Exhibit 2.5
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement, made as of this ___ day of July, 1998, by
and among LASER INDUSTRIES LTD., an Israeli company ("Purchaser"), ORZIV
(Z.K.Y.P.) LTD., an Israeli company (the "Seller"), YEHIAM PRIOR ("Prior")
and ZIV KARNI ("Karni"), individuals residing in the State of Israel and
shareholders of the Company. Prior and Karni shall sometimes collectively
be referred to herein as (the "Shareholders").
WITNESSETH
WHEREAS, the parties hereto desire to enter into this Asset Purchase
Agreement pursuant to which Purchaser will purchase from the Seller all of
the assets of Seller and assume all of the obligations of the Seller
identified herein, upon the terms and subject to the conditions set forth
herein;
NOW THEREFORE, in consideration of the premises and the mutual promises,
representations, warranties and covenants hereinafter set forth, the
parties hereto agree as follows:
1. DEFINITIONS
As used herein, the following terms shall have the following meanings
unless the context otherwise requires:
1.1 "Agreement" shall mean this Asset Purchase Agreement.
1.2 "Business" shall mean the production of laser processing
systems for industrial purposes.
1.3 "Closing Date" shall mean _______________, 1998.
1.4 "1995, 1996 and 1997 Financial Statements" shall have the
meaning set forth in Section 4.2.1.
1.5 "Financial Statement Date" shall mean March 31, 1997.
1.6 "Indemnified Party" shall have the meaning set forth in
Section 9.3.1.
1.7 "Indemnifying Party" shall have the meaning set forth in
Section 9.3.1.
1.8 "Proprietary Information" shall have the meaning set forth in
Section 4.7.2.
1.9 "Net Assets" shall mean the assets and liabilities set forth in
Section 2.1.
1.10 "Purchase Price" shall have the meaning set forth in Section 3.
1.11 "Non-Assumed Liabilities" shall mean the assets and liabilities
of the Seller which are neither (i) set forth in Schedule 2.1
and/or the 1997 Financial Statements or the Interim Financial
Statements (as defined in Article 4.2.1) nor (ii) Non-Material
Liabilities, nor (iii) liabilities relating to the premises of
the Seller at 0 Xxxxxxxxx Xxxxxx, Raanana (the "Seller
Premises"), including any mortgages or liens in respect
thereof.
1.12 "Non-Material Liabilities" shall mean liabilities of the
Company which, individually or in the aggregate, (i) are not
material to the business or financial condition of the Company
and (ii) do not exceed the amount of US$25,000.
2. PURCHASE OF NET ASSETS
2.1 Purchase and Sale of Net Assets. Seller shall sell, assign, and
transfer to Purchaser and Purchaser shall purchase, as of the
Closing Date, free and clear of all liens, pledges, or
encumbrances of any kind, nature, or description all of
Seller's assets and properties, including, but not limited to
cash, notes, accounts receivable, including but not limited to
VAT refunds, security interests, inventories, intangible and
tangible assets including Proprietary Information, technology,
ongoing research and development, all know-how relevant to the
manufacture and/or sale of Seller's products, equipment,
furniture and fixtures, automobiles, trademarks, trade names
including Seller's corporate name, accrued interest, prepaid
insurance, other prepaid expense, and deposits which Seller
owns or to which it was entitled on the Closing Date (including
but not limited to all such assets reflected on Seller's
balance sheet as of the date of this Agreement).
Notwithstanding anything to the contrary in this Agreement, it
is expressly agreed that the Seller Premises, including any
mortgages or obligations relating thereto, are expressly
excluded from this Transaction, and shall remain with the
Seller. Purchaser shall assume those obligations of Seller, and
royalties payable that are (i) set forth in SCHEDULE 2.1 and/or
in the 1997 Financial Statements or the Interim Financial
Statements and (ii) Non Material Liabilities, other than
Non-Assumed Liabilities. All operations in the ordinary and
regular course of business carried on by Seller after the
Closing Date, shall be deemed to have been carried on for the
account of Buyer, which shall be entitled to all proceeds
derived therefrom and bear all expenses and losses incurred
thereby. Seller shall, following Closing, change its corporate
name. Seller represents that since April 1, 1998, it has not
assumed any liability except as disclosed in SCHEDULE 2.1 or
Non- Material Liabilities (to the extent such Non-Material
Liabilities, when aggregated with any other Non-Material
Liabilities, do not exceed the amount of $25,000).
2.2 Non-Assumed Liabilities. Non-Assumed Liabilities, if any, shall
remain the property and liability of the Seller and the
Shareholders. Seller and the Shareholders warrant and represent
that any Non-Assumed Liabilities shall be paid in full.
3. PURCHASE PRICE
3.1 Net Asset Purchase Price.
3.1.1 Purchaser, in full payment for the Net Assets, shall pay
to Seller an amount equal to US$3,450,000 (Three Million
Four Hundred Fifty Thousand U.S. Dollars), subject to
adjustment as hereafter set forth (the "Total Purchase
Price), which shall be payable in accordance with the
provisions of 3.1.2 below.
3.1.2 The Total Purchase Price shall be payable in the following
manner:
(a) $2,450,000, subject to adjustment as hereafter set
forth shall be paid to the Company on the Closing
Date (which amount will not be deemed to be an
asset of the Company for purposes of this
Agreement).
(b) On the date which is 12 months after the Closing
Date, provided that the tasks specified in clauses
(c)(1), (2) and (3) below have been achieved on or
before the date indicated, the Purchaser shall pay:
(i) US $500,000 to Prior or to a company controlled
by Prior, in accordance with written instructions
from Prior; and
(ii) US$500,000 to K.H. Trustees Ltd. (the "Escrow
Agent"), as escrow agent, on behalf of and
for the account of Karni, in accordance with
an escrow agreement (the "Escrow Agreement")
to be entered into between the Escrow Agent,
Karni and the Purchaser. The form of the
Escrow Agreement shall be mutually agreed to
by the signatories thereto and payment under
this clause (ii) shall be conditional upon
signature thereon by all of the parties
thereto.
(c) The aforementioned payments in clause (b) shall be
subject to the achievement of the following:
(1) Within 3 months after the Closing, the
development of the "reduced weight loss" improvement to
the Seller's diamond processing laser systems (Orziv 2001
and 2100), and the submission of a full technical report
on this development to the Purchaser shall have been
completed. The Purchaser will provide the support
required for this technical development.
(2) Within 9 months after the Closing, the
relocation of the Seller's activities from their present
address in Raanana to the plants of Laser Industries in
Atidim shall have been completed, provided the Purchaser
has decided to carry out such a relocation. The expenses
of such relocation shall be borne by Purchaser. Until
such time as the relocation is completed, Seller hereby
agrees to permit the Purchaser to occupy the Seller
Premises; and
(3) During the 12 month period immediately
following the Closing, Prior shall have cooperated with
and provided technical support to the Purchaser in
accordance with provisions of SCHEDULE 3.1.2 hereto. The
Purchaser agrees to pay to Prior a reasonable
compensation for his activities as described in SCHEDULE
3.1.2.
