JOINT VENTURE AGREEMENT BY AND AMONG ORBOTECH LTD. AND VALOR COMPUTERIZED SYSTEMS LTD.
BY
AND
AMONG
ORBOTECH
LTD.
AND
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XXXXX
XXXXX - XXXXX XXXXX
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X.
XXXXXXXXX & CO.
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LAW
OFFICES
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ADVOCATES
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00
XXXX XXXXXX XXXX
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00
ROTHSCHILD BLVD.
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RAMAT-GAN
52506
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TEL-AVIV
65784
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seven
hundred thirty-sixth
CONSOLIDATED
AMENDMENT TO THE JOINT VENTURE AGREEMENT
This
Consolidated Amendment to the Joint Venture Agreement (this “Amendment”),
made
and
entered into as of the ___ day of September, 1999
BY
AND BETWEEN
ORBOTECH
LTD. with
an
address at New Industrial Zone, Yavne, Israel
(hereinafter:
“Orbotech”)
of
the
one part
AND
VALOR
COMPUTERIZED SYSTEMS LTD. with
an
address at New Industrial
Zone,
Yavne, Israel
(hereinafter:
“Valor”)
of
the
second part
AND
FRONTLINE
P.C.B. SOLUTIONS LIMITED PARTNERSHIP with
an
address at Xxx
Xxxxxxxxxx Xxxx, Xxxxx, Xxxxxx
(hereinafter:
“Frontline”)
of
the
third part
AND
FRONTLINE
P.C.B. SOLUTIONS (1998) LTD. with
an
address at Xxx Xxxxxxxxxx Xxxx, Xxxxx, Xxxxxx
(hereinafter:
“Frontline
Ltd.”)
of
the
fourth part
(collectively
the “Parties”,
each
a
“Party”)
| WHEREAS: |
Orbotech
and Valor entered into a Joint Venture Agreement as of August 10,
1998
which Frontline and Frontline Ltd. subsequently became parties to
and
which the Parties subsequently amended and/or agreed to amend (such
Joint
Venture Agreement as amended, the “JV
Agreement”); and
|
| WHEREAS: |
the
Parties desire to consolidate the various amendments made to the
JV
Agreement to date and further amend the terms thereof, as hereinafter
set
forth.
|
NOW,
THEREFORE, in
consideration of the mutual promises and covenants set forth herein the parties
hereto agree as follows:
-2-
| 1. |
Effective
as of the date hereof, the binding version of the JV Agreement,
incorporating all amendments thereto made or agreed to by the parties
to
date, shall be the Consolidated Version attached hereto as Exhibit
A.
|
IN
WITNESS WHEREOF, the
parties hereto have executed this Consolidated Amendment as of the day and
year
first above written.
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/s/
Xxxxx Xxxxx
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/s/
X. Xxxxxxx [COMPANY SEAL]
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ORBOTECH
LTD.
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By:
_____________________________
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By: X.
Xxxxxxx
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Title:____________________________
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Title:
C.E.O.
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Date:____________________________
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Date:
8/10/99
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FRONTLINE
P.C.B SOLUTIONS LIMITED PARTNERSHIP
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FRONTLINE
P.C.B. SOLUTIONS (1998) LTD.
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By:
/s/ X. Xxxxx
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By: /s/
X. Xxxxx
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Frontline
P.C.B. Solutions (1998) Ltd., general partner
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By:
_____________________________
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Title:____________________________
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Title:
_________________
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Date:____________________________
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Date:
_________________
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CONSOLIDATED
VERSION
BY
AND
AMONG
ORBOTECH
LTD.
AND
CONSOLIDATED
VERSION
TABLE
OF CONTENTS
| PAGE NO. | ||
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SECTION
1 - Definitions
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7
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SECTION
2 - General
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12
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2.1.
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Purpose
of the Joint Venture.
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12
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2.2.
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JV
Entities.
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12
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SECTION
3 - Formation, Ownership and Capitalization of the JV
Entities
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12
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3.1.
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Formation
of JV Entities.
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12
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3.2.
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Initial
Shareholdings in the JV Company.
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12
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3.3.
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Initial
Interests in the JVLP.
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13
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3.4.
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Equity
Investments in JV Entities.
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13
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3.5.
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Additional
Working Capital.
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13
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3.6.
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Distributions.
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14
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SECTION
4 - JV Assets
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15
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4.1.
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Availability
of Assets.
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15
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4.2.
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Cooperation.
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16
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SECTION
5 - Transfer of Employees, Equipment and Inventory, Purchase Orders
and
Warranties
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16
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5.1.
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Designated
Employees.
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16
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5.2.
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Transfer
of Designated Employees.
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16
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5.3.
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Refusal
of Designated Employee.
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17
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5.4.
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Termination
of Prior Employment.
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17
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5.5.
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Satisfaction
and Waiver of all Prior Undertakings.
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17
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5.6.
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Release
by Founding Shareholder.
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17
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5.7.
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Indemnification
by the Founding Shareholder.
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17
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5.8.
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Indemnification
by the JV.
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17
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5.9.
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Transfer
of Equipment and Other Inventory.
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18
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5.10.
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Purchase
Orders and Warranty Commitments.
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18
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5.11.
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Transferred
Warranties - Local Service Provider and
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Transfer
of Purchase Price.
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18
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5.12.
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Bundled
Purchase Orders.
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18
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5.13.
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“Effective”
Transfer or Assumption.
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18
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SECTION
6 - JV Development Principles
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19
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6.1.
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General
Principles.
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19
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6.2.
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Support
for Orbotech’s Products.
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20
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6.3.
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Support
for Valor’s Products.
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20
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6.4.
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Interfaces
for Other Products.
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21
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-2-
CONSOLIDATED
VERSION
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PAGE
NO.
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6.5.
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Additional
Developments Benefiting Orbotech or Valor.
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21
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6.6.
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JV
Development Products.
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21
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6.7.
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Termination.
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21
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SECTION
7 - Sales and Customer Support
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21
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7.1.
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Sales
and Customer Support Agents.
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21
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7.2.
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Conditions
to Maintain Sales Rights.
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22
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7.3.
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Interfaces
for Other Products.
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22
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7.4.
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JV/Orbotech
Interface Products.
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23
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7.5.
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Valor
Subsidiaries.
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23
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7.6.
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Assignment
of Sales, Agency and Customer Agreements.
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23
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7.7.
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Service
Continuity.
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23
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7.8.
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“Effective”
Assignment.
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23
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7.9.
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OEM
Arrangements.
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24
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7.10.
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Inconsistent
Arrangements.
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24
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7.11.
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Agency
Agreements Warranty.
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24
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7.12.
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Marketing
Subsidiaries.
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25
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SECTION
8 - Representations, Warranties and Undertakings of the
Parties
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24
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8.1.
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Due
Incorporation.
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25
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8.2.
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Due
Authorization.
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25
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8.3.
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Ownership
of the JV Assets.
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25
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8.4.
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Liabilities.
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25
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8.5.
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Actions.
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26
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8.6.
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IP
Rights.
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26
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8.7.
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Material
Assets.
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27
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8.8.
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1997
Revenue.
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27
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8.9.
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No
Misleading Statement.
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27
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8.10.
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Founding
Shareholder Cooperation.
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27
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8.11.
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No
Assumption of Liability.
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27
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SECTION
9 - Governance of the JV Entities
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28
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9.1.
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General
Principles.
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28
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9.2.
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Board
of Directors; Executive Committee.
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28
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9.3.
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Budget.
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30
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9.4.
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General
Managers.
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30
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9.5.
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Management
and Officers.
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30
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9.6.
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Major
Decisions — Shareholders.
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31
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9.7.
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Major
Decisions — Board of Directors.
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32
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9.8.
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Reports.
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33
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SECTION
10 - Intellectual Property
|
35
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|
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10.1.
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Intellectual
Property Owned/Retained by Orbotech
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|
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and
Valor.
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35
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-3-
CONSOLIDATED
VERSION
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PAGE
NO.
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10.2.
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Intellectual
Property Developed by the JV.
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35
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10.3.
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Enforcement
of Rights.
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35
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10.4.
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Further
Agreements.
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36
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10.5.
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Chief
Scientist Funding.
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36
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SECTION
11 - Non-Competition, Corporate Opportunities
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36
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11.1.
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Non-Competition
of Founding Shareholders with the
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|
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Joint
Venture.
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36
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11.2.
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Non-Competition
of the JV Entities with Founding
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Shareholders.
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37
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11.3.
