<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1999
-------------------------------------------------
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from _____________________ to ________________________
Commission file number 0-538
---------
AMPAL-AMERICAN ISRAEL CORPORATION
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
New York 13-0435685
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1177 Avenue of the Americas, New York, New York 10036
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (212) 782-2100
------------------------------
- --------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|
The number of shares outstanding of the issuer's Class A Stock, its only
authorized common stock, is 24,115,471 (as of April 30, 1999).
<PAGE> 2
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
Index to Form 10-Q
Page
----
Part I Financial Information
Consolidated Statements of Income...................... 1
Consolidated Balance Sheets............................ 2
Consolidated Statements of Cash Flows.................. 4
Consolidated Statements of Changes in Shareholders'
Equity................................................ 6
Consolidated Statements of Comprehensive Income........ 7
Notes to the Consolidated Financial Statements......... 8
Management's Discussion and Analysis of
Financial Condition and Results of Operations......... 11
Part II Other Information...................................... 15
<PAGE> 3
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1999 1998
- --------------------------------------------------------------------------------
(Dollars in thousands, except per share data) (Unaudited) (Unaudited)
<S> <C> <C>
REVENUES
Equity in earnings of affiliates ..................... $ 811 $ 3,179
Manufacturing ........................................ 1,844 1,901
Interest:
Related parties ..................................... 104 618
Others .............................................. 221 246
Rental income ........................................ 1,878 1,757
Realized and unrealized gains on investments ......... 9,088 1,636
Other ................................................ 1,755 496
------- -------
Total revenues .................................. 15,701 9,833
------- -------
EXPENSES
Manufacturing ........................................ 2,278 1,987
Interest:
Related parties ..................................... 1,042 937
Others .............................................. 1,010 1,173
Rental property operating expenses ................... 872 854
Other ................................................ 1,576 1,216
------- -------
Total expenses .................................. 6,778 6,167
------- -------
Income before income taxes ........................... 8,923 3,666
Provision for income taxes ........................... 3,371 1,660
------- -------
NET INCOME ...................................... $ 5,552 $ 2,006
======= =======
Basic EPS
Earnings per Class A share .......................... $ .23 $ .08
======= =======
Shares used in calculation (in thousands) ........... 24,094 23,832
Diluted EPS
Earnings per Class A share .......................... $ .20 $ .07
======= =======
Shares used in calculation (in thousands) ........... 27,716 27,616
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
1
<PAGE> 4
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS AS AT 1999 1998
- ----------------------------------------------------------------------------------
(Dollars in thousands) (Unaudited)
<S> <C> <C>
Cash and cash equivalents ............................ $ 11,900 $ 12,047
Deposits, notes and loans receivable ................. 26,166 27,816
Investments .......................................... 229,879 214,421
Investment held for sale(Note 5) ..................... 23,955 25,104
Real estate rental property, less accumulated
depreciation of $6,770 and $6,492 ................... 30,151 29,735
Property and equipment, less accumulated
depreciation of $2,767 and $2,608 ................... 3,254 3,227
Other assets ......................................... 15,415 16,896
-------- --------
TOTAL ASSETS ......................................... $340,720 $329,246
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
2
<PAGE> 5
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
LIABILITIES AND March 31, December 31,
SHAREHOLDERS' EQUITY AS AT 1999 1998
- ---------------------------------------------------------------------------------------
(Dollars in thousands) (Unaudited)
<S> <C> <C>
LIABILITIES
Notes and loans payable:
Related parties .......................................... $ 56,540 $ 57,557
Others ................................................... 40,698 40,636
Debentures ................................................. 27,752 32,817
Accounts and income taxes payable, accrued
expenses and minority interests ........................... 47,816 37,071
--------- ---------
Total liabilities .................................. 172,806 168,081
--------- ---------
SHAREHOLDERS' EQUITY
4% Cumulative Convertible Preferred Stock, $5 par value;
authorized 189,287 shares; issued and
outstanding 170,255 and 172,238 shares .................... 851 861
6-1/2% Cumulative Convertible Preferred Stock, $5 par value;
authorized 988,055 shares; issued and
outstanding 920,186 and 925,279 shares .................... 4,601 4,626
Class A Stock, $1 par value; authorized 60,000,000 shares;
issued 24,710,016 and 24,684,822 shares;
outstanding 24,104,616 and 24,079,422 shares .............. 24,710 24,685
Additional paid-in capital ................................. 57,839 57,829
Retained earnings .......................................... 96,167 90,615
Treasury Stock, 605,400 shares of Class A Stock,
at cost ................................................... (3,829) (3,829)
Accumulated other comprehensive loss ....................... (12,425) (13,622)
--------- ---------
Total shareholders' equity ......................... 167,914 161,165
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ................. $ 340,720 $ 329,246
========= =========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
3
<PAGE> 6
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1999 1998
- ---------------------------------------------------------------------------------
(Dollars in thousands) (Unaudited) (Unaudited)
(Note 2)
<S> <C> <C>
Cash flows from operating activities:
Net income .......................................... $ 5,552 $ 2,006
Adjustments to reconcile net income to net cash
provided by operating activities:
Equity in earnings of affiliates ................... (811) (3,179)
Realized and unrealized gains on investments ....... (9,088) (1,636)
Depreciation expense ............................... 323 333
Amortization expense ............................... 347 346
Translation gain ................................... (137) (152)
(Increase) decrease in other assets ................. (640) 3,614
Increase (decrease) in accounts and income taxes
payable, accrued expenses and minority
interests .......................................... 3,151 (2,994)
Investments made in trading securities .............. (4,514) (2,157)
Proceeds from sale of trading securities ............ 1,235 3,447
Dividends received from affiliates .................. 2,243 3,144
--------- ---------
Net cash (used in) provided by operating
activities ........................................ (2,339) 2,772
--------- ---------
Cash flows from investing activities:
Deposits, notes and loans receivable collected ...... 6,107 14,809
Deposits, notes and loans receivable granted ........ (3,702) (22)
Investments made in affiliates and others ........... (1,863) (112,367)
Proceeds from sale of investments:
Others ............................................. 1,072 1,207
Deposit-sale of affiliate ........................... 7,581 --
Purchase of property and equipment .................. (28) (47)
Real estate rental property - capital
improvements ....................................... (486) (825)
--------- ---------
Net cash provided by (used in) investing
activities ........................................ 8,681 (97,245)
--------- ---------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
4
<PAGE> 7
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1999 1998
- ----------------------------------------------------------------------------------
(Dollars in thousands) (Unaudited) (Unaudited)
(Note 2)
<S> <C> <C>
Cash flows from financing activities:
Notes and loans payable received:
Related parties .................................... $ -- $ 35,710
Others ............................................. -- 32,088
Notes and loans payable repaid:
Related parties .................................... (1,281) (712)
Others ............................................. (48) (609)
Debentures repaid ................................... (5,764) (7,936)
Contribution to partnership by minority
interests .......................................... -- 9,765
-------- --------
Net cash (used in) provided by financing
activities ........................................ (7,093) 68,306
-------- --------
Effect of exchange rate changes on cash and
cash equivalents .................................... 604 (215)
-------- --------
Net (decrease) in cash and cash equivalents .......... (147) (26,382)
Cash and cash equivalents at beginning of
period .............................................. 12,047 45,457
-------- --------
Cash and cash equivalents at end of period ........... $ 11,900 $ 19,075
======== ========
Supplemental Disclosure of Cash Flow Information
Cash paid during the period:
Interest:
Related parties .................................... $ 395 $ 72
Others ............................................. 577 1,100
-------- --------
Total interest paid .............................. $ 972 $ 1,172
======== ========
Income taxes paid (refunded), net ................... $ 36 $ (665)
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
5
<PAGE> 8
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1999 1998
- ---------------------------------------------------------------------------------
(Dollars in thousands, except share amounts) (Unaudited) (Unaudited)
<S> <C> <C>
4% PREFERRED STOCK
Balance, beginning of year ......................... $ 861 $ 898
Conversion of 1,983 and 1,440 shares into
Class A Stock ..................................... (10) (7)
-------- --------
Balance, end of period ............................. $ 851 $ 891
======== ========
6-1/2% PREFERRED STOCK
Balance, beginning of year ......................... $ 4,626 $ 4,842
Conversion of 5,093 and 9,881 shares into
Class A Stock ..................................... (25) (50)
-------- --------
Balance, end of period ............................. $ 4,601 $ 4,792
======== ========
CLASS A STOCK
Balance, beginning of year ......................... $ 24,685 $ 24,418
Issuance of shares upon conversion of
Preferred Stock ................................... 25 37
-------- --------
Balance, end of period ............................. $ 24,710 $ 24,455
======== ========
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of year ......................... $ 57,829 $ 57,491
Conversion of Preferred Stock ...................... 10 20
-------- --------
Balance, end of period ............................. $ 57,839 $ 57,511
======== ========
RETAINED EARNINGS
Balance, beginning of year ......................... $ 90,615 $ 88,775
Net income ......................................... 5,552 2,006
-------- --------
Balance, end of period ............................. $ 96,167 $ 90,781
======== ========
ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance, beginning of year: ........................ $(13,622) $(10,085)
Cumulative translation adjustments:
Balance, beginning of year ....................... (18,580) (10,085)
Foreign currency translation adjustment .......... 1,163 (973)
-------- --------
Balance, end of period ........................... (17,417) (11,058)
-------- --------
Unrealized gain on marketable securities:
Balance, beginning of year ....................... 4,958 --
Unrealized gain, net ............................. 1,745 1,441
Transfer to trading securities ................... (1,711) --
-------- --------
Balance, end of period ........................... 4,992 1,441
-------- --------
Balance, end of period ............................. $(12,425) $ (9,617)
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
6
<PAGE> 9
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1999 1998
- -------------------------------------------------------------------------------------
(Dollars in thousands) (Unaudited) (Unaudited)
<S> <C> <C>
Net income ................................................. $ 5,552 $ 2,006
------- -------
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments .................. 1,163 (973)
Unrealized gain on securities ............................. 1,745 1,441
------- -------
Other comprehensive income ................................ 2,908 468
------- -------
Comprehensive income ...................................... $ 8,460 $ 2,474
======= =======
Related tax (expense) benefit of other comprehensive income:
Foreign currency translation adjustments .................. $ (178) $ 141
Unrealized gain on securities ............................. $ (940) $ (776)
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
7
<PAGE> 10
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. As used in these financial statements, the term the "Company" refers to
Ampal-American Israel Corporation ("Ampal") and its consolidated
subsidiaries.
2. The December 31, 1998 consolidated balance sheet presented herein was
derived from the audited December 31, 1998 consolidated financial
statements of the Company.
Reference should be made to the Company's consolidated financial
statements for the year ended December 31, 1998 for a description of the
accounting policies which have been continued without change. Also,
reference should be made to the notes to the Company's December 31, 1998
consolidated financial statements for additional details of the Company's
consolidated financial condition, results of operations and cash flows.
The details in those notes have not changed except as a result of normal
transactions in the interim. Certain amounts in the 1998 consolidated
statement of cash flows have been reclassified to conform with the current
period's presentation. All adjustments (of a normal recurring nature)
which are, in the opinion of management, necessary to a fair presentation
of the results of the interim period have been included.
3. Segment information presented below results primarily from operations in
Israel.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1999 1998
-------------------------------------------------------------------------
(Dollars in thousands)
<S> <C> <C>
Revenues:
Finance ..................................... $ 10,919 $ 2,739
Real estate rental .......................... 1,878 1,757
Mattress manufacturing ...................... 1,844 1,901
Leisure-time ................................ 390 404
Intercompany adjustments .................... (141) (147)
--------- ---------
Total .................................. $ 14,890 $ 6,654
========= =========
Pretax Operating Income (Loss):
Finance ..................................... $ 7,868 $ (52)
Real estate rental .......................... 654 593
Mattress manufacturing ...................... (499) (136)
Leisure-time ................................ 93 59
--------- ---------
Total .................................. $ 8,116 $ 464
========= =========
Total Assets:
Finance ..................................... $ 276,771* $ 263,388*
Real estate rental .......................... 36,055 33,504
Mattress manufacturing ...................... 5,372 6,929
Leisure-time ................................ 36,436 36,953
Intercompany adjustments .................... (13,914) (9,880)
--------- ---------
Total .................................. $ 340,720 $ 330,894
========= =========
</TABLE>
Corporate office expense is principally applicable to the financing
operation and has been charged to that segment above. Revenues and pretax
operating income above exclude equity in earnings of affiliates and
minority interests.
The real estate rental segment consists of rental property owned in Israel
and the United States leased to related and unrelated parties. The
mattress manufacturing segment consists of Paradise Industries, Ltd.,
which is a leading manufacturer and distributor of mattresses and fold-out
beds in Israel whose customer base consists of independent stores as well
as hotel chains. The
8
<PAGE> 11
leisure-time segment consists primarily of Moriah Hotels Ltd. (hotel chain
in Israel, see Note 4 below), Coral World International Limited (marine
parks located around the world) and Country Club Kfar Saba (the company's
51%-owned subsidiary located in Israel).
*Includes an investment in MIRS of $111 million.
4. The following table summarizes securities that were outstanding as of
March 31, 1999 and 1998, but not included in the calculations of diluted
earnings per Class A share because such shares are antidilutive.
<TABLE>
<CAPTION>
(Shares in thousands)
March 31,
---------------------
1999 1998
---- ----
<S> <C> <C>
Options and Rights 1,100 109*
Warrants -- 4,500*
* Expired on January 31, 1999.
</TABLE>
5. On April 14, 1999, the Company sold its 46% equity interest in Moriah
Hotels Ltd. ("Moriah") to Koor Tourism Enterprises Ltd. and Sheraton
International Ltd. for $29.6 million. Prior to the sale, on April 12,
1999, the Company received a dividend from Moriah in the amount of $7.9
million. As a result of the aforementioned transaction, the Company will
record a gain on sale in the amount of approximately $13.5 million ($8.8
million, net of income taxes) in the June 30, 1999 consolidated financial
statements.
6. On May 11, 1999, the Company signed an agreement with Bank Hapoalim B.M.
("BHP") and two wholly-owned subsidiaries of BHP, which provides for the
following:
(a) The Company will acquire from BHP and its subsidiary all of
their holdings in Ampal - 5,874,281 shares of Class A Stock,
3,350 shares of 4% Preferred Stock and 122,536 shares of 6
1/2% Preferred Stock for $31.3 million.
(b) The Company will sell to BHP's subsidiary seven real estate
properties totaling 53,000 sq. ft., currently leased to and
occupied by BHP, for $14.7 million.
(c) Ampal's subsidiary will renew the lease agreement with BHP
with respect to a 4,400 sq. ft. branch in Bnei Brak, Israel
for ten years at an annual rental income of $346,000.
Upon completion of the transaction, Ampal's outstanding shares will
consist of 18,242,891 shares of Class A Stock, 166,180 shares of 4%
Preferred Stock and 794,673 shares of 6 1/2% Preferred Stock, based on
shares outstanding on May 10, 1999. Rebar Financial Corporation and the
public will hold 11,083,712 and 7,159,179 shares of Class A Stock,
representing 60.8% and 39.2% of Ampal's Class A Stock outstanding,
respectively.
Ampal will record a net gain of approximately $6 million on the sale of
the aforementioned real estate properties.
The above transactions are subject to the receipt of the approval of the
Related Party Transactions and Audit Committees, boards of directors and
shareholder approval of Ampal, its subsidiaries, and the relevant
committees of Bank Hapoalim and its subsidiaries, where applicable, as
well as the approval of the appropriate regulatory agencies in Israel.
Ampal's Related Party Transactions Committee has requested a fairness
opinion from Lehman Brothers concerning the aforementioned transactions.
Lehman Brothers has begun its evaluation.
9
<PAGE> 12
The transaction is expected to close after Ampal's annual meeting to be
held on June 29, 1999.
10
<PAGE> 13
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Consolidated net income increased to $5.6 million for the three-month period
ended March 31, 1999, from $2 million for the same period in 1998. The increase
in net income is primarily attributable to greater unrealized gains on
investments and the dividend income from MIRS Communication Company Ltd.
("MIRS") in 1999, which were partially offset by the decrease in equity in
earnings of affiliates and the decrease in interest income.
Ampal-American Israel Corporation ("Ampal") and its subsidiaries (the "Company")
recorded $8.5 million of unrealized gains on investments which are classified as
trading securities in the three-month period ended March 31, 1999, as compared
to $.5 million in the same period in 1998. The unrealized gains recorded in 1999
are primarily attributable to the Company's investments in the shares of Bank
Leumi Le'Israel B.M. (pretax gain of $4 million) and Fundtech Ltd. ("Fundtech")
(pretax gain of $3.6 million). The Company's investment in Fundtech, which was
classified as an available-for-sale security at December 31, 1998, was
classified as a trading security at March 31, 1999, since the Company commenced
selling its shares in Fundtech. At March 31, 1999 and December 31, 1998, the
aggregate fair value of trading securities amounted to approximately $39.2
million and $26.3 million, respectively.
In the quarter ended March 31, 1999, the Company recorded $.6 million of gains
on sale of investments, which are primarily attributable to its investment in
Fundtech. In the quarter ended March 31, 1998, the Company recorded $1.1 million
of gains on sale of investments, which are attributable to its investments in
Mercury Interactive Corporation, Shikun U'Fituach le-Israel Ltd., and Fundtech
Ltd.
The increase in other income in the three months ended March 31, 1999, as
compared to the same period in 1998 is attributable to the dividend of $1.2
million ($.9 million, net of minority interest) declared by MIRS.
The Company recorded lower interest income in the three months ended March 31,
1999, as compared to the same period in 1998, as a result of utilizing its funds
for making investments in various companies.
Equity in earnings of affiliates decreased to $.8 million for the three months
ended March 31, 1999, from $3.2 million for the same period in 1998. The
decrease is primarily attributable to the decreased earnings of Ophir Holdings
Ltd. ("Ophir"), the Company's 42.5%-owned affiliate, which is a holding company
with interests in high technology and real estate companies. Ophir reported
lower earnings in 1999 primarily due to gains realized on the sale of several
commercial real estate properties and shares of Memco Software Ltd. ("Memco") in
1998, which were absent in 1999.
Granite Hacarmel Investments Ltd. ("Granite"), the Company's 20.3%-owned
affiliate, which is one of the largest distributors of refined petroleum
products in Israel, reported lower earnings in the first quarter of 1999 as a
result of higher interest expense, which is attributable to increased bank
borrowings.
Moriah Hotels Ltd. ("Moriah"), the Company's 46%-owned affiliate (See Subsequent
Events), which is one of the largest hotel chains in Israel, recorded higher
losses in the first quarter of 1999 primarily due to a decrease in occupancy
rates as a result of the decrease in tourism to Israel.
11
<PAGE> 14
Manufacturing revenues and expenses reflect the operations of Paradise
Industries Ltd., the Company's 85.1%-owned subsidiary, which is a manufacturer
and distributor of mattresses and fold-out beds in Israel. Manufacturing
expenses were lower in 1998 as a result of the additional expense reimbursement
by the insurance company in early 1998, for the fire that occurred in 1997.
The decrease in the effective income tax rate in 1999 as compared to 1998 is
mainly attributable to the decreased deferred tax provisions of certain Israeli
subsidiaries due to the utilization of available tax benefits.
Liquidity and Capital Resources
At March 31, 1999, cash and cash equivalents were $11.9 million as compared with
$12 million at December 31, 1998. The decrease in debentures is primarily
attributable to scheduled repayments. The increase in accounts payable is
attributable to the deposit received from Koor Tourism Enterprises Ltd. ("Koor")
and Sheraton International Ltd. ("Sheraton") with respect to the sale of Moriah.
During the first quarter of 1999, the Company made an additional investment of
$1.8 million in Granite and increased its equity interest from 19.1% to 20.3%.
OTHER DEVELOPMENTS
On March 29, 1999, Memco, in which Ophir had a 9.3% interest, merged with
Platinum Technology International Inc. ("Platinum"). Pursuant to this merger,
Ophir exchanged its 1,626,000 shares of Memco for 1,360,000 shares of Platinum.
On March 29, 1999, Platinum signed a merger agreement with Computer Associates
International, Inc. ("CA"). The merger was approved by the Board of Directors
of both companies, and is subject to approval by Platinum's shareholders.
CA agreed to acquire Platinum for $29.25 per share.
Subject to completion of the purchase of Platinum's shares by CA, Ophir is
expected to receive approximately $40 million and expects to record a net gain
on sale of approximately $22 million. As a result of the above transaction, the
Company will record equity in the above gain of approximately $9 million
($6 million after taxes).
MARKET RISKS AND SENSITIVITY ANALYSIS
The Company is exposed to various market risks, including changes in interest
rates, foreign currency rates and equity price changes. This analysis presents
the hypothetical loss in earnings, cash flows and fair values of the financial
instruments which are held by the Company at March 31, 1999, and are sensitive
to the above market risks.
Interest Rate Risks
At March 31, 1999, the Company had financial assets totalling $36.6 million and
financial liabilities totalling $125 million, respectively. For fixed rate
financial instruments, interest rate changes affect the fair market value but do
not impact earnings or cash flows. Conversely, for variable rate financial
instruments, interest rate changes generally do not affect the fair market value
but do impact future earnings and cash flows, assuming other factors held
constant.
At March 31, 1999, the Company had fixed rate financial assets of $25.5 million
and variable rate financial assets of $11.1 million. Holding other variables
constant, a ten percent increase in interest rates would decrease the unrealized
fair value of the fixed financial assets by approximately $.4 million.
At March 31, 1999, the Company had fixed rate debt of $34.2 million and variable
rate debt of $90.8 million. A ten percent decrease in interest rates would
increase the unrealized fair value of the fixed rate debt by approximately $.6
million.
12
<PAGE> 15
The net decrease in earnings for the next year resulting from a ten percent
interest rate increase would be approximately $.5 million, holding other
variables constant.
Exchange Rate Sensitivity Analysis
The Company's exchange rate exposure on its financial instruments results from
its investments and ongoing operations in Israel. On March 31, 1999, the Company
entered into a foreign exchange forward purchase contract for $10 million to
partially hedge this exposure. Holding other variables constant, if there were a
ten percent adverse change in foreign currency exchange rates, the Company's
earnings would decrease by $2.4 million and cumulative translation loss
(reflected in the Company's accumulated other comprehensive loss) would increase
by $.8 million.
Equity Price Risk
The Company's investments at March 31, 1999, included marketable securities
which are recorded at fair value of $39.2 million, including net unrealized
gains of $ 5.6 million. Those securities have exposure to price risk. The
estimated potential lossin fair value resulting from a hypothetical 10% decrease
in prices quoted by stock exchanges is approximately $3.9 million.
Year 2000 Compliance
The Company has completed the process of identifying, evaluating and
implementing changes to computer programs necessary to address the year 2000
issue which is the result of computer programs having been written using two
digits instead of four to define a year. This issue affects computer systems
that have date sensitive programs that may recognize a date using "00" as 1900
rather than 2000. Systems that do not properly recognize such information could
generate erroneous data or cause a system to fail, resulting in business
interruption. The Company presently expects that with modifications to existing
systems and software and converting to new software, the Year 2000 issue will
not pose an operational problem and does not believe the cost of converting all
internal systems to be year 2000 compliant will be material to its financial
condition or results of operations. Costs related to the year 2000 issue are
being expensed as incurred. The Company expects to complete all of its year 2000
modifications by the end of 1999.
The year 2000 issue is expected to affect the systems of various entities with
which the Company interacts. However, there can be no assurance that the systems
of other companies on which the Company's systems rely will be timely converted,
or that a failure by another company's systems to be year 2000 compliant would
not have a material adverse effect on the Company.
Subsequent Events
On April 14, 1999, the Company sold its 46% equity interest in Moriah to Koor
and Sheraton for $29.6 million. Prior to the sale, on April 12, 1999, the
Company received a dividend from Moriah in the amount of $7.9 million. As a
result of the aforementioned transaction, the Company will record a gain on sale
in the amount of approximately $13.5 million ($8.8 million, net of income taxes)
in the June 30, 1999 consolidated financial statements.
On May 11, 1999, the Company signed an agreement with Bank Hapoalim B.M. ("BHP")
and two wholly-owned subsidiaries of BHP, which provides for the following:
(a) The Company will acquire from BHP and its subsidiary all of their
holdings in Ampal - 5,874,281 shares of Class A Stock, 3,350 shares
of 4% Preferred Stock and 122,536 shares of 6 1/2% Preferred Stock
for $31.3 million.
