Unofficial Translation] AGREEMENT Made and entered into on the 31st day of March 2009 Between
Exhibit
4.30
[Unofficial
Translation]
Made
and entered into on the 31st day of
March 0000
Xxxxxxx
XXXX
XXXXXX CHAIN PROPERTIES & INVESTMENTS LTD.
Publ.
Co. 520036187
whose
address is 0 Xxxx Xxxxxx, Ofek Industrial Zone, Rosh Ha’ayin
(hereinafter: “the
Seller”)
of the one
part;
And
BLUE
SQUARE REAL ESTATE LTD.
Pvte.
Co. 513765859
whose
address is 0 Xxxxxx Xxxxxx, Xxxx Xxxx, Xxxx Ha’ayin
(hereinafter: “the Buyer”)
of the other
part;
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WHEREAS
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The
Seller engages in the operation of retail chain stores and is the owner of
activities in the field of leasing, management, development and
improvement of real estate properties owned by it;
and
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WHEREAS
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The
Seller wishes to spin off its activities, in a manner whereby assets and
liabilities connected with and/or related the Seller’s activities in the
field of leasing, management, development and improvement of real estate
properties owned by it (hereinafter: “the Real Estate Activities
Transferred”) will be transferred to the Buyer (hereinafter: “the Spin-Off”);
and
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WHEREAS
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The
Buyer is a public company engaged in the development, initiation and
management of real estate and is controlled by Blue Square Israel Ltd.,
which is also the controlling shareholder in the Seller;
and
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WHEREAS
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The
parties declare that the Spin-Off is being effected for a commercial and
economic objective; and
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WHEREAS
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The
Spin-Off is being effected in accordance with 105I of the Income Tax
Ordinance, and all the conditions and sub-sections thereof, and is
contingent upon approval by the tax authorities and approval of the
applicability of the tax benefits pursuant to Section 105B of the Income
Tax Ordinance; and
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1
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WHEREAS
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For
purposes of effecting the aforesaid Spin-Off the Seller wishes to sell the
Property Sold to the Buyer, and the Buyer wishes to purchase the Property
Sold from the Seller, as same is defined below, all in accordance with the
terms and conditions set forth in this Agreement;
and
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WHEREAS
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The
parties have applied to the tax authorities with an application to obtain
an approval in advance pursuant to which the Property Sold will be
transferred from the Seller to the Buyer in accordance with Section 105I
of the Income Tax Ordinance (New Version), 5721-1961 and on the terms and
conditions as will be specified in the approval of the tax authorities;
and
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WHEREAS
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Now
therefore it is agreed, declared and stipulated by the
parties
as
follows:
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1.
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Preamble
and interpretation
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1.1
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The
preamble to the Agreement, the appendices hereto and the declarations by
the parties constitute an integral part
hereof.
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1.2
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2.
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Definitions
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The terms
set forth below will have the meaning in this Agreement as set opposite
them:
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2.1
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“The property sold” –
the properties transferred and the liabilities transferred, as defined
below.
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2
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2.2
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“The properties
transferred” – the real estate properties listed in Appendix
A to this Agreement (hereinafter: “the Real Estate
Properties”), including all the Seller’s rights in relation to the
Real Estate Properties (including goodwill), as well as the Seller’s
shares in the holding companies listed in Appendix
A to this Agreement (hereinafter: “the Shares
Transferred”, and “Holding Companies”,
respectively), including all the Seller’s rights in relation to the Shares
Transferred (including goodwill) and in relation to shareholders’ loans
that were given by the Seller to the Holding Companies, and the Seller’s
rights pursuant to the Agreement.
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2.3
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“The liabilities
transferred” – the Seller’s liabilities pursuant to the agreements,
as well as the Seller’s financial liabilities in connection with financing
the Real Estate activities being transferred against which encumbrances
have been created and/or will be created over the properties transferred
or part thereof, all as described in Appendix
B which will be signed and attached to this Agreement after receipt
of the approval from the tax authorities (hereinafter: “the Financial
Liabilities”). The balance of the Financial Liabilities
as at the effective date will stand at a sum equivalent to the value of
the Real Estate Properties and the shares transferred as set forth in
Appendix
A to this Agreement, plus a sum equivalent to the balance of the
shareholders loans which were provided to the Holding Companies by the
Seller, as same are presented in the financial statements of the Holding
Companies as at the effective date, and the plus or minus (as the case may
be) the increase or decrease, respectively, in the Seller’s proportionate
share (according to its percentage holdings in the Holding Company) in the
difference between the total assets of one of the Holding Companies
(excluding the Real Estate Property) as at the effective date and the
total liabilities of each of the Holding Companies as at the effective
date, as against the difference specified in Appendix
C to this Agreement.
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2.4
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“The agreements” –
contractual engagements between the Seller and third parties in connection
with the Real Estate Properties and/or the Shares Transferred, including
leasehold agreements and/or lease agreements and/or co-ownership
agreements and/or purchase agreements and/or management agreements and/or
any other agreement between the Seller and any third party in connection
with the Real Estate Properties and/or the Shares Transferred, including
and without derogating from the generality of the foregoing, the finance
agreement between the Seller and the bank / the financial entity which is
providing the finance in connection with the financial liabilities
(hereinafter: “the
Finance Agreement”).
