On March 15, 2011, pursuant to the terms of the agreement entered into by and among Greenstone Industries Ltd., a public Israeli company traded on the Tel Aviv Stock Exchange Ltd., A.O. Tzidon Ltd. and Aviv Tzidon (the “Agreement”) and the option awarded to Greenstone Industries Ltd. to purchase up to 65.0% but not less than 50.14% of the issued share capital of R.V.B. Holdings Ltd., A.O. Tzidon Ltd. and Aviv Tzidon determined to sell to Greenstone: (i)76,680,848 ordinary shares of R.V.B. Holdings Ltd., constituting 65.0% of the issued and outstanding share capital of R.V.B. Holdings Ltd. (not taking into account 930,000 dormant shares of R.V.B. Holdings Ltd. which are held by R.V.B. Holdings Ltd.); and (ii) 1,800,000 options exercisable into 1,800,000 ordinary shares of R.V.B. Holdings Ltd.
On March 16, 2011, Greenstone issued to A.O. Tzidon Ltd. and Aviv Tzidon an exercise notice with respect to the above referenced shares and options.
* Based on 118,900,535 ordinary shares of R.V.B. Holdings Ltd. outstanding as of December 31, 2010, as reported in the Annual Report of R.V.B. Holdings Ltd. for the fiscal year ended December 31, 2010, as filed with the Securities and Exchange Commission on February 14, 2011 (not taking into account 930,000 dormant shares of R.V.B. Holdings Ltd. which are held by R.V.B. Holdings Ltd.).
The statement on Schedule 13D filed on March 17, 2011, relating to ordinary shares, par value NIS 1.00 per share (the “Ordinary Shares”) of R.V.B. Holdings Ltd., a company organized under the laws of the State of Israel (the “Issuer”), is hereby amended as set forth below by this Amendment No. 1. (the statement on Schedule 13D, as amended, is referred to herein as “Schedule 13D”).
Introduction
On December 12, 2010, Greenstone Industries Ltd. (“Greenstone” or the “Reporting Person”), a public Israeli company traded on the Tel Aviv Stock Exchange Ltd. entered into an agreement (the “Agreement”) with A.O. Tzidon Ltd. and Aviv Tzidon (together, the “Seller”).
Per the Agreement, Greenstone provided to Seller a loan in the amount of $12,500,000 which, subject to certain provisions, may be increased to $13,600,000 (the “Loan”) for purpose of exercising an option granted to the Seller under a certain agreement entered into on September 8, 2010, to purchase 58,142,608 Ordinary Shares of the Issuer from Chun Holdings Limited Partnership (“Chun LP”).
The Loan bears an annual interest of 5% and is to be repaid by the Seller two months after Greenstone announces it will not exercise the option granted to it, as detailed below.
To secure the Loan (including interest thereto and interest for late payments, if applicable), the Seller pledged to the benefit of Greenstone, in a fixed and floating pledge of the first degree, all of the Issuer shares held by Seller, namely 59,142,608 Ordinary Shares of the Issuer. Subject to certain exemptions relating to the distribution of dividends, such fixed and floating pledge will also apply to all rights attached and/or deriving from the Issuer shares held by the Seller. In addition, to further secure the repayment of the Loan, 59,142,608 Ordinary Shares of the Issuer were transferred by the Seller to Yigal Arnon & Co. - Trust Company Ltd. who is holding such shares as a trustee for Greenstone. The Seller holds voting rights, through a proxy, to vote in respect of all such shares provided, however, that from the date of the Greenstone Agreement and until the full repayment of the Loan or the closing of the Greenstone Option (as defined below), the Seller has undertaken, as shareholders and subject to the provisions of any law, to make best efforts, to cause that certain actions will not be performed by the Issuer, including, among others, changes in the Issuer’s capital, the entering into new business, the distribution of dividends while the Greenstone Option has not been exercised etc.
In addition, as part of the Agreement, the Seller undertook to make its best efforts to purchase additional shares of the Issuer, which shall bring its holdings in the Issuer to 57.5% of the issued share capital of the Issuer (not taking into account 930,000 dormant shares of the Issuer which are held by the Issuer). Should the Seller pledge such additional shares of the Issuer to the benefit of Greenstone the loan amount shall be increased by an additional $1,100,000, which shall be deemed part of the Loan for all intents and purposes.
During a period of 90 days from the date of the provision of the Loan, namely December 16, 2010 (the “Option Period”), Greenstone was granted an option to purchase from the Seller Ordinary Shares of the Issuer which shall constitute on the date of the exercise of the option not less than 50.14% and not more than 65.0% of the issued share capital of the Issuer (not taking into account 930,000 dormant shares of the Issuer which are held by the Issuer) (the “Option Shares” and the “Greenstone Option” respectively). Upon the terms of the Agreement, the Final number of Option Shares to be purchased by Greenstone upon the exercise of the Greenstone Option shall be determined by the Seller (within the range described above).
