EXHIBIT 99.2
EXECUTION COPY
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ASSET PURCHASE AGREEMENT
BY AND AMONG
Ampal Communication 2010 Ltd.
as Purchaser
AND
012 Smile.Communications Ltd.
as Seller
AND
Merhav Ampal Energy Ltd.
as Guarantor
Dated as of November 16, 2009
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of November 16, 2009
(the "Effective Date"), is made by and among 012 Smile Communications Ltd., a
company incorporated in accordance with the laws of the State of Israel (the
"Seller"); Merhav Ampal Energy Ltd. on behalf of Ampal Communication 2010 Ltd.,
a company in formation in accordance with the laws of the State of Israel (the
"Purchaser"); and Merhav Ampal Energy Ltd., a company incorporated in accordance
with the laws of the State of Israel (the "Guarantor"). The Seller, the
Purchaser and the Guarantor are referred to herein collectively, as "Parties",
and each of them, separately, as a "Party".
RECITALS
A. The Seller is engaged in the Business (as defined below).
B. The Purchaser wishes to acquire from the Seller, and the Seller wishes to
sell to the Purchaser, the Business and the Acquired Assets (as defined
below), and the Purchaser wishes to assume and the Seller wishes to
transfer the Assumed Liabilities (as defined below), all on the terms and
subject to the conditions and the conditions precedents hereinafter set
forth.
C. The Parties wish to set forth herein all of the terms and conditions that
shall govern the sale and purchase of the Acquired Assets and the
assumption of the Assumed Liabilities.
D. The Parties are aware that the prompt consummation of the transactions
contemplated hereby is of the essence.
NOW, THEREFORE, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties, and covenants
herein contained, and intending to be legally bound hereby, the Parties agree as
follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions. In this Agreement, the following terms shall have
the following meanings:
"Accounts Receivable" means all accounts receivable, notes receivable
and other current rights to payment of Seller.
"Acquired Assets" shall mean all of Seller's assets, properties,
contracts, licenses and permits and rights of every kind and description,
tangible and intangible, including any assets, properties and rights used in
connection with the Business as it exists (subject to Section 3.4) or shall
exist on the Closing, wherever situated, and excluding only the Excluded Assets.
Without limiting the foregoing, the Acquired Assets shall include:
(a) the Seller's holdings in 012 Telecom Ltd., the subsidiary of
Seller, and the Seller's interest in 012 Global, including
shareholder loans;
(b) all machinery, equipment and other tangible personal property and
fixed assets used to conduct the Business;
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(c) all inventories of Seller related to the Business, including raw
materials, supplies, goods consigned to vendors or
subcontractors, works in process, finished goods and goods in
transit;
(d) all Accounts Receivable related to the Business;
(e) all prepaid expenses related to the Business;
(f) all rights and interests of Seller in and to the leases,
subleases, licenses, sublicenses, contracts, commitments,
obligations or other agreements, whether written or oral, or
other similar agreements and rights thereunder, including
contracts for the purchase of supplies and services and the sale
of products and services, used to conduct the Business, and
including the Leases and leasehold improvements ("Contracts");
(g) the business records, plans, notebooks, specifications,
advertising and promotional materials and campaigns, studies,
reports, equipment repair, maintenance or service records, in
each case as used by Seller for operating the Business; provided
that Seller shall be entitled to maintain (but, other than as
required by law, shall not use) one copy of any of such documents
for the sole purpose of either retention as required by any
applicable Legal Requirement or litigation or dispute of this
Agreement;
(h) all Intellectual Property Rights related to the conduct of the
Business, including all registrations (and applications for
registration) of Intellectual Property Rights (collectively, the
"Business Intellectual Property Rights");
(i) all Government Authorizations and other permits or licenses
related to the Business, including the Licenses (except in such
case where the license, permit or authorization is replaced or
exchanged for a newly issued License);
(j) all lists and records pertaining to customer accounts (whether
past or current), suppliers, distributors, personnel and agents
of the Business;
(k) all claims, deposits, prepayments, warranties, guarantees,
refunds, causes of action, rights of recovery, rights of set-off
and rights of recoupment of every kind and nature, whether
liquidated or unliquidated, fixed or contingent, that relate to
the Business (in each case except for Tax items that relate to
periods ending on or before the Cutoff Date), including any
causes of action, claims and rights which Seller may have under
any insurance contracts or policies insuring the Acquired Assets;
and
(l) the Positive Cash Amount (as defined in Section 3.4).
"Affiliate" shall mean a person Controlling, Controlled by or under
common Control with a person, and if such person first stated above is a natural
person, a relative of such person.
"Antitrust Approval" shall be as defined in Section 5.1(ii).
"Assumed Liabilities" shall mean all of Seller's present or future
liabilities and obligations of every kind arising out of, relating to, in the
nature of or caused by the Business, including legal claims of third parties,
regardless of whether such liabilities arise or become known before or after the
Effective Date, excluding only the Retained Liabilities. Without limiting the
foregoing, the Assumed Liabilities shall include all liabilities of any kind
relating to employees of the Seller or the Business other than those employees
who are not Assumed Employees (as set forth in Section 9.1). and shall include
the replacement of any guarantees given by Seller with respect to Acquired
Assets.
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"Bezeq" means Bezeq - The Israeli Telecommunication Corporation Ltd.
"Bezeq Transaction" means the acquisition of Bezeq shares from ▇▇.▇▇.▇▇
Holdings Ltd. ("APSBAR") pursuant to that certain Share Purchase Agreement,
dated October 25, 2009 by and between Seller and APSBAR.
"Business" shall mean all of the business of the Seller as conducted on
the date of this Agreement other than the Bezeq Transaction. Such Business shall
include, without limitation, as defined below, the International Telephony
Business, the Land Line Business, the ISP Business and the Other Business.
"Business Day" shall mean any day on which banks are open for business in
the State of Israel.
"Closing" and "Closing Date" shall be as defined in Section 4.
"Consent" shall mean any regulatory consent, permit, approval, order,
authorization, registration, declaration, filing or exemption, to the extent
required under applicable law (but not as a matter of contract).
"Control" or "Controlled" or "Controlling" shall mean the ability,
directly or indirectly, to direct the activities of the relevant entity,
including, without limitation, the holding of (i) more than 50% of the issued
share capital, or (ii) such share capital as carries directly or indirectly,
more than 50% of the shareholder votes in a general meeting or the ability to
appoint or elect more than 50% of the directors or equivalent of such entity.
"Cut-off Date" shall mean December 31, 2009.
"Damages" shall mean any liabilities, claims, injuries, losses, damages,
settlements, judgments, awards, penalties, fines, costs or expenses (including,
without limitation, reasonable legal fees and expenses), whether or not arising
out of third party claims.
"Dollar" or "$" means U.S. Dollars.
"End Date" shall have the meaning ascribed thereto in Section 10.1(b).
"Exchange Act" shall mean the U.S. Securities Exchange Act of 1934, as
amended.
"Excluded Assets" shall mean (a) the corporate seal, charter documents,
minute books, stock books, tax returns, books of account or other records having
to do with the corporate organization of Seller, (b) the rights that accrue or
may accrue to Seller under this Agreement, (c) the Retained Cash (as defined in
Section 3.4) and other derivative instruments (forward USD contracts) of the
Seller, (d) any additional cash, cash equivalents and marketable securities that
are obtained by Seller (or any Subsidiary thereof), including by way of existing
or future loans or equity investments from Affiliates or third parties, not
generated as part of the Business, (e) any tax assets (including without
limitation advance tax payments) relating to periods prior to the Cutoff Date,
(f) any assets related to the Bezeq Transaction, as set forth on Schedule 1.1
hereto (which may be amended by the Seller from time to time prior to the
Closing); and (g) certain components or possible components of the Excluded
Assets as are set forth in Schedule 1.1 hereto.
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"Family Member" shall mean, in respect of a natural Person, (i) a spouse
of such Person; (ii) a descendant of such Person or of such Person's spouse;
(iii) such Person's brother or sister, or (iv) a spouse of any of the Persons
referred to in clauses (ii) or (iii) above.
"Governmental Authorization" shall mean any permit, license, certificate,
franchise, permission, clearance, registration, approval, consent, qualification
or authorization issued, granted, given or otherwise made available by or under
the authority of any Governmental Entity or pursuant to any Legal Requirement.
"Governmental Entity" shall mean any government, governmental department,
ministry, cabinet, commission, board, bureau, agency, tribunal, regulatory
authority, instrumentality, judicial, legislative or administrative body or
entity, domestic or foreign, federal, national, state, regional, provincial or
local, having or exercising jurisdiction over the matter or matters in question.
"Initial End Date" shall have the meaning ascribed thereto in Section
10.1(b).
"Intellectual Property Rights" means all intellectual property and
proprietary rights throughout the world, including (i) all trademark rights,
trade dress, service marks and trade names; (ii) all copyrights and all other
rights associated therewith and the underlying works of authorship; (iii) all
patents and all proprietary rights associated therewith; (iv) all inventions,
mask works and mask work registrations, net lists, schematics, enhancements,
designs, improvements, know how, discoveries, improvements, designs, trade
secrets, computer software programs or applications (in both source code and
object code form), flow charts, diagrams, coding sheets, listings and
annotations, programmers' notes, information, work papers, work product; and (v)
all registrations of any of the foregoing, all applications therefor, all
documentation and all goodwill associated with any of the foregoing.
"International Telephony Business" shall mean the businesses of outgoing
and incoming international telephony services, of hubbing services, and of
international calling card services and any other operations and activities
conducted by Seller, including other data and other related services, pursuant
to Seller's international services license dated June 2, 2004.
"ISP Business" shall mean the businesses of the ADSL/cable/dial-up
Internet and access services, the value-added services and the WiFi services and
any other operations and activities, including all other related services,
conducted by Seller pursuant to its internet access license dated January 24,
2002.
"Knowledge" shall mean, with respect to any Entity, with respect to any
fact, circumstance, event or other matter in question, the actual knowledge of
the executive officers of the Entity after reasonable and diligent inquiry.
"Land Line Business" shall mean the businesses of local telephony using
VoB access and local telephony using dedicated lines based on PRI services and
any other operations and activities conducted by Seller and its subsidiary
pursuant to the domestic fixed-line license, dated December 15, 2005, of 012
Telecom Ltd.
