven (7) days of the consummation of the sale
to the third party in question.
11.7 Notwithstanding all of the above, during the First
Offer Period Sellers shall be permitted to sell from
the Remaining Shares each calendar quarter a number of
shares constituting no more than 1.00% of the entire
issued share capital of the Company (the "Permitted
Quarterly Amount"). Permitted Quarterly Amounts not
used may be aggregated over successive quarters up to a
maximum of 3.00% per such quarter, all without being
subject to Purchaser's said first offer right.
11.8 Notwithstanding all of the above, during the First
Offer Period Sellers shall be permitted to transfer
Remaining Shares among themselves and their wholly
owned subsidiaries and Isal may transfer Remaining
Shares to Isal Amlat Investment (1993) Ltd., or any
wholly owned subsidiary thereof, without being subject
to Purchaser's said first offer right, provided that
before any such transfer is made to a wholly owned
subsidiary such subsidiary will undertake to comply
with the provisions of this Section which undertaking
should be in form and substance reasonably satisfactory
to Purchaser.
12. Conditions Precedent
The obligation of Purchaser to consummate the transactions
contemplated hereby shall be subject to the satisfaction on
or prior to the Closing of all of the following conditions,
any of which may be waived by Purchaser prior to the
Closing:
12.1 Representations, Warranties and Covenants
The representations and warranties of Sellers contained
in this Agreement shall be true and correct at and as
of the date hereof and at the Closing; each and al1 of
the covenants, agreements and conditions to be
performed or satisfied by Sellers on or prior to the
Closing shall have been duly performed or satisfied;
and Sellers shall furnish Purchaser with a certificate,
signed by authorized signatories of each of Sellers,
evidencing the truth and correctness of such
representations and warranties and the performance and
satisfaction of such covenants, agreements and
conditions.
12.2 Impediments to Closing
On the Closing no suit, action, claim, proceeding or
official investigation shall be pending or threatened
which might jeopardize the transactions contemplated
hereby or the business of the Company.
12.3 Consents, Approvals and Waivers
On or prior to the Closing, Sellers shall have
performed all requisite filings and shall have obtained
the consents, approvals and waivers specified in
Section 8.3 above.
13. Closing Statements and Post Closing Adjustment
13.1 The Parties shall instruct Kesselman & Kesselman to
prepare the Closing Statements using to the maximum
extent possible the same accounting policies and
methods, all in accordance with generally accepted
Israeli accounting principles and practices applied on
a consistent basis, as used in the preparation of the
December 31, 1996 and December 31, 1997 audited
statements, and to report to the Parties as
appropriate. The Parties shall do their utmost that
the Closing Statements be provided before June 1, 1998.
13.2 The Parties shall equally bear the costs of the
preparation of the Closing Statements.
13.3 Purchaser undertakes to use its best efforts so that as
of the Closing and prior to the submission of the
Closing Statements the Company shall not engage in any
action which is not in the ordinary course of business
and will prevent the preparation of the Closing
Statements as aforesaid in Section 13.1 above. Should
such action nevertheless occur, its effect on the
Closing Statements shall be disregarded for the Post
Closing Adjustment.
13.4 Any dispute, argument, disagreement or controversy
arising out of, or pertaining to the Closing Statements
("Dispute") shall be resolved by an expert appointed by
the Purchaser and the Sellers (the "Expert") in
accordance with Sections 13.1-13.3 above. In the
absence of an agreement over the identity of the
Expert, the parties shall appoint Prof. I. Swari as the
Expert. Should Prof. Swari not accept the appointment
for any reason within 10 days of being asked by any of
the parties hereto, the parties shall appoint J. Sachak
as the Expert. Should Mr. Sachak not accept the
appointment for any reason within 10 days of being
asked by any of the parties hereto, the Expert shall be
appointed by the President of the Association of
Certified Public Accountants at the request of any
party. The Expert shall render a final decision within
thirty days following its appointment. Notwithstanding
the aforesaid, the Parties undertake to use their best
efforts to settle any Dispute amicably without the
Expert, to involve their most senior officers in such
efforts and to dedicate for this purpose a period of
not less than 30 days. The Parties further agree that
the Expert can only be appointed after the lapse of 30
days from the date a notice is given by one Party to
the other outlining the Dispute in question and such
Party's wish to settle such Dispute in accordance with
the aforesaid procedure ("Dispute Notice").
A Dispute Notice may not be served after 30 days lapsed
from the day the Closing Statements are provided to the
Parties (the "Final Notice Date") and unless such
notice is served as aforesaid the Closing Statements
shall then be deemed as fully agreed to by all Parties.
13.5 There will be a Post Closing Adjustment only if the net
book value (shareholders equity) of the Company in New
Israeli Shekels as shall be reflected in the Closing
Statements (the "Closing NBV") is lower than
NIS183,118,000.
