o |
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|
x |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
N/A
(Translation of Registrant’s
name into English)
|
Israel
(Jurisdiction of incorporation
or organization)
|
Title of Each Class
|
Name of Each Exchange on Which Registered
|
Ordinary Shares,
par-value NIS 0.13 each
|
The Nasdaq Global Market
|
CERTAIN DEFINED TERMS |
4
|
|
FORWARD-LOOKING STATEMENTS |
4
|
|
PART I |
5
|
|
5
|
||
5
|
||
5
|
||
19
|
||
26
|
||
26
|
||
38
|
||
49
|
||
53
|
||
59
|
||
60
|
||
77
|
||
78
|
||
PART II |
79
|
|
79
|
||
79 | ||
79
|
||
80
|
||
80
|
||
80
|
||
80
|
||
81
|
||
81 | ||
81
|
||
81
|
||
PART III |
81
|
|
82
|
||
82
|
||
82
|
Consolidated Statement of Operations Data:
|
Year Ended December 31,
|
|||||||||||||||||||
2007
|
2008
|
2009
|
2010
|
2011
|
||||||||||||||||
(U.S. dollars in thousands, except per share data)
|
||||||||||||||||||||
Fixed income from real estate
|
- | - | $ | 272 | $ | 1,650 | $ | 12,479 | ||||||||||||
Costs and expenses:
|
||||||||||||||||||||
Cost of real estate operation
|
- | - | 11 | 59 | 1,869 | |||||||||||||||
Real estate depreciation and amortization
|
- | - | 115 | 695 | 2,153 | |||||||||||||||
General and Administrative
|
1,257 | 1,347 | 1,175 | 1,502 | 3,057 | |||||||||||||||
Total costs and expenses
|
1,257 | 1,347 | 1,301 | 2,256 | 7,079 | |||||||||||||||
Operating income (loss)
|
(1,257 | ) | (1,347 | ) | (1,029 | ) | (606 | ) | 5,400 | |||||||||||
Gain on bargain purchase
|
- | - | - | - | 4,412 | |||||||||||||||
Other income (loss)
|
- | - | - | (600 | ) | - | ||||||||||||||
Financial income (loss), net
|
(31 | ) | 270 | 617 | 304 | (7,481 | ) | |||||||||||||
Net income (loss) before tax on income
|
(1,288 | ) | (1,077 | ) | (412 | ) | (902 | ) | 2,331 | |||||||||||
Taxes on income
|
- | - | - | (43 | ) | (481 | ) | |||||||||||||
Net income (loss) from continuing operations
|
(1,288 | ) | (1,077 | ) | (412 | ) | (945 | ) | 1,850 | |||||||||||
Net income (loss) from discontinued operations
|
(5,885 | ) | (8,468 | ) | 472 | 5,399 | (51 | ) | ||||||||||||
Net income (loss)
|
$ | (7,173 | ) | $ | (9,545 | ) | $ | 60 | $ | 4,454 | $ | 1,799 | ||||||||
Net income attributable to non-controlling interest
|
- | - | - | - | 2,038 | |||||||||||||||
Net income (loss) attributable to Optibase LTD
|
$ | (7,173 | ) | $ | (9,545 | ) | $ | 60 | $ | 4,454 | $ | (239 | ) | |||||||
Net earnings (loss) per share :
|
||||||||||||||||||||
Basic and Diluted net earnings (loss) per share from continuing operations
|
$ | (0.09 | ) | $ | (0.07 | ) | $ | (0.02 | ) | $ | (0.06 | ) | $ | (0.01 | ) | |||||
Basic and diluted net earnings (loss) per share from discontinued operations
|
$ | (0.43 | ) | $ | (0.56 | ) | $ | 0.03 | $ | 0.33 | $ | (0.00 | ) | |||||||
Basic and diluted net earnings (loss) per share
|
$ | (0.53 | ) | $ | (0.63 | ) | $ | 0.00 | $ | 0.27 | $ | (0.01 | ) | |||||||
Weighted average number of shares used in computing basic and diluted net earnings (loss) per share (in thousands):
|
||||||||||||||||||||
Basic and Diluted
|
13,602 | 15,159 | 16,534 | 16,555 | 18,210 |
Consolidated Balance Sheet Data:
|
December 31,
|
|||||||||||||||||||
2007
|
2008
|
2009
|
2010
|
2011
|
||||||||||||||||
(U.S. dollars in thousands)
|
||||||||||||||||||||
Cash, cash equivalents and short term investment in marketable securities net
|
$ | 19,021 | $ | 11,386 | $ | 28,651 | $ | 30,260 | $ | 22,945 | ||||||||||
Working capital
|
38,366 | 34,200 | 29,621 | 26,415 | 16,361 | |||||||||||||||
Long term investment in marketable securities
|
- | - | - | - | - | |||||||||||||||
Total assets
|
51,932 | 47,306 | 63,350 | 64,726 | 219,885 | |||||||||||||||
Long term loans, including current maturities
|
- | - | 18,262 | 19,589 | 126,135 | |||||||||||||||
Capital Stock
|
120,706 | 126,142 | 126,299 | 126,378 | 131,478 | |||||||||||||||
Total shareholders’ equity
|
$ | 39,164 | $ | 35,011 | $ | 35,238 | $ | 40,392 | $ | 61,261 |
v
|
The purchase or failure to purchase real-estate assets;
|
v
|
Changes in rent prices for our properties;
|
v
|
Changes in presence of tenants and tenants' insolvency;
|
v
|
Changes in the availability, cost and terms of financing;
|
v
|
The ongoing need for capital improvements;
|
v
|
Changes in foreign exchange rates;
|
v
|
Changes in interest rates; and
|
v
|
General economic conditions, particularly in those countries or regions in which we operate.
|
v
|
Availability of funding resources for the acquisition of new real estate assets;
|
v
|
General market conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors;
|
v
|
Seizure of a substantial business opportunity by our competitors or us;
|
v
|
Changes in interest rates;
|
v
|
Changes in foreign exchange rates;
|
v
|
The entering into new businesses;
|
v
|
Quarterly variations in our results of operations or in our competitors’ results of operations; and
|
v
|
Changes in earnings estimates or recommendations by securities analysts.
|
v
|
Additional operating expenses without additional revenues;
|
v
|
Potential dilutive issuances of equity securities;
|
v
|
The incurrence of debt and contingent liabilities;
|
v
|
Amortization of bargain purchase gain and other intangibles;
|
v
|
Impairment charges; and
|
v
|
Other acquisition-related expenses.
|
|
·
|
employment levels;
|
|
·
|
availability of financing for homebuyers and for real estate investors/funds;
|
|
·
|
interest rates;
|
|
·
|
consumer confidence and expenditure;
|
|
·
|
levels of new and existing homes for sale;
|
|
·
|
demographic trends;
|
|
·
|
urban development and changes;
|
|
·
|
housing demand;
|
|
·
|
local laws and regulations; and
|
|
·
|
acts of terror, floods or earthquakes.
|
|
·
|
even if we enter into an acquisition agreement for a property, it is usually subject to customary conditions to closing, including due diligence investigations to our satisfaction;
|
|
·
|
we may be unable to finance acquisitions on favorable terms or at all;
|
|
·
|
acquired properties may fail to perform as we expected;
|
|
·
|
we may not be able to obtain adequate insurance coverage for new properties; and
|
|
·
|
we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations, and therefore our results of operations and financial condition could be adversely affected.
|
|
·
|
liabilities for clean-up of undisclosed environmental contamination;
|
|
·
|
claims by tenants, vendors or other persons arising from dealing with the former owners of the properties;
|
|
·
|
liabilities incurred in the ordinary course of business; and
|
|
·
|
claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties.
|
|
·
|
an inability to acquire a desired property because of competition from well-capitalized real estate investors, including publicly traded and privately held REITs, private real estate funds, domestic and foreign financial institutions, life insurance companies, sovereign wealth funds, pension trusts, partnerships and individual investors; and
|
|
·
|
an increase in the purchase price for such acquisition property, in the event we are able to acquire such desired property.
|
v
|
The judgment was rendered by a court which was, according to the laws of the state of the court, competent to render the judgment;
|
v
|
The judgment can no longer be appealed;
|
v
|
The obligation imposed by the judgment is enforceable according to the rules relating to the enforceability of judgments in Israel and the substance of the judgment is not contrary to public policy; and
|
v
|
The judgment is executory in the state in which it was given.
|
v
|
The judgment was obtained by fraud;
|
v
|
There was no due process;
|
v
|
The judgment was rendered by a court not competent to render it according to the laws of private international law in Israel;
|
v
|
The judgment is at variance with another judgment that was given in the same matter between the same parties and which is still valid; or
|
v
|
At the time the action was brought in the foreign court a suit in the same matter and between the same parties was pending before a court or tribunal in Israel.
|
·
|
purchase of real estate mainly in Central and Western Europe, North America and Israel.
|
·
|
developing and improving existing real estate;
|
·
|
maximize the leasing of existing properties to commercial users;
|
·
|
increase and develop unused building rights in our existing properties; and
|
·
|
acquire additional commercial, residential and other real estate assets in light of market conditions, while diversifying our real estate property base.
|
Property
|
Location
|
Acquisition
date
|
Company Stake
|
Nature of Rights
|
Property Type
|
Net
Rentable
Square Meters
Excluding
Redevelopment
Space
(1)
|
Annualized
Rent
($000)
(2)
|
Rate of Occupancy
(3)
|
Annualized
Rent per
Occupied
Square
Meter
($)
(4)
|
NOI ($000)
|
Centre des Technologies Nouvelles (CTN)
|
Geneva, Switzerland
|
March 2, 2011
|
51%
|
Ownership with land lease
|
Commercial
|
35,000
|
11,245
|
100
|
321
|
6,439
|
Rümlang
|
Rümlang, Switzerland
|
October 29, 2009
|
100%
|
Ownership
|
Commercial
|
12,500
|
1,805
|
99
|
146
|
677
|
Marquis Residences
|
Miami, Florida
|
December 30, 2010
|
100%
|
Ownership
|
Residential - Condominium Units
|
3,229
|
574
|
67
|
267
|
(423)
|
Portfolio Total/Weighted Average
|
-
|
-
|
-
|
50,729
|
13,624
|
98
|
275
|
6,693
|
Year Ended December 31
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
Fixed income real estate
|
100.0 | % | 100.0 | % | 100.0 | % | ||||||
Costs and expenses:
|
||||||||||||
Cost of real estate operations
|
4 | 3.6 | 15 | |||||||||
Real estate depreciation and amortization
|
42.3 | 42.1 | 17.3 | |||||||||
General and administrative
|
432 | 91 | 24.5 | |||||||||
Total costs and expenses
|
478.3 | 136.7 | 56.8 | |||||||||
Operating income (loss)
|
(378.3 | ) | (36.7 | ) | 43.2 | |||||||
Gain on bargain purchase
|
- | - | 35.5 | |||||||||
Other income (expenses), net
|
- | (36.4 | ) | - | ||||||||
Financial (expenses) income, net
|
226.8 | 18.4 | (60 | ) | ||||||||
Income (loss) before provision for tax
|
(151.5 | ) | (54.7 | ) | 18.7 | |||||||
Provision for tax
|
- | (2.6 | ) | (3.9 | ) | |||||||
Net income (loss) from continuing operations
|
(151.5 | ) | (57.3 | ) | 14.8 | |||||||
(Loss) income from Discontinued Operations
|
173.5 | 327.2 | (0.4 | ) | ||||||||
Net income
|
22 | 269.9 | 14.4 | |||||||||
Attributable to non controlling interest
|
- | - | 16.3 | |||||||||
Net income (loss) attributable to Optibase
|
22 | 269.9 | (1.9 | ) |
v
|
Fixed income real-estate;
|
v
|
Long-lived assets including intangible assets;
|
v
|
Investment in companies
|
v
|
Principles of consolidation
|
v
|
Non-controlling Interests
|
v
|
Goodwill and bargain purchase gain
|
v
|
Business Combinations
|
v
|
Accounting for stock-based compensation
|
v
|
Contingencies; and
|
v
|
Income Taxes.
|
Payments Due by Period
(USD in thousands)
|
||||||||||||||||||||
Contractual Obligations
|
Total
|
Less than 1 year
|
1- 3 years
|
4-5 years
|
After 5 years
|
|||||||||||||||
Long-Term Debt
|
126,135 | 2,529 | 7,587 | 5,058 | 110,961 | |||||||||||||||
Capital Lease Obligations
|
7,175 | 76 | 229 | 152 | 6,718 | |||||||||||||||
Lease Obligations
|
111 | 60 | 51 | -- | -- | |||||||||||||||
Purchase Obligations
|
-- | -- | -- | -- | -- | |||||||||||||||
Severance pay
|
-- | -- | -- | -- | -- | |||||||||||||||
Other Long-Term Obligations
|
-- | -- | -- | -- | -- | |||||||||||||||
Total Contractual Cash
Obligations
|
133,421 | 2,665 | 7,867 | 5,210 | 117,679 |
Amount of Commitment Expiration Per Period
(USD in thousands)
|
||||||||||||||||||||
Other Commercial Commitments
|
Total
|
Less than 1 year
|
1- 3 years
|
4-5 years
|
After 5 years
|
|||||||||||||||
Lines of Credit
|
65 | -- | 65 | -- | -- | |||||||||||||||
Standby Letters of Credit
|
-- | -- | -- | -- | -- | |||||||||||||||
Guarantees
|
199 | -- | 199 | -- | -- | |||||||||||||||
Standby Repurchase Obligations
|
-- | -- | -- | -- | -- | |||||||||||||||
Other Commercial Commitments
|
-- | -- | -- | -- | -- | |||||||||||||||
Total Commercial Commitments
|
264 | -- | 264 | -- | -- |
Name
|
Age
|
Position
|
||
Alex Hilman
|
59
|
Executive Chairman of the board of directors
|
||
Shlomo (Tom) Wyler
|
60
|
President and Director
|
||
Amir Philips
|
44
|
Chief Executive Officer
|
||
Yakir Ben-Naim
|
40
|
Chief Financial Officer
|
||
Orli Garti Seroussi
(1)(2)
|
51
|
Director
|
||
Danny Lustiger
(1)
|
44
|
Director
|
||
Chaim Labenski
(1)(2)
|
64
|
Director
|
(1)
|
Member of the Audit Committee
|
(2)
|
External Director
|
v
|
A breach of the duty of care vis-a-vis us or vis-a-vis another person;
|
v
|
A breach of the fiduciary duty vis-a-vis us, provided that the director or officer acted in good faith and had a reasonable basis to believe that the act would not harm us;
|
v
|
A monetary obligation imposed on him or her in favor of another person;
|
v
|
Financial liability imposed on him for payment to persons or entities harmed as a result of violations in Administrative Proceedings, as detailed in section 52(54)(A)(1)(a) of the Israeli Securities Law;
|
v
|
Expenses incurred by him in connection with Administrative Proceedings (as defined above) he was involved in, including reasonable litigation fees, and including attorney fees; or
|
v
|
Any other matter in respect of which it is permitted or will be permitted under applicable law to insure the liability of our director or officer.
|
v
|
Any financial liability he or she incurs or imposed on him or her in favor of another person in accordance with a judgment, including a judgment given in a settlement or a judgment of an arbitrator, approved by a court.
|
v
|
Reasonable litigation expenses, including legal fees, incurred by the director or officer or which he or she was ordered to pay by a court, within the framework of proceedings filed against him or her by or on behalf of Optibase, or by a third party, or in a criminal proceeding in which he or she was acquitted, or in a criminal proceeding in which he or she was convicted of a felony which does not require a finding of criminal intent.
|
v
|
Reasonable litigation expenses, including legal fees he or she incurs due to an investigation or proceeding conducted against him or her by an authority authorized to conduct such an investigation or proceeding, and which was ended without filing an indictment against him or her and without being subject to a financial obligation as a substitute for a criminal proceeding, or that was ended without filing an indictment against him, but with the imposition of a financial obligation, as a substitute for a criminal proceeding relating to an offence which does not require criminal intent, within the meaning of the relevant terms in the Companies Law.
|
v
|
Financial liability he or she incurs for payment to persons or entities harmed as a result of violations in Administrative Proceedings, as detailed in section 52(54)(A)(1)(a) of the Securities Law. For this purpose "Administrative Proceeding" shall mean a proceeding pursuant to Chapters H3 (Imposition of Monetary Sanction by the Israel Securities Authority), H4 (Imposition of Administrative Enforcement Means by the Administrative Enforcement Committee) or I1 (Settlement for the Avoidance of Commencing Proceedings or Cessation of Proceedings, Conditioned upon Conditions) of the Securities Law, as shall be amended from time to time.
|
v
|
Expenses that he or she incurs in connection with Administrative Proceedings (as defined above) he was involved in, including reasonable litigation fees, and including attorney fees.
|
v
|
Any other obligation or expense in respect of which it is permitted or will be permitted under law to indemnify a director or officer of Optibase.
|
v
|
a breach of the fiduciary duty, except for a breach of the fiduciary duty vis-à-vis the company with respect to indemnification and insurance if the director or officer acted in good faith and had a reasonable basis to believe that the act would not harm the company;
|
v
|
an intentional or reckless breach of the duty of care, except for if such breach was made in negligence;
|
v
|
an act done with the intention of unduly deriving a personal profit; or
|
v
|
a fine imposed on the directors or officers.
|
|
(i)
|
the director holds an academic degree in one of these areas: economics, business administration, accounting, law or public administration;
|
|
(ii)
|
the director holds an academic degree or has other higher education, all in the main business sector of the company or in a relevant area for the board position; or
|
|
(iii)
|
the director has at least five years’ experience in one or more of the following or an aggregate five years’ experience in at least two or more of these: (a) senior management position in a corporation of significant business scope; (b) senior public office or senior position in the public sector; or (c) senior position in the main business sector of the company.
|
|
(i)
|
accounting issues and accounting control issues characteristic to the segment in which the company operates and to companies of the size and complexity of the company;
|
|
(ii)
|
the functions of the external auditor and the obligations imposed on such auditor;
|
|
(iii)
|
preparation of financial reports and their approval in accordance with the companies law and the securities law.
|
|
(i)
|
the majority of shares voted for the election includes the majority of the shares of non-controlling shareholders or with no personal interest excluding a personal interest not resulting from relation with controlling shareholders, voted at the meeting; or
|
|
(ii)
|
the total number of shares to total amount of shareholders listed in subsection (i) above, who voted against the election of the external director does not exceed two percent (2%) of the aggregate voting rights of the company.
|
Division
|
December 31,
|
|||||
2009
|
2010
|
2011
|
||||
US
|
Israel
|
US
|
Israel
|
Europe
|
Israel
|
|
Research & Development
|
-
|
29
|
-
|
-
|
-
|
-
|
Sales and Technical Marketing
|
10
|
16
(1)
|
-
|
-
|
-
|
-
|
Marketing
|
1
|
6
|
-
|
-
|
-
|
-
|
Operations
|
-
|
17
|
-
|
-
|
-
|
-
|
General and Administrative, Finance and Human Resources
|
2
|
13
|
1
|
5
|
1
|
5
|
Total
|
13
|
81
|
1
|
5
|
1
|
5
|
94
|
6
|
6
|
(1)
|
This number includes eight employees in Asia.
|
Plan
|
Number of options outstanding
|
Number of options reserved for issuance
|
||||||
1999 Plans
|
643,000 | 2,335,715 | ||||||
2001 Non-statutory share option plan
|
2,500 | 490,560 |
Total options
|
645,500 | 2,826,275 |
Plan
|
Number of shares outstanding
|
Number of shares reserved for issuance
|
||||||
2006 Israeli Incentive Compensation Plan
|
30,000 | 62,450 | ||||||
Total shares
|
30,000 | 62,450 |
Name of Beneficial Owner
|
No. of Ordinary Shares
Beneficially Owned
(1)
|
Percentage of Ordinary Shares Beneficially Owned
|
||||||
Shlomo (Tom) Wyler
(2)
|
9,782,535 | 51.3 | ||||||
Arthur Mayer – Sommer
(3)
|
1,200,000 | 6.29 | ||||||
Gesafi Real Estate S.A
(4)
|
2,441,098 | 12.8 | ||||||
Shareholding of all directors and officers as a group (7 persons)
(5)
|
10,085,922 | 52.23 |
Beneficial Owner –
|
Date of filing
|
No. Of Shares Beneficially Held
|
||||
Shlomo (Tom) Wyler
|
August 13, 2009
|
7,285,934 | * | |||
Shlomo (Tom) Wyler
|
June 30, 2011
|
9,880,534 | ** |
Beneficial Owner –
|
Date of filing
|
No. Of Shares Beneficially Held
|
||||
Prescott Group Capital Management, L.L.C.
|
January 6,
2009
|
2,004,698 | ||||
Prescott Group Capital Management, L.L.C.
|
February 12,
2010
|
*2,006,098 |
Beneficial Owner –
|
Date of filing
|
No. Of Shares Beneficially Held
|
||||
Gesafi Real Estate S.A
|
September 8, 2011
|
2,006,098 | ||||
Gesafi Real Estate S.A
|
August 12, 2011
|
2,441,098 |
Nasdaq
|
||||||||
Year
|
High
|
Low
|
||||||
2007
|
$ | 4.52 | $ | 2.52 | ||||
2008
|
$ | 2.73 | $ | 0.74 | ||||
2009
|
$ | 1.50 | $ | 0.93 | ||||
2010
|
$ | 1.60 | $ | 1.20 | ||||
2011
|
$ | 1.75 | $ | 0.99 |
|
High
|
Low
|
|||||||
2010 | |||||||||
First Quarter
|
$ | 1.43 | $ | 1.20 | |||||
Second Quarter
|
$ | 1.55 | $ | 1.35 | |||||
Third Quarter
|
$ | 1.50 | $ | 1.30 | |||||
Fourth Quarter
|
$ | 1.60 | $ | 1.38 | |||||
2011
|
|||||||||
First Quarter
|
$ | 1.75 | $ | 1.42 | |||||
Second Quarter
|
$ | 1.75 | $ | 1.36 | |||||
Third Quarter
|
$ | 1.51 | $ | 1.32 | |||||
Fourth Quarter
|
$ | 1.52 | $ | 0.99 | |||||
2012
|
|||||||||
First Quarter
|
$ | 1.29 | $ | 1.05 | |||||
High
|
Low
|
||||||||
Most Recent Six Months
|
|||||||||
October 2011
|
$ | 1.40 | $ | 1.11 | |||||
November 2011
|
$ | 1.52 | $ | 1.30 | |||||
December 2011
|
$ | 1.50 | $ | 0.99 | |||||
January 2012
|
$ | 1.16 | $ | 1.05 | |||||
February 2012
|
$ | 1.29 | $ | 1.06 | |||||
March 2012
|
$ | 1.29 | $ | 1.07 |
v
|
the avoidance of any conflict of interest between the director’s or officer’s position with the company and any other position he or she fulfills or with his or her personal affairs;
|
v
|
the avoidance of any act in competition with the company’s business;
|
v
|
the avoidance of exploiting any of the company’s business opportunities in order to gain a personal advantage for himself or for others; and
|
v
|
the disclosure to the company of any information and documentation relating to the company’s affairs obtained by the director or officer due to his or her position with the company.
|
v
|
broker-dealers,
|
v
|
financial institutions,
|
v
|
certain insurance companies,
|
v
|
investors liable for alternative minimum tax,
|
v
|
tax-exempt organizations,
|
v
|
non-resident aliens of the U.S. or taxpayers whose functional currency is not the U.S. dollar,
|
v
|
persons who hold the ordinary shares through partnerships or other pass-through entities,
|
v
|
investors that actually or constructively own 10 percent or more of our voting shares, and
|
v
|
investors holding ordinary shares as part of a straddle or a hedging or conversion transaction.
|
v
|
an individual who is a citizen or, a resident of the United States for U.S. federal income tax purposes;
|
v
|
a partnership, corporation or other entity created or organized in or under the laws of the United States or any political subdivision thereof;
|
v
|
an estate whose income is subject to U.S. federal income tax regardless of its source;
|
v
|
a trust if: (a) a court within the United States is able to exercise primary supervision over administration of the trust, and (b) one or more United States persons have the authority to control all substantial decisions of the trust; or
|
v
|
a trust, if the trust were in existence and qualified as a "United States person," within the meaning of the Code, on August 20, 1996 under the law as then in effect and elected to continue to be so treated.
|
|
·
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and asset dispositions;
|
|
·
|
provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
|
·
|
provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.
|
2010
|
2011
|
|||||||
Audit fees
(1)
|
95 | 115 | ||||||
Audit-related fees
(2)
|
-- | 20 | ||||||
Tax fees
(3)
|
-- | -- | ||||||
All other fees
(4)
|
25 | -- | ||||||
Total
|
120 | 135 |
(1)
|
Audit fees consist of fees billed for the annual audit services engagement and other audit services, which are those services that only the external auditor can reasonably provide, and include the group audit; statutory audits; comfort letters and consents; attest services; and assistance with and review of documents filed with the SEC.
|
(2)
|
Audit-related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements or that are traditionally performed by the external auditor, and include consultations concerning financial accounting and reporting standards; internal control reviews of new systems, programs and projects; review of security controls and operational effectiveness of systems; review of plans and control for shared service centers, due diligence related to acquisitions; accounting assistance and audits in connection with proposed or completed acquisitions; and employee benefit plan audits.
|
(3)
|
Tax fees include fees billed for tax compliance services, including the preparation of original and amended tax returns and claims for refund; tax consultations, such as assistance and representation in connection with tax audits and appeals, tax advice related to mergers and acquisitions, transfer pricing, and requests for rulings or technical advice from taxing authority; tax planning services; and expatriate tax planning and services.
|
(4)
|
All other fees include fees billed for training; forensic accounting; data security reviews; treasury control reviews and process improvement and advice; and environmental, sustainability and corporate social responsibility advisory services.