"Leases" shall mean all of Seller's right, title and interest in each of
that certain Real Estate Lease Agreements including the right to any security
deposits and other amounts and instruments deposited by or on behalf of Seller
thereunder.
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"Legal Proceeding" shall mean any action, suit, litigation, arbitration,
proceeding (including any civil, criminal, administrative, investigative or
appellate proceeding), hearing, inquiry, audit, examination or investigation
commenced, brought, conducted or heard by or before, or otherwise involving, any
court or other Governmental Entity or any arbitrator or arbitration panel.
"Legal Requirement" shall mean any federal, state, local, municipal,
foreign or other law, statute, constitution, principle of common law,
resolution, ordinance, code, edict, decree, rule, order, judgment, regulation,
ruling or requirement issued, enacted, adopted, promulgated, implemented or
otherwise put into effect by or under the authority of any Governmental Entity.
"Licenses" shall mean the following licenses granted by the MoC (as
defined below) to the Seller and/or its Affiliates, as amended from time to
time:
(a) International telephony license (general license) (b) VoB and DFL license
(general specific license) (c) ISP license (specific license) (d) Endpoint
Network Services (e) VoBoC experimental license
"MoC" shall mean the Israeli Ministry of Communications.
"NIS" means New Israeli Shekels.
"Other Businesses" shall mean the businesses related to end-point network
services (and any other operations and activities conducted by Seller pursuant
to the network end-point licence, dated December 30, 2007, of Seller), and the
VoBoC and WiFi experimental services of Seller and 012 Telecom Ltd.
"Permitted Liens" means: (A) statutory liens for taxes not yet due and
payable; (B) statutory liens to secure obligations to landlords, lessors or
renters under leases or rental agreements which obligations are not yet due; (C)
deposits or pledges made in connection with, or to secure payment of, workers'
compensation, unemployment insurance or similar programs mandated by applicable
law; (D) statutory liens in favor of carriers, warehousemen, mechanics and
materialmen, to secure claims for labor, materials or supplies and other like
liens incurred in the ordinary course of business and not yet due; (E) liens in
favor of customs and revenue authorities arising as a matter of law to secure
payments of customs duties in connection with the importation of goods not yet
due and payable; (F) non-exclusive object code licenses of software by Seller in
the ordinary course of its business consistent with past practice; and (G)
rights of third parties that are inherent to assets being transferred (such as
software licenses, leased cars, contractual rights, etc.); provided, however,
that Permitted Liens shall not, for the avoidance of doubt, include liens
created for the benefit of financial institutions.
"Person" shall mean any individual, firm, corporation (including any
nonprofit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organisation (including
unincorporated organisation), other entity or governmental authority.
"Purchaser Indemnitees" means any of Purchaser and its Representatives,
successors and assigns.
"Representatives" means officers, directors, employees, agents,
attorneys, accountants, advisors and representatives.
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"Retained Liabilities" shall mean obligations and liabilities resulting
from, arising out of, relating to, in the nature of or caused by (a) any
indebtedness of Seller under its Series A Debentures; (b) any other borrowings
of the Seller from any third party financial institution or other financial
lenders including Affiliates (including from its direct or indirect parent
company); (c) any liabilities in connection with the Bezeq Transaction; (d) all
liabilities for Taxes for periods ending on or before the Cut-off Date; (e)
Excluded Asset; (f) certain employment and employee benefits-related claims,
obligations and liabilities for employees who are not Assumed Employees as set
forth in Section 9 hereof, (g) fees, costs or expenses incurred by Seller in
connection with the preparation, negotiation, execution, delivery and
performance of this Agreement and the other transactions contemplated hereby;
(h) other derivative instruments (forward USD contracts) of the Seller; and (i)
as set forth in Schedule 1.2 hereto.
"Security Interest" shall mean any mortgage, charge, lien, trust,
encumbrance, pledge, assignment, title retention, claim, right of first refusal,
preemptive right or any other encumbrance of whatever nature, kind or
description.
"Seller Indemnitees" means any of Seller and its Representatives,
successors and assigns.
"Subsidiary" shall mean a corporation, partnership, limited liability
company, or other entity of which an entity directly or indirectly owns or
Controls (i) a majority of the voting securities; or (ii) interests that are
sufficient to elect or appoint a majority of the Board of Directors or other
comparable organ of such Person.
"Tax" or "Taxes" shall mean federal, state, local or foreign net or gross
income, gross receipts, social security, national health insurance, capital
gains, license, payroll, employment, excise, severance, stamp, occupation,
premium, customs duties, capital stock, franchise, profits, withholding,
unemployment, disability, real property, personal property, sales, use, offer,
registration, value added, alternative or add-on minimum, estimated or other
tax, governmental fee or like assessment or charge of any kind whatsoever,
including any interest, penalty or addition thereto, whether disputed or not.
"Tax Returns" shall mean all reports, returns, declarations, statements,
claim for refund, or information return or statement relating or other
information required to be supplied to a taxing authority in connection with
Taxes, including any schedule or attachment thereto, and including any
amendments thereof.
"U.S. GAAP" means generally accepted accounting principles in the United
States of America.
1.2 General Interpretation. The paragraph headings are for the sake of
convenience only and shall not affect the interpretation of this Agreement. The
recitals, schedules, appendices, annexes and exhibits hereto form an integral
part of this Agreement. The Parties agree that they have been represented by
counsel during the negotiation and execution of this Agreement and, therefore,
waive the application of any law, holding or rule of construction providing that
ambiguities in an agreement or other document shall be construed against the
Party drafting such agreement or document. The words "include," "includes" and
"including" when used herein shall be deemed in each case to be followed by the
words "without limitation."
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2. ACQUISITION OF ASSETS; ASSUMPTION OF LIABILITIES
2.1 Purchase of Assets. Subject to the terms and conditions of this
Agreement, at the Closing, the Seller shall, and the Seller shall cause its
Affiliates (to the extent necessary) to, sell, assign, transfer and convey to
the Purchaser, and the Purchaser shall purchase and acquire, assume and accept,
all right, title and interest of Seller or its Affiliates in and to all of the
Acquired Assets, free and clear from any Security Interests (for the avoidance
of doubt, including necessary consents from financial institutions), other than
Permitted Liens.
2.2. Assumed Liabilities. Subject to the terms and conditions of this
Agreement, at the Closing, the Purchaser shall assume and agree to pay,
discharge or perform, as appropriate, the Assumed Liabilities and the Seller
shall have no other obligations in connection therewith.
2.3 Excluded Assets and Retained Liabilities. The Seller shall not
transfer, or be deemed to transfer, the Excluded Assets and the Purchaser shall
not assume, or be deemed to have assumed, the Retained Liabilities.
2.4 Non-Transferable Assets. To the extent that Seller's rights to any
Acquired Assets may not be sold or assigned to the Purchaser without the consent
of another person that has not been obtained at or prior to Closing or if such
sale or assignment would constitute a violation of any contract constituting or
relating to an Acquired Asset, or a violation of any Legal Requirement, this
Agreement shall not constitute an agreement to sell or assign the same, and such
Acquired Asset shall remain in the Seller's ownership and shall not be sold,
assigned, transferred, conveyed or delivered hereunder, nor shall any liability
constituting or relating to such Acquired Asset be assumed by Purchaser. Any
such Acquired Asset shall be referred to herein as a "Non-Transferable Asset".
In such event:
2.4.1 Both before and after the Closing Date, the parties
shall exercise their reasonable best efforts to obtain any consents so as to
transfer each such Non-Transferable Asset to Purchaser without modifying,
amending or burdening such Non-Transferable Asset in any material respect.
2.4.2 To the extent that on the Closing Date there is any
Non-Transferable Asset outstanding, the Seller shall, from and after the Closing
Date, use its reasonable commercial efforts to obtain any such required consents
as promptly as possible, with any expenses involved to be borne by the Party
handling the matter. If any such Consent shall not be obtained or if any
attempted assignment would be ineffective in whole or in part, Seller shall
cooperate with Purchaser in any reasonable and lawful arrangement designed to
provide the Purchaser the benefits and use of such asset for which the consent
was not obtained. Such arrangements may include, with the consent of Purchaser,
terminating the Non-Transferable Asset between the Seller and the relevant third
party and the entry into a new contract by Purchaser with such third party on
substantially the same terms or a subcontract of the Non-Transferable Asset to
Purchaser. In particular, with regard to contracts which are Non-Transferable
Assets, Seller will, to the extent practicable and subject to applicable law:
(i) provide to the Purchaser all of the benefits of the applicable contract;
(ii) cooperate in any reasonable and lawful arrangement designed to provide such
benefits to the Purchaser; and (iii) enforce at the request of the Purchaser and
for the account of Purchaser, any rights of the Seller arising from any such
contract. In addition, with regard to liabilities falling within the definition
of Assumed Liabilities that cannot be assigned or assumed, Purchaser shall
indemnify Seller for all such liabilities as set forth in Section 12 hereto.
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2.4.3 In the event that Purchaser is provided all of the
benefits received by the Seller under any contract pursuant to the foregoing
paragraph, the Purchaser shall perform and discharge when due the obligations,
and assume the liabilities of the Seller under such contract to the extent
arising out of relating to the Business.
2.4.4 For the avoidance of doubt, the Non-Transferable Assets,
if any, shall not include any of the consents that are required closing
conditions set forth in Section 5.
2.5 Further Assurances. From time to time after the Closing, Seller shall
execute and deliver such other instruments of transfer and documents related
thereto and take such other action as may be necessary or reasonably requested
by Purchaser in order to more effectively transfer to Purchaser, and to place
Purchaser in possession and control of, the Acquired Assets. Purchaser shall
take such actions as may be necessary or reasonably requested by Seller in order
to assure Purchaser's assumption of the Assumed Liabilities.
2.6 Effect of Absence of Consent. Other than the closing conditions set
forth in Section 5 (including without limitation Section 5.2) and without
derogating from Section 2.4 and Section 6.8, the absence of any consent,
approval or authorization of any third party for the transaction contemplated
hereby shall not constitute a condition precedent for Closing, a ground for
terminating or not consummating this Agreement or the transactions contemplated
hereby, or a breach of this Agreement, and the Purchaser fully accepts upon
itself all risks in connection with the absence of any such consent, approval or
authorization.
