Exhibit 4.10
AGREEMENT
THIS AGREEMENT is made and entered into as of the 12th day of May,
1998, by and among RADVision LTD., an Israeli company, having an address at 00
Xxxxx Xxxxxxxxxx Xx., Xxx Xxxx 00000, Xxxxxx (the "Company") and the entities as
identified in EXHIBIT A attached hereto (the "Purchasers").
W I T N E S S E T H :
WHEREAS, the Company is and will be engaged in the business of
developing, manufacturing and marketing products and technologies in the field
of video conferencing; and
WHEREAS, the Company desires to issue and sell, and the Purchasers
desire to purchase Preferred Shares, par value NIS 1.- each, of the Company (the
"Shares").
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions herein contained, the Company and the Purchasers hereby
agree as follows:
SECTION 1
ISSUANCE AND PURCHASE OF SHARES
1.1 The Purchasers undertake to invest in the Company (the
"Investment") the amount of Two Million United States Dollars (U.S. $2,000,000)
(hereinafter, the "Investment Amount") on the Closing Date as defined in Section
2 hereinbelow. All amounts will be deposited in US dollars or their equivalent
in NIS in the Company's account, No.377906 at Hapoalim Bank, Hadar Xxxxx Xxxxxx
(610).
1.2 In consideration for and subject to the execution of the
Investment, the Company shall issue to the Purchasers on the Closing Date Five
Thousand Seven Hundred Seventy-Four (5,774) Preferred Shares. The Company shall
not be obligated to issue any Preferred Shares whatsoever before the full
Investment Amount is received by it. The Preferred Shares, when issued, will
have been validly issued, fully paid and non-assessable, and will be free of any
liens or encumbrances. After all Preferred Shares have been issued, the
ownership of the Company, on a fully diluted basis, will be as set forth in
EXHIBIT 1.2.
1.3 In addition to the Investment, the Company may receive additional
financing of up to $3,000,000 from additional investors, and from present
shareholders of the Company who may exercise their preemptive rights (these
additional investors and present
shareholders being collectively referred to as the "Other Purchasers"), thus
increasing the amount of the financing in this round up to $5,000,000
(hereinafter, the "Total Investment"). In consideration for the investment by
the Other Purchasers, the Company will issue such number of Preferred Shares, as
set forth in the attached Exhibit 1.2 (which may be amended after the Closing
Date), all of which will be issued upon substantially similar terms and
conditions as set forth in this Agreement and in any event not better than the
terms of this Agreement. After all said Preferred Shares have been issued to the
Purchasers and the Other Purchasers (hereinafter, the "Shares"), the ownership
of the Company on a fully diluted basis will be as set forth in EXHIBIT 1.2.
1.4 The Preferred Shares shall have all the rights attached to the
existing Ordinary Shares and all the rights specifically set forth in this
Agreement as attached to them.
SECTION 2
CLOSING
2.1 CLOSING DATE. The payment of the Investment Amount by the
Purchasers shall take place on ______________, 1998 (the "Closing"). The date of
the Closing is referred to as the "Closing Date" in this Agreement.
2.2 TRANSACTIONS AT THE CLOSING. Unless otherwise indicated below, the
following transactions shall occur at the Closing, which transactions shall be
deemed to take place simultaneously, and no transactions shall be deemed to have
been completed or any document delivered until all such transactions have been
completed and all required documents delivered:
2.2.1 The Company shall deliver to the Purchasers the
following documents against the transfer of the Investment Amount:
(a) Resolution of the Company's shareholders by which
the Articles of Association of the Company were amended by the Amended Articles
of Association attached hereto as Exhibit 2.2.1.(A)(A) (the "Amended Articles"),
by which the authorized share capital of the Company was changed as described in
the Amended Articles, together with a duly completed notice of such changes to
the Israeli Registrar of Companies, all of the foregoing duly signed.
(b) Validly executed share certificates covering the
Shares, issued in the names of the respective Purchasers, provided, however,
that those certificates being issued to Purchasers entitled to repatriation
rights with respect to the funds invested shall be delivered to such Purchasers
as soon as practicable following the Closing, after
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being stamped by an Israeli commercial bank to indicate that such Shares were
purchased with foreign currency, provided such foreign Purchasers provide all
the necessary documentation required by the bank.
(c) A certificate duly executed by an executive
officer of the Company, dated as of the date of the Closing, in the form
attached hereto as EXHIBIT 2.2.1(C) (the "Compliance Certificate").
(d) An opinion of Xxxxxx Xxxx, counsel to the
Company, in the form attached hereto as EXHIBIT 2.2.1(D) (the "Opinion"), dated
as of the date of the Closing.
(e) A waiver of preemptive rights from each current
shareholder of the Company which chooses not to exercise its preemptive rights
to purchase additional Shares in connection with the Investment, whether in full
or in part, shall have been received by the Company.
2.2.2 After the Closing, assuming receipt of the full Investment
Amount, the Company shall register the allotment of the Shares to the Purchasers
in the share transfer register of the Company, in the respective numbers
indicated in Exhibit 1.1 opposite the names of the Purchasers.
2.2.3 Receipt of the full Investment Amount by the Company as evidenced
by bank confirmation.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchasers the facts
hereinafter set forth in this Section 3.
3.1 CORPORATE POWER. As of the date hereof and as of the Closing, the
Company has and will have all requisite corporate power to enter into and to
perform this Agreement.
3.2 ORGANIZATION AND STANDING. The Company is a corporation duly
organized and existing under the laws of the State of Israel. The Company has
requisite corporate power to own, lease and operate its properties and assets,
and to carry on its business as presently conducted. The Company has all
requisite power and authority to execute and deliver this Agreement, and to
consummate the transactions contemplated hereby and thereby. To the best of the
Company's knowledge, neither the nature of the Company's business as now
conducted nor its ownership or leasing of property require that the
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Company be qualified to do business or in good standing in any jurisdiction
other than the State of Israel. The Memorandum of Association and all amendments
to date of the Company are attached hereto as EXHIBIT 3.2(A) and all of these
documents will be in effect on the Closing Date. The Company has not taken any
action or failed to take any action, which action or failure would preclude or
prevent the Company from conducting its business after the Closing Date in the
manner heretofore conducted. The Company has all franchises, permits, licenses,
and any similar authority necessary for the conduct of its business as now being
conducted and as proposed to be conducted by it, the lack of which could
materially and adversely affect the business, properties, prospects, or
financial condition of the Company, and the Company believes that it can obtain,
without undue burden or expense, any similar authority for the conduct of its
business as planned to be conducted. The Company is not in material default
under any of such franchises, permits, licenses, or other similar authority. The
Company does not have a business permit.
3.3 CAPITALIZATION The Company's authorized capital is currently NIS
60,000, divided into 60,000 Shares having a nominal value of NIS 1.00 each. The
Company's authorized capital shall be increased prior to the Closing to be NIS
85,000, divided into 85,000 Shares having a nominal value of NIS 1.00 each. The
Company's issued capital stock immediately prior to the Closing Date shall
consist of 49,471 Ordinary Shares, and no Preferred Shares, all of which are
duly authorized, validly issued and free of any liens or encumbrances, and 1,127
Deferred Shares. The Company has no intent to, and will not, issue the Deferred
Shares or re-convert them into ordinary or other shares at any time. The Company
will increase its share capital prior to the Closing Date to enable the
performance of the Agreement. Out of the issued share capital, all of the shares
are fully paid, except for shares reserved for Employees. All shares are
non-assessable, and, to the best of the Company's knowledge and belief, are
beneficially owned by their holders of record. There are no preemptive,
conversion or other rights, options, or agreements granted or issued by, or
binding upon, the Company or the shareholders which entitle any person, firm or
corporation to purchase or acquire any shares of the Company's capital stock,
except as set forth in this Agreement, and in Section 3.16. The Shares, when
issued and allotted in accordance with this Agreement, will be duly authorized,
validly issued, fully paid, nonassessable, and free of any preemptive rights,
will have the rights, preferences, privileges, and restrictions set forth in the
Company's Amended Articles, and will be free and clear of any liens, claims,
encumbrances or third party rights of any kind and duly registered in the name
of each Purchaser in the Company's share transfer register. The Company is not
under any obligation to register for trading on any securities exchange any of
its currently outstanding securities or any of its securities which may
hereafter be issued. Since its incorporation, there has been no declaration or
payment by the Company of dividends, or any distribution by the Company of any
assets of any kind to any of its shareholders in redemption of or as the
purchase price for any of the Company's securities.
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(a) OWNERSHIP OF SHARES. Except for RADVision, Inc. and RadVision B.V.,
wholly owned subsidiaries, the Company does not own any of the issued and
outstanding share capital of any other company, and is not a participant in any
partnership or joint venture.
3.4 AUTHORIZATION. All corporate actions on the part of the Company and
its directors and shareholders, required for the authorization, execution,
delivery and performance by the Company of this Agreement and the consummation
of the transactions contemplated herein have been, or will be taken, upon
signature of this Agreement or prior to the Closing Date. This Agreement, when
executed and delivered by the Company, will constitute the valid and binding
obligations of the Company, legally enforceable in accordance with its terms.
