SC 13D

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LTx8exv0lGx852RXLDGrriKkJojy97u1ffzxJnZ+VNk2OxBXxaxl17LZnvr37MEE DI2EkzEXtoZClnRqEqjxUA== 0000950123-07-009819.txt : 20070711 0000950123-07-009819.hdr.sgml : 20070711 20070711161651 ACCESSION NUMBER: 0000950123-07-009819 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 18 FILED AS OF DATE: 20070711 DATE AS OF CHANGE: 20070711 GROUP MEMBERS: SHAUL SHANI SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ECI TELECOM LTD/ CENTRAL INDEX KEY: 0000701544 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-52743 FILM NUMBER: 07974435 BUSINESS ADDRESS: STREET 1: 30 HASIVIM ST CITY: PETAH TIKVA STATE: L3 ZIP: 49133 IS BUSINESS PHONE: 9729266555 MAIL ADDRESS: STREET 1: 30 HASIVIM ST STREET 2: 345 PARK AVE CITY: PETAH TIKVA 49133 IS STATE: L3 ZIP: 00000 FORMER COMPANY: FORMER CONFORMED NAME: ECI TELECOM LTD DATE OF NAME CHANGE: 19950606 FORMER COMPANY: FORMER CONFORMED NAME: ELECTRONICS CORP OF ISRAEL LTD DATE OF NAME CHANGE: 19850702 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Swarth Group Inc. CENTRAL INDEX KEY: 0001406367 IRS NUMBER: 000000000 STATE OF INCORPORATION: D8 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: P.O. BOX 3321 STREET 2: DRAKE CHAMBERS CITY: ROAD TOWN, TORTOLA STATE: D8 ZIP: VG 1110 BUSINESS PHONE: 212 974 3999 MAIL ADDRESS: STREET 1: P.O. BOX 3321 STREET 2: DRAKE CHAMBERS CITY: ROAD TOWN, TORTOLA STATE: D8 ZIP: VG 1110 SC 13D 1 y37041sc13d.htm SCHEDULE 13D SC 13D


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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

Under the Securities Exchange Act of 1934
(Amendment No. )*

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)

ECI Telecom Ltd.

(Name of Issuer)

COMMON STOCK, PAR VALUE NIS 0.12 PER SHARE

(Title of Class of Securities)

268258100

(CUSIP Number)

Swarth Group Inc.
PO Box 3321, Drake Chambers
Road Town, Tortola
British Virgin Islands
VG1110
+1 212 974 3999

Copy to:
Allen & Overy LLP
1221 Avenue of the Americas
New York, NY 10020
Attention: Thomas D. Abbondante, Esq.
+1 212 610 6328

(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)

July 1, 2007

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).


CUSIP No.		268258100

NAMES OF REPORTING PERSONS:

Swarth Group Inc.

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):

N/A

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):

(a) o

(b) þ

SEC USE ONLY:

SOURCE OF FUNDS (SEE INSTRUCTIONS):

CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e):

CITIZENSHIP OR PLACE OF ORGANIZATION:

British Virgin Islands

SOLE VOTING POWER:

NUMBER OF

None

SHARED VOTING POWER:

BENEFICIALLY

OWNED BY

53,313,088¹

EACH

SOLE DISPOSITIVE POWER:

REPORTING

PERSON

None

WITH

SHARED DISPOSITIVE POWER:

None

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:

53,313,088¹

CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS):

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):

44.36%¹

TYPE OF REPORTING PERSON (SEE INSTRUCTIONS):

¹ Beneficial ownership of the common stock referred to herein is being reported hereunder solely because the Reporting Person named above may be deemed to beneficially own such shares as a result of the Voting Agreements described in Items 3, 4 and 5 hereof. Neither the filing of this statement on Schedule 13D nor any of its contents shall be deemed to constitute an admission by the Reporting Person named above that it is the beneficial owner of any o f the common stock referred to herein for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, or for any other purpose, and such beneficial ownership is expressly disclaimed.


