EXHIBIT 10.7
SHARE PURCHASE AGREEMENT
This Agreement (the "AGREEMENT") is made as of November 2, 2004, by and
among Telsys Ltd., an Israeli Company No. 520038100, having its address at
Kiryat Atidim 3, Tel-Aviv ( the "SELLER") and B.O.S Better Online Solutions
Ltd., an Israeli company No. 520042565, having its address at Beit Xxxxx,
Xxxxxxxx Xxxxxxxxxx Xxxx, Xxxxxx 00000, Xxxxxx, or an affiliate thereof (the
"PURCHASER"); and Xxxx Electronic Technologies 1992 Ltd., an Israeli company No.
00-0000000, having its address at 00 Xxxxxxx Xxxxx Xxxxxx, Xxxxxx Xx-Xxxx,
00000, Xxxxxx (the "COMPANY").
W I T N E S S E T H :
WHEREAS, the Seller is the owners of 67 issued and outstanding ordinary
shares of the Company, nominal value NIS 0.1 each (the "COMPANY SHARES")
reflecting 25% of the issued and outstanding shares in the Company; and
WHEREAS, the Seller wish to sell to the Purchaser, 34 Company Shares,
reflecting 12.68% of the issued and outstanding shares in the Company (the "SOLD
SHARES"); and
WHEREAS, The Purchaser wishes to acquire such Sold Shares in accordance
with the terms of this Agreement; and
WHEREAS, the Board of Directors of the Company agrees to the transfer of
the Sold Shares, as set forth below;
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties hereby agree as follows:
1. SALE AND PURCHASE OF SHARES.
1.1 GENERAL. The Seller shall sell to Purchaser and the Purchaser shall
purchase, all rights, title and interest in the Sold Shares on the
terms of this Agreement, free from all claims, liens, charges,
pledges, security interests, encumbrances and third party rights of
any kind (the "SECURITY INTERESTS"), other than under the Articles, as
amended, together with all rights, preferences and privileges
attaching to, or conferred by, them.
1.2 CONSIDERATION. Subject to Closing, the Purchaser shall, in
consideration for the purchase from the Seller of the Sold Shares pay
to the seller cash in the amount of Five Hundred Seventy Thousand
Eight Hundred and Ninety Five US Dollars ($570,895).
2. CLOSING OF SHARE EXCHANGE.
2.1 CLOSING. The closing of the sale and purchase of the Sold Shares shall
take place at a closing (the "Closing"), which will be held at the
offices of Amit, Pollak, Matalon & Xxx-Xxxxxxx, Erez & Co., Advocates
and Notary, NYP Tower, 19th Floor, 00 Xxxxxxx Xxxxx Xx., Xxx-Xxxx
00000 xxxxxxxx (00) xxxx xxxx the date hereof or on such other date,
time and place as the Purchaser and the Seller shall mutually agree,
subject to the fulfillment to the Purchaser's satisfaction, or waiver
of the conditions detailed in Section 8 below, and subject further to
the fulfillment to the Seller's satisfaction, or waiver, of the
conditions detailed in Section 9 below.
2.2 TRANSACTIONS AT CLOSING. At the Closing, the following transactions
shall occur, which transactions shall be deemed to take place
simultaneously and no transaction shall be deemed to have been
completed or any document delivered until all such transactions have
been completed and all required documents delivered:
2.2.1 The Seller and the Company shall deliver, or procure the
delivery, to the Purchaser of the following documents:
a. A duly executed share transfer deed with respect to the
transfer of all the Sold Shares to the Purchaser;
b. A true and correct copy of resolutions of the Board of
Directors of the Company, approving this Agreement and the
transactions contemplated hereby;
c. If issued by the Company, a validly executed share
certificate covering the Sold Shares, issued in the name of
the Purchaser;
d. A true and correct copy of resolutions of the Board of
Directors of the Seller, approving this Agreement and the
transactions contemplated hereby;
e. A signed opinion of counsel to Seller, in the form attached
hereto as EXHIBIT 2.2.1(E), dated as of the date of the
Closing and addressed to the Purchaser.
