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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(AMENDMENT NO. 4)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
ELBIT SYSTEMS LTD.
(Name of Issuer)
ORDINARY SHARES, NOMINAL VALUE 1.00 NEW ISRAELI SHEKELS M3760D101
PER SHARE
------------------------------------------------------- ---------
(Title of class of securities)
ZVI FIRON, ADVOCATE
M. FIRON & CO., ADVOCATES AND NOTARIES
16 ABBA HILLEL SILVER ROAD
RAMAT GAN, ISRAEL
972-3-7540000
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(Name, address and telephone number of person authorized to receive notices and
communications)
(SEE EXPLANATORY NOTE)
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(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rules 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box [_].
CUSIP No. M3760D101 13D/A Page 2
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1. Names of Reporting Person: Michael Federmann
I.R.S. Identification Nos. of above persons (entities only).
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [ ]
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3. SEC Use Only
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4. Source of Funds: BK
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e) [ ]
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6. Citizenship or Place of Organization Israel
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Number of 7. Sole Voting Power -0-
Shares Bene- ------------------------------------------------------
ficially Owned 8. Shared Voting Power 16,778,469/1/2/
By Each ------------------------------------------------------
Reporting 9. Sole Dispositive Power -0-
Person With ------------------------------------------------------
10. Shared Dispositive Power 16,755,448
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
16,778,469/1/2/
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
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13. Percent of Class Represented by Amount in Row (11)
41.15%
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14. Type of Reporting Person (See Instructions)
IN
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----------
(1) The 16,778,469 Ordinary Shares beneficially owned by the Reporting Person
consist of an aggregate 16,755,448 Ordinary Shares beneficially owned by
the Reporting Person and 23,021 Ordinary Shares held by a wholly owned
subsidiary of the Issuer (as defined in Item 1 below) which, under Israeli
law, are considered or, prima facie, deemed to be beneficially owned by
the Reporting Person.
(2) The Reporting Person may also be deemed to have shared voting power with
respect to, and to beneficially own, an additional 3,160,000 shares of the
Issuer that are owned by Koor Industries, Ltd. ("Koor"), representing an
additional 7.75% of the Issuer's outstanding ordinary shares, as a result
of a Shareholders Agreement between Koor and certain of the Reporting
Persons dated December 27, 2005, as amended on July 6, 2005, a description
of which is attached as Schedule F hereto. The Reporting Person disclaims
beneficial ownership of such shares.
2
CUSIP No. M3760D101 13D/A Page 3
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1. Names of Reporting Person: Federmann Enterprises Ltd.
I.R.S. Identification Nos. of above persons (entities only).
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [ ]
--------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------
4. Source of Funds: BK
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e) [ ]
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6. Citizenship or Place of Organization Israel
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Number of 7. Sole Voting Power -0-
Shares Bene- ------------------------------------------------------
ficially Owned 8. Shared Voting Power 16,778,469/1/2/
By Each ------------------------------------------------------
Reporting 9. Sole Dispositive Power -0-
Person With ------------------------------------------------------
10. Shared Dispositive Power 16,755,448
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
16,778,469/1/2/
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
41.15%
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
CO
--------------------------------------------------------------------------------
----------
(1) The 16,778,469 Ordinary Shares beneficially owned by the Reporting Person
consist of an aggregate 16,755,448 Ordinary Shares beneficially owned by
the Reporting Person and 23,021 Ordinary Shares held by a wholly owned
subsidiary of the Issuer (as defined in Item 1 below) which, under Israeli
law, are considered or, prima facie, deemed to be beneficially owned by
the Reporting Person.
(2) The Reporting Person may also be deemed to have shared voting power with
respect to, and to beneficially own, an additional 3,160,000 shares of the
Issuer that are owned by Koor Industries, Ltd. ("Koor"), representing an
additional 7.75% of the Issuer's outstanding ordinary shares, as a result
of a Shareholders Agreement between Koor and certain of the Reporting
Persons dated December 27, 2005, as amended on July 6, 2005, a description
of which is attached as Schedule F hereto. The Reporting Person disclaims
beneficial ownership of such shares.
3
CUSIP No. M3760D101 13D/A Page 4
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1. Names of Reporting Person: Heris Aktiengesellschaft
I.R.S. Identification Nos. of above persons (entities only).
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [ ]
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3. SEC Use Only
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4. Source of Funds: N/A
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e) [ ]
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6. Citizenship or Place of Organization Liechtenstein
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Number of 7. Sole Voting Power -0-
Shares Bene- ------------------------------------------------------
ficially Owned 8. Shared Voting Power 3,836,458/1/
By Each ------------------------------------------------------
Reporting 9. Sole Dispositive Power -0-
Person With ------------------------------------------------------
10. Shared Dispositive Power 3,836,458
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
3,836,458/1/
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
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13. Percent of Class Represented by Amount in Row (11)
9.40%
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14. Type of Reporting Person (See Instructions)
CO
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----------
(1) The Reporting Person may also be deemed to have shared voting power with
respect to, and to beneficially own, an additional 3,160,000 shares of the
Issuer that are owned by Koor Industries, Ltd. ("Koor"), representing an
additional 7.75% of the Issuer's outstanding ordinary shares (based on the
Issuer then current share capital), as a result of a Shareholders
Agreement between Koor and certain of the Reporting Persons as amended on
July 6, 2005, a description of which is attached as Schedule F hereto. The
Reporting Person disclaims beneficial ownership of such shares.
4
CUSIP No. M3760D101 13D/A Page 5
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1. Names of Reporting Person: Beit Federmann Ltd.
I.R.S. Identification Nos. of above persons (entities only).
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [ ]
--------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------
4. Source of Funds: BK
--------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization Israel
--------------------------------------------------------------------------------
Number of 7. Sole Voting Power -0-
Shares Bene- ------------------------------------------------------
ficially Owned 8. Shared Voting Power 16,778,469/1/2/
By Each ------------------------------------------------------
Reporting 9. Sole Dispositive Power -0-
Person With ------------------------------------------------------
10. Shared Dispositive Power 16,755,448
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
16,778,469/1/2/
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
41.15%
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
CO
--------------------------------------------------------------------------------
----------
(1) The 16,778,469 Ordinary Shares beneficially owned by the Reporting Person
consist of an aggregate 16,755,448 Ordinary Shares beneficially owned by
the Reporting Person and 23,021 Ordinary Shares held by a wholly owned
subsidiary of the Issuer (as defined in Item 1 below) which, under Israeli
law, are considered or, prima facie, deemed to be beneficially owned by
the Reporting Person.
(2) The Reporting Person may also be deemed to have shared voting power with
respect to, and to beneficially own, an additional 3,160,000 shares of the
Issuer that are owned by Koor Industries, Ltd. ("Koor"), representing an
additional 7.75% of the Issuer's outstanding ordinary shares, as a result
of a Shareholders Agreement between Koor and certain of the Reporting
Persons dated December 27, 2005, as amended on July 6, 2005, a description
of which is attached as Schedule F hereto. The Reporting Person disclaims
beneficial ownership of such shares.
5
CUSIP No. M3760D101 13D/A Page 6
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1. Names of Reporting Person: Beit Bella Ltd.
I.R.S. Identification Nos. of above persons (entities only).
--------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [ ]
--------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------
4. Source of Funds: BK
--------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization Israel
--------------------------------------------------------------------------------
Number of 7. Sole Voting Power -0-
Shares Bene- ------------------------------------------------------
ficially Owned 8. Shared Voting Power 16,778,469/1/2/
By Each ------------------------------------------------------
Reporting 9. Sole Dispositive Power -0-
Person With ------------------------------------------------------
10. Shared Dispositive Power 16,755,448
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
16,778,469/1/2/
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
41.15%
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
CO
--------------------------------------------------------------------------------
----------
(1) The 16,778,469 Ordinary Shares beneficially owned by the Reporting Person
consist of an aggregate 16,755,448 Ordinary Shares beneficially owned by
the Reporting Person and 23,021 Ordinary Shares held by a wholly owned
subsidiary of the Issuer (as defined in Item 1 below) which, under Israeli
law, are considered or, prima facie, deemed to be beneficially owned by
the Reporting Person.
(2) The Reporting Person may also be deemed to have shared voting power with
respect to, and to beneficially own, an additional 3,160,000 shares of the
Issuer that are owned by Koor Industries, Ltd. ("Koor"), representing an
additional 7.75% of the Issuer's outstanding ordinary sharesas a result of
a Shareholders Agreement between Koor and certain of the Reporting Persons
dated December 27, 2005, as amended on July 6, 2005, a description of
which is attached as Schedule F hereto. The Reporting Person disclaims
beneficial ownership of such shares.
6
CUSIP No. M3760D101 13D/A Page 7
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1. Names of Reporting Person: Beit Yekutiel Ltd.
I.R.S. Identification Nos. of above persons (entities only).
--------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [ ]
--------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------
4. Source of Funds: BK
--------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization Israel
--------------------------------------------------------------------------------
Number of 7. Sole Voting Power -0-
Shares Bene- ------------------------------------------------------
ficially Owned 8. Shared Voting Power 16,778,469/1/2/
By Each ------------------------------------------------------
Reporting 9. Sole Dispositive Power -0-
Person With ------------------------------------------------------
10. Shared Dispositive Power 16,755,448
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
16,778,469/1/2/
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
41.15%
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
CO
--------------------------------------------------------------------------------
----------
(1) The 16,778,469 Ordinary Shares beneficially owned by the Reporting Person
consist of an aggregate 16,755,448 Ordinary Shares beneficially owned by
the Reporting Person and 23,021 Ordinary Shares held by a wholly owned
subsidiary of the Issuer (as defined in Item 1 below) which, under Israeli
law, are considered or, prima facie, deemed to be beneficially owned by
the Reporting Person.
(2) The Reporting Person may also be deemed to have shared voting power with
respect to, and to beneficially own, an additional 3,160,000 shares of the
Issuer that are owned by Koor Industries, Ltd. ("Koor"), representing an
additional 7.75% of the Issuer's outstanding ordinary shares, as a result
of a Shareholders Agreement between Koor and certain of the Reporting
Persons dated December 27, 2005, as amended on July 6, 2005, a description
of which is attached as Schedule F hereto. The Reporting Person disclaims
beneficial ownership of such shares.
7
Explanatory Note
This Amendment No. 4 to the Schedule 13D amends and restates
Schedule 13D and Amendments No. 1, No. 2 and No. 3 to the Schedule 13D
previously filed with the Securities and Exchange Commission (collectively, the
"Prior Schedule").
Item 1. Security and Issuer.
The title and class of equity security to which this Amendment
No. 4 to the Schedule 13D relates is ordinary shares, nominal value 1.00 New
Israeli Shekels per share (the "Ordinary Shares"), of the Elbit Systems Ltd.
(the "Issuer"), a corporation existing under the laws of the State of Israel.
The address of the Issuer's principal executive offices is Advanced Technology
Center, Haifa, Israel 31053.
The Ordinary Shares are traded on the NASDAQ National Market
System and the Tel Aviv Stock Exchange.
The CUSIP number for the Ordinary Shares is M3760D101.
Item 2. Identity and Background.
This statement is being filed by Michael Federmann, for and on
behalf of himself, Federmann Enterprises Ltd. ("FEL"), Heris Aktiengesellschaft
("HF"), Beit Federmann Ltd. ("BFL"), Beit Bella Ltd. ("BBL") and Beit Yekutiel
Ltd. ("BYL") (collectively, the "Reporting Persons" or the "Federmann Group").
Michael Federmann is the controlling shareholder of each of BBL and BYL; BBL and
BYL are the controlling shareholders of BFL; BFL is the controlling shareholder
of FEL; and FEL is the controlling shareholder of HF. The Reporting Persons are
making this single joint filing pursuant to Rule 13d-1(k) under the 1934 Act. An
agreement among the Reporting Persons with respect to the filing of this
statement is attached hereto as Exhibit 1.
The business address of Mr. Michael Federmann is c/o Federmann
Enterprises Ltd., 87 Hayarkon Street, Tel-Aviv, Israel. Mr. Michael Federmann is
the Chairman of the Board of Directors of each of FEL (see description below)
and Dan Hotels Corp. Ltd., which is principally engaged in the business of
operating luxury hotels in Israel. The address of Dan Hotels Corp. Ltd. is 111
Hayarkon Street, Tel Aviv, Israel. Mr. Michael Federmann is also the Chairman of
the Board of Directors of the Issuer, which is principally engaged in the
development, manufacturing and integration of advanced, high-performance defense
electronics systems. The address of the Issuer is set forth in Item 1 above. Mr.
Michael Federmann is a citizen of the State of Israel.
FEL is a corporation existing under the laws of the State of
Israel with its principal executive offices located at 87 Hayarkon Street,
Tel-Aviv, Israel. The principal business activity of FEL is the holding and
managing of investments in private and public companies.
HF is a corporation existing under the laws of the State of
Liechtenstein with its principal executive offices located at Aeulestrasse 38
F1-9490 Vaduz Forstentum Liechtenstein, c/o Prasidial-Anstalt. The principal
business activity of HF is the holding of investments in private and public
companies.
8
Each of BFL, BBL and BYL is a corporation existing under the
laws of the State of Israel with its registered offices located at 16 Abba
Hillel Silver Road, Ramat Gan, Israel, c/o M. Firon & Co., Advocates and
Notaries. The principal business activity of each of BFL, BBL and BYL is the
holding of investments in private companies.
The name, present business address, present principal
occupation or employment and citizenship of each director and executive officer
of FEL, HF, BFL, BBL and BYL are set forth on Schedules A, B, C, D and E
attached hereto, respectively.
During the last five years none of the Reporting Persons, nor,
to the best of their knowledge, any of their directors or executive officers,
has been (i) convicted of any criminal proceeding (excluding traffic violations
or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to federal or
state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
On December 19, 1999, the Issuer, FEL, HF, Rehovot Instruments
Ltd. and Elop Electro-Optics Industries Ltd. ("Elop") entered into a Merger
Agreement (the "Merger Agreement"), pursuant to which Elop would be merged into
and become a subsidiary of the Issuer in exchange for the issuance by the Issuer
of an aggregate of 12,100,000 Ordinary Shares to FEL and HF. The merger
transaction contemplated under the Merger Agreement was completed on July 5,
2000.
Concurrently with the signing of the Merger Agreement, on
December 19, 1999 Elron Electronic Industries Ltd. ("Elron"), FEL and HF entered
into a Shareholders' Agreement (the "Old Shareholders Agreement") which governed
the relations between Elron, FEL and HF as shareholders of the Issuer following
the merger. Pursuant to the Old Shareholders Agreement, should any party to the
Old Shareholders Agreement desire to transfer any of its Ordinary Shares and the
rights associated with such shares ("Associated Rights") to a third party, it
must first offer such Ordinary Shares and Associated Rights to the other parties
of the Old Shareholders Agreement. On July 8, 2004, Elron entered into an
agreement with Tadiran Communications Ltd. to sell its 7,815,448 Ordinary Shares
and Associated Rights for $196.5 million, subject to Elron's obligations under
the Old Shareholders Agreement to first offer the Ordinary Shares and Associated
Rights to FEL and HF on the same terms and conditions as were agreed between
Elron and Tadiran Communications Ltd. After Elron made the offer to FEL and HF,
FEL exercised on July 28, 2004 its rights to purchase the 7,815,448 Ordinary
Shares and Associated Rights from Elron.
In order to obtain some of the funds to purchase the 7,815,448
Ordinary Shares and Associated Rights from Elron, FEL entered into a loan
agreement with Bank Leumi Le'Israel B.M. (the "Lender"), dated July 28, 2004
(the "Loan Agreement") and two related security agreements with the Lender, each
dated July 28, 2004 (each, a "Security Agreement"). A summary of the Loan
Agreement is attached hereto as Exhibit 3 and a summary of the Security
Agreements is attached hereto as Exhibit 4.
9
The remainder of the purchase price was paid by FEL from its own funds. Under
the Loan Agreement, the Lender made the following loans to FEL:
(1) a loan in an amount of approximately $111 million, which
was secured by 4,915,448 Ordinary Shares pledged in favor of the Lender. From
September 23, 2004 through April 18, 2005, FEL paid back the Lender
approximately $61 million under this loan. Currently, $50 million remain
outstanding and secured by 1,755,448 Ordinary Shares pledged in favor of the
Lender.
(2) two loans in the total amount of $51 million, one of which
is secured by 2,900,000 Ordinary Shares pledged in favor of the Lender. On
September 20, 2004, FEL paid back the Lender one of the loans in an amount of
$24 million. The other loan, in the amount of $27 million remains outstanding
and secured by 2,900,000 Ordinary Shares pledged in favor of the Lender.
The shares so pledged are registered in the name of a trust
company which is an affiliate of the Lender (the "Trustee"). The Trustee has
granted FEL a proxy to vote the pledged Ordinary Shares. This proxy can be
revoked by the Lender upon the occurrence of an event of default under the Loan
Agreement. In addition, FEL agreed, if necessary to make payments under the Loan
Agreement, to sell up to approximately 4 million Ordinary Shares previously held
by it and to use the proceeds for payment of the Loan. The Loan Agreement
contains customary events of default.
Pursuant to Israeli law, the Reporting Persons, together with
the Issuer, may be considered, or prima facie deemed, to beneficially own the
Ordinary Shares held by a wholly owned subsidiary of the Issuer. A wholly owned
subsidiary of the Issuer holds 23,021 Ordinary Shares which are entitled to be
voted. Therefore, the Reporting Persons may have the right to direct the vote of
such Ordinary Shares and may be considered, or prima facie deemed, to
beneficially own such Ordinary Shares. Each of the Reporting Persons currently
beneficially owns 16,755,448 Ordinary Shares, except for HF which beneficially
owns 3,836,458 Ordinary Shares.
Subsequent to the sale of Elron's Ordinary Shares to FEL, the
Old Shareholder's Agreement is of no more force and effect.
Item 4. Purpose of Transaction.
