Addendum to An Investment Agreement Dated 13.11.2005 Signed in ______, on the ___, of November, 2006 Between
Exhibit
10.4
Addendum
to An Investment Agreement Dated 13.11.2005
Signed in
______, on the ___, of November, 2006
Between
|
|
Pimi
▇▇▇▇▇▇ Holdings Ltd ("The
Company")
|
|
1.
|
|
|
|
|
|
|
|
||
|
1.
|
Pimi
▇▇▇▇▇▇ Holdings Ltd ("The Company")
|
|
|
|
|
|
| 2. |
▇▇▇▇▇▇
▇▇▇-▇▇▇▇▇▇
|
|
| 3. |
Omdan
Consulting and Instructing Ltd
|
|
|
Jointly and
severally: "The
Shareholders")
|
||
|
|
|
On the first Party |
|
And
Between
|
||
| Alon Carmel ("Alon") | ||
| On the second Party | ||
| And Between | ||
| JNS Capital LLC ("JNS") | ||
| On the third Party |
|
Whereas
|
On
the 13th
of November 2005, the parties have signed an Investment Agreement
(hereinafter: "The
Agreement"), under which Alon and JNS undertook to invest the sum
of US$ 900,002, against the issuance of 2 Management Shares and 120,000
Ordinary Shares (hereinafter: "The Investment");
and
|
|
Whereas
|
Until
the execution of this Addendum, Alon invested US$ 485,000 and
JNS invested US$ 300,000 in the Company and the Company has issued 24,000
Ordinary Shares to Alon and 24,000 Ordinary Shares to JNS on account of
the shares that they are entitled to pursuant to The Agreement and their
respective investments; and
|
|
Whereas
|
The
Company is in need for further investment in order to finance its
activities; and
|
|
Whereas
|
Alon
has agreed to invest an additional sum in the Company above the Investment
on certain conditions (hereinafter: "The Additional
Investment"); and
|
|
Whereas
|
In
order to induce Alon to further invest in The Company, the parties have
agreed to improve the conditions of The Investment and to modify The
Agreement, in accordance with the terms of this
Addendum;
|
|
|
Now
therefore the Parties have agreed as
follows:
|
|
1.
|
The
Preamble to this Addendum is one and integral part of
it.
|
|
2.
|
JNS
shall be released from any further obligation to invest in The Company.
Upon signing of this Addendum, The Company shall issue to JNS, pursuant to
the below said, an additional amount of shares reflecting its investment
of US$ 300,000 (i.e. 40,000 shares) in The Company as well as 1 management
share.
|
2
|
3.
|
Alon
and JNS shall be entitled, subject to the completion of The Investment by
Alon as set forth in The Agreement, to receive 120,000 Preferred Shares of
0.01 NIS each, of the Company instead of 120,000 Ordinary Shares of 0.01
NIS each. The shares already issued shall be converted. The shares will be
issued to Alon and JNS respectively to their investment in The Company.
The "Preferred
Shares"- shall have all rights attached to the Ordinary Shares and
in addition will entitle their holders to priority in the distribution of
the company assets and/or dividends in case of liquidation of
the Company or termination of its business, over any other shareholder of
the Company in a way that until the holder of a Preferred Share will
receive the full amount of his Investment in The Company as dividends or
as proceeds of the sale of the Company's assets no other shareholder will
receive any dividend in
liquidation.
|
|
4.
|
3. The
Company shall issue to, Adv. ▇▇▇▇ ▇▇▇▇▇▇, ▇ Decisive Share of 0.01 NIS.
The "Decisive
Share"- will entitle its holder to participate in The Company`s
Shareholders assemblies and/or The Board of Directors meetings upon the
request of any Director or Shareholder as the case may be, and in a case
of a dead-lock situation only, the Decisive Share holder`s vote shall be
the overbalancing vote. In case of a board decision only, the Decisive
Share holder shall use its discretion and vote as what he considers as the
benefit of The Company.
|
The
parties hereby acknowledge and agree that Adv. ▇▇▇▇ ▇▇▇▇▇▇ does not act as any
kind of trustee, and that he as well as Heskia-Hacmun Law Firm provided and/or
may provide in the future legal services and represent Alon and/or JNS and/or
eNitiatives – New Business Architects Ltd. and that they may continue to
represent them and/or have any other business relations with same without any
limitation or duty to disclose same to any party to this Addendum, including the
representation of Alon and/or JNS in case of a future dispute between any of the
parties to this Addendum. The parties further confirm that they have been
notified that Adv. ▇▇▇▇ ▇▇▇▇▇▇ and/or a related company have a shareholding
interest in eNitiatives – New Business Architects Ltd.
