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SHARE PURCHASE AGREEMENT
Made and entered into this 5th day of July, 2000
by and between
Newtech Broadwidth Ltd.
a company duly registered under
the laws of the state of Delaware,
(hereinafter: the "Company")
of the first part
and
Xxxxxx Xxxxxxx, Advocate
Xxxxxx Xxxxx & Co, Law Offices
America House.
00, Xxxxx Xxxxxxxx Xxxx.
Xxx-Xxxx
Xxxxxx
As TRUSTEE on behalf of the shareholders
(hereinafter jointly and severally: the "Current Shareholders"
or "CSH")
of the second part
and
Yellowave Corporation
a corporation registered under the
Laws of the State of Nevada
(hereinafter: "YWAV")
11777 Xxx Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
of the third part
WITNESSETH:
WHEREAS the Company is creating and managing a network of TMT
(Technology, Media and Telecom) companies specializing in
broadband applications and the integration of new technologies
offered by interactive XX.XX,
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E.Commerce IP Content, Advertising/Marketing, Enabling
Technologies and the internet economy, including reception of
data and television program channels transmitted by satellite
(ICOM4U) as well as a home server, the X.X.X.X Universal Player
at Home (YOOPYAH), Fast Internet Solutions (FREE).
The Company is the owner and/or integrator of the technologies
for ICOM4U, X.X.X.X Universal Player at Home (YOOPYAH) and Fast
Internet Solutions (FREE). The Company commits itself to bring to
YWAV agreements with NDS, National Semi Conductors Quantum &
Philips.
AND
WHEREAS the Current Shareholders own all of the issued and outstanding
shares of the Company;
AND
WHEREAS YWAV and the CSH deem it desirable and in their respective best
interests for YWAV to acquire from the CSH all of the shares of
the Company, and in consideration to transfer 7,425,000 YWAV
Shares which represent about 75% of the share capital and all
respective rights of YWAV including shares outstanding, and
4,140,000 YWAV Options, as defined hereinbelow, to the CSH, all
upon the terms and conditions set forth herein;
NOW, THEREFORE in consideration of the premises and mutual covenants herein
contained, the Parties agrees as follows:
1. Preamble and Annexes
The preamble to this Agreement and all Annexes attached hereto form an
integral part hereof.
2. Definitions
Capitalized terms, unless otherwise defined herein, shall have the
respective meaning ascribed to them hereunder:
2.1 the "Agreement" --- this Agreement.
2.2 the "Closing"-- the closing of the transaction contemplated
hereunder, as provided in Section 3.3 hereinbelow.
2.3 the "Company's Business" -- creating and managing a network of TMT
(Technology, Media and Telecom) companies specializing in broadband
applications and the integration of new technologies offered by
interactive XX.XX, E.Commerce, IP Content, Advertising/Marketing,
Enabling Technologies and the
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internet economy, including reception of data and television program
channels transmitted by satellite (ICOM4U) as well as a home server, the
X.X.X.X Universal Player at Home (YOOPYAH), and Fast Internet Solutions
(FREE).
2.4 "Companies Law" -- the United States Law.
2.5 "Dollar(s)" or "$" -- United States Dollars.
2.6 "Intellectual Property" -- all registered patents, copyrights,
trademarks, trade names, service marks, designs, logos and
applications thereof, technology, know-how, inventions, trade
secrets, designs, process and technical data and information, or any
other type of proprietary intellectual property rights, if any.
2.7 "Interested Party"-- any interested person within the meaning of
such term under the US Companies Law.
2.8 "Products" products developed by the Company.
2.9 "Securities" -- securities of any kind, including, without
limitation, shares of any class, options, warrants, convertible
debentures or any rights to subscribe for, purchase of otherwise
acquire shares of any class in any manner.
2.10 the "VWAV Shares" -- Shares of YWAV, to be transferred to the CSH
according to the provisions of Sections 3.2 and 3.3 hereinbelow
3. Purchase and Sale of the Company Shares
3.1 Purchase and Sale of Shares
Subject to the terms and conditions of this Agreement, and in
reliance on the representations, warranties and agreements contained
herein, at the Closing, the CSH shall sell, assign, transfer and
deliver to YWAV all of the issued share capital of the Company
(hereinafter: the "Company Shares") and YWAV shall purchase the
Company Shares from the CSH in consideration for the issuance of the
YWAV Shares.
Each of the CSH shall sell YWAV all its Ordinary Shares of the
Company of $ 0.01 par value each (hereinafter: the "Shares").
3.2 Issuance of the YWAV Shares
YWAV will issue to the CSH YWAV Shares on the date of the Closing,
being a total of 7,425,000 (seven million four hundred twenty five
thousands) shares which will represent about 75% of the share
capital and all respective rights of YWAV including shares
outstanding as of the closing, with restrictions of 6 months from
the closing on the transfer of the first 10% of such shares of CSH,
and the balance of 90% of the shares of CSH can be sold after one
year from closing according to regulations imposed by SEC, NASDAQ,
AMEX and NASD. YWAV will issue to the CSH option to acquire
4,140,000 (four million one hundred and forty thousands) shares of
YWAV at prices equal to those Xx. Xxxx Xxxx and Xxx. Xxxxx Xxxxxxxxx
hold as described in Annex A.
