Document:

exhibit_4-11.htm

Exhibit 4.11

 

DEED OF INDEMNITY

THIS DEED is dated 20 May 2015

BETWEEN

GILAT SATELLITE NETWORKS LTD, a company organised under the laws of Israel, under company no 52-003893-6, with its registered office at 21 Yegia Kapayin ST. Petah Tikva, Israel 49130 (The “Indemnifying Party”).

AMTRUST EUROPE LIMITED, a company organised under the laws of England and Wales, under company no. 1229676, with its registered office at Market Square House, St. James Street, Nottingham NG1 6FG. (The “Surety”).

Each of Surety and Indemnifying Party may be referred to herein as a "Party" and, jointly, as the "Parties".

RECITALS

1).- Subject to the execution of this Deed, the Surety will issue Bonds in favor of the Obligee for the benefit of Principal Obligor, as per the terms and conditions of the Contract (as defined below).

2). - The Principal Obligor shall post the Bonds with Obligee(s) (as defined below).

3).- The Indemnifying Party has agreed to enter into this Deed for the purpose of indemnifying and holding the Surety harmless from any and all Liabilities (as defined below) in relation to the Bonds.

AGREED TERMS

1. - INTERPRETATION.

The definitions and rules of interpretation in this clause apply in this Deed:

	
  

	
A.

	
“Bonds” means contracts of surety-ship, undertakings, guarantees or indemnities executed or procured by the Surety, described in the Contract, including those underwritten as reinsurers or by means of a Fronting Company or Cedant or issued in any acceptable form.

	
  

	
B.

	
“Contract” means the agreement, attached (SCHEDULE No 1), executed by or on behalf of the Principal Obligor with the Surety.

 

	
  

	
C.

	
"Collateralization Event" means any one or more of the following:

 

	
  

	
a.

	
The Surety has declared the Principal Obligor in default under the Contract(s) in relation to the bank intervention of the advance payments as described in the Section 2 of said Contract, or

	
  

	
b.

	
The Surety has received notice from the Obligee or has knowledge of facts communicated by the Obligee which Surety reasonably believes may result in a Liability to Surety; or

 

  

Page 1 of 14

  

	
  

	
D.

	
“ Event of Default” means any one or more of the following:

 

	
  

	
a.

	
The Indemnifying Party breaches any of its material obligation under this Deed; or

	
  

	
b.

	
The Obligee has requested payment in respect of any of the Bonds which have been deposited or posted with the Obligee; or

	
  

	
c.

	
The Principal Obligor has failed, refused or delayed to pay or is unable to pay claims, premium invoices or other indebtedness due to the Surety for the issuance of any of the Bonds which have been deposited or posted with an Obligee.

 

	
  

	
E.

	
“Liabilities” means all claims, damages, expenses, costs, fees and liabilities of every nature (including premiums, taxes and duties) (whether actual or contingent, present or future, joint or several, and whether or not subject to the giving of notice related to the Bonds or the Contract) which Surety may sustain or incur by reason of having issued the Bond (s) or by reason of the Principal Obligor’s default under the Contract (including premiums) and shall include but not be limited to account payments, partial payments, or without prejudice payments made by the Surety to the Obligee (s) provided always that the maximum aggregate liability on the part of the Indemnifying Party shall not exceed US$ 57.269.707,00 (FIFTY SEVEN MILLION TWO HUNDRED AND SIXTY-NINE THOUSAND SEVEN HUNDRED AND SEVEN) US DOLLARS and shall not include indirect or consequential damages.

 

	
  

	
F.

	
“Obligee” means the FONDO DE INVERSION EN TELECOMUNICACIONES (FITEL), with RUC (Peruvian Taxpayer Registration) No. 20514935590 and domiciled at Jr. Zorritos No. 1203, Lima 01, the Republic of Peru, or any entity that may replace it.

 

	
  

	
G.

	
“Principal Obligors” means:

 

GILAT NETWORKS PERÚ S.A., a subsidiary of GILAT HOME TO PERU S.A. (99%) and GILAT SATELLITE NETWORKS LTD (1%), organised under the laws of Perú or any other joint substitute or successor, affiliates, subsidiaries, divisions, successors, assigns or joint ventures of GILAT NETWORKS PERÚ S.A.

 

2. – INDEMNITY AND COLLATERALIZATION.

 

	
2.1. –

	
Upon the occurrence of an Event of Default, the Indemnifying Party and its successors (jointly and severally) unconditionally and irrevocably agree to indemnify and keep indemnified the Surety, holding it harmless from any and all Liabilities in connection with the Bonds paying to Surety upon first demand and before the Surety has made any payment, any and all Liability. A Statement of Loss sworn to by an officer of Surety shall be conclusive evidence of fact and extent of liability of Indemnifying Party to Surety.

 

	
2.2. – 

	
Upon the occurrence of a Collateralization Event, Surety has the right, in its sole and absolute discretion to require the Indemnifying Party to pay the Surety on demand for the credit of such account as the Surety may specify for this purpose such amount or amounts that the Surety may specify as being necessary to ensure the full payment of any and all Liability to Obligee.

 

  

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2.3. -  

	
Surety shall have the exclusive right, in its sole and absolute discretion, to determine whether any claim, demand, suit or judgement on the Bond (s) shall be paid, settled, defended, prosecuted, compromised or appealed. It shall not be a defence to such enforcement by the Surety that the Surety could or should have resisted or disputed any claim, demand, suit or judgement. The Surety shall submit timely and complete updates regarding any such action to the Indemnifying Party and support the joining of Indemnifying Party to such proceedings (if sought by Indemnifying Party), at Indemnifying Party's costs and expense.

 

	
2.4. - 

	
The Surety shall be entitled to enforce the obligations under this Deed against the Indemnifying Party without first proceeding against any Principal Obligor or exercising or exhausting any security held by Surety.

 

	
2.5. - 

	
Should the Obligee request the amendment of the wording, terms or conditions of any Bond the Surety may cancel, modify, amend or renew or extend the terms and conditions of the said Bond and the Indemnifying Party agrees that it will not release, remove discharge or affect the Indemnifying Party’s liability hereunder and shall provide advance notice to Indemnifying Party of such changes.

