SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (this "Agreement") is made as of the 18th day
of May, 1999, by and among SCNV ACQUISITION CORP., a Delaware corporation (the
"Purchaser"); Elecmatec Electro-Magnetic Technologies Ltd., and Israeli Company
(the "Company"); and Xx. Xxxxx Xxxxxx, Israeli ID Number 0-0000000-0; and Xx.
Xxxxxx Xxxxxxxx, Israeli ID Number 0-0000000-0 (each a "Selling Shareholder" and
together, the "Selling Shareholders").
WITNESSETH:
WHEREAS, the Selling Shareholders own and desire to sell four thousand
(4,000) Ordinary Shares, nominal value NIS 0.01 each (the "Shares") of the
Company; and
WHEREAS, the Purchaser desires to purchase the Shares on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties hereby agree as follows:
1. Sale and Purchase. Subject to the terms and conditions hereof, at the
Closing, the Selling Shareholders shall sell and transfer to the Purchaser, and
the Purchaser shall purchase from the Selling Shareholders, for an aggregate
purchase price of thirteen thousand, one-hundred and twenty-five US Dollars
($13,125) (the "Purchase Price"), 4,000 Ordinary Shares of the Company, nominal
value NIS 0.01 each.
2. Additional Consideration.
2.1 Qualified Investment. In the event the Company will be successful in
obtaining a Qualified Investment, as defined below, the Purchaser shall pay the
Selling Shareholders an additional sum, as follows: for every dollar raised in
the Qualified Investment, the Purchaser shall pay the Selling Shareholders an
additional sum of $0.0467 (four cents and sixty-seven hundredths of a cent) up
to an aggregate additional sum of $70,000 (seventy thousand US Dollars). For
purposes of this Agreement, the term "Qualified Investment" shall mean the
raising by the Company of an aggregate sum of at least $500,000 (five-hundred
thousand US dollars) in debt or equity financing from person(s) other than the
Purchaser or an Affiliate of the Purchaser; provided however that in the event
of debt financing, an investment shall not be deemed a Qualified Investment if
(i) the Purchaser or an Affiliate of the Purchaser is required to provide a
guarantee in order for the Company to obtain such financing or (ii) as a result
of such debt financing, the pledge of the Company's assets in favor of the
Purchaser pursuant to the Pledge Agreement between the Company and the
Purchaser, dated as of December 30, 1998, as amended, (a copy of which is
attached hereto as Exhibit A), is made inferior to a pledge in favor of such
third party lender, unless the full amount of the Loans, as defined below, is
repaid as a result of such debt financing. For purposes of this Agreement,
"Affiliate" shall mean an entity controlled by, controlling, or under common
control with another entity where control is the power to elect or appoint more
than 50% of the board of directors or other governing body of such entity or the
power to vote more than 50% of the shares of such entity.
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2.2 Earn-Up. Following the full repayment by the Company of the loans
(including profits thereon pursuant to the terms of the Heiterei Iska) obtained,
and to be obtained, by the Company from SCNV pursuant to that certain loan
agreement dated May 18, 1999, between the Company and the Purchaser (a copy of
which is attached hereto as Exhibit B) (the "Loans"), in each calendar quarter
in which the Company (A) obtains positive net income and (B) has overall
retained earnings which would permit the Company to distribute dividends under
the law, SCNV shall pay the Selling Shareholders an amount equal in the
aggregate to 10% of such net income as further consideration for the Shares,
until the total amount of consideration paid by SCNV to the Selling Shareholders
under this Section 2.2 reaches $360,000; provided however, that SCNV shall in no
event be required to pay more than $180,000 to the Selling Shareholders in any
single calendar year.
3. Closing of Sale and Purchase.
3.1 Closing. The sale of the Shares, the purchase thereof by the Purchaser
and the registration of the Shares in the names of the Purchaser in the share
transfer register of the Company, shall take place on the date hereof.
3.2 Transactions at Closing. At the Closing, the following transactions
shall occur, which transactions shall be deemed to take place simultaneously and
no transactions shall be deemed to have been completed or any document delivered
until all such transactions have been completed and all required documents
delivered:
3.2.1 The Selling Shareholders shall deliver to the Purchaser the following
documents:
(a) duly executed share transfer deeds, against payment of the
purchase price therefor in US dollars, and
(b) True and correct copies of resolutions of the Company's Board of
Directors approving the transfer of the Shares from the Selling
Shareholders to the Purchaser;
3.2.2 The Purchaser shall cause the transfer to the Selling Shareholders of
the Purchase Price for the Shares by wire transfer, banker's check, or such
other form of payment as is mutually agreed by the Company and the Purchaser.