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2.5
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“The effective date” –
March 31, 2009.
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3
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3.
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Declarations
and undertakings by the
Seller
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The
Seller hereby declares and undertakes to the Buyer that:
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3.1
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The
Seller’s rights in each of the Real Estate Properties are as stated
alongside each Real Estate Property in Appendix
A to this Agreement, with it being agreed that in relation to
Property Xx. 00 (Xxx Xxxx – Tel Kabir) the contents of Appendix
D to this Agreement will
apply.
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3.2
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The
Seller is the sole owner of the Shares
Transferred.
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3.3
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Apart
from the properties listed alongside each company in Appendix
A to this Agreement (hereinafter: “the Holding Company’s
Properties”), the liabilities mentioned in the financial statements
that are attached to this Agreement as Appendix
E.
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3.4
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The
Seller’s rights in Real Estate Properties and in the Shares Transferred
are free and clear of any attachment and/or encumbrance and/or pledge
and/or any other right in favor of a third party, except only encumbrances
that have been created and/or may be created as security for the
liabilities transferred, and which shall continue to remain in force and
be binding on the Buyer in all respects, according to the terms and
conditions of the Financial Liabilities. The Seller undertakes
that its rights as aforesaid will remain in the condition as described
above until same are registered in the name of the Buyer in the Land
Registry and/or until the transfer thereof into the Buyer’s name in the
relevant register of the companies, as the case may
be.
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3.5
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The
leasehold contracts between the Seller and the Israel Lands Administration
or the Tel Aviv Municipality, as the case may be, in respect of the Real
Estate Properties that are leased under leasehold to the Seller and/or to
the Holding Companies by the Israel Lands Administration or the Tel Aviv
Municipality, are in force, and the Seller is not aware of any grounds for
the cancellation of any of them.
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3.6
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Except
for the legal proceedings described in Appendix
F to this Agreement, no legal proceedings are pending against the
Company and/or the Holding Companies in connection with the Real Estate
Properties and/or the Holding Companies’ assets and/or the Shares
Transferred.
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3.7
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In
relation to the Real Estate Properties and the Holding Companies’ assets
which are not registered in the name of the Seller or the Holding
Companies, as the case may be, the Seller declares that there is no
material impediment to completing registration of the rights in and to the
Properties in the name of the Seller or the Holding Companies, as the case
may be.
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3.8
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Except
for the Property in Kfar Saba (Property No. 6, to which the provisions of
sub-clause 6.5 below will apply), there are no faults and/or defects
and/or damage in the structural frame of the buildings and/or in the
water-proofing of the buildings which form part of the Real Estate
Properties and/or the Holding Companies’
assets.
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4
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3.9
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Subject
to the fulfillment of the conditions precedent, there is no legal,
contractual or other bar or impediment to the Seller entering into this
Agreement and to performance of its obligations pursuant to this Agreement
in full and punctually on due date.
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4.
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Declarations
and undertakings by the
Buyer
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The Buyer
hereby declares and undertakes to the Seller that:
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4.1
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It
is purchasing the Property Sold in its condition “as is” at the time of
signing of this Agreement, without any representation and/or declaration
by the Seller, including, without limitation, in regard to the condition
of the Real Estate Properties and/or the Holding Companies’ assets and/or
the Shares Transferred from the physical and/or zoning and/or legal aspect
and/or from any other aspect and/or in regard to the value thereof, except
only the Seller’s representations as set forth in Clause 3 above, and the
Seller’s undertaking as set forth below in this
Agreement.
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4.2
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Subject
to the fulfillment of the conditions precedent, there is no legal,
contractual or other bar or impediment to its enter into this Agreement
and to the performance of its obligations under this Agreement in full and
punctually on due date.
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5.
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Conditions
precedent
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5.1
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This
Agreement and the implementation hereof are contingent upon the
fulfillment of and compliance with the following cumulative conditions
(hereinafter: “the
Conditions Precedent”):
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5.1.1
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Receipt
from the Seller’s competent organs of all the resolutions and approvals
that are required for implementation of the transaction that is the
subject matter of this Agreement.
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5.1.2
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Approval
of the Buyer’s audit committee and its board of directors to
implementation of the transaction that is the subject matter of this
Agreement, including to the terms and conditions of the Finance Agreement
and the conditions of the approval of the tax authorities, as well as
further approval by the Buyer’s general meeting for implementation of the
transaction that is the subject matter of this Agreement, to the extent
that it is specified by the Buyer’s audit committee that such approval is
necessary.
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5.1.3
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Obtaining
an approval from the Income Tax Commission for effecting the Spin-Off in
accordance with the provisions of this Agreement, to the satisfaction of
the parties (hereinbefore and hereinafter: “the Approval of the Tax
Authorities”).
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5
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5.1.4
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Fulfillment
of the conditions for the coming into force and implementation of the
lease agreements mentioned in Clause 6.2.2
below.