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Deleted
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37
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11.4.
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Purchase
of
EIT and other CAM Opportunities by the
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Parties.
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37
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11.5.
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“directly
or indirectly”.
|
38
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11.6.
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Corporate
Opportunities.
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39
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11.7.
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Remedies.
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39
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11.8.
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Employees.
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39
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11.9.
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Termination
upon Liquidation
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39
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SECTION
12 - Dispute Resolution
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40
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12.1.
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Dispute.
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40
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12.2.
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Appointment
of Arbitrator.
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40
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12.3.
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Court
Jurisdiction.
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40
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SECTION
13 - Term
|
41
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13.1.
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Term.
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41
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13.2.
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Breach.
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41
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13.3.
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Survival.
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41
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SECTION
14 - Closing
|
41
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14.1.
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Conditions
Precedent.
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41
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14.2.
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Each
Founding Shareholder’s Conditions to the Closing.
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42
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14.3.
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Closing.
|
42
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14.4.
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Transactions
at Closing.
|
42
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14.5.
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Outside
Closing Date.
|
43
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SECTION
15 - Post Closing Covenants
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43
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15.1.
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Transition.
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43
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15.2.
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Access
to
Information.
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44
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SECTION
16 - Transfer of Shares; Exit Arrangements
|
44
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16.1.
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Transfer
of Shares.
|
44
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16.2.
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Right
of First Negotiation; Open Negotiation Period.
|
45
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16.3.
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Right
of First Refusal; Right to Tag Along.
|
46
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16.4.
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Right
of Approval.
|
47
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-4-
CONSOLIDATED
VERSION
|
PAGE
NO.
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16.5.
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Certain
Permitted Transfers.
|
48
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16.6.
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Change
in Control.
|
50
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16.7.
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Sell-Buy
Procedure.
|
51
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16.8.
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Closing;
Directors.
|
52
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16.9.
|
Selling
Shareholder’s Obligations.
|
53
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||
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SECTION
17 - Indemnification
|
53
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17.1.
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Indemnification
by Orbotech.
|
53
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17.2.
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Indemnification
by Valor.
|
54
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SECTION
18 - Confidentiality
|
54
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18.1.
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Publicity.
|
54
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18.2.
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Confidentiality.
|
54
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||
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SECTION
19 - Waiver of Claims
|
55
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19.1.
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Waiver
by Founding Shareholders.
|
55
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19.2.
|
No
Claims Assigned.
|
55
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19.3.
|
Claims
Affiliates Defined.
|
55
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SECTION
20 - General Provisions
|
56
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20.1.
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Relationship
of the Parties.
|
56
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20.2.
|
Assignment.
|
56
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20.3.
|
Taxes.
|
56
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20.4.
|
Force
Majeure.
|
56
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20.5.
|
Notice.
|
56
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20.6.
|
Entire
Agreement and Amendment.
|
56
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20.7.
|
Severability.
|
56
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20.8.
|
Governing
Law.
|
57
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20.9.
|
Non-waiver
of
Rights.
|
57
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20.10.
|
Headings.
|
57
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20.11.
|
Counterparts.
|
57
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20.12.
|
Further
Assurances.
|
57
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20.13.
|
Expenses.
|
57
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|
20.14.
|
No
Third Party Beneficiary.
|
57
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APPENDICES
-5-
CONSOLIDATED
VERSION
This
Joint Venture Agreement (this “Agreement”),
made
and
entered into as of the 10th day of August, 1998
BY
AND BETWEEN
ORBOTECH
LTD.
with an
address at New Industrial Zone, Yavne, Israel
(hereinafter:
“Orbotech”)
of
the
one part
AND
VALOR
COMPUTERIZED SYSTEMS LTD. with
an
address at New Industrial
Zone,
Yavne, Israel
(hereinafter:
“Valor”)
of
the
other part
(collectively
the “Parties”,
each a
“Party”)
|
WHEREAS:
|
Orbotech
is engaged, inter alia, in the development, manufacturing, marketing,
sale
and after sales support of automated optical inspection (“AOI”)
systems, computer aided manufacturing (“CAM”)
and archiving systems, plotters and direct imaging systems for use
in the
manufacture of printed circuit boards (“PCBs”)
and of AOI systems for use in the manufacture of multi-chip modules
and
flat panel displays and in the processes involved in the mounting
of PCBs
with electronic components; and
|
| WHEREAS: |
Valor
is engaged, inter alia, in the development, manufacturing, marketing,
sale
and after sales support of data management and archiving
systems for use in the design of PCBs, design for manufacturing,
simulation and analysis tools for use in PCB layout, CAM and archiving
systems for use in the manufacture of PCBs and CAM systems for use
in the
mounting of PCBs with electronic components;
and
|
|
WHEREAS:
|
The
Parties derive revenue from their CAM and archiving activities from
sales
and after sales support; and
|
|
WHEREAS:
|
Each
Party’s CAM and archiving systems for use in the manufacture of PCBs are
based on intellectual property which is subject to claims of ownership
by
the other Party, which claims have been brought before courts in
Israel
and the United States and the Parties have resolved to acknowledge
that
their respective CAM and archiving systems for use in the manufacture
of
PCBs
|
-6-
CONSOLIDATED
VERSION
are
based on intellectual property which is jointly
owned and to waive and dismiss their respective claims with respect thereto,
all
subject and pursuant to the terms of this Agreement; and
|
WHEREAS:
|
Orbotech
and Valor desire to enter into a joint venture (the “Joint
Venture”)
to consolidate their efforts in the development, manufacturing, marketing,
sale and after sales support of CAM and archiving systems for use
in the
manufacture of PCBs so as to become a world leader in such field
while
retaining all their respective rights relating to all other uses
and all
other developments and products in which each of them is or may become
engaged, all upon the terms and conditions set forth
below.
|
NOW,
THEREFORE, in
consideration of the mutual promises and covenants set forth herein the parties
hereto agree as follows:
SECTION
1
Definitions
The
following terms in this Agreement shall have the meaning ascribed to them as
follows:
1.1. “Action”
-
as
set forth in Section 8.5 hereof.
1.2. “Additional
Working Capital”
-
as
set forth in Section 3.5 hereof.
1.3. “Affiliates”
-
with
respect to any Party, an entity controlled by, controlling, or under common
control with such Party. For purposes hereof, “control” of an entity shall mean
the ownership of: (1) more than 50% of the equity securities (or similar
interests) of the entity; and (2) more than 50% of the right to participate
in
the entity’s profits and assets upon liquidation or winding-up; and (3) the
right to appoint more than 50% of the members of the board of directors (or
similar governing body) of such entity.
1.4. “AOI”
-
automated optical inspection.
1.5. “Appraiser”
- as set forth in Section 16.5.3.2 hereof.
1.6. “Arbitrator”
-
as
set forth in Section 12.2 hereof.
1.7. “Authority”
-
as
set forth in Section 8.5 hereof.
1.8. “Beneficial
Interests”
-
as
set forth in Section 16.1.1 hereof.
1.9. “Board”
-
as
set forth in Section 9.2.1 hereof.
-7-
CONSOLIDATED
VERSION
1.10. “Budget”
-
as
set forth in Section 9.3 hereof.
1.11. “Buy
Offer”
-
as
set forth in Section 16.7.3 hereof.
1.12. “CAM”
-
computer aided manufacturing.
1.13. “Change
in Control”
- as set forth in Section 16.6.3 hereof.
1.14. “Changed
Shareholder”
- as set forth in Section 16.6.1 hereof.
1.15. “Claims
Affiliates”
- as set forth in Section 19.3 hereof.
1.16. “Closing”
-
the
closing of the transactions hereunder.
1.17. “Closing
Date”
-
the
seventh (7th) business day following the day in which both Founding Shareholders
have confirmed in writing that all Conditions Precedent pursuant to Section
14
hereof have either been satisfied or waived.
1.18. “CMs”
-
contract manufacturer.
1.19. “Confidential
Information”
-
as
set forth in Section 18.2 hereof.
1.20. “Conditions
Precedent”
-
as
set forth in Section 14.1 hereof.
1.21. “Controlling
Group
of Valor”
-
as
set forth in Appendix 16.6.3
1.22. “Designated
Employees”
-
as
set forth in Section 5.1 hereof.
1.23.
Deleted
1.24. “directly
or indirectly”
-
as
set forth in Section 11.5 hereof for purposes of Section 11.
1.25. “Directors”
-
as
set forth in Section 9.2.1 hereof.
