Document:

exhibit_4-5.htm

Exhibit 4.5

 

[An unofficial English translation of the original document in German]

 

	 	Basler 

Kantonalbank

fair banking

 

	
Copy of letter – return to BKB

Commercial customers

 

POB

CH-4002 Basel

 

Phone +41(0)612663333

Fax +41 (0)61

BKB-EasyTrading +41 (0)61 266 31 31

BKB-Lady-Consult +41 (0)61 266 30 00

BKB-Seniorenberatung +41 (0)61 266 33 66

welcome@bkb.ch

www.bkb.ch

Postkonto 40 - 61 - 4

MWST-Nr_ 116 650

	

  

 

 

 

 

 

 

 

 

 

Optibase RE 1 S.à.r.l.

54, avenue de la Liberté

L-1930 Luxembourg

 

Date: 28th October / SDM

Contact person: Sigrid Müller

Direct dial: +41 (0)61 266 22 32

E-Mail sigrid.mueller@bkb.ch

Credit Agreement General Limits

Dear Mr. Gross, dear Mr. Wyler,

Following the discussion of 23rd September 2009 between you and Mrs. Sigrid Müller, we are pleased to confirm to you the financing of the office and commercial building on Riedmattstrasse 9 in 8153 Rümlang as follows:

	
Borrower

	
Optibase RE 1 S.à.r.l.

54, avenue de la Liberté

L-1930 Luxembourg

hereafter referred to as Borrower

 

	
Creditor

	
Basler Kantonalbank

Spiegelgasse 2

4051 Basel

hereafter referred to as BKB

 

General limits (covered by mortgage)

 

	
Amount

	
CHF 18,800,000.00

(eighteen million eight hundred Swiss Francs)

 

	
Credit purpose

	
Financing of the property at Riedmattstrasse 9 in 8153 Rümlang

 

	
Use

	
The line of credit is available to the borrower any time alternatively -  within the framework of the available limit components within the total limit of CHF 18.8 million.- for the following use variations:

● in the form of fixed advances in installments of at least CHF 0.5 million, usable within a time period of 1 to maximum 60 months

 

and/or

● in the form of a variable mortgage

  

  

  

 

	 	Basler 

Kantonalbank

fair banking

 

 

Optibase RE 1 S.à.r.l.                                                                Page 2 of 8                                           October 28, 2009

	
Conditions

	
Fixed advance payments

 

	
Interest rate

	
The determination of the interest rate depends on the current situation on the money and capital markets (Reference rate: Libor/Swap), plus a margin of 0.80 % p.a. for all time periods.

 

The BKB reserves the right to adjust the margin anytime to the changed situation, should the credit standing of the borrower or the quality of the property deteriorate considerably.

 

Fresh receipts or extensions are dealt with on telephone under consideration of the two-day value position which is usual in money market business. The rates established in that way are net and fixed for the whole time duration. The borrower shall receive a relevant confirmation of the concluded money market business in a separate letter.

 

	
Calculation of interest

	
International Interest rate (exact days/360)

 

	
Interest dates

	
For a duration of up to 3 months the charging of interest takes place upon expiry of the period, for periods exceeding that it takes place quarterly.

 

If the due date for interest or capital happens to fall on a bank holiday, then the next bank working day shall serve as the pay day, unless this happens to fall in the next calendar month, in which case the previous bank working day shall be the pay day. Interests are calculated up to the actual pay date.

 

	
Re-imbursements

	
Not possible within the agreed time duration. As long as nothing else has been agreed on, fixed installments are due for re-imbursement upon expiry of the period.

 

● Variable mortgage

 

	
Interest rate

	
at the moment: 3.00 % p.a. net

 

	
Calculation of interest

	
German Interest rate (360/360 days)

 

	
Change in interest due dates

	
Possible any time with adherence to a three months notice

 

	
Interest due dates

	
Quarterly, on 31st March, 30th June, 30th September and 31st December respectively.

 

The BKB reserves the right to set the interest due dates differently any time at its discretion or to determine their number afresh.

 

	
Re-imbursements

	
Directly possible within the agreed duration with adherence to a three months notice.

