Contract
Made and Signed in Migdal Haemek this 27th day of September 1993
BETWEEN: Rafi Amit
(hereinafter: "Amit")
of the first part
AND: Yotam Stern
(hereinafter: "Stern")
of the second part
AND: Yitzchak Kerl
(hereinafter: "Kerl")
of the third part
WHEREAS The parties are the owners of an approximate 40% core of control of
the Company and are directors thereof; and
WHEREAS The parties and the additional shareholders employed by the Company
(the parties jointly with the additional shareholders employed by
the Company being hereinafter called: "the Original Shareholders")
are mutually committed by a voting agreement dated March 29, 1992
(hereinafter: "the Voting Agreement"); and
WHEREAS On account of the blocking provisions of the Stock Exchange and the
directives of the Income Tax Commission, the shares of the Original
Shareholders are being held by a trustee (hereinafter: "the
Trustee") according to a trust contract dated __________
(hereinafter: "the Trust Contract"); and
WHEREAS Some of the shares of the Original Shareholders have become
unblocked; and
WHEREAS A number of the shareholders from amongst the Original Shareholders
have recently expressed an interest in selling their shares in
company; and
WHEREAS The parties wish to retain the core of control in the Company;
Therefore, it is declared, agreed and stipulated between the parties as
follows:
1. The preamble to this Contract constitutes an integral part thereof.
2. The parties undertake not to sell their shares in the Company and to vote
jointly and as one at meetings of the Original Shareholders and at general
meetings, as mentioned below.
<PAGE>
2
3. The following provisions will apply in relation to the sale of shares of
the parties in the Company including their shares held by the Trustee
(hereinafter: "the Parties' Shares"):
3.1 Each of the parties undertakes not to sell or otherwise dispose of
any of the Parties' Shares without the prior written consent of at
least one of the other parties to this Contract.
3.2 Notwithstanding the foregoing, a party may sell shares amounting to
not more than 1% (one per centum) of his shares in the Company
during any calendar year without requiring any consent, if such sale
is made in the course of regular trading on the Stock Exchange.
3.3 The parties hereby irrevocably instruct the Trustee not to allow the
sale or transfer of any of the Parties' Shares unless he is
satisfied that the provisions of this Contract have been fulfilled.
3.4 For the avoidance of doubt it is hereby stated that the prohibition
against sale or transfer contained in this clause will not apply to
a transfer by way of succession or by operation of law, to a
transfer to a close family member (spouse, child) or to a
corporation which is wholly owned by a party.
4. The following provisions will apply in relation to voting rights in
respect of the Parties' Shares:
4.1 The parties will vote jointly and in a uniform manner in meetings to
be held according to the Voting Agreement in general meetings, as
set out below.
4.2 Approximately half an hour before the holding of a meeting of the
Original Shareholders according to the Voting Agreement (or before
the holding of a general meeting of the Company, if, for any reason,
a meeting according to the Voting Agreement is not held) the parties
will meet and decide how they will vote on the matters on the agenda
and as to the questions arising at such meeting.
If all of the parties have not appeared at such meeting - if two of
the parties are present at the meeting - decisions adopted by the
shareholders present will be binding upon all the parties.
4.3 A decision by the parties respecting the manner of their voting at
the meeting, will be determined by simple majority according to the
rate of their holdings of the shares of the Company.
4.4 The parties hereby irrevocably appoint the Trustee as their
attorney-in-fact and hereby irrevocably instruct him to vote at
meetings of the Original Shareholders and at the general meetings
pursuant to decisions adopted at meetings as mentioned in this
clause 2 above.
<PAGE>
3
The Trustee will act at meetings according to a decision signed by
at least two of the parties to this Contract.
5. For the avoidance of doubt it is hereby stated that if shares are
transferred in any of the cases enumerated in clause 3.4 above, the
transferee will be subject to all the provisions of this Contract.
6. The Contract will be in force with respect to each party so long as he
holds at least 2% of the shares of the Company.
7. The parties hereby instruct the Trustee to hold the Parties' Shares in
trust for them and act as provided in this Contract for the entire term
hereof as provided in clause 6 above.
8. The provisions contained in clauses 3(d), 5, 7, 9, 10 and 11 of the Trust
Contract will, mutatis mutandis, apply to the trusteeship relating to this
Contract.
9. The provisions of this Agreement will apply to the parties in addition to
but without prejudice to or derogating from the provisions of the Voting
Agreement.
In witness whereof the parties have set their hands:
(signed) (signed) (signed)
----------------------- ---------------------- -------------------
Amit Stern Kerl
