I, the undersigned, Tamar Enav, Adv., confirm that this Deed of Trust has been signed by Cellcom Israel Ltd. by Messrs. Tal Raz and Liat Menachemi Stadler and that their signature binds the Company concerning this Deed of Trust.
| | any pledge and in any way, to the benefit of any third party, without the need for any consent from the Trustee and/or the Debenture Holdersfrom each of the Series. In addition, the Company will be allowed to sell, lease, assign, deliver or transfer in any other way its assets, in part or in full, in any way, for benefit of any third party, without the need for any consent of the Trustee and/or the Debenture Holders in each of the Series. |
| | 2.3 | For the removal of doubt, it is clarified that the Trustee has no duty to examine, and in fact the Trustee has not examined, the need for providing collateral for securing the payments to the Debenture Holders. In its entering the engagement in this Deed of Trust, and with the consent of the Trustee to serve as the trustee for the Debenture Holders, the Trustee does not express its opinion, implicitly or explicitly, as to the ability of the Company to fulfill its undertakings towards the Debenture Holders of each of the Series. |
For the removal of doubt it is clarified that if the Company’s undertakings towards the Debenture Holders are secured by any collateral, the Trustee has no duty to examine, and in fact the Trustee will not examine, the value of the collateral. In its entering the engagement in this Deed of Trust, and with the consent of the Trustee to serve as the trustee for the Debenture Holders, the Trustee does not express its opinion, implicitly or explicitly, as to the value of the collateral, to the extent that collateral is provided, or as to the ability of the Company to fulfill its undertakings towards the Debenture Holders in any of the Series. In the event that the Debentures are secured by any collateral, the fee of the Trustee shall be increased as shall be agreed between the Company and the Trustee.
The Trustee has not been requested to perform, and in fact has not performed a financial, accounting or legal due diligence as to the state of affairs of the Company or the subsidiaries and will not perform such due diligence when a series is taken off the shelf.
The foregoing does not derogate from the duty of the Trustee by law and/or Deed of Trust, nor does it derogate from the duty of the Trustee (to the extent that this duty applies to the Trustee according to any law) to examine the effect of changes in the Company from the date of the Prospectus onwards, to the extent that these may adversely affect the ability of the Company to fulfill its undertakings to the Debenture Holders in any of the Series.
| | 2.4 | The Debentures in any of the Series will be in an equal pari passu degree of security among themselves concerning the undertakings of the Company pursuant to the Debentures of the same Series, without precedence or preference over each other. |
3. The principal of the Debentures and its linkage bases
The principal of the Debentures in the relevant Series will be repayable in a number of installments that shall not fall below one and shall not exceed ten (10) annual installments, or that shall not fall below one and shall not exceed twenty (20) semi-annual installments that shall be consecutive and equal (with the exception of the first or the last installment, that may be set at a different rate) and shall be payable on the dates stipulated in the Initial Offer Report for the relevant Series and subject to the linkage terms specified in this section below.
The principal of the Debentures may be linked to any of the linkage bases listed below or unlinked, all as shall be specified in the Initial Offer Report of the Debentures in that Series, with reference to the definitions of the linkage bases provided below:
If the terms of the relevant Series of Debentures stipulate the linkage of the principal and interest of the Debentures in that Series to the Index, then the linkage to the Index of the principal and interest will be such that, if on any date of payment on account of the principal and/or interest of said Debentures the Payment Index exceeds the Basic Index, the Company’s principal and/or interest payment on such date would be increased in proportion to the rate of increase in the Payment Index over the Basic Index. In case the Payment Index is less than the Basic Index, the Company may stipulate in the Initial Offer Report of the Debentures in that Series that the principal and/or interest of the Debentures are to be secured (i.e. if the Payment Index is less than the Basic Index, the Payment Index shall be the Basic Index) or unsecured (i.e. the Payment Index shall be the Known Index on the date of payment, even if such index is less than the Basic Index). The securing against a decrease in the index where the Payment Index is less than the Basic Index is to be provided for in the Initial Offer Report, as described above.
The interest payable on the Debentures in that Series will be at a fixed rate as described in Section 4.1.1 below, or at a variable rate (Prime Interest or Telbor Interest or any other basic interest, as shall be determined in the Initial Offer Report of the Debentures in the relevant Series, with the addition or less a margin that would be specified in the Initial Offer Report or determined in a bid) as described in Section 4.1.2 below.
| | 3.2 | Linkage to foreign currency |
If the terms of the relevant Series of Debentures stipulate the linkage of the principal and interest of the Debentures in that Series to foreign currency, then their linkage to foreign currency will be such that, if on any date of payment on account of the principal and/or interest of said Debentures the Payment Exchange Rate exceeds the Basic Exchange Rate, the Company’s principal/interest payment on such date would be
increased in proportion to the rate of increase in the Payment Exchange Rate over the Basic Exchange Rate. In case the Payment Exchange Rate is less than the Basic Exchange Rate, the Company may stipulate in the Initial Offer Report of the Debentures in that Series that the principal and/or interest of the Debentures are to be secured (i.e. if the Payment Exchange Rate is less than the Basic Exchange Rate, the Payment Exchange Rate shall be the Basic Exchange Rate) or unsecured (i.e. the Payment Exchange Rate shall be the Known Exchange Rate on the date of payment, even if such Exchange Rate is less than the Basic Exchange Rate). The securing against a decrease in the Foreign Currency Exchange Rate where the Payment Exchange Rate is less than the Basic Exchange Rate is to be provided for in the aforesaid Initial Offer Report.
The interest payable on the Debentures in that Series will be at a fixed rate as described in Section 4.3.1 below, or at a variable rate (Libor Interest or Euribor Interest or any other basic interest, as shall be determined in the Initial Offer Report of the Debentures in the relevant Series, with the addition or less a margin that would be specified in the Initial Offer Report or determined in a bid) as described in Section 4.3.2 below.
If the terms of the relevant Series of Debentures do not stipulate any linkage basis for the principal of the Debentures in that Series, the principal will be denominated in NIS and would not be linked to any Index or Foreign Currency. In this case, the interest on the Debentures would also not be linked to any Index or Foreign Currency.
The interest payable on the Debentures in that Series will be at a fixed rate as described in Section 4.2.1 below, or at a variable rate (Prime Interest or Telbor Interest or any other basic interest, as shall be determined in the Initial Offer Report of the Debentures in the relevant Series, with the addition or less a margin that would be specified in the Initial Offer Report or determined in a bid) as described in Section 4.2.2 below.
| | 3.4 | Subject to the stated in the Code and Guidelines of the Stock Exchange, the linkage method will not be changed throughout the period of the Debentures and no more than one linkage basis will be assigned to each of the Series of Debentures. |
The principal of the Debentures in the relevant Series will bear annual interest at a rate that will be determined in the Initial Offer Report of the Debentures in that Series, and based on one of the interest calculation mechanisms described below, as shall be determined in the aforesaid Initial Offer Report , in reference to the interest calculation mechanisms described below:
| | 4.1 | Interest on index-linked principal |
The principal of the Debentures, if these are linked to the Consumer Price Index, will bear linked interest as aforesaid, at a fixed or a variable rate, as described below:
| | 4.1.1 | Interest at a fixed rate - interest at a fixed rate, as shall be stipulated in the Initial Offer Report of the Debenture in the relevant Series and/or determined in a bid carried out under said Offer Report. |
| | 4.1.2 | Interest at a variable rate, for which the margin above or below the Basic Interest is specified in the Initial Offer Report of the Debentures or determined in a bid thereunder, if the Basic Interest is the Prime - the interest rate for the full interest period would be determined according to the Basic Interest Rate specified in the Initial Offer Report of the Debentures, as quoted on the Banking Business Day that takes place two (2) Business Days prior to the first day of the interest period (“the Sample Date”). The Company will submit an immediate report on the interest rate determined as above within four (4) days of the Sample Date. |
| | 4.2 | Interest on unlinked principal |
The principal of the Debentures, if not linked to any index or currency, will bear interest at a fixed or variable rate, as described below:
| | 4.2.1 | Fixed NIS interest - interest at a fixed rate, as shall be stipulated in the Initial Offer Report of the Debenture in the relevant Series and/or determined in a bid carried out under such Offer Report. |
| | 4.2.2 | Interest at a variable rate, for which the margin above or below the Basic Interest is specified in the Initial Offer Report of the Debentures or determined in a bid thereunder, if the Basic Interest is the Prime or the Telbor, or any other Basic Interest determined in the Initial Offer Report of the Debentures -the interest rate for the full interest period would be determined according to the rate of the Prime, the Telbor or any other Basic Interest, as quoted on the Banking Business Day that takes place two (2) Business Days prior to the first day of the interest period (“the Sample Date”). The Company will submit an immediate report on the interest rate determined as above within four (4) days of the Sample Date. |
| | 4.3 | Interest on principal linked to foreign currency |
The principal of the Debentures, if these are linked to a foreign currency, will bear interest at a fixed or a variable rate, as described below:
| | 4.3.1 | Fixed interest linked to foreign currency - interest that is linked to a foreign currency, the fixed rate of which would be determined in the Initial Offer |
Report of the Debentures in the relevant Series and/or in a bid conducted under such Offer Report.
