FORM OF INSTRUCTIONS
AS TO USE OF
TEFRON LTD.
SUBSCRIPTION RIGHTS CERTIFICATES
CONSULT THE INFORMATION AGENT, YOUR BANK OR BROKER
AS TO ANY QUESTIONS
The following instructions relate to a rights offering (the "Rights
Offering") by Tefron Ltd., an Israeli company ("Tefron"), to the holders of
record (the "Recordholders") of its ordinary shares, par value NIS 10.0 per
share (the "Ordinary Shares"), as described in the Tefron prospectus dated
[_________] [_], 2010 (the "Prospectus"). Recordholders of Ordinary Shares as of
5:00 p.m., New York City time, on [________________], 2010 (the "Record Date")
are receiving transferable subscription rights (the "Rights") to subscribe for
and purchase Ordinary Shares. An aggregate of 1,578,947 underlying Ordinary
Shares are being offered by the Prospectus. Each Recordholder will receive one
Right for each 1.3429 Ordinary Shares owned of record as of 5:00 p.m., New York
City time, on the Record Date. The Rights will expire, if not exercised, at 5:00
p.m., New York City time, on [__________], 2010, unless extended in the sole
discretion of Tefron (as it may be extended, the "Expiration Date"). After the
Expiration Date, unexercised Rights will be null and void. Tefron will not be
obligated to honor any purported exercise of Rights received by American Stock
Transfer & Trust Company, LLC (the "Rights Agent") after 5:00 p.m., New York
City time, on the Expiration Date, regardless of when the documents relating to
such exercise were sent, except pursuant to the Guaranteed Delivery Procedures
described below. Tefron may extend the Expiration Date by giving oral or written
notice to the Rights Agent on or before the Expiration Date, followed by a press
release no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date. The Ordinary Shares are quoted
on the Over the Counter Bulletin Board ("OTCBB") under the symbol "TFRFF.OB" and
are listed on the Tel Aviv Stock Exchange in Israel under the Symbol "TFRLF."
The Rights are transferable, and we have applied to quote the Rights on the
OTCBB. We have also applied to list the Rights on the TASE under the symbol
"[______]" for one day only on _______, 2010. The Rights will be evidenced by
Rights certificates (the "Rights Certificates"), which will be transferable
until the close of business on the last OTCBB trading day preceding the
Expiration Date, at which time they will cease to have value.
Each Right entitles the holder thereof to purchase one Ordinary Share (the
"Subscription Privilege") at the cash price of $3.8 per share (the "Subscription
Price").
The number of Rights to which you are entitled is printed on the face of
your Rights Certificate. You should indicate your wishes with regard to the
exercise of your Rights by completing the appropriate portions of your Rights
Certificate and returning the certificate to the Rights Agent in the envelope
provided, in accordance with these instructions and the terms set forth in the
Prospectus.
YOUR RIGHTS CERTIFICATES, OR NOTICE OF GUARANTEED DELIVERY, AND
SUBSCRIPTION PRICE PAYMENT, INCLUDING FINAL CLEARANCE OF ANY CHECKS, MUST BE
RECEIVED BY THE RIGHTS AGENT ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE. ONCE A HOLDER OF RIGHTS HAS EXERCISED ITS SUBSCRIPTION
PRIVILEGE, SUCH EXERCISE MAY NOT BE REVOKED. RIGHTS NOT EXERCISED PRIOR TO THE
EXPIRATION DATE OF THE RIGHTS OFFERING WILL EXPIRE AND BE NULL AND VOID.
