<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. _____)
TEFRON LTD.
- -------------------------------------------------------------------------------
(Name of Issuer)
ORDINARY SHARES, PAR VALUE NIS 1.0 PER SHARE
- -------------------------------------------------------------------------------
(Title of Class of Securities)
M87482 10 1 (ORDINARY SHARES)
- -------------------------------------------------------------------------------
(CUSIP Number)
AVI RUIMI
THE FINANCIAL GROUP INVESTMENT HOUSE LTD.
ALVOR TOWER
46 ROTHCHILD BLVD.
TEL AVIV, 66883, ISRAEL
011-972-3-5664080
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
JANUARY 31, 2000
- -------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box 9
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7 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 ("Act") 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).
<PAGE> 2
SCHEDULE 13D
CUSIP NO. M87482 10 1 PAGE 2 OF 12 PAGES
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
Avi Ruimi
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
###-##-####
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) [X]
(B) [ ]
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
BK, PF
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E) [ ]
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- -------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER 124,100
SHARES ---------------------------------------------
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER 8,000,382
EACH ---------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER 124,100
PERSON WITH ---------------------------------------------
10 SHARED DISPOSITIVE POWER 4,388,210
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,124,482
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
60.6%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 2 of 12 Pages
<PAGE> 3
SCHEDULE 13D
CUSIP NO. M87482 10 1 PAGE 3 OF 12 PAGES
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
Omnia Business Ltd.
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) [X]
(B) [ ]
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
BK, PF
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E) [ ]
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Panama
- -------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER 124,100
SHARES ----------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER 0
OWNED BY ----------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER 124,100
REPORTING ----------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER 0
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
124,100
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.9%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 3 of 12 Pages
<PAGE> 4
SCHEDULE 13D
CUSIP NO. M87482 10 1 PAGE 4 OF 12 PAGES
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
Condo Overseas Inc.
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) [X]
(B) [ ]
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
BK, PF
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E) [ ]
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Panama
- -------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER 0
SHARES ------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER 8,000,382
OWNED BY ------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER 0
REPORTING ------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER 4,388,210
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,000,382
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
59.7%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 4 of 12 Pages
<PAGE> 5
STATEMENT ON SCHEDULE 13D
PURSUANT TO RULE 13D-1 UNDER
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
Pursuant to Rule 13d-1 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the undersigned hereby file this Statement on
Schedule 13D with the Securities and Exchange Commission (the "Commission") with
respect to the Ordinary Shares, par value NIS 1.0 per share (the "Tefron
Ordinary Shares") of Tefron Ltd. (the "Issuer").
ITEM 1. SECURITY AND ISSUER
This Statement on Schedule 13D relates to the Tefron Ordinary Shares. The
name and address of the principal executive offices of the Issuer are as
follows: Tefron Ltd., 28 Chida Street, Bnei-Brak 51371, Israel.
ITEM 2. IDENTITY AND BACKGROUND
This Statement on Schedule 13D is filed on behalf of Avi Ruimi ("Ruimi"),
Omnia Business Ltd. ("Omnia") and Condo Overseas Inc. ("Condo") (Ruimi, Omnia
and Condo are collectively referred to herein as the "Reporting Persons").
Ruimi has his business address at The Financial Group Investment House
Ltd., Alvor Tower, 46 Rothchild Blvd., Tel Aviv, 66883, Israel. The principal
occupation of Ruimi is private investor. Ruimi is a citizen of the United
States. Ruimi owns all of the outstanding capital stock of Omnia and Condo, and
is the only director and executive officer of Omnia and Condo.
Omnia has its principal business address c/o Mitchell M. Gaswirth,
Proskauer Rose LLP, 2049 Century Park E., suite 3200, Los Angeles, CA 90067.
Omnia is a corporation organized in Panama. The principal business of Omnia is
as a holding company.
Condo has its principal business address c/o Mitchell M. Gaswirth,
Proskauer Rose LLP, 2049 Century Park E., suite 3200, Los Angeles, CA 90067.
Condo is a corporation organized in Panama. The principal business of Condo is
as a holding company.
During the last five years, none of the Reporting Persons has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or was 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 subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
Page 5 of 12 Pages
<PAGE> 6
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The purchases of Macpell shares made under the Macpell Purchase Agreement
(described below in Item 4) have been funded as described in this paragraph. The
purchase made on December 29, 1999, was in the amount of $1,750,000. The
purchase made on January 31, 2000 was in the amount of $5,233,260. The purchases
made under the Macpell Purchase Agreement were funded substantially as follows:
approximately seventy percent (70%) of the purchase price was financed through a
non-recourse bank loan to Ruimi due in seven years with a variable interest rate
dependent on alternative selected (current rate for dollar loans would be
approximately 7.1%), and secured by the Macpell shares; and the remaining
approximately thirty percent (30%) of the purchase price was funded through
borrowings on personal credit lines of Ruimi (current interest rates of
approximately 9.0% and 12.3%), and other personal funds of Ruimi.
The source of funds for the transactions described in Item 5 part (c) was
Ruimi's personal funds.
ITEM 4. PURPOSE OF TRANSACTION
On December 28, 1999, Ruimi entered into an agreement with Arwol Holdings,
Ltd. ("Arwol") providing for Ruimi to acquire shares of Macpell on three
separate dates (the "Macpell Purchase Agreement"). On December 29, 1999, Ruimi
acquired 454,227 shares of Macpell. Combined with the 110,286 Macpell shares
acquired by Ruimi prior to December 29, 1999, Ruimi had as of December 29, 1999,
a 3.6% ownership interest in Macpell. On January 31, 2000, Ruimi acquired an
additional 1,539,623 shares of Macpell, giving Ruimi an aggregate 13.5%
ownership interest in Macpell. On February 15, 2000, Ruimi intends to acquire an
additional 1,993,850 shares of Macpell, giving Ruimi an aggregate 26.3%
ownership interest in Macpell. All of Ruimi's Macpell shares are or will be
owned by Condo.
