EXHIBIT 10.15
SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (this agreement together with all schedules
thereto: the "AGREEMENT") made as of the 15th day of July, 2004 (the "EFFECTIVE
DATE"), by and among Technoprises Ltd., an Israeli public company of 12 ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, Tel-Aviv (Reg. No. ▇▇▇▇▇▇▇▇▇) ("TECHNOPRISES"), EVR Entertainment
Applications of Virtual Reality (94) Ltd. ("EVR"), an Israeli private company,
of 12 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Tel-Aviv (Reg. No. ▇▇▇▇▇▇▇▇▇), ▇▇▇▇▇▇ Ltd., an Israeli
private company of ▇▇▇▇▇▇▇ 121, Tel-Aviv (Reg. No. ▇▇▇▇▇▇▇▇▇) ("▇▇▇▇▇▇"), and
all of the shareholders of ▇▇▇▇▇▇ listed in SCHEDULE 1 hereto (the
"SHAREHOLDERS" and together with ▇▇▇▇▇▇, the "SELLERS" and each a "SELLER").
W I T N E S S E T H:
WHEREAS, ▇▇▇▇▇▇ is engaged in the development, design and sale of core
technologies in the IP convergent media communication field and the Shareholders
are the owners of all of the outstanding share capital of ▇▇▇▇▇▇, on a fully
diluted basis;
WHEREAS, TECHNOPRISES is a public company traded in the United States,
which is the owner of several cross-media subsidiaries and technologies;
WHEREAS, EVR is a wholly owned subsidiary of TECHNOPRISES engaged in
design and marketing of Broadband access systems ;
WHEREAS, TECHNOPRISES wishes to purchase from the Shareholders and the
Shareholders wish to sell to TECHNOPRISES, through EVR, all of the share capital
of ▇▇▇▇▇▇, on a fully diluted basis, for the consideration and on the terms set
forth herein;
WHEREAS, TECHNOPRISES and the Sellers believe it is in the best of their
interests that the transactions contemplated hereby be consummated;
WHEREAS, TECHNOPRISES and the Sellers desire to make certain
representations, warranties, covenants and other agreements in connection with
the transaction contemplated hereby;
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties hereby agree as follows:
1. SALE AND TRANSFER OF SHARES. Subject to the terms and conditions set forth
herein and against receipt of the consideration set forth herein, the
Shareholders shall sell, transfer, assign, convey and deliver to EVR, and EVR
shall purchase and acquire from the Shareholders, on the Closing Date (as
hereinafter defined), the number of Ordinary Shares, 0.01 NIS par value each of
▇▇▇▇▇▇ (the "▇▇▇▇▇▇ SHARES") set forth opposite the name of such Shareholder in
SCHEDULE 1 hereto under the heading "▇▇▇▇▇▇ Shares" comprising all of the shares
of ▇▇▇▇▇▇ owned by such Shareholder immediately prior to the Closing, free and
clear of all liens, charges, pledges, claims, security interests, mortgages,
adverse claims of ownership or use and/or any other third party right of any
kind, restrictions on transfer, defect of title or other encumbrance of any kind
or character ("LIENS"). The ▇▇▇▇▇▇ Shares will represent 100% (one hundred
percent) of ▇▇▇▇▇▇'▇ issued and outstanding share capital, all on a
fully-diluted basis (the "SHARE CAPITAL") as of the Closing Date
2. CONSIDERATION.
Subject to the terms and conditions set forth herein, in consideration for the
sale, assignment, conveyance, transfer and delivery of the ▇▇▇▇▇▇ Shares being
sold, conveyed, transferred, assigned and delivered to EVR hereunder,
TECHNOPRISES will issue to the Shareholders at the Closing, an aggregate number
of Ordinary Shares non par value each of TECHNOPRISES valued at $2,000,000 (two
million US Dollars) (the "ISSUED SHARES"), determined based on a price per share
of US$0.25 of each Ordinary Share of TECHNOPRISES. The Issued Shares will be
issued to the Shareholders, as shares fully paid up and free of any Liens. Each
Shareholder shall receive such amount of Ordinary Shares of TECHNOPRISES
(representing such percentage of the Issued Shares) as listed besides the name
of each Shareholder in SCHEDULE 1 hereto, under the heading "Issued Shares".
Notwithstanding the above, at the Closing TECHNOPRISES will deduct 3% of the
Issued Shares issuable to each respective Shareholder hereunder and will issue
such shares to the Finders as the ▇▇▇▇▇▇ Commission Shares, all as defined and
set forth in Section 9 below.
3. CLOSING.
3.1 The Closing shall take place, subject to, and no later than five (5)
business days after the satisfaction or waiver of all the conditions set forth
in SECTION 7 hereunder, and in any case no later than 30 days from the Effective
Date, at the offices of ▇▇▇▇▇▇▇ Behar Chen & Co. 3 ▇▇▇▇▇▇ ▇▇▇▇▇▇ Street , Tel
Aviv, or at such other place and/or date as the parties hereto shall mutually
agree. In case a condition to Closing will not be satisfied or waived, the
Closing shall be defer automatically by 15 days. (the actual date on which the
Closing shall occur being referred to herein as the "CLOSING DATE").
3.2 DELIVERY OF ▇▇▇▇▇▇ SHARES AND ISSUANCE OF THE ISSUED SHARES.
3.2.1. Subject to the terms and conditions set forth herein, at the Closing,
▇▇▇▇▇▇ and the Shareholders shall deliver to EVR a certificate registered in
EVR's name representing all the ▇▇▇▇▇▇ Shares free and clear of any Liens,
accompanied by share transfer deeds, in a form satisfactory to EVR duly signed
by each Shareholder.
3.2.2. Subject to the terms and conditions set forth herein, in consideration
for the sale, assignment, conveyance, transfer and delivery of the ▇▇▇▇▇▇ Shares
being sold, conveyed, transferred, assigned and delivered hereunder: (i)
TECHNOPRISES will issue to the Shareholders at the Closing, the Issued Shares
minus the ▇▇▇▇▇▇ Commission Shares (as defined in Section 9 below), as shares
fully paid and registered in the name of the Shareholders. Each Shareholder
shall receive such amount of Ordinary Shares of TECHNOPRISES (and representing
such percentage of the Issued Shares) as listed by the name of each Shareholder
in SCHEDULE 1, under the heading "Issued Shares" (from which the number of
▇▇▇▇▇▇ Commission Shares and the Escrow Shares will be deducted on a pro-rata
basis); (ii) TECHNOPRISES will issue the Esrow Shares to the Escrow Agent, on
account of the Issued Shares, as set forth in Section 11.7 below; (iii)
TECHNOPRISES will issue the ▇▇▇▇▇▇ Commission Shares to the Finders (in equal
portions) on account of the Issued Shares, as set forth in Section 9 below.
3.2.3. TECHNOPRISES will issue the TECHNOPRISES Commission Shares to the Finders
(in equal portions), as defined and set forth in Section 9 below.
3.2.4. The Sellers, TECHNOPRISES ▇▇▇▇▇▇ and the Escrow Agent will sign and
execute the Escrow Agreement (as defined in Sections 11.7 and 11.8 below).
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4. REPRESENTATIONS AND WARRANTIES OF TECHNOPRISES. TECHNOPRISES and EVR hereby
jointly and severally represent and warrant to the Sellers and acknowledge that
the Sellers are entering into this Agreement in reliance thereon, that(the
"TECHNOPRISES DISCLOSURE SCHEDULE"):
4.1 ORGANIZATION. Each of TECHNOPRISES and EVR is a corporation duly organized
and validly existing under the laws of the State of Israel and has the requisite
corporate power and authority to own or lease all of its assets, to carry on its
business as now conducted and to enter into this Agreement and to consummate the
transactions contemplated hereby and thereby. Each of TECHNOPRISES and EVR has
delivered to the Sellers true, complete and correct copies of its Certificate of
Incorporation and Articles of Association (the "TECHNOPRISES INCORPORATION
DOCUMENTS" and "EVR INCORPORATION DOCUMENTS" respectively), each as amended
through the date hereof. TECHNOPRISES has not taken any action or failed to take
any action, which action or failure would preclude or prevent it from conducting
its business after the Closing in the manner heretofore conducted. TECHNOPRISES
has all franchises, permits, licenses, and any similar authority necessary for
the conduct of its business as now being conducted and as currently proposed to
be conducted by it, the lack of which could have a Material Adverse Effect.
