Exhibit 2.1
This Share Contribution Agreement
(this “Agreement”) is entered into as of the 11th day of May
2006, by and among:
1. |
– |
Xx
Xxxxxx Xxxxxxxxx, a French citizen, born on October 5, 1968 in
Toulouse (France), residing at 00-00 xxx Xxxxxxx, 00000 Rueil Malmaison, |
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– |
Xx.
Xxxxxxxx Xxxxx, a French citizen, born on April 20, 1975 in Paris (France), residing
at 000 xxx Xxxxxxxx 00000 Xxxxx, |
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– |
Xx.
Xxxxxx Xxxxxxxxxxxx, a French citizen, born on May 10, 1971 in Marseille (France),
residing at 00 xxx xx Xxxxx 00000 Xxxxx, |
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– |
Xx. Xxxx Xxxxxx Enguent, a French citizen, born on May 8, 1962 in Marseille
(France), residing at boulevard de la Thumine, Résidence Le Gardanon, bat. G, 13090
Aix en Provence, |
|
– |
Xx. Xxxxx Charrat, a French citizen, born on July 11, 1968 in Saint Etienne
(France), residing at 000 xxxxxx xxx Xxxxxxxxx 00000 Aix en Provence |
(each individually, a
“Seller” and together, the “Sellers”); and
2. |
On
Track Innovations Ltd., a company organised under the laws of the state of
Israel, having its principal place of business at ZHR Industrial Zone, XX Xxx
00 Xxxx Xxxx 00000, Israel (the “Issuer”) duly represented by
its president, Xx. Xxxx Xxxxxx; |
|
In
the presence of InSeal, SAS, a société par actions simplifiée
organised under the laws of France, registered at the Registry of Commerce and Companies
of Marseilles under the number 000 000 000 having its registered office located at 0 xxx
xx Xxxxx Xxxx 00000 Xxxxxxxxx, Xxxxxx (the “Company”), duly represented
by its President, Xx. Xxxxxx Xxxxxxxxxxxx |
WHEREAS:
(A) |
Each Seller is the sole owner of the Seller’s Shares (as defined below); |
(B) |
Each Seller wishes to contribute the Seller’s Shares held by him to the
Issuer, free and clear of all Security Interests (as defined below), in
consideration of ordinary shares of the Issuer in accordance with the terms of
this Agreement; and |
(C) |
The Issuer wishes to issue ordinary shares to each Seller in consideration of
the Seller’s Shares in accordance with the terms of this Agreement; and |
(D) |
The Sellers and the Warrantors (as defined below) have accepted to make the
representations and warranties and make such covenants as set forth herein. |
NOW THEREFORE, the parties to
this Agreement agree as follows:
|
1.1 |
The
following terms shall have the following meanings: |
|
(a) |
Affiliate
– An entity controlling, controlled by or under common
control with a person and if such entity is a person, then the immediate
family of such person. For the purpose of this definition of Affiliate,
“control” shall mean the ability to direct the activities of the
relevant entity and shall include the holding of 50% or more of the issued
and outstanding share capital, voting rights or other ownership interests
of such entity or the right to appoint 50% or more of the directors (or
the equivalent thereof) in such entity, or in case of a partnership shall
also include, a general manager of such entity, or a partner of such
entity or an entity managed by such entity; |
|
(b) |
Aggregate
Share Consideration – 243,800 Ordinary Shares to be issued
by the Issuer, with a par value NIS0.1 each, which will be restricted and
registered with the U.S. Securities and Exchange Commission
(“SEC”) and listed for trading on the NASDAQ stock
exchange, together with all existing and future rights attached thereto,
all which Issuer is entitled to issue to third parties under and subject
to applicable rules and regulations of the Securities Act (as defined
below); |
|
(c) |
Board
– Board of directors of the Company; |
|
(d) |
Fully
Diluted Basis – The issued and outstanding share capital of the
Company assuming the exercise and conversion of all warrants, options,
convertible securities, convertible debts and all other securities and
rights; |
|
(e) |
Intellectual
Property – All intellectual and industrial property rights
including in particular software, designs and models, trademarks, domain
names, know-how; |
|
(f) |
Material
Contract –All contracts including any note, indenture, lease,
purchase orders, letters of intent, memorandum of understanding,
confidentiality agreements, covenants or other agreements whether executed
or which are being negotiated and under which the Company or the
co-contracting party is committed for a yearly amount of 15,000 euros or
which may not be terminated by the Company with two-month or less notice
period or which may be terminated by the co-contracting party with
two-month or less notice period; |
|
(g) |
Regulation
S – Regulation S under the United States Securities Act (as
defined below); |
|
(h) |
Securities
Act – United States Securities Act of 1933, as amended; |
|
(i) |
Security
Interest – Any interest or equity of any person (including any
right to acquire, option, or right of pre-emption, right of first offer or
right of first refusal) or any mortgage, charge, pledge, lien, attachment,
assignment or any other encumbrance or security interest or arrangement of
whatsoever nature over or in the relevant property; |
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(j) |
Seller’s
Shares –Such number of ordinary shares of the Company
owned by each of the Sellers as set forth in Exhibit A; |
|
(k) |
Warrantors – Xx.