The
parties further and irrevocably agree that such relations shall not be
considered in any event as neither relations of a trustee with The Company and
The Shareholders nor as a conflict of interest and they explicitly and
irrevocably waive any argument and claim against Adv. Hacmun and/or
Heskia-Hacmun Law Firm and/or Alon and/or JNS and/or Enitiatives – New Business
Architects Ltd. and/or whom on their behalf in this matter or any matter
resulting thereof.
|
5.
|
The
Shareholders undertake to convene a special assembly for the purpose of
amending the Company's Article Of Association in accordance with the above
Paragraphs 2 and 3, and to convert the 48,000 Ordinary Shares that were
issued to Alon and JNS, to 48,000 Preferred Shares. The assembly
resolution shall be made pursuant to the requirements of part 6 of chapter
5 of The Companies Law [5759-1999].
|
|
6.
|
Alon
undertakes to transfer to the Company US$ 215,000, from which US$ 115,000
is the balance of The Investment and US$ 100,000 is an
"Additional Investment" :
|
|
a.
|
The
sum of US$ 15,000 will be transferred to The Company's bank account
immediately after this Addendum has been signed by the
Parties.
|
|
b.
|
The
sum of US$ 100,000 shall be transferred to The Company's bank account no
later than 01.01.2007.
|
|
c.
|
The
sum of US$ 100,000 shall be transferred to The Company's bank account no
later than 01.03.2007.
|
Notwithstanding
the above, the Company may waive to Alon the obligation to invest US$ 80,000 out
of the sum mentioned in clause (c) of this section, in case of improvement in
its financial situation or, in case there is another investor who is ready to
invest in the Company a sum of at least US$ 80,000 at a valuation of US$
3,000,000 (pre-money) and provided such investor will commit himself to invest
in the Company before 1.2. 2007.
|
7.
|
The
parties agree, that against each installment of US$ 20,000 by Alon, of the
Additional Investment, Alon shall be entitled to receive and the Company
shall issue to Alon such amount of Preferred Shares of 0.01 NIS each
reflecting 1% of The Company's issued share capital (not including
management shares) as shall be after the completion of The Investment and
the Additional Investment.
|
In
addition any other Shareholder has the right until the 1.2.2007 to notify the
Company on his willingness to participate in the Additional Investment in
accordance with his prorated his shareholding in the Company under the same
terms and conditions as described in this section above. In such a case the
investment obligation of Alon will be reduced accordingly provided that such
shareholder has transferred his share in the Additional Investment until the
1st
of March 2007.
Alon and
JNS and any other Shareholder who have notified and has made the investment as
described above , shall each respectively be entitled to full protection against
dilution due to the issuance of the Preferred Shares for the Additional
Investment so that The Company shall issue a corresponding amount of Preferred
Shares of 0.01 NIS to Alon and JNS or to the other Shareholder respectively to
their holdings of The Company's shares as should be after completion of The
Investment.
3
|
8.
|
The
Company shall deposit all materials concerning its product intellectual
property including but not limited to the product formula, ingredients,
composing, manufacturing process etc, with Heskia-Hacmun Law Firm who
shall be allowed to release such materials to Alon and JNS in case that
The Company shall enter liquidation or terminate its business. The above
shall also apply to any future changes, updates or modifications of the
said materials.
|
|
9.
|
Omdan
Consulting and Instructing Ltd. through ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, declares that
until a new investor will invest in the Company, Sadot & Co`s monthly
fees in the total amount of US$ 2,000, will be paid as
follows:
|
|
a.
|
The
Company shall pay to Sadot & Co. monthly payment of
US$ 1,000.
|
|
b.
|
The
additional monthly payment of US$ 1,000 will be delayed and shall be
registered as a shareholder loan by Omdan Consulting. The Company shall
pay the balance of such shareholder loan to Sadot & Co. in accordance
with its financial ability after a new investment of not less then US$
500,000 at a evaluation of not less then US$ 3,000,000 (pre-money) will be
made by a new investor or in case of another event causing The Company to
receive an income of more then US$
500,000.
|
|
c.
|
It
is agreed that in case that no new investor will invest in the Company or
if the Company shall reach liquidation or terminate its business, Sadot
& Co. will waive their right to such additional monthly
payment.
|
|
10.
|
Mr.