3. CONSIDERATION AND PAYMENT
3.1. Purchase Price. As consideration for the sale of the Acquired Assets
and the assumption of the Assumed Liabilities by Purchaser, at the Closing, the
Purchaser shall pay to the Seller, by wire transfer of immediately available
funds to an account designated in writing by Seller, NIS 1,200,000,000 (One
Billion Two Hundred Million New Israeli Shekels) (the "Purchase Price").
3.2 VAT. VAT shall be added to the Purchase Price, as applicable, and
shall be paid by Purchaser against an invoice issued by the Seller. The parties
will use commercially reasonable efforts to cooperate with each other to obtain
any available reduction or exemption from such VAT or other Taxes (including, by
way of example, assistance with regard to production of any applicable resale
certificate, resale purchase exemption certificate or other certificate or
document of exemption required or appropriate to reduce or eliminate such VAT or
other Taxes) or any available refund of such VAT or other Taxes. For the
avoidance of doubt, obtaining any such reduction or exemption shall not be a
condition to the Closing.
3.3 Tax Withholding. Purchaser shall be entitled to deduct and withhold
from any consideration payable or otherwise deliverable pursuant to this
Agreement to Seller such amounts as may be required to be deducted or withheld
therefrom under any applicable law, including the Israeli Tax Ordinance, unless
Purchaser received from Seller a certificate or ruling from the ITA providing
for an exemption or other reduction from such withholding or deduction which can
be relied upon by Purchaser and which is presented at least seven days prior to
the time that the applicable payment of consideration is due to be made. To the
extent such amounts are so deducted or withheld, such amounts shall be treated
for all purposes of this Agreement as having been delivered and paid to Seller
and Purchaser shall provide to Seller reasonably requested documentation
evidencing such deduction or withholding.
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3.4 Cash Adjustments. Cash, cash equivalents and marketable securities
and derivative instruments (collectively, "Cash") of the Seller and its
Subsidiaries as of the Cut-off Date shall be retained by Seller as part of the
Excluded Assets (the "Retained Cash"). Any income or losses, including Cash, of
the Business after the Cut-off Date shall be for the account of the Purchaser.
Without derogating from the foregoing, the Purchaser (i) understands that
outside of the operations in the ordinary course of the Business, the Seller
will continue to collect cash, cash equivalents and marketable securities and
derivative instruments for the purpose of consummating the Bezeq Transaction,
including, without limitation, through shareholder loans, shareholder
investments and financial loans, (ii) acknowledges that it has no rights to any
such assets (and has no liability for any liabilities related thereto), and
(iii) all such assets shall be part of the Excluded Assets.
If during the period from the Cut-off Date until the Closing the
Business generates a positive Cash amount, then the Seller shall transfer such
positive amount to the Purchaser as part of the Acquired Assets ("Positive Cash
Amount"). If during the period from the Cut-off Date until the Closing the
Business generates a negative Cash amount and hence such amounts were financed
by the Seller during such period, the Purchaser will transfer such amount to the
Seller within 14 days after the Closing. At Purchaser's request, if the Acquired
Assets include cash of less than NIS 10,000,000, the Seller will provide
Purchaser at Closing with a non-interest bearing loan of up to an amount
required to bring such cash to NIS 10,000,000 ("Seller Loan"), and such loan
shall be repaid by Purchaser to Seller within fourteen (14) days after Closing.
For the avoidance of doubt, this Section 3.4 shall not be deemed to
derogate from Seller's obligation under Section 6.1(xi).
4. CLOSING
4.1 Closing. Unless earlier terminated pursuant to Section 10 hereof, the
closing of the transactions contemplated hereby, including the purchase and sale
of the Acquired Assets and the payment of the Purchase Price (the "Closing"),
shall take place at the offices of Seller on December 31, 2009, provided that
the conditions set forth in Section 5 shall have been satisfied or waived prior
thereto, other than those conditions that are to be satisfed at the Closing;
provided, however, if such conditions have not been waived or satisfied by
December 31, 2009, the Closing shall take place on the fifth (5th) business day
immediately following the satisfaction or waiver (by the applicable party) of
the conditions set forth in Section 5, other than those conditions that by their
terms are to be satisfied at the Closing, or on such other date and at such
other time and place as is mutually agreed by the Parties (such date, the
"Closing Date"). For the avoidance of doubt, nothing in this Section 4.1 shall
derogate from section 10.1.
4.2. Closing Deliveries. At the Closing, the following actions and
occurrences will take place, all of which shall be deemed to have occurred
simultaneously, and no action shall be deemed to have been completed and no
document or certificate shall be deemed to have been delivered, until all
actions are completed and all documents and certificates delivered:
4.2.1 The Seller deliver to the Purchaser the following:
(a) Possession of the Acquired Assets (to the extent
applicable).
(b) Such duly executed bills of sale, endorsements,
assignments and other instruments of transfer and
conveyance necessary to vest in the Purchaser the
rights, title and interests of the Seller in and to
the Acquired Assets, free and clear of all Security
Interests other than Permitted Liens.
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(c) A certificate executed by the CEO or CFO of the
Seller (without personal liability therefor), or
alternatively by another officer duly authorized by
the Seller's Board of Directors confirming the
satisfaction of the conditions set forth in Section
5.1 and 5.2.
(d) Seller's balance sheet for the Cut-off Date (a
draft of which shall be delivered at least five (5)
business days prior to the Closing, but in no event
prior to January 15, 2010) (the "Cut-off Date
Statement").
4.2.2 The Purchaser shall deliver to the Seller the
following:
(a) The Purchase Price.
(b) Such duly executed bills of sale, endorsements,
assignments and other instruments of transfer and
conveyance necessary to vest in the Purchaser the
rights, title and interests of the Seller in and to
the Acquired Assets, free and clear of all Security
Interests other than Permitted Liens.
(c) Undertakings duly executed by Purchaser, in form
and substance reasonably satisfactory to the Seller,
whereby Purchaser assumes and agrees to discharge when
due the Assumed Liabilities.
(d) A certificate executed by an officer duly
authorized by the Purchaser's Board of Directors
confirming the satisfaction of the conditions set
forth in Section 5.1.
5. CONDITIONS PRECEDENT
5.1 Conditions to Obligations of Each Party. Each Party's
obligation to consummate the transactions contemplated hereunder is subject
to the fulfilment, prior to or at the Closing, of each of the following
conditions:
(i) Approval of the MoC of the transactions
contemplated hereby, either by the transfer
of the existing Licenses to the Purchaser
or the grant of new licenses that permit
the Business to continue to be operated
(the "MoC Approval") shall have been duly
obtained and shall be in full force and
effect on the Closing Date.
(ii) Approval of the Israeli Antitrust
Commissioner of the transactions
contemplated hereby (to the extent such
approval is required) (the "Antitrust
Approval") shall have been duly obtained
and shall be in full force and effect on
the Closing Date.
(iii) Any other material Governmental
Authorization necessary to effect the
transaction contemplated by this Agreement
shall have been duly obtained and shall be
in full force and effect on the Closing
Date.
(iv) No temporary restraining order, preliminary
or permanent injunction, judgment or other
order issued by any court of competent
jurisdiction or other legal or regulatory
restraint or prohibition preventing the
consummation of the transactions
contemplated hereby shall be in force.
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5.2 Additional Condition to Obligations of Purchaser. The obligations of
Purchaser to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction at or prior to the Closing of the following
condition, which may be waived exclusively in writing by Purchaser: All of the
consents listed on Schedule 5.2 (the "Required Consents") that are required
shall have been duly obtained and delivered to Purchaser (or shall have been
replaced in a manner that does not adversely affect Purchaser) and shall be in
full force and effect on the Closing Date.
6. COVENANTS; OTHER AGREEMENTS
6.1 Ordinary Course.
(a) From the date of this Agreement until the Closing
Date (the "Interim Period"), and subject to any
limitations under the Israeli Antitrust Law, with
respect to the Business, other than (i) with the
prior written consent of the Purchaser (such consent
not to be unreasonably withheld, conditioned or
delayed) or (ii) as expressly contemplated hereunder:
(i) Seller shall conduct the Business in the usual,
regular and ordinary course and in substantially the same manner as the Business
has been conducted prior to the date of this Agreement;
(ii) Seller shall comply with all legal requirements
and contractual liabilities in all material respects applicable to the operation
of the Business and pay all applicable Taxes as and when due and payable;
(iii) Seller shall use reasonable commercial efforts
to keep available the service of the Employees and to preserve intact its
current business organization and maintain its relations with all material
suppliers, customers, landlords, creditors, and other Persons having business
relationships with Seller, all in the ordinary course of business;
(iv) Seller shall not make any sale, assignment,
transfer, abandonment or other conveyance of a material part of the Acquired
Assets, except transactions pursuant to the existing Contracts or transactions
in the ordinary course of business consistent with past practice to unaffiliated
third Persons;
(v) Seller shall not enter into any material new
customer, supplier, lease, reseller or distributor agreement other than in the
ordinary course of business consistent with past practice;
(vi) Seller shall not materially change the business
practices of the Business as presently conducted, in regard to customer credit
terms, accounts receivable and payable;
(vii) Seller shall not sell, lease, license, or
otherwise dispose of or grant any license to any material Business Intellectual
Property Rights, other than non-exclusive licenses or leases granted to
customers in the ordinary course of business;
(viii) Seller shall not subject any of the Acquired
Assets, or any part thereof, to any Lien or suffer such to exist other than
Permitted Liens and other than such non-material Liens as may arise in the
ordinary course of business consistent with past practice or by operation of
law;
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(ix) Seller shall not purchase, lease or otherwise
acquire any material asset for the Business outside the ordinary course of
business;
(x) Seller shall not change the terms of any
employment agreements or compensation practices with senior employees of the
Business or make across-the-board changes in employment agreements or
compensation practices or enter into any new (or amend any existing) employee
benefit plan, program or arrangement, except in accordance with pre-existing
contractual provisions;
(xi) Seller shall not materially change its policies
and practices with respect to collection of accounts receivable, payment of
accounts payable or the grant of discounts or rebates;
(xii) Seller shall not enter, modify or amend in any
material respect or terminate any contract that is material to the Business or
announce or commence any material offering or campaign to customers if such
action would have an adverse effect on the Business;
(xiii) Seller shall not solicit or enter into any
transaction to sell the Business or a substantial part thereof, directly or
indirebtly other than as contemplated by this Agreement;
(xiv) Seller shall not waive, cancel, compromise,
settle or release any rights or claims of material value, outside the ordinary
course of business, that are Acquired Assets;
(xv) Seller, solely through its CEO, shall confer on
a regular and reasonable basis with Representatives of Purchaser to report on
operational matters and the general status of ongoing operations of the
Business; and
(xvi) Seller shall not agree or commit to take any of
the actions described above.