| | 4.3.2 | Interest at a variable rate, for which the margin above or below the Basic Interest is specified in the Initial Offer Report of the Debentures or determined in a bid thereunder,if the Basic Interest is the Libor, the Euribor or any other Basic Interest determined in the Initial Offer Report of the Debentures, the interest rate for the full interest period would be determined according to the rate of the Libor, the Euribor or any other Basic Interest, as quoted on the Banking Business Day that takes place two (2) Business Days prior to the first day of the interest period (“the Sample Date”). The Company will submit an immediate report on the interest rate determined as above within four (4) days of the Sample Date. |
| | 4.4 | The interest rate for the first interest period of the Debentures in the relevant Series will be specified in the Initial Offer Report of the Debenture in that Series and/or in a report that will be published by the Company with respect to the results of the bid that would be conducted by the Company, as appropriate. |
| | 4.5 | It is clarified that, for Debentures that bear a variable interest rate, as described in Sections 4.1.2, 4.2.2 and 4.3.2 above, the interest rate paid in each interest period will vary, as stated above. |
| | 4.6 | The interest rate determined for each relevant Series will be an annual rate. |
| | 4.7 | The interest on the Debentures in the relevant Series will be payable every year in one annual installment or in two semi-annual installments or in four quarterly installments, as shall be stipulated in the Initial Offer Report of the Debentures in the relevant Series (the “Interest Periods”) in respect of the interest period ended on the last day prior to the date of payment. The first interest period of the Debentures in the relevant Series will commence on the first Trade Day following the date of closing of the list of signatures, as specified in the Initial Offer Report of the Debentures in the relevant Series, and end on the last day prior to the first date of payment. Any subsequent interest period of the Debentures in the relevant Series will commence on the first day following the end of the preceding interest period and end on the last day prior to the date of payment closest after to its date of commencement. The interest for the first interest period will be calculated according to the number of days in this period based on a 365-day year. |
| | 4.8 | The interest on the principal of the Debentures in the relevant Series will be calculated starting from the date of clearing (the first Trade Day following the date of closing of the list of signatures, as specified in the Initial Offer Report of the Debentures in the |
relevant Series). On the date of clearing, the Company will submit an immediate report specifying the rate of interest that shall be payable in respect of the first interest period, calculated as above.
| | 4.9 | The last installment of interest on the principal of the Debentures in the relevant Series will be paid together with the last installment on account of the principal of the Debentures in that Series, against the delivery of the Debenture Certificates of the Series to the Company. |
| | 4.10 | Income tax (see Section 2.11 of the Prospectus) will be deducted from each payment of interest for the Debentures, according to the law. |
| 5. | The right for Conversion of Debentures (Series 1 through 2) into shares (“the Convertible Debentures”) |
| | 5.1.1 | On every Trade Day, commencing on the first-time listing of each of the Series of Convertible Debentures for trade on the Stock Exchange until several days prior to the end of the period of the Debentures in the relevant Series, in accordance with the guidelines of the Stock Exchange as of the date of the Initial Offer Report of the Debentures in that Series and as shall be provided for in the aforesaid Offer Report (“the Conversion Period”, and each Trade Day as aforesaid shall be hereinafter referred to as “the Date of Conversion”, and the final date of the Conversion Period shall be hereinafter referred to as “the End of the Conversion Period”), with the exception of several days prior to the determinant date for partial redemption in accordance with the Code and guidelines of the Stock Exchange as of the date of the aforesaid Initial Offer Report through to the date of execution of the partial redemption, the balance of the principal of the Convertible Debentures in that Series that are in circulation on such date will be convertible into fully paid ordinary shares of the Company, registered to name, outstanding in the Company’s equity on the date of the Offer Report (“the Conversion Shares”), at a conversion rate that shall not be less than the par value of the Company’s ordinary shares as of the date of said Offer Report (“the Conversion Rate”), subject to adjustments as specified below, and in the manner and under the terms, all as shall be stipulated in the aforesaid Offer Report. |
| | 5.1.2 | Any Holder of Convertible Debentures in any Series looking to convert the par value balance of the principal of Convertible Debentures in the Series held by him into Conversion Shares (“the Converter”) will submit to the Company, directly at its registered office (if the Debentures are registered to the name of |
the Converter in the Register of that Series) or through a member of the Stock Exchange (if the Debentures are held by the Converter through the member of the Stock Exchange), on the Dates of Conversion and in all events before the End of the Conversion Period with respect to said Series, a written application to this effect in the format that shall be determined by the Company, together with the Certificates of the Convertible Debentures to which the application relates (“the Conversion Notice”).
| | 5.1.3 | Within a single Conversion Notice, the conversion of the par value balance of the number of Convertible Debentures of the same Series that are registered to the name of one Holder may be requested and must be accompanied by all the Certificates of the Convertible Debentures to which the Conversion Notice relates. |
| | 5.1.4 | In the event of conversion of Convertible Debentures into shares pursuant to this section that relates only to part of the par value sum of Convertible Debentures registered in the same Certificate, the Certificate of Convertible Debentures must first be split into the appropriate number of Debenture Certificates, such that the sum of all the par value amounts of the Debentures registered therein is equal to the par value sum of the Debenture Certificate divided up as aforesaid. |
| | 5.1.5 | The Conversion Notice forms are available at the registered office of the Company as well as in any other location advised by the Company. |
| | 5.1.6 | The Converter will, at any time, sign any document that may be required under any law and pursuant to the Company’s directives for the allocation of the Conversion Shares. The date on which the Company receives a Conversion Notice directly from the Converter (with respect to directly held Debentures), or the Stock Exchange Clearing House receives a notice of the conversion of the Convertible Debentures from a member of the Stock Exchange (with respect to Debentures held through the Nominee Company), that fully complies with all the terms stipulated in this Prospectus, as appropriate, will be deemed as the date of conversion (“the Conversion Date”). |
| | 5.1.7 | In the event that the Converter does not fully comply with the terms for the conversion of the Convertible Debentures, the Conversion Notice will be deemed as void and the Certificates of the Convertible Debentures will be returned to the applicant. |
| | 5.1.8 | A Conversion Notice submitted to the Company may not be cancelled or altered. |
| | 5.1.9 | The Converter will not be entitled to the allocation of a part of a single Conversion Share, however any fractions of Conversion Shares that arise upon conversion, if any, will be sold on the Stock Exchange by a trustee that would be appointed by the Company for this purpose, within thirty (30) days of the accrual of such fractions into whole shares in a quantity that is reasonable for sale on the Stock Exchange, taking into consideration the costs involve, and the net consideration from the sale will be proportionately divided between the beneficiaries within fifteen (15) days of the selling date. A check will not be issued to any of the beneficiaries for an amount less than NIS 50; such amounts may be collected at the offices of the Company. |
| | 5.1.10 | Conversion Shares will confer upon their holders full participation rights in any dividend and other distribution the determinant date for entitlement thereto is the Conversion Date or a later date, and will be equal in rights in all respects to the ordinary shares outstanding in the Company’s equity on such date. |
| | 5.1.11 | Any Convertible Debentures that are converted will be removed from circulation on their Conversion Date and will be fully cancelled, with retroactive effect to the Conversion Date, from the date of allotment of Conversion Shares in their respect, and will not confer any right to any interest subsequent to the final date of payment of interest thereon, with respect to which the determinant date precedes the Conversion date, and will not confer any right to linkage differences accrued on the balance of the principal under the terms of linkage as stated in Section 3 above (and which would have been payable together with the principal of the Debentures had the applicant not exercised his right to convert the Convertible Debentures into shares as aforesaid). |
| | 5.1.12 | Any part of the Convertible Debentures of any Series that is not converted until the End of the Conversion Period of such Series will no longer confer upon its Holder any right to convert it into Conversion Shares, and the related conversion right will be null and void subsequent to said date. |
| | 5.2 | Timetables for the conversion |
The bylaws of the Stock Exchange clearing House known as of the date of publication of the Shelf Prospectus with respect to the timetable for the execution of an order for the conversion of the Convertible Debentures that are held through members of the Stock Exchange stipulate as follows:
| | 5.2.1 | The notification by a client of a conversion that is received by 12:00 noon at the offices of the member of the Stock Exchange will be transmitted by that |
member of the Stock Exchange to the Clearing House not later than 12:00 noon on the following Trade Day.
