SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (the "Agreement") is made as of the 12th day of
January, 2007, by and between MoreGasTech SRL ("MGT"), Energtek Inc. ("Energtek
US") and Energtek Products Ltd. ("Energtek Israel") for the purchase by Energtek
Israel of all the issued and outstanding capital of Natural Gas For Israel
(Gatal) Ltd. ("Gatal")
MGT, Energtek US. and Energtek Israel. being hereinafter individually or
collectively referred to as the "Party" or the "Parties" as the context may
require.
W I T N E S S E T H
WHEREAS Energtek Israel, an Israeli company, is a wholly owned subsidiary
of Energtek US, a State of Nevada corporation; and
WHEREAS, Gatal, an Israeli company, is a wholly owned subsidiary of MGT, a
Nevis company, which is the owner of 100 (One Hundred) ordinary
shares, nominal value NIS 1 per share (the "Shares") of Gatal,
which Shares constitute 100% of the issued and outstanding share
capital of Gatal and which Shares are held in escrow for the
benefit of MGT; and
WHEREAS, Energtek Israel wishes to purchase the Shares from MGT and MGT
wishes to sell the Shares to Energtek Israel, subject to the
terms and conditions set forth herein; and
WHEREAS, the Parties wish to record the understandings between them with
respect to the purchase of the Shares.
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the parties hereby agree as follows:
1. Sale and Purchase of the Shares
At the Closing (as defined herein) MGT shall sell and transfer the Shares to
Energtek Israel and Energtek Israel shall purchase the Shares from MGT. In
consideration for the Shares, Energtek US shall deliver to MGT at the Closing a
warrant to purchase up to 3,500,000 shares of common stock, par value US$0.001
per share of Energtek US, substantially in the form set forth in Schedule 1 -
Class 2007-A Warrant Agreement (the "Warrant"). The Warrant shall be exercisable
starting July 1, 2008 until December 31, 2011 and shall have a per share
exercise price equal to US$0.05, all according to the terms and conditions set
forth in the said Exhibit.
2. Closing of Sale and Purchase
2.1. Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of
Xxxxxxx, Luchtenstein & Co. on the date hereof, or at such other
date, time or place as the parties shall mutually agree upon in
writing (the "Closing Date").
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2.2. Transactions at Closing. At the Closing, the following transactions
shall occur, which transactions shall be deemed to take place
simultaneously and no transaction shall be deemed to have been
completed or any document delivered until all such transactions have
been completed and all required documents delivered:
2.2.1. MGT shall deliver or cause to be delivered to Energtek Israel
a resolution of the Board of Directors of MGT approving the
transfer of the Shares to Energtek Israel;
2.2.2. Energtek Israel shall deliver, or cause to be delivered, to
MGT a resolution of the Board of Directors of Energtek Israel
approving the purchase of the Shares.
2.2.3. Energtek US shall deliver, or cause to be delivered, to MGT:
(a) a resolution of the Board of Directors approving the
purchase of the Shares by Energtek Israel and the
issuance of the Warrant;
(b) the duly executed Warrant issued in the name of MGT.
3. Representations and Warranties of MGT
MGT represents and warrants that the following statements are true and
correct as of the date hereof:
3.1 The registered share capital of Gatal consists of NIS 1,000,000
divided into 1,000,000 ordinary shares, nominal value NIS 1 per
share, of which 100 (one hundred) ordinary shares are held by MGT.
The Shares constitute one hundred percent (100%) of the issued and
outstanding shares of capital stock of Gatal. The Shares have been
duly authorized and validly issued, are fully paid and
non-assessable, and have been issued in compliance with all
pertinent laws and other legal requirements. The shares are owned by
Gatal, free and clear of all Liens (hereafter defined).
3.2 A copy of Gatal's Articles of Association (the "Articles of
Association") and Certificate of Incorporation as in effect are
attached hereto as Schedule 3.2. Gatal is a company organized,
validly existing and in good standing under the laws of Israel, with
full corporate power and authority to conduct its business as it is
now being conducted.
3.3 All corporate action on the part of MGT and Gatal necessary for: (i)
the due authorization, execution and delivery of this Agreement,
(ii) the performance of all obligations of MGT hereunder and (iii)
the authorization, issuance, sale and delivery of the Shares has
been taken or will be taken prior to or upon the Closing.
