AGREEMENT
THIS AGREEMENT (the “Agreement”) is made as of
March 3, 2008 (the “Effective
Date”), by and between (i) Ronex Holdings, Limited
Partnership (“Ronex”) ,
an Israeli limited partnership wholly owned by certain limited partnerships
managed by FIMI IV 2007 Ltd. and FIMI Opportunity 2005 Ltd. (“FIMI”, and together with
Ronex, the “Investor”),
(ii) Xx. Xxxxx Xxxxxx (“Shaked”) and (iii) Mr. Xxxxx
Xxxxxx (“Xxxxxx”)
(Shaked and Xxxxxx shall be collectively referred to as the “Founders”).
WHEREAS,
Retalix Ltd. (the “Company”) is an Israeli public
company, whose shares are traded on the Tel-Aviv Stock Exchange and Nasdaq
Global Market (“Nasdaq”); and
WHEREAS, the Investor directly and
indirectly holds as of the Effective Date approximately 2,400,000 Ordinary
Shares of the Company, nominal value NIS 1.00 each; and
WHEREAS,
Shaked directly and indirectly holds as of the Effective Date approximately
1,000,000 Ordinary Shares of the Company, nominal value NIS 1.00 each, and
options to purchase approximately 750,000Ordinary Shares of the Company;
and
WHEREAS, Xxxxxx directly and indirectly
holds as of the Effective Date approximately 750,000 Ordinary Shares of the
Company, nominal value NIS 1.00 each,; and
WHEREAS,
Shaked, Xxxxxx and the Investor (each, a “Shareholder”
and, collectively, the “Shareholders”) believe that it
is in the best interests of the Company to continue to pursue the end-to-end
solution business directly and through mergers and acquisitions and wish to set
forth the general terms and conditions with respect to their relationship
vis-à-vis the Company as of the date hereof.
NOW, THEREFORE, in consideration of the
mutual promises contained in this Agreement, the parties hereto agree as
follows:
1.
Board of
Directors
1.1. The
Founders and the Investor agree to convene a shareholders meeting by no later
than September 30, 2008 (the “September Meeting”) for the
purpose of electing members to the board of directors of the Company (the "Board"). The Shareholders
hereby agree to vote, at the September Meeting and in any other shareholders
meeting during the term of this Agreement, all of the voting Ordinary Shares of
the Company now or hereafter owned or controlled by them (including without
limitation, Ordinary Shares owned following the exercise of any options or
warrants to purchase Ordinary Shares), whether beneficially or otherwise held by
them, for the election to the Board of (i) four directors designated by the
Founders and four directors designated by the Investor, and (ii) two external
directors, one of which shall be designated by the Investor and the other shall
be designated by the Founders; provided, however, that for so long as the
current external directors remain members of the Board one of them shall be
deemed
to have
been designated by the Founders. Accordingly, for as long as both of the current
external directors remain members of the Board, the number of directors to be
designated by Founders pursuant to (i) above shall be reduced from four to three
and the number of directors to be designated by the Investor shall be increased
from four to five. If required under applicable law, one of the persons
designated by the Investor shall be female. The Founders agree that one of their
designees to the Board shall qualify as financial expert in accordance with
Nasdaq rules and regulations.
1.2 The
Founders shall endeavor to ensure that until the September Meeting at least
three individuals designated by the Investor, whose names shall be forwarded to
the Founders within 14 days from the date hereof, shall serve as members of the
Board. Following the appointment of such three designees, the Board shall
comprise of a total of 10 members, one of which shall be Xx. Xxxxxxx Xxxxx. If,
despite the Founders' best efforts, the Board composition is not changed as set
forth in the preceding sentences before the lapse of 18 days from the date
hereof, the Investor and the Founders shall convene a meeting of the
shareholders of the Company in accordance with the procedures set forth in the
Company's Articles of Association, which shall take place by no later than 70
days from the date hereof, for the purpose of electing a slate of directors that
shall be designated as set forth in Section 1.1 above.