CUSIP No.		268258100

NAMES OF REPORTING PERSONS:

Shaul Shani

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):

N/A

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):

(a) o

(b) þ

SEC USE ONLY:

SOURCE OF FUNDS (SEE INSTRUCTIONS):

CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e):

CITIZENSHIP OR PLACE OF ORGANIZATION:

Israel

SOLE VOTING POWER:

NUMBER OF

None

SHARED VOTING POWER:

BENEFICIALLY

OWNED BY

53,313,088²

EACH

SOLE DISPOSITIVE POWER:

REPORTING

PERSON

None

WITH

SHARED DISPOSITIVE POWER:

None

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:

53,313,088²

CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS):

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):

44.36%²

TYPE OF REPORTING PERSON (SEE INSTRUCTIONS):

² Beneficial ownership of the common stock referred to herein is being reported hereunder solely because the Reporting Person named above may be deemed to beneficially own such shares as a result of the Voting Agreements described in Items 3, 4 and 5 hereof. Neither the filing of this statement on Schedule 13D nor any of its contents shall be deemed to constitute an admission by the Reporting Person named above that it is the beneficial owner of any o f the common stock referred to herein for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, or for any other purpose, and such beneficial ownership is expressly disclaimed.

TABLE OF CONTENTS


	Item 1. Security and Issuer
	Item 2. Identity and Background
	Item 3. Source and Amount of Funds or Other Consideration
	Item 4. Purpose of Transaction
	Item 5. Interest in Securities of the Issuer
	Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
	Item 7. Material to be Filed as Exhibits
SIGNATURE
EXHIBIT INDEX
EX-99.1: JOINT FILING AGREEMENT
EX-99.3: UNDERTAKING AGREEMENT WITH M.A.G.M. CHEMISTRY HOLDINGS LTD.
EX-99.4: UNDERTAKING AGREEMENT WITH IBD DEVELOPMENT CORP.
EX-99.5: UNDERTAKING AGREEMENT WITH HAREL BEIT-ON
EX-99.6: UNDERTAKING AGREEMENT WITH D. PARTNERS (ISAREL) LIMITED PARTNERSHIP
EX-99.7: UNDERTAKING AGREEMENT WITH D. PARTNERS (BVI) L.P.
EX-99.8: UNDERTAKING AGREEMENT WITH CLAL ELECTRONICS INDUSTRIES LTD.
EX-99.9: UNDERTAKING AGREEMENT WITH CARMEL V.C. LTD
EX-99.10: UNDERTAKING AGREEMENT WITH CARMEL SOFTWARE FUND GBR
EX-99.11: UNDERTAKING AGREEMETN WITH CARMEL V.C. LTD.
EX-99.12: UNDERTAKING AGREEMENT WITH CARMEL SOFTWARE FUND (ISRAEL) L.P.
EX-99.13: UNDERTAKING AGREEMENT WITH CARMEL SOFTWARE FUND (DELAWARE) L.P.
EX-99.14: UNDERTAKING AGREEMENT WITH CARMEL SOFTWARE FUND 9CAYMAN) L.P.
EX-99.15: UNDERTAKING AGREEMENT WITH BADAL SECURITIES LTD.
EX-99.16: UNDERTAKING AGREEMENT WITH AVI ZEEVI
EX-99.17: UNDERTAKING AGREEMENT WITH AHARON DOVRAT
EX-99.18: UNDERTAKING AGREEMENT WITH SHLOMO DOVRAT

SCHEDULE 13D

Item 1. Security and Issuer

This statement on Schedule 13D (this “Schedule”) relates to shares of common stock, New Israeli Sheqel (NIS) 0.12 par value per share (the “Common Stock”), of ECI Telecom Ltd., an Israeli company (the “Issuer”). The principal executive offices of the Issuer are located at 30 Hasivim Street, Petach Tikva, 49517 Israel.

Item 2. Identity and Background

Swath Group Inc. (“Swarth”) and Shaul Shani are jointly filing this Schedule. Swarth Group Inc. and Shaul Shani (the “Reporting Persons”) have entered into a Joint Filing Agreement, dated July 11, 2007, a copy of which is filed with this Schedule as Exhibit 1, pursuant to which the Reporting Persons have agreed to file this Schedule jointly in accordance with the provisions on Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended.

The name, business address, present principal occupation or employment and certain other information relating to each of the directors and executive officers of Swarth is set forth in Schedule A hereto, and is incorporated by reference.

During the last five years, none of the Reporting Persons have, nor to the best knowledge of the Reporting Persons have any of the directors or executive officers of Swarth listed on Schedule A attached hereto, (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject, to U.S. federal or state securities laws or finding any violation with respect to such laws.

The Reporting Persons:

Swarth is organized and existing as a company under the laws of the British Virgin Islands and has its principal office address at PO Box 3321, Drake Chambers, Road Town, Tortola VG 1110, British Virgin Islands.

All of the issued and outstanding share capital of Swarth is wholly-owned by Mr. Shaul Shani, an Israeli national, with an address for notices as a shareholder of Swarth c/o Trustco Services AG, Chamerstrasse 12c, P.O. Box 4436, CH-6304, Zug, Switzerland.