(b) The Company will sell to BHP's subsidiary seven real estate
properties totaling 53,000 sq. ft., currently leased to and occupied
by BHP, for $14.7 million.
13
<PAGE> 16
(c) Ampal's subsidiary will renew the lease agreement with BHP with
respect to a 4,400 sq. ft. branch in Bnei Brak, Israel for ten years
at an annual rental income of $346,000.
Upon completion of the transaction, Ampal's outstanding shares will consist of
18,242,891 shares of Class A Stock, 166,180 shares of 4% Preferred Stock and
794,673 shares of 6 1/2% Preferred Stock, based on shares outstanding on May 10,
1999. Rebar Financial Corporation and the public will hold 11,083,712 and
7,159,179 shares of Class A Stock, representing 60.8% and 39.2% of Ampal's Class
A Stock outstanding, respectively.
Ampal will record a net gain of approximately $6 million on the sale of the
aforementioned real estate properties.
The above transactions are subject to the receipt of the approval of the Related
Party Transactions and Audit Committees, boards of directors and shareholder
approval of Ampal, its subsidiaries, and the relevant committees of Bank
Hapoalim and its subsidiaries, where applicable, as well as the approval of the
appropriate regulatory agencies in Israel.
Ampal's Related Party Transactions Committee has requested a fairness opinion
from Lehman Brothers concerning the aforementioned transactions. Lehman Brothers
has begun its evaluation.
The transaction is expected to close after Ampal's annual meeting to be held on
June 29, 1999.
14
<PAGE> 17
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - None.
Item 2. Changes in Securities and Use of Proceeds - None.
Item 3. Defaults upon Senior Securities - None.
Item 4. Submission of Matters to a Vote of Security Holders - None.
Item 5. Other Information - On May 11, 1999, the Company signed an agreement
with Bank Hapoalim B.M. ("BHP") and two wholly-owned subsidiaries of
BHP, which provides for the following: (i) the Company will acquire from
BHP and its subsidiary all of their holdings in Ampal - 5,874,281 shares
of Class A Stock, 3,350 shares of 4% Preferred Stock and 122,536 shares
of 6 1/2% Preferred Stock for $31.3 million; (ii) the Company will sell
to BHP's subsidiary seven real estate properties totaling 53,000 sq.
ft., currently leased to and occupied by BHP, for $14.7 million; and
(iii) Ampal's subsidiary will renew the lease agreement with BHP with
respect to a 4,400 sq. ft. branch in Bnei Brak, Israel for ten years at
an annual rental income of $346,000.
The above transactions are subject to the receipt of the approval of the
boards of directors and certain committees of each of the parties, the
approval of the shareholders of Ampal and the approval of the
appropriate regulatory agencies in Israel. See "Management's Discussion
And Analysis of Financial Condition And Results of Operations -
Subsequent Events".
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 9 - Form of Agreement, dated January 27, 1999, between Ampal
Israel Ltd., Amot Investments Ltd. and Gmul Investment Co. and Koor
Tourism Enterprises Ltd. and Sheraton International Ltd. (Translation).
Exhibit 10 - Form of Agreement, dated May 11, 1999, between Bank
Hapoalim B.M., Atad Investment Company Ltd. and Revadim (Nechasin) Ltd.
and Ampal-American Israel Corporation, Ampal Development (Israel) Ltd.,
Ampal Financial Services Ltd. and Ampal (Israel) Ltd. (Translation).
Exhibit 11 - Schedule Setting Forth Computation of Earnings Per Share of
Class A Stock.
Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K. A Current Report on Form 8-K was filed by the
Registrant on April 27, 1999, which described an Item 2 Event, the
Disposition by Ampal (Israel) Ltd., a wholly-owned subsidiary of
Ampal-American Israel Corporation, of its 46% equity interest in Moriah
Hotels Ltd., to Koor Tourism Enterprises Ltd. and Sheraton International
Ltd.
15
<PAGE> 18
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMPAL-AMERICAN ISRAEL CORPORATION
By: /s/ Yehoshua Gleitman
-------------------------------
Yehoshua Gleitman
Chief Executive Officer
(Principal Executive Officer)
By: /s/ Shlomo Meichor
-------------------------------
Shlomo Meichor
Vice President - Finance
and Treasurer
(Principal Financial Officer)
By: /s/ Alla Kanter
-------------------------------
Alla Kanter
Vice President - Accounting
and Controller
(Principal Accounting Officer)
Dated: May 14, 1999
16
<PAGE> 19
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
Exhibit Index
<TABLE>
<CAPTION>
Exhibit No. Description
<S> <C> <C>
9 Form of Agreement, dated January 27, 1999,
between Ampal Israel Ltd., Amot
Investments Ltd. and Gmul Investment Co. and
Koor Tourism Enterprises Ltd. and Sheraton
International Ltd. (Translation)..........................
10 Form of Agreement, dated May 11, 1999,
between Bank Hapoalim B.M., Atad Investment
Company Ltd. and Revadim (Nechasin) Ltd.
and Ampal-American Israel Corporation,
Ampal Development (Israel) Ltd., Ampal
Financial Services Ltd. and Ampal
(Israel) Ltd. (Translation)...............................
11 Schedule Setting Forth Computation of Earnings
Per Share of Class A Stock................................
27 Financial Data Schedule.
</TABLE>
17
<PAGE> 1
[TRANSLATED FROM THE HEBREW]
APPENDIX "G"
AGREEMENT
Made this _____ day of ___________________ 199__
BETWEEN: 1. AMPAL ISRAEL LTD (Public Company No. 52-002622-0)
of 111 Ariozorov St., Tel Aviv
(hereinafter referred to as "Ampal")
2. AMOT INVESTMENTS LTD (Public Company No. 52-002668-3)
of 8 Shaul Hamelech Blvd., Tel Aviv
(hereinafter referred to as "Amot")
3. GMUL INVESTMENT CO. (Public Company No. 52-0018136)
of 8 Shaul Hamelech Blvd., Tel Aviv
(hereinafter referred to as "Gmul")
(hereinafter jointly referred to as "the Vendors")
of the one part
AND: __________________________________________________
of________________________________________________
(hereinafter referred to as "the Purchaser")
of the other part
Samuel, Moshinsky & Co., Law Offices and Notary
Firon, Kami, Sarov & Firon, Advocates and Notaries
<PAGE> 2
WHEREAS Ampal holds 783,778 ordinary shares of NIS 1 n.v. each in
Moriah Hotels Ltd (Private Company No. 51-0508160-1)
(hereinafter referred to as "Ampal's shares") (hereinafter
referred to as "the Company");
AND WHEREAS Amot holds 460,725 ordinary shares of NIS 1 n.v. each in the
Company (hereinafter referred to as "Amot's shares");
AND WHEREAS Gmul holds 340,773 ordinary shares of NIS 1 n.v. each in the
Company (hereinafter referred to as "Gmul's shares");
AND WHEREAS the Vendors wish to jointly sell Ampal's shares, Amot's shares
and Gmul's shares to the Purchaser pursuant to the matters
provided and set forth in this agreement below (Ampal's
shares, Amot's shares and Gmul's shares are hereinafter
referred to as "the sold shares");
AND WHEREAS the Purchaser wishes to purchase the sold shares from the
Vendor pursuant to the matters provided and set forth below in
this agreement;
AND WHEREAS the Purchaser has, to its full satisfaction, carried out a due
diligence examination of the Company, its business, assets and
liabilities, its legal, accounting and financial position and
also additional examinations which it deemed appropriate to
make, and after the examinations as aforesaid it made an offer
to the Vendors to enter into this agreement with them and to
purchase the sold shares from them, for the consideration and
upon the terms and conditions set forth below herein;
AND WHEREAS the Vendors wish to enter into this agreement with the
Purchaser and to sell the offered shares to the Purchaser for
the consideration and upon the terms and conditions set forth
below herein;
IT HAS ACCORDINGLY BEEN WARRANTED, PROVIDED AND AGREED
BY THE PARTIES AS FOLLOWS:
<PAGE> 3
1. Recitals, Appendices and Headings
1.1 The recitals and the appendices to this agreement constitute an
integral part hereof.
1.2 The headings in this agreement are for convenience purposes only,
and no regard shall be had thereto for the purposes of interpreting
this agreement or any part hereof.
1.3 Set forth below is an itemisation of the appendices annexed hereto:
Appendix "Al" - the Company's audited financial
statements as at 30th December 1997;
Appendix "A2" - the Company's reviewed financial
statements as at 30th September 1998;
y Appendices "B1" to "B3" - texts of share transfer deeds;
Appendix "C" - text of minutes of a meeting of the
Company's board of directors;
Appendix "Dl" - text of HVE's notice of exercising
HVE's option;
Appendix "D2" - text of HVE's share transfer deed.
2. Definitions
In this agreement the following expressions shall bear the meanings set
forth alongside them.
"dollar" - a US dollar;
"HVE's option" - as defined in clause 9 below;
"the approvals" - the approvals specified in clause 5.2 herein
and each of them;
"the Company" - Moriah Hotels Ltd. Private Company No.
51-050816-1;
"the last date" - 90 days after the date of the agreement as
defined below or a later date upon which the
parties shall agree in writing;
<PAGE> 4
"the sold shares" - Ampal's shares, Amot's shares and Gmul's
shares;
"the representative rate"
and/or "the representative
rate of the dollar" - the representative rate of The US dollar as
published by the Bank of Israel; if at any
time a representative rate of the US dollar
shall not be published, "the representative
rate of the dollar shall be the average
between the lowest cash rate at which, at
the relevant time at noon, Bank Hapoalim Ltd
purchases US dollars from Israeli citizens
without rights and special exemptions and
the highest cash rate at which, at the
relevant time at noon, Bank Hapoalim Ltd
sells US dollars to Israeli residents
without rights and special exemptions;
"the consideration" - US$75,827,600 (seventy-five million, eight
hundred twenty-seven thousand, six hundred
US dollars) which is the price which the
Purchaser undertakes to pay the Vendors for
the sold shares as provided in clause 8
below;
"Ampal's part of
the consideration" - 49.44% of the consideration as provided in
clause 8.1.1 below;
"Amot's part of
the consideration" - 29.06% of the consideration as provided in
clause 8.1.2 below;
Gmul's part of
the consideration" - 21.50% of the consideration as provided in
clause 8.1.3 below;
"HVE" - HVE - Hevrat Ovdim Investments Ltd (Public
Company No. 52-002847-3);
"business day" - a day on which there is trading in foreign
currency by the banks in Israel; for the
avoidance of doubt, Sundays are not a
business day;
"the completion date" - as defined in clause 6 below;
"Ampal's shares" - 783,778 ordinary stares of NIS 1 n.v. each
in the Company;
<PAGE> 5
"Amot's shares" - 460,725 ordinary shares of NIS 1 n.v. each
in the Company;
"Gmul's shares" - 340,773 ordinary shares of NIS 1 n.v. each
in the Company;
"HVE's shares" - as defined in clause 9 below;
"the agreement date" - the date on which this agreement shall be
executed by the Vendors;
"the interim period" - the period between the agreement date and
the completion date.
3. The Vendors' Warranties
3.1 Ampal warrants that:
(a) It is the owner of Ampal's shares and that Ampal shares are
fully paid up and are free of any charge, attachment or third
party rights whatsoever and when they shall be transferred to
the Purchaser pursuant to the provisions of this agreement,
they shall be transferred free of any charge, attachment or
third party right.
(b) There is no impediment at law and/or agreement into its
entering into this agreement.
(c) It is duly incorporated and is entitled pursuant to its
documents of incorporation to enter into this agreement and to
act pursuant thereto and that all its competent organs have
passed all the resolutions required to approve its contractual
relationship in this agreement and to perform all its
obligations pursuant hereto.
3.2 Amot warrants that:
(a) It is the owner of Amot's shares and that Amot shares are
fully paid up and are free of any charge, attachment or third
party rights whatsoever and when they shall be transferred to
the Purchaser pursuant to the provisions of this agreement,
they shall be transferred free of any charge, attachment or
third party right.
<PAGE> 6
(b) There is no impediment at law and/or agreement into its
entering into this agreement.
(c) It is duly incorporated and is entitled pursuant to its
documents of incorporation to enter into this agreement and to
act pursuant hereto and that all its competent organs have
passed all the resolutions required to approve its contractual
relationship in this agreement and to perform all its
obligations pursuant hereto.
3.3 Gmul warrants that:
(a) It is the owner of Gmul's shares and that Gmul shares are
fully paid up and are free of any charge, attachment or third
party rights whatsoever and when they shall be transferred to
the Purchaser pursuant to the provisions of this agreement,
they shall be transferred free of any charge, attachment or
third party right.
(b) There is no impediment at law and/or agreement into its
entering into this agreement.
(c) It is duly incorporated and is entitled pursuant to its
documents of incorporation to enter into this agreement and to
act pursuant hereto and that all its competent organs have
passed all the resolutions required to approve its contractual
relationship in this agreement and to perform all its
obligations pursuant hereto.
3.4 The Vendors warrant, that as far as they are aware, the Company's
audited financial statements as at 31st December 1997 and the
Company's reviewed financial statements as at 30th September 1998,
annexed hereto as appendices "A1" and "A2", fairly reflect, in
conformity with generally accepted accounting principles, the
Company's financial position as at the respective date that each of
them were drawn up.
3.5 The Vendors warrant that they requested the Company to centralise at
the Company's offices and/or Ampal's offices, at 111 Ariozorov St.,
Tel Aviv, material documents and data in connection with the Company
which did not include agreements with suppliers, customers and/or
agents, and to enable the Purchaser to inspect, at its election,
such documents and data and that they are unaware of any material
agreement of the Company, save for agreements with suppliers,
customers and/or agents, that were not made available for the
Purchaser's inspection nor of any material claim against the Company
the documents in connection with which were not made available for
the Purchaser's inspection.
<PAGE> 7
3.6 The Vendors warrant that, apart from the matters set forth in
sub-clauses 3.4 and 3.5 above, they and/or any of them and/or anyone
on their behalf do not expressly or impliedly make any
representation whatsoever and/or assume any undertaking whatsoever
with regard to the correctness, accuracy and/or completeness of the
documents and/or the data that were made available for the
Purchaser's inspection as in clause 3.5 above and/or that were
delivered to the Purchaser by the Company and/or the Vendors and/or
any of them and/or anyone on their behalf and/or which reached the
Purchaser's knowledge in any manner whatsoever, whether in writing
or orally, directly or indirectly, whether within the context of the
tours of the Company's hotels or in any other manner.
4. The Purchaser's Warranties
The Purchaser warrants and undertakes that:
4.1 It independently and to its full satisfaction carried out a due
diligence examination of the Company, its business, assets and
liabilities and legal, accounting and financial position and also
additional examinations which it deemed appropriate to make, that it
and/or anyone on its behalf received all the information they
requested to receive and that it was given the opportunity of
carrying out any examination it wished to make and to receive all
information, irrespective of whether it requested it, within the
context of the documents and the data that were made available for
its inspection as provided in clause 3.5 above, during the course of
the tours of the Company's hotels and also in any other manner, and
that insofar as any information was not delivered to it, whether it
requested that it should be delivered to it or otherwise, it has
decided to enter this agreement notwithstanding the fact that such
information was not delivered to it, and while giving a full waiver
of any claim and/or complaint and/or demand in such regard, and that
it has found the Company and the sold shares appropriate for its
objects and that it is purchasing the sold shares `as is' and with
the Company being `as is', and that it fully and finally waives any
claims and/or demands and/or complaints whatsoever against the
Vendors and/or the Company and/or any of them and/or anyone on their
behalf, including with regard to a patent and/or latent
non-conformity and/or defect in respect of the sold shares and/or
the Company, and that it is purchasing the sold shares without
relying upon any representation and/or undertaking on behalf of the
Vendors and/or the Company and/or any of them and/or anyone on their
behalf, save for these expressly set forth in clause 3 above.
<PAGE> 8
4.2 It waives any complaint and/or claim and/or demand against the
Vendors and/or against the Company and/or any of them and/or anyone
on their behalf in respect of incorrectness, inaccuracy and/or
incompleteness of the documents and/or the data that were made
available for its inspection as provided in clause 3.5 above and/or
that were brought to its knowledge during the course of the tours of
the Company's hotels and/or that were delivered to it by the Company
and/or the Vendors and/or any of them and/or anyone on their behalf
and/or that reached it in any other manner, directly or indirectly,
whether in writing or orally.
4.3 It is aware and it agrees that the Vendors and/or the Company and/or
any of them and/or anyone on their behalf are not making any
representation with regard to the correctness, accuracy and/or
completeness of the documents and/or the information that were
delivered to it, whether in writing or orally, directly or
indirectly, including, but without derogating from the generality of
the aforegoing, any statement, information or representation that
were made or given, if made or given, by any of the employees and/or
officers and/or shareholders of the Company and/or of the Vendors,
and without prejudice to the generality of the aforegoing, directors
and/or representatives and/or consultants (legal or others) of the
Vendors and/or of the Company and/or by any other person and/or
entity on behalf of any of those enumerated above.
4.4 It is aware and it agrees that the Company and all its subsidiaries
have confirmed to the Vendors that they do not and shall not have
and they waive in advance any claim and/or complaint and/or demand
against the Vendors, any of them and anyone on their behalf,
including anyone who served and/or is serving as a director of the
Company and/or of any of its subsidiaries, and the Purchaser hereby
undertakes to indemnify the Vendors and/or any of them and/or anyone
on their behalf and/or anyone who served and/or is serving as a
director of the Company and/or of any of its subsidiaries in respect
of any expense that shall be incurred and/or payment that shall be
made in connection with any claim and/or complaint and/or demand
that shall be raised against any of them by the Company and/or any
of its subsidiaries on its behalf in any matter whatsoever.
4.5 That there is no impediment at law and/or agreement and/or any other
impediment to its entering into this agreement and purchasing the
sold shares.
<PAGE> 9
4.6 That it is duly incorporated and is entitled pursuant to its
documents of incorporation to enter into this agreement and to act
pursuant hereto and that all its competent organs have passed all
the resolutions required to approve its contractual relationship in
this agreement and to perform all its obligations pursuant hereto.
5. Validity of the Agreement and Terms and Conditions for the Sale of the
Sold Shares
5.1 This agreement shall come into effect immediately upon the execution
hereof by the Vendors.
5.2 Notwithstanding the provisions of clause 5.1 above, the performance
of the parties' obligations pursuant to clauses 7, 8 and 9 to this
agreement is conditional upon obtaining all the approvals specified
below by the last date:
(a) unconditional and unqualified approval of the Director of
Restrictive Trade Practices pursuant to the Restrictive Trade
Practices Law, 5748-1988;
(b) approval of the Investment Centre of the Ministry of Industry
and Trade;
(c) approval of Bank Hapoalim Ltd as required pursuant to the
debentures signed in its favour by the Company.
5.3 The parties shall cooperate insofar as required to obtain the
Director of Restrictive Trade Practices' approval as provided in
clause 5.2(a) above and they shall, inter alia, within 14 days from
the agreement date, submit an appropriate application to the
Director of Restrictive Trade Practices and thereafter shall furnish
the Restrictive Trade Practices Authority with any document or
information that it shall require for the purposes of granting the
approval.
5.4 Within 14 days of the agreement date the Vendors shall make
application to the entities mentioned in sub-clauses 5.2(b) and
5.2(c) to grant the approvals mentioned in sub-clauses 5.2 and
5.2(c) above; copies of the said applications shall be sent to the
Purchaser.
The parties shall cooperate and furnish every document or
information that shall be required by any of the entities mentioned
in sub-clauses 5.2(b) and 5.2(c) in order to grant such approvals.
<PAGE> 10
5.5 All the expenses and payments that must be effected, if any, in
order to obtain the approvals shall be borne and paid by the
Company.
5.6 If any of the approvals are not received by the last date (and there
is no undertaking and/or representation by any of the parties hereto
in connection with the possibility of receiving the approvals), this
agreement shall automatically terminate at the end of 14 days from
the last date, unless all the approvals have been received prior to
the end of the said 14 days.
If the agreement terminates as aforesaid, each of the Vendors shall
refund to the Purchaser the first instalment paid made by the
Purchaser on account of its part of the consideration, as provided
in clause 8.5 below, and none of the parties shall have any
complaint and/or claim and/or demand against the others in
connection with this agreement and/or the proceeding which led to
the execution hereof and/or the failure to obtain any of the
approvals and/or the termination of this agreement.
5.7 The Purchaser hereby confirms that it is aware that pursuant to
various agreements between the Company and its subsidiaries and/or
any of them and Israel Land Administration, Israel Land
Administration's consent is required for the transfer of the sold
shares from the Vendors to the Purchaser, and that the Israel Land
Administration may require, as a condition for giving its said
consents, consent charge payments from the Company and/or the
Company's subsidiaries and/or any of them and that Israel Land
Administration has not given any consent to the transfer of the
offered shares to the Company. The Purchaser hereby undertakes to do
every action and to make every necessary payment, including consent
charges and/or capitalisation charges required in order to obtain
all the necessary consents from Israel Land Administration to the
transfer of the sold shares to the Purchaser. It is hereby agreed
that if the Purchaser does not obtain Israel Land Administration's
consent to the transfer of the sold shares to the Purchaser by
completion date, the Purchaser shall be entitled to act as aforesaid
in order to obtain the said consents even after the completion
dates, and that in such event the Purchaser may require the Company
and/or any of its subsidiaries to pay Israel Land Administration the
Payments that it shall require in order to grant its consents. In
any event, failure to obtain Israel Land Administration's consents
shall not impair the validity of this agreement and/or constitute a
cause for the annulment hereof, whether prior to the completion date
or thereafter, and all the liability and damages that may be
occasioned to the Purchaser and/or the Company and/or the Company's
subsidiaries and/or any of them shall be borne by the Purchaser,
without it having any claim and/or demand and/or complaint against
the Vendors and/or any of them and/or anyone on their behalf.
<PAGE> 11
6. The Completion Date and the Interim Period
6.1 After receiving all the approvals, the Vendors shall determine the
date and time at which the operations set forth in clauses 7 and 8
below shall take place, which shall not be later than the end of 14
business days from the last date, and they shall give written notice
thereof to the Purchaser (the said date and time as shall be
determined by the Vendors are hereinafter referred to in this
agreement as "the completion date").
On the completion date, the parties shall meet at the offices of
Advs. Firon, Kami, Sarov & Firon, at 111 Ariozorov St., Tel Aviv and
shall effect the operations enumerated in clauses 7 and 8 below:
6.2 (a) The Purchaser hereby confirms that it agrees that in the
interim period the Company shall declare and distribute cash
dividends in any amount whatsoever not exceeding the sum of
all the Company's distributable profits in respect of 1998 and
in respect of previous periods, as shall be determined by the
Company's auditors.
(b) The dividend amounts that shall actually be distributed by the
Company to Ampal, Amot and Gmul during the interim period, in
their dollar value according to the representative rate of the
dollar on the date of actual payment to Ampal, Amot and Gmul,
shall be deducted from the consideration which the Purchaser
is liable to pay the Vendors as provided in clause 8 below and
each of the Vendors' part of the consideration shall be
reduced respectively.
(c) Without prejudice to the generality of the provisions of
clause 4.4 above, the Purchaser warrants and undertakes to
each of the Vendors and to HVE that it is aware and it agrees
that the Company has confirmed to the Vendors that it does not
and shall not have and it waives in advance any claim and/or
complaint and/or demand against the Vendors and/or any of them
and/or anyone on their behalf, including anyone who served
and/or is serving as a director of the Company and/or against
HVE in respect at and in connection with the dividends that
shall be declared and/or distributed by the Company in the
interim period, and the Purchaser hereby undertakes to
indemnify the Vendors and/or any of then and/or anyone on
their behalf, including anyone who served and/or serves as a
director of the Company and/or HVE, in respect of any expense
that shall be incurred
<PAGE> 12
and/or payment that shall be made in connection with any claim
and/or complaint and/or demand that shall be raised against
any of them by the Company and/or anyone on its behalf in
connection with the Company's declaration and/or distribution
of dividends.
6.3 Any event or occurrence that shall occur during the interim period,
whether as a result of a decision of the Company and/or the Vendors
or otherwise, shall not confer any right upon the Purchaser to
rescind the agreement.
6.4 In the interim period, the Vendors shall inform the Purchaser of
every board of directors' meeting that shall be convened in the
interim period and they shall enable a representative on the
Purchasers behalf to be present as an observer at such meeting.