Xxxxxx Xxxxxxxxx, Xx. Xxxxxxxx Xxxxx and Xx. Xxxxxx Xxxxxxxxxxxx are
individually the “Warrantor” and together the “Warrantors”. |
|
1.2 |
Words
and defined terms denoting the singular number include the plural and vice versa and the
use of any gender shall be applicable to all genders. |
|
1.3 |
The
paragraph headings are for the sake of convenience only and shall not
affect the interpretation of this Agreement. |
|
1.4 |
The
recitals, schedules, appendices, annexes and exhibits hereto form an integral part of
this Agreement. |
2. |
CONTRIBUTION
OF THE SHARES |
|
2.1 |
CONTRIBUTION
OF THE SHARES. |
|
2.1.1 |
Subject
to and in accordance with the terms and conditions of this Agreement, each Seller
contributes, assigns, conveys and delivers to the Issuer, and the Issuer acquires and
accepts for delivery from each Seller the Seller’s Shares, constituting together
100% of the issued and outstanding share capital of the Company on a Fully Diluted Basis
as of the Closing Date, as represented in the Capitalization Table set forth in Annex
4.2. |
|
2.1.2 |
In
consideration for all Sellers’ Shares and all other covenants made under this
Agreement, the Issuer will issue to each Seller his respective portion of the Aggregate
Share Consideration as set opposite to such Seller’s name in Exhibit A. |
|
The
signing and the closing of the contribution of the Sellers’ Shares and the issuance
of the Aggregate Share Consideration (the “Closing”) shall take place
simultaneously at the offices of Xxxx & Associés, Avocats à la Cour
– Law Offices 00, xxx Xxxxxx d’Xxxxxxx 00000 Xxxxx, Xxxxxx with the
satisfaction of all the conditions to Closing as set out herein in Sections 2.2 and 2.3
(the time and date of the Closing being herein referred to as the “Closing Date”). |
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At
the Closing, the following actions and occurrences shall take place, all of which shall
be deemed to have occurred simultaneously: |
|
(a) |
The
Sellers and/or each Seller (as indicated below) delivers to the Issuer at
the Closing: |
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|
(i) |
The
Sellers deliver to the Issuer a certified copy of the minutes of the
shareholders’ meeting of the Company (i) approving the Issuer as a
new shareholder of the Company in compliance with the Articles of Association
of the Company (ii) approving the two agreements for the assignment of
intellectual property rights entered into between the Company and Xxxxxx
Xxxxxxxxx and Philippe Fremy on January 1st, 2006 (iii) approving
the 2005 fiscal year accounts and distributing half of the distributable profit
i.e. 30,030 Euros. |
|
(ii) |
Each
Seller delivers a certificate duly executed by him certifying to the Issuer that the
right of preemption (“droit de preemption”) with regard to the
transfer of the Sellers’ Shares has been waived. |
|
(iii) |
The
Sellers deliver to the Issuer an executed French short form contribution
agreement (“déclaration d’apport aux fins d’enregistrement”)
regarding the contribution of the Sellers’ Shares and the rights relating
thereto to the Issuer, solely for the purpose of the registration of the
contribution with the French tax authorities and the subsequent payment of the
fixed registration tax to be settled by the Issuer on the contribution
consideration in connection with the contribution of the Sellers’ Shares,
attached hereto as Annex 2.2(a)(iii). It being understood between the
Sellers and the Issuer, and expressly agreed to by the Sellers and the Issuer,
that in the event of a conflict between the terms of the executed déclaration
d’apport aux fins d’enregistrement and this Agreement, the terms
of this Agreement shall prevail, including, but not limited to, the
representations and warranties of the Sellers set forth in this Agreement which
will not be set forth in the déclaration d’apport aux fins d’enregistrement. |
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(iv) |
The
Sellers deliver to the Issuer the complete and up-to-date Company’s books
and registries, including check books, books of accounts, records, and other
data relating to the Company’s operations, and documents required to be
kept by the Company under French law including, but not limited to, the Company’s
duly accurate, updated completed and signed corporate ledgers, including share
transfer registry (“registre des mouvements de titres”) and
individual shareholders’ accounts (“comptes individuels des actionnaires”). |
|
(v) |
Each
Seller (in his capacity as a shareholder, officer or director or president of
the Company) delivers to the Issuer a written acknowledgment that he or anyone
on his behalf has no claim whatever against the Company or any other
Shareholders attached hereto as Annex 2.2(a)(v). |
|
(vi) |
Each
Seller delivers to the Issuer an original version of any power of attorney
under which this Agreement or any other related documents is executed. |
|
(vii) |
The
Sellers deliver a list of all Material Contracts as well as outstanding
proposals or agreements not yet executed attached hereto as Annex 2.2.
(a) (vii). |
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(viii) |
Xx.
Xxxxxx Xxxxxxxxxxxx and Xx. Xxxxxxxx Xxxxx deliver duly executed employment
agreements with the Company attached hereto as Annex 2.2(a)(viii). |
|
(ix) |
The
Sellers deliver to the Issuer the documents regarding the change of
ownership of all domain names related to the Company’s business, as
attached hereto as Annex 2.2. (a) (ix) . |
|
(x) |
The
Sellers deliver to the Issuer the legal opinion dated May 5, 2006 of the Law
Firm Bignon Lebray & Associés regarding researches’ result
and explanations on the name “JAYCOS”, as attached hereto as Annex
2.2. (a) (x). |
|
(xi) |
The
Sellers represent that the amount of €uros 22,660.73 is still owed at
Closing Date to the Banque Populaire Provençale et Corse in respect
of a loan dated November 22, 2004. |
|
(xii) |
The
Sellers deliver a statement by the President of the Company certifying that
all the shareholders’ accounts have been entirely reimbursed by the
Company as attached hereto as Annex 2.2. (a) (xii). |
|
(b) |
The
Sellers and the Issuer shall cause the Company to make the appropriate
entries in the registre des mouvementsde titres and the comptes
individuels d’actionnaires of the Company to register the
consummation of the transactions contemplated by this Agreement. |
|
(c) |
The
Issuer issues to each of the Sellers his respective portion of the Aggregate
Share Consideration as set opposite to such Seller’s name in Exhibit
A and registers each Seller as the holder of his respective portion of
the Aggregate Share Consideration in the Issuer’s shareholder
register. |
|
(d) |
The
Issuer delivers the warrant agreements attached hereto as Exhibit B. |
|
(e) |
Each
Seller executes and delivers to Xxxx Xxxxxx a proxy attached hereto as Exhibit C. |
|
(f) |
Each
Seller delivers to the Company an executed lock up agreement attached
hereto as Exhibit D. |
|
(g) |
Xx.
Xxxxxxxx Xxxxx who serves as a director and vice president of the Company
delivers to the Company (with a copy to the Issuer) a resignation letter
effective as of the Closing Date attached hereto as Exhibit E (a). |
|
(h) |
Xx.