On December 27, 2004, the Issuer signed a Share Transfer Deed
(the "Original Tadiran Deed") and a Shareholders Agreement (the "Original
Tadiran Shareholders Agreement" and the transactions contemplated by the
Original Tadiran Deed and the Original Tadiran Shareholders Agreement, the
"Original Tadiran Acquisition") with Koor Industries Ltd. ("Koor") regarding the
Issuer's purchase from Koor of the 3,944,276 ordinary shares held by Koor in
Tadiran Communications Ltd. ("Tadiran") for overall consideration of
approximately $146 million, based on a purchase price of $37.00 per share
(subject to adjustment for dividends and interest). The Original Tadiran
Acquisition was to be made in two stages. In "Stage A" (as defined in the
Original Tadiran Deed), the Issuer purchased from Koor 1,700,000 ordinary shares
of Tadiran. In "Stage B" (as defined in the Original Tadiran Deed), the Issuer
was to purchase the balance (an additional 2,244,276 shares) of the Tadiran
ordinary shares then held by Koor. On July 6, 2005, the Issuer and Koor entered
into amendments to both the Original Tadiran Deed
10
and the Original Tadiran Shareholders Agreement (hereinafter the "Amended
Tadiran Deed", the "Amended Tadiran Shareholders Agreement" and, collectively,
the "Amended Tadiran Acquisition Agreements" or the "Amended Tadiran
Transaction"). The major revisions in the Amended Tadiran Acquisition Agreements
relate to the addition of a "new Stage B". Under the new Stage B the Issuer
accelerated the purchase from Koor of 623,115 ordinary shares in Tadiran which
represent approximately 5% of Tadiran's shares, resulting in the Issuer holding
a total of approximately 26% of Tadiran's shares based on Tadiran's current
share capital. Under the Amended Tadiran Deed, the Issuer will purchase the
balance (an additional 1,621,161 shares) of the Tadiran shares held by Koor
under a "new Stage C". The total consideration for the Amended Tadiran
Acquisition remains the same as under the original Tadiran Acquisition
Concurrently with the signing of the Original Tadiran
Acquisition Agreements, Koor signed a Share Transfer Deed with FEL (the
"Original Koor - FEL Deed") and a Shareholders Agreement with FEL and HF (the
"New Shareholders Agreement") relating to the purchase by Koor from FEL of
4,000,000 ordinary shares of the Issuer, representing approximately 9.8% of the
Issuer's issued and outstanding ordinary shares based on the Issuer's current
share capital (the "Koor - FEL Transaction"). (The Original Koor - FEL Deed and
the New Shareholders Agreement are referred to as the "Original Koor - FEL
Agreements" or the "Original Koor - FEL Transactions"). The total consideration
that was to be paid by Koor to FEL under the Original Koor - FEL Transaction was
approximately $99 million, based on a purchase price of $24.70 per Issuer share
(subject to deductions for dividends paid by the Issuer). Interest is payable
for any amounts paid after April 1, 2005. A description of the New Shareholders
Agreement is attached as Schedule F hereto. A translation of the Original Koor -
FEL Deed is attached hereto as Exhibit 5 and a translation of the New
Shareholders Agreement is attached hereto as Exhibit 6.
The Original Koor - FEL Transaction was to be consummated in
two stages. "Stage A" (as defined in the Original Koor - FEL Deed) of the
Original Koor - FEL Transaction closed concurrently with Stage A of the Tadiran
Acquisition. "Stage B" (as defined in the Original Koor - FEL Deed) of the
Original Koor - FEL Transaction was to occur concurrently with the original
Stage B of the Tadiran Acquisition, subject to certain exceptions as described
in the Original Koor - FEL Deed. Pursuant to Stage A of the Original Koor - FEL
Transaction, Koor purchased 2,160,000 ordinary shares, representing
approximately 5.3% of the Issuer's shares (based on the Issuer's current share
capital), and FEL supported the appointment of one director nominated by Koor to
the Issuer's Board of Directors (the "Issuer's Board"). Under Stage B of the
Original Koor - FEL Transaction, Koor was to purchase from FEL an additional
1,840,000 ordinary shares, representing approximately 4.5% of the Issuer's
shares (based on the Issuer's current share capital), and FEL agreed to support
the appointment of an additional director to be nominated by Koor to the
Issuer's Board (such that Koor nominees will consist of not less than 20% of the
directors on the Issuer's Board).
Under the New Shareholders Agreement, which became effective
upon the completion of Stage A of the Original Koor - FEL Transaction, Koor
obtained certain tag along rights in the event of FEL's sale of shares in the
Issuer, and Koor is subject to certain restrictions on the transfer of its
shares in the Issuer. Also, Koor has agreed to vote at General Shareholders
Meetings of the Issuer in accordance with FEL's instructions, with certain
exceptions, and Koor will receive certain additional non-transferable rights
after the consummation of Stage B.
11
On July 6, 2005, concurrently with the signing of the Amended
Tadiran Acquisition Agreement, Koor and FEL entered into amendments to the
Original Koor-FEL Deed (the "Amended Koor-FEL Deed") and to the New Shareholders
Agreement (the "Amended Koor - FEL Transaction"). Pursuant to the Amended
Koor-FEL Deed, in Stage B Koor purchased 1,000,000 ordinary shares of the Issuer
(representing approximately 2.45% of the Issuer's shares based on the Issuer's
then current share capital) rather than 1,840,000 ordinary shares of the Issuer,
as provided in the Original Koor-FEL Deed (representing approximately 4.5% of
the Issuer's shares based on the Issuer's then current share capital). The
closing of Stage B of the Amended Koor-FEL Transaction occurred on August 25,
2005 immediately following the closing of the New Stage B under the Amended
Tadiran Acquisition Agreement. The Amended Koor-FEL Transaction was not
conditioned on the completion of any stages of the Tadiran Acquisition and the
Amended Koor - FEL Transaction was not subject to any conditions precedent.
Following the completion of Stage B of the Amended Koor-FEL
Deed, Koor owns 3,160,000 ordinary shares of the Issuer, representing
approximately 7.75% of the Issuer's shares based on the Issuer's then share
capital. Also Upon completion of Stage B of the Amended Koor-FEL Deed, another
director nominated by Koor was appointed to the Issuer's board. The
consideration per share that was paid by Koor to FEL remained the same as under
the original Koor-FEL Deed, and the other provisions of the original Koor-FEL
Agreements remained substantially the same.
Except as set forth above, none of the Reporting Persons, nor,
to the best of their knowledge, any of their directors or executive officers,
has any present plans or proposals which relate to or would result in any of the
actions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) The responses of the Reporting Persons to Rows (11)
through (13) of the cover pages of this Schedule 13D/A are incorporated herein
by reference. As of August 25, 2005, each of the Reporting Persons beneficially
owns an aggregate of 16,778,469 Ordinary Shares, representing approximately
41.15% of the outstanding Ordinary Shares of the Issuer (based on an aggregate
of 40,772,980 Ordinary Shares outstanding as of July 31, 2005, excluding 385,900
Ordinary Shares held in treasury by the Issuer), except for HF which
beneficially owns 3,836,458 Ordinary Shares, representing approximately 9.40% of
the outstanding Ordinary Shares of the Issuer (based on an aggregate of
40,772,980 Ordinary Shares outstanding as of July 31, 2005, excluding 385,900
Ordinary Shares held in treasury by the Issuer).
Except as disclosed in this Item 5(a), none of the Reporting
Persons, nor, to the best of their knowledge, any of their directors or
executive officers, beneficially owns any Ordinary Shares.
(b) The responses of the Reporting Persons to (i) Rows (7)
through (10) of this Schedule 13D/A and (ii) Item 5(a) hereof are incorporated
herein by reference.
Except as disclosed in this Item 5(b), none of the Reporting
Persons, nor, to the best of their knowledge, any of their directors or
executive officers, presently has the power to
12
vote or to direct the vote or to dispose or direct the disposition of any of the
Ordinary Shares which they may be deemed to beneficially own.
(c) On April 18, 2005 FEL and Koor consummated Stage A of the
Original Koor-FEL Deed, dated December 27, 2004. Pursuant thereto, FEL sold Koor
2,160,000 Ordinary Shares at a price per share of $24.62. On August 25, 2005,
FEL and Koor consummated Stage B of the Amended Koor-FEL Deed. Pursuant thereto,
FEL sold Koor 1,000,000 ordinary shares at a price per share of $24.91. As a
result, each of the Reporting Persons beneficially owns 16,778,469 Ordinary
Shares, except for HF which beneficially owns 3,836,458 Ordinary Shares.
(d) Pursuant to Israeli law, the Reporting Persons, together
with the Issuer, may be considered, or prima facie deemed, to beneficially own
Ordinary Shares held by a wholly owned subsidiary of the Issuer. A wholly owned
subsidiary of the Issuer holds 23,021 Ordinary Shares which are entitled to be
voted. Therefore, the Reporting Persons may have the right to direct the vote of
such Ordinary Shares and may be considered, or prima facie deemed, to
beneficially own such Ordinary Shares. The remaining 4,655,448 Ordinary Shares
and Associated Rights purchased from Elron are registered in the name of the
Trustee, which is an affiliate of the Lender. The Trustee granted FEL a proxy to
vote the pledged Ordinary Shares. This proxy can be revoked upon the occurrence
of an event of default under the Loan Agreement. Upon the termination of the
Loan Agreement, such Ordinary Shares will be re-registered under the name of
FEL. Each of the Reporting Persons currently beneficially owns 16,778,469
Ordinary Shares, except for HF which beneficially owns 3,836,458 Ordinary
Shares. The wholly owned subsidiary of the Issuer, however, retains the right to
dispose of the Ordinary Shares held by it.
Under the Loan Agreement, FEL undertook to oppose any
amendment of the Issuer's organizational documents that would adversely affect
the Lender's rights in connection with the pledged Ordinary Shares and
Associated Rights. Failure to do so will be considered to be a default under the
Loan Agreements.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
The information set forth in Items 3 and 4 hereof is
incorporated herein by reference.
On July 5, 2000, upon consummation of the merger transaction
contemplated by the Merger Agreement, Elron, FEL and HF entered into a
Registration Rights Agreement which governs the rights and obligations of the
parties with respect to the registration of their Ordinary Shares for sale in
the United States. Elron's rights under the Registration Rights Agreement were
assigned to FEL on July 28, 2004. A copy of that agreement is set forth on
Exhibit 2.
An agreement among the Reporting Persons with respect to the
filing of this Schedule 13D and any amendments hereto is attached as Exhibit 1.
Under the Loan Agreement, FEL undertook to oppose any
amendment of the Issuer's organizational documents that would adversely affect
the Lender's rights in connection
13
with the pledged Ordinary Shares and Associated Rights. Failure to do so will be
considered to be a default under the Loan Agreements.
Pursuant to the Security Agreements, the remaining 4,655,448
Ordinary Shares and Associated Rights purchased from Elron are pledged to the
Lender. Such Ordinary Shares are registered in the name of the Trustee, which is
a trust company and an affiliate of the Lender. The Trustee granted FEL a proxy
to vote the pledged Ordinary Shares. This proxy can be revoked by the Lender
upon the occurrence of an event of default under the Loan Agreement. Upon the
termination of the Loan Agreement, such Ordinary Shares will be re-registered
under the name of FEL.
A description of the New Shareholders Agreement is attached as
Schedule F hereto.
Except as disclosed in this Item 6, none of the Reporting
Persons, nor, to the best of their knowledge, any of their directors or
executive officers, are parties to any contract arrangement, understanding or
relationship (legal or otherwise) with respect to securities of the Issuer.
Item 7. Materials to be Filed as Exhibits.
Exhibit 1 Joint Filing Agreement by and among Michael Federmann,
Federmann Enterprises Ltd., Heris Aktiengesellschaft, Beit
Federmann Ltd., Beit Bella Ltd. and Beit Yekutiel Ltd.
(Incorporated by reference to Amendment No. 1 to the Schedule
13D filed by Michael Federmann on August 19, 2003.)
Exhibit 2 Registration Rights Agreement dated July 5, 2000 by and among
Elbit Systems Ltd., Elron Electronic Industries Ltd.,
Federmann Enterprises Ltd. and Heris Finanz Aktiengesellschaft
(now known as Heris Aktiengesellschaft). (Incorporated by
reference to Amendment No. 1 to the Schedule 13D filed by
Michael Federmann on August 19, 2003.)
Exhibit 3 English Summary of Loan Agreement dated July 28, 2004 by and
among Michael Federmann, Federmann Enterprises Ltd. and Bank
Leumi Le-Israel B.M. (Incorporated by reference to Amendment
No. 2 to the Schedule 13D filed by the reporting persons on
August 2, 2004.)
Exhibit 4 English Summary of Security Agreements, dated July 28, 2004,
by and between Federmann Enterprises Ltd. and Bank Leumi
Le-Israel B.M. (Incorporated by reference to Amendment No. 2
to the Schedule 13D filed by the reporting persons on August
2, 2004.)
Exhibit 5 English Translation of the Original Koor -FEL Deed, dated
December 27, 2004, (incorporated by reference to Amendment No.
3 to the Schedule 13D filed by the reporting persons on May 5,
2005).
Exhibit 6 English Translation of the New Shareholders Agreement, dated
December 27, 2004, (incorporated by reference to Amendment No.
3 to the Schedule 13D filed by the reporting persons on May 5,
2005).
14
Exhibit 7 English Translation of the Share Transfer Deed dated December
27, 2004, amended on July 6, 2005.
Exhibit 8 English Translation of the Shareholders Agreement dated
December 27, 2004, amended on July 6, 2005
Exhibit 9 English Translation of the Amendment to Share Transfer Deed
and Shareholders' Agreement dated July 6, 2005
15
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: Sep ___, 2005
/s/ Michael Federmann
-------------------------
Michael Federmann
FEDERMANN ENTERPRISES LTD.
By: /s/ Michael Federmann
-------------------------
Name: Michael Federmann
Title: Chairman of the Board
HERIS AKTIENGESELLSCHAFT
By: /s/ Michael Federmann
-------------------------
Michael Federmann, Attorney in Fact
BEIT FEDERMANN LTD.
By: /s/ Michael Federmann
-------------------------
Name: Michael Federmann
Title: Director
BEIT YEKUTIEL LTD.
By: /s/ Michael Federmann
-------------------------
Name: Michael Federmann
Title: Director
BEIT BELLA LTD.
By: /s/ Michael Federmann
-------------------------
Name: Michael Federmann
Title: Director
16
SCHEDULE A TO SCHEDULE 13D/A
Filed by Michael Federmann for and on behalf of himself,
Federmann Enterprises Ltd., Heris Aktiengesellschaft, Beit Federmann Ltd., Beit
Bella Ltd. and Beit Yekutiel Ltd.
FEDERMANN ENTERPRISES LTD.
DIRECTORS AND EXECUTIVE OFFICERS
PRESENT PRESENT
BUSINESS PRINCIPAL
NAME* ADDRESS OCCUPATION
---- ------- ----------
Directors
---------
Bella Federmann 87 Hayarkon St. Manager
Tel-Aviv, Israel
Michael Federmann 87 Hayarkon St. Chairman of the Board
Tel-Aviv, Israel of each of Federmann Enterprises
Ltd.,
Dan Hotels Corp. Ltd. and Elbit
Systems Ltd.
Samuel Federmann 87 Hayarkon St. Manager
Tel-Aviv, Israel
Irit Federmann 87 Hayarkon St. Manager
Tel-Aviv, Israel
Liora Federmann 87 Hayarkon St. Manager
Tel-Aviv, Israel
Officers
Dov Ninveh 87 Hayarkon St. Manager
Tel-Aviv, Israel
Aharon Beth-Halachmi 87 Hayarkon St. Manager
Tel-Aviv, Israel
* Each person listed in this Schedule is a citizen of the State of Israel.
17
SCHEDULE B TO SCHEDULE 13D/A
Filed by Michael Federmann for and on behalf of himself,
Federmann Enterprises Ltd., Heris Aktiengesellschaft, Beit Federmann Ltd., Beit
Bella Ltd. and Beit Yekutiel Ltd.
HERIS AKTIENGESELLSCHAFT
DIRECTORS AND EXECUTIVE OFFICERS
PRESENT PRESENT
NAME AND BUSINESS PRINCIPAL
CITIZENSHIP ADDRESS OCCUPATION
----------- ------- ----------
Directors
---------
Prasidial Aeulestrasse 38 Management Company
Management Anstalt Fl-9490 Vaduz
Forstentum Liechtenstein
Dr. Lina Alexander Aeulestrasse 38 Manager
Austrian Fl-9490 Vaduz
Forstentum Liechtenstein
Michael Federmann 87 Hayarkon St. Chairman of the Board
Tel-Aviv, Israel of each of Federmann Enterprises
Ltd.,
Dan Hotels Corp. Ltd. and Elbit
Systems Ltd.
Federmann Enterprises ltd. 87 Hayarkon St.
Tel-Aviv, Israel
Officers
--------
None
18
SCHEDULE C TO SCHEDULE 13D/A
Filed by Michael Federmann for and on behalf of himself,
Federmann Enterprises Ltd., Heris Aktiengesellschaft, Beit Federmann Ltd., Beit
Bella Ltd. and Beit Yekutiel Ltd.
BEIT FEDERMANN LTD.
DIRECTORS AND EXECUTIVE OFFICERS
--------------------------------
PRESENT PRESENT
BUSINESS PRINCIPAL
NAME* ADDRESS OCCUPATION
---- ------- ----------
Directors
---------
Bella Federmann 87 Hayarkon St. Manager
Tel-Aviv, Israel
Michael Federmann 87 Hayarkon St. Chairman of the Board
Tel-Aviv, Israel of each of Federmann Enterprises
Ltd., Dan Hotels Corp. Ltd. and
Elbit Systems Ltd.
Samuel Federmann 87 Hayarkon St. Manager
Tel-Aviv, Israel
Irit Federmann 87 Hayarkon St. Manager
Tel-Aviv, Israel
Officers
--------
None
* Each person listed in this Schedule is a citizen of the State of Israel.
19
SCHEDULE D TO SCHEDULE 13D/A
Filed by Michael Federmann for and on behalf of himself,
Federmann Enterprises Ltd., Heris Aktiengesellschaft, Beit Federmann Ltd., Beit
Bella Ltd. and Beit Yekutiel Ltd.
BEIT BELLA LTD.
DIRECTORS AND EXECUTIVE OFFICERS
--------------------------------
PRESENT PRESENT
BUSINESS PRINCIPAL
NAME* ADDRESS OCCUPATION
---- ------- ----------
Directors
---------
Bella Federmann 87 Hayarkon St. Manager
Tel-Aviv, Israel
Michael Federmann 87 Hayarkon St. Chairman of the Board
Tel-Aviv, Israel of each of Federmann Enterprises
Ltd., Dan Hotels Corp. Ltd. and
Elbit Systems Ltd.
Samuel Federmann 87 Hayarkon St. Manager
Tel-Aviv, Israel
Officers
--------
None
* Each person listed in this Schedule is a citizen of the State of Israel.
20
SCHEDULE E TO SCHEDULE 13D/A
Filed by Michael Federmann for and on behalf of himself,
Federmann Enterprises Ltd., Heris Aktiengesellschaft, Beit Federmann Ltd., Beit
Bella Ltd. and Beit Yekutiel Ltd.
BEIT YEKUTIEL LTD.
DIRECTORS AND EXECUTIVE OFFICERS
--------------------------------
PRESENT PRESENT
BUSINESS PRINCIPAL
NAME* ADDRESS OCCUPATION
---- ------- ----------
Directors
---------
Bella Federmann 87 Hayarkon St. Manager
Tel-Aviv, Israel
Michael Federmann 87 Hayarkon St. Chairman of the Board
Tel-Aviv, Israel of each of Federmann Enterprises
Ltd., Dan Hotels Corp. Ltd. and
Elbit Systems Ltd.