3.2 Payments shall be made in New Israeli Shekels at the representative
rate of exchange for the U.S. dollar last published by the
Bank of Israel at the time of payment.
3.3 The parties agree that the Total Purchase Price is based on a
value of $ US 190,000 for the Seller's Premises which are
excluded from the transaction. If an appraisal of the Seller's
Premises, to be commissioned by Purchaser, reflects a value in
excess of $190,000, the Total Purchase Price and the payment
under 3.1.2(a) will be reduced by the excess amount.
4. SELLER'S REPRESENTATIONS AND WARRANTIES
The Seller and each of the Shareholders, jointly and severally,
represent and warrant to Purchaser as follows:
4.1 Organization, Standing and Authority
4.1.1 Seller is a company duly organized, validly existing and
in good standing under the laws of Israel, and has the
full power and authority to carry on its business in the
places and as it is now being conducted and to own and
lease the properties and assets which it now owns or
leases.
4.1.2 Seller is now, and will be at Closing, duly qualified
and/or licensed to transact business and in good standing
in the jurisdictions it carries out business. The
character of the property owned or leased by the Seller
and the nature of the business conducted by Seller does
not require qualification and/or licensing in any other
jurisdiction.
4.1.3 Seller represents that, subject to receipt of the
approvals and permits specified in Section 4.8, it has
the capacity and authority to execute and deliver this
Agreement, to perform hereunder and to consummate the
transactions contemplated hereby without the necessity of
any act or consent of any other person whomsoever.
4.1.4 The execution, delivery and performance by the Seller of
this Agreement and each and every agreement, document and
instrument provided for herein have been duly authorized
and approved by Seller's Board of Directors and, if
required by law or the Seller's Articles of
Association, the shareholders of the Seller. This
Agreement and each and every agreement, document and
instrument to be executed, delivered and performed by
the Seller or any Shareholder in connection herewith
constitute or will, when executed and delivered,
constitute the valid and legally binding obligations of
the Seller and the Shareholders, as the case may be,
enforceable against each of them in accordance with
their respective terms, except as enforceability may be
limited by applicable equitable principals or by
bankruptcy, insolvency, reorganization, moratorium, or
similar laws from time to time in effect, affecting the
enforcement of creditors' rights generally. Attached
hereto as EXHIBIT 4.1.4 are true, correct and complete
copies of the Memorandum and Articles of Association of
the Seller.
4.2 Liabilities and Obligations of the Seller
4.2.1 Attached hereto as EXHIBIT 4.2.1 are true, correct and
complete copies of Seller's audited year end financial
statements and reviewed quarterly statements as of
December 31, 1995, December 31, 1996, and December 31,
1997 (respectively, the "1995, 1996 and 1997 Financial
Statements"). Also attached hereto as EXHIBIT 4.2.2 are
true and complete copies of the unaudited reviewed
financial statements of Seller as of March 31, 1998 (the
"Financial Statement Date") (the "Interim Financial
Statements"). The 1995, 1996, and 1997 Financial
Statements and the Interim Financial Statements are
complete, have been prepared in accordance with generally
accepted accounting principles of Israel and the
provisions of Section 2.3, consistently applied, fairly
present the financial condition of the Seller as of the
respective dates thereof and disclose all liabilities of
the Seller, whether absolute, contingent, accrued or
otherwise, existing as of the date thereof which are of a
nature required to be reflected in financial statements
prepared in accordance with generally accepted accounting
principles of Israel.
4.2.2 The Seller has no liability or obligation (whether
accrued, absolute, contingent or otherwise) which is of a
nature required to be reflected in financial statements
prepared in accordance with generally accepted accounting
principles of Israel, consistently applied, including
without limitation, any liability which might result
from an audit of its Tax Returns by any appropriate
authority, except for (a) the liabilities and
obligations of the Seller which are disclosed or
reserved against in the Interim Financial Statements or
EXHIBIT 4.2.2 hereto, to the extent and in the amounts
so disclosed or reserved against, and (b) liabilities
incurred or accrued in the ordinary course of business,
assets or operations of the Seller.
4.2.3 Except as disclosed in the Interim Financial Statements
or EXHIBIT 4.2.2, the Seller is not in default with
respect to any material liabilities or obligations, and
all such liabilities or obligations shown or reflected in
the Interim Financial Statement or EXHIBIT 4.2.2 and such
liabilities incurred or accrued subsequent to the
Financial Statement Date, have been, or are being, paid
and discharged as they become due, and all such
liabilities and obligations were incurred in the ordinary
course of business except as indicated in EXHIBIT 4.2.2.
4.2.4 There are no outstanding loans or advances that have been
made by the Seller or any entity controlled by it other
than as set forth in the Financial Statements and no
outstanding amounts due to the Seller from any
Shareholder, employee or any such controlled entity.
4.3 Tax Returns and Tax Status. Unless otherwise specified in the
Financial Statements, the Seller will within 30 days of the
Closing, timely and accurately file all Tax Returns required to
be filed by Seller prior to such dates and will by such time
pay all taxes shown on such returns as owed for the periods of
such returns, including (without limitation) all withholding or
other payroll related taxes shown on such returns. Seller
further undertakes to file 1997 tax returns on a timely basis.
The tax basis of all assets of the Seller as reflected on its
books and records is correct and accurate for use in tax
periods ending after the Closing Date, (such tax basis shall be
set forth on EXHIBIT 4.3 which shall include the value of all
assets for tax purposes at the Closing Date, and detail the
date of purchase, cost and accumulated depreciation for tax
purposes), assuming that no change in applicable tax laws
occurs subsequent to Closing. The Seller is not, nor will it
become, subject to any additional taxes, interest, penalties or
other similar charges as a result of the failure to file timely
or accurately, as required by applicable law, any such Tax
Return prior to the Closing Date or to pay timely any amount
shown to be due thereon, including, without limitation, any
such taxes, interest, penalties or charges resulting from
the obtaining of an extension of time to file any return or
to pay any tax. No assessments or notices of deficiency or
other communications have been received by the Seller with
respect to any such tax return which has not been paid,
discharged or fully reserved in the Interim Financial
Statements or EXHIBIT 4.3 hereto, and no amendments or
applications for refund have been filed or are planned with
respect to any such return.
4.4 Ownership of Assets and Leases. EXHIBIT 4.4 attached hereto is
a complete and correct list and brief description as of the
date of this Agreement of all material items of personal
property, owned, leased or licensed by the Seller as of March
31, 1998 included in Net Assets (such list identifying which of
such properties are owned by the Seller and all of the leases,
licenses or agreements under which the Seller is lessee or
licensee or hold or operate any property, real or personal).
