<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
RULE 13d-1(a) AND AMENDMENTS THERETO FILED TO PURSUANT TO
RULE 13d-2(a)
Tefron Ltd. - TFR
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(Name of Issuer)
Common Stock, par value NIS 1.0 per share
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(Title of Class of Securities)
M87482-10-1
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(CUSIP Number)
Arie Wolfson, President
Tefron Ltd.
28 Chida Street
Bnei-Brak, 51371, Israel
011-972-3-579-8701
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 31, 2000
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(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement in Schedule 13G
to report the acquisition that is the subject of this Schedule 13D , and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box /_/
Note. Schedules filed in paper format shall include signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP No. M87482-10-1 13D Page 2 of 21 Pages
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1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Not Applicable
Arwol Holdings Ltd.
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [x]
(b) /_/
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3. SEC Use Only
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4. Source of Funds
AF, BK
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5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) /_/
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6. Citizenship or Place of Organization
Israel
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Number of 7. Sole Voting Power
Shares
Beneficially --------------------------------------------------------
Owned by Each 8. Shared Voting Power
Reporting 8,000,382
Person With: --------------------------------------------------------
9. Sole Dispositive Power
--------------------------------------------------------
10. Shared Dispositive Power
4,388,210
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
8,000,382*
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) /_/
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13. Percent of Class Represented by Amount in Row (11)
60.0%*
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14. Type of Reporting Person (See Instructions)
CO
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* Includes 3,612,172 Tefron Ordinary Shares as to which the
reporting person disclaims beneficial ownership. (See Items
5 and 6 hereof).
<PAGE>
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CUSIP No. M87482-10-1 13D Page 3 of 21 Pages
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1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Not Applicable
Arie Wolfson
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [x]
(b) /_/
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3. SEC Use Only
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4. Source of Funds
PF, BK
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5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) /_/
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6. Citizenship or Place of Organization
Israel
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Number of 7. Sole Voting Power
Shares
Beneficially --------------------------------------------------------
Owned by Each 8. Shared Voting Power
Reporting 8,000,382
Person With: --------------------------------------------------------
9. Sole Dispositive Power
--------------------------------------------------------
10. Shared Dispositive Power
6,083,720
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
8,000,382*
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) /_/
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13. Percent of Class Represented by Amount in Row (11)
60.0%*
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14. Type of Reporting Person (See Instructions)
IN
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* Includes 3,612,172 Tefron Ordinary Shares as to which the
reporting person disclaims beneficial ownership. (See Items
5 and 6 hereof).
<PAGE>
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CUSIP No. M87482-10-1 13D Page 4 of 21 Pages
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1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Not Applicable
Sigi Rabinowicz
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [x]
(b) /_/
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3. SEC Use Only
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4. Source of Funds
PF, BK
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5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) /_/
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6. Citizenship or Place of Organization
Israel
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Number of 7. Sole Voting Power
Shares
Beneficially --------------------------------------------------------
Owned by Each 8. Shared Voting Power
Reporting 8,000,382
Person With: --------------------------------------------------------
9. Sole Dispositive Power
--------------------------------------------------------
10. Shared Dispositive Power
6,083,720
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
8,000,382*
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) /_/
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
60.0%*
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14. Type of Reporting Person (See Instructions)
IN
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* Includes 3,612,172 Tefron Ordinary Shares as to which the
reporting person disclaims beneficial ownership. (See Items
5 and 6 hereof).
<PAGE>
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CUSIP No. M87482-10-1 13D Page 5 of 21 Pages
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1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Not Applicable
Riza Holdings Ltd.
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [x]
(b) /_/
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3. SEC Use Only
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4. Source of Funds
AF, BK
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5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) /_/
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6. Citizenship or Place of Organization
Israel
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Number of 7. Sole Voting Power
Shares
Beneficially --------------------------------------------------------
Owned by Each 8. Shared Voting Power
Reporting 8,000,382
Person With: --------------------------------------------------------
9. Sole Dispositive Power
--------------------------------------------------------
10. Shared Dispositive Power
4,388,210
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
8,000,382*
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) /_/
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
60.0%*
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14. Type of Reporting Person (See Instructions)
CO
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* Includes 3,612,172 Tefron Ordinary Shares as to which the
reporting person disclaims beneficial ownership. (See Items
5 and 6 hereof).
<PAGE>
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CUSIP No. M87482-10-1 13D Page 6 of 21 Pages
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15. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Not Applicable
Macpell Industries Ltd.
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16. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [x]
(b) /_/
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17. SEC Use Only
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18. Source of Funds
AF
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19. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) /_/
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20. Citizenship or Place of Organization
Israel
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Number of 21. Sole Voting Power
Shares 628,600
Beneficially --------------------------------------------------------
Owned by Each 22. Shared Voting Power
Reporting 7,371,782
Person With: --------------------------------------------------------
23. Sole Dispositive Power
4,388,210
--------------------------------------------------------
24. Shared Dispositive Power
0
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25. Aggregate Amount Beneficially Owned by Each Reporting Person
8,000,382*
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26. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) /_/
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27. Percent of Class Represented by Amount in Row (11)
60.0%*
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28. Type of Reporting Person (See Instructions)
CO
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* Includes 3,612,172 Tefron Ordinary Shares as to which the
reporting person disclaims beneficial ownership. (See Items
5 and 6 hereof).
<PAGE>
Item 1. Security and Issuer
Tefron Ltd. (TFR) Ordinary shares, par value NIS 1.0 per share
(the "Tefron Ordinary Shares")
28 Chida Street
Bnei-Brak 51371 Israel
Items 2(a)-(c) and (f). Name of Persons Filing, Address of Principal Business
Office, Present Occupation or Employment and Citizenship.
This report is being filed on behalf of Arie Wolfson ("Wolfson"),
Sigi Rabinowicz ("Rabinowicz"), Arwol Holdings Ltd. ("Arwol"),
Riza Holdings Ltd. ("Riza") and Macpell Industries Ltd.
("Macpell") (each, a "Reporting Person").
For information with respect to the (a) identity; (b) residence
of business address; (c) present principal occupation or
employment and address of any corporation or other organization
in which such employment is conducted and (d) citizenship of each
Reporting Person and executive officers and directors of Arwol,
Riza and Macpell see Schedules II, III and IV respectively,
attached hereto and incorporated herein by reference.
Item 2(d). and (e).
During the last five years, none of Arwol, Riza, Macpell, Wolfson
or Rabinowicz nor, to their knowledge, any director or executive
officer of Arwol, Riza or Macpell has been (i) convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction and as a result
of such proceeding was or is a subject to a judgment, decree or
final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or
finding any violations of such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Wolfson acquired his interest in Tefron through the purchase of
Macpell Ordinary Shares, as defined in Item Four hereof, in three
separate transactions. Pursuant to the Arwol Purchase Agreement,
as defined in Item Four hereof, Wolfson acquired 11,853,214
Macpell Ordinary Shares for an aggregate purchase price of
$44,981,761. On September 24, 1998 following the exercise of put
options pursuant to Article 10 of the Arwol Purchase Agreement,
Wolfson acquired an additional 283,249 Macpell Ordinary Shares
for an aggregate purchase price of $879,564. On June 1, 1994
following the exercise of put options pursuant to Article 10 of
the Arwol Purchase Agreement, Wolfson acquired an additional
47,208 Macpell Ordinary Shares for an aggregate purchase price of
$146,392. The transactions were funded through (i) a loan in the
principal amount of $33,500,000 provided to Wolfson through Arwol
in equal parts by First International Bank of Israel Ltd.
and its subsidiary Bank Poali Agudat Israel Ltd. (collectively,
"FIBI") (the "FIBI Loan") pursuant to a loan agreement, attached
hereto as Exhibit K, whereby Arwol pledged Macpell ordinary
shares as collateral, (ii) an unsecured loan in the principal
amount of $11,600,000 provided to Arwol by Tabriz Anstalt
Limited NV ("Tabriz")(the "Tabriz Loan") pursuant to a loan
agreement attached hereto as Exhibit L, and (iii) a loan secured
by Macpell Ordinary Shares provided to Arwol on July 9, 1998 by
Bank Hapoalim Ltd. ("Hapoalim") (the "Hapoalim Loan") pursuant
to an agreement attached hereto as Exhibit N. The FIBI Loan was
repaid with funds received pursuant to the issuance of a
dividend by Macpell and with the proceeds of the Hapoalim Loan.
The outstanding balances on the Tabriz Loan and the Hapoalim
Loan were repaid with the proceeds of the transactions pursuant
to the Riza Purchase Agreement, as defined in Item four hereof.
Rabinowicz acquired his interest in Tefron through the purchase
of Macpell Ordinary Shares by Riza. Pursuant to the Riza
Purchase Agreement, as defined in Item Four hereof, Riza
purchased 3,893,086 Macpell Ordinary Shares for an aggregate
purchase price of $13,635,144. The purchase price was funded
with the proceeds of a loan provided to Riza by Hapoalim in the
principal amount of $13,650,000 pursuant to an agreement,
attached hereto as Exhibit O whereby Riza pledged its Macpell
Ordinary Shares as collateral and Arwol pledged certain Macpell
Ordinary Shares as security for its guarantee of 35% of the
loan. As security for Arwol's guarantee, Riza granted Arwol a
subordinate security interest in Riza's Macpell Ordinary Shares.
Item 4. Purpose of the Transactions.
On September 17, 1997 certain shareholders of Tefron including
Macpell, Tabriz, Discount Investment Corporation
<PAGE>
Ltd. ("DIC") and PEC Israel Economic Corporation ("PEC") (DIC and
PEC collectively, the "Discount Group") (each, a "Party" and
collectively, the "Parties") entered into a shareholders
agreement (the "Tefron Shareholders Agreement") attached hereto
as Exhibit A and described more fully in Items Five and Six
hereof. Thereafter, on February 26, 1998 pursuant to a purchase
agreement among Arwol, Eliezer Peleg, Nachum Peleg, Mast
Industries, Inc., a Delaware corporation, Shimon Topor, and
Michael Steinhardt (the "Arwol Purchase Agreement"), attached
hereto as Exhibit B, Arwol a company wholly-owned by Wolfson,
acquired approximately 81.1% of the issued and outstanding shares
of Macpell (the "Macpell Ordinary Shares"). Arwol acquired the
interest in Macpell so as to have a controlling interest in
Tefron and for investment purposes. In connection with the Arwol
Purchase Agreement, Wolfson acquired the right to designate five
members of the Tefron board of directors and thereafter was
elected Chairman and President of Tefron by the board of
directors..
On January 24, 2000, Arwol entered into a purchase agreement (the
"Riza Purchase Agreement"), attached hereto as Exhibit E, and
more fully described in Items Five and Six hereof. Riza and
Rabinowicz entered into the Riza Purchase Agreement so as to
purchase shares of Macpell from Arwol. Rabinowicz and Riza
purchased the Macpell Ordinary Shares for investment purposes
and, through the Voting Agreement, described further in Items
Five and Six below, Rabinowicz and Riza share in the decision
making process by which Macpell appoints directors to the board
of directors of Tefron. Rabinowicz has served as the Chief
Executive Officer of Tefron since 1990.
As of the date hereof the board of directors of Tefron consists
of five directors appointed by Macpell, two directors appointed
by the Discount Group and one director appointed by Tabriz.
Wolfson and Rabinowicz, pursuant to a series of letter agreements
described more fully in Items Five and Six hereof, have the right
to purchase 1,695,690 Tefron Ordinary Shares held by Tabriz. On
December 28, 1999 Wolfson and Rabinowicz entered into an option
agreement with Ruimi whereby Ruimi was given the right to
purchase 565,230 Tefron Ordinary Shares as more fully described
in Items Five and Six hereof.
The transactions reported on this Schedule 13D may have the
effect of impeding the acquisition of control of Tefron by a
third party because the parties to the Tefron Shareholders
Agreement jointly control over 60% of the Tefron Ordinary Shares
with the concurrent right to appoint all eight directors or
thirteen of fifteen directors if Tefron is required to appoint
Directors from Among the Public pursuant to Israeli law.
Except as described above, the Reporting Persons do not have any
present plans or proposals which relate to or would result in:
<PAGE>
(a) the acquisition by any person of additional securities of the
Company or the disposition of securities of the Company;
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of
its subsidiaries;
(c) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries;
(d) any material change in the present capitalization or dividend
policy of the Company;
(e) any other material change in the Company's business or
corporate structure;
(f) changes in the Company's charter, by-laws, or other
instruments corresponding hereto or other actions which may
impede the acquisition of control of the Company by any person;
(g) causing a class of common stock of the Company to be delisted
from a national securities exchange or to cease to be authorized
to be quoted in an inter-dealer quotation system of a registered
national securities association;
(h) a class of equity securities of the Company becoming eligible
for termination of registration pursuant to Section 12(g)(4) of
the Act; or
(i) any action similar to any of those enumerated above.
It is the Reporting Persons present intention to retain their
controlling interest in Tefron and to continue to conduct
business operations in accordance with their present practices.
Notwithstanding the foregoing, the Reporting Persons will
continue to review their investment in Tefron and reserve the
right to change their intentions with respect to any and all
matters reported in Item Four hereof.
Items 5. and 6. Interest in Securities of Tefron Ltd. and Contracts,
Arrangements, Understandings or Relationships With Respect to
Securities of Tefron Ltd.
The Parties to the Tefron Shareholders Agreement transferred
7,371,782 Tefron Ordinary Shares, representing approximately 55%
of the issued and outstanding Tefron Ordinary Shares, to a
trustee, which trustee has agreed to vote the such shares in
accordance with the terms and conditions
<PAGE>
of the Tefron Shareholders Agreement. The trustee is required to
vote with respect to all matters to be voted upon, other than the
election of the Tefron's directors, in accordance with the terms
and conditions of the Tefron Shareholders Agreement and in
accordance with any resolutions of the Parties made at a meeting
held prior to each general meeting of Tefron shareholders. At
such meeting of the Parties, each Party has one vote for each
Tefron Ordinary Share transferred by such Party to the trustee
and approval of resolutions requires the same percentage of votes
as such resolution would require at a general meeting of Tefron
Shareholders. Each party to the Tefron Shareholders Agreement is
entitled to direct the trustee to vote the Tefron Ordinary Shares
held by the trustee in favor of the number of directors selected
by such party as provided in the Tefron Shareholders Agreement.
Each party has agreed not to sell any of its Tefron Ordinary
Shares subject to the Tefron Shareholders Agreement during the
term of the Tefron Shareholders Agreement, except under limited
circumstances.
Pursuant to the Arwol Purchase Agreement Wolfson acquired
beneficial ownership of the 4,388,210 Tefron Ordinary Shares
owned directly by Macpell (or 35.4% of the outstanding Tefron
Ordinary Shares) and the sole power to vote or direct the vote of
and to dispose or direct the disposition of the Tefron Ordinary
Shares owned by Macpell.
On December 28, 1999 Arwol entered into a purchase agreement (the
"Ruimi Purchase Agreement"), attached hereto as Exhibit C,
whereby Arwol sold approximately 33% of its shares of Macpell (or
26.5% of the issued and outstanding Macpell Ordinary Shares) to
Mr. Avi Ruimi ("Ruimi") through his holding companies Omnia
Business Ltd. and Condo Overseas Inc. on three separate dates. On
December 29, 1999 Rumi acquired 454,227 Macpell Ordinary Shares,
on January 31, 2000, 1,539,623 Macpell Ordinary Shares and on
February 15, 2000, 1,993,850 Macpell Ordinary Shares. In
connection with that transaction, on December 28, 1999, Arwol
entered into a voting agreement (the "Voting Agreement") attached
hereto as Exhibit D, with Ruimi pursuant to which the parties
agreed that neither party would sell more than 50% of their
respective shares in Macpell. The terms of the Voting Agreement
also permit Arwol, provided that it, and its affiliates, control
more shares than Ruimi, to name six of the eleven directors of
Macpell, while Ruimi shall be entitled to appoint three Macpell
directors, the remaining two directors will be External Directors
(formerly known as Directors on Behalf of the public). The Voting
Agreement also provides that the vote of the holders of 75% of
the Macpell Ordinary Shares is required for Macpell to (i) enter
another line of business, (ii) merge, consolidate or dispose of
any of its substantial assets, (iii) purchase, lease or acquire
another substantial company, (iv) wind-up Macpell, (v) make
decisions regarding the allotment of Macpell Ordinary Shares, and
(vi) declare dividends. The Voting Agreement specifically permits
the sale of Macpell Ordinary Shares by Arwol to Rabinowicz, or a
company controlled by Rabinowicz, provided that Rabinowicz agrees
to be bound by the terms and conditions of the Voting Agreement.
<PAGE>
Pursuant to the Riza Purchase Agreement, Riza, a company wholly
owned by Rabinowicz, purchased 3,893,086 shares of Macpell from
Arwol, representing approximately 25.02% of the issued and
outstanding Macpell Ordinary Shares. Rabinowicz and Riza agreed
to sign and become a party to the Voting Agreement and assume all
of Arwol's obligations thereunder as a necessary condition to the
sale. Following the sale to Riza, Arwol owns 28.6% of the issued
and outstanding Macpell Ordinary Shares.
On August 27, 1997, Tabriz entered into an option agreement (the
"Option Agreement"), attached hereto as Exhibit F, with
Rabinowicz and Wolfson pursuant to which, in consideration for
$460,000, Tabriz granted to Rabinowicz and Wolfson an option to
purchase any and all Tefron Ordinary Shares held by Tabriz
(1,695,690 Tefron Ordinary Shares) at an exercise price of
$17.00. Pursuant to a letter agreement dated December 21, 1997,
attached hereto as Exhibit G, for an additional payment of
$40,000 by Rabinowicz and Wolfson, the payment date of the option
price was extended until August 12, 1999. Pursuant to a letter
agreement dated as of January 24, 2000, (the "Tabriz Option")
attached hereto as Exhibit I, the payment date under the Option
Agreement was extended to the expiration date of the Option
Agreement in consideration for an increase of the exercise price
to $17.40 per Tefron Ordinary Share.
In conjunction with the Ruimi Purchase Agreement, Wolfson,
Rabinowicz and Ruimi entered into an option agreement (the "Ruimi
Option"), attached hereto as Exhibit J, pursuant to which Ruimi
has the option to acquire 565,230 Tefron Ordinary Shares under
the Tabriz Option (the "Ruimi Option Shares"). Ruimi has the
right to acquire the Ruimi Option Shares; however, if he elects
not exercise the option, he may be required to purchase such
shares if the average daily closing price of Tefron Ordinary
Shares on the New York Stock Exchange is at least $15.40 for the
30 to 60 day period prior to August 29, 2000.
Pursuant to Rule 13d-5 of the Securities Exchange Act of 1934, as
amended, (the "Exchange Act") Wolfson, Rabinowicz, Arwol and Riza
may be deemed to beneficially own the 7,371,782 Tefron Ordinary
Shares held by the trustee pursuant to the Tefron Shareholders
Agreement and Wolfson and Rabinowicz may also be deemed to
beneficially own the 1,695,690 Tefron Ordinary Shares subject the
Option Agreement. Pursuant to Rule 13d-4 of the Exchange Act,
Wolfson, Rabinowicz, Arwol, Macpell and Riza expressly disclaim
beneficial ownership of 3,612,172 shares of the 7,371,782 Tefron
Ordinary Shares held by the trustee pursuant to the Tefron
Shareholders Agreement; and Wolfson and Rabinowicz expressly
disclaim beneficial ownership of the 1,695,690 Tefron Ordinary
Shares subject to the Option Agreement.
<PAGE>
Item 7. Material to be filed as Exhibits.
Exhibit A. Shareholders Agreement dated September 17, 1997 between Macpell,
Tabriz, Discount Investment Corporation, Ltd. and PEC Israel
Economic Corporation.
