UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 28) *
SCAILEX CORPORATION LTD.
--------------------------------------------------------------------------------
(Name of Issuer)
Ordinary Shares
--------------------------------------------------------------------------------
(Title of Class of Securities)
809090-10-3
--------------------------------------------------------------------------------
(CUSIP Number)
Kurt Keren, Adv.
Discount Investment Corporation Ltd.
The Triangular Tower, 44th Floor
3 Azrieli Center, Tel Aviv 67023
Israel
Tel: +972 3 6075888
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
May 29, 2006
--------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 249.13d-1(g), check the
following box. [_]
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss.240.13d-7 for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 33 pages
SCHEDULE 13D/A
CUSIP NO. 809090-10-3
--------------------------------------------------------------------------------
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only)
Clal Electronics Industries Ltd.
--------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [_]
--------------------------------------------------------------------------------
3. SEC Use only
--------------------------------------------------------------------------------
4. Source of funds (See Instructions)
WC
--------------------------------------------------------------------------------
5. Check if disclosure of Legal Proceedings Is Required Pursuant to Items 2(d)
or 2(e) [_]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Israel
--------------------------------------------------------------------------------
7. Sole Voting Power
0
Number -------------------------------------------------------------
of Shares 8. Shared Voting Power
Beneficially 9,458,838
Owned by Each -------------------------------------------------------------
Reporting 9. Sole Dispositive Power
Person With: 0
-------------------------------------------------------------
10. Shared Dispositive Power
9,458,838
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
9,458,838
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [_]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
24.85%
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
CO
--------------------------------------------------------------------------------
Page 2 of 33 pages
SCHEDULE 13D/A
CUSIP NO. 809090-10-3
--------------------------------------------------------------------------------
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only)
Clal Industries and Investments Ltd.
--------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [_]
--------------------------------------------------------------------------------
3. SEC Use only
--------------------------------------------------------------------------------
4. Source of funds (See Instructions)
Not Applicable
--------------------------------------------------------------------------------
5. Check if disclosure of Legal Proceedings Is Required Pursuant to Items 2(d)
or 2(e) [_]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Israel
--------------------------------------------------------------------------------
7. Sole Voting Power
0
Number -------------------------------------------------------------
of Shares 8. Shared Voting Power
Beneficially 9,458,838
Owned by Each -------------------------------------------------------------
Reporting 9. Sole Dispositive Power
Person With: 0
-------------------------------------------------------------
10. Shared Dispositive Power
9,458,838
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
9,458,838
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [_]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
24.85%
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
CO
--------------------------------------------------------------------------------
Page 3 of 33 pages
SCHEDULE 13D/A
CUSIP NO. 809090-10-3
--------------------------------------------------------------------------------
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only)
DIC Loans Ltd.
--------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [_]
--------------------------------------------------------------------------------
3. SEC Use only
--------------------------------------------------------------------------------
4. Source of funds (See Instructions)
Not Applicable
--------------------------------------------------------------------------------
5. Check if disclosure of Legal Proceedings Is Required Pursuant to Items 2(d)
or 2(e) [_]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Israel
--------------------------------------------------------------------------------
7. Sole Voting Power
0
Number -------------------------------------------------------------
of Shares 8. Shared Voting Power
Beneficially 0
Owned by Each -------------------------------------------------------------
Reporting 9. Sole Dispositive Power
Person With: 0
-------------------------------------------------------------
10. Shared Dispositive Power
0
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
0
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [_]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
0%
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
CO
--------------------------------------------------------------------------------
Page 4 of 33 pages
SCHEDULE 13D/A
CUSIP NO. 809090-10-3
--------------------------------------------------------------------------------
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only)
Discount Investment Corporation Ltd.
--------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [_]
--------------------------------------------------------------------------------
3. SEC Use only
--------------------------------------------------------------------------------
4. Source of funds (See Instructions)
WC
--------------------------------------------------------------------------------
5. Check if disclosure of Legal Proceedings Is Required Pursuant to Items 2(d)
or 2(e) [X]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Israel
--------------------------------------------------------------------------------
7. Sole Voting Power
0
Number -------------------------------------------------------------
of Shares 8. Shared Voting Power
Beneficially 9,341,417
Owned by Each -------------------------------------------------------------
Reporting 9. Sole Dispositive Power
Person With: 0
-------------------------------------------------------------
10. Shared Dispositive Power
9,341,417
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
9,341,417
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [_]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
24.54%
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
CO
--------------------------------------------------------------------------------
Page 5 of 33 pages
SCHEDULE 13D/A
CUSIP NO. 809090-10-3
--------------------------------------------------------------------------------
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only)
IDB Development Corporation Ltd.
--------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [_]
--------------------------------------------------------------------------------
3. SEC Use only
--------------------------------------------------------------------------------
4. Source of funds (See Instructions)
Not Applicable
--------------------------------------------------------------------------------
5. Check if disclosure of Legal Proceedings Is Required Pursuant to Items 2(d)
or 2(e) [_]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Israel
--------------------------------------------------------------------------------
7. Sole Voting Power
0
Number -------------------------------------------------------------
of Shares 8. Shared Voting Power
Beneficially 18,800,255 *
Owned by Each -------------------------------------------------------------
Reporting 9. Sole Dispositive Power
Person With: 0
-------------------------------------------------------------
10. Shared Dispositive Power
18,800,255 *
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
18,800,255 *
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [X] #
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
49.39%
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
CO
--------------------------------------------------------------------------------
* Does not include 11,508 Ordinary Shares which are held for members of the
public through mutual funds and exchange traded funds managed by companies
controlled by Clal Insurance Enterprises Holdings Ltd. ("CIEH"), a subsidiary of
IDB Development Corporation Ltd. (the "CIEH Shares").
# Excludes the CIEH Shares.
Page 6 of 33 pages
SCHEDULE 13D/A
CUSIP NO. 809090-10-3
--------------------------------------------------------------------------------
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only)
IDB Holding Corporation Ltd.
--------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [_]
--------------------------------------------------------------------------------
3. SEC Use only
--------------------------------------------------------------------------------
4. Source of funds (See Instructions)
Not Applicable
--------------------------------------------------------------------------------
5. Check if disclosure of Legal Proceedings Is Required Pursuant to Items 2(d)
or 2(e) [_]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Israel
--------------------------------------------------------------------------------
7. Sole Voting Power
0
Number -------------------------------------------------------------
of Shares 8. Shared Voting Power
Beneficially 18,800,255 *
Owned by Each -------------------------------------------------------------
Reporting 9. Sole Dispositive Power
Person With: 0
-------------------------------------------------------------
10. Shared Dispositive Power
18,800,255 *
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
18,800,255 *
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [X] #
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
49.39%
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
CO
--------------------------------------------------------------------------------
* Does not include the CIEH Shares.
# Excludes the CIEH Shares.
Page 7 of 33 pages
SCHEDULE 13D/A
CUSIP NO. 809090-10-3
--------------------------------------------------------------------------------
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only)
Nochi Dankner
--------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [_]
--------------------------------------------------------------------------------
3. SEC Use only
--------------------------------------------------------------------------------
4. Source of funds (See Instructions)
Not Applicable
--------------------------------------------------------------------------------
5. Check if disclosure of Legal Proceedings Is Required Pursuant to Items 2(d)
or 2(e) [_]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Israel
--------------------------------------------------------------------------------
7. Sole Voting Power
0
Number -------------------------------------------------------------
of Shares 8. Shared Voting Power
Beneficially 18,800,255 *
Owned by Each -------------------------------------------------------------
Reporting 9. Sole Dispositive Power
Person With: 0
-------------------------------------------------------------
10. Shared Dispositive Power
18,800,255 *
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
18,800,255 *
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [X] #
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
49.39%
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
IN
--------------------------------------------------------------------------------
* Does not include the CIEH Shares.
# Excludes the CIEH Shares.
Page 8 of 33 pages
SCHEDULE 13D/A
CUSIP NO. 809090-10-3
--------------------------------------------------------------------------------
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only)
Shelly Bergman
--------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [_]
--------------------------------------------------------------------------------
3. SEC Use only
--------------------------------------------------------------------------------
4. Source of funds (See Instructions)
Not Applicable
--------------------------------------------------------------------------------
5. Check if disclosure of Legal Proceedings Is Required Pursuant to Items 2(d)
or 2(e) [_]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Israel
--------------------------------------------------------------------------------
7. Sole Voting Power
0
Number -------------------------------------------------------------
of Shares 8. Shared Voting Power
Beneficially 18,800,255 *
Owned by Each -------------------------------------------------------------
Reporting 9. Sole Dispositive Power
Person With: 0
-------------------------------------------------------------
10. Shared Dispositive Power
18,800,255 *
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
18,800,255 *
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [X] #
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
49.39%
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
IN
--------------------------------------------------------------------------------
* Does not include the CIEH Shares.
# Excludes the CIEH Shares.
Page 9 of 33 pages
SCHEDULE 13D/A
CUSIP NO. 809090-10-3
--------------------------------------------------------------------------------
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only)
Ruth Manor
--------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [_]
--------------------------------------------------------------------------------
3. SEC Use only
--------------------------------------------------------------------------------
4. Source of funds (See Instructions)
Not Applicable
--------------------------------------------------------------------------------
5. Check if disclosure of Legal Proceedings Is Required Pursuant to Items 2(d)
or 2(e) [_]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Israel
--------------------------------------------------------------------------------
7. Sole Voting Power
0
Number -------------------------------------------------------------
of Shares 8. Shared Voting Power
Beneficially 18,800,255 *
Owned by Each -------------------------------------------------------------
Reporting 9. Sole Dispositive Power
Person With: 0
-------------------------------------------------------------
10. Shared Dispositive Power
18,800,255 *
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
18,800,255 *
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [X] #
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
49.39%
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
IN
--------------------------------------------------------------------------------
* Does not include the CIEH Shares.