Under a series of agreements dated August 27, 1997, December 21, 1997,
September 4, 1998 and January 24, 2000 among Zigi Rabinowitz ("Rabinowitz"),
Arye Wolfson ("Wolfson") and Tabriz Anstalt Limited NV ("Tabriz") (together, the
"Tabriz Agreements"), Rabinowitz and Wolfson were granted an option to acquire
1,695,690 Tefron Ordinary Shares from Tabriz (the "Tabriz Agreement Shares").
Ruimi has entered into an agreement with Rabinowitz and Wolfson (the "Option
Agreement"), pursuant to which Ruimi has an option to acquire 565,230 of the
Tabriz Agreement Shares (the "Option Agreement Shares"). Ruimi has the right to
acquire the Option Agreement Shares, and if he does not elect to exercise the
option, he can be required to purchase the Option Agreement 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.
Macpell owns 4,388,210 Tefron Ordinary Shares, approximately 34.5% of the
outstanding Tefron Ordinary Shares, and is a party to the Tefron Shareholders'
Agreement (described in Item 6, below). Pursuant to that agreement, Macpell is
entitled to name five members of the Issuer's board of directors (the "Macpell
Directors") which currently consists of eight persons. Ruimi and Arwol have
entered into an agreement (the "Macpell Shareholders' Agreement") effective
January 31, 2000, pursuant to which Ruimi has been granted the right to appoint
one of the Macpell Directors. In addition, the Macpell Shareholders'
Page 6 of 12 Pages
<PAGE> 7
Agreement provides that Ruimi can gain the right to appoint an additional member
of the Issuer's board of directors if he acquires, pursuant to the Option
Agreement, the Option Agreement Shares. The Macpell Shareholders' Agreement
contains a right of first refusal in the event that either party wishes to sell
its shares, and a tag-along right if either party finds a buyer outside of the
Macpell Shareholders' Agreement who is willing to purchase the Macpell shares.
It also provides that the parties to the Macpell Shareholders' Agreement shall
retain their ownership of at least 50% of the Macpell shares they own as of the
date the agreement was executed. The Macpell Shareholders' Agreement also
provides that the vote of the holders of 75% of the Macpell 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 shares, and (vi) declare dividends. The Macpell
Shareholders' Agreement specifically permits the sale of Macpell shares by Arwol
to Zigi Rabinowitz or a company controlled by Zigi Rabinowitz, provided that
Zigi Rabinowitz agrees to be bound by the terms and conditions of the Macpell
Shareholders' Agreement.
The purpose of the acquisition of shares of Macpell and Tefron by the
Reporting Persons was for investment. Except as otherwise described herein or in
Item 6 of this Statement on Schedule 13D, the Reporting Persons do not have any
present plans or proposals which relate to or would result in (a) the
acquisition by any person of additional securities of the Issuer, or the
disposition of securities of the Issuer, (b) an extraordinary corporate
transaction, such as a merger, reorganization, or liquidation, involving the
Issuer or any of its securities, (c) a sale or transfer of a material amount of
the assets of the Issuer or any of its subsidiaries, (d) any change in the
present board of directors or management of the Issuer, including any plans or
proposals to change the number or term of directors or to fill any existing
vacancies on the Issuer's board of directors, (e) any material change in the
present capitalization or dividend policy of the Issuer, (f) any other material
change in the Issuer's business or corporate structure, (g) changes in the
Issuer's charter, bylaws, or instruments corresponding thereto or other actions
which may impede the acquisition of control of the Issuer by any person, (h)
causing a class of the securities of the Issuer 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, (i) a class of
equity securities of the Issuer becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Exchange Act or (j) any action
similar to any of those enumerated above. Although the Reporting Persons have
not formulated a present plan or proposal to acquire additional shares of the
Issuer or dispose of shares of the Issuer, the Reporting Persons may from time
to time acquire additional securities of the Issuer or Macpell or dispose of
securities of the Issuer or Macpell on terms satisfactory to such persons.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) The responses of the Reporting Persons to Items (11) and (13) of the
cover pages of this Schedule 13D which relate to the aggregate number of shares
and percentage of Tefron Ordinary Shares beneficially owned are herein
incorporated by reference. All of the Tefron Ordinary Shares disclosed in Items
(7) and (9) of the cover pages of this Schedule 13D are owned by Omnia.
(b) The responses of the Reporting Persons to Items (7) through (10) of the
cover page of this Schedule 13D which relate to the shares of Tefron Ordinary
Shares as to which there is power to vote or direct the vote, or power to
dispose or direct the disposition, are herein incorporated by reference. All of
the Tefron Ordinary Shares disclosed in Items (7) and (9) of the cover page of
this Schedule 13D are owned by Omnia.
(c) The following is a description of transactions in Tefron Ordinary
Shares that were effected by Omnia during the past sixty days on the New York
Stock Exchange. All transactions were funded as described in Item 3.
