[UNOFFICIAL ENGLISH TRANSLATION]
Exhibit 99.4
SHAREHOLDERS AGREEMENT
Entered into and signed on June 23, 2003
Between: ALON ISRAEL OIL COMPANY LTD. ("ALON")
DOR ENERGY (1988) LTD. ("DOR")
DOR FOOD CHAINS HOLDINGS LTD. ("DOR FOOD")
(Alon, Dor and Dor Food shall be referred to hereinafter
jointly and severally as the "ALON GROUP")
OF THE FIRST PART;
And: MR. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇")
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇")
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ INVESTMENTS LTD. ("▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ LTD.")
MBISF LTD. ("M.S.")
(Bronfman, Fischer, ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Ltd. and M.S. shall be
referred to hereinafter jointly and severally as the "▇▇▇▇▇▇▇▇
GROUP")
OF THE SECOND PART;
And: NISSAN DOR CHAINS LTD. (the "GRANDPARENT COMPANY")
NISSAN ALON RETAIL HOLDINGS LTD. (the "PARENT COMPANY")
▇▇▇▇▇▇▇▇-▇▇▇▇ LTD. (the "HOLDING COMPANY")
(the Grandparent Company, the Parent Company and the Holding
Company shall be referred to hereinafter jointly and severally
as the "GROUP OF JOINT COMPANIES")
OF THE THIRD PART;
Whereas the ▇▇▇▇▇▇▇▇ Group and the Alon Group are the owners, in equal
shares, of the Holding Company; and
Whereas the Holding Company bid in a tender for the sale of the shares
held by Co-op Blue Square Services Association Ltd. (the
"ASSOCIATION") in Blue Square - Israel Ltd. ("BLUE SQUARE"),
which constitute approximately 78% of Blue Square's issued and
outstanding share capital; and
Whereas on April 7, 2003, the Association notified the Holding Company
of its selection, subject to the approval of the District Court,
as the preferred bidder in the tender; and
Whereas on April 10, 2003, the District Court approved the Holding
Company's selection as the preferred bidder; and
Whereas as part of the tender process, the Holding Company executed a
purchase agreement for the purchase of Blue Square's shares, in
the form
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determined by the Association and which constituted part of the
tender documents; and
Whereas the parties wish to complete the purchase proceedings, as
required following the winning of the tender, including
completing the Financing Arrangements and the engagement with
the Financing Bank and the Additional Financing Banks, and all
according to the schedule fixed therefor by the Association; and
Whereas the parties are interested in regulating their rights and
undertakings in connection with the financing of the purchase of
Blue Square's shares and the purchase arrangements; and
Whereas the parties are interested in determining their mutual rights
and obligations as shareholders of the Holding Company and of
the Group of Joint Companies, including the arrangements for the
management and control of Blue Square and of the Material
Subsidiaries thereof after the closing of the Purchase;
THEREFORE, IT HAS BEEN DECLARED, STIPULATED AND AGREED BY AND BETWEEN THE
PARTIES AS FOLLOWS:
1. DEFINITIONS
The following terms shall have the meaning set forth beside them:
"ALON" Alon Israel Oil Company Ltd.
"MEANS OF CONTROL" As defined in the Banking Law
(Licensing), 5741-1981.
"▇▇▇▇▇▇▇▇" Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
"▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ LTD." ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Investments Ltd., a
company wholly owned (100%) by Mr.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ at the time of execution of
this agreement.
"M.S." MBISF Holdings Ltd.
"DOR" Dor Energy (1988) Ltd.
"DOR FOOD" Dor Food Chains Holdings Ltd.
"ASSOCIATION" Co-op Blue Square Services
Association Ltd.
"FINANCING BANK" Bank Hapoalim Ltd.
"ADDITIONAL FINANCING BANKS" The banks which shall provide Dor
Food and/or
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M.S. with financing in connection
with the provision of either one's
portion in the Holding Company's
shareholders equity.
"HOLDING COMPANY" ▇▇▇▇▇▇▇▇-▇▇▇▇ Ltd., the authorized
capital of which is 50,000 shares of
par value NIS 1 each, of which 100
shares were issued to ▇▇▇▇▇▇▇▇ on
the one hand; and 100 shares to Alon
Israel Oil Company Ltd. on the other
hand, immediately prior to the
execution of this agreement.
"MATERIAL RESOLUTION" A resolution concerning a Material
Transaction, as defined herein, and
any resolution having a potential
material impact on the business,
assets, profits or liabilities of
Blue Square or of any Material
Subsidiary of Blue Square.
"FINANCING ARRANGEMENTS" or The arrangements to be fixed between
"FINANCING AGREEMENT" the Holding Company and the
Financing Bank in connection with
the financing of the Purchase.
"PURCHASE AGREEMENT" An agreement for the purchase of
Blue Square's shares from the
Association, which was executed by
the Holding Company within the
tender process, in the form
determined by the Association and
which constituted part of the tender
documents.
"BLUE SQUARE" Blue Square-Israel Ltd.
"MATERIAL SUBSIDIARY OF BLUE Blue Square Properties or any
SQUARE" subsidiary or held company,
including a partnership or any other
legal entity, the business of which
has an material impact on the
business, property, profits or
liabilities of Blue Square. Within
this framework, it is agreed that
any legal entity in which Blue
Square has a material investment
will be deemed as a Material
Subsidiary of Blue Square.
"PARENT COMPANY" Nissan Alon Retail Holdings Ltd.,
the authorized capital of which is
50,000 shares of par value NIS 1
each, of which 200 shares were
issued to the Grandparent Company
immediately prior to the execution
of this agreement.