TECHNOPRISES is not in default under any of such franchises, permits, licenses,
or other similar authority.
4.2 AUTHORITY. NO CONFLICTS. All corporate action on the part of each of
TECHNOPRISES and EVR necessary for the authorization, execution, delivery, and
performance of all the of TECHNOPRISES's and EVR's obligations under this
Agreement has been taken (or will be taken prior to the Closing). This
Agreement, when executed and delivered by or on behalf of TECHNOPRISES and EVR,
shall constitute the valid and legally binding obligation of TECHNOPRISES and
EVR, legally enforceable against it in accordance with its terms. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ was given the authority to sign this agreement and all ancillary
documents required for its implementation, on TECHNOPRISES and EVR's behalf, and
their signature on this Agreement is binding upon TECHNOPRISES and EVR. No
consent, approval, order, license, permit, action by, or authorization of or
designation, declaration, or filing with any governmental entity, or any other
third party on the part of TECHNOPRISES or EVR is required that has not been, or
will not have been, obtained by TECHNOPRISES and EVR prior to the Closing in
connection with the valid execution, delivery and performance of this Agreement.
The execution and delivery of this Agreement do not, and the consummation of the
transactions contemplated by this Agreement and compliance with the provisions
of this Agreement will not, conflict with or result in any violation of or
default under (i) the TECHNOPRISES Incorporation Documents or the EVR
Incorporation Documents, (ii) any loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to TECHNOPRISES or its assets or (iii) any
judgment, writ, order, decree, statute, law, ordinance, rule or regulation
applicable to it.
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4.3 CAPITALIZATION. Immediately prior to Closing, the authorized share capital
of TECHNOPRISES shall consist of 500,000,000 Ordinary Shares, non par value each
(the "TECHNOPRISES SHARES") of which 133,077,010 Ordinary Shares, non par value
each, are issued and outstanding. All outstanding shares of TECHNOPRISES,
including the Issued Shares when issued, are and will be, duly authorized,
validly issued, fully paid and nonassessable and not subject to preemptive
rights. The Issued Shares will be duly authorized, validly issued, fully paid,
nonassessable, and free of any preemptive rights, and will have the rights,
preferences, privileges, and restrictions set forth in the TECHNOPRISES
Articles.. Except as set forth in the TECHNOPRISES Disclosure Schedule, there
are no options, warrants or other forms of securities convertible into shares of
TECHNOPRISES. Except as contemplated by this Agreement, the TECHNOPRISES
Disclosure Schedule and the TECHNOPRISES Incorporation Documents, there are no
preemptive rights, convertible securities, outstanding warrants, options or
other rights to subscribe for, purchase or acquire from TECHNOPRISES any shares
and there are no contracts or binding commitments providing for the issuance of,
or the granting of rights to acquire, any shares of TECHNOPRISES or under which
TECHNOPRISES is, or may become, obligated to issue any of its securities. All
issued and outstanding share capital of TECHNOPRISES has been duly authorized,
and is validly issued and outstanding and fully paid and nonassessable. At the
Closing, the Issued Shares shall be duly authorized, validly issued, fully paid,
nonassessable, and free of any preemptive rights, and will have the rights,
preferences, privileges, and restrictions set forth in the TECHNOPRISES
Articles, and will be free and clear of any Liens and duly registered in the
name of the respective Shareholder in TECHNOPRISES 's Register of Members.
4.4 ASSETS AND LIABILITIES. TECHNOPRISES' major assets and liabilities are
described in the TECHNOPRISES SEC Documents (as defined below).
4.5 CONTRACTS. TECHNOPRISES is not a party to any material contract not
disclosed in the TECHNOPRISES SEC Documents (as defined below).
4.6 LITIGATION. Except as set forth in the TECHNOPRISES SEC Documents, no
action, proceeding or governmental inquiry or investigation is pending or
threatened against TECHNOPRISES or any of its officers, directors, or employees
(in their capacity as such), or against any of TECHNOPRISES's properties, before
any court, arbitration board or tribunal or administrative or other governmental
agency, nor is there any basis for the foregoing. To the best knowledge of
TECHNOPRISES there are no actions pending or threatened involving the prior
employment of any of TECHNOPRISES's employees or use by any of them in
connection with TECHNOPRISES's business of any information, property or
techniques allegedly proprietary to any of their former employers.
SEC DOCUMENTS; FINANCIAL STATEMENTS. Neither this Agreement nor any
certificates made or delivered by TECHNOPRISES in connection herewith contains
any untrue statement. TECHNOPRISES has delivered to the Sellers true, complete
and correct copies of its latest draft of the Registration Statement on Form
F-1, to be filed on July, 2004 (the "F-1 STATEMENT") and other forms filed
subsequently by TECHNOPRISES with the U.S. Securities and Exchange Commission
(the "SEC" and the "TECHNOPRISES SEC DOCUMENTS", respectively). As of their
respective dates, the TECHNOPRISES SEC Documents complied in all material
respects with the requirements of the United States Securities Act of 1933 (the
"SECURITIES ACT") or the United States Exchange Act of 1934 (the "EXCHANGE
ACT"), as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such TECHNOPRISES SEC Documents, and none of the
TECHNOPRISES SEC Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Except to the extent that information contained
in any TECHNOPRISES SEC Document has been revised or superseded by a later-filed
TECHNOPRISES SEC Document filed and publicly available prior to the date of this
Agreement, none of the TECHNOPRISES SEC Documents contains any untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of TECHNOPRISES included in the TECHNOPRISES SEC Documents comply as
to form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with Israeli generally accepted accounting principles
("GAAP") applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto) and fairly present the consolidated
financial position of TECHNOPRISES and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal year-end adjustments).
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4.7 .FULL DISCLOSURE. Neither this Agreement nor any certificates made or
delivered by TECHNOPRISES in connection herewith contains any untrue statement
of a material fact or omits to state a material fact necessary to make the
statements herein or therein not misleading, in view of the circumstances in
which they were made. To TECHNOPRISES's best knowledge, there is no material
fact or information relating to the business, prospects, condition (financial or
otherwise), affairs, operations, or assets of TECHNOPRISES that has not been
disclosed to the Sellers in writing by TECHNOPRISES.
4.8 BROKERS. Other then as set forth in section 9 hereof, no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of TECHNOPRISES.
5. REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇ & THE SELLERS. Each of ▇▇▇▇▇▇ and
the Sellers hereby, jointly and severally, represents and warrants to
TECHNOPRISES, and acknowledges that TECHNOPRISES is entering into this Agreement
in reliance thereon, that except as otherwise set forth in SCHEDULE 5 hereto
(the "▇▇▇▇▇▇ DISCLOSURE SCHEDULE"), as follows:
5.1 ORGANIZATION. ▇▇▇▇▇▇ is duly organized and validly existing under the laws
of the State of Israel, 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 and as currently proposed to be conducted, . ▇▇▇▇▇▇ has all requisite
corporate 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. The Articles of Association of
▇▇▇▇▇▇ as in effect at the Closing are attached hereto as SCHEDULE 5(B) (the
"▇▇▇▇▇▇ ARTICLES"). ▇▇▇▇▇▇ has not taken any action or failed to take any
action, which action or failure would preclude or prevent ▇▇▇▇▇▇ from conducting
its business after the Closing in the manner heretofore conducted. ▇▇▇▇▇▇ has
all franchises, permits, licenses, and any similar authority necessary for the
conduct of its business as now being conducted and as currently proposed to be
conducted by it, the lack of which could have a Material Adverse Effect. ▇▇▇▇▇▇
is not in default under any of such franchises, permits, licenses, or other
similar authority.