The execution, delivery and performance by the Company of this Agreement, and
compliance therewith, and the consummation of the transactions contemplated by
this Agreement will not result in any violation of and will not conflict with,
or result in a breach of any of the terms of, or constitute a default under, (i)
the Company's Memorandum of Association or the Articles of Association, or other
governing instruments of the Company, (ii) any judgment, order, injunction,
decree, or ruling of any court or governmental authority, domestic or foreign,
to which the Company is subject, (iii) any agreement, contract, lease, license
or commitment to which the Company is a party or to which it is subject and
which would impair the ability of the Company to execute, deliver or perform
this Agreement, or (iv) applicable law. Such execution, delivery and compliance
will not (a) give to others any material rights, including rights of
termination, cancellation or acceleration, in or with respect to any agreement,
contract or commitment referred to in this paragraph, or to any of the
properties of the Company or (b) otherwise require the consent or approval of
any person. To the best of the Company's knowledge, no third party's consent is
required for the Company to become a party to this Agreement, except for the
approval of the Office of the Chief Scientist of Israel (the "OCS"). Prior to
the Closing Date, the Company will obtain consent from all governmental
authorities requiring prior notification of changes in equity, including, but
not limited to the Israel Investment Center and the OCS. The Purchasers
undertake to cooperate with the Company in order to obtain such consents and to
execute whatever documentation is requested of them in this regard by the
governmental authorities.
3.5 FINANCIAL STATEMENTS. The Company has furnished the Purchasers with
audited financial statements (including balance sheets, income statements and
statements of cash flow) for the period ending December 31, 1997 (the "Balance
Sheet Date") attached hereto as EXHIBIT 3.5 (the "Financial Statements"). To the
best of the Company's knowledge, the Financial Statements are true and correct
in all material respects, are prepared in accordance with the books and records
of the Company, fairly and accurately present in all material respects the
financial position of the Company as of such date and the results of its
operations for the period then ended, and have been prepared in accordance
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with Israeli generally accepted accounting principles ("GAAP") consistently
applied. Except in the ordinary course of business, there exists no default by
the Company under the provisions of any agreement or other instrument evidencing
or relating to any indebtedness or obligation. Since the Balance Sheet Date, and
except as set forth in the Schedule of Exceptions, the Company has operated in
the ordinary and usual course of business, and there has not been:
(i) any material change in the assets, liabilities, condition
(financial or otherwise) or business of the Company from that reflected in the
Financial Statements;
(ii) any damage, destruction or loss, whether or not covered
by insurance, materially affecting the assets, business, properties, condition
(financial or otherwise), operating results, prospects or business of the
Company as such business is presently conducted;
(iii) any waiver by the Company of a valuable right or of a
material debt owed to it;
(iv) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company, except in the ordinary
course of business and that is not individually or in the aggregate materially
adverse to the assets, properties, condition (financial or otherwise), operating
results or business of the Company as such business is presently conducted and
proposed to be conducted;
(v) any material change or amendment to a material contract or
arrangement by which the Company or any of its assets is bound or subject;
(vi) any material change in any compensation arrangement or
agreement with any employee of the Company;
(vii) any loans made by the Company to its directors;
(viii) any sale, transfer or lease of, except in the ordinary
course of business, or mortgage or pledge or imposition of lien on, any of the
Company's material assets;
(ix) any change in the accounting methods or accounting
principles or practices employed by the Company.
3.6 ABSENCE OF UNDISCLOSED LIABILITIES AND OUTSTANDING DEBT. Except as
set forth in the Financial Statements or EXHIBIT 3.6 ("Schedule of Exceptions"),
the Company has no material liability of any nature, direct or indirect,
absolute or contingent, not
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adequately reserved against, or outstanding indebtedness for borrowed money. The
Company has paid, or has made adequate provisions for the payment of, all taxes,
interest, penalties, assessments or deficiencies owing by it to any taxing
authority. The Company is not a guarantor of any debt or obligation of another.
There exists no default by the Company under the provisions of any agreement or
other instrument evidencing or relating to any indebtedness or obligation.
3.7 CONTRACTS AND CONTRACTUAL ARRANGEMENTS. The Company is a party to
several material agreements, all of which are described in the Schedule of
Exceptions attached hereto. Each of such agreements is in full force and effect
and, to the Company's knowledge, no party thereto is in breach thereof, nor is
any such breach threatened or contemplated. The Company is of the opinion that
it receives services from affiliated companies for fair consideration as
described in the Schedule of Exceptions attached hereto. The Company is not
obligated to receive services from said affiliated companies. True and correct
copies of all contracts described in the Schedule of Exceptions have been
delivered to the Purchasers. Except as set forth in the Schedule of Exceptions,
the Company has no employment or consulting contracts, deferred compensation
agreements or bonus, incentive, profit-sharing, or pension plans currently in
force and effect, or any understanding with respect to any of the foregoing.
3.8 INDEBTEDNESS OF OR TO SHAREHOLDERS, ETC.; CONFLICTS OF INTEREST.
Other than as set forth in the Schedule of Exceptions or in the Financial
Statements, no officer, director or stockholder of the Company, or any affiliate
or family member of any such person or entity or the Company, has or has had,
either directly or indirectly, (a) an interest in any person or entity which (i)
furnishes or sells services or products which are furnished or sold or are
proposed to be furnished or sold by the Company, or (ii) purchases from or sells
or furnishes to the Company any goods or services, or (b) a beneficial interest
in any contract or agreement to which the Company is a party or by which it may
be bound or affected. Other than as set forth in the Schedule of Exceptions,
there are no existing material arrangements or proposed material transactions
between the Company and any officer, director, or holder of more than 5% of the
capital stock of the Company, or any affiliate or associate of any such person.
Other than as set forth in the Schedule of Exceptions, no employee, shareholder,
officer, or director of the Company, or any of their affiliates or families, is
indebted to the Company, nor is the Company indebted (or committed to make
investments or extend or guarantee credit) to any of them except for accrued
wages for the current period.
3.9 LITIGATION; INSOLVENCY PROCEEDINGS. No action, proceeding or
governmental inquiry or investigation is pending or (to the Company's best
knowledge) threatened against the Company or any of its officers, directors, or
employees (in their capacity as such), or against any of the Company's
properties, before any court, arbitration board or
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tribunal or administrative or other governmental agency, nor (to the Company's
best knowledge) is there is any basis for the foregoing. The foregoing includes,
without limiting its generality, actions pending or threatened involving the
prior employment of any of the Company's employees or use by any of them in
connection with the Company's business or any information, property or
techniques allegedly proprietary to any of their former employers. The Company
is not a party to or subject to the provisions of any order, writ, injunction,
judgment or decree of any court or governmental agency or instrumentality. There
is no action, suit, proceeding or investigation by the Company currently pending
or that the Company intends to initiate.
3.10 INSURANCE. The Company maintains insurance through RAD-Bynet
insurance policies which, in the opinion of the Company's management, adequately
covers the perils normally insured against by companies similarly situated.
Copies of all insurance policies were given to the Purchasers. To the best of
the Company's knowledge, all such policies are in full force and effect.
3.11 TITLE TO PROPERTIES; LIENS AND ENCUMBRANCES. The Company leases
the real property set forth in the Schedule of Exceptions hereto. A complete and
accurate copy of the lease agreements has been furnished to counsel for the
Purchasers. Except as set forth on the Schedule of Exceptions hereto, (i) the
Company has good title to all of the properties and assets, both real and
personal, tangible and intangible, that it purports to own, and they are not
subject to any mortgage, pledge, lien, security interest, conditional sale
agreement, encumbrance or charge except routine statutory liens securing
liabilities not yet due and payable and minor liens, encumbrances, restrictions,
exceptions, reservations, limitation and other imperfections which do not
materially detract from the value of the specific asset or the present use of
such asset; and (ii) the Company is not knowingly, after due review, in default
or breach of any material provision of its leases or licenses and holds a valid
leasehold or licensed interest in the property it leases or that is licensed to
it.
3.12 BUSINESS OF THE COMPANY. Except as set forth in the Schedule of
Exceptions, the Company has no knowledge of (i) the existence of any pending or
planned patent, or any statute, rule, law, regulation, standard or codes which
would materially adversely affect the condition, financial or otherwise, or the
business operations, of the Company; or (ii) the existence of any other factor
which would materially adversely affect the financial condition, or the
operations, of the Company.
3.13 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in default
(a) under its Memorandum or Articles of Association or other formative
documents, or under any material note, indenture, mortgage, lease, agreement,
contract, purchase order or other instrument, document or agreement to which the
Company is a party or by which it or
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any of its property is bound or affected or (b) with respect to any law,
statute, ordinance, regulation, order, writ, injunction, decree, or judgment of
any court or any governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which default, in any such case, would
adversely affect or in the future is reasonably likely to materially and
adversely affect the Company's business, prospects, condition (financial or
otherwise), affairs, operations or assets. To the Company's best knowledge, no
third party is in default under any material agreement, contract or other
instrument, document or agreement to which the Company is a party or by which it
or any of its property is affected. The Company is not a party to, nor to its
best knowledge is it bound by, any order, judgment, decree or award of any
governmental authority, agency, court, tribunal or arbitrator.
3.14 EMPLOYEES. All the key employees of the Company are listed on
EXHIBIT 3.14 hereto and have executed employment agreements. Except as set forth
in EXHIBIT 3.6, the Company has no employment contract with any officer or
employee or any other consultant or person which is not terminable by it at will
without liability, upon a prior notice of 30 days. The Company has complied with
all applicable employment laws except for such non-compliance as would not cause
a material adverse effect to the business, operations or prospects of the
Company. The forms of standard employment agreements which all employees of the
Company have signed are attached as EXHIBIT 3.14(A) hereto, and include
confidentiality and non-competition provisions. Notwithstanding the foregoing,
the Inception Agreement with Xx. Xxx Xxxx contains a specific provision to that
effect. True and correct copies of such agreements have been delivered to the
Purchasers. To date, all payments due to the Company's employees have been paid
regularly. In addition, the Company believes it made all material allowances
required by law to cover the amounts due to its employees and/or officers in
connection with their employment and/or termination of employment, as reflected
in the Financial Statements.