"GRANDPARENT COMPANY" Nissan Dor Chains Ltd., the
authorized capital of which is
50,000 shares of par value NIS 1
each, of which 100 shares were
issued to Dor Food on the one hand;
and 100 shares to M.S. on the other
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hand, immediately prior to the
execution of this agreement.
"PURCHASE PRICE" NIS 1,337,360,000 plus interest of
Prime + 1% from April 6, 2003 until
the date of closing of the Purchase
Transaction.
"EXECUTIVE OFFICERS" Management team members and/or
division heads, including the heads
of the planning and maintenance,
real estate, human resources and
information technologies divisions,
VPs operations, VPs finance and
accounting, VPs trade and marketing
and legal counsel.
"MATERIAL TRANSACTION" or Any transaction or investment of
"MATERIAL INVESTMENT" Blue Square and/or of member
companies of the Blue Square Group,
not approved in the relevant
company's annual budget or any
transaction of $1.5 million and
over, if not in the ordinary course
of business of the Blue Square
Group.
"PURCHASE TRANSACTION" or the The purchase of the Association's
"PURCHASE" shares in Blue Square pursuant to
the Purchase Agreement, as defined
herein.
"▇▇▇▇▇▇▇" ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
"ALON GROUP" Alon, Dor and Dor Food, as defined
herein, jointly and severally.
"▇▇▇▇▇▇▇▇ GROUP" Bronfman, Fischer, ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇
Ltd. and M.S., as defined herein,
jointly and severally.
"GROUP OF JOINT COMPANIES" The Grandparent Company, the Parent
Company and the Holding Company, as
defined herein, jointly and
severally.
"BLUE SQUARE GROUP" Blue Square and the Material
Subsidiaries of Blue Square, jointly
and severally.
"BLUE SQUARE PROPERTIES" Blue Square Chain Properties and
Investments Ltd.
2. PREAMBLE, APPENDICES AND HEADINGS
2.1 The preamble to this agreement and the appendices enclosed
herewith constitute an integral part hereof.
2.2 The headings in this agreement are inserted for the sake of
convenience only and shall not be relied upon for the
interpretation of this agreement.
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3. PARTIES' REPRESENTATIONS
The Alon Group and the ▇▇▇▇▇▇▇▇ Group represent and warrant as follows:
3.1 Each one of the parties hereby represents and warrants that it
possesses the requisite powers and authorities for its
execution and performance of this agreement, and that it has
adopted all the resolutions required under any law or
agreement for the purpose of entering into this agreement.
3.2 Each one of the parties hereby represents and warrants that it
is executing this agreement, and consents to the Holding
Company's execution of the Purchase Agreement, on the basis of
examinations performed thereby, and after having found the
execution of this agreement and the Holding Company's
execution of the Purchase Agreement to be satisfactory
thereto.
3.3 Each one of the parties hereby represents that it possesses
the requisite legal and financial capabilities for the
execution of this agreement and for the performance of its
undertakings in connection with the Purchase Agreement and the
Financing Arrangements associated with the Purchase Agreement,
as specified in this agreement.
3.4 Dor represents that it is the sole owner (100%) of Dor Food,
and that Dor Food holds 50% of the issued share capital of
Nissan Dor Chains Ltd.
3.5 ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Ltd. represents that it is the sole owner
(100%) of M.S., and that M.S. holds 50% of the issued share
capital of Nissan Dor Chains Ltd.
3.6 ▇▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ represent and warrant that
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Ltd. shall at all times be wholly owned
(100%) by them; that so long as this agreement is in effect,
and the parties hereto directly or indirectly hold the Blue
Square Group, ▇▇▇▇▇▇▇▇ and/or ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall not
transfer and shall not bestow, directly or indirectly, rights
in ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Ltd. to third parties, except as provided
in Section 10.1.4; and that it shall be an SPV (Special
Purpose Vehicle) in that its sole business and assets shall be
its holdings in M.S.
3.7 Alon Israel Oil Company Ltd. represents and warrants that Dor
Energy (1988) Ltd. shall be controlled thereby so long as this
agreement is in effect.
4. BLUE SQUARE HOLDINGS STRUCTURE
The following acts shall be performed concurrently and parallel to the
closing of the purchase of Blue Square's shares from the Association:
(i) Alon Israel Oil Company Ltd. shall transfer all of its holdings in
the
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Holding Company to the Parent Company; (ii) ▇▇▇▇▇▇▇▇ shall transfer all
of his holdings in the Holding Company to the Parent Company. After
performing this transfer and closing the Purchase, the structure of the
holdings in Blue Square and in the Group of Joint Companies shall be as
follows:
▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Alon Israel Oil Company Ltd.
----------------------------------------------------------------------------
\ / |
From \ 50.01% / Up to 49.9% 100% |
\ / |
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Ltd. Dor Energy (1988) Ltd.
100% 100%
______________________ ______________________
| | | |
| M.S. | | Dor Food |
|______________________| |______________________|
\ /
\ /
\ 50% 50% /
\ /
\ /
_______________________________
| |
| Nissan Dor Chains |
|_______________________________|
|
|
100%
|
|
_____________________________________
| |
| Nissan Alon Retail Holdings Ltd. |
|_____________________________________|
|
|
100%
|
|
_____________________________
| |
| ▇▇▇▇▇▇▇▇ ▇▇▇▇ Ltd. |
|_____________________________|
|
|
Approximately 78%
|
|
_______________________
| |
| Blue Square |
|_______________________|
|
|
Approximately 80%
|
|
_______________________________
| |
| Blue Square Properties |
|_______________________________|
The parties undertake to take all necessary action to cause the
structure of the holdings in Blue Square and in the Group of Joint
Companies to be as specified above in this Section 4.