7. Transfer of the Sold Shares
On the completion date, after all the approvals have been received and
after all the payments which the Purchaser is liable to pay Ampal, Amot
and Gmul as provided in clause 8 below have been effected:
(a) Ampal shall deliver a share transfer deed to the Purchaser in the
text annexed hereto as appendix "B1" in respect of Ampal's shares;
(b) Amot shall deliver a share transfer deed to the Purchaser in the
text annexed hereto as appendix "B2" in respect of Amot's shares;
(c) Gmul shall deliver a share transfer deed to the Purchaser in the
text annexed hereto as appendix "B3" in respect of Gmul's shares;
(d) the Vendors shall deliver to the Purchaser minutes of the Company's
board of directors approving the transfer of Ampal's shares, Amot's
shares and Gmul's shares to the Purchaser in the text annexed hereto
as appendix "C", signed by the chairman of such meeting.
By delivering the aforementioned documents, the Vendors will have
fulfilled their duty to transfer and sell the sold shares to the
Purchaser.
<PAGE> 13
8. The Consideration
In consideration for the sold shares, the Purchaser shall pay the Vendors
the sum of US$75,827,600 (seventy-five million, eight hundred twenty-seven
thousand, six hundred US dollars) hereinafter referred to as "the
consideration") in the apportionment and instalments and at the times
specified below.
8.1 The Purchaser shall pay each of the Vendors its part of the
consideration in two instalments as specified below:
8.1.1 To Ampal - an amount equal to 49.44% as the consideration for
Ampal's shares (hereinafter referred to as "Ampal's part of
the consideration");
8.1.2 To Amot - an amount equal to 29.06% as the consideration for
Amot's shares (hereinafter referred to as "Amot's part of the
consideration");
8.1.3 To Gmul - an amount equal to 21.50% as the consideration for
Gmul's shares (hereinafter referred to as "Gmul's part of the
consideration");
8.2 The Purchaser shall pay the consideration to the Vendors in the
following instalments and at the following times:
8.2.1 The first instalment - at 08:30 hours on the second business
day after the agreement date, the Purchaser shall pay the
Vendors 20% of the consideration as a first instalment on
account of the consideration as follows:
8.2.1.1 the Purchaser shall pay Ampal 20% of Ampal's part
of the consideration;
8.2.1.2 the Purchaser shall pay Amot 20% of Amot's part of
the consideration;
8.2.1.3 the Purchaser shall pay Gmul 20% of Gmul's part of
the consideration;
8.2.2 The Second Instalment
The Purchaser shall pay the Vendors the balance of the
consideration on the completion date, that is to say 80% of
the consideration as follows:
<PAGE> 14
8.2.2.1 the Purchaser shall pay Ampal 80% of Ampal's part
of the consideration;
8.2.2.2 the Purchaser shall pay Amot 80% of Amot's part of
the consideration;
8.2.2.3 the Purchaser shall pay Gmul 80% of Gmul's part of
the consideration;
8.2.3 A breach of any of the Purchaser's obligations pursuant to
clause 8.2.1 above and/or pursuant to clause 8.2.2 above shall
constitute a fundamental breach of this agreement.
8.3 The consideration and each and every instalment in respect thereof
shall be paid by the Purchaser in new shekels according to the
representative rate at the time of actually effecting the payment.
8.4 The consideration and each and every instalment in respect thereof
shall be paid by way of bank cheques to the order of Ampal, Amot or
Gmul, as the case may be, drawn on one of the five largest
commercial banks in Israel.
The consideration amount and/or each and every instalment in respect
thereof shall only be deemed as having been paid at the time that
the bank accounts of Ampal, Amot and/or Gmul, as the case may be,
are credited with the amount of the relevant bank cheque.
8.5 If this agreement is terminated as provided in clause 5.6 above,
each of the Vendors, without mutual liability inter se, shall,
within 21 days of the last date, refund to the Purchaser its part of
the first instalment paid to it by the Purchaser on account of the
consideration as provided in clause 8.2.1 above, in its dollar value
and in new shekels according to the representative rate of the
dollar known at the time of actually effecting the refund.
8.6 It is hereby agreed that if the Purchaser breaches its obligation to
pay the Vendors on due date the full amount of the first instalment
as provided in clause 8.2.1, or the full amount of the second
instalment as provided in clause 8.2.2 above, the Vendors shall in
each of the said events be entitled to rescind this agreement upon
written notice to the Purchaser, without giving it any advance
notice thereof and without giving it any opportunity to rectify the
breach.
<PAGE> 15
8.7 The parties hereby determine, after a cautious evaluation, that the
damage that can be anticipated at the time of entering into this
agreement as a reasonable consequence of a breach of the Purchaser's
obligation to pay the Vendors on due date the full amount of the
first instalment, as provided clause 8.2.1 above, and/or the full
amount of the second instalment, as provided in clause 8.2.2 above,
and of the rescission of the agreement by the Vendors as provided in
clause 8.6 above, is 10% of the consideration (in dollar values).
Without prejudice to any other and/or additional right and/or relief
of the Vendors, it is hereby agreed that if the Purchaser breaches
its obligation to pay the Vendors the first instalment, as provided
in clause 8.2.1 above, and/or the second instalment, as provided in
clause 8.2.2 above, and if the Vendors rescind the agreement as
provided in clause 8.6 above, the Purchaser shall pay each of the
Vendors, by way of liquidated damages, and immediately upon being
required to do so by the Vendors, an amount equal to 10% of the
consideration (in dollar values) (hereinafter referred to as "the
liquidated damages").
The liquidated damages shall be apportioned between the Vendors as
follows: to Ampal - 49.44% of the liquidated damages; to Amot -
29.06% of the liquidated damages and to Gmul - 21.50% of the
liquidated damages. The Purchaser hereby agrees that if this
agreement is rescinded by the Vendors as provided in clause 8.6
above, each of the Vendors shall be entitled, without prejudice to
any right and/or relief available to it at law and/or agreement, to
set-off its part of the liquidated damages or part thereof, at its
election, against any amount due from it to the Purchaser.
9. Purchase of HVE's Shares by the Purchaser
The Purchaser warrants and confirms that it is aware that HVE is the owner
of 118,589 ordinary shares of NIS 1 n.v. each in the Company (hereinafter
referred to as "HVE's shares"). The Purchaser hereby grants HVE an option
(hereinafter referred to as "HVE's option") to sell it all HVE's shares as
follows:
9.1 The exercise of HVE's option is conditional upon all the approvals
being received, that the Vendors shall determine the completion date
as provided in clause 6 above, and that on the completion date the
Vendors shall deliver to the Purchaser the share transfer deeds and
the minutes of the Company's board of directors as provided in
clause 7 above.
<PAGE> 16
9.2 Immediately after the completion date and the performance of the
matters set forth in clause 7 above, the Purchaser and/or the
Vendors shall give notice thereof to HVE.
9.3 HVE shall be entitled to exercise HVE's option within 14 days of the
date on which the Purchaser's and/or the Vendors' notice is
delivered to HVE as provided in clause 9.2 above by giving the
Purchaser, within the 14 days, written notice of its decision to
exercise HVE's option in the text annexed hereto as appendix "D1" to
which shall be annexed a share transfer deed in the text annexed
hereto as appendix "D2" signed by HVE (hereinafter referred to as
"HVE's notice").
If HVE's notice is not delivered to the Purchaser together with a
share transfer deed as aforesaid within the said 14 days, HVE's
option shall expire, and HVE and/or the Purchaser shall not be
granted any right whatsoever.
9.4 By twelve noon on the seventh business day after the date on which
HVE's notice is delivered to the Purchaser, the Purchaser shall pay
HVE, in consideration for HVE's shares (and in addition to the full
amount of the consideration that it paid the Vendors as provided in
clause 8 above, an amount equal to 7.48% of the consideration in new
shekels according to the representative rate known on the date of
actual payment.
If the Company distributes cash dividends in the interim period, the
value of the dividends which HVE shall actually receive in the
interim period, in their dollar value according to the
representative rate of the dollar on the date of the actual payment
thereof to HVE, shall be deducted from the amount that shall be paid
by the Purchaser in consideration for HVE's shares as aforesaid.
The Purchaser hereby undertakes that if it directly or indirectly
purchases HVE's shares within twelve months of the agreement date,
whether in consequence of exercising HVE's option or in any other
manner it shall deduct 1% (one percent) of the amount of the payment
to HVE together with VAT and shall remit it to the Vendors as HVE's
contribution to the costs of preparing this agreement. The payment
shall be effected by way of a bank cheque to HVE's order drawn on
one of the five large commercial banks in Israel; the payment amount
shall only be deemed as having been paid at the time HVE's bank
account is credited with the amount of the bank cheque as aforesaid.
<PAGE> 17
9.5 If HVE exercises HVE's option, the Purchaser shall be deemed as also
having given HVE all the warranties and undertakings in clause 4
above and in clause 10.2 below, mutatis mutandis, in connection with
HVE's shares and HVE.
9.6 The Purchaser warrants and confirms that it is aware and it agrees
that the Vendors and/or the Company and/or any of them and/or anyone
on their behalf do not make any representation with regard to HVE's
shares and/or the possibility of HVE's option being exercised by
HVE, and it waives any complaint and/or claim and/or demand against
the Vendors and/or against the Company and/or any of them and/or
anyone on their behalf in connection with HVE's shares and/or HVE's
option, including, but without prejudice to the generality of the
aforegoing, the exercise or non-exercise thereof by HVE.
9.7 The provisions of this clause 9 constitute a contract in favour of a
third party - HVE; however, it is hereby expressly agreed that the
Vendors and the Purchaser are entitled to amend the provisions of
this clause 9 at any time, either prior to or after notice thereof
is given to HVE.
10. Taxes, Expenses and Various Payments
10.1 Income tax and/or capital gains tax that shall apply, if at all, to
Ampal, Amot or Gmul in connection with the sale of the sold shares
pursuant to this agreement shall be borne by Ampal, Amot or Gmul, as
the case may be. Any tax and/or levy and/or other official fee,
including, but without prejudice to the generality of the
aforegoing, stamp duty, shall be borne and paid by the Purchaser.
10.2 Save for those deductions of income tax at source which the
Purchaser shall be statutorily liable to deduct the Purchaser shall
not deduct and shall not set-off any amount from any payment it is
liable to make to the Vendors and/or to any of them and/or to HVE,
and any such deduction and/or set-off, whether justified or
otherwise, shall constitute a breach of the provisions of this
agreement.
For the avoidance of doubt if a certificate of the income tax
authorities is produced to the Purchaser exempting the payment to
the Vendors and/or any of them from deduction of income tax at
source, tax shall not be deducted at source from the payments to
such party.
<PAGE> 18
10.3 In addition, but without prejudice to the provisions of clause 5
above, it is hereby expressly agreed that any tax, official fee,
levy, consent charges, capitalisation charges and/or other payment
and/or other expense which the Company and/or any of its
subsidiaries (hereinafter jointly and severally referred to as "the
Group") paid and/or incurred and/or shall pay and/or shall incur in
accordance with a determination of the Vendors in connection with
the preparation of this agreement and/or in connection with the
proceeding within the context whereof this agreement was executed
and/or in connection with the implementation of this agreement
and/or the exercise of HVE's option, and, but without prejudice to
the generality of the aforegoing, any payment of capitalisation
charges and/or consent charges to Israel Land Administration which
the Group shall pay in accordance with the Vendors' determination in
connection with obtaining the approvals, shall be borne and paid by
the Group, without the Group and/or the Purchaser having any
complaint and/or claim and/or demand whatsoever against the Vendors
and/or any of them and/or anyone on their behalf and/or against any
officers of the Group, and the Purchaser hereby undertakes to
indemnify the Vendors and/or any of them and/or anyone on their
behalf and/or any officer of the Group in respect of any expense
that shall be incurred and/or payment that shall be made in
connection with any claim and/or complaint and/or demand that shall
be raised against any of them by the Group and/or the Purchaser
and/or anyone on their behalf.
11. Arbitration
11.1 All the disputes, contentions or differences that may arise between
the parties in all matters relating to this agreement or the
rescission hereof or any of the terms and conditions hereof
(including the issue of the validity thereof) shall be referred to
the decision of a sole arbitrator who shall agreed upon by the
parties.
11.2 If the parties to not reach agreement as to the arbitrator's
identity, he shall be appointed by the Tel Aviv-Jaffa District Court
upon written application by any party.
11.3 The arbitrator shall be released from the laws of evidence and the
rules of procedure, but he shall make his award in accordance with
the substantive law, he shall give reasons for his decision and his
decision shall be final and bind the parties.
<PAGE> 19
12. Miscellaneous
12.1 The parties' rights and duties in connection with the subject matter
of this agreement shall only be determined in accordance with the
provisions hereof and any amendment or addendum thereto shall
require the parties' written consent.
12.2 Without prejudice to the Purchaser's duty to make every payment
pursuant to this agreement on due date, it is agreed that any
payment made by the Purchaser after the date on which it was under a
duty to make it pursuant to the provisions hereof shall be linked to
the representative rate of the dollar and shall bear interest at the
rate of 9% per annum.
12.3 This agreement annuls and replaces any agreement, consent and/or
undertaking whatsoever between the Purchaser and the Vendors and/or
any of them, and/or anyone on their behalf.
12.4 This agreement shall be governed by Israeli law and exclusive
jurisdiction in connection herewith, subject to the provisions of
clause 11 above, is hereby given to the Tel Aviv-Jaffa courts alone.
12.5 Notices
For so long as a party does not give another written notice to the
other, the parties' addresses for the purpose of this agreement are
as appear in the recitals and any such notice sent by any party to
another shall be deemed as having been received by the party to
which it was sent; if delivered or left at its address - at the time
of delivery thereof; if sent by registered post - three (3) business
days from the date of delivery thereof to the post office for
dispatch by registered post; and if transmitted by facsimile - at
the end of the first business day after the time of transmission.
For so long as any party does not give another notice to the other,
the parties' addresses for the purpose of this agreement shall be as
follows:
(a) Ampal Israel Ltd -
111 Ariozorov St., Tel Aviv, Fax: 03-6090827, with a copy to
Adv. Zvi Firon of 111 Ariozorov St., Tel Aviv, Fax:
03-6953802;
<PAGE> 20
(b) Amot Investments Ltd.
8 Shaul Hamelech Blvd, Tel Aviv, Fax: 03-6938501, with a copy
to Adv. Yoram Samuel of 138 Rothschild Blvd, Tel Aviv, Fax:
03-6867533;
(c) Gmul Investments Co. Ltd.
8 Shaul Hamelech Blvd, Tel Aviv, Fax: 03-6979480, with a copy
to Adv. Yoram Samuel of 138 Rothschild Blvd. Tel Aviv, Fax:
03-6867533;
(d) The Purchaser --
Sheraton Intercontinental Ltd. and Koor Tourism Ltd., Fax: For
Sheraton Intercontinental Ltd: 32 2 224 3592; for Koor Tourism
Ltd.:_________________________________________________________
12.6 Each of the Vendors (hereinafter referred to as "the selling party")
is entitled to sell its shares in the Company to the other Vendors.
In such event, the selling party shall assign and transfer to the
other Vendors all the selling party's rights pursuant hereto, and
such rights and obligations shall be apportioned between the other
Vendors in a form and manner that shall be determined in a notice to
be given by the other Vendors to the Purchaser.
AS WITNESS THE HANDS OF THE PARTIES:
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
- ----------------- ------------------------- ---------------------
Ampal Israel Ltd. Gmul Investment Co., Inc. Amot Investments Ltd.
/s/ Robert F. Cotter
-------------------------
The Purchaser
I the undersigned, Robert L. Scott, Adv., hereby certify that on January 20,
1999 Mr. Robert Cotter signed this agreement in my presence on behalf of
Sheraton Intercontinental Ltd. (hereinafter, together with Koor Tourism Ltd.,
referred to as "The Purchaser") and that the signatures of Mr. Robert Cotter to
this agreement, together with the signature of the authorized representative of
Koor Tourism Ltd., collectively on the Purchaser's behalf, binds the Purchaser
for all intents and purposes.
/s/ Robert L. Scott
- ----------------------
Robert L. Scott, Adv.
20.1.99 [ILLEGIBLE TRANSLATION OF A HEBREW PARAGRAPH]
[ILLEGIBLE - HEBREW]
[ILLEGIBLE - HEBREW]
[ILLEGIBLE - HEBREW]
/s/ [ILLEGIBLE]
- ----------------------
[ILLEGIBLE - HEBREW]
<PAGE> 21
PUT OPTION SIDE LETTER AGREEMENT
Dated: April 12, 1999
Further to an Agreement dated the 27th day of January, 1999, by and between
Ampal Israel Ltd. ("Ampal"), Amot Investments Ltd. ("Amot") and Gmul Investments
Company Ltd. ("Gmul"), (collectively, the "Vendors") of the one part, and
Sheraton Intercontinental Ltd. ("Sheraton") and Koor Tourism Ltd. ("Koor")
(jointly and severally, the "Purchasers"), of the other part (the "Main
Agreement").
WHEREAS the Purchasers entered into the First Closing SLA with Gmul (attached
hereto as Appendix A) and the Purchasers entered into the Second Closing SLA and
the Dividend Side Letter Agreement with Ampal and Amot (attached hereto as
Appendices B and C) (collectively the "Other SLAs"); and
WHEREAS the bifurcation of the Completion Date under the Main Agreement into the
First Closing and the Second Closing (as specified in the Other SLAs) was made
at Ampal's and Amot's request and the Purchasers have agreed thereto subject to
Ampal granting the Put Option as herein defined, so that in the event that the
First Closing is completed but the Second Closing is not completed, and if the
Purchasers exercise the Put Option, Ampal shall purchase the Gmul's Shares and
for all purposes Ampal shall be deemed to have purchased such Shares from Gmul
in accordance with Section 12.6 of the Main Agreement as if the First Closing
had never happened, and Ampal, Amot and the Purchasers shall have the same
rights and obligations as they would have had under the Main Agreement in the
event of such purchase under Section 12.6 of the Main Agreement and as if the
above bifurcation had never happened.
Now therefore the Parties have agreed:
1. If, for reasons other than the acts or omissions of the Purchasers, the
Second Closing is not completed as provided for in Section 2.2 of the
Second Closing SLA, within fourteen days of the First Closing, Purchasers
shall hold a put option against Ampal (the "Put Option") for the MHL
shares purchased by the Purchasers from Gmul at the First Closing (the
"Option Shares").
1.1 The Put Option shall be in effect and exercisable as of the
fifteenth day following the First Closing until the one hundred and
twentieth day following the First Closing (the "Option Period").
Delivery to Ampal during the Option Period of written notice from
the Purchasers of the exercise of the Put Option (the "Notice")
shall require Ampal to purchase the Option Shares for a
consideration equal to the full consideration paid by the Purchasers
<PAGE> 22
-2-
to Gmul pursuant to Sections 8.2.1.3 and 8.2.2.3 of the Main
Agreement (in US dollars), i.e. $16,302,934, less the US dollar
equivalent of any dividends actually paid by MHL with respect to the
Option Shares after the completion of the First Closing (the
"Consideration"). The said US dollar equivalency shall be determined
by the Bank of Israel representative rate in effect at the time of
the payment of the said dividends by MHL.
1.2 Ampal shall be required to pay to the Purchasers the Consideration
within fourteen days of delivery of the Notice (the "Payment
Period") but only if the Purchasers deliver to Ampal against such
payment a share transfer deed with respect to all Option Shares, in
the text annexed hereto as Appendix D, and a written confirmation by
the person or entity registered as shareholder with respect to the
Option Shares, confirming that upon payment of the Consideration
Ampal is the beneficial owner of the Option Shares and all rights
attached thereto, and that the Option Shares are registered in such
person or entity's name as trustees for Ampal until they are
registered in Ampal's name.
2. In the event the Second Closing is not completed within forty-eight hours
of the First Closing as a result of acts or omissions attributed to any
third party ("Third Party"), the parties will cooperate fully in pursuing
any claim against such Third Party.
3. The provisions of this agreement do not prejudice, unless expressly stated
herein, in any way existing legal and/or contractual rights of the parties
hereto including, but not limited to, with respect to sale and purchase of
Ampal's Shares and Amot's Shares (as defined in the Main Agreement) under
the Main Agreement.
4. If the Put Option is exercised, Ampal shall be deemed to have purchased
from Gmul all the Gmul Shares (as defined in the Main Agreement) in
accordance with Section 12.6 of the Main Agreement, together with all of
Gmul's rights and obligations under the Main Agreement, as if the First
Closing has never happened, so that if the purchase of the Ampal Shares
(as defined in the Main Agreement) by the Purchasers and/or any of their
affiliates will be completed by virtue or as a result of the Main
Agreement, the Purchasers will purchase, simultaneously with the purchase
of Ampal Shares (as defined in the Main Agreement), and as a condition to
the purchase of the Ampal's Shares, all the Option Shares for an amount
equal to the Consideration plus interest at an annual rate of LIBOR as of
the date on which Ampal pays the Consideration to the Purchasers until the
payment by the Purchasers to Ampal.
The above does not reflect on the question of whether or not interest
should accumulate on other payments made or due under the Main Agreement.
<PAGE> 23
-3-
Koor Industries Ltd. AMPAL
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
-------------------------- -----------------------
SHERATON
--------------------------
<PAGE> 24
-3-
Koor Industries Ltd. AMPAL
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
-------------------------- ------------------------
SHERATON
/s/ Robert F. Cotter
--------------------------
Robert F. Cotter
I confirm that Robert F. Cotter, by his above signature, is authorized to
represent Sheraton Intercontinental Ltd.
/s/ Robert L. Scott
--------------------------------
Robert L. Scott
General Counsel
Sheraton Intercontinental Ltd.
<PAGE> 25
DIVIDEND SIDE LETTER AGREEMENT
Dated: April 12, 1999
Further to an Agreement dated the 27th day of January, 1999, by and between
Ampal Israel Ltd. ("Ampal"), Amot Investments Ltd. ("Amot") and Gmul Investments
Company Ltd. ("Gmul"), (collectively, the "Vendors") of the one part, and
Sheraton Intercontinental Ltd. ("Sheraton") and Koor Tourism Ltd. ("Koor")
(jointly and severally, the "Purchasers"), of the other part (the "Main
Agreement").
WHEREAS, in accordance with the Main Agreement, Ampal shall sell 783,778 shares
of Moriah Hotels Ltd. ("MHL") to the Purchasers ("Ampal's Shares") for
consideration in the amount of US$37,489,165, Amot shall sell 460,725 shares of
MHL to the Purchasers ("Amot's Shares") for consideration in the amount of
US$22,035,509, and Gmul shall sell 340,773 shares of MHL to the Purchasers
("Gmul's Shares") for consideration in the amount of US$16,302,934;
WHEREAS the Purchasers paid on January 27, 1999, to each of the Vendors as
required by the Main Agreement, their share of 20% of the consideration for the
shares of the Vendors in MHL;
WHEREAS the Purchasers entered into the First Closing SLA with Gmul (attached
hereto as Appendix A) and the Purchasers entered into the Second Closing SLA
with Ampal and Amot (attached hereto as Appendix B);
WHEREAS Ampal, Amot and the Purchasers have agreed to separate the closing of
the sale of Ampal's Shares and Amot's Shares (the "Second Closing" as specified
in the Second Closing SLA), from the closing of the sale of Gmul's Shares to the
Purchasers (the "First Closing" as specified in the First Closing SLA) so that
the Second Closing will take place no earlier than 24 hours and no later than 48
hours following the First Closing;
Now therefore the Parties have agreed:
1. DIVIDEND DISTRIBUTION AFTER THE FIRST CLOSING
1.1 The board of directors of MHL shall be convened immediately
following the First Closing to discuss the distribution of dividends
in the amount of NIS.69,000,000 (the "Dividends"). The Board will
take note of the legal opinion of Prof. J. Gross, Hodak & Co. and
the expert opinion of the independent auditors of MHL and shall
decide whether MHL can distribute such dividends. If so decided by
the board of directors of MHL, the Dividends shall be distributed to
the shareholders in accordance with their pro rata shareholding in
<PAGE> 26
-2-
MHL. Thus if the Board will decide to distribute dividends in the
total amount of NIS.69,000,000, such dividend will be distributed as
follows:
To Ampal - 46%, namely, NIS.31,740,000
To Amot - 27.04%, namely, NIS.18,657,600
To the Purchasers and to their Affiliates, to which the Gmul Shares
will be transferred at the First Closing, in the total - 20%,
namely, NIS.13,800,000
To Hevrat Haovdim - 6.96%, namely, NIS.4,802,400.