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5.2
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If
the Conditions Precedent or any of them are not fulfilled within 6 months
from the date of signing of this Agreement, and the parties have not
agreed on extending the period as stated in sub-clause 5.3 below, this
Agreement will be null and void without this being deemed to be a breach
hereof and without any party having any right to relief as a consequence
thereof.
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5.3
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Notwithstanding
the contents of sub-clause 5.2 above, the board of directors of either of
the parties will be entitled, by way of written notice to the other party,
to extend the period for fulfillment of the Conditions Precedent, each
time for a period of an additional 60 days beyond the last date that was
fixed for fulfillment of the Conditions Precedent prior to the giving of
the notice, but it is agreed that under no circumstances will the period
for fulfillment of the Conditions Precedent be extended beyond a period of
12 months from the date of signing of this
Agreement.
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6.
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The
transaction and the effective
date
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6.1
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On
the date of closing, as defined below, the Seller will transfer the
Property Sold to the Buyer and the Buyer will accept same from the Seller,
with effect from the effective date, including in a manner in which with
effect from the effective date, the Seller will assign its rights in the
Properties transferred to the Buyer, including its rights pursuant to the
Agreement and its rights in connection with the shareholders’ loans that
were provided by the Seller to the Holding Company (including in a manner
in which the obligation of the Holding Company for payment of the
shareholders’ loan, in accordance with the conditions thereof, will apply
in full vis-à-vis
the Buyer), and the Seller will assign the liabilities transferred to the
Buyer, including in a manner in which all the income and expenditure in
respect of the Property Sold shall be borne and paid by the Buyer, with
effect from the effective date. Included in the foregoing it is
agreed that (a) guarantees and collateral security that were given to the
Seller, if given, in the framework of any of the Agreements, will be
endorsed into the name of the Buyer and/or will be held by the Seller in
trust for the Buyer; (b) the Buyer will take upon itself all the Seller’s
rights and obligations under co-ownership agreements to which the Seller
is a party in relation to any of the Real Estate Properties, and to the
extent necessary the Buyer will sign such co-ownership agreements in place
of the Seller; (c) the encumbrances mentioned in Clause 3.4 shall continue
to remain in force and shall be binding on the Buyer, for all intents and
purposes, according to the conditions of the financial liabilities, on a
basis that the Buyer will take action for completing registration of the
aforesaid encumbrances, in accordance with and subject to the conditions
of the financial liabilities (including the terms and conditions of the
Finance Agreement).
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6
Notwithstanding
the foregoing, it is agreed that on the date of closing the parties will do an
accounting in relation to the financial costs in respect of the financial
liabilities for the period between the effective date and the date of closing
(hereinafter: “the Interim
Period”), in a way that the Seller will bear the financial costs vis-à-vis the Bank/the
financial entity providing the finance, which apply on the total financial
liabilities in respect of the Interim Period, while the Buyer will pay the
Seller in respect of the total financial liabilities interest at a rate
equivalent to on-call interest (as defined below), for the period commencing
from the effective date and up to the date of closing, with it in any event
being agreed that the Buyer will not bear the financial costs which exceed the
financial costs that would have applied to it in respect of the Interim Period
had the transaction been executed on the effective date (where for these
purposes the calculation shall be made also taking into account financial income
from which the Buyer benefited during the Interim Period).
In this
sub-clause – “on-call interest” means variable interest at the rate of interest
that was paid in the Interim Period by Blue Square Israel Ltd. in respect of
“on-call credit”, on an average weighted monthly basis, while the interest will
be calculated weekly.
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6.2
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If
one of the parties should bear any payment and/or receive any income in
connection with the Property Sold beyond its entitlement or its
obligation, as the case may be, in accordance with the provisions of this
sub-clause 6.1 above, then the parties shall do an accounting between
them, in a manner whereby each party will bear expenses and will receive
income according to the provisions of this sub-clause 6.1
above. Included in the contents of sub-clause 6.1 above it is
agreed between the parties as
follows:
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6.2.1
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In
relation to assets (or part thereof) forming part of the Real Estate
Properties that are leased to third parties, it is agreed that all the
Seller’s rights and obligations under the lease agreements will be
assigned in favor of the Buyer, with effect from the effective date, in a
manner whereby the Buyer will be entitled and will be obliged vis-à-vis such third
parties, with effect from the effective date onwards, for everything
connected with the lease agreements. For the removal of doubt
it is clarified that at the latest with effect from the effective date all
the existing lease agreements between the Seller and Blue Square Israel
Ltd. or Blue Square Chain (Hyper Hyper) Ltd. in relation to any of the
Real Estate Properties will be cancelled and in their place the lease
agreement between the Seller and the Buyer as set forth in sub-clause
6.2.2 below shall come into force with respect to such
assets.