Page 7 of 12 Pages
<PAGE> 8
NUMBER OF
DATE OF SHARES PRICE
TRANSACTION ACQUIRED PAID
----------- --------- ------
12/5/99 3,000 10.37
12/5/99 4,000 10.37
12/7/99 4,800 10.37
12/8/99 5,000 11.25
12/8/99 2,500 11.37
12/8/99 2,500 11.37
12/8/99 1,600 11.50
12/8/99 10,000 11.50
12/9/99 1,500 11.62
12/9/99 5,000 11.75
12/12/99 2,900 12.50
12/13/99 3,000 12.31
12/13/99 3,000 12.43
12/14/99 4,000 13.00
12/14/99 5,000 13.25
12/14/99 2,500 13.37
12/14/99 4,000 13.62
12/15/99 5,000 13.25
12/19/99 3,000 12.75
12/21/99 4,000 12.50
12/24/99 3,000 12.25
12/24/99 5,000 12.25
(d) Not applicable.
(e) Not applicable.
Page 8 of 12 Pages
<PAGE> 9
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Under the Tabriz Agreements (described above in Item 4), Rabinowitz and
Wolfson were granted an option to acquire the Tabriz Agreement Shares. Under the
Option Agreement (described above in Item 4), Ruimi has an option to purchase,
and may be required to purchase, the Option Agreement 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.
Upon completion of the transactions provided for in the Macpell Purchase
Agreement (described above in Item 4), Ruimi will own 26.3% of the outstanding
shares of Macpell. Under the Macpell Shareholders' Agreement (described above in
Item 4), Ruimi is given the right to appoint up to three of the eleven directors
of Macpell based on his proportional ownership interest in Macpell and one (and
under certain circumstances two) of the directors of the Issuer.
Together with Tabriz, Discount Investment Corporation Ltd. ("DIC") and PEC
Israel Economic Corporation ("PEC"), Macpell is a party to an agreement (the
"Tefron Shareholders' Agreement") with respect to the election of directors of
the Issuer and restrictions on transfers of Tefron Ordinary Shares owned by such
shareholders. Pursuant to the Tefron Shareholders' Agreement, Macpell, Tabriz,
DIC and PEC (the "Agreement Shareholders") transferred Tefron Ordinary Shares
held by them representing, in the aggregate, approximately 50% of the
outstanding Tefron Ordinary Shares plus one Tefron Ordinary Share (the
"Agreement Shares") to a trustee (the "Trustee"), which shares will be voted by
the Trustee as provided in the Tefron Shareholders' Agreement. As of the date
hereof, the number of Tefron Ordinary Shares that the Agreement Shareholders
have transferred to the Trustee for voting pursuant to the Tefron Shareholders'
Agreement is 7,371,782, representing approximately 55.0% of the outstanding
Tefron Ordinary Shares.
Voting. Pursuant to the Tefron Shareholders' Agreement, the Trustee shall
vote the Agreement Shares on all matters to be voted upon at an annual general
meeting, other than the election of Issuer directors, in accordance with the
resolution of the Agreement Shareholders at a meeting to be held prior to each
respective annual general meeting. At such meeting, each Agreement Shareholder
will have one vote for each Tefron Ordinary Share transferred by such party to
the Trustee in accordance with the Tefron Shareholders' Agreement. Approval of
each such resolution will require the same majority required for the respective
resolution at the annual general meeting.
Election of Directors. Pursuant to the Tefron Shareholders' Agreement, the
Agreement Shareholders have agreed to establish a Board of Directors of up to
eight directors. In addition, the Trustee will vote the Agreement Shares to
elect up to five directors to be designated by Macpell, one director to be
designated by Tabriz and up to two directors to be designated by DIC and PEC,
provided that two of the directors will be qualified to serve as independent
directors in accordance with the requirements of the New York Stock Exchange.
Page 9 of 12 Pages
<PAGE> 10
Lock-up. Pursuant to the Tefron Shareholders' Agreement, each Agreement
Shareholder has agreed not to transfer, sell, pledge or grant any right with
respect to the Agreement Shares to any third party. Notwithstanding the
foregoing, Tabriz may transfer all or part of its Agreement Shares to Sigi
Rabinowicz or Arie Wolfson or to a company controlled solely by either of them
(each a "Permitted Transferee") provided that (i) the Permitted Transferee will
assume all of Tabriz's obligations under the Tefron Shareholders' Agreement, and
(ii) if the Permitted Transferee is a corporation, any transfer of control of
such corporation shall for the purposes of the Tefron Shareholders' Agreement be
deemed to be a transfer of the Agreement Shares. The parties to the Tefron
Shareholders' Agreement shall have a right of first refusal and tag-along rights
with respect to the Tefron Ordinary Shares held by Macpell, DIC and PEC that
will not be transferred to the Trustee.
Term. The Tefron Shareholders' Agreement shall remain in effect for a
period of three years from September 29, 1997, the effective date of the
Issuer's initial public offering. Upon the expiration of such three-year term,
the agreement shall automatically be renewed for an additional two years unless
a party to the agreement shall give a notice of termination at least 30 days
prior to the expiration of the initial three-year period. Notwithstanding the
foregoing, the Tefron Shareholders' Agreement may be terminated by Macpell, at
any time, upon 180 days' prior notice.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The Reporting Persons file as exhibits the English translations of the
following:
Exhibit 1. Contract dated as of December 28, 1999 between Ruimi and Arwol
Achzakot Ltd. with respect to Ruimi's purchase of Macpell shares (the "Macpell
Purchase Agreement").
Exhibit 2. Shareholders Agreement dated as of December 28, 1999 between
Ruimi and Arwol Holdings Ltd. with respect to Ruimi's purchase of Macpell shares
(the "Macpell Shareholders' Agreement").