Samuel Federmann 87 Hayarkon St. Manager
Tel-Aviv, Israel
Officers
--------
None
* Each person listed in this Schedule is a citizen of the State of Israel.
21
SCHEDULE F TO SCHEDULE 13D/A
Filed by Michael Federmann for and on behalf of himself,
Federmann Enterprises Ltd., Heris Aktiengesellschaft, Beit Federmann Ltd., Beit
Bella Ltd. and Beit Yekutiel Ltd.
DESCRIPTION OF THE NEW SHAREHOLDERS AGREEMENT
EFFECTIVE DATE AND DURATION
The New Shareholders Agreement between Koor, FEL and HF took effect upon
completion of Stage A of the Koor - FEL Transaction. The New Shareholders
Agreement shall remain in effect for a period of 15 years from its effective
date or until such time as FEL's (or a "Transferor Party" as defined in Clause
12 of New Shareholders Agreement) holdings in the FEL Shares together with
Koor's (or a Transferor Party) holdings in the "Koor Shares" (as defined in the
New Shareholders Agreement) fall below 25% of the Issuer's issued and
outstanding share capital, whichever is earlier.
In addition, after April 1, 2009, Koor may elect to terminate its rights and
obligations under the New Shareholders Agreement, with the exception of the
provisions specified in Clauses 11.6 and 11.7 thereof.
BOARD MEMBERS
The Issuer's Articles of Association provides that the standard number of
directors on the Issuer's Board shall be ten, including the two External
Directors. However, the Board or a General Shareholders Meeting may determine a
different number of directors between 5 and 17.
After the completion of Stage A of the Koor - FEL Transaction and until the
completion of Stage B of the Koor - FEL Transaction, and if Stage B of the Koor
- FEL Transaction does not occur, then until such time as Koor's holdings of the
Koor Shares fall below 4.32% of the Issuer's share capital, or below 2,050,000
shares, whichever is sooner, FEL shall vote all its holdings of the Issuer's
shares in favor of the election of one director nominated by Koor.
Commencing from the time of completion of Stage B of the Koor - FEL Transaction,
FEL will support the appointment or vote for the election of directors to the
Issuer's Board who are nominated by Koor, in a number equal to the higher of
either: (a) two or (b) 20% of the number of the Issuer's directors (including
External Directors and the director(s) appointed or elected pursuant to Koor's
nomination), rounded up to the nearest whole number.
After the completion of Stage B of the Koor - FEL Transaction, from such time as
Koor's holdings of the Koor Shares fall below 6.45% of the Issuer's share
capital, or below 3,050,000 shares, whichever is sooner, and until Koor's
holdings in the Koor Shares fall below 4.32% of the Issuer's share capital or
2,050,000 shares, whichever is earlier, FEL shall vote all its holdings in the
Issuer's shares in favor of the election of one director nominated by Koor.
22
Koor has undertaken to vote for the election of all the candidates nominated by
FEL for the offices of the other directors of the Issuer (including External
Directors).
Koor also has undertaken to support the appointment of the candidate nominated
by FEL as chairperson of the Issuer's Board.
VOTING AT SHAREHOLDERS MEETINGS
Koor has undertaken to vote, in every matter and proposed resolution that will
be submitted for approval to a General Shareholders Meeting of the Issuer's
shareholders, in accordance with instructions that will be given to it by FEL,
subject to certain exceptions.
RESTRICTIONS ON TRANSFER OF ISSUER'S SHARES
Both Koor and FEL are subject under the New Shareholders Agreement, to certain
limitations and rights regarding the transfer of their respective shares in the
Issuer. Accordingly, under the conditions described in the New Shareholders
Agreement:
(1) Koor has been granted a right to tag along to FEL's sale of shares in
the Issuer in the event FEL wishes to transfer to a third party more
than half of FEL's shares in the Issuer;
(2) FEL has been granted a right of first refusal if Koor wishes to
transfer to a third party any of the Koor Shares;
(3) If Koor elects to withdraw from the "Controlling Interest" in the
Issuer (according to the provisions of Clause 16 of the New
Shareholders Agreement) FEL shall have a right of first offer to
acquire Koor's shares in the Issuer;
(4) The parties have been granted a mutual right to jointly participate in
the acquisition of shares from a single third party if the proposed
acquisition will exceed a total consideration of $25 million;
(5) Koor shall not transfer any of the Koor Shares during the period
commencing on the date of signing the New Shareholders Agreement and
ending on the later of the following:
(a) 12 months after completion of Stage A of the Koor - FEL
Transaction; or
(b) if the Stage B of the Koor - FEL Transaction has been
completed - then nine months after the Second Closing Date.
(6) A transfer to a third party of: (1) Koor Shares that are subject to
FEL's right of first refusal, or (2) "Federmann Shares" (as defined in
the Koor - FEL Deed) that are subject to Koor's tag along rights, will
be subject to the third party transferee's undertaking to assume the
transferor's undertakings according to the New Shareholders Agreement.
23
The above mentioned limitations and rights on transfer of Issuer's shares apply
only to the Federmann Shares and the Koor Shares and not to any other Issuer's
shares that may be held by FEL or Koor, as the case may be.
ADDITIONAL NON-TRANSFERABLE RIGHTS GRANTED TO KOOR
After the completion of Stage B of the Koor - FEL Transaction, Koor will be
granted, subject to applicable law, certain non-transferable rights, as
specified below, which will expire if Koor's holdings fall below 6.45% of the
Issuer's share capital, or below 3,050,000 ordinary shares, whichever is
earlier:
(1) The appointment of one of the directors nominated by Koor to the
position of Vice Chairperson of the Issuer's Board, and the appointment
of one director nominated by Koor to each of the Issuer Board's
committees. Such right may be terminated by FEL in the event of a
change of control of Koor as specified in Clause 6.1 of the New
Shareholders Agreement.
(2) Establishment of a Board Committee for Strategic Planning, in which at
least one member will be a director nominated by Koor, having the
authority to assist and recommend on strategic issues;
(3) In the event of a change of the current Issuer's President and CEO (Mr.
Joseph Ackerman), a search committee having the authority to recommend
will be appointed to attempt to identify a suitable candidate for the
office of CEO of the Issuer. If the search committee does not succeed
in unanimously so recommending a candidate, the Issuer's Board will
appoint a CEO of the Issuer by a majority vote of its members.
(4) FEL will support, if so requested by Koor, granting registration rights
to Koor.
(5) In the event that an officer or any of the holders of control in FEL
serves as a director in a subsidiary of the Issuer, Koor will be
entitled, subject to applicable law, to appoint as a director in that
subsidiary one of the directors of the Issuer nominated by Koor. It
should be noted that currently officers or holders of control in FEL do
not serve as directors in any of the Issuer's subsidiaries.
24
EXHIBIT INDEX
Exhibit No.
-----------
Exhibit 1 Joint Filing Agreement by and among Michael Federmann,
Federmann Enterprises Ltd., Heris Aktiengesellschaft, Beit
Federmann Ltd., Beit Bella Ltd. and Beit Yekutiel Ltd.
(Incorporated by reference to Amendment No. 1 to the Schedule
13D filed by Michael Federmann on August 19, 2003.)
Exhibit 2 Registration Rights Agreement dated July 5, 2000 by and among
Elbit Systems Ltd., Elron Electronic Industries Ltd.,
Federmann Enterprises Ltd. and Heris Finanz Aktiengesellschaft
(now known as Heris Aktiengesellschaft). (Incorporated by
reference to Amendment No. 1 to the Schedule 13D filed by
Michael Federmann on August 19, 2003.)
Exhibit 3 English Summary of Loan Agreement dated July 28, 2004 by and
among Michael Federmann, Federmann Enterprises Ltd. and Bank
Leumi Le-Israel B.M. (Incorporated by reference to Amendment
No. 2 to the Schedule 13D filed by the reporting persons on
August 2, 2004.)
Exhibit 4 English Summary of Security Agreements, dated July 28, 2004,
by and between Federmann Enterprises Ltd. and Bank Leumi
Le-Israel B.M. (Incorporated by reference to Amendment No. 2
to the Schedule 13D filed by the reporting persons on August
2, 2004.)
Exhibit 5 English Translation of the Original Koor -FEL Deeddated
December 27, 2004 (incorporated by reference to Amendment No.
3 to the Schedule 13D filed by the reporting persons on May 5,
2005).
Exhibit 6 English Translation of the New Shareholders Agreement, dated
December 27,2004, (incorporated by reference to Amendment No.
3 to the Schedule 13D filed by the reporting persons on May 5,
2005).
Exhibit 7 English Translation of the Share Transfer Deed dated December
27, 2004, amended on July 6, 2005.
Exhibit 8 English Translation of the Shareholders Agreement dated
December 27, 2004, amended on July 6, 2005
Exhibit 9 English Translation of the Amendment to Share Transfer Deed
and Shareholders' Agreement dated July 6, 2005
25
EXHIBIT 7
[TRANSLATED FROM THE HEBREW ORIGINAL]
SHARE TRANSFER DEED
Made in Tel Aviv this 27th day of December 2004
as amended on 6th July 2005
BETWEEN
FEDERMANN ENTERPRISES LTD.
(Public Company No. 51 - 227839-1)
of 99 Hayarkon Street, Tel Aviv
("FEDERMANN")
OF THE ONE PART
AND
KOOR INDUSTRIES LTD.
(Public Company No. 52 - 001414-3)
of 14 Hamalacha Street, Afek Industrial Park, Rosh Ha'ayin 48091
("KOOR")
OF THE OTHER PART
(hereinafter the "PARTIES")
WHEREAS Federmann is the holder of 19,915,448 Ordinary Shares of the
issued and paid up share capital of Elbit Systems Ltd., a
public company duly incorporated in Israel, whose number
with the Companies Registrar is Public Company No.
52-004302-7 (hereinafter the "COMPANY");
AND WHEREAS Federmann wishes to sell and transfer to Koor, in two
stages, 3,160,000 (three million one hundred and sixty
thousand) Ordinary Shares, which on the date of signing this
Deed constituted approximately 7.75% of the Company's issued
and paid-up share capital, while in the first stage
Federmann will sell and transfer to Koor 2,160,000 (two
million one hundred and sixty thousand) Ordinary Shares,
which on the date of signing
this Deed constituted approximately 5.3% of the Company's
issued and paid-up share capital, and in the second stage
Federmann will sell and transfer to Koor 1,000,000 (one
million) Ordinary Shares, which on the date of signing this
Deed constituted approximately 2.45% of the Company's issued
and paid-up share capital, subject to and in accordance with
the provisions of this Deed;
AND WHEREAS Koor wishes to purchase and receive from Federmann
the Shares Being Sold, subject to and in accordance with the
provisions of this Deed;
AND WHEREAS the performance of Stage `A' of the Transaction, is subject
to Conditions Precedent as provided below in this Deed;
AND WHEREAS the Parties wish to set forth their relationship
with respect to the sale and purchase of the Shares Being
Sold in the context of this Deed;
NOW, THEREFORE, IT IS WARRANTED, PROVIDED AND AGREED BETWEEN THE PARTIES AS
FOLLOWS:
1. PREAMBLE, APPENDICES AND INTERPRETATION
1.1 The preamble and appendices hereto constitute an integral
part hereof.
1.2 The clause headings in this Deed are solely for the sake of
convenience and shall not be applied in the interpretation
hereof.
2. DEFINITIONS
2.1 In this Deed, the following terms shall have the meanings
herein ascribed to them, unless expressly stated otherwise:
"GENERAL MEETING" means as defined in the Companies Law, and
any adjourned meeting;
"U.S. DOLLAR" or "$" means United States dollars;
"COMPANY" means as defined in the preamble hereto;
"SHAREHOLDERS AGREEMENT" means the Agreement between
Federmann and Koor in the form of APPENDIX "10.7" hereto,
which is to be signed on the signature of this Deed and will
enter into effect on the First Closing Date, including its
amendments;
"STAGE `A' CONDITIONS PRECEDENT" means the Conditions
Precedent for Stage `A' of the Transaction, as provided in
APPENDIX "9.2" hereto;
"CONDITIONS PRECEDENT" means the Stage `A' Conditions
Precedent;
"COMPANIES LAW" means the [Israel] Companies Law, 5759-1999;
"BUSINESS DAY" means a day on which the two major banks in
Israel are open for business, other than Fridays and holiday
eves, which shall not be treated as a "Business Day";
"KOOR" means as defined in the preamble hereto;
"FIRST CLOSING DATE" means the third Business Day after the
date on which all the Stage `A' Conditions Precedent have
been fulfilled or such later date as agreed by the Parties,
as provided in Clause 20.3 below;
"ELBIT-KOOR DEED FIRST CLOSING DATE" means the First Closing
Date as the term is defined in the Elbit-Koor Deed;
"SECOND CLOSING DATE" means 4 October 2005 or such earlier
date as may be agreed in writing by the parties;
"STAGE `A' COMPLETION DEADLINE" means as defined in Clause
9.1 below;
"CONFIDENTIAL INFORMATION" means all information relating to
the Parties hereto or to the Company, other than (a)
information that was in the public domain or came into the
public domain otherwise than due to a breach of this Deed
and (b) information the disclosure of which is required in
accordance with the provisions of law;
"ORDINARY SHARE" or "ORDINARY SHARES" means Ordinary Shares
of 1 NIS par value each of the Company's issued share
capital;
"STAGE `A' SHARES" mean 2,160,000 (two million one hundred
and sixty thousand) Ordinary Shares;
"STAGE `B' SHARES" mean 1,000,000 (one million) Ordinary
Shares;
"SHARES BEING SOLD" means the Stage `A' Shares and the Stage
`B' Shares;
"FREE AND CLEAR" means free and clear of any charge, pledge,
attachment, levy, debt, lien, claim, right of pre-emption,
right of refusal, option, lock-up arrangement or any further
or other third party right whatsoever, other than
restrictions with respect to the transfer and/or
negotiability of shares that are imposed pursuant to U.S.
securities law (shares which are not registered under U.S.
securities laws);
"FEDERMANN" means as defined in the preamble to this Deed;
"INTEREST" means three-month LIBOR at Bank Leumi Le-Israel
B.M., plus annual interest at the rate of 1.5%, compounded
every three months;
"DEED" means this Share Transfer Deed together with all the
appendices hereto, including its amendments;
"ELBIT-KOOR DEED" means the Share Transfer Deed together
with all the appendices thereto made between the Company and
Koor on the signature of this Deed, subject to and in
accordance with the conditions of which Koor will sell and
transfer to the Company, in two stages, 3,944,276 (three
million nine hundred forty-four thousand two hundred and
seventy-six) Ordinary Shares of 1 NIS par value each of
Tadiran Communications, which on the date of signing this
Deed constitute approximately 32% of Tadiran Communication's
issued share capital;
"STAGE `A' OF THE TRANSACTION" means as defined in Clause
8.1 below;
"STAGE `B' OF THE TRANSACTION" means as defined in Clause 11
below;
"ELBIT-KOOR DEED STAGE `A'" means Stage `A' of the
Transaction contemplated by the Elbit-Koor Deed as the term
is defined in the Elbit-Koor Deed;
"ELBIT-KOOR DEED STAGE `B'" means Stage `B' of the
Transaction contemplated by the Elbit-Koor Deed as the term
is defined in the Elbit-Koor Deed;
"TADIRAN COMMUNICATIONS" means Tadiran Communications Ltd.
(Private [sic] Company No. 51-207441-0);
"STAGE `A' CONSIDERATION" means US$24.70 (twenty-four U.S.
dollars and seventy cents) for each of the Stage `A' Shares,
totaling
US$53,352,000 (fifty-three million three hundred and
fifty-two thousand U.S. dollars), and insofar as all or part
of that amount is actually paid after April 1, 2005, such
amount as aforesaid shall be subject to the addition of the
Interest from April 1, 2005 until the time of actual
payment, all subject to the adjustments as provided in
Clause 15 below;
"STAGE `B' CONSIDERATION" means US$24.70 (twenty-four U.S.
dollars and seventy cents) for each of the Stage `B' Shares,
totaling US$24,700,000 (twenty four million seven hundred
thousand U.S. dollars), and insofar as all or part of that
amount is actually paid after April 1, 2005, such amount as
aforesaid shall be subject to the addition of the Interest
from April 1, 2005 until the time of actual payment, all
subject to the adjustments as provided in Clause 15 below;
"CONSIDERATION" means the Stage `A' Consideration and the
Stage `B' Consideration together;
"QUALIFICATION CONDITIONS" means all the requirements in
accordance with applicable law and pursuant to the Company's
incorporation documents for a person to serve as a director
of the Company, including security clearance as required in
Israel for the purpose of such service, but excluding the
conditions for an Independent Director;
"INDEPENDENT DIRECTOR" means a director who meets the
independence criteria in accordance with U.S. securities
law, including the Sarbanes-Oxley Act and the rules and
regulations that have been and are in future issued by
virtue thereof, including rules of the Nasdaq.
2.2 The following terms shall have the meanings defined in
Section 1 of the [Israel] Securities Law, 5728-1968:
"securities", "company", "subsidiary", "acquisition of
securities", "holding and acquisition" and "control".
2.3 The following terms shall have the meanings defined in
Section 1 of the Companies Law:
"dividend", "director", "external director", "public
company", "distribution", "bonus shares", "officer",
"personal interest", "transaction", "extraordinary
transaction", "act", the "Companies Registrar" and "share
certificate".
3. APPENDICES
The following appendices, which constitute an integral part hereof,
are annexed to this Deed:
3.1 APPENDIX "9.2" - the Stage `A' Conditions Precedent;
3.2 APPENDIX "10.7" - the Shareholders Agreement between
Federmann and Koor, which is to be signed contemporaneously
with the signature of this Deed and will enter into effect
on the First Closing Date;
4. THE ELBIT-KOOR DEED
Contemporaneously with the signing of this Deed, the Elbit-Koor Deed
is also being signed. The Elbit-Koor Deed and this Deed are separate
and unrelated deeds, except as expressly provided in this Deed. For
the avoidance of doubt it is hereby clarified that the Company is not
a Party to this Deed, and the provisions of the Elbit-Koor Deed do not
impose any duty on Koor to Federmann or on Federmann to Koor that is
not expressly provided in this Deed.
5. THE PARTIES' WARRANTIES AND UNDERTAKINGS
The Parties hereby warrant and undertake to each other as follows:
5.1 The representations and warranties of the Parties in this
Deed are solely as provided in this Clause 5 and in Clauses
6 and 7 below, as the case may be.
5.2 The Parties' warranties and undertakings as provided in this
Clause 5 and in Clauses 6 and 7 below, as the case may be,
will continue to be correct, complete and accurate on the
First Closing Date and the Second Closing Date, and they
shall be deemed as having been provided again by each of the
Parties on both the First Closing Date and on the Second
Closing Date.