1.3 Notwithstanding
anything to the contrary herein, in the event that the Investor, in its sole
discretion, delivers to the Founders a written notice requesting to convene a
shareholders meeting to cause the election of a Board whose composition shall be
as set forth in 1.1 above, the Founders and the Investor shall take all actions
required to convene such meeting by no later than 35 days from the date of the
Investor's written notice and shall vote all of the voting Ordinary Shares
of the Company now or hereafter owned or controlled by them
(including without limitation, Ordinary Shares owned by them upon exercise of
any options or warrants to purchase Ordinary Shares), whether beneficially or
otherwise held by them, for the election of the persons designated as set forth
in 1.1 above.
1.4 The
Shareholders agree, in their capacity as shareholders, that the Investor shall
designate the Chairman of the Board, effective from the date that the three
Investor's designees are appointed to the Board in accordance with Section 1.2
above; provided that the Investor shall consult with the Founders as to the
identity of such designee, and the Founders shall be entitled to object to the
first designee of the Investor (provided that such designee is not a partner of
FIMI), but shall not be entitled to unreasonably withhold their consent to the
second designee, or to withhold their consent to any designee thereafter. In the
event that the Board does not appoint the Investor's designee to serve as the
Chairman of the Board within 10 days of the date on which the Investor
designates such person, the Investor and the Founders shall promptly take all
actions required to convene a meeting of the shareholders of the Company as set
forth in the second part of Section 1.2 and, in addition to the matters set
forth in Section 1.2, such meeting shall be requested to vote on an amendment of
the Company's Articles of Association conferring the power to elect the Chairman
on the Company's shareholders rather than on the Board. The Founders and the
Investor agree to vote FOR the adoption of such amendment and the election of
the Investor's designee as Chairman. The Chairman shall not have a casting
vote.
1.5 In
the event of any share split, share dividend, recapitalization, reorganization,
combination or the acquisition or receipt of additional Company shares, the
provisions of this
Agreement
shall apply also to any Ordinary Shares issued to, purchased or otherwise held
by the Shareholders.
1.6 To
the maximum extent permitted by applicable law, including fiduciary duties under
applicable law, the Shareholders shall use their reasonable efforts to cause an
equal number of Board designees of the Founders and of the Investor to be
elected or appointed to the Board of Directors of any of the Company’s active
subsidiaries.
2. Tag
Along
2.1. If
any Shareholder wishes to sell or otherwise transfer any or all of such
Shareholder’s shares in the Company (the “Selling Party”), then if the
Selling Party is a Founder he/they shall send the Investor, and if the Investor
is the Selling Party it shall send the Founders, written notice (the “Sale Notice”) in which the
Selling Party shall specify the following information: (i) the number of Company
shares that the Selling Party proposes to sell or transfer (the “Offered Shares”); (ii) the
price that the Selling Party intends to receive in respect of the Offered
Shares, which shall be stated in cash, and the terms of payment thereof; and
(iii) the identity of the proposed purchaser of the Offered Shares (the “Proposed Purchaser”). The
Shareholder receiving the Sale Notice (the “Tag Along Shareholder”) shall
have the right to notify the Selling Party, within 3 business days after it has
received the Sale Notice, of its intention to exercise its Tag Along Right
pursuant to this Section (the “Tag Along Notice”). Following
the Tag Along Notice, the Tag Along Shareholder shall add to the securities
being sold by the Selling Party to the Proposed Purchaser that number of
securities which bears the same ratio to the total number of Ordinary Shares
held by the Tag Along Shareholder, as the ratio that the number of Offered
Shares bears to the Selling Party’s total number of Ordinary Shares, and such
shares shall be sold upon the same terms and conditions under which the Selling
Party’s securities are sold, provided however that for the purpose of
calculating such ratio the aggregate number of shares, the sale of which covers
the exercise price of the options exercised by the Founders, shall be
ignored.
2.2. In
the event that the Tag Along Shareholder exercises its right hereunder, the
Selling Party must cause the Proposed Purchaser to add such securities to the
Offered Shares to be purchased by the Proposed Purchaser, as part of the sale
agreement or, in the event that the Proposed Purchaser declines to purchase the
total number of shares that the parties wish to sell, the Selling Party shall
reduce the number of securities that it proposes to sell to the Proposed
Purchaser (in which case, all shareholders participating in the sale to the
Proposed Purchaser shall contribute the identical portion of shares relative to
their total holdings of Ordinary Shares), and either complete the transaction in
accordance with such revised structure or withdraw from completing the
transaction.