Exhibit 3. Contract dated as of September 17, 1997 among Macpell Industries
Ltd., Discount Investment Company Ltd., PEC Israel Economic Corporation, Tabriz
Anstalt Ltd. and Oranim (Securities) Ltd. with respect to the relationship
between the shareholders of Tefron Ltd. (the "Tefron Shareholders' Agreement").
Exhibit 4. Letter agreement dated as of August 27, 1997 among Zigi
Rabinowitz , Arye Wolfson and Tabriz Anstalt Limited NV with respect to the
purchase of Tefron Ordinary Shares owned by Tabriz.
Exhibit 5. Letter agreement dated as of December 21, 1997 among Zigi
Rabinowitz , Arye Wolfson and Tabriz Anstalt Limited NV with respect to the
purchase of Tefron Ordinary Shares owned by Tabriz.
Page 10 of 12 Pages
<PAGE> 11
Exhibit 6. Letter agreement dated as of September 4, 1998 among Zigi
Rabinowitz , Arye Wolfson and Tabriz Anstalt Limited NV with respect to the
purchase of Tefron Ordinary Shares owned by Tabriz.
Exhibit 7. Letter agreement dated as of January 24, 2000 among Zigi
Rabinowitz , Arye Wolfson and Tabriz Anstalt Limited NV with respect to the
purchase of Tefron Ordinary Shares owned by Tabriz (together with Exhibit 4,
Exhibit 5 and Exhibit 6, the "Tabriz Agreements").
Exhibit 8. Letter agreement dated as of December 28, 1999 to Ruimi from
Zigi Rabinowitz and Arye Wolfson with respect to the option for the purchase of
Tefron Ordinary Shares (the "Option Agreement").
Exhibit 9. Business Executive Line dated as of November 10, 1999 for Avi
Ruimi with respect to the provision of a $2,000,000 line of credit.
Exhibit 10. Pledge of Shares owned by Condo Overseas Inc. dated as January
24, 2000 signed by Arwol Holdings Ltd. and Riza Holdings Ltd.
Page 11 of 12 Pages
<PAGE> 12
SIGNATURE
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.
February 10, 2000 /s/ AVI RUIMI
- ------------------------------ -----------------------------------
Date Avi Ruimi
Omnia Business Ltd.
/s/ AVI RUIMI
-----------------------------------
By: Avi Ruimi, Authorized Officer
Condo Overseas Inc.
/s/ AVI RUIMI
-----------------------------------
By: Avi Ruimi, Authorized Officer
Page 12 of 12 Pages
<PAGE> 1
EXHIBIT 1.
- ---------
This exhibit is a fair and accurate English translation of a foreign language
document.
/s/ AVI RUIMI
----------------------------------------
Avi Ruimi
CONTRACT
MADE AND ENTERED INTO AT TEL AVIV ON THIS 28TH DAY OF DECEMBER 1999
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;
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 Macpell
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> 2
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> 3
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> 4
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> 5
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> 6
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> 7
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> 8
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> 9
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
<PAGE> 1
EXHIBIT 2.
- ---------
This exhibit is a fair and accurate English translation of a foreign language
document.
/s/ AVI RUIMI
----------------------------------------
Avi Ruimi
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> 2
"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
3.1 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> 3
(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> 4
(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.
3.4 PURCHASER
<PAGE> 5
(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> 6
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> 7
(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> 8
(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> 9
(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
<PAGE> 10
acquired, 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> 11
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:
/s/ ARYE WOLFSON /s/ AVI RUIMI
---------------------------- ----------------------------
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.
/s/ ARYE WOLFSON
----------------------------
Arye Wolfson
<PAGE> 1
EXHIBIT 3.
- ---------
This exhibit is a fair and accurate English translation of a foreign language
document.
/s/ AVI RUIMI
----------------------------------------
Avi Ruimi
A CONTRACT
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;
<PAGE> 2
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
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
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> 5
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
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> 7
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
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> 9
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> 10
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:
/s/ /s/
--------------------------------- ---------------------------------
Macpell Industries Ltd. Discount Investments Ltd.
/s/ /s/
--------------------------------- ---------------------------------
pp./ Tabriz Anstalt Ltd. PEC Israel Economic corporation
Pinchas Wolowelsky, advocate
under a general power of attorney
/s/
---------------------------------
Oranim (Securities) Ltd.
<PAGE> 11
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> 1
EXHIBIT 4.
- ---------
This exhibit is a fair and accurate English translation of a foreign language
document.
/s/ AVI RUIMI
----------------------------------------
Avi Ruimi
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 Stock
Exchange Ordinary Shares per 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;
Now 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 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 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 for our Israeli lawyer, Pinhas Volovelsky, Adv., of 30
Achad - Haam St., Tel Aviv 65151, Israel - 30 (thirty) days in advance and to
pay us the price of the shares you will decide to purchase within the said 30
days.
<PAGE> 2
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 it 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 $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,
/s/ PHILIPPE STEURBAUT
/s/ PHILIPPE DERIJCKERE
-----------------------------------
Tabris 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.
/s/ SIGI RABINOWICZ /s/ ARIE WOLFSON
------------------------------- --------------------------------
Sigi Rabinowicz Arie Wolfson
(Belgian Passport No. U 080704) (British Passport No. 700123538)
September 10, 1997
<PAGE> 1
EXHIBIT 5.
- ---------
This exhibit is a fair and accurate English translation of a foreign language
document.
/s/ AVI RUIMI
----------------------------------------
Avi Ruimi
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 to 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 known 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 was been agreed between us as follows:
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.
