SECURITIES PURCHASE AGREEMENT
EXECUTION
VERSION
SECURITIES
PURCHASE AGREEMENT (this “Agreement”),
dated
as of March 27, 2008, by and among Xxxxx Joint Investments (2005) Limited
Partnership (“Xxxxx”),
and
S. Xxxxxxx Investments (2008) Ltd. (“Xxxxxxx
Investments”)(each,
a “Purchaser”
and
together, the “Purchasers”),
and
the sellers listed on Schedule
I
hereto
(each a “Seller”
and
collectively, the “Sellers”).
WITNESSETH:
WHEREAS,
the Sellers own an aggregate of 25,714,285 ordinary shares, par value NIS 1.00
per share (“Shares”),
of
Nur Macroprinters Ltd., a company organized under the laws of the State of
Israel (“Nur”),
and
warrants to purchase 15,100,757 Shares of the Company at an exercise price
of
$0.40 per share (the “Anti-dilution
Warrants”),
as
set forth on Schedule
I
hereto,
which represent 35.36% of the Company’s outstanding Shares and 35.36% of the
Company’s outstanding warrants, respectively;
WHEREAS,
subject to the terms and conditions set forth in this Agreement, the Purchasers
desire to Purchase the Shares and Anti-dilution Warrants from the Sellers and
the Sellers desire to sell the same to the Purchasers based on a price per
share
equal to the product of the net equity of Nur multiplied
by
0.3536
multiplied
by
1.10
(the “Price
Formula”);
WHEREAS,
the Sellers own additional warrants to purchase 4,184,957 Shares of the Company
at an exercise price of $0.40 per share (the “Put/Call
Warrants”)
as set
forth on Schedule
I
hereto,
with respect to which the Purchasers or the Sellers, as the case may be, desire
to grant to the other party an option under certain terms and conditions;
and
WHEREAS,
the Company has sold substantially all of its assets to Hewlett-Packard Company
(“HP”)
in
consideration for cash pursuant to an Asset Purchase Agreement, dated as of
December 9, 2007 (the “HP
Agreement”),
of
which $14,500,000 has been deposited in escrow in accordance with the terms
of
the HP Agreement to cover potential liabilities of the Company (the
“HP
Escrow”).
NOW,
THEREFORE, in consideration of the mutual representations, warranties and
covenants contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
Purchasers and the Sellers agree as follows:
SECTION
1. DEFINITIONS
As
used
in this Agreement, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
“Affiliate”
of
a
specified Person shall mean a Person that directly or indirectly controls or
is
controlled by, or is under common control with, such specified Person. For
this
purpose, “control” shall mean the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of a person,
whether through the ownership of voting securities, by contract or
otherwise.
“Business
Day”
shall
mean a day other than a Friday or Saturday or other day on which banks in the
State of Israel are not required or authorized to close.
“Company”
shall
mean Nur and each of its subsidiaries.
“Encumbrances”
shall
mean mortgages, charges, pledges, security interests, liens, encumbrances,
actions, claims, demands, voting trusts, voting agreements, rights of first
offer or refusal and equities of any nature whatsoever and howsoever arising
and
any rights or privileges capable of becoming any of the foregoing.
“Governmental
Authority”
shall
mean any agency, department, court or any other administrative, legislative
or
regulatory authority of any U.S., Israeli or other governmental
body.
“Person”
shall
mean an individual, partnership, joint-stock company, corporation, limited
liability company, trust or unincorporated organization, and a government or
agency or political subdivision thereof.
“Securities”
shall
mean the Shares and the Warrants, collectively.
“Securities
Act”
shall
mean the U.S. Securities Act of 1933, as amended.
“Warrants”
shall
mean the Anti-dilution Warrants and the Put/Call Warrants,
collectively.
SECTION
2. PURCHASE
AND SALE OF SECURITIES
2.1 Purchase
and Sale of the Securities.
(a) Subject
to the terms and conditions set forth in this Agreement and in reliance upon
each party’s representations set forth below, on the Closing Date, the
Purchasers, severally and not jointly, shall purchase from each Seller and
each
Seller shall sell, transfer, convey and deliver to the Purchasers, free and
clear of all Encumbrances, the Shares and Anti-dilution Warrants set forth
opposite such Seller’s name in the applicable table on Schedule
I
hereto
for the consideration specified in Section 2.1(b) below, as allocated on said
Schedule
I.
(b) Subject
to the adjustments set forth in Section 2.3 below, the aggregate consideration
payable by both of the Purchasers, severally and not jointly, in accordance
with
their respective Purchaser Proportions (as defined below), for the Shares and
Anti-dilution Warrants (the “Consideration”)
shall
be $35,485,713, which is based on the Price Formula, including a control
premium. Except as otherwise indicated, all references in this Agreement to
“$”
or “dollars” shall be to US dollars (US$).
2.2 Closing.
(a) The
closing of the sale and purchase of the Shares and Anti-Dilution Warrants (the
“Closing”)
shall
take place within three Business Days of the date hereof, subject to the
satisfaction or waiver (by the applicable party) of all the conditions set
forth
in Sections 6 and 7, or such other date as the parties may agree in writing
(the
“Closing
Date”),
at
the offices of Goldfarb, Levy, Eran, Meiri, Tzafrir & Co. or such other
location as the parties shall mutually agree, provided, however, that if the
Purchasers' financing is not complete by such date, then the Purchasers may
defer the Closing by up to 14 days, in which case the First Payment shall
increase by the amount of the interest that shall accrue on the First Payment
during such period, at the rate of three-month LIBOR per annum.
(b) Seller
Deliverables.
At the
Closing, each Seller shall deliver or shall cause to be delivered to the
respective Purchasers (A) any and all original certificates and instruments
evidencing the Shares and the Anti-dilution Warrants and (B) instruments of
sale, transfer, conveyance and assignment as the Purchasers as their respective
counsel may reasonably request (the items mentioned in sub-clauses (A) and
(B)
shall be referred to collectively as the “Conveyance
Documents”).
