EXHIBIT 4.19
EXECUTION COPY Xxxxx Xxxx Xxxxxxxx
advokat (H), LL.M
SHAREHOLDERS AGREEMENT
CONCERNING
KIRKEBY INTERNATIONAL FOODS A/S
XXXXXXXXXXXXXXXX 0
XX 0000 XXXXXXXXX, XXXXXXX
CVR-NR. 31055296
BETWEEN
KIRKEBY CHEESE EXPORT A/S
RODKILDE XXXXXXXX 0
XX 0000 XXXXXXXXX, XXXXXXX
DANISH COMPANY REGISTRATION NO. 78 49 82 18
AND
GOLD FROST LTD.
0 XXXXX XXXXX XXXXXX
XXXXX, XXXXXX
ISRAELI COMPANY REGISTRATION NO.520034824
SKE-0057
TABLE OF CONTENTS
The parties............................................................... 3
1. Definitions..................................................... 3
2. Scope of this Agreement......................................... 5
3. Share Capital, Conversion and Dividends......................... 5
4. Board of Directors and Management............................... 6
5. General Meetings................................................ 8
6. Execution of rights............................................. 8
7. Audit and Auditors.............................................. 8
8 Share Transfer.................................................. 9
9. Tag-along ...................................................... 11
10. Exit ........................................................... 11
11. Non - competition .............................................. 12
12. Breach of Agreement ............................................ 12
13. Validity, Enforcability and Amendments ......................... 13
14. Confidentiality ................................................ 13
15. Law and Venue .................................................. 13
Side 2.
SHAREHOLDERS AGREEMENT
This Agreement is made as of February 13, 2008 between
Kirkeby Cheese Export A/S
Rodkilde Xxxxxxxx 0
0000 Xxxxxxxxx
XXXXXXX
("KCE")
and
Gold Frost Ltd.
0 Xxxxx Xxxxx xxxxxx
Xxxxx,
Xxxxxxx Company registration
No.520034824
ISRAEL
("GF")
1. DEFINITIONS
In this Shareholders Agreement the terms mentioned below shall have the
following meaning
"Articles" shall mean the Articles of Association of the Company
(as amended from time to time).
"Board" shall mean the board of directors of the Company.
"Business" shall mean the business of the Company as described in
the Business Plan adopted by the Board from time to
time.
"Company" shall mean the company Kirkeby International Foods A/S,
registered in the Danish company house under the
registration number CVR. No. 31055296.
"Exit" shall mean an initial public offering (IPO) of the
Company shares or an event whereby all or materially all
of the Company's assets or shares are sold in
consideration for cash or liquid securities. An Exit may
be carried out in a variety of ways, including, but not
limited to a) a trade sale of the Company's shares,
including a sale pursuant to the tag along or drag along
provisions set out below; b) entering into a partnership
or joint venture agreement leading to the future
acquisition by the partner; c) a merger
Side 3.
whereby the Company is not the surviving entity or in
which the shareholders of the Company prior to the
merger do not maintain 50% of the shares of the Company
following the merger; d) a sale of the company's
Intellectual Property rights; e) licensing of all or a
material part of the Intellectual Property right of the
Company in a way, which can be considered equal to an
Exit; or f) a combination of the above.
"Intellectual
Property" shall mean all intellectual property rights related to
the business including, but not limited, to trade marks,
trade services, right in designs, trade and business
names and or any software rights, rights in confidential
know-how and confidential information, and right in
databases and all rights under licenses and consents in
relation to any such rights.
"Letter
of Intent" shall mean the signed letter of intent, including the
Appendixes hereto, forecasts, budgets and the parties'
negotiations hereunder the share transfer agreement
signed prior to this agreement.
"Liquidity
Event" shall mean an Exit, liquidation, dissolution or winding
up of the Company.
"Securities" shall mean the Shares, as well as any future convertible
bonds and any other forms of equity based securities
issued by the Company, including Warrants, subscription
rights, pre-emption rights and of first refusal.
"Share Capital
And Shares" shall mean any and all of the Shares outstanding at any
given time.
"Shareholders
Agreement" shall mean this Agreement between the parties who have
entered here in and any eventual future shareholder of
the Company who becomes a Party hereto.
"Working Days" shall mean days where banks are generally open for
business in Denmark.
"The Parties" shall mean any Shareholder in the Company who has signed
this Agreement.
Side 4.