<PAGE> 2
Please confirm by signing the enclosed copy of this letter.
Yours Sincerely,
Tabriz Anstalt Limited NV
By /s/ PHILIPPE STEURBAUT /s/ PHILIPPE DERIJCKERE
--------------------------------- ---------------------------------
Mr. Philippe Steurbaut Mr. Philippe Derijckere
Director Director
We confirm our consent to the above said 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).
/s/ SIGI RABINOWICZ /s/ ARIE WOLFSON
- ----------------------------------- ---------------------------------
Mr. Sigi Rabinowitz Mr. Arie Wolfson
<PAGE> 1
EXHIBIT 6.
- ---------
This exhibit is a fair and accurate English translation of a foreign language
document.
/s/ AVI RUIMI
----------------------------------------
Avi Ruimi
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: /s/ PHILIPPE STEURBAUT /s/ PHILIPPE DERIJCKERE
--------------------------------- ---------------------------------
Mr. Philippe Steurbaut Mr. Philippe Derijckere
Director Director
<PAGE> 2
We confirm our consent to the above said 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).
/s/ SIGI RABINOWICZ /s/ ARIE WOLFSON
- ----------------------------------- ----------------------------------
Mr. Sigi Rabinowicz Ms. Arie Wolfson
<PAGE> 1
EXHIBIT 7.
- ---------
This exhibit is a fair and accurate English translation of a foreign language
document.
/s/ AVI RUIMI
----------------------------------------
Avi Ruimi
Tabriz Anstalt Limited NV
Joe Englishstraat 54
2140 Borgerhout
Antwerpen
Belgium
January 24, 2000
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 a 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 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.
<PAGE> 2
4. Please confirm your acceptance of the above said by signing the enclosed
copy of this letter and sending it back to us.
Yours sincerely,
Tabriz Anstalt Limited NV
By: /s/ PHILIPPE STEURBAUT By: /s/ PHILIPPE DERIJCKERE
-------------------------------- -------------------------------
Mr. Phillipe 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.
/s/ SIGI RABINOWICZ /s/ ARIE WOLFSON
- ----------------------------------- ---------------------------------
Mr. Sigi Rabinowicz Mr. Arie Wolfson
January 24, 2000
<PAGE> 1
EXHIBIT 8.
- ---------
This exhibit is a fair and accurate English translation of a foreign language
document.
/s/ AVI RUIMI
----------------------------------------
Avi Ruimi
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 exercisable 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 15.40 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> 2
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.
/s/ SIGI RABINOWICZ /s/ ARIE WOLFSON
---------------------------- ----------------------------
Sigi Rabinowitz Arie Wolfson
I confirm and agree to the aforesaid:
/s/ AVI RUIMI
-------------------------------
Avi Ruimi and/or
a corporation under his control
<PAGE> 1
EXHIBIT 9.
- ---------
BUSINESS EXECUTIVE LINE
Loan Agreement and Note
- --------------------------------------------------------------------------------
Borrower(s) Name: Avi Ruimi Loan Number
5417 Donna Avenue -----------------------------
Tarzana, CA 91356 Credit Limit: $2,000,000.00
- --------------------------------------------------------------------------------
SECTION 1. THE LINE OF CREDIT. Subject to the terms and conditions of this Loan
Agreement and Note ("Agreement") _____________________________ ("Bank") hereby
provides to Avi Ruimi ("Borrower"), a business line of credit ("Line of Credit")
in the amount of Two Million Dollars and no/100 ($2,000,000.00) ("Credit
Limit").
SECTION 2. PROMISE TO PAY. For value received, on Demand the undersigned
Borrower(s) jointly and severally promise to pay to Bank at its _____________
_________________ office in the City of ______________________, or to order, the
total unpaid principal amount hereunder advanced by Bank from time to time to or
for the benefit of Borrower in accordance with the terms hereof, together with
interest thereon from the date of the advances until paid, and fees and charges
that may be assessed by the Bank from time to time. Principal interest and fees
and charges are payable in lawful money of the United States.
SECTION 3. COLLATERAL. The obligations of the undersigned under this note are
subject to the terms of N/A . If this is a deed of trust, it contains the
following provisions:
"That upon default by Trustor or Obligor in the performance of the
payment or other obligation secured hereby or in the performance of any
agreement hereunder or if the trustor shall sell, convey or alienate
said property or any part thereof, or any interest therein, or shall be
divested of his title, or any interest therein, in any manner or way,
whether voluntary or involuntary, any indebtedness or obligation secured
hereby, irrespective of the maturity dates expressed in any note
evidencing the same, at the option of the holder hereof, and without
demand or notice, shall immediately become due and payable. If there is
procured from Beneficiary an agreement or waiver resulting in the
non-exercise by Beneficiary of such option in any certain instance or on
any particular occasion, then in that event any privilege or option now
in effect to pay said indebtedness or any part thereof prior to the date
the same would be delinquent if not paid, is thereupon and thereby
waived and terminated."
SECTION 4. GUARANTOR. N/A continuing guarantee(s) of __________________________
___________________________________ shall secure the full and timely payment of
principal, interest, and all other amounts due under the Line of Credit and any
renewal thereof.