The consideration to be paid for the Option Shares shall be equal to the percentage of the Option Shares from the issued shares capital of the Issuer (not taking into account 930,000 dormant shares of the Issuer which are held by the Issuer) multiplied by the cash amount held by the Issuer (which shall not be less than $31,500,000) after deduction of obligations of the Issuer on the date of exercise of the Greenstone Option, plus $1,000,000 (the “Exercise Price”). The Loan provided until such date, including accrued interest, shall be deducted from the Exercise Price such that the Loan amount shall be deemed a payment on account of the Exercise Price. Should Greenstone exercise the Greenstone Option while holders of all other convertible securities of the Issuer have not converted their securities into Ordinary Shares of the Issuer prior to the date of exercise of the Greenstone Option as aforesaid, Aviv Tzidon will also transfer to Greenstone his options to purchase 1,800,000 Ordinary Shares of the Issuer, free of charge.
In addition, as part of the Greenstone Agreement, Seller undertook to indemnify Greenstone for any damages and/or loss and/or expenditure which it will incur if one of the representations provided in the Greenstone Agreement is not true or misleading and/or as a result of a claim made against the Issuer relating to the period ending on the closing date of the Greenstone Option and/or as a result of any tax liabilities or other payments to any governmental authority which will apply to the Issuer and which will relate to the period ending on the closing date of the Greenstone Option.
On March 15, 2011, the Seller determined the amount of Option Shares to be sold under the Greenstone Option, namely76,680,848 ordinary shares of the Issuer, constituting 65.0% of the issued and outstanding share capital of the Issuer (not taking into account 930,000 dormant shares of the Issuer which are held by the Issuer), and 1,800,000 options exercisable into 1,800,000 ordinary shares of the Issuer. Accordingly, on March 16, 2011, Greenstone provided an exercise notice to the Seller with respect to the above referenced Option Shares and options to purchase 1,800,000 Ordinary Shares (sold to Greenstone free of charge).
The Exercise Price will be determined upon the closing of the Greenstone Option. The source of the funds used to purchase such shares is the working capital of Greenstone.
| Item 1. | Security and Issuer |
This statement on Schedule 13D (this “Statement”) relates to the Ordinary Shares of the Issuer. According to the most recent Annual Report on Form 20-F of the Issuer, filed with the Securities and Exchange Commission on February 14, 2011, the principal executive offices of the Issuer are located at c/o Yigal Arnon & Co., 1 Azrieli Center, Tel Aviv, 67021, Israel.
| Item 2. | Identity and Background |
(a) This Statement is being filed by Greenstone, a company organized under the laws of the State of Israel.
(b) The place of business of Greenstone is 21 Haarbaa Street, Tel Aviv 64739, Israel.
(c) Greenstone has two core activities: solids recycling and yielding real estate. Greenstone’s solids recycling activities are done through its subsidiary E.E.R. Environmental Energy Resources (Israel) Ltd. (“EER”).
Leader Holdings & Investments Ltd., a company organized under the laws of the State of Israel (“Leader”) is the holder of 47.0% of the equity interest of Greenstone. Polar Communication Ltd., a company in which Leader holds a 56.46% equity interest, holds 5.3% of the equity interest of the Issuer.
ATE Technology Equipment B.V., a company organized under the laws of the Netherlands (“ATE”) is the holder of approximately 48.0% of the equity interest of Leader. Dalia and Eliahu Huri Holdings and Management Ltd., a private company owned by Mr. Eliyahu Houri (a director in ATE) (“Houri”) owns approximately 3.0% of the equity interest of Leader. To the best of Greenstone’s knowledge, ATE and Houri have entered into a voting agreement with respect to their holdings of shares of Leader. Pursuant to the voting agreement, Houri undertook, among others, to vote in accordance with ATE’s directions at all shareholders’ meetings of the Issuer, except with respect to resolutions that ATE is precluded from voting pursuant to applicable law.
