Exhibit 4.1
PURCHASE AND ASSIGNMENT AGREEMENT
By and Between
I.I.S. INTELLIGENT INFORMATION SYSTEMS LTD.
a company incorporated under the laws of the State of Israel
of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇
(hereinafter "Buyer") of the first part
and
EASTEK EMBEDDED SYSTEMS (MEITAV) LTD.
a company incorporated under the laws of the State of Israel
of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇, ▇▇▇▇▇▇
(hereinafter "Seller") of the second part
and
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
an Israeli citizen and resident (I.D. No. 53486619)
of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇'▇▇, ▇▇▇▇▇▇
(hereinafter "Founder") of the third part
WHEREAS Seller wishes to sell, assign and transfer to Buyer all the material
activities, assets and rights, and certain obligations of Seller in
the Business (as defined below); and
WHEREAS Buyer wishes to purchase and obtain by assignment from Seller the
Business, all in accordance with the terms and conditions set forth
hereinbelow;
NOW, THEREFORE, the parties do hereby stipulate, affirm and agree as follows:
1. Preamble and Appendices
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1.1 The preamble to this Agreement and the appendices attached hereto
constitute integral parts hereof.
1.2 The headings used in this Agreement are for convenience of reference only
and do not constitute a part of this Agreement and will not be deemed to
limit, characterize or in any way affect any provision of this Agreement.
2. Definitions
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2.1 Unless otherwise specifically stated herein, for the purpose of this
Agreement each of the following terms shall have the respective meaning
ascribed to it below.
2.2 The term "Business" means all the material activities, assets and rights,
and the Assumed Liabilities of the Seller in the field of software tools
for testing adapters and storage devices, text- to-speech software engine,
products for blind and visually impaired persons and performance of
software development projects.
2.3 The term "Agreements" means those agreements (also including insurance
policies, purchase orders and other documents which create rights or
obligations) listed in Appendix 2.3 hereto.
2.4 The term "Assumed Liabilities" means those liabilities of Seller pertaining
to the Business that are specified in Appendix 2.4 hereto, which are to be
assigned to and assumed by Buyer.
The Assumed Liabilities include, among other things, service obligations
towards clients who purchased products and services from Seller - to the
extent expressly specified in Appendix 2.4 hereto.
2.5 The term "Tangible Assets" means materials, stocks of any kind, equipment,
tools, utensils, apparatus and appliances as detailed in Appendix 2.5
hereto.
2.6 The term "Technology" means the technology, know- how, inventions,
developments, software, customer lists and customer information and any
other documentation and electronic media which are owned or used by Seller
and/or Founder, or are accessible or licensed to them, with regard to the
Business. A list and a short description of all the licensing agreements to
which Eastek is a party is attached as Appendix 2.6 hereto.
2.7 The term "Proprietary Rights" means any and all intellectual property
rights (such as patent applications, patents, copyrights, designs, trade
secrets, trade marks and names, brand names, domain names etc.) and moral
rights owned and/or used by Seller and Founder relating to the Technology
and the Business, including among all other things the knowhow and rights
under the agreement between Eastek and Prof. Uzi Ornan. To avoid doubts, to
date Seller and Founder do not own and have not applied for any patents or
designs with regard to the Technology and the Business.
2.8 The term "Goodwill" means the goodwill of the Business and the goodwill of
the Founder with regard to the Business.
2.9 The terms "Assets" means the Tangible Assets, the Technology, the
Proprietary Rights and the Goodwill.
2.10 The term "Financial Reports" means the audited financial reports of Seller
as of 31 December 1999 and the year then ended, and the reviewed financial
reports as of 30 September 2000 and the period then ended.
2.11 The term "Closing" means the closing of the transaction hereunder.
3. Representations and Warranties by Seller and Founder
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3.1 Seller and Founder, jointly and severally, hereby represent and warrant to
Buyer as set forth below.
3.2 Seller is the exclusive owner of the Assets and any other rights pertaining
to the Business, free and clear of all liens, encumbrances, payment
obligations and claims and rights of third parties, except the Assumed
Liabilities and subject to the provisions of section 3.3.3 below.