-2-
(c) Purchaser
Deliverables.
At the
Closing, the Purchasers, severally and not jointly, shall transfer or cause
to
be transferred 84.1% of the Consideration payable by such Purchasers (the
"First
Payment"),
in
accordance with their respective portions of the Securities as set forth on
Schedule
I
(the
“Purchaser
Proportions”),
to
the respective Sellers in accordance with the Sellers’ respective portions of
the Securities as set forth on Schedule
I
(the
“Seller
Proportions”).
The
balance of the Consideration shall be referred to herein as the “Withheld
Amount”.
2.3 Subsequent
Payments.
(a)
Interim
Installment(s).
Subject
to Sections 2.3(b) and 2.3(c) below, promptly following each release, if any,
of
funds from the HP Escrow to the Company pursuant to the HP Agreement (including
any amount constituting interest accrued on the escrowed funds), the Purchasers,
severally and not jointly, in accordance with their respective Purchaser
Proportions, shall transfer an aggregate amount equal to the product of 35.36%
of the amount so released, to the respective Sellers in accordance with their
respective Seller Proportions. Any amount payable to Sellers pursuant to this
Section 2.3(a) or (c), except for any amount paid on account of the interest
accrued on the HP Escrow, after making the applicable adjustments pursuant
to
Section 2.3, shall be increased by 10% of such amount.
(b) Price
Adjustment.
Any
interim installment pursuant to Section 2.3(a) above shall be subject to:
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(i)
|
reduction
in the event that any potential receivable of the Company has been
finally
resolved for an amount (which amount shall include any direct third-party
fees and expenses incurred in resolving such matters) less than the
amount
estimated therefor as set forth in Schedule
II;
and/or
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(ii)
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reduction
in the event that any potential liability of the Company has been
finally
resolved for an amount (which amount shall include any direct third-party
fees and expenses incurred in resolving such matters) greater than
the
amount estimated therefor as set forth in Schedule
II;
and/or
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(iii)
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increase
in the event that any potential receivable of the Company has been
finally
resolved for an amount (which amount shall include any direct third-party
fees and expenses incurred in resolving such matters) greater than
the
amount estimated therefor as set forth in Schedule
II;
and/or
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(iv)
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increase
in the event that any potential liability of the Company has been
finally
resolved for an amount (which amount shall include any direct third-party
fees and expenses incurred in resolving such matters) less than the
amount
estimated therefor as set forth in Schedule
II;
and/or
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(v)
|
reduction
in the event that the Company suffers any claim, liability, loss,
cost,
damage or expense (including reasonable attorneys’ fees) (collectively,
“Losses”)
relating to a matter the grounds for which arose prior to the closing
under the HP Agreement and that is not contemplated in Schedule
II.
Any settlement or payment of any such claim, and expenses shall require
the prior written approval of the Sellers, which shall not be unreasonably
withheld;
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-3-
provided,
however, that in the event that any potential receivable or liability of the
Company has not been finally resolved but it has become reasonably foreseeable
that it likely will be finally resolved for an amount (which amount shall
include any direct third-party fees and expenses incurred in resolving such
matters) less than the amount estimated therefor as set forth in Schedule
II
(in the
case of a receivable) or greater than the amount estimated therefor as set
forth
in Schedule II (in the case of a liability), then the amount payable to the
Sellers pursuant to this Section 2.3(b) shall be reduced by an appropriate
amount pending the final resolution of such matter and the final payment to
the
Sellers pursuant to Section 2.3(c) below.
Any
costs
and expenses incurred by the Company with respect to its ongoing operations
(including, but not limited to employee compensation and business expenses
incurred by employees) and any Losses relating to matters the grounds for which
arose following the closing of the HP Agreement shall not require a price
adjustment.
The
amount of any such reduction or increase pursuant to this Section 2.3(b) shall
be equal to the product of 35.36% of the difference between the final resolution
amount (or the reasonably foreseeable amount, as the case may be) and the
estimated amount set forth in Schedule
II,
and the
amount of any such reduction pursuant to clause (v) above shall be equal to
the
product of 35.36% of the applicable Losses. Two or more adjustments pursuant
to
the foregoing clauses shall be aggregated or offset, as the case may be. The
parties shall share all information necessary to determine the adjustments
contemplated hereby.
(c) Final
Payment.
Promptly following the final release, if any, of funds from the HP Escrow to
the
Company pursuant to the HP Agreement, if after making the adjustments
contemplated by Section 2.3(b) above, there shall still remain any potential
receivables or liabilities of the Company that shall not have been finally
resolved, whether or not they have been identified in Schedule
II,
or
constitute potential Losses under Section 2.3(b)(v) above or otherwise,
including without limitation, unresolved tax exposures, the parties shall
negotiate in good faith to estimate the amounts that the Company would
ultimately receive or pay upon final resolution of such matters in order to
arrive at a final payment under this Agreement. In the event that the parties
are unable to reach an agreement after 30 days following the commencement of
negotiations on the matter, then the conflict shall be resolved pursuant to
the
procedure set forth in Section 9 below. In the event that (i) the final tax
liabilities relating to the transaction effected pursuant to the HP Agreement
exceeds $1,000,000 and (ii) the required adjustment pursuant to Section 2.3
results in an aggregate net reduction of the amount payable to the Sellers
that
exceeds the Withheld Amount less
any
amounts paid to the Sellers pursuant to Section 2.3, then each Seller, pro
rata
based on its Seller Proportion, shall promptly pay to the Purchasers, pro rata
based on their respective Purchaser Proportions, the aggregate amount of such
excess, up to a maximum of $354,000 in the aggregate (which equals 35.36% of
the
maximum amount of $1,000,000).