(b) Without derogating from the foregoing, nothing in this
Section 6.1 is intended to inhibit or otherwise restrict the Seller from
conducting its business during the Interim Period in the ordinary course of
business or from taking actions in furtherance of the Bezeq Transaction. Nothing
contained in this Agreement is intended to give Purchaser, directly or
indirectly, the right to control or direct the Company's operations prior to the
Closing Date or vice versa. Prior to the Closing, each of the Parties shall
exercise, consistent with the terms and conditions of this Agreement, complete
control and supervision over its and its subsidiaries respective operations.
6.2 Public Announcements.
(a) Neither Party nor any of its Affiliates shall issue any
press release or public announcement concerning this Agreement or the
transactions contemplated hereby without obtaining the prior written approval of
the other Party, which approval will not be unreasonably withheld or delayed,
unless disclosure is otherwise required by applicable law or by the applicable
rules of or listing agreement with any stock exchange on which the securities of
a Party or its Affiliates are traded securities, in which case the disclosing
party shall consult with the other party prior thereto.. The Purchaser shall
not, and shall cause its Affiliates not to, make public announcements concerning
concrete business plans with respect to the Business without Seller's prior
written approval.
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(b) Nothing in Section 6.2(a) shall: (i) prevent the Parties
from providing any of their Affiliates or their shareholders, attorneys,
accountants or advisors any details or information regarding this Agreement, the
transaction contemplated hereby, the identity of the other Party and its direct
and indirect shareholders to the extent that such details or information are
required for the approval of this Agreement and the transaction contemplated
herein; or (ii) prevent the Purchaser from providing any lenders, institutions
and other entities which will provide loans/credit to the Purchaser for the
purpose of the consummation of the transactions provided in this Agreement
(including by means of issuance of bonds and/or prospectus), any details or
information regarding this Agreement and the transaction contemplated herein to
the extent that such details or information are required for the purpose of
financing the transactions contemplated hereby.
6.3 Filings and Consents.
(a) The Purchaser shall, and shall cause its Affiliates to, and
the Seller shall, (i) file all applications legally required of such Person with
the Israeli Antitrust Commissioner in connection with obtaining the Antitrust
Approval, within 14 days of the date hereof, and (ii) provide all information
required by the Israeli Antitrust Commissioner in connection with such filings
in a timely manner.
(b) The Purchaser shall, and shall cause its Affiliates to, (i)
file within 14 days of the date hereof all applications legally required of such
Person with (y) the MoC in connection with obtaining the MoC Approval, and (z)
any other governmental authority required by law to effect the transaction
contemplated hereby ((y) and (z), together with the Antitrust Approval,
collectively the "Regulatory Approvals"), and (ii) provide all information
required by the MoC or other Governmental Authority in connection with such
filings in a timely manner. In the event the any such filings are to be made by
the Seller, it shall do the same, except that with respect to the MoC Approval
or other governmental approval as relevant, (i) Seller shall provide Purchaser
relevant information concerning Seller that is in Seller's possession, (ii)
Purchaser shall prepare such filings in full, (iii) Seller's sole responsibility
(other than with respect to information that it provides) shall be to deliver
such filings to the MoC or other relevant governmental authority, (iv) the
content of such filings with the MoC (other than with respect to information
concerning the Seller) shall remain the responsibility of Purchaser, and
Purchaser shall retain liability for the contents thereof.
(c) Upon the terms and subject to the conditions set forth in
this Agreement, the Purchaser agrees to use best efforts to obtain the
Regulatory Approvals as soon as possible, to make such filings and notifications
and respond to any requests for additional information made by an authority in a
timely, complete and correct manner, and to comply with all applicable law and
all requirements applicable to it of the MoC or the Israeli Antitrust
Commissioner or other applicable agencies or regulatory authorities, as the case
may be, to effect the transactions contemplated by this Agreement. The Purchaser
undertakes not to, and shall exercise best efforts to cause any of its
controlling shareholders and its Affiliates not to, take any action that would
adversely affect its ability to effect the Closing in a timely manner or that
would reasonably be expected to materially delay, impede or prevent receipt of
any necessary Regulatory Approvals.
(d) Without limiting the generality of the foregoing, while the
Purchaser does not foresee the same, in order to facilitate the issuance of any
Regulatory Approval:
(i) The Purchaser shall take such actions
including with respect to its assets
(including without limitation the sale or
other disposition of such assets or the
transfer of certain of its operations and
activities to subsidiaries), as and to the
extent required to obtain such Approval.
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(ii) The Purchaser shall not object to any
condition or stipulation (regardless of
whether such condition or stipulation is
burdensome) from the MoC or the Israeli
Antitrust Commissioner or other relevant
regulatory authority stipulated as a
condition to the MoC Approval or the
Antitrust Approval or any other Regulatory
Approval as the case may be.
(iii) The Purchaser shall take any other action
required to facilitate the issuance of any
Regulatory Approval.
(e) The Seller shall use reasonable efforts to assist and to
cooperate with the Purchaser in obtaining the approvals required under Section
6.3(a) and (b) above and shall use reasonable efforts to cause the conditions to
Closing set forth in Section 5 (to the extent that the approvals provided for in
Section 5 are required by law to be obtained by the Seller) to be satisfied as
promptly as practicable, it being understood that any action or omission to act
by the Seller taken in connection with effectuation of the Bezeq Transaction
shall not be deemed a breach by Seller of this Section 6.3(e) or grounds for any
failure of the Purchaser to satisfy its obligations hereunder.
(f) The Purchaser shall provide the Seller with all material
correspondence (including e-mail correspondence) and material relevant
information with respect to Regulatory Approvals; provided that any trade
secrets or other confidential information shall be redacted from such updates
and shall be provided to a third party trustee for safekeeping. The Purchaser
shall promptly notify the Seller of any material written communication
(including e-mail correspondence) made to or received by such party or its
Affiliates from the MoC or the Israeli Antitrust Commissioner or any other
regulatory body regarding any of the transactions contemplated hereby, and
permit the Seller to review in advance any proposed written communication
(including e-mail correspondence) to the MoC or the Israeli Antitrust
Commissioner and incorporate the Seller's reasonable comments, not agree to
participate in any substantive meeting or discussion with or in the MoC or the
Israeli Antitrust Commissioner in respect of any filing, investigation or
inquiry concerning this Agreement or the transactions contemplated hereby
unless, to the extent reasonably practicable and lawful, it consults with the
Seller in advance and, to the extent permitted, gives the Seller the opportunity
to attend, and furnish the Seller with copies of all correspondence, filings and
written communications between them on one hand and the MoC or the Israeli
Antitrust Commissioner or its respective staff on the other hand, with respect
to this Agreement and the transactions contemplated hereby. This provision shall
apply to Seller, mutatis mutandis, in regard to the transaction contemplated
hereby.
(g) Without derogating from the foregoing, the Purchaser shall
use its best efforts to cause the conditions to Closing set forth in Section 5.1
(Regulatory Approvals) to be satisfied and to comply with any and all of its
obligations and covenants hereunder as promptly as practicable.
6.4 "012 Smile" Name and Operations. At the Closing of the Agreement, in
connection with the transfer of the Acquired Assets, (i) Seller shall execute
the assignment to Purchaser of the "012 Smile" trademarks and name used by the
Business and (ii) Seller shall procure that Internet Gold - Golden Lines Ltd.
shall execute the assignment to Purchaser of the "012 Smile" logo used by the
Business. Immediately after the Closing, and not later than 60 days thereafter,
the Seller shall change its name from 012 Smile.Communications Ltd. to another
name which bears no similarity to its current name.
6.5 Wrong Pocket; Tax Accounting. In the event that receivables relating
to the Business are received by the Seller after the Closing Date, it shall
forward such receivables to thePurchaser. Any Assumed Liability addressed to the
Seller after the Closing shall be assumed by the Purchaser. The Purchaser and
the Seller shall perform a reconciliation of claims on a monthly basis and any
net amounts due from one Party to the other shall be paid within 7 days of such
reconciliation. The Parties will also effect similar reconciliations with
respect to Tax payments, refunds and other items effected by Seller prior to the
Cut-off Date and Tax payments, refunds and other items effected by Purchaser
after the Cut-off Date.
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6.6 Accounting Books and Records. The Seller shall retain all of the
accounting books and records for purpose of reporting the transactions
contemplated hereby but shall cooperate with the Purchaser with respect to such
reporting. The Seller shall also retain its accounting books and records for
periods prior to Closing but shall provide the Purchaser access and information
with respect thereto to the extent necessary for Purchaser's reasonable business
needs.
6.7 Notification of Certain Matters. During the Interim Period, Seller
shall promptly notify Purchaser, and Purchaser shall promptly notify Seller, in
writing of the discovery of any of the following: (i) any event, condition, fact
or circumstance that occurred or existed on or prior to the date of this
Agreement and that caused or constitutes a material inaccuracy in or breach of
any representation or warranty made by the relevant party in this Agreement;
(ii) any event, condition, fact or circumstance that occurs, arises or exists
after the date of this Agreement and that causes or constitutes, or could
reasonably be seen as likely to cause or constitute, a material inaccuracy in or
breach of any representation or warranty made by the relevant party in this
Agreement; (iii) any breach of any material covenant or obligation of the
relevant party; and (iv) any event, condition, fact or circumstance that would
make the timely satisfaction of any of the conditions set forth in Section 5
impossible, unlikely or postponed.
6.8 Reasonable Efforts. During the Interim Period, the Seller shall use
its reasonable efforts to cause the conditions set forth in Section 5.2
(Required Consents) to be satisfied on a timely basis, and Purchaser shall
reasonably cooperate with Seller in connection therewith.
6.9 Non-solicitation. Seller shall not, at all times from the Closing
Date until the first (1st) anniversary of the Closing Date, without the prior
written consent of Purchaser: encourage or solicit any officer or key employee
of Purchaser to leave their employment; provided, however, that this provision
shall not limit Seller's ability to make generalized solicitations of
employment. Seller acknowledges that the covenants of Seller in this Section 6.9
are reasonably necessary for the protection of Purchaser's interests under this
Agreement and are not unduly restrictive upon Seller.