5. FINANCING THE PURCHASE TRANSACTION
5.1 The ▇▇▇▇▇▇▇▇ Group and the Alon Group confirm and agree that
the principles for financing the Purchase Transaction are as
set forth in APPENDIX A. Each of the ▇▇▇▇▇▇▇▇ Group and the
Alon Group undertakes: (i) to provide one half of the
shareholders equity, the
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collateral and the guarantees required to finance the Purchase
Transaction, from its own sources and over and above the
senior lien to be imposed on the acquired shares in favor of
the Financing Bank; (ii) that the guarantees of each party
shall be several, according to its share in the Holding
Company (50%) and without any mutual guarantee between them;
(iii) to provide the aforementioned collateral and guarantees
in a timely manner, as required for a timely closing of the
Purchase Transaction; (iv) subject to the Financing
Arrangements and to the Financing Bank's consent, to cause the
Group of Joint Companies to sign any documents required, to
the extent required, by the Additional Financing Banks in
connection with the Group of Joint Companies' undertaking to
distribute to Dor and to M.S., in the form of a dividend or
otherwise, including by way of payment of the notes, cash
balances remaining in the Group of Joint Companies after the
distribution of dividends or the performance of other payments
by Blue Square; provided, however, that such signature shall
not impose on the parties any obligations in addition to those
fixed herein; (v) the parties agree that each party shall be
entitled to have a senior lien imposed on its holdings in the
Grandparent Company in favor of the Financing Bank for the
purpose of obtaining the financing and reaching the Financing
Agreement; provided, however, that any exercise of such liens
shall be subject to the right of first refusal stipulated in
Section 8 below.
5.2 In accordance with Appendix A, each party undertakes to infuse
its share in the capital constituting approximately 25% of the
Purchase Price, directly into the Holding Company, from its
own sources and under its responsibility, against a note to be
provided thereto by the Holding Company. The note shall be
nominal and shall bear no interest or differences of
indexation, unless the board of directors of the Holding
Company shall determine otherwise. In any case, the terms and
conditions of the note shall be identical for both parties.
The parties agree that subject to the provisions of the
Financing Agreement and to the terms and conditions stipulated
therein: (i) of the approximately NIS 480 million to be
distributed by Blue Square as a first dividend, approximately
one half shall be applied to repaying the notes; (ii) any
additional dividend to be distributed by Blue Square, in
whatever scope, shall first be applied to repaying the
financing provided by the Financing Bank in accordance with
the payment schedule, and any balance in excess of the payment
amounts according to the payment schedule shall be applied to
repaying the notes; (iii) each party shall be entitled to
pledge/endorse its rights under the note to its Additional
Financing Bank; (iv) each party shall be entitled to create
the liens specified in APPENDIX B hereto in favor of its
Additional Financing Bank, provided that the realization of
such liens shall be subject to the right of first refusal as
provided in Section 8 hereunder.
5.3 Upon payment of the notes by the Holding Company, the parties
shall act to remove all of the liens created in favor of the
Additional
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Financing Banks in connection with the financing of the
parties' share in the shareholders equity, as provided in
Section 5.2 above.
6. COMPANIES' BYLAWS
6.1 The bylaws of the Group of Joint Companies are attached hereto
as APPENDIX C.
6.2 The parties shall act to adjust the provisions of the bylaws
to the provisions of this agreement. In any case of conflict
between the provisions of this agreement and the provisions of
the bylaws, the provisions of this agreement shall prevail.
7. BOARD OF DIRECTORS, MANAGEMENT AND DECISION-MAKING OF AND IN THE
HOLDING COMPANY
7.1 The number of directors in the Holding Company shall be 8.
7.2 The parties agree that the ▇▇▇▇▇▇▇▇ Group, through M.S., shall
be entitled to appoint one half of the members of the board of
directors of the Holding Company, by recommending to the
Holding Company's general meeting to appoint one half of the
directors as aforesaid, and that the Alon Group, through Dor
Food, shall be entitled to appoint one half of the members of
the board of directors of the Holding Company, by recommending
to the Holding Company's general meeting to appoint one half
of the directors as aforesaid.
7.3 The first directors of the Holding Company shall be 4
recommendees of the ▇▇▇▇▇▇▇▇ Group and 4 recommendees of the
Alon Group.
7.4 Each party having appointed one director or more, by virtue of
its right as aforesaid, shall be entitled to appoint a
substitute director for any such director as aforesaid, and to
replace any director appointed thereby, to terminate his
office and to appoint another director in his place at any
time. A substitute director shall have the same authorities
conferred upon the director for whom he is substituting. The
parties shall arrange for the purchase of insurance coverage
for the professional liability of the Holding Company's
directors, subject to any law.
7.5 Each director attending a board meeting of the Holding Company
shall have one vote.
Subject to Section 7.9 below, the resolutions of the Holding
Company's board of directors shall be passed by a 60% majority
of the votes of the directors present at such meeting.
7.6 The legal quorum for board meetings of the Holding Company
shall be no less than six directors, provided that three of
them shall have been appointed by the ▇▇▇▇▇▇▇▇ Group and three
by the Alon Group.
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7.7 The Holding Company's authorized signatories shall be as set
forth in APPENDIX D hereto. The Holding Company's board of
directors shall be entitled to modify the signature rights in
the Holding Company from time to time.
7.8 The parties agree that ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be appointed
as the first Chairman of the Holding Company and shall
actively serve as chairman, that ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be
appointed as the first Vice and Substitute Chairman of the
Holding Company, and that the first CEO of the Holding Company
shall be CPA ▇▇▇▇▇▇ ▇▇▇▇▇ or another CEO to be appointed by
the mutual consent of the ▇▇▇▇▇▇▇▇ Group and the Alon Group.