3.15 The Company has adopted a Trust Agreement and share incentive
option plans for employees of the Company and its affiliates which are attached
hereto as EXHIBIT 3.15(A) AND 3.15(B) (the "Employee Plans"). At the Closing
Date, the total number of shares reserved under the Employee Plans for Employees
of the Company and its affiliates will be 5,727 which includes an increase in
the number of options reserved for employees of the Company and its subsidiaries
of up to 3,000 additional options. To date, options under the Employee Plan have
been granted only to employees of the Company and its affiliates who assist the
Company. In the event of a contradiction between this Agreement and the Employee
Plans and the current Memorandum of Association and Articles of Association, the
Employee Plans shall prevail.
3.16 INTELLECTUAL PROPERTY AND OTHER INTANGIBLE ASSETS.
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(a) Other than as set forth in the Schedule of Exceptions, the Company
owns or has the right to use, free and clear of all liens, claims and
restrictions, all patents, trademarks, service marks, trade names and
copyrights, and applications, licenses and rights with respect to the foregoing,
and all trade secrets, including know-how, inventions, designs, processes, works
of authorship, computer programs and technical data and information
(collectively herein "Intellectual Property") used and in the management's
opinion, sufficient for use in the conduct of its business as now conducted, and
such ownership or right to use, to the Company's best knowledge, does not
infringe upon or violate any right, lien, or claim of others. Except as
described in the Schedule of Exceptions, the Company is not obligated to make
payments by way of royalties, fees or otherwise to an owner or licensee of, or
other claimant to, patents, trademarks, service marks, trade names, copyrights
or other intangible asset, with respect to the use thereof or in connection with
the conduct of its business or otherwise.
(b) Any and all Intellectual Property of any kind currently being
developed, or developed in the future, by any employee of the Company in
connection with his employment by the Company, is and shall remain the property
solely of the Company. The Company has taken security measures to protect the
secrecy, confidentiality and value of all the Intellectual Property, which
measures are reasonable and customary in the industry in which the Company
operates. All of the Company's employees have entered into a written agreement
with the Company in the form of Exhibit 3.14(a).
(c) The Company has not received any communications alleging that the
Company has violated, or by conducting its business as proposed, would violate,
patents, trademarks, trade names, copyrights or trade secrets or other
proprietary rights of other persons or entities. To the best of the Company's
knowledge, its use of the Intellectual Property does not conflict with, violate
or infringe upon any rights of any third party, including any proprietary rights
of any third party.
3.17 The Schedule of Exceptions attached hereto includes a true and
complete list of each of the agreements and contractual arrangements, whether
written or oral, to which both the Company and any of its Interested Parties are
bound, where "Interested Party" means a person who holds 5% or more of the
nominal value of the Company's issued share capital or of voting power in it, or
who is entitled to nominate one or more of its directors or its general manager,
or who is a director or general manager of the Company.
3.18 RECORDS. Minutes of the Company which have been provided to the
Purchasers contain accurate and complete copies of the minutes of every meeting
of the Company's shareholders and Board of Directors. No resolutions have been
passed,
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enacted, consented to or adopted by the directors or shareholders of the
Company, except for those contained in such minute books.
3.19 TAXES. The Company has accurately prepared and duly filed all
income and payroll tax returns and filings that are required to be filed by it
(the "Tax Returns") and has paid or made provision for the payment of all
amounts due pursuant to such returns. Except as set forth in the Schedule of
Exceptions, none of the Tax Returns has been audited by any taxing authority,
the Company has not been advised that any of such Tax Returns will be so
audited, and there are no waivers in effect of the applicable statute of
limitations for any period. There is no "deficiency assessment" or proposed
adjustment of income or payroll taxes which is pending against the Company, and
the Company has no knowledge of any proposed liability for any tax to be
imposed. The Company has not made any elections under applicable laws or
regulations (other than elections that related solely to methods of accounting,
depreciation or amortization) that would have a material adverse effect on the
Company, its financial condition, its business as presently conducted as
described in the Business Plan or proposed to be conducted, or any of its
properties or material assets. The Company has been a "family company" since its
inception until December 31, 1994.
3.20 NO PUBLIC OFFER. Neither the Company nor anyone acting on its
behalf has offered securities of the Company or any part thereof or any similar
securities for issuance or sale to, or solicited any offer to acquire any of the
same from, anyone so as to make issuance and sale of the Preferred Shares not
exempt from the registration requirements of Section 5 of the Securities Act of
1933, as amended, or the Israeli Securities Law, 1968. None of the shares of the
Company's capital stock issued and outstanding, or options to purchase such
shares, have been offered or sold in such a manner as to make the issuance and
sale of such shares or options not exempt from such registration or prospectus
requirements, and all such shares of capital stock have been offered and sold,
and the Shares sold hereunder shall be offered and sold, in compliance with all
applicable state securities laws.
3.21 BROKERS. No agent, broker, investment banker, person or firm
acting in a similar capacity on behalf of or under the authority of the Company
are or will be entitled to any broker's or finder's fee or any other commission
or similar fee, directly or indirectly, on account of any action taken by the
Company in connection with any of the transactions contemplated under the
Agreement.
3.22 DISCLOSURE. This Agreement and the Schedule of Exceptions
delivered to the Purchasers do not contain any material untrue statement and do
not omit to state a material fact necessary in order to make the statements
contained herein not misleading in the light of the circumstances under which
they were made, and such documents represent full
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disclosure by the Company of the material facts with respect to the business,
prospect and plans of the Company. The Company confirms that to the date of this
Agreement, the Business Plan dated July, 1997, which was provided to the
Purchasers, does not contain any materially untrue information as far as same
relates to the Company itself. There is no material fact or information relating
to the business, prospects, condition (financial or otherwise), affairs,
operations, or assets of the Company known to the Company after inquiry that has
not been disclosed to the Purchasers.
3.23 The agreements with the Other Purchasers in this round who are
part of the Total Investment will have terms and conditions which are identical,
in all material respects, to, and not better than, the terms and conditions of
this Agreement.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
The Purchasers represent and warrant to the Company as follows:
4.1 LEGAL POWER. As of the date hereof and as of the Closing, the
Purchasers have and will have all requisite power to enter into and to perform
this Agreement.
4.2 EXPERIENCE. The Purchasers have sufficient experience as investors
in hi-tech companies such as the Company and expertise to evaluate the risk of
their investment in the Company and its suitability to their needs.
4.3 INVESTMENT. The Purchasers are acquiring the Shares for investment
for their own accounts.
4.4 ACCESS TO DATA. The Purchasers hereby represent that they have had
the full opportunity to discuss management and financial affairs of the Company
with its management and have had an opportunity to review the Business Plan and
the Company's facilities. The Purchasers have not been denied any information
that has been requested and based on the said information have made diligent
examination of the Company's business. The Purchasers have heretofore received
information that the Purchasers have deemed necessary and appropriate to enable
the Purchasers to evaluate the financial risk inherent in making an investment
in the shares of the Company and the Purchasers have received satisfactory and
complete information concerning the business and financial condition of the
Company in response to all inquiries in respect thereof. Nothing contained in
this Section 4.4 shall derogate from the liability of the Company with respect
to the representations and warranties made in Section 3 above.
4.5 BROKERS. No agent, broker, investment banker, person or firm acting
in a similar capacity on behalf of or under the authority of the Purchasers are
or will be entitled
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to any broker's or finder's fee or any other commission or similar fee, directly
or indirectly, on account of any action taken by the Purchasers in connection
with any of the transactions contemplated under the Agreement.
4.6 AUTHORIZATION. All corporate or partnership action on the part of
the Purchasers, their respective directors, partners and/or shareholders
necessary for the authorization, execution, delivery, payment and performance by
the Purchasers of this Agreement and the consummation of the transactions
contemplated herein, has been taken.
4.7 Purchasers have sufficient financial resources to enable them to
fulfill their obligations under this Agreement and commit to make their
investment in the Company as set forth in Section 1 hereinabove.
4.8 The Purchasers hereby certify that they are aware
of the Company's commitments under the Encouragement of Research and Development
in Industry Law - 1984, which prohibits the transfer of know-how, manufacturing
and production information and technology to any third party without the prior
consent of the Research Committee, and the Purchasers agree to execute whatever
documentation is requested of them in this regard by the OCS.
SECTION 5
CONDITIONS OF THE PURCHASERS TO CLOSING
The obligations of the Purchasers at the Closing, as referred to in
Section 1 hereof, are subject to the fulfillment of each of the following
conditions:
5.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company in Section 3 hereof shall be true and correct
when made, and shall be true and correct in all material respects on Closing
with the same force and effect as if they had been made immediately prior to the
Closing and as of such time, except for such changes as contemplated by this
Agreement.
5.2 PERFORMANCE. All covenants, agreements and conditions contained in
this Agreement to be performed or complied with by the Company on or prior to
Closing shall have been performed or complied with in all respects prior to or
at the Closing.
5.3 LEGAL INVESTMENT. At the time of the Closing, the purchase and
issuance of the Shares shall be legally permitted by all laws and regulations to
which the Purchasers and the Company are subject.
5.4 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated hereby and all documents and
instruments
13
incident to such transactions, including the amendment of the Company's Articles
of Association to reflect the transaction contemplated hereby, shall have been
completed or amended effective as at the Closing to the reasonable satisfaction
(as to substance and form) of the Purchasers.