2.4
Put
Option and Call Option.
Commencing
on the first anniversary of the Closing Date, (i) the Sellers, severally, shall
have the option to sell their respective Put/Call Warrants to the Purchasers,
pro rata based on their respective Purchaser Proportions, at a price of $0.50
per warrant, as set forth on Schedule
I
hereto
(the "Put
Option"),
and
(ii) the Purchasers, severally, pro rata based on their respective Purchaser
Proportions, shall have the option to purchase the Put/Call Warrants from the
respective Sellers, at a price of $0.80 per warrant, as set forth on
Schedule
I
hereto
(the "Call
Option").
The
Put Option or the Call Option shall be exercisable by written notice to both
Purchasers or to all the Sellers, as the case may be, which notice shall be
irrevocable. Once such notice has been delivered with respect to any Put/Call
Warrants, the corresponding option relating to such Put/Call Warrants shall
terminate. For the avoidance of doubt, any exercise by any Seller of the Put
Option must give equal treatment to both Purchasers, pro rata based on their
respective Purchaser Proportions, and any exercise by any Purchaser of the
Call
Option must give equal treatment to all Sellers, pro rata based on their
respective Seller Proportions. Closing of the Put Option or the Call Option
transaction shall be ten Business Days from the date of exercise thereof and
shall be conditioned upon the receipt of representations and warranties similar
to those set forth in Sections 3 and 4 hereof mutatis
mutandis,
which
representations and warranties shall be true and correct in all respects as
of
the closing date designated for the Put Option or the Call Option transaction.
The exercise price per warrant of the Put Option and the Call Option shall
be
subject to equitable adjustment for stock splits, recombinations and similar
events occurring between the date hereof and the exercise date, as well as
for
any dividends paid by the Company during such period. The Put Option and the
Call Option, if either is not exercised prior, shall terminate on the earlier
to
occur of (i) the second anniversary of the Closing Date and (ii) the date on
which the Put/Call Warrants have been listed for trade on a stock market.
Neither the Put Option nor the Call Option shall be assignable. Nothing herein
shall restrict the ability of any Seller to exercise all or a portion of its
Put/Call Warrants pursuant to their terms.
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SECTION
3. REPRESENTATIONS
AND WARRANTIES OF THE SELLERS
Each
Seller, jointly and severally, hereby represents and warrants to the Purchasers
as of the date hereof and the Closing Date, as follows:
3.1 Organization;
Authorization; Enforcement.
If such
Seller is an entity, such Seller has the requisite power and authority to enter
into and to consummate the transactions contemplated by this Agreement and
otherwise to carry out its obligations hereunder. The execution and delivery
by
such Seller of this Agreement and the consummation by it of the transactions
contemplated hereby has been duly authorized by all necessary action on the
part
of such Seller and no further action is required by such Seller. This Agreement
has been duly executed by such Seller and constitutes the valid and legally
binding obligation of such Seller, enforceable against it in accordance with
its
terms, subject to laws of general application relating to bankruptcy, insolvency
and the relief of debtors. Fortissimo Capital (Israel-DP) LP, is an Israeli
limited partnership in which (i) Freenet A.K. Communications Ltd., a wholly
owned subsidiary of Discount Capital Markets Ltd., which is a wholly owned
subsidiary of Israel Discount Bank Ltd., holds 99% and (ii) Fortissimo Capital
Fund GP LP owns 1%, of the outstanding partnership interests, respectively.
3.2 Ownership
of Securities.
Such
Seller (i) is the sole record owner and legal owner of the Securities set forth
opposite such Seller’s name on Schedule
I,
(ii)
has good, valid and marketable title to such Securities free and clear of all
Encumbrances and (iii) is conveying such Securities to the Purchasers free
and
clear of all Encumbrances that it may have created or suffered to exist. Such
Seller has neither previously sold, assigned, conveyed, transferred or otherwise
disposed of, in whole or in part, any of the Securities or any rights
thereunder, nor is such Seller party to any agreement other than this Agreement
to sell, assign, convey, transfer or otherwise dispose of, in whole or in part,
any of the Securities or any rights thereunder. Seller has no reason to believe
that the Securities have not been duly and validly issued. When delivered to
the
Purchasers pursuant to the terms hereof, the Securities shall be fully paid
and
nonassessable, free and clear of all Encumbrances. Such Seller has delivered
to
the Purchasers true and complete copies of the Warrants.
3.3 No
Conflicts.
Except
as set forth in Schedule
3.3,
neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) conflict with or violate any (A)
statute, law regulation, rule, injunction, judgment, order, decree, ruling,
charge or other restriction of any Governmental Authority to which Seller is
subject or (B) if such Seller is an entity, any provision of such Seller’s
organizational documents (each as amended through the date hereof) or (ii)
require any notice or consent under, any agreement to which such Seller is
a
party or by which such Seller is bound or to which the Securities are or may
be
bound or affected or result in the imposition of any Encumbrance upon the
Securities. Specifically, except as set forth in Schedule
3.3,
no
Person has a right to sell any securities of the Company in connection with
the
sale of any of the Securities, and if any Person has, or claims to have, such
a
right, it shall be the sole obligation of the Sellers. Neither the execution
and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will give rise to a default or penalty under any loan agreements between
the Company and its lending banks.
-5-
3.4 Governmental
Consents.
Such
Seller is not required to give any notice to, make any filings with, or obtain
any authorization of any Governmental Authority in order for the parties to
execute, deliver or consummate the transactions contemplated by this
Agreement.
3.5 Exempt
Offering.