# Excludes the CIEH Shares.
Page 10 of 33 pages
SCHEDULE 13D/A
CUSIP NO. 809090-10-3
--------------------------------------------------------------------------------
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only)
Avraham Livnat
--------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [_]
--------------------------------------------------------------------------------
3. SEC Use only
--------------------------------------------------------------------------------
4. Source of funds (See Instructions)
Not Applicable
--------------------------------------------------------------------------------
5. Check if disclosure of Legal Proceedings Is Required Pursuant to Items 2(d)
or 2(e) [_]
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Israel
--------------------------------------------------------------------------------
7. Sole Voting Power
0
Number -------------------------------------------------------------
of Shares 8. Shared Voting Power
Beneficially 18,800,255 *
Owned by Each -------------------------------------------------------------
Reporting 9. Sole Dispositive Power
Person With: 0
-------------------------------------------------------------
10. Shared Dispositive Power
18,800,255 *
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
18,800,255 *
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [X] #
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
49.39%
--------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
IN
--------------------------------------------------------------------------------
* Does not include the CIEH Shares.
# Excludes the CIEH Shares.
Page 11 of 33 pages
This Amendment No. 28 on Schedule 13D/A (the "Amendment") amends and
supplements, to the extent specified herein, the Statement on Schedule 13D, as
amended, previously filed with the Securities and Exchange Commission by the
Reporting Persons with respect to the ordinary shares, par value New Israeli
Shekel 0.12 per share, of Scailex Corporation Ltd. ("Scailex") owned by the
Reporting Persons (the "Statement"). Capitalized terms used in the Amendment
without being defined herein have the meanings given to them in the Statement.
The Amendment is filed by the Reporting Persons in connection with an
agreement entered into by DIC, CEI and Clal for the sale of all the Ordinary
Shares owned by them as set forth in the Amendment.
The following amends and supplements Items 2, 3, 4, 5, 6 and 7 of the
Statement.
Item 2. IDENTITY AND BACKGROUND
(a), (b) and (c): The Reporting Persons.
The address of Shelly Bergman is 9 Hamishmar Ha'Ezrachi Street, Afeka,
Tel-Aviv 69697, Israel.
As of May 29, 2006:
DIC Loans did not own any Ordinary Shares, and is no longer a Reporting Person
(See Item 3 in the Amendment).
IDB Development owned approximately 62% of the outstanding shares of Clal and
approximately 74% of the outstanding shares of DIC.
IDB Holding owned approximately 72% of the outstanding shares of IDB
Development.
Nochi Dankner (together with a private company controlled by him) and Shelly
Bergman own approximately 57.1% and 13.4% respectively of the outstanding shares
of, and control, Ganden Holdings. One of Ganden Holdings' other shareholders,
owning in the aggregate approximately 1.8% of Ganden Holdings' outstanding
shares, has a tag along right granted to it by Nochi Dankner to participate in
certain sales of Ganden Holdings' shares by Nochi Dankner, and such shareholder
agreed to vote all its shares of Ganden Holdings in accordance with Nochi
Dankner's instructions. Nochi Dankner is the Chairman of the Boards of
Directors, and Zehava Dankner (the mother of Nochi Dankner and Shelly Bergman)
is a director, of IDB Holding, IDB Development, DIC and Clal.
In addition to approximately 31.02% of the outstanding shares of IDB Holding
owned by Ganden, which is controlled by Nochi Dankner and Shelly Bergman through
Ganden Holdings, (i) Ganden owned directly approximately 6.7% of the outstanding
shares of IDB Holding, (ii) Ganden Holdings itself owned directly approximately
11.4% of the outstanding shares of IDB Holding, and (iii) a private Israeli
corporation which is wholly owned by Shelly Bergman owned approximately 7.2% of
the outstanding shares of IDB Holding. These additional shares of IDB Holding
are not subject to the Shareholders Agreement. Substantially all of these
additional shares of IDB Holding owned by Ganden, Ganden Holdings and Shelly
Bergman's wholly owned corporation as set forth above were acquired with
borrowed funds and are subject to the rights of each respective shareholder's
lending institution in the event of default.
In addition to approximately 10.34% of the outstanding shares of IDB Holding
owned by Manor, which is controlled by Ruth Manor, another private Israeli
corporation which is controlled by her owned approximately 0.03% of the
outstanding shares of IDB Holding. These additional shares of IDB Holding are
not subject to the Shareholders Agreement.
Page 12 of 33 pages
In addition to approximately 10.34% of the outstanding shares of IDB Holding
owned by Livnat, which is controlled by Avraham Livnat, another private Israeli
corporation which is controlled by him owned approximately 0.04% of the
outstanding shares of IDB Holding. These additional shares of IDB Holding are
not subject to the Shareholders Agreement.
The name, citizenship, residence or business address and present principal
occupation of the directors and executive officers of (i) CEI, (ii) Clal, (iii)
DIC Loans, (iv) DIC, (v) IDB Development and (vi) IDB Holding are set forth in
Schedules A, B, C, D, E and F attached hereto, respectively, and incorporated
herein by reference.
(d) None of the Reporting Persons or, to the knowledge of the Reporting
Persons, any director or executive officer named in Schedules A, B, C, D, E and
F to this Amendment, has, during the last five years, been convicted in any
criminal proceeding, excluding traffic violations and similar misdemeanors,
except as provided below.
In November 2004, the Tel Aviv District Court acquitted DIC, several past
executive officers of DIC and one of its other officers, and accepted their
appeal filed in such Court against a judgment of Tel Aviv Magistrate's Court
convicting them in February 2002, of criminal offenses under the Israeli
Securities Act, 1968, regarding the inclusion of a misleading detail in DIC's
annual and quarterly financial statements in order to mislead a reasonable
investor by not attaching the financial statements of certain companies to DIC's
financial statements in respect of the financial reporting periods from 1990
through the first quarter of 1995 filed with the Tel Aviv Stock Exchange and the
Israeli Registrar of Companies. In December 2004, the prosecution filed in the
Supreme Court of Israel a request for leave to appeal against the aforesaid
decision of the Tel Aviv District Court. This request of the prosecution has not
yet been heard by the Supreme Court. None of the activities underlying the legal
proceedings described above, which activities ended in May 1995, relate to or
involve Scailex or its business in any way.
(e) None of the Reporting Persons or, to the knowledge of the Reporting
Persons, any director or executive officer named in Schedules A, B, C, D, E and
F to this Amendment, has, during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction which
as a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, Federal or state securities laws or finding any violation with
respect to such laws.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On November 16, 2005 DIC Loans sold to DIC, the parent company of DIC Loans,
4,880,336 Ordinary Shares, constituting all the Ordinary Shares then directly
owned by DIC Loans, for a total consideration of NIS 130,988,164 (approximately
$27,663,815) at a price of NIS 26.84 (approximately $4.73) per share, and
consequently DIC Loans ceased to be a Reporting Person. DIC used its own funds
to purchase such Ordinary Shares from DIC Loans.
On March 29, 2006 and March 30, 2006 CEI and DIC purchased an aggregate of
98,000 Ordinary Shares for a total purchase price of NIS 2,718,746
(approximately $578,579), excluding commissions, in cash, using their respective
own funds to pay such total purchase price.
Item 4. PURPOSE OF TRANSACTION
The Reporting Persons (other than those who do not directly hold any Ordinary
Shares) have decided to sell all of their Ordinary Shares pursuant to the Sale
Agreement described in Item 6 below. See Item 6 below, which is incorporated
herein by reference.
Page 13 of 33 pages
Item 5. INTEREST IN SECURITIES OF THE ISSUER
As of May 29, 2006:
DIC Loans did not beneficially own any Ordinary Shares.
DIC directly owned 9,341,417 Ordinary Shares, or approximately 24.54% of
the outstanding Ordinary Shares. DIC shared the power to vote and dispose of
these Ordinary Shares.
CEI directly owned 9,458,838 Ordinary Shares, or approximately 24.85% of
the outstanding Ordinary Shares. CEI shared the power to vote and dispose of
these Ordinary Shares. Clal may be deemed beneficial owner of, and to share the
power to vote and dispose of, the Ordinary Shares held by CEI.
DIC, CEI, Clal, IDB Development, IDB Holding and the Reporting Persons who
are natural persons may each be deemed beneficial owner of, and to share the
power to vote and dispose of, the aggregate of 18,800,255 Ordinary Shares held
by DIC and CEI, or approximately 49.33% of the outstanding Ordinary Shares.
The percentages of Ordinary Shares outstanding set forth above are based on
38,066,363 Ordinary Shares outstanding on May 29, 2006 (excluding 5,401,025
treasury shares) according to the most recent filing of Scailex with the
Securities and Exchange Commission.
The following table sets forth the purchases of Ordinary Shares made by CEI and
DIC during the period beginning 60 days prior to May 29, 2006 (a total of 98,000
Ordinary Shares). CEI and DIC acted together in making these purchases. All
these purchases were made on the Tel Aviv Stock Exchange.
Date of Number of Shares Number of Shares Price Per
Transaction Purchased by CEI Purchased by DIC Share
----------- ---------------- ---------------- -----
March 29, 2006 1,258 1,242 NIS 27.62
4,025 3,975 27.66
252 248 27.67
10,062 9,938 27.70
151 149 27.71
7,044 6,956 27.75
2,516 2,484 27.79
17,457 17,243 27.80
March 30, 2006 4,729 4,671 27.70
1,313 1,296 27.71
197 194 27.72
302 298 27.74
Except as aforesaid and the Sale Agreement described in Item 6 below, none of
the Reporting Persons purchased or sold any Ordinary Shares during the last 60
days.