2. SCOPE OF THIS AGREEMENT
2.1 Whereas GF has purchased from KCE 51% of the Shares in the Company
pursuant to a Share Purchase Agreement dated as of the date hereof, the
purpose of this Agreement is to lay down the Parties' mutual rights and
obligation as shareholders in the Company and thus shall govern all of
the Parties' existing and future ownership interests in the Company.
2.2 This Agreement shall take precedence over the Articles, the Share
Purchase Agreement as well as any other corporate document of the
Company. In the event that any provision of this Agreement may prove
invalid, the Shareholders shall be obliged to make such other decisions
and/or agreement that may be required in order to position the
Shareholders as originally intended for by the provisions of this
Agreement. Further any such invalidity or enforceability of any other
provision shall not affect or impair the validity or enforceability of
any other provision set out herein.
2.3 The Parties shall at all times use their voting rights in the Company
as well as their influence on any members of the Board appointed by them-
whether in general meeting or otherwise - so as to give effect to the
provisions of this Shareholders Agreement.
2.4 The Parties agree that all commercial and other relations between the
Company on one side and any Party, member of the Board or management or
any related third party thereto on the other side must always be
conducted on the arm's length basis.
2.5 No subscription or acquisition of Shares by any third party shall be
permitted unless such party adheres to and becomes party to this
Agreement by way of signing of a copy hereof.
3. SHARE CAPITAL, CONVERSIONS AND DIVIDENDS
3.1 The nominal paid up Share Capital of the Company as of the date of
this Agreement is divided as follows:
GF: DKK 510.000
KCE: DKK 490.000.
3.2 There are no preference shares in the Company.
3.3 No Shareholder shall have any obligation to contribute to additional
capital to the Company, whether by equity or loan capital, nor shall any
of the Shareholders be obliged to undertake any liability or provide
guarantee for the obligations of the Company.
3.4 Profits earned by the Company shall be used to consolidate the
Company's business.
Side 5.
3.5 When the additional consolidation is not deemed to be required, the
Company's dividend policy shall be based on commercial principles that
secure reasonable equity and dividend will be paid when and if the
Parties agree.
4. BOARD OF DIRECTORS AND MANAGEMENT
4.1 The Board shall consist of up to 5 members to be elected in general
meeting and appointed as follows:
GF: 3 members
KCE: 2 members.
4.2 The right of appointment stipulated in this clause is not based on
the number of Shares held by each Party, but agreed upon in this
Agreement. The Parties have agreed that this right to appoint Board
members shall be in force as long as GF and KCE are Shareholders in the
Company. Further KCE has the right to appoint the Chairman of the Board
for the first [three] financial years of the Company, which means until
the general meeting has been held, to execute the 2011 revenue of the
Company. The Chairman of the Board shall have no additional powers or
rights, including, without limitation, no additional or casting vote.
4.3 The number of Board members may only be adjusted if agreed upon by
the Parties.
4.4 The names of the Board members to be appointed by a Party shall be
submitted to the other Party prior to a general meeting at which
directors are to be elected. The Parties are obliged to vote for the
proposed members, unless there are reasonable material reasons for
objecting to a proposed member.
4.5 In the event a member of the Board wishes to resign or a Party wishes
to replace the member appointed by it, the Parties and the Board are
under an obligation to ensure that a general meeting is held immediately
with the view to elect a new member to the Board.
4.6 No resolution shall be passed unless all members of the Board have
had notice, as provided in Clause 4.7 below, of the meeting at which
deliberations relating to the matter were held. A Board member may be
represented at a Board meeting by granting a proxy to another Board
member.
4.7 Board meetings shall be convened in writing with not less that 10
working Day's written notice specifying the agenda thereof and to the
extent possible accompanied by the written material to be submitted for
the purpose of the discussion of individual matters on the agenda.
Side 6.
4.8 Resolutions in the Board shall be passed by a simple majority of
votes, except as set out in Clause 4.9.
4.9 The following matters require the approval of all members of the
Board:
1: Entering into any joint venture, agency, distribution,
development or similar arrangements outside the ordinary
course of business.
2: Purchase or divestment of any asset at a value exceeding DKK
500.000,00 or investment(s), which irrespective of their size,
materially lie outside the Company's ordinary course of
business, including, but not limited to hiring or dismissal of
any employment agreement with the CEO of the Company.
3: Raising of loans or provisions of security other than ordinary
bank overdraft facilities and goods credits, exceeding amounts
DKK 500.000.