1.26. “Dispute
Notice”
-
as
set forth in Section 12.1 hereof.
1.27. “EIT”
-
Electronic Imaging Technologies Co. Ltd.
1.28. “Executive
Committee”
-
as
set forth in Section 9.2.3 hereof.
1.29. “Execution
Date”
-
the
date set forth above in the preamble to this Agreement.
1.30. “Exercise
Notice”
-
as
set forth in Section 16.3.2 hereof.
1.31. “First
Negotiation Notice”
-
as
set forth in Section 16.2.1 hereof.
-8-
CONSOLIDATED
VERSION
1.32. “First
Negotiation Period”
-
as
set forth in Section 16.2.2 hereof.
1.33. “Founding
Shareholder(s)”
-
as
set forth in Section 2.2 hereof.
1.34. “Founding
Shareholder Conditions”
-
as
set forth in Section 14.2 hereof.
1.35. “Founding
Shareholder Holding Period”
-
as
set forth in Section 11.1 hereof.
1.36. “Founding
Shareholder NC Period”
-
as
set forth in Section 11.1 hereof.
1.37. “Independent
Director”
-
as
set forth in Section 9.2.6 hereof.
1.38. “IP
Developments”
-
as
set forth in Section 10.2 hereof.
1.39. “IP
Rights”
-
as
set forth in Section 10.1 hereof.
1.40. “Joint
Venture”
-
as
set forth in the Preamble hereof.
1.41. “JV
Activities”
-
as
set forth in Section 2.1 hereof.
1.42. “JV
Assets”
-
as
set forth in Section 4.1 hereof.
1.43. “JV
Company”
-
as
set forth in Section 2.2 hereof.
1.44. “JV
Development Products”
-
as
set forth in Section 2.1 hereof.
1.45. “JV
Entities/JV/JV Entity”
-
as
set forth in Section 2.2 hereof.
1.46. “JV
Existing Products”
-
as
set forth in Section 2.1 hereof.
1.47. “JV
Future Products”
-
as
set forth in Section 2.1 hereof.
1.48. “JVLP”
-
as
set forth in Section 2.2 hereof.
1.49. “JV/Orbotech
Formats and Interfaces”
-
as
set forth in Section 6.2.1 hereof.
1.50. “JV
Products”
-
as
set forth in Section 2.1 hereof.
1.51. “JV/Valor
Formats and Interfaces”
-
as
set forth in Section 6.3.1. hereof.
1.52. “Minimum
Distribution Amount”
-
as
set forth in Section 3.6.3.
1.53.
Deleted
1.54. “No
Sale Period”
-
as
set forth in Section 16.1.1 hereof.
-9-
CONSOLIDATED
VERSION
1.55. “OCS”
-
as
set forth in Section 10.5 hereof.
1.56. “OEM”
-
original equipment manufacturer.
1.57. “Orbotech
Indemnified Persons”
-
as
set forth in Section 17.1 hereof.
1.58. “Other
Founding Shareholder”
-
as
set forth in Section 16.2.1 hereof.
1.59. “Other
Shareholder”
-
as
set forth in Section 16.6.1 hereof.
1.60. “Open
Negotiation Period”
-
as
set forth in Section 16.2.3 hereof.
1.61. “Party/Parties”
-
as
set forth in the Preamble and Section 3.1 hereof.
1.62. “PCB”
-
printed circuit board.
1.63. “PCB
Assembly”
-
the
mounting of bare PCBs with electronic components and all processes involved
therewith. For the removal of doubt, “PCB Assembly” does not include the
assembly and/or packaging of bare wafers in the “back-end” of the semiconductor
industry.
1.64. “PCB
Assembly Entities”
-
any
business, entity or division within the electronics and/or manufacturing
industry, which is engaged in PCB Assembly activities and/or services,
including, but not be limited to, PCB Assembly departments in electronic
original equipment manufacturers (“OEMs”),
PCB
Assembly operations or departments of independent contract manufacturers
(“CMs”),
PCB
Assembly departments or subsidiaries of PCB Fabrication Entities and service
bureaus engaged in PCB Assembly activities and/or services such as solder paste
stencil design and fabrication. However, PCB Fabrication Entities or PCB Design
Entities owned by OEMs and/or PCB Assembly Entities shall not be considered
PCB
Assembly Entities.
1.65. “PCB
Design”
-
the
physical layout design of PCBs, commencing with the reception of PCB schematic
data and ending with the generation of layout data for PCB Fabrication and
PCB
Assembly.
1.66. “PCB
Design Entities”
-
any
business, entity or division within the electronics and/or manufacturing
industry which is engaged in PCB Design activities and/or services, including,
but not limited to, PCB Design departments in electronic OEMs, independent
PCB
layout service bureaus, PCB Design departments of CMs and PCB Design departments
or subsidiaries of PCB Fabrication Entities. However, PCB Fabrication Entities
or PCB Assembly Entities owned by OEMs and/or PCB Design
-10-
CONSOLIDATED
VERSION
Entities
shall not be considered PCB Design
Entities.
1.67. “PCB
Fabrication”
-
all
manufacturing processes of a bare PCB, commencing with preparation and
optimization of the bare board production data (also known as pre-production
and/or planning and/or engineering and/or CAM processes) and ending with
delivery of the finished and tested bare PCB.
1.68. “PCB
Fabrication Entities”
-
any
business, entity or division within the electronics and/or manufacturing
industry which is engaged in PCB Fabrication activities and/or services,
including but not limited to PCB Fabrication departments in electronic OEMs,
PCB
Fabrication departments of CMs, PCB Fabrication departments or subsidiaries
of
PCB Design and/or PCB Assembly Entities or of entities which also have PCB
Design and/or PCB Assembly departments or subsidiaries. In addition, any
business, entity or division engaged in the provision of services to PCB
Fabrication Entities, such as, film plotting service bureaus, testing or AOI
service bureaus, drill and rout service bureaus, shall be considered a PCB
Fabrication Entity. However, PCB Assembly Entities or PCB Design Entities owned
by OEMs and/or PCB Fabrication Entities shall not be considered PCB Fabrication
Entities.
1.69. “Permitted
Transferee”
-
as
set forth in Section 16.5.1 hereof.
1.70. “R&D”
-
research and development.
1.71. “Right
of Approval”
-
as
set forth in Section 16.4.1 hereof.
1.72. “Right
of First Refusal”
-
as
set forth in Section 16.3 hereof.
1.73. “Rights
Notice”
-
as
set forth in Section 16.3.1 hereof.
1.74. “Right
to Tag Along”
-
as
set forth in Section 16.3 hereof.
1.75. “Sale”
-
as
set forth in Section 16.9.1 hereof.
1.76. “Secondment
Agreement”
-
as
set forth in Section 5.2 hereof.
1.77. “Sell-Buy
Notice”
-
as
set forth in Section 16.6.2 hereof.
1.78. “Selling
Shareholder”
-
as
set forth in Section 16.8 hereof.
1.79. “Terms
Agreement”
-
as
set forth in Section 16.3 hereof.
1.80. “Transferee”
-
as
set forth in Section 16.3 hereof.
1.81. “Transferor”
-
as
set forth in Section 16.2.1 hereof.
-11-
CONSOLIDATED
VERSION
1.82. “Valor
Indemnified Persons”
-
as
set forth in Section 17.2 hereof.
1.83. “Valuation”
-
as
set forth in Section 16.5.3.2 hereof.
SECTION
2
General
|
2.1.
|
Purpose
of the Joint Venture.
Subject to the provisions of this Agreement, the purpose of the Joint
Venture shall be to develop, manufacture, assemble and integrate,
market,
distribute, service and support and provide related services (e.g.,
customization, consulting and audits) with respect to, (a) all of
the
existing (including earlier generation) CAM and archiving products
of the
Parties listed in Appendix
2.1(a)
for use in PCB Fabrication (the “JV
Existing Products”);
(b) all of the CAM and archiving products of the Parties under development
(including new releases and updates and additional, next generation
and
more advanced products) which are listed in Appendix
2.1(b)
for use in PCB Fabrication (“JV
Development Products”);
and (c) any
and all other CAM and archiving systems which may be developed in
the
future for use in PCB Fabrication (“JV
Future Products”)
(collectively, the “JV
Products”)
and to become a world leader in activities related to CAM and archiving
systems for use by PCB Fabrication Entities in PCB Fabrication, all
pursuant to the terms of this Agreement (collectively, the “JV
Activities”);
and (d) to engage in such other activities as may be agreed subject
to
Section 11.2 hereunder.
|
|
2.2.
|
JV
Entities.