Exhibit B. Purchase Agreement dated February 26, 1998 between Arwol and
Eliezer Peleg, Nachum Peleg, Mast Industries, Inc., a Delaware
corporation, Shimon Topor, and Michael Steinhardt, with respect
to Arwol's purchase of 81% of the Macpell Ordinary Shares.
Exhibit C. Purchase Agreement dated December 28, 1999 by and among Arwol and
Ruimi with respect to Ruimi's purchase of Macpell Ordinary
Shares.
Exhibit D. Voting Agreement dated December 28, 1999 by and among Arwol and
Ruimi.
Exhibit E. Purchase Agreement dated December 30, 1999 by and among Arwol and
Riza with respect to the purchase of Macpell Ordinary Shares by
Riza from Arwol.
Exhibit F. Option Agreement dated August 27, 1997 by and among Tabriz,
Wolfson and Rabinowicz.
Exhibit G. Option Agreement Extension Letter dated December 21, 1997 by and
among Tabriz, Wolfson and Rabinowicz.
Exhibit H. Option Agreement Extension Letter dated September 4, 1998 by and
among Tabriz, Wolfson and Rabinowicz.
Exhibit I. Option Agreement Extension Letter dated January 24, 2000 by and
among Tabriz, Wolfson and Rabinowicz.
Exhibit J. Option Agreement dated December 28, 1999 by and among Wolfson,
Rabinowicz and Ruimi.
Exhibit K. Loan Agreement by and among Arwol and FIBI. To be filed by
amendment to this Schedule 13D.
Exhibit L. Loan Agreement dated February 18, 1998 by and among Arwol and
Tabriz.
Exhibit M. Addenduem to Loan Agreement dated February 18, 1998 by and among
Arwol and Tabriz.
Exhibit N. Loan Agreement by and among Arwol and Hapoalim. To be filed by
amendment to this Schedule 13D.
Exhibit O. Loan Agreement by and among Riza, Arwol and Hapoalim. To be filed
by amendment to this Schedule 13D.
<PAGE>
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Date: February 15, 2000
ARWOL HOLDINGS LTD.
By: /s/ ARIE WOLFSON
--------------------
Name: Arie Wolfson
Title: Chairman and
Chief Executive Officer
<PAGE>
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Date: February 15, 2000
/s/ ARIE WOLFSON
--------------------
Arie Wolfson
<PAGE>
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Date: February 15, 2000
/s/ SIGI RABINOWICZ
---------------------
Sigi Rabinowicz
Title: Chief Executive Officer
<PAGE>
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Date: February 15, 2000
RIZA HOLDINGS, LTD.
By: /s/ SIGI RABINOWICZ
----------------------
Name: Sigi Rabinowicz
Title: Chief Executive Officer
<PAGE>
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Date: February 15, 2000
MACPELL INDUSTRIES LTD.
By: /s/ ARIE WOLFSON
--------------------
Name: Arie Wolfson
Title: Chief Executive Officer
<PAGE>
Schedule I
JOINT FILING AGREEMENT
The undersigned parties hereby agree that the Schedule 13D filed
herewith relating to the Common Stock, par value NIS 1.0 per share of Tefron
Ltd., is being filed jointly with the Securities and Exchange Commission
pursuant to Rule 13d-1(f) on behalf of each such person.
Date: February 15, 2000
ARWOL HOLDINGS LTD.
By: /s/ ARIE WOLFSON
-------------------
Name: Arie Wolfson
Title: Chief Executive Officer
/s/ ARIE WOLFSON
-----------------
Arie Wolfson
/s/ SIGI RABINOWICZ
-------------------
Sigi Rabinowicz
RIZA HOLDINGS LTD.
By: /s/ SIGI RABINOWICZ
----------------------
Name: Sigi Rabinowicz
Title: Chief Executive Officer
MACPELL INDUSTRIES LTD.
By: /s/ ARIE WOLFSON
--------------------
Name: Arie Wolfson
Title: Chairman and Chief
Executive Officer
<PAGE>
Schedule II
Arie Wolfson is a British citizen and the Chairman and
President of Tefron Ltd. The address of Arie Wolfson's principal place of
business is 28 Chida Street Bnei-Brak 51371, Israel.
Arwol Holdings Ltd. is company organized under the laws of
Israel. The principal place of business of Arwol is c/o Ravillan, Volovelsky,
Dinstein, Sneh & Co., Law Offices 76 Rothschild Boulevard Tel Aviv, Israel.
DIRECTORS AND EXECUTIVE OFFICERS of Arwol Holdings Ltd.
Present Principal
Occupation or
Name Citizenship Employment
---- ----------- ----------
Arie Wolfson British Chairman and
President of Tefron
Ltd.
Chairman and Chief
Executive Officer
of Macpell.
Pinhes Volvelsky Israeli Advocate
<PAGE>
Schedule III
Sigi Rabinowicz is a Belgian citizen and the Chief Executive
Officer of Tefron Ltd. The address of Sigi Rabinowicz's principal place of
business is 28 Chida Street Bnei-Brak 51371, Israel.
Riza Holdings Ltd. is company organized under the laws of
Israel. The principal place of business of Riza is c/o Ravillan, Volovelsky,
Dinstein, Sneh & Co. Law Offices, 76 Rothschild Boulevard Tel-Aviv, Israel.
DIRECTORS AND EXECUTIVE OFFICERS of Riza Holdings Ltd.
Present Principal
Occupation or
Name Citizenship Employment
---- ----------- ----------
Sigi Rabinowicz Belgian Chief Executive
Officer of Tefron
Ltd.
Director of Macpell
Pinhes Volovelsky Israeli Advocate
<PAGE>
Schedule IV
Macpell Industries Ltd. is company organized under the laws of
Israel. The principal place of business of Macpell is 28 Chida Street, Bnei-Brak
51371 Israel.
DIRECTORS AND EXECUTIVE OFFICERS of Macpell Industries Ltd.
Present Principal
Occupation or
Name Citizenship Employment
---- ----------- ----------
Arie Wolfson British Chairman of the
Board of directors
Chief Executive
Officer
Sigi Rabinowicz Belgian Director
Eliezer Peleg Israeli Director
Nachum Peleg Israeli Director
Israel Baum Israeli Director
Aviela Sherbo Cohen Israeli Director
Shmuel Nir Israeli Director
Ronen Landesman Israeli Director
Raphael Wacht Israeli Director
Yehiel Rotenberg Israeli Director
Eli Azriel Israeli Director
Shmuel Rozenblum Israeli Director
<PAGE>
Exhibit A
A Contract
<TABLE>
<S> <C>
Entered into and signed in Tel-Aviv on the 17th of September, 1997
Between: Macpell Industries Ltd.
of 40 Hanamal Street
(hereinafter - "Macpell")
of the first part
And: 1 Discount Investment Company Ltd.
of 14, Simtat Bet Hashoeva, Tel-Aviv 65814
2. PEC Israel Economic Corporation
511 Fifth Avenue
NYC NY 10017
(hereinafter collectively - "the Discount Group")
of the second part
And: Tabriz Anstalt Ltd.
Represented by advocate Pinchas Wolowelsky
of 30, Achad Ha'am Street, Tel-Aviv
(hereinafter - "Tabriz")
of the third part
(Macpell, Discount Group and Tabriz collectively - "the parties")
And Oranim (Securities) Ltd.
Of 14, Simtat Bet Hashoeva, Tel-Aviv
(hereinafter - "the Trustee")
of the fourth part
Whereas the parties are holders of shares in Tefron Ltd., a company
registered in Israel (hereinafter "the Company"), which is about
to make a public offering in the USA;
And whereas the majority of the shares in Tefron are held by Macpell and such
holding confers upon it control in the Company and the right to
appoint the majority of the members of the Board of Directors of
the Company;
And whereas the parties agree to act jointly with respect to their holdings in
the Company and regulate the relationship between them as
shareholders in the Company after the public offering, all as set
out in this Contract below;
</TABLE>
<PAGE>
Now, therefore, it has been declared, stipulated and agreed between the parties
as follows:
1. 1.1 The following expressions in this Contract shall have the meaning
set opposite them as set out below:
1.1.1 "Holder of Interest in the Company" - within its meaning
in the Securities Law, 5728-1968.
1.1.2 "the Company" - Tefron Ltd. (Pub.C. 52-0043407)
1.1.3 "Shares under the Contract" - the number of ordinary
shares of a nominal value of NS 1 each of the Company out
of the shares held by the parties, as specified in clause
2, which will be transferred to the Trustee as provided
in clause 3.2 below, including all the bonus shares which
the Company will distribute in respect thereof during the
term of this Contract as provided in clause 4.3 below.
1.1.4 "Control" - within its meaning in the Securities Law,
5728-1968.
1.2 The Preamble and the annexes to this Contract form an integral
part thereof.
1.3 The headings of the clauses in this Contract are designed for
convenience only and they are not to be considered for the
interpretation of the Contract.
2. Declarations
2.1 Macpell declares that as of the date of execution of this
Contract, it is the holder of 5,138,880 ordinary shares of a
nominal value of NS 1.- each of the Company.
2.2 Each one of the individuals of the Discount Group declares that as
of the date of execution of this Contract, it is the holder of
1,309,910 ordinary shares of a nominal value of NS 1.- each of the
Company. (The Discount Group holds collectively 2,619,820 ordinary
shares of a nominal value of NS 1.- each).
2.3 Tabriz declares that as of the date of execution of this Contract,
it is the holder of 2,317,533 ordinary shares of a nominal value
of NS 1.- each of the Company.
2.4 In order to eliminate any doubt, it is hereby expressly stated
that the provisions of this Contract will apply only to the Shares
under the Contract as specified in sub-clause 3.2 and 3.4 below.
<PAGE>
3. Obligations of the Parties
3.1 The parties hereby appoint the Trustee to hold the Shares under
the Contract in its name on trust for them, and by their signing
this Contract they also instruct the Trustee to act as specified
for it under the provisions in this Contract. The Trustee agrees
to hold the Shares under the Contract and act in respect thereof
as provided in this Contract. The Trustee may, but is not
obligated to, act in respect of the Shares under the Contract in
any manner whatsoever, except for cases expressly prescribed in
this Contract.
3.2 Upon the execution of this Contract. Macpell, the Discount Group
and Tabriz, severally, shall deliver to the Trustee an instrument
of transfer of shares duly signed by that party in respect of the
Shares under the Contract specified in respect of that party in
annex 3.2, together with a resolution of the Board of Directors of
the Company approving the transfer of the shares and accompanied
by a share certificate in respect of the said shares, if any such
share certificates were issued. Immediately after the coming into
force of this Contract, the parties shall cause the registration
of the Trustee in the Company's Register as the holder of the
Shares under the Contract.
The parties shall cause the delivery of appropriate statements to
the Registrar of Companies, of the transfer of the Shares under
the Contract in the name of the Trustee as aforesaid.
3.3 During the whole term of this Contract, the Shares under the
Contract shall be registered in the name of the Trustee, and the
Trustee only shall be entitled to vote in respect thereof at the
general meetings of the Company.
3.4 At the end of the term of the Contract as specified in clause 9
below, the Trustee shall transfer to each one of the parties the
shares which each one of them had transferred thereto as provided
in clause 3.2 above and all the bonus shares allotted to the
Trustee in respect of such shares as provided in clause 4.3 below.
3.5 So long as this Contract is in force pursuant to the provisions of
clause 9 below, each one of the parties and/or any of the
individuals of the parties shall not sign any additional agreement
with respect to cooperation in voting in the Company in respect of
the Shares under the Contract.
The parties are aware that there is a voting agreement among the
individuals of the Discount Group, whereunder they will coordinate
and unite their voting power in the companies held by them,
including the Company, and the said prohibition in this clause
above shall not apply in respect of any agreement between them
regarding the manner of their voting in the Company as aforesaid.
<PAGE>
4. Dividend, Bonus shares
4.1 All dividends in cash payable by the Company or all the rights
issued in respect of the Shares under the Contract, which are held
by the Trustee for any of the individuals of the parties, shall be
transferred to the party for whom such shares are held as
aforesaid.
4.2 The Trustee may instruct the Company to pay the dividend or issue
the rights directly to those entitled thereto. The parties shall
do their utmost so that the Company shall perform direct payment
of the dividend or a direct issue of the rights as instructed by
the Trustee.
4.3 If the Company allots bonus shares in respect of the Shares under
the Contract , such bonus shares shall be added to the shares of
the parties held by the Trustee, and it shall hold them for the
benefit of each party or any one of the individuals of the
parties, at such rate of distribution as such party or any of the
individuals of the parties is entitled to receive in respect of
the shares held by the Trustee for him on trust.
5. Voting at a General Meeting
5.1 The parties agree to cooperate between them in all matters
relating to their votes at the general meetings of the Company,
and as prescribed in this clause and in clause 6 below.
5.2 If notice is given of the holding of a meeting of the shareholders
of the Company (hereinafter "the General Meeting"), a preliminary
meeting of the parties to this Contract shall be convened in order
to coordinate the manner of voting on the subjects on the agenda
and on questions arising at the general meeting (hereinafter -
"the Preliminary Meeting").
5.3 The Preliminary Meeting shall be held at the offices of the
Company, at 17:00 hours, seven business days before the date
prescribed for holding the general meeting. The date and place of
the Preliminary Meeting may be changed with the consent of the
parties.
5.4 No business shall be transacted at any Preliminary Meeting, unless
all the parties and the Trustee are present in person or by proxy.
Each one of the parties may appoint a proxy by letter, facsimile
or electronic mail, The Trustee's representative shall act as
chairman of the meeting and record the minutes of the meeting but
shall have no voting right at the Preliminary Meeting.
5.5 If a quorum is not present for the opening of the Preliminary
Meeting as provided in clause 5.4 above, the Preliminary Meeting
shall stand adjourned to the first business day following the date
appointed in sub-clause 5.3 above, at the same place and time at
which the original Preliminary Meeting was said to be held
(hereinafter - "the Adjourned
<PAGE>
Meeting"). If at the Adjourned Meeting a quorum is not present as
provided in clause 5.4 above, then, any of the individuals of the
parties present at the Adjourned Meeting shall be a quorum and
entitled to transact the business and the subjects for which the
Preliminary Meeting was convened.
5.6 The persons present at the Preliminary Meeting shall consider each
one of the subjects and matters which are about to be placed on
the agenda of the general meeting and try to formulate in respect
thereof a unified position and a unified manner of voting. At the
Preliminary Meeting, each one of the parties shall have one vote
in respect of each Share under the Contract transferred by it to
the Trustee and the bonus shares allotted in respect thereof as
provided in clause 3.2 and clause 4.3 Resolutions which require a
simple majority at a general meeting shall be passed by a simple
majority at the Preliminary Meeting, and resolutions which require
at general meeting a special majority, shall be passed by the
Preliminary Meeting by such special majority as is required at the
general Meeting. Resolutions shall be passed by the parties
present and voting.
At the conclusion of the Preliminary Meeting, the Trustee's
representative shall record the minutes of the resolutions passed
thereat. The minutes of the meeting signed by the Trustee's
representatives shall be conclusive evidence of the truth of the
contents therein.
5.7 The Trustee shall use its voting power in respect of the Shares
under the Contract in order to vote at the general meeting
according to the resolutions of the Preliminary Meeting as
recorded in the said minutes. If at the Preliminary Meeting a
resolution is not passed by the majority required as aforesaid in
respect of the manner of voting in respect of the said shares on
any subject put to the vote at the general meeting, the Trustee
shall vote at the general meeting against the passing of the
resolution on the said subject.
5.8 Notwithstanding the aforesaid, if any one of the subjects on the
agenda of the general meeting is the approval of a transaction in
which any holder of interest in the Company has a personal
interest therein, the Trustee shall give each one of the parties a
power of attorney to vote at its discretion with respect to such
subject (and not with respect to the other subjects on the agenda)
in respect of the shares held by the Trustee to the benefit of
such party.
5.9 A resolution signed by each one of the parties by cablegram,
facsimile or electronic mail, shall be as valid and effective for
all purposes whatsoever as if passed at a Preliminary Meeting duly
convened and shall be deemed as a resolution of the Preliminary
Meeting for all intents and purposes.
<PAGE>
6. Election of Directors
6.1 Notwithstanding the aforesaid in clause 5 above, at the general
meeting of the Company, the Trustee shall use its voting power in
respect of the Shares under the Contract for the purpose of
electing Directors, in the manner specified in this clause 6
below.
6.2 The number of Directors on the Board of Directors of the Company
shall be fixed by the parties by consent, subject to the
limitations prescribed in the Articles of Association of the
Company. Until otherwise decided, the number of the members of the
Board of Directors shall not exceed eight (8).
6.3 Each one of the parties shall recommend the appointment of the
Directors, as follows:
6.3.1 Macpell - 5 Directors
6.3.2 Discount Group - 2 Directors, who meet the criteria
required under the Rules of the Stock Exchange in the USA
in order to be considered as External Directors.
6.3.3 Tabriz - 1 Director.
6.4 At the Preliminary Meeting to be convened before the date of he
general meeting, at which the election of the Directors in the
Company will be placed on the agenda, each party shall deliver to
the other party a list of Directors recommended by it.
6.5 The names of the persons recommended to be Directors shall be
included in the minutes of the meeting of the Preliminary Meeting,
and the Trustee shall use its voting power in respect of the
Shares under the Contract for the election of the persons
recommended as aforesaid to be Directors of the Company.
6.6 It is hereby agreed that if the Company is requested to appoint
Directors from Among the Public pursuant to Israeli law
(hereinafter - D.F.A.P."), the following provisions shall apply:
6.6.1 The number of Directors to be recommended by each one of
the parties shall be increased so that Macpell will
recommend eight (8) Directors, the Discount Group will
recommend three (3) Directors and Tabriz will recommend
two (2) Directors.
6.6.2 In addition to the provisions in clause 6.6.1, Macpell
shall recommend one candidate to be a D.F.A.P. and
Discount Group jointly with Tabriz shall recommend one
candidate to be a D.F.A.P. The names of the candidates to
be D.F.A.P.s shall be included in the minutes of the
Preliminary Meeting, and the
<PAGE>
Trustee shall use its voting power in respect of the
Shares under the Contract for voting at the general
meeting for the election of the candidates for the
D.F.A.P.s on the Board of Directors of the Company.
7. Vacancy of Office of Director
7.1 If the office of a Director recommended by any one of the parties,
is vacated for any reason whatsoever, the parties agree that upon
the request of the party as aforesaid, a general meeting of the
Company shall be convened and/or caused to be convened for the
purpose of electing another Director in his place, pursuant to the
recommendation of such party as aforesaid. Such election shall be
governed, mutatis mutandis, by the provisions of clause 6 above
7.2 Should any one of the parties wish to remove from office any
Director elected upon his recommendation, it shall give written
notice thereof to the Trustee and the other parties to this
Contract, and upon the request of such party, the parties shall
convene and/or cause the convening of a general meeting for the
purpose of removing the Director from his office as aforesaid. The
Trustee shall use its voting power in respect of the Shares under
the Contract for voting at the general meeting for the removal
from office of the Director as aforesaid.
7.3 If the office of a Director vacated is fulfilled or if a Director
ceases to hold office, as the case may be, according to the
request of the party as provided in clause 7.1 or 7.2 above within
15 days of his request, same will make it unnecessary to convene a
general meeting particularly for such purpose.
8. Transfer of Shares
8.1 Each one of the parties undertakes that during the whole term of
the Contract, it will not transfer, sell, charge by way of a fixed
charge nor grant to any third party any right whatsoever in
respect of the Shares under the Contract. This clause shall not be
interpreted in any way as restricting any party from including the
Shares under the Contract in a floating charge on its assets now
or hereafter.