| | 5.2.2 | Having received a notification of a conversion from a member of the Stock Exchange by 12:00 noon, the Clearing House will debit the member of the Stock Exchange and credit the Nominee Company accordingly, this not later than 12:00 noon on the following Trade Day. |
| | 5.2.3 | Having received a credit notification pursuant to Section 5.2.2 above by 12:00 noon, the Nominee Company will transmit the Conversion Notice to the offices of the issuing company not later than 12:00 noon on the following Trade Day. |
| | 5.2.4 | Any notification from the parties mentioned in Sections 5.2.1 through 5.2.3 above that is received after 12:00 noon on any Trade Date will be deemed as having been received by 12:00 noon of the following Trade Day. |
| | 5.2.5 | Notwithstanding the said above, on the last Conversion Date preceding final redemption or preceding an ex partial redemption date, as applicable, the members of the Stock Exchange are required to transmit to the Clearing House the final conversion applications by 12:00 noon. The conversion will be executed on the same date. Any member of the Stock Exchange that does not submit an application by said time will be deemed as not having exercised its right. |
| | 5.2.6 | In the event that the final date for the conversion of the Convertible Debentures of any Series or the final date for conversion prior to partial redemption falls on a day that is not a Trade Day, such date will be deferred to the following Trade Day. |
It is hereby emphasized that the conversions of the Convertible Debentures shall be subject to the bylaws of the Stock Exchange Clearing House existing on the actual date of conversion.
Within one Trade Day of the Conversion Date, the Company will allot each Converter certificates in respect of the Conversion Shares due to him, and after approval is received for the listing for trade of the allotted Conversion Shares, the Company will take action to list the Conversion Shares for trade on the Stock Exchange within three (3) days of said date.
| | 5.3 | Directives for the protection of the Holders of Convertible Debentures during the Conversion Period |
| | 5.3.1 | Distribution of bonus shares |
In the event of the distribution of bonus shares by the Company between the
date of the Initial Offer Report of any of the Series of Convertible Debentures through to the End of the Conversion Period of such Series, the rights of the Holders of Convertible Debenture in said Series will be protected as follows:
| | 5.3.1.1 | Subsequent to the determinant date for the entitlement to participate in such distribution, the number of Conversion Shares receivable by the Holder of Convertible Debentures in such Series upon their conversion would be increased by adding the number of shares to which the Holder would have been entitled as bonus shares had he converted the Convertible Debentures immediately before the aforesaid determinant date. |
| | 5.3.1.2 | The Holder of the Convertible Debentures will not be entitled to the allocation of a part of a bonus share as above, however any fractions of bonus shares that arise upon allotment, if any, will be sold on the Stock Exchange by a trustee that would be appointed by the Company for this purpose, within thirty (30) days of the aforesaid date of allotment, and the net consideration (less selling costs and compulsory payments and fees) will be divided between the beneficiaries within fifteen (15) days of the selling date. A check will not be issued to one beneficiary for an amount less than NIS 50; such amounts may be collected at the offices of the Company. |
| | 5.3.1.3 | Subject to the stated in the Code and guidelines of the Stock Exchange, the adjustment method may not be altered. |
In the event that, between date of the Initial Offer Report of any of the Series of Convertible Debentures through to the End of the Conversion Period of such Series, the Company should offer to its shareholders securities of any kind by way of the issuance of rights, the number of Conversion Shares receivable upon conversion of the Convertible Debentures in such Series that have not yet been converted into ordinary shares of the Company on the determinant date based will be adjusted according to the benefit component of the rights, as reflected in the ratio of the quoted price of the Company’s share on the Stock Exchange on the determinant date to the basic “ex rights” price. Subject to the stated in the Code and guidelines of the Stock Exchange, the adjustment method may not be altered.
| | 5.3.3 | Adjustment with respect to dividend distribution |
Should the Company carry out a dividend distribution, as defined in the
Companies Law (“the distribution”), the determinant date for the entitlement thereto (“the determinant date for distribution”) falls before the End of the Conversion Period, one of the provisions stipulated in subsections (1) and (2) below shall apply, all as shall be determined by the Company in the Initial Offer Report of the Convertible Debentures under the Shelf Prospectus. The Company will publish in detail in the aforesaid Offer Report the manner of adjustment of the Conversion Rate and/or the Conversion Ratio following a distribution, to the extent that such is carried out, based on its selection of one of the following alternatives:
| | 5.3.3.1 | The Conversion Rate and/or the Conversion Ratio will not be adjusted as a result of a distribution by the Company. |
| | 5.3.3.2 | Commencing on the first Trade Day on which the Company’s shares are traded subsequent to the determinant date for distribution (ex dividend), the Conversion Ratio of the Convertible Debentures in circulation will be adjusted by its multiplication by the ratio of the price of the Company’s share on the Stock Exchange, as determined by the Stock Exchange, adjusted for the distribution (ex dividend price), to the closing price determined for the Company’s share by the Stock Exchange on the determinant date for distribution). The Company will announce the adjustment of the Conversion Ratio, as above, in an immediate report not later than the date on which the Company’s shares are traded “ex dividend”. |
The Company will act in accordance with the stated in Section 5.3.3.1 above, this without derogating from the Company’s right, as aforesaid, to change the adjustment of the Conversion Rate and/or the Conversion Ratio following a distribution by way of the issuance of a notice within the framework of the Initial Offer Report of the Debentures in the relevant Series.
| | 5.4 | Additional directives for the protection of the Holders of Convertible Debentures during the Conversion Period |
Commencing on the date of publication of the Offer Report for any Series of Convertible Debentures until all of the Convertible Debenture in that Series are converted, but in no event later than the End of the Conversion Period of the Series, the following directives shall apply:
| | 5.4.1 | The Company will maintain a sufficient amount of ordinary shares in its authorized share capital, to secure the allotment of all of the shares that may result from the conversion of all of the Convertible Debentures in a given Series |
that are in circulation from time to time, and if necessary will cause the increase of its authorized share capital accordingly.