Xxxxxx Xxxxxxxxxxxx who serves as a Director and President of the Company
delivers to the Company (with a copy to the Issuer) a resignation letter
effective as of the Closing Date attached hereto as Exhibit E (b). |
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(a) |
The
Issuer will deliver to each of the Sellers within fifteen (15) days after
the Closing the respective share certificates in their names corresponding
to their respective portion of the Aggregate Share Consideration as set
forth in Exhibit A. |
|
(b) |
The
Sellers will deliver to the Issuer uncertified financial statements as of
and for the three months period ended March 31, 2006, within fifteen (15)
days after the Closing. |
|
(c) |
The
Sellers will deliver to the Issuer a statement certified by the Statutory
auditor of the Company that all the shareholders’ accounts have been
entirely reimbursed by the Company. |
3. |
REPRESENTATIONS
AND WARRANTIES OF EACH SELLER |
|
Each
Seller provides as of the Closing Date the sole representations and warranties as
restrictively listed under Sections 3.1. to 3.13 hereunder, to the exclusion of any other
representation or warranty, either direct or indirect, express or implied: |
|
3.1 |
Authority
to Transact |
|
(a) |
The
Seller has the capacity and authority to execute and deliver this Agreement,
to perform hereunder and to consummate the transactions contemplated
hereby. Subject to the execution by each of the parties thereto, this
Agreement constitutes and, when signed by him, all other documents
contemplated hereby will constitute, valid and legally binding obligations
of the Seller, enforceable in accordance with their terms. |
|
(b) |
No
action, proceeding or governmental inquiry or investigation is pending, or to
the Seller’s best knowledge threatened, against the Seller or against
the Seller’s assets, before any court, arbitration board or tribunal
or administrative or other governmental agency, which questions the
validity or hinders the enforceability of this Agreement and/or the
transactions contemplated hereby, nor to the knowledge of the Seller is
there any basis for the foregoing. |
|
3.2 |
Execution
of Agreement |
|
3.2. |
(a) |
Except as set forth under any of the terms and provisions of this Agreement
and of any of the documents, exhibits or annexes attached hereto, the
execution and delivery of this Agreement (and the other documents
contemplated hereby) by the Seller does not, and the consummation of
the transactions contemplated hereby and thereby will not: |
|
(i) |
constitute
a breach of any law, rule or regulation of any government applicable to the
Seller; |
|
(ii) |
require
the consent or agreement of any court, governmental body or entity; |
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(iii) |
violate
any provisions of any contract, agreement, indenture, mortgage, instrument,
lease, license, arrangement, or undertaking of any nature, written or oral, of
the Seller. |
|
3.2. |
(b) |
The execution and delivery of this Agreement (and the other documents
contemplated hereby) by the Seller does not, and the consummation of
the transactions contemplated hereby and thereby will not result in
any violation of, or conflict with or constitute a default under any
term of, or result in the creation or enforcement of any Security
Interest upon any of the Seller’s Shares. |
|
(a) |
The
Seller is the sole owner of the Seller’s Shares free and clear of any
Security Interest except as set forth in the Articles of Association of
the Company. Except for the Seller’s Shares, the Seller has no and is
not entitled to any other shares, options, warrants or securities in the
Company. There are no outstanding debts owed by the Company to the Seller
or by the Seller to the Company and following the Closing the Seller (in
his capacity as a shareholder, officer, director or president of the
Company) or anyone on his behalf has no claims whatsoever towards the
Company. |
|
(b) |
The
Seller is entitled to sell the full legal and beneficial interest in the
Seller’s Shares, free of any Security Interest to the Issuer on the
terms set out in this Agreement. The Seller has the unrestricted power and
authority to transfer the Seller’s Shares to the Issuer. |
|
(i) |
are
duly authorised, validly issued, fully paid and non-assessable and have the
rights, preferences, privileges, and restrictions set forth in the
Company’s Articles of Association in effect immediately prior to the
Closing (“Articles”). Except for the Articles, there are no
contracts, agreements, commitments or instruments, whether written or oral,
providing for any rights, preferences, privileges and restrictions granted to
and/or imposed on the Seller’s Shares and any holder thereof; |
|
(ii) |
are
free of any Security Interests, proxies, voting trusts and other voting
agreements, calls or commitments of any kind, other than as explicitly
contemplated by the Articles; and |
|
(iii) |
were
issued in compliance with all laws, rules and regulations, including applicable
securities laws. |
|
3.4 |
Restrictions
on Transferability |
|
3.4.1 |
The
Seller understands that (i) his respective portion of the Aggregate Share Consideration
as set opposite to such Seller’s name in Exhibit A (hereinafter, the “Shares”),
have not yet been registered under the Securities Act, or under the laws of any other
jurisdiction; (ii) such Shares cannot be sold, transferred or otherwise disposed of
unless they are subsequently registered under the Securities Act and, where required,
under the laws of other jurisdictions, in accordance with Regulation S, or unless another
exemption from registration is then available; (iii) there is now no registration
statement on file with the SEC with respect to the Shares. |
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The
Seller acknowledges and agrees that the certificates representing the Shares shall bear a
restrictive legend as counsel to the Issuer may determine are necessary or appropriate
under applicable securities laws, substantially to the effect of the following: |
|
“The
securities represented by this certificate have not been registered under the Securities
Act of 1933 and may not be transferred, sold or otherwise disposed of in the absence of
an effective registration statement with respect to the shares evidenced by this
certificate, filed and made effective under the Securities Act of 1933, or an opinion of
counsel satisfactory to On Track Innovations Ltd. to the effect that registration under
such Act is not required.” |
|
3.4.2 |
The
Issuer will not register any transfer of Shares not made in accordance with the
provisions of Regulation S, pursuant to registration under the Securities Act, or
pursuant to an available exemption from registration. |
|
3.5 |
Offshore
Transaction and Investment Purposes |
|
The
Seller is not a “U.S. person”, as such term is defined in Regulation S, his
principal address is outside the United States, and it was located outside the United
States at the time any offer to buy the Shares was made to the Seller and at the time
that the buy order was originated by the Seller, and the Shares are being acquired solely
for such Seller’s own account (and in no event and without derogating from the
foregoing, for the account or the benefit of a U.S. person) for investment and are not
being purchased with a view to or for resale, distribution or other disposition, and the
Seller has no present plans to enter into any contract, undertaking, agreement or
arrangement for any such resale, distribution or other disposition, except as set forth
in the Agreement. |
|
3.6 |
Information
and Advice |
|
The
Seller has carefully reviewed and understands the risks of a purchase of the Shares. In
connection with such Seller’s investment in the Issuer, it has obtained the advice
of his own investment advisors, counsel and accountants. The Seller and his advisors have
been afforded the opportunity to ask questions to the Issuer concerning the terms and
conditions of the Shares and to obtain any additional information necessary to verify the
accuracy of any representations or information set forth about the Shares. |
|
3.7 |
Sophistication
and Risk |
|
3.7.1 |
The
Seller has such knowledge and experience in financial and business matters that it is
capable of evaluating, and has evaluated, the merits and risks in receipt of the Shares
as consideration for the Seller’s Shares. |
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3.7.2 |
The
Seller understands that no federal or state agency has passed upon the Shares or made any
finding or determination as to the fairness of the transactions contemplated in this
Agreement. |
|
The
jurisdiction in which an offer to sell, and any other action in connection with such
offer and sale of the Shares to the Seller was outside the United States. The Seller has
no present intention of becoming a resident of (or moving his principal place of business
to) the United States. |
|
At
no time was the Seller presented with or solicited by any leaflet, public promotional
meeting, newspaper or magazine article, radio or television advertisement or any other
form of general advertising or general solicitation concerning the Shares. |
|
The
Seller represents that it is not a broker or dealer, nor is it an affiliate of any broker
or dealer. For the purpose of this Sub-Section, the term “dealer” means any
person who engages either for all or part of his time, directly or indirectly, as agent,
broker, or principal, in the business of offering, buying, selling, or otherwise dealing
or trading in securities issued by another person; and the term “broker” means
any person engaged in the business of effecting transactions in securities for the
account of others. Each Investor further represents that it is acquiring the Shares in
the ordinary course of business, and at the time of this Agreement it has no agreements
or understandings, directly or indirectly, with any person to distribute the Share. |
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The
Seller hereby confirms that he shall be solely responsible and liable for any taxes