Information provided to the Reporting Persons indicates that none of the
executive officers and directors of IDB Holding, IDB Development, Clal, CEI, DIC
and DIC Loans owned as of May 29, 2006, or purchased or sold during the last 60
days, any Ordinary Shares, except that as of May 29, 2006, Mr. Dovrat, a
director of Clal, owned 2,210 Ordinary Shares.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF ISSUER
On May 29, 2006 CEI, Clal and DIC (collectively, the "Sellers") entered into a
Sale Agreement with Israel Petrochemical Enterprises Ltd. (the "Purchaser"), an
Israeli public company whose shares are traded on the Tel Aviv Stock Exchange,
for the sale by the Sellers of their entire holdings of Ordinary Shares to the
Purchaser (the "Sale Agreement"). Pursuant to the Sale Agreement, the Sellers
agreed to sell to the Purchaser all of the 18,800,255 Ordinary Shares owned by
the Sellers, representing approximately 49.4% of the outstanding Ordinary
Shares, for an aggregate price of $165 million (reflecting a price of
approximately $8.776 per Ordinary Share), subject to certain price adjustments
set forth in the Sale Agreement. The Sale Agreement contains representations and
warranties as well as covenants of the parties, including the Sellers'
undertaking to cooperate with the Purchaser in order to allow the Purchaser to
appoint a majority of the members of Scailex's Board of Directors upon the
closing of the sale. The Sale Agreement provides that the closing of the sale is
subject to customary closing conditions, including the approval of the Israeli
Restrictive Trade Commissioner, and that the last date for the closing of the
sale is the end of August 2006. The foregoing description of the Sale Agreement
is qualified in its entirety by the complete text of the Sale Agreement attached
as Exhibit 1 to the Amendment, which text is incorporated herein by reference.
Page 14 of 33 pages
Item 7. MATERIAL TO BE FILED AS EXHIBITS
Schedules Name, citizenship, residence or business address and present
A, B, C, D, principal occupation of the directors and executive officers of
E and F (i) CEI, (ii) Clal, (iii) DIC Loans, (iv) DIC, (v) IDB
Development and (vi) IDB Holding.
Exhibit 1 Sale Agreement dated May 29, 2006. *
* Translation from Hebrew
SIGNATURE
After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certify that the information set forth in this Amendment No. 28 is
true, complete and correct.
Date: June 6, 2006 CLAL ELECTRONICS INDUSTRIES LTD.
CLAL INDUSTRIES AND INVESTMENTS LTD.
DIC LOANS LTD.
DISCOUNT INVESTMENT CORPORATION LTD.
IDB DEVELOPMENT CORPORATION LTD.
IDB HOLDING CORPORATION LTD.
NOCHI DANKNER
SHELLY BERGMAN
RUTH MANOR
AVRAHAM LIVNAT
BY: IDB HOLDING CORPORATION LTD.
(signed)
BY: ______________________________
Inbal Tzion, authorized signatory of IDB Holding
Corporation Ltd., for itself and on behalf of Clal
Electronics Industries Ltd., Clal Industries and
Investments Ltd., DIC Loans Ltd., Discount Investment
Corporation Ltd., IDB Development Corporation Ltd.,
Nochi Dankner, Shelly Bergman, Ruth Manor and Avraham
Livnat, pursuant to agreements annexed to Amendment No
25 of the Statement as Exhibits 2 through 11.
Page 15 of 33 pages
Schedule A
Directors and Executive Officers
o f
CLAL ELECTRONICS INDUSTRIES LTD.
(as of May 29, 2006)
Citizenship is the same as country of address, unless otherwise noted.
NAME & ADDRESS POSITION CURRENT PRINCIPAL OCCUPATION
-------------- -------- ----------------------------
Avi Fischer Chairman of the Executive Vice President of IDB Holding; Deputy
3 Azrieli Center, The Triangular Tower, 45th Board of Directors Chairman of IDB Development; Co-Chief Executive
floor, Tel-Aviv 67023, Israel Officer of Clal.
Gil Milner Director & Vice President & Comptroller of Clal.
3 Azrieli Center, The Triangular Tower 45th Comptroller
floor, Tel-Aviv 67023, Israel
Gonen Bieber (*) Director & Finance Vice President, Finance of Clal.
3 Azrieli Center, The Triangular Tower 45th Manager
floor, Tel-Aviv 67023, Israel
Guy Rosen Director Vice President of Clal.
3 Azrieli Center, The Triangular Tower 45th
floor, Tel-Aviv 67023, Israel
Boaz Simons Director Vice President of Clal.
3 Azrieli Center, The Triangular Tower 45th
floor, Tel-Aviv 67023, Israel
(*) Dual citizen of Israel and Germany.
======================================================================
Schedule B
Directors and Executive Officers
o f
CLAL INDUSTRIES AND INVESTMENTS LTD.
(as of May 29, 2006)
Citizenship is the same as country of address, unless otherwise noted.
NAME & ADDRESS POSITION CURRENT PRINCIPAL OCCUPATION
-------------- -------- ----------------------------
Nochi Dankner Chairman of the Chairman and Chief Executive Officer of IDB
3 Azrieli Center, The Triangular Tower, 44th Board of Directors Holding; Chairman of IDB Development, DIC and
floor, Tel-Aviv 67023, Israel Clal; Director of companies.
Zehava Dankner Director Member of the executive committee of the
64 Pinkas Street, Tel Aviv 62157, Israel Beautiful Israel Council.
Shay Livnat Director President of Zoe Holdings Ltd.
26 Shalva Street,
Herzlia Pituach 46705, Israel
Avi Fischer Director & Co-Chief Executive Vice President of IDB Holding; Deputy
3 Azrieli Center, The Triangular Tower, 45th Executive Officer Chairman of IDB Development; Co-Chief Executive
floor, Tel-Aviv 67023, Israel Officer of Clal.
Page 16 of 33 pages
Isaac Manor (*) Director Chairman of companies in the motor vehicle sector
26 Hagderot Street, Savion 56526, Israel of the David Lubinski Ltd. group.
Dori Manor (*) Director Chief Executive Officer of companies in the motor
18 Hareches Street, Savion 56538, Israel vehicle sector of the David Lubinski Ltd. group.
Lior Hannes Director Senior Executive Vice President of IDB
3 Azrieli Center, The Triangular Tower, 44th Development; Chairman of Clal Tourism Ltd.
floor, Tel-Aviv 67023, Israel
Refael Bisker Director Chairman of Property and Building Corporation Ltd.
3 Azrieli Center, The Triangular Tower, 44th
floor, Tel-Aviv 67023, Israel
Adiel Rosenfeld Director Representative in Israel of the Aktiva group.
42 Ha'Alon Street, Timrat 23840, Israel
Marc Schimmel Director Chairman & Chief Executive Officer of UKI
13 High field Gardens, Investments.
London NW1 19HD, United Kingdom
Yecheskel Dovrat (1) Director Economical consultant & director of companies.
1 Nachshon Street,
Ramat Hasharon 47301, Israel
Eliahu Cohen Director Chief Executive Officer of IDB Development.
3 Azrieli Center, The Triangular Tower 44th
floor, Tel-Aviv 67023, Israel
David Leviatan Director Director of companies.
18 Mendele Street, Herzelia 46709, Israel
Nachum Langental External Director Director of companies.
19 Nimrover Street,
Givat Shmuel 54019, Israel
Aliza Rotbard External Director Chief Executive Officer of DOORS Information
6 Rosenblum Street, #6101 Sea & Sun, Tel Aviv Systems, Inc.
69583, Israel
Zvi Livnat Co-Chief Executive Executive Vice President of IDB Holding; Deputy
3 Azrieli Center, The Triangular Tower, 45th Officer Chairman of IDB Development; Co-Chief Executive
floor, Tel-Aviv 67023, Israel Officer of Clal.
Nitsa Einan Vice President and General Counsel of Clal.
3 Azrieli Center, The Triangular Tower 45th General Counsel
floor, Tel-Aviv 67023, Israel
Gil Milner Vice President & Comptroller of Clal.
3 Azrieli Center, The Triangular Tower 45th Comptroller
floor, Tel-Aviv 67023, Israel
Gonen Bieber (**) Vice President, Vice President, Finance of Clal.
3 Azrieli Center, The Triangular Tower 45th Finance
floor, Tel-Aviv 67023, Israel
Guy Rosen Vice President Vice President of Clal.
3 Azrieli Center, The Triangular Tower 45th
floor, Tel-Aviv 67023, Israel
Page 17 of 33 pages
Boaz Simons Vice President Vice President of Clal.
3 Azrieli Center, The Triangular Tower 45th
floor, Tel-Aviv 67023, Israel
Tamar Manor Chief Technology Chief Technology Officer, Biotechnology of Clal.
3 Azrieli Center, The Triangular Tower 45th Officer,
floor, Tel-Aviv 67023, Israel Biotechnology
(*) Dual citizen of Israel and France.
(**) Dual citizen of Israel and Germany.
(1) As of May 29, 2006 Mr. Dovrat owned 2,210 Ordinary Shares.
======================================================================
Schedule C
Directors and Executive Officers
o f
DIC LOANS LTD.
(as of May 29, 2006)
Citizenship is the same as country of address, unless otherwise noted.
NAME & ADDRESS POSITION CURRENT PRINCIPAL OCCUPATION
-------------- -------- ----------------------------
Oren Lieder Director & Chief Senior Vice President & Chief Financial Officer
3 Azrieli Center, The Triangular Tower 44th Financial Officer of DIC.
floor, Tel-Aviv 67023, Israel
Raanan Cohen Director Vice President of DIC; President and Chief
3 Azrieli Center, The Triangular Tower 44th Executive Officer of Scailex.
floor, Tel-Aviv 67023, Israel
Michel Dahan Director & Comptroller of DIC.
3 Azrieli Center, The Triangular Tower 44th Comptroller
floor, Tel-Aviv 67023, Israel
======================================================================
Schedule D
Directors and Executive Officers
o f
DISCOUNT INVESTMENT CORPORATION LTD.
(as of May 29, 2006)
Citizenship is the same as country of address, unless otherwise noted.
NAME & ADDRESS POSITION CURRENT PRINCIPAL OCCUPATION
-------------- -------- ----------------------------
Nochi Dankner Chairman of the Chairman and Chief Executive Officer of IDB
3 Azrieli Center, The Triangular Tower, 44th Board of Directors Holding; Chairman of IDB Development, DIC and
floor, Tel-Aviv 67023, Israel Clal; Director of companies.
Zehava Dankner Director Member of the executive committee of the
64 Pinkas Street, Tel Aviv 62157, Israel Beautiful Israel Council.
Zvi Livnat Director Executive Vice President of IDB Holding; Deputy
3 Azrieli Center, The Triangular Tower, 45th Chairman of IDB Development; Co-Chief Executive
floor, Tel-Aviv 67023, Israel Officer of Clal.