1. METHOD OF SUBSCRIPTION - EXERCISE OF RIGHTS.
To exercise Rights, complete your Rights Certificate and send your properly
completed and executed Rights Certificate evidencing such Rights with any
signatures required to be guaranteed so guaranteed, together with payment in
full of the Subscription Price for each Ordinary Share subscribed for pursuant
to the Subscription Privilege, to the Rights Agent, on or prior to 5:00 p.m.,
New York City time, on the Expiration Date. Payment of the Subscription Price
will be held in a segregated account to be maintained by the Rights Agent. All
payments must be made in U.S. dollars for the full number of Ordinary Shares
being subscribed for (a) by cashier's or certified check drawn upon a U.S. bank
payable to American Stock Transfer & Trust Company LLC, as Rights Agent, or (b)
by wire transfer of immediately available funds, to the account maintained by
the Rights Agent for purposes of accepting subscriptions in the Rights Offering
at JP Morgan Chase, ABA No.021000021, further credit to Account Number
323-836895, reference Tefron Ltd., Attention: Reorganization Department (the
"Subscription Account"). Any wire transfer should clearly indicate the identity
of the subscriber who is paying the Subscription Price by wire transfer and the
Rights Certificate number. Additionally for wire transfers, send your Rights
Certificate via overnight courier to be delivered on the next business day
following the day of the wire transfer to the Rights Agent. Payments will be
deemed to have been received upon (i) receipt by the Rights Agent of a cashier's
or certified check drawn upon a U.S. bank payable to the Rights Agent or (ii)
receipt of collected funds in the Subscription Account designated above.
Personal checks will not be accepted. You are responsible for any wire transfer
fees.
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The Rights Certificate and payment of the Subscription Price (other than
wire transfers), or, if applicable, the Notice of Guaranteed Delivery (as
defined below) must be delivered by the Expiration Date to the Rights Agent by
one of the methods described below:
IF DELIVERING BY MAIL: IF DELIVERING BY HAND OR COURIER:
American Stock Transfer & Trust Company, LLC American Stock Transfer & Trust Company, LLC
Operations Center Operations Center
Attn: Reorganization Department Attn: Reorganization Department
6201 15th Avenue 59 Maiden Lane
Brooklyn, New York 11219 New York, New York 10038
BY FACSIMILE TRANSMISSION FOR NOTICE OF GUARANTEED DELIVERY:
(718) 234-5001
TELEPHONE NUMBER FOR CONFIRMATION:
Toll Free: (877) 248-6417
(718) 921-8317
Telephone Number for Information:
Toll Free: (877) 896-3194
Information Agent, The Altman Group, Inc.
DELIVERY TO AN ADDRESS OTHER THAN THOSE ABOVE DOES NOT CONSTITUTE
VALID DELIVERY.
By making arrangements with your bank or broker for the delivery of funds
on your behalf you may also request such bank or broker to exercise the Rights
Certificate on your behalf. Alternatively, you may cause a written guarantee
substantially in the form of Exhibit A to these instructions (the "Notice of
Guaranteed Delivery"), from an "Eligible Guarantor Institution," as such term is
defined in Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended, such
as a member firm of a registered national securities exchange or a member of the
Financial Industry Regulatory Authority, Inc., or a commercial bank or trust
company having an office or correspondent in the U.S., subject to standards and
procedures adopted by the Rights Agent (each, an "Eligible Institution"), to be
received by the Rights Agent on or prior to the Expiration Date together with
payment in full of the applicable Subscription Price. Such Notice of Guaranteed
Delivery must state your name, the number of Rights represented by the Rights
Certificate held by you, the number of Ordinary Shares being subscribed for
pursuant to the Subscription Privilege and that you will guarantee the delivery
to the Rights Agent of any properly completed and executed Rights Certificate
evidencing such Rights within three (3) business days following the date of the
Notice of Guaranteed Delivery. If this procedure is followed, the properly
completed Rights Certificate evidencing the Rights being exercised, with any
signatures required to be guaranteed so guaranteed, must be received by the
Rights Agent within three (3) business days following the date of the Notice of
Guaranteed Delivery. The Notice of Guaranteed Delivery may be delivered to the
Rights Agent in the same manner as Rights Certificates at the address set forth
above, or may be transmitted to the Rights Agent by facsimile transmission
(Facsimile No. (718) 234-5001). Additional copies of the Notice of Guaranteed
Delivery may be obtained upon request from the Rights Agent at the address set
forth above, or by calling The Altman Group, Inc., the Information Agent, at
(877) 896-3194 (banks and brokers only may call (201) 806-7300).
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If the aggregate Subscription Price paid by you is insufficient to purchase
the number of Ordinary Shares subscribed for, or if no number of Ordinary Shares
to be purchased is specified, then you will be deemed to have exercised the
Subscription Privilege to purchase Ordinary Shares to the full extent of the
payment tendered.