2.3 In
the event of a proposed sale of shares of the Company by a Shareholder on a
stock exchange, the Shareholder shall coordinate such sale with the other
Shareholders so as to comply to the maximum extent possible with the principles
of the provisions of Section 2.1 and 2.2 hereof.
2.4 Notwithstanding
the foregoing, the provisions of this Section 2 shall not apply to (i) the
transfer of securities of the Company by a Shareholder to its Permitted
Transferee (as defined below), (ii) the sale by the Founders of a total of up to
10% of the Company's issued and
outstanding
ordinary shares held by them as of the Effective Date, and (iii) the
sale by the Investor of a total of up to 10% of the Company's issued and
outstanding ordinary shares held by it as of the Effective Date.
For
purposes of this Agreement, “Permitted Transferee” means
(i) the investors of the Investor or any affiliated fund managed by the same
management company or by an affiliate thereof; or (ii) an entity controlled by,
under the control of or under common control with a Shareholder or any Permitted
Transferee set forth in (i); or (iii) any spouse (or widow or widower) or
children, including step and adopted children, of a Shareholder; provided
that in each case, the Permitted Transferee has agreed in writing to assume and
be bound by all of the Shareholder’s obligations hereunder as if it were an
original party hereto.
3.
Bring
Along
In the
event that a Shareholder wishes to accept an offer to sell all of the Company
shares it holds to any third party at a price per Company share of not less than
$26 (as adjusted for stock splits bonus shares and combinations), and such third
party has made its offer contingent upon the sale to such third party of all of
the Company’s shares held by the other Shareholders (the "Sale Transaction"), then, at
the closing of such Sale Transaction, the other Shareholders shall be obligated
to sell all Company shares they hold to such third party at the same price per
share.
4. Discussions
prior to Meetings
The
Shareholders agree to cooperate on Company matters and shall meet regularly and
in any event prior to each general meeting of shareholders of the Company and
will review, discuss and, subject to the provisions of applicable law, shall
attempt to reach a unified position with respect to principal issues on the
agenda of each such meeting. The Shareholders agree to vote AGAINST any proposed
change to the Company's articles of association which will conflict with the
provisions of this Agreement.
5. Dividend
Distribution
It is the
view of the
Shareholders that the Company should distribute at least 30% of the Company's
GAAP net income in dividends in any relevant year, effective as of calendar year
2008, all subject to the provisions of applicable law.
5A.
CEO
Compensation
The
Shareholders agree that for a period of at least two years from the date hereof
they shall not initiate a shareholder vote, and in the event of such vote, shall
vote AGAINST any change in the compensation of the CEO as such exists on the
date hereof and reflected in the Company's Form 20-F for calendar year 2006. For
such purpose, the Shareholders agree to vote FOR maintaining the CEO
compensation of Shaked at its current amounts and terms despite the fact that
the CEO shall no longer be Chairman.
6.
Term
This
Agreement shall commence upon the Effective Date and shall terminate on the
earlier to occur of: (i) the fifth anniversary of the Effective Date, and (ii)
the first date on which either the Founders (collectively) or the Investor, hold
less than 1,100,000 Ordinary Shares of the Company (as adjusted for stock splits
bonus shares and combinations).
7.
Miscellaneous
7.1 Founders.
Notwithstanding anything to the contrary herein, the Founders shall be treated
as a group for all purposes of this Agreement.
7.2 Fees & Expenses.
Each Shareholder shall bear its own legal fees and all related expenses in
connection with this Agreement.
7.3 Notices. All
notices to be given to a party pursuant to this Agreement shall be in writing
and shall be deemed to have been duly given to the addressee thereof (i) if hand
delivered, on the day of delivery, (ii) if given by facsimile transmission, on
the business day on which such transmission is sent and confirmed, (iii) if
given by air courier, five business days following the date it was sent or (iv)
if mailed by registered mail, return receipt requested, two business days
following the date it was mailed, to such party’s address as set forth below or
at such other address as such party shall have furnished to the other party in
writing in accordance with this provision:
If
to
Founders:
x/x
Xxxxxxx Xxx.