The term of office of the said Chairman, Vice and Substitute
Chairman and CEO of the Holding Company shall be 3 years from
the date of closing of the Purchase Transaction.
7.9 On the matters listed below, the resolutions of the Holding
Company, either at its board of directors or at the general
meeting, as the case may be, shall be adopted by a 75%
majority of the voting rights at the board of directors or (as
the case may be) of the shareholders, as follows:
7.9.1 Transactions with interested parties.
7.9.2 Transactions with officers in the Holding Company or
transactions in which an officer of the Holding
Company has a personal interest.
7.9.3 Resolutions on the modification of the Holding
Company's bylaws.
7.9.4 A resolution on modifications in the classes of
shares of the Holding Company and/or in the rights
associated with the classes of shares of the Holding
Company.
7.9.5 A resolution on the modification of the terms and
conditions of the notes to be issued by the Holding
Company to any of the shareholders thereof,
including a resolution pertaining to interest on the
notes.
7.9.6 A resolution pertaining to a merger and/or spin-off
of the Holding Company.
7.9.7 A resolution concerning the allotment of securities
of the Holding Company or the sale of such
securities or the introduction of an additional
shareholder to the Holding Company in another
manner, or any allotment of Means of Control in the
Holding Company.
7.9.8 The appointment of officers to the Holding Company
and determining their terms of employment.
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7.9.9 The appointment of a CPA and legal Attorneys for the
Holding Company and for the Blue Square Group. It is
agreed that the firms of Zohar & Zohar and an
additional firm recommended by the Alon Group (50%
each) shall serve as the first CPA firm of the
Holding Company and of the Blue Square Group from
2004 (with the current CPA firm, as being on the
date of execution of this agreement, continuing to
serve as the CPA of Blue Square Group in 2003), and
that the law firm of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. shall
serve as the first attorneys of the Holding Company
and of the Blue Square Group, in all matters except
for corporate secretarial matters, securities, labor
law and torts. A law firm recommended by the
▇▇▇▇▇▇▇▇ Group shall be appointed as the first law
firm of the Holding Company and of Blue Square Group
for corporate secretarial matters, securities, labor
law and torts. The appointments of CPAs and
attorneys as provided in this subsection above,
shall not apply to transactions between the Holding
Company and/or Blue Square Group and interested
parties therein.
7.9.10 A resolution on the sale of material assets of the
Holding Company and/or on a change in the Holding
Company's line of business.
7.9.11 A resolution on the sale of Means of Control in Blue
Square or in Material Subsidiaries of Blue Square.
7.9.12 Any material resolution pertaining to the Blue
Square Group, including resolutions on the sale or
purchase of material assets of any member of the
Blue Square Group and/or resolutions on the
appointment of Executive Officers in the Blue Square
Group and determining their terms of employment.
7.9.13 So long as the Holding Company is a controlling
shareholder of Blue Square - any resolution
pertaining to the Holding Company's position on the
matters specified in Sections 7.9.1-7.9.11 above,
mutatis mutandis, which requires the approval of
Blue Square's shareholders meeting.
8. TRANSFER OF SHARES
The parties hereby agree that subject to the provisions of Section 10
and without derogating therefrom, the following provisions shall apply
to a transfer or sale of shares in Nissan Dor Chains Ltd., M.S. or Dor
Food (in this Section 8: the "COMPANY"):
8.1 A shareholder wishing to sell its shares in the Company, in
whole or in part (the "OFFEROR") to any third party (the
"THIRD PARTY"), shall be obligated to first offer the same to
the other shareholders in the Company, and in the case of the
sale of any of the shares of M.S.
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and/or Dor Food, to Dor or to ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Ltd.,
respectively (the "OFFEREES") pursuant to the following
provisions:
8.1.1 The Offeror shall give the Offeree written notice
(the "OFFEROR'S Notice"), stating its intention of
selling or transferring its shares in the Company,
in whole or in part (the "SHARES FOR SALE"). The
notice shall specify the terms of the offer
(including the number of Shares for Sale, the
consideration therefor, the terms of payment, the
collateral, if any, and any other material detail
proposed to the Offeror by the Third Party (the
"OFFER"), the identity of such Third Party (the
"INTERESTED BUYER") and the Interested Buyer's
written consent to assume all of the undertakings
imposed on the Offeror pursuant to this contract.
8.1.2 The Offeror's Notice shall be accompanied by the
Interested Buyer's undertaking to buy the proposed
Shares for Sale at the price and under the terms
proposed thereby.
8.1.3 In the event that the Offerees or any one of them
shall wish to buy all of the Shares for Sale, they
shall give written notice thereof (the "PURCHASE
NOTICE") to the Offeror, no later than the end of
the 30th (thirtieth) day after receiving the
Offeror's Notice (the "EFFECTIVE PERIOD"). An
Offeree who shall have failed to deliver a Purchase
Notice for all of the Shares for Sale by the end of
the Effective Period, shall be deemed to have
declined the Offer. Each one of the Offerees shall
be entitled to purchase part of the Shares for Sale
according to its prorated share in the holdings of
all the Offerees in the Company. In the event that
any one of the Offerees shall have declined to buy
its share in the Shares for Sale, the other Offerees
shall be entitled to buy its share, by giving the
Offeror notice thereof within 30 (thirty) days after
the end of Effective Period (the "ADDITIONAL
EFFECTIVE Period").
8.1.4 Exercising the right of first refusal as aforesaid
is contingent on that the Offerees or any one of
them shall buy all of the Shares for Sale.
