JOINT VENTURE AGREEMENT
THIS JOINT VENTURE AGREEMENT (this
"Agreement") is made as
of June 1 2010, by and between Laser Detect Systems
Ltd., a company organized under
the laws of the State of Israel with principal offices at 00 xXxxxxx Xx., Xxxxxx
Xxxx, XX Xxx 00000, Xxxxxx Xxxxx 00000, Israel ("Laser"), and Oramed Ltd., a company
organized under the laws of the State of Israel with principal offices at
Hi-Tech Park 2/5 Givat-Ram, XX Xxx 00000, Xxxxxxxxx 00000, Israel ("Oramed") (Laser and Oramed are
referred to herein as the "Founding
Shareholders").
|
WHEREAS,
|
the
Founding Shareholders plan to establish an Israeli company to be named
Entera Ltd. (or such other name as may be approved by the Founding
Shareholders and the Companies Registrar) (the “Company”) and will at
inception be the sole shareholders of the Company;
and
|
|
WHEREAS,
|
the
Founding Shareholders desire to determine the principles, provisions,
terms and conditions required for the establishment, management, finance
and operation of the Company, all subject to the terms and conditions set
forth herein; and
|
|
WHEREAS,
|
Oramed
will provide the Company with a license pursuant to the License Agreement
(as defined below), and Laser will be responsible for the initial funding
the Company on the terms set forth
herein.
|
NOW THEREFORE, in consideration of the
mutual promises and covenants set forth herein and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties to this Agreement (the "Parties") hereby agree as
follows:
|
1.
|
General.
|
1.1 Purpose. The
Founding Shareholders shall cause the Company to be incorporated under the laws
of the state of Israel as a private company with limited liability, which will
be operated by them pursuant to the terms of this Agreement for the purposes of
developing pharmaceutical products for the oral delivery of peptides pursuant to
the License Agreement.
1.2 Articles. The
Company shall be organized in accordance with the provisions of this Agreement.
Promptly upon incorporation, the Parties shall cause the Company to adopt this
Agreement and approve the acts of the Parties carried out in the name of the
Company pursuant to Israeli law. The articles of association of the
Company (the "Articles")
shall be in a form mutually agreed between the Founding
Shareholders. In case of any contradiction between the provisions of
this Agreement and the Articles, the provisions of the Articles shall prevail
and govern in the relationship between the Parties.
1.3 Offices. The
Company’s offices shall be located in Oramed’s offices at Hi-Tech Park 0/0
Xxxxx-Xxx, Xxxxxxxxx 00000, Xxxxxx. The Company will rent office
space and services from Oramed for a period of up to 24 months commencing on the
Closing Date, for a non-refundable, up-front fee in the amount of $36,000. It is
acknowledged that the rental period may be less than 24 months if Oramed vacates
such premises before the end of such 24-month period. The services
will include the use of one half of an office for one employee of the Company
and the use of office equipment and furniture.
1.4 Accounting
Services. Oramed shall provide accounting services to the
Company for the maintenance of the Company's accounting records and the
preparation of quarterly and annual financial statements of the Company in
accordance with U.S. GAAP and IFRS, to the extent financial statements in
accordance with such rules are required by either of the Founding
Shareholders. In consideration for such services, the Company shall
pay to Oramed a monthly fee in the amount of NIS 3,500 plus VAT.
|
2.
|
Capitalization,
Closing and Share
Transfers.
|
2.1 Capitalization. The
authorized share capital of the Company shall initially consist of NIS 100,000
divided into 100,000 ordinary shares, NIS 1.00 par value each (the "Ordinary
Shares").
2.1.1 On
the basis of the representations, warranties, covenants, agreements,
commitments, undertakings and obligations contained herein, at the Closing (as
such term is defined in Section 2.3 below), each of Laser and Oramed shall
purchase 5,000 Ordinary Shares (the "Original
Shares"). The Ordinary Shares issued to Laser shall be issued
against payment of $600,000, and the Ordinary Shares issued to Oramed shall be
issued in consideration of Oramed's entering into the License Agreement in the
form attached hereto as Exhibit A (the
“License
Agreement”). Such Original Shares shall, when issued at the
Closing, be free and clear from any and all liens and shall be duly authorized,
validly issued, fully paid and nonassessable. Immediately following the Closing,
the issued and outstanding share capital of the Company shall consist solely of
the Original Shares.