6.10 Cooperation re Credit Agreements/Financing. Seller shall reasonably
cooperate with Purchaser's requests for information that Purchaser requires for
purposes of obtaining financing for the transaction contemplated hereby,
including (in the event that the Closing does not occur upon a quarter-end)
providing required comparative historical financial data, subject to customary
indemnities, at Purchaser's expense and sole responsibility.
6.11 Coordination. Purchaser shall coordinate all contacts with the
Seller or any of its employees or Representatives through the Chief Executive
Officer of the Seller or such other persons as the Seller may designate from
time to time.
6.12 Pro Forma Financial Statement. Within three (3) business days of the
date of this Agreement, the Seller shall provide the Purchaser with a pro forma
financial statement as of September 30, 2009 with respect to the Business, which
shall be treated as a representation under Section 7 hereof when it is provided.
6.13 Senior Management. Within fourteen (14) days of the date of this
Agreement, the Seller shall provide the Purchaser with a chart showing the
principal components of the terms of employment of senior management.
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7. REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Purchaser that, subject
to the exceptions set forth in the disclosure schedule (the "Seller Disclosure
Schedule") delivered by Seller, on the date hereof:
7.1 Organization and Authority
(a) The Seller duly and validly exists under the laws of
Israel and, subject to the conditions specified under
Section 5, has all necessary company power and
authority to enter into this Agreement, to carry out
its obligations hereunder and to consummate the
transactions contemplated hereby.
(b) The execution and delivery of this Agreement and all
such other agreements delivered pursuant hereto
(collectively, the "Transaction Documents") by the
Seller, the performance by the Seller of its
obligations hereunder and thereunder and the
consummation by the Seller of the transactions
contemplated hereby have been duly authorised by all
requisite corporate action on the part of the Seller
and no further shareholder or other organ's approval
is required.
(c) This Agreement has been duly executed and delivered by
the Seller, and (assuming due authorisation, execution
and delivery by the Purchaser and subject to the
conditions set under Section 5) this Agreement
constitutes a legal, valid and binding obligation of
the Seller enforceable against the Seller in
accordance with its terms, except as such
enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws
relating to or affecting the enforcement of creditors'
rights in general or by general principles of equity.
(d) Except for 012 Telecom Ltd., an Israeli company, which
is wholly owned by the Seller, the Seller has no
Subsidiaries. Other than the Subsidiary of the Seller,
neither the Company nor its Subsidiary owns any
material Subsidiary.
7.2 No Conflict.
Other than Regulatory Approvals and without derogating from Section 2.4,
the execution, delivery and performance by Seller of this Agreement and the
Transaction Documents and the consummation by Seller of the transactions
contemplated hereby and thereby do not and will not violate or conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a
default, or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of any benefit (any such event, a "Seller Conflict")
under (i) the corporate documents of Seller, and (ii) any Legal Requirement or
any order of any court or other Governmental Entity by which Seller or any of
its material properties or assets is or are bound, other than in a manner that
would not have a material adverse effect on Purchaser.
17
7.3 Litigation. Except as set forth in the Financial Statements (as
defined below) or in Schedule 7.3, there are no actions, suits or proceedings
pending, or to the Seller's knowledge, threatened in writing against, the Seller
involving the Business or the Acquired Assets, which would have a material
adverse effect on Seller. Neither the Business nor the Acquired Assets is
subject to any order, writ, judgment, award, injunction or decree of any
Governmental Entity or arbitrator, domestic or foreign, that materially
adversely affects the Business or the Acquired Assets.
7.4 Compliance with Laws; Governmental Authorizations.
(a) To Seller's Knowledge, Seller has complied with and is in
compliance with all Legal Requirements (except where any
such non-compliance shall not have a material adverse
effect on the Business) in all material respects.
(b) To Seller's Knowledge the Seller holds all permits,
licenses (including the Licenses), certificates,
registrations and other authorizations necessary to conduct
the Business as currently conducted (except where the
absence of such permits, licenses, certificates,
registrations and othe authorizations would not have a
material adverse effect on the Business). The Licenses are
in the name of Seller or its Subsdiary and Seller is not
aware of any material procedures that in Seller's opinion
would be reasonably likely to cause the cancellation or
withdrawal of the Licenses, except as set forth in
Schedule7.4(b).
7.5 Financial Statements; Seller Public Filings.
(a) The audited financial statements of the Seller for the period ended
December 31, 2008 and the unaudited and unreviewed financial statements for the
period ended September 30, 2009 (the "Financial Statements"), copies of which
are attached hereto as Schedule 7.5, are complete and accurate in all material
respects, fairly represent the financial position and results of operations of
the Seller as of the dates and for the periods indicated, and have been prepared
in conformity with US GAAP applied on a basis consistent with prior years.
(b) Seller's Form 20-F for the year ended December 31, 2008 was prepared
in accordance with the requirements of applicable law and does not contain any
material untrue statement of fact.
7.6 Absence of Certain Changes
Since September 30, 2009, the Business has not suffered any change, event
or condition that is materially adverse to (i) the Business (other than changes,
events or conditions occurring in the ordinary course of business), or (ii) the
transactions contemplated by this Agreement.
7.7 Employees.
(a) Seller is in compliance in all material respects with
applicable Legal Requirements (including any national,
industry or company collective agreement, order or award) and
agreements relating (i) to the employment of the Employees,
and (ii) to the proper withholding and remission to the proper
tax authorities or to the proper withholding or contribution
and remission to the proper pension or provident, life
insurance, disability insurance, continuing education or other
similar funds of all sums required to be withheld, contributed
or remitted, legally or contractually.
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(b) Seller is not a member in any employers' organization, and
no claim or request has been made of Seller by any employers'
organization. Seller is not a party to, or bound by, any
collective bargaining agreement or arrangement or union
contract or extension order (excluding such extension
orders that may apply to all employers or employees in Israel
in general) and no such collective bargaining agreement is
being negotiated by Seller. No labor union or other
representative organization has otherwise been certified
or recognized as the collective bargaining representative
of any employees of Seller or has applied to represent such
employees or, to Seller's Knowledge, is attempting to
represent such employees.
7.8 Tax. As of the Closing, there shall be no Tax liens on any
Acquired Asset with respect to the period prior to the Cut-off Date.
7.9 Title to Assets.
(a) The Seller has (and will, at the Closing, have) good
title to all of the Acquired Assets, free and clear of
all Security Interests other than Permitted Liens.
Seller does not own any real property.
(b) The Acquired Assets, collectively, comprise all of the
assets, rights and services used by Seller for the
operation of the Business as currently conducted. All
material machinery, equipment and other tangible assets
included in the Acquired Assets are in good and
sufficient operating condition and in a state of
reasonable maintenance and repair for the continued
conduct of the Business on a basis consistent with past
practice, ordinary wear and tear excepted.
7.10 Brokers and Finders. As a result of the transaction contemplated
hereby, Purchaser shall not be required to pay any brokerage commission,
finders' fees or similar consideration based on any arrangement or agreement
made by Seller.
7.11 Related Party Transactions. Except as set forth in Seller's Form
20-F for the year ended December 31, 2008 and except for transactions in the
ordinary course of business at arm's length, to Seller's Knowledge: (a) no
Related Party has any direct or indirect interest in any Acquired Asset used in
or otherwise relating to the Business; (b) no Related Party is indebted to
Seller in connection with the Business; and (c) no Related Party has entered
into any material contract, transaction or business dealing related to the
Business.. For purposes of this Section 7.11 each of the following shall be
deemed to be a "Related Party": (i) each Person that, directly or indirectly,
has an equity interest in Seller; (ii) each individual who is an officer or
director of Seller; (iii) each Family Member of each of the individuals referred
to in clauses "(i)" and "(ii)" above.
7.12 Intellectual Property. The Seller does not have material
Intellectual Property Rights except for trademarks and rights under third party
license agreements. To the knowledge of the Seller, such Intellectual Property
Rights do not infringe, misappropriate or otherwise violate the Intellectual
Property Rights of a third party in a manner that would have a material adverse
effect on the Business.
7.13 Contracts. Each contract that is the subject of a Required
Consent is in full force and effect and is not subject to any material default
on the part of Seller, and to the knowledge of the Seller, no other party to
such contracts is in material default with respect thereto.
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7.14 Selected Information. The information set forth in part
1 of Schedule 7.14 is true and accurate in all material respects.
7.15 Insurance. The Seller has insurance coverage for the
Business at a level that is reasonably adequate in view of the size and scope
of the Business.
7.16 Insolvency. The Seller is not insolvent or unable to pay its debts
as they fall due. No order has been made, petition presented, resolution passed
or meeting convened for the winding up of the Seller. No receiver (including an
administrative receiver) liquidator, trustee, administrator, custodian or
similar official has been appointed in any jurisdiction in respect of the whole
or any part of the business or assets of the Seller and no step has been taken
for or with a view to the appointment of such a person.
7.17 Disclosure. Seller acknowledges and agrees that Purchaser does not
make and has not made any representations or warranties with respect to the
trasnsactions contemplated hereby other than those specifically set forth in
Section 8 hereof, including as to projections, forecasts or forward-looking
statements. The Seller is aware of the significance of the transaction
contemplated hereby to the Purchaser and acknowledges that time is of the
essence in consummating the transaction contemplated hereby.
8. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Seller that on the
date hereof:
8.1 Organization and Authority.
(a) The Purchaser duly and validly exists under the laws
of Israel and, subject to the conditions specified
under Section 6, has all necessary company power and
authority to enter into this Agreement, to carry out
its obligations hereunder and to consummate the
transactions contemplated hereby.
(b) The execution and delivery of this Agreement and all
such other agreements delivered pursuant hereto
(collectively, the "Transaction Documents") by the
Purchaser, the performance by the Purchaser of its
obligations hereunder and thereunder and the
consummation by the Purchaser of the transactions
contemplated hereby have been duly authorised by all
requisite corporate action on the part of the
Purchaser and no further shareholder or other organ's
approval is required.
(c) This Agreement has been duly executed and delivered by
the Purchaser, and (assuming due authorisation,
execution and delivery by the Seller and subject to
the conditions set under Section 6) this Agreement
constitutes a legal, valid and binding obligation of
the Purchaser enforceable against the Purchaser in
accordance with its terms, except as such
enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws
relating to or affecting the enforcement of creditors'
rights in general or by general principles of equity.