6. FEDERMANN'S WARRANTIES AND UNDERTAKINGS
Federmann hereby warrants and undertakes to Koor as follows:
6.1 That it is a duly incorporated private company, that its
number with the Companies Registrar is as appears in the
preamble hereto and that no actions or proceedings for
delisting, liquidation, winding-up, receivership or like
acts have been taken or are threatened against it.
6.2 That on signing this Deed and until the completion of Stage
`A' of the Transaction it is and shall be the sole owner of
the Shares Being Sold
(subject to the Lien), and after the completion of Stage `A'
of the Transaction and until the completion of Stage `B' of
the Transaction it is and shall be the sole owner of the
Stage `B' Shares (subject to the Lien, as will be modified,
amended as provided in Clause 10.4 below), that it will not
grant any person or entity an option or right to purchase
all or any of the Shares Being Sold, that it has not
undertaken to grant such an option or right as aforesaid,
that no person or entity has any right of first refusal or
tag-along right in connection with all or any of the Shares
Being Sold and that on the date of signing this Deed it
holds 19,915,448 Ordinary Shares.
6.3 That the Shares Being Sold are fully paid and Free and
Clear, except for a first ranking fixed lien and an
assignment by way of charge, of unlimited amount, which are
registered in favor of Bank Leumi Le-Israel B.M. (in this
Deed the "BANK") over the Shares Being Sold and over
Federmann's rights in the Shares Being Sold (in this Deed
the "LIEN") and that pursuant to the Lien the Shares Being
Sold are held by and registered in the name of Bank Leumi
Le-Israel Trust Co. Ltd., and that on the First Closing
Date, upon the Stage `A' Consideration being received in
Federmann's Account, the Stage `A' Shares will be Free and
Clear and that on the Second Closing Date, upon the Stage
`B' Consideration being received in Federmann's Account, the
Stage `B' Shares will be Free and Clear.
6.4 That apart from approval by Federmann's General Meeting and
board of directors, Federmann has no need, including
pursuant to its incorporation documents and applicable law,
in Israel or abroad, to obtain any other approvals from any
of its organs for the purpose of entering into this Deed and
performing all its obligations pursuant hereto.
6.5 That subject to ratification by Federmann's General Meeting
and board of directors, the signatories on Federmann's
behalf to this Deed and the documents ancillary hereto are
the persons who are empowered, on Federmann's behalf, to
sign this Deed and the documents ancillary hereto and/or
necessary for the performance hereof and to obligate
Federmann by their signature, and this Deed, together with
all its terms and conditions, obligates Federmann in all
respects.
6.6 That subject to the approval of Federmann's General Meeting
and board of directors and the fulfillment of the Conditions
Precedent, there is no legal or other impediment to its
entering into this Deed and the performance hereof and that
this Deed and the performance of its obligations pursuant
hereto are not contrary to any judgment, order or direction
of a court, to any contract, understanding or agreement to
which Federmann is a party, to its incorporation documents
or to any other obligation of Federmann, whether by virtue
of an contract (oral, by conduct or written) or by virtue of
law.
6.7 That apart from the approval of Federmann's General Meeting
and board of directors and the Conditions Precedent, all the
approvals, consents and permits have been obtained and all
the necessary proceedings have been performed, including
with any authorities, government entities or any other body,
for the purpose of Federmann's entering into this Deed and
performing its obligations pursuant hereto, including
transferring the Shares Being Sold to Koor.
6.8 That neither the Company nor any of its subsidiaries is
party to any transaction or agreement in which Federmann
and/or its subsidiaries and/or the controlling shareholders
and/or officers of Federmann and/or the companies controlled
by any of them has a personal interest, other than (1)
payment of remuneration to directors of the Company, in the
same amounts as paid to the Company's external directors;
(2) arrangements for the grant of relief, insurance and
indemnity by the Company to the Company's directors; and (3)
apart from, for the avoidance of doubt, Federmann's holding
of securities of companies whose securities are also held by
the Company.
7. KOOR'S WARRANTIES AND UNDERTAKINGS
Koor hereby warrants and undertakes to Federmann as follows:
7.1 That it is a duly incorporated public company, that its
number with the Companies Registrar is as appears in the
preamble hereto and that no actions or proceedings for
delisting, liquidation, winding up the receivership or like
acts have been taken or are being threatened against it.
7.2 That it has the ability and resources to perform its
obligations pursuant to this Deed in full and on time and
that it is in possession of the financial resources
sufficient for payment of the Consideration in full and at
the times provided in this Deed.
7.3 That apart from approval by Koor's board of directors, Koor
has no need, including pursuant to its incorporation
documents and applicable law, in Israel or abroad, to obtain
any other approvals from any of its organs for the purpose
of entering into this Deed and performing all its
obligations pursuant hereto.
7.4 That subject to ratification by Koor's board of directors,
the signatories on behalf of Koor to this Deed and the
documents ancillary
hereto are those who are empowered, on Koor's behalf, to
sign this Deed and the documents ancillary hereto and/or
necessary for the performance hereof, and to obligate Koor
by their signatures, and this Deed, including all its terms
and conditions, obligates Koor in all respects.
7.5 That subject to the approval of Koor's board of directors
and the fulfillment of the Conditions Precedent, there is no
legal or other impediment to its entering into and
performing this Deed and that this Deed and the performance
of its obligations pursuant hereto are not contrary to any
judgment, order or direction of a court, to any contract,
understanding or agreement to which it is a party, to its
incorporation documents or to any other obligation of Koor,
whether by virtue of a contract (oral, by conduct or
written) or by virtue of law.
7.6 That except for the approval of Koor's board of directors
and except for the Conditions Precedent, all the approvals,
consents and permits have been obtained and all the
necessary proceedings have been performed, including with
any authorities, government entities or any other body, for
the purpose of Koor's entering into this Deed and performing
its obligations pursuant hereto, including the acquisition
from Federmann of the Shares Being Sold.
7.7 That subject only to Federmann's warranties and
representations in Clauses 5 and 6 of this Deed, the Shares
Being Sold are being purchased in their actual condition,
and the actual condition of the Company and its assets, and
they are "As Is", without any other representations or
warranties being received from or on behalf of Federmann and
that the Consideration, as agreed between the Parties, has
been fixed having regard also to the fact that the purchase
is on such a "As Is" basis as aforesaid.
8. STAGE `A' OF THE TRANSACTION
8.1 On the First Closing Date and subject to the fulfillment of
the Stage `A' Conditions Precedent by the Stage `A'
Completion Deadline, Federmann shall sell and transfer to
Koor, on and against payment of the full amount of the Stage
`A' Consideration, 2,160,000 (two million one hundred and
sixty thousand) Ordinary Shares (the Stage `A' Shares),
fully paid and Free and Clear, and Koor shall purchase and
receive from Federmann the Stage `A' Shares and pay
Federmann the full amount of the Stage `A' Consideration (in
this Deed "STAGE `A' OF THE TRANSACTION").
8.2 Furthermore, on the First Closing Date, the Company shall
purchase from Koor 1,700,000 (one million seven hundred
thousand) Ordinary
Shares of 1 NIS par value each of Tadiran Communications,
which on the date of signing this Deed constitute
approximately 13.8% of Tadiran Communication's issued share
capital, in accordance with the Elbit-Koor Deed, which is
being signed contemporaneously with this Deed. The
Elbit-Koor Deed Stage `A' and Stage `A' of the Transaction
contemplated by this Deed shall be performed
contemporaneously and Stage `A' of the Transaction
(contemplated by this Deed) shall not be performed without
the Elbit-Koor Deed Stage `A' being performed.
8.3 For the avoidance of doubt, after the performance and
completion of Stage `A' of the Transaction, Stage `A' of the
Transaction will not be revoked, even if Stage `B' of the
Transaction is not performed or completed for any reason.
9. THE STAGE `A' COMPLETION DEADLINE AND THE STAGE `A' CONDITIONS
PRECEDENT
9.1 In this Deed the "STAGE `A' COMPLETION DEADLINE" means:
9.1.1 April 15, 2005 [extended by consent in the past];
or
9.1.2 if by April 15, 2005 [extended by consent in the
past] all the Stage `A' Conditions Precedent have
been fulfilled, other than the approval of the
[Israel] Commissioner of Restrictive Trade
Practices, as provided in Clause 1 of APPENDIX
"9.2", the Stage `A' Completion Deadline shall be
automatically deferred until May 31, 2005 or to
such later date as agreed by the Parties as
provided in Clause 20.3 below.
9.2 The Stage `A' Conditions Precedent are provided in APPENDIX
"9.2".
9.3 Should all the Stage `A' Conditions Precedent not have been
fulfilled by the Stage `A' Completion Deadline, this Deed
shall be void, except for the provisions of Clause 17
hereof, without either of the Parties having any complaint
and/or claim and/or demand against the other. The foregoing
provisions of this Clause 9.3 shall not derogate from any
right or other remedy pursuant to this Deed or by law that
is available to the Parties with respect to a breach of any
of the provisions of this Deed (insofar as breached).
10. THE FIRST CLOSING DATE
Subject to the Stage `A' Conditions Precedent being fulfilled by the
Stage `A' Completion Deadline, the Parties shall meet on the First
Closing Date at such
place as determined by the Parties and the following interdependent
acts shall be performed contemporaneously:
10.1 Koor shall remit the Stage `A' Consideration by bank
transfer to Federmann's bank account at the Bank, the
details of which shall be provided to it in writing by
Federmann by the First Closing Date (in this Deed
"FEDERMANN'S ACCOUNT"), and confirmation from the Bank that
the Stage `A' Consideration has been received in Federmann's
Account shall be provided to Federmann.
10.2 Federmann shall deliver to the Company a share transfer deed
pursuant whereto the Stage `A' Shares are being transferred
from Bank Leumi Le-Israel Trust Co. Ltd to Federmann, signed
by Bank Leumi Le-Israel Trust Co. Ltd and Federmann, and the
Company shall enter Federmann in its shareholder registry as
the holder of the Stage `A' Shares.
10.3 Federmann shall provide Koor confirmation from the Bank,
according to which the Bank agrees that, on and against
receipt of the Stage `A' Consideration in Federmann's
Account, it will discharge the Lien from the Stage `A'
Shares.
10.4 Federmann shall provide Koor written instructions from the
Bank, in the Bank's standard form, addressed to the
Companies Registrar, pursuant to which the Bank applies to
the Companies Registrar to amend the Lien to the effect that
the Lien will be discharged from the Stage `A' Shares.
10.5 Federmann and Koor shall deliver this Deed to the Company,
and Federmann shall procure that Koor is entered in the
Company's shareholder registry as the holder of the Stage
`A' Shares and that Koor receives a share certificate from
the Company, in the Company's standard form, attesting to
Koor's ownership of the Stage `A' Shares.
10.6 Federmann shall provide Koor a copy of the Company's board
of directors' resolution to the effect that, subject to the
performance of Stage `A' of the Transaction, as of the First
Closing Date there shall be added to the Company's board of
directors and serve thereon as a director one nominee who
shall be nominated for office by Koor and who meets the
Qualification Conditions. Federmann undertakes that there
will be a vacancy on the Company's board of directors so
that it will be possible to add Koor's nominee as aforesaid
to the Company's board of directors. Koor shall provide
Federmann and the Company prior written notice of the name
of such nominee or of another nominee, as nominated by Koor,
in his place, and Koor (with Federmann's assistance) shall
coordinate with the Company's
corporate secretary such nominee's compliance with the
Qualification Conditions, all no later than 14 days prior to
the earlier of: (1) the Stage `A' Completion Deadline or (2)
the First Closing Date.
If for any reason it is not possible to appoint the nominee
nominated by Koor as aforesaid as a director of the Company,
another nominee nominated by Koor, who meets the
Qualification Conditions, shall be appointed in his place.
Without derogating from the foregoing, if the nominee
nominated by Koor as aforesaid is not added to the Company's
board of directors on the First Closing Date, Federmann
shall call a General Meeting of the Company as soon as
possible, on the agenda of which shall be the appointment of
the nominee nominated by Koor as aforesaid as a director of
the Company. Federmann undertakes to vote in favor of the
appointment of the nominee nominated by Koor, who was not
appointed as aforesaid but does meet the Qualification
Conditions.
10.7 The Shareholders Agreement, in the form annexed hereto as
APPENDIX "10.7", shall become effective.
10.8 Federmann shall provide Koor a written declaration, duly
signed by Federmann, according to which all the warranties
and representations of Federmann as provided in Clauses 5
and 6 of this Deed are also correct, complete and accurate
as of the First Closing Date.
10.9 Koor shall provide Federmann a written declaration, duly
signed by Koor, according to which all the warranties and
representations of Koor as provided in Clauses 5 and 7 of
this Deed are also correct, complete and accurate as of the
First Closing Date.
10.10 The Elbit-Koor Deed Stage `A' shall be completed, namely all
the acts that are to be performed on the Elbit-Koor Deed
First Closing Date shall be performed, as provided in Clause
10 of the Elbit-Koor Deed.
10.11 Each Party undertakes to do all the acts for which it is
responsible pursuant to this Clause 10.
10.12 All the acts mentioned above in this Clause 10 shall be
deemed as being made concurrently, no individual act shall
be deemed as completed and no individual document shall be
deemed as delivered until all the concurrent acts have been
completed and all the documents have been delivered.
11. STAGE `B' OF THE TRANSACTION
On the Second Closing Date, Federmann shall sell and
transfer to Koor, on and against payment of the full amount
of the Stage `B' Consideration, 1,000,000 (one million)
Ordinary Shares (the Stage `B' Shares), fully paid and Free
and Clear, and Koor shall purchase and receive from
Federmann the Stage `B' Shares and pay Federmann the full
amount of the Stage `B' Consideration (in this Deed "STAGE
`B' OF THE TRANSACTION").
For the avoidance of any doubt, the performance of Stage `B
`of the Transaction is not conditioned upon any condition
precedent, and is not connected in any way or form
whatsoever with the Elbit-Koor Deed and/or Stage `B' of the
Elbit-Koor Deed.
12. REVOKED [including the extension of certain deadlines, in accordance
with the protocol dated 18 April 2005]
13. THE SECOND CLOSING DATE
On the Second Closing Date, the Parties and the Company shall meet at
such place as determined by the Parties and the Company, and they
shall perform the following interdependent acts contemporaneously:
13.1 Koor shall remit the Stage `B' Consideration by bank
transfer to Federmann's Account, and confirmation from the
Bank that the Stage `B' Consideration has been received in
Federmann's Account shall be provided to Federmann.
13.2 Federmann shall deliver to the Company a share transfer deed
pursuant to which the Stage `B' Shares are being transferred
from Bank Leumi Le-Israel Trust Co. Ltd. to Federmann,
signed by Bank Leumi Le-Israel Trust Co. Ltd. and Federmann,
and the Company shall enter Federmann in its shareholders
registry as the holder of the Stage `B' Shares.
13.3 Federmann shall provide Koor confirmation from the Bank,
according to which the Bank agrees that on and against
receipt of the Stage `B' Consideration in Federmann's
Account, it will discharge the Lien from the Stage `B'
Shares.
13.4 Federmann shall provide Koor a letter of instructions from
the Bank, in the Bank's standard terms, addressed to the
Companies Registrar pursuant whereto the Bank applies to the
Companies Registrar to amend the Lien to the effect that the
Lien will be discharged from the Stage `B' Shares.
13.5 Federmann and Koor shall deliver this Deed to the Company,
and Federmann shall procure the entry of Koor in the
Company's
shareholder registry as the holder of the Stage `B' Shares
and that Koor receives a share certificate from the Company
in the Company's standard form attesting to Koor's ownership
of the Stage `B' Shares.
13.6 Federmann shall provide Koor a copy of the Company's board
of directors' resolution that, subject to the performance of
Stage `B' of the Transaction, there shall be added to the
Company's board of directors and serve on it an additional
director or directors another nominee or such number of
other nominees who is or are nominated for office by Koor to
the effect that after his or their addition to the board of
directors, the number of the Company's directors who have
been nominated for office by Koor and meet the Qualification
Requirements, including the director added to the Board of
Directors as provided in Clause 10.6 above, shall be the
greater of:
(1) two directors; or
(2) a number of directors equal to 20% of the number
of the Company's directors (including external
directors and including the director or directors
added on Koor's nomination as aforesaid), rounded
up to the nearest whole number.
Said board of directors' resolution shall provide that
Koor's nominee or nominees as aforesaid shall be added to
the Company's board of directors on the Second Closing Date.
Federmann undertakes that there will be sufficient vacancies
on the Company's board of directors to make the addition of
Koor's nominee or nominees as aforesaid possible.
Koor shall arrange to provide Federmann and the Company
prior written notice of the name or names of its nominee or
nominees as aforesaid or of another nominee or other
nominees, as nominated by Koor in his or their place, and
Koor (with Federmann's assistance) shall coordinate with the
Company's corporate secretary those nominees' compliance
with the Qualification Requirements, all by no later than 14
days prior to the Second Closing Date.
If for any reason it is not possible to appoint the nominee
or nominees that Koor proposes as aforesaid as a director or
directors of the Company, another nominee or nominees,
meeting the Qualification Requirements, shall be appointed
on Koor's nomination in his or their place.
If and insofar as according to U.S. securities laws,
including the U.S. Sarbanes-Oxley Act and the rules and
regulations that have been and are in future issued by
virtue thereof, including the rules of Nasdaq, it is
required that a majority of the Company's directors be
Independent Directors, then there shall be appointed as
additional directors of the Company, on Koor's nomination as
aforesaid, such number of nominees who fulfill the
requirements for Independent Directors, equal to one half
(50%) of the total number of directors who are elected to
office on Koor's nomination as provided in Clause 10.6 above
and in this Clause 13.6, that number being rounded up to the
nearest whole number.
13.7 Federmann shall provide Koor a written declaration duly
signed by Federmann that all Federmann's warranties and
representations as provided in Clauses 5 and 6 of this Deed
are also correct, complete and accurate as of the Second
Closing Date.
13.8 Koor shall provide Federmann a written declaration duly
signed by Koor that all Koor's warranties and
representations as provided in Clauses 5 and 7 of this Deed
are also correct, complete and accurate as of the Second
Closing Date.
13.9 Each Party undertakes to perform all the acts for which it
is responsible pursuant to this Clause 13.
13.10 All the acts mentioned above in this Clause 13 shall be
deemed as being performed concurrently, no individual act
shall be deemed as completed and no individual document
shall be deemed as delivered until all the concurrent acts
have been completed and all the documents are delivered.
14. ACTS AND OBLIGATIONS AFTER THE SIGNATURE OF THIS DEED
14.1 Immediately after the signature of this Deed, the Parties
shall act and use their best efforts for the fulfillment of
all the Conditions Precedent, including obtaining all the
certificates, permits and consents necessary, as early as
possible. In such connection and without derogating from the
generality of the foregoing, the Parties shall apply to
every competent authority and to every other entity whose
approval is necessary for the performance of the transaction
contemplated by this Deed, in both its stages, they shall
submit all the applications and deliver all the information,
data and particulars in their possession, without delay, and
act to resolve or avoid a disapproval, if any, by the
various government authorities in any respect relating to or
arising out of this Deed.