8.2 Any transfer to a corporation in which the transferor has control
or to any body having control of the transferor or any transfer to
another corporation controlled by a body having control of the
transferor corporation or any transfer between the parties to this
Agreement, shall not be deemed to be a transfer of shares for the
purpose this clause, provided that the transferee undertakes in
writing the provisions of this Contract in full. A transfer of
control in the transferee company, either directly or indirectly,
shall be deemed to be a transfer of shares for the purpose of this
Contract.
<PAGE>
8.3 Macpell and the Discount Group have no objection to Tabriz
transferring its Shares under the Contract (in whole or in part)
to Zigi Rabinowitz or Arye Wolfson or a company under the
exclusive control of each one of them (hereinafter - "the
Transferee Company"), provided that:
(1) The transferee assumes all the obligations of Tabriz
under this Contract, mutatis mutandis, as the case may
be, and
(2) If the transferee is a Transferee Company, the relevant
holder of control shall undertake in advance to Macpell
and the Discount Group that, so long as this Contract is
in force, it will neither sell nor charge its shares in
the Transferee Company. A transfer of control in the
transferee company, either directly or indirectly, shall
be deemed to be a transfer of the shares for the purpose
of this Contract.
9. Term of Contract
This Contract shall come into force upon the execution thereof and shall
be in force until the end of three years from the date of the public
offering of the shares of the Company, provided that the offering as
aforesaid is effected by 31.12.97. This Contract shall be automatically
extended for two additional years, unless one of the parties gives at
least thirty (30) days' notice to the others before the termination of
the term of the Contract that it does not agree to the extension of the
Contract.
Notwithstanding the aforesaid, by written notice of Macpell to the other
parties, this Contract shall be terminated 180 days after Macpell's
notice as aforesaid.
If the public offering is not effected by 31.12.97, the shareholders
undertake to replace forthwith thereafter the Articles of Association of
the Company by the Articles of Association that had existed immediately
before its replacement towards the public offering. Immediately after the
passing of the resolution as aforesaid, the Trustee shall restore to each
one of the parties the Shares under the Contract held at the time by the
Trustee for such party, and this Contract shall be terminated.
10. The Trustee
The parties or any one of them shall have no demand and/or claim of any
kind and class and for any reason whatsoever against the Trustee, with
respect to the holding of the Shares under the Contract on trust and/or
with respect to the performance of its duties under this Contract, except
for the case of the Trustee's act or omission committed with gross
negligence, maliciously or otherwise than in good faith. The parties
and/or any of them shall indemnify the Trustee for any expense, loss
and/or damage caused to or incurred by the Trustee in respect of any
demand and/or claim made or brought against it in
<PAGE>
respect of the holding on trust of the Shares under the Contract and/or
in respect of the performance of its duties as a Trustee under this
Contract.
11. Miscellaneous
11.1 The provisions of this Contract shall apply to the parties, their
successors and heirs.
11.2 The parties shall take all the additional steps (including
performance of payments, payments of expenses, signing of
additional documents and the presentation of all the approvals)
required for the application and implementation of this Contract,
according to its letter and spirit.
11.3 This Contract exhausts the agreements between the parties in
respect of all the matters referred to in this Contract, and there
shall be no effect to any negotiations, declaration, presentation,
obligation and/or consent made or given, if any, either in writing
or orally, either expressly or impliedly, between the parties
prior to the execution of this Contract. Save as therein expressly
stated, this Contract does not derogate from any of the provisions
of the Agreement between the parties dated 30.6.93. It is agreed
that the right of first refusal and the tag along right to sell
under clauses 8.4.1 and 8.4.2 of the Agreement of 30.6.93 shall
continue to apply subject to the necessary adjustments, also after
the Company's issue of securities to the public, in respect of the
Company's shares held by Macpell and the Discount Group
respectively, so long as they are held as aforesaid.
11.4 No modification in this Contract or in any of its provisions shall
have any effect unless made in writing and signed by all the
parties to this Contract.
11.5 The conduct of any one of the parties shall not be deemed as a
waiver of any of its rights under this Contract or under any law,
and/or as a waiver of or consent on its part to any breach
whatsoever or any failure to comply with any condition whatsoever,
unless the waiver or the consent is made expressly and in writing.
11.6 Notices under this Contract shall be in writing and sent by air
mail, by personal delivery or by facsimile, at the addresses of
the parties as specified in the Preamble to this Contract.
<PAGE>
Any notice delivered personally or transmitted by facsimile, shall
be deemed to have been received by the addressee on the first
business day following the day on which it is delivered or
transmitted, as the case may be, and any notice sent by registered
mail shall be deemed to have been received by the addressee three
business days after the date of delivery thereof for mailing at a
post office in Israel, if sent to an address in the country in
which the notice has been delivered to a post office as aforesaid,
or at the end of seven days, if sent at an address in a country
other than that in which the notice has been delivered to a post
office as aforesaid.
In witness whereof the parties hereto have hereunto set their hand:
(-) (-)
- ---------------------------------- ---------------------------------
Macpell Industries Ltd. Discount Investments Ltd.
(-) (-)
- ---------------------------------- ---------------------------------
pp./ Tabriz Anstalt Ltd. PEC Israel Economic corporation
Pinchas Wolowelsky, advocate
under a general power of attorney
(-)
----------------------------------
Oranim (Securities) Ltd.
<PAGE>
Annex 3.2
Shares under the Contract
Macpell Industries Ltd. - 3,759,610 ordinary shares of a n.v. of
NS 1.- each of the Company
Discount Investment Company Ltd. - 958,331 ordinary shares of a n.v. of
NS 1.- each of the Company
PEC Israel Economic corporation - 958,331 ordinary shares of a n.v. of
NS 1.- each of the Company
Tabriz Anstalt Ltd. - 1,695,510 ordinary shares of a n.v. of
NS 1.- each of the Company
(-) Pinchas Wolowelsky
advocate
pp./ Tabriz Anstalt Ltd.
Discount Investment Company Ltd. (-)
Oranim (Securities) Ltd. (-)
Macpell Industries Ltd. (-)
40-42 Nachmani Street, Tel-Aviv
63508,Tel: 5460404
<PAGE>
SHARE PURCHASE AGREEMENT
------------------------
Made and entered into as of the 26th day of February 1998 among: ARWOL HOLDINGS
LTD. a company incorporated under the laws of Israel and having its registered
office at 30 Ahan Ha'am Street, Tel-Aviv, Israel ("the Buyer") and MR. ELIEZER
PELEG (I.d. No. 00-795101-5), of 35 Basel Street, Tel-Aviv. Israel ("E. Peleg"),
MR. NACHUM PELEG (I.D. No. 00-795102-3), of 14 Mishmar Hagvul Street, Tel-Aviv,
Israel ("N. Peleg"), MAST INDUSTRIES (DELEWARE) INC. (formerly Mast Holding
Corporation), a corporation incorporated under the laws of the State of
Delaware, USA, of c/o THE LIMITED, Inc., Three Limited Parkway, Columbus, Ohio
43230, USA ("Mast"), MR. SHIMON TOPOR (I.D. No. 4888660) of 650 Madison Avenue,
New York, New York 10022, USA ("Topor") and MR. MICHAEL STEINHARDT (US Passport
No. D2233127), of 650 Madison Avenue, New York, New York 10022, USA
("Steinhardt") (E. Peleg, N. Peleg, Mast, Toper and Steinhardt collectively,
"the Main Sellers") and those persons and entities listed in Annexure A hereto
(the Main Sellers and those persons and entities listed in Annexure, A,
collectively, "the Sellers")
WHEREAS: each of the Sellers in the registered or beneficial owner of,
or, entitled to, or has the right to acquire on closing (as
referred to in clause 6 below) (hereinafter "Closing"), a
certain number of ordinary fully paid-up shares of nominal
value NIS 1.0 (one New Israel Sheqel) each in the share
capital of Macpell Industries Ltd. ("the Company");
AND WHEREAS: the Buyer wishes to purchase from the Sellers all shares of
the Company held by the Sellers or to which the Sellers are
entitled or which the Sellers have the right to acquire on
Closing (all such shares, collectively, "the Sale Shares") and
each of the Sellers is willing to sell its portion of the Sale
Shares to the Buyer, all for the consideration and subject to
the terms and conditions set out in this Agreement below,
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. SALE
1.1. Subject to the fulfillment of the Conditions Precedent (as defined in
clause 7 below), each of the Sellers shall sell or produce the sale,
and the Buyer shall purchase from each of the Sellers, free from all
liens, security interests, adverse third party claims or encumbrances
of whatsoever nature, its portion of the Sale Shares, being that number
of the Sale Shares set out opposite such Seller's name in column 6 of
Annexure B to this Agreement, all for, and against payment of, the
Purchase Price (as defined in clause 2 below) and subject to the other
terms and conditions of this Agreement.
<PAGE>
1.2. It is expressly recorded and agreed that, under this Agreement, each of
the Sellers is entering into a separate transaction with the Buyer with
respect to the Sale Shares to be sold by such Seller, no Seller shall
be liable for the obligations to be performed by any other Seller and
the liability of each of the Sellers in respect of the obligations
imposed on the Sellers under this Agreement (including, without
limitation, in respect of clause 3 below), shall be several and not
joint as if each of the Sellers had entered into a separate agreement
with the Buyer. Notwithstanding the above, in the event that at the
Closing the number of Sale Shares represented by the share certificates
and duly executed share transfer deeds in favor of the Buyer or
transfer instructions to the Registration Company in favor of the
Buyer, as the case may be, represent, in aggregate, less than
11,365,406 (eleven million three hundred and sixty-five thousand, four
hundred and five) Sale Shares, then the Buyer shall be entitled to
cancel this Agreement. In the event of such cancellation, the Buyer
shall have no rights or claims against any of the Sellers, save for
those of the Sellers who breached this Agreement by not making
available share certificates and duly executed share transfer deeds in
favor of the Buyer or transfer instructions to the Registration Company
in favor of the Buyer, as the case may be, in respect of all of such
Seller's Sale Shares (as reflected opposite such Seller's name in
column 6 of Annexure B) at Closing in accordance with such Seller's
obligations under clause 6 below.
2. PURCHASE PRICE
The purchase price (Purchase Price) per Share for the Sale Shares shall
be US $3.7949 (three United States Dollars, and seventy-nine cents and
forty-nine hundredths of a cent) payable, at the Buyer's discretion
(provided that all of the Sellers shall be paid in the same currency)
either in US Dollars or in New Israel Sheqels equal, in accordance with
the representative rate of exchange of the US Dollar last published by
the Bank of Israel immediately prior to the time of Closing ("the
Determining Representative Rate"), to the Purchase Price. The Buyer
shall notify the Main Sellers within 10 (ten) days of signature of this
Agreement as to the currency (US Dollars or NIS) in which payment shall
be made in accordance with the aforegoing
3. REPRESENTATION, WARRANTIES AND
CERTAIN UNDERTAKING OF THE SELLERS
3.1. Each of the Sellers hereby represents, warrants and undertakes (for the
removal of doubt -as to itself only, severally and not jointly) as
follows:
3.1.1. Annexure B attached hereto sets out opposite the name of such
Seller: (i) in column 1, the number of Sale Shares (if any) of
which it is the registered owner, (ii) in column 2, the number
of Sale Shares (if any) which are registered in the name of
the Trust Company of Bank Leumi Le' Israel B.M. ("BLL Trust")
as trustee on its behalf, (iii) in column 3, the number of
Sale Shares (if any) in an account in its name with the
Registration Company of United Mizrahi Bank Ltd. ("the
Registration
2
<PAGE>
Company"); (iv) in column 4, the number of Sale Shares (if
any) which it is obliged to transfer to any other Seller on
Closing, the names of each such other Seller and the number of
Sale Shares which is to be transferred to each such other
Seller; (v) in column 5, the number of Sale Shares (if any
which it shall acquire on Closing, from whom it shall acquire
such Sale Shares and in whose name such Sale Shares are
currently registered; and (vi) in column 6, the aggregate
number of Sale Shares which such Seller shall hold and shall
(subject to the provisions of this Agreement) transfer, or
procure the transfer of, to the Buyer on Closing;
3.1.2. such Sellers' Sale Shares, to the extent registered in its
name, in the name of BLL Trust on its behalf or in an account
in its name with the Registration Company or to be acquired by
it on Closing (all as set out in Annexure B) will, at Closing,
be free and clear from all liens, security interests, adverse
third party claims or encumbrances of any nature, subject only
to its obligation (if any) to transfer any of its Sale Shares
to any other Seller on Closing as reflected in column 4, of
Annexure B.
3.2. Each of the Main Sellers (for the removal of doubt - as to itself only,
severally and not jointly) hereby represents, warrants and undertakes
as follows:
3.2.1. the Company is a public company duly registered, validly
existing and in good standing under the laws of the State of
Israel;
3.2.2. the authorized share capital of the Company consists of
50,000,000 (fifty million) ordinary shares of nominal value
NIS 1.0 (one New Israel Sheqel)) each, of which as at the date
of signature of this Agreement, 14,492,958 (fourteen million
four hundred and ninety-two thousand, nine hundred and
fifty-eight shares have been issued and are fully paid-up (it
being recorded by the parties that the Company has issued
various debentures and options convertible into shares of the
Company, which may be exercised at any time after the date of
signature of this Agreement, all as described in the Company's
prospectus of July 21, 1997, a copy of which is annexed hereto
as Annexure C ("the Prospectus"));
3.2.3. save as set forth in the Prospectus, the Company has not
issued any option, warrant, right or commitment for the issue
or acquisition of any shares or other securities of the
Company;
3.2.4. that it hereby waives its rights of first refusal under the
shareholders' agreement dated may 17, 1992 amongst the Main
Sellers ("the Shareholders' Agreement") in respect of the
transfers to be made on Closing pursuant to this Agreement,
and subject to Closing, and that with effect from, and subject
to, the Closing, the Shareholder's Agreement and any other
agreements between any of the Main Sellers relating to the
Sale Shares be cancelled (it being recorded as between the
Main Sellers that, with effect from Closing, no party to the
Shareholders' Agreement or any
3
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such other agreement shall have any claim or right of
whatsoever nature against any other party arising out of or in
connection with the Shareholders' Agreement or any such other
agreement);
3.2.5. since December 31, 1997, the Company has not declared or paid
any dividend in cash, shares or otherwise.
3.3. Each of the Main Sellers (for the removal of doubt - as to itself only,
severally and not jointly) undertakes to the Buyer that the warranties
and representatives given by such Main Seller pursuant to clauses 3.2.3
and 3.2.5 above (to the extent dependent on such Main Seller) will
continue to be true and accurate in all respects at Closing.
3.4. Each of E. Peleg and N. Peleg (for the removal of doubt - as to himself
only, severally and not jointly) hereby represents, warrants and
undertakes as follows:
3.4.1. he is not aware of any material adverse change in the business
operations or financial condition of the Company which
occurred after the date of the Prospectus, save for any such
change, if any, reflected in the audited financial statements
of the Company as of December 31, 1997 ( a copy of which
statements is annexed hereto as Annexure D) or reported by the
Company to the Israeli Securities Authority, the Tel-Aviv
Stock Exchange and the Registrar of Companies;
3.4.2. he is not aware of any material action of proceeding in any
court or before any governmental authority which has been
instituted or threatened against the Company after December
31, 1997, save as reported (if reported) by the Company to the
Israeli Securities Authority, the Tel-Aviv Stock Exchange and
the Registrar of Companies;
3.4.3. to the best of his knowledge, the signing of the Agreement or
the consummation of the transactions contemplated hereby does
not constitute a default or cause for acceleration under any
material loan agreement, lease agreement or similar agreement
to which the Company is a party;
3.4.4. in the event that he becomes aware, after the date of
signature of this Agreement, of any fact which, had be been
aware of such fact as at the date of signature of this
Agreement, then clause 3.4.1 or clause 3.4.2 would have been
inaccurate, he shall promptly give notice of such fact to the
Buyer, provided, for the removal of doubt, that receipt of
such notice shall not entitle the Buyer to refuse to close
this Agreement (however, the above shall not be construed as
derogating from any remedy available to the Buyer under this
Agreement against either of E. Peleg or N. Peleg, as the case
may by, in the event of a breach by E. Peleg or N. Peleg of
the provisions of clause 3.4.1 or 3.4.2 above).
3.5. Mast hereby undertakes to E. Peleg and N. Peleg that on, and subject
to, the Closing, all options granted under the Option Agreement dated
January 15, 1996
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shall be accelerated and Mast shall transfer to the persons listed
opposite Mast's name in column 4 of Annexure B all the Sale Shares
being the subject of such options, all as contemplated in clause 6.2.1
below.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants to Sellers as follows:
4.1. the Buyer is a corporation duly organized, validly existing and in good
standing under the laws of Israel and has all requisite corporate power
and authority to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby;
4.2. the execution, delivery and performance by the Buyer of this Agreement
and the consummation by the Buyer of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on
the part of the Buyer. This Agreement has been duly and validly
executed and delivered by Buyer and constitutes the valid and binding
obligation of Buyer, enforceable in accordance with its terms;
4.3. subject to the fulfillment of the Conditions Precedent (as defined in
clause 7 below), no consent, approval or authorization of, exemption
by, or filing with, any governmental or regulatory authority is
required in connection with the execution, delivery and performance by
the Buyer of the Agreement or the consummation by the Buyer of the
transactions contemplated hereby;
4.4. the Buyer is aware, inter alia, that the Company is negotiating to sell
its investments in M.I.B.S. International Trade N.V.;
4.5. that Mr. Arie Wolfson is the owner and controller of the Buyer and
serves as the Chairman of the Board of Directors of Tefron Ltd. and as
its President and has been involved in the management of Tefron Ltd.
for some years and, accordingly, the Buyer hereby acknowledges and
agrees that nothing in this Agreement (including, without limitation,
clause 3 above) shall be construed as imposing on any of the Sellers
any obligation or liability whatsoever in relation to the business,
operations or condition of Tefron Ltd. or otherwise in connection with
Tefron Ltd.
5. DEPOSIT
5.1. On the date of signature of this Agreement and simultaneously with such
signature, the Buyer shall deposit with the Trust Company of the First
International Bank of Israel Trust Company Ltd. (hereinafter "FIBI
Trust") an amount of US $6,000,000 (six million United States Dollars)
(hereinafter "the Deposit Amount"): the Buyer and the Sellers
(represented for this purpose by the Main Sellers) shall sign the
instructions to FIBI Trust set out in Annexure E hereto ("the Trustee's
Instructions") and the Buyer shall procure that FIBI Trust shall
confirm receipt of the Deposit Amount and shall undertake to act as
trustee for each of the Sellers and for the Buyer in respect to thereof
in accordance
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with the instructions to FIBI Trust set out in the Trustee's
Instruction, by signing in the place indicated therefor on the
Trustee's Instructions.
5.2. In the event of payment by FIBI Trust to the Sellers following the
receipt by FIBI Trust of a notice signed by the Main Sellers to the
effect that as a result of a breach of clause 6 of this Agreement by
the Buyer, this Agreement has been cancelled (all as referred to in
paragraph 3.1 of the Trustee's Instructions), the amount of such
payment shall be deemed liquidated damages in respect of the breach by
the Buyer referred to in such notice, the parties agreeing that such
amount is a genuine pre-estimate of the damages which will be suffered
by each of the Sellers in the event of a breach of this Agreement by
the Buyer resulting in the Closing not taking place.
6. CLOSING
6.1. The Closing of the purchase of the Sale Shares shall take place at the
offices of the First International Bank of Israel Ltd. or Bank Poalei
Agudat Israel Ltd. (as designated by the Buyer to the Sellers not later
than 7 (seven) days prior to the Closing Date)(the bank designated as
aforesaid "the Bank") at 9 Ahad Ha'am Street, Tel Aviv, at 10:00 a.m.,
on the day falling 7 (seven) business days after the date on which the
last of the Conditions Precedent to be fulfilled is fulfilled (provided
that, in the event that payment will be made by the Buyer in NIS, then,
if the representative rate last published by the Bank of Israel prior
to the date determined for Closing in accordance with the aforegoing
("the Intended Date") was published earlier than the business day
before the Intended Date, then the Closing shall take place on the
first business day following the business day on which a representative
rate is next published by the Bank of Israel immediately after the
Intended Date) or at such other place or time as the Buyer and the Main
Sellers may agree to in writing ("the Closing Date").