levied against the Seller arising out of or in connection with the receipt and sale of
the Shares. Seller hereby declares that he will make sure that his sale of the Shares,
are performed strictly in accordance with and under the terms and conditions of the Issuer’s
Xxxxxxx Xxxxxxx Policy, as available from time to time, if applicable. |
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Without
prejudice of the representations and warranties of the Issuer set forth in Section 5 and
subject to the fulfilment of all of the Issuer’s undertakings and obligations
pursuant to this Agreement, the Seller hereby irrevocably waives, relinquishes and
releases the Issuer from any and all claims, rights, demands or causes of action asserted
or non-asserted which Seller may have had, now has or hereafter may have against the
Issuer, its directors, officers, employees, agents and/or consultants, in connection with
the issuing and/or sale of the Shares, including without limitation, any fluctuations in
the Share price. For the avoidance of doubt, it is hereby expressly agreed that nothing
in this Section shall prevent the Sellers from asserting any claim against the Issuer for
fraud and/or breach of this Agreement. |
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Neither
the Seller, nor any of his employees has employed or made any agreement with any broker,
finder or similar agent or any person or firm, which will result in the obligation of the
Seller, the Company or the Issuer to pay any finder’s fee, brokerage fees or
commission or similar payment in connection with the transactions contemplated hereby. |
4. |
REPRESENTATIONS
AND WARRANTIES OF THE WARRANTORS |
|
Each
Warrantor acting severally and not jointly provides as of the Closing Date the sole
representations and warranties as restrictively listed under Sections 4.1. to 4.17
hereunder, to the exclusion of any other representation or warranty, either direct or
indirect, express or implied: |
|
The
Company is duly organized and validly existing under the laws of France, 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. |
|
Immediately
before Closing the issued and outstanding share capital of the Company on a Fully Diluted
Basis shall be as set forth in Annex 4.2 hereto.Other than the transactions
contemplated by this Agreement and in the Articles, there are no other share capital,
preemptive rights, convertible securities, outstanding warrants, options or other rights
to subscribe for, purchase or acquire from the Company any share capital of the Company
and there are no contracts or binding commitments providing for the issuance of, or the
granting of rights to acquire, any share capital of the Company or under which the
Company is, or may become, obligated to issue any of its securities. All issued and
outstanding share capital of the Company has been duly authorized, and is validly issued
and outstanding and fully paid and non assessable. The Sellers’ Shares, when
transferred to the Issuer at the Closing will be duly authorized, validly issued, fully
paid, nonassessable, and free of any Security Interest and will have the rights,
preferences, privileges, and restrictions set forth in this Agreement, and in the
Articles and will be duly registered in the name of the Issuer in the Company’s
share transfer register and in the shareholders’ accounts. The Company is not under
any obligation to register for trading on any securities exchange any of its currently
outstanding securities or any of its securities that may hereafter be issued. Except as
set forth in this Agreement, since its incorporation, there has been no declaration or
payment by the Company of dividends, or any distribution by the Company of any assets of
any kind to any of its shareholders in redemption of or as the purchase price for any of
the Company’s securities. |
|
The
Company does not presently own or control, directly or indirectly any interest in any
other corporation, partnership, trust, joint venture, association, or other entity. |
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The
directors, president and officers of the Company as of the Closing are listed under Annex
4.4. Other than the transactions contemplated by this Agreement, the Company has no
agreement, obligation or commitment with respect to the election of any individual or
individuals to the Board or as president of the Company and to the best knowledge of the
Sellers, there is no voting agreement or other arrangement among the Company’s
shareholders with respect to the election of any individual or individuals to the Board
or as president of the Company. |
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4.5 |
Financial
Statements. |
|
The
Company has furnished the Issuer with the financial statements as of and for the year
ended December 31, 2005 certified without any reserve by the statutory auditor of the
Company, a copy of which is attached as Annex 4.5. The Company has provided the
statutory auditor with all information and documents required by him to complete his
audit of the 2005 accounts. Since December 31, 2005, other than as stated in this
Agreement and in any of the documents, exhibits or annexes attached hereto, there has not
been: |
|
(a) |
any
material adverse change in the assets, liabilities, condition (financial or
otherwise), business or prospects of the Company; |
|
(b) |
any
damage, destruction or loss, whether or not covered by insurance, materially
and adversely affecting the assets, properties, conditions (financial or
otherwise), operating results, business or prospects of the Company; |
|
(c) |
any
waiver by the Company of a valuable right or of a material debt owed to it; |
|
(d) |
any
satisfaction or discharge of any material lien, material claim or material
encumbrance or payment of any material obligation by the Company, except
in the ordinary course of business and that is not individually or in the
aggregate adverse to the assets, properties, condition (financial or
otherwise), operating results, business or prospects of the Company; |
|
(e) |
any
change or amendment to a material contract or material arrangement by which
the Company or any of its assets or properties is bound or subject; |
|
(f) |
any
material change in any compensation arrangement or agreement with any
employee of the Company; including, without limitation, any registration
or termination of employment of any key officer or key employee of the
Company; |
|
(g) |
any
loans or guaranties made by the Company to its employees, officers,
president or directors other than travel advances made in the ordinary
course of business; |
|
(h) |
any
sale, transfer or lease of, except in the ordinary course of business, or
mortgage or pledge of imposition of lien on, any of the Company’s
assets; |
|
(i) |
any
change in the accounting methods or accounting principles or practices
employed by the Company; or |
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|
(j) |
any
other event or condition of any character that would materially adversely
affect the assets, properties, financial condition, operating results,
business or prospects of the Company; |
|
More
generally, since December 31, 2005, other than as stated in this Agreement and in any of
the documents, exhibits or annexes attached hereto, the Company has been managed “en
bon père de famille”. |
|
4.6 |
Authorization;
Approvals. |
|
All
corporate action on the part of the Company necessary for the authorization, execution,
delivery, and performance of all of the Sellers and Company’s obligations under this
Agreement, and for the authorization of the transfer of the Sellers’ Shares under
this Agreement has been duly and lawfully taken prior to or at the Closing. This
Agreement, when executed and delivered by the Sellers, shall constitute the valid and
legally binding obligations of the Sellers, legally enforceable against the Sellers in
accordance with their respective terms (except as such enforceability may be limited by
applicable law). Except as set forth in this Agreement and the Articles, no consent,
approval, order, license, permit, action by, or authorization of on the part of the
Company is required that has not been, or will not have been, obtained by the Company
prior to the Closing in connection with the valid execution, delivery and performance of
this Agreement. |
|
4.7 |
Compliance
with Other Instruments. |
|
The
Sellers are not in default under the Articles of the Company. |
|
4.8 |
Intellectual
Property and Other Intangible Assets. |
|
(a) |
Annex
4.8(a) is a true, correct and complete list of all Intellectual
Property owned by the Company at Closing Date which to the best knowledge
of the Warrantors does not infringe any rights of third parties. |
|
Any
Intellectual Property related to the business of the Company which has been developed by
any of the Warrantors has been assigned exclusively to the Company pursuant to two
agreements appearing under Annex 2.2 (a) (vii) concluded on January 1, 2006
respectively between the Company, Xxxxxx Xxxxxxxxx and Xxxxxxxx Xxxxx and between
the Company and Philippe Frémy. |
|
The
Company does not use any Intellectual Property, if any, developed by Mr. Xxxx-Xxxxxx
Enguent and Xx. Xxxxx Charrat. Notwithstanding the foregoing, the Warrantors notified the
Issuer that by virtue of the agreements between the Company and InSide Contactless, the
agreements between the Company and ST Microelectronics NV and the agreements between the
Company and Atmel Inc., these agreements are specified in Annex 2.2 (a) (vii), the
Company may have legally used Intellectual Property (if at all) of Mr. Xxxx-Xxxxxx
Enguent and Xx. Xxxxx Charrat. In addition, Mr. Xxxx-Xxxxxx Enguent and Xx. Xxxxx Charrat
do not legally own and/or do not have a legal right to use any Intellectual Property of
the Company. |
- 12 -
|
(b) |
Annex
2.2. (a) (vii) is a true, correct and complete list of all contracts
to which the Company is a party with respect to Intellectual Property as
of the Closing Date. |
|
(c) |
In
respect of each item of Intellectual Property identified in Annex 4. 8.
