EXHIBIT 10.25
Escrow Agreement with respect to Option Agreements, dated as of June 15, 2000,
by and among Xxxxxxx Xxxxx, Xxxxxx Xxxxxx Xxxxx, Xxxxxxx Xxxxxxx Xxxxx, a civil
partnership and the Registrant.
Escrow Agreement
with respect to the Option Agreements
between
Xxxxxxx Xxxxx, Xxxxxx Xxxxxx Xxxxx, Xxxxxxx Xxxxxxx Xxxxx
(the "Shareholders" or the "Sellers")
and
On Track Innovations Ltd.
("OTI")
and
X X Xxxxxxx & Co. KGaA
(the "Bank")
(the Shareholders, OTI and the Bank hereinafter referred to as the "Parties")
Whereas: The Parties have entered into a Share Purchase Agreement (the "SPA"),
dated June 15, 2000 pursuant to which OTI has acquired 51% ownership of
(i) Intercard GmbH Kartensysteme, registered in the Commercial Register
of the local court Villingen-Schwenningen under No. HRB 603 and having
its offices at Xxx xxx Xxxxx 0, 00000 Xxxxxxxxx-Xxxxxxxxxxxx
("InterCard K"), and InterCard GmbH Systemelectronic, registered in the
Commercial Register of the local court Villingen-Schwenningen under No.
HRB 532 and having its offices at XxxxxxxxxxXx 0, 00000 Xxx Xxxxxxxx
("InterCard S", collectively referred to in this Agreement as
"InterCard" or the "Companies") from the Shareholders, and,
Whereas: The Sellers own the remaining 49% ownership interest in InterCard
(hereinafter the "Remaining" or "Option Interest") or are entitled by
way of call options granted by Xx. Xxxxxx Xxxxxxx to acquire the
Remaining Interest (the "Xxxxxxx Options").
Whereas: The Sellers and OTI have entered into a Put Option Agreement (the "Put
Option") and a Call Option Agreement (the "Call Option", collectively
the "Options") pursuant to which the Sellers may sell the Remaining
Interests to OTI or OTI may acquire the Remaining Interests. The
acceptance of the Put Option by the Shareholders shall substantially be
in the form of Exhibit A, the acceptance of the Call Option by OTI
shall substantially be in the form of Exhibit B, both as a notarial
deed,
Whereas: The Sellers and OTI have agreed in the SPA and the Options to pay the
purchase prices for the Sold Interest (as defined in the SPA) and the
Option Interest by way of transferring ordinary shares of NIS 0.01 n.v.
each of OTI (hereinafter referred to as "OTI Shares") to the
Shareholders and have agreed on a mechanism by way of which the Bank is
instructed to act as agent in relation to the transfer of the OTI
Shares to the Shareholders.
NOW, THEREFORE, the Parties agree as follows:
1. Escrow Account
1.1 The Bank shall establish an escrow account (the "Escrow Account") in the
name of OTI to which OTI is obliged and entitled to transfer OTI Shares as
purchase price for the Sold Interest.
1.2 OTI shall irrevocably transfer to the Bank (without any right of recall
except for OTI's right to the Remainder according to Section 4 and free of
any third party rights) OTI Shares in an aggregate value of DM 7,700,000
according to the official average closing price of an OTI Share in the Neuer
Markt, traded in Frankfurt at the Xetra system (such official average
closing price hereinafter referred to as the "Closing Price"), in the 3
(three) trading days of May 29 to 31, 2000, which are admitted to trading at
Deutsche Borse AG in the Neuer Markt (the "OTI Trust Shares").
1.3 As long as any OTI Trust Shares are held in the Escrow Account with the Bank
they shall be "frozen" (as understood in accordance with the Israeli
Companies Law), i.e. the OTI Trust Shares shall not have any of the rights
attached to an OTI Share under OTI's Articles of Association, in particular
the right to vote and the right to receive profits.
2. Option Price
2.1 As Option Price the Shareholders and OTI agreed on a total amount of DM
7,000,000 (the "Option Price") or - with regard to the Call Option - on a
reduced amount (the "Reduced Option Price"). The whole Option Price is
payable in OTI Shares. Xx. Xxxxxxx Xxxxx is irrevocably authorized by the
other Shareholders to receive the entire Option Price. OTI irrevocably
instructs by these presents the Bank to transfer the amount of the OTI
Trust Shares which is required to be transferred for the payment of the
Option Price or the Reduced Option Price, as the case may be, to the
following account.