14.2 It is hereby agreed that the provisions of this Deed are not
such as to place either of the Parties under a duty to make
any payment for the fulfillment of the Conditions Precedent
or any of them, other than official fees and other
reasonable expenses (such payment as aforesaid, excluding
official fees and other reasonable expenses, is hereinafter
a "FULFILLMENT PAYMENT"), provided that if a Party to this
Deed refuses to make a Fulfillment Payment, the other Party
may make it for the fulfillment of all or any of the
Conditions Precedent, provided that the first Party shall
not be responsible to indemnify the other Party in respect
of a Fulfillment Payment and the Party that makes the
Fulfillment Payment shall have no demand, claim or right of
recourse against the other Party with respect to the making
of such payment.
14.3 Without prejudice to the provisions of Clauses 15 and 16
below, Federmann hereby undertakes that from the date of
signing this Deed until the earlier of:
14.3.1 the Stage `A' Completion Deadline, if the Stage
`A' Conditions Precedent have not been fulfilled
by that time; or
14.3.2 the Second Closing Date;
Federmann and/or its subsidiaries and/or the controlling shareholders
and/or officers of Federmann and/or companies under the control of any
of them shall not enter into an extraordinary transaction with the
Company in which any of them has a personal interest, other than the
transactions contemplated by this Deed and the Elbit-Koor Deed.
15. MODIFICATIONS TO THE CONSIDERATION OR THE NUMBER OF SHARES BEING SOLD
15.1 During the period from the date of signing this Deed until
the earlier of: (1) the Stage `A' Completion Deadline, if
the Stage `A' Conditions Precedent have not been fulfilled
by that time; or (2) the Second Closing Date; Federmann
shall, insofar as it is able, oppose and vote by virtue of
all the Company's shares that it holds at that time against
any resolution that concerns: (a) the making of any
distribution whatsoever, whether in cash, in kind or by a
distribution of bonus shares, to the Company's shareholders,
apart from the distribution of a current dividend in cash of
not more than $ 0.23 per Ordinary Share in any calendar
quarter; (b) an rights offering for the acquisition of any
securities of the Company; (c) any modification to the
Company's incorporation documents that is such as to affect
Koor's rights pursuant to the Company's incorporation
documents in a way that is prejudicial to Koor in comparison
with Federmann, all unless Koor's
consent is provided thereto by written notice to be signed
by two officers of Koor without any further approval being
necessary.
15.2 Insofar as during the period from the date of signing this
Deed until the First Closing Date or until the Second
Closing Date, as the case may be, one or more of the
following events occurs, despite or in accordance with the
provisions of Clause 15.1 above, the Consideration or number
of the Shares Being Sold, as the case may be, shall be
adjusted in accordance with the following provisions:
15.2.1 If the Company resolves to make any distribution
to its shareholders, the Consideration shall be
subject to the deduction of any amount (translated
into Dollars at the representative exchange rate
on the earlier of the date of actually making the
distribution or the First Closing Date or the
Second Closing Date, as the case may be) that
Federmann will be entitled to receive in respect
of the Shares Being Sold (gross) (namely that the
record date for its distribution is prior to the
First Closing Date or the Second Closing Date, as
the case may be).
15.2.2 If the Company offers its Shareholders rights for
the acquisition of any securities, the record date
for the exercise of which is prior to the First
Closing Date or the Second Closing Date, as the
case may be, the Consideration shall be adjusted
for the bonus element embodied (if at all) in the
rights, unless Koor instructs Federmann in writing
prior to the exercise date in respect of those
rights to exercise the rights and in such event
Federmann shall exercise the rights by virtue of
the Shares Being Sold which have not yet been
transferred to Koor as at that time, and it shall
transfer to Koor, immediately on the occurrence of
the earlier of (1) the exercise date or (2) the
First Closing Date, or after the Second Closing
Date, as the case may be, the securities exercised
as aforesaid on and against payment of the whole
exercise price paid by Federmann to the Company
for the exercise thereof, plus Interest from the
date of Federmann's paying the exercise price to
the date of actual payment to Federmann by Koor.
15.2.3 If the Company distributes bonus shares or
dividend in kind to its shareholders prior to the
First Closing Date or the Second Closing Date, as
the case may be, the Consideration shall not be
adjusted but the Shares Being Sold shall be
subject to the addition of the bonus Shares, Free
and Clear, or of assets received as dividend in
kind (gross) in respect of
the Shares Being Sold, Free and Clear, without
Koor being required to pay additional
Consideration for them.
15.2.4 If the Company makes a consolidation, reduction or
sub-division of its share capital or does any
other act of similar effect, the number of Shares
Being Sold shall be adjusted pro rata to the
consolidation or sub-division and the
Consideration shall not be modified.
16. KOOR'S RIGHT TO RESCIND THE DEED
16.1 On the occurrence of one or more of the events set out in
Clause 16.2 below, unless it occurs with Koor's consent,
Koor may rescind any of the stages of this Deed before it
has been completed and performed (provided that if one of
the events set out in Clause 16.2 below occurs prior to the
performance of Stage `A' of the Transaction, Koor may only
rescind this Deed in full). Such rescission shall be
effected by Koor by written notice, to be received by
Federmann within 10 Business Days of the date on which Koor
learns of the occurrence of one of the events set out in
Clause 16.2 below. Should Koor provide such notice of the
rescission of this Deed after the completion of Stage `A' of
the Transaction, the sale of the Stage `A' Shares to Koor
shall not be set aside, Koor shall not return to Federmann
the Stage `A' Shares and Federmann shall not refund to Koor
the Stage `A' Consideration. Nevertheless, all the Parties'
other obligations and rights pursuant to this Deed and the
appendices hereto, except for the Shareholders Agreement,
shall be void.
16.2 The events are as follows:
16.2.1 If a temporary or permanent receiver and/or
temporary liquidator and/or liquidator and/or
trustee is appointed for the Company and/or if a
winding-up order and/or receivership order and/or
suspension of proceedings order is awarded against
it and/or if any of the Company's material assets
is attached, provided that such appointment, order
or attachment is not set aside within 30 days.
16.2.2 If the Company enters into merger proceedings as
provided in Chapter Eight of the Companies Law or
compromise or arrangement proceedings in
accordance with Section 350 of the Companies Law
or restructuring and/or merger proceedings in
accordance with Section 351 of the Companies Law.
16.3 Subject to applicable law, Federmann shall provide written
notice to Koor of the occurrence of any of the events set
out in Clause 16.2 above, immediately upon its publication.
16.4 The foregoing provisions of this Clause 16 shall not
derogate from any other right or remedy pursuant to this
Deed or by law that is available to Koor with respect to a
breach of any of the provisions of this Deed (if and insofar
as breached).
17. CONFIDENTIALITY AND NOTICES
17.1 The Parties shall use Confidential Information that comes
into their possession in connection with this Deed and the
Company solely for the performance of their obligations
pursuant to this Deed, and they shall not disclose or
transfer in any manner whatsoever Confidential Information
to any third party, other than to their employees or
independent advisors and except insofar as required for the
fulfillment of the Conditions Precedent and insofar as
possible by prior coordination with the other Party. Without
derogating from the foregoing, if the transaction
contemplated by this Deed is not actually implemented, each
Party shall return to the other Party hereto all
Confidential Information that has come into its possession
in connection with this Deed, if any. This obligation is not
limited in time and shall continue in force even after the
term of this Deed or if this Deed is cancelled or rescinded
for any reason.
17.2 If and insofar as possible and subject to applicable law and
to the time periods mandated by law, the Parties shall
coordinate in advance the wording of every report,
communication or notice published by either of them in
connection with their entering into this Deed, its
performance and the fulfillment of the terms pursuant
hereto.
18. TAXES AND MANDATORY PAYMENTS
18.1 Unless otherwise provided in this Deed, each Party shall
bear the mandatory payments and taxes that may be imposed on
it by law (if and insofar as charged) in respect of the sale
or acquisition of the Shares Being Sold pursuant to this
Deed.
18.2 If any amount payable in accordance with the provisions of
this Deed is subject to a duty to withhold taxes at source,
the tax shall be duly withheld by the paying Party unless
the recipient Party produces a valid tax withholding
exemption certificate issued by the tax authorities.
18.3 Each Party shall bear its own expenses, including the
professional fees of its legal advisers in connection with
the preparation and performance of this Deed.
18.4 If any amount paid by one Party to the other in accordance
with the provisions of this Deed is subject under applicable
law to value added tax (VAT), the paying Party shall, at the
same time and in the same manner as it pays that amount,
also pay the VAT at its legal rate on and against a duly
issued tax invoice.
19. ENTRY INTO EFFECT
19.1 This Deed shall enter into effect upon the receipt of all
the following approvals:
19.1.1 Approval from Federmann's General Meeting and
board of directors for it to enter into this Deed
and the Shareholders Agreement and for performance
thereof by Federmann in accordance with their
terms and conditions, including ratification of
the signatures of Messrs Michael Federmann and Dov
Ninveh to this Deed and the Shareholders
Agreement.
19.1.2 Approval by Koor's board of directors for it to
enter into this Deed and the Shareholders
Agreement and for performance thereof by Koor in
accordance with their terms and conditions,
including ratification of the signatures of Messrs
Jonathan Kolber and Danny Biran to this Deed and
the Shareholders Agreement.
Provided that:
(1) such approvals as mentioned in Clauses 19.1.1 and
19.1.2 have been obtained by no later than January
6, 2005 by 17:00 hours (in this Clause referred to
as the "EFFECTIVE DATE");
(2) by the Effective Date copies of the resolutions of
Federmann's General Meeting and board of
directors, as mentioned in Clause 19.1.1 above,
have been received at Koor's offices jointly with
written confirmation from Federmann's attorneys
that the said resolutions were duly adopted and
Messrs Michael Federmann and Dov Ninveh were
together empowered to sign, on behalf of
Federmann, this Deed and the documents ancillary
hereto or those necessary for the purpose of its
performance, and also the
Shareholders Agreement, and to obligate it
thereunder; and written confirmation from the
attorneys of Heris Aktiengesellschaft that the
competent organs of Heris Aktiengesellschaft have
approved its entering into the Shareholders
Agreement and Mr. Michael Federmann has been
empowered to sign, on behalf of Heris
Aktiengesellschaft, the Shareholders Agreement and
obligate it by virtue thereof;
(3) by the Effective Date a copy of the resolution of
Koor's board of directors, as mentioned in Clause
19.1.2 above, has been received at Federmann's
offices, together with written confirmation from
Koor's legal counsel that the resolution was duly
adopted and Messrs Jonathan Kolber and Danny Biran
were together empowered to sign, on Koor's behalf,
this Deed and the documents ancillary hereto or
those necessary for the purpose of its performance
and also the Shareholders Agreement and to
obligate it thereunder; and
(4) all the approvals, as mentioned in Clause 19.1 of
the Koor-Elbit Deed, have been obtained by the
Effective Date.
19.2 Should all the approvals as mentioned in Clauses 19.1.1 and
19.1.2 not have been obtained by the Effective Date, and
without derogating from the provisions of Clause 20.3 below,
this Deed shall automatically expire and be null and void,
without either of the Parties having any complaint, claim or
demand against the other.
19.3 This Deed shall become effective, if and insofar as it
becomes effective, at such time as mentioned in Clause 19.1
above. Nevertheless: the performance and completion of Stage
`A' of the Transaction are conditional upon the fulfillment
of all the Stage `A' Conditions Precedent by the Stage `A'
Completion Deadline and, except for the obligations in
Clauses 14 to 18 above and Clause 20.8 below, neither Party
shall be liable to do any act for the performance and
completion of Stage `A' of the Transaction before the
fulfillment of all the Stage `A' Conditions Precedent; and
19.4 The performance and completion of Stage `B' of the
Transaction is not conditioned upon any condition precedent.
20. MISCELLANEOUS
20.1 This Deed shall be governed by the laws of the State of
Israel. Sole and exclusive jurisdiction in all respects
relating to this Deed shall be
vested only in the courts of the District Court in the City
of Tel Aviv-Jaffa, and no other court shall have
jurisdiction thereover.
20.2 Any modification, addendum or addition, waiver, extension,
concession or failure to exercise a right pursuant to this
Deed shall only be effective if done in an express document
signed by all the Parties hereto and shall only apply to the
case specified in such document and shall not derogate from
other rights of any Party pursuant to this Deed.
20.3 The Parties hereto may extend or reduce any time specified
in this Deed and waive the performance of any of the
provisions of this Deed, either once or several times, by
written notice signed by two officers of each of Federmann
and Koor, without any further authority being necessary.
20.4 This Deed fully contains, embodies, merges, expresses and
exhausts all the understandings of the Parties hereto solely
in respect of the matters mentioned herein. Any promises,
guarantees or agreements, whether written or oral,
undertakings or representations concerning the subject
matter of this Deed provided or made by the Parties prior to
entering into this Deed, orally or in writing, that are not
specifically expressed herein, shall not be deemed to
augment the rights and obligations prescribed in this Deed
or to derogate from or modify them, and the Parties shall
not be bound by them, insofar as existed, as from the date
of this Deed. Without derogating from the generality of the
foregoing, the documents exchanged between the Parties prior
to the signature hereof, including the drafts exchanged
between them, shall have no significance in the
interpretation of this Deed. For the avoidance of doubt, the
terms of the Elbit-Koor Deed shall not be applied in the
interpretation hereof.
20.5 No conduct by either of the Parties shall be construed as a
waiver of any of its rights pursuant hereto or by law or as
its waiver of or acquiescence to any breach or
non-performance of a condition of the Deed by the other
Party or as granting a postponement or extension or as a
modification, cancellation or addition of any condition,
unless done expressly and in writing.
20.6 Unless otherwise expressly provided in this Deed, the
Parties hereto may not assign or transfer their rights or
obligations pursuant to this Deed to any third party or
perform this Deed through any third party, unless the other
Party's prior written consent has been obtained, and nothing
in this Deed shall be deemed to vest any right in anyone who
is not a Party hereto.
20.7 Should either of the Parties not enforce or delay in
enforcing any of the rights vested in it pursuant to this
Deed or by law in a particular case or series of cases, such
shall not be deemed a waiver of said right or of any other
rights.
20.8 Subject to the provisions of Clause 14.2 above in connection
with the Conditions Precedent, the Parties shall cooperate
between them in the implementation of the provisions of this
Deed and they shall assist each other insofar as reasonable
and necessary and in such connection they shall sign every
reasonable document, application and approval necessary for
such purpose.
20.9 Notices pursuant to this Deed shall be provided in writing
to the Parties' addresses as set out in the preamble hereto
or to such other addresses of which the Parties may provide
notice in accordance with the provisions of this Clause. Any
notice sent by one Party to the other by registered mail
shall be deemed to have reached the addressee following the
passage of three days from the date of being posted, and
notice delivered in person by 17:00 hours on any Business
Day shall be treated as received immediately on delivery, or
if delivered after 17:00 hours on any Business Day, it shall
be treated as received on the first Business Day after its
delivery.
IN WITNESS WHEREOF THE PARTIES HAVE EXECUTED THIS AGREEMENT
___(signed)________________ _____(signed)________________
KOOR INDUSTRIES LTD. FEDERMANN ENTERPRISES LTD.
By: Jonathan Kolber By: Michael Federmann
Danny Biran Dov Ninveh
APPENDIX 9.2
THE CONDITIONS PRECEDENT FOR THE PERFORMANCE OF STAGE `A' OF THE TRANSACTION
Set out below are the Conditions Precedent and approvals required, insofar as
necessary, for the completion of Stage `A' of the Transaction contemplated by
the Deed of which this Appendix is an integral part ("THIS DEED") -
1. Obtaining the [Israel] Commissioner of Restrictive Trade Practices'
approval of the Parties' contracting pursuant to this Deed and the
performance of Stage `A' of the Transaction, provided that the
Commissioner's disapproval of Stage `B' of the Transaction is not
received.
2. Obtaining all the consents and approvals necessary and the fulfillment
of all the Conditions Precedent for the Elbit-Koor Deed Stage `A' to
become effective, as provided in the Elbit-Koor Deed.
3. Obtaining the [Israel] Ministry of Defense's approval of the Parties'
contracting pursuant to this Deed and the performance of all their
obligations pursuant hereto, including in connection with Stage `B' of
the Transaction, all insofar as necessary.
4. Obtaining the [Israel] Chief Scientist's approval of the Parties'
contracting pursuant to this Deed and the performance of all their
obligations pursuant hereto, including in connection with Stage `B' of
the Transaction, all insofar as necessary.
5. Obtaining the [Israel] Investment Center's approval of the Parties'
contracting pursuant to this Deed and the performance of all their
obligations pursuant hereto, including in connection with Stage `B' of
the Transaction, all insofar as necessary.
6. Obtaining approval from banks, all insofar as necessary.
In this Appendix 9.2, "APPROVAL" means - including an approval that is subject
to conditions but excluding an approval that is subject to conditions that are
such as to materially alter the business activity of Elbit, as existing at the
time of signing this Deed or as may arise in the future in accordance with
resolutions that have been adopted by Elbit prior to signing this Deed, or the
way in which Elbit conducts its business.
EXHIBIT 8
[TRANSLATED FROM THE HEBREW ORIGINAL]
APPENDIX 10.7
SHAREHOLDERS AGREEMENT
Made in Tel Aviv this 27th day of December 2004
as amended on 6th July 2005
BETWEEN
KOOR INDUSTRIES LTD.
whose address for the purpose of this Agreement
is 14 Hamalacha Street, Afek Industrial Park, Rosh
Ha'ayin 48091
("KOOR")
OF THE ONE PART
AND
1. FEDERMANN ENTERPRISES LTD.
("FEDERMANN ENTERPRISES")
2. HERIS AKTIENGESELLSCHAFT
("HERIS")
whose address solely for the purpose of this Agreement is
99 Hayarkon Street, Tel Aviv
(Federmann Enterprises and Heris are hereinafter
jointly and severally referred to as "FEDERMANN")
OF THE OTHER PART
(hereinafter the "PARTIES")
WHEREAS on the date of signing this Agreement Federmann is the
holder of 19,915,448 Ordinary Shares of 1 NIS par value each
of Elbit Systems Ltd, a public company whose Shares are
traded on the Tel Aviv Stock Exchange and on Nasdaq in the
United States (hereinafter the "Company"), of which
Federmann Enterprises is owner of 16,078,990 Ordinary Shares
of 1 NIS par value each of the Company and Heris is the
owner of 3,836,458 Ordinary Shares of 1 NIS par value each
of the Company (those specific
Shares and bonus Shares that are in future issued in respect
of them, if at all, excluding the Koor Shares, as defined
below, are hereinafter the "FEDERMANN SHARES");
AND WHEREAS in accordance with a Share Transfer Deed between Federmann
Enterprises and Koor, together with the appendices thereto,
including its amendments, of which this Agreement
constitutes Appendix 10.7 (herein the "DEED OF SALE"),
Federmann Enterprises and Koor have agreed upon the sale of
3,160,000 (three million one hundred and sixty thousand)
Ordinary Shares of 1 NIS par value each of the Company from
Federmann Enterprises to Koor, subject to various conditions
precedent and in two stages, in the first stage 2,160,000
(two million one hundred and sixty thousand) Ordinary Shares
of 1 NIS par value each of the Company being sold to Koor,
and in the second stage an additional 1,000,000 (one
million) Ordinary Shares of the Company being sold to Koor,
all subject to and in accordance with the provisions of the
Deed of Sale (the specific Shares that are to be transferred
to Koor from Federmann Enterprises pursuant to the Deed of
Sale and bonus Shares issued in respect of them, if at all,
are herein referred to as the "KOOR Shares");
AND WHEREAS the Parties wish to set forth their relationship with
respect to their holdings of the Company's Shares.