4. Representations and Warranties of the Selling Shareholders. Each Selling
Shareholder hereby represents and warrants to the Purchaser as follows:
4.1 Title. Selling Shareholder has good and valid title to the Shares to be
transferred by Selling Shareholder hereunder, free and clear of all liens,
encumbrances, equities or claims, and third party rights of whatever nature, and
upon delivery of such Shares, good and valid title to such shares, free and
clear of all liens, encumbrances, equities or claims, will pass to the
Purchaser.
4.2 Due Issuance. The Shares to be transferred by Selling Shareholder
hereunder have been duly authorized, are validly issued, fully paid and
non-assessable.
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4.3 Authority. The Selling Shareholder has full right, power and authority
to enter into this Agreement; the execution, delivery and performance of this
Agreement by Selling Shareholder and the consummation by Selling Shareholder of
the transactions contemplated hereby will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which Selling Shareholder is a party or by which
Selling Shareholder is bound or to which any of the property or assets of
Selling Shareholder is subject, nor will such actions result in any violation of
any statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over Selling Shareholder; and no consent, approval,
authorization or order of, or filing or registration with any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement by Selling Shareholder and the consummation by
Selling Shareholder of the transactions contemplated hereby.
4.4 Effectiveness; Survival; Indemnification. Each representation and
warranty herein is deemed to be made on the date of this Agreement and at the
Closing, and shall survive and remain in full force and effect after the
Closing. In the event of any material breach or misrepresentation of any
covenant, warranty or representation made by Selling Shareholder under this
Agreement, the Selling Shareholder shall indemnify the Purchaser and hold it
harmless from any and all loss, damage, liability and expense (including
reasonable legal fees and costs) sustained or incurred by the Purchaser as a
result of or in connection with said breach or misrepresentation for an
indefinite period.
5. Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Selling Shareholders as follows:
5.1 Organization. The Purchaser is duly organized, validly existing and in
good standing under the laws of the State of Delaware, and has full corporate
power and authority to own, lease and operate its properties and assets and to
conduct its business as now being conducted. The Purchaser has all requisite
power and authority to execute and deliver this Agreement, and other agreements
contemplated hereby or which are ancillary hereto, and to consummate the
transactions contemplated hereby and thereby.
5.2 Enforceability. Neither the execution and delivery of this Agreement
nor compliance by the Purchaser with the terms and provisions hereof and
thereof, will conflict with, or result in a breach or violation of, any of the
terms, conditions and provisions of: (i) the Purchaser's charter documents, (ii)
any judgment, order, injunction, decree, or ruling of any domestic court or
governmental authority, to which the Purchaser is subject, or (iii) any
agreement, contract, lease, license or commitment to which the Purchaser is a
party. This Agreement, when executed and delivered by the Purchaser, will
constitute the valid, binding and enforceable obligations of the Purchaser.
5.3 Authorization. All corporate action on the part of the Purchaser
necessary for the authorization, execution, delivery, and performance of all of
the Purchaser's obligations under this Agreement has been (or will be) taken
prior to the Closing.
5.4 Loan Agreement. The Purchaser acknowledges that the Selling
Shareholders are in no way guarantors for the repayment of the Loans by the
Company and that the Loans were not made, and will not be made, to the Company
based on any representations or warranties made by the Selling Shareholders.
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5.5 Effectiveness; Survival; Indemnification. Each representation and
warranty herein is deemed to be made on the date of this Agreement and at the
Closing, and shall survive and remain in full force and effect after the
Closing. In the event of any material breach or misrepresentation of any
covenant, warranty or representation made by the Purchaser under this Agreement,
the Purchaser shall indemnify the Selling Shareholders and hold them harmless
from any and all loss, damage, liability and expense (including reasonable legal
fees and costs) sustained or incurred by the Selling Shareholders as a result of
or in connection with said breach or misrepresentation for an indefinite period.
6. Conditions of Closing of the Purchaser. The obligations of the Purchaser
to purchase the Shares and transfer the Purchase Price at the Closing are
subject to the fulfillment at or before the Closing of the following conditions
precedent, any one or more of which may be waived in whole or in part by the
Purchaser, which waiver shall be at the sole discretion of the Purchaser:
6.1 Representations and Warranties. The representations and warranties made
by the Selling Shareholders in this Agreement shall have been true and correct
when made, and shall be true and correct as of the Closing as if made on the
date of the Closing.
6.2 Legal Investment. On the Closing Date, the sale of the Shares shall be
legally permitted by all laws and regulations to which the Company is subject.
6.3 Delivery of Documents. All of the documents to be delivered by the
Selling Shareholders pursuant to Section 3.2.1 shall have been delivered to the
Purchaser.
7. Conditions of Closing of the Selling Shareholders. The Selling
Shareholders' obligations to sell the Shares at the Closing are subject to the
fulfillment at or before the Closing of the following conditions, which may be
waived in whole or in part by the Selling Shareholders, and which waiver shall
be at the sole discretion of the Selling Shareholders:
7.1 Representations and Warranties. The representations and warranties made
by the Purchaser in this Agreement shall have been true and correct when made,
and shall be true and correct as of the date of the Closing.