The JV and the JV Activities shall be undertaken by a limited partnership
(the “JVLP”)
and a private limited company (the “JV
Company”),
each to be registered and incorporated in Israel at or prior to the
Closing, as more fully described in Section 3 hereof. (The parties
are
sometimes referred to collectively as the “Founding
Shareholders”,
and each as a “Founding
Shareholder”.
The JV Company and the JVLP are referred to herein collectively as
the
“JV
Entities”
or the “JV”,
and each as a “JV
Entity”.)
|
SECTION
3
Formation,
Ownership and Capitalization of the JV Entities
|
3.1.
|
Formation
of JV Entities.
At or prior to the Closing, the Parties shall form the JV Company
and the
JVLP by executing and registering the formation documents set forth
in
Section 14.4 hereof. Upon such formation, each of the JV Entities
shall
become a party to this Agreement by executing the JV Entities’ signature
page annexed hereto, (each of the JV Entities are hereinafter sometimes
referred to as a “Party”;
and, collectively with the Founding Shareholders, the “Parties”).
|
-12-
CONSOLIDATED
VERSION
|
3.2.
|
Initial
Shareholdings in the JV Company.
The initial shareholdings of the JV Company shall be as
follows:
|
|
SHAREHOLDER
|
CLASS
|
NUMBER
OF
SHARES
|
PERCENTAGE
|
|
Orbotech
|
Ordinary
|
50
|
50%
|
|
Valor
|
Ordinary
|
50
|
50%
|
|
3.3.
|
Initial
Interests in the JVLP.
The initial partnership interests in the JVLP shall be
follows:
|
|
ENTITY
|
STATUS
|
PARTNERSHIP
INTEREST
|
|
JV
Company
|
General
partner
|
1.0%
|
|
Orbotech
|
Limited
partner
|
49.5%
|
|
Valor
|
Limited
partner
|
49.5%
|
|
3.4.
|
Equity
Investments in JV Entities.
At the Closing, the Founding Shareholders shall purchase shares and
partnership interests in the JV Entities and the JV Company will
purchase
a partnership interest in the JVLP for such nominal consideration
as will
be agreed between the Founding Shareholders. In the event additional
equity investments are required in the future in order to comply
with the
requirements of the Israeli Investment Center with respect to Approved
Enterprises, such investments shall be made pro-rata by the Founding
Shareholders.
|
|
3.5.
|
Additional
Working Capital.
To the extent that the JV Entities shall require working capital
in excess
of that provided from the operations of the JV (“Additional
Working Capital”),
the JV shall acquire such Additional Working Capital by means of
a bank
loan or a line of credit. If required, such bank loan or line of
credit
shall be secured, pro-rata, against the Founding Shareholders’ holdings in
the JV. In the event that it shall not be reasonably commercially
possible
for the JV to acquire a bank loan or line of credit as aforesaid,
Orbotech
shall provide an acceptable guarantee of all of such bank loan or
line of
credit provided that:
|
|
3.5.1.
|
Orbotech
shall be granted a security interest in Valor’s interests in the JV
superior to and with priority over any other security interest; provided
however, that Orbotech’s security interest shall not have priority over a
security interest granted to a financial institution which previously
provided any of Valor’s share of Additional Working Capital, or as shall
otherwise be agreed upon by Orbotech and
Valor;
|
|
3.5.2.
|
Orbotech’s
obligations hereunder with respect to Additional Working Capital
shall in
no event exceed $3 Million in the aggregate and with respect to Valor’s
pro-rata interest in the Additional Working Capital shall in no event
exceed $1.5 Million in the
|
-13-
CONSOLIDATED
VERSION
aggregate;
and
|
3.5.3.
|
Valor
shall repay any such loan and/or release Orbotech from any such guarantee
with respect to Valor’s pro-rata interest in the Additional Working
Capital on or before the earlier to occur of: (a) the third (3rd)
anniversary of the Closing Date; or (b) sixty (60) days from the
closing
of a public offering of securities of Valor in Israel or abroad.
In the
event that Valor shall fail to do so, Orbotech shall be free to execute
the above security interest on Valor’s interest in the JV.
|
|
In
the event the JV Entities shall require working capital in excess
of that
provided for above (after full utilization of the bank loan or line
of
credit guaranteed by Orbotech), the Founding Shareholders will contribute
or otherwise provide, pro-rata, the Additional Working Capital; provided
however, that in the event that the amount so contributed by any
Founding
Shareholder pursuant to the above shall exceed $750,000 in the aggregate,
such Founding Shareholder shall (notwithstanding the provisions of
Section
11.9 below but subject to the next following sentence) be entitled
to
apply for dissolution or liquidation of the JVLP and upon such application
shall not be required to make any further contributions. Such application
may be made only after written notification to the other Founding
Shareholder and only if such other Founding Shareholder has not agreed
within 20 business days of such notice, by written notice, to make
or
otherwise provide for such excess
contribution.
|
|
3.6.
|
Distributions.
All of the JVLP’s revenues, profits and losses belong to the partners
thereof and will be allocated among them. Cash or approved credit
available for distribution will be distributed to the partners on
an
on-going quarterly basis subject
to
the following:
|
|
3.6.1.
|
The
retention by the JVLP of sufficient cash or approved credit to cover
the
expenses of the JV (disregarding any expected income) through the
end of
the immediately succeeding three months period as set forth in the
Budget;
|
|
3.6.2.
|
During
the first six months following the Closing, a monthly distribution
of
$600,000 will be made, subject to the provisions of Section 3.6.1
above,
as an advance on the quarterly distribution;
and
|
|
3.6.3.
|
Any
amount available for distribution in any quarter in excess of the
“Minimum
Distribution Amount” shall be used to
repay
|
-14-
CONSOLIDATED
VERSION
any
outstanding loans or credit facilities not
extended or guaranteed in equal pro-rata amounts by Orbotech and
Valor.
|
“Minimum
Distribution Amount”
shall mean, $4,000,000 per quarter provided
that
the Minimum Distribution Amount for any quarter shall be increased
(or
decreased) by the excess (or deficiency) of the aggregate of all
prior
Minimum Distribution Amounts over
all prior distributions to
partners.
|
|
For
the removal of doubt it is hereby clarified that the above is solely
for
the purpose of defining the terms of repayment of outstanding loans
or
credit facilities not extended or guaranteed in equal pro-rata amounts
by
Orbotech and Valor and is not intended to serve as an indication
of the
Budget of the JV or of any
distribution.
|
SECTION
4
JV
Assets
|
4.1.
|
Availability
of Assets.
Effective as of the
Closing Date, subject to the terms and conditions herein set forth,
each
Party shall make available to the JV the following assets, properties
and
business and the following obligations with respect to the JV Existing
Products and JV Development Products (the “JV
Assets”),
in an orderly fashion so as to enable the JV Entities to begin immediate
operation and full use thereof in the JV Activities, and each Party
shall
retain all other rights with respect to such items subject only to
its
non-compete obligations set forth in Section 11
hereof:
|
|
4.1.1.
|
Its
customer and supplier lists, records and files (including, without
limitation, regulatory approvals, testing and quality assurance records,
complaint and return histories, sales and marketing plans, price
lists
repair or service manuals, business plans, fire, safety or environmental
reports).
|
|
4.1.2.
|
Trademarks
or applications for trademarks of the JV Existing Products or JV
Development Products, including names which it has a contractual
right to
use.
|
|
4.1.3.
|
Its
“IP Rights”, as defined in, and to the extent and in the manner set forth
in Section 10.1 hereof.
|
|
4.1.4.
|
Its
outstanding purchase orders and warranty agreements, as more fully
described in Sections 5.10 - 5.13
below.
|
|
4.1.5.
|
Its
agency, distribution and other marketing agreements, to the extent
and in
the manner set forth in Sections 7.6 -
7.11
|
-15-
CONSOLIDATED
VERSION
hereof.
|
4.1.6.
|
Its
interest in any license or other agreement with respect to technology
used
in connection with the JV Existing Products and/or the JV Development
Products, provided that if it shall be impossible or impracticable
to
obtain any necessary consent, then the Parties shall act with respect
to
any such interest in the manner described in Section 5.13 hereof.
|
|
4.2.
|
Cooperation.
The Parties shall cooperate to obtain all the necessary licenses,
permits
and consents in order to make available to the JV all of the JV Assets
prior to or at the Closing Date.
|
SECTION
5
Transfer
of Employees, Equipment and
Inventory,
Purchase Orders and Warranties
|
5.1.
|
Designated
Employees.