(a), as of the Closing Date: |
|
(i) |
the
Company possesses all rights and title to the item which to the best
knowledge of the Warrantors, as mentioned under article 4.8 (a) hereabove,
does not infringe any rights of third parties, |
|
(ii) |
neither
the Sellers nor the Company have received any notification alleging that
the Company, by using the item, has violated or infringed third parties’ rights. |
|
No
litigation, proceeding, complaint or demand is pending or to the best of the Warrantors’ knowledge,
threatened, which challenges the ownership of the item and the Company was not served
with any notice relating to the intention of any party to commence such actions. |
|
The
Company has prepared and timely filed all applicable sales (including but not limited to
VAT) estate, income and payroll tax returns and filings that are required to be filed by
it (the “Tax Returns”) and has paid all amounts due pursuant to
such returns. None of the Tax Returns has been audited by any taxing authority. |
|
Annex
2.2. (a) (vii) contains a true and complete list of all Material Contracts to which
the Company is a party or which is under negotiation as of the Closing Date. |
|
Neither
the Sellers nor the Company have terminated or been notified termination, to the extent
applicable, of such Material Contracts as of the Closing Date. |
|
Neither
the Sellers nor the Company have received any notification alleging that the Company has
violated any of the Material Contracts as of the Closing Date. |
|
Neither
the Sellers nor the Company have sent any notification alleging that the contracting
party has violated any of the Material Contracts as of the Closing Date. |
|
To
the best knowledge of the Warrantors, the Company is not in material breach of any
Material Contract. |
|
The
Company is not a party to any litigation, proceeding or governmental inquiry or
investigation and, to the best knowledge of the Warrantors, no action, proceeding or
governmental inquiry is pending or threatened before any court, arbitration board or
tribunal or administrative or other governmental agency. |
- 13 -
|
4.12 |
Interested
Party Transactions. |
|
There
are no existing arrangements or proposed transactions between the Company and any
officer, director, president or holder of more than ten percent (10%) of the share
capital of the Company, or any affiliate or associate of any such person. No employee,
shareholder, officer, director or president of the Company is indebted to the Company,
nor is the Company indebted (or committed to make loans or extend or guarantee credit) to
any of them (except for payment of salaries when due). |
|
Annex
4.1 3(a) contains a true, correct and complete list of the name, title, date of hire
and current monthly compensation, of each person employed by the Company on the Closing
Date (including persons employed as trainees) and any independent contractors engaged by
the Company as clearly identified as not being employees of the Company, together with a
statement of the full amount and nature of any other remuneration, whether in cash or
kind, paid to each such person during the 2005 calendar year and during the calendar year
2006 through the Closing Date. |
|
Annex
4.13(b) contains a true, correct and complete list of the contracts of employment and
hiring agreements executed with each of the employees of the Company as well as the last
12 months pay slips concerning each of the employed persons. |
|
The
Company has not received any complaint nor notice from any of its employees indicating
his/her intent to terminate his/her employment with the Company. |
|
As
of the Closing Date, the Company is not a party to any litigation or proceeding and, to
the best knowledge of the Warrantors, none is pending against the Company in relation to
employee matters. |
|
The
Company is not the subject of any particular proceeding by the Labor Inspection for
failure to comply with labor legislation. |
|
As
of the Closing Date, the Company does not have and has not taken any undertakings
regarding additional or deferred compensation or share or option plans covering any of
its officers, employees or consultants. |
|
Neither
the Company, nor any of its employees, shareholders or any subsidiary has employed or
made any agreement with any broker, finder or similar agent or any person or firm, which
will result in the obligation of the Company or the Issuer to pay any finder’s fee,
brokerage fees or commission or similar payment in connection with the transactions
contemplated hereby. |
|
4.15 |
Banks,
Powers of Attorney |
|
Annex
4.15 hereto contains a correct and complete list setting forth the name of each bank
in which the Company has an account or safe deposit box, the names of all persons
authorized to draw thereon or to have access thereto, and the names of each person
holding a power of attorney from the Company. Except as described in Annex 4.15 with
details of powers thus granted and the post occupied by the beneficiaries, there are no
outstanding powers of attorneys or delegations of power which have been granted by the
Company to any person or entity. |
- 14 -
|
4.16 |
Corporate
books and Records |
|
The
minutes and related books of resolutions of the Company and the stock registers (the «registre
des mouvements de titres » and the « comptes d’actionnaires »)
of the Company required by French Law, as amended, are up-to-date, have been fully
maintained and contain true and accurate records in all material respect. |
|
The
Warrantors have disclosed to the Issuer all material information relating to the Company
and the Sellers’ Shares. |
5. |
REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE ISSUER |
|
The
Issuer hereby represents and warrants to the Sellers as of the date hereof and as of the
Closing as follows: |
|
The
Issuer is a duly organized and validly existing corporation under the laws of the state
of Israel. |
|
5.2 |
Authority
to Transact |
|
The
Issuer has the capacity and authority to execute and deliver this Agreement, to perform
hereunder and to consummate the transactions contemplated hereby. All corporate action on
the part of such Issuer necessary for the authorization and execution of this Agreement,
the purchase of the Sellers’ Shares and the performance of all of such Issuer’s
obligations hereunder have been taken. This Agreement constitutes and, when signed by its
duly authorized representatives, all other documents contemplated hereby will constitute,
valid and legally binding obligations of the Issuer, enforceable in accordance with their
terms. The Issuer has complied with the securities laws of Israel and the United States
in connection with the issuance of the Aggregate Share Consideration. |
|
The
Issuer is not in possession of any material non-public information regarding the Issuer
having material adverse affect on the Issuer and which it has not disclosed to the
Warrantors. |
|
5.4 |
Execution
of Agreement |
|
The
execution and delivery of this Agreement by the Issuer does not, and the consummation of
the transactions contemplated hereby will not, violate any provisions of the