The Seller has good and marketable title to all of those
properties listed and described in EXHIBIT 4.4 as owned
property and assets, in each case free and clear of any liens,
security interests, claims, charges, options, rights of tenants
or other encumbrances, except as disclosed or reserved against
in EXHIBIT 4.4 (to the extent and in the amounts so disclosed
or reserved against) and except for liens arising from current
taxes not yet due and payable. Each of the leases, licenses and
agreements described in EXHIBIT 4.4 is in full force and effect
and constitutes a legal, valid and binding obligation of (i)
the Seller and (ii) to the best of Seller's and the
Shareholders' knowledge, the other respective parties thereto;
and is enforceable in accordance with its terms, except as
enforceability may be limited by applicable equitable
principles or by bankruptcy, insolvency, reorganization,
moratorium, or similar laws from time to time in effect
effecting the enforcement of creditors' rights generally. There
is not under any of such leases, licenses or agreements
existing any material default (i) of the Seller, or (ii) to the
best of Seller's and the Shareholders' knowledge, of any other
parties thereto (or, with respect to (i) and (ii) above, event
or condition which, with notice or lapse of time, or both,
would constitute a default). The inventories of the Seller
consist of items of a quality and quantity readily usable or
readily salable, at prices equal to the values at which such
items are reflected in the Seller 's books, in the normal
course of its business and are valued so as to reflect the
normal valuation policy of the Seller, all in accordance with
generally accepted accounting principles, applied on a basis
consistent with prior years, but not in excess of the lower of
cost or net realizable market value. All of the accounts
receivable of the Seller as of the Closing Date will reflect
actual transactions, will have arisen in the ordinary course
of business and will not be subject to offset or deduction.
All of such accounts receivable will be collectible (without
recourse to any judicial proceedings) within six (6) months
of the Closing Date at the aggregate recorded amounts
thereof, net of reserves for estimated doubtful accounts
disclosed on the Interim Financial Statements. Except
pursuant to this Agreement, neither the Seller nor any
Shareholder is a party to any contract or obligation whereby
there has been granted to anyone an absolute or contingent
right to purchase, obtain or acquire any rights in any of
the assets, properties or operations which are owned by the
Seller or which are used in connection with the business of
the Seller and are being acquired hereby, except as
indicated in EXHIBIT 4.4.
4.5 Agreement Does Not Violate Other Instruments. Except as listed
in EXHIBIT 4.5 (i) the execution and delivery of this Agreement
by the Seller and the Shareholders do not, and the consummation
of the transactions contemplated hereby will not, violate any
provision of the Memorandum and Articles of Association of the
Seller or violate or constitute an occurrence of default under
any provision of, or conflict with, or result in acceleration
of any obligation under, or give rise to a right by any party
to terminate its obligations under any mortgage, deed of trust,
conveyance to secure debt, note, loan, lien, lease, agreement,
instrument, or any order, judgment, decree or other arrangement
to which the Seller or any Shareholder is a party or is bound
or by which the Seller's assets are affected; and (ii) no
consent, approval, order or authorization of, or registration,
declaration or filing with any governmental entity is required
to be obtained or made by or with respect to the Seller, any
Shareholder or any assets, properties or operations of the
Seller or any Shareholder, in connection with the execution and
delivery by the Seller and the Shareholders of this Agreement
or the consummation of the transactions contemplated hereby.
4.6 Conduct of the Business of the Seller Prior to the Closing
4.6.1 Except (i) with the prior consent in writing of the
Purchaser, (ii) as may be required to effect the
transactions contemplated by this Agreement, or (iii) as
provided otherwise in this Agreement, the Seller shall
conduct, between the date of this Agreement and the
Closing Date, its business in the ordinary course, and
shall (a) use its best efforts to preserve the
organization of the Seller intact and to preserve the
goodwill of customers and others having business
relations with the Seller; (b) maintain the properties of
the Seller in the same working order and condition as
such properties are in as of the date of this Agreement,
reasonable wear and tear excepted; (c) keep in force at
no less than their present limits all existing bonds and
policies of insurance insuring the Seller and its
property; (d) not enter into any contract, commitment,
arrangement or transaction not in the ordinary course of
business that cannot be terminated by the Seller within
30 days without payment of any amount for any reason
whatsoever, or suffer, permit or incur any of the
transactions or events described in Section 4.5 hereof to
the extent such events or transaction are within the
control of the Seller or; (e) not make or permit any
change in the Memorandum and Articles of Association of
the Seller, or in the Seller's authorized, issued or
outstanding securities; (f) not issue any securities, not
grant any stock option or right to purchase any security
of the Seller, issue any security convertible into such
securities, purchase redeem, retire or otherwise acquire
any of such securities, or agree to do any of the
foregoing or declare, set aside or pay any dividend or
other distribution in respect of such securities; (g) not
make any contribution to or distribution from any
employee benefit plan, pension plan, stock bonus plan or
profit sharing plan or similar employee benefit plan
recognized by the laws of Israel or any political
subdivision thereof (except for the payment of any
health, disability and life insurance premiums which may
become due and except for contributions or distribution
required to be made); (h) not pay or retire from the
assets of the Seller any loans, advances, or other like
amounts, including any interest due thereon, from any
Shareholder or any affiliate of any Shareholder to the
Seller; (i) promptly advise Purchaser in writing of any
matters arising or discovered after the date of this
Agreement which, if existing or known at the date hereof,
would be required to be set forth or described in this
Agreement or the Exhibits hereto; and (j) maintain
adequate insurance consistent with past practices for its
businesses and properties.
4.6.2 Except after prior notification to, and with the prior
written consent of, Purchaser, the Seller will not make,
between the date of this Agreement and the Closing Date,
any change in their banking arrangements. A list of all
bank accounts of the Seller and of all persons authorized
to act with respect thereto is attached hereto as EXHIBIT
4.6.2.
4.6.3 Except with the prior consent in writing of Purchaser,
the Seller will not make between the date of this
Agreement and the Closing Date, any material changes in
their accounting methods or practices.
4.7 Examination of Property and Records
4.7.1 Between the date of this Agreement and the Closing Date,
the Seller will allow Purchaser, its counsel and other
representatives full access to all books, records, files,
documents, assets, properties, contracts and agreements
of the Seller which may be reasonably requested, and
shall furnish Purchaser, its officers and representatives
during such period with all information concerning the
affairs of the Seller. Purchaser will conduct any
investigation in a manner which will not unreasonably
interfere with the business of the Seller. In the event
the Closing does not occur, Purchaser will as soon as is
practicable, return or destroy all material of the Seller
then in its possession and hereby covenants to keep
confidential all Proprietary Information (as defined in
Section 4.7.2 below); provided, however, that the
foregoing agreement to keep information confidential
shall not apply to any information (a) in the public
domain not as a result of the violation of Purchaser's
undertakings herein, (b) available to Purchaser on a
nonconfidential basis without regard to the disclosure by
the Seller to Purchaser, (c) available to Purchaser from
a source other than the Seller, provided that such source
in so acting is not, to Seller's or the Shareholders'
knowledge, violating any duty or agreement of
confidentiality or (d) required to be disclosed by any
law, rule or regulation.