The Parties acknowledge that the JV will require the services of
qualified
employees to conduct its business. The Parties currently anticipate
that
between 15 to 20 research and development (“R&D”)
personnel with appropriate skills will be required immediately to
continue
supporting the JV Existing Products and to form a development team
for the
JV Development Products and JV Future Products. Such number of R&D
personnel does not include employees who may be transferred directly
or
indirectly from Electronic Imaging Technologies Co. Ltd. (“EIT”)
(as set forth in Section 11.4) as may be needed by the JV to support
EIT’s
existing products. Accordingly, immediately after the Closing, the
Parties
shall jointly determine: (a) the R&D employees of each Founding
Shareholder (the “Designated
Employees”)
to be transferred to the JV (in the manner described below) which
shall
number seven (7) employees of each Founding Shareholder; and (b)
the
salary, employment period and other terms of employment (including
undertakings of confidentiality and non-competition) of each Designated
Employee. Designated Employees who are officers and key employees
shall be
eligible to participate in option plans to purchase shares of both
of the
Founding Shareholders subject to applicable law and as shall be agreed
between the Founding Shareholders.
|
|
5.2.
|
Transfer
of Designated Employees.
Each Founding Shareholder shall use its commercially reasonable best
efforts (and each of the other Parties shall cooperate with such
Founding
Shareholder) to ensure that, promptly after the Closing, each of
its
Designated Employees shall enter into an employment agreement with
the JV
pursuant to the terms of employment jointly determined by the Parties.
In
the event that any Designated Employee shall not agree to become
an
employee of the JV despite the Parties’ commercially reasonable best
efforts, and only in such event,
such
|
-16-
CONSOLIDATED
VERSION
Designated
Employee shall remain in the employ of the
relevant Party but be seconded to the JV for two years pursuant to a secondment
agreement to be determined by the Parties (“Secondment
Agreement”).
|
5.3.
|
Refusal
of Designated Employee. In
the event that a Designated Employee shall refuse to become an employee
of
the JV and shall also refuse to be seconded to the JV, the relevant
Founding Shareholder shall terminate its employment of such Designated
Employee. Any Designated Employee so terminated shall be deemed
transferred by the relevant Founding Shareholder for the purposes
of
Section 5.1(a) above.
|
|
5.4.
|
Termination
of Prior Employment.
Upon the transfer of each Designated Employee as set forth above,
the
relevant Founding Shareholder shall cease to employ such Designated
Employee except as otherwise provided in any applicable Secondment
Agreement.
|
|
5.5.
|
Satisfaction
and Waiver of all Prior Undertakings.
Each Founding Shareholder shall: either (a) (i) pay to its Designated
Employees that become direct employees of the JV: all wages and all
ancillary expenses, including for accrued leave, recuperation allowance,
pension (including manager’s insurance policies), commissions and bonuses
and severance pursuant to existing employment agreements, custom,
law or
as otherwise required with respect to the period prior to the transfer;
and (ii) obtain from such Designated Employee a waiver and release
of the
JV with respect thereto; or (b) provide full funding to the JV with
respect to its Designated Employees that become direct employees
of the JV
of all such amounts.
|
|
5.6.
|
Release
by Founding Shareholder.
Each Founding Shareholder shall release each of its Designated Employees
who shall execute employment agreements with the JV from any
non-competition and confidentiality undertaking to such Founding
Shareholder included in his or her current agreement to the extent
such
undertaking shall conflict with his employment by the JV with respect
to
the JV Activities and shall sign any document which is required in
order
to achieve the same.
|
|
5.7.
|
Indemnification
by the Founding Shareholder.
Each Founding Shareholder shall fully indemnify the JV Entities and
the
other Founding Shareholder against any and all claims, proceedings
and
liabilities imposed upon any of the JV Entities or the other Founding
Shareholder in relation to the employment by the JV of its Designated
Employee (or other former employee), previously employed by it or
in
relation to any employees seconded by it to the JV, the cause of
action of
which is in respect to the period prior
to
their transfer.
|
|
5.8.
|
Indemnification
by the JV.
The JV Entities shall fully indemnify each Founding Shareholder against
any and all claims, proceedings and liabilities imposed upon any
Founding
Shareholder in relation to any
|
-17-
CONSOLIDATED
VERSION
Designated
Employee (or other former employee)
employed by the JV, the cause of action of which is in respect of the period
after
their
transfer.
|
5.9.
|
Transfer
of Equipment and Other Inventory. Immediately
after the Closing, the Founding Shareholders and the JV shall jointly
determine the equipment and other inventory of each Founding Shareholder
currently used in its CAM and archiving operations to be transferred
or
leased to the JV. Promptly thereafter, the relevant Founding Shareholder
shall transfer or lease the relevant equipment and other inventory
to the
JV in consideration for payment by the JV of the fair market value
of such
equipment or the lease thereof.
|
|
5.10.
|
Purchase
Orders and Warranty Commitments.
As of the Closing Date, each Founding Shareholder shall assign, and
shall
cause its subsidiaries to assign, to the JVLP, to the extent related
to
the JV Existing Products and the JV Development Products, all purchase
orders and outstanding warranty commitments which were accepted and/or
made prior to the Closing Date with respect to which delivery, service
or
other fulfillment remains outstanding. All receivables shall be allocated
between the JVLP and such assigning Party based on the delivery,
service
or other fulfillment remaining to be performed under such agreement.
To
the extent necessary, any such receivables which are received by
the JVLP
or such Founding Shareholder will be transferred to the JVLP or such
Founding Shareholder so entitled.
|
|
5.11.
|
Transferred
Warranties - Local Service Provider and Transfer of Purchase
Price.
Notwithstanding the provisions of Section 5.10 above, the local service
provider which provided warranty service on behalf of the transferring
Founding Shareholder with respect to any warranty commitment shall
continue to provide such service (and receive a commission with respect
thereto) until the expiration of such commitment. In connection with
each
warranty obligation transferred, the transferring Party shall also
transfer a portion of the sales price of the applicable JV Existing
Product to the JV at a rate of 0.83% of the sales price for each
remaining
month of the warranty (e.g., 10% of the sales price in the case of
12
months).
|
|
5.12.
|
Bundled
Purchase Orders.
To the extent that fulfillment of any transferred order shall require
bundling with other products of such Founding Shareholder which are
not JV
Existing Products, such Founding Shareholder shall remain liable
for the
fulfillment of such order. In such event, the relevant Founding
Shareholder shall pay the JV for the JV Existing Product included
in the
bundle the price therefor as set forth in the order or, if no price
is
stated therein, a portion of the sale price pro-rata to the Founding
Shareholder’s list prices for the items included in the bundle or as
otherwise agreed between the JV and such
Party.
|
-18-
CONSOLIDATED
VERSION
|
5.13.
|
“Effective”
Transfer or Assumption.
For purposes of the foregoing Section 5.10 and as otherwise applicable
in
this Agreement, if it is impossible or impracticable to obtain the
consent
of a third party, or the Parties shall otherwise agree not to seek
such
consent, which is necessary in connection with: (a) the effective
transfer
of an asset to be transferred hereunder; (b) the effective assumption
of a
liability or obligation to be assumed hereunder; or (c) the effective
transfer of a contractual relationship or contractual offer; then
the JV
and the other relevant Party will, for the purposes of their internal
relationship, behave and conduct themselves as if the transfer or
assumption had effectively taken place on the Closing Date. In any
such
case, (i) the other relevant Party will, in respect of its external
relationships, remain the party to the relevant liability, obligation
or
contractual relationship but will hold and be responsible for the
relevant
contract in the internal relationship between the other relevant
Party and
the JV for the account of the JV; and (ii) each of the JV and the
other
relevant Party shall indemnify and hold harmless the other with respect
to
its conduct hereunder.
|
SECTION
6
JV
Development Principles
| 6.1. | General Principles. The JV will, (a) continue to provide development support for the JV Existing Products; (b) determine, according to its best interests, whether to continue to develop the JV Development Products; (c) invest significant research and development resources in the development of JV Future Products; and (d) promote the concept of open systems to PCB Fabrication Entities, PCB Design Entities and PCB Assembly Entities. The format and the interface to the database of the JV’s Products will be open to all PCB Fabrication Entities PCB Design Entities and PCB Assembly Entities and their suppliers. Any format changes shall be subject to the prior approval of the Executive Committee. The JV shall provide the Founding Shareholders with prior notice of these changes and full early access to the details thereof. |
|
6.2.
|
Support
for Orbotech’s Products.
|
|
6.2.1.
|
The
Parties acknowledge that the interfaces between the JV Products and
Orbotech’s AOI and other PCB Fabrication products, including interfaces to
plotters and direct imaging and electrical testing products manufactured
or sold by Orbotech and the formats defined by Orbotech for these
interfaces (“JV/Orbotech
Formats and Interfaces”)
are strategic to Orbotech’s PCB Fabrication business. Therefore, all JV
Products will support the JV/Orbotech Formats and Interfaces as the
preferred interface formats between the JV’s Products and AOI and such
other PCB Fabrication products,
|
-19-
CONSOLIDATED
VERSION
including
plotters and direct imaging and electrical
testing products.
|
6.2.2.
|
The
JV will give priority to development of, and improvements in, JV/Orbotech
Formats and Interfaces, both in terms of timing and functionality,
compared to other interface products that the JV may develop or sell.