 

  

  

  

 

	 	Basler 

Kantonalbank

fair banking

 

 

Optibase RE 1 S.à.r.l.                                                                Page 3 of 8                                           October 28, 2009

	
Amortization

	
CHF 94,000.00 per quarter / the first time on 31st March 2010 Should one of the three main tenants (Polymed Medical Center, DHL Logistics (Switzerland) AG, Arrow CE International) drop out or cancel his existing tenancy relationship and the rooms cannot be rented out within a time limit of 6 months after cancellation in respect of an advert under similar conditions, the BKB reserves the right to possible adjustment of the amortizations.

Within the scope of the respective amortizations the available limit reduces.

 

	
Guarantee

	
- 12,500,000.00 registered bond in the 1st rank

- 600,000.00 bearer bond in the 2nd rank

- 500,000.00 bearer bond in the 2nd rank

- 22,200,000.00 registered bond in the 3rd rank

 

all signed in the land register Rümlang, Sheet No. 1688, land register No. 4778, Plan 40 holding 5.090 m2 with office and commercial buildings on Riedmattstrasse 9 in 8153 Rümlang.

 

Bond debtors and owners: Optibase RE 1 S.à.r.l.

 

BKB assumes this title using transfer of ownership as security on a debt on property.

 

- Pledging of account credit

All credit on the relevant rent account, in the names of the borrower, are pledged to BKB in accordance with the enclosed form „General Pledges”.

 

- Transfer of all existing and future rent demands with all rent guarantees from the aforementioned property.

In this connection, the borrower commits himself to open/ maintain a rent account at the BKB, through which all rent of the categorized property is taken. BKB has to be informed at least annually without request, the first time on 31-12-2009, about the current rent level of the property. The transfer of the rent demands can be communicated to the tenants in writing through notification letters.

 

- Transfer of the company capital of Optibase RE 1 S.à.r.l.

  

  

  

 

	 	Basler 

Kantonalbank

fair banking

 

 

Optibase RE 1 S.à.r.l.                                                                Page 4 of 8                                           October 28, 2009

 

	
 

	
The disbursement of the credit amount can take place as soon as

 

	Disbursement	a)  	
all documents necessary for the identification of the borrower without problems in accordance with the VSB-agreement (in conjunction with  the banks’ obligation to care) are in the hands of BKB in proper arrangement;

 

	 	b) 	
either the bonds listed under the item „Securities“ and recorded in the land register or the relevant interim receipts are in the hands of BKB;

 

	 	c) 	
all agreements (purchase agreement, all tenancy agreements, credit agreement, transfer of ownership as security on a debt, pledge agreements etc.) legally signed, are in the hands of BKB properly arranged, and

 

	 	d) 	
personal funds (difference between purchase price and grant plus hand change and other costs) have been realized in the process.

 

	 	e)   	
the pledging of company capital listed under item „Securities“ can take place due to reasons of time and in exceptional cases also after the disbursement of funds, however latest by 31st December 2009.

 

	
Cancellation

	
The present general limit can be cancelled any time and by mutual agreement with 3 months notice.

The fixed agreed duration of the contract with fixed installments doesn't allow any early cancellation. If the total amount is used in the form of fixed installments by the time of the cancellation, then the cancellation becomes effective only on the due date respectively.

 

The BKB has the right with regard to this, to declare any time the whole line of credit and the relevant uses, including accrued interest and costs up to the day of the payment, due and payable immediately in the following cases:

 

-       if the borrower is in delay with the payment of a due capital or interest amount by more than 30 days;

 

-       if the borrower is no longer able to fulfill some of his probably existing legally binding obligations towards third parties, and this state of affairs cannot be resolved within 30 days;

 

-       if any prosecution measures are instituted against the borrower (distraint, use of pledged articles, bankruptcy, notice to the judge of over indebtedness, and the like) or if the borrower personally seeks deferment of discounts; in case of considerable change, in the view of BKB, in the participation conditions, dissolution, merger (in which the borrower is not the company continuing to exist), shifting of location, change of legal form or reorganization (in which the substance deteriorates considerably, in the view of BKB), unless such reorganization guarantees enough security, in the view of the BKB;

  

  

  

 

	 	Basler 

Kantonalbank

fair banking

 

 

Optibase RE 1 S.à.r.l.                                                                Page 5 of 8                                           October 28, 2009

	  	
-   if the borrower violates fundamental regulations of this agreement;

 

-   if there are other important reasons which BKB does not have to justify by itself, especially if the financial and/or profit situation of the borrower has deteriorated substantially or considerable financial danger has set in, according to the rational judgment of BKB.