1.2 Since the Second Closing SLA requires implementation of the Second
Closing within forty-eight hours of the First Closing, the Dividends
shall be paid by MHL to the shareholders within twenty-four hours of
the First Closing, by bank transfer to the said shareholders' bank
accounts.
2. REDUCTION OF CONSIDERATION
2.1 In accordance with the provisions of Section 6.2(b) of the Main
Agreement the US dollar equivalent of the portion of the Dividends
which shall be distributed and actually paid by MHL to Ampal shall
be deducted from the remainder of Ampal's Part of the Consideration,
and the US dollar equivalent of the portion of the Dividends which
shall be distributed and actually paid by MHL to Amot shall be
deducted from the remainder of Amot's Part of the Consideration.
2.1.1 Thus, it is agreed by the parties hereto that for purposes of
the Second Closing SLA, the dollar figure constituting the
term "Remaining Ampal Consideration" (Section 2.2 of the
second Closing SLA) shall be reduced by the US Dollar
equivalent of the portion of the Dividends actually paid to
Ampal and the dollar figure constituting the term "Remaining
Amot Consideration" (Section 2.2 of the second Closing SLA)
shall be reduced by the US Dollar equivalent of the portion of
the Dividends actually paid to Amot.
2.1.2 Also for the avoidance of doubt, the unconditional
confirmation included in the Bank Documentation (as defined in
Section 2.3 of the Second Closing SLA) shall confirm without
any reservation the payment to Ampal and Amot of the Remaining
Ampal Consideration and of the Remaining Amot Consideration
(as defined in Section 2.2 of the Second Closing SLA), as
reduced by the portion of the Dividend actually paid to Ampal
and Amot respectively as provided hereunder, and the Trustees
are hereby instructed accordingly.
<PAGE> 27
-3-
2.2 For purposes of calculating the US dollar equivalent of the said
portions of the Dividends, the Bank of Israel's representative rate
in effect at the time of the bank transfer of the said portions of
the Dividends to Ampal's and Amot's accounts shall apply.
3. The Purchasers undertake to convene a general meeting of the
shareholders of MHL, no later than 30.6.99, for the purpose of
approving the dividends to be distributed as provided above as final
dividends for the periods ending 31.12.98, and to vote in favor of
such approval. The Purchasers will provide Ampal and Amot with a
copy of the minutes of such meeting.
4. In this side letter agreement each of the terms defined in the Main
Agreement shall have the same meaning ascribed to it therein.
Koor Industries Ltd. AMPAL
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
----------------------------- ---------------------------
SHERATON AMOT
/s/ [ILLEGIBLE]
----------------------------- ---------------------------
APPENDICES
Appendix A: The First Closing SLA
Appendix B: The Second Closing SLA
<PAGE> 28
-3-
2.2 For purposes of calculating the US dollar equivalent of the said
portions of the Dividends, the Bank of Israel's representative rate
in effect at the time of the bank transfer of the said portions of
the Dividends to Ampal's and Amot's accounts shall apply.
3. The Purchasers undertake to convene a general meeting of the
shareholders of MHL, no later than 30.6.99, for the purpose of
approving the dividends to be distributed as provided above as final
dividends for the periods ending 31.12.98, and to vote in favor of
such approval. The Purchasers will provide Ampal and Amot with a
copy of the minutes of such meeting.
4. In this side letter agreement each of the terms defined in the Main
Agreement shall have the same meaning ascribed to it therein.
Koor Industries Ltd. AMPAL
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
----------------------------- ---------------------------
SHERATON AMOT
/s/ Robert F. Cotter /s/ [ILLEGIBLE]
----------------------------- ---------------------------
I confirm that Robert F. Cotter, by his above signature, is authorized to
represent Sheraton Intercontinental Ltd.
/s/ Robert L. Scott
---------------------------
Robert L. Scott
General Counsel,
Sheraton Intercontinental Ltd.
APPENDICES
Appendix A: The First Closing SLA
Appendix B: The Second Closing SLA
<PAGE> 29
Side Letter Agreement on the First Closing
(hereinafter, the "First Closing SLA")
Dated: April 12, 1999
Further to an Agreement dated the 27th day of January, 1999, by and between
Ampal Israel Ltd. ("Ampal"), Amot Investments Ltd. ("Amot") and Gmul Investments
Company Ltd. ("Gmul"), (collectively, the "Vendors") of the one part, and
Sheraton Intercontinental Ltd. (hereinafter, "Sheraton") and Koor Tourism Ltd.
(hereinafter, "Koor") (jointly and severally, the "Purchasers"), of the other
part (hereinafter the "Main Agreement").
Whereas, in accordance with the Main Agreement, Ampal shall sell 783,778 shares
of Moriah Hotels Ltd. ("MHL") to the Purchasers ("Ampal's Shares") for
consideration in the amount of US$37,489,165, Amot shall sell 460,725 shares of
MHL to the Purchasers ("Amot's Shares") for consideration in the amount of
US$22,035,509, and Gmul shall sell 340,773 shares of MHL to the Purchasers
("Gmul's Shares") for consideration in the amount of US$16,302,934;
Whereas the Purchasers paid on January 27, 1999, to each of the Vendors as
required by the Main Agreement, their share of 20% of the consideration for the
shares of the Vendors in MHL; and
Whereas Ampal, Amot and the Purchasers have agreed to separate the closing of
the sale of Ampal's Shares and Amot's Shares (the "Second Closing"), from the
closing of the sale of Gmul's Shares to the Purchasers (the "First Closing") so
that the Second Closing will take place no earlier than 24 hours and no later
than 48 hours following the First Closing.
NOW THEREFORE THE PARTIES AGREE:
1. Gmul and the Purchasers hereby agree that Gmul's Shares shall be sold at
the First Closing.
2. For purposes of the First Closing and pursuant to Section 7(d) of the Main
Agreement, Gmul shall deliver minutes of the board of directors of MHL in
the form of Appendix C-1 hereto, instead of delivering minutes in the form
of Appendix C of the Main Agreement.
3. The Purchasers shall have the right to execute the acts required of them,
in the Main Agreement and in this First Closing SLA, through either of the
Purchasers and/or any of their affiliates or together in any proportion
the Purchasers deem fit. In light thereof, the share transfer deeds
attached as Appendix B3 to the Main Agreement shall be delivered to the
Purchasers such that
<PAGE> 30
-2-
the Purchasers shall be able to fix in writing on the said deed the names
of the transferees and distribution of Gmul's Shares among them in any
proportion the Purchasers deem fit.
4. Gmul confirms that it is aware of the Second Closing SLA and has no
objection thereto.
5. This First Closing SLA constitutes an integral part of the Main Agreement
and shall be read and interpreted as an integral part thereof.
Koor Industries Ltd. SHERATON GMUL
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
--------------------- -------------------- --------------------
APPENDICES
Appendix C-1: Resolution of the Board of Directors regarding transfer of Gmul's
Shares
<PAGE> 31
-2-
the Purchasers shall be able to fix in writing on the said deed the names
of the transferees and distribution of Gmul's Shares among them in any
proportion the Purchasers deem fit.
4. Gmul confirms that it is aware of the Second Closing SLA and has no
objection thereto.
5. This First Closing SLA constitutes an integral part of the Main Agreement
and shall be read and interpreted as an integral part thereof.
Koor Industries Ltd. SHERATON GMUL
/s/ [ILLEGIBLE] /s/ Robert F. Cotter /s/ [ILLEGIBLE]
--------------------- -------------------- --------------------
I confirm that Sheraton Intercontinental Ltd. is duly represented by
Robert F. Cotter, who has signed above on behalf of the Company.
/s/ Robert L. Scott
----------------------------------
Robert L. Scott
General Counsel,
Sheraton Intercontinental Ltd.
APPENDICES
Appendix C-1: Resolution of the Board of Directors regarding transfer of Gmul's
Shares
<PAGE> 32
Side Letter Agreement on the Second Closing
(the "Second Closing SLA")
Dated: April 12, 1999
Further to an Agreement dated the 27th day of January, 1999, by and between
Ampal Israel Ltd. ("Ampal"), Amot Investments Ltd. ("Amot") and Gmul Investments
Company Ltd. ("Gmul"), (collectively, the "Vendors") of the one part, and
Sheraton Intercontinental Ltd. ("Sheraton") and Koor Tourism Ltd. ("Koor")
(jointly and severally, the "Purchasers"), of the other part (the "Main
Agreement").
Whereas, in accordance with the Main Agreement, Ampal shall sell 783,778 shares
of Moriah Hotels Ltd. ("MHL") to the Purchasers ("Ampal's Shares") for
consideration in the amount of US$37,489,165, Amot shall sell 460,725 shares of
MHL to the Purchasers ("Amot's Shares") for consideration in the amount of
US$22,035,509, and Gmul shall sell 340,773 shares of MHL, to the Purchasers
("Gmul's Shares") for consideration in the amount of US$16,302,934;
Whereas the Purchasers paid on January 27, 1999, to each of the Vendors as
required by the Main Agreement, their share of 20% of the consideration for the
shares of the Vendors in MHL; and
Whereas Ampal, Amot and the Purchasers have agreed to separate the closing of
the sale of Ampal's Shares and Amot's Shares (the "Second Closing"), from the
closing of the sale of Gmul's Shares to the Purchasers (the "First Closing", as
specified in the First Closing SLA attached here as Appendix A) so that the
Second Closing will take place no earlier than 24 hours and no later than 48
hours following the First Closing.
1. In this Second Closing SLA, each of the terms defined in the Main
Agreement shall have the same meaning ascribed to it therein.
2. The transfer of the Sold Shares and payment of the Second Installment
shall be carried out in two (2) stages as follows:
2.1 In the First Closing, the Purchaser shall pay Gmul the remainder of
Gmul's Part of the Consideration (80% [eighty percent] of Gmul's
Part of the Consideration) against delivery to the Purchaser of a
share transfer deed in the text annexed to the Main Agreement as
Appendix B3 and as stipulated in Section 3 of the First Closing SLA,
and the Minutes of MHL's Board of Directors approving the transfer
of the Gmul Shares in the text annexed hereto and marked "Appendix
C-1".
<PAGE> 33
-2-
2.2 In the Second Closing, the Purchaser shall pay to Ampal the
remainder of Ampal's Part of the Consideration, namely, $29,991,332
(hereinafter - the "Remaining Ampal Consideration") and to Amot the
remainder of Amot's Part of the Consideration, namely, $17,628,407
(hereinafter - the "Remaining Amot Consideration") against delivery
to the Purchaser of the Minutes of the Company's Board of Directors
approving the transfer of Ampal's Shares and Amot's Shares to the
Purchaser in the text annexed hereto and marked "Appendix C-2".
2.3 Upon paying the Remaining Ampal Consideration and the Remaining Amot
consideration, the Purchasers shall deliver to the Trustees (as
hereinafter defined) documents signed by either Bank Hapoalim Ltd.
confirming, without any reservation, the payment of the Remaining
Ampal Consideration to Ampal's Account No.277002 in Bank Hapoalim
Ltd. Arlozorov Branch, and of the Remaining Amot Consideration to
Amot's Account No.44670 in Bank Hapoalim Ltd. Hameasfim Branch (the
"Bank Documentation").
3. Upon execution of this Second Closing SLA, Ampal and Amot shall deliver to
Muriel Matalon, Adv. and Zvi Firon, Adv. (the "Trustees") in trust the
following documentation:
3.1 Share transfer deeds (the "Deeds") attached as Appendices B1* and B2
to the Main Agreement. The Deeds shall be delivered so that if and
when such deeds of transfer are delivered to the Purchasers by the
Trustees in accordance with this Section 3, the Purchasers shall be
able to fix in writing on the Deeds the distribution of Ampal's
Shares and Amot's Shares to either of the Purchasers and/or any of
their affiliates in any proportion the Purchasers deem fit.
*the serial numbers recited for Ampal's Shares in the English
language Appendix B1 are short by around 550,000 Shares of the total
of 783,778 Shares to be transferred. The Hebrew version is correct.
3.2 Letters of resignation from the Board of Directors of MHL of the
following directors: Daniel Steinmetz, Raz Steinmetz, Yehoshua
Gleitman, Yoseph Steinman, Eli Wagner, Haim Kimche, Zamir Sofer,
BenAmi Zukerman and Zvi Fichman, to become effective only upon
delivery thereof, if at all, to MHL.
The parties hereby instruct the Trustees, and the Trustees hereby
undertake to fulfill the following instructions:
If the Trustees have received:
<PAGE> 34
-3-
(a) a written confirmation signed by Ampal and Amot confirming that they
have received all the consideration due to them under the Main
Agreement (the "Confirmation"); or
(b) The Bank Documentation.
Then, and only then, will the Trustees transfer the Deeds and the said
letters of resignation to the Purchasers.
If the Trustees do not receive either the Confirmation or the Bank
Documentation within fourteen days of the date of First Closing, the
Trustees shall return the Deeds and the said letters of resignation to
Ampal and Amot.
4. The Purchasers shall have the right to execute the acts required of them,
in the Main Agreement and in this Second closing SLA, through either of
the Purchasers and/or any of their affiliates or together in any
proportion the Purchasers deem fit.
5. All the terms of the Main Agreement with respect to the Completion Date
will apply with the respect to both the First Closing and the Second
Closing, and whenever the term Completion Date is referred to, it shall
mean the First closing and the Second Closing, or either of them, as
appropriate. To avoid doubt, for the purpose of Section 9 of the Main
Agreement - the Completion Date shall mean the date of the completion of
the Second Closing.
6. To avoid doubt:
6.1 The acts referred to in Sections 7(c) and 8.2.2.3 of the Main
Agreement shall be performed on the First Closing.
6.2 The Interim Period is the period between the date of the Main
Agreement and the Second Closing.
6.3 Appendix C to the Main Agreement is hereby replaced by Appendices
C-1 and C-2 annexed hereto. Appendix C-1 shall be delivered to the
PURCHASER on the First Closing, and Appendix C-2 shall be delivered
to the PURCHASER on the Second Closing and the provisions of Section
7(d) to the Main Agreement are amended accordingly.
7. Between the First Closing and the Second Closing, Koor, Sheraton, Ampal
and Amot shall make their best effort to prevent the taking of any
decisions and/or acts by MHL which are not in the ordinary course of
business. The act and decisions required under the Main Agreement, the
First Closing SLA, this Second Closing SLA and/or any other written
agreement between the above parties shall constitute exceptions to the
aforesaid prohibition.
<PAGE> 35
-4-
8. All other terms and conditions of the Main Agreement remain unchanged, and
the terms of this Second Closing SLA do not prejudice, unless expressly
stated herein, in any way existing legal and/or contractual rights of the
parties hereto.
9. This Second Closing SLA constitutes an integral part of the Main Agreement
and shall be read and interpreted as an integral part thereof.
Koor Industries Ltd. AMPAL
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
-------------------------- -----------------------------
SHERATON AMOT
/s/ [ILLEGIBLE]
-------------------------- -----------------------------
APPENDICES
Appendix A: The First Closing SLA
Appendix C-1: Resolution of Board of Directors approving transfer of Gmul's
Shares
Appendix C-2: Resolution of Board of Directors approving transfer of Ampal's
Shares and Amot's Shares
We hereby agree to act in accordance with the instructions in Section 3 of this
Second Closing SLA.
------------------------- -----------------------------
Muriel Matalon Zvi Firon
<PAGE> 36
-4-
8. All other terms and conditions of the Main Agreement remain unchanged, and
the terms of this Second Closing SLA do not prejudice, unless expressly
stated herein, in any way existing legal and/or contractual rights of the
parties hereto.
9. This Second Closing SLA constitutes an integral part of the Main Agreement
and shall be read and interpreted as an integral part thereof.
Koor Industries Ltd. AMPAL
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
-------------------------- ------------------------------
SHERATON AMOT
/s/ Robert F. Cotter /s/ [ILLEGIBLE]
-------------------------- ------------------------------
I confirm that Robert F. Cotter is authorized to sign on behalf of
Sheraton Intercontinental Ltd.
Robert L. Scott
General Counsel,
Sheraton Intercontinental Ltd.
APPENDICES
Appendix A: The First Closing SLA
Appendix C-1: Resolution of Board of Directors approving transfer of Gmul's
Shares
Appendix C-2: Resolution of Board of Directors approving transfer of Ampal's
Shares and Amot's Shares
We hereby agree to act in accordance with the instructions in Section 3 of this
Second Closing SLA.
------------------------- ------------------------------
Muriel Matalon Zvi Firon
<PAGE> 37
April 12, 1999
Ampal (Israel) Ltd.
Amot Investments Ltd.
Gmul Investments Company Ltd.
Gentlemen,
Re: Sale of Holdings in Moriah Hotels Ltd.
Further to the agreement dated 27.1.99 (hereinafter "the Agreement") for the
sale of your holdings in Moriah Hotels Ltd. (hereinafter "the Company"), we
hereby confirm as follows:
In all matters concerning authorizations of the Company and other companies of
the Moriah group, that were given to you as set out in Sections 4.4 and 6.2(c)
of the Agreement, we or the Company or another company in the Moriah group will
not have any claim against you emanating from the change in identity of the
purchasers of your holdings in the Company.
Sincerely yours,
Koor Industries Ltd.
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
- ------------------------- ------------------- ------------------------------
Koor Industries Ltd. Koor Tourism Ltd. Sheraton Intercontinental Ltd.
Authorization
I, the undersigned, Muriel Matalon, attorney of Koor Industries Ltd., Koor
Tourism Ltd., and Sheraton International Ltd. (hereinafter "my Clients") hereby
confirm that the above signatures are binding on my Clients in everything
connected with this document or emanating herefrom.
------------------------------
Muriel Matalon, Adv.
<PAGE> 38
April 12, 1999
Ampal (Israel) Ltd.
Amot Investments Ltd.
Gmul Investments Company Ltd.
Gentlemen,
Re: Sale of Holdings in Moriah Hotels Ltd.
Further to the agreement dated 27.1.99 (hereinafter "the Agreement") for the
sale of your holdings in Moriah Hotels Ltd. (hereinafter "the Company"), we
hereby confirm as follows:
In all matters concerning authorizations of the Company and other companies of
the Moriah group, that were given to you as set out in Sections 4.4 and 6.2(c)
of the Agreement, we or the Company or another company in the Moriah group will
not have any claim against you emanating from the change in identity of the
purchasers of your holdings in the Company.
Sincerely yours,
Koor Industries Ltd.
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE] /s/ Robert F. Cotter
- ------------------------- ------------------- ------------------------------
Koor Industries Ltd. Koor Tourism Ltd. Sheraton Intercontinental Ltd.
Authorization
I, the undersigned, Muriel Matalon, attorney of Koor Industries Ltd., Koor
Tourism Ltd., and Sheraton International Ltd. (hereinafter "my Clients") hereby
confirm that the above signatures are binding on my Clients in everything
connected with this document or emanating herefrom.
------------------------------
Muriel Matalon, Adv.
<PAGE> 1
AN AGREEMENT
Made and entered into in Tel-Aviv on the day of , 1999
BY AND BETWEEN
1. BANK HAPOALIM B.M. (p.c.52-000011-8)
(hereinafter "BHP")
2. ATAD INVESTMENTS COMPANY LTD. (p.c.51-089763-0)
(hereinafter "ATAD")
(BHP and ATAD shall be hereinafter referred to jointly and
severally as "the BANK")
3. REVADIM (NECHASIM) LTD. (p.c.51-073528-5) (hereinafter "the
BUYER")
all of them of 63-65 Yehuda Halevi Street, Tel-Aviv
of the first part;
AND
1. AMPAL-AMERICAN ISRAEL CORPORATION
(c/o Ampal Israel)
of 111 Arlozorov Street, Tel-Aviv
(hereinafter "AMPAL")
2. AMPAL DEVELOPMENT (ISRAEL) LTD. (p.c.52-000238-7)
of 111 Arlozorov Street, Tel-Aviv
(hereinafter "AMPAL DEVELOPMENT")
3. AMPAL FINANCIAL SERVICES LTD. (p.c.52-002104-9)
of 111 Arlozorov Street, Tel-Aviv
(hereinafter "AMPAL FINANCING")
4. AMPAL (ISRAEL) LTD. (p.c.52-002622-0)
of 111 Arlozorov Street, Tel-Aviv
(hereinafter "AMPAL ISRAEL")
(AMPAL, AMPAL DEVELOPMENT, AMPAL FINANCING, and AMPAL ISRAEL shall be
hereinafter referred to jointly and severally as "the PURCHASERS")
5. NIR LTD. (p.c.52-000062-2)
of 111 Arlozorov Street, Tel-Aviv
(hereinafter "NIR")
of the second part;
WHEREAS The BANK represents and warrants that ATAD is, and was at all times
at which it held the Shares (as hereinafter defined), a wholly owned
subsidiary of BHP; and
<PAGE> 2
- 2 -
WHEREAS The BANK represents and warrants that ATAD is the record owner
and holder, and BHP through ATAD is the beneficial owner, of
5,874,281 Ordinary Shares, as defined in the Shares Transfer
Agreement, attached hereto as ANNEX "A" (hereinafter "the "Shares
Transfer Agreement"), of 3,350 4% Preferred Shares (as defined in
the Shares Transfer Agreement), and of 122,536 6.5% Preferred
Shares (as defined in the Shares Transfer Agreement) (the
Ordinary Shares, the 4% Preferred Shares, and the 6.5% Preferred
Shares are collectively referred to herein as "the Shares"), and
that the Shares and ATAD's holding therein are free and clear of
any Third Party Right (as hereinafter defined); and
WHEREAS BHP is interested in transferring and selling the Shares to the
PURCHASERS, and the PURCHASERS are interested in purchasing the
Shares on the terms and conditions and for the consideration as set
out in the Shares Transfer Agreement; and
WHEREAS Each one of the PURCHASERS is an owner of rights in certain real
estate (hereinafter "the Real Estate Rights") as specified in the
Real Estate Agreements, copies of which are attached hereto as
ANNEXES "B", "C", "D" and "E" (hereinafter "the Real Estate
Agreements"); and
WHEREAS Each of the PURCHASERS is interested in selling to the BUYER, and
the BUYER is interested in buying from each of the respective
PURCHASERS, the Real Estate Rights owned by it, on the terms and
conditions and for the consideration as set out in the relevant Real
Estate Agreement; and
WHEREAS NIR has the right to be registered as the owner of the Bnei Brak
Branch of BHP, as defined in the Lease Agreement, copy of which is
attached hereto as ANNEX "F" (hereinafter "the Lease Agreement"),
and NIR and BHP are interested in entering into the Lease Agreement;
NOW, THEREFORE, it has been declared, agreed and warranted between the parties
as follows:
1. PREAMBLE, CAPTIONS, DEFINITIONS, AND ANNEXES
1.1 The preamble to this Agreement and the Annexes hereto, including their
annexes, form an integral part hereof.
1.2 Captions used in this Agreement are solely for convenience of reading
and shall not be used for the interpretation or determination of the
validity of this Agreement or any provision hereof.
1.3 In this agreement the following terms shall have the meanings ascribed
to them:
1.3.1 "This Agreement" or "the Agreement" - this Agreement and all the
Annexes, amendments or additions to it, as well as any document to be
furnished in accordance with the provisions hereof.
<PAGE> 3
- 3 -
1.3.2 "Third Party Right" - Any lien, pledge, mortgage, suit, demand, claim,
attachment and/or debt or obligation towards whatsoever third party
and/or whatsoever other third party right.
1.3.3 "Amount of the Deposit" - As defined in the Shares Transfer Agreement.
1.3.4 "Dollar" - U.S. Dollar.
1.3.5 "The PURCHASERS' Attorney" - Any of the attorneys from the office of
Firon, Karni, Sarov & Firon, Advs., of 111 Arlozorov Street, Tel-Aviv,
alone and/or in any combination.
1.3.6 "The BANK's Attorney" - Advs. Moriah Hoftman Doron and Avraham Hirsch of
63 Yehuda Halevi Street, Tel-Aviv, alone and/or in any combination.
1.3.7 "The Closing Date" - As defined in Section 8. hereinafter.
1.3.8 "The Latest Date" - 120 days from the date of signing this Agreement or
such later date to be agreed upon by the parties in writing.