These priorities will not be subject to the 10% special allocation
set
forth in Section 6.5 below.
|
|
6.3.
|
Support
for Valor’s Products.
|
|
6.3.1.
|
The
Parties acknowledge that the promotion of the ODB++ format and the
development of interfaces between the JV Products to Valor’s Enterprise
3000, Star 1000 and Universal Viewer products (“JV/Valor
Formats and Interfaces”)
are strategic to Valor’s PCB Design business. Therefore, all JV Products
will support the JV/Valor Formats and Interfaces as the preferred
transfer
format and interface between PCB Design and PCB
Fabrication.
|
|
6.3.2.
|
The
JV will give priority to development of, and improvements in, the
JV/Valor
Formats and Interfaces both in terms of timing and functionality,
compared
to the JV’s support for other data transfer formats and interfaces between
PCB Design and PCB Fabrication. These priorities will not be subject
to
the 10% special allocation set forth in Section 6.5
below.
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6.4.
|
Interfaces
for Other Products.
Subject to the foregoing priorities, the JV may, according to its
best
interests, develop, promote and support formats and software interfaces,
including CAD translators (i.e., transfer formats and solutions between
design and manufacturing), interfaces to archiving systems and interfaces
to AOI systems, plotters and direct imaging and electrical testing
products of other entities, including interfaces to products which
compete
with Valor’s PCB Design products and Orbotech’s PCB Fabrication products
provided
that
the JV shall give prior written notice to the Founding Shareholders
of any
such developments.
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6.5.
|
Additional
Developments Benefiting Orbotech or Valor.
In addition to the priorities set forth above, each Founding Shareholder
may request the JV to allocate up to 10% (in equal parts between
them (5%
each)) of the JV’s research and development resources for development of
JV Products which support the products of such Founding Shareholder.
The
rights to such developments shall be deemed “IP Developments” as set forth
in Section 10.2 hereof.
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CONSOLIDATED
VERSION
|
6.6.
|
JV
Development Products.
In the event that a Founding Shareholder has undertaken or promised
(including by way of a promise or other understanding and whether
or not a
legally enforceable obligation) to any customer to develop and/or
supply a
customization, update, interface, future version or other development
related to any JV Existing Product or JV Development Product and
the JV
will determine, according to its best interests, not to (continue
to)
develop such item, the JV shall assume and undertake such obligation
and
the Parties shall cooperate and use all reasonable commercial efforts
to
satisfy such obligation by providing a software substitute or other
solution available to the JV in the minimum acceptable to such customer,
it being agreed that such cooperation will include providing the
responsible Founding Shareholder with reasonable access to the relevant
customer together with the agent who otherwise services such customer
pursuant to Section 7 below. Notwithstanding the above, any monetary
penalty which may nevertheless be payable by the JV in connection
with
such undertaking shall remain the obligation of the responsible Founding
Shareholder.
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|
6.7.
|
Termination.
Each Founding Shareholder’s rights under Sections 6.2 - 6.5 hereof as well
as its right to enforce the performance of the JV pursuant to Sections
6.1
and 6.6 hereof, shall terminate upon the date that it together with
its
Permitted Transferees shall no longer hold at least 30% of the interests
in the JV.
|
SECTION
7
Sales
and Customer Support
|
7.1.
|
Sales
and Customer Support Agents.
The JV shall determine, which of the JV Existing Products and which
of the
JV Development Products to sell and to offer for sale and the respective
marketing and distribution channels and procedures therefor, all
in its
own best interests. Subject to the provisions of this Section 7,
the JV
Entities shall initially employ directly or through their marketing
subsidiaries (as provided below) the agents set forth below in the
manner
and in the territories provided for marketing, sales, installation,
training and service (including warranty service) of the JV
Products:
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|
In
Europe,
Orbotech SA, as exclusive agent;
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|
In
Far East, not including Japan,
Orbotech Far East Ltd., as exclusive
agent;
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|
In
Japan,
Valor Japan will act as exclusive agent with respect to certain specified
accounts, as will be determined by the Parties, and Orbotech Japan
will
act as exclusive agent with respect to all other accounts in
Japan.
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CONSOLIDATED
VERSION
|
In
North America, Orbotech
Inc. will act as exclusive agent with respect to the accounts listed
in
Appendix
7.1(i),
and Valor Inc. will act as exclusive agent with respect to all other
accounts in the North America.
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|
The
principal terms and conditions of the JV’s arrangements with such agents
including commissions payable to them shall be as set forth in
Appendix
7.1(ii).
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7.2.
|
Conditions
to Maintain Sales Rights.
The Board shall determine performance criteria for all of the JV’s sales
and customer support agents, such as defined annual revenue, annual
market
share, maintaining of captive accounts using JV Products, etc. The
Board
may, in accordance with the best interests of the JV, replace any
agent
which shall not meet the defined performance criteria, with another
agent
or sales channel, including a subsidiary of another Founding Shareholder,
a third party distributor, agent or VAR (Value Added Reseller), etc.
or an
independent sales department within the JV Entity. The replacement
of any
Founding Shareholder’s subsidiary pursuant to this Section 7.2 shall be
without charge and the Founding Shareholder shall cause its subsidiary
to
give its consent to such replacement. Such Founding Shareholder shall
indemnify the other Founding Shareholder and the JV from and against
any
claims made by any of its subsidiaries in this
respect.
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|
7.3.
|
Interfaces
for Other Products.
Notwithstanding the provisions of Section 7.1, the JV may, according
to
its best interests, sell the software interfaces described in Section
6.4
hereof on an OEM basis provided
that
the JV shall in all events give prior written notice to the Founding
Shareholders of all such arrangements such that a Founding Shareholder
may
have the opportunity to request that such agreement be approved by
the
Founding Shareholders in accordance with the provisions of Section
9.6.9.
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|
However,
for the purpose of Section 9.6.9 the mere fact that a third party
OEM is a
competitor of one of the Founding Shareholders shall not in and of
itself
be considered reasonable grounds for withholding approval of the
transaction with such third party OEM, as set forth in Section
9.6.9.
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|
7.4.
|
JV/Orbotech
Interface Products.
Notwithstanding the provisions of Sections 7.1 and 7.2, Orbotech
(directly
or through its Affiliates) shall be the exclusive worldwide agent
(or
other reseller) for the JV/Orbotech Formats and Interface
products.
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7.5.
|
Valor
Subsidiaries.
It is the expectation of the Parties that by the year 2001 Valor’s PCB
Design and PCB Assembly businesses shall develop to a level such
that
Valor, in its discretion, may cease the business of marketing the
JV
Products. In such event, the JV shall: (a) terminate the sales, agency
and
customer support agreements with Valor’s subsidiaries without charge to
the JV (and Valor shall cause such subsidiaries to
give
|
-22-
CONSOLIDATED
VERSION
their
consent thereto and shall indemnify Orbotech and
the JV from and against any claims made by any of its subsidiaries in this
respect); and (b) enter into exclusive arrangements with Orbotech’s subsidiaries
whereby such subsidiaries shall serve as the JV’s exclusive worldwide sales
and
customer support agents, subject to the provisions of Section 7.2 hereof. For
the removal of doubt, it is hereby clarified that the provisions of this Section
7.5 are not intended to create a binding obligation upon Valor to cease the
marketing of the JV Products but are meant to serve as a general declaration
of
intent only.
|
7.6.
|
Assignment
of Sales, Agency and Customer Agreements.