 

	
2.6. -

	
For the avoidance of doubt, clarified that the obligations and undertakings of the Indemnifying Party pursuant to this Deed constitute an indemnity undertaking in accordance with section 16 of the Israeli Guarantee Law 1967 and not a guarantee or surety.

 

3. - SEVERANCE.

 

	
3.1.

	
Should any provision of this Deed be held to be unlawful, unenforceable or invalid by a court competent jurisdiction, then (i) such provision is hereby declared to be of no force and effect and this Deed shall be construed as if such provision had not been included herein, (ii) the Surety and the Indemnifying Party shall replace such provision with another provision or provisions which will as closely as possible reflect the commercial intention of the parties hereto and shall not render the other provisions hereof invalid, and (iii) all other provisions of this Deed shall not be rendered invalid as a result of such provision being unlawful, unenforceable or invalid.

4. VARIATION AND WAIVER.

 

	
4.1. -

	
No variation of this Deed shall be effective unless it is in writing and signed by the parties (or their authorized representatives).

 

	
4.2. -

	
No failure or delay by a party to exercise any right or remedy provided under this deed or by law shall constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict the further exercise of that or any other right or remedy. No single or partial exercise of such right or remedy shall prevent or restrict the further exercise of that or any other right or remedy. A waiver of any right or remedy under this Deed or by law is only effective if it is in writing.

 

5. ASSIGNMENT AND OTHER DEALINGS.

 

	
5.1.

	
Neither party shall assign, transfer, mortgage, charge, subcontract, declare a trust over or deal in any other manner with any or all of its rights and obligations under this Deed without the prior written consent of the other party.

 

  

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6. THIRD PARTY RIGHTS.

 

	
6.1.

	
No one other than a party to this Deed shall have any right to enforce any of its terms.

 

7. GOVERNING LAW AND JURISDICTION.

 

	
7.1

	
This Deed and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of the State of Israel.

 

	
7.2

	
The Indemnifying Party irrevocably agrees that the courts of Tel Aviv, Israel, shall have jurisdiction to settle any dispute or claim arising out of or in connection with this Deed or its subject matter or formation (including non-contractual disputes or claims).

 

8. NOTICES.

 

	
8.1.

	
Any notices required to be given under the provisions of this Agreement shall be in writing and shall be deemed to have been duly served if delivered by hand or sent by recorded delivery post correctly addressed to the address of the respective party as specified in this Deed or at such other address as may be designated by the relevant party by notice in writing to the other party from time to time in accordance with this clause 8, and shall be deemed effective as from the date of receipt.

 

9. COUNTERPARTS.

 

	
9.1.

	
This Deed may be executed in any number of counterparts, each of which when executed and delivered shall constitute a duplicate original, but all the counterparts shall together constitute the one Deed.

 

10. MISCELLANEOUS.

 

	
10.1.

	
The terms and conditions of this Deed comprise the entire understanding of the Parties in connection with the subject matter of this Deed, and they shall prevail over any oral or written understanding, commitment, representation, or undertaking entered into prior to the signing of this Deed.

 

	
10.2.

	
Each Party shall maintain in confidence and protect the secrecy of all confidential and proprietary information disclosed to it by the other Party (including the existence of this Deed) or disclosed during or in connection of or in performance of this Deed, including all technical, business and pricing information (the "Confidential Information"). Such receiving Party may only disclose such Confidential Information to its associates, partners, agents, representatives, counsels, employees, consultants and, in the case of the Surety, to entities who provide the necessary capacity to issue surety bonds or guarantees. The recipient Party shall in any case inform of the confidential nature of the said Confidential Information and shall, in any case, be responsible for unauthorized use or disclosure of such Confidential Information. Such receiving Party shall not disclose the said Confidential Information to any other person or entity, other than the above mentioned, unless it receives the prior written consent of the disclosing Party. The foregoing obligations shall not apply in the following instances: (i) disclosure of the Confidential Information was required under any applicable law; (ii) the Confidential Information is in the public domain otherwise than as a consequence of a breach of this Deed; or (d) such Confidential Information was previously and demonstrably known to the receiving party, or was subsequently independently developed without use of the confidential information.

 

  

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SCHEDULE 1

 

SURETY - SPECIAL CONDITION ́S SCHEDULE.

 

	
Blanket Policy no

	
(PENDING)

	
Policy Holder/ Principal’s Name  

	
GILAT NETWORKS PERÚ S.A. 

	
Branch and class

	
Contract Surety

Advance Payment Bonds 

	
Policy Holder/Principal’s Adresss.

	
AVENIDA CARLOS VILLARÁN No 140, TORRE “A” DEL EDIFICIO INTERBANK, PISO 12, URBANIZACIÓN SANTA CATALINA, DISTRITO DE LA VICTORIA, PROVINCIA Y DEPARTAMENTO DE LIMA, PERÚ.

	
Inception Date

	
20/05/2015

	
Policy Holder/Principal’s Province.

	
LIMA 

	
Maximum Insured Capital

	
Apurimac Project: USD 16,532,190

Ayacucho Project: USD 21,282,882

Huanvelica Project: USD 19,454,635

Total: USD 57,269,706

	
Insured’s/Obligee`s  Name

	
FONDO DE INVERSION EN TELECOMUNICACIONES (FITEL)

	
Rate

	
2,75% (annual) + local taxes and issuance expenses

	
Broker’s Name/Direct insurance

	
JAIME GABEL 

 

INSURED OPERATION

	
 

 

 Title of the work,  supply, ...

	
 

THREE PROJECTS OF REGIONAL TELECOMMUNICATIONS. Installation of broadband for the integral connectivity and social development of 3 regions: Apurimac, Ayacucho and Huancavelica.

 

	
 

 Minimum Premium

 

	
For the first year it will be the Premium equivalent to 6 months of the risk. For the following periods, the premium will be fixed based on the above rate, dates, capitals and advance of the works. We will refund the premium not used in the case the bonds are cancelled before the annuity and always if the minimum Premium is exceeded.