Purchaser:

Epsilon 1 Ltd. (“Purchaser”), a company organized under the laws of the State of Israel, was formed for the purpose of effecting the transactions contemplated by the Merger Agreement described in Item 4 below. Purchaser’s principal office is located at 3 Daniel Frisch Street, Tel-Aviv, 64731 Israel.

The Reporting Persons hold (indirectly) a beneficial interest in Purchaser. A beneficial interest in Purchaser is also held (indirectly) by Ashmore Management Company Limited, Ashmore Global Special Situations Fund 2 Limited, Asset Holder PCC Limited re Ashmore Emerging Markets Liquid Investment

Portfolio, Ashmore Emerging Markets Global Investment Portfolio Limited, Ashmore Growing Multi Strategy Fund Limited, Ashmore Global Special Situations Fund 3 Limited Partnership, and Ashmore SICAV Emerging Markets Debt Fund, which are filing a separate Schedule 13D in respect of their rights under the Voting Agreements described in Item 3 below.

Item 3. Source and Amount of Funds or Other Consideration

As described in Item 4 and Item 5, the shares of Common Stock to which this statement relates have not been purchased by the Reporting Persons or Purchaser. In connection with an Agreement and Plan of Merger by and among Purchaser, Epsilon 3 Ltd., an Israeli company and an indirect wholly-owned subsidiary of Purchaser (“Epsilon 3”), and the Issuer dated as of July 1, 2007 (the “Merger Agreement”), Purchaser entered into voting undertaking agreements (the “Voting Agreements”) with certain individuals (the “Stockholders”) with respect to the voting of an aggregate amount of 53,313,088 shares of the Issuer’s Common Stock in connection with the transaction contemplated by the Merger Agreement as described in Item 5 below.

The Reporting Persons have not paid, and do not expect to pay, additional consideration in connection with the execution and delivery of the Voting Agreements, other than the consideration to be received by such Stockholders in their capacity as shareholders of the Issuer pursuant to the terms of the Merger Agreement. For a description of the Voting Agreement, see item 5 below, which description is incorporated into this Item 3 .

Item 4. Purpose of Transaction

On July 1, 2007, Purchaser, Epsilon 3 and the Issuer entered into the Merger Agreement providing for the merger of Epsilon 3 into the Issuer (the “Merger”) upon the terms and subject to the conditions therein set forth. The Issuer is to survive the Merger as an indirect wholly-owned subsidiary of Purchaser.

A copy of the Merger Agreement is included as Exhibit 2 hereto and the description of the Merger Agreement contained herein is qualified in its entirety by reference to Exhibit 2, which is incorporated herein by reference.

Item 5. Interest in Securities of the Issuer

As a result of the execution of the Voting Agreements, Purchaser may be deemed to have an indirect beneficial interest in the aggregate amount of 53,313,088 shares of the Issuer’s Common Stock that are subject to the Voting Agreements. By virtue of the Reporting Persons’ relationship to Purchaser it may be deemed to have an indirect beneficial interest in those same 53,313,088 shares of the Issuer’s Common Stock that are subject to the Voting Agreements. Such shares represent approximately 44.36% of the total outstanding Common Stock of the Issuer, based upon 120,160,650 shares of Common Stock as of June 17, 2007 as represented by the Issuer in the Merger Agreement. The Reporting Persons are filing this statement solely because the Reporting Persons may be deemed to have beneficial ownership of such shares as a result of the Voting Agreement. Neither the filing of this statement nor any of its contents shall be deemed to constitute an admission by the Reporting Persons that they are the beneficial owner of any of the Common Stock for the purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, or for any other purposes, and such beneficial ownership is expressly disclaimed.

Pursuant to the Voting Agreements, the Stockholders have agreed to vote all securities of the Issuer owned by them in favor of the Merger and against the following actions: (i) any extraordinary corporate transaction, such as merger, consolidation or other business combination involving the Issuer or any of its material subsidiaries; (ii) any sale, lease or transfer of a material amount of the assets of the Issuer or any of its material subsidiaries, or a reorganization, recapitalization, dissolution or liquidation of the Issuer or any of its material subsidiaries; (iii) any change in the persons who constitute the board of directors of the Issuer that is not approved in advance by at least a majority of persons who were directors of the Issuer as of the July 1, 2007; or (iv) any other action or proposal involving the Issuer or any of its material subsidiaries that is intended, or would reasonably be expected, to prevent, impede, interfere with, delay, postpone, or adversely affect the transactions contemplated by the Merger Agreement.