Except as otherwise set forth below or in Section 5 above or as may
be
agreed between the Parties, as of the Closing Date, each Party shall
assign and shall cause its subsidiaries to assign, to the JVLP, to
the
extent related to the JV Existing Products and the JV Development
Products, all sales, agency and customer support agreements (including
the
undertakings and other understandings described in Section 6.6 hereof)
which were accepted and/or made prior to the Closing Date with respect
to
which service or other fulfillment remains outstanding. A list of
all
sales, agency and customer support agreements of each Founding Shareholder
shall be provided at the Closing and attached hereto as Appendix
7.6.
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|
7.7.
|
Service
Continuity.
Notwithstanding the foregoing, the local service provider which provided
service on behalf of the transferring Founding Shareholder with respect
to
any service contract shall be engaged to continue providing such
service
for the remainder of the term thereof; it being understood that each
of
the Founding Shareholders shall use all reasonable efforts, including
all
legal or contractual remedies available, to cause such agreements
to be
terminated at the earliest possible date and/or renewed with the
JV.
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|
7.8.
|
“Effective”
Assignment.
If it is impossible or impracticable to obtain the consent of an
agent or
other third party to an assignment hereunder, or the Parties shall
otherwise agree not to seek such consent, the provisions of Section
5.13
shall apply.
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|
7.9.
|
OEM
Arrangements.
The Parties acknowledge that, as of the Closing Date, each of the
Founding
Shareholders and/or its subsidiaries shall have OEM agreements in
effect
as set forth in a list to be attached hereto at the Closing as
Appendix
7.9
with respect to JV Existing Products. The provisions of Sections
7.6 and
7.8 hereof shall apply to such OEM agreements as well. To the extent
not
assigned, the relevant Founding Shareholder shall use all reasonable
efforts, including all legal or contractual remedies available, to
cause
such agreements to be terminated at the earliest possible date and/or
renewed with the JV. A Founding Shareholder (or its subsidiary) shall
in
no event renew any such OEM agreement without the consent of the
other
Founding Shareholder.
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-23-
CONSOLIDATED
VERSION
|
7.10.
|
Inconsistent
Arrangements.
The Parties acknowledge that, as of the Closing Date, Valor shall
have
agency agreements in effect in Europe and North America which are
not
consistent with the territorial or account assignments set forth
in this
Section 7 above. The JV and Valor shall take such steps as are necessary
to terminate such inconsistent agreements as soon as possible (taking
into
account any active negotiations), at the JV’s expense, by making
termination payments to the relevant agent against commissions which
would
otherwise have been payable following the termination date. The JV
may
also make lump sum termination payments with the consent of both
of the
Parties. Such payments shall not affect the commissions otherwise
payable
to the JV’s agents.
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|
7.11.
|
Agency
Agreements Warranty.
Each Party represents and warrants that all of its agency agreements
with
respect to the JV Existing Products: (a) expire on or before December
31,
1999 (or are cancellable prior to such date without penalty); and
(b) are
non-exclusive except for Valor’s agreements with AMS and Xxxx Xxxxx
Associates which are exclusive with respect to certain geographical
areas
in the United States. Valor will take such steps as are necessary
to
terminate these agreements immediately following the Execution Date
in the
manner set forth in Section 7.10
above.
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|
7.12.
|
Marketing
Subsidiaries.
Following the Closing, as and when the JVLP determines it advisable,
taking into account legal, financial and other business considerations,
the JVLP shall form and incorporate wholly-owned subsidiaries in
the
following jurisdictions: the United States, Europe, Far East (excluding
Japan) and Japan.
|
SECTION
8
Representations,
Warranties and Undertakings of the Parties
|
Without
derogating from the representations, warranties and undertakings
of the
parties contained elsewhere in this Agreement, each of Valor and
Orbotech
hereby represents, warrants and undertakes to the other, and acknowledges
that the other is entering into this Agreement in reliance thereon,
that,
except as otherwise specified in the Schedule of Exceptions annexed
hereto
as Appendix
8:
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|
8.1.
|
Due
Incorporation.
It is a corporation duly organized and validly existing under the
laws of
Israel, has all requisite corporate power and authority to carry
on its
business as now being conducted and to enter into and perform its
obligations under this Agreement. It is duly qualified to transact
business and is in good standing in each jurisdiction in which the
nature
of its business or the ownership or leasing of its properties make
such
qualification necessary, and has all powers, authorities, licenses,
authorizations and approvals necessary to carry on its
business
|
-24-
CONSOLIDATED
VERSION
as
now conducted other than in such jurisdictions
where the failure to be so qualified and other than for such powers,
authorities, licenses, authorizations and approvals the absence of which, would
not have a material adverse effect on the JV, the JV Activities or the ability
of the JV or such Founding Shareholder to perform its obligations and consummate
the transactions provided for herein.
|
8.2.
|
Due
Authorization.
The execution, delivery and performance of this Agreement and the
consummation of the transactions provided for herein, have been duly
authorized by all necessary corporate action of such Founding Shareholder.
This Agreement constitutes a valid and legally binding obligation
of such
Founding Shareholder, enforceable in accordance with its terms. The
execution and delivery by such Founding Shareholder of this Agreement,
and
the consummation by it of the transactions contemplated hereby in
accordance with the terms of this Agreement, do not and shall not
as of
the Closing Date contravene or conflict with (or constitute a violation
of
or breach of or default under or give to others any rights, including
rights of termination, cancellation or acceleration): (i) its Memorandum
or Articles of Association or other incorporating or corporate documents;
(ii) any provision of any law, regulation, judgment, injunction,
order or
decree binding upon or applicable to such Founding Shareholder; or
(iii)
any agreement, contract, lease or commitment to which it is a Founding
Shareholder.
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|
8.3.
|
Ownership of
the JV Assets.
Other than such assets which are owned jointly by the Founding
Shareholders and subject to claims of ownership of the other Founding
Shareholder, it is the sole legal owner of the JV Assets being made
available by it hereunder. The JV Assets being made available by
it
hereunder are free and clear of any liens, claims, restrictions,
encumbrances or any other rights in favor of third parties, and there
is
no legal or other impediment to making available its rights in, and
possession of, the JV Assets to the JV in such state, pursuant to
this
Agreement.
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|
8.4.
|
Liabilities.
Other than undertakings or promises as set forth in this
Agreement, it
has no liabilities, debts or obligations, whether accrued, absolute
or
contingent, which could in any way adversely affect the JV Activities
or
hinder or adversely affect the consummation of the transactions provided
for herein.
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|
8.5.
|
Actions. There
is no action, claim, proceeding or governmental inquiry or investigation
(collectively, “Action”)
either pending or, to the best of its knowledge, threatened in connection
with the JV Activities or the JV Assets being made available by it
and/or
its Designated Employees before any court, arbitration board or tribunal
or administrative or other governmental or local authority (collectively,
“Authority”),
nor is it or any of its directors or officers aware that there is
any
basis for any such Action. Neither it nor any Affiliate, director
or
officer, is a party to or
|
-25-
CONSOLIDATED
VERSION
subject
to the provisions of any order, writ,
injunction, judgment or decree of any Authority which is connected to the JV
Activities, the JV Assets and/or its Designated Employees nor are any of them
aware of any pending or threatened Action (or of any basis for same) against
any
of them by any Authority which is connected to the JV Activities, the JV Assets
and/or its Designated Employees. To its best knowledge, there is no Action
by it
or by any Affiliate, director or officer, currently pending or that any such
entity or person intends to initiate which is connected to the JV Activities,
the JV Assets and/or its Designated Employees.
|
8.6.
|
IP
Rights. With
respect to the IP Rights being made
available by
such Founding Shareholder or the use thereof, including the rights
of
manufacture, sale and/or use of the JV Existing Products and JV
Development Products of such Founding
Shareholder:
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|
8.6.1.
|
the
above are, to the best of its knowledge, free from the infringement
of
patents and any and all other intellectual property rights of third
parties;
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|
8.6.2.
|
the
above are exclusive and free and clear of all liens, claims, royalty
obligations, licenses, encumbrances, security interests or other
rights
of, or granted to, third parties (other than the right to use granted
to
end users in the ordinary course of business), and it is not and
the JV
Entities will not be obliged, under any liability whatsoever to make
any
payments by royalties, fees or otherwise to any owner or licensee
of, or
other claimant with respect
thereto;
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|
8.6.3.
|
its
current business operations relating to the JV Existing Products
do not
require the use of any intellectual property rights (other than the
rights
of, or claimed by, the
other Founding Shareholder in such know-how or off-the-shelf software)
not
included in the above nor is it dependent thereon. None of such IP
Rights
is being challenged by third parties or, to the best of its knowledge,
infringes any third party rights. The conduct of its current business
operations relating to the JV Existing Products does not, to the
best of
its knowledge, violate the intellectual property rights or copyrights
of
any third party.