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5.2 CAPITALIZATION. ▇▇▇▇▇▇'▇ registered share capital as at the date hereof is
comprised of: 3,600,000 Ordinary Shares and 200,000 Preferred A Shares, 0.01 NIS
par value each. Prior to Closing hereunder all of ▇▇▇▇▇▇'▇ registered Preferred
A Shares (issued and non-issued) shall be converted into Ordinary Shares, so
that ▇▇▇▇▇▇'▇ registered share capital shall be comprised of: 3,800,000 Ordinary
Shares, 0.01 NIS par value each. ▇▇▇▇▇▇'▇ capitalization table, as of the date
of this Agreement, on a Fully Diluted Basis, is attached as ANNEX 5.2(A) hereto
(the "EXISTING CAP TABLE"). Prior to Closing hereunder all of the existing
options, warrants or other forms of securities convertible into shares of ▇▇▇▇▇▇
shall have been exercised or terminated and the issued and outstanding share
capital of ▇▇▇▇▇▇ (on a Fully Diluted Basis) as of the Closing Date shall be as
set forth in the Cap Table attached hereto as exhibit 5.2(B). Except as
contemplated by this Agreement and the ▇▇▇▇▇▇ Articles, there are no preemptive
rights, convertible securities, outstanding warrants, options or other rights to
subscribe for, purchase or acquire from ▇▇▇▇▇▇ any shares and there are no
contracts or binding commitments providing for the issuance of, or the granting
of rights to acquire, any shares of ▇▇▇▇▇▇ or under which ▇▇▇▇▇▇ is, or may
become, obligated to issue any of its securities. All issued and outstanding
share capital of ▇▇▇▇▇▇ has been duly authorized, and is validly issued and
outstanding and fully paid and nonassessable. At the Closing, the ▇▇▇▇▇▇ Shares
shall be duly authorized, validly issued, fully paid, nonassessable, and free of
any preemptive rights, and will have the rights, preferences, privileges, and
restrictions set forth in the ▇▇▇▇▇▇ Articles, and will be free and clear of any
Liens and duly registered in the name of TECHNOPRISES in ▇▇▇▇▇▇'▇ Register of
Members. ▇▇▇▇▇▇ is not under any obligation to register for trading on any
securities exchange any of its currently outstanding securities or any of its
securities which may hereafter be issued. Since its incorporation, there has
been no declaration or payment by ▇▇▇▇▇▇ of dividends, or distribution by ▇▇▇▇▇▇
of any assets of any kind to any of its shareholders in redemption of or as the
purchase price for any of ▇▇▇▇▇▇'▇ securities.
5.3 AUTHORIZATION; NO CONFLICTS. All corporate action on the part of ▇▇▇▇▇▇
necessary for the authorization, execution, delivery, and performance of all
▇▇▇▇▇▇'▇ obligations under this Agreement has been taken (or will be taken prior
to the Closing). This Agreement when executed and delivered by or on behalf of
▇▇▇▇▇▇ shall constitute the valid and legally binding obligations of ▇▇▇▇▇▇,
legally enforceable against it in accordance with its terms. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ were given the authority to sign this Agreement and all
ancillary documents required for its implementation, on ▇▇▇▇▇▇'▇ behalf, and
their signature on this Agreement is binding upon ▇▇▇▇▇▇. No consent, approval,
order, license, permit, action by, or authorization of or designation,
declaration, or filing with any governmental entity on the part of ▇▇▇▇▇▇ is
required that has not been, or will not have been, obtained by ▇▇▇▇▇▇ prior to
the Closing in connection with the valid execution, delivery and performance of
this Agreement. The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated by this Agreement and compliance
with the provisions of this Agreement will not, conflict with or result in any
violation of or default under (i) the ▇▇▇▇▇▇ Articles, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to ▇▇▇▇▇▇ or its
assets or (iii) any judgment, writ, order, decree, statute, law, ordinance, rule
or regulation applicable to them.
5.4 DIRECTORS, OFFICERS. The directors and officers of ▇▇▇▇▇▇ are listed in the
Disclosure Schedule.
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5.5 INTELLECTUAL PROPERTY RIGHTS. [Other than as set forth in the ▇▇▇▇▇▇
Disclosure Schedule], ▇▇▇▇▇▇ owns and has developed, or has obtained the right
to use, free and clear of all Liens, claims, restrictions, third-party rights,
or royalties, all patents, and applications, licenses and rights with respect to
the foregoing, and all trade secrets, including know-how, inventions, designs,
processes, works of authorship, computer programs and technical data and
information, including without limitation, all the items set forth in the ▇▇▇▇▇▇
Disclosure Schedule corresponding to this Section 5.5 (the "INTELLECTUAL
PROPERTY") used and sufficient for use in the conduct of its business as now
conducted and as currently proposed to be conducted immediately following
Closing hereunder without, to the best of ▇▇▇▇▇▇'▇ knowledge after due inquiry,
infringing upon or violating any right, Lien, or claim of others, including
without limitation any shareholder or employee or consultant of ▇▇▇▇▇▇, and past
and present employees and employers of any past or present shareholder or
employee or consultant of ▇▇▇▇▇▇. Except as set forth in the ▇▇▇▇▇▇ Disclosure
Schedule, ▇▇▇▇▇▇ is not obligated or under any liability whatsoever to make any
payments by way of royalties, fees or otherwise to any owner or licensee of, or
other claimant to, any patent, trademark, service ▇▇▇▇, trade name, copyright or
other intangible asset, with respect to the use thereof or in connection with
the conduct of its business as now conducted or as currently proposed to be
conducted immediately following Closing hereunder. Each item of Intellectual
Property owned or used by ▇▇▇▇▇▇ immediately prior to the Closing shall be owned
or available for use by ▇▇▇▇▇▇ on materially identical terms and conditions
immediately subsequent to the Closing hereunder. Any and all Intellectual
Property of any kind, which has been developed and is currently being developed
by any employee of ▇▇▇▇▇▇ in the framework of his employment with ▇▇▇▇▇▇ and
relating to ▇▇▇▇▇▇'▇ business, is and shall be the property solely of the
▇▇▇▇▇▇. ▇▇▇▇▇▇ has taken security measures to protect the secrecy,
confidentiality and value of all the Intellectual Property, which measures are
reasonable and customary in the industry in which ▇▇▇▇▇▇ operates. Except as set
forth in the ▇▇▇▇▇▇ Disclosure Schedule each of ▇▇▇▇▇▇'▇ employees and
consultants, has entered into written agreements with ▇▇▇▇▇▇ assigning to ▇▇▇▇▇▇
all rights in Intellectual Property developed in the course of their employment
or consultancy by ▇▇▇▇▇▇ and each of ▇▇▇▇▇▇'▇ employees and consultants, and
other persons who, either alone or in concert with others, developed, invented,
discovered, derived, programmed or designed the Intellectual Property, or who
has knowledge of or access to information about the Intellectual Property have,
or will have prior to the Closing, entered into written agreements in customary
forms with ▇▇▇▇▇▇ concerning confidentiality. To the best knowledge of ▇▇▇▇▇▇
and the Sellers, no such agreements have been violated by any employee or
consultant, or former employee or consultant, or other person. Except as set
forth in the ▇▇▇▇▇▇ Disclosure Schedule neither ▇▇▇▇▇▇ nor any of the Sellers
have received any communications alleging that ▇▇▇▇▇▇ has violated or by
conducting its business as proposed, would violate, any of the patents,
trademarks, service marks, trade names, copyrights or trade secrets or other
proprietary rights of any other person or entity, nor, to the best knowledge of
▇▇▇▇▇▇ and the Sellers, is there any basis for any such communication. ▇▇▇▇▇▇
Disclosure Schedule contains a status report prepared by ▇▇▇▇▇▇'▇ patent
attorney of all ▇▇▇▇▇▇'▇ Intellectual Property. In respect of each item of
Intellectual Property identified in such report, and without derogating of the
generality of the above representations in this Section: (i) ▇▇▇▇▇▇ possesses
all rights, title, and interest in and to the item, free and clear of any
interest, license, or other restriction; (ii) the item is not subject to any
outstanding injunction, judgment, order, decree, or charge; (iii) no action,
suit, proceeding, hearing, investigation, charge, complaint, claim, or demand is
pending which challenges the legality, validity, enforceability, use, or
ownership of the item and ▇▇▇▇▇▇ was not served with any notice relating to the
intention of any party to commence such actions; and (iv) ▇▇▇▇▇▇ has not agreed
to indemnify any person for or against any interference, infringement,
misappropriation, or other conflict with respect to the item.