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6.2.2
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In
relation to properties forming part of the Real Estate Properties (or part
thereof) in which the Seller makes self-use (including Real Estate
Properties the use of which was transferred to the Seller by Blue Square
Israel Ltd. or the Blue Square (Hyper Hyper) Chain Ltd. and also in
relation to the property held by Hyper Lod Center Ltd. (hereinafter: “Hyper Lod”) – it is
agreed that these properties will be leased to the Seller by the Buyer or
by Hyper Lod, as the case may be, with effect from the date of closing
onwards, in accordance with the conditions of lease as will be set forth
in lease agreements that have been signed or may be signed between the
Seller and the Buyer and between the Seller and Hyper Lod, and which will
come into force on the date of closing as stated in sub-clause 9.1
below.
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6.3
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If
the consent of third parties is required for the transfer of the Property
Sold and/or any part thereof, then the Seller undertakes to act diligently
and continuously in order to obtain the consent of such third parties,
until the aforesaid consents are obtained and transfer of the Property
Sold to the Buyer is completed, and the Seller declares and undertakes
that there is no impediment to obtaining all the consents that are
required from third parties for purposes of transferring the Property Sold
to the Buyer. In a situation in which consent of any third
party is required for the transfer of a right or obligation being
transferred and such consent has not been obtained (hereinafter: “Property the Transfer of which
Requires Consent”) the Seller will continue performing the
contractual arrangement in trust for the Buyer until the transfer is
completed, including on a basis that the income and expenditure in respect
of the Property the Transfer of which Requires Consent will be attributed
to the Buyer, so that receipts that are received by the Seller in respect
of such properties will be transferred to the Buyer, while expenses in
respect of such properties will be paid by the Buyer. It is
agreed that in a case in which it becomes apparent that notwithstanding
the Seller’s representation as set forth above in this sub-clause, there
is an impediment to obtaining the consent of any third party, the
provisions of sub-clause 10.2 of this Agreement will apply to the
matter.
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6.4
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It
is agreed that consent fees and/or capitalization fees to the Israel Lands
Administration and/or to the Tel Aviv Municipality, to the extent that
same apply, and in respect of which a deduction was made from the value of
the Real Estate Properties and/or the Shares Transferred in the scope of
assessing the value that was made for purposes of the transaction that is
the subject matter of this Agreement, shall be borne and paid by the
Buyer. If it should transpire that in respect of any of the
Real Estate Properties and/or the holding companies’ assets capitalization
fees and/or consent fees to the Israel Lands Administration and/or to the
Tel Aviv Municipality apply, the payment of which is required for purposes
of transferring the rights in the Property Sold into the name of the
Buyer, and which were not deducted in the scope of the assessments of
value referred to above, then such payment shall be borne and paid by the
Seller.
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6.5
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It
is agreed between the parties that payments and/or expenses that may be
demanded for purposes of repairing defects and/or faults and/or the
existing damage in the structural frame of the building in Kfar Saba shall
be borne by the Seller and the Buyer in equal
shares.
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7.
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Registration
of the rights in the Buyer’s
name
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7.1
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The
parties will act in cooperation until completion of registration in the
name of the Buyer of the transfer of the Seller’s rights in the Real
Estate Properties and in the Shares Transferred, which shall include the
parties signing any deed and/or application and/or any other document that
may be required for purposes of completing the registration as
aforesaid. Included in the foregoing, the Seller undertakes to
furnish any document required from the Seller and to take any action
(including legal proceedings) that may be required from the Seller and to
bear all the expenses connected with furnishing of documents and/or taking
of actions as aforesaid, in order to facilitate execution of the
registration as aforesaid. It is agreed that the Buyer shall
bear all the costs and fees connected with registration of the rights in
the Buyer’s name.
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7.2
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Commencing
from the date of closing, the Buyer will be entitled to register a caveat in its favor in
the Land Registry with respect to the Real Estate Properties, to the
extent that this is possible. It is further agreed, that in
relation to properties in respect of which it is not possible to register
a caveat as
aforesaid, the Buyer will be entitled, after the date of closing,
and to the extent that this is possible, to register a pledge
in its favor over the Seller’s contractual rights, which shall remain in
force until completion of registration of the rights in the Buyer’s
name.
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7.3
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It
is agreed that if attachments and/or encumbrances exist and/or are imposed
on any of the Real Estate Properties and/or the Shares Transferred the
origin of which is connected with the Seller, apart from the encumbrances
for securing the liabilities transfers that are mentioned in Clause 3.4
above, the Seller undertakes to take steps for the removal of such
attachments and/or encumbrances, including in a manner that will
facilitate completion of registration of the transfer of rights from the
Seller to the Buyer.
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8.
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Transfer
without consideration
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Since the
total Financial Liabilities being transferred to the Buyer are to an extent
equal to the value of the assets being transferred, the transfer of the Property
Sold to the Buyer (including the transfer of the liabilities transferred) shall
be without consideration.
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9.
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The
closing
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9.1
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Within
14 days from the date on which the Conditions Precedent are fulfilled
(hereinbefore and hereinafter: “the Date of Closing”),
after the parties have verified that all the Conditions Precedent have
been fulfilled to their satisfaction, the parties shall perform all the
following acts at one and the same time and will complete the transaction
that is the subject matter of this Agreement, with effect from the
effective date, as follows:
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9.1.1
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Possession
of the properties transferred shall be delivered by the Seller to the
Buyer (subject to the lease agreements mentioned in sub-clause 6.2
above).