| | 5.4.2 | Should the Company consolidate the ordinary shares in its issued share capital into shares with a greater par value or subdivide them into shares with a lesser par value - the number of Conversion Shares for allotment following the conversion of the Convertible Debentures in the relevant Series would be consequently reduced or increased, as appropriate. In such case, the provisions of this Section 5.4 must be followed, mutatis mutandis. |
| | 5.4.3 | Within ten (10) days of any adjustment to the Conversion Rate or to the number of Conversion Shares in relation to the aforesaid Series of Convertible Debentures, the Company will publish a notice in two (2) widely distributed daily newspapers that are published in Israel in Hebrew, concerning the entitlement of the Holders of Convertible Debentures in said Series to convert them into shares, specifying the Conversion Period, the Conversion Rate and the number of Conversion Shares to which the Holder of Convertible Shares would be entitled following a conversion at such time, all in relation to the abovementioned Series. |
| | 5.4.4 | In addition to said notice, not later than three (3) weeks and not earlier than four (4) weeks before the End of the Conversion Period in respect of said Series, the Company will publish a notice in two (2) widely distributed daily newspapers that are published in Israel in Hebrew, and will issue a written notice, with copies to the Stock Exchange and the Trustee of the Series, to the Holders registered in the Register of the Holders of Convertible Debentures in that Series, one month prior to the End of the Conversion Period, as aforesaid, concerning the final date for the conversion of the Convertible Debentures in that Series. Such notice will specify the Conversion Rate, the number of Conversion Shares and the number of bonus shares to which the Holder of Convertible Shares would be entitled following a conversion at such time, all in relation to the abovementioned Series. |
| | 5.4.5 | The Company will not distribute nor offer to the holders of ordinary shares a cash dividend or bonus shares or an offer of rights in any securities, unless the determinant date for their receipt is at least ten (10) days after the publication of the Company’s notice concerning the distribution or offer of rights, as appropriate. |
| | 5.4.6 | The Company will refrain from any action, including the distribution of bonus shares, which may result in the reduction of the price of a Conversion Share below its par value. |
| | 5.4.7 | In accordance with the Code and guidelines of the Stock Exchange, the terms of the Convertible Debentures with respect to the Conversion Rate, the conversion dates and the linkage method cannot be changed; nevertheless, the Company is allowed to change the Conversion Period and/or the Conversion Rate provided that such change is effected within the framework of an arrangement or settlement that has been approved by Court, under Section 350 of the Companies Law. Additionally, in accordance with the Code and guidelines of the Stock Exchange, the Company may change the Conversion Rate as part of a procedure for the split of the Company or a procedure for the merger of the Company, provided that the change includes only those adjustments that are essential to such procedure. |
In accordance with the Code and guidelines of the Stock Exchange, the “split procedure” for this purpose signifies - a procedure whereunder the Company transfers to its shareholders shares that it holds in another company, or a procedure whereunder the Company transfers assets and liabilities to a new company that was established for the purpose of the split and the shareholders in the new company are also shareholders in the company that transfers the assets and liabilities, all conditional upon the split procedure being carried out pari passu for all shareholders of the Company. In accordance with the Code and guidelines of the Stock Exchange, the “merger procedure” for this purpose signifies - a procedure whereunder all the shares of the Company are transferred to the possession of a new company or to the possession of another registered company whose shares are listed for trade on the Stock Exchange or a procedure whereunder the Company transfers all of its assets and liabilities to another company as above, all conditional upon the securities of the Company whose shares or assets are to be transferred as aforesaid being delisted from trade on the Stock Exchange and upon the merger procedure being carried out pari passu for all shareholders of the Company.
Notwithstanding the above, in accordance with the Code and guidelines of the Stock Exchange, the Company may change the Conversion Rate, provided that such change is effected as part of a procedure for an offering by way of rights in the Company or as part of a procedure for the distribution of a bonus shares in the Company or as part of a procedure for the distribution of dividend in the Company, and provided that the change includes only those adjustments that are essential to such procedure, as described in Section 5.3 above.
In the event that the Code and guidelines of the Stock Exchange relating to the alteration of the terms of the Convertible Debentures are amended, the amended
provisions shall apply.
| | 5.5.1 | In the event that a resolution is passed for the voluntary liquidation of the Company, the Company will issue a written notice to this effect to all the Holders of Convertible Debentures in circulation at the time, that are registered in the Register of the relevant Series of Convertible Debentures, and will additionally publish a notice in this regard in two (2) widely distributed daily newspapers that are published in Israel in Hebrew. Every Holder of Convertible Debentures shall be entitled, at his choice, to be considered as having exercised the conversion right pertaining to the Debentures shortly before the resolution was passed, provided that he notifies the Company of his choice within three (3) months of the said notice by the Company. |
| | 5.5.2 | In such case, the Holder of the Convertible Debentures shall be entitled to participate in the distribution of the excess assets of the Company upon liquidation (following the settlement of all its debts) between its shareholders, this in the amount that he would have received upon the liquidation of the Company had he been a shareholder in the Company shortly before the passing of the liquidation resolution by virtue of the conversion of the Convertible Debentures that are in his possession, with respect to which he had notified the Company as aforesaid, less the amount of interest that was paid for such Convertible Debentures on the date of the resolution or shortly thereafter (with the exception of interest that falls due prior to the date of the resolution, even if paid on the date of the resolution or thereafter); and the Holder of the Convertible debentures will not be entitled to any payment under the Debentures that falls due subsequent to the date of the resolution. |
6. Payments of the Principal and the Interest of the Debentures
| | 6.1 | The payments on account of the interest and/or the principal of the Debentures will be paid to the persons whose names are listed in the Register of Debenture Holders of the relevant Series on the dates that will be specified in the Initial Offer Report of the Debentures in such Series in accordance with the guidelines of the Stock Exchange Code on such date (the “Determinant Day for the Relevant Series”), with the exception of the last installment of the principal and the interest, which will be paid against delivery of the Debentures Certificates to the Company, at its registered office or anywhere else as advised by the Company, by no later than five (5) Business Days before the day stated for payment of the last installment. |
It is clarified that any person not registered in the Company’s Register of Debenture
Holders of the relevant Series on the Determinant Day for the Relevant Series will not be entitled to the payment of interest in respect of the interest period that had commenced prior to the said date.
| | 6.2 | In any case of the date of payment on account of principal and/or interest falls on a day that is not a Business Day, the payment date will be deferred to the first Business Day thereafter without additional payment, interest or linkage. |
| | 6.3 | The payment of principal and interest will be subject to the linkage terms stipulated in Section 3 above, as appropriate. |
| | 6.4 | Payment to beneficiaries will be made by checks or by bank transfer to the credit of the bank account of the persons whose names are listed in the Register of the Debenture Holders and that is indicated in the details that they give to the Company in writing in advance, in accordance with the provisions of subsection 6.5 below. If the Company cannot, for any reason that does not depend thereupon, pay any sum to the beneficiaries, the provisions of Section 7 below will apply. |
| | 6.5 | A Debenture Holder that will be interested in informing the Company of the details of the bank account for crediting it with payments pursuant to the Debentures as stated above, or change these account detail or instructions concerning the mode of payment, may do so by notice to the company by registered letter. However, the Company will fulfill the instruction only if it reaches its registered office at least thirty (30) days before the determining Date for payment of any installment pursuant to the Debenture. |
| | In the case of the notice being received by the Company belatedly, the Company shall act thereby only concerning installments whose Determinant Payment Date is after the date of payment which is near to the day of receipt of the notice. |
| | 6.6 | If a Debenture Holder who is entitled to such a payment has not given the Company in advance details concerning its bank account, any installment on the account of the principal and interest will be made out by a check that will be sent by registered mail to its last address listed in the Register of the Debenture Holders. Sending of a check to a beneficiary by registered mail as stated above will be considered, for all intents and purposes, as payment of the sum specified therein on the date of its mailing, as long as it is duly paid upon its presentation for collection. |
7. Abstention from Payment for a Reason that does not Depend on the Company
| | 7.1 | Any sum that is due to the debenture Holder that is not actually paid for a reason that does not depend on the Company, while the company was prepared to pay it, will cease to bear interest and linkage differences from the date stated for its payment, whereas the Debenture Holder will be entitled only to the sums that it would have been entitled to on the date stated for repayment of that sum on the account of the principal, the |
linkage differences or the interest.
| | 7.2 | The Company will deposit with the Trustee by no later than 14 business days from the date stated for that payment, the sum of the payment that has not been paid for a reason that does not depend on the Company, and such a deposit will be considered as settlement of that payment, and in the case of settlement of all dues pursuant to the Debenture, as redemption of the Debenture. |
| | 7.3 | The Trustee shall deposit in a bank the sums that will be transferred thereto as stated in Section 7.2 above, to the credit of those Debenture Holders and will invest it in investments permitted hereby that are securities of he State of Israel or other securities that the laws of the State of Israel permit investment of the trust money in, as the Trustee deems fit and subject to the provisions of the law. Should the Trustee do so, it will not owe the beneficiaries for sums other than the remuneration that is received from realizing the investments less the expenses, commissions and mandatory payments, if any that are related to the said investment in managing the trust account less its fee. |
| | 7.4 | The Trustee shall transfer to each Debenture Holder for which sums and/or funds due to the Debenture Holders have been deposited with the Trustee, out of sums thus deposited, less all expenses, commissions, the mandatory payments and its fee, against presentation of the proof that is required by the Trustee, to the full satisfaction thereof. |
| | 7.5 | The Trustee shall keep these sums and invest them in the above mentioned manner until one year elapses from the final redemption date of the Debentures. After this date, the Trustee shall transfer to the Company these sums, including profits that result from their investment, less its expenses and other expenses incurred in accordance with the provisions of this Deed of Trust (such as service provider fees, etc.) to the extent that these remain in its possession on that date. The Company shall keep these sums in trust for an additional year from the day of their transfer thereto by the Trustee, for the Debenture Holders that are entitled to those sums, and with regard to the sums that are transferred thereto by the Trustee as stated above, the provisions of Section 7.3 of this Deed of Trust will apply, mutatis mutandis. Upon the transfer of the sums from the Trustee to the Company, to the satisfaction of the Trustee, the Trustee shall be exempt from payment of such sums to the entitled Debenture Holders. The Company shall approve to the Trustee in writing the holding of the sums and the receipt thereof in trust for the said Debenture Holders, and will indemnify the Trustee for any claim and/or expense and/or damage of any type that it sustains due to and for the said money transfer, as long as the Trustee has acted reasonably. The Company shall keep these sums in trust for the Debenture Holders that are entitled to these sums for an additional year from the day of their transfer to it from the Trustee. Sums that are not demanded |
from the Company by a Debenture Holder two years from the final repayment date of the Debentures will be transferred to the Company, which will be entitled to use the remaining sums for any purpose.