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5.6 TITLE TO ASSETS. (i) Except as set forth in the Disclosure Schedule and
except for assets of no significant value, ▇▇▇▇▇▇ is the owner of all its
assets, which such assets are listed in the ▇▇▇▇▇▇ Disclosure Schedule
corresponding to this Section 5.6 and has good and marketable title to all such
assets free and clear of any Liens. ▇▇▇▇▇▇ does not own any tangible or
intangible assets of a material nature other than those set forth in the ▇▇▇▇▇▇
Disclosure Schedule. (ii) Except as set forth in the ▇▇▇▇▇▇ Disclosure Schedule,
the properties and equipment of ▇▇▇▇▇▇ presently being used in the conduct of
its business are substantially in good operating condition and repair, ordinary
wear and tear excepted and are suitable for the purposes used. (iii) ▇▇▇▇▇▇ does
not own any real property. (iv) ▇▇▇▇▇▇ owns or leases all of the assets and
properties, and is a party to all licenses and other agreements, presently used
or necessary to carry on the business or operations of ▇▇▇▇▇▇ as presently
conducted. All leasehold interests relating to real property, machinery,
equipment, vehicles and other personal property are valid and in full force and
effect and enforceable in accordance with their terms and there does not exist
any violation, breach, or default thereof or thereunder.
5.7 ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth in the ▇▇▇▇▇▇
Disclosure Schedule, to ▇▇▇▇▇▇'▇ and the Sellers' best knowledge, there are no
material Liabilities of ▇▇▇▇▇▇, including Liabilities which may arise only after
the Closing and which result from acts, omissions or occurrences of ▇▇▇▇▇▇ or
its officers prior to the Closing, other than: Liabilities for express executory
obligations to be performed after the Closing (other than any express executory
obligations that might arise due to any default or other failure of performance
by ▇▇▇▇▇▇ or its officers prior to the Closing). Prior to Closing hereunder,
▇▇▇▇▇▇ shall have paid up for all of its outstanding Liabilities, so that
▇▇▇▇▇▇'▇ outstanding Liabilities, as of the Closing Date shall include ongoing
Liabilities up to an aggregate amount of $25,000. A list of the outstanding
Liabilities as of Closing Date shall be attached at the Closing as SCHEDULE
7.2.5 hereto. "LIABILITY" or "LIABILITIES" means any liabilities, debts,
obligations or claims of any kind whatsoever whether absolute, accrued or
unaccrued, fixed or contingent, matured or unmatured, asserted or unasserted,
known or unknown, direct or indirect, contingent or otherwise and whether due or
to become due, including without limitation any foreign or domestic tax
liabilities or deferred tax liabilities incurred in respect of or measured by
the ▇▇▇▇▇▇'▇ income, or any other debts, liabilities or obligations relating to
or arising out of any act, omission, transaction, circumstance, sale of goods or
services, state of facts or other condition which occurred or existed on or
before the date hereof, whether or not known, due or payable.
5.8 LEASE. ▇▇▇▇▇▇ leases its offices under a lease agreement, as attached to the
▇▇▇▇▇▇ Disclosure Schedule.
5.9 LOANS & GUARANTEES. ▇▇▇▇▇▇ does not have any outstanding loans nor any
outstanding guarantees.
5.10 CONTRACTS. The ▇▇▇▇▇▇ Disclosure Schedule contains a true and complete list
of all material contracts and agreements to which ▇▇▇▇▇▇ is a party or by which
its property and/or its Intellectual Property is bound. To the best knowledge of
▇▇▇▇▇▇ and the Sellers each of such contracts and agreements is in full force
and effect, and neither ▇▇▇▇▇▇ nor any other party thereto is in breach thereof.
Except as set forth in the Disclosure Schedule, the ▇▇▇▇▇▇ has no employment or
consulting contracts, deferred compensation agreements or bonus, incentive,
profit-sharing, or pension plans currently in force and effect, or any
understanding with respect to any of the foregoing. Except as set forth in this
Agreement and/or the ▇▇▇▇▇▇ Disclosure Schedule neither the execution and
delivery of this Agreement, nor compliance by ▇▇▇▇▇▇ with the terms and
provisions hereof or thereof, will conflict with, or result in a breach or
violation of, any of the terms, conditions and provisions of: (i) ▇▇▇▇▇▇'▇
Memorandum of Association or Articles of Association, or other governing
instruments of the ▇▇▇▇▇▇, (ii) any judgment, order, injunction, decree, or
ruling of any court or governmental authority, domestic or foreign, (iii) any
agreement, contract, lease, license or commitment to which ▇▇▇▇▇▇ is a party or
to which it is subject, or (iv) applicable law. Such execution, delivery and
compliance will not (a) give to others any rights, including rights of
termination, cancellation or acceleration, in or with respect to any agreement,
contract or commitment referred to in this paragraph, or to any of the
properties of ▇▇▇▇▇▇, or (b) otherwise require the consent or approval of any
person, including without limitation, any governmental entity, which consent or
approval has not heretofore been obtained.
8
5.11 LITIGATION. Except as set forth in the ▇▇▇▇▇▇ Disclosure Schedule and to
the Seller's best knowledge, no action, proceeding or governmental inquiry or
investigation is pending or threatened against ▇▇▇▇▇▇ or any of its officers,
directors, or employees (in their capacity as such), or against any of ▇▇▇▇▇▇'▇
properties, before any court, arbitration board or tribunal or administrative or
other governmental agency, nor is there any basis for the foregoing. To the best
knowledge of ▇▇▇▇▇▇ there are no actions pending or threatened involving the
prior employment of any of ▇▇▇▇▇▇'▇ employees or use by any of them in
connection with ▇▇▇▇▇▇'▇ business of any information, property or techniques
allegedly proprietary to any of their former employers.
5.12 INSURANCE. The ▇▇▇▇▇▇ Disclosure Schedule lists the insurance policies
purchased by and currently in force for the benefit of ▇▇▇▇▇▇. To ▇▇▇▇▇▇'▇ and
the Sellers' best knowledge, ▇▇▇▇▇▇ has neither done nor suffered anything to be
done which has materially rendered or might materially render any policies of
insurance taken out by it void or voidable or which might result in a material
increase in premiums; ▇▇▇▇▇▇ has materially complied with all conditions
attached to such policies. To the best of the ▇▇▇▇▇▇'▇ and the Sellers'
knowledge and belief, there are no material claims or circumstances giving rise
to a claim under any of ▇▇▇▇▇▇'▇ insurance policies. To the best of ▇▇▇▇▇▇'▇
knowledge and belief, there are no material claims or circumstances that would
give rise to a refusal to renew the insurance policies issued to ARANEOby the
insurer. 5.13 NO PUBLIC OFFER OF ▇▇▇▇▇▇ SHARES. Neither ▇▇▇▇▇▇ nor anyone acting
on its behalf has offered or will offer securities of ▇▇▇▇▇▇ or any part thereof
or any similar securities for issuance or sale to, or solicit any offer to
acquire any of the same from, anyone so as to make issuance and sale of the
Shares hereunder not exempt from the registration requirements of the Securities
Act of 1933, as amended (the "Securities Act"), the Israeli Securities Law,
1968, or to ▇▇▇▇▇▇'▇ best knowledge other applicable foreign securities law.