	
Place for the payment of premiums.

	
 

Perú

 

CONDITIONS FOR THE ISSUANCE OF THE BONDS THAT WILL BE EXCUTED BY RIMAC SEGUROS Y 

REASEGUROS AS FRONTING COMPANY IN PERU BEING AMTRUST EUROPE LIMITED THE REINSURER.

 1).- DEED OF INDEMNITY signed as Indemnitor by GILAT SATELITE NETWORKS LTD up to 100% of the maximum insured capital of the bonds.

 2).- BANK INTERVENTION OF THE ADVANCE PAYMENTS RECEIVED FROM THE OBLIGEE FOR THE TOTAL AMOUNT OF USD 57,269,706. 

 

  

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SCHEDULE 1

 

 

These payments will be deposited in a bank account with the joint signature of the POLICY HOLDER on one side and a legal representative of AMTRUST Peru. In this case, and in order for the funds to be gradually available, the AMTRUST legal representative will sign the disposals always after receiving proof of all the amounts/invoices of the services or materials used in for the Works as set out below.

 

Regarding the setting up of the intervened account and how to disburse the funds, we are setting out the following;

 

2.1.).- SETTING UP THE INTERVENED ACCOUNT.

 

In order to verify that the “intervened account” has been correctly set up, the client must deliver Amtrust the following documentation: 

 

1).- Instructions letter to the bank with evidence that it has been received by the bank. This instructions letter will have to expressly convey that any payment to be made from the account can only be made if there is a joint signature of both, an AMTRUST legal representative and the POLICY HOLDER, and that such instruction can only be revoked / cancelled with a written communication from AMTRUST to the Bank.

 

2).- A document from the bank accepting the instructions above.

 

3).- The contract of the account. 

AMTRUST will not allow any fund disposal until all these 3 documents have been received. 

 

We recommend, in order for the bank account to be set up in an efficient matter, to open it at the GNB bank as it already knows and accepts all the requirements that these accounts must comply with. If the client wants to propose another Bank, this will be accepted only if such other bank compromises itself to intervene the account according to the said AMTRUST terms, which include the obligation to give us a certificate that the account has been intervened and that this intervention cannot be revoked or cancelled unless it is acknowledged by AMTRUST.

 

2.2).- PROCEDURE FOR THE DISPOSAL OF THE FUNDS.

 

In order to disburse funds from the intervened account, it will be required to provide to AMTRUST:

 

1).- FINANCIAL PLANNING OR SCHEDULE of the Works (in Excel format) including all the costs related to the Project, which shall be provided to AMTRUST by POLICY HOLDER. 

 

2).- INVOICES OR EQUIVALENT PAYMENT INSTRUCTIONS that proof the requested amounts to be disbursed. 

 

3).- A SUMMARY OF THE INVOICES. Besides of the invoices, the POLICY HOLDER will provide us with an Excel file that will include the main information of every invoice such as:

 

-  Invoice number

-  Date

-  Provider

-  Amount of the invoice

-  Amount to be paid

-  Concept within the financial planning the invoice is related to

-  Total amount to disburse 

 

4).- AMTRUST shall receive quarterly updated information on the evolution of the Works. 

 

In order to disburse the funds AMTRUST will count on the support of an external Engineering Consulting firm.

 

  

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SCHEDULE 1

 

2.3.).- SCHEDULE FOR THE FUNDS DISPOSALS.

 

1).- AMTRUST is committed to respond to any fund disposal request in maximum 24 working hours since the request has been received within the working schedule of the AMTRUST Madrid Office.

 

2).- Any fund disposal request that has a lower or equal value to that established in the budget (with a 10% tolerance) will be approved by AMTRUST. The general expenses/overheads foreseen in the financial planning will be disbursed by AMTRUST without the need of specific justification up to the sum of USD 1,000,000 monthly. 

 

3).- If AMTRUST does not comply with this proposed performance and within the agreed period (or if AMTRUST does not answer or show enough flexibility), AMTRUST will commit itself to implement an “accelerated process” by which 25% of the funds deposited in the intervened account from time to time will be automatically disbursed after having been requested so by the POLICY HOLDER, and then being accounted for “a posteriori”.

 

4).- AMTRUST can value the possibility that, at the POLICY HOLDER’s choice, the funds that are not used were to be invested in financial products that might generate profits. Notwithstanding the foregoing, the POLICY HOLDER must provide AMTRUST with the information about such products for its knowledge and approval in order to verify the type of product, its validity and to make sure that the entity where these funds would be deposited is not a risk for this operation. 

 

5).- For future projects, and if the POLICY HOLDER has shown and established at positive performance regarding the disposal of funds, AMTRUST could implement the “accelerated process” from the beginning.

 

6).- If the POLICY HOLDER makes the decision to swap with another bonds or guarantees the bonds, AMTRUST shall cease in the intervention of the intervened account at the time that the bonds have been returned by the Insured and this contract shall terminate at such time provided POLICY HOLDER has paid AMTRUST`s outstanding premiums until such time.

 

These conditions shall be governed under the laws of England and Wales and the Courts of London, United Kingdom shall have exclusive jurisdictions over any dispute arising out of on in connection therewith. 

 Madrid, 20/05/2015.

 

	
Policyholder

	
Reinsurer

	
 

 

 

GILAT NETWORKS PERU S.A

	
 

 

 

AMTRUST EUROPE LIMITED

 

Data Protection

 

The personal data provided in this contract shall be processed by AM TRUST EUROPE LIMITED, established in Market Square House, St. James Street, Nottingham, Nottinghamshire, NG1 6FG, Tel 44 0115 941 1022, Fax.44 0115 941 1316; in accordance with the legislation applicable to the Insurer under the Data Protection Act 1998 (UK Data Protection Act 1998).

 

 The data shall be used to address and resolve their queries, to provide information about our products and services, and for research, analysis and regulation. Data may be shared with other companies with whom we have a business relationship, including our regulator (Financial Conduct Authority and Prudential Regulation Authority). We may contact you by mail, email, telephone or other suitable means to answer your queries.