5.5 PROPRIETARY INFORMATION AND NON-COMPETITION AGREEMENT. Each of the
Company's key employees shall have executed and delivered to the Company an
Employment Agreement, substantially in the form attached hereto as EXHIBIT
3.14(A) which agreement contains non-disclosure and non-competition provisions
therein.
5.6 RETENTION OF KEY EMPLOYEES. All the persons listed in EXHIBIT 3.14
shall either be employees of the Company as of the Closing and to the best of
the Company's knowledge, shall not have informed the Company that they intend to
leave the Company, or if an employee has left the Company or intends to leave
the Company, the latter has notified the Purchasers of same.
5.7 CONSENTS, ETC. The Company shall have secured all permits,
consents and authorizations that shall be necessary or required lawfully to
consummate this Agreement and to issue the Shares to be purchased by each
Purchaser at the Closing, and the Amended Articles.
5.8 ABSENCE OF ADVERSE CHANGES. From the date hereof until the Closing,
there will have been no material adverse change in the financial or business
condition of the Company, in the sole, but reasonable judgment of the
Purchasers.
5.9 DELIVERY OF DOCUMENTS. All of the documents to be delivered by the
Company pursuant to Section 2.2 shall be in form and substance reasonably
satisfactory to the Purchasers and their counsel, in their sole discretion, and
shall have been delivered to the Purchasers against the transfer of the
Investment Amount to the Company.
SECTION 6
CONDITIONS OF COMPANY TO CLOSING
The obligations of the Company at the Closing, as referred to in
Section 1 hereof, are subject to the fulfillment of each of the following
conditions:
6.1 REPRESENTATION. The representations and warranties made by the
Purchasers in Section 4 hereof shall be true and correct when made and shall be
true and correct on Closing with the same force and effect as if they had been
made immediately prior to the Closing and as of such time.
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6.2 Purchasers have fulfilled any and all of their obligations set
forth in Section 1.1 and 4.8.
SECTION 7
BOARD OF DIRECTORS
The present directors of the Company are Xxxxxx Xxxxxxx, Xxxxx Xxxxxxx,
Xxxxxx Xxxx, Xxx Xxxx, Xxxxxx Xxxxxxx and Ran Xxxxxxx. As of the Closing and for
as long as the Purchasers' collective equity interest in the Company equals at
least 5% of the capital securities therein, the Purchasers will be entitled to
nominate one representative to the Board of Directors, whose identity will be
reasonably acceptable to Xxxxxx Xxxxxxx, Xxxxx Xxxxxxx and Xxx Xxxx. The parties
agree that Yiftach Atir will be the first Director so appointed by the
Purchasers. In the event that the Purchasers' collective equity interest in the
Company falls below 5% of the outstanding capital securities therein, the
Purchasers will be entitled to designate one Observer only to the Board of
Directors. The identity of the Observer will be reasonably acceptable to Xxxxxx
Xxxxxxx, Xxxxx Xxxxxxx and Xxx Xxxx. Provided that the Observer signs a
commitment in a form customary to that used by the RAD-Bynet Group for
Observers, the Observer shall be entitled to receive all notices and materials
provided to directors and to attend and participate in all meetings of the Board
of Directors. The Observer shall not be entitled to vote.
The Board will convene at least once a quarter.
SECTION 8
COVENANTS OF THE COMPANY
Until the earlier to occur of (a) the closing of an effective
underwritten public offering of the Company's ordinary shares pursuant to an
effective registration statement under the United States Securities Act of 1933,
as amended, or equivalent law of another jurisdiction (an "IPO"), or (b) the
date on which the Purchasers' collective equity interest in the Company falls
below five (5%) percent of the outstanding capital securities therein, on a
fully-diluted basis, and without derogating from any rights or obligations
conferred upon shareholders or upon corporations under applicable law, the
Company hereby covenants and agrees that the special consent set forth in
Section 8.1 shall be needed. Thenceforth, following the earlier of the dates
described above, no special consent shall be needed.
8.1 SPECIAL CONSENT. Resolutions of the Board of the Company regarding
the following subject matters shall require the consent of at least two
directors (the "Outside Directors") appointed by any of the investor groups not
affiliated with the Zisapels, as they will be defined at that time in the
Articles of Association of the Company (collectively, the "Investors") in the
Company, in addition to a simple majority:
15
(a) Establishment of any non-wholly owned subsidiary;
(b) Acquisition or disposition, including mortgage, of real estate
out of the ordinary course of the Company's business;
(c) Replacement of the Company's Managing Director;
(d) Replacement of the auditors of the Company;
(e) Approval of the distribution of dividends by the Company,
except for recapitalization prior to an IPO or a merger and
acquisition transaction (an "M&A Transaction");
(f) Transactions in excess of $50,000 not included in the approved
Annual Operating Plan between the Company or its affiliates
and their directors, officers and employees or their relatives
or other affiliates, with the exception of employees receiving
securities;
(g) Resolution to enter a new business field unrelated to the
present field; and
(h) Issuance of shares with rights superior to those of the Shares.
If the Director on behalf of the Purchasers has not responded within 14 days of
notification of such matters, it will be deemed that the required consent is
granted.
SECTION 9
PRE-EMPTIVE RIGHTS
Until the closing of an IPO or an M&A Transaction, and without
derogating from any rights conferred upon shareholders, or obligations conferred
upon corporations under applicable law, the Company hereby covenants and agrees
as follows:
If the Company should at any time or from time to time propose to issue
and sell New Securities, as defined in subsection (a) below, a pro rata portion
of such New Securities shall first be offered (as hereinafter provided) to the
shareholders of the Company (each of whom shall hereinafter be referred to as an
"Offeree"). For purposes of this Section 9, the pro rata portion of each Offeree
shall mean a fraction of the New Securities to be issued, of which the aggregate
number of shares which are held by the Offeree on the date of the Company's
initial written notification referred to in subsection (b) below (the "Notice
Date") shall be the numerator and the aggregate number of shares held by all the
Offerees as of such date shall be the denominator. The aforesaid rights of the
Offerees shall be subject to the following provisions:
(a) "New Securities" shall mean any capital stock of the
Company, whether or not now authorized, and rights, options or warrants to
purchase capital stock, and securities of any type whatsoever that are, or may
become, convertible into capital stock; provided that the term "New Securities"
shall not include (i) securities purchased under this Agreement; (ii) securities
offered to the public; (iii) securities issued pursuant to
16
the acquisition of another corporation by the Company by merger, purchase of
substantially all the assets of another corporation or any other reorganization
whereby the Company owns not less than fifty-one percent (51%) of the voting
power of such corporation; (iv) securities issued to employees, consultants or
directors of the Company pursuant to any stock option plan or stock purchase or
stock bonus arrangement approved by the Board of Directors of the Company; or
(v) securities issued pursuant to payment of any dividend or distribution with
respect to the Company's issued and outstanding capital stock.
(b) In the event the Company proposes to undertake an issuance
of New Securities, it shall give each Offeree written notice of its intention,
describing the type of New Securities and the price and the terms upon which the
Company proposes to issue the same, and offering its pro rata portion thereof to
such Offerees at such price and on such terms. Each Offeree shall have
twenty-one (21) days from the Notice Date to accept such offer, in whole or in
part, by written notice to the Company, which notice must be received by the
Company during the above-mentioned 21 day period. All New Securities as to which
such offers have not been accepted, in whole or in part, by one or more of the
Offerees (of which fact the Company shall give immediate written notice to all
other Offerees), shall be re-offered to each of the Offerees who have accepted
in full the original offer, and each such Offeree shall have the right, within
ten (10) days of the date of such written notice, to purchase the respective pro
rata portions of such new Securities, the same to be computed as aforesaid but
without regard to the shares held by any Offeree which had not accepted the
original offer in full.
(c) In the event any Offeree fails to accept such offers, the
Company shall have the right to sell, or to enter into an agreement to sell,
within six (6) months after the Notice Date, such New Securities as to which
such offers were not accepted, provided, however, that no such sale may be
effected at a price or upon terms more favorable to the purchasers thereof than
those specified in the Company's notice pursuant to Section 9(b). If the Company
has not sold the New Securities within said 6-month period, the Company shall
not thereafter issue or sell any New Securities without first offering such
securities to the shareholders in the manner provided above.
(d) Each of Xxxxxx Xxxxxxx, Xxxxx Xxxxxxx and RAD Data
Communications Ltd. shall have a right to allocate any unused portion of the New
Securities offered to him to the other or to a wholly owned company.
(e) Each of the Purchasers shall have the right to allocate
any unused portion of the New Securities offered to such Purchaser, to any other
member in the Purchaser Group as defined in Section 11, to its parents or to any
of its subsidiaries, of which at least 51% of the stock is owned by such
Purchaser, or to a company under
17
common control affiliated with Purchaser, provided that such recipient of Shares
will join in this Agreement as if it had become a party to it as of the receipt
of the Shares.
(f) Notwithstanding anything to the contrary contained herein,
so long as Xxxx Xxxx is the Managing Director of the Company, Xxxx Xxxx and his
wholly-owned companies are, and shall continue to be, entitled to be Offerees
under this Section 9. Other than as set forth in this Section 9, Mr. Amir does
not have any preemptive rights to shares of the Company.
(g) Each of Lerosh Investments Ltd., Gevahim Investments House
Limited Ltd., Xx. Xxxx Xxxxxxxxx, Permal Emerging Growth V Ltd., Maritime-Julex
Investment Ltd., Xx. Xxxxxx Xxxxxx and Xx. Xxx Xxx shall have a right to
allocate any unused portion of the New Securities offered to him to the other.