5.14 COMPLIANCE WITH LAWS. Except as set forth in the ▇▇▇▇▇▇ Disclosure Schedule
▇▇▇▇▇▇ has complied and is complying with all laws, orders, ordinances, rules
and regulations relating to its properties, business and the operation and
conduct thereof and with all provisions of its documents of incorporation.
5.15 TAXATION. (i) Until the date hereof, ▇▇▇▇▇▇ has duly filed all reports
required by the applicable tax authorities. (ii) ▇▇▇▇▇▇ has at all times and
within the requisite time limits promptly, fully and accurately observed,
performed and complied with all obligations or conditions imposed on it, or to
which any deduction, allowance or relief made, claimed by or afforded to it, was
made subject under any legislation relating to taxation. (iii) All documents and
reports submitted to the tax authorities were in all material respects true,
correct, not misleading and not omitting any information required to be
contained therein, and were submitted as required by law.
9
5.16 FINANCIAL STATEMENTS. (i) The ▇▇▇▇▇▇ Disclosure Schedule contains ▇▇▇▇▇▇'▇
audited financial statements as at December 31, 2003 (the "FINANCIAL
STATEMENTS"). The Financial Statements were prepared in compliance with
generally accepted accounting principles, and were not affected by any
extraordinary, exceptional or non-recurring item, and materially comply with the
requirements of all applicable Israeli regulations. (ii) The Financial
Statements fairly reflect the business situation of ▇▇▇▇▇▇, its properties,
assets and liabilities as at December 31, 2003 and the profit and loss statement
of ▇▇▇▇▇▇ contained in the Financial Statements fairly reflect the result of
▇▇▇▇▇▇'▇ operations during the year ended, at such date. ▇▇▇▇▇▇ and the Sellers
represent that there was no material adverse change in ▇▇▇▇▇▇'▇ situation, as
reflected in the Financial Statements, other than changes resulting from
financing ▇▇▇▇▇▇'▇ on-going operation since December 31, 2003.
5.17 EMPLOYEES. The ▇▇▇▇▇▇ Disclosure Schedule contains true details of ▇▇▇▇▇▇'▇
employees, their duties, date of beginning of their employment, monthly salary
and benefits and a list of all the employment agreements and confidentiality
agreements with such employees. (ii) To the best of the ▇▇▇▇▇▇'▇ knowledge and
except as set forth in the ▇▇▇▇▇▇ Disclosure Schedule neither ▇▇▇▇▇▇ nor any
affiliate of the ▇▇▇▇▇▇ sponsors, maintains, contributes to or is required to
contribute to any pension, welfare, incentive, perquisite, paid time off,
severance or other benefit plan, policy, practice or agreement. (iii) To the
best of the Seller's knowledge and except as set forth in the ▇▇▇▇▇▇ Disclosure
Schedule, there are no facts or circumstances which could, directly or
indirectly, subject ▇▇▇▇▇▇ or any of its affiliates to any liability of any
nature with respect to any pension, welfare, incentive, perquisite, paid time
off, severance or other benefit plan, policy, practice or agreement.
5.18 NO BROKER. Except for the Commission, as set forth in Section 9 below, no
agent or broker or other person acting pursuant to authority given by ▇▇▇▇▇▇ is
entitled to any commission or finders' fee in connection with the transaction
contemplated by this Agreement.
5.19 FULL DISCLOSURE. Neither this Agreement nor any certificates made or
delivered by ▇▇▇▇▇▇ in connection herewith contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
herein or therein not misleading, in view of the circumstances in which they
were made. To the Seller's best knowledge there is no material fact or
information relating to the business, prospects, condition (financial or
otherwise), affairs, operations, or assets of ▇▇▇▇▇▇ that has not been disclosed
to TECHNOPRISES in writing by ▇▇▇▇▇▇ either herein or in the Due Diligence
material provided to TECHNOPRISES.
6. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS. Each
Shareholder hereby represents and warrant to TECHNOPRISES, and acknowledge that
TECHNOPRISES is entering into this Agreement in reliance thereon, as follows:
6.1 AUTHORITY. NO CONFLICTS. Such Shareholder has full legal competence and
capacity and unrestricted power to execute and deliver this Agreement and any
ancillary documents (each a "TRANSACTION DOCUMENT"), and to perform his, her or
its obligations hereunder and thereunder. The execution and delivery by such
Shareholder of this Agreement and each Transaction Document to which such
Shareholder is a party, and the performance by such Shareholder of his, her or
its obligations hereunder and thereunder, have been duly authorized by all
requisite action, and will not violate any provision of law, any order of any
court or other agency of government, any judgment, award or decree or any
provision of any contract or other instrument to which such Shareholder is a
party, or by which such Shareholder is bound, or conflict with, result in a
breach of or constitute a default under any such contract or other instrument.
10
6.2 AUTHORIZATION. This Agreement has been duly executed and delivered by such
Shareholder and, assuming the due authorization, execution and delivery by the
other parties thereto, constitutes, and each other Transaction Document to which
such Shareholder is a party, when executed and delivered by such Shareholder as
contemplated hereby, will constitute, the legal, valid and binding obligations
of such Shareholder, enforceable against such Shareholder in accordance with
their respective terms, except to the extent that its enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally or by general equitable
principles.
6.3 TITLE TO SHARES. Such Shareholder has good and valid title to and is the
lawful holder of record and beneficial owner of the number of ▇▇▇▇▇▇ Shares set
forth opposite the name of such Shareholder in SCHEDULE 1 to this Agreement
under the heading "▇▇▇▇▇▇ Shares" in each case free and clear of any and all
Liens of any nature whatsoever. The delivery by such Shareholder of a share
transfer deed duly executed, to TECHNOPRISES pursuant to Section 3.2 above,
together with a resolution of ▇▇▇▇▇▇'▇ Board of Directors approving such
transfer of shares and registering the transfer in the ▇▇▇▇▇▇'▇ share register,
will transfer legal, good, valid and full title to and the legal and beneficial
ownership of said ▇▇▇▇▇▇ Shares, free and clear of any Liens of any nature
whatsoever.
6.4 EXPERIENCE; RECEIPT OF INFORMATION; CONSULTATION WITH ADVISERS; REGULATION
S. Except as set forth in the ▇▇▇▇▇▇ Disclosure Schedule each Shareholder is
either (i) an "Accredited Investor" as such term is defined in Rule 501 of
Regulation D promulgated under the Securities Act or (ii) not a U.S. Person as
such term is defined in Regulation S promulgated under the Securities Act and at
the time the offer and buy order for the Issued Shares was originated,
including, without limitation, at the time the Shareholder executed and
delivered this Agreement and otherwise agreed to purchase the Issued Shares, it
was located outside the United States. Each Shareholder has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks relating to acquiring the Issued Shares and, by reason of such
Shareholder's financial and business experience, the Shareholder has the
capacity to protect its interest in connection with the acquisition of such
Issued Shares. Each Shareholder understands that its acquisition of such Issued
Shares involves a high degree of risk. Without prejudice to the representations
and warranties of TECHNOPRISES, each Shareholder and its counsel have been
afforded the opportunity to ask questions and otherwise conduct a due diligence
inquiry. In making its decision to receive the Issued Shares as consideration
for the ▇▇▇▇▇▇ Shares, such Shareholder has relied upon review of data and
information filed by TECHNOPRISES with the SEC as well as all the other
documents and information regarding TECHNOPRISES, which the Sellers have
requested. Each Shareholder has had the opportunity to review with its own tax
advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated hereunder. It understands that it
(and not TECHNOPRISES) shall be responsible for its own tax liability that may
arise as a result of the transactions contemplated hereunder..