 

-   if the BKB willingly sells, sub-divides or reduces in value the property that was serving as security;

 

-   if any due rent amounts from the renting out of the property serving as security to the BKB are confiscated in favor of a third party;

 

The aforementioned cancellation regulations take precedence over the cancellation regulations of the BKB in accordance with article 13 of the General Terms and Conditions and the cancellation regulations in accordance with the General Mortgage Regulations.

 

In case of contract termination by the BKB a pre-due date compensation at expense of the borrower becomes due.

 

In case of contract termination by the BKB in accordance with the General Terms and Conditions or the General Mortgage Regulations of the BKB a pre-due date compensation at expense of the borrower becomes due.

 

In case of contract termination by the BKB in accordance with the General Terms and Conditions of the BKB or the Contract Terms and Conditions a pre-due date compensation at expense of the borrower becomes due.

 

	
Compensation for prematurely due payment

	
The compensation for prematurely due payment is calculated in percentages of the debt capital for the whole duration period. The standard percentage rate per year corresponds to the difference between the interest rate agreed upon by contract minus the rate applicable on the money and capital markets for the remaining duration at the time of repayment (reference rate: Euro market money rate). If this reference rate is higher than the agreed rate .....then this is a case of compensation for prematurely due payment.

 

	
Hand change or forced utilization

	
If hand change or forced utilization sets in for properties which serve as security to BKB, then all demand in connection with this general agreement by due agreement become due on the day of transfer of ownership or on the official day of repayment.

 

	
Encumbrance

	
The due interest as well as amortizations are paid directly into the new rent account to be opened in the names of the borrower with the BKB.

  

  

  

 

	 	Basler 

Kantonalbank

fair banking

 

 

Optibase RE 1 S.à.r.l.                                                                Page 6 of 8                                           October 28, 2009

	
Expenses

	
The compensation of BKB is measured according to the respective applicable tariff for the services listed there which are subject to expenses.  The borrower is given a copy of it. The BKB reserves the right to make changes any time. Changes are made known to the borrower through circulation channels or other suitable means (e.g. through notice and circulation of relevant leaflets in the business hall of BKB), and are regarded as approved if there is no contradiction within one month.

 

The BKB can likewise charge separately for expenses (including delivery expenses) as well as extraordinary efforts of other nature than that mentioned in the tariff.

 

	
Other conditions

	
During the complete duration of the credit relationship, the borrower obliges himself to inform the BKB about essential changes immediately, namely if circumstances which can form reason for a cancellation according to the termination clause emerge or happen.

 

The borrower confirms that he shall submit his financial statement consisting of the income statement, the balance sheets and the appendix as well as the report of the auditing authority to the BKB within a useful period after conclusion of the financial year, without being asked.

 

The borrower obliges himself to maintain the building, for which the credit was granted, in good condition and to accomplish all necessary renovation and maintenance work professionally. To this end the borrower grants BKB access to the building any time after prior announcement and in keeping with the rental legal regulations.

 

Moreover, the borrower obliges himself during the validity of this general credit agreement, neither to further encumber the property serving the BKB as a security or to set up new mortgages on it, nor to lend out empty titles again or in the case of existing lending, to lend out mortgage titles becoming free through amortizations without consent of the BKB.

 

If the property serving the BKB as security is threatened by the danger of value depreciation, no matter for what reasons, then the BKB is also authorized but not obliged to undertake legal negotiations with the authorities, courts of law, etc, just like the owner himself.

 

According to article 818 ZGB the basic mortgage also offers security for processing expenses.

 

With the signature under this contract, the borrower authorizes the BKB to settle possible bills for the land register charges directly by debiting the mentioned rent account to be newly opened.