Assuming the accuracy of the representations and warranties of the Purchasers
set forth in Section 4.2, the offer and sale of the Securities as contemplated
hereby are, to the best knowledge of the Sellers, exempt from the registration
requirements of the Securities Act. Neither such Seller nor any Person acting
on
its behalf has taken or is, to the knowledge of such Seller, contemplating
taking any action which could subject the offering or sale of such Securities
to
the registration requirements of the Securities Act. Neither such Seller, nor
any of its Affiliates, nor any Person acting on their behalf, has engaged,
nor
will they engage, in any “direct selling efforts” (within the meaning ascribed
to such term in Regulation S promulgated under the Securities Act (“Regulation
S”))
with
respect to the sale of the Securities. The sale of the Securities by such Seller
is not part of a plan or scheme to evade the registration requirements of the
Securities Act.
3.6 Fees.
No fees
or commissions will be payable by the Purchasers to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or
other
Person with respect to the transactions contemplated by this Agreement based
on
any arrangement made by or on behalf of such Seller.
3.7 Adequacy
of Consideration.
Such
Seller is aware that the Purchasers in the future may generate greater value
with respect to its Securities than such Seller will receive for such Securities
pursuant to this Agreement, especially since the Purchasers will become the
members of the controlling group of the Company. Such Seller is also aware
that
the Purchasers may purchase securities of the Company from other shareholders
of
the Company, including large shareholders, either alone or together with other
purchasers, for consideration that may exceed the consideration payable pursuant
to this Agreement and/or pursuant to other terms and conditions that may be
more
favorable to the sellers than the terms and conditions of this Agreement. Such
Seller waives any right to receive any consideration for selling its Securities
to the Purchasers (other than the consideration specifically payable pursuant
to
this Agreement) and waives any possible claim against the Purchasers with
respect to the fairness of the consideration payable hereunder.
3.8 No
Adverse Information.
The
sale of the Securities pursuant hereto is not prompted by any adverse
information concerning the Company that has not been publicly disclosed by
the
Company.
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SECTION
4. REPRESENTATIONS
AND WARRANTIES OF THE PURCHASERS
Each
Purchaser, severally but not jointly, hereby represents and warrants to the
Sellers, as of the date hereof and the Closing Date, as follows:
4.1 Organization;
Authorization; Enforcement.
Such
Purchaser is an entity duly organized and validly existing under the laws of
the
jurisdiction of its organization. The purchase by such Purchaser of the
Securities has been duly authorized by all necessary action on the part of
such
Purchaser. This Agreement has been duly executed by such Purchaser and
constitutes the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of
debtors.
4.2 Exempt
Offering.
(a) Such
Purchaser understands and agrees that the Securities have not been registered
under the Securities Act and may not be offered or sold except pursuant to
an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act. Such Purchaser warrants that neither it
nor
any of its Affiliates nor any Person acting on their behalf has offered or
sold,
or will offer or sell, any Securities except in an “offshore transaction” in
accordance with Regulation S or otherwise pursuant to an exemption from the
Securities Act.
(b) No
Persons acting on behalf of such Purchaser or any of its Affiliates has engaged
or will engage in any “directed selling efforts” (as such term is defined in
Regulation S) with respect to the Securities.
(c) Such
Purchaser is an experienced investor and is purchasing the Securities for the
purpose of investment for its own account and not with a view to distribution
or
resale, directly or indirectly, to United States persons, in the United States
or otherwise in violation of the United States securities laws, without
prejudice, however, to such Purchaser’s right at all times to sell or otherwise
dispose of all or any part of the Securities in compliance with applicable
securities laws. Such Purchaser is not located in the United States and is
not a
“U.S. person” (as defined in Regulation S).
(d) The
contemplated purchase of the Securities is not part of a plan or scheme to
evade
the registration provisions of the Securities Act.
4.3 Fees.
No fees
or commissions will be payable by such Purchaser to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or
other
Person with respect to the transactions contemplated by this Agreement based
on
any arrangement made by or on behalf of such Purchaser.
4.4 No
Conflicts.
Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) conflict with or violate any (A)
statute, law regulation, rule, injunction, judgment, order, decree, ruling,
charge or other restriction of any Governmental Authority to which such
Purchaser is subject or (B) any provision of such Purchaser’s organizational
documents (each as amended through the date hereof) or (ii) require any notice
or consent under, any agreement to which such Purchaser is a party or by which
such Purchaser is bound.
-7-
SECTION
5. ADDITIONAL
COVENANTS OF THE PARTIES
5.1 Further
Assurance.
Each of
the parties shall promptly execute such documents and other papers and take
such
further actions as may be reasonably required or desirable to carry out the
provisions hereof and the transactions contemplated hereby. Each such party
shall use its reasonable efforts (i) to fulfill or obtain the fulfillment of
the
conditions to the Closing as promptly as practicable and (ii) to assist each
of
the other parties, to the extent practicable and reasonable under the
circumstances, to do the same.
5.2 Publicity
and Confidentiality.
The
parties shall not disclose the terms of this Agreement to any third party,
nor
issue any press release, publicity statement or other public notice relating
to
this Agreement or the transactions contemplated by this Agreement without first
obtaining the prior consent of the other parties to this Agreement, provided
that a party shall not be precluded from making such filings or giving such
notices as may be required by law or the rules of any stock market, including
without limitation, Schedule 13D.
5.3 Dividends
and Distributions.
Each
Seller will promptly pay or transfer to or to the order of the applicable
Purchaser, upon receipt by such Seller, any dividend or distribution declared
or
other rights declared or distributed by the Company in respect of the Securities
for which a record date occurs prior, on or after the Closing Date and which
are
paid or distributed by the Company to the Sellers on or after the date
hereof.
5.4 Withholding
Tax.