.
(d) The ultimate control of the Purchaser is held by an
Israeli citizen and resident in the manner required to
receive the International Telephony License as set
forth in detail in Schedule 8.1(d).
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(e) The Purchaser is an entity being formed under the laws
of the State of Israel for the purpose of holding an
international long-distance telephony license.
8.2 Consent and Approvals; No Conflict. Other than Regulatory Approvals,
the execution, delivery and performance by Purchaser of this Agreement and the
Transaction Documents and the consummation by Purchaser of the transactions
contemplated hereby and thereby do not and will not violate or conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a
default, or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of any benefit (any such event, a "Purchaser Conflict")
under (i) the Corporate Documents of Purchaser, (ii) any Legal Requirement or
any order of any court or other Governmental Entity by which Purchaser or any of
its material properties or assets is or are bound, other than in a manner that
would not have a material adverse effect on Purchaser's ability to consummate
the transaction contemplated hereby.
8.3 Litigation. There is no judgment, decree or order against the
Purchaser that prevents, enjoins, or materially alters or delays the purchase of
the Acquired Assets or the assumption of the Assumed Liabilities by the
Purchaser under this Agreement and the consummation of the transactions
contemplated herein.
8.4 Financial Capability
The Purchaser has access to, and at the Closing shall have, sufficient
funds or commitments to pay in cash any and all amounts necessary to consummate
the payments and transactions contemplated hereby, including the purchase of the
Acquired Assets, and the Purchaser acknowledges that any failure to obtain the
financing necessary to consummate the transaction contemplated hereby shall not
constitute a defence or condition precedent to its obligations hereunder. The
Purchaser will provide the Seller with copies of all credit agreements,
financing commitments and other arrangements with banks and other entities
providing financing to the Purchaser for purposes of funding its obligations
hereunder (collectively "Credit Agreements"), or a letter from the lending bank
confirming the terms of such Credit Agreements, shortly after such documents are
made available to the Purchaser and such copies shall be complete and accurate;
provided, however, that the Purchaser may redact trade secrets and other
confidential commercial information which shall be provided to a third party
trustee for safekeeping. The Purchaser undertakes to take all actions necessary
to fulfill all of its obligations set forth in such Credit Agreements in a
prompt and timely manner.
8.5 The MoC Approval and Antitrust Approval. The Purchaser has examined
the Business of the Purchaser and the Acquired Assets and the Assumed
Liabilities (including the Licenses as set forth in Section 8.6 below), and has
taken into consideration the Purchaser's and its Affiliates' operations, and has
conferred with counsel and it is not aware of any reason, and to the best of its
knowledge, there is no reason for the denial or material delay of the
Purchaser's application to obtain the MoC Approval and the Antitrust Approval
and any other Regulatory Approval (to the extent such approval is required) with
respect to the transactions contemplated hereby.
8.6 Licences and Related Regulations. The Purchaser and its Affiliates
and Representatives have had adequate opportunity to review the Licences and
related regulations, and have received all information (legal, financial and
otherwise) required by them concerning the Licences and related regulations and
all of the terms and conditions thereto.
21
8.7 Brokers and Finders. As a result of the transaction contemplated
hereby, Seller shall not be required to pay any brokerage commission, finders'
fees or similar consideration based on any arrangement or agreement made by
Purchaser.
8.8 Acknowledgement. Without derogating from the representations of
Seller herein, the Purchaser acknowledges that it has voluntarily decided to
enter into this Agreement, to consummate the transactions contemplated herein
and hereby confirms that (i) it is familiar with the Business and the industry
sectors in which it operates, (ii) it has had adequate opportunity to select and
consult with its financial, tax, accounting and legal advisors regarding the
terms, conditions, rights and obligations set forth in this Agreement, and (iii)
it received all information (legal, financial and otherwise) concerning the
business and financial condition of the Seller that it requested. The Purchaser
is aware of the significance of the transactions contemplated hereby to the
Seller and acknowledges that time is of the essence in consummating the
transaction contemplated hereby.
8.9 Disclosure. Purchaser acknowledges and agrees that Seller does not
make and has not made any representations or warranties with respect to the
trasnsactions contemplated hereby other than those specifically set forth in
Section 7 hereof, including as to projections, forecasts or forward-looking
statements. Without derogating from Seller's representations under Section 7
hereof or from Seller's indemnification under Section 11 hereof, the Purchaser
agrees that the Acquired Assets, Assumed Liabilities and the Business are
purchased and assumed by the Purchaser at the condition of the Acquired Assets,
Assumed Liabilities and the Business on the Closing Date, whether or not any
fact, act or circumstance of any nature whatsoever relating to the company is
known, disclosed or discussed, and regardless of any investigation, inquiry or
disclosure that was or could have been made, and whether or not any fact or
circumstance is different than expected by the purchaser, subject only to the
representations made by the Seller in section 7.
Without derogating from Section 7, any materials and presentations made
available to the Purchaser or its affiliates or representatives, do not,
directly, or indirectly, and shall not be deemed to, directly or indirectly,
contain representations or warranties of the Seller, or any of its respective
Affiliates or Representatives.
8A. REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR
The Guarantor hereby represents and warrants to the Seller that on the
date hereof:
8A.1 Organization and Authority.
(a) The Guarantor duly and validly exists under the laws
of Israel and, subject to the conditions specified
under Section 5, has all necessary company power and
authority to enter into this Agreement, to carry out
its obligations hereunder and to consummate the
transactions contemplated hereby.
(b) The execution and delivery the Transaction Documents
by the Guarantor, the performance by the Guarantor of
its obligations hereunder and thereunder and the
consummation by the Guarantor of the transactions
contemplated hereby have been duly authorised by all
requisite corporate action on the part of the
Guarantor and no further shareholder or other organ's
approval is required.
(c) This Agreement has been duly executed and delivered by
the Guarantor, and (assuming due authorisation,
execution and delivery by the Seller and subject to
the conditions set under Section 5) this Agreement
constitutes a legal, valid and binding obligation of
the Guarantor enforceable against the Guarantor in
accordance with its terms, except as such
enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws
relating to or affecting the enforcement of creditors'
rights in general or by general principles of equity.
22
9. EMPLOYEE MATTERS
9.1 Promptly following the date hereof, Purchaser shall make an offer of
continued employment (`haavara beretzef' in Hebrew), effective as of the Closing
Date, to each of the Seller Employees that Purchaser desires to retain (other
than to those employees set forth in Schedule 9.1 who shall continue to be
employed by the Seller), in the form to be agreed between the Parties (such form
and any ancillary document thereto shall be hereinafter referred to as the
"EmployeeNotice"). The Employees who receive such Employee Notice (and do not
lawfully object thereto or, at the request of either Party, countersign such
Notice) are hereinafter referred to as "Assumed Employees." The Seller shall use
its reasonable commercial efforts to assist the Purchaser in retaining such
Assumed Employees.
9.2 At Closing, Seller shall (a) consent to the transfer of each of the
Assumed Employees to Purchaser and each such employee shall become an employee
of Purchaser, and (ii) transfer and assign to Purchaser, for the benefit of the
Assumed Employees, all education funds (keren hishtalmut), managers' insurance
policies (bituach menahalim) and/or pension funds, severance pay funds and any
other funds, that have been reserved or contributed by Seller (whether required
by applicable law, custom or agreement) with respect to any of such Employees
(the "Seller Existing Funds") and all of Sellers' rights with regard thereto,
and subject to the following sentence, the Seller shall not have any obligation
to complete any such Funds. It is hereby acknowledged and agreed that to the
extent that any of the Seller Existing Funds at Closing are not sufficient to
cover all such funds to which any Assumed Employee who has chosen not to
continue his employment with the Purchaser is entitled through the Closing Date
(by applicable law or agreement), Seller shall, without any consideration or
adjustment of the Purchase Price, transfer cash equal to the balance required to
complete any such funds to the Seller Existing Funds. Prior to the Closing,
Purchaser shall make (and Seller shall cooperate with Purchaser to the extent
required) the appropriate filings with the ITA for the transfer of the Seller
Existing Funds from Seller to Purchaser and Seller shall submit all required
documents to the Assumed Employees' funds and insurance policies. Promptly
following its receipt of all requisite approvals from the ITA, and after the
Closing, Seller will transfer to Purchaser all its rights and interests in and
to the Seller Existing Funds.
9.3 The employment agreements of the Assumed Employees and their Funds
shall be assigned from Seller to Purchaser, and the Assumed Employees shall
transfer to Purchaser, as applicable, with continuity of rights, and whilst
taking their employment with Seller in account for purposes of the calculation
of their rights and entitlements.
9.4 Notwithstanding any non-compete obligations of any Assumed Employee
to Seller, or any Affiliates thereof, all Assumed Employees shall be permitted,
on and after the Closing Date, to engage in the Business only on behalf of
Purchaser and its Affiliates.
9.5 Purchaser shall assume all obligations and liabilities (including any
and all prior notice payments and other employment and severance and termination
benefits as is required by applicable Law, custom or agreement, as well as
liability with respect to any accrued but unpaid vacation pay or benefits, any
withholding or employment Taxes, any other mandatory payments to social security
or otherwise) concerning the Assumed Employees, whereas Seller shall retain all
such liabilities concerning any other employees and will be liable for all
severance expenses of Assumed Employees who resign and are entitled to receive
such severance due to the transaction..
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10. TERMINATION
10.1 Right of Parties to Terminate. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned, at any
time prior to the Closing:
(a) by mutual written consent of the Parties;
(b) by either Party, by written notice to the other
Party, if the Closing has not occurred on or prior
to the close of business on February 15, 2010 (the
"Initial End Date"); provided, however, that
either Party may extend the Initial End Date until
February 22, 2010, and provided further that the
Seller, in its sole discretion, may extend the
Initial End Date by up to four one-month periods,
until not later than June 22, 2010 (the "End Date")
by written notice to the Purchaser to be issued
not later than February 22, 2010 and each
subsequent one-month anniversary thereof;
provided, further, that if a Party is in breach
and such breach prevented the closing from occurring
shall not be permitted to terminate the Agreement
pursuant to this section 10.1(b).
