Istec - Industries and technologies Ltd.: Notice of an Extraordinary General Meeting of the Shareholders of the Company

TEL AVIV, Israel, September 7, 2010 /PRNewswire/ -- Notice is hereby given that an Extraordinary General Meeting of the Shareholders (the "Meeting") of Istec - Industries and technologies Ltd., a company incorporated under the laws of the State of Israel (the "Company"), will be held at the Company's offices, at 22 Hayetzira Street, Petach Tikva, Israel, on Thursday, October 7th, 2010 at 10:00 a.m., Israel time. This Notice is a translation for convenience of the Hebrew version of the notice. In case of divergence of interpretation between the English version and the Hebrew version, the Hebrew version will prevail.

The issues on the agenda for the meeting are as follows:

1. Approval of the Merger Agreement and the Transactions Contemplated thereby To approve and adopt the Merger Agreement by and among the Company and Shlomo Shmaltzer Holdings Yehudit (2010) Ltd. (the "Target Company" and the "Merger Agreement", respectively). The Target Company is a wholly owned subsidiary of Shlomo Shmaltzer Holdings (1995) Ltd. (the "Shmaltzer Holdings"), a private company that its controlling person is Mr. Shlomo Shmaltzer (the controlling person of the Company and the chairman of its Board of Directors) ("Mr. Shmaltzer"). Shmaltzer Holdings and Mr. Shmaltzer own approximately 55% of the Company's issued and outstanding shares. The Merger Agreement provides, among other things, that:

1.1. Pursuant to the Merger Agreement, the Company will merge with the Target Company (a private company incorporated only for the purpose of this Merger and which has no activities), in accordance with the provisions of Sections 314-327 of the Companies Law 5759-1999 of the State of Israel (the "Companies Law"), following which, the Target Company will cease to exist, and the Company will become a wholly owned Subsidiary of Shmaltzer Holdings and Mr. Shmaltzer, and the Company's Shareholders among the public prior to the Merger (who are not Shmaltzer Holdings nor Mr. Shmaltzer) will be entitled to cash payment in consideration for their shares, as set forth below (the "Public Shareholders").

1.2. The Consideration (as defined hereinafter) was determined by the audit committee and the Board of Directors of the Company, based upon a joint evaluation commissioned by the Company and Shmaltzer Holdings from an independent appraisal. According to the Merger Agreement, each Ordinary Shares par value NIS 10 per share of the Company (pursuant to a reverse stock split effective as of November 1995) issued prior to the Record Date, as defined hereto, shall be converted on the completion of the Merger into the right to receive from Shmaltzer Holdings NIS 6.226 cash payment (without interest) less any applicable withholding tax at source (the "Consideration" ). A Public Shareholder who asks to receive the Consideration at the completion of the Merger, will provide the Company with a proof of ownership (as of the Record Date as defined hereinafter) from a member of the Tel Aviv Stock Exchange in such manner prescribed by the Israeli Companies Regulations (Proof of Ownership of Shares for Voting at General Meeting), 2000 (the "Proof of Ownership Regulations"), or another proof of ownership that shall be provided to the Company in accordance with applicable law, to the Company's satisfaction.

1.3. It should be noted that the Consideration, as set by the audit committee and the Board of Directors of the Company, is in a rate higher by approximately 10% than the consideration set by the independent appraisal.

1.4. The completion of the Merger Agreement is subject to various closing conditions, particularly the approval of the Merger Agreement by the Company's Shareholders Meeting carried by the affirmative vote of a majority as set forth in Section 320(c) of the Companies Law and described below (alternately, if the Merger is not approved by the abovementioned majority, and whom of the parties to the Merger Agreement should address the court according to Section 321 of the Companies Law, in the affirmative vote of a majority determined by the court pursuant to the approval of the Merger).

1.5. Together with the consummation of the Merger Agreement, the Company engaged in a trust agreement with Hermetic Trust (1975) Ltd. (the "Trust Agreement" and the "Trustee", respectively). According to the Trust Agreement, the Consideration entitled to the Public Shareholders who did not contact the Company for their Consideration by the time of the completion of the Merger (the "Unclaimed Consideration") will be deposited in a trust account for a period of 36 months (the "Trustee Period").

1.6. Each Public Shareholder who has proved his ownership of the Company's shares pursuant to the Trust Agreement will receive from the Trustee the Consideration he is entitled to pursuant to the Merger Agreement with the fruits actually yielded of the investment in the trustee account, if any, with the abatement of the shareholder relative share in all trust expenses and the trust account. The Trustee should also withhold tax at source from the Consideration the shareholder is entitled to according to all applicable law.

1.7. A Public Shareholder who asks to receive the Unclaimed Consideration after the end of the Trustee Period should address the Company in order to inquire his entitlement to the Consideration according to the Merger Agreement, and the ways he may obtain it.

It is possible to review the Merger Agreement, the Trust Agreement and the contemplated documents with the merger transaction at the offices of Meitar Liquornik Geva & Leshem Brandwein that acts as the Company's legal counsel (the "Offices of the Company's Legal Counsel"), at the time and place mentioned below.

2. Approval of the office holders' liability insurance policy

2.1. To approve the purchase of the office holders' liability insurance policy for those office holders who are not controlling persons.

2.2. To approve that the office holders' liability insurance policy abovementioned shall apply also to Mr. Shlomo Shmaltzer, the controlling person of the Company, and to Mrs. Atalya Shmaltzer (Mr. Shmaltzer's wife) and Mr. Asi Shmaltzer (Mr. Smaltzer's son).