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3.3 The Closing
3.3.1 The Closing of the transactions contemplated herein shall take
place at the offices of Xxxxxx Xxxxx & CO Law Offices, on July
15, 2000 at 11:00 a.m., or at such other time and/or place as
may be agreed upon in writing by the Parties
3.3.2 At the Closing -- provided that the Company, YWAV and the
CSH have complied with all their covenants and undertakings
set forth in Sections 8 hereinbelow and in this Section 3, but
subject to the Parties' right to close disregarding any
failure, as Provided under section 3.33 hereunder the
following actions will be taken and shall be considered as
taken simultaneously:
(a) the Company and the CSH shall deliver to YWAV a written
confirmation in the form attached hereto as Annex I confirming
and certifying: (i) that all their representations and
warranties set forth in Sections 4 & 5 are true and correct as
of the Closing, with the same effect as though such
representations and warranties had been made on and as of the
date of the Closing (subject to changes which were notified in
writing to YWAV under Section 8.6 hereinbelow); and (ii) that
the Company and the CSH have performed and complied with all
of their undertakings and obligations set forth under Section
8 herein; (iii) that all authorizations, approvals and
consents as set forth under Section 4.4 hereinbelow were
obtained.
(b) The CSH shall transfer shall of the Company Shares to YWAV,
and shall deliver to YWAV duly executed share transfer deeds
and share certificates in YWAV's name, representing the
Company Shares sold and transferred to YWAV hereunder
(c) The Company shall deliver to YWAV: (i) a true copy of the
corporate approval and authorization of the execution,
delivery and performance by the Company of this Agreement and
the consummation of the transactions contemplated herein,
including the approval of the Board of Directors of the
Company to the sale and transfer of the Company Shares to YWAV
(d) Each of the CSH shall have waived their right of first
refusal, and any other rights (with the exception of the right
to receive the YWAV Shares as specified in Section 3.2 above)
with respect to the execution and implementation of
transactions contemplated hereby, and shall have executed the
letter in the form attached hereto as Annex 2.
(e) YWAV shall deliver to the Company and CSH a written
confirmation in the form attached hereto as Annex 3,
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confirming and certifying: (i) that all its representations
and warranties set forth in Section 7 herein are true and
correct as of the Closing, with the same effect as though such
representations and warranties had been made on and as of the
date of the Closing and (ii) that YWAV has performed and
complied with all of their undertakings and obligations set
forth under Section 8 herein; and (iii) that all required
authorizations, approvals and consents as set forth under
Section 7.4 hereinbelow were obtained.
(f) YWAV shall transfer the YWAV Shares to the CSH, as provided in
Section 3.2 above, and shall deliver to each of the CSH duly
executed share transfer deeds and share certificates in their
names, representing the number of shares transferred to each
of them.
(g) YWAV shall further deliver to the CSH a true copy of the
corporate approval and authorization of the execution,
delivery and performance by YWAV of this Agreement and the
consummation of the transactions contemplated herein,
including the approval of the Board of Directors of YWAV
including the transfer of the YWAV Shares to the CSH, in a
form satisfactory to CSWs counsel.
(h) YWAV shall further deliver to the Company and CSH a copy of a
resolution of a general meeting of YWAV appointing Xxxxxxx
Xxxxxxx as Chairman & CEO, Xxxx Xxxxxxxx, Xxxxxxx Xxx Xxxx,
Xxxxxx Xxxxxxx and Xxxxx Xxxxxxxxx, as directors of YWAV and
letters of resignation from Xxxx Xxxx, Xxxxx Xxxxxxxxx,
Xxxxxxx Xxxxx, Nir Natan, Xxxxxx Xxxxxxxx and Xxxxxx Wiengrood
which provide for their resignation from YWAV's board of
directors, as specified in section 8.9 hereinbelow.
(i) YWAV shall further deliver written notice by YWAV and all
shareholders in YWAV waiving any rights of first refusal or
other similar rights in respect of the transfer of YWAV Shares
by YWAV to the CSH.
3.3.3 Failure to fulfil any of the undertakings and/or covenants
required to be taken at or prior to the Closing, by any of the
Parties hereto, as set forth herein, shall constitute a breach
of the relevant Party, and shall entitle the other Party(ies),
at their sole discretion, without derogating from any other
remedy or relief available to them to: (i) terminate the
Agreement (in case of any material breach or an immaterial
breach which was not remedied within reasonable time after
delivering a notice stating the breach); (ii) postpone the
Closing and reset it to such date at which the failure shall
have been remedied; or (iii) to close in disregard of the
failure.
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3.3.4 Upon the occurrence, prior to or at the Closing, of any
material change of events or conditions which have a material
adverse effect the condition of the business situation,
financially or otherwise, of the Company or of YWAV, or
rendering any of the representations or warranties given
hereunder as the case may be, to be untrue or incorrect in any
material way, YWAV or the CSH, as the case may be, shall be
entitled, at their sole discretion, to terminate this
Agreement by giving written notice to the other Parties. The
Parties hereby agree that in such event, neither party shall
have any claims and/or demands towards the other parties with
regard to the termination of the Agreement.