(c) without derogating from the provisions of Section
11.5, by either Party, if the other Party has
materially breached any covenant or agreement
contained in this Agreement; provided, however,
that the non-breaching Party may not terminate this
Agreement pursuant to this Section 10.1(c) unless
such breach would cause any of the conditions
specified in Section 5 not to be satisfied and any
such breach has not been cured within fifteen (15)
Business Days after written notice by the
non-breaching Party to the breaching Party
informing the breaching Party of such breach, it
being understood and agreed that no cure period shall
be required for a breach which by its nature
cannot be cured; provided further, that the
terminating Party may not terminate this Agreement
pursuant to this Section 10.1(c) if it is then in
material breach of the terms of this Agreement.
10.2 Procedure upon Termination. In the event the Purchaser or
the Seller, or both, as the case may be, elect to terminate this Agreement
pursuant to Section 10.1, written notice thereof shall be given to the other
Party, and following compliance with Section 10.3 below, this Agreement shall
terminate without further action of the Parties.
10.3 Effect of Termination. In the event of termination of this
Agreement as provided in Section 10.1, this Agreement shall forthwith become
void and all further obligations and liabilities of each party to the other
party under this Agreement shall terminate; provided, however, that (a) neither
party shall be relieved of any obligation or liability arising from any prior
willful and material breach of any representation, warranty, covenant or
agreement in this Agreement that occurred prior to the date of termination; and
(b) the parties shall, in all events, remain bound by and continue to be subject
to Sections 7.2 (Announcements), Section 10.2 (Procedure upon Termination), this
Section 10.3 (Effect of Termination), and Section 15 shall survive any such
termination and shall be enforceable hereunder.
10.4 Undertaking to Consummate. The Parties acknowledge and agree that,
except as otherwise provided herein, their obligation to consummate the
transactions contemplated hereby constitutes an unconditional obligation to
procure performance and consummation of the transaction. It is hereby clarified,
that nothing in this Section 10 shall be deemed in any way as preventing the
Seller from seeking specific performance of this Agreement.
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11. SELLER'S INDEMNIFICATION
11.1 The representations and warranties made by Seller (i) in Section 7
(other than the Fundamental Representations (as defined below)) or in any other
Transaction Document shall survive the Closing and shall expire eighteen (18)
months following the Closing Date and (ii) in Sections 7.1, 7.5, and 6.12
(collectively, the "Fundamental Representations") shall survive the Closing and
shall expire twenty-four (24) months following the Closing Date (as applicable,
the "Termination Date"); provided, however, that if, at any time prior to the
applicable Termination Date, any Purchaser Indemnitee delivers to Seller a
written notice alleging a breach of any of the representations and warranties
made by it (and setting forth in reasonable detail the basis for its belief that
such an incompleteness, inaccuracy or breach may exist) and asserting a claim
for recovery under this Section 11, then the claim asserted in such notice shall
survive the Termination Date.
11.2 The Seller shall defend, indemnify, and hold the Purchaser and its
affiliates and their respective employees, directors, officers, shareholders and
agents (the "Purchaser Indemnitees") harmless from and against, and reimburse
the Purchaser Indemnitees with respect to, any Damages incurred by the Purchaser
Indemnitees by reason of or arising out of or in connection with (i) any breach
or inaccuracy of representation made by the Seller as set forth in Section 7 or
in any other Transaction Document, (ii) any failure to comply with or breach of
any covenant or obligation of Seller hereunder or in any other Transaction
Document; or (iii) any claims against Purchaser with respect to any of the
Excluded Assets or the Retained Liabilities, regardless of when or with respect
to which period incurred.
11.3 Notwithstanding any other provision in this Section 11 but solely
with respect to clauses 11.2 (i) and (ii) above, the Purchaser Indemnitees shall
be entitled to indemnification only if the aggregate indemnifiable amounts
exceed 25,000,000 (Twenty Five Million) New Israeli Shekels (the "Threshold
Amount") whereupon indemnification may be sought by the Purchaser Indemnitees
from the first NIS.
11.4 Notwithstanding any other provisions of this Section 11 (including
Section 11.3), with respect to the matters addressed in part I of Schedule 11,4,
the compensation provisions set forth in Schedule 11.4 will apply. For the
avoidance of doubt, if a matter would give rise to a right of indemnification by
Purchaser under Section 11 and a right of compensation under Schedule 11.4, only
the compensation provisions of Schedule 11.4 will apply.
11.5 The Indemnification set forth in this Section 11 shall be the
Purchaser's sole and exclusive remedy for the Damages for any breach of
representation. For the avoidance of doubt, breach of a representation by Seller
under Section 7 shall not be grounds for termination or delay of consummation of
this Agreement.
12. PURCHASER'S INDEMNITY
12.1 The representations and warranties made by Purchaser (i) in Section
8 (other than the Fundamental Representations (as defined below)) or in any
other Transaction Document shall survive the Closing and shall expire eighteen
(18) months following the Closing Date and (ii) in Sections 8.1 and 8A.1
(collectively, the "Fundamental Representations") shall survive the Closing and
shall expire twenty-four (24) months following the Closing Date (as applicable,
the "Termination Date"); provided, however, that if, at any time prior to the
applicable Termination Date, any Seller Indemnitee delivers to Purchaser a
written notice alleging a breach of any of the representations and warranties
made by it (and setting forth in reasonable detail the basis for its belief that
such an incompleteness, inaccuracy or breach may exist) and asserting a claim
for recovery under this Section 12, then the claim asserted in such notice shall
survive the Termination Date.
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12.2 Without derogating from any other provision herein, including
Section 12.3, in the event the Closing occurs, the Purchaser will indemnify,
defend and hold harmless the Seller, its Affiliates and each of their respective
shareholders, directors, officers, employees, agents, successors and permitted
assigns (collectively, the "Seller Indemnitees") from and against (i) any breach
or inaccuracy of representation made by the Purchaser or Guarantor as set forth
in Section 8 or Section 8A or in any other Transaction Document, (ii) any
failure to comply with or breach of any covenant or obligation of Purchaser
hereunder or in any other Transaction Document; or (iii) any claims against
Seller with respect to any of the Acquired Assets or the Assumed Liabilities,
regardless of when or with respect to which period incurred.
12.3 Notwithstanding any other provision in this Section 12 but solely
with respect to clauses 12.2 (i) and (ii) above, the Seller Indemnitees shall be
entitled to indemnification only if the aggregate indemnifiable amounts exceed
the Threshold Amount whereupon indemnification may be sought by the Purchaser
Indemnitees from the first NIS. For the avoidance of doubt, any default on the
Seller Loan shall not be deemed to be subject to the Threshold Amount.
12.4 The Indemnification set forth in this Section 12 shall be the
Seller's sole and exclusive remedy for the Damages for any breach of
representation. For the avoidance of doubt, breach of a representation by
Purchaser or Guarantor under Section 8 or 8A shall not be grounds for
termination or delay of consummation of this Agreement.
13. INDEMNIFICATION PROCEDURE; EXCLUSIVE REMEDY
13.1 If a Party seeks indemnity under Section 11 or Section 12 (the
"Indemnified Party"), it will give written notice (a "Claim
Notice") to the other party (the "Indemnifying Party"). The
Claim Notice must contain (i) a description and, if known,
estimated amount (the "Claimed Amount") of any Damages incurred
or reasonably expected to be incurred by the Indemnified Party,
(ii) a reasonable explanation of the basis for the Claim Notice
to the extent of facts then known by the Indemnified Party, and
(iii) a demand for payment of those Damages.
13.2 Response to Notice of Claim. Within 30 days after delivery of a
Claim Notice, the Indemnifying Party will deliver to the
Indemnified Party a written response (the "Response") in which
the Indemnifying Party will either:
(a) agree that the Indemnified Party is entitled to receive all
of the Claimed Amount, and, within five business days of the
Indemnified Party's receipt of the Response, the
Indemnifying Party will pay the Claimed Amount to the
Indemnified Party in accordance with a payment and
distribution method reasonably acceptable to the Indemnified
Party;
(b) agree that the Indemnified Party is entitled to receive
part, but not all, of the Claimed Amount (such portion, the
"Agreed Portion"), and, within five Business Days of the
Indemnified Party's receipt of the Response, the
Indemnifying Party will pay the Agreed Portion of the
Claimed Amount to the Indemnified Party in accordance with a
payment and distribution method reasonably acceptable to the
Indemnified Party; or
26
(c) dispute that the Indemnified Party is entitled to receive
any of the Claimed Amount.
13.3 If no Response is delivered by the Indemnifying Party to the
Indemnified Party within such 30-day period, the Indemnifying
Party is deemed to have agreed that an amount equal to the
entire Claimed Amount will be payable to the Indemnified Party
within five business days after the expiration of such 30-day
period in accordance with a payment and distribution method
reasonably acceptable to the Indemnified Party.
13.4 Contested Claims. In the event that the Indemnifying Party
disputes the Claimed Amount (or the portion of the Claimed
Amount not comprising the Agreed Portion), such dispute will be
governed by, and subject to the terms of, [Section 15.10]
hereof.
13.5 Third Party Claims.
(a) In the event that the Indemnified Party receives notice or
otherwise learns of the assertion of any claim with respect
to which the Indemnifying Party may be obligated to provide
indemnification under Section 11 or 12 (a "Third Party
Claim"), the Indemnified Party will provide a Claim Notice
to the Indemnifying Party as soon as practicable but in no
event later than five business days thereafter. Such Claim
Notice will be accompanied by reasonable supporting
documentation submitted by such third party (to the extent
then in the possession of the Indemnified Party) and will
describe in reasonable detail the facts constituting the
basis for such suit or proceeding and the amount of the
claimed damages (in each event to the extent known or
reasonably ascertainable by the Indemnified Party);
provided, however, that no delay or deficiency on the part
of the Indemnified Party in so notifying the Indemnifying
Party will relieve the Indemnifying Party of any liability
or obligation hereunder except if such delay or deficiency
materially prejudices the defense of such claim or otherwise
materially and adversely affects the rights of the
Indemnifying Party with respect thereto, and then in each
such case only to the extent of such material prejudice.
Within 20 days after delivery of such notification, the
Indemnifying Party may, upon written notice to the
Indemnified Party, assume control of the defense of such
suit or proceeding with counsel reasonably satisfactory to
the Indemnified Party, strictly at its own cost and expense;
provided, however, that the Indemnifying Party may not
assume control of the defense of a suit or proceeding (A)
involving criminal liability or (B) to the extent the suit
or proceeding seeks an injunction or equitable relief
against the Indemnified Party. If the Indemnifying Party
does not so assume control of such defense, the Indemnified
Party will control such defense.