 

The BKB is the only credit granting bank and all of the sales of the borrower from the Swiss property on Riedmattstrasse 9 in 8153 Rümlang in respect of rental incomes are processed through the BKB.

 

The BKB is authorized to make the whole outstanding credit, including interest accrued up to the day of payment, due for immediate repayment any time, if a substantial change in the control relationships (shareholders, shares) emerge with the borrower.

  

  

  

 

	 	Basler 

Kantonalbank

fair banking

 

 

Optibase RE 1 S.à.r.l.                                                                Page 7 of 8                                           October 28, 2009

	
Documents

	
The following documents form an integrated part of these credit agreement and with his legal signature under this agreement the borrower expressly confirms knowledge of the contents of the agreement:

- General terms and conditions

- General mortgage conditions

- Expenses leaflet

- Agreement (Transfer of ownership as security on a debt)

- Cession of rent

- General pledges

 

	
Place of jurisdiction

	
Swiss law applies. Place of jurisdiction is Basel city. Meanwhile, BKB also has the right to prosecute the borrower in every other responsible court.

 

	
A s a sign of your agreement with the contents of this credit agreement, would you please send the documents listed hereunder back to us dated and legally signed as soon as possible:

 

	  	
- Copy of the letter

- General mortgage conditions

- Agreement (Transfer of ownership as security on a debt)

- Cession of rent

- General pledges

 

	
We thank you very much for the confidence shown in us and look forward to further good and pleasant cooperation.

 

 

	 	  

With best regards

/s/ Basler Kantonalbank                                             /s/ Sigrid Müller

Stefan Käsermann                                                       Sigrid Müller

Member of Board of Directors                                   Cadre member

 

-           Copy of the letter

-           General mortgage conditions

-           General terms and conditions

-           Expenses leaflet

-           Agreement (Transfer of ownership as security on a debt)

-           General pledges

-           Cession of rent

-           Reply envelope

  

  

  

 

	 	Basler 

Kantonalbank

fair banking

 

 

Optibase RE 1 S.à.r.l.                                                                Page 8 of 8                                           October 28, 2009

In complete agreement with the contents of this contract:

 

	  

Niederglatt, October 29. 2009                                                                                                

(Place and date)     

	
Optibase RE 1 S.à.r.l.

 

/s/ Thomas Ziegler

 (Signatures)

 

(Thomas Ziegler)

Signature

30.10.09

/s/ Sigrid Müller

Sigrid Müllerexhibit_4-6.htm

Exhibit 4.6

 

 

OPTION AGREEMENT

 

This OPTION AGREEMENT (this “Agreement”) is entered into as of this 1st day of March, 2010 and effective as of October 29, 2009 by and between OPTIBASE REAL ESTATE EUROPE SARL., a company organized under the laws of Luxembourg ("Optibase Europe")  OPTIBASE RE 1 SARL, a company organized under the laws of Luxembourg (the “Company”) and CHESSELL HOLDINGS LIMITED, a company organized under the laws of Cyprus having its principal place of business at Agias Elenis, 36, GALAXIAS TOWER, 4th Floor, Flat/Office 401, P.C. 1061, Lefkosia, Cyprus (the “Investor”).

 

R E C I T A L S

WHEREAS, the Investor via Mr. Eyal Gross assisted the Company with the acquisition of the property located at Riedmattstrasse 9, Rumlang, Switzerland (the “Property”);

WHEREAS, the Company has agreed to grant the Investor an option to acquire certain ownership interests in the Company, in consideration for the aggregate total amount of CHF 315,000 (Three Hundred and Fifteen Thousand Swiss Franks) (the “Option Initial Price”), pursuant to the terms and conditions set forth herein;

 

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, accepted and agreed to, the Company and the Investor, intending to be legally bound, agree to the terms set forth below.

1.           INVESTOR OPTION

 

1.1.   Option.

 

1.1.1.                      In full compensation for the Option Initial Price, which has been incurred as of the date of this Agreement and which shall be paid upon exercise of the Option, and subject to receipt by the Company of all consents, approvals, resolutions or actions required to be taken under applicable law, the Company grants the Investor an exclusive option to cause the Company to issue to the Investor twenty percent (20%) of the outstanding and issued share capital of  the Company calculated as of the date of the exercise of the option (the "Option Shares" and the “Option”).