The Voting Agreements terminate upon the earliest to occur of (i) immediately prior to the termination of the Merger Agreement in accordance with its terms, (ii) the agreement of Purchaser and the Stockholder to terminate the Voting Agreements, and (iii) the Effective Time (as defined in the Merger Agreement).

Copies of the Voting Agreements are included as Exhibits 3 through 18 hereto and the description of the Voting Agreements contained herein is qualified in its entirety by reference to Exhibits 3 through 18, which are incorporated herein by reference.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

The information contained in Items 3, 4 and 5 with respect to any contract, arrangement, understanding or relationship described therein is hereby incorporated herein by this reference.

Item 7. Material to be Filed as Exhibits.


EXHIBIT		DOCUMENT

1		Joint Filing Agreement, dated July 11, 2007, by and among Swarth Group Inc. and Shaul Shani.

2		Agreement and Plan of Merger, dated as of July 1, 2007, by and among ECI Telecom, Ltd., Epsilon 2 Ltd. and Epsilon 3 Ltd., filed as Exhibit 99.2 to the Company’s Current Report on Form 6-K (SEC File No. 000-12672) filed with the Securities and Exchange Commission on April 30, 2007, and incorporated herein by reference.

3		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and M.A.G.M. Chemistry Holdings Ltd.

4		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and IBD Development Corporation

5		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and Harel Beit-On

6		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and D. Partners (Israel) Limited Partnership


EXHIBIT		DOCUMENT

7		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and D. Partners (BVI) L.P.

8		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and CLAL Electronics Industries LTD.

9		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and Carmel V.C. LTD.

10		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and Carmel Software Fund GbR

11		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and Carmel V.C. Ltd. (acting for Siemens Venture Capital Fund GmbH)

12		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and Carmel Software Fund (Israel) L.P.

13		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and Carmel Software Fund (Delaware) L.P.

14		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and Carmel Software Fund (Cayman) L.P.

15		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and BADAL Securities Ltd.

16		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and Avi Zeevi

17		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and Aharon Dovrat

18		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and Shlomo Dovrat

(Continued on following page.)

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: July 11, 2007


		SWARTH GROUP INC.

		By:		/s/ Maria Meier

		Name: Maria Meier Title: Director

		SHAUL SHANI

		/s/ Shaul Shani

SCHEDULE A

Directors and Executive Officers

EXECUTIVE OFFICERS AND DIRECTORS OF SWARTH GROUP INC.


Name, Business Address	Position with Swarth
and Citizenship	Group Inc.	Principal Occupation (for Directors)
Maria Meier Chamerstrasse 12c P.O. Box 4436 CH-6304, Zug Switzerland Swiss	Sole Director	Company Executive

EXHIBIT INDEX


EXHIBIT		DOCUMENT

1		Joint Filing Agreement, dated July 11, 2007, by and among Swarth Group Inc. and Shaul Shani.

2		Agreement and Plan of Merger, dated as of July 1, 2007, by and among ECI Telecom, Ltd., Epsilon 2 Ltd. and Epsilon 3 Ltd., filed as Exhibit 99.2 to the Company’s Current Report on Form 6-K (SEC File No. 000-12672) filed with the Securities and Exchange Commission on April 30, 2007, and incorporated herein by reference.

3		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and M.A.G.M. Chemistry Holdings Ltd.

4		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and IBD Development Corporation

5		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and Harel Beit-On

6		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and D. Partners (Israel) Limited Partnership

7		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and D. Partners (BVI) L.P.

8		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and CLAL Electronics Industries LTD.

9		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and Carmel V.C. LTD.

10		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and Carmel Software Fund GbR

11		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and Carmel V.C. Ltd. (acting for Siemens Venture Capital Fund GmbH)

12		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and Carmel Software Fund (Israel) L.P.

13		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and Carmel Software Fund (Delaware) L.P.

14		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and Carmel Software Fund (Cayman) L.P.

15		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and BADAL Securities Ltd.


EXHIBIT		DOCUMENT

16		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and Avi Zeevi

17		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and Aharon Dovrat

18		Undertaking Agreement, dated as of July 1, 2007, between Epsilon 1 Ltd. and Shlomo Dovrat

EX-99.1 2 y37041exv99w1.htm EX-99.1: JOINT FILING AGREEMENT EX-99.1

Exhibit 1

JOINT FILING AGREEMENT

In accordance with Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended, the persons named below agree to the joint filing on behalf of each of them of a Statement on Schedule 13D and any amendments to it with respect to the common stock, par value NIS .12 per share, of ECI Telecom Ltd., and further agree that this Joint Filing Agreement be included as an Exhibit to those joint filings.