4: Making any material expenditure or group of expenditures in
excess of DKK 500.000 individually or in the aggregate that
are outside the prevailing annual business plan or budget.
5: Contracts between the Company and a Party or a Party's family
member and or a Party's affiliate including companies
controlling, controlled by or under common control with a
Party - and any changes in such contracts.
6: Amendments to the accounting principles of the Company must be
agreed in writing unless recommended or supported by the
Company's auditors.
7: Initiating, conducting or settling any material litigation.
8: Any material change in the nature or scope of the business or
other decisions having a material impact on the Company.
The parties acknowledge that they have approved the Company's 2008
Business Plan annexed hereto as EXHIBIT A.
4.10 The Board appoints and dismisses the Company's management. At the
date hereof, the management comprise Mr. Xxxxxx Xxxxxx as Chief Executive
Officer "CEO". The Parties agree that a new manager/CEO may be employed
if and when the Board deems it best for the Company.
4.11 The management is obliged to be present at the Board meetings,
unless otherwise decided by the Board in relation to a particular meeting
or matter to be discussed.
Side 7.
5. GENERAL MEETINGS
5.1 All resolutions passed in general meetings shall be adopted by a
simple majority, unless otherwise provided by the Danish Companies Act,
the Articles or this Shareholders Agreement. Each Share shall have one
vote.
5.2 The following matters ("Material Decisions") require the approval of
at least 75% of the Shares:
1: Change of the Articles,
2: Changes in the Share Capital or the rights of the
Shareholders,
3: Issuance of any other kind of Securities,
4: Redemption of Shares,
5: Changes to the authorized size of the Board,
6: Changes in or essential expansion or reconstructing of the
Company's activities or Business, including acquisition of or
merger with another company, as well as demerger (In Danish
"spaltning") of the Company,
7: Establishment of subsidiaries or branches,
8: Resolutions concerning entering the Company into voluntary
Liquidation,
9: Setting of dividend policy,
10: Election of the Company auditor who shall be a Danish State
Authorized Public Accountant; and
11: Sale of all or substantially all of the Company's assets in a
way, which can be considered equal to an Exit.
6. EXECUTION OF RIGHTS
With respect to clause 10 below, any Shareholder that alone or together
with other Shareholders represent 76 % of the nominal Shares, shall have
the right to cause the remaining Shareholders and all board members to
vote in favour of sale of the Company's assets or other way of realising
all or substantially all of the Company's assets in an Exit situation.
7. AUDIT AND AUDITORS
7.1 The annual accounts of the Company shall be audited by a well reputed
firm of State Authorized Public Accountants (in Danish: "Statsautoriserede
Revisorer") elected, subject to Section 5.2(10), by the Parties at the
annual general meeting of the Company for two years at the time.
Re-election may take place. Initially, such accountant shall be the local
office of Deloitte.
Side 8.
7.2 The Company shall keep true and accurate books of account and records
according to the Law of Denmark, and other relevant laws and regulations
and a system of accounting established and maintained in accordance with
IFRS consistently applied. The Company shall provide to each Party the
accounting information such Party requires to comply with its own
financial reporting requirements. The Company's fiscal year shall be the
January-December calendar year.
8. SHARE TRANSFER
8.1 Any transfer of Securities requires the prior consent from the Board.
Such consent shall be granted provided that any such transfer complies
with the provisions set out below. The Chairman of the Board shall carry
out the duties set out below without delay.
8.2 For a period of three years from signing this Agreement, the Parties
undertake not to transfer any Securities or voting rights pertaining
thereto in the Company unless a) having obtained the written consent of
the other party prior to the transfer, or b) permitted in accordance with
Clauses set out below. The obligation to hold shares shall terminate upon
an IPO unless otherwise agreed in connection with an IPO.
8.3 The following transfer of securities are permitted and are exempt
from the restrictions of Clause 8.2 and any right of first refusal as
further stipulated in 8.4 - 8.13.
1) A Shareholder which is a company shall be
entitled to freely transfer any an all of its
Securities to a company which is wholly owned
by the owner of such Shareholder, including
daughter- sister- and parent companies,
provided that the acquiring entity assumes
all rights and obligations under this
Agreement. The transferring Party shall
ensure and warrant that the acquiring, wholly
owned company fulfils the provisions of this
Agreement.
2) Transfer of Securities pursuant to the
provisions of Clause 9.