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9.1.2
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The
Seller and the Buyer shall sign a share transfer deed in respect of the
Shares Transferred.
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9.1.3
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The
Seller’s rights arising from the shareholders loans that were provided by
the Seller to the holding company shall be assigned to the
Buyer.
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9.1.4
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The
Seller shall lodge with the Buyer an irrevocable notarial power of
attorney in two copies in favor of the Buyer, which enables the Buyer to
perform any act in connection with the Real Estate Properties and/or the
Property Sold, including the transfer of rights in the Real Estate
Properties and the Shares Transferred into the name of the
Buyer.
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9.1.5
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The
lease agreement between the Seller and the Buyer in relation to the
Properties forming part of the Real Estate Properties that will be let to
the Seller by the Buyer as stated in sub-clause 6.2.2 above shall come
into force.
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9.1.6
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The
lease agreement between Hyper Lod and the Seller in relation to Property
No. 7 will be cancelled, and the new lease agreement between the Seller
and Hyper Lod Center (as referred to in sub-clause 6.2.2 above) shall come
into force.
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9.1.7
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The
parties shall sign all the documents required for purposes of the transfer
/ assignment of the liabilities being transferred to the Buyer, in
accordance with the terms and conditions of this
Agreement.
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9.1.8
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The
parties shall sign any document and shall perform any act that may be
required for purposes of completing the transaction that is the subject
matter of this Agreement.
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10
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10.
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Liability
and indemnity
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10.1
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All
responsibility and/or liability according to law and/or agreement vis-à-vis any person
and/or any body (including authorities and/or other third parties) in
connection with the use of the Real Estate Properties and/or the Holding
Companies’ assets and/or the Property Sold and/or acts or omissions in
connection with the Real Estate Properties and/or the Holding Companies’
assets and/or the Property Sold, the origin and/or the cause of action
and/or the facts which found same pertain to the period prior to the
effective date or relate to the aforesaid period (whether or not legal
proceedings were instituted in respect thereof as at the date of signing
of this Agreement, including as described in the representations to this
Agreement) shall be borne by the Seller to the exclusion of responsibility
for the Buyer. The Seller shall indemnify the Buyer in respect
of any damage or expense that may be incurred by it, as a result of a
claim or demand in connection with the Property Sold and the
responsibility for which is imposed on the Seller in accordance with the
foregoing in this clause, provided that the Buyer has notified the Seller
about any demand and/or claim which was instituted or made against it in
connection therewith, within a reasonable period of time from the date of
receipt thereof, and has enabled the Seller to defend such demand or
claim. It is further agreed that the Buyer will not be entitled
to make a compromise in connection with any such demand or claim, except
subject to receiving the Seller’s prior written
consent.
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10.2
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Without
derogating from the provisions of Clause 10.1 above, it is agreed that if
during a period of 24 months commencing from the Date of Closing, it
transpires that any of the Seller’s representations in Clause 3 above is
incorrect and/or inaccurate (hereinafter: “Non-Conformity”), on a
basis that had it been aware of the aforesaid Non-Conformity at the time
of signing of this Agreement, this would have had the effect of reducing
the value of any of the Real Estate Properties and/or the Shares
Transferred as same were valued in the appraisals of value that were done
immediately prior to the signing of this Agreement (hereinafter: “the Appraisals of
Value”), then and in that event, without derogating from any remedy
available to the Buyer according to any law, the Seller undertakes to
indemnify the Buyer in respect of the difference (in nominal values)
between the value of the Real Estate Properties and/or the Shares
Transferred, as the case may be, which was fixed for purposes of this
Agreement as stated in the Appendix
G to this Agreement, and the value of the Real Estate Properties
and/or the Shares Transferred (as the case may be) as at the date of the
Appraisals of Value, had the Non-Conformity been known at the time of the
Appraisals of Value.
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For the
removal of doubt it is clarified that the indemnity arrangement set forth in
this sub-clause above does not derogate from any other remedy available to the
Buyer according to any law in respect of the incorrectness of any of the
Seller’s representations, with it being clarified that the incorrectness of a
representation in relation to a particular property shall not constitute a
breach of this Agreement as a whole. It is further clarified, for the
removal of doubt, that the existence of the Non-Conformity as also the question
of entitlement to indemnity and the amount thereof will be fixed by an
arbitrator in accordance with the mechanism described in Clause 12
below.
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10.3
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It
is further agreed, without derogating from the provisions of sub-clauses
10.1-10.2 above, that since for purposes of drawing up the appraisals of
value for purposes of the transaction that is the subject matter of this
Agreement, data and/or information and/or documents were delivered by the
Seller to the appraiser, O. Haushner Civil Engineering and Real Estate
Appraisal Ltd. and/or Haushner & Co. and/or Oded Haushner
(hereinafter: “the
Appraiser”), and since the Buyer undertook to indemnify the
Appraiser in respect of a claim in connection with the opinion resulting
from data that was supplied to the Appraiser and which turn out to be
incorrect and/or materially inaccurate, the Seller undertakes that if the
Buyer is called upon to pay the Appraiser any amount by virtue of the
aforesaid undertaking for indemnity, the Seller will then indemnify the
Buyer, on a back-to-back basis, in respect of any such
payment.