If the aggregate Subscription Price paid by you exceeds the amount
necessary to purchase the number of Ordinary Shares for which you have indicated
an intention to subscribe, then any remaining amount shall be returned to you by
mail without interest or deduction as soon as practicable after the Expiration
Date and after all prorations and adjustments contemplated by the terms of the
Rights Offering have been effected.
2. ISSUANCE OF ORDINARY SHARES.
As soon as practicable after the Expiration Date and the valid exercise of
Rights, the Rights Agent will mail to each exercising Rights holder certificates
representing Ordinary Shares purchased pursuant to the Subscription Privilege.
3. SALE OR TRANSFER OF RIGHTS.
(A) SALE OF RIGHTS THROUGH A COMMERCIAL BANK OR BROKER. To sell Rights
evidenced by a Rights Certificate through your commercial bank or broker, sign
Form 2 of your Rights Certificate leaving the rest of the Form blank (your
broker will add the buyer's name later). You must have your signature on Form 2
guaranteed in Form 5 by an Eligible Institution and deliver your Rights
Certificate and the accompanying envelope to your commercial bank or broker.
Your Rights Certificate should be delivered to your commercial bank or broker in
ample time for it to be exercised. If Form 2 is completed without designating a
transferee, the Rights Agent may thereafter treat the bearer of the Rights
Certificate as the absolute owner of all of the Rights evidenced by such Rights
Certificate for all purposes, and the Rights Agent shall not be affected by any
notice to the contrary. Because your commercial bank or broker cannot issue
Rights Certificates, if you wish to sell less than all of the Rights evidenced
by a Rights Certificate, either you or your commercial bank or broker must
instruct the Rights Agent as to the action to be taken with respect to the
Rights not sold, or you or your commercial bank or broker must first have your
Rights Certificate divided into Rights Certificates of appropriate denominations
by following the instructions in Section 4 of these instructions. The Rights
Certificates evidencing the number of Rights you intend to sell can then be
transferred by your commercial bank or broker in accordance with the
instructions in this Section 3(a).
(B) TRANSFER OF RIGHTS TO A DESIGNATED TRANSFEREE. To transfer your Rights
to a transferee other than a commercial bank or broker, you must complete Form 2
in its entirety, execute the Rights Certificate and have your signature
guaranteed in Form 5 by an Eligible Institution. A Rights Certificate that has
been properly transferred in its entirety may be exercised by a new holder
without having a new Rights Certificate issued. In order to exercise, or
otherwise take action with respect to, such a transferred Rights Certificate,
the new holder should deliver the Rights Certificate, together with payment of
the applicable Subscription Price and complete separate instructions signed by
the new holder, to the Rights Agent in ample time to permit the Rights Agent to
take the desired action. Because only the Rights Agent can issue Rights
Certificates, if you wish to transfer less than all of the Rights evidenced by
your Rights Certificate to a designated transferee, you must instruct the Rights
Agent as to the action to be taken with respect to the Rights not sold or
transferred, or you must divide your Rights Certificate into Rights Certificates
of appropriate smaller denominations by following the instructions in Section 4
below. The Rights Certificate evidencing the number of Rights you intend to
transfer can then be transferred by following the instructions in this Section
3(b).
(c) Rights holders wishing to transfer a portion of their Rights (or all of
their Rights in separate portions) should allow a sufficient amount of time
prior to the Expiration Date for (i) the transfer instructions to be received
and processed by the Rights Agent, (ii) a new Rights Certificate to be issued
and transmitted to the transferee or transferees with respect to transferred
Rights and to the transferor with respect to retained Rights, if any, and (iii)
the Rights evidenced by such new Rights Certificates to be exercised or sold by
the recipients thereof. The Rights Agent will facilitate transfers of Rights
Certificates only until 5:00 p.m., New York City time, on [_____________], 2010,
the fifth business day before the Expiration Date.
(d) Neither Tefron nor the Rights Agent shall have any liability to a
transferee or transferor of Rights if Rights Certificates or any other required
documents are not received in time for exercise or sale prior to the Expiration
Date.
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(E) COMMISSIONS, FEES AND EXPENSES. Tefron will pay all fees charged by the
Rights Agent, other than fees associated with the sale or transfer of Rights,
and the fees charged by the Information Agent. You are responsible for paying
any other commissions, fees, taxes or other expenses incurred in connection with
the exercise of the Rights. Neither we nor the Rights Agent nor the Information
Agent will pay such expenses. Tefron has agreed to indemnify the Rights Agent
from certain liabilities that they may incur in connection with the issuance of
the Rights and the Ordinary Shares if you exercise your Rights.