To the best of the Greenstone’s knowledge, ATE shareholders are:
| | (i) | Dan David Foundation (the “Fund”), a fund incorporated under the laws of Lichtenstein, which holds approximately 98.0% of the shares of ATE The Fund is an independent legal entity, with no shareholders, and does not engage in any commercial activity. Notwithstanding the aforementioned, the Fund may transact business in the course of managing its assets. The board of directors of the Fund, which is the administrative body of the Fund, is made up of the following persons: (i) Mr. Dan David; (ii) his son, Mr. Ariel David; (iii) Mr. Itamar Rabinowitch; and (iv) Mr. Martin Shtohel, Adv. |
| | (ii) | Mr. Yitzhak Apeloig (a director of Greenstone), which owns 1.0% of the equity interest of ATE. |
| | (iii) | AdviCorp PLC, a company organized under the laws of the Great Britain, which owns 1.0% of the equity interest of ATE. |
The names, business addresses, present principal occupation or employment (and names, principal businesses and addresses of any corporations or other organizations in which such employment is conducted) and citizenship of the executive officers and directors of Greenstone, Leader, ATE, Houri and the Fund are set forth in Annex A hereto and incorporated herein by reference.
(d)-(e) Neither Greenstone, Leader, ATE, Houri and the Fund, nor, to the best of Greenstone’s knowledge, any of the persons listed on Annex A hereto, have during the last five years (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to any civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person 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. |
The consideration to be paid for the Option Shares shall be equal to the percentage of the Option Shares from the issued shares capital of the Issuer (not taking into account 930,000 dormant shares of the Issuer which are held by the Issuer) multiplied by the cash amount held by the Issuer (which shall not be less than $31,500,000) after deduction of obligations of the Issuer on the date of exercise of the Greenstone Option, plus $1,000,000. The final consideration will be determined upon the closing of the Greenstone Option. The source of the funds used to purchase such shares is the working capital of Greenstone.
| Item 4. | Purpose of Transaction. |
The Reporting Person entered into the Agreement and has exercised the Greenstone Option, purchased the Option Shares and acquired the options to purchase 1,800,000 Ordinary Shares (sold to Greenstone free of charge) because it has determined that such Agreement represents an attractive business opportunity.
Greenstone intends to nominate representatives to the board of directors of the Issuer pursuant to Sections 3.6.7 and 3.6.8 to the Agreement. Additionally, Greenstone intends to consider various alternatives with respect to the Issuer, including merging the activities of EER with the Issuer.
Depending on market conditions, the Reporting Person may acquire additional securities of the Issuer or dispose of any such securities which were previously acquired.
In addition, subject to applicable law, the Reporting Person specifically reserves the right to discuss with other shareholders and the Issuer matters that may be of common concern.
Except as set forth in this Item 4, neither Greenstone, Leader, ATE, Houri and the Fund, nor, to the best knowledge of Greenstone, any of the persons set forth on Annex A, has any present plan or proposal that relates to or would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D. However, Greenstone specifically reserves the right to adopt and pursue one or more such plans, and to make such proposals, at any time and from time to time in the future.
| Item 5. | Interest in Securities of the Issuer. |
(a) By virtue of the Greenstone Option, Greenstone is deemed to be the beneficial owner of 78,480,848 Ordinary Shares or approximately 65.53% of the outstanding Ordinary Shares of the Issuer (based on 118,900,535 Ordinary Shares of the Issuer outstanding as of December 31, 2010, as reported in the Annual Report of the Issuer for the fiscal year ended December 31, 2010, as filed with the Securities and Exchange Commission on February 14, 2011 (not taking into account 930,000 dormant shares of the Issuer which are held by the Issuer)). Other than as described above, to the best knowledge of Greenstone, none of the persons set forth on Annex A beneficially owns any securities of the Issuer.
(b) Greenstone shall have the sole voting and dispositive power with respect to the Option Shares upon the exercise of the Greenstone Option.
(c) Except as otherwise described herein, neither Greenstone, Leader, ATE, Houri and the Fund, nor, to the best knowledge of Greenstone, any of the persons set forth on Annex A, effected any transaction in the Ordinary Shares during the past 60 days.
(d) Not applicable.
(e) Not applicable.
| Item 6. | Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. |
Except as otherwise described herein, there are no present contracts, arrangements, understandings or relationships (legal or otherwise) between Greenstone, Leader, ATE, Houri and the Fund, or, to the best knowledge of Greenstone, any of the persons set forth on Annex A, and any other person with respect to the securities of the Issuer, including, but not limited to, transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangement, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies.
| Item 7. | Material to be Filed as Exhibits. |
| 99.1 | Agreement, dated December 12, 2010, by and among, Greenstone Industries Ltd., A.O. Tzidon Ltd. and Aviv Tzidon (incorporated by reference to Exhibit 7 to Schedule 13D/A filed by Aviv Tzidon on December 20, 2010 with respect to the Issuer’s Ordinary Shares). |
| 99.2 | Exercise Notice issued by Greenstone to the Seller, dated March 16, 2011 (convenience translation from Hebrew). |