1.4 The following Annexes are attached to this Agreement and form an
integral part thereof:
1.4.1 Annex "A" - The Shares Transfer Agreement
1.4.2 Annex "B" - The Arlozorov A Real Estate Agreement
1.4.3 Annex "C" - The Holon, Panorama and Allenby Real Estate Agreement
1.4.4 Annex "D" - The Rosh Pina and Ramat Hasharon Real Estate Agreement
1.4.5 Annex "E" - The Arlozorov B Real Estate Agreement
1.4.6 Annex "F" - The Lease Agreement
1.4.7 Annex "G" - Form of Agreement by and among the BANK, Rebar
Financial Corp., Daniel Steinmetz and Raz Steinmetz
2. REPRESENTATIONS AND WARRANTIES OF THE PARTIES
2.1 Representations and Warranties of the BANK and of the BUYER
-----------------------------------------------------------
The BANK and the BUYER represent, warrant, covenant and undertake, all
as relevant to each and every one of them respectively, the following to
be true and correct on the date hereof and that the following will be
true and correct on the Closing Date, and are aware and acknowledge that
the PURCHASERS and NIR have agreed to enter into this Agreement and the
transactions contemplated therein in reliance on these representations,
warranties, covenants and undertakings of the BANK:
2.1.1 ATAD is a private company duly registered in Israel; its registration
number with the Registrar of Companies is 51-089763-0; it is wholly
owned and controlled by BHP; and it is an active company lawfully
conducting its business and it has all the powers and authorities to
enter into this Agreement and to fulfill all its undertakings hereunder.
2.1.2 The BUYER is a private company duly registered in Israel; its
registration number with the Registrar of Companies is 51-073528-5, it
is wholly owned and controlled by BHP;
<PAGE> 4
- 4 -
and it is an active company lawfully conducting its business and it has
all the powers and authorities to enter into this Agreement and to
fulfill all its undertakings hereunder.
2.1.3 BHP is a public company duly registered as a bank in Israel; its
registration number with the Registrar of Companies is 52-000011-8, and
it is an active company lawfully conducting its business and it has all
the powers and authorities to enter into this Agreement and to fulfill
all its undertakings hereunder.
2.1.4 Save as set out in Section 7.1 hereunder, each of BHP and ATAD and the
BUYER have completed all such corporate acts and proceedings required
under their incorporation documents and under law for entering into this
Agreement and the fulfillment of its undertakings hereunder.
2.1.5 ATAD is the record owner and holder of the Shares; the Shares and ATAD's
rights therein are free and clear of any Third Party Right, and there is
nothing to prevent the sale and transfer of the Shares to the PURCHASERS
as set out hereinafter in this Agreement and the Shares Transfer
Agreement.
2.1.6 On October 30, 1985, and at all times thereafter until the Closing Date,
BHP was, is, and will be the "Beneficial Owner" (as the term is defined
in Section 912 of the New York Business Corporation Law), directly or
through ATAD (which is and always was a wholly owned subsidiary of BHP),
of not less than 20% of the outstanding voting stock of AMPAL.
2.1.7 On October 30, 1985, and at all times thereafter until the day of
transfer of the Shares to the PURCHASERS, BHP was, is, and will be an
"Interested Shareholder" for the purposes stated in Section 912 of the
New York Business Corporation Law.
2.1.8 On the Closing Date, BHP will be the sole record and Beneficial Owner
and holder of the Shares and will transfer the Shares to the PURCHASERS
free and clear of any Third Party Right.
2.2 Representations and Warranties of the PURCHASERS
------------------------------------------------
Each of the PURCHASERS and NIR hereby represent, warrant, covenant and
undertake, all as relevant to each and every one of them respectively,
the following to be true and correct on the date hereof and that the
following will be true and correct on the Closing Date, and is aware and
acknowledges that the BANK and the BUYER have agreed to enter into this
Agreement and the transactions contemplated therein in reliance on these
representations, warranties, covenants and undertakings of the
PURCHASERS:
2.2.1 AMPAL is a corporation duly organized in the State of New York, U.S.A.,
whose Ordinary Shares are traded on the AMEX; it is an active company
lawfully conducting its business, and has all the powers and authorities
to enter into this Agreement and to fulfill all its undertakings
hereunder.
2.2.2 AMPAL DEVELOPMENT is a public company duly registered in Israel; its
registration number with the Registrar of Companies is 52-000238-7; and
it is an active company lawfully conducting its business and it has all
the powers and authorities to enter into this Agreement and to fulfill
all its undertakings hereunder.
<PAGE> 5
- 5 -
2.2.3 AMPAL FINANCING is a public company duly registered in Israel; its
registration number with the Registrar of Companies is 52-002104-9; and
it is an active company lawfully conducting its business and it has all
the powers and authorities to enter into this Agreement and to fulfill
all its undertakings hereunder.
2.2.4 AMPAL ISRAEL is a public company duly registered in Israel; its
registration number with the Registrar of Companies is 52-002622-0; and
it is an active company lawfully conducting its business and it has all
the powers and authorities to enter into this Agreement and to fulfill
all its undertakings hereunder.
2.2.5 NIR is a public company duly registered in Israel; its registration
number with the Registrar of Companies is 52-000062-2; and it is an
active company lawfully conducting its business and it has all the
powers and authorities to enter into this Agreement and to fulfill all
its undertakings hereunder.
2.2.6 Save as set out in Section 7.1 hereinafter, each of the PURCHASERS and
NIR has completed all such corporate acts and proceedings required under
its incorporation documents and any law for entering into this Agreement
and the fulfillment of all its undertakings hereunder.
2.2.7 The PURCHASERS are aware of AMPAL's condition, rights and obligations,
and the rights attached to the Shares under AMPAL's Certificate of
Incorporation and Bylaws and they purchase the Shares by virtue of
this Agreement and the Shares Transfer Agreement based on AMPAL's
condition, rights and obligations, and the said rights as they are,
without any reliance on any representations and/or warranties of the
BANK regarding AMPAL's condition, rights and obligations, and the said
rights.
3. THE SHARES TRANSFER AGREEMENT
3.1 Simultaneously with the signing of this Agreement, the BANK and the
PURCHASERS are signing the Shares Transfer Agreement under which BHP
undertakes to sell and transfer the Shares to the PURCHASERS on the
Closing Date in the apportionment set out therein, all on the terms and
for the consideration as set out in the Shares Transfer Agreement.
3.2 ATAD undertakes to do everything required in order to enable BHP to
fulfill its undertakings under Section 3.1 above and under the Shares
Transfer Agreement. Without derogating from the generality of the
aforesaid, ATAD and BHP undertake that ATAD will transfer the Shares to
BHP and complete the transfer prior to the Closing Date, in order to
enable their transfer by BHP to the PURCHASERS in accordance with the
provisions of the Shares Transfer Agreement.
3.3 The Shares will be sold and transferred to the PURCHASERS in the
portions and for the consideration as follows:
3.3.1 To AMPAL - 3,517,683 Ordinary Shares, 3,350 4% Preferred Shares, and
122,536 6.5% Preferred Shares in consideration for:
3.3.1.1 The transfer of the Amount of the Deposit; and
3.3.1.2 $3,420,000 (plus interest in the rate of LIBOR + 0.75% per annum
from April 12, 1999 until the date of actual payment); and
<PAGE> 6
- 6 -
3.3.1.3 $3,210,208
All as set out and detailed in Sections 3.3.1 and 4 of the Shares
Transfer Agreement.
3.3.2 To AMPAL DEVELOPMENT - 1,560,450 Ordinary Shares in consideration of
$7,802,248, all as set out and detailed in Sections 3.3.2 and 5 of the
Shares Transfer Agreement.
3.3.3 To AMPAL FINANCING - 660,803 Ordinary Shares in consideration of
$3,304,013, as set out and detailed in Sections 3.3.4 and 6 of the
Shares Transfer Agreement.
3.3.4 To AMPAL ISRAEL - 135,345 Ordinary Shares in consideration of $76,726,
all as set out and detailed in Sections 3.3.4 and 7 of the Shares
Transfer Agreement.
4. THE REAL ESTATE AGREEMENTS
Simultaneously with signing this Agreement and the Shares Transfer
Agreement, the BUYER and each of the PURCHASERS, respectively, are
signing the following Real Estate Agreements:
4.1 The Real Estate Agreement ANNEX "B" hereto between AMPAL and the BUYER
regarding the sale of the "Arlozorov A Property", as defined therein, to
the BUYER.
4.2 The Real Estate Agreement ANNEX "C" hereto between AMPAL DEVELOPMENT and
the BUYER regarding the sale of the "Holon Property", "Panorama
Property" and "Allenby Property", all as defined therein, to the BUYER.
4.3 The Real Estate Agreement ANNEX "D" hereto between AMPAL FINANCING and
the BUYER regarding the sale of the "Rosh Pina Property" and "Ramat
Hasharon Property", all as defined therein, to the BUYER.
4.4 The Real Estate Agreement ANNEX "E" hereto between AMPAL ISRAEL and the
BUYER regarding the sale of the "Arlozorov B Property", as defined
therein, to the BUYER.
4.5 The PURCHASERS undertake to support and assist the BUYER in all
necessary acts required to register the rights in the various Properties
that are subject of the Real Estate Agreements ANNEXES "B", "C", "D" and
"E" hereto in the name of the BUYER in the Land Registry Offices, after
the Determining Date, as defined in each Real Estate Agreement,
including, subject to the provisions of each relevant Real Estate
Agreement, by signing any necessary document and submitting any
necessary document which is in the relevant PURCHASER's possession;
provided however, but without derogating from the respective provisions
of the respective Real Estate Agreement, that all the expenses and/or
any financial obligations incurred due to any such support and
assistance will be borne and paid solely by the BUYER.
5. THE LEASE AGREEMENT
Simultaneously with the signing of this Agreement, NIR and BHP will sign
the Lease Agreement ANNEX "F" hereto.
<PAGE> 7
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6. Simultaneously with the signing of this Agreement the BANK, Rebar
Financial Corp., Daniel Steinmetz and Raz Steinmetz are signing an
agreement in the form of Annex "G" hereto, in connection with the
agreement among them of May 12, 1996, and in connection with the
transfer of the Shares according to the Shares Transfer Agreement.
7. CONDITIONS PRECEDENT
7.1 The sale and transfer of the Shares and the payment of the consideration
therefor under the Shares Transfer Agreement, the sale of the Real
Estate Rights under the Real Estate Agreements and the payment of the
consideration therefor, and the start of the lease under the Lease
Agreement are subject to the fulfillment of all the following conditions
precedent (hereinafter "the Conditions Precedent"):
7.1.1 The receipt of unconditional and unreserved approval of the Director of
Restrictive Trade Practices (hereinafter "the Director") under the
Restrictive Trade Practices Law, 5748-1988) for the transfer of the
Shares.
7.1.2 The approval of this Agreement by AMPAL's Related Parties Transactions
Committee.
7.1.3 The approval of the transactions which are the subject of this Agreement
and the Annexes thereto and the execution thereof, by AMPAL's Board of
Directors.
7.1.4 The approval of the transactions which are the subject of this Agreement
and the Annexes thereto and the execution thereof, by a majority of
AMPAL's Shareholders participating in the voting thereon at a
shareholders meeting.
7.1.5 The approval of this Agreement, its Annexes and the transactions
contemplated thereunder by the Audit Committee of AMPAL DEVELOPMENT and
by the boards of directors and the general shareholders meetings of each
one of AMPAL DEVELOPMENT, AMPAL FINANCING, AMPAL ISRAEL, and NIR.
7.1.6 The approval of this Agreement, its Annexes and the transactions
contemplated thereunder by BHP's Audit Committee and Related Parties
Transactions Committee, and BHP's Board of Directors, and by the Board
of Directors and the general shareholders meetings of each of ATAD and
the BUYER.
7.1.7 All representations and warranties are true and correct and all
covenants and undertakings have been performed as of the Closing Date.
7.1.8 Officers' Certificates will be submitted to the effect that all
representations and warranties are true and correct, all covenants and
undertakings have been performed and all necessary approvals have been
obtained as of the Closing Date.
7.2 The parties will cooperate as required for the purpose of obtaining the
approval of the Director as aforesaid in Section 7.1.1 above, and inter
alia, will file within 14 days from the date of signing the Agreement a
proper application to the Director, and thereafter will furnish the
Restrictive Trade Practices Authority any document or information
required by it for the purpose of giving the said approval.
7.3 Each party will bear all of its expenses incurred with respect to the
fulfillment of the Conditions Precedent.
<PAGE> 8
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7.4 If any of the Conditions Precedent is not fulfilled by the Latest Date
this Agreement, including, to avoid any doubt, all its Annexes, will
terminate, automatically, at the end of 14 days from the Latest Date,
unless all the Conditions Precedent have been fulfilled prior to the end
of the said period of 14 days. In the event of such termination none of
the parties hereto will have any claim of whatsoever sort against any
other party hereto in connection with this Agreement and/or any of its
Annexes and/or the process that led to the execution thereof and/or the
failure to fulfill the Conditions Precedent and/or the termination of
this Agreement and its Annexes, except for any amount due under Section
7.3 above and 14.1 hereunder; and except that each of the parties will
have a claim against any other party if such other party does not pursue
in good faith the fulfillment of the Conditions Precedent.
7.5 The parties recognize that the PURCHASERS will request a Fairness
Opinion from Lehman Brothers or any other investment banker selected by
AMPAL, and that the PURCHASERS' various committees, boards of directors
and shareholders' meetings will rely on such Fairness Opinion in
deciding whether or not to approve the transactions which are the
subject of this Agreement and of the Annexes thereto, and the execution
thereof.
8. THE CLOSING DATE
After the fulfillment of all Conditions Precedent, BHP and AMPAL shall
determine the date (the "Closing Date") which will not be later than 14
days from the date on which all the Conditions Precedent are fulfilled
and which will be the "Determining Date" for the purpose of the Shares
Transfer Agreement, each of the Real Estate Agreements and the Lease
Agreement.
To remove doubt, it is declared and clarified that the Closings of the
Shares Transfer Agreement, each one of the Real Estate Agreements, and
the Lease Agreement will be held simultaneously, and no such closing
will be considered complete unless all the said closings are completed
in accordance with each relevant agreement. On the Closing Date,
authorized representatives of all parties will convene at the place(s)
to be determined by AMPAL and BHP, and all actions that are required
under this Agreement and/or any of its Annexes to be done on the Closing
Date and/or Determining Date and/or at the Closing will be done
simultaneously.
9. If, prior to the Closing Date any shareholder of AMPAL (other than Rebar
Financial Corp. (hereinafter "Rebar") and any of Rebar's shareholders,
directors and office holders) makes a written demand or claim, against
AMPAL and/or any of its directors and/or office holders and/or other
shareholders, with respect to this Agreement and/or any of the
transactions contemplated thereunder, and if AMPAL provides the legal
opinion of its US Attorneys, under which such claim and/or demand is
reasonably likely to result in a judgment imposing payment on the
parties hereto or any of them in an amount exceeding $5,000,000 or may
delay the Closing Date by six months or more, then AMPAL shall have the
right to terminate this Agreement and all of its Annexes by giving
written notice of such termination to the other parties hereto. In the
event of such termination, none of the parties hereto will have any
claim of whatsoever sort against any other party hereto in connection
with this Agreement and/or any of its Annexes and/or the process that
led to the execution thereof and/or their termination and/or the failure
to fulfill the Conditions Precedent, except for any amount due under
Section 14.1 hereunder.
<PAGE> 9
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10. INDEMNIFICATION
10.1 The Bank agrees to indemnify and hold harmless the PURCHASERS and their
officers, directors, employees, agents and attorneys (each, an
"Indemnitee") from and against 22.7% of any and all liabilities, losses,
damages, penalties, actions, judgments, suits, claims, costs and
expenses (including but not limited to attorneys' fees, disbursements
and expenses) of any kind whatsoever (collectively, "Losses") arising
out of, based upon or relating to this Agreement and/or any of its
annexes or any of the transactions contemplated thereby, suffered or
incurred by any of them in connection with any (i) suit, action
proceedings, claim and/or demand (including, without limitation, class
action and derivative claims by the holders of any securities issued by
any of the Purchasers, (ii) any suit, action proceedings, claim,
investigation or demand by the United States Securities and Exchange
Commission or the Israeli Securities Authority or any other United
States or Israeli governmental or regulatory agency or authority, but
always after deducting from the Losses all sums received by the relevant
Indemnitee from its insurance company or any other third party which is
not an Indemnitee, as indemnification of such Losses, and provided
however that in no event shall the Bank be liable to pay the Indemnitee,
under this Section 10.1, more than $1,000,000. However, the Bank shall
not indemnify an Indemnitee for any amount to be borne by said
Indemnitee in satisfaction of that Indemnitee's deductible ("hishtatfut
atsmit") under the said Indemnitee's Insurance Policies.
10.2 Promptly after receipt by any Indemnitee of notice of any claim, suit
action or proceeding (any of the foregoing, an "Action") from any Person
who is not a party to this Agreement or to its respective Annex, which
Action may give rise to a claim for indemnification hereunder, the
Indemnitee shall give reasonable written notice thereof to the Bank; but
the failure to give such notice in a timely fashion shall not relieve
the Bank from any liability hereunder except to the extent, if any, that
the Bank is materially prejudiced by such delay. In case any Action is
brought against any Indemnitee, the Bank shall be entitled to
participate in such defense after giving a written notice to the
Indemnitee, stating its desire to do so, within fourteen days after the
Bank was given notice of the Action. In the event that the Bank does not
give the Indemnitee such timely notice of its desire to participate in
any defense of any such Action, the Indemnitee shall be free to conduct
the defense as it deems fit without the participation of the Bank. In
any event, the defense of any such Action shall be controlled by the
Indemnitee. The Bank shall not have any power or authority to settle
such Action without the written consent of the affected Indemnitees. The
affected Indemnitees in any Action shall have the right and power to
settle such Action but the Bank will be exempt from its indemnification
obligations under Sections 10.1 and 10.2 above, if such settlement is
not coordinated with the Bank in advance.
10.3 To remove doubt it is declared and clarified that the provisions of
Sections 10.1 and 10.2 above shall in no way prejudice any party's right
to full and prompt compensation and indemnification for 100% of its
Losses which result from a breach by any of the other parties of any of
its representations, warranties or obligations under this Agreement
and/or any of its annexes and/or any applicable law.
11. SETTLEMENT OF DISPUTES
Any disagreement, dispute, or difference of opinion arising among the
parties concerning this Agreement and/or any of its Annexes or any of
their terms (including a question of their validity), the signing,
implementation, interpretation and/or application thereof, will be
<PAGE> 10
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brought for determination by a single arbitrator to be agreed upon by
the parties within 14 days of the date on which any of the parties
requests such arbitration. In the absence of agreement among the parties
on the identity of the arbitrator, the arbitrator's identity shall be
determined, at the written request of any of the parties, by the
Chairman of the Board of Management of BHP and the Chairman of the Board
of Directors of AMPAL within 7 days of such request, and failing such
determination, by the District Court of Tel-Aviv at the request of any
of the parties hereto, provided that such party notifies the other
parties to this Agreement or its relevant Annex in writing of its
intention to do so at least ten (10) days in advance.
The arbitrator will not be bound by the rules of evidence and procedure,
however he shall be obliged to make his award according to the
provisions of the substantive law and the provisions of this Agreement
and/or its relevant Annex, to substantiate his award as well as any
decision, and his decision will be final and binding upon all the
respective parties.
The arbitration will take place in Israel.
12. NO WAIVER OF RIGHTS
No waiver, extension, reduction, or abstention from acting by any of the
parties is to be considered a waiver of its rights under this Agreement
or its relevant Annex or under any law and shall not prevent any claim
whatsoever.
13. WITHHOLDING TAX
To remove doubt, it is declared and agreed that each payment under any
of the Real Estate Agreements and under the Shares Transfer Agreement is
subject to withholding tax, as such duty exists under any applicable
law, and unless a proper exemption authorization is submitted prior to
such payment, the proper tax will be withheld from any such payment.
14. STAMP DUTY, ATTORNEY'S FEES AND EXPENSES
14.1 Stamp duty with respect to this Agreement, the Shares Transfer
Agreement, and the Lease Agreement, if any, will be borne by the parties
in equal portions, i.e., half by the BANK and half by the PURCHASERS.
14.2 Subject to the provisions of Section 14.1 above, each party shall bear
its own expenses and attorney's fees in connection with this Agreement
and its implementation.
15. MISCELLANEOUS
15.1 Without derogating from their undertakings under this Agreement and/or
any of its Annexes, each of the parties undertakes and agrees to perform
such further and additional acts and sign or furnish such further and
additional documents as shall be necessary or required for the
implementation of this Agreement and its Annexes.
15.2 The provisions of this Agreement and its relevant annexes shall
supersede and replace all previous representations, agreements,
undertakings, and understandings made between the parties in anything
concerning the sale and purchase of the Shares and/or the Real Estate
Rights. It is clarified, to avoid doubt, that all agreements regarding
credit facilities and other banking services between BHP and any of the
other parties and the rights attributed to the Shares held by BHP in
AMPAL ISRAEL in accordance with the Articles of Association of AMPAL
ISRAEL are not affected by this Agreement.
<PAGE> 11
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15.3 This Agreement (including its Annexes) constitutes the entire agreement
between the parties in the matters set out therein, and no amendment or
modification therein will be valid unless in writing signed by the
relevant parties.
15.4 Subject to the provisions of Section 11 above, each of the parties
hereto irrevocably submits to the exclusive jurisdiction of the
competent courts of the District of Tel-Aviv-Yafo in all matters
connected with this Agreement and all its Annexes or arising therefrom.
15.5 Subject to Section 11 of the Shares Transfer Agreement, the rights and
obligations of the parties under this Agreement or pursuant thereto will
be governed by and construed in accordance with the laws of the State of
Israel, including, to avoid doubt, such rules applying foreign laws, if
and to the extent such rules are applicable.
15.6 Any amount due by one party to another under ANNEXES "A", "B", "C", "D",
or "E", which is denominated in such Annex in U.S. Dollars, is to be
paid in U.S. Dollars.
15.7 The addresses of the parties for the purpose of this Agreement are as
set out in the preamble hereto. Any notice, direction or other
instrument required or permitted to be given by a party hereunder shall
be made in writing and may be given by mailing the same registered mail,
postage pre-paid, or by delivering the same addressed to such other
party at their address aforesaid. Any notice, direction or other
instrument if delivered shall be deemed to have been given or made on
the date on which it was actually delivered; or if mailed shall be
deemed to have been given or made on the seventh business day following
the day on which it was mailed.
The parties hereto may change their address for service hereunder from
time to time by notice given in accordance with the foregoing.
IN WITNESS WHEREOF the parties have executed this Agreement:
- ----------------------------------- ----------------------------------
BANK HAPOALIM B.M. ATAD INVESTMENTS COMPANY LTD.
- ----------------------------------- ----------------------------------
REVADIM (NECHASIM) LTD. AMPAL-AMERICAN ISRAEL CORPORATION
- ----------------------------------- ----------------------------------
AMPAL DEVELOPMENT (ISRAEL) LTD. AMPAL FINANCIAL SERVICES LTD.
- ----------------------------------- ----------------------------------
NIR LTD. AMPAL (ISRAEL) LTD.
<PAGE> 12
ANNEX "A"
SHARES TRANSFER AGREEMENT
Made and entered into in Tel-Aviv on the day of , 1999
BY AND BETWEEN
1. BANK HAPOALIM B.M. (p.c.52-000011-8)
(hereinafter "BHP")
2. ATAD INVESTMENTS COMPANY LTD. (p.c.51-089763-0)
(hereinafter "ATAD")
both of 63-65 Yehuda Halevi Street, Tel-Aviv
(BHP and ATAD shall be hereinafter referred to jointly and
severally as "the BANK")
of the first part;
AND
1. AMPAL-AMERICAN ISRAEL CORPORATION
(c/o Ampal Israel)
of 111 Arlozorov Street, Tel-Aviv
(hereinafter "AMPAL")
2. AMPAL DEVELOPMENT (ISRAEL) LTD. (p.c.52-000238-7)
of 111 Arlozorov Street, Tel-Aviv
(hereinafter "AMPAL DEVELOPMENT")
3. AMPAL FINANCIAL SERVICES LTD. (p.c.52-002104-9)
of 111 Arlozorov Street, Tel-Aviv
(hereinafter "AMPAL FINANCING")
4. AMPAL (ISRAEL) LTD. (p.c.52-002622-0)
of 111 Arlozorov Street, Tel-Aviv
(hereinafter "AMPAL ISRAEL")
(AMPAL, AMPAL DEVELOPMENT, AMPAL FINANCING, and AMPAL ISRAEL shall
be hereinafter referred to jointly and severally as "the
PURCHASERS")
of the second part;
WHEREAS The BANK represents and warrants that ATAD is, and was at all
times at which it held the Shares (as hereinafter defined), a
wholly owned subsidiary of BHP; and
WHEREAS The BANK represents and warrants that ATAD is the record owner
and holder, and BHP through ATAD is the beneficial owner, of
5,874,281 Ordinary Shares (as hereinafter defined), of 3,350
4% Preferred Shares (as hereinafter defined), and of 122,536
6.5% Preferred Shares (as hereinafter defined)) (the Ordinary
Shares, the 4% Preferred Shares, and the 6.5% Preferred Shares
are collectively referred
<PAGE> 13
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to herein as "the Shares"), and that the Shares and ATAD's
holding therein are free and clear of any Third Party Right
(as hereinafter defined); and
WHEREAS BHP is interested in transferring and selling the Shares to
the PURCHASERS, and the PURCHASERS are interested in
purchasing the Shares, all on the terms and conditions and for
the consideration as set out hereinafter in this Agreement;
and
WHEREAS Simultaneously with signing this Agreement the BANK, the
PURCHASERS and others are also signing the agreement
(hereinafter the "Main Agreement") to which this Agreement is
attached as Annex "A" and other agreements which are attached
to the Main Agreement as Annexes "B", "C", "D", "E", "F" and
"G" thereto (hereinafter the "Other Agreements").