 

1.2.            Option Purchase Price.  The exercise of the Option shall be subject to delivery by the Investor to the Company of the Purchase Price (as defined below) in cash and the satisfaction by the Investor of any and all applicable tax requirements.  In addition, upon exercise of the Option, the Investor shall pay the Initial Option Price. In the event that the Purchase Price is a negative number, then, upon exercise of the Option, the Investor shall be entitled to a credit against the Option Initial Price equal to the difference between zero and the Purchase Price, up to an amount of CHF 315,000.  Other than the aforementioned credit against the Option Initial Price, in no event shall the Company be obligated to pay the Investor as a result of the Investor exercising the Option.

 

1.3.           Option Term.  The Option may only be exercised during the period commencing as of the date hereof and for a period of eight (8) years thereafter (the “Term”).  The Option may only be exercised in full may not be partially exercised by the Investor.

 

  

  

  

 

1.4.           Definitions.  For the purpose of this Section 1, the terms below shall be defined as follows:

 

	
  

	
1.4.1.

	
"Purchase Price" means twenty percent (20%) multiplied by the Investment Amount (as defined below), calculated as of the date that the Option is exercised.

 

	
  

	
1.4.2.

	
“Investment Amount” means (A) the Transaction Costs (as defined below) plus the Transaction Cost Adjustment; less (B) the Shareholder Proceeds.

 

	
  

	
1.4.3.

	
 The "Transaction Cost Adjustment" means ten percent of (x) the Transaction Costs less (y) any cash amounts distributed or deemed to be distributed as dividends; all as calculated on December 31st of each year.

 

	
  

	
1.4.4.

	
“Transaction Costs” means the sum of (A) CHF 4,700,000 (four million and seven hundred thousand Swiss Franks); plus (B) the Expenses.

 

	
  

	
1.4.5.

	
“Expenses” means any of the following expenses that have been incurred by Optibase Ltd., Optibase Europe, or the Company as of the date when the option is exercised, as reasonably determined by the Company:

 

	
  

	
a.

	
all legal and accounting fees incurred and paid in connection with the Transaction;

 

	
  

	
b.

	
all other costs and expenses reasonably incurred in connection with the Transaction;

 

	
  

	
1.4.6.

	
“Shareholder Proceeds” means all proceeds distributed by the Company to Optibase Europe as of the date that the Option is exercised, including without limitation:

 

	
  

	
c.

	
any amount actually distributed to Optibase Europe SARL as a dividend (subject to applicable law) from the net cash flows of the Company; and

 

	
  

	
d.

	
any amount of any proceeds that are actually distributed to Optibase Europe  from: (i) a sale of all or part of the Property, or (ii) a refinancing of the existing mortgage loan on the Property or (iii) a sale of substantially all of the assets of the Company.

 

For Example:  If the Investor decides to exercise the Option on the second anniversary of this Agreement; and the Transaction Costs equal to CHF 4,700,000 (i.e. assuming that no Expenses have been incurred), and the Shareholder Proceeds equal CHF 1,000,000 in each year, then on the second anniversary of this Agreement, the Purchase Price will be equal to:

 

Purchase Price = 20% * [CHF 4,700,000 + (CHF 4,700,000 * 10%) –CHF 1,000,000 + (CHF 4,170,000 * 10%) – CHF 1,000,000] = CHF 717,400

 

1.5.           The Investor undertakes to execute any and all documents, including an option agreement (if and where applicable), as may be required by the Company, Optibase Ltd. or Optibase Europe in connection with the Option, and the grant of the Option shall be subject to the Investor's fulfillment of the aforesaid undertaking, provided, that any of the said documents shall not materially change (subject to applicable law) any of the parties' rights or undertakings as indicated in this Agreement.

 

1.6.           By signing this Agreement, the Investor hereby gives an irrevocable proxy to the Optibase Europe (or any other person designated by the Board of Directors of Optibase Europe), to vote any shares that may be issued to the Investor following the exercise of the Option. If necessary, the Investor undertakes to execute a proxy form, upon exercise of the Option, in the form to be provided by the Optibase Europe.