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets
|
F-3 - F-4
|
Consolidated Statements of Operations
|
F-5
|
Statements of Changes in Shareholders’ Equity
|
F-6
|
Consolidated Statements of Cash Flows
|
F-7 - F-8
|
Notes to Consolidated Financial Statements
|
F-9 - F-40
|
Page
|
|
F-2
|
|
F-3 - F-4
|
|
F-5
|
|
F-6
|
|
F-7 - F-8
|
|
F-9 - F-40
|
Kost Forer Gabbay & Kasierer
3 Aminadav St.
Tel-Aviv 67067, Israel
Tel:
972 (3)6232525
Fax: 972 (3)5622555
www.ey.com
|
/s/ KOST FORER GABBAY & KASIERER | |
Tel-Aviv, Israel
|
KOST FORER GABBAY & KASIERER
|
April 30, 2012
|
A Member of Ernst & Young Global
|
December 31,
|
||||||||
2010
|
2011
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$ | 30,260 | $ | 22,945 | ||||
Restricted cash
|
- | 131 | ||||||
Trade receivables
|
- | 732 | ||||||
Other accounts receivable and prepaid expenses (Note 5)
|
334 | 1,260 | ||||||
Total assets attributed to discontinued operations (Note 1c)
|
966 | 969 | ||||||
Total
current assets
|
31,560 | 26,037 | ||||||
LONG-TERM INVESTMENTS:
|
||||||||
Long-term deposits (Note 9)
|
157 | 56 | ||||||
Investments in companies (Note 6)
|
100 | 100 | ||||||
Total
long-term investments
|
257 | 156 | ||||||
PROPERTY, EQUIPMENT AND OTHER ASSETS, NET
|
||||||||
Equipment, net
|
4 | 7 | ||||||
Real Estate Property, net (Note 3)
|
32,353 | 192,173 | ||||||
Other assets, net (Note 4)
|
552 | 1,512 | ||||||
Total
property, equipment and other assets
|
32,909 | 193,692 | ||||||
Total
assets
|
$ | 64,726 | $ | 219,885 |
April 30, 2012 | /s/Amir Philips | /s/ Alex Hilman | ||
Date of approval of the
financial statements
|
Amir Philips
Chief Executive Officer.
|
Alex Hilman
Executive Chairman of the board
of directors
|
Year ended
December 31,
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
Fixed income from real estate rent
|
$ | 272 | $ | 1,650 | $ | 12,479 | ||||||
Costs and expenses:
|
||||||||||||
Cost of real estate operations
|
11 | 59 | 1,869 | |||||||||
Real estate depreciation and amortization
|
115 | 695 | 2,153 | |||||||||
General and administrative
|
1,175 | 1,502 | 3,057 | |||||||||
Total
costs and expenses
|
1,301 | 2,256 | 7,079 | |||||||||
Operating income (loss)
|
(1,029 | ) | (606 | ) | 5,400 | |||||||
Gain on bargain purchase (Note 1b(3))
|
- | - | 4,412 | |||||||||
Other income (loss) (Note 6)
|
- | (600 | ) | - | ||||||||
Financial income (expenses), net (Note 12)
|
617 | 304 | (7,481 | ) | ||||||||
Income (loss) before taxes on income
|
(412 | ) | (902 | ) | 2,331 | |||||||
Taxes on income (Note 10)
|
- | 43 | 481 | |||||||||
Net income (loss) from continuing operations
|
(412 | ) | (945 | ) | 1,850 | |||||||
Net income (loss) from discontinued operations (Note 1c)
|
472 | 5,399 | (51 | ) | ||||||||
Net income
|
60 | 4,454 | 1,799 | |||||||||
Net income attributable to non-controlling interest
|
- | - | 2,038 | |||||||||
Net income (loss) attributable to Optibase LTD
|
$ | 60 | $ | 4,454 | $ | (239 | ) | |||||
Net earnings (loss) per share:
|
||||||||||||
Basic and diluted net earnings (loss) per share from continuing operations
|
$ | (0.02 | ) | $ | (0.06 | ) | $ | (0.01 | ) | |||
Basic and diluted net earnings (loss) per share from discontinued operations
|
$ | 0.03 | $ | 0.33 | $ | (0.00 | ) | |||||
Basic and diluted net earnings (loss) per share
|
$ | 0.00 | $ | 0.27 | $ | (0.01 | ) | |||||
Weighted average number of shares used in computing basic and diluted net earnings (loss) per share:
|
16,533,586 | 16,554,870 | 18,209,676 |
Ordinary
shares
|
Additional
paid-in
capital
|
Treasury
shares
|
Accumulated
other comprehensive income (loss)
|
Accumulated
deficit
|
Total
shareholders'
equity of Optibase Ltd.
|
Non-controlling interests
|
Total comprehensive income (loss)
|
Total
shareholders'
equity
|
||||||||||||||||||||||||||||
Balance as of January 1, 2009
|
$ | 650 | $ | 125,492 | $ | (1,306 | ) | $ | - | $ | (89,825 | ) | $ | 35,011 | $ | - | $ | - | $ | 35,011 | ||||||||||||||||
Stock-based compensation related to options and unvested shares granted to employees
|
- | 221 | - | - | - | 221 | - | - | 221 | |||||||||||||||||||||||||||
Issuance of treasury shares upon vesting shares
|
- | (64 | ) | 98 | - | (34 | ) | - | - | - | - | |||||||||||||||||||||||||
Foreign currency translation adjustment
|
- | - | - | (54 | ) | - | (54 | ) | - | (54 | ) | (54 | ) | |||||||||||||||||||||||
Net income
|
- | - | - | - | 60 | 60 | - | 60 | 60 | |||||||||||||||||||||||||||
Total comprehensive income, net
|
$ | 6 | ||||||||||||||||||||||||||||||||||
Balance as of December 31, 2009
|
650 | 125,649 | (1,208 | ) | (54 | ) | (89,799 | ) | 35,238 | - | - | 35,238 | ||||||||||||||||||||||||
Stock-based compensation related to options and unvested shares granted to employees
|
- | 167 | - | - | - | 167 | - | $ | - | 167 | ||||||||||||||||||||||||||
Issuance of treasury shares upon vesting of shares
|
- | (88 | ) | 134 | - | (46 | ) | - | - | - | - | |||||||||||||||||||||||||
Foreign currency translation adjustment
|
- | - | - | 533 | - | 533 | - | 533 | 533 | |||||||||||||||||||||||||||
Net income
|
- | - | - | - | 4,454 | 4,454 | - | 4.454 | 4,454 | |||||||||||||||||||||||||||
Total comprehensive income, net
|
$ | 4,987 | ||||||||||||||||||||||||||||||||||
Balance as of December 31, 2010
|
650 | 125,728 | (1,074 | ) | 479 | (85,391 | ) | 40,392 | - | $ | - | 40,392 | ||||||||||||||||||||||||
Issuance of ordinary shares
|
94 | 4,906 | - | - | - | 5,000 | - | - | 5,000 | |||||||||||||||||||||||||||
Stock-based compensation related to options and unvested shares granted to employees
|
- | 120 | - | - | - | 120 | - | - | 120 | |||||||||||||||||||||||||||
Issuance of treasury shares upon vesting of shares
|
- | (20 | ) | 120 | - | (100 | ) | - | - | - | - | |||||||||||||||||||||||||
Foreign currency translation adjustment
|
- | - | - | (174 | ) | - | (174 | ) | (131 | ) | (305 | ) | (305 | ) | ||||||||||||||||||||||
Non-controlling interests
|
- | - | - | - | - | - | 14,255 | - | 14,255 | |||||||||||||||||||||||||||
Net income (loss)
|
- | - | - | - | (239 | ) | (239 | ) | 2,038 | 1,799 | 1,799 | |||||||||||||||||||||||||
Total comprehensive income, net
|
$ | 1,494 | ||||||||||||||||||||||||||||||||||
Balance as of December 31, 2011
|
$ | 744 | $ | 130,734 | $ | (954 | ) | $ | 305 | $ | (85,730 | ) | $ | 45,099 | $ | 16,162 | $ | 61,261 |
Year ended
December 31,
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$ | 60 | $ | 4,454 | $ | 1,799 | ||||||
Loss (income) from discontinued operations
|
(472 | ) | (5,399 | ) | 51 | |||||||
Income (loss) from continued operation
|
(412 | ) | (945 | ) | 1,850 | |||||||
Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
||||||||||||
Depreciation and amortization
|
115 | 696 | 2,220 | |||||||||
Impairment of an investment in company
|
- | 600 | - | |||||||||
Stock-based compensation related to options and unvested shares granted to employees
|
221 | 167 | 120 | |||||||||
Gain from a bargain purchase
|
- | - | (4,412 | ) | ||||||||
Decrease in trade receivables
|
- | - | 1,216 | |||||||||
Decrease in deferred tax liabilities
|
- | - | (482 | ) | ||||||||
Increase in other long-term liabilities
|
- | - | 3,319 | |||||||||
Decrease (increase) in other accounts receivable and prepaid expenses
|
(218 | ) | 29 | 1,371 | ||||||||
Increase (decrease) in trade payables
|
29 | 2 | (136 | ) | ||||||||
Increase (decrease) in accrued expenses and other accounts payable
|
757 | (164 | ) | (3,161 | ) | |||||||
Net cash provided by from continuing operations
|
492 | 385 | 1,905 | |||||||||
Net cash used in discontinued operations
|
(3,349 | ) | (202 | ) | (70 | ) | ||||||
Net cash provided by (used in) operating activities
|
(2,857 | ) | 183 | 1,835 | ||||||||
Cash flows from investing activities:
|
||||||||||||
Purchase of equipment
|
- | (5 | ) | (5 | ) | |||||||
Proceeds from (investment in) short-term deposit
|
(3,750 | ) | 3,750 | (1,065 | ) | |||||||
Proceeds from (investment in) long-term lease deposits
|
11 | (57 | ) | 101 | ||||||||
Investment in real estate property
|
(22,282 | ) | (8,786 | ) | (1,187 | ) | ||||||
Investment in other assets
|
(659 | ) | - | - | ||||||||
Increase in restricted cash
|
- | - | (131 | ) | ||||||||
Acquisition of Eldista, net (b)
|
- | - | (20,684 | ) | ||||||||
Proceeds from sale of the Video activity
|
- | 6,800 | - | |||||||||
Net cash provided by (used in) investing activities from continuing operations
|
(26,680 | ) | 1,702 | (22,971 | ) | |||||||
Net cash provided by (used in) investing activities from discontinued operations
|
28,481 | - | - | |||||||||
Net cash provided by (used in) investing activities
|
1,801 | 1,702 | (22,971 | ) |
Year ended
December 31,
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
Cash flows from financing activities:
|
||||||||||||
Issuance of ordinary shares in a private placement
|
- | - | 5,000 | |||||||||
Proceeds from bank loan
|
18,353 | - | 106,441 | |||||||||
Repayment of bank loan
|
- | (406 | ) | (91,847 | ) | |||||||
Repayment of loan to non- controlling interests
|
- | (5,618 | ) | |||||||||
Net cash provided by (used in) financing activities from continuing operations
|
18,353 | (406 | ) | 13,976 | ||||||||
Exchange differences on balances of cash and cash equivalents
|
(32 | ) | 130 | (155 | ) | |||||||
Increase (decrease) in cash and cash equivalents
|
17,265 | 1,609 | (7,315 | ) | ||||||||
Cash and cash equivalents at the beginning of the year
|
11,386 | 28,651 | 30,260 | |||||||||
Cash and cash equivalents at the end of the year
|
$ | 28,651 | $ | 30,260 | $ | 22,945 |
NOTE 1:-
|
GENERAL
|
|
a.
|
Optibase Ltd. ("the Company") was incorporated and commenced operations in 1990.
|
|
b.
|
Acquisitions:
|
|
1.
|
Rümlang , Switzerland
|
NOTE 1:-
|
GENERAL (Cont.)
|
Cash paid
|
$ | 22,828 | ||
Land
|
$ | 2,818 | ||
Building
|
19,354 | |||
Above market value of in-place leases
|
656 | |||
Total purchase price
|
$ | 22,828 |
|
2.
|
Marquis Residence in Miami, Florida
|
NOTE 1:-
|
GENERAL (Cont.)
|
|
3.
|
Centre des Technologies Nouvelles in Geneva, Switzerland
|
|
NOTE 1:-
|
GENERAL (Cont.)
|
USD
|
||||
Cash paid for Eldista shares
|
$ | 40,559 | ||
Assets and liabilities acquired:
|
||||
Land
|
23,654 | |||
Building
|
137,797 | |||
Swap instrument
|
(392 | ) | ||
Mortgage loan
|
(92,705 | ) | ||
Rent settlements with tenants
|
(1,759 | ) | ||
Lease provision
|
(7,311 | ) | ||
Above and below-market value of in-place leases
|
1,124 | |||
Deferred tax liabilities
|
(15,282 | ) | ||
Other current net assets
|
(155 | ) | ||
Gain from a bargain purchase
|
(4,412 | ) | ||
Total purchase price
|
40,559 | |||
Less:
|
||||
Purchase price paid by non-controlling interests
|
(19,875 | ) | ||
Net purchase price
|
$ | 20,684 |
NOTE 1:-
|
GENERAL (Cont.)
|
|
c.
|
Sale of the Video activity (Discontinued operations):
|
NOTE 1:-
|
GENERAL (Cont.)
|
Year ended December 31,
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
Revenues
|
$ | 13,149 | $ | 4,457 | $ | - | ||||||
Operating income
|
$ | 6,612 | $ | 2,874 | $ | - | ||||||
Costs and expenses
|
$ | 10,914 | $ | 3,779 | $ | 51 | ||||||
Other Income
|
$ | 4,774 | $ | 6,304 | $ | - | ||||||
Net income (loss) from discontinued operations
|
$ | 472 | $ | 5,399 | $ | (51 | ) | |||||
Basic and Diluted net earnings per share from discontinued operations
|
$ | 0.03 | $ | 0.33 | $ | (0.00 | ) |
December 31,
|
||||||||
2010
|
2011
|
|||||||
Assets:
|
||||||||
Other accounts receivable
|
$ | 966 | $ | 969 | ||||
Total assets
|
$ | 966 | $ | 969 | ||||
Liabilities:
|
||||||||
Other accounts payable and accrued expenses
|
$ | 3,006 | $ | 2,990 | ||||
Total liabilities
|
$ | 3,006 | $ | 2,990 |
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES
|
|
a.
|
Use of estimates:
|
|
b.
|
Financial statements in U.S. dollars:
|
|
c.
|
Principles of consolidation:
|
|
d.
|
Non-controlling Interests:
|
|
e.
|
Cash equivalents:
|
|
f.
|
Property and equipment:
|
Years
|
|||
Building and buildings' improvements
|
30-100 | ||
Computers and equipment
|
3 |
|
g.
|
Long-lived assets including intangible assets:
|
|
h.
|
Investments in companies:
|
|
i.
|
Goodwill and bargain purchase gain:
|
|
j.
|
Intangibles assets:
|
|
k.
|
Derivative Instruments:
|
|
l.
|
Business Combinations:
|
|
m.
|
Revenue recognition:
|
|
n.
|
Contingencies:
|
|
o.
|
Income taxes:
|
|
p.
|
Concentrations of credit risk:
|
|
q.
|
Earnings (loss) per share:
|
|
r.
|
Accounting for stock-based compensation:
|
December 31,
|
|||||||||
2009
|
2010
|
2011
|
|||||||
Dividend yield
|
0% | 0% | 0% | ||||||
Volatility
|
60% | 61% | 67% | ||||||
Risk free interest
|
2.36% - 3.69% | 1.8% -2.22% | 0.9% -1.7% | ||||||
Expected term (years)
|
4.75 | 4.75 | 4.75 |
|
s.
|
Treasury Shares:
|
|
t.
|
Fair value of financial instruments:
|
Level 1-
|
Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
Level 2-
|
Include other inputs that are directly or indirectly observable in the marketplace.
|
|
Level 3-
|
Unobservable inputs which are supported by little or no market activity.
|
|
u.
|
Impact of newly issued Accounting Standards:
|
|
1.
|
In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP. This pronouncement is an authoritative guidance to amend certain measurement and disclosure requirements related to fair value measurements to improve consistency with international reporting standards. This guidance is effective prospectively for public entities for interim and annual reporting periods beginning after December 15, 2011, with early adoption prohibited. The Company is currently evaluating the effect of ASU No. 2011-04, but does not expect its adoption will have a material effect on its consolidated financial statements.
|
|
2.
|
In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, which specifies that the total of comprehensive income, the components of net income and the components of other comprehensive income are to be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. This update eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. No change has been made in the items to be reported in comprehensive income. ASU No. 2011-05 is effective for the interim and annual periods beginning after December 15, 2011, and should be applied retrospectively.
|
NOTE 3:-
|
REAL ESTATE PROPERTY, NET
|
Land
|
Building
|
Condominium units
|
Currency translation adjustment
|
Total
|
||||||||||||||||
Cost:
|
||||||||||||||||||||
At January 1, 2010
|
$ | 2,832 | $ | 19,450 | $ | - | $ | (110 | ) | $ | 22,172 | |||||||||
Additions
|
- | 154 | 8,632 | 2,102 | 10,888 | |||||||||||||||
At December 31, 2010
|
2,832 | 19,604 | 8,632 | 1,992 | 33,060 | |||||||||||||||
Additions
|
23,654 | 138,983 | 781 | (1,583 | ) | 161,835 | ||||||||||||||
At December 31, 2011
|
26,486 | 158,587 | 9,413 | 409 | 194,895 | |||||||||||||||
Accumulated depreciation:
|
||||||||||||||||||||
At January 1, 2010
|
- | 92 | - | - | 92 | |||||||||||||||
Depreciation charge for the year
|
- | 563 | - | 52 | 615 | |||||||||||||||
At December 31, 2010
|
- | 655 | - | 52 | 707 | |||||||||||||||
Depreciation charge for the year
|
- | 2,011 | 45 | (41 | ) | 2,015 | ||||||||||||||
At December 31, 2011
|
- | 2,666 | 45 | 11 | 2,722 | |||||||||||||||
Real estate property, net:
|
||||||||||||||||||||
At December 31, 2011
|
$ | 26,486 | $ | 155,921 | $ | 9,368 | $ | 398 | $ | 192,173 | ||||||||||
At December 31, 2010
|
$ | 2,832 | $ | 18,949 | $ | 8,632 | $ | 1,940 | $ | 32,353 |
NOTE 4:-
|
OTHER ASSETS, NET
|
Above market value of in-place leases *)
|
Currency translation adjustment
|
Total
|
||||||||||
Cost:
|
||||||||||||
At January 1, 2010
|
$ | 659 | $ | (3 | ) | $ | 656 | |||||
Additions
|
- | 62 | 62 | |||||||||
At December 31, 2010
|
659 | 59 | 718 | |||||||||
Additions
|
1,125 | (11 | ) | 1,114 | ||||||||
At December 31, 2011
|
1,784 | 48 | 1,832 | |||||||||
Accumulated depreciation:
|
||||||||||||
At January 1, 2010
|
22 | - | 22 | |||||||||
Depreciation charge for the year
|
132 | 12 | 144 | |||||||||
At December 31, 2010
|
154 | 12 | 166 | |||||||||
Depreciation charge for the year
|
162 | (8 | ) | 154 | ||||||||
At December 31, 2011
|
316 | 4 | 320 | |||||||||
Other assets, net:
|
||||||||||||
At December 31, 2011
|
$ | 1,468 | $ | 44 | $ | 1,512 | ||||||
At December 31, 2010
|
$ | 505 | $ | 47 | $ | 552 |
|
*)
|
Amortization expenses amounted to $ 22, $ 132 and $ 162 for the years ended December 31, 2009, 2010 and 2011, respectively.
|
NOTE 4:-
|
OTHER ASSETS, NET (Cont.)
|
Year
|
Estimated amortization
expenses
|
|||
2012
|
$ | 156 | ||
2013
|
275 | |||
2014
|
428 | |||
2015
|
229 | |||
2016 and thereafter
|
424 | |||
$ | 1,512 |
NOTE 5:-
|
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES
|
December 31,
|
||||||||
2010
|
2011
|
|||||||
Short-term deposit (1)
|
$ | - | $ | 1,065 | ||||
Deferred tax asset
|
145 | - | ||||||
Prepaid expenses
|
96 | 147 | ||||||
Income receivable
|
20 | 20 | ||||||
Others
|
73 | 28 | ||||||
$ | 334 | $ | 1,260 |
|
(1)
|
OPCTN S.A. paid CHF 1,000 into an escrow account as part of a net assets adjustment mechanism agreed by the parties
in connection with CTN transaction (see details in Note 1b (3)).
|
NOTE 6:-
|
INVESTMENTS IN COMPANIES
|
|
a.
|
The Company invested several amounts in Mobixell Networks Inc. (Mobixell), a privately held Company which is engaged in the design, development and marketing solutions for mobile rich media adaptation, optimization and delivery. As of December 31, 2011, the Company holds 2.08% of Mobixell's shares on a fully diluted basis. The Company's investment in Mobixell is presented at cost net of impairments recorded and as of December 31, 2010 and 2011 the investment amounted to $ 100, following an impairment of $ 600 recorded during 2010.
|
NOTE 6:-
|
INVESTMENTS IN COMPANIES (Cont.)
|
|
b.
|
The Company holds approximately 24% on a converted and fully diluted basis, of V.Box Communication Ltd. ("V. Box"), a privately held company. As of December 31, 2007, the Company has impaired its entire investment. Optibase did not invest additional amounts thereafter.
|
NOTE 7:-
|
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES
|
December 31,
|
||||||||
2010
|
2011
|
|||||||
Employees and payroll accruals
|
$ | 167 | $ | 163 | ||||
Accrued expenses
|
1,438 | 1,681 | ||||||
Institution (mainly tax provision)
|
- | 1,881 | ||||||
Advance rent payments
|
- | 287 | ||||||
Deferred tax liability
|
- | 97 | ||||||
Other
|
103 | 21 | ||||||
$ | 1,708 | $ | 4,130 |
NOTE 8:-
|
LONG TERM LOANS
|
|
a.
|
On October 29, 2009, Optibase SARL received a mortgage loan ("the Loan") from a financial institution in Switzerland, in the amount of CHF 18,800 for the purpose of purchasing the real estate property located in Rümlang, Switzerland ("the Property"). As of December 31, 2011 total mortgage loan amounted to $ 18,810 with current maturities of $ 400. The loan bears a variable interest rate based on current money and capital markets in Switzerland plus the bank's customary margins (0.8%). The financial institution may increase margin at any time if creditworthiness of the borrower or quality of the property is impaired. Principal and interest of the loan are payable quarterly. The mortgage loan may be repaid at any time with a three months prior written notice by the Company. The mortgage loan is governed by the laws of Switzerland and bears other terms and conditions customary for that type of mortgage loans
.