3.4 To the knowledge of MGT, except as set forth in Schedule 3.4, in
this Agreement and in the Articles of Association, Gatal is not a
party or subject to any agreement or understanding with respect to
any securities of Gatal and there are no outstanding options,
warrants, convertible securities, rights (including registration
rights, voting rights, conversion or preemptive rights and rights of
first refusal), shareholder agreements, or agreements of any kind
for the purchase or acquisition of securities from Gatal or that
relate to the ownership, voting or transfer of any shares of Gatal's
capital stock. Upon the consummation of the transactions
contemplated in this Agreement, Energtek Israel will receive good
and marketable title to the Shares, free and clear of all Liens.
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3.5 The Shares, when sold and delivered in accordance with the terms of
this Agreement, will be: (i) duly and validly issued, fully paid and
nonassessable, (ii) free and clear of any liens, mortgages, claims,
charges, security interests, restrictions or encumbrances of any
kind ("Liens"), and (iii) not subject to any rights of first
refusal, preemptive or other third party rights existing prior to
the issuance thereof, except as provided under this Agreement.
3.6 To the knowledge of MGT, there are no liabilities, encumbrances or
obligations of any third party including of MGT to Gatal's assets
whether accrued, absolute or contingent that are not in Gatal's
ordinary course of business except as set forth in Schedule 3.6
attached hereto.
3.7 To the knowledge of MGT, there is no action, suit, claim or
proceeding pending, currently threatened, against Gatal, and MGT is
not aware of any event or circumstance that may form a basis for any
such action, suit, claim, or proceeding that might, either
individually or in the aggregate, have a material adverse effect on
the condition (financial or otherwise), properties, assets,
liabilities, rights, business, prospects or results of operations of
Gatal or could reasonably be expected to have a material adverse
effect on such condition, properties, assets, liabilities, rights,
business, prospects or results of operations (a "Material Adverse
Effect").
3.8 Gatal is not a party or subject to the provisions of any order,
writ, injunction, judgment or decree of any court or government
authority that might, either individually or in the aggregate, have
a Material Adverse Effect on Gatal.
3.9 There is no action, suit, claim or proceeding by Gatal that is
currently pending or that Gatal intends to initiate.
3.10 There is no action, suit, claim or proceeding pending or, to the
knowledge of MGT, threatened, that questions the validity of this
Agreement or the right of MGT to enter into this Agreement, or to
consummate the transactions contemplated hereby.
3.11 To the knowledge of MGT, except as set forth in Schedule 3.11, no
shareholder, officer, or director of the MGT (collectively, an
"Affiliate"), is indebted to Gatal, nor is Gatal indebted to any
such Affiliate. Except as set forth in Schedule 3.11, to MGT's
knowledge, no Affiliate of Gatal (i) has any direct or indirect
interest in any contract to which Gatal is a party or by which it or
its properties may be bound or affected (ii) has any direct or
indirect interest in any entity which transacts business with Gatal,
(iii) has a direct or indirect interest in any property, asset or
right which is used by Gatal in the conduct of its business.
3.12 Financial Statements
3.12.1 Schedule 3.12 attached hereto sets forth a true, correct and
complete copy of the financial statements of Gatal as of, and
for the period ended, 31 December 2006 (the "Financial
Statements").
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3.12.2 The Financial Statements have been prepared in accordance
with United States generally accepted accounting principles,
consistently applied, and fairly present the true and correct
financial position and results of operations of Gatal as of
the dates and for periods set forth therein, and were
prepared in accordance with Gatal's books and records, which
have been maintained in a manner consistent with historical
practice.
3.12.3 Since the date of the Financial Statements, Gatal has
conducted its business in a consistent manner without any
material change in accounting or credit principles, policies
or procedures. Except as set forth on Schedule 3.12.3, since
the date of the Financial Statements, there has been no
material adverse change in the assets, liabilities or
obligations (of any kind and description, whether absolute or
contingent, monetary or non-monetary, direct or indirect,
known or unknown or matured or unmatured, or of any other
nature) or financial condition of Gatal from that reflected
on the Financial Statements other than those changes
occurring in the ordinary course of business subsequent to
such date, which, individually or in the aggregate, are not
material to the business, properties, prospects, operations,
results of operations or condition (financial or otherwise)
of Gatal.
3.13 Schedule 3.13 lists all material contracts, agreements and
obligations, oral or written, to which Gatal is party to or by which
its property is bound (each a "Contract" and collectively the
"Contracts"). Gatal is not in breach of any of its Contracts which
would adversely affect or in the future is reasonably likely to
adversely affect the business, condition (financial or otherwise),
affairs, operations or assets of Gatal.