f. A true and correct copy of resolutions of the Company's
shareholders, properly and duly adopted resolving to amend
the Company's current articles of association (the
"ARTICLES"), in the form attached hereto as EXHIBIT 2.2.1(F)
(the "AMENDMENT"). The Amendment shall include the increase
of the size of the Board of Directors to at least 5
directors, and revisions to Article 32 and 32A of the
Articles, as more fully provided in EXHIBIT 2.2.1(F).
g. A waiver executed by Jacob and Xxxx Xxxxxx ("XXXXXX")
waiving any and all rights they may have with respect to the
transfer of the Sold Shares at the Closing, in the form
attached hereto as EXHIBIT 2.2.1(G).
h. A waiver executed by Seller, waiving any and all rights it
may have with respect to the sale and transfer of Company
Shares at the Closing from Neuhof to Purchaser, in the form
attached hereto as EXHIBIT 2.2.1(H).
i. A copy of an agreement terminating each of the agreement and
the memorandum entered into between the Seller and Neuhof on
September 27, 2000, effective as of the date of Closing, in
the form attached as EXHIBIT 2.2.1(I).
2.2.2 The Purchaser shall deliver to the Seller true and correct
copies of resolutions of the Purchaser's Board of Directors
approving the transaction contemplated hereby.
2.2.3 The Purchaser shall pay $570,895 to the Seller by wire transfer
in immediately available funds to the account(s) of the Seller in
Israel, the details of which appear in EXHIBIT 2.2.3 hereto. Such
payment shall be made in NIS, according to the the NIS-U.S.
Dollar representative rate known on the Closing Date
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3. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
The Seller, represents and warrants to the Purchaser as follows:
3.1 It is the holder and legal owner of all rights, titles and interests
in and to the Sold Shares, free from all Security Interests, other
than as set forth in the Company's Articles, as amended, together with
all rights, preferences and privileges attaching to, or conferred by,
such Sold Shares;
3.2 Other than as set forth in SCHEDULE 3.2, such Seller is not entitled
to purchase, receive or otherwise acquire from the Company any
additional securities of the Company, including without limitation
securities exercisable or convertible into securities of the Company.
3.3 The execution and delivery of this Agreement (and the other documents
contemplated hereby) by such Seller does not, and the consummation of
the transactions contemplated hereby and thereby will not:
(a) constitute a breach of any law, rule or regulation of any
government applicable to the Seller;
(b) violate any judgment, order, injunction, decree, or ruling of any
court or governmental authority, domestic or foreign, to which
the Seller is subject;
(c) require the consent or agreement of any court, governmental body
or entity;
(d) violate any material contract, agreement, indenture, mortgage,
instrument, lease, license, arrangement, or undertaking of the
Seller;
(e) result in the creation or enforcement of any Security Interest
upon the Sold Shares held by the Seller;
3.4 It has, and will have at the Closing, the right to sell and transfer,
or procure the sale and transfer of, the full legal and beneficial
interest in the Sold Shares to the Purchaser on the terms set out in
this Agreement, free from all Security Interests.
3.5 (a) it is duly organized and validly existing under the laws of the
State of Israel, with power and authority to carry on its
business as now being conducted;
(b) it 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 Seller, its directors, and its shareholders necessary for
the authorization and execution of this Agreement, the
authorization, sale and delivery of the Sold Shares and the
performance of all of Seller'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
Seller, enforceable in accordance with their terms; and
(c) the execution, delivery and performance of this Agreement (and
the other documents contemplated hereby) by Seller does not, and
the consummation of the transactions contemplated hereby and
thereby will not violate the provisions of Seller's
organizational documents.
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3.6 Except as set forth in SCHEDULE 3.6, Seller is not party to any
shareholders agreements, voting agreements, registration rights
agreements or any other agreements or undertakings relating to the
share capital of the Company.