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6.5 ACQUISITION FOR OWN ACCOUNT, ETC. Each Shareholder is acquiring the Issued
Shares for its own account for investment and not with a view to the resale,
transfer or distribution thereof, nor with any intention of distributing any
Issued Shares. No other person will have any direct or indirect beneficial
interest in the Issued Shares acquired by the Shareholder at the Closing. The
Shareholder is not organized for the specific purpose of acquiring the Issued
Shares to be issued at the Closing. Subject to and without derogating from the
provisions of section 8 Below, each Shareholder understands that, in connection
with the acquisition of the Issued Shares as contemplated herein, the Issued
Shares have not yet been registered under the Securities Act or registered or
qualified under the securities laws of any U.S. state or other jurisdiction, in
each case by reason of specific exemptions from the registration provisions of
the Securities Act and the securities laws of such states or other
jurisdictions, the availability of which depend upon, among other things, the
bona fide nature of the investment intent and the accuracy of the Shareholder's
representations as expressed herein and in response to the Shareholder's
inquiries, if any.
6.6 RESTRICTED SECURITIES. Subject to section 8, each Shareholder understands
that the Issued Shares are and will be "restricted securities" under the
Securities Act in that such securities will be acquired from TECHNOPRISES in a
transaction not involving a public offering under the Securities Act, and that
under U.S. federal and state laws and applicable regulations, such Issued Shares
may be resold without registration under the Securities Act only in certain
limited circumstances and that otherwise such securities must be held
indefinitely. In this regard, Shareholder understands the resale limitations
imposed by the Securities Act and is familiar with SEC Rule 144, as presently in
effect, and the conditions which must be met in order for that Rule to be
available for resale of "restricted securities".
6.7 BROKERS. Except for the Commission, as set forth in Section 9 below, no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated hereby
based upon arrangements made by or on behalf of such Shareholder.
7. CONDITIONS PRECEDENT TO CLOSING.
7.1 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF EACH PARTY. The obligations of
the parties hereto to consummate the transactions contemplated by this Agreement
are subject to the satisfaction or, if permitted by applicable law, waiver of
the following conditions:
7.1.1. no court of competent jurisdiction shall have issued or entered any
order, writ, injunction or decree, and no other governmental entity shall have
issued any order, which is then in effect and has the effect of making the
transactions contemplated hereby illegal or otherwise prohibiting their
consummation;
7.1.2. the parties shall have timely obtained from each relevant governmental
entity all approvals, waivers and consents, if any, necessary for consummation
of, or in connection with, the transactions contemplated hereby;
7.1.3. All corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be in a form and substance reasonably satisfactory to
the parties and their respective counsel, and the parties and their respective
counsel shall have received all such counterpart originals or certified or other
copies of such documents as they may reasonably request.
7.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF TECHNOPRISES. The obligation of
TECHNOPRISES to consummate the transactions contemplated by this Agreement is
subject, at the option of TECHNOPRISES, to the satisfaction at or prior to the
Closing Date of each of the following conditions:
12
7.2.1. REPRESENTATIONS, WARRANTIES AND COVENANTS. (i) The representations and
warranties of ▇▇▇▇▇▇ and the Sellers contained in this Agreement shall be true
and correct in all material respects (except for such representations and
warranties that are qualified by their terms by a reference to materiality,
which representations and warranties as so qualified shall be true in all
respects) on and as of the date of this Agreement and on and as of the Closing
as though such representations and warranties were made on and as of such time,
except for representations and warranties which were made only as of a specific
date, which shall be true and correct in all material respects (except for such
representations and warranties that are qualified by their terms by reference to
materiality which representations and warranties as so qualified shall be true
in all respects) only as of such date, (ii) the Sellers shall have performed and
complied in all material respects with all covenants, obligations and conditions
of this Agreement required to be performed and complied with by them as of the
Closing, and (iii) TECHNOPRISES shall have received officers' certificates,
executed on behalf of ▇▇▇▇▇▇ by duly authorized officers thereof, certifying as
to the accuracy of the matters set forth in clauses (i) and (ii) of this SECTION
7.2.1.
7.2.2. CONVERSION OF PREFERRED A SHARES. All of the Preferred A Shares of
▇▇▇▇▇▇, 0.01 NIS par value each, (whether issued, authorized or outstanding)
shall be converted into Ordinary shares, 0.01 par value each (the "CONVERSION"),
so that the authorized and issued share capital of ▇▇▇▇▇▇ shall be as set forth
in Section 5.2 above.
7.2.3. ADOPTION OF NEW ARTICLES OF ASSOCIATION. The existing Articles of
Association of ▇▇▇▇▇▇ will be replaced with new Articles of Association in the
form attached as SCHEDULE 7.2.3 hereto (the "NEW ARTICLES").
7.2.4. TERMINATION OR EXERCISE OF OPTIONS. All of the options, warrants or other
forms of securities convertible or exercisable into shares of ▇▇▇▇▇▇ outstanding
at the date hereof and immediately prior to Closing, shall have been exercised
or terminated, so that there shall be no person or other entity entitled to
purchase or be allotted with shares of ▇▇▇▇▇▇ and the ▇▇▇▇▇▇ Shares shall
constitute of ▇▇▇▇▇▇'▇ entire share capital on a Fully diluted Basis.
TECHNOPRISES shall have received documents evidencing the termination or
exercise of such options and warrants in a form satisfactory to TECHNOPRISES'
counsel.
7.2.5. LIABILITIES. ▇▇▇▇▇▇ shall have paid up for all of its outstanding debts
and/or liabilities pursuant to any contract or other form of commitment, so that
▇▇▇▇▇▇'▇ outstanding liabilities, as of the Closing Date shall include ongoing
liabilities up to an aggregate amount of $25,000. A list of such outstanding
liabilities shall be attached at the Closing as SCHEDULE 7.2.5 hereto (the
"OUTSTANDING LIABILITIES"). The Outstanding Liabilities shall be increased by up
to US$10,000 for every week by which the Closing is postponed after July 31,
2004 for reasons that are under TECHNOPRISES's control . TECHNOPRISES undertakes
to assume the Outstanding Liabilities at the Closing.
7.2.6. RESIGNATION OF DIRECTORS. ▇▇. ▇▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇ will have submitted
their resignation from ▇▇▇▇▇▇'▇ Board of Directors, effective as of the Closing
Date.
7.2.7. NO MATERIAL ADVERSE EFFECT. From the date hereof until the Closing, there
will have been no Material Adverse Effect in ▇▇▇▇▇▇.
7.2.8. SUPPORTING DOCUMENTS. On or prior to the Closing Date, TECHNOPRISES shall
have received copies of the following supporting documents:
7.2.8.1. resolutions of ▇▇▇▇▇▇'▇ board of directors and shareholders
respectively, approving the Conversion, the adoption of the New Articles and the
transfer of the ▇▇▇▇▇▇ Shares to the Escrow Agent and registering the Escrow
Agent in the ▇▇▇▇▇▇'▇ Register of Members as the holder of all issued and
outstanding shares of the ▇▇▇▇▇▇, in forms satisfactory to TECHNOPRISES and its
counsel, to be attached at the Closing as SCHEDULE 7.2.8.1 HERETO;
13
7.2.8.2. A new Register of Members of ▇▇▇▇▇▇ in which the Escrow Agent shall be
as the holder of all issued and outstanding shares of the ▇▇▇▇▇▇.
7.2.8.3. duly completed notices of transfer regarding the transfer of all the
issued shares of ▇▇▇▇▇▇ as provided above in form and substance acceptable for
immediate filing with the Israeli Registrar of Companies;
7.2.8.4. Technoprises shall have received an opinion from the legal counsel of
▇▇▇▇▇▇, dated as of the Closing, in a form satisfactory to Technoprises, which
will be attached at the Closing as SCHEDULE 7.2.9.4 hereto.