4. Representations of the Company and the CSH
The Company and each of the CSH, jointly and severally, hereby represent,
warrant and undertake towards YWAV that the following is true and correct
as of the date hereof
4.1 Organization and Standing
The Company is a private company duly incorporated, organized and
validly existing under the laws of Delaware. A true copy of the
Company's registration certificate is attached hereto as Annex 4
No proceeding or resolution for bankruptcy, dissolution,
liquidation, winding-up, appointment of receiver and/or similar
proceeding has been instituted or taken by the Company, and to the
best of their knowledge, no such proceeding has been instituted or
threatened against the Company.
4.2 Authority
The Company has full corporate power and authority to enter into,
execute and deliver this Agreement, bind itself hereunder, comply
with its obligations hereunder and consummate the transactions
hereunder; the entering into and the execution, delivery and
performance by the Company of this Agreement and the transactions
contemplated hereunder have been duly approved and authorized by all
the required corporate actions, and this Agreement was signed by the
Company's duly authorized representatives and constitutes a valid
and legally binding obligation on the Company.
4.3 Absence of Conflict
The execution, delivery and performance of this Agreement by the
Company will not conflict with, give rise to, or a result in, any
breach or default of any terms of any provision of law, or
regulation, agreement, obligation, commitment, ruling, judgment or
order to which the Company is a party or by which the Company is
bound, including under the Company's Memorandum and Articles of
Association;
4.4 Required Consent
No approval or consent from, nor any filing with, any person, entity
or authority is required by the Company, for the execution, delivery
and performance by it of this Agreement.
4.5 Corporate Documents
True copies of the Company's Memorandum and Articles of Association
as in effect on the date hereof, and of all minutes and resolutions
(including actions by
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written consent) of the Board of Directors of the Company, any
committee thereof, and of the shareholder of the Company, since the
date of its corporation through the date hereof, are attached hereto
as Annex 5
All the Company's resolutions have been duly approved and accepted,
and the Company has filed with the Registrar of Companies all
reports, notices and other documents required to be so filed.
4.6 Capitalization
(a) The capitalization table attached hereto as Annex 6 sets forth
the Company's authorized share capital, its issued and paid-up
share capital, the registered holders thereof all as of the
date hereof and immediately prior to the Closing.
(b) Subject to Section 4.7 below, except for (i) the rights of
pre-emption and first refusal under the Company's Articles of
Association; (ii) the rights of YWAV hereunder above; no
person or entity has any agreement, option, right (including
conversion rights, preemptive rights and rights of first
refusal) or warrant for the subscription, allotment, issue or
purchase of any of the Company's Shares or other Securities of
the Company, nor is the Company or any of the CSH a party to
any undertaking of any kind, towards any person or entity,
regarding any shares or other Securities of the Company,
whether purchased from the Company or from the CSH.
4.7 Share Option Plan
The Company doesn't have any share option plan.
4.8 Directors
The Company's board of directors consists of 2 members: Xxxxxxx
Xxxxxxx, Chairman and CEO and Xxxx Xxxxxxxx.
4.9 Subsidiaries
The Company does not hold any shares in any joint venture,
partnership or similar arrangement.
4.10 Contracts and other Commitments
(a) The Company is not a party to and is not bound by any material
agreement, contractual obligation or commitment of any kind
whatsoever, and has not given any power of attorney to any
person or entity for any purpose whatsoever. Furthermore, the
Company is not a party to any negotiation with a view to
executing any agreement, contractual obligation or commitment,
and no proposed transaction exists.
(b) All aforesaid agreements, obligations and commitments are in
full force and effect, the Company is not in default under any
of them, nor is the Company or any of the CSH aware of any
breach by any other party thereto or of any possible premature
termination of any of them.
4.11 Related Parties Transactions
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(a) Neither the CSH no other Interested Party of the Company or
affiliate of the Company, is indebted to the Company, nor is
the Company indebted (or committed to make loans or guarantee
credit) to any of them.
(b) Except Mr. Xxxx Xxxxxxxx, neither the CSH, and to the best of
their knowledge, nor any other Interested Party of the
Company, has any direct or indirect ownership interest in any
entity (whether corporate or not) with which the Company is
affiliated or with which the Company has a business
relationship or any entity (whether corporate or not) that
competes with the Company. Furthermore, neither the CSH, and
to their best knowledge, nor any Interested Party of the
Company, is directly or indirectly, interested in any
agreement or transaction made, proposed, or currently
contemplated to be made by or with the Company, and except for
their ownership interest in their shares in the Company and by
virtue thereof, they have no ownership interest or other right
in any of the Company's business or property.
(c) the Company is not a party to any agreement with, nor is the
Company obligated or committed to any of the CSH, any other
Interested Party of the Company, or affiliate of the Company,
nor does any proposed transaction with any of them exist.
4.12 Litigation
(a) There are no legal or administrative, actions, suits or
proceedings, pending, threatened, filed, or authorized by the
Company, nor docs the Company have any intention of filing
any. Furthermore, there have not been and there are no regal
or administrative, actions, suits, proceedings or
investigations pending or threatened against the Company, or
any such which are related in any way to the Company or to the
Company's Business - against the CSH, or against any of its
office holders - in their capacity as such, and neither the
Company nor the CSH know of any fact which may result in any
such proceedings.
(b) There are no valid or existing court or arbitration,
judgments, or orders against the Company, or any of its office
holders (in their capacity as such), or with regard to the
Company -- against any of the CSH.