NOW, THEREFORE, it has been declared, agreed and warranted between the parties
as follows:
1. PREAMBLE, CAPTIONS, DEFINITIONS, AND ANNEXES
1.1 The preamble to this Agreement and the Annexes hereto form an integral
part hereof.
1.2 Captions used in this Agreement are solely for convenience of reading
and shall not be used for the interpretation or determination of the
validity of this Agreement or any provision hereof.
1.3 In this Agreement the following terms shall have the meanings ascribed
to them:.
1.3.1 "This Agreement" or "the Agreement" - this Agreement and all the
Annexes, amendments or additions to it, as well as any document to be
furnished in accordance with the provisions hereof.
1.3.2 "Ordinary Shares" - Class A Stock of $1 (one dollar) par value each in
AMPAL.
1.3.3 "4% Preferred Shares" - 4% Cumulative Convertible Preferred Stock of $5
par value each in AMPAL.
1.3.4 "6.5% Preferred Shares" - 6.5% Cumulative Convertible Preferred Stock
of $5 par value each in AMPAL.
1.3.5 The "Shares" - As defined in the preamble to this Agreement.
1.3.6 "Third Party Right" - Any lien, pledge, mortgage, suit, demand, claim,
attachment and/or debt or obligation towards whatsoever third party
and/or whatsoever other third party right.
1.3.7 "Amount of the Deposit" - A sum of 12,880,000 dollars deposited by
AMPAL on April 13, 1999 as a dollar deposit in Account No.370959 in the
name of AMPAL at the BHP Branch (No. 608) at 111 Arlozorov Street,
together with interest thereon which was actually accrued in said
deposit from the day of deposit until the time of its transfer to BHP
according to the provisions of this Agreement.
<PAGE> 14
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1.3.8 "Dollar" - U.S. Dollar.
1.3.9 "The PURCHASERS' Attorney" - Any of the attorneys from the office of
Firon, Karni, Sarov & Firon, Advs., of 111 Arlozorov Street, Tel-Aviv,
alone and/or in any combination.
1.3.10 "The BANK's Attorney" - Advs. Moriah Hoftman Doron and Avraham Hirsch
of 63 Yehuda Halevi Street, Tel-Aviv, alone and/or in any combination.
1.3.11 "The Determining Date" - The date which BHP and AMPAL will determine as
the Closing Date in accordance with the provisions of Section 8 of the
Main Agreement.
2. REPRESENTATIONS AND WARRANTIES OF THE PARTIES
2.1 Representations and Warranties of the BANK
The BANK represents, warrants, covenants and undertakes the following
to be true and correct as of the date hereof and that the following
will be true and correct on the Determining Date and is aware and
acknowledges that the PURCHASERS have agreed to enter into this
Agreement and the transactions contemplated herein in reliance on these
representations, warranties, covenants and undertakings of the BANK:
2.1.1 ATAD is a private company duly registered in Israel; its registration
number with the Registrar of Companies is 51-089763-0; it is wholly
owned and controlled by BHP; and it is an active company lawfully
conducting its business and it has all the powers and authorities to
enter into this Agreement and to fulfill all its undertakings
hereunder.
2.1.2 BHP is a public company duly registered as a bank in Israel; its
registration number with the Registrar of Companies is 52-000011-8, and
it is an active company lawfully conducting its business and it has all
the powers and authorities to enter into this Agreement and to fulfill
all its undertakings hereunder.
2.1.3 Save as set out in Section 7.1 of the Main Agreement each of BHP and
ATAD have completed all such corporate acts and proceedings required
under their incorporation documents and under law for entering into
this Agreement and the fulfillment of their undertakings hereunder.
2.1.4 ATAD is the record owner and holder of the Shares; the Shares and
ATAD's rights therein are free and clear of any Third Party Right, and
there is nothing to prevent the sale and transfer of the Shares to the
PURCHASERS as set out hereinafter in this Agreement.
2.1.5 On October 30, 1985, and at all times thereafter until the Determining
Date, BHP was, is, and will be the "Beneficial Owner" (as the term is
defined in Section 912 of the New York Business Corporation Law),
directly or through ATAD (which is and always was a wholly owned
subsidiary of BHP), of not less than 20% of the outstanding voting
stock of AMPAL.
2.1.6 On October 30, 1985, and at all times thereafter until the day of
transfer of the Shares to the PURCHASERS, BHP was, is, and will be an
"Interested Shareholder" for the purposes stated in Section 912 of the
New York Business Corporation Law.
<PAGE> 15
- 4 -
2.1.7 On the Determining Date, BHP will be the sole record and Beneficial
Owner and holder of the Shares and will transfer the Shares to the
PURCHASERS free and clear of any Third Party Right.
2.2 Representations and Warranties of the PURCHASERS
Each of the PURCHASERS hereby represents, warrants, covenants and
undertakes, all as relevant to each and every one of them respectively,
the following to be true and correct on the date hereof and that the
following will be true and correct on the Determining Date, and is
aware and acknowledges that the BANK has agreed to enter into this
Agreement and the transactions contemplated therein in reliance on
these representations, warranties, covenants and undertakings of the
PURCHASERS:
2.2.1 AMPAL is a corporation duly organized in the State of New York, U.S.A.,
whose Ordinary Shares are traded on the AMEX; it is an active company
lawfully conducting its business, and has all the powers and
authorities to enter into this Agreement and to fulfill all its
undertakings hereunder.
2.2.2 AMPAL DEVELOPMENT is a public company duly registered in Israel; its
registration number with the Registrar of Companies is 52-000238-7; and
it is an active company lawfully conducting its business and it has all
the powers and authorities to enter into this Agreement and to fulfil
all its undertakings hereunder.
2.2.3 AMPAL FINANCING is a public company duly registered in Israel; its
registration number with the Registrar of Companies is 52-002104-9; and
it is an active company lawfully conducting its business and it has all
the powers and authorities to enter into this Agreement and to fulfill
all its undertakings hereunder.
2.2.4 AMPAL ISRAEL is a public company duly registered in Israel; its
registration number with the Registrar of Companies is 52-002622-0; and
it is an active company lawfully conducting its business and it has all
the powers and authorities to enter into this Agreement and to fulfil
all its undertakings hereunder.
2.2.5 Save as set out in Section 7.1 of the Main Agreement, each of the
PURCHASERS has completed all such corporate acts and proceedings
required under its incorporation documents and any law for entering
into this Agreement and the fulfillment of all its undertakings
hereunder.
2.2.6 The PURCHASERS are fully aware of AMPAL's condition, rights and
obligations, and of the rights attached to the Shares under AMPAL's
Certificate of Incorporation and Bylaws and they purchase the Shares
by virtue of this Agreement based on AMPAL's condition, rights and
obligations, and the said rights as they are, without any reliance on
any representations and/or warranties of the BANK regarding AMPAL's
condition, rights and obligations, and the said rights.
3. THE TRANSACTION - GENERAL
3.1 BHP hereby undertakes, for the Consideration as set out hereinafter, to
sell and transfer on the Determining Date the Shares to the PURCHASERS
in the apportionment set out hereinafter, and that at the time of
transferring the Shares to the PURCHASERS as provided hereunder, the
Shares and the rights of BHP therein will be free and clear of any
Third Party Right whatsoever.
<PAGE> 16
- 5 -
3.2 ATAD hereby undertakes to do everything required in order to enable BHP
to fulfill its undertakings under Section 3.1 above. Without derogating
from the generality of the aforesaid, ATAD and BHP undertake that BHP
will be the record owner and holder of the Shares and ATAD's rights
thereunder and that ATAD will transfer the Shares to BHP, the Shares
and ATAD's rights therein being free and clear of any Third Party Right
whatsoever and complete the transfer prior to the Determining Date, in
order to enable their transfer by BHP to the PURCHASERS as provided
hereunder.
3.3 The Shares will be sold and transferred to the PURCHASERS in the
portions and for the consideration as follows:
3.3.1 To AMPAL - 3,517,683 Ordinary Shares, 3,350 4% Preferred Shares, and
122,536 6.5% Preferred Shares (hereinafter "the AMPAL Shares") in
consideration of:
3.3.1.1 The transfer of the Amount of the Deposit; and
3.3.1.2 $3,420,000 plus interest in the rate of LIBOR plus 0.75% per
annum from April 12, 1999 until the date of actual payment
(herein the "Interest"); and
3.3.1.3 $3,210,208;
All as set out in Section 4 hereinafter.
3.3.2 To AMPAL DEVELOPMENT - 1,560,450 Ordinary Shares (hereinafter "the
AMPAL DEVELOPMENT Shares") in consideration of $7,802,248, as set out
in Section 5 hereinafter.
3.3.3 To AMPAL FINANCING - 660,803 Ordinary Shares (hereinafter "the AMPAL
FINANCING Shares")in consideration of $3,304,013, as set out in Section
6 hereinafter.
3.3.4 To AMPAL ISRAEL - 135,345 Ordinary Shares (hereinafter "the AMPAL
ISRAEL Shares") in consideration of $676,726, as set out in Section 7
hereinafter.
3.4 To avoid doubt, the completion of the transfer and sale of the Shares
to the PURCHASERS and the payment of the consideration therefor ("the
Closing") will take place simultaneously so that none of the Shares
will be transferred and sold to any of the PURCHASERS and no part of
the consideration therefor will be paid by the PURCHASERS unless all
the Shares are transferred and sold to the PURCHASERS and all the
consideration therefor is paid by the PURCHASERS as provided hereunder.
3.5 All documents required to be signed and delivered on the Determining
Date (the "Closing") will be completed as required to effect the
transfer of the Shares to the PURCHASERS.
4. THE SALE AND TRANSFER TO AMPAL
4.1 On the Determining Date BHP will sell and transfer the AMPAL Shares to
AMPAL, and for that purpose BHP will sign and deliver to AMPAL the
following documents: (1) Original Stock Certificates Issued to BHP for
3,517,683 Ordinary Shares, 3,350 4% Preferred Shares and 122,536 6.5%
Preferred Shares of AMPAL, and (2) The BANK's Representation Letter,
and (3) BHP's Stock Power, bearing a medallion signature guaranteed by
a bank or a brokerage firm, and (4) BHP's Secretary's Certificate, and
<PAGE> 17
- 6 -
(5) AMPAL's Opinion of Counsel, all in the forms attached as ANNEXES
4.1.1-4.1.5 hereto in respect of the AMPAL Shares.
4.2 On the Determining Date and against delivery of all signed documents
required to be delivered by BHP to the PURCHASERS:
4.2.1 AMPAL will transfer to BHP the Amount of the Deposit by signing the
irrevocable instruction attached hereto AS ANNEX 4.2.1 and delivering
it to BHP.
4.2.2 AMPAL will pay BHP the sum of $3,420,000 plus the Interest, plus
$3,210,208 by bank check or bank transfer.
5. THE SALE AND TRANSFER TO AMPAL DEVELOPMENT
5.1 On the Determining Date BHP will sell and transfer the AMPAL
DEVELOPMENT Shares to AMPAL DEVELOPMENT, and for that purpose BHP will
sign and deliver to AMPAL DEVELOPMENT the following documents: (1)
Original Stock Certificate issued to BHP for 1,560,450 Ordinary Shares
of AMPAL, and (2) The BANK's Representation Letter, and (3) BHP's Stock
Power bearing a medallion signature guaranteed by a bank or a brokerage
firm, and (4) BHP's Secretary's Certificate, and (5) AMPAL's Opinion of
Counsel, all in the forms attached as ANNEXES 5.1.1-5.1.5 hereto in
respect of the AMPAL DEVELOPMENT Shares and AMPAL DEVELOPMENT will
furnish the AMPAL DEVELOPMENT's Representation Letter ANNEX 5.1.6
hereto.
5.2 On the Determining Date and against delivery of all signed documents
required to be delivered by BHP to the PURCHASERS, AMPAL DEVELOPMENT
will pay BHP a sum of $7,802,248 by bank check or bank transfer.
6. THE SALE AND TRANSFER TO AMPAL FINANCING
6.1 On the Determining Date BHP will sell and transfer the AMPAL FINANCING
Shares to AMPAL FINANCING, and for that purpose BHP will sign and
deliver to AMPAL FINANCING the following documents: (1) Original Stock
Certificate issued to BHP for 660,803 Ordinary Shares of AMPAL, and (2)
The BANK's Representation Letter, and (3) BHP's Stock Power bearing a
medallion signature guaranteed by a bank or a brokerage firm, and (4)
BHP's Secretary's Certificate, and (5) AMPAL's Opinion of Counsel, all
in the forms attached as ANNEXES 6.1.1-6.1.5 hereto in respect of AMPAL
FINANCING Shares and AMPAL FINANCING will furnish the AMPAL FINANCING
Representation Letter, ANNEX 6.1.6 hereto.
6.2 On the Determining Date and against delivery of all signed documents
required to be delivered by BHP to the PURCHASERS, AMPAL FINANCING will
pay BHP a sum of $3,304,013 by a bank check or by a bank transfer.
7. THE SALE AND TRANSFER TO AMPAL ISRAEL
7.1 On the Determining Date BHP will sell and transfer the AMPAL ISRAEL
Shares to AMPAL ISRAEL, and for that purpose BHP will sign and deliver
to AMPAL ISRAEL the following documents: (1) Original Stock Certificate
issued to BHP for 135,345 Ordinary Shares of AMPAL, and (2) The BANK's
Representation Letter, and (3) BHP's Stock Power bearing a medallion
signature guaranteed by a bank or brokerage firm, and (4) BHP's
Secretary's Certificate, and (5) AMPAL's Opinion of Counsel, all in the
forms attached as
<PAGE> 18
- 7 -
ANNEXES 7.1.1-7.1.5 hereto in respect of the AMPAL ISRAEL Shares and
AMPAL ISRAEL will furnish the AMPAL ISRAEL's Representation Letter
ANNEX 7.1.6 hereto.
7.2 On the Determining Date and against delivery of all signed documents
required to be delivered by BHP to the PURCHASERS, AMPAL ISRAEL will
pay BHP a sum of $676,726 by bank check or bank transfer.
8. RESIGNATION OF DIRECTORS
At the Determining Date, and against the payment by the PURCHASERS to
BHP of the consideration for the Shares as provided in Sections 4, 5,
6, and 7 above, BHP shall deliver to AMPAL notices of resignation from
AMPAL's Board of Directors signed by Messrs. Yaakov Elinav and Shimon
Ravid, to become effective immediately upon delivery to AMPAL. The
notices will be in the form attached as ANNEX 8 to this Agreement.
9. This Agreement is subject to the fulfillment of all the Conditions
Precedent as defined and provided for in Section 7 of the Main
Agreement.
10. TAXES AND OTHER COMPULSORY PAYMENTS
Capital Gains Tax and/or Income Tax and New York Stamp and Transfer
Taxes (if applicable) on the sale of the Shares to the PURCHASERS will
be borne and paid by the BANK.
11. REGISTRATION OF SHARES
After the Determining Date, if requested by the PURCHASERS, BHP will
sign any document and take whatever action that is necessary in order
to complete the registration of the Shares in the name of each relevant
PURCHASER.
12. MISCELLANEOUS
To remove any doubt, it is declared and agreed that all the provisions
of Sections 7, 8, 9, 10, 11, 12, 13, 14 and 15 of the Main Agreement
shall apply herein mutatis mutandis. However, it is specifically
declared and agreed that this Agreement and the rights and obligations
of the parties hereunder or pursuant hereto shall be governed by and
construed in accordance with the laws of the State of New York, U.S.A.,
including, to avoid doubt, such rules applying foreign laws, if and to
the extent such rules are applicable.
IN WITNESS WHEREOF the parties have signed:
- ----------------- -----------------------------
BANK HAPOALIM B.M. ATAD INVESTMENTS COMPANY LTD.
- --------------------------------- -------------------------------
AMPAL-AMERICAN ISRAEL CORPORATION AMPAL DEVELOPMENT (ISRAEL) LTD.
- ----------------------------- -------------------
AMPAL FINANCIAL SERVICES LTD. AMPAL (ISRAEL) LTD.
<PAGE> 19
ANNEX "B"
REAL ESTATE AGREEMENT
Made and entered into in Tel-Aviv on the day of , 1999
BY AND BETWEEN
REVADIM (NECHASIM) LTD. (p.c. 51-073528-5)
of 63-65 Yehuda Halevi Street, Tel-Aviv
(hereinafter "the BUYER")
of the first part;
AND
AMPAL-AMERICAN ISRAEL CORPORATION
(c/o Ampal (Israel) Ltd.)
of 111 Arlozorov Street, Tel-Aviv
(hereinafter "AMPAL")
of the second part;
WHEREAS AMPAL is an owner of rights in the Arlozorov A Property, as
specified hereinafter in this agreement; and
WHEREAS AMPAL is interested in selling to the BUYER and the BUYER is
interested in buying from AMPAL its rights in the Arlozorov A
Property as defined hereinafter, all on the terms and conditions and
for the consideration specified herein; and
WHEREAS Simultaneously with signing this Agreement, the BUYER, AMPAL and
others are signing also the Agreement (hereinafter the "Main
Agreement") to which this Agreement is attached as ANNEX "B" and
other agreements which are attached to the Main Agreement as ANNEXES
"A", "C", "D", "E", "F" and "G" thereto (hereinafter the "Other
Agreements");
NOW, THEREFORE, it has been declared, agreed and warranted between the parties
as follows:
<PAGE> 20
- 2 -
1. PREAMBLE, CAPTIONS, DEFINITIONS, AND ANNEXES
1.1 The preamble to this agreement and the annexes hereto form an integral
part hereof.
1.2 Captions used in this Agreement are solely for convenience of reading
and shall not be used for the interpretation or determination of the
validity of this Agreement or any provision hereof.
1.3 In this agreement the following terms shall have the meanings ascribed
to them:.
1.3.1 "This Agreement" or "the Agreement" - this agreement and all the
annexes, amendments or additions to it, as well as any document to be
furnished in accordance with the provisions hereof.
1.3.2 "Third Party Right" - Any lien, pledge, mortgage, suit, demand, claim,
attachment and/or debt or obligation towards whatsoever third party
and/or whatsoever other third party right.
1.3.3 "Arlozorov A Property" or the "Real Estate"- The real estate property
known as Block 6213 Parcel 661/5 at 105 Arlozorov Street, Tel-Aviv, of
which AMPAL is entitled to be registered as owner and of which today BHP
is registered as owner in its entirety, as specified in the extract,
copy of which is attached hereto as ANNEX 1.3.3.
1.3.4 "Dollar" - U.S. Dollar.
1.3.5 "AMPAL's Attorney" - Any of the attorneys from the office of Firon,
Karni, Sarov & Firon, Advs., of 111 Arlozorov Street, Tel-Aviv, alone
and/or in any combination.
1.3.6 "The BUYER's Attorney" - Advs. Moriah Hoftman Doron and Avraham Hirschof
63 Yehuda Halevi Street, Tel-Aviv, alone and/or in any combination.
1.3.7 "The Determining Date" - The date which BHP and AMPAL will determine as
the Closing Date in accordance with the provisions of Section 8 to the
Main Agreement.
1.3.8 "BHP" - Bank Hapoalim B.M.
<PAGE> 21
- 3 -
2. REPRESENTATIONS AND WARRANTIES OF THE PARTIES
2.1 Representations and Warranties of the BUYER The BUYER represents,
warrants, covenants, and undertakes the following to be true and correct
on the date hereof and that the following will be true and correct on
the Determining Date, and is aware and acknowledges that AMPAL has
agreed to enter into this Agreement and the transactions contemplated
therein in reliance on these representations, warranties, covenants, and
undertakings of the BUYER:
2.1.1 The BUYER is a private company duly registered in Israel; its
registration number with the Registrar of Companies is 51-073528-5; it
is wholly owned and controlled by BHP; and it is an active company
lawfully conducting its business and it has all the powers and
authorities to enter into this Agreement and to fulfil all its
undertakings hereunder.
2.1.2 BHP is a public company duly registered as a bank in Israel; its
registration number with the Registrar of Companies is 52-000011-8, and
it is an active company lawfully conducting its business and it has all
the powers and authorities to enter into this Agreement and to fulfil
all its undertakings hereunder.
2.1.3 Save as set out in Section 7.1 of the Main Agreement, the BUYER has
completed all corporate acts and proceedings required under its
incorporation documents and under law for the entering into this
Agreement and the fulfillment of its undertakings hereunder.
2.1.4 BHP is the lessee and actual holder, for many years, of the Real Estate
according to a lease agreement between BHP and AMPAL.
2.1.5 The BUYER has examined independently, to its full satisfaction, and
knows well the Real Estate and AMPAL's rights in it from all aspects,
physical, planning, factual, and legal, the BUYER was given every
opportunity to make any examination, and the BUYER has found the Real
Estate suited to its purposes and is acquiring the rights therein "as
is", being fully aware of its condition and age, and it waives
absolutely and
<PAGE> 22
- 4 -
finally any demand and/or claim against AMPAL, including in the matter
of any unsuitability and/or defect in respect of the Real Estate,
whether disclosed or concealed, existing or future.
2.2 REPRESENTATIONS AND WARRANTIES OF AMPAL
AMPAL hereby represents, warrants, covenants and undertakes the
following to be true and correct on the date hereof, and the following
will be true and correct on the Determining Date, and is aware and
acknowledges that the BUYER has agreed to enter into this Agreement and
the transactions contemplated therein in reliance on these
representations, warranties, covenants and undertakings of AMPAL:
2.2.1 AMPAL is a corporation duly organized in the State of New York, U.S.A.,
it is an active company lawfully conducting its business, and has all
the powers and authorities to enter into this Agreement and to fulfil
all its undertakings hereunder.
2.2.2 Save as set out in Section 7.1 of the Main Agreement, AMPAL has
completed all such corporate acts and proceedings required under its
incorporation documents and any law for entering into this Agreement and
the fulfillment of all its undertakings hereunder.
2.2.3 AMPAL is entitled to be registered as the owner of the Arlozorov A
Property, and its rights therein are free and clear of any Third Party
Right whatsoever, as set out in Annex 1.3.3, and they can be sold and
transferred to the BUYER.
3. THE TRANSACTION - GENERAL
AMPAL hereby undertakes to sell and transfer to the BUYER on the
Determining Date, the Real Estate and all of AMPAL's rights therein, the
Real Estate and AMPAL's rights therein being free and clear of any Third
Party Right whatsoever, for the consideration in the sum of $2,919,208
plus V.A.T. (hereinafter the "Consideration"), to be paid to it by the
BUYER as set out hereinafter.
<PAGE> 23
- 5 -
4. THE SALE AND TRANSFER
4.1 On the Determining Date ("the Closing") the BUYER will pay AMPAL the
Consideration by bank check or bank transfer.
4.2 Against receipt of the Consideration in full, AMPAL will sign and submit
to the BUYER an irrevocable power of attorney in the form attached
hereto as ANNEX "4.2" which will enable the BUYER to do any act in
connection with transferring AMPAL's rights in the Arlozorov A Property
to the BUYER, including, inter alia, registering the transfer of these
rights at the Land Registry Office, signing any document for the purpose
of transferring the said rights and/or obtaining whatsoever approval
which is required for the transfer of the said rights as aforesaid, as
well as to appear before any competent authority in connection with the
abovementioned activities.