 

1.7.           In addition, for the removal of doubt, the shares that may be issued by the exercise of the Option shall not include any voting or veto rights with respect to the Company.

 

1.8.           The Investor shall not have any rights as a shareholder with respect to the Option (including, without limitation, any rights to receive dividends or non-cash distributions), until such time as the Option is exercised into shares and registered in the Investor's name in the Company’s register of shareholders. Except as provided in this Agreement, no adjustment shall be made for dividends or other rights for which the record date is prior to the date that such shares are registered in the Company’s register of shareholders.

 

  

2

  

 

1.9.           The Option is personal and no rights granted hereunder may be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) other than as set forth specifically in this Agreement. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of the Option or of such rights contrary to the provisions hereof, or upon the levy of any attachment or similar process upon the Option or such rights, the Option and such rights shall, at the election of the Company, shall become null and void.

 

1.10.           To the extent the Option is not exercised by the Investor during the Term, then the Option Initial Price shall be reduced to CHF 1 and shall be paid upon the expiration of the Term.

 

1.11.           Drag Along Right.

 

1.11.1.                In the event of a Sale Transaction (as defined below), and subject to the exercise of the Option by the Investor, the Investor shall, upon the written request of Optibase Europe (i) exercise the Option and pay the Purchase Price (to the extent that the Option was not already exercised) or, at the Investor's discretion, waive all rights to the Option by delivering a written waiver in a form satisfactory to the Company; and  (ii) sell, transfer and deliver, or cause to be sold, transferred and delivered, to the Buyer (as defined below) all of its shares in the Company on the same terms that apply to the Optibase Europe and all other selling shareholders, and/or (ii) execute and deliver such instruments of conveyance and transfer and take such other action, including voting such shares in favor of any Sale Transaction proposed by the Optibase Europe or the Company and executing any purchase agreements, indemnity agreements, escrow agreements or related documents, as the Company, Optibase Europe, and the Buyer execute that are reasonably required in order to carry out the terms and provisions of this Section 1.11.

 

1.11.2.                Not less than thirty (30) days prior to the date proposed for the closing of any Sale Transaction, the Company or Optibase Europe shall give notice to the Investor setting forth in reasonable detail the name or names of the Buyer, the terms and conditions of the Sale Transaction, including the purchase price, and the proposed closing date.

 

1.11.3.                In furtherance of the provisions of this Section 1.11, the Investor (i) irrevocably appoints the designee of Optibase Europe as its agent and attorney-in-fact (the “Agent”) (with full power of substitution) to execute all agreements, instruments and certificates and take all actions necessary or desirable to effectuate any sale in accordance with the provisions of this Section 1.11;  and (ii) grants to the Agent a proxy to vote all shares held by the Investor, whether now or in the future, in favor of any Sale Transaction hereunder in compliance with the provisions of this Section 1.11

 

1.11.4.               “Sale Transaction” means a transaction with a third party (the “Buyer”) in which (i) Optibase Europe  as the case may be, has determined to (a) sell all of its shares, in the Company to the Buyer, (b) sell or otherwise dispose all or substantially all of the assets of the Company, or (c) to cause the Company to effect a merger or (ii) a transaction in which involves a change of the beneficial ownership or control of Optibase  Europe or Optibase Ltd.

 

	
1.12.

	
Right of First Refusal.

 

1.12.1.                If at any time the Investor receives a bona fide offer to purchase all or part of the Option Shares (following the exercise of the Option), the Investor shall give the Company notice of its receipt of an offer to purchase the Option Shares describing the terms of such offer (the “Offer Notice”).  The Company shall have a period of sixty (60) days from the date of receipt of the Offer Notice to elect to exercise its Right of First Refusal by delivering written notice to the Investor of its election to do so (the “Election Notice”).

 

1.12.2.                If the Company delivers an Election Notice, the Company shall repurchase the Option Shares from the Investor on the terms set forth in the Offer Notice within ninety (90) days from the date of the Offer Notice.

 

1.12.3.                If the Company fails to deliver the Election Notice within sixty (60) days of receipt of the Offer Notice then its Right of First Refusal shall terminate. Thereafter, the Investor shall be permitted to sell the Project free of the Right of First Refusal.