13.6 Subject to Section 13.5, the Post Closing Adjustment
shall occur at 10:00 A.M. on the seventh Business Day
following the Final Notice Date or, if a Dispute Notice
is served, on the seventh Business Day following the
delivery of the Expert's decision, at the offices of
Zellermayer and Pelossof, Advocates, 37 Shaul Ha'Melech
Blvd., Tel-Aviv, Israel, or at such other time and
place as Purchaser and Sellers may agree in writing.
At the Post Closing Adjustment:
13.6.1 In the event that the Closing NBV is less
than NIS183,118,000, Sellers shall pay
Purchaser an amount equal to (i) the actual
Purchase Price paid at the Closing less (ii)
the actual Purchase Price paid at the Closing
multiplied by the actual Closing NBV and
divided by the Benchmark Book Value - linked
to the CPI from the Closing until the Post
Closing Adjustment plus annual interest of
3.5% running from 45 days after the Closing
until the Post Closing Adjustment, by
Cashier's Checks payable to the Purchaser or
by wire transfer to an account designated
thereby confirmed by the transferring bank.
If no such account is designated by the
Purchaser in writing at least 3 Business Days
before the Post Closing Adjustment, Sellers
may make the transfer to the account
specified in Section 7.1.2.
Example l:
Original Purchase Price= 88,000,000
Benchmark Book Value= 184,000,000
Adjustment permitted if book value is under
183,000,000
Closing NBV= 170,000,000
Amount due By Sellers at Post Closing
Adjustment=
88,000,000-170,000,000/184,000,000*88,000,000
=6,695,652
Example 2:
Original Purchase Price= 88,000,000
Benchmark Book Value= 184,000,000
Adjustment permitted if book value is under
183,000,000
Closing NBV= 183,500,000
Amount due By Sellers at Post Closing
Adjustment= 0
13.6.2 In the event that the Closing NBV is less
than NIS 183,118,000 the Option Purchase
Price shall also be decreased as aforesaid.
13.6.3 For the removal of doubt, in no event shall
the Purchase Price and the Option Purchase
Price be adjusted above the figures
stipulated in Sections 4 and 5.4,
respectively, subject to Sections 5.4 and
15.6.
14. Indemnification
14.1 Without derogating from any right or remedy available
under applicable law, Sellers shall promptly indemnify
Purchaser against and hold them harmless from any and
all direct or indirect losses, damages, liabilities,
expenses (including without limitation any and all
arbitration costs, legal fees and charges, experts and
witnesses fees), claims or actions in respect thereof
("Loss") arising out of, resulting from, based on or
otherwise incurred by Purchaser in connection with any
misrepresentations and/or non compliance of the actual
condition of the Company (including its Subsidiaries)
and/or its shares with the representations hereunder,
breach of a warranty or failure to perform any covenant
or obligation of Sellers, under this Agreement.
Without limitation to the generality of the foregoing,
Sellers shall promptly indemnify Purchaser against and
hold them harmless from any liability of the Company
(including its Subsidiaries) which shall have arisen
prior to the Closing and is not but should be reflected
in the Closing Statements in accordance with Section
13.1.
14.2 If any claim, suit, action or other proceeding to which
the indemnity set forth herein applies is brought
against Purchaser, it shall give the indemnifying party
prompt notice of same, and the latter shall have the
right, at its own expense, to participate in or assume
the defense of such claim, suit, action or other
proceeding.
If any claim, suit, action or other proceeding to which
the indemnity set forth herein applies is brought
against the Company, Purchaser shall give the
indemnifying party prompt notice of same, and use its
efforts so that the latter shall have the right, at its
own expense, to participate in or assume the defense of
such claim, suit, action or other proceeding.
14.3 The provisions of this Section 14 shall survive the
execution and delivery of this Agreement, the
consummation of the transactions contemplated herein
and the termination of this Agreement, for whatever
cause or reason, regardless of any investigation made
by or on behalf of Purchaser provided that Purchaser
shall not be entitled to an indemnity under the
provisions of this Section 14 with respect to a breach
of the representations given in Sections 8.4, 8.10,
8,11, 8.12, 8.13, 8.14 and 8.15 (the "Business
Representations"), if it does not make a respective
demand to Sellers within 2 years from the Closing.
14.4 Notwithstanding anything to the contrary herein, the
liability of each Seller under the indemnity provided
for in this Section 14 (I) shall be limited with
respect to a breach of a Business Representation, to
half of the indemnifiable amount, and (ii) shall be
jointly and severally with respect to a breach of the
representations, warranties and/or covenants and
undertakings of Sellers contained in sections 2, 3, 5,
6, 7.1, 8.1, 8.2, 8.3, 8.5, 8.6, 8.7, 8.8, 8.9, 8.16,
10, 11, 13, 14 and 15.