The Company pledged to the bank the property and all accounts and assets of the Company's subsidiary which are deposited with the bank against the loan received. The Company is required to meet certain covenants under this mortgage loan. As of December 31, 2011, the Company met these covenants.
|
NOTE 8:-
|
LONG TERM LOANS (Cont.)
|
Year ended December 31,
|
||||
2012 (current maturity)
|
$ | 400 | ||
Long-term portion
:
|
||||
2013
|
400 | |||
2014
|
400 | |||
2015
|
400 | |||
2016
|
400 | |||
2017
|
400 | |||
2018 and thereafter
|
16,810 | |||
$ | 18,810 |
|
b.
|
On September, 2010, Eldista was granted a mortgage loan from a financial institution in Switzerland, in the amount of CHF 85,250 for the purpose of purchasing its real estate property located in Geneva, Switzerland. The loan bears an adjustable interest rate based on current money and capital markets in Switzerland plus the bank's customary margins (1.8%). Principal and interest of the loan are payable quarterly. The mortgage loan may be repaid at any time with a three months prior written notice by the Company. Eldista had the option to convert the mortgage into another mortgage product offered by the bank until April 30, 2015. The mortgage loan is governed by the laws of Switzerland and bears other terms and conditions customary for that type of mortgage loans. The Company pledged to the bank the property and all accounts and assets of the Company's subsidiary which are deposited with the bank against the loan received.
|
NOTE 8:-
|
LONG TERM LOANS (Cont.)
|
Year ended December 31,
|
||||
2012 (current maturity)
|
$ | 2,129 | ||
Long-term portion
:
|
||||
2013
|
2,129 | |||
2014
|
2,129 | |||
2015
|
2,129 | |||
2016
|
2,129 | |||
2017
|
2,129 | |||
2018 and thereafter
|
94,151 | |||
$ | 104,796 |
|
c.
|
As of December 31, 2010 and 2011, the Company and its subsidiaries had authorized lines of credit in the amount of $ 70 and $ 65, respectively which are linked to the NIS and bear an annual bank interest rate of Prime plus 1%-1.25%.The Company and its subsidiaries did not utilize its line of credit as of December 31, 2010 and 2011.
|
NOTE 9:-
|
COMMITMENTS AND CONTINGENT LIABILITIES
|
|
a.
|
Lease commitments:
|
2012
|
$ | 60 | ||
2013
|
51 | |||
$ | 111 |
NOTE 9:-
|
COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)
|
|
b.
|
Guarantees:
|
|
c.
|
Assets pledged as collateral:
|
|
d.
|
Office of the Chief Scientist and European Commission commitments:
|
NOTE 9:-
|
COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)
|
|
e.
|
Legal claim and
contingent liabilities:
|
|
1.
|
Under the Agreement related to the sale of Video Activity (as further described in Note 1c) the parties agreed on a price adjustment mechanism, upon which, Vitec shall add or subtract to the consideration the adjustment amount whereby the adjustment amount would be deposited in escrow within five days from the closing date.
|
NOTE 9:-
|
COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)
|
|
2.
|
Personal Claim against Adv. Doron Afik.
|
|
a.
|
Corporate tax rates:
|
Year ended December 31,
|
|||||||||
2009
|
2010
|
2011
|
|||||||
Luxemburg
|
29% | 29% | 29% | ||||||
Switzerland
|
25% | 25% | 24% | ||||||
United States
|
35% | 35% | 34% |
|
b.
|
Tax assessments:
|
|
c.
|
Deferred tax assets and liabilities:
|
March, 2 (acquisition date)
|
December 31
|
|||||||||||
2011
|
Amortization
|
2011
|
||||||||||
Land
|
$ | 5,620 | $ | - | $ | 5,620 | ||||||
Building
|
11,738 | (98 | ) | 11,640 | ||||||||
Swap instrument
|
(93 | ) | (761 | ) | (854 | ) | ||||||
Mortgage loan
|
(248 | ) | 5 | (243 | ) | |||||||
Settlements with tenants
|
(418 | ) | 418 | - | ||||||||
Lease provision
|
(1,737 | ) | 15 | (1,722 | ) | |||||||
Other assets, net (In-place leases)
|
267 | (3 | ) | 264 | ||||||||
$ | 15,129 | $ | (424 | ) | $ | 14,705 |
|
d.
|
Net operating losses carryforward:
|
|
e.
|
Reconciliation of the theoretical tax expenses to the actual tax expenses:
|
Year ended
December 31,
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
Income (loss) before taxes as reported
|
$ | (412 | ) | $ | (902 | ) | $ | 2,331 | ||||
Theoretical tax benefit computed at the statutory rate (26%, 25%
and 24% for the years 2009, 2010 and 2011, respectively)
|
$ | (107 | ) | $ | (226 | ) | $ | 560 | ||||
Differences in tax rates on income deriving from foreign subsidiaries
|
(10 | ) | (89 | ) | 42 | |||||||
Gain derived from bargain purchase
|
- | - | (1,059 | ) | ||||||||
Tax adjustments in respect of currency translation
|
341 | 643 | 154 | |||||||||
Deferred taxes on losses and other temporary differences for
which valuation allowance was provided
|
(162 | ) | (339 | ) | 626 | |||||||
Settlement of prior years tax assessments
|
- | - | 41 | |||||||||
Other non-deductible expenses
|
(62 | ) | 54 | 117 | ||||||||
Income tax expense
|
$ | - | $ | 43 | $ | 481 |
|
f.
|
Income (loss) before taxes on income consists of the following:
|
Year ended
December 31,
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
Domestic
|
$ | (443 | ) | $ | (1,343 | ) | $ | (3,138 | ) | |||
Foreign
|
31 | 441 | 5,469 | |||||||||
$ | (412 | ) | $ | (902 | ) | $ | 2,331 |
NOTE 10:-
|
TAXES ON INCOME (Cont.)
|
|
g.
|
Income tax expenses are comprised as follows:
|
Year ended
December 31,
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
Current
|
$ | - | $ | 7 | $ | 863 | ||||||
Deferred
|
- | 36 | (382 | ) | ||||||||
$ | - | $ | 43 | $ | 481 | |||||||
Domestic
|
$ | - | $ | - | $ | - | ||||||
Foreign
|
- | 43 | 481 | |||||||||
$ | - | $ | 43 | $ | 481 |
|
h.
|
As of December 31, 2010 and 2011 the Company has no liability for unrecognized income tax benefits, and there was no change in its liability for unrecognized income tax benefits during all years presented.
|
NOTE 11:-
|
SHAREHOLDERS' EQUITY
|
|
a.
|
General:
|
|
1.
|
The Ordinary shares of the Company are traded on the NASDAQ Global Market since April 1999.
|
|
2.
|
On May 5, 2011, following the receipt of the approval of the Company's shareholders on March 30, 2011, the Company completed a private placement of 2,500,000 ordinary shares of the Company to the Company's President and the controlling shareholder of the Company, in consideration for $ 5,000.
|
NOTE 11:-
|
SHAREHOLDERS' EQUITY (Cont.)
|
|
b.
|
Stock options:
|
Year ended December 31, 2011
|
||||||||||||
Weighted
|
||||||||||||
average
|
||||||||||||
Amount
|
Weighted average exercise price
|
Remaining contractual term (years)
|
||||||||||
Outstanding at the beginning of the year
|
543,100 | $ | 2.96 | |||||||||
Granted
|
310,000 | $ | 1.99 | |||||||||
Forfeited
|
(207,600 | ) | $ | 4.64 | ||||||||
Outstanding at the end of the year
|
645,500 | $ | 1.95 | 5.51 | ||||||||
Exercisable options at the end of the year
|
198,008 | $ | 2.42 | 3.79 | ||||||||
Options vested and expected to vest at end of year
|
632,059 | $ | 2.1 | 5.37 |
NOTE 11:-
|
SHAREHOLDERS' EQUITY (Cont.)
|
|
c.
|
Non-vested shares:
|
Nonvested shares
|
Shares
|
Weighted average grant date fair value
|
||||||
Non-vested at January 1, 2011
|
34,000 | $ | 1.27 | |||||
Granted
|
24,000 | $ | 1.48 | |||||
Exercised
|
(18,000 | ) | $ | 1.23 | ||||
Forfeited and cancelled
|
(10,000 | ) | $ | 1.34 | ||||
Non-vested at December 31, 2011
|
30,000 | $ | 1.43 |
NOTE 11:-
|
SHAREHOLDERS' EQUITY (Cont.)
|
|
d.
|
The total equity-based compensation expense related to all of the Company's equity-based awards, recognized for the years ended December 31, 2009, 2010 and 2011, was comprised as follows:
|
Year ended
December 31,
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
General and administrative from continued operations
|
$ | 79 | $ | 112 | $ | 120 | ||||||
Expenses recorded as discontinued operations
|
142 | 55 | - | |||||||||
Total equity-based compensation expense
|
$ | 221 | $ | 167 | $ | 120 |
NOTE 12:-
|
SELECTED STATEMENT OF OPERATIONS DATA
|
|
a.
|
Financial income (expenses):
|
Year ended
December 31,
|
||||||||||||
2009
|
2010
|
2011
|
||||||||||
Financial income:
|
||||||||||||
Interest
|
$ | 423 | $ | 612 | $ | 35 | ||||||
Foreign currency translation adjustments
|
257 | - | - | |||||||||
680 | 612 | 35 | ||||||||||
Financial expenses:
|
||||||||||||
Interest
|
(63 | ) | (207 | ) | (3,081 | ) | ||||||
Foreign currency translation adjustments
|
- | (101 | ) | (334 | ) | |||||||
Remeasurement of derivatives
|
- | - | (4,101 | ) | ||||||||
(63 | ) | (308 | ) | (7,516 | ) | |||||||
$ | 617 | $ | 304 | $ | (7,481 | ) |
NOTE 13:-
|
SUBSEQUENT EVENTS
|
Date: April 30, 2012
|
OPTIBASE LTD.
|
|
By:
/s/
Amir Philips
|
||
Name: Amir Philips
|
||
Title: Chief Executive Officer
|
8.1*
|
List of the subsidiaries of the Company.
|
11.1
|
Code of Business Conduct and Ethics (incorporated by reference to Exhibit 11.1 to the Registrant’s Annual Report on Form 20-F for the fiscal year ended December 31, 2010).
|
12.1*
|
Certification by Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
12.2*
|
Certification by Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
13.1*
|
Certification by Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
13.2*
|
Certification by Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
15.1*
|
Consent of Kost, Forer Gabbay & Kasierer, a member of Ernst & Young Global.
|
Paragraph
|
Subject
|
Page
|
1.
|
Introduction
|
3
|
2.
|
Public Company
|
5
|
3.
|
The Company's Purpose
|
5
|
4.
|
The Company's Objects
|
5
|
5.
|
Limitation of Liability
|
5
|
6.
|
The Share Capital
|
5
|
7.
|
The Issue of Shares and Other Securities and the repurchase of shares
|
6
|
8.
|
Calls for Payment
|
7
|
9.
|
The Company's Register of Shareholders and the Issue of Share Certificates
|
8
|
10.
|
Transfer of the Company's Shares
|
9
|
11.
|
Lien
|
12
|
12.
|
Alterations to the Share Capital
|
12
|
13.
|
The General Meeting's Powers
|
14
|
14.
|
Annual and Special General Meetings and Class Meetings
|
15
|
15.
|
Convening of General Meetings
|
16
|
16.
|
The General Meeting's Agenda
|
17
|
17.
|
The Discussion at General Meetings
|
18
|
18.
|
Voting by Shareholders
|
19
|
19.
|
The Appointment of a Proxy
|
22
|
20.
|
Voting Instrument
|
24
|
21.
|
The Board of Directors' Powers
|
27
|
22.
|
The Appointment of Directors and Termination of Their Office
|
27
|
23.
|
The Directors' Acts
|
31
|
24.
|
Board of Directors' Committees
|
35
|
25.
|
The Board of Directors' Chairman
|
35
|
26.
|
The General Manager
|
36
|
27.
|
Secretary, Internal Auditor and Other Officials in the Company
|
39
|
28.
|
Auditor
|
39
|
29.
|
Permitted Distribution
|
40
|
30.
|
Dividend and Bonus Shares
|
41
|
31.
|
Purchase of the Company's Shares
|
44
|
32.
|
Insurance of Officers
|
45
|
33.
|
Indemnity of Officers
|
45
|
34.
|
Exemption of Officers
|
47
|
35.
|
Insurance, Exemption and Indemnity - General
|
47
|
36.
|
Merger
|
48
|
37.
|
[Reserved]
|
48
|
38.
|
Winding Up
|
48
|
39.
|
The Sale of the Company's Assets
|
48
|
40.
|
Notices
|
49
|
1.
|
Introduction
|
|
1.1
|
In these articles, each of the following expressions shall bear the meanings set forth alongside them:
|
|
"shareholder"
– any person to whose credit a share is registered with a member of the Stock Exchange (as defined in the Companies Law) and such share is included among the shares registered in the shareholders register of the Company in the name of a registration Company, or a person registered as a shareholder in the Company's register of shareholders;
|
|
"financial statements"
- the financial statements which the Company must prepare pursuant to the law;
|
|
"periodic report"
- as defined in Chapter Two of the Securities (Periodic and Immediate Reports), Regulations 5730-1970 or any securities regulations replacing them;
|
|
"law"
- the provisions of any law prevailing in the State of Israel;
|
|
"director"
- as defined in section 1 of the Companies Law, including an alternate or attorney;
|
|
"the Companies Law"
- the Companies Law, 5759-1999;
|
|
"the Securities Law"
- the Securities Law, 5728-1968;
|
|
"business day"
- Sundays to Thursdays, other than religious and public holidays in the State of Israel;
|
|
"writing"
- print and any other form of printing words, including documents sent in writing by facsimile, cable, telex, e-mail, computer or through any other electronic media, which creates or enables the creation of a copy and/or printout of the document;
|
|
"office"
- the Company's registered office;
|
|
"securities"
- shares, debentures, capital notes, securities convertible into shares and rights to any of the aforegoing, issued by the Company;
|
|
"the Companies Ordinance"
- the Companies Ordinance (New Version), 5743-1983;
|
|
"ordinary majority"
- a majority of more than half the votes of the shareholders entitled to vote and voting themselves, by proxy or through a voting instrument;
|
|
"special majority"
- a majority of more than three quarters of the votes of the shareholders entitled to vote and voting themselves, by proxy or through a voting instrument;
|
|
"articles"
- the Company's articles as formulated herein or as altered, expressly or pursuant to the law;
|
|
"the Companies Regulations"
- regulations promulgated by virtue of the authority granted pursuant to the Companies Law;
|
|
"Securities Regulations"
- regulations promulgated by virtue of the authority granted pursuant to the Securities Law.
|
|
"person" or "persons"-
Including a corporation.
|
|
"year" and "month"-
a Gregorian month or year.
|
|
1.2
|
The provisions of sections 3-10 of the Interpretation Law, 5741-1981 shall also apply, mutatis mutandis, to the interpretation of the articles, if there is no provision to the contrary or unless the context otherwise admits.
|
|
Save as provided in this paragraph, every word and expression herein shall bear the meaning designated to them in the Companies Law, and if none - the meaning designated to them in the Companies Regulations, and if none - the meaning designated to them in the Securities Law, and if none - the meaning designated to them in the Securities Regulations, and if none - the meaning designated to them in any other law, unless the context otherwise admits.
|
|
Where these articles refer to any legal provision and such provision is amended or cancelled, the said provision shall be deemed valid and as part of the articles, unless such is prohibited by the law.
|
|
The headings in these articles are meant for the purpose of convenience only and shall not be used for the interpretation of these articles
|
|
Provisions of the Companies Law which are dispositive shall apply to the Company, to the extent that it is not otherwise provided in these articles and to the extent that there is no contradiction between them and between the provisions of these articles.
|
|
1.3
|
Amendment
If a resolution to amend these articles is recommended by the Board of Directors, such recommended resolution’s adoption in a General Meeting requires a simple majority. In any other case a resolution adopted in a General Meeting approved by a special majority is required to approve any amendment of these articles.
|
2.
|
Public Company
|
|
The Company is a "public company" as defined in section 1 of the Companies Law.
|
3.
|
The Company's Purpose
|
|
The Company's purpose is according to its Amended and Restated Memorandum of Association. If the memorandum is silent with regard to the Company’s purpose, than it will act pursuant to business considerations to make profits; however, the Company may contribute a reasonable amount for an appropriate cause, even if the contribution is not within the framework of the said business considerations.
|
4.
|
The Company's Objects
|
|
The Company shall engage in any Lawful business.
|
5.
|
Limitation of Liability
|
|
The liability of the Company's shareholders is limited, each to payment of the full amount which he undertook to pay for the shares allotted to him at the time of the allotment.
|
CHAPTER TWO - THE
COM
PANY'S SHARE CAPITAL
|
6.
|
The Share Capital
|
|
6.1
|
The Company's authorised share capital is NIS 3,900,000 divided into 30,000,000 ordinary shares of NIS 0.13 par value each (hereinafter referred to as “share", "ordinary share", "shares" or "ordinary shares", as the case may be).
The Company may alter the authorised share capital in accordance with the provisions of the Companies Law and of these articles.
|
|
6.2
|
Each share vests a right to receive invitations, to participate in and vote at the general meetings. A shareholder shall have one vote for each share held by him.
|
|
6.3
|
All the shares rank pari passu in relation to the amounts of capital paid or credited as paid on their nominal value, in connection with dividend, the distribution of bonus shares and any other distribution, return of the capital and participation in a distribution of the Company's surplus assets on winding up.
|
|
6.4
|
The provisions of these articles in respect of shares shall also apply to other securities issued by the Company, mutatis mutandis.
|
7.
|
The Issue of Shares and Other Securities and the repurchase of shares
|
|
7.1
|
The Company's board of directors may issue shares and other securities of the Company, up to the limit of the Company's authorised share capital. If the Company's share capital includes a number of classes of shares and securities, shares and securities exceeding the limit of the authorised share capital of such class shall not be issued. In such regard, securities convertible or exercisable into shares shall be deemed to have been converted or exercised on the date of their issue.
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7.2
|
The Company's board of directors may issue redeemable securities, with such rights and on such conditions as the board of directors prescribes.
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7.3
|
Subject to the provisions of the articles and the provisions of the Companies Law, the board of directors may allot shares to any person with restrictions and conditions, for their nominal value, with a discount or with a premium, as it deems fit.
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7.4
|
The Company's board of directors may resolve to issue a series of debentures within the framework of its authority to borrow on the Company's behalf, and within the limits of such authority. The aforegoing does not negate the authority of the general manager or someone authorised by him to borrow on the Company's behalf, to issue debentures, promissory notes and bills of exchange, within the limits prescribed by the board of directors.
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7.5
|
The Company's existing shareholders shall not have a right of pre-emption, preferred right or any other right to purchase the Company's securities. The board of directors may, in its exclusive discretion, first offer the Company's securities to the existing shareholders or some of them.
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7.6
|
The Company may pay any person commission in consideration for the underwriting, marketing or distribution of the Company's securities, conditionally or unconditionally, on such terms and conditions as the board of directors prescribes. Such payments may be made in cash or securities of the Company, or partly in one way and partly in another.
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7.7
|
The Company may at any time and from time to time, subject to the Companies Law, purchase back or finance the purchase of any shares or other securities issued by the Company, in such manner and under such terms as the Board of Directors shall determine, whether from any one or more shareholders. Such purchase shall not be deemed as payment of dividends and no security holder will have the right to require the Company to purchase his securities or offer to purchase securities from any other security holders.
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8.
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Calls for Payment
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8.1
|
If pursuant to the conditions of an allotment of shares there is no fixed date for the payment of any part of the price payable for them, the board of directors may from time to time make calls upon the shareholders in respect of the monies not yet paid in relation to the shares held by them (hereinafter referred to as “calls" or "call", as the case may be).
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8.2
|
The call shall determine the date by which the amount specified therein must be paid, together with interest, linkage and the expenses incurred as a result of the non-payment, at the rates and in the amounts prescribed by the board of directors. Such date shall not be less than 14 days from the date of the call.
The call shall also specify that in the event of non-payment by the date fixed as required, the shares in relation to which the call is being made are likely to be forfeited. If a shareholder does not comply with the call, any share in relation to which the said call has been made may be forfeited at any time thereafter, pursuant to the board of directors' resolution. Share forfeitures shall include all the dividends on such shares which have not been paid prior to the forfeiture, even if declared.
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8.3
|
Any amount which pursuant to a share's allotment conditions is payable at the time of the allotment or at a fixed time, on account of the amount of the share or for premium, shall be deemed in respect of the articles a call duly made and notified, and the payment date is the date fixed for payment. In the event of non-payment, all the paragraphs of the articles dealing with the payment of interest, linkage and expenses, the forfeiture of shares and the like and all the other paragraphs hereof relating to the matter shall apply as though the said amount had been duly called and notified.
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8.4
|
The board of directors may distinguish between the shareholders in relation to the amounts of the calls and/or their payment times.
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8.5
|
Joint holders of a share shall be jointly and severally liable for payment of the calls made on such share.
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8.6
|
Any payment on account of a share shall first be attributed on account of the nominal value and only thereafter on account of the premium in respect of any share.
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8.7
|
A call may be cancelled or postponed to another date, as resolved by the board of directors. The board of directors may waive all or any of the interest, linkage and expenses.
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8.8
|
The board of directors may accept from a shareholder willing to pay in advance payments on account of his shares in addition to amounts actually called, and the board of directors may pay such shareholder interest on the amounts paid in advance as aforesaid, or on such part thereof as exceeds the amount called on account of the shares, in relation to which the payment was made in advance, or come to any other arrangement with him which is such as to compensate him for the advance payment.
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8.9
|
A shareholder shall not be entitled to his rights as shareholder, including dividend, unless he has paid all the amounts detailed in the calls made on him, together with interest, linkage and expenses, if any, unless otherwise prescribed by the board of directors.
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8.10
|
The board of directors may sell, re-allot or otherwise transfer any share forfeited in such manner as it resolves, including without consideration, provided that the Company is paid the full nominal value in respect of such share.
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8.11
|
The board of directors may, at any time prior to selling or otherwise transferring the forfeited share, cancel the forfeiture on such conditions as it resolves.