3.7 Except as set forth in SCHEDULE 3.7, no consent, approval, order,
license, permit, action by, or authorization of or from any person or
entity or filing with any governmental authority on the part of the
Seller is required that has not been, or will not have been, obtained
by the Seller prior to the Closing in connection with the valid
execution, delivery and performance of this Agreement or the transfer
of the Sold Shares to the Purchaser.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. Purchaser hereby
represents and warrants to the Seller as follows:
4.1. CORPORATE ORGANIZATION. The Purchaser is a corporation duly
incorporated and validly existing under the laws of Israel.
4.2. DUE AUTHORIZATION AND VALID ISSUANCE. The Purchaser has the corporate
power to enter into this Agreement. The Agreement has been, or will
have been, at the time of its execution and delivery, duly executed
and delivered by a duly authorized officer of the Purchaser.
4.3. BINDING AGREEMENT. The Agreement constitutes valid and legally binding
obligations of the Purchaser enforceable against the Purchaser in
accordance with its terms, except as (i) such enforceability may be
limited by bankruptcy, insolvency, reorganization, arrangement,
moratorium or similar laws relating to or affecting the rights of
creditors and contracting parties generally, (ii) the remedy of
specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefore may be brought.
4.4. NON-CONTRAVENTION. Neither the execution and delivery of the
Agreement, nor the consummation of the transactions or the performance
of the obligations contemplated hereby will result in any violation or
breach of Purchaser's articles of association.
5. COVENANTS
5.1 From and after the signing of this Agreement and until the Closing the
Seller shall not dispose of any interest in its Company Shares or any
of them or grant any option over or create or allow to exist any
Security Interest over its Company Shares or any of them.
5.2 No announcement or other disclosure concerning the sale and purchase
of the Sold Shares or any ancillary matter shall be made before or
after the Closing by the parties or any person acting on their behalf,
except subject to Purchaser's prior written approval of the form and
content of such announcement or disclosure or otherwise as required by
law or by the applicable rules of any stock exchange or automated
quotation system.
6. PUT OPTION
6.1 At any time starting from 180 days after the date hereof and ending 12
months thereafter (the "TELSYS OPTION TERM"), Seller may serve notice
in writing on the Purchaser requiring the Purchaser to purchase (the
"TELSYS PUT OPTION") all of the Company Shares then held by Seller
(the "TELSYS OPTION SHARES") in consideration for payment in cash of
Five Hundred Fifty Four Thousand One Hundred and Five US Dollars
($554,105) The Telsys Put Option may be exercised by the Seller in one
occasion during the Telsys Option Term, in full and not in part.
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6.2 The closing of the Telsys Put Option shall be subject to: (i) Seller's
provision, at such closing, of the representation and warranties of
Section 3 hereof, with respect to the Telsys Option Shares; and (ii)
the representation and warranties made by Seller in this Agreement
shall have been true and correct as of the Closing Date.
7. BOARD OF DIRECTORS
7.1 Prior to the Company's IPO, the following shall apply:
(a) Neuhof shall have the right to appoint one (1) member of the
Company's Board of Directors, for as long as Neuhof holds at
least sixty four (64) shares of the Company.
(b) Seller shall have the right to appoint one (1) member of the
Company's Board of Directors, for as long as Seller holds at
least thirty three (33) shares of the Company.
(c) Purchaser shall have the right to appoint all the remaining
members of the Company's Board of Directors, and no less than
three (3) members.
7.2 The parties hereby undertake to vote their shares of the Company in
order to give effect to the provisions of this Section 7.
8. CONDITIONS OF CLOSING OF THE PURCHASER. The obligation of the Purchaser to
purchase the Sold Shares at the Closing are subject to the fulfillment at
or before the Closing of the following conditions precedent, any one or
more of which may be waived in whole or in part by and at the sole
discretion of the Purchaser:
8.1. REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by the Seller in this Agreement shall have been true and correct
when made, and shall be true and correct as of the Closing as if made
on the date of the Closing.