 

  

3

  

 

1.13.             Tag Along Right.

 

1.13.1.              If Optibase Europe  wishes to sell shares of the Company reflecting at least 50% of the issued and outstanding share capital of the Company (the “Offered Shares”) to a third party purchaser (a “Purchaser”), Optibase Europe shall first notify the Investor of the terms of the proposed sale (a "Tag Along Notice").

 

1.13.2.              Upon receipt of the Tag Along Notice, the Investor may notify Optibase Europe within ten (10) days (the “Tag Along Period”) that the Investor intends to participate in Optibase Europe's 's sale of the Offered Shares (the “Participating Notice”).

 

1.13.3.              If the Investor delivered a Participating Notice during the Tag Along Period, (i) the Investor shall sell to the Purchaser a number of shares equal to the number of shares owned by the Investor in the Company multiplied by the Pro Rata Percentage (hereinafter defined) and (ii) the Optibase Europe  will be entitled to sell to the Purchaser, a number of shares equal to the Offered Shares multiplied by the Pro Rata Percentage.

 

     1.13.3.1.                  "Pro Rata Percentage" means the percentage calculated by dividing the Offered Shares by the total number of shares in the Company.

 

1.13.4.              If the Investor does not deliver a Participating Notice during the Tag Along Period, Optibase Europe shall be permitted to proceed with the sale of the Offered Shares to the Purchaser.

 

1.13.5.              Prior to the exercise of the Option the Optibase Europe shall not be obligated to deliver a Tag Along Notice and the Investor shall not be entitled to participate in a sale of the Offered Shares. In addition, if the Optibase Europe exercises its Drag Along Right (Section 1.11), this Section 1.13 shall not apply to such sale.

 

1.14.           Total Consideration. Other than the Option, the Investor shall have no lawful right or claim to any compensation, fee or other consideration for services performed in connection with, or relating to, the Transaction. The Option shall constitute the total compensation due to the Investor under this Agreement and the Investor acknowledges that it shall not be entitled to any other form of compensation, commission, fee, bonus, reimbursement or any other form of payment for the Transaction and the Investor irrevocable waives and forever releases the Company, Optibase Ltd. and/or Optibase Europe and their respective officers, directors and affiliates from any claim or demand for any further alleged compensation.

 

1.15.           Taxes. The Investor shall pay any and all taxes, duties, fees and/or other impositions that may be levied pursuant to applicable law upon the Investor with regard to the provision of the services under this Agreement, including, but not limited to, Value Added Tax and Income Tax, and the amounts of the aforesaid payments shall be deemed to have been included in the Option. In the event that pursuant to any law or regulation, tax is required to be withheld at source from any payment made to the Investor, the Company shall withhold said tax at the rate determined by said law or regulation.

 

2.             THE NATURE OF THE CONTRACTUAL RELATIONSHIP.

 

The Investor and Mr. Eyal Gross shall at all times act as an independent third party, and shall not be, and/or claim to be, an employee of the Company.  The Investor and Mr. Eyal Gross warrant that it/he is aware that this Agreement is only an agreement for investment herein, and does not create employer-employee relations between it/him and the Company and does not confer upon him any rights, except for those set forth herein explicitly.

 

  

4

  

 

3.              MISCELLANEOUS.

 

3.1.           Ownership of Investor.  If the Investor is not an individual, the Investor represents and undertakes that at least 70% of the beneficial ownership of the Investor and the control of the Investor is and will be owned and controlled by Mr. Eyal Gross.  Notwithstanding the foregoing, the Investor shall be permitted to reduce the ownership and control of Mr. Eyal Gross to a minimum of 51% provided that Optibase Europe and Optibase Ltd. have delivered their written consent to the Investor.

 

3.2.           Waiver. Any waiver by the Company of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of the same or any other provision hereof.  All waivers by the Company shall be in writing.

