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ELECTROCHEMICAL INDUSTRIES (FRUTAROM) LTD. (EIF) - ADVISES ABOUT A RESOLUTION FROM THE MEETING OF DEBENTURES HOLDERS OF THE COMPANY

ACRE, Israel, March 10 /PRNewswire/ -- The following was released today by Electrochemical Industries (Frutarom) Ltd. (AMEX: EIF):

We hereby notify that, at a meeting of the Series 1 Debenture- holders of the company held on March 6, 1996 it was resolved by a special resolution as follows:

1. To approve, within the framework of the spin-off arrangement in
 terms of paragraph 105a(1) of the Income Tax Law (New Version)
 5721-1961, the transfer (by way of dividend and/or capital
 depreciation and/or any other way), of:-
 a. The shares of Frutarom Ltd.
 b. The Potassium Carbonate Plant.
 c. Land in the Haifa Bay Area that is in the use of Frutarom
 Ltd. and/or of the shares of companies that hold the
 aforesaid assets (or part thereof), to a new company that
 will be set up for the purposes of the spin-off.


It was resolved by a Special Resolution:-

2. Subject to the passing of the aforesaid resolution, to change
 the terms of the Trust Deed for the Series 1 Debentures and the
 terms of the debentures as specified below:-
 a. An additional undertaking by the company shall be added to
 the Deed of Trust, whereby, in order to secure the repayment
 of the debenture, the company shall deposit in trust with the
 Trustee for the Series 1 Debentures, the amount of
 US.$500,000 or an amount in NIS. equivalent to that sum.
 b. The company shall undertake that, until the repayment of the
 debentures, the Equity to Debt Ratio shall not exceed 3:1 at
 the end of every quarter, and any infringement of this
 limitation shall be cause for demanding immediate repayment
 or partial repayment of the debentures to such amount as will
 restore the Equity to Debt Ratio to the ratio of 3:1. At the
 end of each quarter, after publication of the Financial
 Statements, a report -- confirmed by an auditor -- will be
 submitted to the Trustee that this undertaking has been
 complied with.
 c. The company shall undertake that, until the date of repayment
 of the debentures, the total Financial Assets of the
 company shall not be less than US$ 15 million. At the end of
 each quarter, after publication of the Financial Statements,
 a report -- confirmed by an auditor -- will be submitted to
 the Trustee that this undertaking has been complied with.
 d. The right associated with the Series 1 Debentures, of
 conversion to shares of the company shall apply, pari passu
 and mutatis mutandis, also to the shares of the new company,
 i.e. Every holder of Series 1 Debentures who converts Series
 1 Debentures of the company shall receive (at no further
 charge) also shares of the new company, to an amount
 identical to the amount of shares of the company to which he
 is entitled. (For example, if a series 1 debenture-holder
 converts debentures that entitle him to 1% of the Ordinary
 Shares of the company, then that same debenture-holder shall
 receive at the time of repayment, also 1% of the Ordinary
 Shares of the new company).
 To remove any doubt, it is hereby made clear that a holder
 of Series 1 Debentures shall have no right to convert the
 Series 1 Debentures only to the shares of the company. The
 right of conversion is solely and only to the two companies
 (i.e. to the company and the new company) together.
 e. The provisions for the protection of the holders of Series 1
 Debentures at the time of repayment stipulated in the Deed of
 Trust, the debentures, and the company's prospectus of
 25.6.89, shall be binding, mutatis mutandis, also on the new
 company.


3. The Trustee shall be authorized by the Meeting to sign any
 document required for the implementation of the aforesaid
 resolution.
 -0- 3/10/96


/CONTACT: Yuval Shadmi, Adv., Corporate Secretary of Electrochemical Industries [Frutarom] Ltd., 011-972-4-9851555/

(EIF)

CO: Electrochemical Industries [Frutarom} Ltd. ST: IN: CHM SU:

PL -- NYSU002 -- 1891 03/10/96 10:22 EST
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Publication:PR Newswire
Date:Mar 10, 1996
Words:663
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