Page 18 of 33 pages
Avi Fischer Director Executive Vice President of IDB Holding; Deputy
3 Azrieli Center, The Triangular Tower, 45th Chairman of IDB Development; Co-Chief Executive
floor, Tel-Aviv 67023, Israel Officer of Clal.
Lior Hannes Director Senior Executive Vice President of IDB
3 Azrieli Center, The Triangular Tower, 44th Development; Chairman of Clal Tourism Ltd.
floor, Tel-Aviv 67023, Israel
Refael Bisker Director Chairman of Property and Building Corporation Ltd.
3 Azrieli Center, The Triangular Tower, 44th
floor, Tel-Aviv 67023, Israel
Jacob Schimmel Director Director of UKI Investments.
17 High field Gardens,
London W11 9HD, United Kingdom
Shaul Ben-Zeev Director Chief Executive Officer of Avraham Livnat Ltd.
Taavura Junction, Ramle 72102, Israel
Eliahu Cohen Director Chief Executive Officer of IDB Development.
3 Azrieli Center, The Triangular Tower, 44th
floor, Tel-Aviv 67023, Israel
Gideon Lahav Director Director of companies.
124 Ehad Ha-Am Street,
Tel-Aviv 65208, Israel
Moshe Arad External Director Director of companies.
14 Shay Agnon Street,
Jerusalem 92586, Israel
Gideon Dover External Director Chief Executive Officer and director of Dover
11 Hamaalot Street, Herzlia B 46583, Israel Medical and Scientific Equipment Ltd.
Isaac Manor (*) Director Chairman of companies in the motor vehicle sector
26 Hagderot Street, Savion 56526, Israel of the David Lubinski Ltd. group.
Dori Manor (*) Director Chief Executive Officer of companies in the motor
18 Hareches Street, Savion 56538, Israel vehicle sector of the David Lubinski Ltd. group.
Adiel Rosenfeld Director Representative in Israel of the Aktiva group.
42 Ha'Alon Street, Timrat 23840, Israel
Ami Erel President and Chief President and Chief Executive Officer of DIC.
3 Azrieli Center, The Triangular Tower, 44th Executive Officer
floor, Tel-Aviv 67023, Israel
Oren Lieder Senior Vice Senior Vice President and Chief Financial Officer
3 Azrieli Center, The Triangular Tower, 44th President and Chief of DIC.
floor, Tel-Aviv 67023, Israel Financial Officer
Raanan Cohen Vice President Vice President of DIC; Chief Executive Officer of
3 Azrieli Center, The Triangular Tower, 44th Scailex.
floor, Tel-Aviv 67023, Israel
Ari Bronshtein Vice President Vice President of DIC.
3 Azrieli Center, The Triangular Tower, 44th
floor, Tel-Aviv 67023, Israel
Page 19 of 33 pages
Michel Dahan Vice President and Vice President and Comptroller of DIC.
3 Azrieli Center, The Triangular Tower, 44th Comptroller
floor, Tel-Aviv 67023, Israel
(*) Dual citizen of Israel and France
======================================================================
Schedule E
Directors and Executive Officers
o f
IDB DEVELOPMENT CORPORATION LTD.
(as of May 29, 2006)
Citizenship is the same as country of address, unless otherwise noted.
NAME & ADDRESS POSITION CURRENT PRINCIPAL OCCUPATION
-------------- -------- ----------------------------
Nochi Dankner Chairman of the Chairman and Chief Executive Officer of IDB
3 Azrieli Center, The Triangular Tower, 44th Board of Directors Holding; Chairman of IDB Development, DIC and
floor, Tel-Aviv 67023, Israel Clal; Director of companies.
Zehava Dankner Director Member of the executive committee of the Beautiful
64 Pinkas Street, Tel Aviv 62157, Israel Israel Council.
Avi Fischer Deputy Chairman of Executive Vice President of IDB Holding; Deputy
3 Azrieli Center, The Triangular Tower, 45th the Board of Chairman of IDB Development; Co-Chief Executive
floor, Tel-Aviv 67023, Israel Directors Officer of Clal.
Zvi Livnat Deputy Chairman of Executive Vice President of IDB Holding; Deputy
3 Azrieli Center, The Triangular Tower, 45th the Board of Chairman of IDB Development; Co-Chief Executive
floor, Tel-Aviv 67023, Israel Directors Officer of Clal.
Refael Bisker Director Chairman of Property and Building Corporation Ltd.
3 Azrieli Center, The Triangular Tower, 44th
floor, Tel-Aviv 67023, Israel
Jacob Schimmel Director Director of UKI Investments.
17 High field Gardens,
London W11 9HD, United Kingdom
Shay Livnat Director President of Zoe Holdings Ltd.
26 Shalva Street,
Herzlia Pituach 46705, Israel
Eliahu Cohen Director and Chief Chief Executive Officer of IDB Development.
3 Azrieli Center, The Triangular Tower 44th Executive Officer
floor, Tel-Aviv 67023, Israel
Isaac Manor (*) Director Chairman of companies in the motor vehicle sector
26 Hagderot Street, Savion 56526, Israel of the David Lubinski Ltd. group.
Dori Manor (*) Director Chief Executive Officer of companies in the motor
18 Hareches Street, Savion 56538, Israel vehicle sector of the David Lubinski Ltd. group.
Abraham Ben Joseph Director Director of companies.
87 Haim Levanon Street,
Tel-Aviv 69345, Israel
Page 20 of 33 pages
Amos Malka External Director Chairman of Albar Mimunit Services Ltd.
18 Nahal Soreq Street, Modi'in 71700, Israel
Rami (Avraham) Mardor External Director Director of companies.
33 Haoranim Street,
Kfar Shmariyahu 46910, Israel
Irit Izakson Director Director of companies.
15 Great Matityahou Cohen Street,
Tel-Aviv 62268, Israel
Lior Hannes Senior Executive Senior Executive Vice President of IDB
3 Azrieli Center, The Triangular Tower, 44th Vice President Development; Chairman of Clal Tourism Ltd.
floor, Tel-Aviv 67023, Israel
Dr. Eyal Solganik Executive Vice Executive Vice President and Chief Financial
3 Azrieli Center, The Triangular Tower, 44th President and Chief Officer of IDB Development; Chief Financial
floor, Tel-Aviv 67023, Israel Financial Officer Officer of IDB Holding.
Ari Raved Vice President Vice President of IDB Development.
3 Azrieli Center, The Triangular Tower, 44th
floor, Tel-Aviv 67023, Israel
Haim Gavrieli Vice President Vice President of IDB Development.
3 Azrieli Center, The Triangular Tower, 44th
floor, Tel-Aviv 67023, Israel
Haim Tabouch Vice President and Vice President and Comptroller of IDB Development;
3 Azrieli Center, The Triangular Tower, 44th Comptroller Comptroller of IDB Holding.
floor, Tel-Aviv 67023, Israel
Ruti Sapan Vice President, Vice President, Management Resources of IDB
3 Azrieli Center, The Triangular Tower, 44th Management Resources Development.
floor, Tel-Aviv 67023, Israel
(*) Dual citizen of Israel and France.
======================================================================
Schedule F
Directors and Executive Officers
o f
IDB HOLDING CORPORATION LTD.
(as of May 29, 2006)
Citizenship is the same as country of address, unless otherwise noted.
NAME & ADDRESS POSITION CURRENT PRINCIPAL OCCUPATION
-------------- -------- ----------------------------
Nochi Dankner Chairman of the Chairman and Chief Executive Officer of IDB
3 Azrieli Center, The Triangular Tower, 44th Board of Directors Holding; Chairman of IDB Development, DIC and
floor, Tel-Aviv 67023, Israel and Chief Executive Clal; Director of companies.
Officer
Isaac Manor (*) Deputy Chairman of Chairman of companies in the motor vehicle sector
26 Hagderot Street, Savion 56526, Israel the Board of of the David Lubinski Ltd. group.
Directors
Page 21 of 33 pages
Arie Mientkavich Vice Chairman of Deputy Chairman of Gazit-Globe Ltd.; Director of
14 Betzalel Street, the Board of Gazit-Globe Israel (Development) Ltd.
Jerusalem 94591, Israel Directors
Zehava Dankner Director Member of the executive committee of the
64 Pinkas Street, Tel Aviv 62157, Israel Beautiful Israel Council.
Lior Hannes Director Senior Executive Vice President of IDB
3 Azrieli Center, The Triangular Tower, 44th Development; Chairman of Clal Tourism Ltd.
floor, Tel-Aviv 67023, Israel
Refael Bisker Director Chairman of Property and Building Corporation Ltd.
3 Azrieli Center, The Triangular Tower, 44th
floor, Tel-Aviv 67023, Israel
Jacob Schimmel Director Director of UKI Investments.
17 High field Gardens,
London W11 9HD, United Kingdom
Shaul Ben-Zeev Director Chief Executive Officer of Avraham Livnat Ltd.
Taavura Junction, Ramle 72102, Israel
Eliahu Cohen Director Chief Executive Officer of IDB Development.
3 Azrieli Center, The Triangular Tower, 44th
floor, Tel-Aviv 67023, Israel
Dori Manor (*) Director Chief Executive Officer of companies in the motor
18 Hareches Street, Savion 56538, Israel vehicle sector of the David Lubinski Ltd. group.
Meir Rosenne Director Attorney.
8 Oppenheimer Street, Ramat Aviv,
Tel Aviv 69395, Israel
Shmuel Lachman External Director Information technology consultant
9A Khilat Jatomir Street,
Tel Aviv 69405, Israel
Rolando Eisen External Director Director of companies.
2 "A" Geiger Street, Naveh Avivim, Tel Aviv
69341, Israel
Zvi Livnat Director and Executive Vice President of IDB Holding; Deputy
3 Azrieli Center, The Triangular Tower, 45th Executive Vice Chairman of IDB Development; Co-Chief Executive
floor, Tel-Aviv 67023, Israel President Officer of Clal.