2.1.2 The
Company shall adopt an employee share incentive plan that allows for the grant
of awards in accordance with Section 102 of the Israeli Income Tax Ordinance
[New Version], 1961. Such plan shall condition the issuance of
Ordinary Shares thereunder to any person prior to the Company's initial public
offering on the execution by such person of a document agreeing to become a
party to this Agreement. Within 60 days following the Closing, the
Company shall issue to Xxxxxx Xxxxxxxx as the Chief Executive Officer of the
Company (the “CEO”)
options to purchase 1,098 Ordinary Shares (the “CEO Options”), reflecting 9.9% of
the Company's share capital immediately following the Closing after dilution by
the CEO Options. The CEO Options will be issued under the share incentive
plan and pursuant to Section 102 of the Ordinance. The CEO Options shall
have a ten (10) year term from the date of grant and shall be subject to
vesting over a three (3) year period, with one-third of the CEO Options vesting
upon the lapse of 6 months from the date of grant and one-third on each of the
second and third anniversary of the date of grant. In the event that
prior to the lapse of 6 months from the date of grant the Company shall receive
equity financing from a third party investor, the vesting of the first third of
the CEO Options shall accelerate immediately prior to the consummation of such
investment. The vesting of the CEO Options will accelerate in full in
the event that the CEO is terminated by the Company without cause and upon the
consummation of an IPO or M&A transaction (as such terms will be defined a
definitive agreement between the Company and the CEO). The exercise
price per share of the CEO Options shall be the nominal value of the Ordinary
Shares.
-2-
2.2 Additional
Shares. Any future issuances of shares in the Company will
dilute all the shareholders of the Company (the "Shareholders")
proportionately, except as set forth in Section 3 below.
2.3 Closing. The
closing of the transactions contemplated hereby (the “Closing”) shall take place on
the second business day following the fulfilment of the conditions set forth in
Section 9 below, at the offices of Goldfarb, Levy, Eran, Meiri, Tzafrir
& Co., 0 Xxxxxxxx Xxxxxx, Xxx Xxxx, or at such other date and place as the
Parties may otherwise agree (the date and time of the Closing are hereinafter
referred to as the “Closing
Date”).
2.4 Share
Transfers.
2.4.1 Each
of the Parties shall be subject to the restrictions on Transfer (as defined
below) of its respective Ordinary Shares set forth below and in the
Articles.
2.4.2 Notwithstanding
anything in this Agreement to the contrary, any Party may freely Transfer any of
its Ordinary Shares to a Permitted Transferee thereof, subject to Section 2.4.3.
“Permitted Transferee”
means: (a) each of the Founding Shareholders; (b) as to any
individual - any grandparents, parents, siblings, children, lineal descendant
(including step and adopted children), and any spouse of such individual or any
of the foregoing, or trust of which at least one of the foregoing is the
beneficiary; (c) any Affiliate of the persons indicated in (a) or (b) above; (d)
as to any partnership: (1) any of its general and limited partners; (2) any of
its Affiliates; (3) any person, directly or indirectly, managing such entity; or
(4) any entity (and its partners) managed by the same management company or
managing general partner, or managed by an affiliate of such management company
or managing general partner; and (e) as to a trust, the beneficiary or
beneficiaries of such trust. “Affiliate(s)” of any person
shall mean another person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with,
such first person; and “control” shall mean ownership
(direct or indirect) of more than 50% of the shares of the subject person
entitled to vote in the election of directors (or, in the case of a person that
is not a corporation, for the election of the corresponding managing
authority).
2.4.3 Any
transferee, concurrently with the completion of the Transfer of Ordinary Shares,
shall have executed a document assuming the obligations of the transferor under,
and agreeing to be bound by and become a party to, this Agreement. An
Affiliated transferee of a Shareholder shall be aggregated together with such
Shareholder with respect to the holdings, rights and obligations of such
Shareholder under this Agreement. Any attempt by a Party to Transfer
Ordinary Shares in violation of this Agreement shall be void and the Company
agrees it will not affect such a Transfer nor will it treat any alleged
transferee(s) as the holder of such Ordinary Shares.
2.4.4 For
the purposes of this Agreement, a "Transfer" shall include to
sell, assign, transfer, grant any right in, assign or dispose of, by gift or
otherwise (including by way of realization of a Pledge), or in any way encumber,
shares or other securities convertible into or exchangeable for shares in the
Company, including, if the transferor (other than Laser or Oramed) is a holding
company, whose primary activity is holding shares in the Company or other
securities convertible into or exchangeable for shares in the Company, by way of
a change of control in such transferor-company. For the removal of doubt, it is
hereby clarified that the pledge, lien, hypothecation or mortgage (collectively,
"Pledge") of any shares
or other securities convertible into or exchangeable for shares in the Company
shall not be considered a Transfer for the purposes of this Section 2.4.4.,
provided that the pledgee agrees in writing towards the Company and the
Shareholders to be bound by all restrictions of Transfer set forth herein,
including, without limitation, the right of first refusal pursuant to Section
2.6 hereafter.