Xxxxxxx Xxxxx, Baden-Wurttembergische Bank AG, account no. 6208275540, bank
sort code 694 210 20, S.W.I.F.T. BWBK DE 6S 694.
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2.2 In the event that the Put Option or the Call Option is exercised, OTI
irrevocably instructs by these presents the Bank to transfer the amount of
the OTI Trust Shares which is required to be transferred for the payment of
the Option Price or the Reduced Option Price, as the case may be, according
to the following provisions. Proof of the exercise of the Put or the Call
Option shall be deemed to be given by presenting a certified copy of the
exercise of the Put Option or the Call Option to the Bank in the form of
Exhibit A or B, as the case may be, specifying the purchase price to be paid
(the "Exercise").
2.3 The Bank shall pay the Option Price or the Reduced Option Price, as the case
may be, from the Escrow Account in 7 (seven) equal instalments (the "Option
Instalments"), each totalling DM 1,000,000 (one million Deutsche Xxxx) or an
accordingly reduced amount in case of the Reduced Option Price. The Bank
shall transfer the Option Instalments in OTI Shares as follows:
2.3.1 The first Instalment (the "First Option Instalment") shall be paid on
the first or the fifteenth day of the month following the exercise of
the Option, whichever day is earlier (the "First Option Instalment
Date"),
2.3.2 The second Instalment (the "Second Option Instalment") shall be paid
one month after the First Option Instalment Date (the "Second Option
Instalment Date"),
2.3.3 The third Instalment (the "Third Option Instalment") shall be paid two
months after the First Option Instalment Date (the "Third Option
Instalment Date"),
2.3.4 The fourth Instalment (the "Fourth Option Instalment") shall be paid
three months after the First Option Instalment Date (the "Fourth
Option Instalment Date"),
2.3.5 The fifth Instalment (the "Fifth Option Instalment") shall be paid
four months after the First Option Instalment (the "Fifth Option
Instalment Date"),
2.3.6 The sixth Instalment (the "Sixth Option Instalment") shall be paid
five months after the First Option Instalment (the "Sixth Option
Instalment Date"),
2.3.7 The seventh Instalment (the "Seventh Option Instalment") shall be paid
six months after the First Option Instalment (the "Seventh Option
Instalment Date"),
(and the First until the Sixth Option Instalments shall be referred to
collectively as the "First Option Instalments"; and the First until the
Seventh Instalment Dates shall be referred to collectively as the "Option
Instalment Dates").
2.4 The Bank shall determine the number of OTI Trust Shares transferred to the
Shareholders as payment of the Option Price or the Reduced Option Price, as
the case may be, for each of the Option Instalments in accordance with the
Closing Price of an OTI share in the 3 (three) trading days prior to the
relevant Option Instalment Date. In the event that these instalments as
calculated above do not result in a whole number of OTI Shares, then these
shall be rounded up by the Bank accordingly.
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2.5 Prior to the Seventh Instalment the Bank shall make a calculation of the
aggregate Deutsche Xxxx value of each of the First Option Instalments
according to 20 (twenty) trading days Closing Price following the relevant
Instalment Date of each of them (the "Aggregate Option Value"). The Deutsche
Xxxx amount of the Seventh Instalment shall be calculated as the difference
between the Option Price or the Reduced Option Price, as the case may be,
less the Aggregate Option Value, and shall be transferred in OTI Shares in
accordance with the provisions of Section 2.4 above.
2.6 Seven months after the First Option Instalment Date (the "Eighth Option
Instalment Date"), the Bank shall make a calculation to the effect that the
amount of the Aggregate Option Value and the value of the Seventh Instalment
according to 20 trading days average market price following the Seventh
Instalment Date shall be added together (the "Final Option Value"). If the
Final Option Value amounts to less than the Option Price or the Reduced
Option Price, as the case may be, the amount of difference shall be
transferred by the Bank to Xxxxxxx Xxxxx in OTI Shares in accordance with
the provisions of Section 2.4 above.
2.7 If there are not enough OTI Shares in the Escrow Account with the Bank to
transfer to the Shareholders for the payment of the Option Price the Bank
shall inform OTI and the Shareholders immediately. No further action of the
bank is required.