incorporation documents of the Issuer. |
- 15 -
|
Neither
such Issuer, nor any of its employees, shareholders or any subsidiary has employed or
made any agreement with any broker, finder or similar agent or any person or firm, which
will result in the obligation of the Seller or the Company to pay any finder’s fee,
brokerage fees or commission or similar payment in connection with the transactions
contemplated hereby. |
|
5.6 |
Registration
and Listing of Shares |
|
5.6.1 |
The
Issuer shall, at its own expense and cost, file a registration statement covering all the
Shares to be issued to the Sellers under this Agreement, as set forth in Exhibit A, and
the warrants to be issued pursuant to this Agreement no later than July 31, 2006 (the “Registration
Statement”), and shall use its commercially reasonable efforts to cause such
Registration Statement to become effective as soon as practicable thereafter. |
|
5.6.2 |
As
soon as practicable and subject to the effectiveness of the Registration Statement, the
Issuer will, at its own expense and cost, complete the necessary actions required to
register and make the Shares tradable in the NASDAQ stock exchange, all in accordance
with and subject to the Securities Act. The Issuer hereby undertakes to deliver to each
Seller a notice confirming that the Shares have become tradable on NASDAQ. |
|
5.6.3 |
Delay
in Effectiveness of Registration Statement. In the event that the Registration
Statement is not declared effective within one hundred eighty (180) days following the
Closing date, the Issuer shall pay to each Seller (except for any Seller whose failure to
provide information as required hereunder causes a delay in filing or in obtaining
effectiveness) liquidated damages, in cash, in an amount equal to such Seller’s pro
rata portion (based on the number of shares sold by such Seller) of $20,000 (a “Liquidated
Damages Payment”). For each successive thirty day period (or portion
thereof) thereafter, until the Registration Statement becomes effective and at the latest
until the end of a twelve-month period, the Issuer shall pay to each Seller (except for
any Seller whose failure to provide information as required hereunder causes a delay in
filing or in obtaining effectiveness) an additional Liquidated Damages Payment in cash;
provided, however, that in the case of any such successive period of less than
thirty days, the additional Liquidated Damages Payment shall be calculated on a pro rata
basis based on the number of days actually elapsed in such period. Each Liquidated
Damages Payment payable in respect of a successive thirty-day period (or portion thereof)
shall be payable at the end of such successive thirty-day period (or portion thereof). In
recognition of the difficulty of determining the Sellers’ damages or loss as a
result of the Registration not being filed or being declared effective within the time
periods described above, it is hereby agreed that the foregoing amount of Liquidated
Damages is deemed to represent a reasonable estimate of the Sellers’ damages and
shall be the sole remedy of the Sellers in this regard. |
- 16 -
|
The
Shares issued to the Sellers pursuant to this Agreement at the Closing shall, upon the
contribution against thereof of the Sellers’ Shares, be duly authorized and validly
issued, fully paid and non-assessable and free of any preemptive rights, liens,
encumbrances or third party rights, and will have the rights, preferences, privileges,
and restrictions set forth in the Company’s Articles of Association. |
|
No
announcement or other disclosure concerning the contribution of the Sellers’ Shares
to the Issuer or any ancillary matter shall be made after Closing by the parties save in a
form agreed between the parties or otherwise as required by law. |
|
7.1 |
As
a reduction of the consideration stated under Section 2.1.2. of this Agreement, each
Warrantor agrees severally and not jointly to indemnify the Issuer against and in respect
of any and all loss, liability, deficiency, damage, cost, or expense, or actions in
respect thereof (including reasonable legal fees and expenses) (“Damages”),
as and when incurred, occasioned by (i) any breach of this Agreement by the Sellers; (ii)
any falsity of any of the representations and warranties of the Warrantors contained in
Section 3 and 4 above, respectively, or any certificate or other instrument furnished by
the Sellers; or (iii) any claim by a third party related to facts originating prior to
the Closing Date which if true would be such a misrepresentation or breach. |
|
7.2 |
The
sole and exclusive remedy of the Issuer for any claim arising under, out of, or related
to this Agreement against the Sellers, shall be the indemnification provided in this
Section 7 and the Issuer agrees that it will not pursue any other remedy (including
statutory, equitable or common law), except claims for specific performance or injunctive
relief in accordance with the terms of this Agreement. |
|
7.3 |
The
representations and warranties set forth in Sections 3, 4 and 5 above of this Agreement
will survive the Closing and will expire upon eighteen (18) months from the Closing Date,
except the representations and warranties concerning Intellectual Property made in or
pursuant to Section 4.8 of this Agreement will expire upon the second anniversary of the
Closing Date. |
|
7.4 |
(a)
The Warrantors which remain employees to the Company will notify the Issuer within eight
(8) days, in writing, as soon as they become aware of any event that could constitute a
violation of one of the representations or warranties, or any of the commitments, or any
of the other provisions of this Agreement, which could justify the implementation of the
right to indemnification. |
|
(b) The Issuer shall also notify the Seller’s Representative (as defined
below) in writing, within eight (8) days, of any event which was brought to his
knowledge and would reasonably be likely to constitute a claim under this
Agreement. |
- 17 -
|
Said
notifications will be made according to the provisions of Section 10.1 hereunder. In this
respect, Xx. Xxxxxx Xxxxxxxxxxxx is appointed as agent and representative of each Seller
and Warrantor (the “Sellers’ Representative”) to give and receive
notifications, agree and negotiate, enter into settlements and compromises, comply with
court orders and take any decisions or actions necessary or appropriate with respect to
any claim under this Agreement. |
|
Should
the Sellers’ Representative not answer to the notification of such claim within
thirty (30) days, the Issuer will be entitled to pursue its claims in accordance with
Section 10.9 hereunder or otherwise as it deems fit in accordance with the terms of this
Agreement. It is hereby clarified that Sellers’ rights should not be adversely
affected by not responding within the said period of time. |
|
In
the event the Sellers’ Representative shall object in writing to such claim, the
Sellers’ Representative and the Issuer shall attempt in good faith to agree upon the
rights of the respective parties and the extent of any Damages with respect to the claim.