4.7.2 Purchaser acknowledges that in accordance with this
Section 4.7.2, the Seller may disclose to Purchaser
certain commercially valuable, proprietary and
confidential information and trade secrets with respect
to the Seller's business, including without limitation,
information which may relate to their proprietary
products, technology, processes, drawings,
specifications, programs, models, financial information
and projections, formulae, data, know-how, methods,
developments, designs, improvements, inventions,
software programs, products, marketing plans and
strategies, customer and supplier lists and other
valuable business information and opportunities
(collectively, "Proprietary Information").
4.8 Consents and Approvals. Prior to the Closing, the Seller shall
obtain those waivers, consents and approvals set forth on
EXHIBIT 4.8 and shall use their best efforts to obtain the
waiver, consent and approval of all persons whose waiver,
consent or approval (i) is required in order to consummate the
transactions contemplated by this Agreement or (ii) is required
by any agreement, lease, instrument, arrangement, judgment,
decree, order or license to which the Seller is a party or
subject on the Closing Date and (a) which would prohibit, or
require the waiver, consent or approval of any person to such
transactions or (b) under which, without such waiver, consent
or approval, such transactions would constitute an occurrence
of default under the provisions thereof, result in the
acceleration of any obligation thereunder or give result in the
acceleration of any obligation thereunder or give rise to a
right of any party thereto to terminate its obligations
thereunder.
4.9 Absence of Changes. Since March 31, 1998, the Seller has not
(except as disclosed on EXHIBIT 4.9 attached hereto or except
as required or contemplated by this Agreement):
4.9.1 Transferred, assigned, conveyed or liquidated into
current assets or any of the Purchased Assets or business
or entered into any transaction or incurred any liability
or obligation, other than in the ordinary course of its
business;
4.9.2 Suffered any adverse change in its business, operations,
or financial condition or become aware of any event or
state of facts which may result in any such adverse
change;
4.9.3 Suffered any destruction, damage or loss, whether or not
covered by insurance;
4.9.4 Suffered, permitted or incurred the imposition of any
lien, charge, encumbrance (which as used herein includes,
without limitation, any mortgage, deed of trust,
conveyance to secure debt or security interest) or claim
upon any of the Net Assets.
4.9.5 Committed, suffered, permitted or incurred any default in any
liability or obligation;
4.9.6 Made or agreed to any material adverse change in the terms of
any contract or instrument to which it is a party;
4.9.7 Waived, canceled, sold or otherwise disposed of, for less
than the face amount thereof, any claim or right which it
has against others;
4.9.8 Paid, agreed to pay or incurred any obligation for any
payment of any indebtedness except current liabilities
incurred in the ordinary course of business.
4.9.9 Delayed or postponed the payment of any liabilities,
whether current or long term, or failed to pay in the
ordinary course of business any liability on a timely
basis consistent with prior practice.
4.10 Litigation. There is no suit, action, proceeding, claim or
investigation pending, threatened against or affecting the
Seller and, to the best of Seller's and the Shareholders'
knowledge, there exists no basis or grounds for any such suit,
action, proceeding, claim or investigation.
4.11 Licenses and Permits; Compliance with Law. The Seller hereby
transfers and assigns, effective upon the Closing Date, free of
liens or any interests of third parties, all contracts,
licenses, certificates, permits, franchises and rights from all
appropriate public authorities of Israel or other nation
necessary for the sale and utilization by Purchaser of the Net
Assets. Except as noted in EXHIBIT 4.11, the Seller, to the
best of its and the Shareholders' knowledge, is presently
conducting its business so as to comply in all respects with
all applicable statutes, ordinances, rules, regulations and
orders of any governmental authority. Further, the Seller has
not been presently charged with, or under governmental
investigation with respect to, any actual or alleged violation
of any statute, ordinance, rule or regulation, nor presently
the subject of any pending or threatened adverse proceeding
by any regulatory authority having jurisdiction over any of
its business, properties or operations. Neither the
execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will,
to the best of Seller's and the Shareholders' knowledge,
result in the termination of any license, certificate,
permit, franchise or right held by the Seller, and all such
licenses, certificates, permits, franchises and rights will
inure to the benefit of the Purchaser upon consummation of
the transactions contemplated by this Agreement.
4.12 Contracts, Etc. EXHIBIT 4.12 hereto consists of a true and
complete list of all contracts, agreements and other
instruments which relate to or in any way affect the Net Assets
and which are assigned pursuant to Section 4.11 above. All of
the contracts, agreements, policies of insurance or instruments
described in EXHIBIT 4.12 immediately prior to the Closing Date
hereto are valid and binding upon (i) the Seller, and (ii) to
the best of Seller's and the Shareholders' knowledge, the other
parties thereto; said contracts, agreements, policies of
insurance and instruments are in full force and effect and
enforceable in accordance with their terms, and neither the
Seller nor any other party to any such contract, commitment or
arrangement has breached any material provision of, or is in
default under, the terms thereof; and there are no existing
facts or circumstances known to the Seller or Shareholders,
which would prevent the work in process of the Seller or its
contracts and agreements from maturing in due course into fully
collectible accounts receivable.
4.13 Intellectual Property
4.13.1 Licenses, Patents, Trademarks. For purposes of this
Agreement, "Intellectual Property" means the following
items of intangible and tangible property:
(i) patents, whether in the form of utility patents or
design patents and all pending applications for
such patents ("Patents");
(ii) trademarks, trade names, service marks,
designs, logos, trade dress and trade styles,
whether or not registered, and all pending
applications for registration of the same
("Trademarks");
(iii) copyrights, whether or not registered, and all
pending applications for registration thereof
("Copyrights");
(iv) inventions, research records, trade secrets,
confidential information, product designs,
engineering specifications and drawings,
technical information, formulae, customer
lists, supplier lists and market analyses
("Technical Information");
(v) computer programs, including, without
limitation, computer programs embodied in
semiconductor chips ("Firmware") or otherwise
embodied, and related flow-charts, programmer
notes, updates and data, whether in object or
source code form ("Software").
4.13.2 EXHIBIT 4.13.2 hereto sets forth a complete and correct
list and summary description of all Patents,
Trademarks, Copyrights, Technical Information, Firmware
and Software, registrations thereof and applications
therefor, applicable to the Net Assets, together with a
complete list of all licenses granted by or to the
Seller with respect to any of the above.
4.13.3 The Seller, to the best of its and the Shareholders'
knowledge, possesses all of the necessary Intellectual
Property necessary to enable the operation of the
business of the Seller as now being conducted.