8.4 Except for the permitted transfers, pursuant to Clause 8.3.1 and
8.3.2 above, Securities can only be offered for sale in its entirety,
i.e. the entire shareholding with any other Securities must be offered
for sale. The Securities shall be offered for sale in compliance with the
provisions of Clause 8.5 to 8.7.
Side 9.
8.5 Upon the transfer of Securities - with the exception of a permitted
transfer pursuant to 8.3.1 and 8.3.2, either by assignment, gift,
inheritance, legal action, liquidation or bankruptcy, the other Parties
shall have the first right of refusal with respect to the Securities
offered in proportion to their holding of Shares (i.e. not including
warrants etc.) in the Company. Pledging of Securities shall be deemed a
transfer of Securities and thus requires the consent of the Board as set
out herein, including first right of refusal for the other Parties.
8.6 A party intending to sell Securities shall notify the Board hereof in
writing (the "Offer"). Such notification shall include information
regarding price and terms upon which the offered Securities can be
acquired. The Offer shall be prepared in such a way that the offered
Securities can be paid in cash against delivery of the Securities free
from any liens and encumbrances. In the event that a third party has made
a bid or is expected to enter into an agreement to purchase the
Securities, the identity of such third party and the contend of the bid
or expected agreement made shall be disclosed.
8.7 The Chairman of the Board shall immediately inform the other Party in
writing with a copy of the Offer. Within 14 working Days from the date of
the offer, the other Party shall either accept or reject the Offer in
writing to the selling Party with copy to the chairman of the Board
(first right of refusal). Notwithstanding the above, the other Party
shall always be granted at least 10 Working Days from the receipt of the
said copy to accept or reject the Offer.
8.8 The purchase price of the Securities acquired pursuant to Clauses 8.6
and 8.7 above shall be paid in cash within 10 Working Days after the
acquiring Party have exercised its right.
8.9 In the event that a Party does not want to acquire any Securities
offered for sale, the first right for refusal shall lapse. The selling
Party is thereafter entitled to freely transfer the offered Shareholding
to any independent third Party - within a period of three month after the
expiry of the time limits of acceptance stipulated - at identical price
and terms as set out in the Offer.
8.10 The transfer of Securities can only be effected provided that the
acquiring Party assumes all rights conferred and obligations imposed in
this Shareholders Agreement.
8.11 The voting right attached to the share can only be transferred with
the share itself.
8.12 Where a final agreement is entered into with an independent third
party, the selling Party shall provide the other Party and the Board with
a copy of the full agreement within 5 Working Days after the agreement
has been executed.
Side 10.
8.13 The selling Party shall not be permitted to initiate new right of
refusal procedure within 6 month from the end of the trading window set
out in Clause 8.9.
9. TAG -ALONG
9.1 Any transfer or assignment (the "Tag-along Transfer") of a Party's
holding of Securities (the "Tag-along Securities") shall be subject to
the transferring Party procuring the right and opportunity for the other
Party (who have not exercised their right of refusal pursuant to Clause
9) to include in the Tag-along Transfer (on the same price per share and
the same terms as applicable to the Tag-along Shares) all of the Party's
Securities (the "Included Securities"). The Tag-along right shall
terminate upon an IPO.
9.2 The transferring Party shall immediately give notice thereof to the
other Party stating the identity of the third party and the terms and the
price offered by said third party to transferring Party (the "Tag-along
Notice"). In the event that the other Party wish to exercise its rights
pursuing to Clause 9.1 such Party shall give notice to the transferring
Party within 14 Working Days after having received the full Tag-along
Notice.
9.3 For the avoidance of doubt, if the transferring Party's transfer of
shares to a third Party is not consummated for any reason, the
transferring Party shall have no obligation pursuant to Clause 9.1 above.
10. EXIT
10.1 It is the overall objective of the two Shareholders to increase the
value of the Shares and to realise such value at an Exit or IPO no later
than seven years from signing of this Shareholders Agreement.
10.2 If the Shareholders decide to list the Company on a stock exchange,
all Shareholders shall be obliged to participate in any decision or
activity necessary to implement such decision, including disposal of a
proportionate part of their Shares as advised by the investment bank.
10.3 In connection with an Exit, the Company shall a) cooperate with the
investment bank/advisor or underwriters participating in the Exit or
offering their counsel in any due diligence investigation reasonably
requested by them and b) participate to the extent reasonably requested
by the managing underwriter for the Exit or offering, in effort to sell
the Securities under the Exit or offering (including without limitation,
participating in "road show" meetings with prospective investors) that
would be customary for underwritten primary offering.