If no agreement can be reached, either the Issuer or the Sellers’ Representative may
subject the claim to an arbitration decision pursuant to the provisions of Section 10.9
hereunder. All indemnities payable by the Warrantors with respect to any final
arbitration decision shall be binding upon them, and shall become immediately due to the
Issuer. |
|
(c)
The Sellers’ Representative shall have the right, at his own expense, to
designate counsel to defend the Sellers’ interests in connection with any
third party claim against the Company which may give rise to Damages. The
Sellers’ Representative and the Issuer shall fully cooperate with such
counsel who shall have the right to participate in all communication and
procedures in defending against any such claim. The Issuer or the Company shall
have the right to settle, adjust or compromise such third party claim with the
consent of the Sellers’ Representative; provided however, such consent
shall not be unreasonably withheld. |
|
(d)
All indemnities payable by the Warrantors with respect to any final,
unappealable adverse judgment obtained against the Company, shall become
immediately due to the Issuer. In the event of an adverse judgment subject to
appeal, unless such judgment is subject to immediate execution, no amount shall
be payable to the Issuer until the expiration of the deadline for appeal, and
thereafter should the Warrantors decide to pursue such appeal, until a judgment
has been obtained upon appeal. |
|
7.5 |
The
maximum amount of Damages that may be recovered from all the Warrantors arising out or
resulting from this indemnification provision shall be equal to one million (1,000,000)
US Dollars. Therefore, the maximum amount of Damages that may be recovered from each of
the Warrantors shall be equal to three hundred thirty three thousand three hundred thirty
three (333,333) US Dollars. |
|
The
Issuer shall be entitled to seek indemnification from the Warrantors under this Agreement
only if the aggregate amount of such Damages exceeds fifty thousand (50,000) US Dollars
and where such amount of fifty thousand (50,000) US Dollars will be deducted from the
total amount of Damages due by the Warrantors. Therefore, each Warrantor may only be
liable until the aggregate amount of such Damages exceeds sixteen thousand six hundred
and sixty six (16,666) US Dollars, such amount being deducted from the total amount of
Damages due by each Warrantor. |
|
In
assessing any Damages recoverable by the Issuer as a result of any claim for
indemnification under this Agreement, there shall be taken into account any tax benefit
obtained directly in consequence of the matter which gives rise to such claim by the
Issuer within the fiscal year in which the matter has occurred. |
- 18 -
|
7.6 |
The
amount of Damages due by the Warrantors to the Issuer pursuant to this Section 7 shall be
paid solely by and limited to the net proceeds received by each Warrantor from the sale
of the Ordinary Shares (including those Ordinary Shares underlying the warrants to the
extent the Warrantor holds any Ordinary Shares and/or warrants) held by the Warrantor at
the Lock Up Acceleration Date, pursuant to the terms of Section 7.5 above (the “Net
Proceeds Indemnification Amount”). |
|
For
example, if the amount of Damages due by a Warrantor is 300,000 US Dollars and the Net
Proceeds Indemnification Amount (received from selling all the Ordinary Shares held by
the Warrantor at the Lock Up Acceleration Date, including those underlying the warrants
to the extent the Warrantor holds warrants) is 200,000 US Dollars, then the Issuer shall
not have any further indemnification action against the Warrantor for the 100,000 US
Dollars difference. |
|
The
Lock Up Acceleration Date shall mean the earlier time when a Warrantor becomes aware of
any event that reasonably could constitute a violation of one of the representations or
warranties, or any of the commitments, or any of the other provisions of this Agreement,
which could justify the implementation of the right to indemnification. |
|
As
soon as the Damages are due by the Warrantors, the Warrantors shall in accordance with
the instructions of the Issuer, sell a sufficient number of Ordinary Shares (including
those Ordinary Shares underlying the warrants to the extent the Warrantor holds any
Ordinary Shares and/or warrants) held by the Warrantor at the Lock Up Acceleration Date
to enable them to pay the full amount of the Net Proceeds Indemnification Amount which
shall be transferred to the Issuer as soon as received. It is hereby clarified, that in
the event that the number of Ordinary Shares (including those Ordinary Shares underlying
the warrants to the extent the Warrantor holds any Ordinary Shares and/or warrants) held
by the Warrantor at the Lock Up Acceleration Date is not sufficient to enable them to pay
the amount of the Net Proceeds Indemnification Amount, the Warrantors shall not be
required to provide any other indemnification to the Issuer. |
|
Any
lock-up restrictions in force at the date the Damages are due, will be waived by the
Issuer for the sole purpose of the indemnification and within the limit of the sale by
the Warrantors of the Ordinary Shares necessary to pay the Net Proceeds Indemnification
Amount. |
8. |
NON-COMPETITION;
NON-SOLICITATION |
|
8.1 |
For
a period of thirty-six (36) months from the Closing Date, none of the Warrantors shall: |
|
(a) |
Directly
or indirectly, engage in, own, control, or make a significant
non-controlling investment in, any business (the “Concerned
Entity”) that competes directly with the Business within the
“Restricted Area”. For purposes of this Section 8.1, the
term “Restricted Area” shall mean all of the countries of the
European Economic Area (E.E.A.), and the term “Business” shall
mean the smart cards industry. |
- 19 -
|
(b) |
Cause,
authorize or let any Concerned Entity that the Warrantors directly or
indirectly control to enter into, or conduct any business that competes
directly with the Business of the Company within the Restricted Area. |
|
(c) |
Accept
employment with, or act as a contractor, consultant, advisor or agent to
or otherwise assist, a Concerned Entity, any person or entity that
competes directly with the Business within the Restricted Area. |
|
(d) |
Directly
or indirectly (other than through general advertisements) solicit or
employ any person who at such time provides services for or is otherwise
employed by the Company, the Issuer, or any of its affiliates, or
encourage or induce any employee of the Company, the issuer or any of its
affiliates to leave such employment. |
|
(e) |
Directly
or indirectly solicit any customer or client of the Company or any of
their affiliates for any activity which competes directly with the
Business. |
|
8.2 |
The
obligations of the Warrantors pursuant to this Section 8 shall be several but not joint,
each Warrantor being solely liable of its obligations therein. |
|
Each
party hereto agrees, in addition to any other existing confidentiality obligation, that it
shall at all times keep confidential and not divulge or make accessible or use any
non-public material information concerning or relating to the business, technical or
financial affairs of the other parties to this Agreement, to which such party has been or
will become privy by reasons relating to this Agreement and the schedules and annexes
attached thereto, to anyone, except (i) to its employees and advisors in such
capacity as required to perform its obligations hereunder, (ii) if required by law
(including without limitations applicable securities laws) or regulatory authorities
(including, without limitations, any securities authority), (iii) as required to be
disclosed to the Company’s shareholders pursuant to the terms of the Articles; (iv)
as required to be disclosed by the Issuer following the Closing pursuant to its
incorporation documents, subscription agreements and partnership agreements and by law. |
|
All
notices or other communications hereunder shall be in writing and shall be given in
person, by registered mail (registered international air mail if mailed internationally),
by an overnight courier service which obtains a receipt of the person to evidence
delivery, or by facsimile transmission (provided that written confirmation by registered
mail is provided), addressed as set forth below: |
- 20 -
|
|
|
|
If to the Issuer:
With a copy to:
If to Sellers (and also in his capacity as
the Sellers' Representative):
With a copy to:
|
On Track Innovations Ltd.