6.2. Each of the Sellers and the Buyer, or their respective authorized
signatories or attorneys shall be present at the Closing. The Main
Sellers and the Buyer shall procure that representatives of FIBI Trust
are present at Closing, the Main Sellers shall procure that
representatives of the Registration Company, of BLL Trust and of the
Company (duly authorized to act on behalf of the Company to perform the
acts which the Company is to perform hereunder) are present at Closing
and the Buyer shall procure that representatives of the Bank shall be
present at Closing. The Main Sellers shall further give written
instructions to BLL Trust to carry out the acts to be performed by it
as provided below. At the Closing, the acts referred to in clauses
6.2.1. - 6.2.9. shall be performed in the sequence set out below. Each
of the parties hereto undertakes to perform those acts which it is
required to perform below and to procure, to the extent within its
power, that FIBI Trust, BLL Trust, the Bank, the Registration Company
and the Company perform the acts which each of them is required to
perform below. For the removal of doubt, Closing shall not be deemed to
have been performed and all acts referred to below (to the extent
performed) shall be cancelled and of no force and effect in the event
that any of the acts set out below is not performed at Closing (but
without
6
<PAGE>
derogating from the remedies available to any party against any other
party for the failure by such other party to perform any of its
obligations under this clause 6.2. below).
6.2.1. Mast shall, against the payment referred to hereunder,
transfer to each of the Sellers listed in column 4 of Annexure
B, that number of the Sale Shares to be transferred by Mast to
it (as per Annexure B), by way of delivery to each such Seller
of share certificates and share transfer deeds in favor of
such Seller duly executed by Mast or BLL Trust (as the case
may be) and /or instructions to the Registration Company to
hold such Sale Shares to the order of such Seller, as the case
may be, and, against such transfer, each of the aforegoing
Sellers shall pay Mast, by way of wire transfer to an account
designated, at least 2 (two) business days prior to Closing,
by Mast to Nachum Peleg, on behalf of such Sellers, in
writing, an amount equal to the NIS equivalent, in accordance
with the Determining Representative Rate, of US $0.63
(sixty-three United States cents) per share in respect of the
Sale Shares transferred to it in accordance with the
aforegoing, and, to the extent applicable, each such Seller
shall execute the share transfer deed relating to the Sale
Shares transferred to it aforesaid;
6.2.2. Topor shall deliver share certificates and share transfer
deeds duly executed by BLL Trust in respect of the number of
Sale Shares listed opposite his name in column 4 of Annexure B
to the Seller to whom Topor is to transfer such Sale Shares
pursuant to such column 4 and such transferee shall execute
such transfer deeds;
6.2.3. Topor shall procure that Chava Topor shall deliver share
certificates and share transfer deeds duly executed by BLL
Trust in respect of the number of Sale Shares listed opposite
her name in column 4 of Annexure B to the Seller to whom Chava
Topor is to transfer such Sale Shares pursuant to the said
column 4 and such transferee shall execute such transfer
deeds;
6.2.4. the Main Sellers shall procure the delivery to the Buyer of an
authenticated copy of minutes of a meeting of the Board of
Directors of the Company, at which a resolution was passed by
the meeting by the vote of at least 75% (seventy-five percent)
of the directors of the Company to appoint as new directors of
the Company, those persons designated by the Buyer to the Main
Sellers in writing at least 7 (seven) days before Closing
(subject to the limit on the number of directors of the
Company set out in its Articles of Association), their
appointments to become effective immediately after, and
subject to, the Closing;
6.2.5. E. Peleg, N. Peleg and Mast (each with respect to the
directors of the Company designated by it only) shall procure
the delivery to the Buyer of (i) resignation notices addressed
to the Company by each of the Company's directors, save for
Messrs. Uzi Tzur and Raphael Vacht
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<PAGE>
(directors from amongst the public), E. Peleg and N. Peleg;
(ii) a resignation notice addressed to the Company by E. Peleg
in respect of his office as Chairman of the Board of Directors
of the Company by N. Peleg in respect of his office as Chief
Executive Officers of the Company, all such resignations to
become effective immediately after, and subject to, the
Closing;
6.2.6. against and simultaneously with the transfers referred to in
clause 6.2.7. below: (i) FIBI Trust shall pay to the Buyer the
Deposit Amount, together with all interest accrued thereon in
the trust account, and (ii) the Buyer shall give to the Bank
irrevocable written instructions to transfer, and the Bank
shall transfer, from the Buyer's account to each of the
Sellers (to a bank account in Israel designated by such Seller
to the Buyer and the Bank in writing at least 2 (two) days
before the Closing), an amount equal to the Purchase Price
multiplied by the number of Sale Shares to be transferred by
such Seller to the Buyer on Closing (as set out in column 6 of
Annexure B);
6.2.7. each of the Sellers shall, in respect of all the Sale Shares
to be transferred by it to the Buyer (as set out in column 6
of Annexure B): (i) deliver or procure the delivery to a
representative of the Bank, acting on behalf of the Buyer, of
share certificates together with share transfer deeds in favor
of the Buyer and/or its order duly executed by the Seller or,
as the case may be, BLL Trust; and/or, as the case may be,
(ii) deliver to the Bank's representative a confirmation
signed by the Registration Company that following instructions
given to it by such Seller, the Registration Company shall
hold a specific number of Sale Shares in favor of the Buyer
and/or to its order;
6.2.8. the Company shall pay to The Limited, Inc. (to a bank account
designated at least 2 (two) days prior to Closing by it to the
Company in writing), the loan in the principal amount of US
$1,000,000 (one million United States Dollars) granted by The
Limited, Inc. under a loan agreement dated January 15, 1996,
together with all accrued interest thereon up to Closing;
6.2.9. N. Peleg shall procure that Nachum Peleg Ltd. and E. Peleg
shall procure that M.G.N. Peleg Ltd. shall execute consulting
agreements between each of them and the Company in the forms
annexed hereto as Annexures F and G respectively and the
Company shall execute such consulting agreements.
6.3. The Company shall register all transfers referred to in this clause 6
above and shall issue to each of the parties entitled thereto share
certificates in respect of those shares that are transferred to them
pursuant to the provisions of clause 6 above and shall, thereafter,
cancel all of the Sellers' respective share certificates in respect of
the Sale Shares.
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7. CONDITION PRECEDENT
7.1. This Agreement is conditional upon the fulfillment of all of the
conditions set out in this clause 7.1 below ("the Conditions
Precedent"). In the event that all of the Conditions Precedent have not
been fulfilled by April 30, 1998, or such other date (if any) as may be
agreed by the parties in writing, this Agreement shall terminate and be
null and void and no party shall have any claims against any other,
save to the extent that such claim arises out of a failure by a party
to act in accordance with clause 7.2 below.
7.1.1. receipt of the approval by the Controller of Restrictive Trade
Practices of the "merger of companies" (within the meaning of
such term in Section 1 of the Restrictive Trade Practices Law,
1958 ("the Law"), contemplated under this Agreement;
7.1.2. receipt of the approval by the Investment Centre established
under the Encouragement of Capital Investments Law, 1959, of
the change in ownership structure of the Company as
contemplated under this Agreement;
7.1.3. receipt of a written agreement by the Company (duly approved
by the audit committee, Board of Directors and Shareholders'
Meeting of the Company) to the prepayment of the loan as
contemplated in clause 6.2.8 above and to the execution of the
consulting agreements as contemplated in clause 6.2.9 above;
7.1.4. The Limited, Inc. shall have given to the Company its written
consent to prepayment of the loan referred to in clause 6.2.8
above upon Closing, all in accordance with the provisions of
clause 6.2.8 above;
7.1.5. the Company shall have duly amended the stock option plan for
employees adopted by it on June 16, 1996 (as described in the
Prospectus) such that: (i) in the event that any beneficiary
under the plan shall cease to be an employee of the Company in
circumstances in which he would be entitled to full severance
pay under the Severance Pay Law, 1963, then such cessation
shall not affect such beneficiary's rights to exercise all its
options under the plan; or such that (ii) all options under
such stock option plan would be realizable with immediate
effect (as if the conditions for the exercise of such options
had already been fulfilled).
7.2. As soon as practicable after the date of signature of this Agreement,
the Main Sellers will each use their reasonable best efforts (each to
the extent within their reasonable control) in order to complete or to
cause the Company to complete (as the case may be), as soon as
possible, the process for fulfilling the Conditions Precedent and the
Buyer (to the extent relevant to it) will cooperate with the Main
Sellers and use its reasonable best efforts with regard to the process
for fulfilling the Conditions Precedent as aforesaid. Nothing in this
clause 7.2 shall be
9
<PAGE>
construed as imposing on any party an obligation actually to procure
fulfillment of any of Conditions Precedent, as distinct from an
obligation to exercise its reasonable best efforts to do so.
8. INDEMNIFICATION FOR BREACH OF WARRANTIES
8.1. With effect from the Closing, subject to the provisions of clauses
8.2., 8.3. and 8.4. below, each of the Sellers shall (with respect to
such Seller's warranties only), indemnify and hold harmless each of the
Sellers, from and against any losses or damages (including, without
limitation, reasonable legal fees), arising out of or resulting from a
material inaccuracy of any representation or warranty given by such
Seller or Buyer (as the case may be) under this Agreement.
8.2. Not withstanding anything in this Agreement to the contrary, none of
the Sellers shall be liable for any claims in respect of a breach of
any warranty or representation unless:
8.2.1. the warranty or representation in respect of which the claim
is made is one given by such Seller;
8.2.2. (save with respect to the warranties given under clauses 3.1.1
and 3.1.2 above), written particulars of the matters in
respect of which such claim is made, specifying in detail the
basis of such claim, the facts pertaining thereto or arising
therefrom, the amount, or an estimate of the amount of the
liability arising therefrom supported by documentary evidence,
shall have been given to such Seller within a period of 1
(one) year from the Closing Date; it being recorded, for the
removal of doubt, that upon the termination of such 1 (one)
year period, all the warranties and representations (if any)
given by such Seller (save for those referred to in clauses
3.1.1 and 3.1.2 above) shall expire and no longer be of any
force or effect;
8.2.3. the amount of such claim shall exceed US $250,000 (two hundred
and fifty thousand United States Dollars) and, if so, the
amount recoverable in respect of such claim shall be reduced
by the aforegoing amount of US $250,000 (two hundred and fifty
thousand United States Dollars).
8.3. The maximum liability of any Seller in respect of the warranties and
representations given by such Seller shall not exceed the amount
received by such Seller from the Buyer in consideration for such
Seller's Sale Shares pursuant to this Agreement.
8.4. Without derogating from the provisions of clause 8.3 above (and as an
additional limit) the maximum liability of each of E. Peleg or N. Peleg
in respect of a material inaccuracy of any representation or warranty
given by such Seller to the Buyer pursuant to clauses 3.4.1, 3.4.2 or
3.4.3 above, shall not exceed that percentage of the losses or damages
(including, without limitation, reasonable legal fees) of the Buyer
arising out of or in respect of such material inaccuracy
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<PAGE>
equal to the percentage which the Sale Shares set out opposite such
Seller's name in column 6 of Annexure B constitute of the aggregate
number of issued shares of the Company as at the date of the signature
of this Agreement.
9. INSURANCE AND INDEMNITY OF DIRECTORS
9.1. The Buyer undertakes to procure that the Company shall continue to
maintain in respect of each of the directors of the Company as at the
date of signature of this Agreement (save for the directors from
amongst the public) directors'/officers' liability insurance for a
period of at least 7 (seven) years from the date of resignation of such
director form the Board of Directors of the Company, such insurance to
be on the same terms and conditions and in the same amounts of cover as
currently applicable, subject to customary increases in the amounts of
such cover or improvements in such terms and conditions.
9.2. In the event that any such resigning directors shall suffer any loss or
damage (including reasonable attorneys' fees) by reason of any claim in
relation to the period prior to the date of resignation by such
director from the Board of Directors of the Company, in respect of
which the Company would under the Ordinance (subject to the necessary
approvals by the Company) have been entitled to indemnify such
director, then to the extent that such resigning director does not
receive from the insurance referred to in 9.1 above the full amount of
such loss or damage (including reasonable attorneys' fees), the Buyer
shall procure that the Company shall indemnify such resigning director
against such loss or damage (including reasonable attorneys' fees) not
covered or not fully-covered by the insurance policy referred to in 9.1
above or. if the Buyer is unable to procure that the Company indemnify
such resigning director, the Buyer shall itself indemnify such
resigning director against any such loss or damage (including
reasonable attorneys' fees) not so covered.
10. CERTAIN PUT OPTIONS
10.1. The Buyer hereby grants to each of those employees of the Company
referred to in the Prospectus as having options to acquire shares of
the Company under the employee stock option plan referred to in the
Prospectus ("the Employee Stock Option Plan"), the following put
options in relation to all shares acquired by such employee upon
realization of his still unrealized options under the Employee Stock
Option Plan (which options constitute 2/3 (two-thirds) of the aggregate
number of options originally granted to such employee under the
Employee Stock Option Plan (the maximum number of shares which may be
acquired by such employee on exercise of all such unrealized options
hereinafter "the Maximum Number")). Such employee shall with respect to
any shares of the Company acquired by him (whether held by such
employee or by a trustee on his behalf) after July 15, 1998 (or before
July 15, 1998, provided that such employee is not entitled in respect
of such shares to any dividend declared by the Company prior to July
15, 1998) as a result of exercise of options under the Employee Stock
Option Plan, be entitled:
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10.1.1. by the giving to the Buyer of notice to such effect at any
time during the period August 1, 1998-September 30, 1998, to
require the Buyer to purchase such number of such shares not
exceeding 50% (fifty percent) of the Maximum Number, free and
clear of all liens, security interests, adverse third party
claims or encumbrances of any nature, at a price equal to the
Purchase Price per share, less any amount of dividends (net of
taxes paid by such employee on such dividends) (such amount of
dividends, net of taxes as aforesaid, to be expressed in US
Dollars in accordance with the representative rate of exchange
of the US Dollar and the NIS last published by the Bank of
Israel prior to the date of actual payment of such dividends)
received by such employee (or for his account) in respect of
such shares;
10.1.2. by the giving to the Buyer of notice to such effect at any
time during the period commencing 18 (eighteen) months after
the Closing Date and ending 20 (twenty) months after the
Closing Date, to require the Buyer to purchase such number of
such shares not exceeding the Maximum Number of shares less
the number of shares, if any, purchased by the Buyer pursuant
to clause 10.1.1 above, such shares to be free and clear of
all liens, security interests, adverse third party claims or
encumbrances of any nature, at a price equal to the Purchase
Price per share, less any amount of dividends (net of taxes
paid by such employee on such dividends) (such amount of
dividends, net of taxes as aforesaid, to be expressed in US
Dollars in accordance with the representative rate of exchange
of the US Dollar and the NIS last published by the Bank of
Israel prior to the date of actual payment of such dividends)
received by such employee (or for his account) in respect of
such shares.
10.2. The provisions of clause 10.1 above shall constitute a contract for the
benefit of those third parties referred to in clause 10.1.
10.3. For the purpose of clauses 10.1.1 and 10.1.2 only, "the Purchase Price"
shall mean the NIS equivalent, at the representative rate of exchange
of the US Dollar last published by the Bank of Israel immediately prior
to the completion of the relevant purchase under this clause 10, of US
$3.7949 (three United States Dollars and seventy-nine cents and
forty-nine hundredths of a cent).
11. MISCELLANEOUS
11.1. Entire Agreement
This Agreement constitutes the sole understanding of the parties with
respect to the subject matter hereof. No amendment, modification or
alteration of the terms or provisions of this Agreement shall be
binding unless the same shall be in writing and duly executed by the
parties hereto.
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11.2. Counterparts
This Agreement may be executed in one or more counterparts, each of
which shall, for all purposes, be deemed to be an original and all of
which shall constitute the same instrument.
11.3. Headings
The headings of the clauses of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this
Agreement or to affect the interpretation hereof.
11.4. Preamble and Annexures
The preamble to this Agreement and the Annexures attached thereto
constitute an integral part of this Agreement.
11.5. Expenses
Each party shall pay all costs and expenses incurred by it or on its
behalf in connection with this Agreement and the transactions
contemplated hereby including, Inter alia, fees and expenses of its own
counsel, financial consultants and accountants.
Stamp duty if demanded in relation to this Agreement and/or to the
transactions contemplated hereby shall be borne equally by the Sellers
(in proportion to their respective holdings of the Sale Shares to be
transferred on Closing (as to 50(degree)/a (fifty percent)) and the
Buyer (as to 50% (fifty percent))).
11.6. Taxes
Each Seller shall be responsible for the payment of capital gains tax
or income tax if and to the extent due from him as a result of the sale
of Sale Shares hereunder.
11.7. Notices
Any notice, request, instruction or other document to be given
hereunder by any party hereto to any other party hereto shall be in
writing and delivered personally or sent by registered or certified
mail, postage prepaid, with a copy by fax (if a fax number is indicated
below).
11.7.1. to the Buyer:
Arwol Holdings Ltd.: 30 Ahad Ha'am Street
Tel-Aviv
Israel
Attention: Adv. P. Volovelsky
Facsimile: 972 (3) 560 4064
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to the Sellers:
\
E. Peleg: 35 Basel Street
Tel-Aviv
Israel
with a copy to: Adv. Ruth Oren or Adv. Anthony Bacon
S. Horowitz & Co.
31 Ahad Ha'am Street
Tel-Aviv
Israel
Facsimile: 972 (3) 560 1143
N. Peleg: 14 Mishmar Hagvul Street
Tel-Aviv
Israel
Facsimile: 972 (3) 641 3903
with a copy to: Adv. Ruth Oren or
Adv. Anthony Bloch
S. Horowitz & co.
31 Ahad Ha'am Street
Tel-Aviv
Israel
Facsimile: 972 (3) 560 1143
Mast: Samuel Fried, Esq.
General Counsel
The Limited, Inc.
Three Limited Parkway
Columbus, OH 43230
U.S.A.
Facsimile: 001 (614) 415 7188
with a copy to: Avishai Schachar, Esq. or
David L. Caplan, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, N.Y. 10017
U.S.A.
Facsimile: 001 (212) 450 4800
Topor: 650 Madison Avenue
New York, New York 10022
U.S.A.
Facsimile: 001 (212) 371 7171
14
<PAGE>
with a copy to:
-------------------------------
-------------------------------
Facsimile:
---------------------
Z. Ben-Tovim: 28 Zahal Street
Neve Amal
Herzliya
Israel
Facsimile: 972 (9) (________)
with a copy to: S. Topor
650 Madison Avenue
New York, New York 10022
U.S.A.
Facsimile: 001 (212) 371-7171
R. Wolkowitz: 6 Chen Street
Petach Tikva
Israel
Facsimile: 972 (3) (________
with a copy to: S. Topor
650 Madison Avenue
New York, New York 10022
U.S.A.
Facsimile: 001 (212) 371 7171
The Topor Family
Foundation: 650 Madison Avenue
New York, New York 10022
U.S.A.
Facsimile: 001 (212) 371 7171
Steinhardt: 650 Madison Avenue
New York, New York 10022
U.S.A.