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8.12
|
A shareholder whose shares have been forfeited shall, notwithstanding the forfeiture, be liable to pay the Company all the calls not paid in relation to such shares prior to the forfeiture, together with interest, linkage and expenses up to the date of the payment as though the shares had not been forfeited, and to comply with all the other claims and demands enforceable by the Company in relation to the shares up to the date of the forfeiture, without a deduction or discount for the value of the shares on the date of the forfeiture. His obligation shall only come to an end after the Company has received the full payment specified at the time of the shares' issue.
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8.13
|
The board of directors may collect the calls not paid in respect of the shares forfeited or some of them, as it deems fit, but shall not be obliged to do so.
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8.14
|
Share forfeitures shall result, at the time of the forfeiture, in the cancellation of any right in the Company and any claim or demand vis-a-vis it in relation to the share, save for those rights and obligations which are excluded from this rule pursuant to these articles or which the law grants or imposes on the former shareholder.
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9.
|
The Company's Register of Shareholders and the Issue of Share Certificates
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9.1
|
The Company shall, through its secretary, keep a register of shareholders and register of material shareholders.
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9.2
|
The board of directors may close the register of shareholders for an overall period of up to 30 days in any year.
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9.3
|
A shareholder is entitled, at his request, to receive from the Company, without payment, within two months of the allotment or registration of the transfer (unless the issue conditions specify another period of time) one certificate or a number of certificates, in accordance with the Company's resolution, in respect of all the shares of a particular class registered in his name, which shall specify the number of shares and any other detail which in the board of directors' opinion is important. In the case of a jointly held share, the Company shall not be liable to issue more than one certificate to all the joint shareholders, and the delivery of such a certificate to one of the joint shareholders shall be deemed delivery to all of them.
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9.4
|
Every certificate shall bear the Company's seal or stamp or its printed name and shall be signed by one director and the Company's secretary, or by two directors or by any other person appointed by the board of directors for such object.
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9.5
|
If a share certificate is destroyed, spoiled, lost or damaged, the board of directors may order the cancellation thereof and the issue of a new certificate in place thereof, provided that the share certificate is delivered to the Company and destroyed by it, or that it is proved to the satisfaction of the board of directors that the certificate has been lost or destroyed and that the Company has received security to the satisfaction of the board of directors against any possible damage. A reasonable sum as may be determined by the board of directors from time to time shall be paid in respect of every certificate issued pursuant to this article
.
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9.6
|
Where two or more persons are registered as joint holders of a share, each of them may confirm the receipt of a dividend or other payments in connection with such share and his confirmation shall bind all the joint shareholders.
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9.7
|
The Company shall not recognize any person as holding a share on trust, and shall not be bound or compelled to recognize any equitable, contingent, future or partial interest in any share, or any other interest in connection with a share, save for the absolute right of the registered holder in respect of any share, except in reliance upon a judicial decision or pursuant to the requirements of any law.
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10.
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Transfer of the Company's Shares
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10.1
|
The Company's shares may be transferred. A share transfer shall not be registered unless a share transfer deed (hereinafter referred to as “share transfer deed") is submitted to the Company. The share transfer deed shall be drawn up in the following manner or in a manner as similar thereto as possible or in another manner approved by the board of directors.
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=====================================================
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Transfer deed
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I ___________________, ID/Company No. __________, of ___________________ (hereinafter referred to as “the transferor") transfer to ___________________, ID/Company No. __________, of ___________________ (hereinafter referred to as “the transferee"), in consideration for NIS __________, __________ ordinary shares of NIS __________ n.v. each, which are marked with the numbers __________ to __________ inclusive, of ___________________ Ltd. (hereinafter referred to as “the Company"), to be held by the transferee, administrators of his estate, guardians and successors and assigns on the same terms and conditions pursuant to which I held these shares at the time of signing this instrument, and I the transferee agree to accept the aforementioned shares on the terms and conditions mentioned above and subject to the Company's articles, as shall be from time to time.
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As witness our hands on ___________________.
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The Transferor - | The Transferee - | ||
Name: | Name: | ||
Signature: | Signature: | ||
Witness to Transferor's Signature - | Witness to Transferee's Signature - | ||
Name: , Adv. | Name: , Adv. | ||
License No. | License No. | ||
Signature: | Signature: |
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=====================================================
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10.2
|
A transfer of shares which are not fully paid, or of shares on which the Company has a lien, shall not be valid, unless approved by the board of directors which may, in its absolute discretion and without giving any grounds therefor, refuse to register such a transfer.
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|
The board of directors may refuse a transfer of shares as aforesaid and may make such a transfer conditional upon the transferee undertaking, to the extent and in the manner prescribed by the board of directors, to perform the transferor's obligations in respect of the shares or the obligations in respect of which the Company has a lien on the shares.
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10.3
|
The transfer of part of a share shall not be valid.
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10.4
|
The transferor shall continue to be considered the holder of the shares being transferred until the transferee's name is entered in the Company's register of shareholders.
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10.5
|
The share transfer deed shall be submitted to the office for registration together with the certificates in which the shares to be transferred are registered (if issued) and any other proof which the Company requires regarding the transferor's proprietary right in the shares or his right to transfer them. The share transfer deeds shall be kept by the Company. The Company shall not be bound to keep share transfer deeds and share certificates which have been cancelled.
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10.6
|
A joint shareholder wishing to transfer his right in a share, who is not in possession of the share certificate, shall not be liable to attach the share certificate to the share transfer deeds, provided that the share transfer deeds state that the transferor is not in possession of the share certificate relating to the share his right in which is being transferred and that the share being transferred is jointly held, together with details of the other joint shareholders.
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10.7
|
The Company may demand the payment of a fee for registering the transfer in such amount as prescribed by the board of directors from time to time.
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10.8
|
Upon the death of a shareholder of the Company, the Company shall recognise his guardians, administrators of the estate or executors of the will, or in the absence of any of the aforegoing the shareholder's legal heirs, as the only persons having a right to his shares, after entitlement thereto is proved as prescribed by the board of directors.
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10.9
|
Where the deceased shareholder held shares jointly with others, the Company shall recognise the surviving joint shareholders as holders of the said shares, unless all the joint shareholders have notified the Company in writing prior to the death of one of them of their wish that the provisions of this article shall not apply; however, such shall not exempt the estate of a joint shareholder from any obligation by which the joint shareholders would have been bound were it not for his death.
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10.10
|
A person acquiring a right to shares in consequence of his being a guardian, administrator of the estate, executor of the will, heir, receiver, liquidator or trustee on bankruptcy of a shareholder or pursuant to the provisions of any other law may, on furnishing proof of his right, as required by the board of directors, be registered as the holder of the shares or transfer them to another person, subject to the provisions of the articles in relation to transfer.
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10.11
|
A person acquiring a right to a share as a result of their transmission shall be entitled to dividend and the other rights in respect of the share and may accept and give receipts for dividend or other payments payable in connection with the share, but shall not be entitled to receive notices of the Company's general meetings and to participate thereinin or vote thereat in connection with such share or exercise any right vested by the share, save for the aforegoing, until after he has been entered in the register of shareholders.
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11.
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Lien
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11.1
|
The Company shall have a first and paramount lien on all the shares not paid in full which are registered in the name of any shareholder, and over the proceeds from the sale thereof, in relation to monies (whether presently payable or not) called or payable at a fixed time in respect of such shares.
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The Company shall also have a first and paramount lien over all the shares (other than fully paid shares) registered in the name of any shareholder to secure monies due from him or from his property, whether such debts are due from him alone or together with others.
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|
The said lien shall also apply to dividends declared from time to time on such shares.
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11.2
|
In order to realize the lien, the board of directors may sell the shares to which the lien applies, or any of them, in such manner as it deems fit. No sale as aforesaid shall be effected until after the date specified for payment and after written notice has been given to the shareholder of the Company's intention to sell the shares, and the amounts are not paid within 14 days of such notice.
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11.3
|
The net proceeds from any such sale, after payment of the sale expenses, shall be applied towards the discharge of the debts or obligations of such shareholder and the balance (if any) shall be paid to him.
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11.4
|
If shares are sold in order to realize a lien through prima facie use of the powers given above, the board of directors may enter these shares in the register of shareholders in the purchaser's name, and the purchaser shall not be liable to check the legality of the acts or the application of the purchase money. After the said shares are registered in the purchaser's name in the register of shareholders, no person shall be entitled to appeal the validity of the sale.
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12.
|
Alterations to the Share Capital
|
|
The general meeting may at any time resolve by an ordinary majority to do any of the following acts.
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12.1
|
Increasing the authorised share capital
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To increase the Company's authorised share capital, whether or not all the shares registered at such time have been issued. The increased capital shall be divided into shares with ordinary, preferred, deferred or other special rights (subject to the special rights attached to an existing class of shares) or shall be subject to such conditions and restrictions in relation to dividend, return of capital, voting or other conditions as directed by the general meeting in its resolution to increase the authorised capital.
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12.2
|
Classes of shares
|
|
To divide the share capital into different classes of shares and to determine and alter the rights attached to each class of shares, on the following conditions -
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(a)
|
so long as the shares' issue conditions do not otherwise provide, the rights attached to any class of shares may be altered after an ordinary majority resolution is passed by general meetings of the holders of each class of shares separately or after obtaining the written consent of the holders of all the classes of shares;
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(b)
|
the rights vested in the holders of shares of a particular class shall not be deemed to have been altered by the creation or issue of other shares with identical rights or alteration of the rights attached to existing shares, unless the issue conditions of such shares otherwise provide.
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12.3
|
Consolidation of the share capital
|
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To consolidate and divide any or all of its share capital into shares of a nominal value greater than that specified in the articles. In the event that there are shareholders who are left with fractions of shares as a result of the consolidation, the board of directors may, if it receives the approval of the general meeting in the resolution on the consolidation of the capital as aforesaid:
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(a)
|
sell all the fractions and for such object appoint a trustee in whose name the share certificates containing the fractions shall be issued, who shall sell them, and the consideration received less commissions and expenses shall be distributed amongst the entitlees. The board of directors may resolve that shareholders entitled to a consideration that is less than the amount prescribed by it shall not receive any consideration from a sale of the fractions as aforesaid, and their share of the consideration shall be distributed amongst the shareholders entitled to a consideration exceeding the amount prescribed, pro rata to the consideration to which they are entitled;
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(b)
|
to allot to all the shareholders left with fractions of shares as a result of the consolidation and division fully paid shares of the class of shares which existed prior to the consolidation in such number the consolidation of which with the fraction would suffice for one whole consolidated share, and an allotment as aforesaid shall be deemed valid just before the consolidation;
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(c)
|
determine that shareholders shall not be entitled to receive a consolidated share in respect of a fraction of a consolidated share deriving from the consolidation of half or less of the number of shares the consolidation of which creates one consolidated share, and shall be entitled to receive a consolidated share in respect of a fraction of a consolidated share deriving from the consolidation of more than half the number of shares the consolidation of which created one consolidated share.
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In the event that an act pursuant to sub-paragraphs (b) or (c) above obliges the issue of additional shares, the payment thereof shall be effected in the manner in which bonus shares may be paid. Consolidation and division as aforesaid shall not be deemed alteration of the rights attached to the shares the subject of the consolidation and division.
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12.4
|
Cancellation of unallotted share capital
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To cancel authorised share capital which has not yet been allotted, provided that the Company has not undertaken to allot such shares.
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12.5
|
Sub-division of the share capital
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To sub-divide the Company's share capital or any part thereof into shares of a nominal value smaller than that specified in the articles by a sub-division of all or any of the Company's shares at such time.
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CHAPTER THREE - GENE
RA
L MEETINGS
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13.
|
The General Meeting's Powers
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13.1
|
Matters within the general meeting's authority
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|
The Company's resolutions on the following matters shall be passed by the general meeting:
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(a)
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alterations to the articles.
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(b)
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the appointment or renewal of the appointment of the auditor, the termination of his office or the non-renewal thereof and the determination of his remuneration in accordance with the provisions of articles 14.1 (b) and 28 below;
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(c)
|
the appointment of directors, including external directors, and the termination of their offices in accordance with article 22.3 below;
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(d)
|
the approval of acts and transactions requiring the general meeting's approval in accordance with the provisions of sections 255 and 268 to 275 of the Companies Law;
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(e)
|
alterations to the Company's share capital, in accordance with the provisions of article 12 above;
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(f)
|
a merger as provided in section 320(a) of the Companies Law;
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(g)
|
any resolution which pursuant to the law or in accordance with these articles requires to be adopted by resolution of a general meeting;
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13.2
|
The general meeting's authority to transfer powers between the organs
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|
The general meeting may, by a special majority, assume powers given to another organ, and it may transfer powers given to the general manager to the authority of the board of directors.
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|
The assumption and/or transfer of powers as aforesaid shall be for a particular matter or for a particular period of time, all as provided in the meeting's resolution.
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14.
|
Annual and Special General Meetings and Class Meetings
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|
14.1
|
Annual meetings
|
|
The annual general meeting shall be held every year by no later than the end of 15 months from the last annual general meeting
,
at such time and place as may be determined by the Board. These general meetings shall be called "annual meetings".
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(a)
|
The annual meeting shall be convened in order to pass resolutions on the following matters:
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(1)
|
the appointment of directors and the termination of their office in accordance with article 22 below;
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(2)
|
the appointment of the auditor or the renewal of his office and the board of directors' authorisation to determine of his remuneration, subject to the provisions of article 28.3 below.
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(b)
|
The annual meeting shall be convened in order to:
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(1)
|
discuss the financial statements and the board of directors' report submitted by the Company pursuant to the Securities Regulations as at 31st December of the calendar year preceding the year in which the general meeting is being held;
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(2)
|
receive the board of directors' report on the auditor's remuneration, as provided in article 28.3 below.
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(c)
|
In addition, the annual meeting shall include a discussion and/or resolution on any other matter placed on the agenda.
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14.2
|
Special meetings
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|
General meetings of the Company which are not convened pursuant to article 14.1 above shall be called "special meetings".
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|
A special meeting shall only discuss and resolve on all the matters not discussed at the annual meeting which are detailed on the agenda of the special meeting.
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14.3
|
Class meetings
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|
The provisions of these articles relating to general meetings shall apply, mutatis mutandis, to class meetings of the Company.
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15.
|
Convening of General Meetings
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|
15.1
|
Convening the annual meeting
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|
The board of directors shall convene annual meetings in accordance with the provisions of article 14.1 above.
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15.2
|
Convening a special meeting
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|
The board of directors shall convene a special meeting pursuant to its resolution; however, it shall be obliged to convene such a meeting if requisitioned by one of the following:
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|
(a)
|
two directors or one quarter of the directors holding office, whichever is the lower;
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|
(b)
|
one or more shareholders holding at least 5% of the voting rights in the Company.
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|
If the board of directors does not convene a general meeting as aforesaid, the person requisitioning the meeting, and where shareholders are involved – such part of them as holds at least one half their voting rights in the Company, may convene the meeting themselves, provided that it shall not be held more than three months after the date the requisition was made, and the meeting shall be convened, insofar as possible, in the same manner as meetings are convened by the board of directors.
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|
Where a general meeting is convened as aforesaid, the Company shall cover the reasonable expenses incurred by the person requisitioning it.
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15.3
|
The time for calling a special meeting pursuant to a requisition
|
|
Where the board of directors is requisitioned to call a special meeting, as provided in paragraph 15.2 above, it shall do so within 21 days of the requisition being submitted, for a date that shall not be later than 35 days from the date on which the notice of the special meeting is published.
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15.4
|
Notice of a general meeting
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|
15.4.1
|
Unless a shorter period is permitted by law, notice of a general meeting shall be given in the manner hereinafter mentioned, to all shareholders entitled to attend and vote at such meeting. No separate notice shall be given to registered shareholders of the Company. Notices shall be given in accordance with Article 40.
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|
15.4.2
|
The notice of the general meeting shall specify the type of meeting, the place and time at which the meeting shall be convened, its agenda, a summary of the proposed resolutions, the majority required to pass the resolutions and the date determining the shareholders' entitlement to participate in and vote at the general meeting according to paragraph 17.1 below.
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16.
|
The General Meeting's Agenda
|
|
16.1
|
The general meeting's agenda shall be prescribed by the board of directors and shall also include matters in respect of which a special meeting is required as provided in article 14.2 above, and matters obliged in accordance with the provisions of article 16.2 below.
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|
16.2
|
One or more shareholders holding at least 1% of the Company's share capital may ask the board of directors to include a matter on the agenda of a general meeting to be held in the future. The board of directors shall include such a matter on the agenda provided that in its discretion such matter is suitable for discussion at a general meeting of the Company.
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|
16.3
|
A request as aforesaid in Article 16.2 above shall be lodged with the Company at least seven days prior to the giving of notice of the convening of the general meeting, and there shall be attached thereto a draft of the resolution proposed by the shareholder.
|
|
16.3
|
The general meeting may only pass resolutions on the matters on its agenda.
|
|
16.4
|
So long as not otherwise obliged by the law, the general meeting may pass or defeat a proposed resolution that was on the general meeting's agenda the text or a summary description of the main points of which was published by the Company, including with slight changes; however, it may not pass a resolution materially different from the proposed resolution.
|
17.
|
The Discussion at General Meetings
|
|
17.1
|
Entitlement to participate in a vote
|
|
Subject to the provisions of section 182(c) of the Companies Law, the shareholders who are entitled to participate in and vote at a general meeting shall be the shareholders on the date prescribed in the resolution to call the general meeting, provided that such date is not more than forty (40) days nor less than four (4) days prior to the date of the general meeting (or any longer or shorter period permitted by law
,
including regulations promulgated pursuant to the Companies Law).
|
|
17.2
|
Quorum
|
|
No discussion may be commenced at a general meeting unless a quorum is present at the time of a discussion. Two shareholders present in person or by proxy, or who have sent the Company a voting instrument indicating the way in which they are voting, and holding or representing at least thirty three and one third percent of the voting rights in the Company, shall constitute a quorum.
|
|
A shareholder or his proxy, who is also acting as the proxy of other shareholders, shall be considered two or more shareholders, in accordance with the number of shareholders represented by him.
|
|
17.3
|
The general meeting's adjournment in the absence of a quorum
|
|
If no quorum is present within half an hour of the time fixed for the meeting, the meeting shall stand adjourned for seven days, to the same day of the week at the same time and place, without further notice being given thereof, or to such other date, time and place as prescribed by the board of directors in notice to the shareholders, and the adjourned meeting shall discuss those matters for which the first meeting was called. If no quorum is present at the adjourned meeting, two shareholders, at least, present in person or by proxy, shall constitute a quorum, subject to the provisions of section 79(b) of the Companies Law.
|
|
17.4
|
The general meeting's chairman
|
|
The board of directors' chairman (if appointed) shall chair the general meeting. In the absence of a chairman, or if he does not appear at the meeting within 15 minutes of the time fixed therefor, those shareholders present at the meeting shall elect one of the Company's directors as chairman, or if no director is present, they shall elect one of the shareholders present to chair the meeting.
|
|
The meeting's chairman shall not have an additional or casting vote (without derogating, however, from the rights of such meeting’s chairman to vote as a shareholder or proxy of a shareholder if, in fact, he is also a shareholder or such proxy).
|
|
17.5
|
Adjourned meeting
|
|
With the agreement of a meeting at which a quorum is present, the chairman may, and on the demand of the meeting he must, adjourn the meeting from time to time and from place to place, as the meeting resolves (hereinafter in this article referred to as “adjourned meeting"). If a meeting is adjourned for 21 days or more, notice of the adjourned meeting shall be given in the same way in which notice is given of a first meeting. Save for the aforegoing, a shareholder shall not be entitled to receive notice of an adjournment or of the matters to be discussed at an adjourned meeting. The adjourned meeting shall not discuss any matters save for those which could have been discussed at the meeting at which the adjournment was resolved upon. The provisions of articles 17.1 and 17.2 hereof shall apply to an adjourned meeting as mentioned in this article.
|
18.
|
Voting by Shareholders
|
|
18.1
|
Passing a resolution
|
|
A resolution put to the vote at any general meeting shall be passed if it acquires an ordinary majority or any other majority especially prescribed for it pursuant to the law or these articles.
|
|
If the votes are tied, the resolution shall be deemed to have been defeated.
|
|
18.2
|
Examining the majority
|
|
18.2.1
|
The majority shall be examined through a poll, each shareholder being entitled at the time of voting to one vote in respect of each share held by him which has been fully paid or the calls in respect of which have been fully paid.
|
|
18.2.2
|
The chairman's declaration that a resolution at the general meeting has been passed or defeated, unanimously or by a particular majority, shall constitute prima facie evidence of that stated therein.
|
|
18.3
|
Right to participate and vote
|
|
A shareholder shall not be entitled to participate in and vote at any general meeting or to be counted amongst those present so long as he owes the Company any payment called in respect of the shares held by him, unless the shares' issue conditions otherwise provide.
|
|
18.4
|
Confirmation of title
|
|
A shareholder in whose favor a share is registered with a stock exchange member and such share is included amongst the shares entered in the register of shareholders in the name of a registration company may not participate in and vote at a general meeting unless he has given the Company confirmation of title as prescribed by the board of directors at least two business days prior to the date of the general meeting.
|
|
18.5
|
Personal interest in resolutions
|
|
A shareholder wishing to vote on a resolution the majority required to pass which includes the votes of those who do not have a personal interest shall notify the Company before the vote on the said resolution commences, or if voting through a proxy or voting instrument within the framework thereof, whether he does or does not have a personal interest in the resolution.
|
|
A shareholder who has not given any notice as aforesaid shall be deemed to have notified the Company that he does not have a personal interest in the resolution.
|
|
18.6
|
Disqualification of voting instruments
|
|
Subject to the provisions of the law, the Company's secretary may, in his discretion, disqualify voting instruments or proxy appointment instruments in the following cases:
|
|
(a)
|
there is a reasonable apprehension that they are forged or were given by virtue of shares in respect of which other proxy appointment instruments or voting instruments were given;
|
|
(b)
|
in respect of voting instruments -
|
|
(1)
|
if more than one choice for a particular resolution is marked therein;
|
|
(2)
|
if in respect of resolutions the majority required to pass which includes the votes of persons who do not have a personal interest in the approval, it is not marked whether or not there is a personal interest as aforesaid.
|
|
18.7
|
Voting by a legally incapacitated person
|
|
A legally incapacitated person may only vote by a trustee, natural guardian or other legal guardian. These persons may vote in person or by proxy.
|
|
18.8
|
Voting by joint shareholders
|
|
Where two or more shareholders are joint holders of a share, one of them shall vote, himself, by proxy or through a voting instrument. If more than one joint shareholder wishes to participate in the vote, only the first joint shareholder may vote. For such object, the first joint shareholder shall be the person whose name is entered first in the register of shareholders.
|
|
18.9
|
Minutes of the general meeting
|
|
The general meeting's chairman shall procure that minutes are properly kept of every general meeting which shall include:
|
|
(a)
|
the name of the shareholder or proxy and the number of shares held by him;
|
|
(b)
|
the main points of the discussion, all the resolutions passed or defeated at the general meeting and if passed - by what majority.
|
|
18.10
|
A defect in convening or conducting the general meeting, including a defect deriving from the non-fulfillment of any provision or condition laid down in the Law or the Company's articles, including with regard to the manner of convening or conducting the general meeting, shall not disqualify any resolution passed at the general meeting and shall not affect the discussions which took place thereat.
|
19.
|
The Appointment of a Proxy
|
|
19.1
|
Voting through a proxy
|
|
A shareholder who is entered in the register of shareholders may appoint a proxy to participate and vote in his stead, at a particular general meeting or at general meetings of the Company in general, personally or through a voting instrument, provided that the proxy appointment instrument is given to the Company at least two business days prior to the date of the general meeting. In the event that the proxy appointment instrument is not for a particular general meeting, a proxy appointment instrument deposited prior to one general meeting shall also be valid for subsequent general meetings. Notwithstanding the aforesaid, the chairman of the meeting may, at his discretion, accept such proxy appointment after such time if he so deems fit at his discretion. If the proxy appointment is not received as aforesaid in this article, it shall not be valid at such meeting
|
|
The aforegoing shall also apply to a shareholder which is a corporation, appointing a person to participate and vote in its stead at the general meeting.
|
|
A proxy need not be a shareholder of the Company.
|
|
19.2
|
The proxy appointment instrument's form of wording
|
|
The proxy appointment instrument shall be signed by the shareholder or by the person authorised therefor in writing, and if the appointor is a corporation, it shall be signed in the manner binding the corporation. The Company may demand that it be given written confirmation to its satisfaction of the authority of those signing to bind the corporation. The proxy appointment instrument shall be drawn up in the form of wording set forth below. The Company's secretary may, in his discretion, accept a proxy appointment instrument in a different form of wording, provided that the changes are not material. The Company shall only accept an original proxy appointment instrument or a copy thereof, provided that it is certified by an attorney with an Israeli license or a notary.
|
|
=====================================================
|
|
Proxy Appointment Instrument
|
|
Date: __________
|
|
To
|
|
[The Company's Name]
|
|
[The Company's Address]
|
|
Dear Sirs,
|
|
Annual/Special General Meeting of ("the Company" to be held on ("the Meeting")
|
|
I the undersigned, ___________________, Identity/Registration No. __________, of ___________________, the registered owner of __________
(*)
shares ordinary of NIS ___ n.v. each, hereby empower __________, Identity No.