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10.4
|
Commencing
from the effective date the Buyer will own all the rights and obligations
in respect of the property sold and will bear all responsibility and/or
liability to any person and/or body, including to various administrative
authorities, in connection with the property sold, the origin of which
and/or the cause of action and/or the facts which serve as a basis for
them pertain to any date subsequent to the effective date – will be borne
by the Buyer alone. The Buyer will indemnify the Seller in
respect of any damage or expense that it may incur, as a result of a claim
or demand in connection with the property sold the responsibility for
which is imposed on the Buyer in accordance with the foregoing, provided
that such indemnity shall be given subject to the condition that the
Seller has notified the Buyer about any amount and/or claim that was
instituted or made against it in connection therewith, within a reasonable
period of time from the time of receipt thereof, and has enabled the Buyer
to defend against it. It is further agreed that the Seller will
not be entitled to make a compromise in connection with any such demand or
claim, except subject to receiving the Buyer’s prior written
consent.
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11.
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Taxes
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11.1
|
The
parties are aware that a request has been made to the tax authorities in
connection with the implementation of the transaction that is the subject
matter of this Agreement for obtaining an approval from the tax
authorities to the effect that the property sold will be transferred from
the Seller to the Buyer in accordance with Section 105I of the Income Tax
Ordinance, and on conditions that will be specified in the aforesaid
approval of the tax authorities. The parties agree that with
regard to tax payments the following provisions will apply between
them:
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12
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11.2
|
The
Seller shall bear the payment of any tax or levy, if and to the extent
that same apply to it, in its capacity as seller of the Property Sold, by
virtue of the provisions of any law in respect of any transfer of a right
in the Real Estate that is the subject matter of this Agreement (except
consent fees and/or capitalization fees which are imposed on the Buyer in
accordance with the provisions of sub-clause 6.4 above). In
addition, it is agreed by the parties that the Seller will bear a
betterment levy as referred to in sub-clause 11.5 below (subject to the
contents of sub-clause 11.6 below).
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11.3
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The
Buyer shall bear the payment of Land Acquisition Tax (at a rate of 0.5%)
and the payment of any tax or levy, if and to the extent that same is
imposed on it, in its capacity as purchaser of the property sold, by
virtue of provisions of any law in respect of any acquisition of a right
in the Real Estate that is the subject matter of this
Agreement.
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11.4
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All
the taxes, rates, fees, levies, and current payments which applied and/or
apply and exist and/or which may apply in connection with the Real Estate
Properties and/or the Holding Companies’ assets, whether or not the
payment thereof has been demanded, including debts to property tax, if
any, in relation to any period up to the effective date, shall be borne by
the Seller, and from the effective date onwards the payments mentioned in
this clause shall be borne by the
Buyer.
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11.5
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A
betterment levy which applies and/or which may apply in respect of a plan
(including a concession, permit for exceptional use and so forth) which
was approved in relation to any of the Real Estate Properties and/or the
Holding Companies’ assets before December 31, 2008, shall be borne and
paid by the Seller. A betterment levy which applies and/or
which may apply in respect of a plan (including a concession, permit for
exceptional use and so forth) which was approved in relation to any of the
Real Estate Properties and/or the Holding Companies’ assets after December
31, 2008, shall be borne by the
Buyer.
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11.6
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Notwithstanding
the contents of sub-clauses 11.4-11.5 above, it is agreed that betterment
levies and past fees levies in respect of which a deduction was made from
the value of the Real Estate Properties and/or the Shares Transferred in
the framework of the appraisals of value – shall be borne and paid by the
Buyer.
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13
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11.7
|
It
is agreed between the parties that in connection with (1) Land
Appreciation Tax and/or capital gains tax payments in respect of the
difference between the value of the assets being transferred to the Buyer
and the value of the assets that are being transferred for tax purposes,
as at the effective date, which shall be borne by the Buyer at the time of
the sale and/or realization of any of the transferred assets and (2) the
depreciation element in respect of the difference between the value of the
assets being transferred to the Buyer and the value of the assets being
transferred for tax purposes as at the effective date – the compensation
and indemnity mechanism described in Appendix
H to this Agreement (which shall be signed and attached to this
Agreement after receipt of the approval of the tax authorities) will apply
between the parties in a manner that will place the Buyer in the same
position with regard to the abovementioned elements as the position in
which it would have been had the fair value of the Properties Transferred
been recognized as cost for tax purposes in the case of the
Buyer.
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12.
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Arbitration
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12.1
|
Any
differences of opinion that may arise between the parties, inter alia in
connection with and/or relating to this Agreement and/or in connection
with any of the provisions hereof and/or in connection with the
performance and/or the breach hereof, if any, shall be referred for the
decision of an arbitrator who shall be appointed by the parties by
consensus agreement and in the absence of agreement, the arbitrator will
be appointed by the legal advisor of Blue Square Israel
Ltd.