4 13 Intellectual Property Rights
it is hereby declared that the Company owns any and all Intellectual
Property which is used and/or developed by the Company and/or is
necessary for its business as conducted on the date hereof and --
subject to further research and -- development activities -- which
is necessary for its business, except for existing proprietary
technologies, which belong to their respective owners and have been
integrated into the Company's Products (hereinafter: the "Company's
Intellectual Property"); (ii) no Company's Intellectual Property is
subject to any law, judgment, decree, outstanding order or agreement
restricting the use or licensing thereof, (iii) no person, including
without limitation any of the CSH or any director of the Company,
other than the Company, has any ownership right, title, interest,
claim in or lien on any of the Company's Intellectual Property;
4.14 Absence of undisclosed Liabilities
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The Company and the CSH are not aware of any liabilities of the
Company of any nature, whether accrued, absolute, contingent or
otherwise, including without limitation, tax liabilities.
4.15 Permits and Licenses
The Company does not require any licenses or permits for the conduct
of its business as now being conducted by it.
4.16 Compliance with other Instruments
The Company is not in default or violation of any term or provision
of its Memorandum and Articles of Association, or of any order, law,
statute, rule or regulation to which it is subject.
4.17 Taxes
The Company has duly filed all tax returns and all other tax reports
which it is required to file, and has paid in full, all taxes, and
other charges due or claimed to be due by any taxing authority. All
such tax returns and reports are correct and accurate and are not
subject to any dispute with the tax authorities.
4.18 Brokerage
No agent or broker or any other person or entity acting in a
similar capacity on behalf or under the authority of the Company
is, or will be entitled to any broker's or finder's fee, or any
other similar commission or fee in connection with the transactions
contemplated hereby, except for Manor Xxxxx who is entitled to
receive 187,500 YWAV Shares as broker's fee.
5 Further Representations is of the CSH
Each of the CSH hereby further represents and warrants toward YWAV that the
following is true and correct as of the date hereof:
5.1 Organization and Standing (in the event of a corporate shareholder)
It is an entity duly organized and validly existing under the laws
of the State of its incorporation. No proceeding or resolution for
bankruptcy, dissolution, liquidation, winding-up, appointment of a
receiver and/or similar proceeding has been instituted or taken by
it, and, to the best of its knowledge, no such proceeding has been
instituted or threatened against it.
5.2 Authority
It has the full power and authority to enter into, execute and
deliver this Agreement, bind itself hereunder, comply with its
obligations hereunder and consummate the transactions hereunder; and
-- in the event of a corporate shareholder -- the entering into and
the execution, delivery and performance by it of this Agreement and
the transactions contemplated hereunder have been duly approved and
authorized by all the required corporate actions, and this Agreement
was signed by its duly authorized representatives and constitutes a
valid and legally binding obligation on it.
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5.3 No Competition
It has no direct or indirect interest in any corporation or business
which competes with the Company's Business, whether as an owner,
shareholder of more than five percent (5%) of a company, director,
partner, principal, agent, consultant, financial supporter, adviser,
employee, employer, manager, other Office Holder or otherwise -- in
each case whether alone or together with others. The above shall not
apply to Mr. Xxxx Xxxxxxxx.
5.4 Absence of Conflict
The execution, delivery and performance of this Agreement by it,
will not conflict with, give rise to, or result in, any breach or
default of any terms of any provision of law, or regulation,
agreement, obligation, commitment, ruling, judgment or order to
which it is a party or by which it is bound, including -- in the
event of a corporate shareholder -- under any of its corporate
documents.
5.5 Required Consents
No approval or consent from any person, entity or authority is
required by it, for the execution, delivery and performance by it of
this Agreement.
5.6 Title to Shares
It has full title and ownership to all the shares in the Company and
such shares and his, rights with respect thereto, are free from and
clear of any liens, claims, charges, pledges, attachments,
encumbrances, interests or any other third party rights or claims of
any type or nature whatsoever, and they shall remain so until
completion of the sale and transfer of the Company Shares to YWAV.
5.7 Arrangements With Respect to Shares
Except for the provisions of this Agreement, it is not a party to
any agreement or obligation which relates to its shares in the
Company, or with respect to any of the rights conferred upon him by
virtue of such shares.
6 All Relevant Information
The Company and the CSH, jointly and severally, confirm toward YWAV,
that the representations and warranties set forth in Sections 4 and
5 above, fully and accurately reflect the condition and state of the
Company, with regard to the matters referred to therein, and, to the
best of their knowledge, there is no material information, required
by a reasonable investor in order to make the transactions
contemplated hereunder, which is not specified therein.
The Company and the CSH shall indemnify, defend, save and hold YWAV
harmless from and against any and all losses, demands, claims, actions,
liabilities, costs and expenses (including attorney's fees) suffered,
imposed on or incurred by YWAV directly or indirectly via the Company and
the CHS as a result of or in connection with a breach of any of the
representations and warranties set out above.
7. Representations of YWAV
YWAV hereby represents and warrants toward the Company and the CSH the
following to be true and correct as of the date hereof:
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7.1 Organization and Standing
YWAV is an entity duly organized and validly existing under the laws
of the State of Nevada. A true copy of YWAV's registration
certificate is attached hereto as Annex 7.