SCHEDULE 1

 

The Policyholder and where appropriate, the insured have the right to request a copy of the personal data supplied (this may have a cost for the applicant) and also have the right to correct any incorrect data that may be contained in the information provided.

 

  

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This document has been executed as a deed and is delivered and takes effect on the date stated at the beginning of it.

 

(The “Indemnifying Party”)

 

Signed as a deed by GILAT SATELLITE NETWORKS LTD.

Acting by

A director and

In the presence of:

 

[Witness]

 

[Signature]

 

[Address]

[Occupation]

 

IN WITNESS WHEREOF, the Surety hereby executes this Deed under seal.

 

(The “ Surety “)

 

Signed as a deed by AMTRUST EUROPE LIMITED

Acting by

A director and

A director/ its secretary

In the presence of:

[Witness]

 

[Signature]

 

[Address]

 

[Occupation]

 

  

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DEED OF CONSENT

 

THIS DEED is dated December 29, 2015

 

BETWEEN

 

GILAT SATELLITE NETWORKS LTD, a company organised under the laws of Israel, under company no 52-003893-6, with its registered office at 21 Yegia Kapayin ST. Petah Tikva, Israel 49130 (The “Indemnifying Party”).

 

AMTRUST EUROPE LIMITED, a company organised under the laws of England and Wales, under company no. 1229676, with its registered office at Market Square House, St. James Street, Nottingham NG1 6FG. (The “Surety”).

 

RECITALS

 

1).- Subject to the execution of the Deed dated 20 May 2015, the Surety has issued Bonds in favor of the Obligee for the benefit of Principal Obligor, as per the terms and conditions of the Contract (as defined in the Deed dated 20 May 2015).

 

2). - The Principal Obligor has posted the Bonds with Obligee(s) (as defined in the Deed dated 20 May 2015).

 

3).- The Indemnifying Party entered the said Deed for the purpose of indemnifying and holding the Surety harmless from any and all Liabilities (as defined in the Deed dated 20 May 2015) in relation to the Bonds.

 

4) - Pursuant to an amendment of the Contract (attached as SCHEDULE No1 to the Deed of Indemnity dated 20 May 2015) the said SCHEDULE No1 is to be replaced by the AMENDED SCHEDULE No1 hereby attached.

 

AGREED TERMS:

 

1.- CONSENT TO VARIATION AND CONFIRMATION OF THE DEED OF INDEMNITY.

 

	
1.1)

	
The Indemnifying Party confirms it has received a copy of the AMENDED SCHEDULE No 1 (hereby attached) and consents to the provisions of the AMENDED SCHEDULE No 1, which, from the date of this deed replaces SCHEDULE No 1 attached to the Deed dated 20 May 2015.

 

	
1.2)

	
 
The Indemnifying Party confirms that the Deed of Indemnity dated 20 May 2015 remains in full force and effect. For the avoidance of doubt, this Deed of Consent shall not expand the Liabilities for which the Indemnifying Party is liable to Surety pursuant to the original terms of the Letter of Indemnity, dated May 20, 2015 and executed between the Parties hereto.

 

2.- COUNTERPARTS.

 

	
2.1)

	
This Deed may be executed in any number of counterparts, each of which when executed and delivered shall constitute a duplicate original, but all the counterparts shall together constitute the one Deed.

 

  

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AMENDED SCHEDULE 1

 

  

SURETY - SPECIAL CONDITION ́S SCHEDULE.

 

	
 

Blanket Policy no

	
 

20600386442

	
Policy Holder/ Principal’s Name  

	
GILAT NETWORKS PERÚ S.A. 

	
 

Branch and class

	
Contract Surety

Advance Payment Bonds 

	
Policy Holder/Principal’s Adresss.

	
AVENIDA CARLOS VILLARÁN No 140, TORRE “A” DEL EDIFICIO INTERBANK, PISO 12, URBANIZACIÓN SANTA CATALINA, DISTRITO DE LA VICTORIA, PROVINCIA Y DEPARTAMENTO DE LIMA 13, LIMA PERÚ.

	
 

Inception Date

	
20/05/2015

	
Policy Holder/Principal’s Province.

	
LIMA 

	
Maximum Insured Capital

	
Apurimac Project: USD 16,532,190

Ayacucho Project: USD 21,282,882

Huanvelica Project: USD 19,454,635

Cusco Proyect: USD 48,779,550 

Total: USD 106,049,257

	
Insured’s/Obligee`s  Name

	
FONDO DE INVERSION EN TELECOMUNICACIONES (FITEL)

	
Rate

	
2,75% (annual) + local taxes and issuance expenses

	
Broker’s Name/Direct insurance

	
JAIME GABEL 

 

INSURED OPERATION

 

	
 

 Title of the work, supply, ...

	
 

THREE PROJECTS OF REGIONAL TELECOMMUNICATIONS. Installation of broadband for the integral connectivity and social development of 3 regions: Apurimac, Ayacucho and Huancavelica.

 

	
 

 Minimum Premium

 

	
For the first year it will be the Premium equivalent to 6 months of the risk. For the following periods, the premium will be fixed based on the above rate, dates, capitals and advance of the works. We will refund the premium not used in the case the bonds are cancelled before the annuity and always if the minimum Premium is exceeded.

	
Place for the payment of premiums.

	
 

Perú

 

  

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CONDITIONS FOR THE ISSUANCE OF THE BONDS THAT WILL BE EXCUTED BY RIMAC SEGUROS Y 

REASEGUROS AS FRONTING COMPANY IN PERU BEING AMTRUST EUROPE LIMITED THE REINSURER.

 

That as a result of the new Cusco contract, whose amount is USD 48,779,550 and the agreed contractual conditions it is necessary to amend the advanced payment's disposal, due to the fact that all revenue/income from the 4 Projects (Apurimac, Ayacucho, and Huanvelica Cusco), will at all times be bound to any and all possible loss that may result from a claim as a money collateral, notwithstanding that the Deed of Indemnity signed on the 20th May 2015 shall, at all times ,hold AMTRUST harmless from any and all liabilities in relation to the bonds issued for the Apurimac, Ayacucho and Huanvelica Projects up to the maximum aggregate amount of USD 57,269,707.