Avi Fischer Executive Vice Executive Vice President of IDB Holding; Deputy
3 Azrieli Center, The Triangular Tower, 45th President Chairman of IDB Development; Co-Chief Executive
floor, Tel-Aviv 67023, Israel Officer of Clal.
Dr. Eyal Solganik Chief Financial Chief Financial Officer of IDB Holding; Executive
3 Azrieli Center, The Triangular Tower, 44th Officer Vice President and Chief Financial Officer of IDB
floor, Tel-Aviv 67023, Israel Development.
Haim Tabouch Comptroller Comptroller of IDB Holding; Vice President and
3 Azrieli Center, The Triangular Tower, 44th Comptroller of IDB Development.
floor, Tel-Aviv 67023, Israel
(*) Dual citizen of Israel and France.
======================================================================
Page 22 of 33 pages
Exhibit 1
(UNOFFICIAL TRANSLATION FROM HEBREW)
SALE AGREEMENT
Made and signed in Tel Aviv on May 29, 2006
BETWEEN: 1. CLAL INDUSTRIES AND INVESTMENTS LTD.
2. CLAL ELECTRONIC INDUSTRIES LTD.
No. 1 and 2 hereinafter to be known jointly as "KATASH"
3. DISCOUNT INVESTMENTS CO. LTD.
Hereinafter to be known as "DASKASH"
(Katash and Daskash to be known hereinafter severally as the
"SELLER" and jointly as the "SELLERS")
OF THE FIRST PART;
AND: ISRAEL PETROCHEMICAL ENTERPRISES LTD.
(itself or by way of a company under its control and ownership)
(the "BUYER")
OF THE SECOND PART;
WHEREAS: Each of the Sellers is the owner of Ordinary Shares with a
nominal value of NIS 0.12 each (the "ORDINARY SHARES") of Scailex
Corporation Ltd. (the "COMPANY"), in an amount and at a rate
stated alongside its name in APPENDIX 1, which constitute all the
shares of the Company under the ownership of the Sellers;
(The total number of Ordinary Shares of the Company, owned by all
the Sellers and indicated in Appendix 1 as constituting 49.39% of
the issued capital of the Company, as noted in Appendix 1 - the
"SHARES BEING SOLD");
WHEREAS: There is a duly signed voting agreement between Clal Industries
and Investments Ltd. and Discount Investment Co. Ltd. in
connection with all the Shares Being Sold, and they are deemed as
"Holding Together" all the Shares Being Sold in the matter of the
Companies Law, 5759-1999;
WHEREAS: The Sellers are interested in selling and transferring the Shares
Being Sold to the Buyer under the terms specified in this
Agreement;
WHEREAS: The Buyer is interested in purchasing from the Sellers the Shares
Being Sold under the terms specified in this Agreement;
NOW, THEREFORE, THE PARTIES HAVE DECLARED, STIPULATED AND AGREED AS FOLLOWS:
1. PREAMBLE AND HEADINGS
The preamble and appendices to this Agreement constitute an inseparable
part thereof.
The section headings in this Agreement shall serve solely for the sake of
convenience and not for the construal of the agreement.
2. THE SELLERS' REPRESENTATIONS
Each of the Sellers represents and undertakes severally in relation to
itself and to the Company vis-a-vis the Buyer, as of the date of signature
of this Agreement, as follows:
2.1 That the Company is registered in Israel as a public company and its
shares are registered for trade on the Tel Aviv Stock Exchange Ltd. as
well as on the NASDAQ in the United States.
2.2 That it is the sole owner of the Ordinary Shares of the Company in the
amount that is registered alongside its name in Appendix 1 (the
"SELLER'S SHARES").
Page 23 of 33 pages
2.3 Except for the Seller's Shares, the Seller does not own any shares of
the Company or any option or other right that is convertible into
shares of the Company.
2.4 The Seller's Shares are paid in full, are fully owned by the Seller
and shall be transferred to the Buyer at the Time of Completion (as
defined below), free of any encumbrance, lien or other third party
right.
2.5 That the Company or companies under its direct or indirect control
(the "COMPANY'S SUBSIDIARIES") are not liable and have not undertaken
to indemnify any third parties in connection with the undertakings of
the Seller, and, to the best of its knowledge, none of the controlling
shareholders have a claim and/or demand vis-a-vis the Company, and
there are no circumstances which are expected to lead to the filing of
an action and/or demand by the controlling shareholders as aforesaid.
2.6 Printouts of cash balances, negotiable securities and other deposits
of the Company and the Company's Subsidiaries, specified in Appendix
2.6 of this Agreement, for the dates May 25, 2006 or May 26, 2006
(except for the account in South Africa, the balance whereof is dated
April 30, 2006) as indicated on the printouts, are attached hereto as
APPENDIX 2.6A.
2.7 Subject to the fulfillment of the conditions determined in Section 5
below, all the required authorizations have been received for the
Sellers to enter into this Agreement and for the performance thereof,
and there is no impediment by law or by agreement for the Sellers to
enter into this Agreement and the performance thereof.
2.8 The Sellers are considered to be "Jointly Holding" the Shares Being
Sold (at a rate that exceeds 45% of the voting rights in the company)
for the purposes of Section 328 of the Companies Law, 5759-1999.
3. THE BUYER'S REPRESENTATIONS
The Buyer represents and undertakes vis-a-vis the Sellers as follows:
3.1 The Buyer possesses sufficient monetary means for the full payment of
the Consideration (as defined below) and for the additional payments
pursuant to Section 4.6 below, insofar as such are demanded, on time
and as required pursuant to the terms of this Agreement.
3.2 That the Buyer has the knowledge and experience in financial and
business matters, which enable it to assess the investment in the
Shares Being Sold and the risks involved therein, and to protect its
interests.
3.3 The Buyer is aware of and agrees that except for the representations
included explicitly in Section 2 above, the Sellers have not
represented and are not representing, explicitly or implicitly, any
other representation in relation to the Company, to the Shares Being
Sold or to the transaction that is the subject of this Agreement and
the Buyer is not relying on any other presentation, as aforesaid, and
is purchasing the Shares Being Sold from the Sellers in their current
state ("As Is") with no liability or representation on the part of the
Sellers except for the accuracy of the Sellers' representations
specified in Section 2 above.
3.4 All necessary authorizations required for the Buyer to enter into this
Agreement and for the performance thereof have been obtained and,
subject to the fulfillment of the conditions determined in Section 5
below, there is no impediment, pursuant to law or agreement, for the
Buyer to enter into this Agreement and for the performance thereof.
3.5 The Buyer purchases the Shares Being Sold not as an agent or a
representative and without the intention of distributing them to the
public, and it is aware that the Sellers are an "affiliate" of the
Company, as the term is defined in the United States Securities Act of
1933 and in Rule 144, and that the Shares Being Sold are deemed to be
"restricted securities" pursuant to the foregoing rule. The Buyer is
not a U.S. Person as the term is defined within the context of
Regulation S, pursuant to the aforesaid law.
Page 24 of 33 pages
4. THE TRANSACTION
4.1 The Sellers' undertakings, pursuant to this Agreement, are made
severally, not jointly and severally. Notwithstanding the aforesaid,
it is clarified that the Buyer shall not be obligated to purchase any
of the Shares Being Sold at the Time of Completion (as defined below)
unless all the Sellers, pursuant to this Agreement, shall fulfill
their undertakings for the sale of all the Shares Being Sold, pursuant
to this Agreement.
4.2 At the Time of Completion (as defined below) the Sellers shall
transfer the ownership of the Shares Being Sold to the Buyer against
the payment of the Consideration (as defined below).
4.3 As consideration for the Shares Being Sold, the Buyer shall pay the
amount of 8.776 U.S. dollars for each of the Company's Ordinary Shares
of the Shares Being Sold and, in total, the amount of $165,000,000
(one hundred and sixty-five million U.S. dollars) for all the Shares
Being Sold (the "CONSIDERATION").
4.4 The Consideration shall be paid as follows:
4.4.1 By May 29, 2006 at 1:00 p.m., the Buyer shall pay GLE Trust
Services Ltd. (the "TRUSTEE") the amount in NIS then equating to
$8,250,000 (eight million and two hundred and fifty thousand U.S.
dollars) (based on the last known representative exchange rate of
the US Dollar, i.e. NIS 37,232,250) (the "TRUST SUM"). The
Trustee shall invest the Trust Sum in NIS deposits or in any
other reliable investment, in accordance with the written
instructions that the Sellers shall provide for the Trustee, and
the Trust Sum, with the addition of its earnings, shall be
transferred to the Sellers (to each its proportional share) at
the time the Sellers notify the Trustee (with a copy to the
Buyer) that the condition specified in Section 5.1 has been
fulfilled. It is clarified that in the event that the Sellers
act, pursuant to the provisions of the Companies Regulations
(Relief in Transactions with an Interested Party) 5760-2000, the
Sellers shall give notice to the Trustee, as aforesaid, but not
before the date determined for objection by the shareholders has
passed, pursuant to Rule 1C of the aforesaid Regulations. The
Trust Sum (including the gains thereon) that the Trustee
transfers to the Sellers shall be deemed as a payment of
$8,250,000 on account of the Consideration to be paid upon
completion of the transaction (regardless of changes in the
representative exchange rate). In the event that the transaction
fails to be completed, notwithstanding the fulfillment of the
condition determined in Section 5.1, subject to the contents of
the final part of Sections 5.2 and 5.3 and Section 5.4 here
below, the sum shall be deemed to have been transferred by the
Trustee to the Sellers as agreed compensation for the Sellers and
shall constitute the sole and final remedy for the Sellers in
respect of the failure to complete the transaction. In such an
event, upon receiving agreed compensation, as aforesaid, the
Sellers and the Buyer, each vis-a-vis the others, waive and
dispense with any action or demand against the others in
connection with this Agreement.
At the time of signature of this Agreement, the parties and the
Trustee shall sign a trust agreement in the form attached hereto
as APPENDIX 4.4.1 to this Agreement (the "TRUST AGREEMENT").