8.1.5 In the event that the Offerees or any one of them
shall have delivered a Purchase Notice to the
Offeror, within the aforementioned time frames, the
parties shall act to execute a detailed contract for
the purchase of all the Shares for Sale by the
Offerees, on the basis of the terms specified in the
Offer (in this Section, the "DETAILED CONTRACT"), as
soon as possible. The parties shall use their best
efforts to obtain all of the approvals required by
any law to consummate the purchase pursuant to the
Detailed Contract, as soon as possible, and shall
fulfill any reasonable condition imposed by any such
approval-provider, within a reasonable period of
time.
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In the event that not all of the approvals required
by law for the consummation of the purchase by the
Offeree and/or Offerees, as the case may be, shall
have been obtained by the end of two months after
the date of execution of the Detailed Contract, then
the Offeror shall be entitled to sell all (but not
part of) the Shares for Sale to the Interested
Buyer, for a price no lower than the price fixed in
the Offer and under terms and conditions no better
(to the Interested Buyer) than those proposed in the
Offer, within a period of three months after the end
of the said two months, and the provisions fixed in
Section 8.2 below shall apply, and subject to the
fulfillment thereof.
8.1.6 In the event that the Offerees shall have given
notice that they are not interested in buying all of
the Shares for Sale under the terms and conditions
of the Offer, or shall have failed to deliver a
Purchase Notice within the time frames fixed in
Section 8.1.3 above, then the Offeror shall be
entitled to sell all (but not part of) the Shares
for Sale to the Interested Buyer, for a price no
lower than the price fixed in the Offer and under
terms and conditions no better (to the Interested
Buyer) than those proposed in the Offer, within a
period of three months after the end of the
Effective Period or the Additional Effective Period,
as the case may be, and the provisions fixed in
Section 8.2 below shall apply.
After expiration of the said three-month period, the
transfer of the Shares for Sale shall once again be
subject to the right of first refusal, as specified
above.
8.2 Without derogating from the effectiveness of the right of
first refusal and from the provisions specified in Section
8.1 above, and subject thereto, the parties hereby explicitly
agree that any sale or transfer of shares in the Company, by a
shareholder, to any Interested Buyer (namely, to an Interested
Buyer who is not a party to this contract), shall be subject
to the following provisions:
8.2.1 The sale or transfer shall be contingent on that the
Interested Buyer shall consent and undertake, in
writing, that this contract and all the provisions
and undertakings specified herein, without
exception, including the undertakings fixed in this
Section 8 and the provisions of the Company's
bylaws, shall apply thereto and shall be binding
thereupon, as they shall have been binding upon
whomever shall have transferred the shares thereto
(the "TRANSFEROR"), including, but without
derogating from the generality of the aforesaid, the
undertaking that the Interested Buyer shall not be
entitled to transfer shares in the Company if the
Transferor shall not have been entitled to transfer
the same according to the terms and conditions
stipulated in this agreement. In the event that the
transferee shall have signed such a document and the
transfer
13
of shares thereto approved, then the undertakings
pursuant to this agreement of the other parties
hereto, shall be deemed to be undertakings to the
transferee too.
8.2.2 The sale or transfer to the Interested Buyer shall
be contingent upon the approval of the Company's
board of directors, which approval shall not be
unreasonably withheld.
8.3 The provisions of Section 8.1 above shall not apply in the
case of: (i) a transfer of up to 49% of the share capital of
Dor Food; (ii) a transfer of up to 35% of the share capital of
M.S.; (iii) a transfer of up to 49% of the share capital of
M.S., if ▇▇▇▇▇▇▇▇ alone shall hold all (100%) of the shares of
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Ltd.; (iv) a transfer of shares to an entity
controlling the seller and/or to a corporation controlled by
the seller and/or to a corporation controlled by the seller's
shareholders, as long as they control or are controlled as
aforesaid, and subject to that the transfer of shares to a
corporation as aforesaid shall not release the Transferor of
its undertakings under this agreement and/or due to the
shares, and that it shall continue to bear the same jointly
and severally with the transferee entity.
For this purpose, "CONTROL" shall mean the ownership of more
than one half of the voting rights and capital of the
controlled corporation.
9. TAG ALONG IN THE SALE OF SHARES IN NISSAN DOR CHAINS LTD.
9.1 Subject to the provisions of Sections 8 and 10 and without
derogating therefrom, in any case in which a shareholder (in
this section: the "SELLER") shall offer to sell its holdings
in Nissan Dor Chains Ltd. (in this Section 9: the "COMPANY"),
in whole or in part (in this Section: the "OFFER"), to any
third party (in this Section: the "BUYER"), then each one of
the other shareholders in the Company shall be entitled to
demand (provided that they did not exercise the right of first
refusal as set out in Section 8 above) to include, in the
shares offered for sale to the Buyer, the same number of
shares from the Company shares owned thereby, equal to the
product of the number of shares of that shareholder who is
exercising its right as aforesaid, as being on the date of the
Offer, multiplied by the number of shares offered for sale by
the Seller, and divided by the total number of shares held by
the Seller (in this Section: the "TAG ALONG RIGHT"). It is
clarified that the Seller shall give notice of the Offer in
the Offeror's Notice as set out in Section 8.1.1 above.