The office holders' liability insurance policy has an effective insurance period of one year commencing on July 14, 2010, and ending on July 13, 2011, provided that the cost therefore is no more than US$3,000,000 for each case and period (plus up to 20% legal fees) at an annual premium of US$10,000. Pursuant to the Merger Agreement, the Company committed that the office holders' liability insurance policy will be renewed every year (for a seven-year period commencing immediately after the effective time of the Merger). Alternately, the office holders' liability insurance may be converted in an insurance policy of seven year-period commencing immediately after the effective time of the Merger on terms no less favorable than those of the abovementioned policy.

It is possible to review the office holders' liability insurance policy at the offices of the Company's Legal Counsel.

3. Approval of the Company's Exemption and Indemnification Undertaking on behalf of the Company's office holders

3.1. To approve the grant of the Exemption and Indemnification Undertaking on behalf of the Company's office holders for those office holders who are not controlling persons (the "Exemption and Indemnification Undertaking"), which key terms and conditions are as follows.

3.2. To approve the grant of the Exemption and Indemnification Undertaking to Mr. Shlomo Shmaltzer, the controlling person of the Company, and to Mrs. Atalya Shmaltzer (Mr. Shmaltzer's wife) and Mr. Asi Shmaltzer (Mr. Shmaltzer's son).

According to the terms of the Exemption and Indemnification Undertaking and subject to the Companies Law, the Company hereby obligates to indemnify its officers (as defined thereto in the undertaking) for any liability or expense as specified in the Exemption and Indemnification Undertaking the officer will be found liable, or will spend with respect to an action made by the officer as an officer of the Company, including but not limited to actions made prior to the effective day of the Exemption and Indemnification Undertaking related, directly or indirectly, to one or more of the events specified on the schedule to the Exemption and Indemnification Undertaking, or any related thereto, directly or indirectly, provided however that the aggregate cost of indemnification of all office holders therefore is no more than NIS 9,000,000.

Also, according to the terms of the Exemption and Indemnification Undertaking, the Company hereby exempts in advance its office holders from liability for damage caused and/or will be caused by the officer to the Company following a violation of his duty of care to the Company, excluding a violation of duty of care in a distribution (as defined in the Companies Law).

It is possible to review Exemption and Indemnification Undertaking at the offices of the Company's Legal Counsel.

The quorum required for the Meeting

The quorum required for the Meeting will constitute (as long as the parties present, whether in person or by proxy at the Meeting) the shareholder or shareholders who hold or represent at least half of the voting rights in the Company. If within half an hour from the time appointed for the Meeting a quorum is not present, the Meeting shall stand adjourned to the same day in the following week at the same time and place, or at any other place as the board of directors shall designate. If at such adjourned Meeting, a quorum is not present within half an hour from the time appointed for the Meeting, two shareholders present in person or by proxy will constitute a quorum.

The majority required for the approval of the resolutions

Section 1 on the agenda for the Meeting requires the affirmative vote of the shareholders all in accordance with Section 320(c) of the Companies Law; the resolution to approve the Merger will not be duly approved if objected to it are Public Shareholders who hold the majority of the voting power present at the Meeting not including the abstained votes.

Sections 2.1 and 3.1 on the agenda for the Meeting require the affirmative vote of the shareholders holding a simple majority of the voting power represented at the Meeting. Sections 2.2 and 3.2 on the agenda for the Meeting require the affirmative vote of the shareholders all in accordance with Section 275 of the Companies Law, provided that one of the following applies: (a) in a count of votes, the majority in the Meeting includes at least one third of all of the votes of those shareholders who do not have a personal interest in the approval of the transaction (i.e. Public Shareholders), who are present at the Meeting; in a count of all of the votes of such shareholders, abstentions shall not be taken into account or (b) the total of opposition votes amongst the shareholders referred to in sub-paragraph (a) above shall not be greater than one percent of all the voting rights in the Company.

Record Date

The record date for the determination of Shareholders entitled to vote at the Meeting, according to Section 182(c) of the Companies Law and Section 3 of the Companies Regulations (voting in writing and an announcement of position), 2005, has been fixed to be at the end day of September 9, 2010 (the "Record Date"). A shareholder who wishes to vote at the Meeting shall provide to the Company proof of ownership of such shareholder's shares from a member of the Tel Aviv Stock Exchange in such manner prescribed by the Proof of Ownership Regulations, or another proof of ownership that shall be provided to the Company in accordance with applicable law, to the Company's satisfaction.

A proxy to participate and vote at the Meeting without attending to the Meeting shall be provided, no later than 48 hours prior to the time set for the Meeting, to the Legal Counsel's Offices. Voting by voting paper shall be done on the back of the second part of the voting paper as may be issued in the Legal Counsel's Offices. The voting paper should be sent to the Legal Counsel's Offices by fax: +972-3-6103649 or by mail to the address mentioned below, in a way and manner the voting paper should be received at the Legal Counsel's Offices no later than 72 hours prior to the time set for the Meeting.

Viewing documents

The full text of the documents in connection with the Meeting may be viewed at the Legal Counsel's Offices, at 16 Abba Hillel Silver Rd., Ramat-Gan, Israel, during regular business hours, and upon advance coordination, by calling +972-3-6103100.

SOURCE Istec - Industries and Technologies Ltd