Dated: July 11, 2007


		SWARTH GROUP INC.

		By:		/s/ Maria Meier

		Name:		Maria Meier
		Title:		Director

		SHAUL SHANI

		By:		/s/

EX-99.3 3 y37041exv99w3.htm EX-99.3: UNDERTAKING AGREEMENT WITH M.A.G.M. CHEMISTRY HOLDINGS LTD. EX-99.3

Exhibit 3

UNDERTAKING AGREEMENT

This UNDERTAKING AGREEMENT (the “Agreement”), dated as of July 1, 2007 is entered into by and between Epsilon 1 Ltd., an Israeli company (“Purchaser”) and the shareholder set forth on the signature page hereto (the “Shareholder”).

WHEREAS, concurrently with the execution and delivery of this Agreement, ECI Telecom Ltd., an Israeli company (the “Company”), Purchaser and Epsilon 3 Ltd., an Israeli company and an indirect wholly owned subsidiary of Purchaser (“Merger Sub”), are entering into an Agreement and Plan of Merger (the “Merger Agreement”), dated as of the date hereof pursuant to which Merger Sub will be merged with and into the Company, and the Company will become a wholly owned subsidiary of Purchaser, upon the terms and subject to the conditions set forth the Merger Agreement;

WHEREAS, as of the date hereof, the Shareholder is the record and/or beneficial owner of, and has the sole right to vote and dispose of or cause to be voted or disposed of, ordinary shares, par value NIS 0.12 per share, 33,049,433 of the Company (the “Company Shares”); and

WHEREAS, as a condition to their willingness to enter into the Merger Agreement, Purchaser and Merger Sub have required that the Shareholder agree, and the Shareholder is willing to agree, to the matters set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the agreements set forth below, the parties hereto agree as follows:

1. Voting Agreement; Grant of Irrevocable Proxy.

1.1 The Shareholder hereby undertakes to vote or cause to be voted all Company Shares at any general, special or other meeting of the shareholders of the Company, and at any adjournment(s) or postponement(s) thereof, however called or convened, or pursuant to any consent in lieu of a meeting or otherwise, which the undersigned has the right to so vote:

(i) provided a Change of Recommendation (as defined in the Merger Agreement) has not occurred and remains in effect, in favor of the Merger (as defined in the Merger Agreement) and the approval and adoption of the Merger Agreement and the Transactions contemplated thereby, and any actions required in furtherance thereof; and

(ii) except as otherwise agreed to in writing in advance by Purchaser, to the extent any of the following actions require a vote of the Company’s shareholders under applicable Law or the Company’s articles of association, against the following actions or proposals (other than the transactions contemplated by the Merger Agreement): (A) any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the Company or any of its material Subsidiaries (as defined in the Merger Agreement); (B) any sale, lease or transfer of a material amount of the assets of Company or any of its material Subsidiaries, or a reorganization, recapitalization, dissolution or liquidation of Company or any of its material Subsidiaries; (C) any change in the persons who constitute the board of directors of Company that is not approved in advance by at least a majority of the persons who were directors of Company as of the

date of this Agreement (or their successors who were so approved); or (D) any other action or proposal involving Company or any of its material Subsidiaries that is intended, or would reasonably be expected, to prevent, impede, interfere with, delay, postpone, or adversely affect the transactions contemplated by the Merger Agreement.

1.2 The Shareholder, on the date hereof, has validly executed and delivered an irrevocable proxy, in the form attached hereto as Exhibit A (the “Proxy”). The Proxy shall be irrevocable during the term of this Agreement, shall be deemed to be coupled with an interest sufficient in law to support an irrevocable proxy and shall revoke all prior proxies granted by the Shareholder. The Shareholder shall not enter into any contract or other agreement with any person that violates or conflicts with or could reasonably be expected to violate or conflict with the provisions and agreements contained in this Agreement, the Proxy or the Merger Agreement. Notwithstanding anything to the contrary contained in this Agreement, Purchaser understands and acknowledges that the Shareholder will have no obligation as a result of this Agreement or the Proxy to exercise stock options or other derivative securities exercisable for, or exchangeable or convertible into, Company Shares.

1.3 Fiduciary Responsibilities. Purchaser and the Shareholder acknowledge that the Shareholder is not making any undertaking or understanding in this Agreement in any capacity other than in the Shareholder’s capacity as a shareholder of the Company. Nothing contained in this Agreement shall limit the rights and obligations of the Shareholder in his capacity as a director, employee or officer of the Company from taking any action in his capacity as a director, employee or officer of the Company, and no action taken by the Shareholder in any such capacity shall be deemed to constitute a breach of any provision of this Agreement.