SECTION 10
AFFIRMATIVE COVENANTS
10.1 USE OF PROCEEDS. The Company will use the Investment Amount to
fund its activities and further its business subject to any resolutions made by
its Board of Directors from time to time.
10.2 BASIC FINANCIAL INFORMATION. Prior to the closing of an IPO or an
M&A Transaction, the Company agrees and undertakes to furnish to the Purchasers'
director and/or Observer (provided that the Observer executes the RAD Group
Observer Form), as the case may be, the following reports certified, when so
required herein, by the Company's auditors:
(a) As soon as practicable after the end of each calendar quarter, and
in any event within forty-five (45) days thereafter, a balance sheet and a
profit and loss account and of cash flow (including opening cash, income,
expenses and closing cash) of the Company as of the end of such quarterly
period, and for the current fiscal year to date, prepared in accordance with
generally accepted accounting principles consistently applied and setting forth
in comparative form the figures for the corresponding periods of the previous
fiscal year, subject to changes resulting from year-end audit adjustments, all
in reasonable detail, signed by the principal financial or accounting officer of
the Company.
(b) Not later than 14 days after the end of each month, a monthly
executive summary in the currently existing format, including a statement of the
cash at the beginning of the month and at the end of the month. This summary
shall be kept confidential.
(c) Not later than ninety (90) days after the end of each fiscal year,
audited annual financial statements.
18
10.3 ACCOUNTS AND RECORDS. The Company will keep true records and books
of account in which full, true and correct entries will be made of all dealings
or transactions in relation to its business and affairs in accordance with
generally accepted accounting principles applied on a consistent basis.
10.4 LEGAL FEES AND STAMP TAX. The Company will pay the fees and
expenses, including but not limited to the fees of counsel for the Purchasers,
in connection with the Investment transaction under this Agreement, in an amount
not to exceed $30,000, plus Value Added Tax. The Company will bear the cost of
stamp tax due in connection with the issuance of shares according to this
Agreement.
10.5 SUFFICIENCY OF COMPANY SHARE CAPITAL. The Preferred Shareholders
agree that, in the event at any time the number of authorized Ordinary Shares of
the Company shall be insufficient to permit the conversion of all Preferred
Shares into Ordinary Shares in accordance with the conversion provisions of the
Company's Articles of Association, the Preferred Shareholders shall vote in
favor of such increase in the Company's registered share capital as shall be
necessary to permit such conversion.
SECTION 11
RESTRICTIONS ON TRANSFERABILITY OF SECURITIES
Except as set forth in this Section, the sale, transfer or grant of any
right whatsoever in the Shares of the Company to any third party is prohibited.
This Section will terminate upon the closing of an IPO of the Company.
11.1 For the purposes of this Section and Section 14.3 below, some of
the current shareholders of the Company and the Purchasers will be regarded as
members of the groups set forth below.
(a) "Zisapel Group" shall mean and consist of Xxxxxx Xxxxxxx, Xxxxx
Xxxxxxx, both personally and as trustees under the employee share plan,
RAD Data Communications Ltd. and their Permitted Transferees.
(b) "Evergreen Group" shall mean and consist of Evergreen, Dovrat Xxxxx
Trust Company Ltd. and their Permitted Transferees.
(c) "Clal Group" shall mean and consist of Clal Venture Capital LP, ECI
Telecom Ltd. and their Permitted Transferees.
19
(d) "Finovelec Group" shall mean and consist of Finovelec Factory
Systemes, Houston Venture Partners Ltd. and their Permitted
Transferees.
(e) "Capital Group" shall mean and consist of Xxxxx Xxxxx, Xxxxxxx
Xxxxxx, Xxxx Xxxxxx, W.S.P. Capital and their Permitted Transferees.
(f) "Maritime Group" shall mean and consist of Lerosh Investments Ltd.,
Gevahim Investments House Limited Ltd., Xx. Xxxx Xxxxxxxxx, Permal
Emerging Growth V Ltd., Maritime-Julex Investment Ltd., Xx. Xxxxxx
Xxxxxx and Xx. Xxx Xxx and their Permitted Transferees.
11.2 Members of each Group are entitled to transfer shares among
themselves for consideration or without consideration without any restrictions.
"Permitted Transferees" shall mean those parties set forth in Sections 11.8,
11.9, 11.10 and 11.11, below, each with respect to its respective Group.
11.3 Except as set forth in sections 11.8 through 11.11 hereinbelow,
any shareholder of the Company who shall elect to transfer (hereinafter
"Seller") all or part of his shares, not in accordance with subsection 11.2
above (hereinafter "Offered Shares") shall offer them first to the other
registered shareholders of the Company at that time (the "Other Shareholders")
on a pro rata basis based on their share in the share capital of the Company
(on an as-converted basis).
11.4 In the event any such Other Shareholder fails to exercise his
right to purchase his Offered Shares within forty-five (45) days from the date
the offer is made, then the Seller shall have the right to offer the Offered
Shares to a third party at the same price and upon the same terms of sale as
those offered to the other shareholders under section 11.3 and provided that
said third party shall undertake all of the Seller's obligations under this
Agreement (such third party to be called hereunder, the "Transferee"). In the
event that the shares are not sold to said party within six (6) months as of
the offer to such said third party, then Section 11.3 will apply anew.
11.5 The Board of Directors shall have the right to not approve the
transfer of shares to a third party in each of the following events:
(i) If the third party is a competitor of the Company;
(ii) If there is a possibility of a conflict of interest
between the third party and the Company;
(iii) For any other reason, in which case such approval
shall not be unreasonably withheld; provided,
however, that if the third party is a
20
venture capital fund or an investment house, such
approval will be deemed granted automatically.
11.6 This Section will supersede Section 14 of the Inception Agreement.
11.7 The terms of the Trust Agreement will have priority over this
Section 11.
11.8 Finovelec, in its discretion, shall be permitted to freely
transfer up to 5% of its shares (at that time) in the Company to up to 6
Finovelec executives, as well as up to an additional 5% of its shares (at that
time) in the Company to IDI (if then an affiliate of Finovelec). Such transfer
shall be considered a transfer among the Finovelec Group, provided that each
Transferee, upon receipt of the shares, will join this Agreement and undertake
all of Purchasers' obligations hereunder and will be considered henceforth a
member in the Finovelec Group for the purpose of this Section.
11.9 Clal Venture Capital L.P. is entitled to transfer all of its
shares in the Company to its partners, provided that each Transferee, upon
receipt of the shares, will join this Agreement and undertake all of Purchasers'
obligations hereunder and will be considered henceforth a member in the Clal
Group for the purpose of this Section.
11.10 Each of Xxxxx Xxxxx, Xxxxxxx Xxxxxx and Xxxx Xxxxxx is entitled,
once, to transfer his shares to a company directly under the total control of
said person, provided that each Transferee, upon receipt of the shares, will
join this Agreement and undertake all of Purchasers' obligations hereunder and
will be considered henceforth a member in the Capital Group for the purpose of
this Section.
11.11 Each of the Evergreen group Purchasers identified in EXHIBIT A
shall be permitted to freely transfer its shares, or any part thereof, in the
Company as follows: (a) if such Purchaser is a partnership, to its partners and
to affiliated partnerships managed by the same management company or managing
general partner, or by a management company or managing general partner which is
controlled by, controlling or under common control with its management company
or managing general partner or (b) otherwise, to an entity controlled by,
controlling or under common control with such Purchaser. Such transfer shall be
considered a transfer among the Evergreen Group provided that each Transferee,
upon receipt of the shares, signs EXHIBIT 11.11 and joins this Agreement and
undertakes all of Purchaser's obligations hereunder and will be considered
henceforth a member of the Evergreen Group, for the purpose of this Section, and
provided further that at no time will the number of Evergreen group entities
exceed four (4). Further transfers can be made in accordance with this Section
11.
11.12 Dovrat Xxxxx Trustees Ltd. shall be permitted to freely transfer
its shares, or any part thereof, in the Company to Dovrat Xxxxx ("DS"), provided
that
21
transferee , upon receipt of the shares, will sign EXHIBIT 11.11 and undertakes
all of the said transferor's obligations hereunder, and will be considered
henceforth as a member of the Purchasers Group and further provided that at no
time will the number of DS entities be more than 1. Further transfers can be
made in accordance with this Section 11.
SECTION 12
TAG ALONG
In the event that Xxxxxx Xxxxxxx and/or Xxxxx Xxxxxxx and/or RAD Data
Communications Ltd. sell more than a total of 25% of their shares in the Company
to third parties, then the Purchasers will have the right to sell the same
portion of Purchasers' shares in the Company under the same terms and conditions
(hereinafter, the "Tag Along Right"). The Purchasers will inform the selling
Zisapel in writing by fax and by confirmation by mail if they intend to exercise
their Tag Along Right within ten (10) days after the date of notice by said
Zisapel to Purchasers. Failure to respond will be deemed a decision not to Tag
Along. It is further provided that this Section shall terminate upon the
Company's IPO, or following the closing of an M&A Transaction.
SECTION 13
ANTI-DILUTION PROTECTION
13.1 In the event that during the first three (3) years after the Closing
the Company issues or sells stock or securities convertible into stock of the
Company to third parties (excluding employees and shareholders) upon a private
placement for consideration per share of less than $350 (hereinafter, the "Lower
Share Price"), then the Purchasers will be entitled to purchase such additional
number of shares at par value as if the investment under this Agreement was made
at the Lower Share Price.
(b) Any and all of Purchasers' anti-dilution rights will terminate upon
the earlier of (i) the closing by the Company of a private placement or private
placements (including by existing shareholders) in an aggregate amount of at
least $3,000,000, (ii) the closing of an IPO, or (iii) the date which is three
years from the Closing Date.