 

1).- BANK INTERVENTION OF THE ADVANCE PAYMENTS RECEIVED FROM THE OBLIGEE AND ANY OTHER REVENUE/INCOME COMING FROM THE ABOVE MENTIONED PROJECTS (APURIMAC, AYACUCHO,HUANCAVELICA Y CUSCO).

 

These payments will be deposited in a bank account with the joint signature of the POLICYHOLDER on one side and a legal representative of AMTRUST Peru. In this case, and in order for the advanced payments to be gradually available, the AMTRUST legal representative will sign the disposals always after receiving proof of all the amounts/invoices of the services or materials used in for the Works as set out below.

 

Amounts from revenue/income will be available as described in clause 1.4)

 

Regarding the setting up of the intervened account and how to disburse the funds we are setting out the following;

 

1.1.). - SETTING UP THE INTERVENED ACCOUNT.

 

In order to verify that the “intervened account” has been correctly set up, the client must deliver Amtrust the following documentation: 

 

1).- Instructions letter to the bank with evidence that it has been received by the bank. This instructions letter will have to expressly convey that any payment to be made from the account can only be made if there is a joint signature of both, an AMTRUST legal representative and the POLICY HOLDER, and that such instruction can only be revoked / cancelled with a written communication from AMTRUST to the Bank.

 

2).- A document from the bank accepting the instructions above.

 

3).- The contract of the account. 

 

AMTRUST will not allow any fund disposal until all these 3 documents have been received. 

 

We recommend, in order for the bank account to be set up in an efficient matter, to open it at the GNB bank as it already knows and accepts all the requirements that these accounts must comply with. If the client wants to propose another Bank, this will be accepted only if such other bank compromises itself to intervene the account according to the said AMTRUST terms, which include the obligation to give us a certificate that the account has been intervened and that this intervention cannot be revoked or cancelled unless it is acknowledged by AMTRUST.

 

1.2). - PROCEDURE FOR THE DISPOSAL OF THE ADVANCED PAYMENTS.

 

In order to disburse advanced payments from the intervened account, it will be required to provide to AMTRUST:

 

1). - FINANCIAL PLANNING OR SCHEDULE of the Works (in Excel format) including all the costs related to the Project, which shall be provided to AMTRUST by POLICYHOLDER. 

 

  

Page 11 of 14

  

 

2). - INVOICES OR EQUIVALENT PAYMENT INSTRUCTIONS that proof the requested amounts to be disbursed. 

 

3). - A SUMMARY OF THE INVOICES. Besides of the invoices, the POLICYHOLDER will provide us with an Excel file that will include the main information of every invoice such as:

 

-   Invoice number

-   Date

-   Provider

-   Amount of the invoice

-   Amount to be paid

-   Concept within the financial planning the invoice is related to

-   Total amount to disburse 

 

4).- AMTRUST shall receive quarterly updated information on the evolution of the Works. 

 

In order to disburse the funds AMTRUST will count on the support of an external Engineering Consulting firm.

 

1.3.).- SCHEDULE FOR THE ADVANCED PAYMENT DISPOSALS.

 

1).- AMTRUST is committed to respond to any advanced payments disposal request in maximum 24 working hours since the request has been received within the working schedule of the AMTRUST Madrid Office.

 

2).- Any advanced payments disposal request that has a lower or equal value to that established in the budget (with a 10% tolerance) will be approved by AMTRUST. The general expenses/overheads foreseen in the financial planning will be disbursed by AMTRUST without the need of specific justification up to the sum of USD 1,000,000 monthly. 

 

3). - If AMTRUST does not comply with this proposed performance and within the agreed period (or if AMTRUST does not answer or show enough flexibility), AMTRUST will commit itself to implement an “accelerated process” by which 25% of the funds deposited in the intervened account from time to time will be automatically disbursed after having been requested so by the POLICYHOLDER, and then being accounted for “a posteriori”.

 

4).- Notwithstanding the above AMTRUST shall not authorize any disposal which might imply that, due to such disposal, the balance in the bank account results to be less than the maximum insured value of the living risks of the bonds issued by AMTRUST for the benefit of Gilat due to the contract signed between the later and Fitel for the Cusco Region.

 

5). - For future projects, and if the POLICYHOLDER has shown and established a positive performance regarding the disposal of funds, AMTRUST could implement the “accelerated process” from the beginning.

 

1.4) DISPOSAL OF THE REVENUE/INCOME AMOUNTS

 

Any and all amounts deposited in the intervened bank account coming from any and all revenues/incomes from the above mentioned projects (Apurimac, Ayacucho, Huancavelica) shall be object of disposal once fulfilled the conditions described in clause 1.4) for Advanced Payments and with express prior consent of AMTRUST.

 

1.5) COMMON PROVISIONS 

 

1). - AMTRUST can value the possibility that, at the POLICYHOLDER’s choice, the amounts deposited in the intervened account that are not used were to be invested in financial products that might generate profits. Notwithstanding the foregoing, the POLICYHOLDER must provide AMTRUST with the information about such products for its knowledge and approval in order to verify the type of product, their validity and to make sure that the entity where these funds would be deposited is not a risk for this operation. The POLICYHOLDER shall, under no circumstances, invest in any financial products which may hinder the payment of claims as established by Peruvian Law.

 

  

Page 12 of 14

  

 

2).- If the POLICYHOLDER makes the decision to swap with another bonds or guarantees the AMTRUST bonds, AMTRUST shall cease in the intervention of the intervened account at the time that the bonds have been returned by the Insured and this contract shall terminate at such time provided POLICYHOLDER has paid AMTRUST`s outstanding premiums until such time.

 

These conditions shall be governed under the laws of England and Wales and the Courts of London, United Kingdom shall have exclusive jurisdictions over any dispute arising out of on in connection therewith. 

 

Madrid, 28/12/2015.