3. Confirmation of Receipt of the OTI Trust Shares
The Bank shall immediately after the irrevocable receipt of the OTI Trust Shares
(without any right of recall of OTI whatsoever except for OTI's right to the
Remainder according to Section 4) confirm in writing to Xxxxxxx Xxxxx (on behalf
of the Shareholders) and to OTI the irrevocable receipt of the OTI Trust Shares
(without any right of recall of OTI whatsoever except for OTI's right to the
Remainder according to Section 4) (the "Confirmation"). The Confirmation shall
in substantially the form attached hereto as Exhibit C.
4. Remainder of OTI Trust Shares
The Bank shall hold the remainder, if any, of the OTI Trust Shares in the Escrow
Account
* once all transfers of the OTI Trust Shares from the Escrow Account to the
Shareholders have been carried out in accordance with Section 2 of this
Agreement; or
* if the Bank has not received a notice of the exercise of the Option pursuant
to Section 2.2 of this Agreement until January 5, 2002,
and the Bank shall act with respect to such remainder in accordance with OTI's
instructions without any right of the Shareholders to such remainder.
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5. Costs
5.1 The Bank receives a fee of 2.25% of the Option Price or the Reduced Option
Price, as the case may be (the "Fee"). The entire remuneration and expenses
of the Bank shall be deemed to be covered by payment of the Fee. Thereby 1%
of the Interest Price is attributed to the remuneration and expenses for the
transfer of the OTI Shares, 1.25% of this amount is attributed to the escrow
function of the Bank according to the terms and conditions of this
Agreement. The Fee shall be due when the First Instalment is effected in
accordance with Sections 2.3, 2.4 of this Agreement.
5.2 The Fee incurred by the Bank shall be borne by OTI 50% and the Shareholders
50% equally.
6. Addresses
The Parties' addresses for the purpose of this Agreement are as set forth below,
unless otherwise notified in writing to all parties:
Shareholders:
Address: Xxxxxxx Xxxxx, Xxxxxxxxx 0, X-00000 Xxxxxxxxxxxx
Tel: xx00-0000-000000
Fax: xx00-0000-000000
Copy to Gleiss Xxxx Hootz Xxxxxx:
Attention: Xx. Xxxxxxx Xxxxxx
Address: XxxxxxxxxxxXx 0, X-00000 Xxxxxxxxx
Tel: xx00-000-00000
Fax: xx00-000-000000
XXX
Xxxxxxx: X.X.X. X.X., Xxxx Xxxx 00000, Xxxxxx
Tel: xx000-0-0000000
Fax: xx000-0-0000000
Copy to White & Case:
Attention: Xxxxxx Xxxxxxx/Xxxxxxxx Xxxxxxx/Xxxxxxx Xxxxxx
Address: Xxxxxxxxxxxx XxxxxxxxXx 00-00, X-00000 Xxxxxxxxx am Main
Tel: xx00-00-000 770
Fax: xx00-00-000 77 100
7. Miscellaneous
7.1 Governing Law. This Agreement shall be governed by the laws of the Federal
Republic of Germany without regard to its conflict of law provisions.
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7.2 Partial Invalidity. If one or more provisions of this Agreement should be or
become wholly or partially invalid, void or impracticable, the validity of
the other provisions of this Agreement shall not be affected thereby. The
same shall apply if it should transpire that this Agreement contains a gap.
In place of the invalid, void or impracticable provision (or, as the case
may be, in order to fill the gap) the parties to this Agreement shall agree
on an appropriate provision which comes as close as legally possible to what
the parties were trying to achieve with the invalid, void or impracticable
provision (or, as the case may be, the invalid, void or impracticable part
thereof). In the event that a gap in this Agreement needs to be filled, a
provision shall be agreed upon which, in view of the purpose and intent of
this Agreement, comes as close as possible to what the parties would have
agreed if they had been aware of the gap at the time that this Agreement was
concluded.
7.3 Liability of the Bank. The Bank shall be liable only for the care it employs
in its own affairs.
/s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
/s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
/s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
On Track Innovations Ltd.
ON TRACK INNOVATIONS LTD.