4. DIVISION OF RIGHTS CERTIFICATE INTO SMALLER DENOMINATIONS.
To have a Rights Certificate divided into smaller denominations, send your
Rights Certificate, together with complete separate instructions (including
specification of the denominations into which you wish your Rights to be
divided) signed by you, to the Rights Agent, allowing a sufficient amount of
time for new Rights Certificates to be issued and returned so that they can be
used prior to the Expiration Date. Alternatively, you may ask a commercial bank
or broker to effect such actions on your behalf. The Rights Agent will
facilitate subdivisions of Rights Certificates only until 5:00 p.m., New York
City time, on [_____________], 2010, five business days prior to the Expiration
Date. Your signature must be guaranteed in Form 5 by an Eligible Institution if
any of the new Rights Certificates are to be issued in a name other than that in
which the old Rights Certificate was issued. As a result of delays in the mail,
the time of the transmittal, the necessary processing time and other factors,
you or your transferee may not receive such new Rights Certificates in time to
enable the Rights holder to complete a sale or exercise by the Expiration Date.
Neither Tefron nor the Rights Agent will be liable to either a transferor or
transferee for any such delays.
5. EXECUTION.
(A) EXECUTION BY REGISTERED HOLDER. The signature on the Rights Certificate
must correspond with the name of the registered holder exactly as it appears on
the face of the Rights Certificate without any alteration or change whatsoever.
Persons who sign the Rights Certificate in a representative or other fiduciary
capacity must indicate their capacity when signing and, unless waived by the
Rights Agent in its sole and absolute discretion, must present to the Rights
Agent satisfactory evidence of their authority to so act.
(B) EXECUTION BY PERSON OTHER THAN REGISTERED HOLDER. If the Rights
Certificate is executed by a person other than the holder named on the face of
the Rights Certificate, proper evidence of authority of the person executing the
Rights Certificate must accompany the same unless the Rights Agent, in its
discretion, dispenses with proof of authority.
(C) SIGNATURE GUARANTEES. Your signature must be guaranteed by an Eligible
Institution.
6. METHOD OF DELIVERY.
The method of delivery of Rights Certificates and payment of the
Subscription Price to the Rights Agent will be at the election and risk of the
Rights holder. If sent by mail, it is recommended that such certificates and
payments be sent by overnight courier or by registered mail, properly insured,
with return receipt requested, and that a sufficient number of days be allowed
to ensure delivery to the Rights Agent and the clearance of payment prior to
5:00 p.m., New York City time, on the Expiration Date.
7. SPECIAL PROVISIONS RELATING TO THE DELIVERY OF RIGHTS THROUGH THE
DEPOSITORY TRUST COMPANY.
In the case of Rights that are held of record through the Depository Trust
Company (the "Book-Entry Transfer Facility"), exercises of the Subscription
Privilege may be effected by instructing the Book-Entry Transfer Facility to
transfer Rights from the Book-Entry Transfer Facility account of such holder to
the Book-Entry Transfer Facility account of the Rights Agent, together with
certification as to the aggregate number of Rights exercised and the number of
Ordinary Shares thereby subscribed for pursuant to the Subscription Privilege by
each beneficial owner of Rights on whose behalf such nominee is acting, and
payment of your Subscription Price for each Ordinary Share subscribed for
pursuant to the Subscription Privilege.
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EXHIBIT A
FORM OF NOTICE OF GUARANTEED DELIVERY
FOR
SUBSCRIPTION RIGHTS CERTIFICATES
ISSUED BY
TEFRON LTD.
This form, or one substantially equivalent to this form, must be used to
exercise the transferable subscription rights (the "Rights") pursuant to the
rights offering (the "Rights Offering"), as described in the prospectus dated
______ __, 2010 (the "Prospectus") of Tefron Ltd., an Israeli company,
("Tefron"), if a holder of Rights cannot deliver the certificate(s) evidencing
the Rights (the "Rights Certificate(s)"), to the Rights Agent listed below (the
"Rights Agent") at or prior to 5:00 p.m., New York City time, on _____ ___,
2010, unless such time is extended by Tefron as described in the Prospectus (as
it may be extended, the "Expiration Date"). Such form must be delivered by hand
or sent by telegram, facsimile transmission, first class mail or overnight
courier to the Rights Agent, and must be received by the Rights Agent on or
prior to the Expiration Date. See "The Rights Offering -- Notice of Guaranteed
Delivery" in the Prospectus.