9.2 In the event that the Seller shall have been given no notice
by any of the shareholders within 7 days from the expiration
of the Effective Period or the Additional Effective Period (as
these terms are defined in Section 8.1.3 above), as the case
may be (the "TAG ALONG EXERCISE PERIOD"), whereby a
shareholder wishes to exercise its Tag Along Right, it shall
be deemed to have waived this right, and the Seller shall be
entitled, within three months after the end of the Tag Along
Exercise Period, to sell the shares included in the Offer to
the Buyer,
14
provided that the price and terms of the sale shall not
exceed, from the Seller's point of view, those specified in
the Offer. After the said three-month period, the transfer of
the shares shall once again be subject to the Tag Along Right,
as specified above.
In the event that any of the shareholders shall have declined
to exercise its Tag Along Right, the other shareholders shall
not be entitled to exercise the said declining shareholder's
share in the Tag Along Right.
9.3 In the event that any one of the shareholders shall have given
notice of exercise of the Tag Along Right, the number of its
shares as provided in Section 9.1 above shall be transferred
to the Buyer, on the date of closing of the transfer of shares
from the Seller to the Buyer, at the same price and under the
same terms applicable to the sale of the Seller's shares to
the Buyer.
10. PROHIBITION OF SALE OF SHARES
10.1 The parties agree and undertake that so long as the Holding
Company shall not have fully repaid the financing to be taken
thereby pursuant to the Financing Arrangements (the "LOCK-UP
PERIOD"), then the following prohibitions shall apply:
10.1.1 Dor shall not be entitled to transfer more than 49%
of Dor Food's share capital, and it undertakes to
remain the controlling shareholder of this company.
10.1.2 ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Ltd. shall not be entitled to
transfer more than 35% of the share capital of M.S.
However, it is agreed that if ▇▇▇▇▇▇▇▇ alone shall
hold all (100%) of the shares of ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇
Ltd., then ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Ltd. shall not be
entitled to transfer more than 49% of the share
capital of M.S.
10.1.3 No party shall be entitled to sell any of its
holdings in the Grandparent Company, in such a
manner that each party shall hold 50% of the
Grandparent Company throughout the entire Lock-Up
Period.
10.1.4 ▇▇▇▇▇▇▇▇ shall Control (as this term is defined in
the latter part of Section 8.3 above)
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Ltd. ▇▇▇▇▇▇▇▇ shall be entitled to
transfer to members of his family, either as
individuals or as owners of 100% of the holdings in
corporations held by them, shares in
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Ltd., subject to that ▇▇▇▇▇▇▇▇
shall remain the owner of no less than 50.01% of the
shares of ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Ltd.
10.1.5 Alon Israel Oil Company Ltd. shall Control (as this
term is defined in the latter part of Section 8.3
above) Dor Energy (1988) Ltd.
15
10.2 The parties undertake that under no circumstances will they,
in any way, transfer shares in Dor Food and/or in M.S. and/or
in the Group of Joint Companies to oil companies or to other
entities operating in the energy industry in Israel and in the
Palestinian Authority.
11. ARRANGEMENTS FOR THE CONTROL AND MANAGEMENT AND THE BLUE SQUARE GROUP
11.1 Control arrangements and provisions for the management of the
Blue Square Group:
As a rule, the parties agree to act while applying the
principle of full equality between them and the need for
mutual consent on the manner of control and the arrangements
for the control and management of the Blue Square Group,
including, but without derogating from the generality of the
aforesaid, determining the Blue Square Group's policy and
strategy, appointing officers and determining their terms of
employment, the Blue Square Group's budget, Material
Transactions, offerings and capital-raising, etc. Within the
framework of the aforesaid, the parties agree that the
following provisions shall apply with respect to the Blue
Square Group:
11.1.1 The parties shall act to have Blue Square's board of
directors comprise 12 directors, in addition to 2
independent directors, and to replace the current
board of directors of Blue Square, on the date of
closing of the Purchase Transaction, with the
following slate: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, Shalom ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, Davidi ▇▇▇▇▇, ▇▇▇▇▇▇ Even, ▇▇▇
Hadasi, Meirav Gold, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and another
director recommended by the ▇▇▇▇▇▇▇▇ Group. The
parties shall act for the adoption of the
appropriate resolutions by the Holding Company so
that Blue Square's board of directors shall at all
times comprise an equal number of ▇▇▇▇▇▇▇▇ Group
recommendees and Alon Group recommendees, in
addition to the independent directors or other
acting directors, the appointment of whom shall have
been agreed upon by the parties without having any
link to any of the parties.
11.1.2 The parties shall act to have Blue Square's board of
directors appoint two executive committees: (i) a
short committee of 4 members (the first members of
which shall be Blue Square's CEO, the Holding
Company's Chairman (Alon Group's Representative), a
representative of the ▇▇▇▇▇▇▇▇ Group and the Holding
Company's CEO), which shall convene on an ongoing
basis as the need arises. The first Chairman of the
narrow committee shall be the Holding Company's CEO;
(ii) an extended committee of 7 members, in addition
to Blue Square officers as needed, which shall
comprise three ▇▇▇▇▇▇▇▇ Group recommendees, three
Alon Group recommendees and the Holding Company's
CEO. The
16
extended committee shall convene once a month. The
Chairman of the extended committee shall be the
Holding Company's CEO. The parties shall be entitled
to appoint substitute members for the members of the
said committees.
11.1.3 The parties shall act so that each party shall be
able to bring about the termination of a director
appointed thereby and to appoint another in his
place in the case of termination or other expiration
of office. As a rule, the parties agree that the
decision of a certain group to appoint a director or
to terminate a director appointed thereby, within
the quota of directors available thereto, shall be
deemed as the parties' decision to vote in favor of
such appointment or termination at the relevant
forum.
11.1.4 Resolutions on material matters pertaining to the
Blue Square Group shall be adopted by the ▇▇▇▇▇▇▇▇
Group and the Alon Group consensually, and the
parties shall act to have their agreements approved
by the competent organs of the Blue Square Group.