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12.2
|
The
arbitrator shall adjudicate on the aforesaid differences of opinion or any
of them after having been requested to do so by way of written notice
signed by either of the parties to this
Agreement.
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12.3
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The
arbitrator will be bound by the substantive law, but will not be bound by
the rules of evidence and of
procedure.
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12.4
|
This
clause constitutes a valid arbitration agreement within the meaning
thereof in the Arbitration Law,
5728-1968.
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13.
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Miscellaneous
|
|
13.1
|
This
Agreement does not constitute an agreement in favor of a third
party.
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13.2
|
The
expenses of the transaction that is the subject matter of this Agreement
shall be borne by the Seller and the Buyer in equal shares, with it being
agreed that the Buyer will bear the fees of the appraiser and in addition
will bear part of the total other expenses of the transaction (in respect
of attorney’s fees, payments to consultants and so forth) so that the
aggregate amount of the expenses of the transaction that will be paid by
the Buyer (in respect of the appraiser’s fees and in respect of the other
expenses) will stand at one-half of the total expenses of the transaction
that is the subject of this
Agreement.
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14
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13.3
|
No
alteration, amendment and/or addition to this Agreement will be of any
validity and same will be deemed not to have been made, unless drawn up in
writing and signed by all the parties to this
Contract.
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13.4
|
The
parties mutually agree to sign any deed and document and to furnish any
certificate and document that is required for purposes of the actual
implementation of the transaction according to this
Agreement. For the removal of doubt it is clarified that the
parties will be entitled to extend the validity of any period specified in
this Agreement.
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13.5
|
The
parties shall render reports according to law to the competent authorities
in connection with this transaction and the implementation hereof, to
whatever extent may be required by
law.
|
In
witness whereof the parties have hereunto signed:
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/s/ Xxxxx Xxxxxxxx, Xxxx
Xxxxxx
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/s/ Xxxxx Xxxxxxxx, Xxxx
Xxxxx
|
|
|
Blue
Square Chain Properties
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Blue
Square Real Estate Ltd.
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|
|
&
Investments Ltd.
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15
Addendum No. 1 to Agreement
dated March 31, 2009
made
and entered into at Tel Aviv on the 13th day of
September 2009
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Between:
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MEGA
RETAIL LTD.
|
(formerly
Blue Square Chain Properties & Investments Ltd.)
Publ.
Co. 520036187
whose
address is 0 Xxxx Xxxxxx, Xxxx Xxxxxxxxxx Zone, Rosh Ha’ayin
(hereinafter:
“the Seller”)
of the first
part;
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And:
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BLUE
SQUARE REAL ESTATE LTD.
|
Pvte.
Co. 513765859
whose
address is 0 Xxxxxx Xxxxxx, Xxxx Xxxx, Xxxx Ha’ayin
(hereinafter: “the
Buyer”)
of the second
part;
|
And:
|
BLUE
SQUARE - ISRAEL LTD.
|
Publ.
Co. 520042847
whose
address is 0 Xxxxxx Xxxxxx, Xxxx Xxxx, Xxxx Ha’ayin
(hereinafter: “Ribua
Israel”)
of the third
part;
|
WHEREAS:
|
On
March 31, 2009 a Spin-Off Agreement was signed between the Buyer and the
Seller in accordance with Section 105I of the Income Tax Ordinance
(hereinafter: “the
Agreement”); and
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|
WHEREAS:
|
The
parties wish to make certain amendments to the Agreement, inter alia in
accordance with an approval from the tax authorities as has been received
by the parties, all in accordance with and subject to the contents of this
Addendum below;
|
Now
therefore it is declared, stipulated and agreed by the parties as
follows:
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1.
|
The
preamble to this Addendum constitutes an integral part
hereof. All the terms and expressions in this Addendum will
have the same meaning ascribed to them in the Agreement, unless otherwise
expressly defined in this Addendum.
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|
2.
|
In
Clause 2.3 of the Agreement, the passage starting with the words: “The
balance of Financial Liabilities as at the effective date” and ending at
the end of the clause shall be deleted and in place thereof the following
shall be inserted: “The balance of the financial liabilities as at the
effective date shall stand at a sum equivalent to NIS 390 million
(hereinafter: “Amount of
the Financial
Liabilities”)”.
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1
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3.
|
Clause
2.6 will be added to the Agreement in the following
text:
|
“2.6
“Value of the properties
transferred” – the value of the Real Estate Properties and the Shares
Transferred as mentioned in Appendix
A to this Agreement, plus a sum equivalent to the balance of the
shareholders loans which were provided by the Seller to the Holding Companies,
as same are reflected in the financial statements of the Holding Companies as at
the effective date, and plus or minus (as the case may be) the increase or
decrease, respectively, in the Seller’s pro rata share (according to
its percentage holdings in the Holding Company) of the difference between the
total assets of each of the Holding Companies (excluding the Real Estate
Properties) as at the effective date, and the total liabilities of each of the
Holding Companies as at the effective date, as against the difference set forth
in Appendix
C to this Agreement”.