(**)
__________ and/or __________, Identity No. __________ and/or __________, Identity No. __________ to participate and vote in my name and stead at the above meeting of the Company and at any adjourned meeting thereof/at any general meeting of the Company, until I notify you otherwise.
|
|
___________________
|
|
Signature
|
|
(*)
|
A registered shareholder may grant a number of proxy appointment instruments, each in relation to another quantity of the Company's shares held by him, provided that he does not grant proxy appointment instruments for a quantity of shares larger than the quantity held by him.
|
|
(**)
|
Where the proxy does not have an Israeli identity document, the passport number and the country which issued the passport may be stated.
|
|
=====================================================
|
|
19.3
|
Voting pursuant to a proxy appointment instrument shall be legal even if prior thereto the appointor dies or becomes legally incapacitated or bankrupt, or in the case of a corporation - is liquidated or cancels the proxy appointment instrument or transfers the shares in relation to which it is given, unless written notice is received at the Company's office prior to the meeting that such an event has occurred.
Notwithstanding the aforesaid the chairman of the meeting may, at his discretion, accept such a notice also during the meeting if he shall so deem fit at his discretion.
|
|
19.4
|
The proxy appointment shall state the class and number of shares in respect of which it is given. If the proxy appointment does not state the number of shares in respect of which it is given or states a number of shares which exceeds the number registered in the name of the shareholder, the proxy instrument shall be deemed to have been given in respect of all the shares of the shareholder according to the registration in the Company’s register.
|
|
19.5
|
If the proxy appointment is given in respect of a number of shares which is less than the number of shares registered in the name of the shareholder, the shareholder shall be deemed not to have participated in the voting in respect of the excess shares and the proxy appointment shall be valid in respect of the number of shares stated therein.
|
|
20.
|
Voting Instrument
|
|
20.1
|
A shareholder may vote at the general meeting through a voting instrument on the matters specified below, unless the Company is legally entitled to a full or partial exemption from the sending of voting instruments in general or in particular circumstances. This paragraph shall only enter into force on the entry of sections 87-89 of the Companies Law into force.
|
|
(a)
|
the appointment and dismissal of directors;
|
|
(b)
|
approving acts with interested parties;
|
|
(c)
|
approving acts and transactions requiring the general meeting's approval in accordance with the provisions of sections 255 and 268-275 of the Companies Law;
|
|
(d)
|
a merger pursuant to section 320 of the Law;
|
|
(e)
|
any matter which the articles provide may be voted upon through a voting instrument;
|
|
(f)
|
any additional matter specified in the law.
|
|
20.2
|
The voting instrument's form of wording
|
|
The voting instrument shall be in the following form of wording, so long as the law does not prescribe another binding form of wording, in which case this form of wording shall apply mutatis mutandis. The Company's secretary or anyone authorised by the Company's board of directors to call the meeting may adapt the form of wording of the voting instrument in accordance with the resolutions on the agenda.
|
|
===================================================
|
|
Voting Instrument
|
|
Date: __________
|
|
To
|
|
[Companys Name]
|
|
[Company's Address]
|
|
Dear Sirs,
|
|
Annual/Special General Meeting of the Company to be Held on ("the Meeting")
|
|
I the undersigned, ___________________, Identity/Registration No. __________, of ____________________, registered holder/holder of a suitable proxy appointment instrument which is annexed hereto
(*)
of __________
(**)
shares ordinary of NIS _____n.v. each hereby give notice that my vote at the meeting of the Company and at any adjourned meeting of that meeting thereof is as follows:
|
No. of Resolution on the Agenda
|
Subject of the Resolution
|
The Vote
(***)
|
Shareholder's Personal Interest in the Resolution
(****)
|
|||
For
|
Abstain
|
Against
|
Yes
|
No
|
||
|
(*)
|
If the shares are held through a registration company, confirmation of title must be annexed.
|
|
(**)
|
If the shareholder wishes to vote differently for any part of his shares, a separate voting instrument must be submitted for every quantity of shares in respect of which he votes differently.
|
|
(***)
|
X must be marked in accordance with the relevant choice. If more than one choice is selected for a particular resolution, the vote on such resolution shall be disqualified.
|
|
(****)
|
In resolutions the majority required to pass which includes the votes of persons who do not have a personal interest in the approval, X must be marked in the appropriate place - whether there is or is not a personal interest as aforesaid. If X is not marked - the vote on such resolution shall be disqualified.
|
|
=================================================
|
|
20.3
|
Sending a voting instrument
|
|
The voting instrument shall be sent by the Company to the shareholders entered in the Company's register of shareholders and entitled to vote at the general meeting, together with the notice of the general meeting.
|
|
If notice of the general meeting is published in a newspaper or in any other manner that is not personal notice to the shareholders through the mail, the voting instrument shall be sent immediately upon the notice's publication.
|
|
The voting instrument shall be sent by the Company at its expense.
|
|
20.4
|
The manner of using a voting instrument
|
|
A voting instrument reaching the Company's registered office at least two business days prior to the date of the general meeting and not disqualified by the Company's secretary shall be considered participation and voting by the shareholder who sent it for all intents and purposes, including for the purpose of the quorum.
|
|
A voting instrument received by the Company as provided in this article in respect of a particular matter not voted upon at the general meeting shall be considered abstention for the purpose of the resolution on the meeting's adjournment and shall be reckoned at the adjourned meeting in accordance with the way of voting appearing therein.
|
|
20.5
|
Notice of position
|
|
The board of directors and anyone on whose due requisition a special meeting is convened may send the shareholders a notice of position in order to persuade the shareholders to vote in a certain way on the matters to be voted upon in the voting instrument. The notice of position shall be sent at the Company's expense together with the voting instrument.
|
|
If a general meeting is called on one of the matters enumerated in article 20.1 above, a shareholder may approach the Company with a request that it send a notice of position on his behalf to the Company's other shareholders. Unless otherwise provided in the law, a notice of position as aforesaid shall be sent at the expense of the shareholder and shall only be sent if delivered to the Company's registered office at least 10 days prior to the general meeting.
|
CHAPTER FOU
R
- THE BOARD OF DIRECTORS
|
21.
|
The Board of Directors' Powers
|
|
21.1
|
The board of directors' powers are as specified in the law and the provisions of these articles.
|
|
21.2
|
The Company's signatory rights and power of attorney on its behalf
|
|
21.2.1
|
The board of directors shall determine the signatory rights in the Company for various matters. The signature of any person appointed from time to time by the board of directors, in general or for a special matter, himself or together with others, together with the Company's seal or stamp or its printed name, shall bind the Company, on such conditions as prescribed by the board of directors.
|
|
21.2.2
|
The board of directors may determine separate signatory rights in respect of different matters of the Company and in respect of the amounts in respect of which such persons are authorised to sign.
|
|
21.2.3
|
The board of directors may from time to time empower any person to be the Company's attorney for such objects, with such powers, on such conditions and for such period as it deems fit, and it may give any attorney as aforesaid the power to delegate all or any of the powers, authorities and discretion given to him.
|
|
21.3
|
The Company's registered office
|
|
The board of directors shall determine what is the Company's registered office.
|
22.
|
The Appointment of Directors and Termination of Their Office
|
|
22.1
|
The number of directors
|
|
The number of directors in the Company shall be not less than three (3) nor more than nine (9) including the external directors, unless the general meeting otherwise resolves.
|
|
22.2
|
The director's identity
|
|
22.2.1
|
A member of the board of directors may hold another office in the Company.
|
|
22.2.2
|
A corporation may hold office as a director in the Company, subject to the provisions of article 22.6 below.
|
|
22.3
|
The appointment and tenure of directors
|
|
(a)
|
The directors shall be elected at each annual meeting and shall hold office until the end of the next annual meeting and so long as an annual meeting is not convened, unless their office is vacated prior thereto in accordance with the provisions of these articles.
|
|
The elected directors shall enter into their positions from the end of the meeting at which they are elected, unless a later date is specified in the resolution appointing them.
|
|
(b)
|
At every annual meeting the directors appointed at the previous annual meeting shall be deemed to have resigned from their office. A resigning director may be re-elected. Notwithstanding the aforegoing, if no directors are appointed at an annual meeting, the current directors shall continue to hold office.
|
|
(c)
|
A special meeting of the Company (including the special meeting adopting these articles) may appoint directors for the Company instead of directors whose office has been terminated and wherever the number of members of the board of directors falls below the minimum specified in the articles or by the general meeting.
|
|
(d)
|
The provisions of paragraphs 22.3(a) to (c) above shall not apply to the appointment and tenure of external directors, in respect of whom the provisions of the Companies Law shall apply.
|
|
(e)
|
No person other than a person who officiated as a director up to the annual meeting, shall be appointed as a director at the annual meeting, unless recommended for appointment by the board, or unless a shareholder of the company who wishes to propose a candidate shall have lodged at the office of the Company, not later than within seven days after the notice of the meeting has been given, a document in writing signed by the shareholder notifying his intention to propose such candidate for appointment as a director, to which document there shall be attached the consent of the candidate to officiate as a director and his/her resume.
|
|
22.4
|
The appointment of directors by the board of directors
|
|
The directors have the right at any time, in a resolution approved by at least a majority of the Company's directors, to appoint any person as a director, subject to the maximum number of directors specified herein, to fill a place which has randomly been vacated or as an addition to the board of directors. Any director so appointed shall hold office until the next annual meeting and may be re-elected.
|
|
22.5
|
Alternates
|
|
A director may from time to time appoint an alternate for himself (hereinafter referred to as “alternate"), dismiss such alternate and appoint another alternate instead of any alternate whose office has been vacated for any reason, for a particular meeting or on a regular basis, provided however that such alternate is approved in a resolution approved by at least a majority of the Company's directors. A person who is not qualified to be appointed as a director and a person holding office as a director or alternate shall not hold office as an alternate.
|
|
22.6
|
Attorney of a corporation holding office as director
|
|
A director which is a corporation shall appoint an individual who is qualified to be appointed as a director in the Company to hold office on its behalf on a permanent basis, or for a particular meeting, or for a particular period, and the said corporation may dismiss the individual and appoint another in his stead.
|
|
22.7
|
Empowered director
|
|
22.8
|
The manner of appointing or dismissing an alternate or attorney of a corporation holding office as a director
|
|
The appointment or dismissal of attorneys of corporations holding office as directors or of alternates shall be effected by written notice to the Company's secretary signed by the appointors or dismissers and shall enter into force on the date specified in the notice of appointment or dismissal, or on the date of its delivery to the Company's secretary, whichever is the later.
|
|
22.9
|
Various provisions in respect of alternates and attorneys of corporations holding office as directors
|
|
The following provisions shall apply in respect of the attorneys of directors, where the directors are corporations, and in respect of alternates:
|
|
(a)
|
any person, whether or not he is a director, may serve as the attorney of a corporation holding office as a director, and one person may serve as the attorney of several corporations holding office as directors;
|
|
(b)
|
the attorney of a corporation holding office as director shall have - in addition to his own vote if he himself is a director - a number of votes equal to the number of corporations holding office as directors for whom he is attorney;
|
|
(c)
|
an alternate and the attorney of a director which is a corporation shall have all the powers vested in the director for whom he is serving as alternate or attorney. Notwithstanding the aforesaid, an alternate or attorney shall not have the power to vote at such meetings at which the director himself is present;
|
|
(d)
|
the office of an alternate or attorney of a director which is a corporation shall automatically be vacated if the office of the director for whom or which he is acting as alternate or attorney is vacated.
|
|
22.10
|
Termination of the office of a director
|
|
22.9.1
|
The office of a director shall terminate in any one of the following cases:
|
|
(a)
|
if he resigns from his office by a letter signed by him which is submitted to the Company;
|
|
(b)
|
if he is declared bankrupt or settles with his creditors within the framework of bankruptcy proceedings;
|
|
(c)
|
if he is declared legally incapacitated;
|
|
(d)
|
on his death, and in the case of a corporation - if a resolution is passed to wind it up voluntarily or if a liquidation order is given in respect of thereof;
|
|
(e)
|
if he is dismissed from his office following a resolution passed by the Company's general meeting, before the end of his term of office;
|
|
(f)
|
if he is convicted of an offence as mentioned in section 232 of the Companies Law;
|
|
(g)
|
if his office is terminated by the board of directors, in accordance with the provisions of section 231 of the Companies Law.
|
|
22.11
|
The implications of the termination of a director's office on the board of directors' operation
|
|
Where the place of a director is vacated, the remaining directors may continue to act so long as the number of directors remaining does not fall below the minimum number of directors specified in the articles or by the general meeting.
|
|
Where the number of directors falls below the minimum number, the remaining directors may only act in order to call a general meeting of the Company.
|
|
22.12
|
The board of directors' members' remuneration
|
|
The members of the board of directors who do not hold other offices in the Company and who are not external directors shall not receive remuneration from the Company's monies, unless the general meeting otherwise resolves and in such amount as the general meeting prescribes, subject to the provisions of the law.
|
|
The directors' remuneration may be prescribed as an overall payment or as payment in respect of participation at meetings or any combination thereof.
|
|
The Company may, in a board of directors' resolution, reimburse expenses incurred by a director for the purpose of performing his position.
|
23.
|
The Directors' Acts
|
|
23.1
|
The board of directors' meetings
|
|
(a)
|
The board of directors' chairman may convene the board of directors at any time.
|
|
(b)
|
The board of directors' chairman shall convene the board of directors pursuant to the Company's requirements and at least once a year, in a manner enabling the Company to comply with the provisions of the law.
|
|
(c)
|
The board of directors' chairman shall convene the board of directors and hold a board of directors' meeting on a specified matter on the demand of at least two directors or one director alone if the Company has less than five directors.
|
|
(d)
|
The board of directors' chairman shall act without delay to call a meeting of the board of directors within 14 days of being notified by a director of the Company that he has learned of a matter of the Company in which a breach of the Law or impairment to proper business procedure has prima facie been discovered or of the date on which the Company's auditor reports to him that he has learned of material deficiencies in the audit of the Company's accounts.
|
|
(e)
|
If a notice or report of the general manager obliges action by the board of directors, the board of directors' chairman shall, without delay and within 14 days of the notice or report, call a meeting of the board of directors.
|
|
23.2
|
Calling a board of directors' meeting
|
|
23.2.1
|
Notice of a board of directors' meeting may be given orally or in writing, provided that the notice is given at least three business days prior to the date fixed for the meeting, unless all the members of the board of directors or their alternates or attorneys agree to a shorter time.
Notice as aforesaid shall be sent in writing or by facsimile or e-mail or by other media, to the postal address, facsimile number, e-mail address or other address given for the sending of notices by other media, as the case may be, given by the director to the Company's secretary upon his appointment, or in written notice to the secretary thereafter.
Notice given or sent as aforesaid shall be deemed to have been given to a director personally on the date of being given or sent as aforesaid.
|
|
23.2.2
|
Where an alternate or attorney has been appointed, notice shall be sent to the alternate or the attorney, unless the director has given notice that he wishes the notice to be sent to him as well.
|
|
23.2.3
|
The notice calling the meeting shall include the place and date of the board of directors' meeting, arrangements with regard to the manner of conducting the meeting (where media are being used) and details of the matters on the agenda, and any other material which the board of directors' chairman wishes to attach to the notice of the meeting.
|
|
23.2.4
|
Notwithstanding anything to the contrary herein, failure to deliver notice to a director of any such meeting in the manner required hereby may be waived by such director, and a meeting shall be deemed to have been duly convened if such defective notice, or failure to deliver such notice is waived prior to action being taken at such meeting, by all directors entitled to participate at such meeting to whom notice was not duly given as aforesaid. Without derogating from the foregoing, no director present at the commencement of a meeting of the board of directors shall be entitled to seek the abolishment of any proceedings or resolutions adopted at such meeting on account of any defect in the notice of such meeting relating to the time or the place thereof.
|
|
23.3
|
The agenda for the board of directors' meetings
|
|
The agenda for the board of directors' meetings shall be prescribed by the board of directors' chairman and shall include the following matters:
|
|
(a)
|
matters prescribed by the board of directors' chairman;
|
|
(b)
|
matters in respect of a meeting has been fixed, as provided in paragraphs 23.1(c) to (e) above;
|
|
(c)
|
any matter which a director or the general manager requests the board of directors' chairman, a reasonable time (having regard to the nature of the matter) prior to the board of directors' meeting, to include on the agenda.
|
|
23.4
|
Quorum
|
|
The quorum for meetings shall be a majority of the members of the board of directors who are not legally prevented from participating at the meeting, or any other quorum prescribed by a majority of the members of the board of directors from time to time.
|
|
23.5
|
Holding a meeting by media
|
|
The board of directors may hold the board of directors' meeting through the use of any media, provided that all the directors participating may hear each other simultaneously.
|
|
A resolution as aforesaid may be passed by the approval given by media of some of the directors, to the extent that the directors who do not approve the resolution were not entitled to participate at the discussion and vote on the resolution pursuant to the law and provided that they confirm by media that they are aware of the intention to pass a resolution as aforesaid.
|
|
23.6
|
Voting by the board of directors
|
|
Issues arising at board of directors' meetings shall be decided by a majority of votes of the directors present (or participating, in the case of voting by media) and voting, each director having one vote, subject to the provisions of article 22.9(b) above with regard to alternates and attorneys of directors which are corporations.
|
|
23.7
|
Passing resolutions without convening
|
|
The board of directors may pass resolutions without actually convening, provided that all the directors entitled to participate in a discussion and vote on a matter brought for resolution have agreed thereto.
|
|
In case such resolutions were passed, as aforesaid, the chairman of the board shall write the resolutions protocol and indicate specifically that it was agreed upon by all directors in writing, orally or by other means of media.
|
|
23.8
|
Resolution approved by media
|
|
A resolution approved by media by the directors shall be treated as a resolution duly passed at a meeting of the board of directors, and the provisions of paragraph 23.6 above shall apply thereto.
|
|
A resolution as aforesaid may be passed by the approval given by media of some of the directors, to the extent that the directors who do not approve the resolution were not entitled to participate in the discussion and vote on such resolution pursuant to the law and provided that they confirm by media that they are aware of the intention to pass the said resolution.
|
|
23.9
|
Validity of the directors' acts
|
|
All acts done in good faith at the directors' meeting or by a board of directors' committee or by any person acting as a director shall be valid even if it later transpires that there was some defect in the appointment of such director or person or that they or one of them were actually disqualified as though every such person had been duly appointed and was qualified to be a director.
|
|
23.10
|
Minutes of board of directors' meetings
|
|
The board of directors' chairman shall procure that minutes are properly kept of the board of directors' meetings, which shall include:
|
|
(a)
|
the names of those participating and present at each meeting;
|
|
(b)
|
all the resolutions and main points of the discussion at the said meetings.
|
|
All such minutes which are signed by the board of directors' chairman at such meeting or by the board of directors' chairman at the subsequent meeting shall be accepted as prima facie proof of the matters recorded therein.
|
24.
|
Board of Directors' Committees
|
|
24.1
|
Subject to the provisions of section 112 of the Companies Law, the directors may delegate their powers, or any of them, to committees as they deem fit and they may from time to time widen, narrow or cancel the delegation of such a power; however, the narrowing or cancellation of a power as aforesaid is not such as to prejudice the validity of a committee resolution pursuant whereto the Company acted vis-a-vis another person, who was not aware of the said change. Every such committee must, at the time of exercising a power as aforesaid, comply with all the directions given to it from time to time by the directors.
|
|
24.2
|
A board of directors' committee shall include at least two directors, one of whom shall be an external director, save for the audit committee, which shall include at least three directors and all the Company's external directors shall be members thereof.
|
|
24.3
|
The meetings and discussions of the board of directors' committees shall be governed by the provisions regarding the meetings of the directors, mutatis mutandis, so long as other provisions are not prescribed by the directors in such regard, and provided that the quorum for meetings of such committees shall be at least two members.
|
|
24.4
|
A resolution passed or an act done by a board of directors' committee shall be treated as a resolution passed or act done by the board of directors, unless expressly otherwise prescribed by the board of directors for a particular matter or in respect of a particular committee.
|
25.
|
The Board of Directors' Chairman
|
|
25.1
|
Appointment
|
|
(a)
|
The board of directors shall elect one of its members to serve as its chairman and shall specify, in the appointment resolution, the term for which he shall hold office.
|
|
(b)
|
If not otherwise provided in the resolution appointing him, the board of directors' chairman shall be elected each calendar year at the first board of directors' meeting held after the annual meeting at which the Company's directors are appointed.
|
|
(c)
|
So long as the board of directors' chairman holds office as a director of the Company, he shall continue to serve in such capacity until someone else is appointed in his stead.
|
|
(d)
|
If the board of directors' chairman ceases to hold office as a director of the Company, the board of directors shall elect a new chairman at the first board of directors' meeting held thereafter, who shall serve in such capacity for the term specified in the appointment resolution, and if no term is specified - until the appointment of a chairman as provided in paragraph 25.1(b) above.
|
|
(e)
|
If the board of directors' chairman is absent from a meeting, the board of directors shall elect one of its members to conduct the meeting and to sign the discussion minutes; however, the person elected shall not have an additional or casting vote in the board of directors' votes.
|
|
25.2
|
Powers
|
|
(a)
|
The board of directors' chairman shall conduct the board of directors' meetings and shall sign the discussion minutes.
|
|
(b)
|
If the votes on a board of directors' resolution are tied, the board of directors' chairman shall not have an additional vote.
|
|
(c)
|
The board of directors' chairman may, at any time, on his own initiative or pursuant to a resolution of the board of directors, demand reports from the general manager on matters relating to the Company's business.
|
|
25.3
|
Provisos to the acts of the board of directors' chairman
|
|
(a)
|
The board of directors' chairman shall not serve as the Company's general manager, unless appointed in accordance with the provisions of article 26.2 below.
|
|
(b)
|
The board of directors' chairman shall not be a member of the audit committee.
|
26.
|
The General Manager
|
|
26.1
|
The appointment and dismissal of the general manager
|
|
(a)
|
The board of directors shall appoint a general manager for a fixed term or for an unlimited term.
|
|
The board of directors may appoint more than one general manager.
|
|
(b)
|
Determining the general manager's remuneration and employment terms shall be subject to the approval of the board of directors, in such manner as it deems fit. Where the general manager's remuneration is considered an "exceptional transaction”, and in case of an exemption, insurance, indemnity undertaking or indemnity pursuant to permission is given to the general manager, the board of director' resolution as aforesaid requires the prior approval of the audit committee.