8. The register of the Debenture Holders and transfer of Debentures
| | 8.1 | The Company shall keep and maintain in its registered office a Register of the Debenture Holders, listing the names of the Debentures Holders, their addresses and the number and par value of the Debentures registered to their name. The register will also list any transfer of title to the Debentures. The Trustee and any Debenture Holder will be entitled, at any reasonable time, to review this Register. The Company is entitled to close the Register from time to time or for a period or periods that do not exceed an aggregate of thirty (30) days a year. |
| | 8.2 | The Company will not be required to note in the Debenture Holder registers any notice concerning explicit, implicit or putative Trust, or hypothecation or pledging of any kind or any equity, claim or offset right or any other right, concerning the Debentures. The Company shall only recognize the ownership of the person whose name the Debentures are listed under, as long as the legal heirs, administrators of estate or executors of the will of the registered owner or any person who will be entitled to the Debentures due to the bankruptcy of any registered owner (and in the case of a corporation - due to the liquidation thereof) will be entitled to register as the Holders thereof, after giving evidence that in the opinion of the Company is satisfactory for proving the right of any of the above to be registered as their Holder thereof. |
9. The Debenture Certificates, their Split and Transfer
| | 9.1 | For the Debentures that are listed to one Holder, one certificate will be issued, or at its request, a number of certificates will be issued (the certificates referred to in this section will be referred to hereinafter as: the “Certificates”). |
| | 9.2 | Each Certificate may be split into certificates whose total principal equals the sum of the par value of the Debentures that have been included in a Certificate whose split has been requested, as long as the new Debenture Certificates that are issued will be to par value sums in whole New Israeli Shekels, in accordance with a split request that has been signed by the registered owner of that Debenture Certificate, against the provision of that Debenture Certificate to the Company at its registered office for effecting the split. The split shall be made within seven (7) days of the end of the month on which the Certificate along with its split request were provided at the registered office of the Company. All of the expenses and commissions involved in the split, including stamp tax and other duties, if any, will apply to the party requesting the split. |
| | 9.3 | The foregoing will apply accordingly to allocation letters, as long as they have not been |
replaced with Certificates.
| | 9.4 | The Debentures may be transferred concerning any par value sum, as long as it is in whole New Israeli Shekels. Any transfer of the Debentures that is not performed through the trading system of the Stock Exchange will be made out according to a transfer deed that is made out in a generally accepted format for transferring shares, duly signed by the registered owner or the legal representatives thereof, and by the transferee or the legal representatives thereof, which will be delivered to the Company at its registered office along with any other proof that is required by the Company for proving the right of the transferor to their transfer and the identity thereof. If any stamp tax or other mandatory payment applies to the deed of transfer of the Debentures, the company will be given proof of their payment by the requester of the transfer, which will be to the satisfaction of the Company. |
| | 9.5 | It is clarified hereby that all of the expenses and commissions involved in the transfer, including stamp tax and other mandatory payments and duties, if any, will be borne by the party requesting the transfer only. The Company shall be allowed to keep the deed of transfer. |
| | 9.6 | In the case of a transfer of only part of the sum of the specified principal of the Debentures in the Certificate, the Certificate will be split first as specified in Section 9.2 above into a number of Debenture Certificates as required thereby, in such a manner that the total sums of the principal specified therein is equal to the sum of the specified principal of the said Debenture Certificate. |
| | 9.7 | After fulfillment of all of the conditions stated above, the transfer will be registered in the Register of the Debenture Holders. |
| | 10.1 | Early redemption initiated by the Stock Exchange - In the event that the Stock Exchange decides to delist from trade therein the Debentures in any of the Series E through I in circulation by reason of the value of the Series falling below the minimum amount stipulated in the Code and guidelines of the Stock Exchange with respect to the delisting from trade therein and/or in the event that the Stock Exchange decides to delist from trade therein the Convertible Debentures in any of the Series 1 through 2 in circulation by reason of the public’s holdings therein falling below the minimum amount stipulated in the Code and guidelines of the Stock Exchange with respect to the delisting from trade therein, the Company will not allow such early redemption of the Series due to the delisting from trade as aforesaid, unless otherwise notified by the Company in the Shelf Offer Report under which the Series of Debentures is initially issued. |
Should the Company choose to allow early redemption of the Debentures as aforesaid, the Company will take the following actions:
| | 10.1.1 | Within forty five (45) days of the decision of the Stock Exchange on the delisting from trade therein, the Company will announce a date for the early redemption, on which the Debenture Holder would be allowed to redeem the Debentures. The announcement of the date of early redemption will be published in two (2) widely distributed daily newspapers that are published in Israel in Hebrew. |
| | 10.1.2 | The date of early redemption of the Debentures in Series E through I with respect to which a delisting decision has been made as aforesaid, shall not be earlier than seventeen (17) days from the date of publication of the announcement or later than forty five (45) days of the said date, but shall not fall in the period between the determinant date for the payment of interest and the date of its actual payment. |
| | 10.1.3 | The date of early redemption of the Convertible Debentures in Series 1 through 2 with respect to which a delisting decision has been made as aforesaid, shall not be earlier than thirty (30) days from the date of publication of the announcement or later than forty five (45) days of the said date, but shall not fall in the period between the determinant date for the payment of interest and the date of its actual payment. |
| | 10.1.4 | On the date of early redemption, the Company will redeem the Debentures from the Series in which the Holders have requested the redemption of the Debentures, at their par value, with the addition of linkage differences, if any, and the interest accrued on the principal, with the interest being calculated in proportion to the period from the last date for which interest has been paid to the aforesaid actual date of early redemption (the calculation of interest for a part of a year will be based on a 365-day year). |
| | 10.1.5 | The scheduling of a date of early redemption, as above, does note derogate from the redemption rights provided for in the Debentures of the same Series, of any of the Debenture Holders that do not redeem them on the date of early redemption as above, and in the case of Convertible Debentures, does not derogate from the conversion rights provided for therein, but the Debentures will be delisted from trade on the Stock Exchange and shall be, inter alia, subject to the consequent tax implications. |
| | 10.1.6 | The early redemption of the Debentures as aforesaid will not confer upon the Holder of Debentures of the same Series redeemed as above the right to receive |
interest in respect of the period subsequent to the date of redemption.