Facsimile: 001 (212) 371 7171
with a copy to:
-------------------------------
-------------------------------
Facsimile:
---------------------
P. Zeevi: 8 Shchunat HaHaruvim
Kfar Tavor
15
<PAGE>
Israel
Facsimile: 972 (-) (________)
A. Rotlevi: 21 Habarkan
Rishon Le Zion
Israel
Facsimile: 972 (3) (________)
with a copy to:
-------------------------------
-------------------------------
Facsimile:
---------------------
T. Peleg: 14 Mishmar Hagvul Street
Tel-Aviv
Israel
Facsimile: 972 (3) 641 3903
with a copy to: Adv. Ruth Oren or
Adv. Anthony Bloch
S. Horowitz & Co.
31 Ahad Ha'am Street
Tel-Aviv
Israel
Facsimile: 972 (3) 560 1143
S. Nir: 26 Barak Street
Tel-Aviv
Israel
Facsimile: 972 (3) (________)
with a copy to:
-------------------------------
-------------------------------
Facsimile:
---------------------
Nir Peleg: 9 Kashani Street
Tel-Aviv
Israel
Facsimile: [_______________]
with a copy to: Adv. Ruth Oren or
Adv. Anthony Bloch
S. Horowitz & Co.
31 Ahad Ha'am Street
Tel-Aviv
Israel
Facsimile: 972 (3) 560 1143
16
<PAGE>
P. Peleg: 5 Romanili Street
Tel-Aviv
Israel
Facsimile: 972 (3) (________)
with a copy to:
-------------------------------
-------------------------------
Facsimile:
---------------------
11.8. Further Assurances
From and after the Closing Date, each party, at the request of another
party, will take all such action and deliver all such documents as
shall be reasonably necessary or appropriate to perform the
transactions contemplated by this Agreement.
11.9. Governing Law
The validity, performance, interpretation and enforcement of this
Agreement and any agreement entered into pursuant hereto, will be
governed by the laws of the State of Israel and the competent courts of
Tel-Aviv shall have jurisdiction in all matters arising from this
Agreement.
11.10. Public Announcement
The Buyer and the Main Sellers (represented by N. Peleg) shall consult
with one another before issuing any press releases or otherwise making
any public statements with respect to this Agreement and the
transactions contemplated hereby and shall not issue any such press
releases or make any public statement prior to such consultation,
except to the extent required by law.
17
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed on its behalf as of the date first above written.
for ARWOL HOLDINGS LTD.
----------------------------------
ELIEZER PELEG
By:
-----------------------------------
Title:
-------------------------------- ----------------------------------
NACHUM PELEG
for MAST INDUSTRIES (DELAWARE) INC.
By:
-----------------------------------
Title:
--------------------------------
- -------------------------------------- -----------------------------------
SHIMON TOPOR ZIPORAH BEN-TOVIN
for THE TOPOR FAMILY FOUNDATION
-----------------------------------
MICHAEL STEINHARDT
By:
-----------------------------------
Title:
-------------------------------- -----------------------------------
RIVKA WOLKOWITZ
- -------------------------------------- -----------------------------------
PALMACH ZEEVI ARIE ROTLEVI
- -------------------------------------- -----------------------------------
SHMUEL NIR TSAFI PELEG
- -------------------------------------- -----------------------------------
NIR PELEG PNINA PELEG
18
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed on its behalf as of the date first above written.
for ARWOL HOLDINGS LTD.
-----------------------------------
ELIEZER PELEG
By:
-----------------------------------
Title:
-------------------------------- -----------------------------------
NACHUM PELEG
for MAST INDUSTRIES (DELAWARE) INC.
By:
-----------------------------------
Title:
--------------------------------
- -------------------------------------- -----------------------------------
SHIMON TOPOR ZIPORAH BEN-TOVIN
for THE TOPOR FAMILY FOUNDATION
-----------------------------------
MICHAEL STEINHARDT
By:
-----------------------------------
Title:
-------------------------------- -----------------------------------
RIVKA WOLKOWITZ
- -------------------------------------- -----------------------------------
PALMACH ZEEVI ARIE ROTLEVI
- -------------------------------------- -----------------------------------
SHMUEL NIR TSAFI PELEG
- -------------------------------------- -----------------------------------
NIR PELEG PNINA PELEG
19
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed on its behalf as of the date first above written.
for ARWOL HOLDINGS LTD.
-----------------------------------
ELIEZER PELEG
By:
-----------------------------------
Title:
-------------------------------- -----------------------------------
NACHUM PELEG
for MAST INDUSTRIES (DELAWARE) INC.
By:
-----------------------------------
Title:
--------------------------------
- -------------------------------------- -----------------------------------
SHIMON TOPOR ZIPORAH BEN-TOVIN
for THE TOPOR FAMILY FOUNDATION
-----------------------------------
MICHAEL STEINHARDT
By:
-----------------------------------
Title:
-------------------------------- -----------------------------------
RIVKA WOLKOWITZ
- -------------------------------------- -----------------------------------
PALMACH ZEEVI ARIE ROTLEVI
- -------------------------------------- -----------------------------------
SHMUEL NIR TSAFI PELEG
- -------------------------------------- -----------------------------------
NIR PELEG PNINA PELEG
20
<PAGE>
Exhibit C
CONTRACT
Made and entered into at Tel Aviv on this 28th day of December 1999
<TABLE>
<S> <C>
Between: Arwol Achzakot Ltd.
Private Company Registration No. 51-260178-2
Care of Ravilan, Volovelsky, Dinstein and Co., Law Offices
76 Rothschild Boulevard, Tel Aviv
(hereinafter: "the Seller")
Of the One Part;
And: Mr. Avi Ruimi, holder of Identity Document No. 54341631
and/or a Corporation under his control
of 46 Rothschild Boulevard, Tel Aviv
(hereinafter: "the Purchaser")
Of the Other Part;
</TABLE>
Whereas The Seller declares that it is the owner of 12,183,671 shares
having a par value of NIS 1.- each in the company Macfall
Industries Ltd. Public Company Registration No. 52-003752-4
(hereinafter: "Macfall" or "the Company"), which constitutes
78.3% of the issued and paid up share capital of the Company;
And Whereas The Seller is desirous of selling to the Purchaser 3,987,700
shares having a par value of NIS 1.- each in the Company
(hereinafter: "the Shares Sold");
And Whereas The Shares Sold as well as the rights of the Seller in and to
the Shares Sold are clean, free and unencumbered by any
pledge, mortgage, attachment, debt, obligation, right of
refusal or any other right of any third party (hereinafter:
"clean, free and unencumbered"), save for a mortgage in favor
of Bank Hapoalim Ltd. (hereinafter: "the Bank"), with respect
to which, on the date of the signature of this Contract, it
has given its consent to the release of the Shares Sold from
the mortgage in its favor;
And Whereas The Purchaser is desirous of purchasing the Shares Sold clean,
free and unencumbered, all of which as set forth hereunder in
this Contract;
And Whereas Simultaneously with the signature of this Contract and as a
condition thereof, the Seller and the Purchaser are entering
into contractual arrangements under a shareholders agreement
(hereinafter: "the Shareholders Agreement");
And Whereas The parties desire to regulate the legal relationships between
them as set out in this Contract and in the Shareholders
Agreement;
<PAGE>
Now therefore it is declared, stipulated and agreed between the parties
as follows:
1. Preamble and Interpretation
1.1 The preamble to this Contract and the Annexes hereto
constitute an integral part hereof. In the event of any
contradiction between the provisions of the Contract and the
provisions of any of the Annexes, the provisions laid down in
this Contract shall prevail.
1.2 Paragraph headings in this Contract are for the purposes of
convenience only and shall not serve in the interpretation of
the Contract and/or of any of the stipulations thereof
whatsoever.
1.3 In this Contract the following terms shall have the meaning
set out alongside them as follows:
"The Stock Exchange" The Tel Aviv Stock Exchange Ltd.
"The First Payment Date" 29th December 1999
"The Second Payment Date" 31st January 2000
"The Third Payment Date" 15th February 2000
"Dollar" An amount in new Israeli shekels
in accordance with the last
known representative rate of
exchange of the United States
dollar as at the date of any
payment or calculation.
2. Declarations and Undertakings by the Seller
The Seller hereby undertakes and declares vis a vis the Purchaser as
follows:
2.1 That it is the sole owner of the Shares Sold and that save for
the mortgage in favor of Bank Hapoalim Ltd. (which as at the
date of signature of this Contract has given its consent to
the release of the mortgage from the Shares Sold), that all
its rights in and to the Shares Sold are clean, free and
unencumbered, that the Shares Sold are fully paid up, and
correct as at the date of signature of this Contract, no
undertakings have been given to any third party whatsoever to
transfer the Shares Sold, or any part of them, or to refrain
from the transfer thereof, and that no option or any other
right for the acquisition of the Shares Sold have been granted
nor given to any third party whatsoever, and that they shall
also so remain on the First Payment Date, as well as on the
Second Payment Date and on the Third Payment Date, as the case
may be.
<PAGE>
2.2 All the Shares Sold are registered in the register of
shareholders of the Company and with the Registrar of
Companies in the name of the Seller in the condition thereof
as set forth in paragraph 2.1 above.
2.3 That there is nothing to prohibit, prevent or otherwise
restrict the sale of the Shares Sold to the Purchaser, the
transfer thereof into its ownership and the registration
thereof in its name in the register of shareholders of the
Company.
2.4 That all the Shares Sold are negotiable, are not "blocked"
under instructions or directives of the Stock Exchange and/or
the Securities Authority and there is no restriction with
respect to the transfer thereof to the Purchaser.
2.5 That the registered share capital of Macfall, correct as at
the date of signature of this Contract, is NIS 50,000,000
divided into 50,000,000 ordinary shares having a par value of
NIS 1.- each.
2.6 That to the best of its knowledge, the issued and fully paid
up share capital of Macfall as at the date of signature of
this Contract is NIS 15,560,588 divided into 15,560,588
ordinary shares having a par value of NIS 1.- each and held by
shareholders as set forth in Annex A to this Contract.
2.7 That to the best of its knowledge, the composition of the
additional securities which Macfall has issued is as set forth
in Annex B to this Contract, and that Macfall does not have
further securities save for those as set forth in Annex B. The
Seller does not hold any of the securities detailed in Annex
B.
2.8 That the unaudited Financial Reports of Macfall as at 30th
September 1999 properly reflect, in accordance with accepted
principles of accounting, the state of its assets, its
liabilities, its capital, its business and the results of its
operations up to that date; and that since the publication of
the foregoing Financial Reports no material changes have taken
place to the detriment of the state of the assets,
liabilities, capital, business and the results of the
operations of Macfall.
2.9 That the Opinion of the valuator which was undertaken by First
Boston Credit Suisse in November 1999 in connection with the
value of the company "Alba Waldenstan" (hereinafter: "Alba"),
pointed to the value of Alba as at the effective date as being
higher than the price which was paid by Tafron for the
purchase there. The board of directors of Tafron relied upon
that Opinion in its decision to acquire Alba.
2.10 The founding documents of the Company (the Memorandum and
Articles of Association) which are attached as Annexes C and D
to this Contract, are valid and the founding documents are
revised to the date of signature of this Contract, and no
resolution for the alteration or amendment thereof has been
adopted.
<PAGE>
2.11 That save for the matters set out in Annex B to this Contract,
correct as at the date of signature of this Contract, no
person (including, but not only, the Seller) has any right to
the allotment of any share capital in Macfall and/or any right
of first refusal in connection with any aforesaid allotment,
and that there is also no obligation of any kind and nature
whatsoever to increase the share capital of Macfall and/or to
allot any securities therefrom and/or to issue capital notes
to any person (included, but not only, to the Seller) and/or
any obligation to refrain from any of the foregoing acts.
For this purpose "share capital" - means securities and rights
of any kind whatsoever, including but not only, ordinary
shares (and all the various classes thereof), management
shares, bonus shares, options, convertible debentures and any
right whatsoever to the receipt thereof and/or to the
acquisition thereof and/or to the allocation of any one of
them.
2.12 That insofar as it is aware, no resolution with respect to the
distribution of a dividend has been adopted by Macfall after
30th September 1999, and insofar as it is aware there is no
intention to distribute any dividend in which the Purchaser
would not be included.
2.13 That to the best of its knowledge the signature of this
Contract and the implementation of the provisions thereof are
not contrary to or inconsistent with any contract, obligation
or restriction to which it is a party, and there is nothing
whatsoever legally, business-wise or otherwise to prevent the
implementation thereof.
2.14 That it is aware that its declarations as set out in this
Contract constitute the basis for the Purchaser's entering
into contractual arrangements under this Contract, and it is
not aware of any material detail in relation to Macfall and/or
to the companies affiliated to it which is not capable of
disclosure to the public.
In this context, the Purchaser declares that it has been
brought to its knowledge that negotiations are being conducted
for the merger of the company New Horizon (a subsidiary of
Macfall) with another company and also that the continued
operations of New Horizon are dependant upon the success of
these negotiations. The Purchaser declares that it shall not
raise any claim against the Seller in this connection
irrespective of howsoever the board of directors of the
Company shall resolve in the matter.
3. The First Stage of the Sale Transaction
3.1 The Seller undertakes to sell and to transfer to the Purchaser
under the first stage half of the Shares Sold, that is to say,
1,993,260 shares in the Company, and the Purchaser hereby
undertakes to purchase and to accept possession from the
Seller of such shares (hereinafter: "the First Half of the
Shares Sold").
<PAGE>
3.2 In consideration for the First Half of the Shares Sold the
Purchaser undertakes to pay to the Seller the sum of $
6,983,260, which constitutes an amount of $ 3.5024 for each
ordinary share in Macfall, multiplied by 1,993,850 shares.
3.3 The consideration set out in paragraph 3.2 above shall be paid
in 2 installments:
3.3.1 On the First Payment Date the sum of $ 1,750,000.
3.3.2 On the Second Payment Date the sum of $ 5,233,260.
3.4 Upon effecting the first payment the Purchaser shall be
entitled to call upon the Seller to recommend to the board of
directors of the Company that an additional director, whose
identity shall be determined by the Purchaser, be attached to
the board of directors. Such additional director shall resign
from his office if the second payment is not made in
accordance with the provisions of this Contract; a letter of
resignation shall be deposited, as a condition of appointment,
with the Seller's attorney, Advocate Pinhas Volovelsky.
3.5 The parties shall appoint Advocate Pinhas Volovelsky
(hereinafter: "the Trustee") as Trustee for the
implementation of both the stages of the sale transaction in
accordance with this Contract. On the First Payment Date the
Seller shall deposit with the Trustee a deed of transfer of
the shares with respect to 454,227 shares, signed by the
Seller together with the appropriate share certificate, which
shall be transferred to the Purchaser upon the First Payment
being effected, to the order of the Seller's account no. 51661
at Branch no. 655 (the Bnei Brak branch) of Bank Hapoalim Ltd.
(hereinafter: "the Bank"). On the Second Payment Date the
Seller shall deposit with the Trustee a deed of transfer of
the shares with respect to 1,539,623 shares, signed by the
Seller, which shall be transferred to the Purchaser against
the Second Payment being effected into the aforesaid account,
together with the appropriate share certificate which shall be
obtained from the Bank against such Second Payment being
effected.
3.6 For the sake of clarity it is recorded that the first stage of
the sale transaction, as set out in paragraph 3 above, is
final and absolute.
4. The Second Stage of the Sale Transaction
4.1 Under the second stage, the Purchaser shall purchase from the
Seller, on the Third Payment Date, the other half of the
Shares Sold, that is to say, 1,993,850 shares in the Company
(hereinafter: "the Balance of the Shares Sold"), at a price
of $ 3.5024 per share and in the aggregate $ 6,983,260
(hereinafter: "the Balance of the Consideration for the
Shares Sold"), this being subject to the carrying out and
completion of an appropriate examination of the Company, as
set forth in paragraph 4.4 hereunder, to the satisfaction of
the Purchaser.
<PAGE>
4.2 Subject to the completion of the appropriate examination as
aforesaid, the transfer of the Balance of the Shares Sold and
payment of the Balance of the Shares Sold shall be effected on
the Third Payment Date, in accordance with the procedure set
forth in paragraph 3.5 above, mutatis mutandis.
4.3 It is hereby agreed that for the purpose of securing the
implementation of the second stage of the sale transaction and
the completion thereof, the Seller shall, on the First Payment
Date, deposit with the Trustee a deed of transfer of the
shares signed by it with respect to the Balance of the Shares
being Transferred. The Trustee shall act in accordance with
the following provisions:
4.3.1 The Trustee shall hand over the deed of transfer of
the shares and the share certificates with respect
thereto (the certificates shall be obtained from the
Bank against the third payment being effected) to the
Purchaser against the deposit of the Balance of the
Consideration for the Shares Sold into the Seller's
account at the Bank.
4.3.2 In the event of the Balance of the Shares Sold not
being handed over to the Purchaser on the Third
Payment Date, the Trustee shall return the deed of
transfer of the Shares to the Seller or to his order,
unless the Trustee shall have received written notice
from the Purchaser that it desires to continue with
the appropriate examination in the circumstances set
out in paragraph 4.5 hereunder, and in such an event,
the Trustee shall hold the deed of transfer of the
shares which are in trust for a further 15 days.
4.3.3 The Trustee shall be entitled to refer to any
competent judicial authority on any question, if any,
which may arise within the context of the trust in
pursuance of this Contract.
4.3.4 The parties hereby release and relieve the Trustee
from any liability for any damage of any kind
whatsoever, if any, which may be caused to it as a
result of and/or in consequence of any act and/or
omission of the Trustee provided that he had acted in
good faith in accordance with the provisions of this
Contract.
4.3.5 The signature by the parties of this Contract
constitutes an irrevocable instruction to the Trustee
to act in accordance with the provisions of this
paragraph 4.3 above.
4.4 It is hereby agreed that the Seller shall do whatsoever shall
be required in order to enable the Purchaser to carry out such
an appropriate comprehensive and detailed examination of
Macfall as is the accepted practice in similar instances on
the basis of the declarations of the Seller contained in
paragraph 2 of the Contract (hereinafter: "the Appropriate
Examination"). The Appropriate Examination shall be carried
out by the Purchaser itself and/or though its employees and/or
its representatives and/or its professional consultants, over
a period which shall be between the First Payment Date and 6th
February 2000.
<PAGE>
4.4.1 The Appropriate Examination shall be carried out
subject to the signature by all the appropriate
entities of a letter of confidentiality in the form
attached hereto as Annex E to this Contract.
4.4.2 Should, at the conclusion of the Appropriate
Examination, it become evident to the Purchaser that
the declarations of the Seller as set forth in
paragraph 2 above are incorrect and incomplete (save
in relation to details which are not of an essential
nature), the Purchaser shall be entitled not to
complete the second stage of the sale transaction, and
not to purchase the Balance of the Shares Sold on the
Third Payment Date.
4.4.3 A "detail of an essential nature" for such purpose
means:
(a) In relation to the declarations of the Seller
with respect to the quantity of shares of the
Company and the nature of its rights therein
(the declarations which are set out in sub
paragraphs 2.1 to 2.7 above as well as in sub
paragraphs 2.10 and 2.11 above) any detail
whatsoever.
(b) In relation to the declarations of the Seller
with respect to the business results and
operations of the Company (the declarations
which are set out in sub paragraphs 2.8 to
2.11 above) - details which would cause,
cumulatively, a divergence of in excess of $
1 M in the equity of the Company as at 30th
September 1999 or a reduction in the worth of
Alba to below the price of the acquisition
thereof by Tafron.
4.4.4 It is hereby agreed that in the event of the Seller
failing to furnish any details, explanations, data or
documents which are reasonably required for the
purpose of the Appropriate Examination (hereinafter:
"the Deficiencies") notwithstanding that the Purchaser
(or the persons scrutinizing on its behalf) shall have
requested this for the purpose of an Appropriate
Examination during the course of the first 15 days
which had been prescribed for the carrying out
thereof, the Third Payment Date shall be postponed for
15 days and the acquisition of the Shares Sold shall
be effected only should the Seller make good the
Deficiencies to the satisfaction of the Purchaser
during those further 15 days.