00
Xxxxxxx Xx., Xx'xxxxx
Tel:
00-0000000
Fax:
00-0000000
Att: Xxxxx
Xxxxxx
with a
copy to:
Goldfarb,
Levy, Eran, Meiri, Tzafrir & Co.
0
Xxxxxxx Xx., Xxx Xxxx
Tel:
00-0000000
Fax:
00-0000000
Att:
Xxxx Xxxxxxx, Adv.
Xxxx Xxxxx,
Adv.
|
If
to the Investor:
|
c/o
FIMI IV 2007 Ltd.
|
|
“Xxxxxxxxxx
Xxxxx”
|
|
00
xxxxx Xxxx
|
|
Xxx-Xxxx,
Xxxxxx
|
|
Tel:
00-0000000
|
|
Fax:
00-0000000
|
|
With
a copy
to: Xxxxxx
X. Xxxx
|
|
Xxxxxxxx,
Xxxxxxx & Co.
|
|
0
Xxxxx Xxxxxx, Xxx-Xxxx 00000
|
|
Xxxxxx
|
|
Tel:
00-0000000
|
|
Fax:
00-0000000
|
or to
such other address as the parties may from time to time designate in
writing.
7.4 Waiver. Any
waiver hereunder must be in writing, duly authorized and signed by the party to
be bound, and shall be effective only in the specific instance and for the
purpose for which it was given. No failure or delay on the part of a
Shareholder in exercising any right, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
7.5. Entire
Agreement. This Agreement, the exhibits and the schedules
hereto and the documents furnished by the parties hereto in connection with the
transactions contemplated herein constitute the entire agreement among the
parties hereto and supersede any other agreement that may have been made or
entered into by the Shareholders relating to the transactions contemplated by
this Agreement.
7.6 Amendments. This
Agreement may be amended or modified in whole or in part only by a duly
authorized written agreement that refers to this Agreement and is signed by the
parties hereto.
7.7 Limitations on Rights of
Third Parties. Nothing expressed or implied in this Agreement
is intended or shall be construed to confer upon or give any person, other than
the Shareholders, any rights or remedies under this Agreement.
7.8 Captions. The
captions in this Agreement are inserted for convenience of reference only and
shall not be considered a part of or affect the construction or interpretation
of any provision of this Agreement.
7.9 Counterparts. This
Agreement may be executed in counterparts and by facsimile signature, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
7.10 Governing
Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Israel. Any dispute
arising under or with respect to this Agreement shall be resolved exclusively in
the appropriate court in Tel Aviv, Israel.
7.11 Further
Assurances. The parties hereto shall execute and deliver such
additional documents and shall take such additional actions (including without
limitation procuring such resolutions or regulatory approvals) as may be
reasonably necessary or appropriate to effect the provisions and purposes of
this Agreement and the consummation of the transactions contemplated
hereby.
7.12 Severability. If
any provision of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected, impaired or
invalidated thereby.
7.13 Assignment. This
Agreement is not assignable by any party hereto and each of the parties hereto
shall not assign or otherwise transfer this Agreement, and/or any of its rights
or obligations hereunder to any third party.
IN
WITNESS WHEREOF, the Shareholders have each caused this Agreement to be duly
executed as of the date first above written.
/s/Xxxxx Shaked_
Xxxxx
Xxxxxx
|
/s/Xxxxx Cooper__
Xxxxx
Xxxxxx
|
Ronex
Holdings, Limited Partnership
/s/
Xxxxx Xxxxxx for Ronex Holdings Ltd._
By:
Ronex Holdings Ltd., General Partner
Name:
Xxxxx Xxxxxx
Title:
CEO
|
|
Fimi IV 2007, LTD.
/s/
Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: CEO
Fimi Opportunity 2005,
LTD.
/s/Xxxxx
Xxxxxx
Name: Xxxxx Xxxxxx
Title: CEO