NOW THEREFORE THE PARTIES HEREBY WARRANT, PROVIDE AND AGREE BETWEEN THEM AS
FOLLOWS:
1. PREAMBLE AND INTERPRETATION
1.1 The preamble and appendices hereto constitute an integral part
hereof and are as binding as the other terms hereof.
1.2 The Clause headings herein are solely for the sake of
convenience and are not to be applied in the interpretation
hereof.
2. DEFINITIONS
In this Agreement the following terms shall have the meanings ascribed
to them, unless expressly stated otherwise:
2.1 "HERIS" means Heris Aktiengesellschaft (Company No.
56-002196-6);
2.2 "INDEPENDENT DIRECTOR" means a director who meets all the
independence criteria in accordance with the Foreign Law;
2.3 "STOCK EXCHANGE" means the Tel Aviv Stock Exchange Ltd. or the
Nasdaq National Market or any other stock exchange on which
the Company's Shares are listed for trade;
2.4 "EXTERNAL DIRECTOR" means as defined in the Companies Law;
2.5 "FOREIGN LAW" means the law applicable in the United States
regarding securities, including the provisions of the Sarbanes
Oxley Act and the rules and regulations that have been and are
in future issued by virtue thereof, and including the rules of
the Nasdaq National Market;
2.6 "AGREEMENT" means this Agreement together with the appendices
hereto, including its amendments;
2.7 "COMPANY" means Elbit Systems Ltd. (Public Company No.
520043027);
2.8 "FIRST MINIMUM QUANTITY" means 3,050,000 (three million fifty
thousand) Ordinary Shares, together with all bonus Shares that
are issued in respect of them, if any, and together with all
the Shares that are issued to Koor by virtue of rights that
are vested in Koor solely in respect of the Koor Shares in the
context of a rights offering of the Company to its
shareholders, if any, all from the time of signing this
Agreement;
2.9 "SECOND MINIMUM QUANTITY" means 2,050,000 (two million fifty
thousand) Ordinary Shares, together with all bonus Shares that
are issued in respect of them, if any, and together with all
the Shares that are issued to Koor by virtue of rights that
are vested in Koor solely in respect of the Koor Shares in the
context of a rights offering of the Company to its
shareholders, if any, all from the time of signing this
Agreement;
2.10 "TRANSFER" means a sale, gift, realization of a lien (but
not the creation of a lien), loan and any other transfer
whatsoever of a Share and/or any right vested in the Share's
owner and/or holder, whether or not for consideration and
whether voluntary or involuntary;
2.11 "COMPANIES LAW" means the [Israeli] Companies Law, 5759-1999;
2.12 "FIRST MINIMUM PERCENTAGE" means 6.45% of the Company's issued
share capital at the time of computation;
2.13 "SECOND MINIMUM PERCENTAGE" means 4.32% of the Company's
issued share capital at the time of computation;
2.14 "BUSINESS DAY" means a day on which the two major banks in
Israel are open for business, other than Fridays and holiday
eves, which shall not be treated as a Business Day;
2.15 "KOOR" means Koor Industries Ltd. (Public Company No.
520014143);
2.16 "FIRST CLOSING DATE" means as defined in the Deed of Sale;
2.17 "SECOND CLOSING DATE" means as defined in the Deed of Sale;
2.18 "STOCK EXCHANGE SALE" means a sale in the context of trading
on the Stock Exchange or a sale in a transaction outside the
Stock Exchange by means of a distributor to buyers whose
identity is unknown to the seller or a sale to trust funds in
Israel or abroad or to provident funds or to provident fund
management companies;
2.19 "KOOR SHARES" means as stated in the preamble hereto;
2.20 "FEDERMANN SHARES" means as stated in the preamble hereto;
2.21 "ORDINARY SHARES", "SHARES" or the "COMPANY'S SHARES" means
Ordinary Shares of 1 NIS par value each in the Company;
2.22 "FEDERMANN ENTERPRISES" means Federmann Enterprises Ltd.
(Private Company No. 512278391);
2.23 "OFFICER" means as defined in the Companies Law;
2.24 "FREE AND CLEAR" means free and clear of any charge, pledge,
attachment, levy, debt, lien, claim, right of pre-emption,
right of refusal, option, lock-up arrangement or any further
or other third party right whatsoever, other than restrictions
in respect of the Transfer and/or negotiability of Shares that
are imposed pursuant to the Foreign Law (Shares which are not
registered under U.S. securities laws);
2.25 "FEDERMANN" means as stated in the preamble hereto;
2.26 "ACQUISITION" means acquisition, purchase, receipt of a gift
and any receipt of a Transfer, in any way whatsoever, of a
Share and/or right vested in the owner and/or holder of the
Share, whether or not for consideration;
2.27 "DEED OF SALE" means as stated in the preamble hereto;
2.28 "DIRECT CONTROL" means Control deriving from holding Shares
alone and not together with others;
2.29 "CONTROL" means as the term is defined in the [Israel]
Securities Law, 5728-1968;
2.30 "QUALIFICATION CONDITIONS" means all the requirements in
accordance with applicable law and pursuant to the Company's
documents of incorporation for a person to serve as a director
of the Company, including security clearance as required in
Israel for the purpose of such service, but excluding the
conditions for an Independent Director.
3. THE PARTIES' WARRANTIES
3.1 Federmann hereby warrants that Federmann Enterprises is a
limited company, duly registered in Israel and that Heris is a
foreign company, duly registered in Liechtenstein.
3.2 Koor hereby warrants that it is a limited company, duly
registered in Israel.
3.3 Each of the Parties warrants that it is empowered to enter
into this Agreement and perform all its obligations pursuant
hereto and that its signatories hereto are duly empowered to
obligate it.
3.4 Each of the Parties hereto warrants and undertakes that there
is no legal impediment and/or no impediment pursuant to its
incorporation documents and/or applicable law and/or any order
or direction of a court and/or any contract, understanding or
agreement to which it is a party, to its entering into this
Agreement and performing all its obligations pursuant hereto.
3.5 Except as set out in this Agreement, each of the Parties
hereby warrants that it is in possession of all the approvals
and consents necessary for the purpose of signing and
performing this Agreement.
3.6 Each of the Parties further warrants that it is not a party to
any agreement, arrangement or obligation that is contrary to
and/or impairs its ability to perform all its obligations
pursuant hereto.
4. VOTING AGREEMENT - BOARD OF DIRECTORS
4.1 From the Second Closing Date until such time as Koor's
holdings of the Koor Shares fall below the First Minimum
Percentage or until such
time as Koor's holdings of the Koor Shares fall below the
First Minimum Quantity, whichever is earlier, Federmann shall
vote by virtue of all its holdings in the Company's Shares in
favor of the election to the Company's Board of Directors of
such number of candidates as are nominated to office by Koor,
which is the greater of:
(1) two directors; or
(2) a number of directors equal to 20% of the number of
the Company's directors, including External Directors
and including the directors who are elected as
aforesaid in accordance with Koor's nomination,
rounded up to the nearest whole number.
It is hereby agreed that if it is required in accordance with
the Foreign Law that a majority of the Company's directors are
Independent Directors, Koor undertakes that at least one half
of the directors who are elected to office in accordance with
its nomination as aforesaid, that number being rounded up to
the nearest whole number, will fulfil the conditions required
in respect of Independent Directors.
4.2 After the Second Closing Date, from such time as Koor's
holdings of the Koor Shares fall below the First Minimum
Percentage or from such time as Koor's holdings of the Koor
Shares fall below the First Minimum Quantity, whichever is
earlier, until such time as Koor's holdings of the Koor Shares
fall below the Second Minimum Percentage or until such time as
Koor's holdings of the Koor Shares fall below the Second
Minimum Quantity, whichever is earlier, Federmann shall vote
by virtue of all its holdings in the Company's Shares in favor
of the election of one director who has been nominated by
Koor, provided that the candidate fulfils all the
Qualification Conditions.
4.3 From the First Closing Date until:
(i) the Second Closing Date; or
(ii) to the extent that the Second Closing Date does not
occur, until such time as Koor's holdings of the Koor
Shares fall below the Second Minimum Percentage or
until such time as Koor's holdings of the Koor Shares
fall below the Second Minimum Quantity, whichever is
earlier;
Federmann shall vote by virtue of all its holdings in the
Company's Shares in favor of the election of one director who
has been nominated
by Koor, provided that the candidate fulfils all the
Qualification Conditions.
4.4 From the First Closing Date, so long as Federmann holds 20% or
more of the Company's issued share capital and so long as Koor
holds the Company's Shares, Koor shall vote by virtue of all
its holdings in the Company's Shares:
4.4.1 In favor of the election of all the directors of the
Company whose candidacy for office has been nominated
by Federmann, except for the directors for whose
election Federmann has undertaken to vote as provided
in Clauses 4.1 or 4.2 or 4.3, as the case may be,
except for a candidate who does not fulfil the
Qualification Conditions.
4.4.2 Without derogating from the generality of Clause
4.4.1 above, in favor of the appointment of all the
external directors whose candidacy is nominated by
Federmann.
4.4.3 In favor of the appointment of the chairperson of the
board of directors who has been nominated for office
by Federmann, provided that if at the time of the
General Meeting at which the appointment of the
chairperson of the Company's board of directors is
raised for discussion and vote, Koor is entitled to
the restricted right described in Clause 6.3 below,
then at the time of the General Meeting there shall
serve one of the directors who has been elected to
office in accordance with Koor's nomination as
provided in Clause 4.1 above, who is nominated by
Koor as Vice chairperson of the Company's board of
directors.
4.5 In Clauses 4.6 to 4.8 below, "Proposing Party" means the Party
on whose nomination, as provided in Clauses 4.1 or 4.2 or 4.3
or 4.4 above, a particular candidate has been appointed as a
director of the Company.
4.6 If a Proposing Party wishes to replace or terminate the office
of a director elected in accordance with its nomination, the
Parties shall act, to the extent necessary, to hold a General
Meeting of the Company and vote in favor of a proposal to
remove said director from office and in favor of the
appointment of another director in his place whose candidacy
is nominated by the Proposing Party and who fulfils all the
Qualification Conditions.
4.7 The Parties shall vote against a proposal to remove from
office a director whose candidacy was nominated by Koor or
Federmann,
unless the Proposing Party otherwise instructs in writing and
in advance.
4.8 If the post of a director is vacated for any reason, the
Parties shall act, to the extent necessary, to hold a General
Meeting of the Company and vote for the appointment as a
director of such candidate as nominated by the Proposing Party
in place of the director whose post has become vacant,
provided that such candidate meets all the Qualification
Conditions.
4.9 Before holding any General Meeting of the Company, on the
agenda of which is the appointment of directors, notice shall
be given by the Company or by Federmann to Koor in connection
with holding the General Meeting and, in accordance with
applicable law and the Company's incorporation documents, each
Party shall give the Company three Business Days' prior
written notice, with a copy to the other, of the candidates
nominated by it for the office of a director in the Company,
as provided in this Clause 4 above.
4.10 Should Koor's holdings of the Koor Shares fall below the First
Minimum Percentage or should Koor's holdings of the Koor
Shares fall below the First Minimum Quantity, whichever is
earlier, Koor shall use its best efforts, subject to
applicable law, in order to procure that all the directors who
have been appointed to office on Koor's nomination as provided
in Clause 4.1 above, other than one director, will immediately
resign from their office as directors of the Company.
4.11 Should Koor's holdings of the Koor Shares fall below the
Second Minimum Percentage or should Koor's holdings of the
Koor Shares fall below the Second Minimum Quantity, whichever
is earlier, Koor shall use its best efforts, subject to
applicable law, to procure that the director appointed to
office on its nomination, as provided in Clauses 4.2 and/or
4.3 above, shall immediately resign from his office as a
director.
5. GENERAL VOTING AGREEMENT
5.1 From the First Closing Date and subject to the provisions of
Clause 4 above, Koor undertakes to vote by virtue of all its
holdings in the Company's Shares, on every matter and proposed
resolution that is put to the Company's General Meeting for
decision and/or for a resolution of the Company's shareholders
in any manner whatsoever, in accordance with written
instructions that are given to it by Federmann at least seven
Business Days in advance before the time of the relevant
General Meeting or the time of passing the relevant
resolution, as the case may be.
Solely for the purpose of this Clause 5.1, Koor shall not be
deemed holder of the Company's Shares that are exclusively
owned by related private companies that are not companies
under Koor's Control and by related public companies of Koor.
At Federmann's request and subject to applicable law, Koor
shall make a recommendation to those companies to vote in
accordance with such instructions as have been given to Koor
by Federmann as aforesaid.
5.2 The provisions of Clause 5.1 above shall not apply:
(i) as regards approval by the Company's General Meeting
of transactions that are to be approved by reason of
the fact that Federmann, Federmann's controlling
shareholders or the officers of any of them have a
personal interest in them; and
(ii) in connection with a proposal to alter the Company's
Articles of Association that is such as to affect
Koor's rights in accordance with the Company's
Articles of Association in a manner that is
prejudicial to Koor in comparison with Federmann.
5.3 For the performance of the provisions of Clauses 4 and 5
above, the Parties undertake to attend every General Meeting
of the Company and do all acts necessary, at the times
prescribed therefor, so that their voting in the General
Meeting by virtue of all their holdings in the Company will be
valid and effective in accordance with applicable law and
pursuant to the Company's incorporation documents.
6. OTHER NON-TRANSFERABLE RIGHTS
6.1 Koor undertakes to give Federmann written notice immediately
after it learns that members of Charles Bronfman's family
and/or trusts for the benefit of Charles Bronfman's family
have ceased being Koor's controlling shareholders.
Federmann may, in its discretion, give written notice to Koor
within 90 days of the date on which it receives Koor's written
notice as aforesaid that it has decided to bring to an end the
additional non-transferable rights set out in Clause 6.3 below
(the date on which Federmann's written notice is received by
Koor being referred to below in this Clause as the
"TERMINATION DATE").
6.2 The provisions of Clauses 6.3 to 6.8 below shall only apply in
the period between the Second Closing Date and the earlier of
the following two dates:
6.2.1 such time as the number of the Koor Shares that are
exclusively owned by Koor falls below the First
Minimum Percentage or such time as the number of the
Koor Shares that are exclusively owned by Koor falls
below the First Minimum Quantity, whichever is
earlier. For the avoidance of doubt, Shares owned by
a person or entity that is not Koor shall not be
deemed as Shares that are exclusively owned by Koor,
even if Koor is deemed to hold them by virtue of
Clause 17.6 below; or
6.2.2 the Termination Date, as defined in Clause 6.1 above.
6.3 The Parties shall act, subject to applicable law, for the
appointment of one of the directors who have been elected to
office on the nomination of Koor as provided in Clause 4.1
above, who shall be nominated by Koor, as Vice Chairperson of
the Company's Board of Directors.
6.4 The Parties shall act, subject to applicable law, so that on
every one of the Company's Board of Directors' committees
there shall be a member one of the directors elected for
office on Koor's nomination as provided in Clause 4.1 above,
who shall be nominated by Koor.
6.5 The Parties shall act, subject to applicable law, so that
there shall be established in the Company a board of
directors' committee for strategic planning, its members
being: one of the directors elected for office on Koor's
nomination as provided in Clause 4.1 above, who shall be
nominated by Koor, at least one of the external directors and
such other directors as determined by the Company's board of
directors (hereinafter the "STRATEGIC PLANNING Committee").
The function of the Strategic Planning Committee shall be to
assist and make recommendations to the Company's board of
directors on the strategic planning of the Company's business
activity.
6.6 When the tenure of Mr Joseph Ackerman (hereinafter "MR.
ACKERMAN") as President and CEO of the Company comes to an
end, the Parties shall act, subject to the provisions of
applicable law, so that the Company's board of directors
establishes a special search committee, the composition of
which shall include the Chairperson of the board of directors,
the Vice Chairperson of the board of directors, a director
elected to office on the nomination of Federmann as provided
in Clause 4.4.1 above and a director elected to office on the
nomination of Koor, as provided in Clause 4.1 above
(hereinafter the "SEARCH COMMITTEE"). The Search Committee
shall act for 30 days in an attempt to identify a candidate
for the post of the Company's CEO, who is agreed by all the
members of the Committee and it shall make
a recommendation to the Company's board of directors to elect
that candidate to the post of the Company's CEO. In any event,
even if the Search Committee has been unable to locate a
candidate agreed by all the members of the Search Committee
within 30 days as aforesaid, the Company's CEO shall be
elected by the Company's board of directors.
For the avoidance of doubt, it is clarified that the Company's
President and CEO is currently Mr Ackerman, and that the
Company's board of directors may extend Mr Ackerman's tenure
as it deems fit, and that the Search Committee mentioned above
shall not be established for that purpose.
6.7 To the extent requested to do so by Koor, Federmann shall vote
in the Company's General Meeting by virtue of all its holdings
in the Company in order to pass a resolution of the Company
approving the Company's entering into a Registration Rights
Agreement with Koor, which will vest Koor, so long as it holds
5% or more of the Company's issued share capital, with one
demand right on the same conditions, mutatis mutandis,
("REGISTRATION RIGHT") as those detailed in the Registration
Rights Agreement dated 5 July 2000 among the Company, Elron
Electronic Industries Ltd. and Federmann (the "REGISTRATION
RIGHTS AGREEMENT"). Federmann hereby undertakes that to the
extent that pursuant to the Registration Rights Agreement it
is vested with more than one demand right and to the extent
that the Company so requires for the purpose of granting the
Registration Right to Koor, Federmann shall, without any
consideration or compensation, relinquish one demand right
that is vested in it pursuant to the Registration Rights
Agreement.
6.8 Should officers or controlling shareholders of Federmann serve
as directors of any subsidiary of the Company, the Parties
shall act, subject to applicable law, so that the Company also
appoints as a director of that subsidiary one of the directors
of the Company who has been appointed to office on Koor's
nomination as provided in Clause 4 above. The foregoing shall
not apply if there is any legal restriction to the appointment
of more than one director, who is a director of the Company,
to the subsidiary's board of directors as aforesaid.