13.2 Upon the occurrence of each event giving rise to a right pursuant
to this Section, the Company will, at its expense, promptly compute the number
of shares that each Purchaser is entitled to purchase against par value in
accordance with the terms hereof, and will immediately furnish to the Purchasers
a notice of such right and the number of shares Purchasers are entitled to.
22
SECTION 14
REGISTRATION AND PIGGYBACK RIGHTS
14.1 DEFINITIONS. As used herein, the following terms have the
following meanings:
"HOLDER" means any holder of outstanding Registrable Shares or shares
convertible into Registrable Shares, who acquired such Registrable Shares or
shares convertible into Registrable Shares in a transaction or series or
transactions not involving any registered public offering.
"REGISTER," "REGISTERED" and "REGISTRATION" refer to a registration effected by
filing a registration statement in compliance with the Securities Act and the
declaration or ordering by the Commission of effectiveness of such registration
statement, or the equivalent actions under the laws of another jurisdiction.
"REGISTRABLE SHARES": All Ordinary Shares issuable upon conversion of the
Preferred Shares, all Ordinary Shares issued by the Company in respect of such
shares and all Ordinary Shares that the Purchasers may previously or hereafter
purchase pursuant to their preemptive rights, rights of first refusal or
otherwise, or Ordinary Shares issued on conversion or exercise of other
securities so purchased.
14.2 INCIDENTAL REGISTRATION. If the Company shall elect to register
any of its securities it shall give prior notice in writing of at least (30)
days to the Holders of such intention and shall include in such registration a
portion of all Holders' shares equal to the total amount of shares registered,
multiplied by an amount derived by dividing the number of Shares held by each
Holder by the total number of shares outstanding at that time. In the event the
public offering involves an underwriting, the rights of the Holders hereunder
shall be conditional upon the underwriter's determination as to marketing
factors requiring the limitation of such right, and the underwriter may preclude
from the offering any or all securities which could have otherwise been included
in the offering.
14.3 DEMAND REGISTRATION. At any time commencing one year following the
closing of the Company's initial public offering, and for a period of three (3)
years thereafter (or, in the event that the Purchasers still have a right to
nominate a director to the Board of Directors, for a period of five (5) years
thereafter), the Purchasers, as defined in section 11.2 above, shall be entitled
to demand (a) one registration of any or all of its shares held at the time (the
Purchasers being defined herein as one of the Groups) of the initial public
offering for trading on any securities exchange (the "Initial Demand"), and (b)
a second registration of any or all of its shares (the "Second Demand") in the
event no shares of the Company were registered within nine (9) months preceding
such Second Demand and no such registration is contemplated within three (3)
months from the date of the
23
Second Demand; PROVIDED, however, that the request for such Initial or Second
Demand registrations must cover shares representing a market value at the time
of such request equal to a minimum of three million Dollars ($3,000,000); and
PROVIDED FURTHER, however, that such request may not include shares which within
three months from the date of such request could be sold to the public without
restriction, for example pursuant to the provisions of Rule 144 of the
Securities and Exchange Commission. Within 20 days after receipt, the Company
shall give written notice of such request to the other Holders and shall include
in such registration all shares held by them with respect to which the Company
receives written requests for inclusion therein within 15 days after the receipt
of the Company's notice. Thereupon, the Company shall use its best efforts to
effect the registration as soon as possible of all shares (as to which it has
received requests for registration) for trading on a securities exchange, where
the shares are then traded, specified in the request for registration. In the
event the registration involves an underwriting, the rights of the shareholders
hereunder shall be conditional upon the underwriter's determination as to
marketing factors requiring the limitation of such right, and the underwriter
may preclude from the offering any or all securities which could have otherwise
been included in the offering. Notwithstanding any other provision of this
clause, after the Company has effected one such registration pursuant to this
clause, and such registration has been declared or ordered effective, in the
event that the Company shall furnish to such shareholder(s) delivering a request
for registration a certificate signed by the Managing Director of the Company
stating that in the good faith judgment of the Board of Directors of the Company
it would be seriously detrimental to the Company or its shareholders for a
registration statement to be filed in the near future, the Company's obligation
to use its best efforts to register, qualify or comply under this clause shall
be deferred for a period not to exceed 120 days from the date of receipt of such
request. Notwithstanding any other provision of this Section 14.3, if the
managing underwriter advises the Holders in writing that marketing factors
require a limitation of the number of shares to be underwritten, then the
registration of such shares will be allocated on a pro rata basis among all
shareholders of the Company (based on the number of shares requested to be
included).
14.4 EXPENSES. All expenses incurred in connection with the Initial
Demand registration shall be borne by the Company. All expenses incurred in
connection with the Second Demand registration shall be borne by the selling
shareholders participating in such registration on a pro rata basis; provided,
however, that the Company shall pay any expenses associated with such
registration which the Company would have incurred in the ordinary course of
business if the Company were itself effecting an underwritten offering. All
expenses incurred in connection with an Incidental Registration shall be borne
by the Company; PROVIDED, however, that each of the shareholders participating
in such registration shall pay its pro rata portion of the fees, discounts or
commissions payable to any underwriter.
24
Notwithstanding anything to the contrary contained herein, the Purchasers
undertake to sign any lock-up commitment as required by the underwriters of the
Company's IPO.
In the event that subsequent investors in the Company are granted better terms
regarding demand or other registration rights, the Purchasers will be granted
identical rights, for as long as they own at least 5% of the Company.
14.5 DESIGNATION OF UNDERWRITER.
(a) In the case of any Demand Registration effected pursuant to
subsection 14.3, the managing underwriter(s) in any underwritten offering shall
be designated by the Company. In the event that such underwriter refuses to
underwrite the offering, then the Purchasers will be entitled to designate the
managing underwriter(s) subject to the consent of the Company to such
underwriter(s), which consent shall not be unreasonably withheld.
(b) In the case of any registration initiated by the Company, the
Company shall have the right to designate the managing underwriter in any
underwritten offering.
14.6 INDEMNITIES.
14.6.1 In the event of any registered offering of Ordinary Shares
pursuant to this Section 14, the Company will indemnify and hold harmless, to
the fullest extent permitted by law, any Holder and any underwriter for such
Holder, and each person, if any, who controls the Holder or such underwriter,
from and against any and all losses, damages, claims, liabilities, joint or
several, costs and expenses (including any amounts paid in any settlement
effected with the Company's consent) to which the Holder or any such underwriter
or controlling person may become subject under applicable law or otherwise,
insofar as such losses, damages, claims, liabilities (or actions or proceedings
in respect thereof), costs or expenses arise out of or are based upon (i) any
untrue statement of any material fact contained in the registration statement or
included in the prospectus, as amended or supplemented, or (ii) the omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances in which they are
made, not misleading, and the Company will reimburse the Holder, such
underwriter and each such controlling person of the Holder or the underwriter,
for any reasonable legal or any other expenses incurred by them in connection
with investigating, preparing to defend or defending against or appearing as a
third-party witness in connection with such loss, claim, damage, liability,
action or proceeding as decided by final judgment of a competent court;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, damage, liability, cost or expense arises out of or
is based upon an untrue statement or omission so made in conformity with
information furnished in writing by a Holder, such underwriter or such
controlling persons in writing
25
specifically for inclusion therein; provided, further, that the indemnity
agreement contained in this subsection 14.6.1 shall not apply to amounts paid in
settlement of any such claim, loss, damage, liability or action if such
settlement is effected without the consent of the Company, which consent shall
not be unreasonably withheld. Such indemnity shall remain in full force and
effect until such Holder sells or transfers his shares to any third party. In no
event shall the liability of the Company exceed the gross proceeds from the
offering received by the Holder regardless of any investigation made by or on
behalf of the selling shareholder, the underwriter or any controlling person of
the selling shareholder or the underwriter, and regardless of any sale in
connection with such offering by the selling shareholder. Such indemnity shall
survive the transfer of securities by a selling shareholder.
14.6.2 Each Holder participating in a registration hereunder will
indemnify and hold harmless the Company, any underwriter for the Company, and
each person, if any, who controls the Company or such underwriter, from and
against any and all losses, damages, claims, liabilities, costs or expenses
(including any amounts paid in any settlement effected with the selling
shareholder's consent) to which the Company or any such controlling person
and/or any such underwriter may become subject under applicable law or
otherwise, insofar as such losses, damages, claims, liabilities (or actions or
proceedings in respect thereof), costs or expenses arise out of or are based on
(i) any untrue or alleged untrue statement of any material fact contained in the
registration statement or included in the prospectus, as amended or
supplemented, or (ii) the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances in which they were made, not
misleading, and each such Holder will reimburse the Company, any underwriter and
each such controlling person of the Company or any underwriter, promptly upon
demand, for any reasonable legal or other expenses incurred by them in
connection with investigating, preparing to defend or defending against or
appearing as a third-party witness in connection with such loss, claim, damage,
liability, action or proceeding; in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was so made in strict conformity with written information
furnished by such Holder specifically for inclusion therein; provided, further,
that the indemnity agreement contained in this subsection 14.6.2 shall not apply
to amounts paid in settlement of any such claim, loss, damage, liability or
action if such settlement is effected without the consent of the Holders, as the
case may be, which consent shall not be unreasonably withheld. In no event shall
the liability of a Holder exceed the gross proceeds from the offering received
by such Holder.