(b) The party not controlling such defense (the "Non-controlling
Party") may participate therein at its own expense. The
party controlling such defense (the Controlling
Party") will keep the Non-controlling Party reasonably
advised of the status of such suit or proceeding
and the defense thereof and will consider in good faith
recommendations made by the Non-controlling Party with
respect thereto. The Non-controlling Party will furnish the
Controlling Party with such information as it may have with
respect to such suit or proceeding (including copies of any
summons, complaint or other pleading which may have been
served on such party and any written claim, demand, invoice,
billing or other document evidencing or asserting the same)
and will otherwise cooperate with and, at the request of the
Controlling Party, assist the Controlling Party in the
defense of such suit or proceeding.
27
(c) The Indemnifying Party will not agree to any settlement
of, or the entry of any judgment arising from, any such suit
or proceeding without the prior written consent of the
Indemnified Party, which will not be unreasonably withheld,
delayed or conditioned; provided, however, that the consent
of the Indemnified Party will not be required if the
Indemnifying Party agrees in writing to pay any amounts
payable pursuant to such settlement or judgment and such
settlement or judgment includes a full, complete and
unconditional release of the Indemnified Party from further
Liability with respect to such claim. The Indemnified Party
will not agree to any settlement of, or the entry of any
judgment arising from, any such suit or proceeding without
the prior written consent of the Indemnifying Party, which
will not be unreasonably withheld, delayed or conditioned.
(d) Notwithstanding anything else herein, in the event that
Seller is sued for the breach of the Bezeq Transaction, the
Seller shall be entitled to defend such claim independently
without derogating from its rights as an Indemnified Party
hereunder.
13.6 The representations, warranties, covenants and obligations of
Purchaser and Seller, and the rights and remedies that may be exercised by
Purchaser or Seller, as the case may be, shall not be limited or otherwise
affected by or as a result of either (i) any waiver of Closing conditions by any
of them, or (ii) any information furnished to, or any investigation made by or
knowledge of, any of them.
14. [RESERVED]
15. MISCELLANEOUS
15.1 Parties in Interest; Assignment.
This Agreement is binding upon and is solely for the benefit of
the Parties and their respective successors, legal
representatives and permitted assigns. No Party may assign this
Agreement or any portion thereof without the written consent of
the other Party. Any attempted assignment not in compliance with
the terms of this Agreement is null and void.
15.2 Notices.
All notices or other communications hereunder shall be in
writing and shall be given in person, by registered mail
(registered international air mail if mailed internationally),
by an overnight courier service which obtains a receipt to
evidence delivery, or by facsimile transmission (provided that
written confirmation of receipt is provided) with a copy by
mail, addressed as set forth below:
28
If to the Seller: 012 Smile.Communications Ltd.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇▇-▇▇-▇▇▇-▇▇▇▇
Attn.: Chief Executive Officer
With a copy to (which shall not ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ Well Orion & Co.
constitute notice): 3 ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
Facsimile: ▇▇▇▇-▇-▇▇▇-▇▇▇▇
Attn: Avraham Well, Adv.
If to the Purchaser or the Guarantor: ▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ "▇"
▇▇▇▇▇▇▇ Pituach 46733
Facsimile: ▇▇▇▇-▇-▇▇▇-▇▇▇▇
Attn: Yoram Firon, VP
With a copy to (which shall not ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
constitute notice): ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Adv.
▇▇▇▇ ▇▇▇▇▇, Adv.
Ido ▇. ▇▇▇▇▇▇, Adv.
Facsimile: ▇▇▇▇-▇-▇▇▇-▇▇▇▇
or such other address as any Party may designate to the other in
accordance with the aforesaid procedure. All communications
delivered in person or by courier service shall be deemed to
have been given upon delivery, those given by facsimile
transmission shall be deemed given on the Business Day following
transmission with confirmed answer back, and all notices and
other communications sent by registered mail (or air mail if the
posting is international) shall be deemed given five (5)
Business Days after posting.
15.3 Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the Parties and their respective
successors and permitted assigns.
15.4 Delays or Omissions; Waiver.
The rights of a Party may be waived by such Party only in
writing and, specifically, the conduct of any one of the Parties
shall not be deemed a waiver of any of its rights pursuant to
this Agreement and/or a waiver or consent on its part as to any
breach or failure to meet any of the terms of this Agreement or
an amendment hereto. A waiver by a Party in respect of a breach
by the other Party of its obligations shall not be construed as
a justification or excuse for a further breach of its
obligations.
No delay or omission to exercise any right, power, or remedy
accruing to any Party upon any breach or default by the other
under this Agreement shall impair any such right or remedy nor
shall it be construed to be a waiver of any such breach or
default, or any acquiescence therein or in any similar breach or
default thereafter occurring.
29
15.5 Amendment. This Agreement may be amended or modified only by a
written document signed by all the Parties.
15.6 Entire Agreement. This Agreement (together with the recitals,
schedules, appendices, annexes and exhibits hereto) contains the
entire understanding of the Parties with respect to its subject
matter and all prior negotiations, discussions, agreements,
commitments and understandings between them with respect thereto
not expressly contained herein shall be null and void in their
entirety, effective immediately with no further action required.
15.7 Severability. If a provision of this Agreement is or becomes
illegal, invalid or unenforceable in any jurisdiction, that
shall not affect the validity or enforceability in that
jurisdiction of any other provision hereof or the validity or
enforceability in other jurisdictions of that or any other
provision hereof. Where provisions of any applicable law
resulting in such illegality, invalidity or unenforceability may
be waived, they are hereby waived by each Party to the full
extent permitted so that this Agreement shall be deemed valid
and binding agreements, in each case enforceable in accordance
with its terms.
15.8 Counterparts; Facsimile Signatures. This Agreement may be
executed in any number of counterparts, each of which shall be
deemed an original but all of which together shall constitute
one and the same instrument. A signed Agreement received by a
Party via facsimile will be deemed an original, and binding upon
the party who signed it.
15.9 Governing Law; Jurisdiction. The Agreement shall be governed by
and construed in accordance with the laws of the State of
Israel, without giving effect to the principles thereof relating
to conflict of laws.
15.10 Venue. Each party hereby irrevocably submits to the exclusive
jurisdiction of the Central District Court for the adjudication
of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including
with respect to the enforcement of any of the Transaction
Documents) and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is improper or inconvenient
venue for such proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served
in any such suit, action or proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for
notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner
permitted by law. in the Central District Court for the
adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the
Transaction Documents) and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is improper or
inconvenient venue for such proceeding. Each party hereby
irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at
the address in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process
in any manner permitted by law.
30
15.11 No Third-Party Beneficiaries. Except as expressly set forth in
sections 11-13, nothing in this Agreement shall create or confer
upon any Person, other than the Parties or their respective
successors and permitted assigns, any rights, remedies,
obligations or liabilities.
15.12 Taxes. Except as expressly set forth herein, each Party shall
bear any Taxes applicable to it in connection with this
Agreement. Any amount stated herein, including, without
limitation, with regard to the Purchase Price, and including any
payments for the Business, Acquired Assets and Assumed
Liabilities, will be exclusive of any VAT, but solely if a valid
VAT invoice is provided. The amount of any such VAT will be
borne by the Purchaser in addition to any payment due under this
Agreement at the time of payment against a proper tax invoice.
In the event that any such VAT is imposed upon or imposed
against the Seller, the Seller will promptly notify the
Purchaser of the VAT amount on a valid VAT invoice.
15.13 Expenses. Except as otherwise expressly provided herein, whether
or not the transactions contemplated hereby are consummated, all
fees and expenses incurred in connection with this Agreement,
including all legal, accounting, financial advisory, consulting
and all other fees and expenses of third parties incurred by a
party in connection with the negotiation, preparation,
effectuation, execution, delivery or performance of this
Agreement, shall be the obligation of the respective party
incurring such fees and expenses.
15.14 Execution by Purchaser. Immediately upon its formation, the
Purchaser shall execute this Agreement and shall be treated as a
Party for all purposes as if it had executed this Agreement on
the date hereof.
15.15 Guarantee. The Guarantor hereby irrevocably guarantees each and
every representation, warranty, covenant, agreement and
obligation of the Purchaser and the full and timely performance
of its obligations under the provisions of this Agreement and
the Transaction Documents. This is a guarantee of payment and
performance, and the Guarantor acknowledges and agrees that this
guarantee is full and unconditional, and no relase or
extinguishments of the Purchaser's obligations or liabilities
(other than in accordance with the terms of this Agreement),
whether by decree of bankruptcy or otherwise, will affect the
continuing validity and enforceability of this guarantee. The
Guarantor hereby waives, for the benefit of the Seller, (a) any
right to require the Seller as a condition of payment or
performance of the Guarantor to proceed against the Purchaser or
pursue any other remedies whatsoever and (b) to the fullest
extent permitted by law, any defenses or benefits that may be
derived or afforded by law that limit the liability of or
exonerate guarantors or sureties, including under the Israeli
Law of Guarantees 1967 (but for the avoidance of doubt,
Guarantor does not waive any defenses that would otherwise be
available to Purchaser). The Guarantor shall have joint and
several liability with the Purchaser for all of Purchaser's
obligations under this Agreement, and Seller shall be entitled
to take all steps to realize its rights under this Agreement and
the Transaction Documents, in whole or in part, to the extent
permissible by law and independently from any other right or
proceeding vis-a-vis the Purchaser, from the Guarantor.
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SIGNATURE PAGE - ASSET PURCHASE AGREEMENT
IN WITNESS WHEREOF, the Seller and the Purchaser have executed this Agreement as
of the date first written above.
--------------------- ---------------------
012 Smile.Communications Ltd. Merhav Ampal Energy Ltd.
on behalf of Ampal Communication
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (2010) Ltd. (in formation)
Title: Chairman of the Board of Directors
By: Yoram Firon ▇▇▇▇ ▇▇▇▇
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Title: Directors
Title: Chief Executive Officer
--------------------------------
Merhav Ampal Energy Ltd.
as Guarantor
By: Yoram Firon ▇▇▇▇ ▇▇▇▇
Title: Directors
33