|
|
(c)
|
The board of directors may from time to time remove or dismiss the general manager from his office and appoint another or others in his stead.
|
|
26.2
|
The board of directors' chairman as general manager
|
|
(a)
|
The Company's general meeting may authorise the board of directors' chairman to fill the position of general manager or to exercise his powers, provided that in counting the votes of the majority at the general meeting at least two thirds of the votes of shareholders who are not the Company's controlling shareholders or persons on their behalf, present at the vote, shall be included. In counting the votes of the shareholders, the votes of those abstaining shall not be taken into account.
|
|
(b)
|
The validity of such a resolution is limited to a period not exceeding three years from the date the resolution is passed by the general meeting. If no period is specified for authority as aforesaid, the authority shall be for a period of three years.
|
|
Before the end of the said three year period and even after it has come to an end, the general meeting may pass another resolution, and so on and so forth.
|
|
(c)
|
The said resolution may relate to the authorization of the board of directors' chairman in general or it may relate to the authorization of a particular board of directors' chairman.
|
|
26.3
|
The general manager's powers and his subordinacy to the board of directors
|
|
(a)
|
The general manager is responsible for the routine management of the Company's affairs within the framework of the policy prescribed by the board of directors and subject to its guidelines.
|
|
The general manager shall have all the management and execution powers not vested by the law or the articles in another organ of the Company, and he shall be under the supervision of the board of directors and subject to its guidelines.
|
|
The general manager shall appoint and dismiss the Company's officers, save for the directors and general manager, and shall determine the terms of their employment, unless otherwise prescribed by the board of directors.
|
|
(b)
|
The board of directors may instruct the general manager how to act in a particular matter; if the general manager does not obey the instruction, the board of directors may exercise the power required to implement the instruction in his stead.
|
|
(c)
|
If the general manager is unable to exercise his powers, the board of directors may exercise them in his stead or authorise someone else to exercise them.
|
|
(d)
|
Subject to the provisions of the Companies Law, the board of directors may delegate to the general manager powers which the board of directors has pursuant to the Company's articles, as it deems fit, and it may delegate these powers, or any of them, for such period and objects, on such conditions and with such restrictions as it deems fit. The board of directors may alter or cancel any delegation of powers as aforesaid.
|
|
26.4
|
The general manager's reporting duties
|
|
The general manager must notify the board of directors' chairman of any exceptional matter which is material to the Company or of any material deviation of the Company from the policy prescribed by the board of directors. If the Company does not have a board of directors' chairman, for any reason, the general manager shall notify all the board of directors' members as aforesaid.
|
|
The general manager shall submit reports to the board of directors on the matters, at the times and on the scale prescribed by the board of directors.
|
|
The general manager shall report to the board of directors' chairman, on his demand, on matters relating to the Company's business and the proper management thereof as mentioned in article 22.1 above.
|
|
26.5
|
Delegation of the general manager's powers
|
|
The general manager may, with the board of directors' approval, delegate any of his powers to another, who is subordinate to him; however, the delegation of powers as aforesaid does not exempt the general manager from liability for the aforegoing.
|
27.
|
Secretary, Internal Auditor and Other Officials in the Company
|
|
27.1
|
Secretary
|
|
27.1.1
|
The board of directors may appoint a secretary for the Company, on such terms as it deems fit, and may appoint a deputy secretary and determine their duties and powers.
|
|
27.1.2
|
If a secretary is not appointed for the Company, the general manager, or someone authorised by him for such purpose and in the absence of a general manager someone authorised for such purpose by the board of directors, shall perform the duties prescribed for the secretary pursuant to the law, these articles and the board of directors' resolution.
|
|
27.1.3
|
The Company's secretary shall be liable for all the documents kept at the Company's registered office, as provided in section 124 of the Companies Law, and shall keep the registers kept by the Company pursuant to the law.
|
|
27.2
|
Internal auditor
|
|
27.2.1
|
The Company's organizational superior over the internal auditor is the board of directors' chairman.
|
|
27.2.2
|
The internal auditor shall submit a proposal for an annual or periodic work plan to the board of directors, which shall be approved by the board of directors, with such changes as it deems fit.
|
|
27.3
|
Other officials in the Company
|
|
The board of directors may resolve that in addition to the general manager and the secretary, other officials shall be appointed by it, in general or in a particular case. In such case, the board of directors shall appoint the official, define his position and powers and determine his remuneration and employment terms.
|
28.
|
Auditor
|
|
28.1
|
The annual general meeting shall appoint an auditor for the period up to the end of the following general meeting. The general meeting may appoint an auditor for a period that shall not extend beyond the end of the third general meeting after the general meeting at which he was appointed. Where the auditor is appointed for such a period, the annual meeting shall not discuss the appointment of an auditor during the said period, unless a resolution is passed to terminate his office.
|
|
28.2
|
The general meeting may at any time terminate the office of the auditor or decline to renew it.
|
|
28.3
|
The board of directors shall determine the remuneration of the Company's auditor and shall report thereon to the Company's annual meeting.
|
|
28.4
|
The board of directors meeting shall determine the auditor's remuneration for services other than the audit and shall report thereon to the Company's annual meeting.
|
29.
|
Permitted Distribution
|
|
29.1
|
Definitions
|
|
In this chapter the following expressions shall bear the meanings attributed to them in sections 1 and 302 of the Companies Law: "distribution", "purchase", "profits", "profit criterion", "adjusted financial statements", "surpluses".
|
|
29.2
|
Distribution from profits alone
|
|
The Company shall not effect any distribution except from its profits, provided that there is no reasonable apprehension that the distribution will deprive the Company of the ability to perform its existing and expected obligations, when the time comes to perform them. Notwithstanding the aforegoing, the Company may effect a distribution that is inconsistent with the profit criterion if it receives the court's approval therefor.
|
|
29.3
|
Allotment for a consideration lower than the nominal value
|
|
Where the Company resolves to allot shares which have a nominal value for a consideration lower than their nominal value, including bonus shares, it must convert into share capital part of its profits, from premium on shares or from any other source included in its equity, which are mentioned in its last financial statements, in an amount equal to the difference between the nominal value and the consideration.
|
|
Notwithstanding the aforegoing, the Company may, with the court's approval, allot shares for a consideration lower than their nominal value.
|
30.
|
Dividend and Bonus Shares
|
|
30.1
|
Right to dividend or bonus shares
|
|
30.1.1
|
The Company's shareholders have a right to receive dividend or bonus shares, if the Company resolves thereon as provided in paragraph 30.2 below, in accordance with the rights attached to any class of shares in such regard.
|
|
30.1.2
|
Dividend or bonus shares shall be distributed amongst anyone entered in the Company's register of shareholders on the date of the resolution on the distribution or at a later date, if another date is prescribed therefor in such resolution (hereinafter referred to as “the determining date").
|
|
30.1.3
|
If the Company's capital contains shares of different nominal values, dividend or bonus shares shall be distribution pro rata to the nominal value of each share.
|
|
30.1.4
|
Subject to the special rights granted to special shares pursuant to their issue conditions, the Company's profits, in respect of which a resolution was passed to distribute them as dividend or bonus shares, shall be paid pro rata to the amount paid or credited as paid on account of the nominal value of the shares held by the shareholder.
|
|
30.1.5
|
If not otherwise provided in the shares' issue conditions or in the general meeting's resolution, all the dividends and bonus shares on shares which are not fully paid within any period in respect of the dividends or bonus shares are payable shall be paid pro rata to the amounts paid or credited as paid on the nominal value of the shares during any part of the said period (pro rata temporis).
|
|
30.2
|
The Company's resolution to distribute dividend or bonus shares
|
|
30.2.1
|
The Company's resolution to distribute dividends, bonus shares or interim dividends on account of future dividends, as it deems fit in accordance with the state of the Company's profits and the terms and conditions thereof, shall be passed by the Company's board of directors.
|
|
30.2.2
|
Funds
The board of directors may, in its discretion, make provisions to special funds of any amount from the Company's profits, or from a revaluation of its assets, or its proportional part in the revaluation of the assets of its affiliates, and determine the purpose of these funds.
|
|
30.3
|
Payment of the dividend
|
|
30.3.1
|
Manner of payment
If not otherwise provided in the resolution on the dividend's distribution, it shall be possible to pay any dividend less the tax required pursuant to the law by a cheque to the payee alone, which shall be sent by registered mail in accordance with the registered address of the shareholder entitled thereto, or by a bank transfer. Any such cheque shall be made out to the order of the person to whom it is being sent.
In the case of registered joint shareholders, the cheque shall be sent to the shareholder whose name is entered first in the register of shareholders in relation to the joint shareholding.
The dispatch of the cheque to a person who on the prescribed date is entered in the register of shareholders as the holder of a share, or in the case of joint shareholders - one of the joint shareholders, shall serve as a release in relation to all the payments made in connection with such share.
The Company may resolve that it shall not send a cheque under a certain amount, and the dividend amounts that should have been payable as aforesaid shall be treated as unclaimed dividend.
|
|
30.3.2
|
Unclaimed dividend
The board of directors may invest any dividend not claimed within a year of being declared or otherwise use it in favour of the Company until it is claimed. The Company shall not be liable to pay interest or linkage for unclaimed dividend.
|
|
30.3.3
|
Dividend in specie
Where the Company declares a dividend, it may resolve that such dividend shall be paid, in whole or in part, by the distribution of particular assets, including paid shares or debentures of any other company or by a combination of such assets.
|
|
30.4
|
The capitalisation of profits and the distribution of bonus shares
|
|
30.4.1
|
Subject to the provisions of paragraph 30 above, the Company's undistributed profits, or premium on shares, or funds created from a revaluation of the Company's assets, or funds created on an equity basis from the profits of affiliated companies, or from a revaluation of the assets of affiliated companies and capital redemption funds - may be capitalised and distributed amongst the entitled shareholders, pursuant to paragraph 31.1 above, to be held by them as capital, and all or any of the money from this capitalisation shall be used in the name of such shareholders for the full payment, at the nominal value or with such premium as the resolution prescribes, of shares distributed in accordance therewith, and such distribution or payment shall be accepted by such shareholders as full consideration for their benefit in the aforementioned capitalised amount, as prescribed by the board of directors.
The provisions of this chapter shall also apply to a distribution of debentures.
|
|
30.4.2
|
Where the Company resolves to distribute bonus shares, it may resolve to transfer to a special fund designated for a distribution of bonus shares in the future such amount the capitalisation of which would be sufficient to allot to anyone who at such time has a right to purchase shares of the Company (including a right which is only exercisable at a later date) bonus shares of such nominal value as would have been due to him had he exercised the right to purchase the shares prior to the determining date at the price of the right in force at such time. If after the determining date the holder of the said right exercises his right to purchase the shares or part thereof, the board of directors shall allot him fully paid bonus shares at such nominal value and of such class as would have been due to him had he exercised the right to purchase the shares which he actually purchased prior to the determining date, by appropriate capitalisation that shall be effected by the board of directors from the said special fund. With regard to determining the nominal value of the bonus shares that are distributed, any amount transferred to the special fund created in respect of a distribution of previous bonus shares shall be treated as though already capitalised and as if shares entitling the holders of the right to purchase shares of the Company to bonus shares had already been allotted therefrom.
|
|
30.4.3
|
In a distribution of bonus shares, all the Company's shareholders shall receive shares of a uniform class or of the class which vested him with the rights to receive the bonus shares, as prescribed by the board of directors.
|
|
30.4.4
|
In order to implement any resolution pursuant to the provisions of paragraph 30.4, the board of directors may settle any difficulty arising in relation to a distribution of bonus shares as it deems fit, and in particular may issue certificates for fractions of shares and sell the fractions in order to pay the proceeds thereof to entitlees and may determine the value for the purpose of distribution of certain assets and resolve that payments in cash shall be made to the shareholders in reliance upon the value so prescribed, or that fractions whose value is less than NIS 1 shall not be taken into account for the purpose of adjusting the rights of all the parties. The board of directors may pay cash or grant these particular assets to trustees on trust in favour of the persons entitled to dividend or capitalised fund, as it deems beneficial.
|
31.
|
Purchase of the Company's Shares
|
|
31.1
|
The Company may purchase or finance the purchase, directly or indirectly, of shares of the Company or of securities convertible into shares or exercisable into shares of the Company, including undertakings to do any of the aforegoing, subject to compliance with the condition of permitted distribution, as provided in paragraph 29 above.
|
|
31.2
|
If the Company purchases any of its shares, the share shall become a dormant share and shall not vest any rights, so long as it is held by the Company.
|
|
31.3
|
If a share of the Company is purchased by a subsidiary or by a corporation under the Company's control, the share shall not vest voting rights, so long as it is held by the said subsidiary or corporation.
|
32.
|
Insurance of Officers
|
|
32.1
|
The Company may insure the liability of an officer therein to the fullest extent permitted by law.
|
|
32.2
|
Without derogating from the aforesaid the Company may enter into a contract to insure the liability of an officer therein for an obligation or payment imposed on him in consequence of an act done in his capacity as an officer therein, in any of the following cases:
|
|
(a)
|
a breach of the duty of care vis-a-vis the Company or vis-a-vis another person;
|
|
(b)
|
a breach of the fiduciary duty vis-a-vis the Company, provided that the officer acted in good faith and had a reasonable basis to believe that the act would not harm the Company;
|
|
(c)
|
a monetary obligation imposed on him in favor of another person.
|
|
(d)
|
Financial liability imposed on him for payment to persons or entities harmed as a result of violations in Administrative Proceedings, as detailed in section 52(54)(A)(1)(a) of the Israeli Securities Law, 1965 (the "
Securities Law
").
|
|
(e)
|
Expenses incurred by him in connection with Administrative Proceedings (as defined above) he was involved in, including reasonable litigation fees, and including attorney fees.
|
|
(f)
|
any other matter in respect of which it is permitted or will be permitted under applicable law to insure the liability of an officer in the Company.
|
33.
|
Indemnity of Officers
|
|
33.1
|
The Company may indemnify an officer therein, to the fullest extent permitted by law. Without derogating from the aforesaid the Company may indemnify an officer in the Company for liability or expense imposed on him in consequence of an action made by him in the capacity of his position as an officer in the Company, as follows:
|
|
33.1.1
|
Any financial liability he incurs or imposed on him in favor of another person in accordance with a judgment, including a judgment given in a settlement or a judgment of an arbitrator, approved by a court.
|
|
33.1.2
|
Reasonable litigation expenses, including legal fees, incurred by the officer or which he was ordered to pay by a court, within the framework of proceedings filed against him by or on behalf of the Company, or by a third party, or in a criminal proceeding in which he was acquitted, or in a criminal proceeding in which he was convicted of a felony which does not require a finding of criminal intent.
|
|
33.1.3
|
Reasonable litigation expenses, including legal fees he incurs due to an investigation or proceeding conducted against him by an authority authorized to conduct such an investigation or proceeding, and which was ended without filing an indictment against him and without being subject to a financial obligation as a substitute for a criminal proceeding, or that was ended without filing an indictment against him, but with the imposition of a financial obligation, as a substitute for a criminal proceeding relating to an offence which does not require criminal intent, within the meaning of the relevant terms in the Companies Law.
|
|
33.1.4
|
Financial liability he incurs for payment to persons or entities harmed as a result of violations in Administrative Proceedings, as detailed in section 52(54)(A)(1)(a) of the Securities Law. For this purpose "
Administrative Proceeding
" shall mean a proceeding pursuant to Chapters H3 (Imposition of Monetary Sanction by the Israel Securities Authority), H4 (Imposition of Administrative Enforcement Means by the Administrative Enforcement Committee) or I1 (Settlement for the Avoidance of Commencing Proceedings or Cessation of Proceedings, Conditioned upon Conditions) of the Securities Law, as shall be amended from time to time.
|
|
33.1.5
|
Expenses that he incurs in connection with Administrative Proceedings (as defined above) he was involved in, including reasonable litigation fees, and including attorney fees.
|
|
33.1.6
|
Any other obligation or expense in respect of which it is permitted or will be permitted under law to indemnify an officer in the Company.
|
|
33.2
|
Advance indemnity
|
|
The Company may give an advance undertaking to indemnify an officer therein in respect of the following matters:
|
|
33.2.1
|
Matters as detailed in Article 33.1.1, provided however, that the undertaking is restricted to events, which in the opinion of the Board of Directors, are anticipated in light of the Company’s actual activity at the time of granting the obligation to indemnify and is limited to a sum or measurement determined by the Board of Directors as reasonable under the circumstances. The indemnification undertaking shall specify the events that, in the opinion of the Board of Directors are expected in light of the Company’s actual activity at the time of grant of the indemnification and the sum or measurement, which the Board of Directors determined to be reasonable under the circumstances.
|
|
33.2.2
|
Matters as detailed in Article 33.1.2 and 33.1.3.
|
|
33.2.3
|
Any matter permitted by applicable law.
|
|
|
33.3
|
Retroactive indemnity
|
|
The Company may indemnify an officer therein, save for the events subject to any applicable law.
|
34.
|
Exemption of Officers
|
35.
|
Insurance, Exemption and Indemnity - General
|
|
35.1
|
The above provisions with regard to insurance, exemption and indemnity are not and shall not limit the Company in any way with regard to its entering into an insurance contract and/or with regard to the grant of indemnity and/or exemption in connection with a person who is not an officer of the Company, including employees, contractors or consultants of the Company, all subject to any applicable law;
|
|
35.2
|
Articles 32 through 35 shall apply mutatis mutandis in respect of the grant of insurance, exemption and/or indemnification for persons serving on behalf of the Company as officers in companies controlled by the Company, or in which the Company has an interest.
|
|
35.3
|
An undertaking to insure, exempt and indemnify an officer in the Company as set forth above shall remain in full force and effect even following the termination of such officer service with the Company.
|
36.
|
Merger
|
|
Notwithstanding the provisions of section
327(a)
of the Companies Law, the majority required for the approval of a merger by the general meeting or by a class meeting shall be an ordinary majority of the votes of the shareholders entitled to vote and voting themselves.
|
37.
|
[Reserved]
|
38.
|
Winding Up
|
|
38.1
|
If the Company is wound up, voluntarily or otherwise, the liquidator may, with the general meeting's approval, distribute parts of the Company's property in specie amongst the shareholders, and he may, with similar approval, deposit any part of the Company's property with trustees in favour of the shareholders as the liquidator, with the approval mentioned above, deems fit.
|
|
38.2
|
Subject to the special rights attached to shares, if shares are issued with special rights, the Company's shares shall rank equally inter se in relation to the amounts of capital paid or credited as paid on the nominal value of the shares, in connection with the return of the capital and participation in a distribution of the Company's surplus assets on winding up.
|
39.
|
The Sale of the Company's Assets in Consideration for Securities
|
|
39.1
|
At the time of selling the Company's property, the board of directors, or the liquidators (in the case of winding up) may, if so permitted in a resolution passed by the Company's general meeting by an ordinary majority, accept fully or partially paid shares, debentures or securities of another company, Israeli or foreign, incorporated or about to be incorporated for the purpose of purchasing the Company's property, or part thereof, and the directors (if the Company's profits so permit) or the liquidators (in the case of winding up) may distribute the shares or securities mentioned above or any other property of the Company amongst the shareholders, without realising them or depositing them with trustees for the shareholders.
|
|
39.2
|
The general meeting may, in a resolution passed by the Company's general meeting by an ordinary majority, resolve on a valuation of the securities or property mentioned above at such price and in such manner as the general meeting resolves, and all the shareholders shall be liable to accept any valuation or distribution permitted as aforesaid and waive their rights in such regard, save, where the Company is about to be wound up or is in winding up proceedings, for those legal rights (if any) which pursuant to the provisions of the law may not be altered or qualified.
|
CHAPTER NINE - MISC
EL
LANEOUS
|
40.
|
Notices
|
|
40.1
|
Notice or any other document which the Company shall deliver and which it is entitled or required to give pursuant to the provisions of these Articles and/or any applicable law shall be delivered by the Company to any person, in any one of the following manners as the Company may choose: in person, by mail, transmission by fax or in electronic form (including through the Internet). Notwithstanding anything to the contrary contained herein and subject to the requirements of any applicable law, a notice to a shareholder may alternatively be served, as a general notice to all shareholders, in accordance with the rules and regulations of any applicable securities authority with jurisdiction over the Company or in accordance with the rules of any stock market upon which the Company’s shares are traded.
|
|
40.2
|
All the notices which must be given to the shareholders shall be given, in relation to shares which are jointly held, to the person whose name is entered first in the register of shareholders and any notice given in such manner shall be adequate notice to all the joint shareholders.
|
|
40.3
|
[Reserved]
|
|
40.4
|
Any notice or other document delivered or sent to a shareholder in accordance with these articles shall be deemed to have been duly delivered and sent in respect of all the shares held by him (alone or together with others), even if such shareholder has passed away at such time, or become bankrupt, or an order has been given for its winding up, or a trustee or liquidator or receiver has been appointed for his shares (whether or not the Company was aware thereof), until another person is entered in the register of shareholders in his stead as the holder thereof, and the giving or dispatch of a notice or document as mentioned above shall be deemed adequate delivery or dispatch to any person who has a right in these shares.
|
|
40.5
|
Any notice or other document sent by the Company by mail in accordance with an address in Israel shall be deemed to have been delivered within 48 hours of the letter containing the notice or document being mailed, within 96 hours where the address is abroad, or on the first day after transmission if transmitted by fax or in electronic form, and when coming to prove the delivery it shall be sufficient to prove the letter containing the notice or document contains the correct mailing, e-mail, or fax details as registered in the register or any other address which the shareholder submitted in writing to the Company as the address and fax or e-mail details for the submission of notices or other documents.
|
|
40.6
|
An accidental omission in giving notice of a general meeting to any shareholder or non-receipt of notice of a meeting or any other notice by a shareholder shall not cause the cancellation of a resolution passed at such meeting or cancellation of proceedings based on such notice.
|
|
40.7
|
Every shareholder and every board of directors' member may waive his right to receive notice or his right to receive notice within a particular time and may agree that a general meeting of the Company or a board of directors' meeting, as the case may be, be convened or take place despite the fact that he has not received notice thereof, or despite the fact that the notice was not received by him within the required time, subject to the provisions of any law prohibiting such waiver or consent.
|
Mortgage collateral
|
-
|
CHF 81’666’000.00 first ranking bearer mortgage note, no prior ranking,
|
|
-
|
CHF 41’959’000.00 third ranking bearer mortgage note, prior ranking CHF 82’523’922.00,
|
||
on business premises “CTN”, Ch. des Aulx 8-18, 1228 Plans-les-Ouates, land register Plans-les-Ouates, land register folio 11095 (hereinafter referred to as “CTN”).
|
|||
Transfer of ownership by way of collateral in accordance with the “Security Agreement” (to be signed)
|
|||
If collateral is provided for more than one claim, the Bank may decide at its discretion which claim(s) will be set off against sales proceeds or any other income derived from the collateral.
|
|||
Further collateral
|
Deed of Assignment in favour of the Bank of any rent payments from the real estate property CTN, Ch. des Aulx 8-18, 1228 Plans-les-Ouates, covering the amount of interest and capital repayment (to be signed).
|
||
If collateral is provided for more than one claim, the Bank may decide at its discretion which claim(s) will be set off against sales proceeds or any other income derived from the collateral.
|
|||
Termination of the framework agreement
|
This framework agreement may be terminated by either party at any time with immediate effect. Upon termination of the framework agreement, maturing loans are not renewed and no new loans will be granted.