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4.
|
Clause
3.3 of the Agreement shall be replaced by the following text: “Except the
assets listed alongside each company in Appendix
A to this Agreement (hereinafter: “Holding Companies’
Assets”) and the liabilities mentioned in the financial statements
attached to this Agreement as Appendix
E, the Holding Companies do not have any additional material assets
or liabilities”.
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|
5.
|
In
Clause 6.1 of the Agreement, after the words “at the date of closing, as
defined below”, the following words shall be added: “and against effecting
of payment of the difference in the consideration as stated in Clause 8.2
below”.
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|
6.
|
In
Clause 6.1 of the Agreement, the second paragraph and the third paragraph
shall be deleted, and in their stead the following shall be
inserted:
|
“Notwithstanding
the foregoing, it is agreed that within 7 days from the date of closing, the
parties will conduct an accounting in regard to the financial costs in respect
of “the financial liabilities” and in respect of “the difference in the
consideration”, for the period from the effective date until the date of closing
(hereinafter: “the Interim
Period”), in a manner whereby the Seller shall bear vis-à-vis the bank/the
financial entity which finances the financial costs that apply to the total
financial liabilities in respect of Interim Period, and the Buyer will bear the
financial costs that would have applied to the Buyer in respect of the Interim
Period had the transaction been implemented on the effective date. In
addition the parties shall within 7 days from the date of closing conduct an
accounting in regard to the rentals pursuant to the lease agreements mentioned
in Clause 6.2 below in respect of the Interim Period, in a manner whereby the
Seller will pay the Buyer the rentals to which the Buyer is entitled in respect
of the Interim Period plus “on-call” interest for the Interim Period, which is
variable interest at a rate equivalent to the interest which was paid by Blue Square Israel
Ltd. in the Interim Period in respect of “on-call
credit””.
2
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7.
|
Clause
8 of the Agreement shall be replaced by the following
text:
|
|
|
“8.
|
Consideration:
|
8.1 As
consideration for the Property Sold, Ribua Israel which is the sole shareholder
in the Seller, is entitled to receive an allotment on the date of closing of
ordinary shares of NIS 1 par value each of the Buyer (hereinafter: “the Consideration Shares”) to
the value of the difference between “the value of the properties transferred”
(as defined above) and “the amount of the financial liabilities” (as defined
above) (hereinafter: “the
Difference in the Consideration”), where in relation to the Consideration
Shares, Ribua Israel will be entitled to compel the Buyer to purchase the
Consideration Shares from it against payment in cash of a sum equivalent to the
Difference in the Consideration (hereinafter: “the Put
Option”).
8.2 Upon
the signing of this Agreement, Ribua Israel hereby notifies the Buyer
unconditionally and irrevocably that had the Consideration Shares as referred to
sub-clause 8.1 above been allotted to it, Ribua Israel would have exercised the
Put Option immediately
after the allotment of the Consideration Shares. In light of the
foregoing and in accordance with the conditions of the approval from the tax
authorities, it is hereby agreed that the Consideration Shares will not be
allotted to Ribua Israel, and that in lieu of the Consideration Shares, the
Buyer shall pay Ribua Israel an amount in cash equivalent to the Difference in
the Consideration on the Date of Closing.
8.3 The
parties declare that no consideration has passed and/or will pass between them
within the framework of the Spin-Off, except payment of the Difference in the
Consideration as described above”.
|
8.
|
In
Clause 9 of the Agreement sub-clause 9.1.9 in the following text will be
added: “The Difference in the Consideration, as mentioned in Clause 8.1
above, shall be paid to Ribua Israel by the
Buyer”.
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|
9.
|
In
Clause 11 of the Agreement sub-clause 11.8 shall be added in the following
text: “For the removal of doubt, it is agreed that in a case in which, for
any reason, any of the conditions and/or restrictions specified in the
approval of the tax authorities are not complied with and/or if the
approval is cancelled, this will not have the effect of derogating from
the validity of the transaction that is the subject matter of this
Agreement, and the provisions of this Clause 11 above will apply as
between the parties in relation to the taxes in respect of the
transaction, where in relation to Land Acquisition Tax it is agreed that
if the rate of Land Acquisition Tax should exceed 0.5%, then the Seller
and the Buyer will bear the surplus Land Acquisition Tax (above 0.5%) as
may be imposed in practice, in equal
shares”.
|
3
|
10.
|
In
every case of a conflict or non-conformity as between the clauses and
provisions of this Addendum and the clauses and provisions of the
Agreement, the provisions of this Addendum shall
prevail.
|
|
11.
|
Apart
from provisions and clauses of the Agreement which have been expressly
altered in this Addendum, all the remaining provisions of the Agreement
shall apply in full and shall continue to bind the parties in all
respects.
|
In
witness whereof the parties have hereunto signed:
|
/s/
Xxxxx Xxxxxxxx, Xxxx Xxxxx
|
/s/
Xxxxx Xxxxxxxx, Zeev Vurembrand
|
|
|
Blue
Square Real Estate Ltd.
|
Mega
Retail Ltd.
|
|
|
/s/
Xxxxx Xxxxxxxx, Xxxx Vurembrand
|
||
|
Blue
Square - Israel Ltd.
|
4