2. Representations and Warranties of the Shareholder. The Shareholder represents and warrants to Purchaser as follows:

2.1 Due Authority; Binding Agreement. The Shareholder (if not an individual) is duly organized and validly existing under the laws of its jurisdiction of organization and has all the necessary corporate power and authority to execute and deliver this Agreement and the Proxy and to consummate the transactions contemplated by this Agreement and the Proxy. The Shareholder has duly and validly executed and delivered this Agreement and the Proxy and, assuming the due authorization, execution and delivery of this Agreement by Purchaser, this Agreement and the Proxy constitute legal, valid and binding obligations of the Shareholder, enforceable against the Shareholder in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting creditors’ rights generally and by general equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law).

2.2 No Conflict. Neither the execution and delivery of this Agreement or the Proxy, the consummation of the transactions contemplated hereby or thereby, nor the performance of the Shareholder’s obligations under this Agreement or the Proxy will, (a) conflict with or result in a breach of any provisions of the organizational documents of the Shareholder (if not an individual), (b) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation, or acceleration) under any contract, agreement, instrument, commitment, arrangement or

understanding with respect to the Shareholder’s Company Shares, (c) require any material consent, authorization or approval of any person other than a governmental entity, (d) violate or conflict with any writ, injunction or decree applicable to the Shareholder or the Shareholder’s Company Shares.

2.3 Ownership of Company Shares. The Shareholder is the record and/or “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended, which meaning will apply for all purposes of this Agreement) of the number of outstanding Company Shares set forth in the recitals to this Agreement. Also set forth in the recitals to this Agreement is the number of Company Shares issuable upon the exercise of the Options. The Shareholder holds the requisite power to vote the number of Company Shares set forth in the recitals to this Agreement.

3. Representations and Warranties of Purchaser. Purchaser represents and warrants to the Shareholder as follows:

3.1 Due Authority; Binding Agreement. The Purchaser is duly organized and validly existing under the laws of its jurisdiction of organization and has all the necessary corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated this Agreement. The Purchaser has duly and validly executed and delivered this Agreement and, assuming the due authorization, execution and delivery of this Agreement by the Shareholder, this Agreement constitutes a legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting creditors’ rights generally and by general equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law).

3.2 No Conflict. Neither the execution and delivery of this Agreement, the consummation by Purchaser of the transactions contemplated by this Agreement, nor the compliance by Purchaser with any of the provisions hereof will (a) conflict with or result in a breach of any provision of its organizational documents, (b) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation, or acceleration) under any contract, agreement, instrument, commitment, arrangement or understanding, (c) require any material consent, authorization or approval of any person other than a governmental entity, or (d) violate or conflict with any writ, injunction or decree applicable to Purchaser.

4. Transfer and Other Restrictions. For so long as the Merger Agreement is in effect:

4.1 Certain Prohibited Transfers. The Shareholder agrees not to, except as provided for in this Agreement or the Merger Agreement:

a. sell, sell short, transfer (including gift), pledge, encumber, assign or otherwise dispose of, or enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, pledge, encumbrance, assignment or other disposition of, any Company Shares or Options or any interest contained therein, except pursuant to existing

obligations under Options granted to third parties, which have previously been disclosed to Purchaser;

b. grant any proxies or power of attorney or enter into a voting agreement or other arrangement with respect to any Company Shares or Options; or

c. deposit any Company Shares or Options into a voting trust;

provided, however, that Shareholder may transfer Company Shares for estate planning purposes or to a nationally (in Israel or the United States) or state recognized charitable organization if, in each case, any such proposed transferee first agrees in writing to be bound by the terms of this Agreement with respect to such Company Shares to be transferred to it, including by executing any documentation requested by Purchaser in connection therewith.

4.2 Additional Company Shares. Without limiting the provisions of the Merger Agreement, in the event (i) of any stock dividend, stock split, recapitalization, reclassification, combination or exchange of shares of the Company affecting the Shareholder’s Company Shares or (ii) the Shareholder shall become the beneficial owner or record owner of any additional Company Shares, including pursuant to the exercise of Options, or other securities entitling the holder thereof to vote or give consent with respect to the matters set forth in Section 1 of this Agreement and the Proxy, in each case, then the terms of this Agreement and the Proxy shall apply to the Company Shares or other securities of the Company held by the Shareholder immediately following the effectiveness of the events described in clause (i), or the Shareholder becoming the beneficial or record owner thereof, as described in clause (ii), as though they were Company Shares of the Shareholder under this Agreement and the Proxy.