14.5 In determining the Loss for the purpose of the
indemnity hereunder, any Company shares purchased by
Purchaser by exercising the Option more than 6 months
from the Closing, shall be disregarded.
14.6 Should the Closing NBV exceed the Benchmark Book Value,
then 51% of the respective excess, to the extent such
excess does not derive from realization or appraisal of
fixed assets, shall be deemed as a set off against
Sellers' liability to indemnify Purchaser hereinabove.
15. General Provisions and Miscellaneous
15.1 Further Assurance
The parties hereto shall do and perform or cause to be
done and performed all such further acts and things and
shall execute and deliver all such other agreements,
certificates, instruments and documents as any other
party or parties hereto may reasonably request in order
to carry out the transactions contemplated hereby.
15.2 Binding Agreement
This Agreement, including all exhibits and other
documents attached hereto, constitutes the entire
agreement among the parties hereto with respect to the
subject matter hereof and embodies all the terms
binding upon the parties in respect thereof. No party
to this Agreement shall be liable or bound in any
manner by prior or contemporaneous express or implied
representation, warranty, statement, promise, covenant
or agreement pertaining to said transactions made by it
or on its behalf unless same is expressly set forth or
referred to herein.
15.3 Amendments, Waivers, Discharges and Consents
15.3.1 No amendment, change or modification of this
Agreement or any of the provisions, terms or conditions
hereof, no waiver of a right, remedy, privilege or
power, or discharge of an obligation or liability,
conferred upon, vested in or imposed on either party
under or pursuant to this Agreement, and no consent to
any act or omission pertaining hereto shall come into
operation and be effective unless duly embodied in a
written instrument signed by or on behalf of the party
against whom such amendment, change, modification,
waiver, discharge or consent is asserted or sought.
15.3.2 No failure to exercise and no delay in
exercising any right, remedy, privilege or
power under or pursuant to this Agreement
shall operate as a waiver thereof; nor shall
any single or partial exercise of any such
right, remedy, privilege or power preclude
any other or further exercise thereof or the
exercise of any other right, remedy,
privilege or power.
15.4 Partial Invalidity or Unenforceability
If any provision of this Agreement is held to be
invalid or unenforceable, such invalidity or
unenforceability shall not invalidate this Agreement as
a whole, but this Agreement shall be construed as
though it did not contain the particular provision held
to be invalid or unenforceable and the rights and
obligations of the parties shall be construed and
enforced only to such extent as shall be permitted by
law.
15.5 Costs
The legal, accounting, advisory and other costs of each
party leading up to the completion of the transaction
contemplated hereunder shall be borne by the respective
party. For the removal of any doubt it is hereby
clarified that no portion of Sellers' cost shall be
borne by the Company. It is acknowledged that the
Company shall bear the expense of US$50,000 which shall
be paid to Hambros America Securities Inc. in
connection with their efforts.
15.6 Linkage
Amounts denominated in NIS herein shall be linked for
the purposes of payment hereunder to the CPI. For this
purpose the base index shall be the "March CPI"
published on April 15, 1998, i.e. 153.20 points and the
new index shall be last index published prior to actual
payment.
Notwithstanding the aforesaid:
15.6.1 The Benchmark Book Value shall be linked to
the CPI with a base index of 152.20 points ,
as published on October 15, 1997 which index
shall be compared with the index applicable
to financial statements in question for the
purposes of adjustment of the Purchase Price
and Option Purchase Price.
15.6.2 The Purchase Price and Option Purchase Price
shall be linked to the CPI with a base index
of 152.20 points.
15.7 Sellers' Undertaking
Sellers undertake to use their best efforts with
respect to their Affiliates, subject to applicable law,
to maintain the minimum holdings specified in Exhibit
8.9, it being understood that Sellers are not required
to pursue in advance the adoption of respective
resolutions in the Affiliate in question.
15.8 Announcements
No announcement or press communication or release or
disclosure (the "Communications") relating to the
matters contained herein, other than those required by
law or by rules of a stock exchange including any
Communications relating to a contemplated IPO by an
entity within the ISAL group (the "ISAL IPO"), shall be
made other than as agreed between the parties. ISAL
shall provide Purchaser with an opportunity to review
any Communications in connection with the ISAL IPO and
use its best efforts to incorporate any amendments
required by Purchaser thereto.
15.9 Confidentiality
Subject to the provisions relating to ISAL IPO in
Section 15.8, each party shall keep in strict
confidence any and all information received by it from
the other related to this transaction, except as
required by law, in which case the party required to
disclose information shall advise the other party
before such disclosure so that the other party may file
for a protective order and review the disclosure
materials in question. This Section 15.9 shall not
derogate from the obligations of the parties under a
certain confidentiality agreement between them dated
November 19, 1997. It is clarified that any
information may be disclosed to employees,
representatives, agents and advisers of the parties,
provided that they undertake to observe the terms of
this Section.