No proceeding or resolution for bankruptcy, dissolution,
liquidation, winding-up, appointment of a receiver and/or similar
proceeding has been instituted or taken by YWAV, and, to the best of
its knowledge, no such proceeding has been instituted or threatened
against it.
7.2 Authority
YWAV has the full corporate power and authority to enter into,
execute and deliver this Agreement, bind itself hereunder, comply
with its obligations hereunder and consummate the transactions
hereunder; the entering into and the execution, delivery and
performance by it of this Agreement and the transactions
contemplated hereunder, have been duly approved and authorized by
all the required corporate actions, and this Agreement was signed by
its duly authorized representatives and constitutes a valid and
legally binding obligation on it.
7.3 Absence of Conflict
The execution, delivery and performance of this Agreement by it will
be not conflict with, give rise to, or result in, any breach or
default of any terms of any provision of law, or regulation,
agreement, obligation, commitment, ruling, judgment or order, to
which it is a party or by which it is bound, including under its
Memorandum of Articles of Association.
7.4 Required Consents and Payments
No approval or consent from any person, entity or authority and no
payment in terms of capital gains tax is required by it for the
execution, delivery and performance by it of this Agreement.
7.5 Corporate Documents
True copies of its Memorandum and Articles of Association as in
effect on the date hereof, and of all minutes and resolutions
(including actions by written consent) of the its Board of
Directors, any committee thereof, and its shareholders, since the
date of its corporation through the date hereof, are attached hereto
as Annex 8.
All of its resolutions have been duly approved and accepted, and it
has filed with the Registrar of Companies all reports, notices and
other documents required to be so filed.
7.6 Capitalization
(a) The capitalization table attached hereto as Annex 9 sets forth
the YWAV's authorized share capital, its issued, allotted and
paid-up share capital, the registered holders thereof -- all
as of the date hereof and immediately prior to the Closing.
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(ii) Subject to the rights of the CSH, YWAV hereby declares that no
person or entity has any agreement, option, right (including
conversion rights, preemptive rights and rights of first
refusal) or warrant for the subscription, allotment, issue or
purchase of any of the YWAV's Shares or other Securities of
YWAV, nor is YWAV a party to any undertaking of any kind,
towards any person or entity, regarding any shares, options,
or other Securities of YWAV, except as detailed in Annex 10
attached hereto. Annex 10 shall include names of Owners of the
abovementioned rights, expiration dates of such rights, the
price of realization of such rights and so forth. Concurrent
with the closing of this agreement, the options of Xxxx Xxxx
and Xxxxx Xxxxxxxxx shall be exercised. Further, YWAV will
register the underlined shares granted pursuant to the
exercised options. For the avoidance of any doubt, this
options exercise does not affect the number and the value of
the options granted to CSH according to Section 3.2 hereabove.
7.7 Share Option Plan
YWAV hereby declares that no options to employees were issued under
any share option plans, and no resolutions with respect to such
issuance have been adopted by the Company, except as detailed in
Annex 10 attached hereto.
7.8 Directors
YWAV's board of directors Consists of 6 members, it is hereby agreed
that upon the Closing, the above directors shall provide the Company
with letters of resignation from YWAV's board of directors and
Xxxxxxx Xxxxxxx as Chairman & CEO Xxxx Xxxxxxxx, Xxxxxxx Xxx Xxxx,
Xxxxxx Xxxxxxx and Xxxxx Xxxxxxxxx shall be appointed as directors
in their place.
7.9 Subsidiaries
YWAV does not hold any shares in any joint venture, partnership or
similar arrangement.
7.10 Contracts and other Commitments
(a) YWAV is not a party to and is not bound by any material
agreement, contractual obligation or commitment of any kind
whatsoever, and has not given any power of attorney to any
person or entity for any purpose whatsoever. Furthermore, YWAV
is not a party to any negotiation with a view to executing any
agreement, contractual obligation or commitment, and no
proposed transaction exists.
7.11 Related Parties Transactions
(a) No other Interested Party of YWAV or affiliate of YWAV, is
indebted to YWAV, nor is YWAV indebted (or committed to make
loans or guarantee credit) to any of them.
(b) No Interested Party of YWAV has any direct or indirect
ownership interest in any entity (whether corporate or not)
with which YWAV is affiliated or with which YWAV has a
business relationship or any entity (whether corporate or not)
that competes with YWAV. Furthermore, no Interested Party of
YWAV is directly or indirectly, interested in any agreement or
transaction made, proposed, or currently contemplated to be
made by or with
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YWAV, and except for their ownership interest in their shares
in YWAV and by virtue thereof, they have no ownership interest
or other right in any of YWAV's business or property.
(c) YWAV is not a party to any agreement with, nor is YWAV
obligated or committed to any Interested Party of it, or
affiliate of it, nor does any proposed transaction with any of
them exist.
7.12 Litigation
(a) Except as provided in Annex B, there are no legal or
administrative actions, suits or proceedings, pending,
threatened, filed, or authorized by YWAV, nor does YWAV have
any intention of filing any. Furthermore, there have not been
and there are no legal or administrative actions, suits
proceedings or investigations pending or threatened against
YWAV, or any such which are related in any way to YWAV -- or
against any of its office holders -- in their capacity as
such, and YWAV does not know of any fact which may result in
any such proceedings.