The matters specified hereunder shall be deemed to
be material: (i) determining the budget of the Blue
Square Group; (ii) a Material Transaction or a
Material Resolution of the Blue Square Group; (iii)
the appointment of Executive Officers to the Blue
Square Group and the determination of their terms of
employment; (iv) the appointment of chairmen in the
Blue Square Group and determining their terms of
employment; (v) a decision on the allotment of
securities of the Blue Square Group; (vi) Blue
Square Group's launching of new lines of business;
(vii) determining signature rights in the Blue
Square Group.
The parties shall act to amend the bylaws of Blue
Square and of Blue Square Properties so that the
required majority for the adoption of resolutions on
the matters listed above by the board of directors
of the relevant company shall be at least 75% of the
directors, it being agreed that the aforesaid shall
bind the parties also before the bylaws are amended.
For the removal of doubt, it is clarified that the
need for mutual consent shall apply with regard to
any material matter, also if not included in the
above list and even if formally a simply majority in
the board of directors is required therefor pursuant
to the bylaws of the relevant company.
11.1.5 The parties agree that ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be
appointed as the first Chairman of Blue Square, and
that ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be appointed as Vice
and Substitute Chairman.
11.1.6 Blue Square's board of directors, in its composition
after the closing of the Purchase, will be asked to
approve the
17
composition of the signature rights on behalf of
Blue Square, after approval thereof by the board of
directors of the Holding Company.
11.1.7 Upon termination of the current independent
directors' office, each party shall decide upon the
identity of a person it recommendees to act as
independent director, and the parties shall act to
obtain the appropriate approvals for their
appointment by Blue Square.
11.1.8 It is agreed that the provisions of Sections
11.1.1-11.1.3 shall also apply to Blue Square
Properties and to Material Subsidiaries of Blue
Square, it being further agreed that: (i) ▇▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇ shall be appointed as the first Chairman of
Blue Square Properties, (ii) ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
shall be appointed as Vice and Substitute Chairman
of Blue Square Properties; (iii) Blue Square's CEO
shall act as a director of Blue Square Properties;
therefore, the provisions of the first part of this
Section 11.1.8 notwithstanding, the board of
directors of Blue Square Properties shall comprise
13 directors and the parties shall act to have the
bylaws of Blue Square Properties amended with
respect to the number of directors therein.
11.1.9 Directors in Blue Square and in Blue Square
Properties shall be entitled to remuneration for
their participation in board meetings in accordance
with the rate fixed in the Companies Regulations
(Rules on the Remuneration and Expenses of
Independent Directors), 5760-2000. The parties shall
act to have this sub-section approved by Blue Square
Group's competent institutions.
11.1.10 The Holding Company's CEO shall be entitled, in
coordination with Blue Square's CEO, to arrange for
the invitation, from time to time and as the need
arises, of observers on behalf of the Holding
Company to board meetings and management meetings of
Blue Square and of Blue Square Properties.
12. MANAGEMENT OF THE JOINT COMPANIES
12.1 It is hereby agreed by the parties that the principles of
management of the Holding Company specified in Section 7
above, and the principles of the control arrangements
specified in Section 11 above shall apply, mutatis mutandis,
also to the management of the Parent Company and/or the
Grandparent Company and to the arrangements for the control of
other companies and corporations to be controlled by the
Parent Company and/or the Grandparent Company, if any.
Detailed provisions on such management and control, including
with regard to the number of directors, the identity of the
chairperson, signature rights, etc., will be determined by the
parties at a later stage; it is
18
agreed, however, that in all cases such provisions shall be
based on the principle of full equality between the ▇▇▇▇▇▇▇▇
Group and the Alon Group, and in accordance with the
principles specified in Sections 7 and 11 hereof. It is
further agreed that in any case in which a resolution shall be
brought before any of the competent organs in the Parent
Company and/or the Grandparent Company that would have
required a special majority or the fulfillment of any other
condition for the adoption thereof, had it been brought before
the Holding Company, then such special majority requirement
and/or the fulfillment of such condition, as the case may be,
shall also apply to the adoption of the said resolution by the
Parent Company and/or the Grandparent Company.
13. PURCHASE OF ADDITIONAL SHARES IN BLUE SQUARE AND IN THE SUBSIDIARIES
Each one of the parties, including through corporations or individuals
controlled thereby or associated therewith, undertakes to refrain from
purchasing, either directly or indirectly, shares in Blue Square or in
Material Subsidiaries of Blue Square, and in the absence of any other
agreement in writing, the purchase of additional shares shall be
performed solely through the Holding Company. In the event of a
purchase by a party contrary to the provisions of this agreement, the
Holding Company shall be entitled (and on this matter the decision of
the party which did not purchase the shares shall suffice to bind the
Holding Company), to adopt the purchase and to obligate the shareholder
which made the purchase in violation of the above undertaking to
transfer the shares it had purchased, for the price and under the
conditions at which they were bought, to the Holding Company.
14. OTHER AGREED PRINCIPLES
14.1 Dividend distribution - As a rule, the parties agree to act
for the distribution of the highest possible dividend by Blue
Square so as to enable the Holding Company and the parties
themselves to keep the payment schedule of the loans taken to
finance the Purchase.
14.2 Introduction of a partner - The parties agree to consider
introducing a partner to the Holding Company or the Parent
Company or the Grandparent Company, at the rate of up to 20%.
The parties agree that in any case the partner will be a
financial partner, while having most of the Means of Control
of Blue Square retained in the hands of the parties
themselves. In no case will such a partner constitute a
balance pivot between the parties.