(a) Each
of
the Purchasers shall be entitled to deduct and withhold from the Consideration
otherwise payable pursuant to this Agreement to any Seller the amounts required
to be deducted and withheld from any payment pursuant to this Agreement under
any applicable law or regulation, provided, however, that if the Sellers obtain
a tax ruling and/or exemption from any applicable Governmental Authority in
a
form reasonably satisfactory to each Purchaser, deduction and withholding of
any
amounts under the tax laws of such Governmental Authority’s jurisdiction shall
be made in accordance with the provisions of such ruling and/or exemption.
To
the extent that amounts are so withheld by the Purchasers, such withheld amounts
(i) shall be remitted by the Purchasers to the applicable Governmental
Authority, and (ii) shall be treated for all purposes of this Agreement as
having been paid to the applicable Seller in respect of which such deduction
and
withholding was made by the Purchasers.
(b) Notwithstanding
anything to the contrary in this Agreement, since two of the Sellers have
applied for, and expect to receive shortly, tax exemptions or rulings from
the
Israeli Tax Authority (the “ITA”)
relating to their respective withholding tax obligations, the parties agree
as
follows:
(i)
the
amount withheld by the Purchasers from the First Payment payable to Fortissimo
Capital Fund (Israel-DP), LP (“FF
DP”)
shall
be converted to NIS and deposited in an interest bearing deposit, pending
receipt of the applicable tax exemption or ruling, provided, however, that
nothing herein shall prevent the Purchasers from transfering the withheld amount
to the ITA by the deadline therefor puruant to applicable laws and regulations.
In the event that FF DP delivers an exemption certificate or tax ruling to
the
Purchasers, in a form reasonably satisfactory to each Purchaser, prior to said
deadline, the Purchasers shall transfer the withheld funds to FF DP and/or
the
ITA in accordance with said certificate or ruling. Any amounts so transferred
to
FF DP shall include interest that actually accrued thereon, less any bank
charges; and
-8-
(ii)
the
entire First Payment payable to Fortissimo Capital Fund, LP (“FF
Cayman”)
shall
be withheld by the Purchasers and deposited in the form of US dollars in an
interest bearing deposit. In the event that FF Cayman delivers an exemption
certificate or tax ruling to the Purchasers, in a form reasonably satisfactory
to each Purchaser, the Purchasers shall transfer the withheld funds to FF Cayman
and/or the ITA in accordance with said certificate or ruling. In the event
that
the exemption certificate or tax ruling is delayed, FF Cayman shall be entitled
to request that the Sellers transfer the First Payment to it, subject to
withholding tax pursuant to applicable laws and regulations. Any amounts so
transferred to FF Cayman shall include interest that actually accrued thereon,
less any bank charges.
5.5 Notice
of Changes.
The
parties undertake to notify each other promptly upon any change affecting any
of
their respective representations and warranties in this Agreement or their
ability to perform any of their respective obligations hereunder.
5.6 Termination.
This
Agreement may be terminated by the Purchasers, on the one hand, or by the
Sellers, on the other hand, if the Closing shall not have occurred (i) within
60
days from the date of this Agreement, subject to extension by 30 days in the
event of any effective injunction, writ, preliminary restraining order or any
order of any nature issued by a court of competent jurisdiction against any
of
the Sellers (“Injunction”),
in
which event the relevant Sellers shall act as required under Section 6.4 hereof,
or (ii) by such later date as may be agreed upon in writing by the parties
hereto; provided, however, that the right to terminate this Agreement under
this
Section 5.6 shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in the
failure of the Closing to occur on or before such date. No such termination
shall relieve any party from liability for any prior breach of this
Agreement.
5.7 Shareholder
Agreement.
The
Sellers hereby waive their rights to receive notice of, or participate in, any
purchases of shares of the Company under Section 8.1 of the Shareholders’
Agreement, dated as of October 31, 2005, among the Sellers and Xxxxx Joint
Investments (2005) Limited Partnership (the “Shareholders
Agreement”).
Notwithstanding Section 4.1 of the Shareholders Agreement, from the date hereof,
each Seller hereby undertakes that it will vote its Shares on any and all
matters as instructed by the Purchasers, except for related-party transactions
involving the Purchasers and matters that adversely and disproportionately
affect the Sellers’ rights and entitlements as compared to the Purchasers’.
5.8 Ongoing
Cooperation; Confidentiality.
Subject
to applicable law, the Sellers and the Purchasers shall meet with each other
every one or two months to discuss the status of the open matters set forth
in
Schedule
II
hereto
and shall cooperate with each other in assisting the Company to wind down its
affairs that arose prior closing of the transaction contemplated under, or
otherwise relating to, the HP Agreement, including without limitation, ongoing
relations with HP, paying banks and other creditors, winding up subsidiaries,
resolving litigation and finalizing tax matters. If requests by the Purchasers
for the assistance of the Sellers shall require a significant amount of time
from the Sellers, then they shall be entitled to reasonable compensation
therefor from the Purchasers or the Company, subject to applicable law. Any
information obtained by any Seller pursuant to this Section 5.8 or otherwise
shall be held in strict confidence. Without limiting the generality of the
foregoing, each Seller shall not, and shall each use its best efforts to cause
its employees and representatives not to, use information obtained pursuant
to
this Section 5.8 or otherwise for any purpose unrelated to the computation
of
the amounts payable to the Sellers pursuant to this Agreement.
5.9 Severability
Among the Purchasers.
This
Agreement is drafted as one agreement with the Purchasers for the sake of
convenience only. However, it is confirmed and agreed that there shall be no
joint liability among the Purchasers, and a failure to perform by one Purchaser
shall not be attached to the other Purchaser, and that, subject to the other
terms of this Agreement, the Sellers shall not be entitled to rescind or
terminate this Agreement as to those Purchasers who have performed their
obligations hereunder. Sellers confirm that they are aware of the severability
among the Purchasers.