4.3 Immediately upon completion of full payment of the Consideration to
AMPAL, the validity of the lease agreement between AMPAL and BHP in
connection with the Arlozorov A Property will expire without any of the
parties thereto having any demand and/or claim whatsoever towards the
other, except in connection with rental fees and other payments due to
AMPAL, or prepaid by BHP, in connection with the period up to the
Determining Date, exclusive possession in the Arlozorov A Property will
pass to the BUYER, and the BUYER will be permitted to register a caveat
in connection with acquisition of AMPAL's rights in the Arlozorov A
Property.
4.4 After the full payment of the Consideration to AMPAL, AMPAL will act to
furnish the BUYER an authorization of Mas Shevach (Land Betterment Tax)
for the registration of the rights in the Arlozorov A Property in the
name of the BUYER at the Land Registry Office. It is agreed that the
BUYER will be responsible for the performance of all acts required for
the purpose of registering the rights in the Arlozorov A Property in its
name according to this Agreement, and will bear all payments involved
therewith. AMPAL, on its part, undertakes to cooperate with the BUYER
and/or the BUYER's Attorney and use its best effort to assist the BUYER
and/or the BUYER's attorney in this
<PAGE> 24
- 6 -
matter and sign the documents and authorizations required for the
purpose of completing the registration of the said rights in the BUYER's
name at the Land Registry Office as aforesaid.
If the authorization of Mas Shevach (Land Betterment Tax) is not
furnished to the BUYER within 180 (one hundred eighty) days of the date
on which the parties shall file the Land Betterment Tax forms and
affidavits as provided in Section 6.5 hereunder, then as soon as the Mas
Shevach Authorities determine the Mas Shevach with respect to this
transaction, AMPAL will either pay and/or provide the Mas Shevach
Authorities with guarantees covering, together, the entire Mas Shevach
determined by the Mas Shevach Authorities with respect to this
transaction, so that the Mas Shevach Authorization is furnished. It is
agreed that should AMPAL decide to contest and/or appeal the Mas Shevach
Authorities' determinations, the BUYER will not have to join such
contest and/or appeal, but will support and assist AMPAL's contest
and/or appeal.
5. This Agreement is subject to the fulfillment of all Conditions Precedent
as defined and provided for in Section 7 of the Main Agreement.
6. TAXES AND OTHER COMPULSORY PAYMENTS
6.1 Value Added Tax in respect of the transfers of AMPAL's rights in the
Real Estate as aforesaid in Section 4 above, will be borne and paid by
the BUYER. The BUYER will transfer the V.A.T. to the V.A.T. Authorities
directly and will issue a "Cheshbonit Mas Azmit" (Self Tax Invoice), as
provided by law.
6.2 Subject to the provisions of Sections 6.3 and 6.4 hereunder, all the
taxes, levies and fees, governmental and municipal, of any kind and
type, except for improvement levies, in respect of the period up to the
Determining Date, will be borne and paid by AMPAL or by BHP - in
accordance with the provisions of the lease agreement between AMPAL and
BHP in connection with the Real Estate, and in respect of the period
from the Determining Date - will be borne and paid by the BUYER alone.
In addition, any betterment levies, if any, which have not yet actually
been paid in
<PAGE> 25
- 7 -
respect of the Real Estate, will be borne and paid by the BUYER.
6.3 Land Betterment Tax or Capital Gains Tax or Income Tax on the transfer
of AMPAL's rights in the Real Estate to the BUYER will be borne and paid
by AMPAL.
6.4 Acquisition Tax (Purchase Tax) on the transfer of AMPAL's rights in the
Real Estate to the BUYER will be borne and paid by the BUYER.
6.5 The BUYER and AMPAL will sign and file at the times set by law, Land
Betterment Tax forms and affidavits in connection with the transfer and
sale of AMPAL's rights in the Real Estate.
7. MISCELLANEOUS
To remove any doubt, it is declared and agreed that all the provisions
of Sections 7, 8, 9, 10, 11, 12, 13, 14 and 15 of the Main Agreement
shall apply herein mutatis mutandis. However, it is specifically
declared and agreed that this Agreement and the rights and obligations
of the parties and BHP hereunder or pursuant hereto shall be governed by
and construed in accordance with the laws of the State of Israel.
IN WITNESS WHEREOF the parties have signed:
- --------------------------------- --------------
AMPAL-AMERICAN ISRAEL CORPORATION THE BUYER
We, Bank Hapoalim B.M., hereby irrevocably agree to all the abovementioned
provisions regarding ourselves and/or having any bearing on us. We also hereby
irrevocably guarantee the full and prompt fulfillment of all the BUYER's
undertakings under the above Agreement. We hereby waive any demand of prior
request from the BUYER under Section 8 of the Guarantee Law, 5727-1967. This
guarantee shall remain in full force in spite of any stay, postponement, waiver,
or change in a guaranteed obligation of the BUYER.
---------------------------
Bank Hapoalim B.M.
<PAGE> 26
ANNEX "C"
REAL ESTATE AGREEMENT
Made and entered into in Tel-Aviv on the day of , 1999
BY AND BETWEEN
REVADIM (NECHASIM) LTD. (p.c. 51-073528-5)
(hereinafter the "BUYER")
of 63-65 Yehuda Halevi Street, Tel-Aviv
of the first part;
AND
AMPAL DEVELOPMENT (ISRAEL) LTD. (p.c. 52-000238-7)
of 111 Arlozorov Street, Tel-Aviv
(hereinafter "AMPAL")
of the second part;
WHEREAS AMPAL is an owner of rights in the Real Estate defined herein
as "Holon Property", "Panorama Property" and "Allenby
Property", as specified hereinafter in this agreement; and
WHEREAS AMPAL is interested in selling to the BUYER and the BUYER is
interested in buying from AMPAL its rights in the Real Estate
as defined hereinafter, all on the terms and conditions and
for the consideration specified herein; and
WHEREAS Simultaneously with signing this Agreement, the BUYER, AMPAL
and others are signing also the Agreement (hereinafter the
"Main Agreement") to which this Agreement is attached as ANNEX
"C" and other agreements which are attached to the Main
Agreement as ANNEXES "A", "B", "D", "E", "F" and "G" thereto
(hereinafter the "Other Agreements");
NOW, THEREFORE, it has been declared, agreed and warranted between the parties
as follows:
1. PREAMBLE, CAPTIONS, DEFINITIONS, AND ANNEXES
1.1 The preamble to this agreement and the annexes hereto form an integral
part hereof.
1.2 Captions used in this Agreement are solely for convenience of reading
and shall not be used for the interpretation or determination of the
validity of this Agreement or any provision hereof.
1.3 In this agreement the following terms shall have the meanings ascribed
to them:
<PAGE> 27
-2-
1.3.1 "This Agreement" or "the Agreement" - this agreement and all the
annexes, amendments or additions to it, as well as any document to be
furnished in accordance with the provisions hereof.
1.3.2 "Third Party Right" - Any lien, pledge, mortgage, suit, demand, claim,
attachment and/or debt or obligation towards whatsoever third party
and/or whatsoever other third party right.
1.3.3 "Holon Property" - The real estate property known as Block 7168 in
Parcel 159/2 at 39 Shenkar Street, Holon, in the ownership of AMPAL
DEVELOPMENT as specified in the extract, copy of which is attached
hereto as ANNEX 1.3.3.
1.3.4 "Panorama Property" - The real estate property known as part of Parcels
97 and 132 in Block 10812 at Panorama Center, 105 Hanassi Boulevard,
Haifa, of which AMPAL DEVELOPMENT is entitled to be registered as the
owner/perpetual lessee, and in respect of which two caveats are
recorded in favor of AMPAL DEVELOPMENT [under its former name - Bank
Lecharoshet B.M.] as specified in the extract, copy of which is
attached hereto as ANNEX 1.3.4.
1.3.5 "Allenby Property" - The real estate property known as Block 6933
Parcel 116 with all its sub-parcels, at 65 Allenby Street, Tel-Aviv, in
the ownership of AMPAL DEVELOPMENT as specified in the extract, copy of
which is attached hereto as ANNEX 1.3.5.
1.3.6 "The Real Estate" - The Holon Property, Panorama Property and Allenby
Property, jointly or severally, as the case may be.
1.3.7 "Dollar" - U.S. Dollar.
1.3.8 "AMPAL's Attorney" - Any of the attorneys from the office of Firon,
Karni, Sarov & Firon, Advs., of 111 Arlozorov Street, Tel-Aviv, alone
and/or in any combination.
1.3.9 "The BUYER's Attorney" - Advs. Moriah Hoftman Doron and Avraham Hirsch
of 63 Yehuda Halevi Street, Tel-Aviv, alone and/or in any combination.
1.3.10 "The Determining Date" - The date which BHP and AMPAL will determine as
the Closing Date in accordance with the provisions of Section 7 to the
Main Agreement.
1.3.11 "BHP" - Bank Hapoalim B.M.
2. REPRESENTATIONS AND WARRANTIES OF THE PARTIES
2.1 Representations and Warranties of the BUYER
-------------------------------------------
The BUYER represents, warrants, covenants, and undertakes the following
to be true and correct on the date hereof and that the following will
be true and correct on the Determining Date, and is aware and
acknowledges that AMPAL has agreed to enter into this Agreement and the
transactions contemplated therein in reliance on these representations,
warranties, covenants, and undertakings of the BUYER:
2.1.1 The BUYER is a private company duly registered in Israel; its
registration number with the Registrar of Companies is 51-073528-5; it
is wholly owned and controlled by BHP; and it is an active company
lawfully conducting its business and it has all
<PAGE> 28
-3-
the powers and authorities to enter into this Agreement and fulfill all
its undertakings hereunder.
2.1.2 BHP is a public company duly registered as a bank in Israel; its
registration number with the Registrar of Companies is 52-000011-8, and
it is an active company lawfully conducting its business and it has all
the powers and authorities to enter into this Agreement and fulfill all
its undertakings hereunder.
2.1.3 Save as set out in Section 7.1 of the Main Agreement, the BUYER has
completed all corporate acts and proceedings required under its
incorporation documents and under law for the entering into this
Agreement and for the fulfillment of its undertakings hereunder.
2.1.4 BHP is the lessee and actual holder, for many years, of all the Real
Estate according to lease agreements between BHP and AMPAL.
2.1.5 The BUYER has examined independently to its full satisfaction and knows
well all of the Real Estate and AMPAL's' rights in it from all aspects,
physical, planning, factual, and legal, the BUYER was given every
opportunity to make any examination, and the BUYER has found the Real
Estate suited to its purposes and is acquiring the rights therein "as
is", being fully aware of its condition and age, and it waives
absolutely and finally any demand and/or suit and/or claim against
AMPAL, including in the matter of any unsuitability and/or defect in
respect of the Real Estate, whether disclosed or concealed, existing or
future.
2.2 Representations and Warranties of AMPAL
---------------------------------------
AMPAL hereby represents, warrants, covenants and undertakes the
following to be true and correct on the date hereof, and the following
will be true and correct on the Determining Date, and is aware and
acknowledges that the BUYER has agreed to enter into this Agreement and
the transactions contemplated therein in reliance on these
representations, warranties, covenants and undertakings of AMPAL:
2.2.1 AMPAL is a public company duly registered in Israel; its registration
number with the Registrar of Companies is 52-000238-7; and it is an
active company lawfully conducting its business and it has all the
powers and authorities to enter into this Agreement and fulfill all its
undertakings hereunder.
2.2.2 Save as set out in Section 7.1 of the Main Agreement, AMPAL has
received from its organs so empowered under its incorporation documents
and any law, all the resolutions required in order to be authorized to
duly enter into this Agreement and fulfill all its undertakings
hereunder.
2.2.3 AMPAL is the registered owner of the Holon Property and the Allenby
Property, is entitled to be registered as the owner of the Panorama
Property, and its rights in these Properties are free and clear of any
Third Party Right whatsoever, as set out in ANNEXES 1.3.3, 1.3.4, and
1.3.5, and they can be sold and transferred to the BUYER.
3. THE TRANSACTION - GENERAL
-------------------------
AMPAL hereby undertakes to sell and transfer to the BUYER on the
Determining Date, the Real Estate and all of AMPAL's rights
<PAGE> 29
-4-
therein being free and clear of any Third Party Right whatsoever, for
the following consideration:
In consideration for AMPAL's rights in the Holon Property - $1,273,836
plus v.a.t.
In consideration for AMPAL's rights in the Panorama Property -
$3,078,438 plus v.a.t.
In consideration for AMPAL's rights in the Allenby Property -
$3,449,974 plus v.a.t.
Total consideration - $7,802,248 plus v.a.t. (hereinafter the
"Consideration") to be paid to it by the BUYER as set out hereinafter.
4. THE SALE AND TRANSFER
4.1 On the Determining Date the BUYER will pay AMPAL the Consideration by
bank check or bank transfer.
4.2 Against receipt of the Consideration in full, AMPAL will sign and
submit to the BUYER an irrevocable power of attorney in the form
attached hereto as ANNEX "4.2" which will enable the BUYER to do any
act in connection with transferring AMPAL's rights in the Real Estate,
including, inter alia, registering the transfer of these rights at the
Land Registry Offices, signing any document for the purpose of
transferring the said rights and/or obtaining whatsoever approval which
is required for the transfer of the said rights as aforesaid, as well
as to appear before any competent authority in connection with the
above mentioned activities.
4.3 Immediately upon completion of full payment of the Consideration to
AMPAL, the validity of the lease agreements between AMPAL and BHP in
connection with all the Real Estate will expire without any of the
parties having any demand and/or claim whatsoever towards the other,
except in connection with rental fees and other payments due to AMPAL
or prepaid by BHP in connection with the period up to the Determining
Date, exclusive possession in the Real Estate will pass to the BUYER,
and the BUYER will be permitted to register a caveat in connection with
acquisition of AMPAL's rights in the Real Estate.
4.4 After the full payment of the Consideration to AMPAL, AMPAL will act to
furnish the BUYER authorizations of Mas Shevach (Land Betterment Tax)
for the registration of the rights in all the Real Estate in the name
of the BUYER at the Land Registry Offices, and certificates or
authenticated copies of certificates from the Registrar of Companies in
Israel or affidavits or any other documents required by the relevant
Land Registry Office, for the purpose of verifying the various changes
in AMPAL's name from its former names to its present name. It is agreed
that the BUYER will be responsible for the performance of all acts
required for the purpose of registering the rights in all the Real
Estate in its name according to this Agreement, and will bear all
payments involved therewith. AMPAL, on its part, undertakes to
cooperate with the BUYER and/or the BUYER's Attorney and use its best
effort to assist the BUYER and/or the BUYER's attorney in this matter
and sign the documents and authorizations required for the purpose of
completing the registration of the said rights in the BUYER's name at
the Land Registry Offices as aforesaid.
If the authorizations of Mas Shevach (Land Betterment Tax) are not
furnished to the BUYER within 180 (one hundred eighty) days of the date
on which the parties shall file the Land Betterment Tax forms and
affidavits as provided in Section 6.5 hereunder, then as soon as the
Mas Shevach Authorities determine the Mas Shevach
<PAGE> 30
-5-
with respect to these transactions, AMPAL will either pay and/or
provide the Mas Shevach Authorities with guarantees covering, together,
the entire Mas Shevach determined by the Mas Shevach Authorities with
respect to these transactions, so that the Mas Shevach Authorizations
are furnished. It is agreed that should AMPAL decide to contest and/or
appeal the Mas Shevach Authorities' determinations, the BUYER will not
have to join such contest and/or appeal, but will support and assist
AMPAL's contest and/or appeal.
5. This Agreement is subject to the fulfillment of all Conditions
Precedent as defined and provided for in Section 7 of the Main
Agreement.
6. TAXES AND OTHER COMPULSORY PAYMENTS
6.1 The Value Added Tax will be paid by the BUYER to AMPAL as part of the
Consideration. As AMPAL is a "MOSAD CASPI" ("Financial Institution"),
AMPAL will pay the V.A.T. to the V.A.T. authorities and will file a
Teudat Iskat Akrai in accordance with Section 15A of the Value Added
Tax (Registration) Regulations (1976-5736), and will provide the BUYER
with said Teudat Iskat Akrai immediately after its filing as aforesaid.
6.2 Subject to the provisions of Sections 6.3 and 6.4 hereunder, all the
taxes, levies and fees, governmental and municipal, of any kind and
type, except for improvement levies, in respect of the period up to the
Determining Date, will be borne and paid by AMPAL or by BHP - in
accordance with the provisions of the lease agreement between AMPAL and
BHP in connection with the Real Estate, and in respect of the period
from the Determining Date - will be borne and paid by the BUYER alone.
In addition, any improvement levies, if any, which have not yet
actually been paid in respect of the Real Estate, will be borne and
paid by the BUYER.
6.3 Land Betterment Tax or Capital Gains Tax or Income Tax on the transfer
of AMPAL's rights in the Real Estate to the BUYER will be borne and
paid by AMPAL.
6.4 Acquisition Tax on the transfer of AMPAL's rights in the Real Estate to
the BUYER will be borne and paid by the BUYER.
6.5 The BUYER and AMPAL will sign and file at the times set by law, Land
Betterment Tax forms and affidavits in connection with the transfer and
sale of AMPAL's rights in the Real Estate.
7. MISCELLANEOUS
To remove any doubt, it is declared and agreed that all the provisions
of Sections 7, 8, 9, 10, 11, 12, 13, 14 and 15 of the Main Agreement
shall apply herein mutatis mutandis. However, it is specifically
declared and agreed that this Agreement and the rights and obligations
of the parties and BHP hereunder or pursuant hereto shall be governed
by and construed in accordance with the laws of the State of Israel.
<PAGE> 31
-6-
IN WITNESS WHEREOF the parties have signed:
- ------------------------------- ---------------------
AMPAL DEVELOPMENT (ISRAEL) LTD. THE BUYER
We, Bank Hapoalim B.M., hereby irrevocably agree to all the abovementioned
provisions regarding ourselves and/or having any bearing on us. We also hereby
irrevocably guarantee the full and prompt fulfillment of all the BUYER's
undertakings under the above Agreement. We hereby waive any demand of prior
request from the BUYER under Section 8 of the Guarantee Law, 5727-1967. This
guarantee shall remain in full force in spite of any stay, postponement, waiver,
or change in a guaranteed obligation of the BUYER.
-----------------------------------
Bank Hapoalim B.M.
<PAGE> 32
ANNEX "D"
REAL ESTATE AGREEMENT
Made and entered into in Tel-Aviv on the day of , 1999
BY AND BETWEEN
REVADIM (NECHASIM) LTD. (p.c. 51-073528-5)
of 63-65 Yehuda Halevi Street, Tel-Aviv
(hereinafter the "BUYER")
of the first part;
AND
AMPAL FINANCIAL SERVICES LTD. (p.c.52-002104-9)
of 111 Arlozorov Street, Tel-Aviv
(hereinafter "AMPAL")
of the second part;
WHEREAS AMPAL is an owner of rights in the Real Estate defined herein as Rosh
Pina Property and Ramat Hasharon Property, as specified hereinafter in
this agreement; and
WHEREAS AMPAL is interested in selling to the BUYER and the BUYER is interested
in buying from AMPAL its rights in the Real Estate as defined
hereinafter, all on the terms and conditions and for the consideration
specified herein; and
WHEREAS Simultaneously with signing this Agreement, the BUYER, AMPAL and others
are signing also the Main Agreement (hereinafter the "Main Agreement")
to which this Agreement is attached as ANNEX "D" and other agreements
which are attached to the Frame Agreement as ANNEXES "A", "B", "C",
"E", "F" and "G" thereto (hereinafter the "Other Agreements");
NOW, THEREFORE, it has been declared, agreed and warranted between the parties
as follows:
1. PREAMBLE, CAPTIONS, DEFINITIONS, AND ANNEXES
1.1 The preamble to this agreement and the annexes hereto form an integral
part hereof.
1.2 Captions used in this Agreement are solely for convenience of reading
and shall not be used for the interpretation or determination of the
validity of this Agreement or any provision hereof.
1.3 In this agreement the following terms shall have the meanings ascribed
to them:.
1.3.1 "This Agreement" or "the Agreement" - this agreement and all the
annexes, amendments or additions to it, as well as any document to be
furnished in accordance with the provisions hereof.
<PAGE> 33
-2-
1.3.2 "Third Party Right" - Any lien, pledge, mortgage, suit, demand, claim,
attachment and/or debt or obligation towards whatsoever third party
and/or whatsoever other third party right.
1.3.3 "Rosh Pina Property" - The real estate property known as Block 13940
Parcel 39/6 at Hachalutzim Street, Rosh Pina, in the ownership of AMPAL
[(under its former name - Bank Ampal Lepituach Hataasiya Be-Israel
B.M.] as specified in the extract, copy of which is attached hereto as
ANNEX 1.3.3.
1.3.4 "Ramat Hasharon Property" - The real estate property known as part of
Parcel 83 in Block 6415 at 90 Sokolov Street, Ramat Hasharon, of which
AMPAL is entitled to be registered as owner, and in respect of which a
caveat is recorded in favor of AMPAL [(under its former name - - Bank
Ampal Lepituach Hataasiya Be-Israel B.M.] as specified in the extract,
copy of which is attached hereto as ANNEX 1.3.4.
1.3.5 "The Real Estate" - The Rosh Pina Property and Ramat Hasharon Property,
jointly or severally, as the case may be.
1.3.6 "Dollar" - U.S. Dollar.
1.3.7 "AMPAL's Attorney" - Any of the attorneys from the office of Firon,
Karni, Sarov & Firon, Advs., of 111 Arlozorov Street, Tel-Aviv, alone
and/or in any combination.
1.3.8 "The BUYER's Attorney" - Advs. Moriah Hoftman Doron and Avraham Hirsch
of 63 Yehuda Halevi Street, Tel-Aviv, alone and/or in any combination.
1.3.9 "The Determining Date" - The date which BHP and AMPAL will determine as
the Closing Date in accordance with the provisions of Section 7 to the
Main Agreement.
1.3.10 "BHP" - Bank Hapoalim B.M.
2. REPRESENTATIONS AND WARRANTIES OF THE PARTIES
2.1 Representations and Warranties of the BUYER
-------------------------------------------
The BUYER represents, warrants, covenants, and undertakes the following
to be true and correct on the date hereof and that the following will
be true and correct on the Determining Date, and is aware and
acknowledges that AMPAL has agreed to enter into this Agreement and the
transactions contemplated therein in reliance on these representations,
warranties, covenants, and undertakings of the BUYER:
2.1.1 The BUYER is a private company duly registered in Israel; its
registration number with the Registrar of Companies is 51-073528-5; it
is wholly owned and controlled by BHP; and it is an active company
lawfully conducting its business and it has all the powers and
authorities to enter into this Agreement and fulfill all its
undertakings hereunder.
2.1.2 BHP is a public company duly registered as a bank in Israel; its
registration number with the Registrar of Companies is 52-000011-8, and
it is an active company lawfully conducting its business and it has all
the powers and authorities to enter into this Agreement and fulfill all
its undertakings hereunder.
2.1.3 Save as set out in Section 7.1 of the Main Agreement, the BUYER has
completed all corporate acts and proceedings required under its
incorporation documents and
<PAGE> 34
-3-
under law for the entering into this Agreement and for the fulfillment
of its undertakings hereunder.
2.1.4 BHP is the lessee and actual holder, for many years, of all the Real
Estate according to lease agreements between BHP and AMPAL.
2.1.5 The BUYER has examined independently to its full satisfaction and knows
well all of the Real Estate and AMPAL's rights in it from all aspects,
physical, planning, factual, and legal, the BUYER was given every
opportunity to make any examination, and the BUYER has found the Real
Estate suited to its purposes and is acquiring the rights therein "as
is", being fully aware of its condition and age, and it waives
absolutely and finally any demand and/or suit and/or claim against
AMPAL, including in the matter of any unsuitability and/or defect in
respect of the Real Estate, whether disclosed or concealed, existing or
future.
2.2 Representations and Warranties of AMPAL
---------------------------------------
AMPAL hereby represents, warrants, covenants and undertakes the
following to be true and correct on the date hereof, and the following
will be true and correct on the Determining Date, and is aware and
acknowledges that the BUYER has agreed to enter into this Agreement and
the transactions contemplated therein in reliance on these
representations, warranties, covenants and undertakings of AMPAL:
2.2.1 AMPAL is a public company duly registered in Israel; its registration
number with the Registrar of Companies is 52-002104-9; and it is an
active company lawfully conducting its business and it has all the
powers and authorities to enter into this Agreement and fulfill all its
undertakings hereunder.