-3-
2.5 Pre-emptive
Right. Until immediately prior to the closing of the initial
public offering of the Ordinary Shares (“IPO”), each Founding
Shareholder will have the right to purchase a pro rata portion (on an
as-converted basis) of any further issuance of share capital, or other rights or
securities convertible into or exchangeable for share capital, by the Company,
other than options (and the shares issuable upon exercise thereof) granted to
employees, consultants and directors under the employee equity incentive plan of
the Company. Each Founding Shareholder shall also be entitled to purchase the
pro rata portion of any other Founding Shareholder that does not exercise such
right.
2.6 Right of First
Refusal
2.6.1 If
at any time prior to the closing of the IPO, any Shareholder (the "Offeror") wishes to Transfer,
other than to a Permitted Transferee, all or any of its Ordinary Shares or other
securities convertible into or exchangeable for shares of the Company (the
"Offered Securities"),
the Founding Shareholders and the CEO shall have the right to purchase all, or
any portion, of the Offered Securities on the same terms and conditions offered
by the Offeror, all in accordance with customary procedures set forth in the
Articles.
2.6.2 Notwithstanding
the foregoing, no Shareholder may transfer Ordinary Shares to a competitor of
the Company, without the prior written consent of the Board and the Founding
Shareholders, which in case of a Founding Shareholder can be withheld in its
sole and absolute discretion.
2.7 Drag-Along
Rights. Without derogating from the provisions of Section 2.6
above, prior to an IPO, in the event that both Founding Shareholders holding in
the aggregate at such time the majority of the Company's issued and outstanding
share capital, accept an offer to sell all of their shares to a third party
(excluding to a Permitted Transferee), and such sale is conditioned upon the
sale of all remaining outstanding Ordinary Shares of the Company to such third
party, all other Shareholders shall be required, upon the Founding Shareholders'
request, to sell their shares in such transaction, on the same terms and
conditions, provided that the terms of such sale reflect a pre-money valuation
of the Company of at least $15,000,000.
2.8 Registration
Rights. In the event of an IPO in the United States, the
Company will grant demand and piggyback registration rights to the Founding
Shareholders on customary terms and conditions.
-4-
3. Funding. In
the event the Company has not obtained third party financing on or prior to the
first year anniversary of this Agreement, or such other date mutually agreed
upon by the Founding Shareholders, each Founding Shareholder shall make a
capital contribution to the Company in the amount of $150,000 (the “Second
Financing”). Subject to Section 2.6 above (mutatis mutandis), each
Founding Shareholder may elect to allow a third party introduced by such
Founding Shareholder to invest an amount equal to all or a portion of such
Founding Shareholder’s Second Financing obligation, provided that the terms of
such investment reflect a pre-money valuation of the Company of at least
$5,000,000 and that, at the election of the other Founding Shareholder, up to
one half of the third party's investment shall count toward such other Founding
Shareholder's Second Financing obligation. Notwithstanding the
foregoing, in order to allow the CEO to maintain beneficial ownership of 9.9% of
the Company (on a fully diluted basis) as of the closing of the Second
Financing, the Company will provide the CEO with the opportunity to contribute
$15,000 to the Company upon the closing of the Second Financing, whether or not
a third party participates in the Second Financing. If the CEO shall
not contribute such amount or if a third party participates in the Second
Financing, the Company shall issue Ordinary Shares in consideration for the
investments in the Second Financing; if the CEO contributes such amount, but no
third party participates in the Second Financing, then such Ordinary Shares
shall be issued at the same valuation as the Original Shares; otherwise, all
such Ordinary Shares shall be issued at the valuation of the third party's
investment in the Second Financing.
|
4.
|
Corporate Governance;
Management.
|
4.1 Shareholders
Meetings.
4.1.1 The
quorum for meetings of the Shareholders shall be the presence, in person or by
proxy, of at least 2 (two) Shareholders, holding shares conferring a majority of
the outstanding voting power of the Company, provided, however, that as long as
a Founding Shareholder holds 10% (ten percent) or more of the issued and
outstanding share capital of the Company, a legal quorum shall require the
presence (in person or by proxy) of such Founding Shareholder.
4.1.2 If
within half an hour from the time appointed for the meeting a quorum is not
present, the meeting shall stand adjourned to the same day in the following week
at the same time and place, or to such other date, time and place as the Board
of Directors may determine. If a notice of the adjourned meeting has been given
to the Shareholders, and a quorum is not present at the adjourned meeting within
half an hour from the time appointed for the meeting, then any Shareholder
present, in person or by proxy, shall be a quorum, and shall be entitled to
deliberate and to resolve in respect of the matters for which the original
meeting was convened. No business shall be transacted at any adjourned meeting
except business which might lawfully have been transacted at the meeting as
originally called.