-9-
SECTION
6. THE
PURCHASERS’ CLOSING CONDITIONS
The
obligation of each of the Purchasers to purchase the Shares and Anti-Dilution
Warrants on the Closing Date, as provided in Section 2 hereof, or to purchase
the Put/Call Warrants at the date designated for such closing in accordance
with
Section 2.4 hereof, in either case shall be subject, in the absence of a written
waiver by such Purchaser, to the performance by each Seller of its agreements
theretofore to be performed hereunder and to the satisfaction, prior thereto
or
concurrently therewith, of the following further conditions:
6.1 Representations
and Warranties.
The
representations and warranties of each Seller contained in this Agreement shall
be true and correct in all respects on and as of the Closing Date as though
such
warranties and representations were made at and as of such date.
6.2 Compliance
with Agreement.
Each
Seller shall have performed and complied in all respects with all agreements,
covenants and conditions contained in this Agreement which are required to
be
performed or complied with by it prior to or on the Closing Date.
6.3 Closing
Certificate.
The
Purchasers shall have received a certificate from each Seller, duly executed
on
such Seller’s behalf, certifying to the satisfaction of the conditions specified
in Sections 6.1 and 6.2 and 6.6.
6.4 Injunction.
There
shall be no effective Injunction issued by a court of competent jurisdiction
directing that the transactions provided for herein or any of them not be
consummated as herein provided. In the event that such an Injunction is issued
by a court of competent jurisdiction, the Sellers shall use their best efforts
to remove it within 30 days from the date of its issuance. If the same is not
removed with respect to one or two Sellers within said 30 days, then the
Purchasers shall be entitled to effect the Closing with the other Seller(s),
without relieving the enjoined Sellers from any obligations under this
Agreement.
6.5 Closing
Documents.
The
Sellers shall have delivered to the Purchasers all instruments and documents
required to be delivered by them pursuant to Section 2.2(b) and all such
instruments and documents shall be in form and substance reasonably satisfactory
to each of the Purchasers.
6.6 Bank
Repayment.
The
Company’s lending banks shall have been repaid in full for all obligations owing
to them by the Company, and all agreements between said banks and the Company
shall have been terminated.
6.7 Assignment
of Registration Rights.
The
Sellers shall have executed and delivered to the Purchasers assignment documents
evidencing the assignment of any and all registration rights relating to the
Securities, such documents to be in form and substance reasonably satisfactory
to the Purchasers, subject, in each case, to the terms and provisions of the
applicable registration rights agreement.
6.9 Director
Resignations.
As may
be requested by the Purchasers, any directors of the Company that were
designated by any of the Sellers shall have delivered to the Purchasers, for
submission to the Company, a letter of resignation from the Company’s Board of
Directors, in form and substance reasonably satisfactory to the Purchasers
(to
include a waiver of any and all claims which any of the directors has or may
have against the Company or against any other Person that has a right to be
indemnified by or have any recourse against the Company as a result of such
claim being asserted against such Person).
-10-
6.10 Agreement
Terminations.
The
Shareholders Agreement, as well as the Management Agreement, dated as of
September 26, 2005, between the Company and Fortissimo Capital Fund GP, LP,
shall have been terminated by mutual consent of the parties thereto, such
parties waiving any and all claims against the other, without consideration
(other than payment of the pro rata portion of the management fee for the period
of the fiscal year up to the date of such termination).
SECTION
7. THE
SELLERS’ CLOSING CONDITIONS
The
obligation of the Sellers to sell the Shares and Anti-Dilution Warrants on
the
Closing Date, as provided in Section 2 hereof, or to sell the Put/Call Warrants
at the date designated for such closing in accordance with Section 2.4 hereof,
in either case shall be subject, in the absence of a written waiver by the
Sellers, to the performance by each Purchaser of its agreements theretofore
to
be performed hereunder and to the satisfaction, prior thereto or concurrently
therewith, of the following further conditions:
7.1 Representations
and Warranties.
The
representations and warranties of each Purchaser contained in this Agreement
shall be true on and as of the Closing Date in all respects as though such
warranties and representations were made at and as of such date.
7.2 Compliance
with Agreement.
Each
Purchaser shall have performed and complied in all respects with all agreements,
covenants and conditions contained in this Agreement which are required to
be
performed or complied with by it prior to or on the Closing Date.
7.3 Closing
Certificate.
The
Sellers shall have received a certificate from each Purchaser, duly executed
on
the Purchaser’s behalf, certifying to the satisfaction of the conditions
specified in Sections 7.1 and 7.2.
7.4 Injunction.
There
shall be no effective injunction, writ, preliminary restraining order or any
order of any nature issued by a court of competent jurisdiction directing that
the transactions provided for herein or any of them not be consummated as herein
provided.
SECTION
8. INDEMNIFICATION
8.1 Indemnification
by the Sellers.
The
Sellers shall jointly and severally indemnify, defend and hold harmless each
Purchaser, its affiliates and their respective directors, officers, employees
or
representatives, from and against any and all claims, costs, expenses, damages,
liabilities or losses (including, without limitation, from and against any
judgment, settlement, reasonable attorneys’ fees and other reasonable
out-of-pocket costs or expenses incurred in connection with the defense of
any
action or threatened action or proceeding) (collectively, “Claims”)
to the
extent relating to or arising out of any breach of any representation, warranty,
covenant or agreement of the Sellers contained in this Agreement.
8.2 Indemnification
by the Purchasers.
Each
Purchaser, severally and not jointly, agrees to indemnify, defend and hold
harmless the Sellers from and against any and all Claims to the extent relating
to or arising out of any breach of any representation, warranty, covenant or
agreement of such Purchaser contained in this Agreement.
-11-
8.3 Third
Party Claims.
Promptly after the receipt by any of the Sellers or the Purchasers of notice
of
any claim, action, suit or proceeding by any person or entity who is not a
party
to this Agreement (collectively, an “Action”)
which
is subject to indemnification pursuant to Section 8.1 or 8.2 above, as
applicable, such party (the “Indemnified
Party”)
shall
give written notice of such Action to the party from whom indemnification is
claimed (the “Indemnifying
Party”).