The Founder confirms that he has assigned to Seller, prior to the date of
this Agreement, all his interest and/or title in any of the Assets, and
especially in the Proprietary Rights.
3.3 3.3.1 Seller and/or Founder have developed the Technology and the
Proprietary Rights independently of any proprietary knowhow or
rights of third parties (unless in the public domain or properly
licensed to Seller).
3.3.2 The use, commercialization and utilization of the Technology and the
Proprietary Rights do not and will not constitute, create or cause
any infringement or misappropriation of any intellectual property
rights of third parties.
No such claim of infringement or misappropriation pertaining to
the Business has been made nor, to the best knowledge of Founder
and Seller, is threatened against Seller or Founder.
3.3.3 The foregoing provisions notwithstanding, certain elements of the
Technology are not owned by Seller and Founder. However, such
elements are in the public domain or are covered by off-the-shelf
licenses granted to Seller and assignable by it. Furthermore,
certain elements of the Technology are subject to the agreement
between the Seller and Prof. Uzi Ornan (which agreement was
presented to Buyer and is included in the list of Agreements in
Appendix 2.3).
3.3.4 Seller is not obligated or under any liability to make payments by
way of royalties, fees or otherwise to any third party with respect
to the use of the Technology and present and planned operations of
the Business, except as included in the Assumed Liabilities.
3.3.5 The Proprietary Rights and the Technology, together with public
domain and licensed elements, comprise all of the intellectual
property which is used or necessary with regard to the Business as
conducted and as contemplated to be conducted. Seller has a valid
right to use the licensed elements of the Technology for the
Business as conducted and as contemplated to be conducted.
3.4 The list of Tangible Assets in Appendix 2.5 hereto comprises all of the
tangible assets of the Seller. All the Tangible Assets are in operable and
useable condition, and are fully insured.
3.5 The list of Agreements in Appendix 2.3 hereto comprises all the agreements
of Seller and Founder pertaining to the Business. The Agreements are in
full force and effect, were not infringed by the Seller nor - to the best
knowledge of Seller and Founder - by the other parties to
the Agreements.
3.6 The total exposure under the Assumed Liabilities is not and shall not be
higher - in the aggregate - than NIS 600,000. Should the Assumed
Liabilities and aggregate amounts which Buyer is required to pay to third
parties consequent to the purchase of the Business (including, without
limitation, payment of royalties, commissions, profit sharing, revenue
sharing etc. related to or arising from the sale of products or knowhow
and the grant of licenses) exceed the sum of NIS 600,000; the Seller and
the Founder - jointly and severally - will either pay the excess sum
directly to the entitled party/ies or reimburse the Buyer for such
payment.
3.7 The Financial Reports were prepared in accordance with Israeli accounting
standards and principles consistently applied, and they show and describe
all the assets, liabilities (including future and contingent liabilities)
and results of operations of the Seller. Since the last Financial Report
date, no material change occurred in the value of the assets and
liabilities and/or in the operations of the Business.
3.8 Seller is the employer of the employees listed in Appendix 3.8 hereto,
which are all the employees of the Business. The full terms of employment
of all such employees are as detailed in Appendix 3.8 hereto. All
obligations towards the employees and/or related to their employment up to
the date of the Closing (including, among others, severance payments,
pension payments, sick days, vacation days and all others), were either
paid in full or are covered by monies deposited in appropriate funds, or
will be made and deposited prior to the Closing, unless they are included
in the Assumed Liabilities.
3.9 The Founder is the holder and owner of the entire share capital of the
Seller. Except for the Founder, no other person or entity is entitled to
shares or has the right to purchase shares in Seller.
3.10 Seller and Founder have all requisite power and authority to execute,
deliver and perform this Agreement. All necessary corporate proceedings of
Seller have been duly taken to authorize the execution, delivery and
performance of this Agreement by Seller. This Agreement is the legal,
valid and binding obligation of Seller and Founder, and is enforceable as
to Founder and Seller in accordance with its terms.