Nimrod ▇▇▇-▇▇▇▇▇▇ agrees, that until a new investor will invest in the
Company, his monthly net salary from The Company shall be
reduced by 3,000 NIS, which sum will be considered as a loan by Mr.
▇▇▇-▇▇▇▇▇▇ to The Company. In addition, Mr. ▇▇▇-▇▇▇▇▇▇ shall present
receipts documenting all the out of pocket expenses Mr. ▇▇▇-▇▇▇▇▇▇ made
for and on behalf of The Company (up to an amount of approx. NIS 50,000)
which shall be considered as a shareholder loan to The Company. The
Company undertakes to pay the shareholders loan to Mr. ▇▇▇-▇▇▇▇▇▇ in
accordance with its financial ability after a new investment of not less
then US$ 500,000 at a evaluation of not less then US$ 3,000,000
(pre-money) will be made by a new investor or in case of another event
causing The Company to receive an income of more then
US$500,000.
|
|
11.
|
All
current investments and/or loans made by Mr. ▇▇▇-▇▇▇▇▇▇ and/or any company
on his behalf as well as Omdan Consulting and Instructing Ltd., ("Omdan") shall be
registered in the books of The Company as a shareholder loan which shall
be paid back in accordance with the financial ability of The Company as
shall be determined by the board of directors of The Company provided that
such board decision has been supported by either Alon or the
representative of JNS, except for Omdan who shall have the right to notify
the Company until the 1.2.2007 on his willingness to convert its
shareholder loans at the amount of 70,000 NIS into Preferred Shares of the
Company in accordance with the terms of section 7
above.
|
|
12.
|
Immediately
after signature of this Addendum eNitiatives loan to the Company for
services in the amount of US$ 14,000 will be converted
into Preferred Shares at the same valuation of US$20000 for
each 1% of the Company capital. If eNitative will execute his right under
section 7 above the Company will convert its existing Regular Shares into
Preferred Shares.
|
|
13.
|
All
other provisions of The Agreement which were not modified under this
Addendum will stay valid and in full
force.
|
|
14.
|
This
Addendum shall take effect as of the moment when signed by both Parties.
However, in case that by March 31, 2007: (i) The Company shall meet its
targets according to the Business Plan (Appendix "A" of The
Agreement and under the applicable terms of the Agreement); or (ii) The
Company shall raise a new investment of not less then US$ 500,000 at an
evaluation exceeding US$ 3,000,000 (pre-money); or (iii) in case of
another event causing The Company to receive an income of more then US$
500,000, this Addendum will be cancelled, and all changes or modification
made in accordance with this Addendum, shall be null and void save for the
Shares acquired by Alon and JNS or any other shareholders due to the
execution of any part of the Additional Investment or under sections 7 and
11 of this Addendum above. In such case all Preferred Shares so acquired
shall be converted into Regular
Shares
|
|
15.
|
The
Company shall promptly and timely make all mandatory payments to the
authorities and shall not obtain any credits and/or loans, whether from
banks or other lenders without the explicit decision of the board of
directors of The Company and provided that Alon or the director on behalf
of JNS have supported such board
decision.
|
|
16.
|
The
Company shall fully reimburse Alon's legal expenses in connection with
this Addendum.
|
|
17.
|
The
Agreement provisions shall be considered and interpreted in accordance
with the provisions of this
Addendum.
|
|
18.
|
In
case of any discrepancies between provisions of this Addendum and other
provisions of The Agreement, the provisions of this Addendum shall
prevail.
|
In
witness Whereof the Parties have signed this Addendum on the
_______
Pimi
▇▇▇▇▇▇ Holdings, Ltd
| By: Eitan Shmeuli______________________ | ||||
| Title: Director ________________________ | ||||
| Omdan Education and Instructing Ltd | Nimrod ▇▇▇ ▇▇▇▇▇▇ | |||
| By: Eitan Shmeuli | __________________ | |||
| JNS Capital LLC | Alon Carmel | |||
| By: ___________________ | __________________ | |||
| Name: ▇▇▇ ▇▇▇▇▇▇▇ | ||||
| Title: Managing Member |
| Agreed to by: | ||||
|
eNitiatives
– New Business Architects Ltd.
|
||||
| By: __________________________ | ||||
| Name: ▇▇▇▇▇▇ ▇▇▇▇▇ | ||||
|
Title:
General Manager
|
||||
4