8.2. COVENANTS. All covenants, agreements, and conditions contained in this
Agreement to be performed or complied with by the Seller prior to the
Closing shall have been performed or complied with by the Seller,
prior to or at the Closing.
8.3. NO INJUNCTION. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent
jurisdiction, which prohibits the consummation of any of the
transactions contemplated by this Agreement.
8.4. CONSENTS, ETC. The Seller shall has secured all permits, consents,
approvals and authorizations that shall be necessary or required of it
lawfully to consummate the transactions contemplated by this Agreement
and to transfer the Sold Shares to be purchased by the Purchaser at
the Closing.
8.5. DELIVERY OF DOCUMENTS. All of the documents to be delivered to the
Purchaser pursuant to Section 2 shall have been fully-executed (if
applicable) by all parties whose names appear as intended signatories
thereto (other than the Purchaser), and delivered to the Purchaser.
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8.6. APPROVALS. The Purchaser shall have received all necessary approvals
by the OCS and the Investment Center and of Laurus Master Fund with
respect to the transactions contemplated hereby.
8.7. NOTICES TO NASDAQ THE TASE AND THE ISA. The Purchaser shall have made
all required filings of notices with NASDAQ, the Tel Aviv Stock
Exchange and the Israel Securities Authority and has received no
notice adversely affecting the performance of the transactions
contemplated hereunder. The Purchaser shall use its commercially
reasonable efforts to complete such filings.
8.8. RIGHTS OF FIRST REFUSAL. No Company Shareholder or any other person
has any rights of first refusal, tag along or similar rights in
connection with the issuance of any of the Sold Shares pursuant to
this Agreement, except those rights which have been duly waived.
8.9. PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings of the
Company and the Seller in connection with the transactions
contemplated by this Agreement and all documents and instruments
incident to such transactions shall be satisfactory in substance and
form to the Purchaser and its counsel, and the Purchaser and its
counsel shall have received all such counterpart originals or
certified or other copies of such documents as the Purchaser or its
counsel may reasonably request.
8.10. ABSENCE OF ADVERSE CHANGES. From the date hereof until the Closing,
there will have been no material adverse change in the financial or
business condition of the Company, in the sole judgment of the
Purchaser.
8.11. NEUHOF CLOSING. The closing of the purchase by Purchaser from Neuhof
of 137 Company Shares, reflecting approximately 51% of the issued and
outstanding Company Shares.
8.12. DUE DILIGENCE. The completion of the due diligence review of the
Company by the Purchaser to the sole and complete satisfaction of the
Purchaser.
9. CONDITIONS OF CLOSING OF THE SELLER. Seller's obligation to sell the Sold
Shares at the Closing is subject to the fulfillment, at the discretion of
the Seller, at or before the Closing of the following conditions precedent,
any one or more of which may be waived in whole or in part by the Seller:
9.1. REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by the Purchaser in this Agreement shall have been true and
correct when made, and shall be true and correct as of the Closing as
if made on the date of the Closing.
9.2. COVENANTS. All covenants, agreements, and conditions contained in this
Agreement to be performed or complied with by the Purchaser prior to
the Closing shall have been performed or complied with by the
Purchaser prior to or at the Closing.
9.3. CONSENTS, ETC. The Purchaser shall have secured all permits, consents
and authorizations that shall be necessary or required of it lawfully
to consummate this Agreement and to issue the Consideration Shares to
be issued at the Closing.
9.4. DELIVERY OF DOCUMENTS. All of the documents to be delivered to the
Seller pursuant to Section 2 shall have been fully-executed (if
applicable) by all parties whose names appear as intended signatories
thereto (other than the Seller), and delivered to the Seller or the
Company. The resolutions to be adopted by the Company's Board of
Directors and shareholders pursuant to Section 2 hereof, and the
documents to be delivered to the Purchaser by Neuhof pursuant to
Section 2 shall have been duly adopted and delivered to the Purchaser.