3.11 Neither the execution, delivery or performance of this Agreement nor the
consummation of the transactions contemplated hereby do or will: (a)
conflict with, result in a breach or violation of or constitute (or with
notice or lapse of time or both constitute) a default under the Articles
of Association of Seller or under any law, statute, regulation, order,
judgment or decree applicable to Seller or Founder or under any
instrument, contract or other agreement to which Seller or Founder is a
party or by which Seller or Founder (or any of their properties, assets or
business) is subject or bound, (b) require Seller and Founder to obtain
any authorization, consent, approval, order or waiver from, or to make any
filing with, any court or governmental entity
or agency or to obtain the approval or consent of any other person or
entity.
3.12 There are no actions, suits, proceedings, investigations or claims pending
or, to the best knowledge of Seller and Founder, threatened against or
involving and/or relating to the Assets and/or the Business.
3.13 Seller and Founder have provided to Buyer all information in their
possession or available to them which is relevant to the Assets, the
Assumed Liabilities and the Business.
3.14 Seller and Founder are aware that Buyer is relying on the representations
set forth above.
4. Representations of Buyer
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4.1 Buyer hereby represents and warrants to Seller and Founder as set forth
below.
4.2 Buyer has all requisite power and authority to execute, deliver and
perform this Agreement. All necessary corporate proceedings of Buyer have
been duly taken to authorize the execution, delivery and performance of
this Agreement by Buyer. This Agreement is the legal, valid and binding
obligation of Buyer, and is enforceable as to Buyer in accordance with its
terms.
4.3 Buyer has received the information requested by it, and has reviewed
carefully the Business, the Assets, the Agreements and the Assumed
Liabilities and found them satisfactory to its needs, all subject to the
representations of the Seller and the Founder contained herein. The
Business and the Assets are being sold to Buyer in "As Is" state, but
without prejudice to the representations of Seller and the Founder
contained herein.
4.4 Buyer has the financial, managerial and organizational resources and
ability to carry out its undertakings hereunder.
4.5 Neither the execution, delivery or performance of this Agreement nor the
consummation of the transactions contemplated hereby do or will: (a)
conflict with, result in a breach or violation of or constitute (or with
notice or lapse of time or both constitute) a default under the Articles
of Association of Buyer or under any law, statute, regulation, order,
judgment or decree applicable to Buyer or under any instrument, contract
or other agreement to which Buyer is a party or by which Buyer (or any of
its properties, assets or business) is subject or bound, (b) require Buyer
to obtain any authorization, consent, approval, order or waiver from, or
to make any filing with, any court or governmental entity or agency or to
obtain the approval or consent of any other person or entity.
5. Sale and Assignment
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5.1 Seller hereby irrevocably sells and assigns to Buyer, and Buyer hereby
purchases and receives from Seller, as of the Closing, all right, title
and interest in the Business and the Assets, free and clear of all liens,
encumbrances, payment obligations and claims and rights of third parties
(including any taxation authority), and Buyer further assumes the Assumed
Liabilities; provided however that there is no assumption by Buyer of any
liabilities (including past,
present, future and contingent liabilities) in excess NIS 600,000.
5.2 Seller and Buyer shall cooperate to notify any party to the Agreements
and/or any party which has granted any permit, approval and license, of
the assignment and transfer according to this Agreement, no later than
seven (7) days following the date of execution hereof.
Seller shall obtain the consent of each of the aforementioned third
parties to said assignment, inasmuch as such consent is required according
to any applicable law, regulation or contract.
Without limiting the generality of the foregoing, Seller will submit to
Buyer the consents of ▇▇▇▇. ▇▇▇▇▇, of the company Control and Monitoring
Circuits (MEITAV) Ltd and of the commercial banks to whom Seller is
indebted, to the sale and assignment of the Assets hereunder.
5.3 5.3.1 Seller shall terminate the employment of all those employees
whom Buyer does not wish to employ, and will pay to such employees
all the payments due to them at and as a result of the termination.