| | 10.2 | Early redemption initiated by the Company - The Company will be allowed to call for the early redemption of the Debentures in Series E through I and 1 through to 2 offered under the Offer Report in accordance with the Shelf Prospectus, under the terms and according to the price, mechanism, schedules and the other terms stipulated by the Code and guidelines of the Stock Exchange prevailing at such time, as shall be determined in the Initial Offer Report of the Debentures in the relevant Series. |
11. Purchase of the Debentures by the Company and/or by a subsidiary
| | 11.1 | The Company reserves the right to purchase at any time, within or without the Stock Exchange, Debentures at any price of its choosing, without prejudice to the obligation of repayment of the Debentures remaining in circulation as specified above. The Debentures that will be purchased by the Company will be cancelled and delisted from trade on the Stock Exchange, and the Company will not be allowed to re-issue them. If the purchase of the Debentures by the Company is carried out as part of the trade on the Stock Exchange, the Company will apply to the Stock Exchange Clearing House to withdraw the relevant Debenture Certificates. |
| | 11.2 | A subsidiary of the Company and/or the controlling shareholder and/or companies under the control of the controlling shareholder of the Company (“Affiliated Company”) are allowed to purchase and/or sell from time to time within or without the Stock Exchange, including by way of issuance by the Company, Debentures at any price of their choosing and sell them accordingly. The Debentures thus held by the allied corporation will be considered as an asset of the affiliated company, and if they are listed for trading, they will not be delisted from trade on the Stock Exchange other than subject to the rules of the Stock Exchange. |
| | On the matter of holding Meetings of Holders of Debentures, the provisions of Section 2.19 of the second addendum to this Deed will apply. |
| | 11.3 | The Company is allowed, at any time and from time to time, without needing the consent of the Debenture Holders or the Trustee, to issue, including to an affiliated company, Debentures of a different type and/or of different series and/or other securities, whether secured or unsecured, whether granting a right of conversion into shares of the Company or not granting such right, whether by public offering, by a private placement or under a Shelf Offer Report or otherwise, under terms of redemption, interest, linkage, discounting, repayment rate in the case of liquidation and other conditions, as the Company sees fit, whether they are preferable to the terms of the Debentures issued pursuant to the Prospectus, equal to them or inferior to them. |
| | 11.4 | Without derogating from the foregoing, the Company is allowed, at any time and from |
time to time, without needing the consent of the Debenture Holders or the Trustee of Each Series, to issue, including to an affiliated company, additional Debentures from the Series offered under the Shelf Prospectus. The additional Debentures that will be issued, to the extent issued, including their conditions and resulting rights, will be identical and as the existing Debentures in the same Series, and will together constitute one series for all purposes (it is clarified that in the case of such issuance, the offerees to whom additional Debentures will be issued will not be entitled to payment of principal and/or interest whose determinant payment date preceded the issuance date). The provisions of the Deed of Trust of the relevant Series will apply to these additional Debentures. The Company shall publish an immediate statement on such an issuance of additional Debentures and will apply to the Stock Exchange in an application to list these additional Debentures for trading these additional Debentures therein. In the case of expansion of the series of the Debentures as above, the fee of the Trustee shall be increased in proportion to the increase of the size of the series.
The Company shall inform the Trustee and the Debenture Holders of the issue of these additional Debentures.
This right of the Company does not exempt the Trustee from examining such an issuance, to the extent that such a duty is imposed on the Trustee by law, and it does not derogate from the rights of the Trustee and of the Meeting of the Debenture Holders according to the Deed of Trust, including their right to make the Debentures immediately payable as stated in Section 16 below.
| | 11.5 | The Company reserves the right to allocate the Debentures following an expansion of the series at a different discount rate (higher or lower) than the discount rate of the Debentures then in circulation (including due to issuance at a price that reflects a different discount rate). The discounted allocation of the Debentures originating from expansion of the series of the Debentures at a rate exceeding the discount rate established for the Debentures before the expansion may adversely affect the state of the Debenture Holders. |
| | 11.6 | The provisions of this Section 11 above itself do not bind the Company or the Debenture Holders to purchase Debentures or sell the Debentures in their possession. |
| | 11.7 | Wherever the rules of the Stock Exchange apply or will apply to any action according to this Deed of Trust, they will have preference over the provisions hereof, and the dates of such an action will be determined in accordance with the rules of the Stock Exchange. |
12. Waiver; Settlement and Changes in the Terms of the Debentures
| | 12.1 | Subject to the provisions of the Law and the regulations promulgated and/or that will |
| | | promulgated thereby, the Trustee shall be allowed, from time to time and at any time, if it is convinced that this does not in its opinion infringe upon the rights of the Debenture Holders, to waive any violation or non-fulfillment of any of the terms hereof by the Company, as long as these do not relate to the terms of repayment of the Debentures and the grounds for calling for immediate repayment as specified in Section 16 below. |
| | 12.2 | Subject to the provisions of the Law and the regulations promulgated and/or that will be promulgated thereby, the Trustee is allowed, whether before or after the principal of the Debentures is called for immediate repayment, to settle with the Company concerning any right or claim of the Debenture Holders and agree with the Company to any arrangement concerning the rights of the Debenture Holders, including waiving any right or claim of the Debenture Holders towards the Company hereby. If the Trustee settles with the Company after having received prior approval of the Debenture Holders as stated above, the Trustee shall be exempt of liability for this action, as approved by the general Meeting. The foregoing does not exempt the Trustee from responsibility for its actions until the date of making a decision of the Meeting of the Holders and/or its actions concerning its application. |
| | 12.3 | Subject to the provisions of the Law and the regulations promulgated and/or to be promulgated thereby, the Trustee and the Company may, whether before or after the principal of the Debentures is called for immediate repayment, change the Deed of Trust (including a change in the conditions of the Debentures), if one of the following is fulfilled: |
| | 12.3.1 | The Trustee is satisfied that the change does not adversely affect the Debenture Holders. |
| | 12.3.2 | The Debenture Holders have agreed to the proposed change, by a special decision as specified in Sections 2.4 and 2.10 of the second addendum hereinafter. |
| | 12.4 | The Trustee shall be entitled, at the request of the Company from time to time, to make changes in the Deed of Trust and/or in the Debentures, as required by a Securities Authority and/or the Stock Exchange and/or any other governmental authority, for the purpose of listing the Debentures for trade on the Stock Exchange, as long as the Trustee is satisfied that the change does not cause a material adverse effect to the Debenture Holders. |
| | 12.5 | The Company will give the Debenture Holders a notice of any such change, in accordance with Section 17 hereof, as soon as possible after its execution. |
| | 12.6 | The general meetings as stated in this section above will be convened, as stated in the |
| | | second addendum of the Deed of Trust. |
| | 12.7 | In any case of use of the right of the Trustee in accordance with this section above, the Trustee shall be entitled to demand that the Debenture Holders give to it or to the Company their certificates, for noting a comment concerning any such settlement, waiver, change or amendment and according to the demand of the Trustee, the Company will note such a comment in the certificates that are given to it. In any case of use of the right of the Trustee pursuant to this section, the Trustee shall announce this, within a reasonable time, in writing, to the Debenture Holders. |
| 13. | Meetings of Debenture Holders |
General meetings of the Debenture Holders will be convened and managed, as stated in the second addendum to the Deed of Trust.
14. Receipts as proof
| | 14.1 | A receipt from the Debenture Holder for the sums of the principal, the interest and the linkage differences that have been paid thereto by the Trustee for that Debenture will release the Trustee categorically in all matters related to payment of the sums stated on the receipt. |
| | 14.2 | Until the end of the period specified in Section 7.5 above, a receipt from the Trustee concerning the deposit of the sums of the principal, the interest and the linkage differences in its possession to the benefit of the Debenture Holders as stated in this Deed will be considered as a receipt from the Debenture Holders for the sums specified therein. |
| | 14.3 | The sums distributed as stated in Sections 7 and 14 hereof will be considered as payment on the account of the repayment of the Debentures. |
| 15. | Replacement of Debenture Certificates |
In the case of a Debenture Certificate wearing out, being lost or destroyed, the Company shall be entitled to issue in its place a new Certificate of the Debentures, under the same conditions concerning proof, indemnification and coverage of the expenses sustained by the Company for inquiring as to the right of ownership of the Debentures that the certificate thus replaced relates to, as the Company deems fit, provided that in the case of wear, the worn out Debenture certificate will be returned to the Company before the new Certificate is issued. Taxes, duties and other expenses involved in the issue of the new Certificate will be borne by the party requesting this Certificate.