 

	
Policyholder

	
Reinsurer

	
 

 

 

GILAT NETWORKS PERU S.A

	
 

 

 

AMTRUST EUROPE LIMITED

 

Data Protection

 

The personal data provided in this contract shall be processed by AM TRUST EUROPE LIMITED, established in Market Square House, St. James Street, Nottingham, Nottinghamshire, NG1 6FG, Tel 44 0115 941 1022, Fax.44 0115 941 1316; in accordance with the legislation applicable to the Insurer under the Data Protection Act 1998 (UK Data Protection Act 1998).

 

The data shall be used to address and resolve their queries, to provide information about our products and services, and for research, analysis and regulation. Data may be shared with other companies with whom we have a business relationship, including our regulator (Financial Conduct Authority and Prudential Regulation Authority). We may contact you by mail, email, telephone or other suitable means to answer your queries.

 

The Policyholder and where appropriate, the insured have the right to request a copy of the personal data supplied (this may have a cost for the applicant) and also have the right to correct any incorrect data that may be contained in the information provided.

 

  

Page 13 of 14

  

This document has been executed as a deed and is delivered and takes effect on the date stated at the beginning of it.

 

(The “Indemnifying Party”)

 

Signed as a deed by GILAT SATELLITE NETWORKS LTD.

Acting by

A director and

In the presence of:

 

[Witness]

 

[Signature]

 

[Address]

[Occupation]

 

IN WITNESS WHEREOF, the Surety hereby executes this Deed under seal.

 

(The “ Surety “)

 

Signed as a deed by AMTRUST EUROPE LIMITED

Acting by

A director and

A director/ its secretary

In the presence of:

 

[Witness]

 

[Signature]

 

[Address]

 

[Occupation]

 

Page 14 of 14exhibit_4-12.htm

Exhibit 4.12

 

MEMORANDUM OF UNDERSTANDING

Be it known by this private document, the Memorandum of Understanding (hereinafter, the MOU) executed by an between:

	
§

	
GILAT NETWORKS PERU SA, identified with RUC No. 20600386442, with domicile at Av. Carlos Villarán 140, Piso 12 Torre A, La Victoria, Lima, represented by Arieh Rohrsatock, identified with C.E. N° 000105760, according to powers of attorney registered under the record N° 13431090 of the Public Registry of Corporations of Lima and Yveth Romero Guía, identified with DNI N° 41358105, according to powers of attorney registered under the Record N° 13431090 of the Public Registry of Corporations of Lima who shall be referred hereinafter as GILAT; and

	
§

	
AMTRUST INSURANCE SPAIN, SL, identified with RUC No. 20563308525 with domicile at Calle Monterrosa 233, Oficina 501, Chacarilla del Estanque, Santiago de Surco, represented by Alfredo Eloy Gastón Llosa Carrión, identified with DNI 07274757, and Miguel Pascual Alvarez identified with Spanish Passport No. PAA990396, who shall be referred hereinafter as AMTRUST.

 

Both parties represent they have freely entered into this MOU and make themselves subject by to its terms, clauses and conditions as follows:

FIRST.-BACKGROUND

	
1.1.

	
GILAT is a company incorporated in Peru, registered before Lima’s Public Registry of Corporations. GILAT is engaged in the execution of telecommunication projects tendered by Peruvian Government’s entities.

	
1.2.

	
GILAT has been awarded the Buena Pro of tender processes summoned by the Fondo de Inversión en Tslecomuniaciones – FITEL (dependent of the Telecommunications and Transports Ministry), consisting on the implementation of broad bands for an integral connectivity in the cities of Cusco, Apurímac, Ayacucho and Huancavelica. The terms and conditions of the obligations GILAT has assumed are specified in the contracts executed between GILAT and FITEL, which are scheduled to this MOU as Annex 2.

 

	
1.3.

	
FITEL has paid sums in advance to GILAT for the contracts of Apurimac, Ayacucho and Huancavelica. Such funds are held in Bank Accounts No. 1236659-001 (Peruvian Soles) y 1236659-002 (US Dollars) of Banco GNB. AMTRUST, through a fronting operation by a Peruvian company authorized to issue payment bonds, has issued payment bonds in favor of GILAT for the sums paid in advance for such contracts.

	
1.4.

	
To guarantee the fulfilment of its obligation in the Cusco contract before FITEL, AMTRUST will issue via a fronting operation of a Peruvian insurance company, two payment bonds to be held by GILAT in favour of FITEL for the sums of US$37’939.650.00 and US$10 ́839.900.00, to back the sums paid and received in advance, as well as for its faithful compliance, respectively. Both payment bonds (advance and faithful compliance) sum up US$48’779,550.00

 

	
1.5.

	
AM TRUST through Rimac Seguros y Reaseguros will issue the Faithful Compliance and Advance payment bonds that GILAT must present to FITEL. The terms and conditions in which the payment bonds will be issued by AMTRUST are scheduled to this MOU as Annex 1.

	
1.6.

	
The parties acknowledge that the conditions afore-mentioned and the agreements of this MOU will apply to the payment bonds issued by AMTRUST to GILAT in Peru.

  

  

  

SECOND.- PURPOSE OF THE MOU

	
2.1.

	
By means of this MOU, GILAT and AMTRUST agree to be bound by the terms and conditions of this MOU in relation to the Advance and Faithful Compliance payment bonds issued, and to be issued, by AMTRUST, as well as the applicable default procedure. The default procedure to execute the payment bonds that AMTRUST will issue is set-forth in the next clause.

 

	
2.2.

	
In accordance with the previous paragraph, GILAT shall, without any exception whatsoever, transfer all and any sum received from FITEL, including the sums paid in advance for the execution of the aforementioned projects, to the bank accounts No. 1236659-001 (Peruvian Soles) y 1236659-002 (US Dollars) of Banco GNB.

 

	
2.3.