It is hereby clarified that in any event whereby, pursuant to the
provisions of this Agreement, the Trustee shall transfer the
Trust Sum (including the gains accrued thereon during the trust
period) to the Sellers or the Buyer, or the Sellers shall
reimburse such sum to the Buyer, in NIS currency, it shall be
deemed as payment or reimbursement, as the case may be, of the
full Trust Sum (without taking into account any changes in the
dollar exchange rate, if any) in accordance with this Agreement.
4.4.2 The Buyer shall pay the Sellers in cash in US Dollars the
balance of the Consideration in an amount of $156,750,000 (one
hundred and fifty-six million and seven hundred and fifty
thousand U.S. dollars) (the "BALANCE OF THE CONSIDERATION") at
the Time of Completion.
4.5 In the event that the Company distributes bonus shares, then the bonus
shares to which the Sellers are entitled in respect of the Shares
Being Sold shall be transferred to the Buyer at the Time of Completion
together with the transfer of the Shares Being Sold, without any
adjustment to the Consideration.
4.6 ADJUSTING THE CONSIDERATION:
4.6.1 In this clause:
"The Agreed Interest" - LIBOR interest for three months (that
shall be updated every three months beginning from the Time of
Completion).
Page 25 of 33 pages
"The Agreed Sum" - 30 million U.S. dollars bearing interest at an
agreed interest rate from the Time of Completion.
"Distribution" - any distribution from the Subsidiary (as defined
in Section 7.1 below) to the Company, that shall be distributed
to the Company during the period from the signature date and
thereafter (net after payment of taxes for that distribution by
the Company, insofar as they shall apply, and less the payments
that the Company made to C.D.I. Technologies (1999) Ltd. from
such distribution according to a settlement agreement between the
Company and C.D.I. Technologies (1999) Ltd. from April 2005).
a. At each Distribution date, the Distribution shall be
deducted from the Agreed Sum, such that from that date only
the balance of the Agreed Sum following said deduction shall
continue to bear the interest at the Agreed Interest rate
(the "AGREED SUM BALANCE") until the Agreed Sum Balance
shall be zero.
b. For each distribution sum after the Agreed Sum Balance has
reached zero (the "EXCESS DISTRIBUTION"), the Buyer shall
pay the Sellers the Excess Distribution Sum multiplied by
54.33%. Each said payment shall be made no later than 10
(ten) business days after the aforementioned distribution is
made.
c. If, on the Time of Completion of dissolution of the
Subsidiary, the total of the Distribution Sums plus the
Agreed Interest that shall be calculated from the date of
each Distribution until said Time of Completion of
dissolution (the "TOTAL ADJUSTED DISTRIBUTIONS") is lower
than the Agreed Sum, the Sellers shall pay the Buyer (each
according to its relative share) the difference between the
Agreed Sum and the total Adjusted Distributions. Said
payment shall be made no later than 10 (ten) business days
following the Time of Completion of dissolution of the
Subsidiary.
d. On each date ("INTERIM DATE") on which it becomes clear that
the total of the Distribution Sums that have been remitted
along with the Agreed Interest (which shall be calculated
from the date of each Distribution until the Interim Date)
and along with anticipated distributions (the "UPDATED
AGREED SUM") will not reach the Agreed Sum, the Sellers
shall reimburse the Buyer (each according to its relative
share) for the difference between the Agreed Sum and the
Updated Agreed Sum multiplied by 54.33%; and the Updated
Agreed Sum shall replace the Agreed Sum for the purpose of
the settlement mentioned above in sub-clauses "a" through
"d" in this clause, for all intents and purposes, and shall
bear interest at the Agreed Interest rate from the Interim
Date. If there are several cases in which the Agreed Sum is
updated as stated above, the aforementioned mechanism shall
be activated, MUTATIS MUTANDIS.
4.6.2 If two years pass since the signing of this Agreement, and the
tax refund of 7.825 million U.S. dollars is not received, as
anticipated, at the Company's subsidiaries, i.e. Scailex DP, Inc.
("SDP") and/or Scailex Development Corp. ("SDC") (the
"ANTICIPATED SUM"), or said subsidiaries receive a sum that is
lower or higher than the aforementioned sum, an adjustment shall
be made, as follows:
If no tax refund is received, or if the tax refund that is
received is lower than the Anticipated Sum, the Sellers shall
reimburse the Buyer (each according to its relative share) for a
total cash amount that shall be calculated as follows: the
difference between the Anticipated Sum and the sum that has
actually been received, multiplied by 54.33%.
If the tax refund that is received is higher than the Anticipated
Sum, the Buyer shall reimburse the Sellers (to each according to
its relative share) for a total cash amount that shall be
calculated as follows: the difference between the sum that has
actually been received and the Anticipated Sum, multiplied by
54.33%.
The adjustment for the tax refund shall be made no later than 10
(ten) business days from the date on which the full tax refund
has been received, and, in any case, no later than two years from
the signing of this Agreement.
Page 26 of 33 pages
4.6.3 If the Company and the Company's Wholly Owned Subsidiaries (as
defined below) pay a tax amount for tax liability for the period
until the Time of Completion that exceeds 4 million US dollars,
the Sellers shall reimburse the Buyer (each according to its
relative share) for a total cash amount that shall be calculated
as follows: the difference between said tax payment sum and 4
million US dollars, multiplied by 54.33%, and, in any case, no
more than 5.43 million US dollars. The payment for said
adjustment shall be made no later than 10 (ten) business days
from the date on which the Buyer notifies the Sellers that the
Company and the Company's Wholly Owned Subsidiaries have paid the
aforementioned tax amount along with the appropriate documents
evidencing the payment.
4.6.4 The tax liability for the period from January 1, 2006 until the
Time of Completion shall be calculated on the basis of the total
tax liability for 2006, as it shall be agreed between the
parties, and, if it is not agreed, in accordance with a decision
by the agreed arbitrator, as stated above in clause 4.6.4.
4.6.5 In each case of disagreement over the calculation of the
consideration adjustment as stated above in clauses 4.6.1-4.6.3,
CPA Ronen Barel of Kost, Forer, Gabbay and Kasierer shall serve
as an agreed arbitrator, and his decision shall bind the parties.
5. SUSPENDING CONDITIONS
5.1 This Agreement is conditioned upon approval by the Sellers' official
organs, including approval by the General Meetings of the Sellers that
are public companies (insofar as these are required in accordance with
the Companies' Regulations (Benefits in Transactions with Interested
Parties), 5760-2000, insofar as they apply with respect to the
transaction pursuant to this Agreement, and in accordance with Chapter
5 of Part 6 of the Companies Law, including Section 278 thereof. If
the aforementioned approvals are not received by the Final Date (as
defined hereunder), this Agreement shall automatically expire, the
Trustee shall reimburse the Buyer for the Trust Sum along with its
gains, and the parties shall have no demands or claims toward each
other in any matter related to this Agreement.
5.2 Sale of the Shares Being Sold by the Sellers to the Buyer is
conditioned upon approval by the Restrictive Trade Commissioner to the
sale of the Shares Being Sold pursuant to this Agreement (the
"CONTROLLER'S CONSENT"), insofar as it shall be required by law. The
parties shall cooperate in order to obtain the Controller's Consent
(insofar as it shall be required) as early as possible. The Sellers
undertake toward the Buyer to induce the Company, at the best of their
ability and insofar as the matter is in their control, to cooperate in
providing information at the Controller's request. If the Controller's
Consent (insofar as it shall be required) is not given because the
Sellers or the Company have failed to cooperate in providing the
information required of them by the Controller, the Sellers shall not
be entitled to the Trust Sum as compensation, as stated in clause
4.4.1 above, and shall return said sum to the Buyer.
5.3 The Buyer's undertaking to purchase the Shares Being Sold shall be
conditioned upon that, on the Time of Completion, the Company's Board
of Directors has adopted the resolutions for appointing directors who,
on the Time of Completion, shall constitute a majority among the
members of the Board of Directors following their appointment, and
whose details shall be transferred to the Sellers by the Buyer three
business days before the Time of Completion (the "NEW DIRECTORS"). The
Buyer shall be entitled to waive the fulfillment of this condition. If
New Directors are not appointed on the Time of Completion, as stated
above, and the Buyer does not waive the fulfillment of this condition,
the Sellers shall not be entitled to the Trust Sum as compensation, as
stated in clause 4.4.1 above, and shall return said sum to the Buyer.
5.4 It is clarified that, in addition to the aforesaid in clauses 5.2 and
5.3, the Sellers shall not be entitled to the Trust Sum as
compensation, as stated in clause 4.4.1 above, and shall return said
sum to the Buyer, if all the suspending conditions specified in
clauses 5.1-5.2 and 5.3 have been met (if not waived by the Buyer),
but the Sellers have not fulfilled their obligations to transfer
ownership of all the Shares Being Sold to the Buyer on the Time of
Completion, whilst they are free and clear of all liens, attachments
and other third-party rights.
5.5 If the Sellers have been obliged to reimburse the Buyer for the Trust
Sum and its gains (this is the "Total Sum," as defined in the Trust
Agreement) pursuant to this Agreement, this obligation shall be an
absolute obligation, without the right of offset, lien and similar
contentions. In the aforementioned case, the Sellers shall reimburse
the Buyer for the Trust Sum within two (2) business days from the date
on which they have been obliged to do so.
Page 27 of 33 pages
5.6 "The Final Date" - August 24, 2006.
6. THE COMPLETION
6.1 Sale of the Shares Being Sold by the Sellers to the Buyer in
accordance with this Agreement shall be implemented on the latter of
the following dates: (a) three (3) business days from the date on
which the suspending conditions set forth in clauses 5.1 and 5.2 above
have been fulfilled for the first time, or (b) at the end of a 45-day
period following the signing of this Agreement (the latter of the
aforementioned dates - (the "TIME OF COMPLETION"), but, in any case,
no later than 3 (three) business days from the Final Date. If not all
the suspending conditions set forth in clauses 5.1 and 5.2 have been
fulfilled by the Final Date, or if the condition stipulated in Clause
5.3 has not been fulfilled by the Time of Completion (unless the Buyer
has waived said condition), this Agreement shall become null and void,
and neither of the parties shall have any contentions and/or claims
against the other, unless the aforesaid in clause 4.4.1 has been
fulfilled, in which case the Trust Sum shall remain as agreed
compensation in the Seller's hands.