 

3.3.           Severability; Reformation. In case any one or more of the provisions (or parts of a provision) contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision (or part of a provision) of this Agreement; and this Agreement shall, to the fullest extent lawful, be reformed and construed as if such invalid or illegal or unenforceable provision (or part of a provision), had never been contained herein, and such provision (or part of the provision) reformed so that it would be valid, legal and enforceable to the maximum extent possible. Without limiting the foregoing, if any provision (or part of provision) contained in this Agreement shall for any reason be held to be excessively broad as to duration, activity or subject, it shall be construed by limiting and reducing it, so as to be enforceable to the fullest extent compatible with then existing applicable law.

 

3.4.           Assignment. The Investor shall not have the right to assign his rights or obligations under this Agreement without the prior written consent of the Company, Optibase Europe and Optibase Ltd., except to a Permitted Transferee. “Permitted Transferee” means a sale, transfer, assignment or other disposition of the Investor's rights or obligations under this Agreement to the spouse, child, parent, sibling or descendants of Mr. Eyal Gross, or to any entity that is wholly owned and controlled by Mr. Eyal Gross; provided, however, that such transferee will take upon itself by written consent all the obligations of the Investor pursuant to this Agreement. This Agreement shall be binding upon and inure to the benefit of the Investor's heirs and legal representatives.  If the Investor is not an individual, a transfer of the beneficial interest or control of the Investor to a person other than a Permitted Transferee shall be prohibited except with the written consent of the Company, Optibase Europe and Optibase Ltd. pursuant to Section 3.1 above. In the event of a prohibited transfer, the Investor’s rights under this Agreement shall immediately terminate and become null and void, without any further action.

 

3.5.           Headings; Interpretation. Headings and subheadings are for convenience only and shall not be deemed to be a part of this Agreement. The preamble, exhibits and schedules to this Agreement constitute an integral part hereof. Words in the singular shall include the plural and vice versa; words in the masculine shall include the feminine and vice versa; and reference to a person shall also include corporate bodies and other legal entities.

 

3.6.           Amendments.  This Agreement may be amended or modified, in whole or in part, only by an instrument in writing signed by all parties hereto.

 

3.7.           Notices. Any notices or other communications required hereunder shall be in writing and shall be deemed given when delivered in person or when mailed, by certified or registered first class mail, postage prepaid, return receipt requested, addressed to the parties at their addresses specified in the preamble to this Agreement or to such other addresses of which a party shall have notified the others in accordance with the provisions of this Section 3.7, and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b), if sent by electronic mail or facsimile (with electronic confirmation of receipt) on the recipient’s next business day, (c) three (3) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt.

 

  

5

  

 

3.8.           Governing Law. This Agreement shall be governed by the laws of the State Israel without reference to principles and laws relating to the conflict of laws. The competent courts of the District of Tel Aviv shall have exclusive jurisdiction over any matter in connection with this Agreement.

 

3.9.           Entire Agreement. This Agreement supersedes all prior agreements, written or oral, between the parties hereto relating to the subject matter of this Agreement.

 

3.10.          Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall constitute an original and all of which shall be deemed a single agreement.

 

 [Remainder of Page Left Intentionally Blank]

 

  

6

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered on and as of the Effective Date.

 

	
COMPANY

	  	
INVESTOR

	
OPTIBASE RE 1 SARL

	  	
CHESSELL HOLDINGS LIMITED

	  	  	  	  	  	  
	  	  	  	  	  	  
	
By:

	
/s/ Tom Wyler                    /s/ Amir Philips

	  	
By:

	
/s/ David Pavoncelo

	  
	
Name:

	
Tom Wyler                           Amir Philips

	  	
Name:

	
David Pavoncelo

	  
	
Title:

	
Authorized signers

	  	
Title:

	
1/3/10

	  
	  	  	  	  	  
	
OPTIBASE EUROPE

	  	  	  	  
	
OPTIBASE REAL ESTATE EUROPE SARL

	  	
By:

	
/s/ Eyal Gross

	  
	  	  	  	
Name:

	
Eyal Gross

	  
	
By:

	
/s/ Tom Wyler                    /s/ Amir Philips

	  	  	  	  
	
Name

	
Tom Wyler                           Amir Philips

	  	  	  	  
	
Title

	
Authorized signers

	  	  	  	  

 

[Signature Page- Option Agreement - Optibase/Chessell Holdings Limited - Project Rumlang]

 

 

7

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