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10. [Reserved]
11. INDEMNIFICATION AND REMEDIES
11.1. The Seller and the Company agree, jointly and severally, to
indemnify, and hold the Purchaser harmless against and in respect of
any and all loss, liability, deficiency or damage, or actions in
respect thereof (including reasonable legal fees and expenses) and any
reduction in the value of the Sold Shares purchased by the Purchaser
hereunder ("DAMAGES"), as and when incurred, occasioned by (i) any
breach of this Agreement; or (ii) any breach of any of the
representations and warranties of the Seller contained in Section 3
hereof (each such representation and warranty is deemed to be made on
the date of this Agreement and at the Closing) or any certificate or
other instrument furnished or to be furnished by the Seller hereunder.
11.2. The Purchaser agrees to indemnify and hold the Seller harmless
against and in respect of any Damages, as and when incurred,
occasioned by any breach of any of the representations and warranties
of the Purchaser contained in Section 4 hereof (each such
representation and warranty is deemed to be made on the date of this
Agreement and at the Closing) or any certificate or other instrument
furnished or to be furnished by the Purchaser hereunder.
11.3. Promptly after (i) receipt by the party making the claim pursuant to
this Section (or any of its directors, employees and advisors) of
notice of the commencement of any action, proceeding, or
investigation; or (ii) the party making the claim pursuant to this
Section (or any of its directors, employees and advisors) becoming
aware of any breach of this Agreement or falsity of representation, in
each case, in respect of which indemnity may be sought as provided
above, such person (the "INDEMNIFIED PARTY") shall notify the party or
parties from whom indemnification is claimed (the "INDEMNIFYING
PARTY") of the claim and, when known, the facts constituting the basis
of such claim. In the event of any such claim for indemnification
hereunder resulting from or in connection with any claim or legal
proceeding by a third party, the notice to the Indemnifying Party
shall specify, if known, the amount of damages asserted by such third
party.
11.4. Upon receipt of any such notice from the Indemnified Party, the
Indemnifying Party shall be entitled to participate in the defense of
such claim and may assume the defense of such claim at its own expense
and by its own counsel. If the Indemnifying Party elects to assume the
defense of such claim, the Indemnified Party shall reasonably
cooperate with the Indemnifying Party in defending such claim, at the
expense of the Indemnifying Party. The parties acknowledge and agree
that in the event the Indemnifying Party has properly assumed the
defense of such claims provided herein, the Indemnified Party shall be
entitled to retain its own counsel to participate in the defense of
such claim at its own cost and expense.
11.5. No claim shall be settled or compromised by the Indemnifying Party
without the written consent of the Indemnified Party (which shall not
be unreasonably withheld) if such settlement or compromise requires
the Indemnified Party to make any payment or to take or refrain from
taking any action or enjoins the Indemnified Party or subjects it to
other equitable relief or subjects it to any potential criminal law,
claim or liability.
11.6. NO LIMITATION. The provisions of this Section shall not limit or
impair any right or remedy available to the Purchaser under any
applicable law or agreement, arising from or in connection with a
breach of a covenant, or a fraudulent misrepresentation.
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12. MISCELLANEOUS
12.1. FURTHER ASSURANCES. Each of the parties hereto shall perform such
further acts and execute such further documents as may reasonably be
necessary to carry out and give full effect to the provisions of this
Agreement and the intention of the parties as reflected hereby.
12.2. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed according to the laws of the State of Israel, without regard
to the conflict of laws provisions thereof. Any dispute arising under
or in relation to this Agreement shall be resolved in the competent
court of Tel Aviv-Jaffa district only, and each of the parties hereby
submits irrevocably to the exclusive jurisdiction of such court.