6.2 On the Time of Completion, the parties shall assemble at the offices
of Goldfarb, Levy, Eran, Meiri and Co., at 2 Weizmann Street, Tel
Aviv, and perform the following actions:
6.2.1 Each of the Sellers shall provide the Buyer with an irrevocable
confirmation from all the bodies in whose accounts the Shares
Being Sold are held, along with an indication of the number of
the Shares Being Sold held in them, that if, as at the Time of
Completion, those bodies receive irrevocable instruction letters
ordering the transfer of the Sellers' shares to the Buyer, the
bodies shall transfer said shares to the Buyer's name. The number
of shares specified in these approvals, along with the number of
shares pursuant to the share transfer deeds that are mentioned in
clause 6.2.2 below, shall equal the total number of Shares Being
Sold.
Alternatively, if the aforementioned approvals are not received,
it is agreed that the Consideration Balance shall be transferred
on the Time of Completion from the Buyer to the Trustee (instead
of to the Sellers, as stated in clause 6.2.3 hereunder), and the
Trustee shall transfer to the Sellers (to each according to its
relative share), on the date on which it shall receive from the
Buyer or the Sellers a copy of the aforementioned bodies'
confirmation that the Shares Being Sold have been transferred to
the Buyer's name or to the Buyer's securities accounts. The Buyer
undertakes to provide the Trustee and the Sellers with a copy of
said confirmations without delay, immediately following receipt
thereof. In this case, the parties shall effect an appropriate
amendment to the Trust Agreement with the Trustee.
6.2.2 Each of the Sellers shall provide the Buyer with share transfer
deeds laid out in accordance with the Company's Articles of
Association and signed by it, according to which the Seller's
shares are being transferred to the Buyer; and/or irrevocable
instruction letters to the bodies in which the Seller's shares
are being held, ordering the transfer of the Seller's shares from
that body's account to the Buyer's securities accounts (whose
details shall be delivered to the Sellers in writing at least
three (3) business days before the Time of Completion), as
applicable. The Buyer shall sign the aforementioned share
transfer deeds as the recipient of the transfer. The shares
pursuant to the share transfer deeds shall be registered in the
Buyer's name in the Company's shareholders registry.
6.2.3 The Buyer shall pay the Sellers the full Consideration Balance
(to each its relative share) by means of a bank transfer to the
Sellers' bank accounts. The details of said accounts shall be
delivered to the Buyer by the Sellers in writing at least three
(3) business days before the Time of Completion.
6.2.4 Each of the Sellers shall provide the Buyer with a copy of the
Tax Authorities' approval granting it an exemption from
withholding tax. If any of the Sellers fails to provide said
approval, the Buyer shall deduct withholding tax from the
consideration to be paid to that Seller on the Time of
Completion.
Page 28 of 33 pages
6.2.5 Each of the Sellers shall provide the Buyer with a signed
declaration that all the representations it made in Section 2
above are accurate as at the Time of Completion (excluding the
aforesaid in clause 2.6, which is accurate as at the date
mentioned therein), and that the other cash balances, securities
and deposits of the Company and its subsidiaries (whose names are
as specified in Appendix 2.6), excluding Scailex Vision (Tel
Aviv) Ltd. and Cshell 201 (PTY) Ltd., as at the Time of
Completion, along with sums that shall be transferred, between
the signature date of this Agreement and the Time of Completion,
to Jemtex Inkjet Printing Ltd. and to Dor Venture Fund, and along
with sums that the Company and its subsidiaries have spent in
agreement with the Buyer according to Section 8 are, as at the
Time of Completion, not smaller than the balances of such
companies specified in Appendix 2.6A. It is clarified that said
calculation shall be done in US dollars (or a translation to US
dollars according to the representative exchange rate on the Time
of Completion).
6.2.6 The Buyer shall provide the Sellers with a signed declaration
that all the representations it made in Section 3 above are
accurate as at the Time of Completion.
6.2.7 The Sellers shall provide the Buyer with letters of resignation
from directors at the Company, with the number of said letters
enabling the Buyer to appoint the New Directors (i.e. such that
the New Directors shall constitute a majority of the members of
the Company's Board of Directors immediately following the Time
of Completion), in the version attached as APPENDIX 6.2.7 to this
Agreement. The Sellers and the Buyer shall cooperate as specified
in clause 5.3 in order that the Company's Board of Directors
shall pass resolutions for appointing the New Directors as
directors of the Company on the Time of Completion, in accordance
with the provisions of the Company's Articles of Association.
Insofar as the directors shall not resign or be appointed as
stated above, the aforesaid in clause 5.3 shall apply, and the
matter shall not be regarded as a breach of this Agreement by the
Sellers.
6.2.8 All the actions performed on the Time of Completion shall be
regarded as actions performed simultaneously. No isolated action
shall be regarded as complete and no isolated document shall be
regarded as delivered until all the actions on that occasion have
been completed and all the documents have been delivered.
7. THE BUYER'S OBLIGATION FOLLOWING THE COMPLETION
7.1 The Buyer shall do its utmost so that: (a) following the Time of
Completion, there shall be no activity at Scailex Vision (Tel Aviv)
Ltd. (the "SUBSIDIARY") excluding that which is necessary for making
distributions to the Subsidiary's shareholders, pursuant and subject
to any law, as specified below in this clause; (b) the Subsidiary
shall distribute to its shareholders, in an ongoing manner and at a
reasonably early time, all the cash it possesses and which it shall
possess in the future; (c) the Subsidiary's subsidiaries shall
distribute to the Subsidiary, pursuant and subject to any law, in an
ongoing manner and at a reasonably early time, all the cash it
possesses and which it shall possess in the future; (d) the Subsidiary
and its subsidiaries shall act efficiently and economically, without
laying out expenses other than those that are reasonably required for
implementing the aforesaid in this clause, and in a manner that shall
maximize the sums of money that shall be distributed to the
Subsidiary's shareholders; and (e) the Company shall not sell its
shares in the Subsidiary and, following completion of the
aforementioned distributions, shall effect the voluntary dissolution
of the Subsidiary.
7.2 Whenever the Sellers so request the Buyer, the Sellers shall be
entitled to receive from the Buyer, the Company and the Subsidiary,
written reports on the cash situation, income and expenses of the
Subsidiary and its subsidiaries, and on the sums of the distributions
that they made on the Time of Completion and thereafter, and the
distributions that they plan to make. The aforementioned requests in
this clause shall be submitted during the acceptable activity hours at
the Company and the Subsidiary, and said requests shall be filled at
the earliest reasonable opportunity. In addition, the Buyer shall
provide the Sellers with all the information it receives regarding
implementation of the distributions and regarding the tax refund and
tax assessments discussed in clause 4.6 above, immediately after it
receives said information. The aforementioned information is likely to
be regarded as "internal information" and, therefore, the Sellers
undertake to keep the information that is transferred in accordance
with this clause strictly confidential and not to make any use of the
information except in relation to implementation of the distributions
from the Subsidiary to the Company.
Page 29 of 33 pages
7.3 The Buyer shall do its utmost in order to induce the Company to
purchase directors and officers liability insurance, according to that
which is customary at the Company at the time of signing of this
Agreement (as much as possible, to obtain said insurance in the
insurance market with reasonable effort) with regard to the liability
limit and coverage, and in any case, such that the coverage and
liability limit according to the insurance policies shall not be less
than that which is common in the market for companies whose shares are
traded on the Tel Aviv Stock Exchange and NASDAQ in the US, that
covers the liability of the directors and officers at the Company
and/or at the companies it controls, whose names appear in the list in
APPENDIX 3 to this Agreement, for their acts and omissions during the
period preceding the Time of Completion, for a period of 7 years from
the Time of Completion, provided that the total premium that the
Company is obliged to pay for the aforementioned insurance does not
exceed $750,000 (US).
7.4 The Buyer shall do its utmost in order to induce the Company to
fulfill its obligations pursuant to the indemnity letters that have
been issued to the directors and officers at the Company and/or the
companies it controls, whose names appear in the list in APPENDIX 3 to
this Agreement. To avoid doubt, it is clarified that the Buyer's
aforementioned obligation shall not be construed as obliging it to
transfer money to the Company so that it can fulfill its obligations
according to the indemnity letters.
7.5 The Buyer shall do its utmost so that, immediately following the
completion, the service and management agreements (insofar as they
exist) between the Company and the Company's Subsidiaries, on the one
hand, and the Sellers, on the other, are terminated, and the Sellers
give their prior consent to terminate the agreements immediately as
stated above, without any compensation for the very termination of the
agreements. Insofar as these agreements are not terminated at the
Company's initiative as stated above, the Sellers shall be entitled to
terminate said agreements according to the terms thereof, but without
any compensation for the very termination thereof.
8. INTERIM PERIOD
The Sellers undertake, up to the Time of Completion: (a) to make available
to the Buyer any information coming to their notice in connection with any
development in the Company and in subsidiaries of the Company that may be
relevant to the Company, subject to the Buyer's obligation of
confidentiality; (b) to the extent that they shall be required to do so by
the Buyer, to act to the best of their ability and of their control and
subject to any law, so as to prevent the Company and the Company's
Subsidiaries from performing any of the following acts without the prior
agreement in writing of the Buyer:
8.1 The distribution of dividends, except the transfer of moneys from SDP
and SDC to the Company within the scope of liquidation as aforesaid.
If dividends are distributed by the Company to its shareholders, the
Buyer shall be entitled to rescind the Agreement and the Sellers shall
in that event not be entitled to the trusteeship amount as set out in
article 4.4.1 by way of compensation, and none of the parties shall
have any action or claim against the other parties in connection with
the rescission of the present Agreement.
8.2 The adoption of a decision of liquidation, merger or an undertaking to
effect a merger with another company or to acquire another company.
8.3 Entering into agreements and transactions wherein a person having
control of the Company has a personal interest, as well as entering
into agreements and transaction which are of material importance to
the Company.