14.6.3 Promptly after receipt by an indemnified party pursuant to the
provisions of Sections 14.6.1 or 14.6.2 of notice of the commencement of any
action involving the subject matter of the foregoing indemnity provisions, such
indemnified party
26
will, if a claim thereof is to be made against the indemnifying party pursuant
to the provisions of said Section 14.6.1 or 14.6.2, promptly notify the
indemnifying party of the commencement thereof; but the omission to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than hereunder. In case such action is brought
against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party shall have the right to participate
in, and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, that if the
defendants in any action include both the indemnified party and the indemnifying
party and there is a conflict of interests which would prevent counsel for the
indemnifying party from also representing the indemnified party, the indemnified
party or parties shall have the right to select one separate counsel to
participate in the defense of such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party will not
be liable to such indemnified party pursuant to the provisions of said Sections
14.6.1 or 14.6.2 for any legal or other expense subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed counsel in accordance with the provision
of the preceding sentence, (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after the notice of the commencement
of the action and within 15 days after written notice of the indemnified party's
intention to employ separate counsel pursuant to the previous sentence, or (iii)
the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. No indemnifying
party will consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
to such claim or litigation.
14.6.4 If recovery is not available under the foregoing indemnification
provisions, for any reason other than as specified therein, the parties entitled
to indemnification by the terms thereof shall be entitled to contribution to
liabilities and expenses as more fully set forth in an underwriting agreement to
be executed in connection with such registration. In determining the amount of
contribution to which the respective parties are entitled, there shall be
considered the parties' relative knowledge and access to information concerning
the matter with respect to which the claim was asserted, the opportunity to
correct and prevent any statement or omission, and any other equitable
considerations appropriate under the circumstances.
27
SECTION 15
LIQUIDATION PREFERENCE
In the event of any liquidation, dissolution or winding up of the
Company, either voluntary or involuntary, or a merger, acquisition or the sale
of the Company's assets, or the majority thereof ("Liquidation Event") during
the first three years from the Closing Date, the owners of Preferred Shares
shall be entitled to receive, prior to any other distribution or payment to any
shareholder of the Company, their pro rata portion of the proceeds up to their
purchase price pursuant to this Agreement. Any remaining proceeds shall be
allocated among all shareholders of the Company on a percentage of ownership pro
rata basis. This liquidation preference will terminate upon the earlier of (a)
the closing by the Company of a private placement or private placements of at
least $3,000,000 in the Company, (b) the closing of an IPO, or (c) the date
which is three years from the Closing Date.
SECTION 16
CONVERSION RIGHTS
The holders of the Preferred Shares shall have conversion rights as
follows:
16.1 Subject to Section 16.2 hereinbelow, the Preferred Shares shall be
convertible, at the option of the holder thereof, at any time after the Closing
at the office of the Company into Ordinary Shares, par value NIS 1.- per share,
of the Company (the "Ordinary Shares") at a conversion rate on a 1 to 1 basis.
All Preferred Shares shall be automatically converted into Ordinary Shares
immediately prior to the Company's IPO or on the closing date of a M&A
Transaction.
16.2 The conversion rate of the Preferred Shares will be appropriately
adjusted in the event that the Company: (i) declares a dividend, or otherwise
makes a distribution, solely on the outstanding Ordinary Shares (and not on any
other class of shares) consisting of Ordinary Shares; (ii) splits or otherwise
reclassifies solely the outstanding Ordinary Shares into a greater or lesser
number of shares (and not any other class of shares).
SECTION 17
VOTING RIGHTS
Holders of the Preferred Shares will be entitled to vote on any matter
submitted to shareholders for their consideration at any shareholders' meeting,
with each Preferred Share having voting power equivalent to the number of
Ordinary Shares into which such Preferred Shares could be converted (one vote
for one Preferred Share).
28
SECTION 18
MISCELLANEOUS
18.1 GOVERNING LAW; JURISDICTION. This Agreement shall be governed by
and construed 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 in the competent court for Tel
Aviv-Jaffa district, and each of the parties hereby submits irrevocably to the
jurisdiction of such court.
18.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto; provided, however, that no party may assign its rights hereunder
without the prior written consent of the other parties hereto, with the
exception of assignments and transfers between the Groups as described in
Section 11.2.
18.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement (including the
Schedules and Exhibits hereto) constitutes the full and entire understanding and
agreement between the parties with regard to the subject matters hereof and
thereof and supersede all prior agreements and understandings relating thereto.
Neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated except by an instrument in writing signed by all the parties hereto.
18.4 NOTICES. All notices and other communications required or
permitted to be given or sent hereunder shall be in writing and shall be deemed
to have been sufficiently given or delivered for all purposes if mailed by
registered airmail, transmitted by telecopier, or delivered by hand to the
following respective addresses until otherwise directed by notice as aforesaid:
To the Purchasers:
Evergreen Group
00 Xxxxxxxxxx Xxxx.
Xxx Xxxx, Xxxxxx 00000
Fax: 000-0-000-0000
Attention: Yiftach Atir
29
Dovrat Xxxxx Trustees Group
00 Xxxxx Xxxxxxxx Xxxx.
Xxx Xxxx, Xxxxxx
Fax: 000-0-000-0000
Attention: Xxxxx Xxxxx
With a copy to:
Xxxxx Xxxxx & Co.
0 Xxxxxx Xxxxxx Xxxxxx
Xxx. Xxxx 00000
Attention: Xxxxx Xxxxxxxx, Adv.
Xxxxxx Xxxxxxx, Adv.
To the Company:
RADVision LTD.
00 Xxxxx Xxxxxxxxxx Xxxxxx
Xxx Xxxx 00000, Israel
Attention: Xx. Xxxx Xxxx, Managing Director
cc: Legal Department
provided, however, that notice of change of address shall be effective only upon
actual receipt.
All notices sent shall be deemed to have been received (i) if by
registered mail, within seventy-two (72) hours of posting, (ii) if delivered by
hand, upon their delivery, and (iii) if sent via telecopier, upon transmission
and electronic confirmation of receipt or (if transmitted and received on a
non-business day) on the first business day following transmission and
electronic confirmation of receipt.
18.6 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy upon any breach or default under this Agreement shall impair any
such right, power or remedy of such holder nor shall it be construed to be a
waiver of any such breach or default, or in acquiescence therein, or of any
similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of any holder of any breach or default under
this Agreement, or any waiver on the part of any holder of any provisions or
conditions of this Agreement shall be effective only if made in writing and only
to the extent specifically set forth in such writing. All remedies, either under
this Agreement or by virtue of law or otherwise afforded to any holder, shall be
cumulative and not alternative.
30
18.7 WAIVER OF DEFAULT. No waiver with respect to any breach or default
in the performance of any obligation under the terms of this Agreement shall be
deemed to be a waiver with respect to any subsequent breach or default, whether
of similar or different nature.
18.8 RIGHTS; SEVERABILITY. In case any provision of the Agreement shall
be held by a court of competent jurisdiction to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby. The invalid
provision shall be excluded from this Agreement and the remainder of this
Agreement shall be interpreted as if such provision were so excluded and shall
be enforceable in accordance with its terms; provided, however, that in such
event this Agreement shall be interpreted so as to give effect, to the greatest
extent consistent with and permitted by applicable law, to the meaning and
intention of the excluded provision as determined by such court of competent
jurisdiction
18.9 CONFIDENTIAL INFORMATION. The Purchasers acknowledge that the
information received by them and such information which will be received
pursuant hereto shall be confidential and is intended for the Purchasers' use
only for the purpose of this Agreement, and the Purchasers will not use or allow
the use of such confidential information or reproduce, disclose or disseminate
such information to any other person (other than the Purchasers' employees or
agents having a need to know the contents of such information, and the
Purchasers' attorneys), except in connection with the exercise of rights under
this Agreement, unless the Company has made such information available to the
public generally or the Purchasers are required to disclose such information by
a governmental body or by judicial order, but only to the persons and the extent
so required, PROVIDED that, in connection with periodic reports to their
shareholders or partners, the Purchasers may make general statements, not
containing technical or other confidential information, regarding the nature and
progress of the Company's business; and PROVIDED, FURTHER, that the Purchasers
may provide summary information regarding the Company's financial information in
their reports to their respective shareholders or partners, but may not annex to
such reports the full financial information to be provided hereunder by the
Company; and PROVIDED, FURTHER, however, that in the event that a Purchaser is
required to annex financial information obtained from the Company to such
reports, such Purchaser shall only disclose such financial information to the
extent required to do so by applicable law.
18.10 TITLES AND SUBTITLES. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
18.11 REPRESENTATION. The Evergreen Group Purchasers and any Transferee
thereof under Section 11 are represented by Mr. Yiftach Atir. The Dovrat Xxxxx
Trustees Group
31
Purchasers and any Transferee thereof under Section 11 are represented by Xx.
Xxxxx Kariv. Notice sent to Mr. Atir or Xx. Xxxxx will be deemed as notice sent
to the Evergreen Group Purchasers or the Dovrat Xxxxx Trustees Group Purchasers,
respectively, and/or any of their respective Transferees. A resolution or
request given by Mr. Atir or Xx. Xxxxx to the Company will be deemed as if given
by the Evergreen Group Purchasers or the Dovrat Xxxxx Trustees Group Purchasers,
respectively, and any of their respective Transferees. The Company will have no
obligation to provide information or notice whatsoever except to Messrs. Atir
and Kariv.
18.12 AMENDMENT OF ARTICLES. Effective as of the Closing Date, the
Company will amend its Memorandum and Articles of Association to reflect this
Agreement.
18.13 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and enforceable against
the parties actually executing such counterpart, and all of which together shall
constitute one and the same instrument.