Side 11.
11. NON - COMPETITION
11.1 The parties acknowledge and confirm their noncompetition obligations
pursuant to the Share Purchase Agreement dated as of the date hereof.
12. BREACH OF AGREEMENT
12.1 No Shareholder may terminate this Agreement due to breach of
agreement by another Shareholder.
12.2 In the event of a Shareholder's breach of this Shareholders
Agreement, the Shareholder in breach shall within 20 Working Days upon
having received notice of such breach to remedy the breach in full.
12.3 Failure by such Shareholders to remedy the breach as set out above,
shall entitle the other Shareholders to claim full compensation for any
loss, expense, legal fees etc. resulting as a consequence of the breach.
Further the other Shareholders shall by way of written request to Board
be entitled to require that all rights of the breaching Shareholder with
respect to the Company shall be suspended with immediate effect, while
the breach remains uncured, including but not limited to loss of right to
vote at the general meeting, the right to have such Shareholder's
appointed members of the Board, attend Board meetings and participate in
the transaction of the Board decisions, as well as the right to
participate in subscription of Shares and granting of warrants and
options and the right to demand an Exit (if relevant).
12.4 The Parties not on breach may - in addition to or as alternative to
the above - choose to acquire (right to purchase option) all or part of
the securities of the Party in breach by way of written notification to
the other Party - copying the Board - setting out the price for the
Securities.
12.5 In the event the Parties cannot agree on the prices within 7 Working
Days from date of notification, the purchase Price shall be fixed as 50 %
of the average of two valuations of the Securities' market value made by
two impartial valuators appointed by the Institute of State-Authorized
Accountants. The valuators shall fix the market value of the Securities
on the basis of the market value of the Company in due consideration of
the Company's accountants and an assessment of the future prospects of
the Company without regard to the fact that the Securities in question
may only represent a minority shareholding in the Company. The Party in
breach shall pay the costs for the valuators. If a transfer of Securities
do not take place the costs shall be paid by the Parties in proportion to
their shareholding in the Company.
12.6 The Party not in breach shall give notice to the Party in breach
within 5 Working Days after the valuation, whether or not the Party wants
to acquire the Securities from the Party in breach.
Side 12.
13. VALIDITY, ENFORCABILITY AND AMENDMENTS
13.1 This Agreement shall be binding on the Shareholders as long as they
own Shares of the Company and as otherwise set out herein e.g. 11.0.
13.2 This Agreement is automatically terminated at the earlier to the
occur of either an Exit or upon a Shareholder or a third party having
acquired all the Shares in the Company.
14. CONFIDENTIALITY
14.1 The Parties agree that the terms and conditions of this Agreement as
well as the negotiations relating thereto shall be considered
confidential information and shall not be disclosed by the Parties to any
third party except if such disclosure takes place with the consent of the
other Party or as set forth below.
14.2 Irrespective of the above, either Party may disclose the
abovementioned information a) if and to the extent required by law or for
the purpose of any judicial proceedings between the Parties b) If and to
the extent required by any law, regulation or securities exchange or c)
it is customary information in the Parties reporting such as the
Company's name, investments, share of ownership and brief
reports/statements regarding the Company and d) to its professional
advisers, auditors and bankers.
15. LAW AND VENUE
15.1 This Shareholders Agreement shall be governed by and construed in
accordance with the law of the Kingdom of Denmark and disregarding its
rules on choice of law.
15.2 Any dispute or claim arising out of or in connection with this
Shareholders Agreement, or the breach, termination or in validity
thereof, shall be subject to arbitration in accordance with the rules of
procedure of the Danish Institute of Arbitration. The arbitration clause
does not imply a waiver of preliminary remedies such as prohibitory
injunction.
The arbitration shall be in Copenhagen. The language of the Arbitration
shall be English.
Side 13.
Signed on the of February in Svendborg
Kirkeby Cheese Export A/S
_____________________________ _________________
Xxxxx Xxxx Xxxxxxxx, formand Xxx Xxxxxxxxxx
Signed on the of February in Israel
Gold Frost Ltd.
_________________ _________________
Mr. Zwi Williger Mr. Gil Hochboim
Signature Page - Shareholders Agreement
Side 14.