4.1.3 Other
than as described in Section 4.2 below, a resolution shall be deemed adopted by
the Shareholders if approved, in person or by proxy, by the holders of more than
50% of the voting power represented at the general meeting and voting
thereon.
4.2 Major Decisions;
Shareholders. Each of the following matters may only be
approved with the prior written consent of each Founding Shareholder, for so
long as such Founding Shareholder holds 20% or more of the issued and
outstanding share capital of the Company, regardless of whether such matter
might otherwise be deemed to be within the competence of the Board of
Directors:
4.2.1 Any
change in the number of directors of the Company or the manner of their
selection.
-5-
4.2.2 Any
amendment of the Articles that adversely affects the rights of such Founding
Shareholder.
4.2.3 The
merger, reorganization, consolidation or change of control transaction with or
into any other entity, other than a bona fide investment transaction or a
purchase of shares from an existing Shareholder of the Company.
4.2.4 Changing
the independent auditor of the Company.
4.2.5 The
liquidation, dissolution or winding up of the Company or termination of the
Company’s activities.
4.3 Board of
Directors. The management of the Company shall be supervised
and directed by the Board of Directors. The Board of Directors shall
initially consist of four members: one representative designated by Oramed (the
“Oramed Board Member”),
one representative designated by Laser (the “Laser Board Member”), the CEO
and an independent director mutually appointed by the Founding Shareholders,
provided, however, that the rights of any Founding Shareholder under this
Section 4.3 shall not apply if its holdings in the Company constitute less than
20% of the outstanding share capital. The Company shall not pay
director fees to the CEO, the Oramed Board Member or the Laser Board
Member.
4.4 Chairman. The
Board of Directors shall appoint one director to serve as Chairman of the Board
of Directors. The Chairman shall be unanimously appointed by the Board of
Directors and shall not have a casting vote in addition to his or her vote as a
director.
4.5 Management. The
day-to-day operations of the Company will be managed by the CEO, who will report
to the Board of Directors.
4.6 Board
Meetings. The quorum for meetings of the Board of Directors
shall be two directors, provided that the Oramed Board Member and the Laser
Board Member are present, to the extent he or she is permitted to participate
under applicable law. Other than as described in Section 4.8 below, resolutions
of the Board of Directors shall be passed by a majority of the directors present
and lawfully entitled to vote thereon.
4.7 Deadlock
Resolution. If the Board of Directors is unable to adopt a
resolution regarding a significant matter due to a tie vote (a “Deadlock”), the Deadlock shall
be resolved in accordance with the following procedure: within three "business days" (i.e., a day (other than a
Friday or Saturday ) on which banks are permitted to be open and transact
business in Israel) of the date of the meeting of the Board of Directors in
which the Deadlock arose, the Founding Shareholders shall mutually appoint an
additional director to the Board of Directors. The Board of Directors
shall then convene a meeting and attempt to resolve the Deadlock.
4.8 Major Decisions; Boards of
Directors. Each of the following matters may only be approved with the
prior written consent of each of the Oramed Board Member and the Laser Board
Member, for so long as each of Oramed and Laser, respectively, holds 20% or more
of the issued and outstanding share capital of the Company, regardless of
whether such matter might otherwise be deemed to be part of the day-to-day
management of the Company:
4.8.1 Any
sale or other disposition of material assets of the Company outside the ordinary
course of business.
-6-
4.8.2 Any
contract or arrangement, or amendment thereto, between the Company or a
subsidiary thereof, on the one hand, and any officer, director, Shareholder or
Permitted Transferee of the foregoing, on the other hand.
4.8.3 Taking
on loans.
4.8.4 Entering
a new business area, other than a new field of development pursuant to the
License Agreement.
4.8.5 The
merger, reorganization, consolidation or change of control transaction, other
than a bona fide investment transaction or a purchase of shares from an existing
shareholder, of the Company with or into any other entity
4.8.6 The
approval of the Business Plan (as defined in Section 4.11 below) and any
material deviation therefrom or material modifications thereto.
4.8.7 Declaration
or payment of any dividend or other distribution by the Company.
4.8.8 Making
any loans, advances, liens or guarantees outside the ordinary course of
business.
4.8.9 Effecting
an IPO and selecting the managing underwriter thereof.
4.8.10 The
hiring, compensation or termination of the CEO.
4.9 Indemnification and
Insurance. The Company will undertake to indemnify its
directors and officers to the fullest extent permitted by applicable law for
such individuals' service as officers and directors and to advance expenses
(including all reasonable legal fees incurred by any such individual in
connection with such indemnification upon the receipt of the signed statement by
the indemnified individual agreeing to reimburse the Company for such advance in
the event it is ultimately determined that any such individual is not entitled
to be indemnified against such expenses), and shall maintain Directors and
Officers Liability Insurance on customary terms and conditions.
