Elbit Imaging enters into letter of undertaking with notes trustees

By Caroline Salls

Pittsburgh, March 21 - Elbit Imaging Ltd. has entered into a letter of undertaking with the trustees of its series 1, C, D, E, F and G notes, according to a company news release.

The letter of undertaking includes the following terms:

• The letter will remain in effect until 14 days from the date on which Elbit notifies the trustees of its intention to terminate it for any reason.

In addition, the company said it may notify the trustees of the termination of any of the undertakings for any reason following the end of the 14-day period from the delivery of notice, or immediately if any of the noteholders file a motion for the liquidation of the company;

• The parties intend to mutually investigate the possibility of formulating a plan of arrangement for Elbit's outstanding obligations to the noteholders;

• Nothing in the letter will be deemed to obligate the company, the trustees, the noteholders' representatives or the controlling shareholder to enter into any arrangement or agreement of any kind, and nothing in the letter will be deemed to constitute a representation and warranty as to any consent or confirmation to any arrangement among the company and the noteholders;

• Execution of the letter will not prejudice any of the parties' or noteholders' rights;

• The company will fully cooperate with the trustees, the representatives and anyone acting on their behalf in conducting a due diligence investigation on Elbit's financial condition for the objective of negotiating an arrangement and/or providing recommendations to the noteholders on their courses of action, subject to confidentiality obligations;

• During the interim period, the company and the entities under its control will not: Make any payments or engage in any transactions with the controlling shareholder, entities under the control of the controlling shareholder or Mordechay Zisser's relatives; dispose of any material asset and provide any guarantee or security to secure any third-party's debt without giving the trustees 14-days' notice; carry out any activity or enter into any transaction that is not in Elbit or the controlled entities' ordinary course of business without notice to the trustees; acquire, sell or pledge any of the company's securities without notice; deposit any cash or cash equivalent with any financial institution that is a creditor or with a bank account in any of the banks where the company and controlled entities' debt exceeds NIS 5 million, excluding any deposits of proceeds made by subsidiaries in the framework of their ongoing activities; announce and/or distribute any dividends or distributions of any kind to shareholders; amend any term under existing credit and funding facilities with any financial creditors; or enter into new investments without notice;

• Elbit and the controlled entities agreed to notify the trustees and representatives during the interim period of actual or threatened litigation or claims against them that exceed NIS 2.5 million;

• During the interim period, the company and controlled entities will not make: Any payments to their creditors or make any obligations to do so without notice, except for payments and undertakings in the ordinary course of business, other than to related parties and financial creditors, subject to thresholds and exclusions; the advance of working capital to Elbit subsidiaries in India and the United States, subject to a threshold; or payments due to secured creditors, provided that the source of the funds used for the repayment of was generated from the secured assets;

• Neither the company nor any of the controlled entities will settle any of their debt toward other entities included in the Elbit Group, except for the settlement of debts owed to the company by those entities or for the settlement of any of the Plaza entity's debts to any third party; and

• Controlling shareholder Mordechay Zisser and the entities owned and controlled by him agreed not to dispose of Elbit or controlled entity securities during the interim period.

In addition, there may not be any change in the controlling shareholder's holdings in any of the company's securities, provided that the undertaking will not apply in case of any conflict between this undertaking and any previous undertaking of the controlling shareholder toward Bank Hapoalim BM.

Tel Aviv-based Elbit Imaging is a holding company with activities in the fields of commercial and entertainment centers, hotels, image-guided treatment, residential real estate and fashion retail.

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