7. For the avoidance of doubt, it is clarified that the rights granted to
Koor pursuant to Clause 6 above, in all its sub-clauses, are personal
(non-transferable) rights that are not attached to the Koor Shares that
are held by Koor. Said rights are not assignable and/or transferable to
any third party, either together with a Transfer of all or any of the
Koor Shares in the Company or otherwise.
8. RESTRICTIONS ON TRANSFER OF SHARES
8.1 From the First Closing Date, Koor shall not Transfer all or
any of the Koor Shares, including in the event of a forced
sale due to receivership, execution proceedings or winding-up
proceedings, except subject to and in accordance with the
provisions of Clauses 10, 11 and 12 below.
8.2 From the First Closing Date, Federmann shall not Transfer all
or any of the Federmann Shares, including in the event of a
forced sale due to receivership, execution proceedings or
winding-up proceedings, except subject to and in accordance
with the provisions of Clauses 9 and 12 below.
9. KOOR'S TAG-ALONG RIGHT ON A SALE OF THE FEDERMANN SHARES
9.1 Should Federmann wish to Transfer any of the Federmann Shares
that constitute more than half the Federmann Shares that are
held by Federmann for the time being to a third party (in this
Clause 9 the "THIRD PARTY"), Federmann shall provide Koor
written notice detailing the number of Shares that it intends
to Transfer to the Third Party (in this Clause "the OFFERED
Shares"), the identity of the Third Party, the identity of all
the Third Party's ultimate interested parties or, to the
extent that the Third Party wishes to receive a Transfer of
the Offered Shares indirectly through a trustee and/or another
person and/or another entity in any manner whatsoever, the
identity of every such trustee and other person and entity as
aforesaid and the identity of the third party beneficiary and
all its ultimate interested parties, the number of Shares that
are held by Federmann at the time of giving the notice, all to
the level of detail for which the Company and/or the Third
Party would be obligated, in accordance with Israeli
securities laws, for reporting the identity of the said
entities and persons, were the Third Party an interested party
in the Company, and the consideration that the Third Party has
undertaken to pay Federmann for the Offered Shares, the
payment terms and all the other material conditions of the
transaction, including the transaction's conditions precedent
(hereinafter in this Clause the "SALE NOTICE").
9.2 By the end of a period of 7 Business Days starting on the date
of Koor's receipt of the Sale Notice (hereinafter the
"TAG-ALONG NOTICE PERIOD"), Koor may provide Federmann written
notice that it wishes to sell to the Third Party the Koor
Shares that it holds at that time or a portion thereof
together with the Offered Shares and at the price and on the
payment terms and other conditions specified in the Sale
Notice (in this Clause 9 the "TAG-ALONG NOTICE"). In the
Tag-Along Notice,
which will be provided during the Tag-Along Notice Period,
Koor shall specify the quantity of Shares, solely out of the
Koor Shares, that Koor wishes to sell the Third Party as
aforesaid.
9.3 Should Koor provide a Tag-Along Notice during the Tag-Along
Notice Period, Federmann shall be entitled to Transfer its
Shares to the Third Party, provided that the Third Party also
purchases from Koor, at the price and on the payment terms and
other conditions specified in the Sale Notice, and at the same
time, the Koor Shares specified by Koor in the Tag-Along
Notice. If the number of Offered Shares, together with the
number of the Koor Shares specified in the Tag-Along Notice,
exceeds the quantity of Shares that the Third Party is willing
to purchase, the quantity of Shares that is purchased by the
Third Party shall be apportioned pro rata between Federmann
and Koor in the ratio between the number of the Federmann
Shares that are held by Federmann prior to completing the
Share Transfer to the Third Party and the number of the Koor
Shares that are held by Koor prior to completing the Share
Transfer to the Third Party.
9.4 Should Koor not provide a Tag-Along Notice during the
Tag-Along Notice Period, Federmann may Transfer the Offered
Shares to the Third Party for consideration and on payment
terms and other conditions no better to Federmann than those
detailed in the Sale Notice, provided that an Agreement for
the Transfer of the Offered Shares is signed by Federmann and
the Third Party within 30 Business Days of the end of the
Tag-Along Notice Period and the Transfer of the Offered Shares
pursuant thereto is completed within 180 days of the end of
the Tag-Along Notice Period, all subject to the provisions of
Clauses 12.1 to 12.3 below.
9.5 For the avoidance of doubt, to the extent that a transaction
for the Transfer to the Third Party of the Offered Shares is
not signed by the expiration of 30 Business Days from the end
of the Tag-Along Notice Period or the transaction for the
Transfer of the Offered Shares is not completed within 180
days of the end of the Tag-Along Notice Period, Federmann may
only Transfer the Offered Shares after again providing a
Tag-Along Notice to Koor as provided above in this Clause 9.
9.6 For the purpose of the foregoing provisions of Clause 9, there
shall be deemed as a single Transfer (1) a number of
transactions for the Transfer of Shares that are effected with
a single Third Party during a six-month period and for such
purpose a "Transaction for the Transfer of Shares" includes
the grant, Transfer or sale of any option or right to acquire
or receive Shares; and the "Single Third Party" includes any
related company (as defined in the Securities Law, 5728-1968)
of the
Third Party and any interested party (as defined in the
Securities Law, 5728-1968) in any of them and includes anyone
acting with the Third Party, in cooperation under an
agreement, whether written or oral, and also (2) a transaction
for the Transfer of Shares (as defined above) in the scope of
which there are Transferred in any manner whatsoever -
including as a result of a Transfer of Control in Heris from
Federmann Enterprises to a Third Party or Third Parties and/or
in other subsidiaries of Federmann from Federmann to any Third
Party or Third Parties and/or a Transfer of actual economic
control of the Federmann Shares that are owned by Heris and/or
other subsidiaries of Federmann from Federmann to any Third
Party or Third Parties - Shares of Federmann, from Federmann
to any Third Party or Third Parties, in a percentage of more
than 50% of the Federmann Shares that are then held by
Federmann.
9.7 For the avoidance of doubt, the foregoing shall not preclude
Federmann from entering into an agreement to Transfer the
Offered Shares to the Third Party before giving the Sale
Notice, provided that such does not preclude Koor from tagging
along in the sale of the Offered Shares to the Third Party in
accordance with the provisions of this Clause 9.
9.8 Without derogating from and in addition to the provisions of
Clause 9.6, the provisions of Clauses 9.1 to 9.7 above shall
not apply, and Koor shall not have a Tag-Along Right, in
respect of a Transfer of any of the Federmann Shares from
Federmann Enterprises to Heris and vice versa. Nevertheless,
if Federmann Enterprises sells Control of Heris and at the
time of the sale Heris holds more than 50% of the Federmann
Shares, Federmann shall grant Koor the Tag-Along Right as
provided in Clauses 9.1 to 9.7 above, mutatis mutandis. To the
extent that at the time of the Transfer of Control of Heris,
Heris holds other assets, in addition to the Federmann Shares,
the value of the Federmann Shares that are held by Heris at
that time shall be determined by an appraiser agreed between
the Parties, and in the absence of such agreement, then by the
chairperson of the accounting firm of Somekh Chaikin (KPMG),
who may also appoint himself.
9.9 It is agreed that the foregoing provisions of Clauses 9.1 to
9.8 shall not apply and Koor's Tag-Along Right shall expire
from such time as Koor's holdings of the Koor Shares fall
below the Second Minimum Percentage or from such time as
Koor's holdings fall below the Second Minimum Quantity,
whichever is earlier.
10. NON-TRANSFER OF SHARES BY KOOR
Koor shall not Transfer the Koor Shares or any of them during the
period commencing on the date of signing this Agreement and ending at
the later of the following two dates:
10.1 on the expiration of 12 months after the First Closing Date;
or
10.2 if the performance of Stage `B' of the Transaction pursuant to
the Deed of Sale is completed - the expiration of nine months
after the Second Closing Date;
(hereinafter the "PROHIBITED SALES PERIOD").
11. FEDERMANN'S RIGHT OF FIRST REFUSAL
11.1 Subject to the provisions of Clause 10 above and Clause 12
below, if Koor wishes to Transfer any of the Koor Shares to a
Third Party, it may only do so if it first enters into an
agreement with a specific Third Party for the Transfer of
those Shares, the agreement being subject to the Right of
First Refusal vested in Federmann pursuant to this Agreement,
and subject to the following provisions.
Koor shall provide Federmann written notice within 2 Business
Days of entering the agreement with the Third Party, in which
it shall notify Federmann that it has entered into a binding
agreement for the Transfer of Shares from the Koor Shares to a
Third Party (in this Clause 11 the "THIRD PARTY"), subject to
the Right of First Refusal vested in Federmann pursuant to
this Clause 11, and in the notice it shall detail the number
of Shares that it has undertaken to Transfer to the Third
Party (in this Clause the "OFFERED SHARES"), the identify of
the Third Party and the identity of all the Third Party's
ultimate interested parties or to the extent that the Third
Party wishes to receive a Transfer of the Offered Shares
indirectly through a trustee and/or other person and/or entity
in any manner, then the identity of every such trustee and
other person and entity as aforesaid, the identity of the
Third Party beneficiary and of all its ultimate interested
parties, the number of the Shares held by the Third Party on
the date of providing the notice, all to the same level of
detail for which the Company and/or the Third Party would be
obligated, in accordance with Israeli securities laws, for
reporting the identity of the said entities and persons, were
the Third Party an interested party in the Company, and the
consideration that the Third Party has undertaken to pay to
Koor for the Offered Shares (which shall only be cash
consideration), the payment terms and all the other material
conditions of the transaction, including all the conditions
precedent of the transaction (hereinafter in this Clause the
"SALES NOTICE").
11.2 Until the end of a period of 21 Business Days commencing on
the date of Federmann's receipt of the Sales Notice
(hereinafter in this Clause 11 the "ACCEPTANCE NOTICE
PERIOD"), Federmann may give Koor written notice that it has
decided to purchase the Offered Shares for the consideration
and on the payment terms and other conditions detailed in the
Sales Notice (hereinafter the "ACCEPTANCE NOTICE").
11.3 In the event of Acceptance Notice being provided, Koor shall
Transfer to Federmann and Federmann shall take a Transfer from
Koor of all the Offered Shares, Free and Clear, for the
consideration and on the terms and conditions detailed in the
Sale Notice, within 7 Business Days of the date on which all
the approvals and permits necessary for such transaction as
aforesaid in accordance with applicable law are obtained and
in any event not later than the expiration of 60 days from the
date the Acceptance Notice is provided (hereinafter the
"COMPLETION PERIOD"). The Parties shall cooperate in order to
obtain all the approvals and permits necessary for the
transaction as aforesaid as soon as possible.
11.4 Should Federmann not provide Koor an Acceptance Notice in
writing by the end of the Acceptance Notice Period or should
Federmann provide an Acceptance Notice but the transaction
mentioned in Clause 11.3 above not be completed by the end of
the Completion Period other than due to a breach of this
Agreement by Koor, Koor may Transfer the Offered Shares to the
Third Party for the consideration and on the payment terms and
other conditions detailed in the Sales Notice, provided that
the transaction for the sale to the Third Party of the Offered
Shares is completed by the expiration of 120 days from the end
of the Acceptance Notice Period or from the end of the
Completion Period, as the case may be (hereinafter the
"MAXIMUM SALES PERIOD"), all subject to the provisions of
Clauses 12.1 to 12.3 below.
11.5 For the avoidance of doubt, should the transaction for the
sale of the Offered Shares to the Third Party not be completed
by the end of the Maximum Sales Period, Koor may only Transfer
the Offered Shares after again providing a Right of First
Refusal to Federmann as provided above in this Clause 11.
11.6 From the end of the Prohibited Sales Period, the provisions of
Clauses 11.1 to 11.5 above shall not apply with respect to a
Stock Exchange sale of the Koor Shares by Koor in aggregate
quantities not exceeding in any 12-month period 2% of the
Company's issued share capital.
11.7 Notwithstanding the provision of Clause 11.6 above, Koor may
not Transfer, pursuant to Clause 11.6 above, in the aggregate,
more than 300,000 of the Koor Shares that are held by it:
11.7.1 unless Federmann Transfers more than 650,000 of the
Federmann Shares, except on a Transfer subject to
Koor's Tag-Along Right pursuant to Clause 9 above,
and except for a Transfer to a person or entity, the
Shares held by which are deemed as held by Federmann
in accordance with the provisions of Clause 17.6
below; or
11.7.2 unless the quantity of the Federmann Shares together
with the Koor Shares falls below 45% of the Company's
issued share capital, other than as a result of a
breach of this Agreement by Koor.
12. TRANSFER OF SHARES AND OBLIGATIONS PURSUANT TO THE AGREEMENT
Without derogating from the other provisions of this Agreement,
including Clause 7 above, it is agreed that on any Transfer of the
Federmann Shares by Federmann that is subject to Koor's Tag-Along Right
under Clause 9 above, and on any Transfer of the Koor Shares by Koor
that is subject to Federmann's Right of First Refusal under Clause 11
above (hereinafter in this Clause 12 the "SHARES BEING Transferred",
and Koor and Federmann being respectively the "TRANSFEROR PARTY"), the
following provisions shall apply:
12.1 If the Transferor Party wishes to Transfer all the Federmann
Shares or all the Koor Shares, as the case may be, the
Transferor Party may not do so and such a Transfer shall be
ineffective unless the Transferor Party Transfers and assigns
to the transferee the Shares Being Transferred (in this Clause
12 the "PURCHASER"), together with the Transfer of the Shares
Being Transferred, all the rights and obligations of the
Transferor Party pursuant to this Agreement, and the Purchaser
and the Transferor Party so confirm in writing to the other
Party as provided in Clause 12.3 below. On completion of the
assignment and Transfer of all the Transferor Party's rights
and obligations as aforesaid, the Transferor Party shall cease
being a Party to this Agreement and shall be succeeded by the
Purchaser.
12.2 If the Transferor Party wishes to Transfer only a portion of
the Federmann Shares or only a portion of the Koor Shares, as
the case may be, then the Transferor Party may not do so and
such a Transfer shall be ineffective, unless, together with
the Transfer of the Shares being Transferred, the Purchaser
assumes all the obligations of the Transferor Party jointly
and severally with the Transferor Party and confirms said
obligation in writing to the other Party as provided in
Clause 12.3 below. For the avoidance of doubt, it is clarified
that the Transferor shall continue to be entitled as against
the other Party to all the rights vested in the Federmann
Shares or the Koor Shares, as the case may be, that are held
by it.
12.3 In the event that Koor is the Transferor Party, Koor shall
provide Federmann, together with the Sales Notice as mentioned
in Clause 11.1 above, the written confirmation of Koor and the
Purchaser as provided in Clause 12.1 above or the written
confirmation of the Purchaser as provided in Clause 12.2
above, as the case may be, duly signed by the Purchaser and/or
Koor, as the case may be.
In the event that Federmann is the Transferor Party, Federmann
shall provide Koor, within 2 Business Days of signing an
agreement with the Purchaser for the Transfer of the Offered
Shares, as provided in Clause 9.4 or Clause 9.7 above, the
written confirmation of the Purchaser, as provided in Clause
12.1 above or the written confirmation of Federmann and the
Purchaser, as provided in Clause 12.2 above, as the case may
be, duly signed by the Purchaser and/or Federmann, as the case
may be.
12.4 In addition to the foregoing, even in a case or cases in which
Federmann Transfers any of the Federmann Shares that are held
by it, the Transfer of which is not subject to Koor's
Tag-Along Right pursuant to Clause 9 above, Federmann may, if
it so desires, assign and Transfer its obligations pursuant to
this Agreement or any of them so that the transferee of the
Shares and Federmann shall be jointly and severally liable to
Koor for all the obligations pursuant to this Agreement or a
portion of them, in such proportion as determined between
Federmann and the transferee of the Shares. For the avoidance
of doubt, Federmann may exercise its right to assign and
Transfer all or any of its obligations as provided in this
Clause 12.4 together with a Transfer of any of the Federmann
Shares, once or several times, in its discretion.
13. LIMITATION ON RESTRICTIONS AND RIGHTS
The limitations imposed with respect to a Share Transfer and the rights
vested in the Parties in connection with a Share Transfer pursuant to
Clauses 9 to 12 above only apply to the Federmann Shares and the Koor
Shares, and those limitations and rights shall not apply with respect
to other Shares in the Company that may be held by Federmann or Koor,
as the case may be.
14. TAG-ALONG RIGHT TO PURCHASE
Should a Party to this Agreement (in this Clause 14 the "PURCHASING
PARTY") directly or indirectly, including through subsidiaries and/or
any trustee, acquire Shares of the Company for total consideration in
excess of US$ 25 million (in this Clause 14 the "PURCHASED SHARES")
from a Single Third Party, as defined in Clause 9.6 above (in this
Clause 14 the "SELLER"), whether or not on the Stock Exchange (in this
Clause 14 the "PURCHASE TRANSACTION"), the other Party to the Agreement
(in this Clause 14 the "OTHER PARTY") shall have a right to tag along
on such Acquisition as aforesaid, on the terms of the Purchase
Transaction, and to acquire a portion of the securities that are being
purchased (in this Clause 14 the "PURCHASE TAG-ALONG RIGHT") in
accordance with the provisions set out below:
14.1 The Purchasing Party shall provide the other Party written
notice within 3 Business Days of the completion of the
Purchase Transaction, detailing the terms of the Purchase
Transaction that it has made, including the quantity of
additional Shares, the price (which shall only be cash
consideration), the payment terms, the Seller's identity and
every other material condition (in this Clause 14 the
"SELLER'S NOTICE").
14.2 Within 14 Business Days of receiving the Purchaser's notice,
the Other Party shall give the Purchasing Party written notice
if it is tagging along in the Purchase Transaction and of the
quantity of Shares, out of the additional Shares, that it
wishes to purchase, not exceeding such quantity the ratio
between which it and the rest of the additional Shares is
equal to the ratio:
(i) if Koor is the Other Party - between the Koor Shares
that are held by Koor on the date the Purchaser's
notice is given and the Federmann Shares that are
held by Federmann on the date the Purchaser's notice
is given;
(ii) if Federmann is the Other Party - between the
Federmann Shares that are held by Federmann on the
date the Purchaser's notice is given and the Koor
Shares that are held by Koor on the date the
Purchaser's notice is given.
14.3 Should the Other Party give the Purchasing Party Tag-Along
notice at such time as mentioned in Clause 14.2 above, the
Purchasing Party shall Transfer to the Other Party Shares of
the Company in the quantity specified in the Tag-Along notice,
Free and Clear, for the consideration and on the terms
detailed in the Purchaser's notice, all within 7 Business Days
of the date of giving the Tag-Along notice.