5. Specific Enforcement. Except as otherwise provided herein, any and all remedies in this Agreement expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred by this Agreement, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy. The parties hereto agree that irreparable damage would occur in the event that any provision of this Agreement or the Proxy were not performed in accordance with its specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement or the Proxy and to enforce specifically the terms and provisions of this Agreement and the Proxy in the competent Israeli courts located in Tel Aviv-Jaffa, this being in addition to any other remedy to which they are entitled at law or in equity.

6. Termination. This Agreement shall terminate on the earliest of (i) immediately prior to the termination of the Merger Agreement in accordance with its terms, (ii) the agreement of Purchaser and the Shareholder to terminate this Agreement, and (iii) the Effective Time (as defined in the Merger Agreement). Termination shall not relieve any party from liability for any intentional and willful breach of its obligations under this Agreement committed prior to such termination.

7. Survival. The representations and warranties of the parties contained in this Agreement shall terminate upon termination of this Agreement.

8. Notices. All notices, claims, demands and other communications hereunder shall be in writing and shall be deemed given when delivered personally or by internationally recognized overnight courier (providing proof of delivery), or sent via fax or electronic email to the Parties at the following addresses, email addresses or fax numbers (or at such other address, email address or fax numbers as shall be specified by like notice):

if to Purchaser, to:

3 Daniel Frisch Street
Tel-Aviv, 64731
C/O Yossi Avraham, Arad & Co.
Fax: +972 3 969 3804
Attention: Yossi Avraham

with a copy to:

Clifford Chance US LLP
31 West 52nd Street
New York, New York 10019
Fax No: +1 212-878-8375


		Email address:		Karl.Roessner@CliffordChance.com
				David.Brinton@CliffordChance.com
		Attention:		Karl A. Roessner, Esq.
				G. David Brinton, Esq.

If to the Shareholders, to:

M.A.G.M. Chemistry Holdings Ltd.
c/o Koor Industries Ltd.
3 Azrieli Center, Triangle Tower, 44th floor
Tel Aviv 67023, Israel
Attention: Raanan Cohen, CEO
Facsimile: +972-3-607-5889

9. Entire Agreement. This Agreement and the documents and instruments and other agreements among the parties hereto as contemplated by or referred to herein constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof.

10. Amendment; Release. Subject to applicable law, this Agreement may be amended by the parties hereto at any time by execution of an instrument in writing signed on behalf of each of the parties.

11. Successors and Assigns. No party may assign either this Agreement or any of its rights, interests, or obligations under this Agreement without the prior written approval of the other party to this Agreement. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.

12. Counterparts. This Agreement may be executed in one or more counterparts (including counterparts executed and delivered by facsimile, which shall be as counterparts executed and delivered manually), all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart.

13. Governing Law and Jurisdiction. THIS AGREEMENT AND THE PROXY SHALL BE SOLELY GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ISRAEL, WITHOUT GIVING EFFECT TO ANY OTHER CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF ISRAEL OR OTHERWISE) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF ISRAEL. Any dispute arising under or in relation to this Agreement or the Proxy shall be resolved in, and the sole and exclusive jurisdiction shall be of, a competent court located in Tel Aviv-Jaffa, and each of the parties hereby submits irrevocably to the jurisdiction of such courts. The parties hereby (i) consent to and grant any such court jurisdiction over the person of such parties and, to the extent permitted by applicable law, over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in such manner as may be permitted by applicable law shall be valid and sufficient service thereof, (ii) agree that they will not attempt to deny or defeat such jurisdiction by motion or other request for leave from any such court, and (iii) agree that they will not bring any action relating this Agreement or the Proxy in any court other than the court of Tel Aviv-Jaffa. Each party agrees that a final judgment in any action or proceeding in any such court shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law.

14. Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of any party hereto under this Agreement will not be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such provision had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by such provision or its severance herefrom and (d) in lieu of such provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such provision as may be possible.

15. Headings; Capitalized Terms. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Capitalized terms used in this Agreement without definition shall have the meanings assigned to them in the Merger Agreement.

16. The effectiveness of this Agreement is conditioned upon the execution and delivery of the Merger Agreement by the parties thereto.

17. Purchaser acknowledges and agrees that nothing in this letter agreement shall be deemed to vest in Purchaser any direct or indirect ownership or incidence of ownership of or with respect to any of the Company Shares. All rights, ownership and economic benefits of and relating to the Shares shall remain vested in and belong to Shareholder, and Purchaser shall have no authority to manage, direct, superintend, restrict, regulate, govern or administer any of the policies or operations of the Company or exercise any power or authority to direct Shareholder in the voting of any of the Company Shares, except as otherwise expressly provided herein.