7.2 Purchase Price. The Purchaser shall have transferred to the Selling
Shareholders the Purchase Price in full.
7.3 Delivery of Documents. The Legal Fees Agreement between the Company and
the Selling Shareholders, attached hereto as Exhibit C, shall have been executed
by the Company and shall have been delivered to the Selling Shareholders. The
Option Grant Letters between the Purchaser and each of the Selling Shareholders,
attached hereto as Exhibits D-1 and D-2, shall have been executed by the
Purchaser and shall have been delivered to the Selling Shareholders.
8. Financial Statements. Until full payment of the amounts set forth in
Section 2.1 and 2.2 above, the Company shall provide the Selling Shareholders on
an annual basis with a copy of its audited financial statements; provided
however, that the failure to provide such financials shall not be deemed a
breach by the Company of this Agreement unless with respect to the final audited
financial statements of any given calendar year the Selling Shareholders notify
the Company that they have not received such financials and the
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Company fails to provide the Selling Shareholders with such financial within the
later of (i) 30 days following the approval of such financial statements by the
Board of Directors of the Company and (ii) 30 days following the receipt of such
notice.
9. Miscellaneous
9.1 Further Assurances. Each of the parties hereto shall perform such
further acts and execute such further documents as may reasonably be necessary
to carry out and give full effect to the provisions of this Agreement and the
intentions of the parties as reflected thereby.
9.2 Governing Law; Jurisdiction. This Agreement shall be governed by and
construed according to the laws of the State of Israel, without regard to the
conflict of laws provisions thereof.
9.3 Successors and Assigns; Assignment. 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. None of the rights, privileges, or obligations set forth in,
arising under, or created by this Agreement may be assigned or transferred
without the prior consent in writing of each party to this Agreement, with the
exception of assignments and transfers from the Purchaser to any other entity
which controls, is controlled by or is under common control with, the Purchaser;
provided in each case that each such transferee or assignee agrees in writing to
be bound by the terms of this Agreement.
9.4 Entire Agreement; Amendment and Waiver. This Agreement and the
Schedules hereto constitute the full and entire understanding and agreement
between the parties with regard to the subject matters hereof and thereof. Any
term of this Agreement may be amended and the observance of any term hereof may
be waived (either prospectively or retroactively and either generally or in a
particular instance) only with the written consent of all of the Company and the
Purchaser.
9.5 Notices, etc. All notices and other communications required or
permitted hereunder to be given to a party to this Agreement shall be in writing
and shall be telecopied or mailed by registered or certified mail, postage
prepaid, or otherwise delivered by hand or by messenger, addressed to such
party's address as set forth below or at such other address as the party shall
have furnished to each other party in writing in accordance with this provision:
if to the Purchaser: SCNV Acquisition Corp.
c/o Solmecs (Israel) Ltd.
Attn.: Chief Executive Officer
Omer Industrial Park
Omer, Israel
if to the Company: Elecmatec Electro-Magnetic Technologies Ltd.
Attn: Chief Executive Officer
Omer Industrial Park
Omer, Israel
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if to Xx. Xxxxx Xxxxxx: Xxxxxx Xxxxx Xxxxxx &
Xxxxxx Law Xxxxxxx
0 Xxxxxx Xxxxxx Xx.
Xxx Xxxx 00000
Israel
if to Xx. Xxxxxx Xxxxxxxx Xx. Xxxxxx Xxxxxxxx, Law
Office & Notary
0 Xxxxxxxx Xx.
Xxx Xxxx
Xxxxxx
or such other address with respect to a party as such party shall notify each
other party in writing as above provided. Any notice sent in accordance with
this Section 9.5 shall be effective (i) if mailed, seven (7) business days after
mailing, (ii) if sent by messenger, upon delivery, and (iii) if sent via
facsimile, upon transmission and electronic confirmation of receipt or (if
transmitted and received on a non-business day) on the first business day
following transmission and electronic confirmation of receipt.
9.6 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. All remedies, either under
this Agreement or by law or otherwise afforded to any of the parties, shall be
cumulative and not alternative.
9.7 Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to be unenforceable under applicable law, then such
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
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.
9.8 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.
IN WITNESS WHEREOF the parties have signed this Agreement as of the date
first hereinabove set forth.
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SCNV Acquisition Corp. Elecmatec Electro-Magnetic Technologies Ltd.
By: /s/ Xxxxx Xxxxx By: /s/ Arik El-Boher
--------------------- -------------------------
Name: Xxxxx Xxxxx Name: Arik El-Boher
Title: E.V.P. Title: CEO
/s/ Xxxxx Xxxxxx /s/ Xxxxxx Xxxxxxxx
------------------------- -------------------------
Xxxxx Xxxxxx Xxxxxx Xxxxxxxx