4.10 Limitation on
Liability. Subject to applicable law, neither the directors nor the
officers shall be liable to the Shareholders or the Company for monetary damages
for an act or omission in such person's capacity as a director or officer,
except for (i) acts of willful misconduct or recklessness, (ii) any transaction
from which the director or officer derived, directly or indirectly, an improper
personal benefit or (iii) fines imposed upon him or her.
4.11 Business Plan. The
CEO shall propose to the Board of Directors an annual business plan of the
Company, including the annual budget, the R&D plan and other major factors
in the Company’ operations (the "Business
Plan"). The business of the Company shall be conducted in
accordance with such Business Plan. The initial Business Plan of the Company for
2010 shall be proposed within 30 days of the Closing, and the Business Plan for
subsequent fiscal years shall be proposed 30 days before the end of the prior
fiscal year.
4.12 Information Rights.
For as long as any Founding Shareholder is the holder of 5% of the issued and
outstanding share capital of the Company, it shall be entitled to full
transparency of the Company’s affairs, including the right to receive, promptly
upon request, financial information and to inspect the books of the Company,
subject to Section 5.3 below.
-7-
4.13 Bank Account; Signatory
Rights.
4.13.1 The
Company shall open and maintain a bank account according to a resolution of the
Board of Directors, into which all income and receipts of the Company will be
deposited and from which all expenses of the Company will be paid.
4.13.2 The
initial signature rights of the Company shall be as follows: (i) the signature
of the CEO, together with the Company’s seal or printed name, shall bind the
Company with respect to payments of up to $5,000 each; and (ii) the joint
signatures of the CEO and one director, or any two directors, together with the
Company’s seal or printed name, shall bind the Company in any matters that do
not require the approval of the Board or Shareholders under applicable law, the
Articles or this Agreement.
4.14 Accounting. The
Company’s initial independent auditor shall be Xxxxxxxxx & Xxxxxxxxx,
certified public accountants in Israel and a member of PricewaterhouseCoopers
International Limited. The Company shall prepare financial statements
in accordance with both U.S. and Israeli generally accepted accounting
principles. The Company's fiscal year shall be the calendar year.
4.15 Consulting
Services. If any personnel of a Shareholder shall provide
consulting services to the Company from time to time, other than in the capacity
of a Board member, the Company will compensate such Shareholder on market
terms.
|
5.
|
Covenants.
|
|
5.1
|
Best
Efforts. Between the date of this Agreement and the
Closing Date, each of the Parties shall use its best efforts to cause the
conditions in Section 9 to be satisfied as soon as practicable prior to
the Closing Date.
|
|
5.2
|
Publicity. No
Party shall issue a press release or cause any other publicity with
respect to the subject matter of this Agreement or the activities of the
Company without the consent of the Founding Shareholders or the Board of
Directors, except as required by applicable law or stock exchange rules,
in which case reasonable effort shall be made to coordinate the content
and timing of such publicity.
|
|
|
5.3
|
Confidentiality.
Each Shareholder shall hold in strict confidence and shall cause its
directors, employees, consultants and advisors to hold in strict
confidence, all documents and information in its possession concerning the
Company and its business, including financial information and the entering
into and content of this Agreement (the "Confidential
Information"), will use such Confidential Information only in
connection with its capacity as a Shareholder and shall not disclose the
same to any person; provided, however, that
in the event that a Shareholder is required by applicable law to disclose
any Confidential Information such Shareholder will first consult with the
Company and cooperate in an effort to minimize such disclosure of
Confidential Information to the greatest extent possible, and after such
consultation shall be entitled to disclose such Confidential Information
to the extent required. The obligations in this Section 5.3 will not apply
to any information which (i) is or becomes available to the public other
than by breach of this Agreement by the receiving party, (ii) is or has
been rightfully received by the receiving party from a third party, or
disclosed by the disclosing party to a third party, without any
restrictions as to its use or disclosure, (iii) is or has been
independently developed by the receiving party, or (iv) is published or
included in any publication in accordance to a regulatory or stock market
requirement or request.
|
-8-
|
|
5.4
|
Legal Representation;
Expenses. The Founding Shareholders acknowledge that attorneys at
the same law firm are representing both Founding Shareholders and the
Company in connection with this Agreement, the License Agreement and the
establishment of the Company. Accordingly, the fees of such
firm incurred in connection with such matters shall be borne by the
Founding Shareholders and the Company in three equal
parts. Such arrangement shall not apply to matters relating
specifically to one Founding Shareholder, such as the corporate approval
process of each Founding Shareholder. Except as otherwise
expressly provided herein, whether or not the transactions contemplated
herein are consummated, each Party shall bear and pay all fees, costs and
expenses (including legal fees and accounting fees) that have been
incurred or that are incurred by such Party in connection with this
Agreement and the transactions contemplated
herein.
|
|
|
5.5
|
Further
Assurances. At any time and from time to time after the Closing
Date, the Parties hereto agree to (i) furnish, execute, acknowledge and
deliver upon reasonable request to each other such further assurances,
documents, and information and (ii) do all such further acts and things,
all as the other Party may reasonably request for the purpose of carrying
out the intent of this Agreement and any document referred to
herein.
|
|
|
5.6
|
Notification.