3.14 No consent, approval, order, license, permit, action by, or
authorization of or from, or filing with, any person or entity or
any governmental authority or agency on the part of Gatal is
required that has not been, or will not have been, obtained by Gatal
prior to the Closing in connection with the valid execution,
delivery and performance of this Agreement.
3.15 MGT is aware that Energtek US is not granting any representation in
respect with the Warrant except as set forth specifically in the
Warrant, as attached hereto as Schedule 1..
3.16 MGT understands that the representations, warranties, covenants and
acknowledgments set forth in this Section 3 constitute a material
inducement to Energtek US and Energtek Israel to enter into this
Agreement.
3.17 No representation, warranty or other statement made by the Seller in
this Agreement contains any untrue statement of material fact or
omits to state a material fact necessary to make any of them, in
light of the circumstances in which it was made, not misleading. The
Seller does not have knowledge of any fact that has specific
application to Gatal (other than general economic or industry
conditions) or the Shares and that may materially adversely affect
Gatal or the Shares or the assets, business, prospects, financial
condition or results of operations of Gatal that has not been set
forth in this Agreement. No event, condition, or other matter, or
any series of events, conditions or other matters, currently exists
that, individually or in the aggregate, adversely affects the Shares
or Gatal's assets, business, prospects, financial condition or
results of its operations that has not been specifically disclosed
to Purchaser in this Agreement.
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4. Representations and Warranties of Energtek US
Energtek US represents and warrants that the following statements are true and
correct as of the date hereof:
4.1 Energtek US has full corporate power and authority to enter into
this Agreement and to carry out the transactions contemplated
hereby. This Agreement has been duly executed and delivered by
Energtek US and is a valid and binding obligation of Energtek US
enforceable in accordance with its terms.
4.2 Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will violate
any provision of the Certificate of Incorporation or Bylaws of
Energtek US or violate, or be in conflict with, or constitute a
default (or an event which, with notice or lapse of time or both,
would constitute a default) under any debt or obligation of Energtek
US or violate any statute or law or any judgment, decree, order,
regulation or rule of any court or governmental authority.
4.3 The Warrant will be duly authorized and validly issued upon Closing.
5. Representations and Warranties of the Energtek Israel
Energtek Israel represents and warrants that the following statements are
true and correct as of the date hereof:
5.1 The Shares are purchased "as is" with no representation or warranty
regarding the Shares and/or regarding Gatal, other than as
specifically set forth herein.
5.2 Energtek Israel has full corporate power and authority to enter into
this Agreement and to carry out the transactions contemplated
hereby. This Agreement has been duly executed and delivered by
Energtek Israel and is a valid and binding obligation of Energtek
Israel enforceable in accordance with its terms.
5.3 Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will violate
any provision of the Articles of Association of Energtek Israel or
violate, or be in conflict with, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute
a default) under any debt or obligation of Energtek Israel or
violate any statute or law or any judgment, decree, order,
regulation or rule of any court or governmental authority.
5.4 Energtek Israel has received and reviewed all the information that
Seller has provided and all the material information that Energtek
Israel has requested. Energtek Israel has had an opportunity to ask
questions and receive answers regarding the Shares and to the extent
requested, received satisfactory answers from MGT.
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6. Miscellaneous
6.1 Survival of Representations, Warranties and Covenants;
Indemnification.
6.1.1 The representations, warranties and covenants of the Parties
contained in or made pursuant to this Agreement will survive
the execution and delivery of this Agreement.
6.1.2 MGT hereby agrees to indemnify and hold harmless Energtek US
and/or Energtek Israel, as applicable, their officers,
directors, shareholders, agents and representatives from and
against any and all claims, demands, losses, damages, expenses
or liabilities (including attorneys' fees) due to or arising
out of a material breach of any representation, warranty or
covenant provided by MGT hereunder, or any undisclosed
liability arising out of the operation of Gatal or its
business or assets prior to the date of the Closing.
6.1.3 Energtek US and Energtek Israel hereby agrees to indemnify and
hold harmless MGT and its officers, directors, shareholders,
agents and representatives from and against any and all
claims, demands, losses, damages, expenses or liabilities
(including attorneys' fees) due to or arising out of a
material breach of any representation, warranty or covenant
provided by the Energtek US and Energtek Israel hereunder.
6.2 Further Actions. Each of the Parties hereto shall, from time to time
after the Closing, upon the request of the other Party hereto, duly
execute, acknowledge and deliver or cause to be duly executed,
acknowledged and delivered, all such further instruments and
documents reasonably requested by the other Party to further
effectuate the intents and purposes of this Agreement.