SECTION 5. ADVANCES. You may borrow money up in your authorized Credit Limit
under the term of this agreement by writing checks which the Bank will provide
to you for your Account, or by borrowing in other ways the Bank establishes. The
Bank will pay any properly completed and signed check presented to it for
payment except if this agreement provides differently. You agree to repay the
Bank for all credit extended under this agreement, as well as the finance
charges and all other charges described below. You agree not to write any checks
against your Account for less than $1,000. The Bank may, but is not obligated to
pay checks written for less than this amount. You are entitled to borrow from
your Account only up to the amount of your Credit Limit. The Bank may, but is
not obligated to, advance any funds if your Account balance would be over your
Credit Limit after that borrowing. Your Credit Limit is shown above.
SECTION 6. INTEREST. You will pay interest if, at the end of any day during the
billing cycle, there is an outstanding principal balance on your Account. This
interest will begin to accrue on the date a check is presented to the Bank for
payment or an advance is posted to your Account.
The Bank figures the finance charge for each billing cycle by applying
the daily periodic interest rate to the product of the "Average Daily Principal
Balance" of the Account times the number of days in the billing cycle. To get
the "Average Daily Principal Balance" (including current transactions), the Bank
takes the beginning principal balance of your Account each day ,add any new
advances and subtract any principal payments and credits. This gives the Bank
the daily principal balance. Then the Bank adds up all the daily principal
balances for the billing cycle and divide by the number of days in the billing
cycle. This gives the Bank the "Average Daily Principal Balance". You can verify
these calculations by multiplying the periodic interest rate times the average
daily principal balance and multiplying that product by the number of days in
the billing cycle.
The "daily periodic interest rate" for the billing cycle will be based
on Bank's Base Rate, as of the close of business on the fifteenth day (or the
following business day if the fifteenth is not a business day) of the preceding
month. Adjustments to the interest rate may occur as the Bank's Base Rate
changes. The Bank's; Base Rate is subject to change at the discretion of the
Bank. To the Bank's Base Rate, the Bank will add a margin of 0.500%. Then, the
ANNUAL PERCENTAGE RATE for the billing cycle will be divided by 360 to get the
"daily periodic interest rate" for the billing cycle.
SECTION 7. "EFFECTIVE DATE: FINANCE CHARGES" will accrue from the effective date
of the transaction until the day we receive payment in full. The effective date
for an advance made by check is the date the item is presented to us for
payment; for all other advances the effective date is our processing date:
SECTION 8. FEE. a) Borrower shall pay to bank a non-refundable loan fee for the
Line of Credit in the amount of Fifteen Thousand Dollars and no/100 Dollars
($15,000.00). In addition, you must pay these other charges:
N/A
These fees and charges will be posted to your Account on the day it is
opened, as your first borrowing. If you want to avoid paying interest on this
initial borrowing, you may pay these fees on or before your Account opening day,
which is estimated to be November 10, 1999.
b) Research and Photocopy Fees. Except in connection with a billing
error inquiry, Borrower shall pay to Bank a fee of Twenty ($20.00) per hour for
any research requested or authorized by Borrower with respect to the Line of
Credit and a fee of One Dollar ($1.00) per copy for any photocopies of any
documents requested or authorized by Borrower with respect to the Line of
Credit.
<PAGE> 2
SECTION 9. PURPOSE. Advances under the Line of Credit may be used only for short
term working capital purposes in Borrower's business. advances may not be used
for personal, family, or household purposes, to purchase or carry investment
securities, to finance the purchase of real property or to make any long term
investment.
SECTION 10. BILLING CYCLE; PAYMENT NOTICE; TOTAL DUE. As used herein, the
following terms shall have the meanings set forth after each:
a) "Billing Cycles" means the regularly recurring monthly periods
established for the purpose of billing Borrower for amounts due under the Line
of Credit.
b) "Payment Notice" means the billing statement sent to Borrower by Bank
approximately sixteen (16) days prior to the end of each Billing Period.
c) "Total Due" means the amount at any time shown on any Payment Notice
as the amount required to be paid by Borrower for a Billing Period, and (i) with
respect to all outstanding advances under the Line of Credit, includes all
interest then due, and all fees and charges assessed by Bank and (ii) with
respect to any Line of Credit, (converted to a term loan or otherwise) with
principal being repaid in accordance with terms specifically agreed to in
writing between Bank and Borrower, the portion of the principal and interest
then due.
SECTION 11. PAYMENT SCHEDULE. You agree to make minimum monthly payments equal
to the sum of (a) the interest charged to your Account during the billing cycle,
plus (b) any past due amount, plus (c) any amount by which your balance exceeds
your established credit limit.
SECTION 12. ALTERNATE MINIMUM PAYMENT SCHEDULE. The Bank, at any time upon not
less than 30 days advance written notice to you, may change the amount of your
minimum monthly payments.
SECTION 13. LATE CHARGE. A late payment charge equal to 5% of each late payment
may be charged on any payment not received by the Bank within 10 calender days
after the payment due date, but acceptance of payment of this charge shall not
waive any Default under this agreement.
SECTION 14. The Bank may pay Credit Line checks written and signed by you or
other loan requests authorized by any person designated on the "Borrowers
Telephone/Facsimile Authorization" form.
SECTION 15. EXPIRATION, EXPIRATION: REPAYMENT. The original term of the Line of
Credit shall expire on Demand by Bank. On such date, no further Advances shall
be available to Borrower and the entire outstanding principal of the Line of
Credit, together with all accrued and unpaid interest thereon and fees and
charges owing in connection therewith, shall be immediately due and payable in
full.
SECTION 16. ACCOUNT REVIEW. From time to time, the Bank will review your Account
and update the information it has concerning your financial condition. You agree
to furnish the Bank with whatever information regarding your financial affairs
the Bank may then request. The Bank may, at any time, seek information about
your financial condition from others and may provide information about your
Account to others.