	
GILAT obliges to irrevocably instruct Banco GNB to transfer all and any sums received as payment or advance payment by Fitel to bank accounts No. 1236659-001 (Peruvian Soles) y 1236659-002 (US Dollars), which will be the only bank accounts held by GILAT in Banco GNB, which will likewise be the only bank accounts held by GILAT in the Peruvian financial system in order to receive amounts paid by FITEL. It is clearly established that the funds accredited in such accounts will only be released with a previous written and signed authorization from AMTRUST officers, Mr. Alfredo Llosa Carrión, identified with ID N° 07275747, with domicile at Calle Monterosa 233, Office 501, Chacarilla, Santiago de Surco, and Mr. Miguel Pascual Alvarez, identified with Spanish Passport No. PAA990396, with domicile at Carretera de la Coruña km. 23,200 Edificio Las Rozas 23 28290 – Las Rozas (Madrid), jointly with the representatives appointed by GILAT. GILAT obliges itself to fulfill this obligation within the next business day of executing this MOU. The instruction letter that GILAT will send to Banco GNB according to what is established in this paragraph must be done with the express character of irrevocable. AMTRUST will retain absolute freedom to unilaterally replace its appointed officers directly, in which case GILAT will authorize them before the Bank.

 

	
2.4.

	
Likewise, in a period not longer than a business day after executing this MOU,GILAT shall inform FITEL that every payment or advance payment due by virtue of the contracts executed by them must be transferred to the aforementioned bank accounts. In said communication, GILAT must instruct FITEL that in case a request is made by GILAT for FITEL to wire the payments and/or payments in advance into any other account than the ones previously referred-to, such request must be made known to AMTRUST and its attorneys, since failure to do so will render the request as null and FITEL must continue to wire the sums into the bank accounts aforementioned. In any case, if GILAT requests to wire the payments and/or payments in advance into a bank account different than the aforementioned bank accounts in Banco GNB, such request will be considered as a default subject to the procedure set-forth in the following clause.

 

	
2.5.

	
GILAT will request AMTRUST authorization in order to initiate any business in Peru different to those mentioned in this MOU, until the risk undertaken by AMTRUST is terminated.

 

	
2.6.

	
Its expressly agreed that GILAT acknowledges and accepts that AMTRUST will not authorize any withdrawal of funds from the accounts aforementioned, if as a result of such the remaining balance in the account is lower than the nominal sum of the ongoing exposure of the payment bonds by AMTRUST, issued by virtue of the contract executed between GILAT and FITEL for the Cusco region.

THIRD.- DEFAULT PROCEDURE

 

	
3.1.

	
The execution of any of the payment bonds issued by Rimac Seguros y Reaseguros, as a fronting of AMTRUST, will be considered as a default event of GILAT. Likewise, a default by GILAT on any of its contractual obligations before FITEL –as well as any event that AMTRUST may consider a default- in any of the contracts executed with said entity for the broadband projects of Apurimac, Ayacucho, Huancavelica and/or Cuzco, will be considered as a default of this MOU.

 

	
3.2.

	
A default will also be configured if GILAT requests the opening of another bank account in order to receive funds wired by FITEL in any financial institution, and also if it requests FITEL to wire the sums into any other account in Banco GNB.

 

	
3.3.

	
In case of default by GILAT, the bank accounts aforementioned will be administered only by AMTRUST, according to the instructions issued by their representatives to the Banco GNB; in which case, the consent or instructions of GILAT will no longer be necessary for the administration of such accounts, nor for the withdrawal of its funds. Therefore, by virtue of GILAT’s default, AMTRUST may –at its own criteria- withdraw funds and/or wire out any and/or all of the funds accredited in the Bank Accounts at Banco GNB.

 

  

  

  

	
3.4.

	
In order for Banco GNB to acknowledge GILAT’s default and act according to the procedure established in the previous paragraphs, a communication by AMTRUST to Banco GNB expressing that a default event has arisen will suffice; such communication may be by email or letter without confirmation of reception and must not necessarily accredit the existence of the default event.

FORTH.- CONFIDENTIALITY

 

	
4.1.

	
The parties represent and warrant that they will perform their best efforts to execute this MOU according to the good faith and common intention of the parties’ rules of article 1362° of the Civil Code.

	
4.2.

	
The parties have the duty to collaborate, which must be met with the maximum efforts when performing the compromised activities and/or obligations.

FIFTH.- GOVERNING LAW AND CONFLICT RESOLUTION

 

	
5.1.

	
Any dispute, claim, conflict of interest or legal uncertainty which may arise between the Parties in relation to the execution, validity, interpretation and/or execution of this MOU, shall be settled amicably between them. In this sense, each of the Parties, either directly or through a representative, and in a period not longer than thirty (30) days, will seek a peaceful resolution of the dispute. This period is not renewable and its accrued since the moment in which one of the parties informs its decision to use this mechanism to the other.

	
5.2.

	
If the parties fail to reach an agreement in the manner and within the period mentioned, the matter will be resolved in a Law Arbitration, by a tribunal comprised of three (3) members that must be lawyers registered at the Bar Association.  The arbitration will be administered according to the Reglamento de Arbitraje del Centro de Arbitraje de la Cámara de Comercio de Lima (hereinafter, the “Centro”), and by the Centro. The arbitration will be held in Lima, capital of the Republic of Peru, in Spanish language and according to Peruvian Law.

	
5.3.

	
The arbitration tribunal shall be comprised as follows:

	
  

	
a)

	
Each party shall appoint an arbitrator, and the arbitrators appointed by each of the parties will appoint the third arbitrator, who will act as President of the Tribunal.

	
  

	
b)

	
In case one of the parties does not appoint its arbitration within fifteen (15) calendars days accrued since the one of the parties expressly informed the other of its will to initiate the procedure, the Centro will appoint the arbitrator.

	
  

	
c)

	
Likewise, in case the two appointed arbitrators fail to appoint the third arbitrator within fifteen (15) calendar days of the last acceptance of them, the Center will appoint the third arbitrator.

 

	
5.4.

	
The Law Arbitration will be held in the city of Lima and its duration will not exceed ninety (90) calendar days since the date of the installation of the Arbitration Tribunal to the issuance of the award, unless all the involved parties accept the renewal of such period.

 

	
5.5.

	
The award issued by the Arbitral Tribunal shall be final and binding.

	
5.6.

	
The expenses of the process shall be assumed equally by both parties.

	
5.7.