5. Shareholders Agreement
At the time of signature of this Contract the parties shall enter into
a Shareholders Agreement in the form attached hereto as Annex F to this
Contract.
6. Taxes and Costs
6.1 Each of the parties to this Contract shall bear such taxes as
are imposed on it according to law with respect to the
transaction which is the subject matter of this Contract.
<PAGE>
6.2 Stamp duty with respect to this Contract and/or in connection
with the transfer of the Shares Sold, if applicable, shall be
due by the Seller and Purchaser in equal shares (50% shall be
paid by the Seller and 50% shall be paid by the Purchaser).
6.3 Each party shall bear the fees of its attorney.
7. Miscellaneous
7.1 The transaction which is the subject matter of this Contract
is subject to and conditional upon the approval of the
Director of Business Restrictions. The parties shall jointly
apply to the Director of Business Restrictions in order to
obtain his approval as aforesaid and shall furnish him with
particulars and documents to the extent required for such
purpose.
7.2 The parties acknowledge and declare that the amounts specified
in paragraphs 3 and 4 above on the one hand and the Shares
Sold on the other, constitute a final, fair, fitting, and
definitive consideration for the fulfillment of all the
obligations which they have assumed by virtue of the
provisions of this Contract, and no claim on the part of one
of them to the effect that the other party is obliged to
increase and to pay or to give to it, either directly or
indirectly, any additional consideration in connection with
this Contract and/or in connection with the fulfillment of any
of its obligations in pursuance thereof, shall be admissible.
7.3 The parties undertake that subject to the provisions of any
law, they shall keep confidential the matter of the
transaction between them and the details thereof. Accordingly
and inter alia, any publication concerning the transaction and
the details thereof, whether by operation of law or
voluntarily by the parties, shall be undertaken in concert and
with consensus between the parties as to the timing thereof,
the content thereof and the place of publication thereof.
7.4 This Contract and the Annexes thereto consolidate and express
the set of relationships, the rights and the obligations
between the parties in an exclusive and absolute manner. Upon
signature of this Contract any agreement, contract,
declaration, assurances and undertakings which had been made
between the parties and/or between some person acting on their
behalf (whether prepared in writing or made verbally) shall be
null and void.
7.5 No variation and/or amendment and/or addition and/or waiver
and/or departure from the provisions of this Contract shall be
valid unless effected in writing and signed by the parties to
this Contract.
<PAGE>
7.6 Any agreement on behalf of one of the parties to this Contract
to depart from the conditions of this Contract and/or to waive
in one particular instance shall not constitute a precedent
and no inference with respect to any other instance is to be
drawn therefrom. The non use by either party of any right
conferred upon it in pursuance of this Contract in any one
particular instance is not to be deemed to be a waiver of that
right in any identical, similar or dissimilar instance, and no
inference may be drawn therefrom as to any waiver whatsoever
of any right whatsoever by that party.
7.7 The parties undertake to cooperate with each other and inter
alia in this context, to do whatever shall be required for the
purpose of the speedy and efficient execution of this
Contract, including the signature of any document which may be
required for such purpose.
7.8 Nothing contained in any of the provisions of this Contract
shall be construed as constituting a contract for the benefit
of any third party whatsoever.
7.9 The addresses of the parties for the purposes of this Contract
are as specified in the heading of this Contract and any
notice to be sent by either party to the other by registered
post in accordance with the above addresses, in the absence of
written notice from either party to the other as to a change
in its address, shall be deemed to have reached its
destination to have come to the knowledge of the addressee
party within 72 hours from the time of its handing for
dispatch by post.
7.10 Notices delivered personally shall be deemed to have been
delivered and to have been brought to the knowledge of the
addressee party at the time of actual delivery. Notices may
also be delivered by means of a telegram in accordance with
the addresses of the parties set out above and the date of
delivery thereof shall be deemed in such an event to be on the
first business day after the date upon which they were so
dispatched.
In witness whereof the parties have affixed their signatures:
"signature" - Arwol Achzakot Ltd. "signature"
- ---------------------------------- ----------------------------------
The Seller The Purchaser
Annexes:
Annex A - Paragraph 2.6 Details of Shareholders in the Company
Annex B - Paragraph 2.7 Details of Additional Securities issued by the
Company and which are held by the Seller
Annex C - Paragraph 2.10 Memorandum of Association of the Company
<PAGE>
Annex D - Paragraph 2.10 Articles of Association of the Company
Annex E - Paragraph 4.4.1 Letter of Confidentiality
Annex F - Paragraph 5 Shareholders Agreement
<PAGE>
ANNEX A
TABLE OF SHAREHOLDERS AND RATES OF THEIR HOLDING
- --------------------------------------------------------------------------------
Name of Shareholder No. of Shares Ordinary Shares of a par
value of NIS 1.-
- --------------------------------------------------------------------------------
Silberdik Gadi 1
- --------------------------------------------------------------------------------
Peleg Ran 1
- --------------------------------------------------------------------------------
Stein Itzhak 1
- --------------------------------------------------------------------------------
Cantalevi Arieh 1
- --------------------------------------------------------------------------------
Kramer Moshe 1
- --------------------------------------------------------------------------------
Bar Lev Yehuda 7
- --------------------------------------------------------------------------------
Bank Mizrachi Registrations Company Ltd. 3,375,905
- --------------------------------------------------------------------------------
Arwol Achzakot Ltd. 12,183,671
- --------------------------------------------------------------------------------
Total 15,560,588
- --------------------------------------------------------------------------------
<PAGE>
ANNEX B
LIST OF SECURITIES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Securities Par Value Basis of Rate of Payment at time of Earliest Last date of
in Turnover Linkage Interest conversion in Payment Date Payment /
nominal new Israeli Lapse
shekels
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ordinary 15,560,588
shares of
NIS 1.-
- ------------------------------------------------------------------------------------------------------------------
Debentures 6,559,113 Index 2.00 15 5th November 5th November
Series A 2000 2000
- ------------------------------------------------------------------------------------------------------------------
Debentures 3,557,011 Dollar 3.00 15 5th May 2000 5th May 2000
Series B
- ------------------------------------------------------------------------------------------------------------------
Debentures 64,679,148 Index 1.45 18 20th August 20th August
Series C 2001 2001
- ------------------------------------------------------------------------------------------------------------------
Options 5,350,000 14
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Exhibit D
Shareholders Agreement
Entered into and signed in Tel-Aviv on the 28th of December, 1999
Between: Arwol Holdings Ltd.
Priv.C. 51-260178-2
c/o Ravilan, Wolowelsky, Dienstein & Co., advocates
76, Shderot Rothchild, Tel-Aviv
(hereinafter - "Owner "A" or "Wolfson")
of the first part;
And: Mr. Avi Ruimi
and/or a corporation under his control
of 46, Shderot Rothchild, Tel-Aviv:
(hereinafter - "Owner "B" or "Ruimi")
of the second part;
Whereas Owner "A" is the holder of 12,183,671 shares in the company of Macpel
Industries Ltd., (hereinafter "the Company") and Owner "B" is the holder
of 110,286 shares in the company;
And whereas on 28th of December, 1999, an agreement was signed between Owner
"A" and Owner "B", whereunder Owner "B" will acquire from Owner "A"
3,987,700 shares in the Company (hereinafter - "the Sale Agreement"),
partly forthwith and partly subject to checking of propriety;
And whereas the parties wish to prescribe, define and regulate in this
Agreement the relationships between them as shareholders in the Company;
Now, therefore, it has been stipulated and agreed between the parties as
follows:
1. Preamble, Headings and Interpretation
1.1 The preamble to this Agreement forms an integral part thereof.. .
1.2 The headings of the clauses are inserted for reference only, and they
shall not be used for interpretation. .
1.3 In this Agreement, the following expressions shall have the meaning
set opposite them:
"Shares" - includes rights to shares and other securities.
"Holding" - within its meaning in the Securities Law,
5728-1968.
"Control" - within its meaning in the Securities Law,
5728-1968.
"Stock Exchange" - The Stock Exchange In Tel-Aviv Ltd.
<PAGE>
"The Shares under the Agreement" - means all the shares presently
held by the parties to this Agreement in the Company and/or through
corporations under their full control, including those acquired by
Ruimi from Wolfson under the Sale Agreement, including such shares as
shall be received by them in consequence of the realization of
convertible securities presently held by them in the Company and in
consequence of a distribution of bonus shares in respect of the
shares as aforesaid.
2. Retention of Holdings
2.1 During the first three (3) years from the date of execution of
this Agreement and thereafter, the owners undertake one to the other,
that the rate of the holdings of each one of them of the shares of
the Company shall not be reduced below 50% of the rate of the
holdings on the date of execution of this Agreement, without
receiving the written consent of the other parties to this Agreement.
2.2 Should Owner "A" sell his shares as provided in clause 2.3 below,
the limitation specified in the commencement of this sub-clause shall
be applied to the rate of holdings of Owner "A" after the said sale
and of the transferee subsequent thereto.
2.3 The sale of up to 50% of Wolfson's shares to Mr. Zigi Rabinowitz
(and/or a corporation under his control) will not be deemed to be a
"sale" or "transfer" under this Agreement, and will not be limited
pursuant to the provisions of sub-clause 2.1 above, will not confer
the right of refusal and the tag along right as provided in clause 3
below, provided that during the first two years after the date of
execution of this Agreement, it is made at a price (in dollars) of at
least 3,5024 per share, adjusted to the distribution of dividends
and/or other capital changes in the course of those two years, if
any.
3. Right of First Refusal and Right of Tag Along the Sale
1 General
(a) Each one of the owners who wishes to sell or transfer the shares
under the Agreement, in whole or in part, shall be bound to
offer to the other party or to each one of the other parties to
this Agreement (if any), in proportion to the rate of their
holdings of the share capital of the Company as it is at that
time (hereinafter - "the Offeree"), a right of first refusal or,
alternatively, a right to tag along the sale, upon conditions
identical to the conditions under which the Offeror wishes to
sell or transfer his shares, as the case may be, according to
the procedure specified in this clause 3 below.
<PAGE>
(b) No transfer of shares in the Company by the parties to this
Agreement shall be permitted, except in consideration of payment
of money (including cash or credit).
(c) Subject to the receipt of the consent of the banks in whose
favor the shares under the Agreement were and/or will be
charged, and for the purpose of securing the first refusal and
the tag along right, the shares under the Agreement shall be
deposited with the Trust Company of Bank Hapoalim Ltd. and/or
such other trustee as shall be agreed upon between the parties
(hereinafter - "the Trustee").
(d) Notwithstanding the provisions in clause 3.1 above. The
provisions of clause 3 of this Agreement shall not apply to any
sale or transfer by way of a gift to a "relative" as defined in
the Land Betterment Tax Law, to a sale or transfer to a
corporation controlled by the transferor or, to Gabi Wolfson -
who jointly with Zigi Rabinowitz has the control thereof or a
transfer to the person having control of the transferor, or any
transfer or sale to another corporation controlled by any person
controlling the transferor's corporation or any transfer between
the parties to this Agreement, or a transfer by way of
inheritance; provided that the transferee, whether a person or
corporation, signs this Agreement and undertakes all the
transferor's obligations.
(e) In order to eliminate any doubt, it is expressly stated that a
transfer from the owners to the Trustee shall not be subject to
the provisions of clause 3 of this Agreement, provided that such
transfer does not violate the other provisions of this
Agreement.
(f) "transfer" for the purpose of this Agreement, includes the
creation of any charge or pledge, the grant of an option to
purchase, the right of first refusal, a right of preference, an
interest in dividends conferred by the shares, or any other way
for the transfer of the economic or legal interest in the
holding of the shares of the Company, and the transfer of
control in a corporation holding shares of the Company; but
excludes the creation of a pledge or charge after the date of
execution of this Agreement in favor of a bank or any other
financial institution, the realization of which will be subject
to the right of first refusal prescribed in this clause 3.
3.2 Notice of Offer
In any case in which any one of the owners wishes to sell any of
his shares in the Company, he shall send a written notice to the
other owners (hereinafter - "the Offeree"), containing the
following details (hereinafter - "Notice of Offer"):
<PAGE>
(a) The number of the shares to be sold or transferred (hereinafter
- "the Shares Offered").
(b) The body to which the Offeror wishes to sell or transfer the
Shares Offered (hereinafter - "the Purchaser").
(c) The price of the Shares Offered to be paid by the Purchaser and
the terms of payment and the credit, if any.
3.3 Notice of Purchase and Tag Along Notice
(a) The Offeree may give to the Offeror written notice, within seven
(7) days from the date of delivery of the Notice of Offer, of
his wish to purchase the Shares Offered at such price and upon
such conditions as were set out in the Notice of Offer
(hereinafter "the Notice of Purchase").
(b) Where more than one Offeree gave a Notice of Purchase, the
Offeror shall give notice thereof to each one of the Offerees
within 3 days from the receipt of the second Notice of Purchase
(hereinafter - Notice of Many Recipients"), and each Offeree
shall be entitled to choose between the revocation of the Notice
of Purchase and the remaining thereof with the Offeror, so that
in any case, the Notice of Purchase will be deemed to have been
given for the purchase of such part of the Shares Offered as is
proportionate to the Offeree's share in the Shares Offered that
delivered Notice of Purchase. The Offeree shall give notice of
his decision to the Offeror within 24 hours from the time of
receipt of the Notice of Many Recipients.
(c) As an alternative to giving Notice of Purchase, the Offeree may
notify the Offeror of his wish to tag along the sale of the
shares by the Offeror (hereinafter - Tag Along Notice"). In such
case, the said quantity will be sold to the Purchaser, but the
Shares Sold will be taken from the shares of the selling owners
in proportion to the condition of their holdings of the shares
of the Company at that time.
(d) If by the end of the time for giving Notice of Purchase as
provided in sub-clause A. above, the Offeree will not give to
the Offeror a Notice of Purchase or a Tag Along Notice, then,
the Offeror shall be free, during 90 days from the end of the
time as aforesaid, to sell the Shares Offered to the Purchaser
whose details were given in the Notice of Offer, at such price
as shall not be different from the price stated in the Notice of
Offer, same being linked to the representative exchange rate of
the dollar and upon such conditions as are identical to those
set out in the Notice of Offer.
<PAGE>
3.4 Purchaser
(a) An Offeree who gives Notice of Purchase, shall be bound within
thirty (30) days from the date of giving Notice of Purchase, to
pay to the Offeror the amount stated in the Notice of Purchase,
under the conditions of sale as aforesaid, same being linked to
the representative exchange rate of the USA dollar until the
date of payment thereof. The Offeror shall deposit with the
Trustee the Shares Offered, simultaneously with the giving of
the Notice of Offer, by delivery of instruments of transfer and
such other documents as may be required.
(b The Trustee will hold the Shares Offered until he receives a
notice from the Offeror that he has been paid all the amounts
for the Shares Offered , whereupon he shall transfer them to the
Offeree.
3.5 Failure of shareholder to pay after Notice of Purchase
If by the end of the thirty (30) days mentioned in clause 3.4 above,
the Offeree fails to pay the full amount stated in the Notice of
Purchase received by him, whilst the Offeror had deposited the Shares
Offered as set out in clause 3.4 above, the Offeror shall be entitled
to claim any remedy and/or relief under this Agreement and/or under
any law, including the enforcement of the sale, and take against the
violating party such steps as he may deem fit, including the receipt
from the Offeree of the amount stated in the Notice of Purchase or,
as the case may be, the balance thereof, with prevailing bank
interest payable at Bank Leumi LeIsrael Ltd. in respect of overdrafts
or cost of living index linked differentials, whichever is higher, as
from the date of sending the Notice of Purchase to the Offeror until
payment in fact.
4. Joint Voting at general meetings of the Company
4.1 Subject to the provisions in clause 4.5 below, the parties to
this Agreement shall vote in respect of the shares under the
Agreement regarding all matters at the general meetings of the
shareholders of the Company pursuant to the provisions of this clause
4, including at ordinary general meetings and extraordinary general
meetings. For the purpose of this clause, all the shares held by the
parties in the Company shall be deemed to be part of the shares under
the Agreement, whether acquired before the date of execution of this
Agreement or thereafter, whether in a transaction on the Stock
Exchange or outside it. In order to secure the provisions of clause
4, the shares under the Agreement will be deposited with the Trustee,
who shall act therewith and in respect thereof in accordance with
these provisions. If no Trustee is appointed as aforesaid, the
parties will act themselves pursuant to the provisions of this clause
4.
4.2 The manner of the parties' vote at the general meetings will be
according to the resolution passed at a preparatory meeting of the
parties to this
<PAGE>
Agreement, to be held at the latest, 48 hours before the general
meeting which it precedes (hereinafter - "the Preparatory Meeting").
The parties shall give to the Trustee a power of attorney to vote in
respect of the shares under the Agreement pursuant to the resolution
of the Preparatory Meeting.
4.3 The resolutions at the Preparatory Meeting shall be passed by a
simple majority, whilst each one of the parties has a voting power
equal to his proportionate share in the shares of the Company. In the
case of equality of votes, the Trustee shall vote at the general
meeting against the resolution on the agenda.
4.4 Notwithstanding the provisions in clause 4.3 above, the Trustee
shall vote in favor of the resolutions on the following subjects, if
placed on the general meeting's agenda, only if at the Preparatory
Meeting thereto, the resolution was approved by a special majority of
75% of the votes at the meeting.
(a) Commencement of a business field other than the field of
production and marketing of clothing and textile products.
(b) Merger of the Company or a sale or lease or exchange or a
transfer in any other form of any material asset of the Company.
(c) The acquisition, lease or sale of another material company or any
material asset.
(d) A resolution in respect of the winding up of the Company.
(e) A resolution in respect of the allotment of shares in the Company
and/or the terms of the allotment, and the increase of the share
capital of the Company.
(f) A declaration of distribution of dividend, including the
sanctioning of an interim dividend.
4.5 Notwithstanding the aforesaid,, upon a vote in respect of the
appointment of Directors by the general meeting, the Trustee shall
vote according to the instructions of the parties as follows:
(a) The number of Directors in the Company shall be 11.
(b) So long as the quantity of the shares held by Wolfson and/or the
corporations under his control, will be larger than that held by
Ruimi and/or corporations under his control, the parties shall
instruct the Trustee to act for the appointment of Directors, as
follows: Wolfson - up to 6; Ruimi - up to 3; Directors on behalf
of the Public (with the consent of the parties) - 2.
<PAGE>
(c) In any other condition, each one of the parties shall have the
right to instruct the Trustee to act for the appointment of a
Director or Directors whose identity will be determined by them
out of all the Directors whose appointment is placed on the
agenda of the general meeting, according to his proportional
share in the shares of the Company held by the parties.
Fractions of a right for the appointment of a Director shall not
be counted for this purpose. In order to eliminate any doubt,
"fractions of a right" in this Agreement means: the remainder of
the right left from the right to appoint a whole number of
Directors and/or a Director.
(d) In the case in which any of the parties is vested with fractions
of a right, so that not all the Directors whose appointment is
placed on the agenda are appointed, the remaining Directors
shall be appointed upon the recommendation of the holders of the
right fractions. The holder of the largest right fractions will
receive the right to determine the identity of the additional
Director, the holder of the second largest right fractions will
receive the right to determine the identity of the second
additional Director, if any, and so forth until the appointment
of the whole number of Directors which the general meeting
resolved to appoint.
(e) In the case in which holders of equal right fractions are
entitled according to the mechanism in clause 4.5(d) above to
determine the identity of the additional Director (hereinafter -
"Holders of Right Fractions Equally Entitled"), each one of them
shall be entitled to instruct the Trustee to act for the
appointment of the additional Director whose identity will be
determined by them. In the case in which the number of holders
of right fractions equally entitled exceeds the number of the
Directors left to be appointed, the holders of right fractions
equally entitled shall instruct the Trustee to appoint the
remaining Directors according to the agreement reached between
them.