2.2.2 Save as set out in Section 7.1 of the Main Agreement, AMPAL has
received from its organs so empowered under its incorporation documents
and any law, all the resolutions required in order to be authorized to
duly enter into this Agreement and fulfill all its undertakings
hereunder.
2.2.3 AMPAL is the registered owner of the Rosh Pina Property, is entitled to
be registered as the owner of the Ramat Hasharon Property, and its
rights in these Properties are free and clear of any Third Party Right
whatsoever, as set out in Annexes 1.3.3 and 1.3.4, and they can be sold
and transferred to the BUYER.
3. THE TRANSACTION - GENERAL
-------------------------
AMPAL hereby undertakes to sell and transfer to the BUYER on the
Determining Date, the Real Estate and all of AMPAL's rights therein,
the Real Estate and AMPAL's rights therein being free and clear of any
Third Party Right whatsoever, for the following consideration:
<TABLE>
<S> <C>
In consideration for AMPAL's rights in the
Rosh Pina Property - $484,323 plus V.A.T.
In consideration for AMPAL's rights in the
Ramat Hasharon Property - $2,819,690 plus V.A.T.
Total consideration - $3,304,013 plus V.A.T.
(hereinafter the "Consideration")
</TABLE>
to be paid to it by the BUYER as set out hereinafter.
<PAGE> 35
-4-
4. THE SALE AND TRANSFER
4.1 On the Determining Date the BUYER will pay AMPAL the Consideration by
bank check or bank transfer.
4.2 Against receipt of the Consideration in full, AMPAL will sign and
submit to the BUYER an irrevocable power of attorney in the form
attached hereto as ANNEX "4.2" which will enable the BUYER to do any
act in connection with transferring AMPAL's rights in the Real Estate,
including, inter alia, registering the transfer of these rights at the
Land Registry Offices, signing any document for the purpose of
transferring the said rights and/or obtaining whatsoever approval which
is required for the transfer of the said rights as aforesaid, as well
as to appear before any competent authority in connection with the
abovementioned activities.
4.3 Immediately upon completion of full payment of the Consideration to
AMPAL, the validity of the lease agreements between AMPAL and BHP in
connection with all of the Real Estate will expire without any of the
parties having any demand and/or claim whatsoever towards the other,
except in connection with rental fees and other payments due to AMPAL
or prepaid by BHP in connection with the period up to the Determining
Date, exclusive possession in the Real Estate will pass to the BUYER,
and the BUYER will be permitted to register a caveat in connection with
acquisition of AMPAL's rights in the Real Estate.
4.4 After the full payment of the Consideration to AMPAL, AMPAL will act to
furnish the BUYER authorizations of Mas Shevach (Land Betterment Tax)
for the registration of the rights in all the Real Estate in the name
of the BUYER at the Land Registry Offices, and certificates or
authenticated copies of certificates from the Registrar of Companies in
Israel or affidavits or any other documents required by the relevant
Land Registry Office, for the purpose of verifying the various changes
in AMPAL's name from its former names to its present name. It is agreed
that the BUYER will be responsible for the performance of all acts
required for the purpose of registering the rights in all the Real
Estate in its name according to this Agreement, and will bear all
payments involved therewith. AMPAL, on its part, undertakes to
cooperate with the BUYER and/or the BUYER's Attorney and to use its
best effort to assist the BUYER and/or the BUYER's Attorney in this
matter and sign the documents and authorizations required for the
purpose of completing the registration of the said rights in the
BUYER's name at the Land Registry Offices as aforesaid.
If the authorizations of Mas Shevach (Land Betterment Tax) are not
furnished to the BUYER within 180 (one hundred eighty) days of the date
on which the parties shall file the Land Betterment Tax forms and
affidavits as provided in Section 6.5 hereunder, then as soon as the
Mas Shevach Authorities determine the Mas Shevach with respect to these
transactions, AMPAL will either pay and/or provide the Mas Shevach
Authorities with guarantees covering, together, the entire Mas Shevach
determined by the Mas Shevach Authorities with respect to these
transactions, so that the Mas Shevach Authorizations are furnished. It
is agreed that should AMPAL decide to contest and/or appeal the Mas
Shevach Authorities' determinations, the BUYER will not have to join
such contest and/or appeal, but will support and assist AMPAL's contest
and/or appeal.
5. This Agreement is subject to the fulfillment of all Conditions
Precedent as defined and provided for in Section 7 of the Main
Agreement.
<PAGE> 36
-5-
6. TAXES AND OTHER COMPULSORY PAYMENTS
6.1 The Value Added Tax will be paid by the BUYER to AMPAL as part of the
Consideration. As AMPAL is a "Mosad Caspi" ("Financial Institution"),
AMPAL will pay the V.A.T. to the V.A.T. authorities and will file a
Teudat Iskat Akrai in accordance with Section 15A of the Value Added
Tax (Registration) Regulations (1976-5736), and will provide the BUYER
with said Teudat Iskat Akrai immediately after its filing as aforesaid.
6.2 Subject to the provisions of Sections 6.3 and 6.4 hereunder all the
taxes, levies and fees, governmental and municipal, of any kind and
type, except for improvement levies, in respect of the period up to the
Determining Date, will be borne and paid by AMPAL or by BHP - in
accordance with the provisions of the lease agreement between AMPAL and
BHP in connection with the Real Estate, and in respect of the period
from the Determining Date - will be borne and paid by the BUYER alone.
In addition, any improvement levies, if any, which have not yet
actually been paid in respect of the Real Estate, will be borne and
paid by the BUYER.
6.3 Land Betterment Tax or Capital Gains Tax or Income Tax on the transfer
of AMPAL's rights in the Real Estate to the BUYER will be borne and
paid by AMPAL.
6.4 Acquisition Tax on the transfer of AMPAL's rights in the Real Estate to
the BUYER will be borne and paid by the BUYER.
6.5 The BUYER and AMPAL will sign and file at the times set by law, Land
Betterment Tax, forms and affidavits in connection with the transfer
and sale of AMPAL's rights in the Real Estate.
7. MISCELLANEOUS
To remove any doubt, it is declared and agreed that all the provisions
of Sections 7, 8, 9, 10, 11, 12, 13, 14 and 15 of the Main Agreement
shall apply herein mutatis mutandis. . However, it is specifically
declared and agreed that this Agreement and the rights and obligations
of the parties and BHP hereunder or pursuant hereto shall be governed
by and construed in accordance with the laws of the State of Israel.
IN WITNESS WHEREOF the parties have signed:
- ------------------------------ ------------------
AMPAL FINANCIAL SERVICES LTD. the BUYER
We, Bank Hapoalim B.M., hereby irrevocably agree to all the abovementioned
provisions regarding ourselves and/or having any bearing on us. We also hereby
irrevocably guarantee the full and prompt fulfillment of all the BUYER's
undertakings under the above Agreement. We hereby waive any demand of prior
request from the BUYER under Section 8 of the Guarantee Law, 5727-1967. This
guarantee shall remain in full force in spite of any stay, postponement, waiver,
or change in a guaranteed obligation of the BUYER.
----------------------
Bank Hapoalim B.M.
<PAGE> 37
ANNEX "E"
REAL ESTATE AGREEMENT
Made and entered into in Tel-Aviv on the day of , 1999
BY AND BETWEEN
REVADIM (NECHASIM) LTD. (p.c. 51-073528-5)
of 63-65 Yehuda Halevi Street, Tel-Aviv
(hereinafter the "BUYER")
of the first part;
AND
AMPAL (ISRAEL) LTD. (p.c. 52-002622-0)
of 111 Arlozorov Street, Tel-Aviv
(hereinafter "AMPAL")
of the second part;
WHEREAS AMPAL is an owner of rights in the Real Estate, as specified
hereinafter in this agreement; and
WHEREAS AMPAL is interested in selling to the BUYER and the BUYER is
interested in buying from AMPAL its rights in the Real Estate
as defined hereinafter, all on the terms and conditions and
for the consideration specified herein; and
WHEREAS Simultaneously with signing this Agreement, the BUYER, AMPAL
and others are signing also the Main Agreement (hereinafter
the "Main Agreement") to which this Agreement is attached as
ANNEX "E" and other agreements which are attached to the Main
Agreement as ANNEXES "A", "B", "C", "D", "F" and "G" thereto
(hereinafter the "Other Agreements");
NOW, THEREFORE, it has been declared, agreed and warranted between the parties
as follows:
1. PREAMBLE, CAPTIONS, DEFINITIONS, AND ANNEXES
1.1 The preamble to this agreement and the annexes hereto form an
integral part hereof.
1.2 Captions used in this Agreement are solely for convenience of reading
and shall not be used for the interpretation or determination of the
validity of this Agreement or any provision hereof.
1.3 In this agreement the following terms shall have the meanings
ascribed to them:.
1.3.1 "This Agreement" or "the Agreement" - this agreement and all the
annexes, amendments or additions to it, as well as any document to be
furnished in accordance with the provisions hereof.
<PAGE> 38
- 2 -
1.3.2 "Third Party Right" - Any lien, pledge, mortgage, suit, demand,
claim, attachment and/or debt or obligation towards whatsoever third
party and/or whatsoever other third party right.
1.3.3 "Arlozorov B Property" or the "Real Estate"- The real estate property
known as Block 6213 Parcels 661/4 and 661/3, of which AMPAL is
registered as owner, as specified in the extracts, copies of which
are attached hereto as ANNEXES 1.3.3A and 1.3.3B.
1.3.4 "Dollar" - U.S. Dollar.
1.3.5 "AMPAL's Attorney" - Any of the attorneys from the office of Firon,
Karni, Sarov & Firon, Advs., of 111 Arlozorov Street, Tel-Aviv, alone
and/or in any combination.
1.3.6 "The BUYER's Attorney" - Advs. Advs. Moriah Hoftman Doron and Avraham
Hirsch of 63 Yehuda Halevi Street, Tel-Aviv, alone and/or in any
combination.
1.3.7 "The Determining Date" - The date which BHP and AMPAL will determine
as the Closing Date in accordance with the provisions of Section 7 to
the Main Agreement.
1.3.8 "BHP" - Bank Hapoalim B.M.
2. REPRESENTATIONS AND WARRANTIES OF THE PARTIES
2.1 Representations and Warranties of the BUYER
-------------------------------------------
The BUYER represents, warrants, covenants, and undertakes the
following to be true and correct on the date hereof and that the
following will be true and correct on the Determining Date, and is
aware and acknowledges that AMPAL has agreed to enter into this
Agreement and the transactions contemplated therein in reliance on
these representations, warranties, covenants, and undertakings of the
BUYER:
2.1.1 The BUYER is a private company duly registered in Israel; its
registration number with the Registrar of Companies is 51-073528-5;
it is wholly owned and controlled by BHP; and it is an active company
lawfully conducting its business and it has all the powers and
authorities to enter into this Agreement and fulfill all its
undertakings hereunder.
2.1.2 BHP is a public company duly registered as a bank in Israel; its
registration number with the Registrar of Companies is 52-000011-8,
and it is an active company lawfully conducting its business and it
has all the powers and authorities to enter into this Agreement and
fulfill all its undertakings hereunder.
2.1.3 Save as set out in Section 7.1 of the Main Agreement, the BUYER has
completed all corporate acts and proceedings required under its
incorporation documents and under law for the entering into this
Agreement and for the fulfillment of its undertakings hereunder.
2.1.4 BHP is the lessee and actual holder, for many years, of the Real
Estate according to a lease agreement between BHP and AMPAL.
2.1.5 The BUYER has examined independently to its full satisfaction and
knows well the Real Estate and AMPAL's rights in it from all aspects,
physical, planning, factual, and legal, the BUYER was given every
opportunity to make any examination, and the BUYER has found the Real
Estate suited to its purposes and is acquiring the
<PAGE> 39
- 3 -
rights therein "as is", being fully aware of its condition and age,
and it waives absolutely and finally any demand and/or suit and/or
claim against AMPAL, including in the matter of any unsuitability
and/or defect in respect of the Real Estate, whether disclosed or
concealed, existing or future.
2.2 Representations and Warranties of AMPAL
---------------------------------------
AMPAL hereby represents, warrants, covenants and undertakes the
following to be true and correct on the date hereof, and the
following will be true and correct on the Determining Date, and is
aware and acknowledges that the BUYER has agreed to enter into this
Agreement and the transactions contemplated therein in reliance on
these representations, warranties, covenants and undertakings of
AMPAL:
2.2.1 AMPAL is a public company duly registered in Israel; its registration
number with the Registrar of Companies is 52-002622-0; and it is an
active company lawfully conducting its business and it has all the
powers and authorities to enter into this Agreement and fulfill all
its undertakings hereunder.
2.2.2 Save as set out in Section 7.1 of the Main Agreement, AMPAL has
received from its organs so empowered under its incorporation
documents and any law, all the resolutions required in order to be
authorized to duly enter into this Agreement and fulfill all its
undertakings hereunder.
2.2.3 AMPAL is the registered owner of the Arlozorov B Property, its rights
in these Properties are free and clear of any Third Party Right
whatsoever, as set out in Annexes 1.3.3A and 1.3.3B, and they can be
sold and transferred to the BUYER.
3. THE TRANSACTION - GENERAL
AMPAL hereby undertakes to sell and transfer to the BUYER on the
Determining Date, the Real Estate and all of AMPAL's rights therein,
the Real Estate and AMPAL's rights therein being free and clear of
any Third Party Right whatsoever, for the consideration in the sum of
$676,726(plus V.A.T. (hereinafter the "Consideration"), to be paid to
it by the BUYER as set out hereinafter.
4. THE SALE AND TRANSFER
4.1 On the Determining Date the BUYER will pay AMPAL the Consideration by
bank check or bank transfer.
4.2 Against receipt of the Consideration in full, AMPAL will sign and
submit to the BUYER an irrevocable power of attorney in the form
attached hereto as ANNEX "4.2" which will enable the BUYER to do any
act in connection with transferring AMPAL's rights in the Real
Estate, including, inter alia, registering the transfer of these
rights at the Land Registry Office, signing any document for the
purpose of transferring the said rights and/or obtaining whatsoever
approval which is required for the transfer of the said rights as
aforesaid, as well as to appear before any competent authority in
connection with the abovementioned activities.
4.3 Immediately upon completion of full payment of the Consideration to
AMPAL, the validity of the lease agreements between AMPAL and BHP in
connection with the Real Estate will expire without any of the
parties having any demand and/or claim whatsoever towards the other,
except in connection with rental fees and other payments due to AMPAL
or prepaid by BHP in connection with the period up to the Determining
Date, the provisions set out in Annex 4.3 regarding six parking
spaces shall come into force, exclusive possession in the Real Estate
will pass to the BUYER, and the BUYER
<PAGE> 40
- 4 -
will be permitted to register a caveat in connection with acquisition
of AMPAL's rights in the Real Estate.
4.4 After the full payment of the Consideration to AMPAL, AMPAL will act
to furnish the BUYER an authorization of Mas Shevach (Land Betterment
Tax) for the registration of the rights in all the Real Estate in the
name of the BUYER at the Land Registry Offices, and certificates or
authenticated copies of certificates from the Registrar of Companies
in Israel or affidavits or any other documents required by the
relevant Land Registry Office, for the purpose of verifying the
various changes in AMPAL's name from its former names to its present
name. It is agreed that the BUYER will be responsible for the
performance of all acts required for the purpose of registering the
rights in all the Real Estate in its name according to this
Agreement, and will bear all payments involved therewith. AMPAL, on
its part, undertakes to cooperate with the BUYER and/or the BUYER's
Attorney and use its best efforts to assist the BUYER and/or the
BUYER's Attorney in this matter and sign the documents and
authorizations required for the purpose of completing the
registration of the said rights in the BUYER's name at the Land
Registry Offices as aforesaid. If the authorization of Mas Shevach
(Land Betterment Tax) is not furnished to the BUYER within 180 (one
hundred eighty) days of the date on which the parties shall file the
Land Betterment Tax forms and affidavits as provided in Section 6.5
hereunder, then as soon as the Mas Shevach Authorities determine the
Mas Shevach with respect to this transaction, AMPAL will either pay
and/or provide the Mas Shevach Authorities with guarantees covering,
together, the entire Mas Shevach determined by the Mas Shevach
Authorities with respect to this transaction, so that the Mas Shevach
Authorization is furnished.
It is agreed that should AMPAL decide to contest and/or appeal the
Mas Shevach Authorities' determinations, the BUYER will not have to
join such contest and/or appeal, but will support and assist AMPAL's
contest and/or appeal.
5. This Agreement is subject to the fulfillment of all Conditions
Precedent as defined and provided for in Section 7 of the Main
Agreement.
6. TAXES AND OTHER COMPULSORY PAYMENTS
6.1 The Value Added Tax will be paid by the BUYER to AMPAL as part of the
Consideration. As AMPAL is a "Mosad Caspi" ("Financial Institution"),
AMPAL will pay the V.A.T. to the V.A.T. authorities and will file a
Teudat Iskat Akrai in accordance with Section 15A of the Value Added
Tax (Registration) Regulations (1976-5736), and will provide the
BUYER with said Teudat Iskat Akrai immediately after its filing as
aforesaid.
6.2 Subject to the provisions of Sections 6.3 and 6.4 hereunder, all the
taxes, levies and fees, governmental and municipal, of any kind and
type, except for improvement levies, in respect of the period up to
the Determining Date, will be borne and paid by AMPAL or by BHP - in
accordance with the provisions of the lease agreement between AMPAL
and BHP in connection with the Real Estate, and in respect of the
period from the Determining Date - will be borne and paid by the
BUYER alone. In addition, any improvement levies, if any, which have
not yet actually been paid in respect of the Real Estate, will be
borne and paid by the BUYER.
6.3 Land Betterment Tax or Capital Gains Tax or Income Tax on the
transfer of AMPAL's rights in the Real Estate to the BUYER will be
borne and paid by AMPAL.
<PAGE> 41
- 5 -
6.4 Acquisition Tax on the transfer of AMPAL's rights in the Real Estate
to the BUYER will be borne and paid by the BUYER.
6.5 The BUYER and AMPAL will sign and file at the times set by law, Land
Betterment Tax forms and affidavits in connection with the transfer
and sale of AMPAL's rights in the Real Estate.
7. MISCELLANEOUS
To remove any doubt, it is declared and agreed that all the
provisions of Sections 7, 8, 9, 10, 11, 12, 13, 14 and 15 of the Main
Agreement shall apply herein mutatis mutandis. However, it is
specifically declared and agreed that this Agreement and the rights
and obligations of the parties and BHP hereunder or pursuant hereto
shall be governed by and construed in accordance with the laws of the
State of Israel.
IN WITNESS WHEREOF the parties have signed:
- ------------------- ----------
AMPAL (ISRAEL) LTD. THE BUYER
We, Bank Hapoalim B.M., hereby irrevocably agree to all the abovementioned
provisions regarding ourselves and/or having any bearing on us. We also hereby
irrevocably guarantee the full and prompt fulfillment of all the BUYER's
undertakings under the above Agreement.
We hereby waive any demand of prior request from the BUYER under Section 8 of
the Guarantee Law, 5727-1967. This guarantee shall remain in full force in spite
of any stay, postponement, waiver, or change in a guaranteed obligation of the
BUYER.
---------------------
Bank Hapoalim B.M.
<PAGE> 42
SHARES TRANSFER AGREEMENT
ANNEX "A"
LIST OF ANNEXES
<TABLE>
<S> <C>
Annex 4.1.1 Form of Original Stock Certificates Issued to BHP for
3,517,683 Ordinary Shares, 3,350 4% Preferred Shares and 122,536
6.5% Preferred Shares of AMPAL
Annex 4.1.2 Form of the BANK's Representation Letter in respect of the
AMPAL Shares
Annex 4.1.3 Form of BHP's Stock Power in respect of the AMPAL Shares
Annex 4.1.4 Form of BHP's Secretary's Certificate in respect of the AMPAL
Shares
Annex 4.1.5 Form of AMPAL's Opinion of Counsel in respect of the AMPAL
Shares.
Annex 4.2.1 Form of AMPAL's irrevocable instruction to BHP regarding
the Amount of the Deposit.
Annex 5.1.1 Form of Original Stock Certificate issued to BHP for
1,560,450 Ordinary Shares of AMPAL in respect of the AMPAL
DEVELOPMENT Shares.
Annex 5.1.2 Form of the BANK's Representation Letter in respect of the
AMPAL DEVELOPMENT Shares
Annex 5.1.3 Form of BHP's Stock Power in respect of the AMPAL DEVELOPMENT
Shares
Annex 5.1.4 Form of BHP's Secretary's Certificate in respect of the AMPAL
DEVELOPMENT Shares
Annex 5.1.5 Form of AMPAL's Opinion of Counsel in respect of the AMPAL
DEVELOPMENT Shares
Annex 5.1.6 Form of the AMPAL DEVELOPMENT's Representation Letter.
Annex 6.1.1 Form of Original Stock Certificate issued to BHP for
660,803 Ordinary Shares of AMPAL in respect of AMPAL FINANCING
Shares
Annex 6.1.2 Form of The BANK's Representation Letter in respect of AMPAL
FINANCING Shares
Annex 6.1.3 Form of BHP's Stock Power in respect of AMPAL FINANCING Shares
Annex 6.1.4 Form of BHP's Secretary's Certificate in respect of AMPAL
FINANCING Shares
Annex 6.1.5 Form of AMPAL's Opinion of Counsel in respect of AMPAL
FINANCING Shares
Annex 6.1.6 Form of the AMPAL FINANCING Representation Letter
Annex 7.1.1 Form of Original Stock Certificate issued to BHP for
135,345 Ordinary Shares of AMPAL in respect of the AMPAL ISRAEL
Shares
</TABLE>
<PAGE> 43
- 2 -
<TABLE>
<S> <C>
Annex 7.1.2 Form of the BANK's Representation Letter in respect of the
AMPAL ISRAEL Shares
Annex 7.1.3 Form of BHP's Stock Power in respect of the AMPAL ISRAEL Shares
Annex 7.1.4 Form of BHP's Secretary's Certificate in respect of the AMPAL
ISRAEL Shares
Annex 7.1.5 Form of AMPAL's Opinion of Counsel in respect of the AMPAL
ISRAEL Shares
Annex 7.1.6 AMPAL ISRAEL's Representation Letter
Annex 8 Form of notices of resignation from AMPAL's Board of Directors
to be signed by Messrs. Yaakov Elinav and Shimon Ravid
</TABLE>
<PAGE> 1
Exhibit 11
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
SCHEDULE SETTING FORTH COMPUTATION OF EARNINGS PER SHARE OF CLASS A STOCK
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1999 1998
- --------------------------------------------------------------------------------
(Amounts in thousands, except (Unaudited) (Unaudited)
per share data)
<S> <C> <C>
Weighted average number of shares outstanding:
4% Preferred .................................... 172 179
6-1/2% Preferred ................................ 921 963
Class A ......................................... 24,094 23,832
======= =======
BASIC EPS
Net Income ......................................... $ 5,552 $ 2,006
======= =======
Earnings per Class A share ......................... $ .23 $ .08
======= =======
Weighted average number of Class A
shares outstanding ................................ 24,094 23,832
DILUTED EPS
Net Income ......................................... $ 5,552 $ 1,915(1)
======= =======
Earnings per Class A share ......................... $ .20 $ .07
======= =======
Weighted average number of Class A
shares outstanding assuming
conversion of preferred stock
into Class A shares ............................... 27,716 27,616
</TABLE>
(1) Includes decrease in net income of $91 due to dilution in equity in
earnings of affiliate.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNAUDITED
CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 11,900
<SECURITIES> 253,834
<RECEIVABLES> 26,166
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 15,415
<PP&E> 42,942
<DEPRECIATION> 9,537
<TOTAL-ASSETS> 340,720
<CURRENT-LIABILITIES> 47,816
<BONDS> 124,990
0
5,452
<COMMON> 24,710
<OTHER-SE> 137,752
<TOTAL-LIABILITY-AND-EQUITY> 340,720
<SALES> 1,844
<TOTAL-REVENUES> 15,701
<CGS> 0
<TOTAL-COSTS> 2,278
<OTHER-EXPENSES> 2,448
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,052
<INCOME-PRETAX> 8,923
<INCOME-TAX> 3,371
<INCOME-CONTINUING> 5,552
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,552
<EPS-PRIMARY> .23
<EPS-DILUTED> .20
</TABLE>