12.3. EXPENSES. Each of the parties hereto shall be responsible for its own
costs and expenses (including legal fees) in connection with this
Agreement and any other documents or actions relating to the
transactions contemplated by this Agreement. All stamp duty and filing
fees payable in respect of this Agreement or the transfer of shares as
contemplated hereby shall be borne equally by the Sellers, on the one
hand, and the Purchaser, on the other
12.4. SUCCESSORS AND ASSIGNS; ASSIGNMENT. Except as otherwise expressly
limited herein, the provisions hereof shall inure to the benefit of,
and be binding upon, the successors, assigns, heirs, executors, and
administrators of the parties hereto. None of the rights, privileges,
or obligations set forth in, arising under, or created by this
Agreement may be assigned or transferred without the prior consent in
writing of each party to this Agreement.
12.5. ENTIRE AGREEMENT. This Agreement and the Schedules and Exhibits
attached hereto constitute the full and entire understanding and
agreement between the parties with regard to the subject matters
hereof and thereof.
12.6. NOTICES, ETC. All notices and other communications required or
permitted hereunder to be given to a party to this Agreement shall be
in writing and shall be faxed or mailed by registered or certified
mail, postage prepaid, or otherwise delivered by hand or by messenger,
addressed to such party's address as set forth below or in SCHEDULE A,
as the case may be, or at such other address as the party shall have
furnished to each other party in writing in accordance with this
provision:
if to the Purchaser:
B.O.S. Better On-Line Solutions Ltd.
Beit Xxxxx, Xxxxxxxx Xxxxxxxxxx Xxxx,
Xxxxxx 00000, Xxxxxx
Attention: Chief Financial Officer
Facsimile: (000) 0 000-0000
WITH A COPY TO:
Amit, Pollak, Matalon & Xxx-Xxxxxxx,
Erez & Co.NYP Tower, 00 Xxxxxxx
Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx, Adv.
Facsimile: (000) 0 000-0000
if to the Company: to the address listed in the preamble to this
Agreement
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if to the Seller: Telsys Ltd.
Xxxxxx Xxxxxx 0, Xxx-Xxxx
Xxxxxxxxx: _______________
Telephone: ______________
Facsimile: _______________
Any notice sent in accordance with this Section 12.6 shall be
effective (i) if mailed, three (3) business days after mailing, (ii)
if sent by messenger, upon delivery, and (iii) if sent via facsimile,
upon transmission and electronic confirmation of receipt or (if
transmitted and received on a non-business day) on the first business
day following transmission and electronic confirmation of receipt
(provided, however, that any notice of change of address shall only be
valid upon receipt).
12.7. DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power, or remedy accruing to any party upon any breach or default
under this Agreement, shall be deemed a waiver of any other breach or
default theretofore or thereafter occurring. Any waiver, permit,
consent, or approval of any kind or character on the part of any party
of any breach or default under this Agreement, or any waiver on the
part of any party of any provisions or conditions of this Agreement,
must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any of the parties,
shall be cumulative and not alternative.
12.8. SEVERABILITY. If any provision of this Agreement is held by a court
of competent jurisdiction to be unenforceable under applicable law,
then such provision shall be excluded from this Agreement and the
remainder of this Agreement shall be interpreted as if such provision
were so excluded and shall be enforceable in accordance with its
terms; provided, however, that in such event this Agreement shall be
interpreted so as to give effect, to the greatest extent consistent
with and permitted by applicable law, to the meaning and intention of
the excluded provision as determined by such court of competent
jurisdiction.
12.9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and
enforceable against the parties actually executing such counterpart,
and all of which together shall constitute one and the same
instrument.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF the parties have signed this Share Exchange Agreement as
of the date first hereinabove set forth.
PURCHASER: COMPANY:
_____________________________ _____________________________
B.O.S. BETTER ONLINE XXXX ELECTRONIC
SOLUTIONS LTD. TECHNOLOGIES LTD.
Name: _______________________ Name: _______________________
Title:_______________________ Title:_______________________
SELLER:
_____________________________
TELSYS LTD.
Name: _______________________
Title:_______________________
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