Between the date of this Agreement and the Closing Date, each Party shall
promptly notify the other Party in writing if it becomes aware of any fact
or condition that causes or constitutes a breach of any of its
representations and warranties as of the date of this Agreement, or if it
becomes aware of the occurrence after the date of this Agreement of any
fact or condition that could (except as expressly contemplated herein)
cause or constitute a breach of any such representation or warranty had
such representation or warranty been made as of the time of occurrence or
discovery of such fact or condition. During the same period, each Party
shall promptly notify the other Party of the occurrence of any breach of
any covenant, agreement, undertaking or obligation of such Party or of the
occurrence of any event that may make the satisfaction of the conditions
in Section 9 impossible or not reasonably
likely.
|
|
6.
|
Non-Solicitation;
Specific Performance
|
6.1 Non-Solicitation.
Each of the Parties and the Company hereby undertakes that for as a long as such
Party holds securities of the Company and for a period of one (1) year
thereafter, it shall not, and shall cause its respective Affiliates not to,
without the prior written consent of the other Party or the Company, as
applicable, directly or indirectly, whether by itself, its employees, officers
or agents and whether on its own account or on behalf of or in conjunction with
or through the medium of any person, firm or company or otherwise howsoever,
(with a view to employment or engagement) solicit or entice away, or endeavour
to solicit or entice away, from the other Party or the Company any employee or
officer of the other Party or the Company.
-9-
6.2 Specific
Performance. The Parties expressly agree and acknowledge that
the detriment caused by any violation of any provision of this Agreement, would
be so severe and fundamental as to be impossible to quantify in monetary
damages. Accordingly, the Parties agree that the Company and each
Party shall be entitled to obtain an order for specific performance of any and
all provisions this Agreement. Nothing in this Section 6.3 shall be
interpreted to limit in any way any other legal or equitable remedies which may
be or become available as a result of a breach of any portion of this Agreement,
including (without limitation) monetary damages.
|
7.
|
Representations and
Warranties.
|
7.1 Each
of the Parties (including the Company, upon adoption of this Agreement) hereby
represents, warrants and undertakes with respect to itself, as applicable, as
follows:
7.1.1 Due Incorporation. It
is a corporation duly organized and validly existing under the laws in which it
was incorporated, has all requisite corporate power and authority to carry on
its business as now being conducted and it has all requisite corporate power to
enter into and perform its obligations under this Agreement and the License
Agreement.
7.1.2 Due Authorization.
The execution, delivery and performance of this Agreement and the License
Agreement and the consummation of the transactions provided for herein and
therein, have been duly authorized by all necessary corporate action. This
Agreement and the License Agreement constitute a valid and legally binding
obligation on its part, enforceable in accordance with its and their terms. The
execution and delivery by it of this Agreement and the License Agreement, and
the consummation by it of the transactions contemplated hereby and thereby in
accordance with the terms of this Agreement and the License Agreement, do not
and shall not as of Closing Date contravene or conflict with (or constitute a
violation of or breach of or default under or give to others any rights,
including rights of termination, cancellation or acceleration): (i) its
memorandum or articles of association or other corporate governing documents;
(ii) any provision of any law, regulation, judgment, injunction, order or
decree binding upon or applicable to it; or (iii) any agreement, contract,
lease or commitment to which it is a party or by which it is bound.
7.1.3 Approvals. The
execution, delivery and performance of this Agreement and the License Agreement
by it do not require any consent of, notice of, or action by any person or
governmental authority, which consent, notice or action has not been made, given
or otherwise accomplished and satisfactory evidence thereof delivered to the
other Party.
7.2 As
of the Closing Date, the Company represents, warrants and undertakes with
respect to itself, as follows:
-10-
7.2.1 Authorization; Valid
Issuance. (a) All corporate action on the part of the Company,
its directors and stockholders necessary for the authorization, sale, issuance
and delivery of the Original Shares, and the performance of the Company's
obligations hereunder has been taken prior to or on the Closing Date; and
(b) the Original Shares, when issued in compliance with the provisions of this
Agreement, will be duly authorized and validly issued, fully paid and
non-assessable, will have the rights, preferences, privileges and restrictions
set forth in this Agreement and the Articles.
7.2.2 Capitalization.
Attached hereto as Exhibit B ("Capitalization Table") is a
true and correct capitalization table of the Company as of the Closing Date.