(f) In any case, the identity of the Directors on behalf of the
Public (and upon the coming into force of the Company Law,
5759-1999, - the External Directors), shall be recommended by
mutual consent of the parties to this Agreement.
(g) Each one of the parties to this Agreement shall be entitled to
determine by himself the identity of the candidates recommended
by him for office on the Board of Directors of the Company in
respect of the number of the Directors to which he is entitled
as aforesaid, and the Trustee shall vote in favor of such
candidates at all the general meetings of the shareholders of
the Company which are requested to approve their appointment,
without the need of approving their identity at a Preparatory
Meeting.
<PAGE>
(h) If and when the Board of Directors of the Company is requested
to appoint an additional Director to the Company, the parties
(subject to the provisions of the law and the formation
documents of the Company), shall recommend the identity of such
Director, pursuant to the provisions of this clause 4.5 above.
4.6 It is hereby expressly stated that in any case, the right of each
one of the parties to this Agreement to elect at least one Director
will be secured so long as this Agreement is in force, even though
the method of calculation prescribed in clause 4.5 above leads to the
result that one of the parties will no longer be entitled to
recommend upon the election of a Director.
4.7 Any change and/or modification and/or updating and/or revocation
and/or cancellation of existing voting agreements as aforesaid,
including the enforcement and/or exercise of any right in respect
thereof, shall require the unanimous agreement of all the parties to
this Agreement. A resolution not to agree to the extension of the
voting agreement dated 17th of September, 1997 with respect to Tefron
Ltd. (hereinafter - "the Tefron Voting Agreement"), shall be in
accordance with Wolfson's exclusive discretion.
4.8 So long as the holdings, both direct and linked (including
through Macpel), of Wolfson and/or corporations under his control, in
Tefron, are larger than the direct and linked (including through
Macpel) of Ruimi and/or corporations under his control, in Tefron,
the parties shall cause the Trustee, by a voting agreement in respect
of Tefron, to vote for the purpose of the appointment of Directors in
Tefron (hereinafter - "Tefron"), as follows:
(a) So long as the Discount Group is a party to the voting
agreement, by Macpel - 5 Directors, 4 of which upon the
recommendation of Wolfson and 1 - upon the recommendation of
Ruimi, 1 upon the recommendation of Tavriz and 2 - upon the
recommendation of Discount.
(b) If Ruimi acquires one third of the shares of Tavriz in Tefron
and Discount does not continue to be a party to the voting
agreement, 6 Directors shall hold office on the Board of
Directors of Tefron, of whom Ruimi will be entitled to recommend
to the Trustee the appointment of 2 Directors, and Wolfson will
be entitled to recommend 6 Directors; and if in such a
situation, Tavriz remains the holder of 2/3 (two thirds) of its
shares in Tefron at the time of the execution of this Agreement,
the number of Directors will be increased by 1, and Tavriz will
be entitled to recommend the identity of such additional
Director.
<PAGE>
(c) If Ruimi acquires one third of the shares of Tavriz in Tefron
and Discount continues to be a party to the voting agreement, 9
Directors shall hold office on the Board of Directors of Tefron,
of whom Ruimi will be entitled to recommend the appointment of 2
Directors, Wolfson - 5 Directors and Discount - 2 Directors; and
if in such a situation, Tavriz remains the holder of 2/3 (two
thirds) of its shares in Tefron at the time of the execution of
this Agreement, the number of Directors will be increased by 1,
and Tavriz will be entitled to recommend the identity of such
additional Director.
(d) If Ruimi does not acquire one third of the shares of Tavriz in
Tefron and Discount does not continues to be a party to the
voting agreement, the provisions of paragraph A above shall
apply, but Discount shall not be entitled to recommend the
identity of the Directors in Tefron.
(e) If Tefron is required to appoint Directors from among the public
and/or external Directors (hereinafter - Additional Directors"),
the number of the Directors in Tefron will be increased by the
number of the Additional Directors. The Additional Directors
shall be appointed by agreement between the parties to this
Agreement. The provisions in this paragraph 4.8(e) above are
subject to the provisions of the Tefron voting agreement.
In any other case, the distribution of the Directors on the Board of
Directors of Tefron shall reflect the direct and linked holdings
(including through Macpel) of the parties and/or corporations under their
control in Tefron, subject to the Tefron voting agreement.
5. Distribution of Profits, Dividends and Bonus Shares
The parties shall do their utmost as shareholders in the Company, subject
to the provisions of the law and the formation documents of the Company,
in order to cause the Board of Directors of the Company to consider the
determination of the policy of distribution of dividends to its
shareholders, in the course of which the option will be examined of the
distribution of a maximum dividend, having regard to the business
requirements of the Company from time to time.
6. Further Acquisitions in the Company
The parties agree that the acquisition of any additional shares in the
Company shall, so long as this Agreement is in force, be made jointly.
The parties shall inform each other, as far as possible, prior to the
acquisition of shares by them in the Company, in order to give to the
other parties an opportunity to participate in the acquisition according
to the proportionate share of each one of the parties to the Agreement,
in the issued and paid up capital of the Company; and if same is not
possible, they shall inform them after the acquisition and enable them to
acquire a proportionate share of the quality of the shares acquired,
<PAGE>
which is equal to the proportionate share of each shareholder in the
issued and paid up capital of the Company. This clause shall apply also
to companies controlled by the shareholders of the Company and the
holders of control of the shareholders in the Company.
7. Term of Agreement
7.1 This Agreement shall come into force upon performance of the
second payment under the Sale Agreement (hereinafter - "the
Commencement Date of the Agreement"). However, if Ruimi does not
purchase the second half of the Shares Sold, as they are defined in
the Sale Agreement, clause 4.5(b) above shall be amended so that
"Ruimi - up to 3", shall be replaced by "Ruimi - up to 1".
7.2 (a) The provisions of clause 3 above shall be in force for 6
years from the Commencement Date of the Agreement.
(b) The provisions of clause 6 above shall be in force for 3 years
from the Commencement Date of the Agreement.
(c) All the other provisions of the Agreement shall be in force for
12 years from the Commencement Date of the Agreement.
7.3 In the event of the holdings of any one of the parties to this
Agreement in the Company, either directly or through a corporation
under his control, being reduced below 10% of the total issued share
capital of the Company for the time being (hereinafter - "the party
who sold part of his holdings"), each one of the remaining parties
shall be entitled to revoke this Agreement with respect to the party
who sold part of his holdings.
7.4 The provisions of this Agreement shall be terminated also in the
case in which the quantity of the shares under the Agreement is
reduced below 25% of the issued and paid up capital of the Company
for a period of at least three (3) months.
7.5 It is hereby agreed that any transfer of shares under the
Agreement, including the transfer of shares to Mr. Zigi Rabinowitz as
provided in clause 2.3 above, shall be improved only on condition
that the transferee will approve in writing and without any
reservation or condition, his consent to the provisions of this
Agreement as if he were originally a party the Agreement, and will
assume a proportionate part of the rights and obligations under this
Agreement, unless otherwise agreed between the transferor and the
transferee with respect to the transfer of rights under this
Agreement.
7.6 Notwithstanding the aforesaid, each party shall be permitted to
sell shares on the stock exchange, without being bound to grant to
the other party the right of refusal and the tag along right as
specified in clause 3 of this
<PAGE>
Agreement, and without the transferee being requested to give his
consent to the provisions of this Agreement, as follows: to Wolfson -
up to 5% of the issued and paid up share capital of the Company at
the time of the transfer, and to Ruimi - up to 4% of the issued and
paid up share capital of the Company at the time of the transfer.
8. Miscellaneous
8.1 No party to this Agreement shall be prevented from demanding the
realization of his rights under the provisions of this Agreement
and/or under the law, even if he acquiesced and/or refrained from
making any claim for some time as aforesaid, whether same relates to
a breach of the Agreement by the other party and/or a failure to
comply with the Agreement and/or in respect of any deviation from the
provisions of the Agreement. Moreover, no consent to any deviation
and/or waiver of rights should be inferred from mere inaction.
8.2 The parties shall take all the steps, including the signing of
additional documents if requested, which may be required for the
application and implementation of this Agreement according to its
wording and spirit.
8.3 Any modification, amendment of or addition to this Agreement
shall be made in writing and signed by the parties.
8.4 Israel law shall be the law applicable to this Agreement.
8.5 The addresses of the parties shall be as set out in the preamble
to this Agreement, and any notice sent by registered mail to any of
the parties at that address, shall be deemed as having been received
three (3) days after the sending thereof, unless it is proved that it
reached the other party prior thereto.
In witness whereof, the parties hereto have hereunto set their hand:
--------------(-)----------- ---------(-)---------
Wolfson Ruimi
I, the undersigned, Arya Wolfson, hereby agree that if I acquire by myself or
through corporations under my control, any shares in Macpel and/or Tefron, I
and/or the corporation under my control will become a party to this Agreement.
-------(-)-----------
Arye Wolfson
<PAGE>
Date: 28th of December, 1999
Mr. Avi Ruimi and/or a corporation under his control, jointly and severally,
46 Shderot Rothchild,
Tel-Aviv
Dear Sir/Madam,
Re: Call Option for the Purchase of shares in the "Tefron" Company:
Further to the contract executed between us today, December, 1999, with respect
to the shares of Macpel Industries Ltd., which holds on its part shares in
Tefron Ltd. (hereinafter - "Tefron"), we wish to put in writing the agreements
between us as follows:
1. We are holders of a call option for the purchase of 1,695,690 shares
of Tefron, granted to us by Tavris Anstalt Limited N.V. (hereinafter -
"the "Option" and "Tavriz", respectively), which is exercizable by notice
on our part not later than by 29.8.2000 (hereinafter - "the Last Date for
Giving Notice of Exercise of the Option"), in consideration of the
payment by 28.9.2000 (hereinafter - "the Last Date for the Exercise of
the Option") of 17.4 dollars per share of Tefron ("the Exercise Price").
Our rights of the option are free, clear and released of any third party
right, and so shall be the Tefron shares to be purchased by you if and
insofar as you exercise your rights of the option as they are hereinafter
defined.
2. It is agreed between us to determine the "Terms of Exercise" to be
complied with, if the average daily closing rate of the Tefron share on
the New York Stock Exchange (NYSE), in the period between the 60th day
and the 30th day before the Last Date for Giving Notice of Exercise of
the Option, will be at least 14.5 dollars per share (hereinafter - "the
Terms of the Exercise").
3. Upon the fulfillment of the Terms of the Exercise, we shall transfer
and assign to you, one third (1/3) of the rights of the Option
(hereinafter - "Your rights of the Option") and you shall give notice to
Tavriz of the exercise of your rights of the Option and acquire the
Tefron Shares in respect thereof on the date of the exercise, in
consideration of the payment of the Price of the Exercise on the date of
the exercise. The said transfer and assignment will come into force
automatically upon the fulfillment of the Terms of the Exercise, without
the need of any notice and/or additional act on our part or of any other
party whatsoever. We shall, however, be entitled upon the fulfillment of
the Terms of the Exercise, if you do not exercise your rights of the
Option by the Last Date for the Exercise of the Option, to force you to
exercise your rights of the Option and acquire the Tefron shares in
respect thereof on the date of the Option, by payment of the Price of the
Exercise on the date of the exercise.
<PAGE>
4. We shall be responsible to obtain, at our cost if so required, the
consent of the "Discount Group" (as it is defined in the Tefron
Shareholders Agreement dated 17th of December, 1997) to the transfer of
your Option rights in your name and ownership, if and insofar as such
consent is at all required.
5. Obviously, until the date of the expiry of the Option, any consent on
our part to any modification on our part and/or amendment and/or updating
and/or revocation of the Option requires your prior consent in writing.
Kindly confirm that you agree to the conditions of this letter by your signing
at the bottom hereof.
---------(-)------ -------(-)-------
Zigi Rabinowitz Arye Wolfson
I confirm and agree to the aforesaid:
----------(-)---------
Avi Ruimi and/or
a corporation under his control
<PAGE>
Date: 28th of December, 1999
Macpel Industries Ltd.
46, Hanamel Street
Tel-Aviv
Dear Sir/Madam,
Re: Changes in the Holdings of Interested Parties
We hereby inform you that today, the 28th of December, 1999, at 21:00 hours, a
contract was executed between the undersigned, according to which Arwol Holdings
Ltd. undertook to sell to Mr. Avi Ruimi (and/or a corporation under his control)
3,987,700 shares of Macpel Industries Ltd. ("The Company"), at an average price
of about NS 14.5 per share (linked to the dollar). The acquisition of one half
of the said shares is subject to the checking of propriety. In addition, the
parties executed a Shareholders Agreement,.which regulates (inter alia), the
manner of their voting at the general meetings of the shareholders of the
Company, the manner of appointment of Directors in the Company, the right of
refusal and the tag along right in certain cases of the sale of shares in the
Company, as well as the joint purchase of additional shares in the Company in
the future.
The transaction is subject to the approval of the Controller of Restraint of
Trade.
---------(-)------------- -----------(-)-----------
Arwol Holdings Ltd. Avi Ruimi
<PAGE>
AGREEMENT
Made and entered into at Tel Aviv on the 30th day of December 1999
BETWEEN
ARIEH WOLFSON (bearer of British Passport No. 740081344),
(Hereinafter: "Wolfson")
of the first part;
AND
ARWOLL HOLDINGS LTD. (Pvte. Co. 51-260178-2),
(hereinafter: "Arwoll")
of the second part;
AND
ZIRA HOLDINGS LTD. (in formation)
represented by its founder - SIGI RABINOWICZ (bearer of
Belgium Passport No. EA 725317),
(hereinafter: "Zira")
of the third part;
AND
SIGI RABINOWICZ (hereinafter: "Rabinowicz")
of the fourth part;
WHEREAS: Wolfson wishes to organize his holdings in the company Macpell
Industries Ltd. (hereinafter: "Macpell") (the holding is via Arwoll - a
company under his full control) within the framework of a group to be
called the Wolfson Group (hereinafter: "the Wolfson Group"); and
WHEREAS: Wofson is desirous that Rabinowicz, with whom he has for many years
been co-operating in the business of Macpell and of Tefron Ltd.
(hereinafter: "Tefron"), should (via Zira - a company in the process of
being formed which will be under the full control of Rabinowicz) join,
as a minority group, the Wolfson Group, in which the majority will
continue to be held by Wolfson (through arwoll); and
<PAGE>
WHEREAS: In connection with the foregoing, Arwoll agrees to sell and transfer to
Zira, and Zira agrees to purchase and accept from Arwoll, portion of
the Macpell shares owned by Arwoll;
WHEREAS: The parties to the Agreement wish to specify herein the terms of sale
and purchase, as well as other matters;
NOW THEREFORE IT IS DECLARED, STIPULATED AND AGREED BY THE PARTIES TO THE
AGREEMENT AS FOLLOWS:
<PAGE>
1. Preamble and interpretation
1.1. The preamble to the Agreement and the appendix attached hereto,
constitute integral parts hereof.
1.2. In this Agreement each of the following terms and expressions will have
the meaning set opposite each of them, as follows:
"The Agreement" - this agreement.
"Macpell" - Macpell Industries Ltd. (Publ. Co. No. 52-003752-4).
"The Shares Sold" - 3,893,086 shares of NIS 1 par value each in
Macpell.
"Tefron" - Tefron Ltd. (Publ. Co. No. 52-004340-7).
"The Bank" - Bank Hapoalim B.M.
"The Bank" - Bank Hapoalim B.M.
"The Contract" - a contract that was signed on 28th December 1999
between Arwoll and Avi Roimi (hereinafter: "Roimi"), in connection with
the acquisition of shares in Macpell.
"The Shareholders' Agreement" - an agreement signed on 28th December
1999 between Arwoll and Roimi in connection with the relationship which
would apply between them as shareholders in Macpell.
This document is attached as an appendix to the Agreement.
2. Representations and undertakings by Arwoll
Arwoll represents and undertakes to Zira that:
2.1. Arwoll is the owner of 8,195,971 shares in the Macpell, which
represent 52.67% of the issued and paid-up share capital of
Macpell.
2.2. A further 3,533,473 shares are still registered in the name of
Arwoll in the register of shareholders of Macpell.
These shares were sold by Arwoll to Roimi and/or to a
corporation under his control, pursuant to the Contract.
<PAGE>
2.3. The Shares Sold and Aroll's rights therein are free and clear
of any pledge, emcumbrance, attachment, undertaking or any
other third party right (hereinafter: "Free and Clear"), apart
from a charge and a pledge in favour of the Bank, which agrees
to release the Shares Sold from the charge and the pledge in
order for same to be sold to Zira as Free and Clear.
2.4. The Shares Sold are fully paid-up and they are registered in
the register of shareholders of Macpell and with the Registrar
of Companies in the name of Arwoll.
2.5. The Shares Sold are transferable, are not blocked by the
provisions of any law or by virtue of provisions or
instructions of any competent body, and there is no
restriction to the sale and transfer thereof to Zira.
3. Representations by Zira
Zira's representations are made by its founder - Rabinowicz.
3.1. Rabinowicz declares that he is a director of Macpell and of
Tefron and is the chief executive officer of Tefron.
3.2. Rabinowicz declares that the affairs, business and the
commercial and legal situation of Macpell and of Tefron are
well-known to him.
3.3. Rabinowicz declares that by virtue of the foregoing in this
clause, Zira (in this name or in such name as may be approved
by the Registrar of Companies of this name is approved) agrees
to purchase the Shares Sold, at the price and on the
conditions specified below, without making the effecting of
the purchase contingent upon conducting due diligence
examinations, or subject to any condition precedent or other
restrictive condition.
4. Sale and Purchase of the shares
4.1. Arwoll undertakes to sell and transfer the Shares Sold to
Zira, and Zira undertakes to purchase the Shares Sold form
Arwoll and to accept delivery thereof.
4.2. In consideration for the Shares Sold Zira undertakes to pay
Arwoll an aggregate amount of $13,635,144 (thirteen million
six hundred and thirty-five thousand one hundred and
forty-four US dollars), on the basis of a price of $3.5024 per
share (which is also the price specified in the Contract).
<PAGE>
The payment shall be effected in dollars and/or in the new
shekel equivalent thereof according to the representative rate
known at the time of payment.
4.3. The full amount of the consideration shall be paid by Zira to
Arwoll on Wednesday, 12th January 2000, at 10.00 a.m. at the
offices of the Bank, at 46 Rothschild Boulevard, Tel Aviv
(hereinafter, "the Date of Execution").
4.4. Against receipt of the full amount of the consideration as
aforesaid to the credti of Arwoll's account, account no.
51661, branch 655 (Bnei Brak branch) of the Bank, Arwoll will
deliver to Zira, on the Date of Execution, a suitable share
transfer deed singed by it, accompanied by share certificate
in respect of all the Shares Sold, in circumstances where the
Shares Sold are Free and Clear.
5. Financing of the transaction
5.1. The Bank has informed the parties, prior to the signing of the
Agreement, that it is prepared to place at Zira's disposal the
credit required for purposes of financing the amount of the
consideration, provided that one-third of the amount of the
credit is guaranteed by way of a guarantee by Arwoll, which
will be secured by a charge over some of Arwoll's shares in
Macpell (hereinafter: "the Guarantor").
5.2. Arwoll agrees to give the Guarantee to the Bank and to
encumber portion of its shares in Macpell as security for the
Guarantee.
5.3. As security for the Guarantee:
5.3.1. Zira will encumber the Shares Sold by way of a
second-ranking charge in favour of Arwoll.
5.3.2. In the scope of its membership of the Wolfson Group,
Zira will give Arwoll an irrevocable power of
attorney to vote on its behalf and in its name on the
strength of the Shares Sold at general meetings of
Macpell, and Zira undertakes, so long as the
Guarantee is in force, not to vote itself and not to
give anyone else a right to vote on the strength of
the Shares Sold.