4.13.4 The Seller will together with the sale of the Net
Assets grant to Purchaser good, valid, subsisting,
unexpired and enforceable title to, free and clear of
all Security Interests, and exclusive rights to use,
all of the Intellectual Property necessary to enable
operation of the Net Assets by the Purchaser and to the
best of the Seller's knowledge, information and belief,
except as set forth in EXHIBIT 4.13.4. no other
Intellectual Property is necessary to permit the
Purchaser to utilize the Net Assets as currently
utilized by Seller without the payment of any fee or
royalty. No employee, director or Shareholder of the
Seller or employer of any such employee of the Seller
has any rights to processes, systems and techniques
used or contemplated to be used by the Seller.
4.13.5 To the best of the Seller's knowledge, information and
belief, no Intellectual Property related to the Net
Assets, has infringed, is infringing or will infringe
upon any intellectual property rights of others and the
use of such Intellectual Property, will not constitute
an infringement, misappropriation or misuse of any
third party's intellectual property. To the best of the
Seller's knowledge, information and belief, no person
(including Shareholders, officers and employees) has
asserted or has the right to assert any claim regarding
the use of, or challenging or questioning the Seller's
right or title in, any of the Intellectual Property.
4.13.6 The Seller and, to the best knowledge of Seller and the
Shareholders, all other parties to any licensing,
leasing or similar arrangements under which either the
Seller is the licenser, lessor or has otherwise granted
the right to use Seller's Intellectual Property are in
full material compliance therewith and are not in
breach of their obligations with respect thereto. The
Seller is not a party to any license, installation
agreement, maintenance agreement, data processing
agreement, service agreement or other agreement
pursuant to which either of them is committed to
perform installation, modifications, enhancements or
services without payment or for payments which, in the
aggregate, are less than the cost to perform such
installation, modifications, enhancements or services
other than pursuant to warranty obligations incurred in
the ordinary course of business. Except for licenses
listed on EXHIBIT 4.13.6, the Seller has not granted
any licenses, leases or other rights and has no
obligations to grant licenses, leases or other rights
with respect to the Seller's Intellectual Property. The
Seller has complied in all respects with its
obligations to its customers, licensees and lessees in
respect of the Seller's Intellectual Property.
4.14 Labor Matters. Except as disclosed in the Financial Statements,
Seller has made all deductions required to be made by law
from the salaries of its employees in respect of tax,
National Insurance contributions or otherwise, and has paid
all such amounts so deducted to the appropriate authorities.
To secure the severance pay due to all employees of Seller,
sufficient provision has been made in accordance with
generally accepted accounting practice among Israel's major
accounting firms, to recognized provident funds, pension
funds, severance pay funds and/or insurance companies under
"Managers Insurance Policies."
4.15 Exhibits. All Exhibits attached hereto are true, correct and
complete as of the date of this Agreement and will be true,
correct and complete as of the Closing.
4.16 Disclosure and Absence of Undisclosed Liabilities. This
Agreement and the Exhibits hereto disclose all facts material
to the assets, business or operations of the Seller. No
statement contained herein or in any certificate, schedule,
list, exhibit or other instrument furnished to Purchaser
pursuant to the provisions hereof contains or will contain any
untrue statement of any material fact or omits or will omit to
state a material fact necessary in order to make the statements
contained herein or therein not misleading.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Seller and the Shareholders
as follows:
5.1 Organization and Standing. Purchaser is a duly organized and
validly existing corporation in good standing under the laws of
the State of Israel.
5.2 Corporate Power and Authority. Purchaser has the capacity and
authority to execute and deliver this Agreement, to perform
hereunder and to consummate the transactions contemplated
hereby without the necessity of any act or consent of any other
person whomsoever. The execution, delivery and performance by
Purchaser of this Agreement and each and every agreement,
document and instrument provided for herein have been duly
authorized and approved by its Board of Directors. This
Agreement, and each and every other agreement, document and
instrument to be executed, delivered and performed by Purchaser
in connection herewith, constitute or will, when executed and
delivered, constitute the valid and legally binding obligation
of Purchaser enforceable against it in accordance with their
respective terms, except as enforceability may be limited by
applicable equitable principles, or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws from time to time in
effect affecting the enforcement of creditors' rights generally.
5.3 Agreement Does Not Violate Other Instruments. The execution and
delivery of this Agreement by Purchaser do not, and the
consummation of the transaction contemplated hereby will not,
violate any provisions of the Memorandum and Articles of
Association of Purchaser.
5.4 Sophisticated Investor
Purchaser is a sophisticated investor, with knowledge and
experience in business and financial matters, including the
transaction and matter at hand.
5.5 Due Diligence
Purchaser has conducted a due diligence investigation of the
business of the Company, including the Net Assets. Purchaser
believes it has received all materials, information and
documentation that it requested. Furthermore, Purchaser
represents that it has relied solely on its own evaluation of
the materials, information and documentation received from the
Company.
5.6 High Technology Risk
Purchaser acknowledges that the Seller's products are based on
high-risk technology and no assurance may be given as to the
commercial success of the Seller's products into the market.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
All of the obligations of Purchaser to consummate the transaction
contemplated by this Agreement shall be contingent upon and subject
to the satisfaction, on or before the Closing Date, of each and every
one of the following conditions, all or any of which may be waived,
in whole or in part, by Purchaser for purposes of consummating such
transactions, but without prejudice (except as provided in the next
sentence) to any other right or remedy which Purchaser may have
hereunder as a result of any misrepresentation by, or breach of any
covenant or warranty of, the Seller or the Shareholders contained in
this Agreement or any other certificate or instrument furnished by
the Seller or any Shareholder hereunder. Notwithstanding the
foregoing, in the event that the Seller notify Purchaser in writing at
least two (2) business days prior to the Closing Date of a
misrepresentation or breach of a covenant that will not be cured by
Closing, and such notice contains sufficient detail to enable
Purchaser to make an informed decision (which detail shall include,
without limitation, a good faith estimate of the maximum dollar amount
of damages that the Purchaser would suffer as a result of such
misrepresentation or breach), closing of the transactions by Purchaser
shall be deemed a waiver solely of such matter, but only to the extent
of the dollar amount of damages described in such notice.
6.1 Representations True at Closing. The representations and
warranties made by the Seller and the Shareholders to Purchaser
in this Agreement, the Exhibits hereto or any document or
instrument delivered to Purchaser or its representatives
hereunder shall be materially true and correct on the Closing
Date with the same force and effect as though such
representations and warranties had been made on and as of such
time, except for changes contemplated by this Agreement.
6.2 Covenants of the Seller and the Shareholders. The Seller and
the Shareholders shall have duly performed all of the
covenants, acts and undertakings to be performed by them on or
prior to the Closing Date, and the President of the Seller and
the Shareholders shall each deliver to Purchaser a certificate
dated as of the Closing Date certifying the fulfillment of this
condition and the condition set forth in Section 6.1 hereof.