7.3 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLERS. The obligations of
the Sellers to consummate the transactions contemplated by this Agreement are
subject, at the option of the Sellers, to the satisfaction at or prior to the
Closing Date of each of the following conditions:
7.3.1. REPRESENTATIONS, WARRANTIES AND COVENANTS. (i) The representations and
warranties of TECHNOPRISES contained in this Agreement shall be true and correct
in all material respects (except for such representations and warranties that
are qualified by their terms by a reference to materiality, which
representations and warranties as so qualified shall be true in all respects) on
and as of the date of this Agreement and on and as of the Closing as though such
representations and warranties were made on and as of such time, except for
representations and warranties which were made only as of a specific date, which
shall be true and correct in all material respects (except for such
representations and warranties that are qualified by their terms by reference to
materiality which representations and warranties as so qualified shall be true
in all respects) only as of such date, (ii) TECHNOPRISES shall have performed
and complied in all material respects with all covenants, obligations and
conditions of this Agreement required to be performed and complied with by them
as of the Closing, and (iii) the Sellers shall have received officers'
certificates, executed on behalf of TECHNOPRISES by a duly authorized officer
thereof, certifying as to the accuracy of the matters set forth in clauses (i)
and (ii) of this SECTION 7.3.1.
7.3.2. NO MATERIAL ADVERSE EFFECT. From the date hereof until the Closing, there
will have been no Material Adverse Effect in TECHNOPRISES.
7.3.3. SUPPORTING DOCUMENTS. On or prior to the Closing Date, the Sellers shall
have received copies of the following supporting documents:
7.3.3.1. True and correct copies of resolutions of TECHNOPRISES's Board of
Directors issuing and allotting the Issued Shares to the Shareholders and to the
Escrow agent as set forth above, against the transfer of the ▇▇▇▇▇▇ Shares
therefore and registering the Shareholders in TECHNOPRISES's Register of
Members, in a form satisfactory to the Sellers and their counsel, to be attached
hereto as SCHEDULE 7.3.3.1;
7.3.3.2. a duly completed notice of such issuances in form and substance
acceptable for immediate filing with the Israeli Registrar of Companies.
14
7.3.4. PRE RULING. On or prior to the Closing Date the Sellers shall have
received a Pre Ruling from the Israeli Income Tax Authority with respect to the
transaction contemplated hereby to their full satisfaction, provided that
Closing will be effected following the lapse of 30 days from the Effective Date
even if such pre-ruling is not obtained by such date (and provided that the
other Closing conditions have been fulfilled or waived).
8. REGISTRATION. Within 30 days from the date in which the F-1 Statement is
declared effective (the "FILING DATE") TECHNOPRISES shall file a new
registration statement under which it will register the Issued Shares for resale
and distribution under the US Securities Act of 1933 (the "NEW REGISTRATION")
and make best efforts that the New Registration will be declared effective
within 90 days thereafter. Such New Registration shall be executed by
TECHNOPRISES and at its expense. TECHNOPRISES undertakes that the registration
of the Issued Shares will be effective no later then 9 months from the date
hereof. In the event that the registration of the Issued Shares will not be
effective by the lapse of 9 months from the date hereof, the Sellers (by a
resolution of the majority of the Sellers) shall have a right, without
derogating from any other right or remedy that they may have, to terminate this
agreement and the transaction contemplated hereby and to have the ▇▇▇▇▇▇ shares
returned to them. Upon registration the Issued Shares will be free for trade,
and shall not be subject to any lock-up period or other restrictions, except
with respect to 1/20 of the Issued Shares which shall be subject to the Escrow
terms as detailed in section 11.7 and except for any lock-up periods which are
imposed under any mandatory ACC or NASDAQ regulations, provided however that
such mandatory lock-up was not imposed as a result of any act or omission by
TECHNOPRISES or any one on its behalf.
9. COMMISSION. At the Closing the parties will pay MRBID Group LLC and ▇▇▇▇▇▇
▇▇▇▇▇▇ (collectively: the "FINDERS") a finders commission, as follows: (i) 3% of
the Issued Shares will be issued to the Finders (in equal portions, "▇▇▇▇▇▇
COMMISSION SHARES") on account of the Issued Shares due to the Shareholders (on
a pro-rata basis); (ii) TECHNOPRISES will issue to the Finders (in equal
portions) such number of TECHNOPRISES Ordinary Shares equal to 3% of the Issued
Shares, which shall not, for the removal of doubt, be on account of the Issued
Shares (the "TECHNOPRISES COMMISSION SHARES")
10. ADDITIONAL COVENANTS.
10.1 CONSENTS; COOPERATION. The parties shall promptly apply for or otherwise
seek, and use its commercially reasonable efforts to obtain, all consents and
approvals required to be obtained by it for the consummation of the transactions
contemplated hereby.
10.2 NOTICES. Each of the parties shall give prompt notice to the others of (i)
any notice or other communication from any person or entity alleging that the
consent of such person or entity is or may be required in connection with the
transactions contemplated hereby, other than any such consent disclosed in this
Agreement as required by one of the parties hereto; (ii) any notice or other
communication from any governmental entity in connection with the transactions
contemplated hereby; (iii) any actions, suits, claims, investigations or
proceedings commenced or, to its knowledge, threatened against, relating to or
involving or otherwise affecting such party, or that relate to the consummation
of the transactions contemplated hereby; (iv) any change that could reasonably
be expected to have a Material Adverse Effect on such party, or to delay or
impede the ability of such party to perform their respective obligations
pursuant to this Agreement and to effect the consummation of the transactions
contemplated hereby.
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10.3 ACCESS TO INFORMATION. From the date of this Agreement to the Closing Date,
each party shall (i) provide to the other and their representatives access at
reasonable times upon prior notice to its officers, employees, agents,
properties, offices and other facilities and to the books and records thereof,
and (ii) furnish promptly such information concerning its business and personnel
as the other party or its representatives may reasonably request. No
investigation conducted pursuant to this Section 10.3 shall affect or be deemed
to modify any representation or warranty made in this Agreement.
10.4 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.
10.5 CERTAIN TAX MATTERS. Each party will, at its own expense, file all
necessary tax returns and other documentation with respect to all taxes and fees
incurred by it at Closing, as required by applicable law. Any Stamp tax required
to be paid in connection with transaction contemplated hereby shall be borne by
TECHNOPRISES.
10.6 PUBLIC ANNOUNCEMENTS. Until the earlier of termination of this Agreement or
the Closing Date, TECHNOPRISES, on the one hand, and the Sellers, on the other
hand, will consult with each other before issuing any press release or otherwise
making any public statements with respect to the Agreement or the transactions
contemplated hereby and shall not issue any such press release or make any such
public statement that is not approved by the other party, except as may be
required by law or the rules of the NASDAQ over-the-counter bulletin board, in
which case the parties will make reasonable efforts to consult with each other
prior to the making of such public statement.
10.7 LEGEND
Until the registration of the shares in accordance with the provisions of
section 8 above, the share certificate evidencing the Issued Shares shall
bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF (i) AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SAID
ACT OR (ii) AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT."
10.8 EXPENSES. All costs and expenses incurred in connection with this
Agreement, and the transactions contemplated hereby and thereby, shall be paid
by the party incurring such expenses.
11. EFFECTIVENESS; SURVIVAL; INDEMNIFICATION AND ESCROW
11.1 The representations, warranties, covenants and obligations of the Parties,
and the rights and remedies that may be exercised by the Parties, shall not be
limited or otherwise affected by or as a result of any information furnished to,
or any investigation made by or knowledge of, any of the Parties or any of their
representatives.
