EXCHANGE AGREEMENT
EXHIBIT
10.4
This
Exchange Agreement (this “Agreement”) is made and entered into as of April 25,
2008, by and between Xxxxxx Xxxxxx (the “Employee”) and Medis Technologies Ltd.,
a Delaware corporation (the “Company”). Each of the Employee and the
Company are sometimes referred to herein as a “Party” or, collectively, as the
“Parties.”
RECITALS
WHEREAS,
the Employee has been granted the options to purchase shares of common stock,
par value $0.01 per share (the “Common Stock”), of the Company, which are
identified on Exhibit A attached hereto (the “Options”);
WHEREAS,
the Board of Directors of the Corporation (the “Board”), the Compensation
Committee of the Board and the Audit Committee of the Board, each (a) has
carefully reviewed and analyzed the transactions contemplated herein, (b)
believes it to be in the Company’s best interest to (i) cancel the Options upon
their surrender to the Company pursuant to the terms hereof and (ii) issue
certain restricted shares of Common Stock to the Employee as an incentive to the
Employee to surrender the Options and for the Employee’s long-term future
performance, and (c) has approved and authorized the Company to enter into such
transactions, all upon the terms and conditions hereinafter set forth;
and
WHEREAS,
the Employee desires to enter into the transactions contemplated by this
Agreement, all upon the terms and conditions hereinafter set forth.
NOW,
THEREFORE, in consideration of the mutual benefits to be derived from this
Agreement and the representations, warranties, covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. Surrender and Cancellation
of Options. Subject to the terms and conditions of this
Agreement, the Employee agrees as of the date hereof to surrender to the Company
all of the Options, at which time the Company shall cancel the Options. Upon
such cancellation, the stock option agreements representing the Options (the
“Option Agreements”) and any other document regarding the surrendered Options
will terminate and be of no further force and effect. Such surrender and
cancellation are together referred to herein as the “Option
Cancellation.”
2. Issuance of Restricted
Shares. Subject to the terms and conditions of this Agreement,
the Company agrees to issue to the Employee, as of the date hereof, an aggregate
of 38,000 shares of its Common Stock (the “Restricted Shares”), set forth more
fully on Exhibit A attached hereto, which Restricted Shares shall be issued
pursuant to, and have the terms and conditions set forth in, the Company’s 2007
Equity Incentive Plan and in one or more Restricted Share Agreements in the form
attached hereto as Exhibit B (the “Restricted Share Agreement” and, collectively
with this Agreement, the “Transaction Documents”). The issuance of the
Restricted Shares to the Employee, collectively with the Option Cancellation,
the “Transactions.”
3. Deliveries. Concurrently
with the Option Cancellation, (a) the Employee shall deliver to the Company the
originally executed Option Agreements representing all of the
Options,
marked “cancelled” and (b) the Company and the Employee shall execute and
deliver the Restricted Share Agreement(s).
4. Representations and
Warranties of the Employee. The Employee represents and
warrants to the Company as follows:
(a) Obligation of the
Employee. The Transaction Documents constitute the legal,
valid and binding obligation of the Employee, enforceable in accordance with
their respective terms.
(b) Non-Contravention. Neither
the execution and delivery of the Transaction Documents, nor the consummation of
the Transactions, will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge or other restriction of any
government, governmental agency or court to which the Employee is subject or
(ii) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which the Employee is a party or by
which the Employee is bound or to which the Employee’s assets are
subject.
(c) The
Options. The Employee is the record and beneficial owner of
the Options. The Employee owns the Options free and clear of all claims,
charges, equities, liens, security interests, pledges, mortgages or encumbrances
(other than (i) as will be discharged on or prior to the date hereof and (ii)
any restrictions under the Securities Act of 1933, as amended (the “Securities
Act”) or state securities laws).
(d) Investment
Experience. The Employee is an “accredited investor” as
defined in Rule 501(a) of Regulation D, promulgated under the Securities Act or,
if not an “accredited investor,” either alone or with the Employee’s
representatives has such knowledge and experience in financial and business
matters that the Employee is capable of evaluating the merits and risks of the
Transactions. The Employee is aware of the Company’s business affairs and
financial condition and has had access to and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision to
enter into and consummate the Transactions. The Employee acknowledges that the
Employee has been afforded the opportunity to ask questions and receive answers
from the Company regarding the (i) Company, (ii) Transactions, (iii) Transaction
Documents and (iv) Restricted Shares, and to obtain any additional information
reasonably necessary to verify the accuracy of such information, and has
received satisfactory answers to any such questions. The Employee further
acknowledges that the Employee has been afforded the opportunity to consult the
Employee’s own legal, tax and financial advisors regarding the (i) Company, (ii)
Transactions, (iii) Transaction Documents and (iv) Restricted Shares, and that
the Employee possesses, either alone or with the Employee’s representatives,
such business and financial experience to protect the Employee’s own interests
in connection with the consummation of the Transactions, and further
acknowledges that the Employee has not received and is not relying upon any
legal, tax or financial advice from the Company or any of its employees,
officers or representatives.