6. The Shareholder's Agreement
6.1. Zira declares that it is conversant with the Shareholders'
Agreement and is aware of the provisions thereof.
<PAGE>
6.2. By virtue of the provisions of Clause 7.5 of the Shareholders'
Agreement, Zira hereby confirms, unreservedly and
unconditionally, its acquiescence to the provisions of the
Shareholders' Agreement as if it had been a party to that
agreement form the outset; Zira assumes a pro rata portion of
the rights and obligations pursuant to that agreement.
6.3. The last part of the preceding sub-clause with regard to the
rights is subject to the provisions of Clause 5.3.2 above with
respect to the voting rights on the strength of the Shares
Sold.
6.4. For the avoidance of doubt, Zira's rights to give instructions
for the appointment of directors in Macpell (Clause 4.5(b) of
the Shareholder's Agreement or in Tefron (Clause 4.8, ibid)
and Zira's rights to sell shares on the Stock Exchange without
restiction (Clause 7.6 ibid.) shall be portion of Arwoll's
rights (Wolfson in those clauses).
7. Holding of shares in Macpell
After the transfer of the shares has been effected pursuant to this
Agreement and pursuant to the Contract, the state of holdings of shares
in Macpell will be as follows:
Arwoll - 4,302,885 shares = 27.65% of the issued and paid-up
capital
Roimi - 4,097,986 shares = 26.34% of the issued and paid-up
capital
Zira - 3,893,086 shares = 25.02% of the issued and paid-up
capital
Totalling - 12,293,957 shares = 79.00%
8. Option to purchase shares in Tefron
8.1. Tabriz Anstalt Ltd. N.V. (hereinafter: "Tabriz") has given
Wolfson and Rabinowicz, and/or companies under their control,
an option (hereinafter: "the Option") to purchase from its
shares of Tefron, on the conditions and at the price as set
forth in the Option documents.
8.2. Wolfson and Rabinowicz hereby agree that if they should
decide, either themselves and also/or through companies under
their control, to exercise the Option or portion thereof, the
division between them of which they will notify Tabriz, as
required under the conditions of the Option, will be 52.5% -
Wolfson and 47.5% - Rabinowicz, until such time as is
otherwise agreed between them.
9. Taxes and expenses
<PAGE>
9.1. Each party to the Agreement shall be liable for the taxes
imposed on it, if imposed, according to any law, in respect of
the transaction which is the subject of the Agreement.
9.2. Stamp duty in respect of the Agreement and/or in respect of
the transfer of the Shares Sold, if same applies, shall be
borne by Arwoll and By Zira in equal shares.
10. Amendments to the Agreement
There will be no validity to any alternation and/or amendment to the
Agreement unless this is done by way of a document in writing, to be
signed by all the relevant parties amongst the parties to the
Agreement.
11. Address
The addresses of the parties for purposes of this Agreement are:
11.1. Wolfson and Arwoll - c/o Pinhas Volovelsky, Adv.
76 Rothschild Boulevard, Tel Aviv 65785
Tel. 03-5664565
Fax 03-5664630
11.2 Rabinowicz and Zira - c/o Tefron Ltd.
28 Chida Street, Bnei Brak 51371
Tel. 03-5798701
Fax 03-5798715
IN WITNESS WHEREOF THE PARTIES HAVE HEREUNTO SIGNED:
------------------- ------------------------
Arieh Wolfson Arwoll Holdings Ltd.
------------------- ------------------------
Sigi Rabinowicz Zira Holdings Ltd.
(in formation)
<PAGE>
Exhibit F
August 27, 1997
Tabriz Anstalt Limited NV
2140 Antwerpen Borgerhout
Te Boelaerlei 37
Belgium
Messrs. Sigi Rabinowicz and Arie Wolfson
c/o Tefron Ltd.
28 Chida St.
Bnei - Brak 51371
Israel
Dear Sirs,
Whereas we are the owners of 23% (twenty - three percent) of the issued and paid
up share capital of Tefron Ltd. ("Tefron"), being at present 1,379,977 Ordinary
Shares par value NIS 1.00 each; And
Whereas Tefron intends to offer to the public through the New York State
Exchange Ordinary Shares par value NIS 1.00 each, that will constitute after the
allotment to the public 25% (twenty - five percent) of the issued and paid up
share capital of Tefron; And
Whereas together with the Tefron's offer, all the present shareholders of Tefron
shall offer to the public ("the Offering") to purchase from them at the same
price as the price payable to Tefron a part (up to about 20% (twenty percent))
of their Ordinary Shares, including an equal percentage of Bonus Shares that
shall be allotted to them before the Offering;
No therefore and following our previous discussions and negotiations we are
granting hereby to you and/or to corporations controlled by you or by your
families and/or to trusts established for the benefit of you or of your
families, an Option ("the Option") to purchase from us at the same price as the
Offering price all or any part at your discretion
<PAGE>
of our shares of Tefron, including the said Bonus Shares, that will not be sold
as a result of the Offering.
To remove any possible doubt, the Option is given to both of you in equal parts
unless you will agree otherwise in writing and deliver to us a signed copy of
such agreement.
The Option shall be exercisable as of after it will be known how many shares
have not been sold in the Offering and shall remain in force for a period of 3
(three) years from the Offering date.
In the event you will decide to exercise the Option you shall have to notify us
in writing - with a copy to our Israeli lawyer, Pinhas Volovelsky, Adv., of 30
Achad - Haam St., Tel Aviv 65151, Israel - 30 (thirty) days in advance and to
pay us to price of the shares you will decide to purchase within the said 30
days.
Shares that shall be sold to you by us shall be transferred to you - immediately
upon receipt of their price - free of any debt, pledge, encumbrance or third
party's rights whatsoever. Any such debt, pledge etc. if presently existing
and/or if will exist in the future shall be removed and/or arranged by us and on
our account and responsibility at the time of the exercise of the Option.
In consideration for this present Option you shall pay us a sum of US
$442,000.00 (four hundred forty two thousand US Dollars).
To give effect to the Option please send us a copy of this Option letter signed
by you to confirm your consent to its terms not later than until September 10,
1997, together with an irrevocable undertaking to pay us the said consideration
within 90 (ninety) days from the date of your consent confirmation.
Yours sincerely,
Tabriz Anstalt Limited NV
We confirm our consent to the terms of this Option letter and irrevocable
undertake, jointly and severally, to pay you the said consideration in the sum
of US $442,000.00 within 90 (ninety) days from today's date.
- ---------------------------------- ----------------------------------
Sigi Rabinowicz Arie Wolfson
(Belgian Passport No. U 080704) (British Passport No. 700123538)
September __, 1997
<PAGE>
Exhibit G
December 21, 1997
Tabriz Anstalt Limited NV
2140 Antwerpen Borgerhout
Te Boelaerlei 37
Belgium
Messrs. Sigi Rabinowicz and Arie Wolfson
c/o Tefron Ltd.
28 Chida St.
Bnei-Brak 51371
Israel
Dear Sirs,
Whereas on August 27, 1997 we have granted you an option ("the Option") to
purchase from us shares of Tefron Limited ("Tefron") at the terms stated in the
Option letter; and
Whereas the consideration for the Option has been determined to be a sum of US
$442,000.00 (four hundred forty two thousand US Dollars) payable within 90
(Ninety) days from the date of your consent confirmation (September 10, 1997)
namely until December 9, 1997; and
Whereas after the conclusion of The Initial Public Offering it is now know that
we still own 1,695,690 (one million six hundred and ninety five thousand six
hundred and ninety) shares of Tefron being the subject matter of the Option and
that the price to be paid by you in the event you will decide to exercise the
Option will be US $17.00 (seventeen) per share; and
Whereas you have requested that we shall agree to delay the payment date of the
Option's consideration and agreed in return that the sum of the consideration
will be increased;
Now Therefore we hereby confirm that it has been agreed between us as follows:
<PAGE>
1. The sum of the Option's consideration is increased to US $460,000.00
(four hundred and sixty thousand US Dollars).
2. The said sum is payable until June 12, 1998 (inclusive).
3. All the other terms of the Option letter remain unchanged.
Please confirm by signing the enclosed copy of this letter.
Yours Sincerely,
Tabriz Anstalt Limited NV
by
------------------------------- ----------------------------------
Mr. Philippe Steurbaut Mr. Philippe Derijckere
Director Director
We confirm our consent to the abovesaid and irrevocably undertake, jointly and
severally, to pay you the sum of US $460,000.00 (four hundred and sixty thousand
US Dollars) until June 12, 1998 (inclusive).
- ---------------------------------- ----------------------------------
Mr. Sigi Rabinowicz Mr. Arie Wolfson
<PAGE>
Exhibit H
Tabriz Anstalt Limited NV
Joe Englishstraat 52
2140 ANTWERPEN
BELGIUM
Messrs. Sigi Rabinowicz and Arie Wolfson
c/o Tefron Ltd.
28 Chida St.
Bnei-Brak 51371
ISRAEL
September 4, 1998
Dear Sirs,
Under two letters dated August 27, 1997 and December 21, 1997 we have granted to
you an option ("the Option") to purchase from us up to 1,695,690 (one million
six hundred and ninety five thousand six hundred and ninety) shares of Tefron
Limited against payment of US $17.00 (seventeen) per share.
The consideration for the Option has been determined to be a sum of US
$460,000.00 (four hundred and sixty thousand) payable until June 12, 1998.
Following your request we hereby confirm our consent to delay the payment date
of the Option's consideration until August 12, 1999 against increasing the sum
of the Option's consideration to US $500,000.00 (five hundred thousand).
All the other terms of the Option letter dated August 27, 1997 remain unchanged.
Please confirm by signing the enclosed copy of this letter.
Yours sincerely,
Tabriz Anstalt Limited NV
by
------------------------------- ----------------------------------
Mr. Philippe Steurbaut Mr. Philippe Derijckere
Director Director
<PAGE>
We confirm our consent to the abovesaid and irrevocably undertake, jointly and
severally, to pay you the sum of US $500,000.00 (five hundred thousand US
Dollars) until August 12, 1999 (inclusive).
- ---------------------------------- ----------------------------------
Mr. Sigi Rabinowicz Mr. Arie Wolfson
<PAGE>
Exhibit I
January 24, 2000
Tabriz Anstalt Limited NV
Joe Englishstraat 54
2140 Borgerhout
Antwerpen
Belgium
Messrs. Sigi Rabinowicz and Arie Wolfson
c/o Tefron Ltd.
28 Chida St.
Bnei-Brak 51371
Israel
Dear Sirs,
Whereas under three previous letters (dated August 27, 1997, December 21, 1997
and September 4, 1998) we have granted you an option ("the Option") to purchase
from us up to 1,695,690 (one million six hundred ninety five thousand six
hundred and ninety) shares of Tefron Limited against payment of US $17.00
(seventeen) per share.
And Whereas you had to pay us in consideration for the Option a sum of US
$500,000.00 (five hundred thousand).
And Whereas it was mutually agreed between us to make certain changes in the
terms of the Option.
Now therefore it is hereby agreed between us as follows:
1. In the event you shall decide to exercise the Option - during the
Option period, namely until September 28, 2000 - you shall have to pay
us for each share of Tefron Limited you will decide to purchase a sum
of US $17.40 (seventeen United States Dollars and forty cents).
2. As the payment date of the Option's consideration has been delayed so
that it has not been paid yet nor is it due for payment until the end
of the Option period - you shall be obliged to pay us on September 28,
2000 - US $0.40 (forty cents) for each
<PAGE>
share that shall not be purchased by you and/or on your behalf in the
process of exercising the Option.
3. All the other terms of the original Option letter dated August 27, 1997
remain unchanged.
4. Please confirm your acceptance of the abovesaid by signing the enclosed
copy of this letter and sending it back to us.
Yours sincerely,
Tabriz Anstalt Limited NV
By By
------------------------------- -------------------------------
Mr. Philippe Steurbaut Mr. Philippe Derijckere
We confirm hereby our consent to the above said and irrevocably undertake,
jointly and severally, to pay you the sum of US $0.40 (forty cents), until
September 28, 2000, for each share of Tefron Limited that eventually shall not
be purchased by us and/or on our behalf by exercising the Option.
- ---------------------------------- ----------------------------------
Mr. Sigi Rabinowicz Mr. Arie Wolfson
<PAGE>
Exhibit J
Date: 28th of December, 1999
Mr. Avi Ruimi and/or a corporation under his control, jointly and severally,
46 Shderot Rothchild,
Tel-Aviv
Dear Sir/Madam,
Re: Call Option for the Purchase of shares in the "Tefron" Company:
Further to the contract executed between us today, December, 1999, with respect
to the shares of Macpel Industries Ltd., which holds on its part shares in
Tefron Ltd. (hereinafter - "Tefron"), we wish to put in writing the agreements
between us as follows:
1. We are holders of a call option for the purchase of 1,695,690 shares of
Tefron, granted to us by Tavris Anstalt Limited N.V. (hereinafter -
"the "Option" and "Tavriz", respectively), which is exercizable by
notice on our part not later than by 29.8.2000 (hereinafter - "the Last
Date for Giving Notice of Exercise of the Option"), in consideration of
the payment by 28.9.2000 (hereinafter - "the Last Date for the Exercise
of the Option") of 17.4 dollars per share of Tefron ("the Exercise
Price"). Our rights of the option are free, clear and released of any
third party right, and so shall be the Tefron shares to be purchased by
you if and insofar as you exercise your rights of the option as they
are hereinafter defined.
2. It is agreed between us to determine the "Terms of Exercise" to be
complied with, if the average daily closing rate of the Tefron share on
the New York Stock Exchange (NYSE), in the period between the 60th day
and the 30th day before the Last Date for Giving Notice of Exercise of
the Option, will be at least 14.5 dollars per share (hereinafter - "the
Terms of the Exercise").
3. Upon the fulfillment of the Terms of the Exercise, we shall transfer
and assign to you, one third (1/3) of the rights of the Option
(hereinafter - "Your rights of the Option") and you shall give notice
to Tavriz of the exercise of your rights of the Option and acquire the
Tefron Shares in respect thereof on the date of the exercise, in
consideration of the payment of the Price of the Exercise on the date
of the exercise. The said transfer and assignment will come into force
automatically upon the fulfillment of the Terms of the Exercise,
without the need of any notice and/or additional act on our part or of
any other party whatsoever. We shall, however, be entitled upon the
fulfillment of the Terms of the Exercise, if you do not exercise your
rights of the Option by the Last Date for the Exercise of the Option,
to force you to exercise your rights of the Option and acquire the
Tefron shares in respect thereof on the date of the Option, by payment
of the Price of the Exercise on the date of the exercise.
<PAGE>
4. We shall be responsible to obtain, at our cost if so required, the
consent of the "Discount Group" (as it is defined in the Tefron
Shareholders Agreement dated 17th of December, 1997) to the transfer of
your Option rights in your name and ownership, if and insofar as such
consent is at all required.
5. Obviously, until the date of the expiry of the Option, any consent on
our part to any modification on our part and/or amendment and/or
updating and/or revocation of the Option requires your prior consent in
writing.
Kindly confirm that you agree to the conditions of this letter by your signing
at the bottom hereof.
(-) (-)
------------------- ----------------
Zigi Rabinowitz Arye Wolfson
I confirm and agree to the aforesaid:
(-)
-------------------------------
Avi Ruimi and/or
a corporation under his control
<PAGE>
Loan Agreement
--------------
Made and entered into this 18th day of February, 1998
Between
Tabriz Anstalt Limited NV
a Belgian company
of Te Boelaerlei 37,
2140 Antwerpen/Bargerhout, Belgium
(hereinafter - "Tabriz")
of the one part;
And
Arwol Holdings Ltd.
an Israeli company
of 30 Haad Haam St., Tel-Aviv 65151, Israel
(hereinafter - "Arwol")
of the other part;
Whereas Tabriz is prepared to grant to Arwol and Arwol is willing to accept from
Tabriz a loan in the sum of up to $11,500,000 (eleven million and five hundred
thousand United States Dollars) upon the terms and conditions set forth;
Now Therefore it is agreed and declared by and between the Parties as follows:
1. Tabriz hereby agrees to lend to Arwol and Arwol hereby agrees to borrow
from Tabriz the sum of up to $11,500,000 (eleven million and five
hundred thousand United States Dollars) (hereinafter - the "Loan").
2. Tabriz shall make the Loan available to Arwol in one or several
disbursements, as to Arwol's account at a bank to be designated by it.
The date or dates of actual disbursement are hereinafter called the
"Loan Commencement Date or Dates". In any event these dates shall not
be later than 30.04.98.
3. Arwol undertakes to repay to Tabriz the principal amount of each
disbursement of the Loan in one installment three (3) years after the
Loan Commencement Date (hereinafter the "Principal Repayment Date").
4. Arwol may, upon giving Tabriz seven (7) days notice, prepay the loan or
any part or parts of it on a date or dates to be stated in such notice
or notices.
<PAGE>
5. (a) Arwol shall pay interest on the unpaid balance of the
principal amount of the Loan commencing as from the Loan
Commencement Date until the principal payment Date at the rate
stipulated in sub-para. (c) below.
(b) The interest shall be payable on the end of each one (1) year
period.
(c) The interest rate shall be 0.75% (three quarters of one per
cent) per annum over the London Interbank Offered Rate (the
"Libor Rate") for one year period, for deposits of similar
amounts.
The said Libor Rate will be determined on the commencement of
each one (1) year period.
6. All payments due from Arwol under this Agreement shall be made by
Tabriz in freely convertible US Dollars by paying some to such account
or accounts as Tabriz shall advise Arwol from time to time.
7. Should any date for the payment of principal or interest fall on a day
which is not a business day, then payment will be made on the next
following business day.
Payments of interest will be calculated up to the date of actual
payment.
8. Payments of interest due to Tabriz in connection with the Loan shall be
made by Arwol after deduction at source of Israeli Income Tax if and to
the extent such deductions is imposed under Law and regulations.
9. Any amount of principal or interest which has not been paid to Tabriz
on the due date thereof - unless the Parties have reached at least
thirty (30) days prior written consent to postpone the dates of payment
- shall bear arrears interest at the rate of 2% above the rate
mentioned in para. 5(c) above.
10. This Agreement will be governed by and construed in all respects in
accordance with the Laws of Belgium; and the Parties hereby submit to
the jurisdiction of the competent courts of Antwerpen, Belgium.
Tabriz shall also have the right, at its discretion, to bring any legal
action or proceeding arising out of or in connection with this
Agreement before the competent courts of Tel-Aviv, Israel.
11. This Agreement may be amended or varied only by an additional
instrument in writing duly signed by the Parties hereto.
2
<PAGE>
In Witness Whereof the Parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
Tabriz Anstalt Limited NV Arwol Holdings Ltd.
By By
-------------------------- -------------------------
P. Steurbant P. Volovelsky
Director Director
3
<PAGE>
Addendum to a Loan Agreement
----------------------------
Made and entered into on February 18, 1998 between Tabriz
Anstalt Limited Nv ("Tabriz") and Arwol Holdings Ltd.
("Arwol")
It is hereby agreed between the parties hereto to increase the
principal amount of the Loan to $ 11,600,000 (eleven million and six
hundred thousand United States Dollars).
Tabriz hereby confirms that it has received from Arwol two
disbursements on account of the Loan:
$ 6,000,000 - on February 23, 1998;
$ 5,600,000 - on April 21, 1998.
$11,600,000
In Witness whereof the Parties have signed this Addendum on April 21,
1998.
Tabriz Anstalt Limited NV Arwol Holdings, Ltd.
By By
------------------------------ ------------------------
P. Volovelsky, Adv. Arie Wolfson
as per a General Power of Attorney Director