Attention: Xx. Xxxx Xxxxxx
Address: X.X. Xxx 00 XXX XX, Xxxx Xxxx, Xxxxxx 00000
Fax: x000 0 0000000
Xx. Xxxxxx Xx Xxxxxxxx
Xxxx & Associes, Avocats a la Cour - Law Offices
00, xxx Xxxxxx x'Xxxxxxx 00000 Xxxxx, Xxxxxx
Fax: x00 0 00000000
Xx. Xxxxxx Xxxxxxxxxxxx
00 xxx xx Xxxxx
00000 Xxxxx
Fax: x00 0 00000000
Xx. Xxxxxxxx Xxxxx
000 xxx Xxxxxxxx
00000 Xxxxx
Xx. Xxxxxx Xxxxxxxxx
10-12 rue Massena
92500 Rueil Malmaison
|
|
or
such other address as any party may designate to the other in accordance with the
aforesaid procedure. All communications delivered in person or by courier service
delivered in person shall be deemed to have been given upon delivery. |
|
10.2 |
Successors
and Assignees |
|
(a) |
None
of the rights or obligations under or pursuant to this Agreement may be
assigned or transferred to any other person without the written consent of
all the parties. |
|
(b) |
This
Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties and their respective successors and assigns. |
|
Each
party shall bear its own costs, taxes and expenses relating to the transactions
contemplated herein. |
|
10.4 |
Delays
or Omissions; Waiver |
|
The
rights of a party may be waived by such party only in writing and specifically; the
conduct of any one of the parties shall not be deemed a waiver of any of its rights
pursuant to this Agreement and/or as a waiver or consent on its part as to any breach or
failure to meet any of the terms of this Agreement or as an amendment hereto. A waiver by
a party in respect of a breach by the other party of its obligations shall not be
construed as a justification or excuse for a further breach of its obligations. |
- 21 -
|
No
delay or omission to exercise any right, power, or remedy accruing to any party hereto
upon any breach or default by the other under this Agreement shall impair any such right
or remedy nor shall it be construed to be a waiver of any such breach or default, or any
acquiescence therein or in any similar breach or default thereafter occurring. |
|
This
Agreement may be amended or modified only by a written document signed by all the parties
hereto. |
|
This
Agreement (together with the recitals, schedules, appendices, annexes and exhibits
attached hereto) contains the entire understanding of the parties with respect to its
subject matter and all prior negotiations, discussions, agreements, commitments and
understandings between them with respect thereto not expressly contained herein shall be
null and void in their entirety, effective immediately with no further action required. |
|
10.7 |
Counterparts,
Facsimile Signatures |
|
This
Agreement may be executed in any number of counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument. A signed
Agreement received by a party hereto via facsimile will be deemed an original, and
binding upon the party who signed it. |
|
This
Agreement shall be governed by and construed according to the laws of the State of Israel
(without giving effect to its conflict of law provisions), except, that the
provisions applicable to the Sellers Shares and/or the exercise of rights by virtue of
any shareholding in the Company as well as the provisions related to the representations
and warranties and covenants of the Sellers as well as indemnification provisions shall
be governed by and construed according to the laws of France. |
|
The
parties acknowledge that this Agreement is deemed to be an international agreement and a
commercial agreement which defines the terms and conditions of the contribution to the
Issuer of 100% of the share capital of the Company. |
- 22 -
|
Therefore,
the parties acknowledge and expressly agree that all claims, controversies or dispute
arising in connection with this Agreement which are not resolved by mutual agreement of
the parties shall be finally settled by arbitration. The arbitral panel shall consist of
three (3) arbitrators. The Sellers’ Representative shall appoint one arbitrator and
the Issuer shall appoint another. The two arbitrators so appointed shall agree upon the
appointment of the third arbitrator, who shall be the President of the arbitral panel,
within fifteen (15) days from the date upon which both of them have been duly appointed.
In the event that one of the parties shall fail to name an arbitrator within fifteen (15)
days from receiving notice from the other to so name an arbitrator or that the two chosen
arbitrators are unable to agree upon a third arbitrator within the above-referenced
fifteen (15) day period, the necessary designation shall be made by the President of the
Commercial Court of Paris (Tribunal de Commerce de Paris), acting in summary
proceedings (statuant comme en matière de référé), at
the request of the most diligent party, with each party having the opportunity to be
heard. The arbitral panel shall render its decision within three (3) months of the date
of its constitution and shall provide the reasoning for its decision. The arbitral panel
shall fix its own rules of procedure, but the arbitrators shall be bound by the
provisions of substantive law and not have the power to act as conciliators (amiables
compositeurs). The decision of the arbitral panel shall be final and binding upon the
parties, shall not be subject to appeal or contest and may be enforced in any court of
appropriate jurisdiction. The place of arbitration shall be Paris, France, and the
English language shall be used throughout the proceedings. This section shall serve as an
arbitration agreement among the parties hereto in accordance wih the Israeli Law of
Arbitration 5728-1968 and their execution of this Agreement shall be deemed execution of
an arbitration agreement. |
|
At
any time and from time to time, each party agrees, without further consideration, to take
such actions and to execute and deliver such documents as may be reasonably necessary to
effectuate the purposes of this Agreement. |
|
10.11 |
No
Third-Party Beneficiaries |
|
Nothing
in this Agreement shall create or confer upon any person or entity, other than the
parties hereto or their respective successors and permitted assigns, any rights,
remedies, obligations or liabilities. |
|
10.12 |
Language
of Agreement |
|
(a) |
The
parties acknowledge that they fully understand and accept any and all
provisions of this Agreement, and the Sellers have been assisted in
the negotiation of this Agreement by a lawyer fluent in both the
English and the French language. The Sellers hereby expressly waive
any rights they may have to terminate this Agreement or have it
declared void because it is not drafted in the French language. |
|
(b) |
The
parties expressly agree that existing contracts and other documents
incorporated into the Schedules, Exhibits and Annexes to this
Agreement can be in the French language, if they only exist in the
French language. |
[Reminder of page
intentionally left blank]
- 23 -
[Signature Page for
Share Contribution Agreement]
IN WITNESS WHEREOF, this
Agreement has been duly executed on the date herein above set forth.
/s/ Xxxx Xxxxxx ——————————————
ON TRACK INNOVATIONS LTD. By: Xxxx Xxxxxx Title: Chairman, President & CEO |
|
/s/ Xxxxxx Xxxxxxxxxxxx ——————————————
INSEAL SAS By: Xxxxxx Xxxxxxxxxxxx Title: President |
/s/ Xxxxxx Xxxxxxxxx ——————————————
By: Xx. Xxxxxx Xxxxxxxxx |
|
/s/ Philippe Fremy ——————————————
By: Xx. Xxxxxxxx Xxxxx |
/s/ Xxxxxx Xxxxxxxxxxxx ——————————————
By: Xx. Xxxxxx Xxxxxxxxxxxx |
|
/s/ Xxxx Xxxxxx Enguent ——————————————
By: Xx. Xxxx Xxxxxx Enguent |
/s/ Bruno Charrat ——————————————
By: Xx. Xxxxx Charrat |
|
|