8.4 Issuing securities and issuing rights to shareholders of the Company
and/or of subsidiaries of the Company, except within the framework of
converting existing convertible securities, as well as any
modification to the registered capital or the number of treasury
shares as at the date of signature of this Agreement.
8.5 The adoption of a decision concerning a modification of the Articles
of Association of the Company and of the subsidiaries of the Company.
9. TAXATION AND EXPENSES
9.1 Each party shall bear tax payments due from that party under any law
in respect of the transaction that is the subject of this Agreement.
Page 30 of 33 pages
9.2 Each party shall bear the expenses of that party in connection with
this Agreement, including the fees of its consultants and
representatives.
10. MISCELLANEOUS
10.1 Subject to the absence of actions and claims as set out in paragraph
10.2 below, or alternatively, to the performance of any obligation of
indemnification under paragraph 10.2 below, the Sellers declare and
undertake that none of them and none of their officers has or shall
have any action or claim against the Company and against the
subsidiaries of the Company the cause of action whereof arises during
the period up to the Time of Completion, except their entitlement to
insurance coverage, their entitlement under the indemnification
undertakings of the Company and of the Company's Subsidiaries towards
them, payments to which they are entitled or shall be entitled under
existing agreements between the Sellers and the Company at the date of
signature of this Agreement, and except claims in connection with this
Agreement.
10.2 The Buyer shall act to the best of its ability to avoid any action or
claim of the Company or of the Company's Subsidiaries against the
Sellers or against its officers concerning any matter arising during
the period up to the Time of Completion, and the Buyer shall indemnify
the Sellers or its officers, as the case may be, at the rate of 49.39%
of any amount which they shall be ordered to pay under a judgment
which has not been subject to a stay of execution, in respect of any
action or claim as stated in this paragraph, if any. Payments under
paragraph 10.2 shall be made by the Buyer within ten (10) business
days from receipt of notice in writing by the Sellers concerning the
amount they have been ordered to pay as aforesaid, enclosing a copy of
the judgment.
10.3 The Sellers shall indemnify the Buyer (each Seller according to its
proportional part in the Shares Being Sold) for the payments made by
the Company and the Company's Wholly Owned Subsidiaries (as defined
below) subsequently to date of signature, as follows:
10.3.1 The Sellers shall indemnify the Buyer by an amount equal to one
half (50%) of 54.33% of any amount in excess of 5 million US
dollars cumulatively, and up to 10 million US dollars
cumulatively, which the Company and/or subsidiaries in the full
ownership of the Company (as at the date of signature of this
Agreement), as set out in SCHEDULE 10.3.1 (the "COMPANY'S WHOLLY
OWNED SUBSIDIARIES") shall pay under judgments not subject to a
stay of execution, or according to a definitive tax assessment or
under settlements agreed to by the parties (the "FINAL DECISION")
in respect of actions or claims of third parties (who are not the
Buyer, the Company, companies under the control of the Company or
of the Buyer, companies controlling the Company or the Buyer, or
any person acting on their behalf, or officers therein serving
subsequently to the Time of Completion), which have been brought
up to the expiry of the Determining Period (as defined below)
against the Company, the Company's Subsidiaries as defined in
this Agreement (not including Scailex Vision (Tel-Aviv) Ltd. and
its subsidiaries) and officers therein, the cause of action
whereof arose during the period ending on the Time of Completion
(a "RELEVANT CLAIM").
10.3.2 The Sellers shall indemnify the Buyer for an amount equal to
75% of 54.33% of any amount in excess of 10 million US dollars
cumulatively (i.e. of the balance in excess of 10 million US
dollars only) that the Company shall pay under a Final Decision
in respect of a Relevant Claim.
10.3.3 A Relevant Claim in respect of tax liability shall be
indemnified under this paragraph 10.3 in accordance with the
provisions of sub-paragraphs 10.3.1 and 10.3.2 respectively
(including the rates specified therein), only in respect of tax
payments by the Company and the Company's Wholly Owned
Subsidiaries, in excess of an amount of 14 million US dollars
cumulatively (because the adjustment of consideration under
sub-paragraph 4.6.3 shall be applicable up to that amount).
10.3.4 The indemnification as aforesaid shall be subject to the
condition that the Company or the Buyer shall notify the Sellers
in writing within a reasonable time under the circumstances, and
in any event not later than the end of the Determining Period, of
any claim as aforesaid, that it shall co-operate with the Seller
in the defense against any claim as aforesaid and shall not
settle such claim without the Seller's consent.
Page 31 of 33 pages
10.3.5 The amount in respect whereof the Buyer shall be entitled to
indemnification shall not include payments in respect of a
Relevant Claim covered by insurance or by a person other than the
Company.
10.3.6 If a Final Judgment in respect of a Relevant Claim is different
from the judgment whereunder the indemnity under this paragraph
has been paid, the indemnity in respect of such Relevant Claim
shall be adjusted and thereupon: the difference calculated under
the provisions of this paragraph and under the Final Judgment
shall be reimbursed to the Seller by the Buyer or paid by the
Buyer to the Seller, as the case may be.
10.3.7 The amount of the indemnity under paragraph 10.3 shall in no
case exceed a cumulative amount equal to the amount of the
Consideration and shall not be less than a cumulative amount
equal to 50,000 US dollars. It is hereby specified that no
indemnity shall be paid as of the first dollar and that it shall
be payable only over and above an amount of 50,000 US dollars.
10.3.8 "The Determining Period" - the period up to the expiration of
two years following the Time of Completion.
10.3.9 The payments under paragraph 10.3 shall be made by the Sellers
and/or by the Buyer, as the case may be, within ten (10) business
days from receipt of a written notice by the Sellers or the
Buyer, respectively, of the Final Decision concerning the payment
of the indemnity, enclosing a copy of the Final Decision as
aforesaid.
10.4 The Buyer shall be entitled to perform this Agreement through a
company under its full control and ownership ("AUTHORIZED ASSIGNEE").
An Authorized Assignee shall not be included within the Authorized
Assignees under paragraph 10.8 below, provided that if the Buyer
chooses to perform the Agreement through an Authorized Assignee, the
Buyer shall guarantee all the obligations of the Authorized Assignee.
10.5 This Agreement shall be subject to Israeli law. The exclusive
jurisdiction on any matter under this Agreement shall be vested in the
competent courts of the city of Tel-Aviv-Jaffa, and no other court
shall have jurisdiction. The addresses of the parties appearing in
SCHEDULE 4 to this Agreement shall serve as addresses for the service
of court documents in the State of Israel.
10.6 Considering that the Sellers and the Buyer are public companies, it is
hereby agreed that the text of any report and/or notice concerning
this Agreement shall be adapted in advance to the extent that this may
not delay the timely delivery of the report.
10.7 Following the Time of Completion, the Sellers undertake (to the extent
that it is in their power) that senior officers serving in the Company
at the Time of Completion (following the conclusion of their service
with the Company) shall collaborate with the Buyer or with any person
acting on its behalf, in a reasonable manner, in obtaining any
information concerning the activity of the Company and of the
Company's Subsidiaries during the period preceding the Time of
Completion, provided that the Company shall bear the costs connected
therewith, if any. Furthermore, the Buyer undertakes (to the extent
that it is in its power) to cause the Company and the Company's
Subsidiaries, subsequently to the Time of Completion, to make
available to the Sellers any information reasonably required by them
in order to enable the Sellers to comply with any legal provision or
in order to protect the Sellers against actions or claims connected
with the Company or the Company's Subsidiaries.
10.8 The parties to this Agreement shall not be entitled, subject to any
express provision to the contrary in this Agreement, to assign their
rights or obligations under this Agreement to any third party, or to
perform this Agreement through any third party, except if they have
obtained the prior written consent thereto from the other parties to
this Agreement. The above provision notwithstanding, the Buyer shall
be entitled, subject to any law, to assign its rights and obligations
under this Agreement, in full or in part, to other persons whose
number shall not exceed four, provided the Buyer shall give prior
notice of five (5) business days to the Sellers of its intention to do
so and that the Buyer and the assignees shall be liable jointly and
severally for all the obligations assigned to the assignees as
aforesaid.
Page 32 of 33 pages
10.9 This Agreement reflects and exhausts the entire obligations of the
parties, their representations and declarations on any matters
included therein, and shall replace and cancel any previous
obligation, representation or declaration, whether orally or in
writing, on the matters contained therein, with the exception of the
letter of confidentiality dated 26 May 2006.
10.10 Any waiver, consent, postponement, modification, cancellation or
addition in respect of this Agreement or under any law shall not be
binding unless the waiver, consent, postponement, modification,
cancellation or addition has been made in writing and signed by the
parties.
10.11 Notices concerning this Agreement shall be sent by registered mail or
by fax or shall be delivered by hand to the addresses of the parties
indicated in SCHEDULE 5 to this Agreement (or to any other address
suitably notified in writing). Any notice sent by one party to another
by registered mail shall be deemed to have reached the addressee upon
the expiry of five (5) business days from the mailing thereof; any
notice delivered personally up to 5:00 p.m. on any business day shall
be deemed to have been received upon delivery or, if delivered after
5:00 p.m. on the first following business day; and any notice sent by
fax as confirmed by the dispatching instrument shall be deemed to have
been received on the business day (as at the place of receipt)
following the date of dispatch according to the confirmation of the
dispatching instrument; any notice concerning a change of address
shall be deemed to have been received only upon its actual receipt by
the addressee.
10.12 For the purposes of the present Agreement, a "BUSINESS DAY" shall be
any day, with the exception of Fridays, Saturdays and Sundays and any
other days during which banks in Israel are allowed or obliged to be
closed for business.
IN WITNESS WHEREOF THE SIGNATURE OF THE PARTIES:
Clal Industries and Investments Ltd.
Represented by: ___________________
Name:
Function:
Clal Electronic Industries Ltd.
Represented by: ___________________
Name:
Function:
Discount Investments Corporation Ltd.
Represented by: ___________________
Name:
Function:
Israel Petrochemical Enterprises Ltd.
Represented by: ___________________
Name:
Function:
Page 33 of 33 pages