15.10 Assignability
15.10.1 Subject to subsection 15.10.2, neither this
Agreement as a whole nor any right or
obligation hereunder shall be assignable by
any party without the prior written consent
of the other parties, other than the right of
claim for breach of this Agreement which
shall be assignable upon a sale of all or
substantially all of the Shares.
15.10.2 It is acknowledged that owing to the ISAL
IPO, ISAL may transfer its shares in the
Company to another affiliate contemplated to
undergo the ISAL IPO in which case the
affiliate in question shall join this
Agreement as part of ISAL. Such transfer
will not release ISAL of any of its
obligations hereunder.
15.11 Section and Other Headings
The section and other headings contained in this
Agreement and all Exhibits and Schedules are for
convenience only and do not constitute matters to
be considered in interpreting this Agreement.
15.12 Notices
Any notice or other communication required to be
made pursuant to the provisions of this Agreement
shall be sufficiently given or made if in writing
and either delivered in person or taxed with
receipt acknowledged, addressed as follows:
A. If to Clal, at: Clal House, 16 Floor, 5
Druyanov Street,
Tel-Aviv 63143 Israel
Attention: Ken Lalo, General
Counsel
Telephone: +972-3-5263350/1
Telecopy: +972-3-6293633
If to ISAL, at: Address as above.
Attention: General Manager
Telephone: +972-3-6202837/8
Telecopy: 972-3-6201498
B. If to Purchaser, at: Halachoh Hane'eman
Hashivim Veshmona Ltd.
C/o the Alpine Group, Inc.
1790 Broadway
New York, NY 10019, USA
(to be changed to "Superior
Cable Ltd.")
Attention: Bragi F. Schut,
Executive V.P.
Telephone: +1 212 757 3333
Telecopy: +1 212 757 3423
Attention: Stewart Wahrsager,
General Counsel
Telephone: +1 212 757 3333
Telecopy: +1 212 757 3423
with copy to: Zellennayer &
Pelossof
Europe House 37 Shaul
Ha'Melech Blvd.
Tel Aviv 64928, ISRAEL
Telephone: 972 3 6939555
Telecopy: 972 3 6952884
Or at such other address as may be substituted by
notice given as herein provided. The giving of
any notice required hereunder may be waived in
writing by the party entitled to receive such
notice. Every notice or other communication
hereunder shall be deemed to have been duly given
or served on the date (according to recipient's
time zone) on which personally delivered, or
fixed, with receipt acknowledged. Failure or
delay in delivering copies of any notice or other
communication to the person designated above to
receive a copy shall in no way adversely affect
the effectiveness of such notice or other
communication.
15.13 Arbitration
15.13.1 Any dispute, argument, disagreement or
controversy arising out of, or pertaining to,
this Agreement, including all Exhibits,
Schedules and other documents relating
thereto which are not amicably resolved,
shall be resolved by a sole arbitrator (the
"Arbitrator") appointed by the Purchaser and
the Sellers. In the absence of an agreement
as to the identity of the Arbitrator the
Arbitrator shall be a retired district court
judge appointed by the incumbent President of
the Tel-Aviv District Court. The Arbitrator
shall render a decision including the details
of its underlying reasoning binding upon the
parties with respect to the dispute within
thirty days following the request of any
party hereto to resolve the dispute.
15.13.2 The Arbitration shall be conducted in Israel
in the English language, in accordance with
the provisions of the Israeli Arbitration
Law, 5728-1968 and its appendices, as
amended.
15.13.3 The Arbitrator shall not be bound by the
rules of procedure or evidence.
15.13.4 The Arbitrator may avail himself with the
services of any expert.
15.14 Governing Law
This Agreement, including all exhibits hereto, and
the rights and obligations of the parties
hereunder or pursuant hereto shall be governed by
and construed in accordance with the laws of the
State of Israel without giving effect to conflict
of laws provisions contained therein.
Subject to the provisions of Section 15.13 hereof,
the competent courts situated in Tel-Aviv shall
have an exclusive jurisdiction in all matters
relating to this Agreement.
IN WITNESS WHEREOF the parties hereto have caused this SHARE
PURCHASE AGREEMENT to be duly executed and delivered as of
the date first written above.
Clal Industries and Investments Ltd.
By: /s/ R. Ben Shaul
Its:
ISAL Holland B.V.
By: /s/ Dr. Hugo Chaufan
Its:
ISAL (AMLAT) Ltd
By: /s/ Dr. Hugo Chaufan
Its:
Halachoh Nane'eman Hashivim Veshmona Ltd.,
/s/ Bragi F. Schut
By: Bragi F. Schut
Its: Director