5.3.2 The Founder and certain employees acceptable to Buyer (collectively:
the "Transferred Employees") will be employed by Buyer. Seller and
Founder confirm that such employees have agreed to be employed by
Buyer under terms similar to their current terms of employment (as
detailed in Appendix 3.8 hereto), and that Seller and Founder made
no promises to the Transferred Employees with regard to a raise in
their salaries and other benefits subsequent to the Closing. Seller
shall transfer to Buyer all rights relating to monies accrued on
behalf of the Transferred Employees in any severance and/or pension
and/or educational and/or similar fund.
5.4 The Founder confirms his agreement to be employed by Buyer for a period of
at least three years following the Closing. The Buyer and the Founder will
sign and execute a customary employment contract. The salary and benefits
package will be as set forth in that contract.
6. General Obligations
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6.1 Any liabilities and obligations based upon, relating to or resulting from
the rights and assets being sold and assigned pursuant to this Agreement,
including without limitation, payments due to any authority or third
party, to the extent relating to the period prior to the Closing, not
including the Assumed Liabilities, shall be borne and paid solely by
Seller and Founder, regardless of the date such liabilities and
obligations are claimed. Any such liabilities and obligations and payments
which accrue after the Closing shall be borne solely by Buyer, subject to
the provisions of section 3.6 above.
6.2 Each of the parties shall indemnify and hold the other party harmless
against and in respect of any losses, liabilities, obligations, damages,
claims, proceedings, judicial verdicts and decrees, settlements,
assessments, audits, fines and arrears, costs and expenses (including
reasonable
attorneys' fees) arising out of or relating to the breach of such party's
commitments, representations and warranties contained in this Agreement.
7. Consideration for the Business and the Assets
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7.1 In consideration of the Business and the Assets sold and assigned to Buyer
hereunder, Buyer assumes the Assumed Liabilities and will issue to Seller
80,000 shares of its common stock. Buyer confirms that its outstanding
share capital consists only of common stock.
7.2 At the Closing, Buyer will issue two share certificates for the above
shares - one certificate for 60,000 shares and one certificate for 20,000
shares, and will deliver/deposit these certificates as follows:
7.2.1. The first certificate, for 60,000 shares, will be delivered to the
Seller at the Closing.
7.2.2 The second certificate, for 20,000 shares, will be deposited in the
hands of Advocate ▇▇▇▇▇▇ ▇▇▇ (the "Trustee", whose fees and expenses
will be borne and paid by the Seller and/or Founder), and the
Trustee will deliver this certificate to the Seller twelve months
after the Closing - provided that no claims are made by any third
party with regard to the Assets that were sold and assigned to Buyer
hereunder, and provided that Seller and Founder are not in default
hereunder.
7.2.3 Should the Seller not be entitled to receive from the Trustee the
above certificate, such certificate will be returned to Buyer, and
the number of shares covered by such certificate will be deducted
from the total number of the consideration shares specified in
section 7.1 above.
7.3 Buyer will pay the sums of the Assumed Liabilities as they become due - as
detailed in Appendix 2.4 hereto.
7.4 The total value of the transaction hereunder is NIS 600,000 plus the
market value of 80,000 Buyer's shares ("Total value"). VAT will be added
to the Total Value. At the Closing, Seller will submit to Buyer a tax
invoice (HESHBONIT MAS) for the Total Value plus VAT. Buyer will pay the
VAT sum until the 15th day of the month following the Closing month, and
will pay the balance of the invoice by assuming the Assumed Liabilities
and by issuing 80,000 of its shares to the Seller.
8. Closing
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8.1 The Closing will occur within 5 business days after execution of the
Agreement by both parties.
8.2 At the Closing, Seller and Founder shall provide to Buyer all the
following items:
8.2.1 The resolution of Seller's Board of Directors confirming the
execution of this Agreement and the transactions contemplated
hereby, and appointing signatories to sign and execute this
Agreement and all related documents on behalf of Seller.
8.2.2 All the records relating to the Business, the Assets and the Assumed
Liabilities.
8.2.3 A compliance certificate, signed by Seller and the Founder,
confirming the completion of all acts which should have been
completed by Seller and Founder prior to the Closing, and confirming
that all representations of Seller and Founder contained herein are
true and complete as if made on the date of the Closing.