However, loans that were previously agreed will remain unaffected by the termination of this framework agreement until the end of their respective terms.
|
||
The termination of a loan granted under this framework agreement does not automatically result in the termination of the framework agreement.
|
|||
Termination of individual loans
Ordinary termination
|
Fixed-term loans granted under this framework agreement can not be terminated prior to maturity, unless otherwise agreed in writing. Loans that
do not have a fixed term may be terminated at any time by either party subject to three months’ notice.
|
||
Extraordinary termination
|
The Bank reserves the right to terminate all loans granted under this agreement with immediate effect at any time if:
|
||
-
|
the Borrower goes bankrupt or is granted a bankruptcy moratorium;
|
||
-
|
the Bank has terminated all loans of OPCTN S.A., 6 Rue Jean Bertholet, LU-1233 Luxembourg under its separate Framework Agreement with the Bank based on the clause “Early Termination”;
|
||
-
|
the Borrower has breached any other obligation under this framework agreement and/or under any agreements based hereon and has failed or was unable to restore the proper contractual situation within 60 calendar days after written notice from the Bank;
|
||
-
|
the Borrower is in arrears on interest payments or mortgage amortizations for more than 60 calendar days after they are due;
|
-
|
the mortgaged property is insufficiently insured against fire and damage caused by natural hazards;
|
||
-
|
the value of the mortgaged property is significantly impaired, especially due to a casualty or insufficient maintenance;
|
||
-
|
the use of the mortgaged property is materially altered without the Bank’s consent;
|
||
-
|
there has been a change in direct or indirect ownership/control in respect of the Borrower / holding company resulting in Optibase Ltd. owning less than 51% of the Borrower’s / holding company’s shares and/or resulting in an ownership structure which at the Bank’s sole discretion is not acceptable for the Bank;
|
||
-
|
owing to default and/or maturity clauses, other loans or similar obligations, exceeding the total amount of CHF 1’000’000.00, entered into by the Borrower have been terminated early;
|
||
-
|
in the bank’s view, asset and/or revenue situation of the Borrower has deteriorated significantly;
|
||
Transfer of ownership
or forced sale |
In the event of transfer of ownership or forced sale of the mortgaged property, all claims in connection with this framework agreement shall fall due for repayment on the date of transfer of ownership or on the date of the public auction, as applicable. | ||
If any fixed-term loans granted under this framework agreement are terminated early, the Bank will credit or debit the Borrower with the interest gain or interest shortfall accrued thereon. This is calculated based
on the difference between the contractual interest rate which applies at the time of termination and the interest rate that, in the Bank’s view, can be earned on an investment with the same residual term (i.e. date of termination to expiry of interest period of such loan/advance) on the money or capital markets at the time of termination, multiplied by the outstanding loan amount and the residual term. Any surplus in favor of the Borrower is set off against the fee for the Bank’s expenses described below.
|
|||
In addition a flat fee of 0.1% of the loan amount, but not less than CHF 1’000.00, is owed for the Bank’s expenses.
|
|||
By way of example:
|
|||
Example 1
|
|||
Early repayment of a loan of CHF 10mn (original term 2 years) with a reference rate of 3.0% (reference rate = internal funding rate) by the Borrower after 1 year and loan is reinvested by the Bank for residual term (1 year with a reinvestment rate of 2.5%). Interest is calculated in accordance with international conventions (actual number of days / 360).
|
- | Annually: | |||
-
|
Balance sheet, profit and loss statement and the notes thereto, as well as the auditor’s report within four months of the financial year end
|
|||
-
|
Current tenant schedule including respective rent of the real estate property CTN within four months of the financial year end.
|
Borrower’s Positive and
Negative Obligations |
●
|
The Borrower undertakes, to the extent permitted by law, to refrain from providing new or additional collateral exceeding the total amount of CHF 2’000’000.00 in favour of a third party to secure existing or future liabilities of the Borrower or a third party.
|
|
●
|
The Borrower undertakes, to the extent permitted by law, to refrain from establishing additional mortgage notes on the real estate property “CTN”.
|
||
●
|
Distributions in form of dividends and/or shareholder loans are only permitted in line with the available yearly profit after amortisation of the loan and interest payments. Notwithstanding, the Borrower shall be permitted to distribute dividends and/or shareholder loans to OPCTN in order to allow OPCTN to make principal and interest payments on its loan from the Bank.
|
||
●
|
The Borrower will undertake the necessary maintenance/investments to avoid any value reduction caused by insufficient investments into the property “CTN”.
|
||
●
|
Loans to third parties (excluding shareholders) by the Borrower are not permitted.
|
||
●
|
The Borrower undertakes not to enter into any further credit or lease financing transactions without the written approval of the Bank. Notwithstanding the foregoing, the Borrower shall be permitted to enter credit or lease financing transactions with third parties provided that at no time the aggregate outstanding indebtedness to third parties exceeds CHF 2’000’000.00.
|
||
Credit Risk Hedging
|
In order for the Bank to directly or indirectly insure or hedge credit risk arising from this credit relationship or collateral underlying the credit, the Bank may, at any time, disclose data and information associated with the credit relationship and the credit risk evaluation required for buying credit protection or credit insurance from a third party. Such hedging and insurance transactions do not entail a transfer of all or any part of this credit relationship or its servicing to a third party.
|
||
Data and information may be disclosed to third parties in Switzerland or abroad, namely to hedging or insurance providers, such as banks, financial institutions, credit insurers, hedge funds or to other entities offering credit protection. In the context of such hedging transactions data and information may also be disclosed to other parties involved within the scope of such hedging or insurance transactions, such as rating agencies.
|
|||
These third parties shall be obliged to keep such transferred data and information confidential and to handle it securely which is subject to the local legal and regulatory provisions governing secrecy and data protection obligations.
|
|||
Additional agreements
and special contractual terms |
The Borrower will have all rent payments of the real estate property CTN made directly into an account at the Bank. In general, the Borrower undertakes to use the Bank for his account movements.
|
The additional agreements that will be concluded or have already been concluded in accordance with the terms of this framework agreement and the agreed loan products (including the special contractual terms applicable to the individual loans) form an integral part of this framework agreement.
|
||
General conditions
|
The Bank’s “General Conditions including the Safe Custody Regulations” supplement this framework agreement.
|
|
Place of performance
|
The place of performance is the location of the Swiss branch of the Bank with which the Borrower has a contractual relationship. For borrowers whose present or future domicile is outside Switzerland, the place of performance is also the place of debt enforcement (“special domicile” as defined in Art. 50 par. 2 of the Federal Law on Debt Collection and Bankruptcy).
|
|
Applicable law and
place of jurisdiction |
This framework agreement and the agreements based on this framework agreement are subject to and shall be construed in accordance with Swiss law. The Borrower recognizes the exclusive jurisdiction of the courts of
Zurich
or of the location of the branch of the Bank with which the contractual relationship exists.
|
|
The Bank also has the right to bring legal action against the Borrower before any other competent court.
|
||
Relationship to existing agreements
|
This framework agreement replaces the loan agreement dated 12.11.2009, but shall not effect any novation of the Borrower’s existing credit obligations pursuant to Art. 116 of the Swiss Code of Obligations.
|
|
Issuance/Signing of Agreement
|
This framework agreement has been drawn up and signed in duplicate.
The Borrower and the Bank each receive one copy.
|
|
CREDIT SUISSE AG
|
|
Paradeplatz 8
8001 Z ü rich |
1.
|
The Bank has acquired / hereby acquires title to the following mortgage note(s) and/or bearer bond(s) with mortgage assignment (hereafter the mortgage deeds):
|
|
- CHF 81’666’000.00 first ranking bearer mortgage note, dated 18.05.2007
|
||
no prior ranking,
|
||
-CHF 41’959’000.00 third ranking bearer mortgage note, dated 18.05.2007
|
||
prior ranking CHF 82’523’922.00,
|
||
on business premises “CTN”, Ch. des Aulx 8-18,1228 Plans-les-Ouates,
|
||
land register Plans-les-Ouates, land register folio 11095
|
||
2.
|
The mortgage deed(s) for which title has or will be transferred to the Bank provide(s) the Bank with security for all claims against
|
|
Eldista GmbH, rue des Pierres-du-Niton 17, c/o INTEREXPERTS SA, 1207 Gen
è
ve
|
||
and / or
|
||
OPCTN S.A., 6 Rue Jean Bertholet, LU-1233 Luxembourg
|
as individual debtor(s) or joint and several debtors (hereinafter referred to as the Borrower) arising from agreements concluded or to be concluded with the Bank in connection with business transactions, including all court and out-of-court fees and costs arising therefrom.
|
||
3.
The mortgage deed(s) assigned to a particular branch of the Bank also serve(s) to secure any claim(s) of its other branches. Where more than one claim exists, the Bank shall determine which claim is to be covered by the assigned mortgage deed(s) or the proceeds from the disposal thereof.
|
||
4.
The Provider(s) of Collateral hereby explicitly acknowledge(s) personal financial liability arising from the mortgage deeds assigned to the Bank as security and amounting to the sum of the principal or the maximum amount borrowed, plus three year’s accrued interest and current interest. This debt acknowledgement is valid irrespective of any stipulations to the contrary concerning the debtor(s) in the mortage deeds. If the Provider(s) of Collateral and the debtor(s) are not identical, they are both hereby joint and severally liable for the debt to the extent detailed above. The Bank may enforce the claims arising from the mortgage deeds assigned to it as security instead of enforcing the secured claims. The Bank is entitled to both the principal and the interest on the mortgage deed claims as full or partial security for the secured claims. If the mortgage deeds assigned to the Bank cover obligations of several
debtors, the Bank may use its discretion in distributing any proceeds among the debtors. The Bank is entitled to assert its secured claims in lieu of and irrespective of the mortgage deed claims.
|
To be completed by the Bank
|
Signature checked:
|
|||
Date, signature and stamp
|
||||
135223
|
||||
Client No. (CIF)
|
0251-1732456-0
|
|||
5.
Regardless of any period(s) of notice and termination date(s) specified in the mortgage deed(s), the parties hereby agree that the Bank may terminate the mortgage deed claim(s) with immediate effect, i.e. without observing a period of notice, although such termination can only be effective at the earliest date on which at least one of the secured claims becomes due. If cantonal law stipulates binding provisions to the contrary, the minimum period provided for under cantonal law shall apply.
|
|
6.
Where the amount(s) of the mortgage deed(s) is/are raised, this agreement also applies to the increased mortgage deed claim(s).
|
|
7.
If the mortgage deed(s) stipulate(s) only a maximum interest rate, this shall be deemed to be the rate agreed with the Provider of Collateral.
|
|
8.
If, on transfer of the pledged property, the new owner acquires both the mortgage deed debt(s) and the secured debt(s), the Bank is entitled to transfer this agreement with all associated rights and obligations to the new owner.
|
|
|
9.
Once the Bank has no further claims against the Borrower, the Bank is obliged to reassign ownership of the mortgage deed(s) to the Provider of Collateral. If a third party who has provided personal or tangible security satisfies the Bank’s claims, the Bank is entitled to transfer ownership of the mortgage deed(s) to this third party.
|
10.
The Bank is authorised to transfer or assign all or part of the rights and obligations arising from this security agreement to a third party in Switzerland or abroad for the purposes of securitisation or outsourcing the claims for which security has been provided, for example. The right to further transfer the relationship or to transfer it back to the Bank is reserved.
|
|
The Bank may make information associated with the security agreement available to such a third party and other involved parties, such as rating agencies or trust companies, at any time; these parties shall be obliged to keep such information confidential. The Provider(s) of Collateral expressly declare(s) his/her/their agreement with the procedure described above.
|
|
11.
The place of performance is the location specified in the Bank’s address. For Providers of Collateral whose current or future domicile is outside Switzerland, the place of performance is also the place of enforcement (special domicile pursuant to Art. 50 para. 2 of the Federal Law on Debt Enforcement and Bankruptcy).
|
|
This agreement is governed by Swiss law, to the exclusion of the conflict of laws provisions of Swiss private international law.
|
|
The Provider of Collateral acknowledges that the provisions governing jurisdiction in the Bank’s General Conditions also apply to this agreement.
|
|
The exclusive place of jurisdiction for the Provider of Collateral for any disputes resulting from this agreement is
Zurich
or – if different – the location specified in the Bank’s address. The Bank is entitled to take legal action against the Provider of Collateral before any other competent court in Switzerland or abroad.
|
Place, date
|
The Provider(s) of Collateral
|
|
Tel Aviv, 3.10.2011
|
/s/ Alex Hilman
|
|
Place, date
|
The Provider(s) of Collateral
|
|
Tel Aviv, 3.10.2011
|
/s/ Irit Weinberg
|
|
Place, date
|
The Provider(s) of Collateral
|
|
Zurich, 5.10.2011
|
/s/ Thomas Erdin
|
|
For CREDIT SUISSE AG
|
||
Place, date
|
||
Zurich, September 28, 2011
|
||
/s/
Christophe Müller
|
/s/ Philipp Meier
|
|
Christophe Müller
|
Philipp Meier
|
Amount of Credit Facility
|
CHF 15’000’000.00
|
||
The amount of the credit facility is reduced by the sum of the amortizations and other loan repayments made.
|
|||
Utilization
|
This credit facility can be used as a limit for cash credits in the form of fixed advances in CHF and/or in any other freely convertible foreign currencies with maximum terms of up to 60 months (interest period). No interest period for a fixed advance shall extend beyond the last amortization payment date.
|
||
Any extension of a fixed advance must be requested by no later than two banking days before the fixed advance expires.
|
|||
Fixed advances may be granted without having to comply with any specific requirements as to form; they will be confirmed by the Bank in writing, but without a signature.
|
|||
The Bank reserves the right to refuse individual transactions relating to the fixed advances above.
|
|||
Conditions for Utilization
of the Credit Facility
|
This credit facility may not be used until all collateral has been legally
established in favour of the Bank and the following documents have been received by the Bank:
|
||
●
|
Due execution of the Framework Agreement.
|
||
●
|
Due execution of the Security Agreement for the pledge of all shares of Eldista GmbH, rue des Pierres-du-Niton 17, c/o INTEREXPERTS SA, 1207 Gen
è
ve (hereinafter referred to as “Eldista”) by the Borrower, including confirmation by the board of Eldista that the pledge has been duly registered in the share book of Eldista.
|
||
●
|
Due execution of the Deed of Assignment.
|
||
●
|
Due execution of the Security Agreement for the pledge of mortgage notes by Eldista.
|
||
●
|
Receipt of certified copies of Articles of Association of Eldista.
|
Arrangement fee
|
A non recurring fee of 0.5% on the total amount will be due to the Bank upon funding of the credit facility.
|
||
Interest payments and
amortization payments |
On the due date, interest payments and amortization payments shall be debited to an account with the Bank.
|
||
The Borrower undertakes to make the applicable amount available in this account on the due date.
|
|||
Until all amounts have been paid, the bank shall retain the existing mortgage right in full.
|
|||
Special costs
|
All costs that the Bank incurs on the basis of the present Framework
Agreement and the associated loan arrangements, including any contingent liabilities of the Bank, among other things, from pursuing or defending its rights, shall be paid by the Borrower at the Bank’s first request.
|
||
Account closings
|
Fixed advances with term of up to 12 months are closed upon maturity; fixed advances with a term of more than 12 months are closed on a quarterly basis, as of the end of each quarter.
|
||
Mortgage collateral
|
-
|
CHF 81’666’000.00 first ranking bearer mortgage note, no prior ranking,
|
|
-
|
CHF 41’959’000.00 third ranking bearer mortgage note, prior ranking CHF 82’523’922.00,
|
||
on business premises “CTN”, Ch. des Aulx 8 - 18, 1228 Plans-les-Ouates, land register Plans-les-Ouates, land register folio 11095 (hereinafter referred to as “CTN”).
|
|||
Transfer of ownership by way of collateral in accordance with the “Security Agreement” (to be signed by Eldista)
|
|||
If collateral is provided for more than one claim, the Bank may decide at its discretion which claim(s) will be set off against sales proceeds or any other income derived from the collateral.
|
|||
Further collateral
|
Pledge of all shares (“Stammanteile”) of Eldista in accordance with a separate “Pledge Agreement” (to be signed).
|
||
Deed of Assignment in favour of the Bank of any rent payments from the real estate property CTN, Ch. des Aulx 8 – 18, 1228 Plans-les-Ouates, covering the amount of interest and capital repayment (to be signed by Eldista).
|
|||
If collateral is provided for more than one claim, the Bank may decide at its discretion which claim(s) will be set off against sales proceeds or any other income derived from the collateral.
|
Late payment
|
The Borrower will be in default with immediate effect, without any reminder by the Bank, if he/she/it fails to fulfill a payment obligation under this framework agreement and/or any agreements based on the framework agreement when they fall due.
|
||
In the event of late payment, the Bank is entitled to increase the interest rate by 2% p.a. as of the due date on the amount in arrears, but in any case to charge a minimum rate of 5% p.a.
|
|||
Ordinary termination
|
●
|
Framework agreement
This framework agreement may be terminated by either party at any time with immediate effect.
|
|
Irrespective of termination of the framework agreement, fixed advances shall continue to run until their maturity; the following provisions on early termination and an automatic acceleration of the due date remain reserved. Following the termination of the framework agreement, no fixed advances may be extended and no new fixed advances may be claimed.
|
|||
●
|
General
The termination or maturity of a credit product granted under this framework agreement does not automatically result in the termination of this framework agreement.
|
||
Maturity of a fixed
advance
|
Subject to an extension or early termination, each fixed advance
automatically falls due for repayment upon its maturity, without any need for a termination notice.
|
||
The Bank is entitled to debit a fixed advance that is due for repayment to an account of the Borrower.
|
|||
Early termination
|
Upon the occurrence of one of the following events, the Bank is entitled at any time to declare all fixed advances (fixed term) and credit products with an agreed notice period granted under this framework agreement, plus all accrued interest, commission and fees, to be immediately due and payable, on an accelerated basis:
|
||
-
|
bankruptcy proceedings have been instituted against the Borrower or a third party providing collateral, one of them has been granted a debt restructuring moratorium or deferral of bankruptcy, or one of them has concluded a judicial or extrajudicial debt restructuring agreement;
|
||
-
|
The Framework Agreement for Mortgage Loans between the Bank and Eldista has been terminated for whatever reason;
|
||
-
|
the Borrower is more than 30 calendar days in default on an interest payment or a repayment of principal;
|
||
-
|
the Borrower has breached any other obligation under this framework agreement and/or under any agreements based hereon and has failed or was unable to restore the proper contractual situation within 30 calendar days after written notice from the Bank;
|
-
|
the mortgaged property is insufficiently insured against fire and damage caused by natural hazards;
|
||
-
|
the value of the mortgaged property is significantly impaired, especially due a casualty or to insufficient maintenance;
|
||
-
|
the use of the mortgaged property is materially altered without the Bank’s consent;
|
||
-
|
there has been a change in direct or indirect ownership/control in respect of the Borrower resulting in Optibase Ltd. owning less than 51% of the Borrower’s shares and/or resulting in an ownership/control structure which at the Bank’s sole discretion is not acceptable for the Bank;
|
||
-
|
owing to default and/or maturity clauses, another loan or similar obligation entered into by the Borrower has been terminated early;
|
||
-
|
in the bank’s view, asset and/or revenue situation of the Borrower has deteriorated significantly;
|
||
-
|
the auditor’s report contains a material qualification.
|
||
The Bank is entitled at its discretion to declare an acceleration of the due date of the loan, either immediately or at a later point in time.
|
|||
Transfer of ownership
or forced sale |
In the event of transfer of ownership or forced sale of the mortgaged
property, all claims in connection with this framework agreement shall fall due for repayment on the date of transfer of ownership or on the date of the public auction, as applicable.
|
||
If any fixed-term loans granted under this framework agreement are terminated early, the Bank will credit or debit the Borrower with the interest gain or interest shortfall accrued thereon. This is calculated based on the difference between the contractual interest rate which applies at the time of termination and the interest rate that, in the Bank’s view, can be earned on an investment with the same residual term (i.e. date of termination to expiry of interest period of such loan/advance) on the money or capital markets at the time of termination, multiplied by the outstanding loan amount and the residual term. Any surplus in favor of the Borrower is set off against the fee for the Bank’s expenses described below.
|
|||
In addition a flat fee of 0.1% of the loan amount, but not less than CHF 1’000.00, is owed for the Bank’s expenses.
|
|||
By way of example:
|
|||
Example 1
|
|||
Early repayment of a loan of CHF 10mn (original term 2 years) with a reference rate of 3.0% (reference rate = internal funding rate) by the Borrower after 1 year and loan is reinvested by the Bank for residual term (1 year with a reinvestment rate of 2.5%). Interest is calculated in accordance with international conventions (actual number of days / 360).
|
-
|
Annually:
|
||
-
|
Balance sheet, profit and loss statement and the notes thereto, as well as the auditor’s report within four months of the financial year end.
|
||
-
|
Current tenant schedule including respective rent of the real estate property CTN within four months of the financial year end.
|
Borrower’s Positive
and Negative Obligations |
●
|
The Borrower undertakes, to the extent permitted by law, to refrain from providing new or additional collateral in favour of a third party to secure existing or future liabilities of the Borrower or a third party. However, in the event the Borrower invests in a new entity, the Borrower has the right to pledge its ownership interest in the new entity to a third party creditor.
|
|
●
|
Distributions in form of dividends and/or shareholder loans are only permitted in line with the available yearly profit after amortisation of the loan and interest payments.
|
||
●
|
The Borrower shall ensure and vote accordingly in the shareholder meeting of Eldista that distributions in form of dividends and/or shareholder loans by Eldista are only done in line with the available yearly profit after amortisation of the loan and interest payments.
|
||
●
|
Loans to third parties (excluding shareholders) by the Borrower are not permitted.
|
||
●
|
The Borrower undertakes not to enter into any further credit or lease financing transactions without the written approval of the Bank. Notwithstanding the foregoing, the Borrower shall be permitted to enter credit or lease financing transactions with third parties provided that at no time the aggregate outstanding indebtedness to third parties exceeds CHF 2’000’000.00.
|
||
Credit Risk Hedging
|
In order for the Bank to directly or indirectly insure or hedge credit risk arising from this credit relationship or collateral underlying the credit, the Bank may, at any time, disclose data and information associated with the credit relationship and the credit risk evaluation required for buying credit protection or credit insurance from a third party. Such hedging and insurance transactions do not entail a transfer of all or any part of this credit relationship or its servicing to a third party.
|
||
Data and information may be disclosed to third parties in Switzerland or abroad, namely to hedging or insurance providers, such as banks, financial institutions, credit insurers, hedge funds or to other entities offering credit protection. In the context of such hedging transactions data and information may also be disclosed to other parties involved within the scope of such hedging or insurance transactions, such as rating agencies.
|
|||
These third parties shall be obliged to keep such transferred data and information confidential and to handle it securely which is subject to the local legal and regulatory provisions governing secrecy and data protection obligations.
|
|||
Additional agreements
and special contractual terms |
In general, the Borrower undertakes to use the Bank for his account movements, whereby the Borrower shall be permitted to use Société G
é
n
é
rale for local needs in Luxembourg.
|
The additional agreements that will be concluded or have already been concluded in accordance with the terms of this framework agreement and the agreed loan products (including the special contractual terms applicable to the individual loans) form an integral part of this framework agreement.
|
||
General conditions
|
The Bank’s “General Conditions including the Safe Custody Regulations” supplement this framework agreement.
|
|
Place of performance
|
The place of performance is the location of the Swiss branch of the Bank with which the Borrower has a contractual relationship. For borrowers whose present or future domicile is outside Switzerland, the place of performance is also the place of debt enforcement (“special domicile” as defined in Art. 50 par. 2 of the Federal Law on Debt Collection and Bankruptcy).
|
|
Applicable law and
place of jurisdiction |
This framework agreement and the agreements based on this framework agreement are subject to and shall be construed in accordance with Swiss law. The Borrower recognizes the exclusive jurisdiction of the courts of
Zurich
or of the location of the branch of the Bank with which the contractual relationship exists. The Bank also has the right to bring legal action against the Borrower before any other competent court.
|
|
Issuance/Signing of Agreement
|
This framework agreement has been drawn up and signed in duplicate. The Borrower and the Bank each receive one copy.
|
CREDIT SUISSE AG
|
||
Paradeplatz 8
8001 Z ü rich |
Special Deed of Pledge
|
|
Pledgor
|
|
Name(s), first name(s)
|
|
OPCTN S.A.
|
|
6 Rue Jean Bertholet
|
|
LU-1233 Luxembourg
|
|
Client
|
|
Name(s), first name(s)
|
|
OPCTN S.A.
|
|
6 Rue Jean Bertholet
|
|
LU-1233 Luxembourg
|
1.