6.3 No Injunction, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted,
threatened or proposed before any court, governmental agency or
legislative body to enjoin, restrain, prohibit or obtain
substantial damages in respect of, or which is related to, or
arises out of, this agreement or the consummation of the
transactions contemplated hereby, or which is related to or
arises out of the business of the Seller, if such action,
proceeding, investigation, regulation or legislation, in the
reasonable judgment of Purchaser would make it inadvisable to
consummate such transactions.
6.4 Opinions of Counsel. A favorable opinion of Xxxxx - Xxxxxx Law
Offices, counsel for the Seller and the Shareholders, shall
have been delivered to Purchaser dated as of the Closing Date,
substantially in form and substance of the opinions attached
hereto as EXHIBIT 6.4.
6.5 Consents, Approvals and Waivers. Purchaser shall have received
a true and correct copy of each and every consent, approval and
waiver (a) referred to in SCHEDULE 4.8 hereof. Seller shall use
its best efforts to obtain all consents, approvals and waivers
otherwise required for the execution of this Agreement and the
consummation of the transactions contemplated hereby.
6.6 Legal Approvals. The execution and the delivery of this
Agreement and the consummation of the transactions contemplated
hereby shall have been approved by all regulatory authorities
whose approvals are required by law or necessary to preserve
the rights and benefits currently enjoyed by the Seller after
the Closing. Without limiting the generality of the foregoing,
such approvals shall include the obtaining of the approval from
the Chief Scientist.
6.7 Execution by Third Parties. All agreements and documents
attached as Exhibits hereto shall have been executed by all the
parties thereto.
6.8 Amendment of Employment Agreement. On or prior to the Closing,
the Company and Karni shall have executed an extension of the
term of Karni's employment agreement with the Company through
June 30, 2002.
6.9 Removal of Floating Charge on Company Asset. On or prior to the
Closing, the Purchaser shall have received written confirmation
from Bank Discount (the "Bank") that, upon the deposit by
Purchaser of an amount not to exceed US$____________ in an
account of Purchaser at a local branch of the Bank, as security
for the obligations of the Company to the Bank, the Bank shall
take all necessary steps to remove the floating charge on the
Company's assets and releasing any other liens or charges the
Bank may have on the Company or the Company's assets and
releasing any other liens the bank may have on the Company or
the Company's assets. The form and content of such confirmation
shall be reasonably acceptable to the Purchaser. The Purchaser
undertakes to deposit such amount with the Bank not later than
the Closing.
6.10 Signature Rights. All existing signature rights over the
Company's bank account at the Rehovot branch of Discount Bank
shall be terminated and exclusive signature rights over such
account shall be granted to a designee of the Purchaser.
6.11 Transfer of Assets. At the Closing, the Company shall deliver
to the Purchaser the documents specified in SCHEDULE 6.11 and
the Purchaser shall deliver a commitment to pay rental fees due
on the premises of the Company up to Relocation Date. Following
the Closing, the Company and the Shareholders will use their
best efforts to provide such other documentation as Purchaser
may reasonably request to effect the transfer of the Company's
assets to the Purchaser.
7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE
SELLER AND THE SHAREHOLDERS TO CLOSE
All of the obligations of the Seller and the Shareholders to
consummate the transactions contemplated by this Agreement shall be
contingent upon and subject to the satisfaction, on or before the
Closing Date, of each and every one of the following conditions, all
or any of which may be waived on whole or in part, by the Seller and
the Shareholders for purposes of consummating such transactions, but
without prejudice (except as provided in the next sentence) to any
other right or remedy which they may have hereunder as a result of
any misrepresentation by, or breach of any covenant or warranty of
Purchaser contained in this Agreement, or any certificate or
instrument furnished by it hereunder. Notwithstanding the foregoing,
in the event that the Purchaser notifies the Seller in writing at
least two (2) business days prior to the Closing Date of a
misrepresentation or breach of covenant that will not be cured by
Closing, and such notice contains sufficient detail to enable the
Seller to make an informed decision (which detail shall include,
without limitation, a good faith estimate of the maximum dollar
amount of damages that the Seller would suffer as a result of such
misrepresentation or breach), closing of the transactions by the
Seller shall be deemed a waiver solely of such matter, but only to
the extent of the dollar amount of damages described in such notice.
7.1 Representations True at Closing. The representations and
warranties made by Purchaser in this Agreement to the Seller or
any document or instrument delivered to the Seller, shall be
materially true and correct on the Closing Date with the same
force and effect as though such representations and warranties
had been made on and as of such date, except for changes
contemplated by this Agreement.
7.2 Covenants of Purchaser. Purchaser shall have duly performed all
of the covenants, acts and undertakings to be performed by
it on or prior to the Closing Date, and a duly authorized
officer of Purchaser shall deliver a certificate dated as of
the Closing Date certifying to the fulfillment of this
condition and the condition set forth under Section 7.1
above.
7.3 No Injunction, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted,
threatened or proposed before any court, governmental agency or
legislative body to enjoin, restrain, prohibit or obtain
substantial damages in respect of, or which is related to or
arises out of, this Agreement or the consummation of the
transactions contemplated hereby, or which is related to or
arises out of, the business of Purchaser, if such action,
proceedings, investigation, regulation or legislation, in the
reasonable judgment of the Seller or the Shareholders would
make it inadvisable to consummate same.
7.4 Approvals. The execution and the delivery of this Agreement and
the consummation of the transactions contemplated hereby shall
have been approved by all regulatory authorities whose
approvals are required by law.
8. CLOSING
8.1 Time and Place of Closing. Subject to the satisfaction of the
conditions set forth in Section 6 and 7 hereof, the Closing
shall occur at a mutually acceptable location on _____________,
1998, or as soon thereafter as practicable when such conditions
have been met, unless another place or date is agreed to in
writing by the Seller, and Purchaser, but in no event will the
Closing be held later than _____________, 1998. If for any
reason the Closing has not occurred by such date, Purchaser may
at any time thereafter terminate this Agreement without
obligation to the Seller by delivery of written notice of
termination to Seller.
8.2 Transactions at Closing. At the Closing, each of the following
transactions shall occur:
8.2.1 At the Closing, the Seller and the Shareholders shall
deliver to Purchaser the following:
(a) the certificates of the Shareholders and of the
President of the Seller described in Section 6.2;
(b) copies of the consents and waivers described in Section
4.8 and Section 6.6;
(c) opinion of counsel described in Section 6.4;
(d) satisfactory evidences of the approvals described in
Section 6.5 and 6.6;
(e) copies of resolutions of the Board of Directors, and
the Shareholders of the Seller;
(f) the documents specified in SCHEDULE 6.11; and
(g) such other evidence of the performance of all
covenants and satisfaction of all conditions
required of the Seller and the Shareholders by this
Agreement, at or prior to the Closing, as Purchaser
or its counsel may reasonably require.