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11.2 Subject to Section 11.4, during a period of 24 months from the date hereof,
each of the Parties to this Agreement shall indemnify and hold the other party
and each of their directors, officers, employees, affiliates, agents, successors
and assigns, harmless from any and all claims, liabilities, obligations, damages
or expenses (including, but without limitation, reasonable attorney's fees)
arising out of a breach of the representations and warranties and covenants made
by such Party, which is contained in this Agreement or any breach or
non-fulfillment of, or any failure to perform, any of the covenants or
undertaking of such party which are contained in or made pursuant to this
Agreement ("INDEMNIFICATION EVENT").
If a Third-Party Claim is made against ▇▇▇▇▇▇ that may subject the Sellers
to the above indemnification, the Sellers will be entitled to participate in the
defense thereof and, to assume the defense thereof at the Expense of
TECHNOPRISES.
11.3 The liability of each of the Sellers pursuant to this Section 11 shall be
limited in the aggregate to the value of the Issued Shares issued to such Seller
at the Closing, provided however that such limitation shall not apply if a Party
made the representation or warranty upon intentional misrepresentation or fraud.
The liability of TECHNOPRISES and EVR pursuant to this Section 11 shall be
limited in the aggregate to the value of the Issued Shares issued by
TECHNOPRISES to the Sellers in, provided however that such limitation shall not
apply if TECHNOPRISES or EVR made the representation or warranty upon
intentional misrepresentation or fraud.
11.4 The Parties (or any of them) shall not bring any claim, or series of claims
for monetary compensation under this Section 11 unless the damages claimed in
accordance therewith are at least twenty five thousand U.S. dollars US$ 25,000,
or, in the case of several damages, none of which individually amounts to twenty
five thousand U.S. dollars (US$ 25,000), the aggregate damages claimed in
accordance therewith are at least twenty five thousand U.S. dollars (US$
25,000).
11.5 With the exception of claims based upon intentional misrepresentation or
fraud, the remedy under this Section 11, shall be the sole and exclusive remedy
of the Parties for any inaccuracy or breach in any representation or warranty
contained in this Agreement or any indemnification required hereunder.
11.6 Each of the Shareholders agrees that he, she or it is, subject to the
limitations set forth in Sections 11.1 and 11.5 above, severally on a pro-rata
basis with the other Shareholders, liable for any breach of any covenant,
representation or warranty of the Sellers.
11.7 In order to secure ▇▇▇▇▇▇'▇ and the Sellers' representations and warranties
hereunder it is recorded and agreed that at the Closing 1/20 of the Issued
Shares (1/20 of the shares issuable to each respective Seller) shall be issued
to and deposited with an escrow agent, who's identity will be mutually
determined by the parties prior to the Closing (the "ESCROW AGENT"), who will
hold such shares in Escrow for the Sellers for a period of twelve months under
the terms of an Escrow Agreement which will be mutually agreed by the parties
and the Escrow Agreement prior to Closing (the "ESCROW AGREEMENT"), which will
be signed and executed at the closing hereunder.
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11.8 In order to secure TECHNOPRISES's representations and warranties and
covenants hereunder (and the undertaking to register the Issued Shares in
particular) it is recorded and agreed that at the Closing, the ▇▇▇▇▇▇ Shares
shall be deposited with the Escrow Agent, who will hold such shares in Escrow
for TECHNOPRISES for a period of twelve months or until the registration of the
Issued Shares in accordance with section 8 above (the earlier of the two) (the
"ESCROW PERIOD") under the terms of the Escrow Agreement, which shall include a
prohibition on taking any of the following actions without the consent of the
majority of the Sellers: (1) the disposition or transfer of any of ▇▇▇▇▇▇ 's
major assets (other than in connection with licenses and/or other transactions
in the ordinary course of business); and (2) the voluntary liquidation of
▇▇▇▇▇▇; and (3) create (or increase) material liability for ▇▇▇▇▇▇ (other than
in the ordinary course of business).
During the Escrow Period, TECHNOPRISES's shall furnish the Sellers with
reasonable information about ▇▇▇▇▇▇ as shall be requested by the Sellers from
time to time, including without limitation any financial statements of ▇▇▇▇▇▇
and the Sellers shall have unlimited access to any information relating to
▇▇▇▇▇▇. In addition, the Sellers shall have the right to appoint one observer to
▇▇▇▇▇▇ 's board of director. Such observer shall have the right to participate
in, and shall be invited to, every meeting (or resolution) of the board of
directors of ▇▇▇▇▇▇ and any committee thereof.
Subject to the said restrictions, terms and conditions, TECHNOPRISES shall
act as the sole shareholder of ▇▇▇▇▇▇ for all purposes and shall manage ▇▇▇▇▇▇
during the Escrow Period.
12. MISCELLANEOUS
12.1 INTERPRETATION. The preamble, Schedules and Exhibits hereto constitute an
integral part hereof. The headings of the sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
12.2 EFFECTIVENESS; SURVIVAL. Each representation and warranty in this Agreement
is deemed to be made on the date of this Agreement and at the Closing Date, and
shall survive and remain in full force and effect after the Closing Date.
12.3 GOVERNING LAW; ARBITRATION. 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.
The parties shall endeavor to equitably settle any dispute, which may arise
between them under or in connection to this Agreement. If and to the extent that
such disputes shall not be so amicably resolved within thirty (30) days from the
date the dispute was brought to the attention of all the parties hereunder the
dispute shall be referred to a single arbitrator which identity shall be
mutually agreed by the parties within such thirty (30) day period (hereinafter
"THE ARBITRATOR"). If the parties shall not be able to reach an agreement in
relation to the identity of the Arbitrator within such thirty (30) days period,
than, upon the written request of either party, the identity of such arbitrator
shall be jointly determined by Adv. E. Arad of Bach, Arad, ▇▇▇▇▇▇ & Co. (or in
his absence, another senior partner in such firm) - on behalf of Technoprises
and EVR and Adv. Atir Harduf-▇▇▇▇▇ of ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ & Co. (or in his
absence, a senior partner of such firm) - on behalf of the Seller, within
additional five (5) days. The Arbitrator shall be bound to reason his decision
and the arbitration shall be subject to the substantive law (but not to rules of
procedure and evidence).
12.4
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12.5 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, beneficiaries and
administrators of the parties hereto.
12.6 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 parties to this Agreement.
12.7 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 TECHNOPRISES: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇, President
-
Phone: ▇▇▇-▇-▇▇▇▇▇▇▇
Fax: ▇▇▇-▇-▇▇▇▇▇▇▇
With a copy to:
Bach, Arad, ▇▇▇▇▇▇ & Co.
▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇-▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇, Adv.
Phone: ▇▇▇-▇-▇▇▇▇▇▇▇
Fax: ▇▇▇-▇-▇▇▇▇▇▇▇
If to the Sellers: At the address set forth next to such
sellers name in Schedule 1
With a copy to:
Fischer, Behar, Chen & Co.
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇, Adv.
Phone: ▇▇▇-▇-▇▇▇▇▇▇▇
Fax: ▇▇▇-▇-▇▇▇▇▇▇▇
if to any Shareholder, to the address appearing under the name
of such Shareholder in SCHEDULE 1 hereto;
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 12.7 shall be
effective (i) if mailed, seven (7) business days after
mailing, (ii) if sent by messenger, upon delivery, and (iii)
if sent via telecopier, 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 (PROVIDED,
HOWEVER, that any notice of change of address shall only be
valid upon receipt).
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12.8 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.
12.9 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.
12.10 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.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF the parties have signed this Share Purchase Agreement
as of the date first hereinabove set forth.
TECHNOPRISES LTD. EVR APPLICATIONS OF ▇▇▇▇▇▇ LTD.
VIRTUAL REALITY (94) LTD.
By: __________________
By: ____________________
By: ________________
Name: ________________
Name: __________________
Name: ______________
Title: _______________
Title: _________________
Title: _____________
[▇▇▇▇▇▇ Shareholders - insert signature places for each shareholder.]
By: ___________________
Name: _________________
Title: ________________
[Signature page of Share Purchase Agreement]
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