Except as set forth in the Capitalization Table, there are no options, warrants
or other securities, conversion privileges or other rights presently outstanding
or reserved to purchase or otherwise acquire any authorized but unissued share
capital or other securities of the Company.
|
8.
|
Term and
Termination.
|
8.1 This
Agreement shall remain in full force and effect until (i) terminated pursuant to
the written consent of both Founding Shareholders or (ii) terminated by any
Founding Shareholder if the Closing shall not have occurred within 60 days of
this Agreement other than due to the fault of such Founding
Shareholder. In addition, this Agreement shall terminate in respect
of any Shareholder when such Shareholder no longer holds any Ordinary
Shares.
8.2 Survival. Sections
4.9, 4.10, 5.3, 6.1, 6.2 and 10 (all subsections) of this Agreement shall
survive and continue to be effective after the termination of this Agreement.
The termination of this Agreement shall not, in and by itself, affect the
effectiveness of any agreement executed by the Parties and/or the Company
pursuant to this Agreement, and such agreements shall continue to be effective
until terminated in accordance with the terms thereof.
|
9.
|
Conditions to
Closing.
|
|
9.1
|
Conditions to the
Obligations of Laser.
|
The
obligation of Laser to take the actions to be taken by it at the Closing is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived in whole or in part by
Laser):
9.1.1 Incorporation
of the Company. The Company shall be duly incorporated and validly
existing under the laws of Israel.
9.1.2 Representations and
Warranties. Each of the representations and warranties of Oramed set
forth in this Agreement shall be true and correct as of the date of this
Agreement and as of the Closing Date, with the same effect as though such
representations and warranties had been made on and as of the Closing
Date.
9.1.3 Covenants. All of the
covenants, agreements, undertakings and obligations that Oramed is required to
perform or to comply with pursuant to this Agreement at or prior to the Closing
shall have been duly performed.
-11-
9.1.4 Corporate Approval.
Oramed shall have approved the transactions contemplated herein in accordance
with Israeli law.
9.1.5 Delivery of
Documents. Laser shall have received a copy of the following
documents:
|
(i)
|
A
copy of the License Agreement duly executed by Oramed and the
Company;
|
|
|
(ii)
|
A
copy of the employment agreement duly executed by the Company and the
CEO;
|
|
|
(iii)
|
A
copy of the current and valid Articles;
and
|
|
|
(iv)
|
A
copy of a joinder agreement to this Agreement duly executed by the
Company.
|
9.1.5 No Action or Order.
No action shall be pending and no order shall have been issued which (i)
involves a challenge to or seeks to prohibit, delay or restrict the consummation
of any of the transactions contemplated herein or (ii) questions the validity or
legality of any of the transactions contemplated herein.
|
9.2
|
Conditions to the
Obligations of Oramed.
|
The
obligation of Oramed to take the actions to be taken by it at the Closing is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived in whole or in part by
Oramed):
9.2.1 Representations and
Warranties. Each of the representations and warranties of Laser set forth
in this Agreement shall be true and correct as of the date of this Agreement and
as of the Closing Date, with the same effect as though such representations and
warranties had been made on and as of the Closing Date.
9.2.2 Covenants. All of the
covenants, agreements, undertakings and obligations that Laser is required to
perform or to comply with pursuant to this Agreement at or prior to the Closing
shall have been duly performed.
9.2.3 Shareholder Approval.
The shareholders of Laser shall have approved the transactions contemplated
herein in accordance with Israeli law.
9.2.4 Delivery of
Documents. Oramed shall have received a copy of the following
documents:
|
|
(i)
|
A
copy of the License Agreement duly executed by the
Company;
|
|
|
(ii)
|
A
copy of the employment agreement duly executed by the Company and the
CEO;
|
|
|
(iii)
|
A
copy of the current and valid Articles;
and
|
-12-
|
|
(iv)
|
A
copy of a joinder agreement to this Agreement duly executed by the
Company.
|
9.2.5 No Action or Order.
No action shall be pending and no order shall have been issued which (i)
involves a challenge to or seeks to prohibit, delay or restrict the consummation
of any of the transactions contemplated herein; or (ii) questions the validity
or legality of any of the transactions contemplated herein.
|
10.
|
Miscellaneous.
|
10.1 Relationship of the
Parties. No Party has the right to bind the other Party in any
manner whatsoever and nothing in this Agreement shall be interpreted to make any
Party the partner, agent or legal representative of any other
Party.
10.2 Assignment. This
Agreement and the rights and obligations granted and undertaken herein shall not
be assigned by any Party without the prior written consent of the other Party,
which consent shall not be unreasonably withheld, or in connection with a
Transfer of Ordinary Shares in accordance with Section 2 hereof.