8.2.2 At the Closing, Purchaser shall deliver to the Seller
the following:
(a) Payment of the amount of US$2,450,000, as set forth in
Section 3.1(a), subject to the adjustments set forth in
section 3.3;
(b) the certificate of the authorized officer described in
Section 7.2;
(c) satisfactory evidence of the approvals described in
Section 7.4;
(d) copy of resolutions of the Board of Directors of
Purchaser approving the transactions set forth in this
Agreement; and
(e) such other evidence of the performance of all the
covenants and satisfaction of all of the conditions
required of Purchaser by this Agreement at or
before the Closing as the Seller, the Shareholders
or their counsel may reasonably require.
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND
INDEMNIFICATION
9.1 Survival of Representations and Warranties of the Seller and
the Shareholders. All representations, warranties, agreements,
covenants and obligations made or undertaken by the Seller and
any of the Shareholders in this Agreement or in any document or
instrument executed and delivered pursuant hereto are material,
have been relied upon by Purchaser, shall survive the Closing
hereunder and shall not merge in the performance of any
obligation by any party hereto. The Seller and the Shareholders
agree to indemnify and hold Purchaser harmless from and against
all liability, loss, damage or injury and all reasonable costs
and expenses, including reasonable counsel fees and costs of
any suit related thereto ("Losses") suffered or incurred by
Purchaser arising from (i) any misrepresentation by, or breach
of any covenant or warranty of, either of the Seller or any
Shareholder contained in this Agreement or any certificate or
other instrument furnished or to be furnished by the Seller or
any Shareholder hereunder, or any claim by a third party
(regardless of whether the claimant is ultimately successful)
which if true would be such a misrepresentation or breach or
(ii) any suit, action, proceeding, claim or investigation
(whether or not currently pending or threatened) against
Purchaser, its officers, directors or shareholders arising from
or related to this Agreement and/or the acquisition utilization
or ownership of the Net Assets. Any examination, inspection or
audit of the properties, financial condition or other matters
of the Seller and their businesses conducted by Purchaser
pursuant to this Agreement shall in no way limit, affect or
impair the ability of Purchaser to rely upon the
representations, warranties, covenants and obligations of the
Seller and Shareholders set forth herein.
9.2 Survival of Representations and Warranties of Purchaser. All
representations, warranties, agreements, covenants and
obligations made or undertaken by Purchaser in this Agreement
or in any document or instrument executed and delivered
pursuant hereto are material, have been relied upon by the
Seller, shall survive the Closing hereunder and shall not merge
in the performance of any obligation by any party hereto.
Purchaser agrees to indemnify and hold the Seller harmless from
and against all liability, loss, damage or injury and all
reasonable costs and expenses (including reasonable counsel
fees and costs of any suit related thereto) suffered or
incurred by the Seller or the Shareholders arising
from any misrepresentation by, or breach of any covenant or
warranty of, Purchaser contained in this Agreement or any
certificate or instrument furnished or to be furnished by
Purchaser hereunder, or any claim by a third party (regardless
of whether the claimant is ultimately successful) which if true
would be such a misrepresentation or breach.
9.3 Notification of Claim.
9.3.1 Whenever any claim shall arise for indemnification
hereunder, the party seeking indemnification hereunder
(the "Indemnified Party") shall promptly notify the party
or parties from whom indemnification is sought
(collectively, the "Indemnifying Party") of the claim
and, when known, the facts constituting the basis for
such claim. In the event of any such claim for
indemnification hereunder resulting from or in connection
with any claim or legal proceeding by a third party, the
notice to the Indemnifying Party shall specify, if known,
the amount of damages asserted by such third party.
9.3.2 Upon receipt of any such notice from the Indemnified
Party, the Indemnifying Party shall be entitled to
participate in the defense of such claim, and may assume
the defense of such claim if and only if: (i) the
Indemnifying Party confirms in writing its obligations to
indemnify the Indemnified Party with respect to such
claim and the Indemnifying Party posts a bond reasonably
acceptable to the Indemnified Party in all respects
sufficient to insure payment of all amounts which are
indemnifiable hereunder (ii) the Indemnified Party in its
good faith discretion does not notify the Indemnifying
Party that it has determined a conflict of interest makes
separate representation by the Indemnified Party's own
counsel advisable, (iii) the claim does not involve a
claim for injunctive or other similar equitable relief
against the Indemnified Party, and (iv) the claim does
not involve any criminal law claim against the
Indemnified Party or its directors, officers, employees
or agents. The parties acknowledge and agree that in the
event the Indemnifying Party has properly assumed the
defense of such claim as provided herein, the Indemnified
Party shall be entitled to retain its own counsel to
participate in the defense of such claim at its own cost
and expense. No claim shall be settled or compromised
without the written consent of the other party if such
settlement or compromise requires such other party to make
any payment or to take or refrain from taking any action or
enjoins such other party or subjects it to other equitable
relief or subjects it to any potential criminal law claim or
liability.
9.4 Survival Period for Claims. A claim for indemnification
hereunder Purchaser shall be forever barred unless made by
notifying the Indemnifying Party in writing in reasonable
detail within three (3) years from the Closing Date with
respect to a breach of the representations and warranties set
forth in Article 4.13 ("Intellectual Property"), and twelve
months following the Closing Date with respect to any other
representations and warranties.
9.5 Limitations on Liability.
Notwithstanding any other provision of this Section 9 to the
contrary, (a) no claim for indemnification under Section 9.1 or
9.2 shall be made unless and until the Indemnified Party shall
have incurred losses in excess of $100,000 in the aggregate and
(b) the maximum aggregate liability of either party to the
other under this Section 9 shall be an amount equal to the
aggregate payment by Purchaser prior to the date of
indemnification, plus interest at a rate of 8% per annum from
the date of payment until the date of indemnification.
10. TERMINATION
10.1 Method of Termination. This Agreement constitutes the binding
and irrevocable agreement of the parties to consummate the
transactions contemplated hereby, the consideration for which
is (a) the covenants set forth in Section 6.2 hereof, and (b)
expenditures and obligations incurred and to be incurred by
Purchaser, on the one hand, and by the Seller and the
Shareholders, on the other hand, in respect of this Agreement,
and this Agreement may be terminated or abandoned only as
follows:
10.1.1 by the mutual consent of the Seller, the Purchaser and
the Shareholders;
10.1.2 by the Seller if (i) any of the conditions set forth in
7 hereof, to which their obligations are subject, have
not been fulfilled or waived, unless such fulfillment
has been frustrated or made impossible by any act or
failure to act of any of them; or (ii) any of the
representations or warrants set forth in Section 5 are
proven to be materially inaccurate: or
10.1.3 by Purchaser if (i) any of the conditions set forth in
6 hereof, to which the obligations of Purchaser are
subject, have not been fulfilled or waived, unless such
fulfillment has been frustrated or made impossible by
any act or failure to act as Purchaser; or (ii) any of
the representations or warrants set forth in Section 4
are proven to be materially inaccurate .