15. TERM OF THE AGREEMENT AND EFFECT OF THE AGREEMENT
15.1 This Agreement shall take effect on the First Closing Date.
Should Stage `A' of the Transaction (as the term is defined in
the Deed of Sale) not be performed and completed by the end of
3 Business Days after the Stage `A' Completion Deadline (as
defined in the Deed of Sale), then this Agreement shall be
null and void and ineffective, without either of the Parties
having any claim, complaint or demand against the other.
15.2 This Agreement shall be in effect until the end of a period of
15 years from the date on which it enters into effect as
provided in Clause 15.1 above or until such time as
Federmann's holdings of the Federmann Shares together with
Koor's holdings of the Koor Shares fall below 25% of the
Company's issued share capital, whichever is the earlier.
15.3 For the avoidance of doubt, it is clarified that this
Agreement shall not come to an end if Koor or Federmann ceases
to hold Koor Shares or the Federmann Shares, as the case may
be, if together with a Transfer of the remainder of the
Federmann Shares or the Koor Shares, as the case may be, the
Transferor Party (as defined in Clause 12 above) Transferred
and assigned all its rights and obligations pursuant to this
Agreement to the Purchaser (as defined in Clause 12 above),
and the provisions of this Agreement shall continue to apply
and obligate the Purchaser and the Other Party.
16. KOOR'S WITHDRAWAL FROM THE CONTROLLING INTEREST
16.1 Koor may at any time from October 1, 2008, provide written
notice to Federmann in which it shall inform Federmann of
Koor's desire to bring to an end its rights and obligations
pursuant to Clauses 4, 6 (if Koor is entitled to rights
pursuant to Clause 6 at that time), 7, 8, 9, 10, 11 (except
for Clauses 11.6 and 11.7), 12, 13 and 14 of this Agreement
(hereinafter in this Clause 16 the "REVOKED CLAUSES"), and on
the expiration of 6 months from the date on which Federmann is
given Koor's written notice as aforesaid (hereinafter in this
Clause 16 the "EXPIRATION DATE"), all the Parties' rights and
obligations pursuant to the Revoked Clauses shall expire so
that the sole rights and obligations that will continue to
obligate and entitle the Parties pursuant to this Agreement
shall be the rights and obligations in Clause 5 above and this
Clause 16, all without prejudice to either of the Party's
rights to any relief in respect of a breach of any of the
provisions of the Revoked Clauses that occurred prior to the
Expiration Date.
16.2 Should such notice be given by Koor and to the extent that
Federmann so wishes, the Parties shall discuss the possibility
of Koor's Shares that are held by Koor at that time being
acquired by Federmann, alone
or together with others, without the provisions of this Clause
being such as to obligate either of the Parties to enter into
such a purchase agreement or to permit Koor to Transfer the
Koor Shares otherwise than in accordance with the provisions
of Clauses 16.3 and 16.4 below.
16.3 As from the Expiration Date, Koor may Transfer all or any of
the Koor Shares that are held by it in any way, either by a
Stock Exchange sale or otherwise, including a distribution in
kind to its shareholders, subject nevertheless to Federmann's
Right of First Offer as provided in Clause 16.4 below or in
accordance with the provisions of Clauses 11.6 and 11.7 above.
16.4 Federmann's Right of First Offer
16.4.1 As of the Expiration Date, Koor may not Transfer any
of the Koor Shares unless it first gives Federmann
written notice detailing the quantity of the Koor
Shares that it wishes to transfer (hereinafter the
"OFFERED SHARES").
16.4.2 Federmann may, but is not required to, within 14
Business Days of receiving Koor's notice as aforesaid
(hereinafter in this Clause 16.4 the "OFFER PERIOD"),
provide Koor written notice (hereinafter in this
Clause 16.4 "FEDERMANN'S NOTICE"), informing Koor
that it wishes to purchase from Koor the Offered
Shares or the portion of them as specified by
Federmann in Federmann's Notice (hereinafter in this
Clause 16. the "SHARES FOR PURCHASE") and the price
per Share that it is willing to pay for those Shares
(hereinafter in this Clause 16.4 the "PRICE
Offered").
16.4.3 Within 7 Business Days of Koor's receiving
Federmann's Notice, Koor shall provide Federmann
written notice (hereinafter in this Clause 16.4 the
"KOOR'S NOTICE") if it agrees or if it does not agree
to Transfer to Federmann the Shares for Purchase at
the Price Offered. Should Koor inform Federmann in
Koor's Notice that it agrees to Transfer to Federmann
the Shares for Purchase at the Price Offered, Koor
shall Transfer to Federmann and Federmann shall
accept from Koor a Transfer of the Shares for
Purchase, and Federmann shall pay Koor the Price
Offered, all by the expiration of 21 Business Days
from the date Koor's Notice is received by Federmann
(hereinafter in this Clause 16.4 the "COMPLETION
PERIOD").
16.4.4 Should Koor inform Federmann in Koor's Notice that it
does not agree to Transfer to Federmann the Shares
for Purchase at the Price Offered, Koor may Transfer
the Shares for Purchase to a Third Party or Third
Parties, but only at a price greater than the Price
Offered on the same or more favorable payment terms
to Koor than those specified in Clause 16.4.3 above,
without any further obligation of Koor, all within 90
Business Days of the date Koor's Notice is given. For
the avoidance of doubt, to the extent that the Shares
for Purchase have not been Transferred by Koor to a
Third Party as aforesaid within 90 Business Days of
the date of Koor's notice being provided, Koor may
only Transfer the Shares for Purchase after again
providing Federmann the Right of First Offer as
provided in this Clause 16.4.
16.4.5 Should Federmann not provide Federmann's Notice
within the 14 Business Days mentioned in Clause
16.4.2 above or should Federmann state in Federmann's
Notice that it wishes to acquire only some of the
Offered Shares or if the Transfer of the Shares for
Purchase has not been completed by the end of the
Completion Period, otherwise than due to a breach of
contract by Koor, Koor may, within 90 Business Days
of the date on which Koor's Notice was provided as
provided in Clause 16.4.3 above or from the end of
the Completion Period, as the case may be, sell the
Offered Shares (if Federmann's Notice has not been
provided as aforesaid) or that portion of them that
are not included in the Shares for Purchase (if
Federmann's Notice is provided with respect to only a
portion of the offered Shares).
16.4.6 For the purpose of Clauses 16.4.3 and 16.4.5 above, a
Transfer of Shares by means of their distribution as
a dividend in kind by Koor to its shareholders shall
be deemed as a Transfer of Shares that is made on the
date determining the rights to receive the dividend
in kind by Koor's shareholders, and such Transfer as
aforesaid shall be deemed as though made at the
average closing price of the Company's shares on the
Tel Aviv Stock Exchange in the 12 trading days before
and in the 12 trading days after the date of giving
Koor's written notice as provided in Clause 16.4.1
above.
17. MISCELLANEOUS
17.1 This Agreement may be signed in several separate copies and
each copy signed by one of the Parties shall be treated as an
original and all together they shall be treated as a single,
complete document.
17.2 No conduct by either of the Parties shall be deemed a waiver
of any of its rights pursuant to this Agreement or by law or
as its waiver of or acquiescence to in any breach or
non-performance of any condition, unless the waiver,
acquiescence, postponement, modification, cancellation or
addendum has been done expressly and in writing.
17.3 This Agreement contains, embodies, merges and expresses all
the terms and conditions agreed between the Parties on the
matters mentioned herein. Any promises, guarantees,
agreements, whether written or oral, undertakings or
representations on the matters mentioned in this Agreement
that were given or made by the Parties prior to the making of
this Agreement that have not found specific expression herein
shall not be deemed to augment, derogate from or modify the
rights and obligations provided in this Agreement or deriving
herefrom, and the Parties shall not be bound by them from the
date of this Agreement (hereinafter "REVOCATION OF THE
OBLIGATIONS PRECEDING SIGNATURE"). It is hereby expressly
agreed that the Revocation of the Obligations Preceding
Signature shall be effective even in the event that this
Agreement is revoked or rescinded for any reason. The
foregoing shall not be such as to impair the effect of the
Parties' rights and obligations pursuant to the Sale [sic]
Agreement.
17.4 For the avoidance of doubt, the provisions of the Shareholders
Agreement between Koor and the Company, including wording that
is different from the wording of this Agreement, shall not in
any manner be applied in the interpretation of this Agreement.
Without prejudice to the generality of the foregoing, the
exchanges of documents between the Parties prior to the
signature of this Agreement, including the drafts exchanged
between them, shall have no significance in the interpretation
of this Agreement.
17.5 Except as otherwise provided in this Agreement, the Parties'
rights and obligations pursuant to this Agreement are not
assignable and/or transferable. The provisions of this Clause
are not such as to affect Federmann's right to exercise its
right of first refusal as provided in Clause 11 above by means
of any third party and/or third parties.
17.6 In this Agreement any person or entity shall be deemed as
holding all the Shares held by it, directly or indirectly and,
without prejudice to the generality of the foregoing, all the
Shares held, directly or indirectly, by any related entity and
by any member of his family, as they are defined in the
Securities Law, 5728-1968; and also all the
Shares that are held by any person and/or entity that is
construed in accordance with the provisions of the Securities
Law, 5728-1968 as holding Shares of the Company together with
that person or entity and also all the Shares held through a
trustee and/or registration company, and also all the Shares
that are held by another shareholder of the Company who is
jointly and severally liable with a Party to this Agreement
for the obligations pursuant to this Agreement. Nevertheless,
a Party to this Agreement shall not, for the purpose of this
Agreement, be treated as holding Shares that are held by the
other Party to this Agreement.
17.7 This Agreement shall be governed by the laws of the State of
Israel, without taking into account its choice of law rules.
Exclusive jurisdiction on all matters relating to this
Agreement or deriving herefrom is vested in the competent
courts in the City of Tel Aviv-Jaffa and in them alone.
17.8 Each of the Parties to this Agreement shall bear the legal
expenses that it is charged in respect of this Agreement.
17.9 An obligation to vote by virtue of all of a Party's Shares in
the Company in connection with any resolution in any way also
includes the obligation to participate in the vote by virtue
of all those Shares, and not to vote for any further or other
proposed resolution that is such as to contradict, cancel or
diminish said resolution.
17.10 Without being such as to impose any further limitations on the
Transfer of Shares other than that expressly provided in this
Agreement, each of the Parties undertakes to act in good faith
towards the other and not, by act or omission, to cause the
frustration of this Agreement's provisions or any of them
and/or to make them unrealizable.
17.11 The Parties hereto may extend any time specified in this
Agreement, either once or several times, by written notice
signed by two officers of each Party to this Agreement,
without any further approval being necessary.
18. NOTICES
18.1 The Parties' addresses for the purpose of this Agreement are
as set out in the heading hereto or any other address in
Israel of which one Party gives the other written notice.
18.2 Any notice pursuant to this Agreement shall be in writing and
be sent by registered mail or personal delivery by messenger
to the address of
the relevant Party, as mentioned in Clause 18.1 above, and
that address shall in all respects in connection with this
Agreement also be the address of that Party for the service of
court process.
18.3 Notice that is sent shall be treated as having reached the
addressee and come to its knowledge within five Business Days
if sent by registered mail or, if delivered in person by
messenger by 17:00 hours on any Business Day, it shall be
treated as received on the Business Day after delivery.
IN WITNESS WHEREOF THE PARTIES HAVE EXECUTED THIS AGREEMENT:
___(signed)____________ _______(signed)___________
Koor Industries Ltd. Federmann Enterprises Ltd.
___(signed)__________
Heris Aktiengesellschaft
EXHIBIT 9
[TRANSLATED FROM THE HEBREW]
AMENDMENT TO SHARE TRANSFER DEED
AND SHAREHOLDERS' AGREEMENT
Made and signed in Tel Aviv on the 6th day of July 2005
BETWEEN: 1. FEDERMANN ENTERPRISES LTD
Company Number 512278391
(hereinafter referred to as "FEDERMANN
ENTERPRISES")
2. HERIS AKTIENGESELLSCHAFT
Company Number 560021966
(hereinafter referred to as "HERIS")
whose address for the purpose of this agreement only is:
99 Hayarkon Street, Tel Aviv
(hereinafter jointly and severally referred to as
"FEDERMANN")
of the one part
AND: KOOR INDUSTRIES LTD
Company Number 520014143
of 14 Hamelacha Street, Afek Industry Park, Rosh
Ha'ayin 48091
(hereinafter referred to as "KOOR")
of the other part
(hereinafter referred to as "THE PARTIES")
WHEREAS on 27th December 2004 Federmann Enterprises and Koor
executed a share transfer deed (hereinafter referred to as
"THE FEDERMANN-KOOR DEED"), pursuant whereto it was agreed,
inter alia, that Federmann Enterprises would sell and
transfer to Koor, in two stages, 4,000,000 (four million)
ordinary shares constituting, on the date of signing the
Federmann-Koor Deed, approx. 9.8% of the issued and paid up
share capital of Elbit Systems Ltd (hereinafter referred to
as "THE COMPANY"), all subject to and in accordance with the
provisions of the Federmann-Koor Deed;
WHEREAS on 30th March 2005 Federmann Enterprises and Koor agreed to
extend Stage "A" Completion Deadline (as such expression is
defined in the Federmann-Koor Deed);
WHEREAS on 18th April 2005 a further protocol was executed between
Federmann Enterprises and Koor pursuant whereto they agreed
to extend certain deadlines prescribed in the Federmann-Koor
Deed (hereinafter referred to as "THE PROTOCOL");
WHEREAS on 18th April 2005 Stage "A" of the Transaction (as such
expression is defined in the Federmann-Koor Deed) was
implemented and Federmann Enterprises sold and transferred
the Stage "A" Shares (as such expression is defined in the
Federmann-Koor Deed) to Koor;
WHEREAS on 27th December 2004 the parties signed a shareholders'
agreement that entered into force on 18th April 2005
(hereinafter referred to as "THE SHAREHOLDERS' AGREEMENT");
WHEREAS before the implementation of Stage "B" of the Transaction
(as such expression is defined in the Federmann-Koor Deed
prior to this amendment), the parties agree to reduce the
quantity of Stage "B" Shares (as such expression is defined
in the Federmann-Koor Deed, prior to this amendment) being
transferred and sold from Federmann Enterprises to Koor,
such that instead of 1,840,000 (one million eight hundred
and forty thousand) ordinary shares of the Company, Koor
will purchase from Federmann Enterprises, in Stage "B" of
the Transaction, 1,000,000 (one million) ordinary share of
the Company alone, such that the total number of shares Koor
has purchased and shall purchase from Federmann Enterprises
pursuant to
the provisions of the Federmann-Koor Deed, including the
amendments thereto, shall be 3,160,000 (three million one
hundred and sixty thousand) ordinary shares of the Company
alone;
WHEREAS the parties agree that the implementation of Stage "B" of
the Transaction (as such expression is defined in the
Federmann-Koor Deed) shall not be subject to any condition
precedent, and shall be implemented independently and
regardless of Elbit-Koor Deed Stage "B" (as such expression
is defined in the Federmann-Koor Deed), prior to its
amendment pursuant hereto);
WHEREAS the parties accordingly wish to amend the Federmann-Koor
Deed and the Shareholders' Agreement, as set forth herein;
NOW, THEREFORE, IT IS WARRANTED, PROVIDED AND AGREED BETWEEN THE PARTIES AS
FOLLOWS:
1. The recitals to this amendment constitute an integral part hereof.
2. The expressions and definitions adopted in this amendment shall bear
the meanings attributed to them in the Federmann-Koor Deed, after its
amendment pursuant hereto, unless expressly stated otherwise.
3. Each of the parties warrants and undertakes as follows:
3.1 that it is authorized to execute this amendment and perform
its obligations pursuant hereto and that those signing this
amendment on its behalf are legally authorized to bind it;
3.2 that there is no impediment at law and/or pursuant to its
documents of incorporation and/or pursuant to any court
order or instruction and/or any contract and/or consent
and/or agreement to which it is a party to its executing
this amendment and performing all its obligations pursuant
hereto;
3.3 that it has all the approvals and consents required for the
purpose of executing and implementing this amendment.
4. The parties agree to effect the amendments to the Federmann-Koor Deed,
as marked with revision marks on the Federmann-Koor Deed annexed
hereto as APPENDIX "A1" and constituting an integral part hereof. In
addition, for the parties' convenience, a clean copy (without revision
marks) of the Federmann-
Koor Deed, after its amendment pursuant hereto, is annexed hereto as
APPENDIX "A2". In the event of any contradiction between the
provisions of APPENDIX "A1" hereto and the provisions of APPENDIX "A2"
hereto, only the provisions of APPENDIX "A1" shall apply to and bind
the parties.
5. The parties agree to effect all the amendments in the Shareholders'
Agreement, as marked with revision marks on the Shareholders'
Agreement annexed hereto as APPENDIX "B1" and constituting an integral
part hereof. In addition, for the parties' convenience, a clean copy
(without revision marks) of the Shareholders' Agreement, after its
amendment pursuant hereto, is annexed hereto as APPENDIX "B2". In the
event of any contradiction between the provisions of APPENDIX "B1"
hereto and the provisions of APPENDIX "B2" hereto, only the provisions
of APPENDIX "B1" shall apply to and bind the parties.
6. In the event of any contradiction between the provisions of the
Federmann-Koor Deed, the provisions of the Shareholders' Agreement and
the provisions of this amendment, the provisions of the amendment
shall prevail, unless expressly stated otherwise, provided that the
provisions of the Federmann-Koor Deed and the provisions of the
Shareholders' Agreement, that have not been expressly amended in this
amendment and its appendices, shall remain unchanged.
AS WITNESS THE HANDS OF THE PARTIES
______(signed)_________ ________(signed)_________
Koor Industries Ltd Federmann Enterprises Ltd
By: Jonathan Kolber, Danny Biran By: Michael Federmann, Dov Ninve
________(signed)____________
Heris Aktiengesellschaft
By: Michael Federmann
ADVOCATE'S CERTIFICATE
I, Shlomo Heller, Adv., hereby certify that Messrs Jonathan Kolber and Danny
Biran, jointly, are authorised to sign, on behalf of Koor Industries Ltd, this
deed and the documents ancillary thereto or required for the object of
implementing it.
____(signed)________________
Sholomo Heller, Adv.
ADVOCATE'S CERTIFICATE
I, Michal Bachrach, Adv., hereby certify that Messrs Michael Federmann and Dov
Ninve, jointly, are authorised to sign, on behalf of Federmann Enterprises Ltd,
this deed and the documents ancillary thereto or required for the object of
implementing it.
____(signed)________________
Michal Bachrach, Adv.
ADVOCATE'S CERTIFICATE
I, Michal Bachrach, Adv., hereby certify that Mr. Michael Federmann is
authorised to sign, on behalf of HERIS AKTIENGESELLSCH, this deed and the
documents ancillary thereto or required for the object of implementing it.
____(signed)________________
Michal Bachrach, Adv.