SECTION 17. CANCELLATION BY BORROWER. The Line of Credit may be canceled by
Borrower at any time upon written notice to Bank in accordance with the
requirements for notice set forth in Section 18. Upon cancellation, the entire
outstanding principal balance of the Line of Credit, together with all accrued
and unpaid interest thereon and fees and charges owing in connection therewith,
shall be due and immediately payable in full.
SECTION 18. FINANCIAL INFORMATION. So long as the Line of Credit remains
available or any indebtedness of Borrower to Bank under the Line of Credit
remains outstanding, Borrower shall provide to Bank:
a) not later than ninety (90) days after and as of the end of each of
Borrower's fiscal years, (i) a reviewed or audited financial statement in form
and substance satisfactory to Bank, prepared by an independent certified public
account, to include balance sheet, income statement and reconciliation of net
worth, or (ii) if Borrower's annual financial statement is not a reviewed or
audited financial statement prepared by an independent certified public
accountant, a financial statement prepared by Borrower or other party
satisfactory to Bank and in form and substance satisfactory to Bank, to include
the same exhibits as required in (i), and a complete copy (including schedules)
of Borrower's most recently filed federal income tax return;
b) not later than ninety (90) days after and as of the end of each of
Borrower's fiscal years, a financial statement of each guarantor of the Line of
Credit, and if Borrower is a proprietorship, a financial statement from the
owner of Borrower, and if Borrower is a partnership, a financial statement from
each general partner and a complete copy (including schedules) of each such
guarantor's, owner's or partner's most recently filed federal income tax return;
and
c) from time to time such financial and other information as bank may
reasonably request.
SECTION 19. DEFAULT; REMEDIES.
a) Default. The occurrence of any of the following shall constitute an
"Event of Default" under this Agreement:
(i) The failure to pay any principal, interest, fees or charges
when due under this Agreement.
(ii) The filing of a petition by or against a Borrower or any
guarantor of the Line of Credit or any general partner in
Borrower under the Bankruptcy Reform Act, Title 11 of the
United States Bankruptcy Code, as amended from time to time,
or under any similar or other law relating to bankruptcy,
insolvency, reorganization or other relief for debtors; the
appointment of a receiver, trustee, custodian or liquidator of
or for any part of the assets or property of Borrower or any
such guarantor or general partner; Borrower or any such
guarantor or general partner becomes insolvent, makes a
general assignment for the general partner; Borrower or any
such guarantor or general partner becomes insolvent, makes a
general assignment for the benefit of creditors, or is
generally not paying its debts as they come due; or any
attachment or like levy on any property of Borrower, any such
guarantor or general partner.
(iii) The dissolution or liquidation of any Borrower, any guarantor
of the Line of Credit or any general partner in Borrower which
is a corporation, partnership or any other type of entity.
(iv) the death or incapacity of any individual borrower, any
individual guarantor of the Line of Credit, or any individual
general partner in Borrower.
(v) Any changes of ownership of more than twenty-five percent
(25%) of the common stock of any Borrower which is a
corporation or the resignation or expulsion of any general
partner with an ownership interest of twenty-five percent
(25%) or more in any Borrower which is a partnership.
<PAGE> 3
(vi) Any violation or default of Borrower of any term or condition
of this Agreement or any agreement or instrument evidencing
the lien or security interest in the Collateral.
(vii) Any default in the performance of any obligations, or any
defined event of default, under any provisions of any contract
or instrument pursuant to which Borrower has incurred debt or
any other liability to any person or entity, including Bank.
(viii) Any sale or transfer of all or a substantial or material part
of any assets of Borrower, any guarantor of the Line of Credit
or any general partner of Borrower other than in the ordinary
course of business.
(ix) Any material adverse change, as determined solely by Bank, in
the financial condition of Borrower.
(x) Any injunction (including temporary protective order and
temporary restraining order), writ of attachment, writ of
possession, writ of execution, judgment, tax assessment, or
any involuntary lien or provisional remedy of any kind is
issued, filed, recorded, served or levied against Borrower or
Borrower's assets or any guarantor or their assets.
(xi) In the event that financial statements, tax returns or other
similar records are not delivered to the Bank as required by
the loan documents, the Agreement and loan shall be considered
in default and the Bank may, in addition to any other remedy
available to the Bank, increase the interest rate to 21%. The
increased rate shall be in effect until the financial
statements, records and tax returns are delivered to the Bank.
(b) Remedies. Upon the occurrence of any Event of Default while the Line
of Credit remains available or any indebtedness of Borrower to Bank under the
Line of Credit remains outstanding, Bank may, at its sole option, declare the
entire balance of principal, interest fees and charges immediately due and
payable without presentment, demand, protest or notice of dishonor, all of which
are expressly waived by Borrower, and Bank shall have the right to refuse to
make any additional Advances to Borrower. Upon such declaration by Bank all
unpaid principal and accrued interest shall bear interest at a rate of 21%
calculated on the basis of a 360- day year. Bank shall have all other rights,
powers, privileges and remedies provided by law. All rights, powers, privileges
or remedy hereunder shall affect or operate as a waiver of such right, power,
privilege or remedy; nor shall any single or partial exercise of any such right,
power, privilege or remedy preclude, waive or otherwise affect any further
exercise thereof or the exercise of any other right, power, privilege or remedy.
Any waiver, permit, consent or approval of any kind by Bank of any default
hereunder, or any such waiver of any provisions or conditions hereof, must be in
writing and shall be effective only to the extent set forth in writing.