11. GENERAL PROVISIONS
11.1 Notices. All notices, request, demands and other communications
hereunder shall be in writing and shall be delivered by hand or
mailed by certified mail, return receipt requested, first class
postage prepaid, or overnight delivery service with receipt
acknowledged or by facsimile addressed as follows:
11.1.1 If to the Seller or the Shareholders:
Orziv (Z.K.Y.P.) Ltd.
0 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxx
Fax: (00) 000-0000
and in each case with a copy to:
Xxx Xxxxx, Adv.
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx
Fax: (00) 000-0000
11.1.2 If to Purchaser:
c/o E.S.C. Medical Systems Ltd.
X.X. Xxx 000
Xxxxxxx 00000
Attention: Xxxxx Xxxxx
Fax: (00) 000-0000
and to:
Kleinhendler & Halevy
Law Offices
00 Xxxxxxxx Xxxxxx
Xxx Xxxx 00000
Israel
Fax: (00) 000-0000
11.1.3 If delivered personally, the date on which a notice,
request, instruction or document is delivered shall be
the date on which such delivery is made and, if
delivered by mail or by overnight delivery service, the
date on which such notice, request, instruction or
document is received shall be the date of delivery. In
the event any such notice, request, instruction or
document is mailed or shipped by overnight delivery
service to a party in accordance with this Section
11.1.3 and is returned to the sender as nondeliverable,
then such notice, request, instruction or document
shall be deemed to have been delivered or received on
the fifth day following the deposit of such notice,
request, instruction or document in the United States
mails or the delivery to the overnight delivery
service.
11.1.4 Any party hereto may change its address specified for
notices herein by designating a new address by notice
in accordance with this Section 10.1
11.2 Further Assurances. Each party covenants that at any time, and
from time to time, after the Closing Date, it will execute such
additional instruments and take such actions as may be
reasonably requested by the other parties to confirm or perfect
or otherwise to carry out the intent and purposes of this
Agreement.
11.3 Waiver. Any failure on the part of any party hereto to comply
with any of its obligations, agreements or conditions hereunder
may be waived by any other party to whom such compliance is
owed. No waiver of any provision of this Agreement shall be
deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a
continuing waiver.
11.4 Expenses. All expenses incurred by the parties hereto in
connection with or related to the authorization, preparation
and execution of this Agreement and the Closing of the
transactions contemplated hereby, including, without limitation
of the generality of the foregoing, all fees and expenses of
agents, representatives, counsel and accountants employed by
any such party, shall be borne solely and entirely by the party
which has incurred the same. All such fees and expenses of the
Seller shall be borne by the Shareholders. In no event shall
any assets of the Seller be utilized for or reduced by the
payment of any such fees or expenses. The Seller and the
Shareholders hereby, jointly and severally, represent and
warrant that no such fees or expenses have been paid by the
Seller from their assets prior to the date of this Agreement,
and hereby, jointly and severally, covenant that the Seller
will not so pay any such fees or expenses prior to the Closing.
11.5 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
heirs, legal representatives, executors, administrators,
successors and assigns, including, without limitation, any
corporation with which the Purchaser may be merged or by which
it may be acquired.
11.6 Headings. This section and other headings in this Agreement are
inserted solely as a matter of convenience and for reference,
and are not a part of this Agreement.
11.7 Entire Agreement; Amendments. This Agreement constitutes the
entire agreement among the parties hereto and supersedes and
cancels any prior agreements, representations, warranties,
or communications, whether oral or written, among the
parties hereto relating to the transactions contemplated
hereby or the subject matter herein. Neither this Agreement
nor any provision hereof may be changed, waived, discharged
or terminated orally, but only by an agreement in writing
signed by the party against whom or which the enforcement of
such change, waiver, discharge or termination is sought.
11.8 Knowledge. "To the extent of," "aware of," and similar phrases
shall mean such level of knowledge or awareness as would be
obtained by a reasonably prudent business person under the
circumstances then existing of the matter with respect to which
such phrase is used (which circumstances shall be deemed to
include the position of the person with Seller who is charged
with such knowledge or awareness), and shall include, without
limitation, such knowledge or awareness as would be obtained
from appropriate discussions with such personnel of Seller who
may reasonably be believed to have actual knowledge of the
relevant matter. Whenever the Seller is charged with knowledge
or awareness herein, such knowledge or awareness shall be
deemed to be that of the officers of such company.
11.9 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Israel.
11.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
11.11 Exhibits Incorporated. All Exhibits attached hereto are
incorporated herein by reference, and all blanks in such
Exhibits, if any, will be filled in as required in order to
consummate the transactions contemplated herein and in
accordance with this Agreement.
11.12 Time of Essence. Time is of the essence in this Agreement.
LASER INDUSTRIES LTD. ORZIV (Z.K.Y.P.) LTD.
By: _________________________ By: ________________________
/title /title
---------------------------- --------------------------------
YEHIAM PRI-OR ZIV KARNI
SCHEDULE 3.1.2
(a) Prior shall cooperate with the Purchaser and provide technical and
other support, as reasonably requested, to help the Purchaser in
understanding and integrating the Seller's activities into the
Purchaser's business.
(b) Prior shall continue to be reasonably available for active involvement
(should the Purchaser so desire) in the activities of the Purchaser
relating to assets of the Seller in a manner similar to his
involvement before Closing, including all technical, commercial and
financial aspects. In particular, (i) he will be reasonably available
for active involvement in the world-wide marketing of the diamond
processing machines (including but not limited to marketing and sales
activities in India) and the orderly transfer of these activities to
people appointed to this function by the Purchaser, (ii) he will be
reasonably available to the Purchaser for consultation relating to
other activities of the Purchaser (should the Purchaser so desire),
whether these relate to industrial or medical laser developments,
(iii) he will be reasonably available for participation (should the
Purchaser so desire) in other activities of Purchaser including the
planning of the new "Industrial Division", assessment of various
activities within the Purchaser's organization, participation in the
preparation and writing of research programs (internal or to be
submitted to external organizations), participation in meetings on
behalf of the Purchaser, and similar activities.
LIST OF SCHEDULES AND EXHIBITS
EXHIBITS
4.1.4 Memorandum and Articles of Association of Orziv Ltd.
4.2.1 Audited Year End Financial Statements
4.2.2 Interim Financial Statements.
4.3 Tax basis of all of Orziv's assets.
4.4 List of material Personal Property as of March 31, 1998.
4.5 Violation of instruments.
4.6.2 Bank Accounts and Authorized Personnel with respect thereto.
4.8 Consents and Waivers.
4.9 Material changes since March 31, 1998.
4.11 Non-compliance with law.
4.12 Contracts, Agreements and other Instruments relating to or affecting
Assets.
4.13.2 Intellectual Property.
4.13.4 Intellectual Property for the use of which payment or royalty is
required.
4.13.6 Software licenses, leases and other rights or obligations related
thereto.
6.4 Opinion of Counsel for Orziv Ltd.
SCHEDULES
2.1 Liabilities of Seller.
3.1.2 Consulting Services to be rendered by Prior
6.11 Transfer Documents