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the Shareholder and a duly authorized officer of Purchaser on the day and year first written above.


EPSILON 1 LTD.
By:	/s/ A. Marom
	Name:	A. Marom
	Title:	Director

Signature Page to Undertaking Agreement


M.A.G.M. Chemistry Holdings LTD.
By:	/s/ Shlomo Heller
	Name:	Shlomo Heller
	Title:	Director

Signature Page to Undertaking Agreement

Exhibit A

IRREVOCABLE PROXY

The undersigned shareholder of ECI Telecom Ltd., a company formed under the laws of the State of Israel (the “Company”) hereby irrevocably appoints and constitutes Shira Azran and/or Zohar Uzdin as the attorney and proxy of the undersigned with full power of substitution and resubstitution to the full extent of the undersigned’s rights with respect to (i) the issued and outstanding ordinary shares, par value NIS 0.12 per share of the Company (“Company Shares”), owned of record by the undersigned as of the date of this proxy, which shares are specified on the final page of this proxy and (ii) any and all other Company Shares which the undersigned may acquire of record after the date hereof (collectively, the “Subject Securities”). Upon execution of this proxy, all prior proxies given by the undersigned with respect to any of the Subject Securities regarding the matters that are the subject hereof, are hereby revoked and no subsequent proxies will be given with respect to any of the Subject Securities. This proxy is irrevocable and coupled with an interest, until the earliest to occur of any of the events specified in clauses (i) through (iii) of the following paragraph, at which time this proxy shall automatically be revoked.

Each of the attorneys and proxies named above are hereby instructed and authorized to exercise this proxy to appear in the name and instead of the undersigned for the purpose of establishing a quorum and to vote (or cause to be voted) all of the Subject Securities, at any general, special or other meeting of the shareholders of the Company, and at any adjournment(s) or postponement(s) thereof, however called or convened, or pursuant to any consent in lieu of a meeting or otherwise, which the undersigned has the right to so vote during the period from the date hereof until the earlier of (i) immediately prior to the termination of the Agreement and Plan of Merger (the “Merger Agreement”), dated the date hereof, among the Company, Epsilon 1 Ltd. , an Israeli company (“Purchaser”) and Epsilon 3 Ltd., an Israeli company and an indirect wholly owned subsidiary of Purchaser (“Merger Sub”), in accordance with its terms, (ii) the agreement of Purchaser and the undersigned to terminate this proxy, and (iii) the Effective Time (as defined in the Merger Agreement):

(ii) except as otherwise agreed to in writing in advance by Purchaser, to the extent any of the following actions require a vote of the Company’s shareholders under applicable Law, against the following actions or proposals (other than the transactions contemplated by the Merger Agreement): (A) any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the Company or any of its material Subsidiaries (as defined in the Merger Agreement); (B) any sale, lease or transfer of a material amount of the assets of Company or any of its material Subsidiaries, or a reorganization, recapitalization, dissolution or liquidation of Company or any of its material Subsidiaries; (C) any change in the persons who constitute the board of directors of Company that is not approved in advance by at least a majority of

the persons who were directors of Company as of the date of this Agreement (or their successors who were so approved); or (D) any other action or proposal involving Company or any of its material Subsidiaries that is intended, or would reasonably be expected, to prevent, impede, interfere with, delay, postpone, or adversely affect the transactions contemplated by the Merger Agreement.

This proxy does not relate to, and the undersigned remains entitled to vote in its discretion the Subject Securities on, all other matters. This proxy shall be binding upon the heirs, successors and assigns of the undersigned (including any transfers of any of the Subject Securities).

* * *

[Remainder of Page Intentionally Left Blank]

Date: July 1, 2007


M.A.G.M. Chemistry Holdings Ltd.
By:	/s/ Shlomo Heller
	Name:	Shlomo Heller
	Title:	Director

Number of Company Shares owned of record: 25,392,637

Signature Page to Irrevocable Proxy

EX-99.4 4 y37041exv99w4.htm EX-99.4: UNDERTAKING AGREEMENT WITH IBD DEVELOPMENT CORP. EX-99.4

Exhibit 4

UNDERTAKING AGREEMENT

WHEREAS, as of the date hereof, the Shareholder is the record and/or beneficial owner of, and has the sole right to vote and dispose of or cause to be voted or disposed of, 100,000 ordinary shares, par value NIS 0.12 per share, of the Company (the “Company Shares”); and