SECTION 20. The undersigned acknowledge(s) that this Agreement matures upon
issuance, and that the Bank, at any time, without notice, and without reason,
may demand that this Agreement be immediately paid in full. The demand nature of
this Agreement shall not be deemed modified by reference to a Default in this
Agreement or in any agreement to a default by the undersigned or to the
occurrence of any event of default (collectively an "Event of Default"). For
purposes of this Agreement, to the extent there is reference to an Event of
Default this reference is for the purpose or permitting the Bank to accelerate
Indebtedness not on a demand basis and to receive interest at the default rate
provided in the document evidencing the relevant Indebtedness. It is expressly
agreed that the Bank may exercise its demand right under this Note whether or
not an Event of Default has occurred. The Bank, with or without reason and
without notice, may from time to time make demand for partial payments under
this Agreement and these demands shall not preclude the Bank from demanding at
any time that this Agreement be immediately paid in full. All payments under
this Agreement shall be in immediately available United States funds, without
setoff or counterclaim.
SECTION 21. NOTICES. All notices, requests and demands required under this
Agreement must be in writing and shall be deemed to have been given or made when
personally delivered or two (2) days after any of the same are deposited in the
U.S. mail, first class and postage prepaid to the address specified below or to
such other address as either party may designate by written notice to the other
party.
SECTION 22. SUCCESSORS; ASSIGNS. This Agreement shall be binding on and insure
to the benefit of the heirs, executors, administrators, legal representatives,
successors and assigns of the parties. However, Borrower may not assign or
transfer its interest or rights hereunder without prior written consent of Bank.
SECTION 23. COSTS AND ATTORNEYS' FEES. Borrower further promises to pay all
costs and expenses incurred by Bank as a result of a default by Borrower,
including without limitation reasonable attorneys' fees (including those
incurred post judgment) and Bank personnel costs.
SECTION 24. CALIFORNIA LAW. This Agreement shall be governed by the laws of the
State of California.
SECTION 25. ENTIRE AGREEMENT, AMENDMENT. This Agreement and any renewal notice
represent the entire agreement between Bank and Borrower with respect to this
Line of Credit and supersede all prior negotiations, communications, discussions
and correspondence concerning the matters addressed herein. This Agreement may
be amended or modified only by a written instrument signed by both Bank and
Borrower, provided however, that the terms of this Agreement may be modified by
Bank in a written notice.
SECTION 26. ACCOUNT DISCLOSURE. Borrower agrees that Bank can share any and all
information relating to Borrower, Borrower's loan and Borrower's relationship
with Bank's parent, affiliates, subsidiaries and any service providers.
THE BORROWER AND THE BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTION ALONE, BUT THAT IT MAY BE WAIVED, EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY
AND VOLUNTARILY AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY
IN THE EVENT OR LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN
ANY WAY RELATED TO, THIS NOTE OF THE INDEBTEDNESS.
See Letter Agreement dated November 10, 1999.
This Agreement is executed as of November 10, 1999.
Borrower(s):
/s/ AVI RUIMI BY MARCIA SIMON
- -----------------------------------
ATTORNEY IN FACT
- ----------------------------------- -----------------------------------
/s/
- ----------------------------------- -----------------------------------
Vice President
- -----------------------------------
<PAGE> 1
EXHIBIT 10.
- ----------
This exhibit is a fair and accurate English translation of a foreign language
document.
/s/ AVI RUIMI
----------------------------------------
Avi Ruimi
Date: 24.01.2000
Bank
Dear Sir/Madam,
Re: Pledge of Shares owned by Condo Overseas Inc, (hereinafter - "Condo")
in Macpell Industries Ltd. (hereinafter - "the Company") to the
benefit of Bank.
1. We, the undersigned, shareholders in the Company, confirm and agree that
Condo shall charge in your favor at any time, its shares in the Company
(hereinafter - "the shares") and all the rights against us and/or against
our transferee under the Agreement between the shareholders in Macpell
dated 28.12.99 (hereinafter - "the Internal Agreement"). We agree to the
aforesaid charge, subject to the fact that in any case of the realization
by you of the pledge of the shares, our right of preference shall be
reserved with respect to the acquisition of the shares as set out in the
Internal Agreement, except for the modification specified in clause 2
below.
2. Notwithstanding the provisions in clause 2.1 of the Internal Agreement, in
any case of the realization of the pledge of the shares by you, (including
through a receiver and/or any other person on your behalf and/or on behalf
of the competent court), you shall be entitled to realize and sell the
charged shares also during the preliminary three years from the date of
execution of the Internal Agreement, without any limitation.
Moreover, notwithstanding the provisions in clause 3.3 of the Internal
Agreement, in any case of realization as aforesaid, the provisions
specified in the Internal Agreement with respect to Tag Along shall not be
applicable.
/s/ /s/
---------------------- ----------------------
Arwol Holdings Ltd. Riza Holdings Ltd.
I, the undersigned, Shay Wolowelsky, advocate of Arwol Holdings Ltd.
(hereinafter - "Arwol"), hereby certify that Mr. Pinchas Wolowelsky,
advocate, has duly signed the said approval and consent in the name of
Arwol, and that the consents contained therein are binding upon Arwol.
I, the undersigned, Shay Wolowelsky, advocate of Riza Holdings Ltd.
(hereinafter - "Riza"), hereby certify that Mr. Pinchas Wolowelsky,
advocate, has duly signed the said approval and consent in the name of
Riza, and that the consents contained therein are binding upon Riza.
(-) Shay Wolowelsky
Advocate
Licence. No. 1637
76, Shderot Rothchild, Tel-Aviv