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(e) Investment
Intent. The Employee is acquiring the Restricted Shares for
the Employee’s own account for investment purposes only and not with a present
view to, or for resale in connection with, any distribution thereof, or any
direct or indirect participation in any such distribution, in whole or in part,
within the meaning of the Securities Act. No arrangement exists between the
Employee and the Company and any other person regarding the resale or
distribution of the Restricted Shares. The Employee understands that the right
to transfer the Restricted Shares is not permitted absent registration under the
Securities Act or an exemption therefrom and that the Company is not required to
register the Restricted Shares under the Securities Act or register or qualify
the Restricted Shares under any state securities law.
5. Representations and
Warranties of the Company. The Company represents and warrants
to the Employee as follows:
(a) Organization. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware.
(b) Authorization. (i)
The Company has all requisite corporate power, capacity and authority and has
taken all requisite corporate action to authorize, execute and deliver each of
the Transaction Documents, to consummate the Transactions and to carry out and
perform all of its obligations under the Transaction Documents and (ii) the
Transaction Documents each constitutes the legal, valid and binding obligation
of the Company. Except as otherwise described herein or as may be
required by The Nasdaq Global Market, the Company is not required to give any
notice to, make any filing with, or obtain any authorization, consent or
approval of any government or governmental agency or third party in order to
consummate the Transactions.
(c) Non-Contravention. Neither
the execution and delivery of the Transaction Documents, nor the consummation of
the Transactions, will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge or other restriction of any
government, governmental agency or court to which the Company is subject, or
violate any provision of its certificate of incorporation or bylaws or (ii)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify
or cancel, or require any notice under any material agreement, contract, lease,
license, instrument, or other arrangement to which the Company is a party or by
which it is bound or to which its assets are subject.
6. Covenants.
(a) The
Employee hereby covenants and agrees that (i) the Employee will use the
Employee’s best efforts to take all action and to do all things necessary,
proper or advisable in order to consummate and make effective the Transactions
and (ii) in case at any time after the date hereof any further action is
necessary to carry out the purposes of the Transaction Documents, the Employee
will take such further action (including, without limitation, the execution and
delivery of such further instruments and documents) as the Company reasonably
may request, all at the sole cost and expense of the Company.
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(b) The
Company hereby covenants and agrees that (i) it will use its best efforts to
take all action and to do all things necessary, proper or advisable in order to
consummate and make effective the Transactions and (ii) in case at any time
after the date hereof any further action is necessary to carry out the purposes
of the Transaction Documents, it will take such further action (including,
without limitation, the execution and delivery of such further instruments and
documents) as the Employee reasonably may request, all at the sole cost and
expense of the Company.
7. Miscellaneous.
(a) Entire
Agreement. The Transaction Documents constitute the entire
agreement between the Parties and supersedes any prior understandings,
agreements, or representations by or between the Parties, written or oral, to
the extent they related in any way to the subject matter hereof.
(b) Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective successors, assigns, personal
representatives, heirs, executors and administrators. Notwithstanding
the foregoing, neither of the Parties may assign either this Agreement or any of
their respective rights, interests, or obligations hereunder without the prior
written approval of the other Party.
(c) Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together will constitute one and the same
instrument.
(d) Headings. The
section headings contained in this Agreement are inserted for convenience only
and shall not affect in any way the meaning or interpretation of this
Agreement.
(e) Governing
Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of New York without giving effect
to any choice or conflict of law provision or rule (whether of the State of New
York or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of New York.
(f) Amendments and
Waivers. No amendment of any provision of this Agreement shall
be valid unless the same shall be in writing and signed by the Company and the
Employee. No waiver by either Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(g) Survival. The
representations, warranties, covenants and agreements made in this Agreement
shall survive the execution and delivery hereof and any investigation made by
the Company or the Employee.
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(h) Severability. Any
term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability of
the remaining terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any other
jurisdiction.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE TO FOLLOW]
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IN
WITNESS WHEREOF, the Parties hereto have executed this Exchange Agreement as of
the date first above written.
|
/s/
Xxxxxx Xxxxxx
[EMPLOYEE]
By:
/s/ Xxxxxx Xxxxxxxx
Name:
Xxxxxx Xxxxxxxx
Title:
COO
|
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Exhibit
A
Options and Restricted
Shares
|
Exercise
Price
|
13.08
|
14.93
|
20.98
|
14.90
|
Total
|
|
Date
issued
|
3-Nov-04
|
26-Aug-05
|
18-Jul-06
|
4-Jun-07
|
|
|
Date
Vested
|
0-Xxx-00
|
00-Xxx-00
|
00-Xxx-00
|
0-Xxx-00
|
|
|
Expiration
Date
|
3-Nov-08
|
26-Aug-09
|
18-Jul-10
|
4-Jun-11
|
|
|
Number
of options to be cancelled:
|
|||||
|
Xxxxxx
Xxxxxx
|
15,000
|
20,000
|
30,000
|
30,000
|
95,000
|
|
Number
of restricted shares to be issued at 2.5 to 1:
|
|||||
|
Xxxxxx
Xxxxxx
|
6,000
|
8,000
|
12,000
|
12,000
|
38,000
|
|
Restricted
shares vesting date:
|
3-Nov-08
|
One
year
from
exchange
|
13
months
from
exchange
|
14
months
from
exchange
|
|
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Exhibit
B
Restricted Share
Agreement
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