(b) There are no valid or existing court or arbitration,
judgments, or orders against YWAV, or any of its office
holders (in their capacity as such).
7.13 Title to Property Right
YWAV has good and valid title to, and is the sole and exclusive
owner of, all rights, title and interests in and to its assets and
properties -- real and personal, tangib1e and intangible -- free
from all mortgages, pledges, liens, security interests, conditional
sale agreements encumbrances or other charges, or any other third
party right whatsoever.
A list of YWAV's assets and properties and their estimated value is
detailed in Annex 11 attached hereto.
7.14 Intellectual Property Rights
It is hereby declared that YWAV exclusively owns any and all
Intellectual Property which is used and/or developed by YWAV and/or
is necessary for its business as conducted on the date hereof
(hereinafter: "VWAV's Intellectual Property"); (ii) YWAV's
Intellectual Property is not subject to any law, judgment, decree,
outstanding order or agreement restricting the use or licensing
thereof, (iii) no person, including any director of YWAV, other than
YWAV, has any ownership right, title, interest, claim in or lien on
any Of YVAV's Intellectual Property
7.15 Financial Statements
(a) Annex 12 attached hereto consists of YWAV's audited financial
statement of June 30, 1999 and unaudited financial statements
for the period ending June 30, 2000, signed by YWAV's
accountants (hereinafter: the "Financial Statements"). The
Financial Statements fairly present the financial condition,
assets, liabilities and operating results of YWAV as of the
dates, and for the periods, indicated therein, and have been
prepared in accordance with generally accepted accounting
principles in the state of California on a consistent basis
through the periods indicated.
(b) Since the date of the Financial Statements there has not been:
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(i) any change in the assets (including YWAV's rights with
respect thereto), liabilities, financial condition, or
operating results of YWAV, from that reflected in the
Financial Statements, except changes in the ordinary
course of business that have not been adverse, except as
detailed in Annex 13 prepared by YWAV at the closing.
(ii) any damage, destruction or loss, whether or not covered
by insurance materially and adversely affecting the
business, properties, prospects or financial condition
of YWAV (as such business is presently conducted and as
it is proposed to be conducted),
(iii) any declaration or payment of dividends or any other
distributions,
(iv) any payment made to an Interested Party or affiliate of
YWAV, except in the ordinary course of business.
7.16 Absence of undisclosed Liabilities
YWAV is not aware of any liabilities on its behalf of any nature,
whether accrued, absolute, contingent or otherwise, including
without limitation tax liabilities, liabilities to the stock market
Securities authority shareholders of YWAV banks, employees of YWAV,
liabilities in terms businesses sold by YWAV and other liabilities
to third parties, except is provided by the June 30th Financial
Statement as detailed in Annex 14.
7. 17 Permits and Licenses
YWAV does not require any licenses or permits for the conduct of its
business as now being conducted by it.
7.18 Compliance with other Instruments
YWAV is not in default or violation of any term or provision of its
Memorandum and Articles of Association or of any order, law,
statute, rule or regulation to which it is subject.
7.19 Taxes
YWAV has duly filed all tax returns and all other tax reports which
it is required to file, and has paid in full, all taxes, and other
charges due or claimed to be due by -any taxing authority. All such
tax returns and reports are correct and accurate and are not subject
to any dispute with the tax authorities.
7.20 Employees
(a) Annex 15 attached hereto contains a true and complete list of
the names of YWAV'S employees and each such employee's
position, starting employment date and monthly salary; the
terms of employment of each is as set forth under their
respective employment agreements true copies of which have
been delivered to the Company and the CSH.
(b) YWAV is in compliance in all material respects with all
applicable laws, policies, procedures and agreements relating
to employment, terms and
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conditions of employment and to the proper withholding and
remission to the proper legal authorities, including social
and tax authorities of all sums required to be withheld from
employees or persons deemed to be employees under applicable
laws including social and tax laws respecting such
withholding.
(iii) YWAV has paid in full to all of its employees all wages,
salaries, commissions bonuses, benefits and other
compensation due and payable to such employees on or
prior to the date hereof and there are no disputes
pending between YWAV and any of its employees.
(iv) As of closing YWAV shall have fired all its employees
and shall have fully paid them Severance Payments,
except for Xxxx Xxxx and Xxxxx Xxxxxxxxx whose
Employment Agreements shall be cancelled without payment
of Severance Payment and shall be replaced with
Consultancy agreements until June 2001 as detailed in
Annex 16 attached hereto.
7.21 Brokerage
No agent or broker or any other person or entity acting in a similar
capacity on behalf or under the authority of YWAV is, or will be
entitled to any broker's or finder's fee, or any other similar
commission or fee in connection with the transactions contemplated
hereby, except for Farelly S.A. who is entitled to receive 162,500
YWAV Shares as broker's fee.
7.22 YWAV Shares
YWAV Shares which shall be transferred to the CSH, at the Closing
shall be duly authorized validly issued, fully paid, non-assessable
and negotiable. YWAV hereby declares that YWAV Shares shall be
delivered to the CSH free of any ability, debt, restriction, lien,
security (interest); collateral, charge, agreement for sale, adverse
claim, easement, pledge, mortgage, attachment and any and all rights
of first refusal, right of first offer, shareholder's agreements or
voting rights/proxy agreements, powers of attorney or other third
party rights.