6.3 Expenses. All legal, accounting and other costs and fees incurred by
any Party hereto in connection with the transaction contemplated by
this Agreement shall be borne and paid by the party incurring same.
6.4 Successors and Assigns. Except as otherwise expressly limited
herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and
administrators of the Parties hereto.
6.5 Entire Agreement; Amendment and Waiver. This Agreement, together
with its Exhibits and Schedules, set forth the entire agreement of
the Parties with respect to the subject matter hereof and supersedes
all prior agreements, contracts, promises, representations,
warranties, statements, arrangements and understandings, if any,
among the Parties hereto or their representatives. No waiver,
modification or amendment of any provision, term or condition hereof
shall be valid unless in writing and signed by the Parties hereto.
6.6 Notices. All notices or other communications required or permitted
hereunder are to be given in writing, and shall be given in person,
by registered mail (registered air mail if mailed internationally),
by an overnight courier service which obtains a receipt to evidence
delivery, or by facsimile transmission or email (provided that
written confirmation of receipt is provided), addressed to each
Party in accordance with this provision:
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if to MGT: MoreGasTech SRL
0 Xxxxx xx xx Xxxx
00000 Xxxxxx -
XXXXXX
Fax: +33-3-5935 0084
if to Energtek US: Energtek Inc.
00 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxx Xxxxxx, Xxx Xxxx 11580
United States of America
Fax: x0 (000) 000-0000
if to Energtek Israel: Energtek Products Ltd.
1 Azrieli Center
Xxxxx Xxxxx, 00 Xxxxx
Xxx Xxxx, 00000, Xxxxxx
Fax: 000-0-0000000
or such other address with respect to a Party as such party shall
notify the other Party in writing as above provided. Any notice sent
in accordance with this Section shall be effective (i) if mailed,
five (5) business days after mailing; (ii) if sent by messenger,
upon delivery, and (iii) if sent by facsimile or email, upon
transmission or if transmitted and received on a non-business day,
on the first business day following transmission.
6.7 Delays or Omissions. No delay or omission to exercise any right,
power, or remedy accruing to any Party upon any breach or default
under this Agreement, shall be deemed a waiver of any other breach
or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any
party of any breach or default under this agreement, or any waiver
on the part of any Party of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the
extent specifically set forth in such writing.
6.8 Severability. If any provision of this Agreement is held by a
competent court to be invalid or unenforceable under applicable law,
then such a provision shall be excluded from this Agreement and the
remainder of this Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance
with its terms; provided, however, that in such an event this
Agreement shall be interpreted so as to give effect, to the greatest
extent consistent with and permitted by applicable law, to the
meaning and intention of the excluded provision as determined by
such court of competent jurisdiction.
6.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and
enforceable against the Parties actually executing such counterpart,
and all of which together shall constitute one and the same
instrument.
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6.10 Governing Law; Jurisdiction. This Agreement shall be governed by and
construed according to the laws of the State of Israel without
regard to principles of conflict of law, and each party hereby
irrevocably submits to the exclusive jurisdiction of the courts in
the City of Tel-Aviv, for the adjudication of any dispute hereunder
or in connection herewith.
IN WITNESS WHEREOF the parties have signed this Share Purchase Agreement as of
the date first hereinabove set forth.
--------------------------- --------------------------- --------------------------
MoreGasTech SRL Energtek Inc. Energtek Products Ltd.
By: _______________ By: _______________ By: _______________
Title: ______________ Title: ______________ Title: ______________
* * *
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Schedule 1.
Class 2007-A Warrant Agreement
(enclose here)
Schedule 3.2
Natural Gas for Israel (Gatal) Ltd.
Articles of Association
(enclose here)
Schedule 3.4
Gatal Ltd. has resolved to reserve for issuance under an ESOP Plan, which shall
be adopted by its Board of Directors, 10 ordinary shares, representing 10% of
the issued and outstanding share capital of Gatal Ltd.
Schedule 3.6
None
Schedule 3.11
See Schedule 3.12
Schedule 3.12
Financial Statements of Gatal
(Copy of the unaudited reports of Gatal to 31.Dec.2006, with specification of
debtors and Creditors)
Schedule 3.12.3
None
Schedule 3.13
1. Verbal agreement with Xxxxxx Xxxxxx for serving as CEO of Gatal.
2. Verbal agreement with Xxxxx Xxxxxxxx for serving as Director and Chairman of
the Board of Gatal
The agreements as reported to the Energtek Israel.