X.X. Xxxxxxx & Co KGaA
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EXHIBIT A
Acceptance of the Put Option
EXERCISE OF OPTION
(1)
By way of notarial deed dated 15 June 2000 - Deed Roll No. 960/2000 of the
notary public Xx. Xxxx Xxxxx, Stuttgart (hereinafter referred to as the Put
Option Agreement) On Track Innovations Ltd., a public company duly organized and
existing under the laws of the State of Israel (Reg. No.: 52-004268-2), has
offered to Messrs. Xxxxxxx Xxxxx, Xxxxxx Xxxxxx Xxxxx and Xxxxxxx Xxxxxxx Xxxxx,
both in their individual capacity and as shareholders of the Civil Partnership,
to purchase and acquire ownership interests in InterCard GmbH Kartensysteme, a
company registered with the Commercial Register of the Villingen-Schwenningen
Local Court under HRB 603 and InterCard GmbH Systemelectronic, a company
registered with the Commercial Register of the Villingen-Schwenningen Local
Court under HRB 532 (both companies hereinafter referred to as InterCard).
(hereinafter referred to as the Put Option)
With regard to the details of the Put Option, reference is made to the Put
Option Agreement.
(2)
Now therefore, Messrs. Xxxxxxx Xxxxx, Xxxxxx Xxxxxx Xxxxx and Xxxxxxx Xxxxxxx
Xxxxx, both in their individual capacity and as shareholders of the Civil
Partnership, declare the acceptance of the offer made under the Put Option
Agreement. The acceptance is made subject to the conditions of the Put Option
Agreement.
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EXHIBIT B
Acceptance of the Call Option
EXERCISE OF OPTION
(1)
By way of notarial deed dated 15 June 2000 - Deed Roll No. 961/2000 of the
notary public Xx. Xxxx Xxxxx, Stuttgart (hereinafter referred to as the Call
Option Agreement) Messrs. Xxxxxxx Xxxxx, Xxxxxx Xxxxxx Xxxxx and Xxxxxxx Xxxxxxx
Xxxxx, both in their individual capacity and as shareholders of a civil
partnership under the German Civil Code (BGB), have offered to On Track
Innovations Ltd, a public company duly organized and existing under the laws of
Israel (Reg. No.: 52-004268-2) (hereinafter referred to as OTI) to sell and
transfer ownership interests in InterCard GmbH Kartensysteme, a company
registered with the Commercial Register of the Villingen-Schwenningen Local
Court under HRB 603 and InterCard GmbH Systemelectronic, a company
registered with the Commercial Register of the Villingen-Schwenningen Local
Court under HRB 532 (both companies hereinafter referred to as InterCard).
(hereinafter referred to as the Call Option)
With regard to the details of the Call Option, reference is made to the Call
Option Agreement.
(2)
Now therefore, OTI declares the acceptance of the offer made under the Call
Option Agreement. The acceptance is made subject to the conditions of the Call
Option Agreement.
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EXHIBIT C
[Letterhead of X.X. Xxxxxxx & Co. XXxX]
Xxxxxxx Xxxxx
Xxxxxxxxx 0
X-00000 Xxxxxxxxxxxx
Fax: xx00-0000-000000
On Track Innovations Ltd.
Z.H.R. I.Z.
Rosh Xxxx 00000
Xxxxxx
Fax: xx000-0-0000000
cc: Gleiss Xxxx Hootz Xxxxxx
Attention: Xx. Xxxxxxx Xxxxxx
Xxxxxxxxxx 0
X-00000 Xxxxxxxxx
Fax: xx00-000-000000
White & Case
Attention: Xxxxxx Xxxxxxx/Xxxxxxxx Xxxxxxx/Xxxxxxx Xxxxxx
Xxxxxxxxxxxx XxxxxxxxXx 00-00
X-00000 Xxxxxxxxx xx Xxxx
Fax: xx00-00-000 77 100
Confirmation of Receipt of the OTI Trust Shares
Gentlemen,
In accordance with Section 3 of the Escrow Agreement with respect to the Option
Agreements of June 30, 2000 by and between Xxxxxxx Xxxxx, Xxxxxx Xxxxxx Xxxxx,
Xxxxxxx Xxxxxxx Xxxxx (the "Shareholders"), On Track Innovations Ltd. ("OTI")
and X.X. Xxxxxxx & Co. KGaA ("Escrow Agreement") we hereby confirm the
irrevocable receipt of the OTI Trust Shares without any right of recall of OTI
whatosever except for OTI's right to the Remainder according to Section 4 of the
Escrow Agreement with respect to the Option Agreements.
Sincerely yours,
X.X. Xxxxxxx & Xx. XXxX
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