7.23 Cash Flow
Annex 17 attached hereto consists of cash flow report of YWAV
detailing income and expenses to be spent by YWAV up until December
2000.
7.24 All material information and documentation which would be necessary
for a reasonable person to evaluate the transaction contemplated by
this Agreement has been disclosed and/or will be disclosed as
detailed in Annex 18 as of closing by YWAV to the Company and
the CSH.
YWAV shall indemnify, defend, save and hold the Company and the CSH harmless
from and against any and all losses, demands, claims, actions, liabilities,
costs and expenses (including attorney's fees) suffered, imposed on or incurred
by the Company and the CSH directly or indirectly via YWAV as a result of or in
connection with a breach of any of the representations and warranties set out
above.
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8. Covenants and Undertakings of YWAV the CSH and the Company an Prior to the
Closing
YWAV, the CSH and the Company, jointly and severally, hereby covenant and
undertake that as of date hereof, and until the Closing:
8.1 none of the CSH shall sell or transfer any of its shares in the
Company or give any rights with respect thereto.
8.2 the Company shall not issue any shares or other Securities or grant
any rights with respect to any shares or Securities.
8.3 YWAV shall not issue any shares or other Securities or grant any
rights with respect to YWAV shares or Securities.
8.4 all the Company's affairs shall be conducted in the ordinary course
of its business, and the Company shall not take any actions or
undertake any obligations which might render the representation or
warranties under sections 4 and 5 herein to be untrue or incorrect
in any way whatsoever,
8.5 all YWAV's affairs shall be conducted in the ordinary course of its
business and YWAV shall not take any actions or undertake any
obligations which might render the representation or warranties
under section 7 herein to be untrue or incorrect in any way
whatsoever.
8.6 the Company shall inform YWAV, in writing, of any meeting of the
Company's shareholders and/or of the Company's Board of Directors,
or of any committee thereof, at least 72 (seventy-two) hours in
advance, in order to allow an observer on behalf of YWAV to attend
such a meeting, and provide YWAV with copies of all minutes and
resolutions thereof and of all actions in writing made within this
period, by the Company's shareholders and/or Board of Directors;
8.7 YWAV shall inform the Company and the CSH, in writing, of any
meeting of YWAV's shareholders and/or its board of directors, or of
any committee thereof, at least 72 (seventy-two) hours in advance,
in order to allow an observer on behalf of the Company and the CSH
to attend such a meeting, and provide the Company and the CSH with
copies of all minutes and resolutions thereof and of all actions in
writing made within this period, by YWAV's shareholders and/or board
of directors;
8.8 without derogating from the Parties' obligations under this
Agreement, the Company and/or YWAV shall notify each other, in
writing, immediately upon the occurrence of any events or conditions
which affect the business or financial situation of the Company or
YWAV, as the case may be, or otherwise render any of the
representations or warranties given by the Company or YWAV, or the
CSH, hereunder, to be untrue or incorrect.
8.9 the Directors of YWAV shall adopt a resolution with respect to
signatory rights of YWAV, effective as of the Closing, and with
respect to the appointment of directors in YWAV, all in the forms
attached hereto as Annex 19.
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9. Due Diligence Investigation
The Parties agree that due diligence, shall be conducted the Company and
the CSH (with respect to YWAV) and by YWAV (with respect to the Company)
up and until the Closing.
During said period, the parties shall mutually provide all and any
assistance and information required for said due diligence by the parties.
YWAV on the one hand and the Company and the CSH on the other, may each
terminate this Agreement during said period, by a 7 day prior written
notice, in the event said party's findings pursuant to the due diligence
conducted by it indicate an adverse condition which to such party was
unaware of prior to the date hereof or contradictory to such party's
representations contained herein unless, during such seven (7) day notice
period the other party offers a satisfactory solution to that finding.
YWAV hereby declares that it has employed a scientist who has reviewed the
Company's technologies and products to its full satisfaction.
10. Confidentiality
Each of the Parties will hold in strict confidence all documents and
information concerning the Company, its business, financial and/or
commercial information, operations, sales, marketing, customers, suppliers
and all information pertaining Co any intellectual Property rights of the
Company and any other proprietary information of the Company whatsoever
including, without limitation, with respect to the Company's intellectual
Property (all hereinafter referred to as the "Confidential Information")
by taking all reasonable measures to maintain the confidentiality of such
Confidential Information which will in no event be less than the measures
they use to maintain the confidentiality of their own information of
similar importance. Each of the Parties also undertakes not to use the
Confidential Information in any way, directly or indirectly, for purposes
other than for the Company and/or for fulfilling its obligations and
exercising its rights under this Agreement. A Party may disclose such
Confidential information, to its officers, directors, consultants, counsel
and their representatives, only on a need to know basis, under
confidentiality obligation, and in connection with the transactions
contemplated by this Agreement.
The obligations hereunder shall not apply as to any Confidential
Information which is proven by the party receiving the information
(hereinafter: the "Receiving Party") to be: (i) known by the Receiving
Party at the time of receiving such information without breach of
confidentiality undertaking and provided that such party has given notice
to this effect; or (ii) in the public domain through no fault of the
Receiving Party; or (iii) later acquired by the Receiving Party, lawfully
and without breach of confidentiality undertaking, from sources other than
the disclosing party (such as independent development, third parties,
etc.), or (iv) furnished by the disclosing party to third parties without
restriction on disclosure.