8.2.4 The assignment deeds and the consents as per section 5.2 above.
8.2.5 The consent of the Transferred Employees as per section 5.3.2 above.
8.2.6 A confirmation certificate signed by Seller's legal counsel, and a
confirmation certificate signed by Seller's accountants, in a form
mutually satisfactory.
8.3 At the Closing, Buyer shall provide to Seller and Founder all the
following items:
8.3.1 The resolution of Buyer's Board of Directors confirming the
execution of this Agreement and the transactions contemplated
hereby, and appointing signatories to sign and execute this
Agreement and all related documents on behalf of Seller.
8.3.2 A compliance certificate, signed by Buyer, confirming the completion
of all acts which should have been completed by Buyer prior to the
Closing, and confirming that all representations of Buyer contained
herein are true and complete as if made on the date of the Closing.
8.3.3 The Share Certificates as per section 7.2 above will be deposited
with the Trustee.
8.3.4 A confirmation certificate signed by Buyer's legal counsel, in a
form mutually satisfactory.
8.4 The failure of Seller and Founder to provide the items as per section 8.2
above, and the failure of Buyer to provide the items as per section 8.3
above, within 5 business days after the execution of this Agreement by
both parties, will be deemed a breach of the Agreement.
9. Non Competition
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9.1 Seller undertakes not to compete directly or indirectly anywhere in the
world, whether by itself or by means of a subsidiary, affiliate or
otherwise with the Business. For purposes of this Section 9, subsidiaries
and affiliates shall have the meaning as ascribed to said terms in the
Securities Law, 1968. Seller further agrees not to solicit the transfer of
employees from Buyer to Seller or any third party.
9.2 This section 9 shall apply for a period of five years after the Closing,
or until Seller ceases to be a shareholder of Buyer, whichever the later.
10. Miscellaneous
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10.1 This Agreement constitutes the entire and sole agreement and understanding
between the parties relating to the subject matter hereof, and cancels any
prior understandings or agreements, whether oral or written, concerning
the subject matter hereof.
10.2 This Agreement shall be governed by and construed in accordance with the
laws of the State of
Israel, without giving effect to its conflict of laws provisions, and the
parties hereto consent to the exclusive jurisdiction of the Courts sitting
in the city of Haifa.
10.3 Notices to be served hereunder shall be in writing as hereinafter provided
and shall be served upon the parties at the addresses set forth below.
Notices served by registered or certified mail shall be deemed to have
been received on the fifth business day after postage. Notices served by
fax or e-mail shall be deemed to be in writing and to have been received
on the business day following the day of dispatch thereof.
10.4 No waiver by a party or failure to enforce any of its rights hereunder
shall be construed as a waiver to enforce other rights or the same right
on future occasions. No amendment, modification or waiver of any of the
provisions of this Agreement shall be effective unless made in writing and
signed by the party against whom such amendment, modification or waiver is
sought to be enforced.
10.5 Each party may offset any consideration it may owe any other party hereto
under this or any other agreement, against any indebtedness of the other
party towards the first party.
10.6 After the completion of all the transactions contemplated hereby, Seller
may enter into winding-up proceedings. In such case, Founder will remain
fully responsible for all the undertakings and representations hereunder.
In witness hereof, the parties hereto have executed this Agreement,
on this 30th day of November 2000.
___________________________ _________________________ _______________________
I.I.S. INTELLIGENT INFORMATION EASTEK EMBEDDED SYSTEMS ▇▇▇▇▇ ▇▇▇▇▇▇
SYSTEMS LTD. (MEITAV) LTD.
By: ▇▇▇▇ ▇▇▇▇▇▇▇ By: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: CEO and President Title: CEO and President
Date: November 30, 2000 Date: November 30, 2000 Date: November 30, 2000
LIST OF APPENDICES
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Appendix 2.3 - Agreements
Appendix 2.4 - Assumed Liabilities
Appendix 2.5 - Tangible Assets
Appendix 2.6 - List and short description of all license agreements
Appendix 3.8 - Employees and terms of employment