The
Indemnified Party’s failure to so notify the Indemnifying Party of any such
matter shall not release the Indemnifying Party, in whole or in part, from
its
obligations to indemnify under this Section 8, except to the extent the
Indemnified Party’s failure to so notify actually and materially prejudices the
Indemnifying Party’s ability to defend against such Action. Unless otherwise
agreed by the parties, the Indemnified Party shall be entitled, at the sole
expense and liability of the Indemnifying Party, to exercise full control of
the
defense, compromise or settlement of any such Action unless the Indemnifying
Party, within a reasonable time after the giving of such notice by the
Indemnified Party, shall: (i) admit in writing to the Indemnified Party, the
Indemnifying Party’s liability to the Indemnified Party for such Action under
the terms of this Section 8; (ii) notify the Indemnified Party in writing of
the
Indemnifying Party’s intention to assume the defense thereof; and (iii) retain
legal counsel reasonably satisfactory to the Indemnified Party to conduct the
defense of such Action. The Indemnified Party and the Indemnifying Party shall
cooperate with the party assuming the defense, compromise or settlement of
any
such Action in accordance herewith in any manner that such party reasonably
may
request. If the Indemnifying Party so assumes the defense of any such Action,
the Indemnified Party shall have the right to employ separate counsel and to
participate in (but not control) the defense, compromise, or settlement thereof,
but the fees and expenses of such counsel shall be the expense of the
Indemnified Party unless (A) the Indemnifying Party has agreed to pay such
fees
and expenses, (B) any relief other than the payment of money damages is sought
against the Indemnified Party or (C) the Indemnified Party shall have been
advised by its counsel that there may be one or more legal defenses available
to
it which are different from or additional to those available to the Indemnifying
Party, and in any such case the reasonable fees and expenses of such separate
counsel shall be borne by the Indemnifying Party. No Indemnified Party shall
settle or compromise or consent to entry of any judgment with respect to any
such Action for which it is entitled to indemnification hereunder without the
prior written consent of the Indemnifying Party. No Indemnifying Party shall,
without the written consent of the Indemnified Party, settle or compromise
or
consent to entry of any judgment with respect to any such Action in which any
relief is sought against any Indemnified Party unless such settlement,
compromise or consent includes as an unconditional term thereof the giving
by
the claimant, petitioner or plaintiff, as applicable, to such Indemnified Party
of a release from all liability with respect to such Action. It is hereby
clarified and agreed that the Indemnifying Party’s admission referred to in
clause (i) above of its liability to the Indemnified Party for an Action filed
on the grounds set forth in this Section 8.3 shall not be deemed as an admission
that any liability exists by the Indemnifying Party toward any party other
than
toward the Indemnified Party.
8.4 Survival
of Representations and Warranties.
The
representations and warranties of the Sellers and the Purchasers contained
in
Sections 3 and 4, respectively, shall survive the Closing.
SECTION
9.DISPUTE
RESOLUTION
9.1 General.
Any
dispute arising out of or relating to this agreement shall be resolved in
accordance with the procedures specified in this Section 9, which shall be
the
sole and exclusive procedures for the resolution of any such disputes; provided,
however, that a party may commence legal proceedings and/or seek interlocutory
or other conservatory relief whether for the purpose of protecting that party’s
rights under applicable limitation or prescription rules or otherwise. For
such
purposes, each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the Tel-Aviv courts, and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is improper.
-12-
9.2 Direct
Negotiation.
(a)
The
parties shall attempt in good faith to resolve any dispute arising out of or
relating to this agreement promptly by negotiation between
executives.
(b)
All
negotiations pursuant to this clause are confidential and shall be treated
as
compromise and settlement negotiations for purposes of applicable rules of
confidentiality, evidence and professional secrecy.
9.3 Binding
Arbitration.
(a)
Any
controversy or claim not so resolved within 21 days of the commencement of
direct negotiations shall be finally settled by arbitration in Israel in
accordance with the Israel Arbitration Law, 1968, before a single arbitrator
experienced in the disputed matter. The language of the arbitration shall be
Hebrew. The arbitrator shall give his reasoned decision in writing, and his
decision shall be binding and conclusive on the parties. The parties shall
mutually select an arbitrator. If they do not agree on the identity of the
arbitrator within an additional seven Business Days, the arbitrator shall be
selected by the chairman of the Israeli Society of Certified Public Accountants.
(b) The
parties shall endeavor to conclude the arbitration process within four months.
If necessary, they shall extend the arbitration period for up to an additional
three months. The arbitrator shall apportion the costs of the arbitration as
he
sees fit, taking into consideration the intent of the parties as set forth
herein. The intent of the parties is to have the party who is most at fault
for
the time and cost of arbitration to be required to pay for the costs thereof
in
order that each party has economic incentive to work together to resolve any
differences that may arise between them.
SECTION
10. MISCELLANEOUS
10.1 Governing
Law.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced solely in
accordance with the internal laws of the State of Israel, without regard to
the
principles of conflicts of law thereof.
10.2 Paragraph
and Section Headings.
The
headings of the sections and subsections of this Agreement are inserted for
convenience only and shall not be deemed to constitute a part
thereof.
10.3 Notices
(a) All
communications under this Agreement shall be in writing and shall be delivered
by hand or facsimile or mailed by a U.S.- based overnight courier or by
registered mail or certified mail, postage prepaid:
if
to the
Purchasers:
(i)
Xxxxx
Joint Investments (2005) Limited Partnership
Erdinast,
Xxx Xxxxx & Co., Law Offices
0
Xxxxxxxxx Xxxxxx
Xxxxxx
Xxxxx
Xxx
Xxxx,
Xxxxxx
Fax:
x000-0-000-0000
Attention:
Xxx Xxxxx, Adv.