| | 16.1 | In one or more of the events enumerated below: |
| | 16.1.1 | If the Company does not repay any sum that is due from it connection to the Debentures within 45 days of the maturity of that sum. |
| | 16.1.2 | If a temporary liquidator has been appointed by a court, or if a valid resolution has been adopted to liquidate the Company (other than liquidation for merging with another company and/or restructuring of the Company) and this appointment or resolution is not cancelled within 30 Business Days of being given. |
| | 16.1.3 | If an attachment is imposed on some or all of the material assets of the Company and the attachment is not removed within 60 days. |
| | 16.1.4 | An execution action is carried out against a material asset of the Company, in part or in full, and the action is not cancelled within 90 days. |
| | 16.1.5 | If a receiver is appointed for the Company and/or some or all of its material assets, and the appointment is not cancelled within 90 days. |
| | 16.1.6 | If the Company ceases the payments of the Debentures and/or announces its intent to cease the payments of the Debentures. |
| | 16.1.7 | If the Company discontinues its business affairs or managing its business affairs, as they are from time to time, and/or announces its intent to cease in engaging in or managing its business affairs as shall be from time to time. |
| | 16.1.8 | If another series of Debentures that the Company has issued is called for immediate repayment other than according to a resolution of the Company. |
| | 16.1.9 | If an order for staying of proceedings is given or if a motion has been filed concerning the Company to make an arrangement with the creditors of the Company pursuant to Section 350 of the Companies Law (other than for merging with another company and/or restructuring of the Company) against the Company and this order or motion is not cancelled within 90 days of commencement thereof. |
| | 16.1.10 | If the Company is wound up or struck for any reason. |
| | 16.1.11 | A fundamental breach of the terms of the Debentures and the Deed of Trust, including if it is found that the undertakings of the Company in the Debentures or herein are incorrect and/or incomplete, provided a notice has been given to the Company to rectify the violation and the Company does not correct such a violation within 14 Business Days of issue of the notice, and provided that the payments to the Debenture Holders and/or the rights thereof are infringed or may be infringed as a result. |
| | 16.1.12 | If there is material concern that the Company will discontinue the payments of the |
Debentures and/or there is material concern that it will cease in managing its business affairs as shall be from time to time.
| | 16.1.13 | In the occurrence of any other event that constitutes material infringement and/or may cause material infringement of the rights of the Debenture Holders. |
For the purposes of this entire section, "Material Asset" is an asset whose value in the books of the Company exceeds 20% of the income of the Company according to its last (audited) consolidated annual statements on the date of the event.
| | 16.2 | In the occurrence of any of the events listed in Section 6.1 above, the following provisions will apply: |
| | 16.2.1 | (A) | In the case of any of the events in Sections 16.1.1 to 16.1.10 (inclusive) above, the Trustee will be required to call a Meeting of the Debenture Holders; or |
| | (B) | In the case of any of the events in Sections 16.1.11 to 16.1.13 (inclusive) above, the Trustee will be allowed (but not required) to call a meeting of the Debenture Holders, but the Trustee will be required to call a meeting of Holders by a written request of Holders of at least ten percent (10%) of the par value of the unsettled balance of the principal of the Debentures in circulation, as specified in Section 1.1 of the second addendum hereto. |
| | 16.2.2 | The date of convening the Meeting, which will be called in accordance with the provisions of Section 16.2.1 A or B above, will be 30 days after the date of its calling (or a shorter term in accordance with the provisions of Section 16.2.5 below), whose agenda will have a resolution concerning calling for immediate repayment the entire unsettled balance of the Debentures, due to the occurrence of any of the events specified in Section 16.1 above, as relevant. |
| | 16.2.3 | In the case that until the date of convening of the Meeting, none of the events specified in Section 16.1 above has been canceled or removed, and the Meeting of the Debenture Holders as stated resolve to call all of the unsettled balance of the Debentures for immediate repayment as a Special resolution (as defined in the second addendum hereto), the Trustee will be required, within a reasonable time, to call all of the unsettled balance of the Debentures for immediate repayment, as long as it has given the Company at least 15 days written warning of its intent to do so and the event for which the resolution was adopted has not been canceled or removed within this period. |
| | 16.2.4 | A copy of the notice for calling the Meeting will be sent by the Trustee to the Company as soon as the notice is published and will constitute advance written warning to the Company of the intent to act to call the Debentures for immediate repayment. |
| | 16.2.5 | The Trustee is entitled, at its discretion, to reduce the count of 30 days (in Section 16.2.2 above) and/or the said 15 days of warning (in Section 16.2.3) in the case of the Trustee opining that any deferral in calling the debt of the Company for repayment endangers the rights of the Debenture Holders, but in any case the Trustee shall not do so without first applying to the Company in writing 7 Business Days before the date of the meeting, indicating the reasons for reducing the time, at the discretion of the Trustee in the circumstances at hand. |
| | 16.2.6 | The Trustee will be responsible for reporting to the Debenture Holders of the occurrence of any of the events specified in Sections 16.1.11 to 16.1.13 (inclusive) above, whether pursuant to publications that the Company has made or according to a notice of the Company that will be sent to it according to the provisions of Section 17 below, soon after it being brought to its attention or delivered to it. |
| | 17.1 | Any notice from the Company and/or the Trustee to the Debenture Holders, as relevant, shall be given as follows: |
| | 17.1.1 | By reporting in the MAGNA system of the Securities Authority; the Trustee is allowed to instruct the Company and the Company will be required to report forthwith in the MAGNA system on behalf of the Trustee any report in the format as forwarded in writing by the Trustee to the Company); and by |
| | 17.1.2 | A notice that will be published in two widely distributed daily newspapers that are published in Israel in Hebrew; |
| | Any notice or demand from the Trustee to the Company may be given by a letter that is sent by registered mail to the address stated herein, or to any other address that the Company informs the Trustee of in writing, or by transmission by facsimile or by courier and any such notice or demand will be considered as having been received by the Company: (1) in the case of sending by registered mail – three business days from the day of mailing thereof; (2) in the case of transmission by facsimile (along with a telephone check of receipt thereof) – one business day from the day of its transmission; (3) and in the case of sending by courier – upon its delivery by the courier to |
the addressee or the offering thereof to the addressee for receipt, as relevant.
| | 17.2 | Any notice or demand from the Company to the Trustee may be given by a letter that is sent by registered mail to the address stated herein, or to another address that the Trustee informs the Company of in writing, or by transmission by facsimile or by electronic mail (“email”) or by courier and any such notice or demand will be considered as having been received by the Trustee: (1) in the case of sending by registered mail – three business days from the day of mailing thereof; (2) in the case of transmission by facsimile or by email (along with a telephone check of receipt thereof) or sending by courier – upon its delivery by the courier to the addressee or the offering thereof to the addressee for receipt, as relevant. |
| | 17.3 | Copies of notices and invitations that the Company gives to the Debenture Holders will also be sent by the Company in an Immediate Report, a copy of which will be given to the Trustee. |
| | Meetings of the Debenture Holders |
The following provisions will apply separately to each of the Series of Debentures E through I and 1 through 2 (in this addendum, the Debentures in each of the aforesaid Series will be hereinafter referred to as “the Debentures”).
| 1. | Calling of Meetings of the Debenture Holders: |
| | 1.1 | The Trustee or the Company may call a Meeting of the Debenture Holders. If the Trustee and/or the Company calls such a Meeting, they must send immediately a written notice to the Trustee and/or the Company, as relevant, regarding the site, the day and the time on which the Meeting will be held and on the matters to be brought for discussion therein, and the Trustee or the Company, as the case may be, or a representative thereof, will be entitled to participate in such a Meeting without them having a voting right. The Company will be required to call a general meeting by written request of the Trustee or of the Debenture Holders holding at least ten percent 10%) of the unsettled balance of the principal of the Debentures in circulation, as relevant. The Trustee shall be required to call such a Meeting, at the written request of the Holders of at least ten percent (10%) of the par value of the unsettled balance of the principal of the Debentures in circulation. If the parties asking to call the Meeting are the Debenture Holders, the Company and/or the Trustee, as relevant, are entitled to demand from the requesting parties indemnification for the reasonable expenses involved therein. |
| | 1.2 | Fourteen (14) days advance notice will be given of each Meeting of the Debenture Holders, which will elaborate the place, the day and the time of the Meeting, and will indicate in general the subjects that will be discussed in the meeting. The Trustee is allowed, at its discretion, to shorten the duration of the advance notice if it sees that a deferral in calling the Meeting will cause infringement of the rights of the Debenture Holders. |
| | 1.3 | In case of the purpose of the Meeting being a discussion and adopting a special resolution as defined in Section 2.4 and 2.10 of this addendum hereinafter, the notice will elaborate, in addition to the foregoing, the principle of the proposed decision. No resolution that has been duly adopted in a Meeting thus called will be disqualified if notice is not given, erroneously to all of the Debenture Holders, or if such notice has not been received by all of the Debenture Holders. |
| | 1.4 | Any such notice from the Company and/or the Trustee to the Debenture Holders will be given by a notice that is published in two (2) widely distributed daily newspapers |
that are published in Israel in Hebrew. In addition, an immediate report will be given by the Company. Any notice that is published as stated above will be considered as having been given to the Debenture Holders on the day of its publication as above.