The Pledgor hereby grants Credit Suisse AG (hereinafter referred to as the “Bank”) a
right of lien
to the assets, rights, and claims vis-
à
-vis the Bank and listed below, including:
|
||
■
|
Book-entry securities, securities, and unsecuritized rights;
|
|
■
|
Account balances, balances in precious metal and coin accounts, and balances from fiduciary investments;
|
|
■
|
and Holdings in precious metal safekeeping accounts;
|
|
hereinafter referred to as the “pledged assets”.
|
||
The pledge also includes any restitution claims resulting from the safekeeping of the pledged assets by the Bank or a third party institution.
|
||
The right of lien covers all forfeited, current, and future accessory rights such as interest, dividend payments, subscription rights, etc.
|
||
Securities that are not in bearer form are pledged to the Bank in accordance with Article 901, para. 2 of the Swiss Civil Code (hereinafter referred to as the “SCC”).
|
||
2.
The purpose of the right of lien is to secure any and all claims of the Bank against the Client arising from any agreements or contracts already concluded or to be entered into in the future within the context of business relationships. This applies to both the principal of such claims as well as the accrued and maturing interest, commissions, expenses, fees and costs. In the case of several claims, the Bank will determine against which claims the collateral or liquidation proceeds will be credited.
|
||
3.
Where mortgage deeds, commercial paper or negotiable instruments, goods and chattels or securities issued on the basis of goods are pledged as collateral, the Pledgor is liable for the customary insurance of the pledged property and/or the real estate, properties, items, and goods represented thereby.
|
The Pledgor hereby assigns to the Bank all insurance and other private or public law compensation claims (including expropriation compensation) accruing to him/her with respect to the aforementioned items, and the Bank is entitled to make the necessary communications and collect such proceeds or indemnification and to give receipt on his/her behalf.
|
|
4.
This pledge is in addition to and independent of any existing or future security of the Bank and will remain in force until such time as the obligations toward the Bank have been fulfilled in their entirety. The release of individual assets from this pledge will not affect the Bank’s right of lien in respect of the other pledged assets. In the event that collateral is exchanged, the new assets will be subject to this pledge without further formalities. Particularly, in the case of security redemptions, the corresponding proceeds replace the security in question and become subject to the pledge. The entire asset is subject to this pledge, even if its value is increased by reason of additional payments, or for any other reason.
|
|
5.
If claims of the Bank are due, it shall be authorized to liquidate the pledged assets and use the proceeds to satisfy its claims after deduction of expenses and costs. The Bank may, at its discretion, instigate ordinary debt collection proceedings against the client, realize the pledged assets by forced execution or, after giving prior notice to the Pledgor, it may liquidate the collateral by private contract, and in particular it may contract on its own account.
|
|
|
If the Bank refrains from liquidating pledged assets, this will not constitute a waiver of the Bank’s aforementioned right nor shall this result in any responsibilities for the Bank.
|
|
6.
If the deed of pledge is issued on behalf of third parties, all communications will be deemed to have been duly transmitted if sent to the Client. The Pledgor undertakes to cooperate when transferring the pledged assets to a new buyer. Pledged securities that are not in bearer form are hereby assigned to the Bank in blank in case it should become necessary to liquidate them.
|
7.
In the case of pledged mortgage deeds and other claims secured by real property, the Pledgor himself/herself must take all necessary measures, such as applications, notices of termination, amortizations, etc., to maintain the rights attaching to the pledged assets. He/she relieves the Bank of all responsibility in this regard. Moreover, the Bank will be entitled, but not obligated, to exercise all those rights and to make decisions which are the prerogative of the Pledgor or the owner of the pledged assets. In particular, in the event of termination of a claim secured by the pledge, the Bank is entitled, but not obligated, to directly terminate the claims against the mortgagor arising from the pledged mortgage deeds and to exercise all rights against the mortgagor in its own name. In the case of pledged mortgage deeds, particularly mortgage notes in the name of the owner, it is hereby agreed that no notice will be required in the event of termination by the Bank. If the mandatory provisions of the relevant cantonal legislation deviate, it is hereby agreed that the minimum period of notice mandated by the cantonal legislation will apply. The Bank is thus authorized to directly collect the principal, interest, and other income generated by the mortgages and also to enforce the claims for rent in accordance with Article 806 of the SCC as if it were the actual owner of the title or mortgage claim. In the case of the sale or fragmentation of the pledged properties, the rights accruing to the mortgage creditor pursuant to Articles 832, 833, and 852 of the SCC will be solely vested in the Bank for the duration of the pledge relationship. The Pledgor undertakes to forward to the Bank all associated notices that come to his/her attention without delay and to accept the Bank’s decisions. Non-compliance will cause the claims to fall due immediately.
|
|
In the case of pledged mortgage deeds (particularly mortgage notes in the name of the owner), the right of lien will cover the current annual interest as well as the annual interest accrued since the date of issue. Interest will be charged at 5% p.a. If, however, a higher rate or a higher maximum interest rate is specified, the latter will be deemed agreed. The Bank may draw on the principal and interest of pledged mortgage deeds separately, and in part or whole, as collateral for its claims.
|
|
8.
The assets pledged hereunder will also serve to secure the Bank’s claims against the Client resulting from outstanding credit card payments. The Pledgor hereby confirms that the Bank is authorized in this context to cover the Client’s outstanding credit card payments (including charges and costs), without providing the Client or the Client or the Pledgor with notification or a deadline, by
liquidating the assets pledged hereunder by private contract (including by purchasing them itself) and applying the resulting proceeds against the outstanding payments, as soon as the Client is in arrears with these payments. If the credit card relationship is terminated, the pledged assets may be retained until all outstanding credit card amounts (including charges and costs) incurred before termination of the credit card relationship or during collection proceedings have been paid in full, but in any case for at least three months after the termination of the credit card relationship.
|
9.
For all other matters, the Bank’s General Conditions and Safe Custody Regulations, with which the Pledgor is familiar, apply.
|
|
10.
The place of performance is the location specified in the Bank’s address.
|
|
If the Pledgor’s current or future place of residence or domicile is outside Switzerland, the place of performance is also the place of enforcement (special domicile pursuant to Article 50, para. 2 of the Federal Law on Debt Enforcement and Bankruptcy).
|
|
All the Pledgor’s legal relationships with the Bank are governed by Swiss law, to the exclusion of the conflict of laws provisions of Swiss private international law.
|
|
The Client as Pledgor acknowledges that the provisions governing jurisdiction in the Bank’s General Terms and Conditions also apply to this contractual relationship.
|
|
A third party as Pledgor acknowledges
Zurich
or - if different - the location specified in the Bank’s address as the exclusive place of jurisdiction. The Bank is entitled to take legal action against the Pledgor (Client or third party) before any other competent court in Switzerland or abroad.
|
List of Pledged Assets, Rights and Claims | |||
Number or nominal amount
|
Designation
|
||
CHF 20’000.00
|
Pledge of all shares (“Stammanteile”) of Eldista GmbH,
|
||
rue des Pierres-du-Niton 17, c/o INTEREXPERTS SA, 1207 Gen
è
ve.
|
|||
To be completed by the Bank
|
||
134343
Client no. (CIF) of Pledgor
0835-1280382-5
|
1.
|
Obligation to indemnify
:
|
|
1.1.
|
To indemnify you for any liability or expense, as detailed below, imposed upon you for actions taken (including actions preceding the date of this Letter) and/or actions that will be taken, by virtue of your service as an Officer of the Company, or an Officer on behalf of the Company in a company controlled by the Company or in which the Company has an interest (such companies being referred to herein as the “
Subsidiaries
”), as follows:
|
|
1.1.1.
|
Financial liability that you incur or imposed on you in favor of another person in accordance with a judgment, including a judgment given in a settlement or a judgment of an arbitrator approved by the Court, provided that such acts pertain to one or more of the events set out in the Schedule hereto (the
“Schedule”
);
|
|
1.1.2.
|
Reasonable litigation expenses, including legal fees that you will incur or for which you will be ordered to pay by a court within the framework of proceedings filed against you by or on behalf of the Company or by a third party, or in a criminal proceeding in which you will be acquitted, or in a criminal proceeding in which you will be convicted of a felony but which does not require criminal intent;
|
|
1.1.3.
|
Reasonable litigation expenses, including legal fees that you will incur due to an investigation or proceeding conducted against you by an authority authorized to conduct such investigation or proceeding and which was ended without the filing of an indictment against you and without being subject to a financial obligation as a substitute for a criminal proceeding, or which was ended without the filing of an indictment against you but with the imposition of financial obligation as a substitute for a criminal proceeding relating to an offence which does not require criminal intent, within the meaning of the relevant terms in the Companies Law;
|
|
1.1.4.
|
Financial liability that you incur for payment to persons or entities harmed as a result of violations in Administrative Proceedings, as detailed in section 52(54)(A)(1)(a) of the Israeli Securities Law, 1965 (the "
Securities Law
"). For this purpose "
Administrative Proceeding
" shall mean a proceeding pursuant to Chapters H3 (Imposition of Monetary Sanction by the Israel Securities Authority), H4 (Imposition of Administrative Enforcement Means by the Administrative Enforcement Committee) or I1 (Settlement for the Avoidance of Commencing Proceedings or Cessation of Proceedings, Conditioned upon Conditions) of the Securities Law, as shall be amended from time to time.
|
|
1.1.5.
|
Expenses that you incur in connection with Administrative Proceedings (as defined above) you were involved in, including reasonable litigation fees, and including attorney fees.
|
|
1.2.
|
The aggregate and accumulated indemnification amount that the Company shall pay to its Officers (in addition to sums that may be received from insurance companies in connection with insurance policies that the Company has purchased, see also section 1.3 below) pursuant to all the letters of indemnification issued and/or that shall be issued by the Company pursuant to the indemnification decisions, shall not exceed the higher of: (i) 25% of the shareholders’ equity of the Company, as set forth in the Company’s most recent consolidated financial statements prior to such payment; (ii) 7.5 million U.S. Dollars (the
“The Maximum Indemnification Amount”
).
|
|
1.3.
|
The Maximum Indemnification Amount shall not be affected in any way by the existence of, or payment under, insurance policies. Payment of the indemnification shall not affect your right to receive insurance payments, if you receive the same (either personally or through the Company or on your behalf) and the Company will not be required to indemnify you for any sums that were, in fact, already paid to you or for you in respect of insurance or any other indemnification obligations made to you by any third party. In the event there is any payment made under this Letter and such payment is covered by an insurance policy, the Company shall be entitle to collect such amount of payment from the insurance proceeds.
|
|
1.4.
|
In the event the indemnification amount the Company is required to pay to its Officers, as set forth in Section 1.1 above, exceeds at a certain time the Maximum Indemnification Amount (or the balance thereof after deducting any indemnification amounts paid or payable by the Company to any of its Officers at such time) in accordance with Section 1.2 above, the Maximum Indemnification Amount or its remaining balance will be allocated between the Officers entitled to indemnification, in the manner that the amount of indemnification that each of the Officers will actually receive will be calculated in accordance with the ratio between the amount each individual Officer may be indemnified for, and the aggregate amount that all of the relevant Officers involved in the event may be indemnified for.
|
|
1.5.
|
Upon the occurrence of an event that by its virtue you are likely to be entitled to indemnification in accordance with Section 1.1 above, the Company shall place at your disposal, from time to time, the funds required to cover the expenditures and payments that are connected to handling the legal proceeding, in a manner that you shall not be required to pay for, or personally finance the legal expenses, subject to the conditions and instructions in this Indemnification Letter.
|
|
1.6.
|
In order to avoid any doubt, upon the occurrence of an event that may entitle you to indemnification, you shall be entitled to appoint an advocate of your choice, with the exception of an advocate whom the Company deems unacceptable for reasonable cause, provided that you shall immediately inform the Company of the identity of the advocate, when it becomes necessary to appoint such advocate. In the event you do not inform the Company regarding your choice of advocate in compliance with the above mentioned, the Company shall have discretion to appoint an advocate on your behalf.
|
2.
|
The obligation to indemnify in accordance with this Letter is subject to the statements set forth in this Section 2 and to any applicable law
:
|
|
2.1.
|
There is nothing by law to prevent your being indemnified.
|
|
2.2.
|
You shall inform the Company of every legal proceeding that shall be brought against you in connection with any event that may entitle you to indemnification, and of every warning made to you in writing, pertaining to legal proceedings that may be commenced against you, and this shall be done in a timely manner, immediately after you shall first be aware of such, and you shall provide the Company or to whom the Company shall instruct you to, all documents in connection with such proceedings.
|
|
2.3.
|
Despite the provisions of Section 1.6 above, the Company is entitled to take upon itself the care of your defense in the legal proceeding and/or to give the above care to any prominent advocate that the Company shall select for this purpose (except an advocate that shall not be reasonably acceptable to you) subject to the fulfillment of all of the following conditions: (a) The Company shall inform the holder of this Indemnification Letter, within 45 days from the time of receiving the notice as said in Section 2.2 above (or within a shorter period of time – if the matter requires filing a statement of defense or a response to a proceeding), that it shall indemnify the holder of the Indemnification Letter according to this Letter; and (b) The legal proceeding against the holder of the Indemnification Letter shall solely entail a claim for monetary damages. The Company and/or the aforementioned advocate shall be entitled to act with their exclusive discretion and to bring the proceeding to a close; the appointed advocate shall act and shall owe its duty of loyalty to the Company and to you. In the event that a conflict of interest shall arise between you and the Company, you shall inform the Company of such conflict and shall be entitled to appoint an advocate on your behalf, and the provisions of this Indemnification Letter shall apply to expenses you may incur as a result of such appointment. In the event that the Company decides to settle a monetary obligation or to decide a monetary obligation by arbitration, or by mediation or by settlement the Company shall be entitled to do so as long as the lawsuit or the threat of a lawsuit against you shall be fully withdrawn. Following the request of the Company you shall sign any document that shall empower the Company and/or an advocate as mentioned above, to act on your name with regard to your defense in the above-mentioned proceedings and to represent you in all matters pertaining to these proceedings, as set forth above.
|
|
2.4.
|
You shall cooperate with the Company and/or with any advocates as set forth above in every reasonable manner that shall be required from you by any of them in connection with the handling of such legal proceedings, all in accordance with Section 1.2 above. You shall not bear any additional legal expenses due to such cooperation.
|
|
2.5.
|
Subject to the provisions of this Indemnification Letter, whether or not the Company shall act in accordance with section 2.3 above, the Company shall cover litigation expenses in a manner that you shall not be required to pay or finance such litigation expenses yourself.
|
|
2.6.
|
Your indemnification in connection to the legal proceeding of any actions against you, as set forth in this Letter, will not be enforceable in connection with amounts that you shall be required to pay as a result of a settlement or arbitration, unless the Company agrees, in advance and in writing, to the settlement, or to the arbitration award.
|
|
2.7.
|
The Company shall not be required to pay, pursuant to this Letter, monies that were actually paid, to you, or on your behalf or in your stead, through an insurance policy that the Company procured or through an obligation to any indemnification that was made by any other person other than the Company. In addition, in the event of the indemnification hereunder is being paid in respect of your serving as an Officer in any Subsidiary, such indemnification will only be paid after all your rights to insurance and indemnification from such Subsidiary will have been exhausted, if and to the extent they exist.
|
|
2.8.
|
Upon your request to an execution of a payment in connection with any event pursuant to this Letter, the Company shall take all necessary steps according to any applicable law to pay such payment and will do all that is required to obtain any approval that is required. If any approval is required for the above payment and that payment shall not be approved for any reason, such payment, or any part of it, that will not be approved, as said above, shall be subject to the approval of a court and the Company shall take all necessary steps to obtain the court’s approval.
|
3.
|
The obligations of the Company according to this Letter shall remain valid even if you have ceased to be an Officer of the Company, provided that acts for which you are given a commitment of indemnification were performed or shall be performed during your service as an Officer of the Company.
|
4.
|
In the event the Company pays to you, or in your place, any amount pertaining to this Letter in connection with a legal proceeding as stated above, and afterwards it shall be determined that you are not entitled to any indemnification from the Company for any reason whatsoever, the sums paid by the Company shall be considered a loan that was granted to you by the Company, and shall be linked to the Consumer Price Index and accrue interest in accordance with the Income Tax Regulations (Determination of the interest rate), 1985, as amended from time to time. You will be required to repay these sums to the Company when requested to do so in writing by the Company and in accordance with a payment schedule that the Company shall determine.
|
5.
|
The terms contained in this Letter will be construed in accordance with the Companies Law, and in the absence of any definition in the Companies Law, pursuant to the Securities Law, 5728-1968.
|
6.
|
The obligations of the Company according to this Indemnification Letter shall be interpreted broadly and in a manner that shall facilitate its execution, to the extent permitted by law, and for the purposes for which it was intended. In the event of a conflict between any provision of this Letter and any provision of the law, said provision of the law shall supersede the specific provision in this Letter, but shall not limit or diminish the validity of the remaining provisions of this Letter.
|
7.
|
The indemnification under this Letter will enter into effect upon your signing a copy of the same in the appropriate place, and the delivery of such signed copy to the Company. It is hereby expressly agreed and understood that this Indemnification Letter does not derogate in any way from any indemnification undertaking the Company has made to you; provided however, that the aggregate indemnification amount pursuant to all the Indemnification Letters issued or that shall be issued by the Company will not exceed the Maximum Indemnification Amount.
|
8.
|
The Company may, at its sole discretion and at any time, may revoke its undertaking to indemnify you hereunder, or reduce the Maximum Indemnification Amount, or limit the events to which it applies, either in regard to all the Officers or to some of them, to the extent it relates only, to events that will apply after the date of such change, provided that prior notice has been given to the Officer of the Company’s intention to do so, in writing at least 60 days before the date on which such decision will enter into effect. For the avoidance of any doubt, it is hereby clarified that any such decision will not have retroactive effect of any kind whatsoever and the Indemnification Letter, prior to such change or revocation, as the case may be, will continue to apply and be in full force and effect for all purposes in relation to any event that has preceded such change or revocation, even if the proceeding in respect thereof has been filed against the Officer after the change or revocation of the Indemnification Letter. In all other cases, this Indemnification Letter may not be changed, unless the Company and yourself have signed it.
|
9.
|
This Letter does not constitute a contract for the benefit of any third party and is not assignable. For the avoidance of any doubt, in the event of death (God forbids), this Letter will apply to you and your estate.
|
10.
|
No waiver, delay, forbearance to act or extension granted by the Company or by you will be construed in any circumstances as a waiver of the rights hereunder or by law, and will not prevent any such party from taking all legal and other steps as will be required in order to enforce such rights.
|
11.
|
The foregoing does not derogate from the Company’s right to indemnify you retroactively in accordance with the articles of association of the Company and subject to any applicable law.
|
12.
|
The law of the State of Israel shall govern this Letter and all issues related thereto, without giving effect to any conflicts of law principles. The courts in Tel Aviv, Israel shall have the exclusive local and international jurisdiction, in connection with this Indemnification Letter, except if an indemnification claim is related to legal proceeding, already filed by a third party in a different court.
|
13.
|
In this Indemnification Letter-
|
14.
|
The Schedule to this Letter is an integral and inseparable part of it.
|
1.
|
Any issuance of securities, including without limitation, a public offering pursuant to a prospectus, a private offering, the issuance of bonus shares or any offer of securities in any other manner;
|
2.
|
Conducting tender offers and any thing related thereto;
|
3.
|
A "Transaction" within the meaning of Section 1 of the Companies Law
1
, including without limitation negotiations for entering into a transaction, the transfer, sale or purchase or charge of assets or liabilities, including securities, or the grant or receipt of a right to any of the foregoing, receiving credit and the grant of collateral and any act directly or indirectly involved in such "Transaction";
|
4.
|
Report or notice filed in accordance with any applicable law, including the Companies Law and/or the Israeli Securities Law of 1968, and/or the Securities Exchange Act of 1933 and/or the Securities Exchange Act of 1934 including regulations promulgated thereunder, or in accordance with rules or instructions prevailing on an Israeli stock exchange or on Nasdaq-NM, or a stock exchange outside of Israel, or any law of another country regulating similar matters and/or the omission to act accordingly;
|
5.
|
Any resolution with respect to distribution, as defined in the Companies Law;
|
6.
|
Amendment to the Company’s structure or its reorganization or any resolution with respect to such matters, including without limitation, a merger, split, change in the Company’s capital structure, incorporation of subsidiaries, dissolution or sale thereof, issuance or distribution;
|
7.
|
Taking part in tenders;
|
8.
|
The making of any statement, including a bona fide statement or opinion made by an officer of the Company in such capacity, including during meetings of the Board of Directors or any committee thereof;
|
9.
|
An act in contradiction to the articles or memorandum of association of the Company;
|
10.
|
Any action or decision in relation to employer-employee relations, including the negotiation for, signing and performance of individual or collective employment agreements, other employees benefits (including allocation of securities to employees) and harassment suits;
|
11.
|
Any action or decision in relation to work safety and/or working conditions;
|
12.
|
Negotiation for, signing and performance of insurance policy;
|
1
|
Article 1 of the Companies Law defines “Transaction” as a contract or engagement or a unilateral decision of the company regarding a grant of a right or another benefit.”
|
13.
|
Formulating working programs, including pricing, marketing, distribution, directives to employees, customers and suppliers and collaborations with competitors;
|
14.
|
Decisions and/or acts pertaining to the environment, including dangerous substances;
|
15.
|
Decisions and/or acts pertaining to the Consumer Protection Law, 5741-1981, and/or orders and/or Regulations thereunder;
|
16.
|
Negotiating, making and performing of contracts of any kind and type with suppliers, distributors, agents, franchisees and the like of the products that are marketed and/or sold by, or by those serving, the Company;
|
17.
|
Negotiating, the making and performing agreements with manpower contractors, service contractors, building contractors, renovations contractors, etc;
|
18.
|
Reporting and/or filing of applications to the state authorities and other authorities;
|
19.
|
Any of the foregoing events relating to the capacity of such officer as an officer of a corporation controlled by the Company or otherwise affiliated therewith; and
|
20.
|
Any event or action for which indemnification is allowed to be granted under the Efficiency of Enforcement Proceedings in the Israel Securities Authority Law (Legislation Amendments) of 2011.
|
1.
|
I have reviewed this annual report on Form 20-F of Optibase Ltd.
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5.
|
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
1.
|
I have reviewed this annual report on Form 20-F of Optibase Ltd.
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5.
|
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
/s/ Amir Philips | |||
Name: Amir Philips
|
|||
Title: Chief Executive Officer |
|
/s/ Yakir Ben-Naim
|
||
Name: Yakir Ben-Naim
|
|||
Title: Chief Financial Officer
|
Tel-Aviv, Israel
April 30, 2012
|
/s/ Kost Forer Gabbay & Kasierer
KOST FORER GABBAY & KASIERER
A Member of Ernst & Young Global
|