Disclosure of any Confidential Information pursuant to any compelling
judicial or administrative order or proceeding or as required by law,
shall not be deemed a breach hereof.
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11. Costs and Expenses related to this Agreement
Each Party shall bear and pay its own expenses in connection with the
preparation and performance of this Agreement.
12 Government Law and Forum
This Agreement, its interpretation, validity and breach shall be governed
by the laws of the USA. Any dispute or claim with respect thereto shall be
submitted to the competent courts in USA, which shall have sole and
exclusive jurisdiction in such matter to exclude the jurisdiction of all
other courts.
13. Miscellaneous
13.1 Further Cooperation
The Parties agree to execute any and all documents necessary in
order to consummate implement and give full force and effect to this
Agreement, and to all matters, things and transactions envisaged and
contemplated herein including, but not limited to, filings with
governmental or regulatory bodies, powers of attorney, corporate
resolutions and such other documentation as may be reasonably
necessary from time to time.
3.2 No Partnership
The Parties to this Agreement are independent contractors. There is
no relationship of partnership, joint venture, employment, franchise
or agency between the Parties. Neither Party will have the power to
bind the other or incur obligations on the other's behalf without
the other's prior written consent, except with regard to the Company
-- in the Parties capacity as authorized organs in the Company.
13.3 Contradiction
in case of any direct contradiction between the provisions of this
Agreement and the Articles of Association of the Company and of
YWAV, the provisions of this Agreement shall prevail in the
relationship between the Parties hereto.
3.4 Captions
The captions of sections in this Agreement are intended solely for
convenience, and will have no significance in the interpretation of
this Agreement.
13.5 Counterparts
This Agreement may be executed in any number of counterparts, and at
one (1) or more times, each of which containing the signature of any
of the Parties, shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13.6 Non-Assignability
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The respective obligations and rights of the Parties hereunder
cannot be assigned, transferred or otherwise conveyed, without the
prior written consent of the other Parties hereto.
13.7 Validity
In the event wherein any provision of this Agreement is held by a
competent court to be invalid or unenforceable, for any reason
whatsoever, all of the remaining provisions contained herein shall
remain in full force and effect and shall be binding on the Parties
without any change; furthermore if all or part of the obligations of
the Parties hereinabove (including those under Sections 18 and 19
hereof) shall be held to be invalid or unenforceable by reason of
exceeding the extent and/or scope allowed by law, such exceeding
obligation(s) shall be reduced to the maximum extent and/or scope
allowed by law.
13.8 Waiver and Consent
The failure of any Party at any time or times to require performance
of any provision hereof or to enforce any right with respect
thereto, shall in no manner affect the right of such Party at a
later time to enforce the same and shall in no way be construed to
be a waiver of such provision or right.
13.9 Amendments
No amendment addition; omission, modification or change to this
Agreement shall be valid unless drawn up in writing and signed by
all of the parties.
13.10 Entire Agreement
This Agreement fully embraces the legal relationship between the
Parties including their relationship as shareholders of the
Company, and no previous agreements, memorandum of agreements,
letters, negotiations promises, consents, undertakings,
representations, warranties or documents which were applied,
exchanged, or signed by or between any of the Parties hereto prior
to the signing of this Agreement shall have any force or effect.
Without derogating from the above, each of the CSH confirms and
acknowledges that this Agreement supersedes the terms of any
previous agreements between the Parties hereto (or any of them).
13.11 Notices
All notices given by one Party to the other hereunder will be given
in writing, and will be deemed to have been delivered to the
addressee immediately upon their delivery if delivered by hand, or
upon transmission if sent by facsimile and confirmed by a machine
printout, or within seven (7) business days after being sent by
mail, as per the addresses indicated hereinbelow, or to such other
address or facsimile number as a party may thereafter give notice in
writing, to the other parties of this Agreement.
The Parties' addresses are as follows:
The Company:
Newtech Broadwidth Ltd.
a company duly registered under
the laws of the state of Delaware,
The CSH:
Xxxxxx Xxxxxxx, Advocate
Xxxxxx Xxxxx & Co, Law Offices
America House,
35, Xxxxx Hamelech Bvd.
Tel-Aviv
Israel
As TRUSTEE on behalf of the shareholders
YWAV:
Yellowave Corporation
a corporation registered under the
Laws of the State of Nevada
In Witness Whereof, the Parties hereto have caused this Agreement to be duly
executed on the day and year first above written:
/s/ Xxxxxxx Xxxxxxx
----------------------
Newtech Broadwidth LTD
The Company
By: Xxxxxxx Xxxxxxx,
Title: Chairman & CEO
_______________________
The CSH
By: Myriarn Xxxxxxx, Advocate
Xxxxxx Xxxxx & Co, Law Offices
America House,
35, Xxxxx Hamelech Bvd.
Tel-Aviv
Israel
Title: As TRUSTEE on behalf of the Company Shareholders
/s/ Xxxx Xxxx
----------------------------
Yellowave Corporation (YWAV)
a corporation registered under the
Laws of the State of Nevada
By: Xxxx Xxxx
Title: Chairman