-13-
with
a
copy to (which shall not constitute notice):
Goldfarb,
Levy, Eran, Meiri, Tzafrir & Co.
0
Xxxxxxxx Xxxxxx
Xxx-Xxxx
00000, Xxxxxx
Facsimile:
x000-0-000-0000
Attention:
Ido Gonen, Adv. and Xxxx X. Xxxxx, Adv.
(ii)
S.
Xxxxxxx Investments (2008) Ltd.
x/x
Xxxxx
& Xx. Xxx Xxxxxxx
00
Xxxxxxx Xxxxxx
Xxx
Xxxx,
Xxxxxx
Fax:
x000-0-000-0000
Attention:
Ram Caspi, Adv.
if
to the
Sellers:
c/o
Fortissimo Capital Fund GP L.P.
00
Xxxxxxxxx Xxxxxx Xxxx Xxxxx
X.X.X.
00000
Xxxx
Xxxxxx 00000 Xxxxxx
Fax:
(000) 0-000-0000
Attention:
Xxxxx Xxxxx
(b) Any
notice so addressed shall be deemed to be given: if delivered by hand or
facsimile, on the date of such delivery (of if such date is not a Business
Day,
on the next Business Day); if mailed by courier, on the second Business Day
following the date of such mailing; and if mailed by registered or certified
mail, on the fifth Business Day after the date of such mailing.
10.4 Expenses.
The
parties acknowledge that, unless otherwise provided herein, all costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby are the sole responsibility
of each respective party and the parties will pay their respective costs and
expenses.
10.5 Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the successors
and
assigns of each of the parties. No party shall be entitled to assign this
Agreement without the consent of the other parties.
10.6 Entire
Agreement; Amendment and Waiver.
This
Agreement constitutes the entire understandings of the parties hereto and
supersedes all prior agreements or understandings with respect to the subject
matter hereof among such parties. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with)
the
written consent of the Sellers and the Purchasers. Notwithstanding the
foregoing, subject to the applicable securities law, each Purchaser shall be
entitled to assign this Agreement to any Affiliates of such Purchaser without
such consent, provided that at the time of such assignment, (i) each Seller
is
given written notice by such Purchaser at the time of such assignment stating
the name and address of such assignee, and the number of Securities with respect
to which such assignment is being made, and that any such assignee shall receive
such assigned rights subject to all the terms and conditions of this Agreement,
including without limitation, the provisions of this Section 10.6 and (ii)
each
assignee shall furnish the Sellers and with the assignee's written agreement
to
be bound by this Agreement and confirming the accuracy of the representations
and warranties set forth in Section 3 with respect to such assignee.
Notwithstanding any such assignment, such Purchaser shall continue to be
responsible for the timely and full payment of its applicable portion of the
Consideration to each Seller.
-14-
10.7 Severability.
In the
event that any part or parts of this Agreement shall be held illegal or
unenforceable by any court or administrative body of competent jurisdiction,
such determination shall not effect the remaining provisions of this Agreement
which shall remain in full force and effect.
10.8 Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original and all of which together shall be considered one and the
same agreement.
10.10 Remedies.
In
addition to being entitled to exercise all rights provided herein or granted
by
law, including recovery of damages, the Purchasers and the Sellers will be
entitled to specific performance under this Agreement.
10.10 No
Third-Party Beneficiaries.
Except
as otherwise set forth herein, this Agreement shall not confer any rights or
remedies upon any Person other than the parties hereto and their respective
successors and permitted assignees.
[SIGNATURE
PAGES IMMEDIATELY FOLLOW]
-15-
IN
WITNESS WHEREOF the parties have signed this Securities Purchase Agreement
as of
the date first hereinabove set forth.
THE
PURCHASERS:
XXXXX
JOINT INVESTMENTS (2005) LIMITED PARTNERSHIP
BY:
XXXXX
INVESTMENTS LTD.
Its
General Partner
| By: | /s/ Xxxxxxx Xxxxxxx | |
| Name: Xxxxxxx Xxxxxxx | ||
| Title: Director |
| By: | /s/ Ran Xxxxxxxx | |
| Name: Ran Xxxxxxxx | ||
| Title: Director |
S.
XXXXXXX INVESTMENTS (2008) LTD.
| By: | /s/ Xxxxxx Xxxxxxx | |
| Name: Xxxxxx Xxxxxxx | ||
| Title: Director |
THE
SELLERS:
FORTISSIMO
CAPITAL FUND, LP
By
FORTISSIMO CAPITAL FUND GP, L.P.
Its
General Partner
By
FORTISSIMO CAPITAL (GP) MANAGEMENT LTD.
Its
General Partner
| By: | /s/ Xxxxx Xxxxx | |
| Name: Xxxxx Xxxxx | ||
| Title: Director | ||
[First Signature Page to Securities Purchase Agreement]
-00-
XXXXXXXXXX
XXXXXXX XXXX (XXXXXX), LP
By
FORTISSIMO CAPITAL FUND GP, L.P.
Its
General Partner
By
FORTISSIMO CAPITAL (GP) MANAGEMENT LTD.
Its
General Partner
| By: | /s/ Xxxxx Xxxxx | |
| Name: Xxxxx Xxxxx | ||
| Title: Director | ||
FORTISSIMO
CAPITAL FUND (ISRAEL-DP), LP
By
FORTISSIMO CAPITAL FUND GP, L.P.
Its
General Partner
By
FORTISSIMO CAPITAL (GP) MANAGEMENT LTD.
Its
General Partner
| By: | /s/ Xxxxx Xxxxx | |
| Name: Xxxxx Xxxxx | ||
| Title: Director | ||
[Second
Signature Page to Securities Purchase Agreement]
-17-