Payment of the subscription price of $3.8 per share (the "Subscription
Price") for each ordinary share, par value NIS 10.0 per share ("Ordinary
Shares") subscribed for upon exercise of such Rights must be received by the
Rights Agent in the manner specified in the Prospectus at or prior to 5:00 p.m.,
New York City time, on the Expiration Date even if the Rights Certificate(s)
evidencing such Rights is (are) being delivered pursuant to the guaranteed
delivery procedures thereof. See "The Rights Offering -- Notice of Guaranteed
Delivery" in the Prospectus.
IF DELIVERING BY MAIL: IF DELIVERING BY HAND OR COURIER:
American Stock Transfer & Trust Company, LLC American Stock Transfer & Trust Company, LLC
Operations Center Operations Center
Attn: Reorganization Department Attn: Reorganization Department
6201 15th Avenue 59 Maiden Lane
Brooklyn, New York 11219 New York, New York 10038
BY FACSIMILE TRANSMISSION
(718) 234-5001
TELEPHONE NUMBER FOR CONFIRMATION:
(877) 248-6417
(718) 921-8317
Telephone Number for Information:
The Altman Group, Inc.
Toll Free: (877) 896-3194
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF THIS INSTRUMENT VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES
NOT CONSTITUTE A VALID DELIVERY
A-1
Ladies and Gentlemen:
The undersigned hereby represents that the undersigned is the holder of
Rights Certificate(s) representing Right(s) and that such Rights Certificate(s)
cannot be delivered to the Rights Agent prior to the Expiration Date. Upon the
terms and subject to the conditions set forth in the Prospectus, receipt of
which is hereby acknowledged, the undersigned hereby elects to exercise
his/her/its subscription privilege to subscribe for ______________ ordinary
share(s) underlying the Rights represented by such Rights Certificate(s).
The undersigned understands that payment of the Subscription Price for each
ordinary share subscribed for pursuant to his/her/its subscription privilege
must be received by the Rights Agent at or prior to the Expiration Date and
represents that such payment, in the aggregate amount of $______________ either
(check appropriate box):
[_] is being delivered to the Rights Agent herewith
or
[_] has been delivered separately to the Rights Agent in the manner set forth
below (check appropriate box and complete information relating thereto):
[_] Wire transfer of funds
Name of transferor institution:________________________________________
_______________________________________________________________________
Date of transfer:______________________________________________________
_______________________________________________________________________
Confirmation number (if available):____________________________________
_______________________________________________________________________
[_] Certified check
[_] Bank draft (cashier's check)
Name of maker: ________________________________________________________
_______________________________________________________________________
Date of check or draft: _______________________________________________
_______________________________________________________________________
A-2
Check or draft: _______________________________________________________
_______________________________________________________________________
Bank on which check is drawn or issuer: _______________________________
_______________________________________________________________________
Signature(s)________________________ Address________________________
Names__________________________________________________________________
(Please type or print)
Address________________________________________________________________
Area Code and Tel. No.(s) _____________________________________________
Rights Certificate No(s) (if available)________________________________
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GUARANTEE OF DELIVERY
(NOT TO BE USED FOR RIGHTS CERTIFICATE SIGNATURE GUARANTEE)
The undersigned, an "Eligible Guarantor Institution," as such term is
defined in Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended,
guarantees that the undersigned will deliver to the Rights Agent the
certificates representing the Rights being exercised hereby, with any required
signature guarantee and any other required documents, all within three (3)
business days after the date hereof.
Dated: ____________________________________________________________________
Authorized Signature:______________________________________________________
Name of Firm:______________________________________________________________
Address:___________________________________________________________________
___________________________________________________________________________
Area Code and Telephone Number:____________________________________________
The institution that completes this form must communicate the guarantee to
the Rights Agent and must deliver the Rights Certificate(s) to the Rights Agent
within the time period shown in this prospectus. Failure to do so could result
in a financial loss to such institution.
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