18.14 FURTHER ASSURANCES. Each of the parties hereto shall perform such
further acts and execute such further documents as may reasonably be necessary
to carry out and give full effect to the provisions of this Agreement and the
intentions of the parties as reflected thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
two (2) original copies, one to the Company and one to the Purchasers, as of the
date first above-mentioned.
RADVision LTD.
By: /s/ XXXX XXXX
--------------------------------
Xxxx Xxxx
Title: Chief Executive Officer
32
Evergreen Canada Israel Management Ltd. IJT Technologies Ltd.
By: /s/ EVERGREEN CANADA ISRAEL MANAGEMENT LTD. By: /s/ IJT TECHNOLOGIES LTD.
------------------------------------------- -------------------------
Periscope I Fund, L.P., a Delaware Limited Partnership
By: /s/ PERISCOPE I FUND, L.P., A DELAWARE LIMITED PARTNERSHIP
-------------------------------------------------------------
Periscope I Fund, L.P., an Israeli Limited Partnership
By: /s/ PERISCOPE I FUND, L.P., AN ISRAELI LIMITED PARTNERSHIP
-------------------------------------------------------------
33
/s/ DOVRAT XXXXX TRUST COMPANY LTD. (OBO)
---------------------------------------------------
Dovrat Xxxxx Trust Company Ltd.
(on behalf of Dovrat Xxxxx Founders Group,
Canada Israel Opportunity Fund L.P.,
The Canada Israel Opportunity Fund II and
Dovrat, Xxxxx & Co. Ltd.)
/s/ XXXXX XXXXXX
---------------------------------------------------
Xxxxx Xxxxxx
34
/s/ STEIMATZKY LTD.
--------------------------------
STEIMATZKY LTD.
/s/ X.X. XXXXXXXXX, TOWBIN, LLC
--------------------------------
X. X. Xxxxxxxxx, Towbin, LLC
/s/ X.X. XXXXXXXXX, TOWBIN PRIVATE EQUITY PARTNERS LP
------------------------------------------------------
X.X. Xxxxxxxxx, Towbin Private Equity Partners LP
/s/ X.X. XXXXXXXXX, TOWBIN PRIVATE EQUITY PARTNERS CV
------------------------------------------------------
X.X. Xxxxxxxxx, Towbin Private Equity Partners CV
/s/ X.X. XXXXXXXXX, TOWBIN PROFIT SHARING PLAN FBO XXXX XXXXXXXXX
------------------------------------------------------------------
X.X. Xxxxxxxxx, Towbin Profit Sharing Plan FBO Xxxx Xxxxxxxxx
00
LIST OF EXHIBITS
EXHIBIT CONTENTS OF EXHIBIT
A List of Purchasers
1.2 Capitalization Table showing Purchasers, Other Purchasers and
existing shareholders' shares, post-closing
2.2.1(a)(A) Amended Articles of Association (to be annexed prior to Closing)
2.2.1(c) Officer's Compliance Certificate
2.2.1(d) Opinion of Xxxxxx Xxxx
2.2.1(f) Waivers of Preemptive Rights
3.2(a) Memorandum of Association
3.5 Financial Statements
3.6 Schedule of Exceptions
3.14 Key Employees
3.14(a) Standard Employment Agreements
3.15(a) Trust Agreement
3.15(b) Option Plan
11.11 Assumption of Purchasers' Obligations by Purchasers' transferee
36
EXHIBIT A
THE PURCHASERS
------------------------------------------------------- -------------------------------------
NAME OF PURCHASER INVESTMENT AMOUNT
------------------------------------------------------- -------------------------------------
Evergreen Canada Israel Management Ltd. 39,827
------------------------------------------------------- -------------------------------------
IJT Technologies Ltd. 580,086
------------------------------------------------------- -------------------------------------
Periscope I Fund, L.P., a Delaware Limited Partnership 461,644
------------------------------------------------------- -------------------------------------
Periscope I Fund, L.P., an Israeli Limited Partnership 118,441
------------------------------------------------------- -------------------------------------
------------------------------------------------------- -------------------------------------
Dovrat, Xxxxx Trust Company Ltd.
(for Dovrat Xxxxx Founders Group) 299,913
------------------------------------------------------- -------------------------------------
Dovrat, Xxxxx Trust Company Ltd.
(for Canada Israel Opportunity Fund L.P.) 250,043
------------------------------------------------------- -------------------------------------
Dovrat, Xxxxx Trust Company Ltd.
(for The Canada Israel Opportunity Fund II) 149,957
------------------------------------------------------- -------------------------------------
Dovrat, Xxxxx Trust Company Ltd.
(for Dovrat, Xxxxx & Co. Ltd.) 100,086
------------------------------------------------------- -------------------------------------
Xxxxx Xxxxxx 250,000
------------------------------------------------------- -------------------------------------
X. X. Xxxxxxxxx, Towbin, LLC 500,150
------------------------------------------------------- -------------------------------------
X.X. Xxxxxxxxx, Towbin Private Equity Partners LP 411,950
------------------------------------------------------- -------------------------------------
X.X. Xxxxxxxxx, Towbin Private Equity Partners CV 87,850
------------------------------------------------------- -------------------------------------
X.X. Xxxxxxxxx, Towbin Profit Sharing Plan FBO Alex 10,150
Xxxxxxxxx
------------------------------------------------------- -------------------------------------
Steimatzky Ltd. 125,000
------------------------------------------------------- -------------------------------------
37
EXHIBIT 1.2
RADVISION CAPITALIZATION TABLE
March 1998 Investment
Shares pre-money (excl. 51,498
deferred)
Preferred shares 1,127
Participating shares (ecl. 48,863
trust)
Company value (pre) 18,000,000
Share price 350
Actual New Shares 14,015
Investment 574
Shares post-money (ex. def) 66,087
Shares incl. opt. 68,814
Options to employees as of 2,727
1/98
SHAREHOLDER NUMBER INVESTMENT NEW SHARES ADJUSTMENT TOTAL % PERCENTAGE
OF AMOUNT SHARES PURCHASED SHARES POST IN CO IN CO
SHARES COMMITTED (F-D)
(PRE)
Xxxxxx Xxxxxxx 6,930 0 0 0 0 6,930 10.49% 10.07%
Xxxxx Xxxxxxx 2,455 299,950 857 99 45 3,357 5.08% 4.88$
Xxxxxxx & Klil 2,454 299,950 857 98 44 3,355 5.08% 4.88%
Lomsha Ltd. 2,454 299,950 857 98 44 3,355 5.08% 4.88%
Xxxx Xxxx 300 0 0 0 0 300 0.45% 0.44%
Plonit Achzakot (Ami) 632 0 0 0 0 632 0.96% 0.92%
Nichsel Almonit (Ami) 2,178 0 0 0 0 2,178 3.30% 3.17%
Xxxxx Networks 6,027 0 0 246 110 6,137 9.29% 8.92%
Xxxxx Xxxxx 313 50,000 143 13 6 462 0.70% 0.67%
TLDVERMOGENSVERWALTUNG 313 88,200 252 13 6 571 0.86% 0.83%
Xxxx Xxxxxx 313 73,150 209 13 6 528 0.80% 0.77%
W.S.P. Capital 196 100,100 286 8 4 486 0.74% 0.71%
Rad Data Communications 3,458 100,100 286 141 63 3,807 5.76% 5.53%
Finovelec 2,686 0 0 0 0 2,686 4.06% 3.09%
Xxxx Xxxxxxx 12 0 0 0 0 12 0.02% 0.02%
Jean Marc Patouillaud 25 0 0 0 0 25 0.04% 0.04%
Maritime Trust Co. 2,548 146,300 418 71 32 2,998 4.54% 4.36%
RAD 2,897 0 0 118 53 2,950 4.46% 4.29%
Factory Systemes 1,238 0 0 0 0 1,238 1.87% 1.80%
Houston Partners 990 41,609 119 0 0 1,109 1.68% 1.61%
Clal Venture Capital 5,794 0 0 236 106 5,900 8.93% 8.57%
Xxxxxxx Xxx 198 0 0 0 0 198 0.30% 0.29%
Xxxxxxx Xxxxx 49 0 0 0 0 49 0.07% 0.07%
Intel 3,126 0 0 123 55 3,181 4.81% 4.62%
Employee Trust 2,635 0 0 0 0 2,635 3.99% 3.83%
Xxxxx Xxxxxx 250,000 714 0 0 714 1.08% 1.04%
Steimatzky Ltd. 125,000 357 0 0 357 0.54% 0.52%
Unterberg/Gilon 500,150 1,429 0 0 1,429 2.16% 2.08%
Unterberg Towbin Private 411,950 1,177 0 0 1,177 1.78% 1.71%
Equity LP
Unerberg Towbin Private 87,850 251 0 0 251 0.38% 0.36%
Equity CV
E.U. Profit Sharing Plan Alex 10,150 29 0 0 29 0.04% 0.04%
Xxxxxxxxx
Dovrat Xxxxx Trust Company 799,999 2,309 0 0 2,309 3.49% 3.36%
Ltd.
Evergreen Canada Israel 39,827 115 0 0 115 0.17% 0.17%
Management Ltd.
IJT technologies Ltd. 580,086 1,675 0 0 1,675 2.53% 2.43%
Periscope I Fund LP (Israeli) 118,441 342 0 0 342 0.52% 0.50%
Periscope I Fund LP (US) 461,645 1,333 0 0 1,333 2.02% 1.94%
(Assuming full investment 50,221 4,884,407 14,015 1,277 574 64,810 98.07% 94.18%
including
employees options)
Employee option plan 3.96%
Total Fully Diluted 98.14%