14.3 Super Alonit - The parties agree that the Blue Square Group
shall enter into an agreement with the Super Alonit chain, on
a commercial basis, for the supply of products and the
rendering of services such as know-how, logistics, etc., to
replace the current engagement between the said chain and
Supersal. For the removal of doubt, it is clarified that the
agreed restriction set forth in Section 14.6 below with regard
to the non-opening of the Blue Square chain stores on the
Sabbath, will not apply to the Super Alonit chain. The Blue
Square Group's engagement
19
with the Super Alonit chain in an agreement as aforesaid shall
be brought before the competent institutions of the Blue
Square Group for approval, and the parties agree to act to
obtain such approval.
14.4 The Alon Group and the ▇▇▇▇▇▇▇▇ Group shall discuss, and shall
act in concurrence, on the issue of the purchase of insurance
for officers in the Group of Joint Companies.
14.5 The parties will act to convene the institutions of Blue
Square to approve the payment of management fees by Blue
Square to the Holding Company in the sum of up to $1.5 million
per year. The management fees shall be applied subject to the
provisions of the Financing Arrangements with the Financing
Bank.
14.6 It is agreed that the Blue Square Group stores will not be
open to the public on the Sabbath.
15. DISPUTE-RESOLUTION MECHANISM
15.1 In any case in which a dispute shall arise between the parties
in connection with this agreement, its performance or any
matter related hereto, such a dispute shall be resolved by a
single arbitrator, the identity of whom shall be agreed upon
by the parties; in the lack of agreement, the arbitrator shall
be named by the chairman of the Israeli bar association. The
arbitration shall take place in Israel and shall be subject to
the Israeli substantive law. The arbitrator shall be obligated
to give reasons for his award but shall not be bound by the
laws of evidence and procedure.
15.2 It is clarified that the provisions of Section 15.1 shall not
apply in the case of a managerial deadlock in the Holding
Company or an inability to pass resolutions therein due to
disagreements between the parties that are not the result of a
breach of this agreement. In such a case, the parties shall
turn to conciliation before a conciliator to be appointed by
mutual consent; in the lack of consent, the conciliator shall
be the then-acting chairperson of Bank Hapoalim.
16. JURISDICTION AND GOVERNING LAW
16.1 Without derogating from the provisions of Section 15.1 above,
it is agreed that the Courts of Tel Aviv Jaffa shall have sole
jurisdiction over any matter pertaining to this agreement.
16.2 This agreement shall be governed by the laws of the State of
Israel.
17. CONFIDENTIALITY AND NON-COMPETITION
17.1 The parties undertake to maintain the particulars of this
agreement and any information, figures, negotiations,
correspondence and communications to be exchanged or conducted
between them, as the case may be, and/or which may reach the
hands of any of them in
20
connection with the consummation of this transaction and the
consummation of the Purchase Transaction, in strict
confidence.
17.2 Each one of the parties undertakes not to compete with the
business of the Blue Square Group in Israel. For the removal
of doubt, it is agreed that the business of any party outside
the State of Israel and the business of the Super Alonit chain
shall not be deemed as competing with the Blue Square Group.
18. TERM OF THE AGREEMENT
This agreement shall be in effect from the time of execution thereof by
all of the parties hereto, and for so long as any one of the entities
comprising the Alon Group, jointly with any one of the entities
comprising the ▇▇▇▇▇▇▇▇ Group, shall hold, either directly or
indirectly, holdings in the Group of Joint Companies, or in any one of
such companies.
19. MISCELLANEOUS
19.1 This agreement reflects the full and exhaustive agreement
between the parties with regard to the issues and matters
discussed herein, and supersedes any representation,
agreement, negotiation, memorandum of understanding, proposal,
discussion summary, letter of intent and/or undertaking and
any other document, which existed or was exchanged (either in
writing or orally), on the said issues and matters, between
the parties prior to the execution of this agreement. The
parties and each one of them shall not be entitled to rely on
any representation, agreement, negotiation, usage, memorandum
of understanding, proposal, discussion summary, letter of
intent and/or undertaking and any other document, unless
explicitly included in this agreement or in the appendices
hereto, or adopted or referred to in this agreement or in the
appendices hereto.
19.2 No amendment, modification or addition of or to this agreement
shall have any force or effect unless reduced to writing and
signed by all of the parties to the agreement. The
translations of this agreement are made for the sake of
convenience only, and the Hebrew version shall in all cases be
the only binding version for all intents and purposes.
19.3 The expenses of having this agreement and the share allotment
stamped shall be borne by the Holding Company.
19.4 Any and all notices under this agreement shall be made in
writing and delivered to the addressee in person or mailed
thereto by registered post according to the following
addresses. A notice delivered in person shall be deemed to
have been received at the time of delivery. A notice mailed by
registered post shall be deemed to have been received within
72 hours from the time of dispatch thereof.
21
ALON ISRAEL OIL COMPANY LTD.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
DOR ENERGY (1998) LTD.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
DOR FOOD CHAINS HOLDINGS LTD.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ INVESTMENTS LTD.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
MBISF LTD.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
NISSAN DOR CHAINS LTD.
By: /s/ ▇▇▇ Hadassi
-----------------------------
Name: ▇▇▇ Hadassi
Title: Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
NISSAN ALON RETAIL HOLDINGS LTD.
By: /s/ ▇▇▇ Hadassi
-----------------------------
Name: ▇▇▇ Hadassi
Title: Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
22
▇▇▇▇▇▇▇▇-▇▇▇▇ LTD.
By: /s/ ▇▇▇ Hadassi
-----------------------------
Name: ▇▇▇ Hadassi
Title: Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