	
Likewise, the parties grant jurisdiction to the Arbitration Tribunal to assess the implementation stage of the award, with all of the constraints that the civil and procedure law grant a civil judge.

	
5.8.

	
In case any of the parties decides to file an annulment remedy against the arbitration award before the Peruvian Poder Judicial, first it must constitute a payment bond in favor of the other party, issued by a Peruvian first level bank, for an amount ordered to paid in the award, which will be executable in case such remedy is declared unfounded in a definitive resolution. Such payment bond must be valid for as long as the procedure is ongoing and for at least three (3) months after its end. In this case, the parties hereby expressly make themselves subject to the jurisdiction of the Judges and Tribunals of Lima, waving any other jurisdiction they may be subject to.

SIXTH.- DOMICILES

	
6.1

	
For purposes of this Contract, the parties reaffirm the domiciles stated in the introduction of this document, in which they will be served with all the communications pertaining to this MOU.

  

  

  

	
6.2

	
Any change of the domiciles must be communicated to the counterparty by notarial letter with an anticipation not minor to 5 business days for the effective date of domicile change; in which case the new domicile must be situated within Lima urban city. The reception of the communication of change of domiciles will give merit to the communications sent prior to that date.

SEVENTH.- DOMICILES

 

	
7.1

	
Modification of Terms: This MOU cannot be modified unless by a written addendum executed by and between both parties. Unless otherwise expressly agreed, any modification to the terms of this MOU will have effect from the date in which such modification is duly executed by the representatives duly authorized of such Parties.

 

	
7.2

	
Titles and Headings: The titles at the beginning of each paragraph, clause, section of this MOU are only for referral and convenience purposes and do not pretend to be inclusive, definitive or influence in any way the construal, meaning, content or scope of this MOU.

	
7.3

	
Partial Nullity: If any section, clause, or provision of this MOU is declared invalid, void or unenforceable by judicial or competent government authority, it shall not affect the validity or enforceability of the rest of the Contract or any other paragraph, clause, section or provision hereof which shall remain in full force and effect. In such cases, the Parties agree to remedy any empty or omission though a complementary addenda within thirty (30) calendar days from the notification of the arbitral decision or statement by the competent government authority that declares the paragraph, clause, section or Annex void or unenforceable.

 

	
7.4

	
No-waiver: If either party does not uphold its rights or faculties under this Contract, such failure shall not constitute a waiver of such term or condition, and will not affect the right of the Parties to claim to the competent authorities at any time.

 

	
7.5

	
Language: This Agreement has been negotiated and written in Spanish. Any translation is for reference only and shall not bind the Parties, prevail in any case, the Spanish version. The Party that requires the translation shall cover the cost.

 

	
7.6

	
Assignment: The parties may not assign this MOU or its rights or obligations under it without the previous express consent of the other Party.

Executed in the City of Lima, in the 28th day of December, 2015, en two copies of the same legal value.

  

  

  

ADDENDUM TO THE MEMORANDUM OF UNDERSTANDING

Be it known by this private document, the Addendum to the Memorandum of Understanding (hereinafter, the MOU) executed by an between:

GILAT NETWORKS PERU SA, identified with RUC No. 20600386442, with domicile at Av. Carlos Villarán 140, Piso 12 Torre A, La Victoria, Lima, represented by Arieh Rohrstock , identified with CE 000105760 , and Yveth Romero Guía, identified with DNI 41358105, according to powers of attorney registered under Record 41358105 of Lima and Callao Registry of Corporations, who shall be referred hereinafter as GILAT; and

 

	
§

	
AMTRUST INSURANCE SPAIN, SL, identified with RUC No. 20563308525 with domicile at Calle Monterrosa 233, Oficina 501, Chacarilla del Estanque, Santiago de Surco, represented by Alfredo Eloy Gastón Llosa Carrión, identified with DNI 07274757, and Miguel Pascual Alvarez identified with Spanish Passport No. PAA990396, who shall be referred hereinafter as AMTRUST.

Both parties represent they have freely entered into this MOU and make themselves subject by to its terms, clauses and conditions as follows:

FIRST.-BACKGROUND

	
1.1.

	
On 28 December 2015, GILAT and AMTRUST entered into a Memorandum of Understanding (hereinafter the MOU) by which they agreed the terms and conditions in relation to the Advance and Faithful Compliance performance bonds issued, and to be issued by AMTRUST, as well as the applicable default procedure.

 

SECOND.-PURPOSE OF THE ADDENDUM

	
2.1.

	
The parties agree that in order to make the appropriate precisions to the MOU, clauses 1.4 and 3.1 should be modified according to the following:

 

“1.4         To guarantee the fulfillment of its obligation in the Cusco Contract before FITEL, AMTRUST will issue via a fronting operation of a Peruvian insurance company, two payment bonds to be held by GILAT in favor of FITEL for the sums of US$37 ́939.650.00 and US$10 ́839.900.00, to back the sums paid and received in advance, as well as for its faithful compliance, respectively.

 

Both payment bonds (advance and faithful compliance) sum up US$48 ́779.550.00 (the “Cusco Project”).

 

In consideration for the issuance of the Cusco Project bonds, GILAT shall pay AMTRUST the amounts set out in Annex 3 hereto”

 

“3.1           The calling execution of any of the payment bonds issued by Rimac Seguros y Reaseguros, as a fronting of AMTRUST, will be considered as a default event of GILAT. Likewise, a default by GILAT on any of its contractual obligations before FITEL (unless such is remedied by GILAT prior to calling of the payment bonds issued by AMTRUST)- as well as any event that AMTRUST may consider a default – in any of the contracts executed with said entity for the broadband projects of Apurimac, Ayacucho, Huancavelica and/or Cuzco, will be considered as a default of this MOU”

  

  

  

THIRD.- OTHERS

The parties ratify the validity of the clauses set forth in the MOU that does not oppose to the ones herein.

 

Executed in the City of Lima, in the 28th day of January 2016, in two copies of the same legal value

GILAT NETWORKS PERU SA,

______________________

Name:

Position:

Date:

AMTRUST INSURANCE SPAIN, SL

______________________

Name:

Position:

Date:

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