10.3 Taxes. Each Party
shall be solely responsible for its own tax obligation. The Company shall make
commercially reasonable efforts to accommodate the tax planning considerations
of the Parties.
10.4 Notice. Notice as
required herein shall be delivered by hand, by fax, by courier service, by
electronic mail, or by registered or certified mail, return receipt requested,
postage prepaid. A notice shall be addressed to a Party or the Company at the
address listed below, or to another address which may subsequently be specified
in writing by a Party or the Company. A notice shall be effective as of the date
it is delivered if by hand or courier service; if by fax, on the date of
machine-confirmation receipt; if by electronic mail, on the date of delivery; or
for notices sent by mail, the earlier of the date of receipt or five (5)
business days after the postmark date. Notices to the Parties shall be sent to
the following:
|
If
to Laser:
|
Laser
Detect Systems Ltd.
00 xXxxxxx
Xx., Xxxxxx Xxxx
X.X.
Xxx 00000
Xxxxxx
Xxxxx 00000, Xxxxxx
Attention:
[_________]
Tel:
x000 0 000 0000
Fax:
x000 0 000 0000
E-mail:
[_________]
|
|
If
to Oramed:
|
Oramed
Ltd.
Xx-Xxxx
Xxxx 0/0, Xxxxx-Xxx
PO
Box 39098
Xxxxxxxxx
00000, Xxxxxx
Attention:
Xxxxx Xxxxxx, CFO
Tel:
x000 0 000 0000
Fax:
x000 0 000 0000
E-mail:
xxxxx@xxxxxx.xxx
|
-13-
10.5 Integration. This
Agreement and the License Agreement (including all Annexes and Exhibits hereto
and thereto) are the complete and exclusive statement of the understandings of
the Parties with respect to the subject matter contained herein, and supersede
and merge all prior proposals and understandings between the Parties, whether
oral or written, in this regard.
10.6 Severability. In the
event that any provision of this Agreement shall be deemed unlawful or otherwise
unenforceable, such provision shall be severed from this Agreement and the
balance of the Agreement shall continue in full force and effect.
10.7 Governing Law and
Jurisdiction. This Agreement shall be governed by and construed solely
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 by arbitration by one arbitrator agreed by the
Parties, in accordance with the Israeli Arbitration Law,
5728-1968. The arbitrator shall have expertise in the area under
dispute and shall be appointed jointly by the Parties or, failing agreement
thereon within fourteen (14) days after either Party requests the submission of
an issue to arbitration, by the President of Israel Bar. The
arbitrators shall apply substantive law but shall not be bound by the laws
relating to procedure. The arbitrator shall render a decision in writing stating
his reasons therefore within 14 days from the last hearing of the
Parties. The fees and expenses of the arbitrator shall be borne by
the Parties equally unless otherwise determined by the arbitrator, but each
Party shall pay its own expenses incurred in the arbitration. The arbitration
process set out herein shall be the sole method for resolving any disputes that
may arise under this Agreement; 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.
10.8 Non-waiver of rights.
The waiver of a breach or default shall not constitute the waiver of any
subsequent breach or default.
10.9 Captions. The
captions, titles and subtitles contained in this Agreement are for convenience
only and shall not affect the construction or interpretation of any provision
hereof.
10.10 Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original but all of which shall constitute but one instrument. The
exchange of an executed Agreement (in counterparts or otherwise) by facsimile
transmission or by electronic delivery in .pdf format or the like shall be
sufficient to bind the parties to the terms and conditions of this Agreement, as
an original.
10.11 Scriveners; Joint
Negotiations. The provisions of this Agreement were negotiated by the
Parties and this Agreement shall be deemed to have been drafted by all of the
Parties.
10.12 Amendments and
Waivers. Any term of this Agreement may be amended and the
observance of any term hereof may be waived only with the written consent of all
of the Parties hereto. 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.
[Signature page
follows]
-14-
IN
WITNESS WHEREOF, the Parties have executed this Joint Venture Agreement as of
the day and year first above written.
LASER
DETECT SYSTEMS LTD.
|
By:
|
_____________________________________
|
|
|
Name:
|
_____________________________________
|
|
|
Title:
|
_____________________________________
|
ORAMED
LTD.
|
By:
|
_____________________________________
|
|
|
Name:
|
_____________________________________
|
|
|
Title:
|
_____________________________________
|
-15-
Exhibit
A
License
Agreement
-16-
Exhibit
B
Capitalization
Table
|
Shareholder
|
Amount
of Shares
|
Percentage
|
||||||
|
Laser
Detect Systems Ltd.
|
5,000 | 50 | % | |||||
|
Oramed
Ltd.
|
5,000 | 50 | % | |||||
|
TOTAL
|
10,000 | 100 | % | |||||
-17-