| 2. | Meetings of the Debenture Holders: |
| | 2.1 | The chairman of the Meeting will be a person who will be appointed by the Trustee. If the Trustee has not appointed a chairman or he is absent from the Meeting for half an hour from the determinant time for holding the Meeting, the attending Debenture Holders will choose a chairmen from among their number. |
| | 2.2 | A Meeting of the Debenture Holders will be opened after it is proved that there is the legal quorum for starting the discussion present. |
| | 2.3 | Subject to the legal quorum that is required in a Meeting that is convened for adopting a special resolution, and subject to the legal quorum that is required for the dismissal of a trustee pursuant to the Securities Law, two Debenture Holders who are attending by themselves or by proxy and together holding or representing at least a tenth (1/10) of the unsettled balance of the Debentures in circulation at that time will constitute a legal quorum. |
| | 2.4 | A special resolution of the Debenture Holder Meeting will be required on the following issues (“Special Resolution”): |
| | 2.4.1 | A change and/or amendment to the Deed of Trust, in the case of this requiring a resolution of a general Meeting pursuant to the Deed of Trust |
| | 2.4.2 | Any amendment, change and/or arrangement of rights of the Debenture Holders, whether these rights result from the Debenture, the Deed of Trust or otherwise, or any settlement or waiver concerning these rights, in the case of a decision of a general meeting being required for this purpose pursuant to the Deed of Trust. |
| | 2.4.3 | Calling the Debentures for immediate repayment, in accordance with the terms of the Deed of Trust. |
| | 2.5 | In a meeting that is called for adopting a Special Resolution a legal quorum will be constituted – if Holders of at least fifty percent (50%) of the unsettled balance of the Debentures in circulation at that time are present in the general meeting, or in a deferred meeting, if Holders of at least ten percent (10%) of the said balance are present. |
| | 2.6 | If within an half an hour of the time set for starting a Meeting, no legal quorum is present, the Meeting will be deferred to the same day in the following week (and in the case of this day not being a Business Day to the Business Day immediately following |
| | | it) to the same place and time, without there being a duty to announce this to the Debenture Holders, or to another day, place and time, as chosen by the inviting party, which it will announce to the Debenture Holders at least three (3) days in advance. If no legal quorum is found in a Meeting thus deferred, half an hour after the time established for starting the Meeting, two (2) Debenture Holders attending by themselves or by proxy, regardless of the par value held thereby, will constitute a legal quorum, and other than the legal quorum required for adopting a special resolution, provided that the instruction determining the legal quorum as above is published within the notice of the original Meeting, provided that the notice to the Debenture Holders of the holding of the deferred Meeting is announced in accordance with the provisions of Section 1.4 hereto above, by no later than seven (7) days before the date of holding the deferred Meeting. Such a notice may be published within the notice of the original meeting (the general Meeting that was deferred). |
| | 2.7 | Other than the foregoing, a Debenture Holder will not be entitled to receive any notice of a deferred Meeting and/or of matters that will be discussed in the deferred Meeting. Only matters that may be discussed in a Meeting will be discussed in a deferred Meeting. |
| | 2.8 | With the consent of a majority in a Meeting in which a legal quorum has attended, the chairman is allowed, and at the demand of the Meeting is compelled, to defer the continuation of the Meeting from time to time and from place to place, as the Meeting decides. If the continuation of the Meeting is deferred by ten (10) days or more, a notice of the continued Meeting will be given by way of publishing an immediate report in the MAGNA system only. |
| | 2.9 | In the vote, each Holder who is present in person or by proxy will have one vote for each NIS 1 par value of the total specified unpaid principal of the Debentures by which he may vote. |
| | 2.10 | Each resolution will be adopted by a counting of votes. The majority that is required for a regular resolution is a regular majority of the number of votes represented in the vote of the Meeting (except abstainers). The majority that is required for a Special resolution in such a Meeting is a majority of not less than 75% of the number of votes represented in such a vote (except abstainers). |
| | 2.11 | An appointment letter that appoints a proxy will be in writing and will be signed by the appointer or by the proxy thereof who is duly authorized to do so in writing. If the appointer is a corporation, the appointment will be made in writing and will be signed by the stamp of the corporation, along with the signature of the secretary of the corporation or the advocate of the corporation who has the authority to do so. The appointment letter of a proxy will be made out in any generally accepted form. A proxy |
| | | is not required to be a Debenture Holder by himself. The appointment letter and the power of attorney or the other certificate by which the appointment letter is made out or an approved copy of such a power of attorney will be deposited in the registered office of the Company or at another address that the Company announces not less than forty eight (48) hours before the time of the Meeting for which the power of attorney has been given, unless otherwise determined in the notice calling the Meeting. The appointment letter will also be valid concerning any deferred Meeting of a Meeting that the appointment letter relates to, unless stated otherwise in the appointment letter. A vote that is made in accordance with the terms in the document appointing a proxy will also be valid if the appointer has passed away or been declared legally incompetent or if the appointment letter is cancelled or the Debenture that the vote has been given for is transferred prior to the vote, unless a written notice of the death, decisions of legal incompetence, cancellation or transfer, as relevant, received at the registered office of the Company before the Meeting. |
| | 2.12 | Any corporation that owns a Debenture may, by duly signed written authorization, empower a person as it deems fit to act as its representative in any Meeting of the Debenture Holders, and the person who has been authorized will be allowed to act on behalf of the corporation that he represents. |
| | 2.13 | Any proposal for a resolution that is put to the vote in a Meeting of Holders will be decided by a show of hands, unless a vote using a ballot box is demanded by the chairman or by at least two (2) Debenture Holders, who are present by themselves or by their proxy, whether a vote was made previously with a raise of hands or thereafter and the vote by ballot box will prevail. In the case of joint Holders, only the vote of the more senior Holder wishing to vote will be accepted, whether by himself or by his proxy, for which purpose seniority will be determined by the order in which the names are listed in the Register of Holders. |
| | 2.14 | The Trustee shall not have a right to vote in a Meeting of the Debenture Holder. |
| | 2.15 | In a vote, a Debenture Holder or the proxy thereof is allowed to vote with some of its votes in favor of a proposal that is being discussed, and with some against the proposal, as it deems fit. |
| | 2.16 | Declaration of the chairman of the Meeting concerning adopting or rejecting a resolution and recording of this matter in the minutes book will serve as prima facie evidence of this fact. |
| | 2.17 | The chairman of the meeting will have a minute of the Meeting of the Debenture Holders prepared which shall be written in the book of minutes. Each such minutes will be signed by the chairman of the meeting or by the chairman of the Meeting held |
| | | thereafter, and all minutes thus signed will serve as conclusive testimony of the proceedings in the Meeting, and as long as it is not proved otherwise, any resolution adopted in such a Meeting will be considered as having been duly adopted. |
| | 2.18 | A person or persons who are appointed by the Trustee, the secretary of the Company and any other person or persons authorized by the Company will be allowed to be present in Meetings of the Debenture Holders without a voting right. In case that, at the discretion of the Trustee, part of the meeting requires a discussion without the presence of the Company or anyone acting on its behalf, then that part of the discussion will be held without the participation of the Company or anyone acting on its behalf. |
| 2.19 | Debentures held by an Affiliated Company will not grant their Holders a voting right in the general meeting of the Debenture Holders, but they will be considered for determining the legal quorum in the general meeting, except Debentures that will be held by an Affiliated Company that is an investor that is one of the investors listed in the first addendum to the Securities Law (concerning Section 15A(B)(1) of the Law) that is not investing for itself (an "Affiliated Institutional Investor”), which will grant voting rights in a meeting of the Debenture Holders. At the time of holding the Meeting of the Debenture Holders, the Trustee shall check for conflicting interests among the Debenture Holders in accordance with the circumstances at hand and the need for calling Class Meetings in cases in which there are differing interests among the Debenture Holders, in accordance with the circumstances at hand. The Company and the Trustee shall act to call Class Meetings of the Debenture Holders in accordance with the provisions of the law, the provisions of the Securities Law and the Regulations and promulgated there under. In the case of holding Class Meetings, approval of a resolution requires approval in each of the Class Meetings that are called, and in the Meeting of all of the Holders Debentures, with the majority that is required by the provisions of the Deed of Trust and the appendices thereof. At the decision of the Trustee, a certain class of interest holders may not be invited and their consent will not be required for the passing of a certain resolution. |