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|
8.6.4.
|
it
has not received any communication, and is not aware that there is
any
basis for any such communication, alleging that by conducting the
JV
Activities, the JV Entities will violate any intellectual property
rights
of any other person or entity.
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|
8.6.5.
|
it
has taken reasonable measures to maintain the confidentiality of
the
intellectual property and processes and formulas, research and development
results and other
|
-26-
CONSOLIDATED
VERSION
know-how
underlying such IP Rights.
|
8.7.
|
Material
Assets.
The JV Assets, including the IP Rights, made available by such Founding
Shareholder, constitute all of the material assets and rights upon
which
its business with respect to the JV Existing Products and the JV
Development Products functions, other than such assets and rights
which
are readily commercially available (e.g., off-the-shelf software).
Following the consummation of the transactions contemplated by this
Agreement and the execution of all documents contemplated
by this Agreement, the JV shall have full use of the JV Assets for
use in
the JV Activities, free and clear of any liens, claims, restrictions,
encumbrances or any other rights in favor of third parties and without
incurring any penalty or other adverse consequence, and without payment
of
any fee or royalties.
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|
8.8.
|
1997
Revenue.
The 1997 revenue figures with respect to sales of JV Existing Products
and
related services by such Founding Shareholder is as set forth in
Appendix
8.8
attached hereto.
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|
8.9.
|
No
Misleading Statement. Its
representations contained herein contain no untrue or misleading
statement
of a material fact and do not omit to state a material fact required
to be
stated herein or necessary to make the statements herein not misleading,
in light of the circumstances under which they were made and the
nature of
the transactions anticipated by this
Agreement.
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|
8.10.
|
Founding
Shareholder Cooperation.
Each Founding Shareholder shall cooperate with the JV and the other
Founding Shareholder in the performance of this Agreement and do
every act
and sign every document reasonably necessary or desirable to perform
this
Agreement, and to consummate the transactions contemplated
herein.
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|
8.11.
|
No
Assumption of Liability.
It acknowledges and agrees that other than as expressly provided
herein,
the JV Entities are not assuming and shall bear no liability with
respect
to any responsibilities and/or liabilities of either Founding Shareholder
to any third parties.
|
SECTION
9
Governance
of the JV Entities
|
9.1.
|
General
Principles.
The JV Company shall oversee, administer and manage the JVLP in its
capacity as general partner, and the JVLP shall carry out the JV
Activities. Except as otherwise agreed by the Parties, the administration
and R&D activities of the JV Entities shall initially be conducted at
premises located and leased by the JV Entities in proximity to Valor’s
location.
|
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CONSOLIDATED
VERSION
|
9.2.
|
Board
of Directors; Executive Committee.
|
|
9.2.1.
|
Board
of Directors.
The Board of Directors of the JV Company (the “Board”)
shall initially consist of four directors (“Directors”).
For as long as the holdings of the Founding Shareholders (together
with
the holdings of their respective Permitted Transferees) in the JV
Entities
are equal, each Founding Shareholder shall have the right to appoint
(and
shall have right to remove and replace) two Directors. Directors
shall be
appointed, removed and replaced by the Founding Shareholders by written
notice to the JV Company. Any Founding Shareholder entitled to appoint
more than one Director hereunder shall also have the right to designate
that a Director appointed by it shall have more than one vote provided
that the aggregate number of votes held by all Directors appointed
by any
such Founding Shareholder shall not exceed the aggregate number of
Directors that such Founding Shareholder is entitled to appoint
hereunder.
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|
9.2.2.
|
Chairman.
The Chairman of the Board shall be elected by the Directors. For
as long
as the holdings of the Founding Shareholders (together with the holdings
of their respective Permitted Transferees) in the JV Entities are
equal,
there shall be two Co-Chairmen, one elected by the Directors appointed
by
Orbotech from among themselves and one elected by the Directors appointed
by Valor from among themselves.
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|
9.2.3.
|
Executive
Committee.
The Board shall appoint an executive committee to define the strategic
business direction of the JV Entities, which committee shall consist
of
four members (the “Executive
Committee”).
For as long as the holdings of the Founding Shareholders (together
with
the holdings their respective Permitted Transferees) in the JV Entities
are equal, two of the members of the Executive Committee shall be
appointed by the Directors appointed by Orbotech from among themselves
and
two shall be appointed by the Directors appointed by Valor from among
themselves. In the event the Executive Committee is unable to reach
a
decision on any matter, such matter shall revert to the Board.
|
|
9.2.4.
|
Committees
and Boards of Subsidiaries.
The composition of all committees of the Board and all boards of
directors
(and committees thereof) of any subsidiaries of the JV Entities and
the
management of any other entity in which the JV Entities hold or will
hold
an equity or partnership interest, shall resemble that of the
Board.
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|
9.2.5.
|
Quorum.
The quorum for meetings of the Board shall be
|
-28-
CONSOLIDATED
VERSION
at
least two Directors. For as long as the holdings of
the Founding Shareholders (together with the holdings of their respective
Permitted Transferees) in the JV Entity are equal, such quorum must include
at
least one Director appointed by each Founding Shareholder. In the event that
none of the Directors appointed by a Founding Shareholder is present, the
meeting shall automatically be postponed 3 days to the same time and place
(or
in the event such day is not a business day in Israel, the first business day
thereafter). At such postponed meeting, any two of the Directors then in office
shall constitute a quorum, whether or not Directors appointed by both Founding
Shareholders are present.
|
9.2.6.
|
Majority;
Independent Director.
Resolutions shall be passed by a simple majority of Directors present
and
voting at a meeting of the Board at which a quorum is present, and
it is
the intention of the Parties that the Board function with an even
number
of Directors as aforesaid. However, at any time after the first (1st)
anniversary of the Closing provided that the holdings of the Founding
Shareholders (together with the holdings of their respective Permitted
Transferees) are equal, each of the Founding Shareholders shall be
entitled to request the appointment of an additional, independent,
Director in the event it believes that the proper functioning of
the Board
requires such appointment. Any such request shall be made in writing.
In
the event the other Founding Shareholder agrees with such request
then a
fifth member of the Board (the “Independent
Director”)
will be appointed by both of the Founding Shareholders acting jointly.
In
the event the other Founding Shareholder disagrees it shall so notify
the
requesting Founding Shareholder in writing within seven (7) days
of
receipt of the request and the Founding Shareholders shall meet to
discuss
the matter. In the event that the requesting Founding Shareholder
has not
withdrawn such request in writing within thirty (30) days of such
request,
then the Independent Director will be appointed effective as of the
termination of such thirty day period. The making of any request
and/or
the withdrawal of any such request by a Founding Shareholder shall
not
preclude such Founding Shareholder (or the other Founding Shareholder)
from making any further or subsequent request. A person recommended
by the
requesting Founding Shareholder and reasonably acceptable to the
other
Founding Shareholder shall
serve as the Independent Director. Any
Independent Director appointed may be removed at any time by the
Founding
Shareholders, acting jointly, and another may be appointed in his
or her
place.
|
-29-
CONSOLIDATED
VERSION
|
9.3.
|
Budget.
The Board shall prepare a budget for the JV on a yearly basis prior
to
October 31 of each year (the “Budget”).
All of the JV Activities (including those implemented by each of
the JV
Entities), shall be conducted pursuant to the Budget as shall be
in effect
from time to time. Until such time as a new Budget has been adopted,
the
prevailing Budget shall remain in force. The initial Budget (i.e.,
through
December 31, 1998) of the JV, which shall include a projected balance
sheet for the JVLP, shall be determined jointly by the Parties immediately
after the Closing.
|
|
9.4.
|
General Managers.
The General Manager(s) shall be appointed by the Board. Initially,
and for
as long as the holdings of the Founding Shareholders (together with
the
holdings of their respective Permitted Transferees) in the JV Entities
are
equal, the JV shall be managed by two joint General Managers, one
of whom
shall be appointed by the Directors appointed by Orbotech, and one
of whom
shall be appointed by the Directors appointed by Valor (who may thereafter
remove such General Manager and appoint another in his or her place)
provided such appointees are reasonably acceptable to both of the
Founding
Shareholders. The initial General Manager to be nominated by Orbotech
shall be Xx. Xxx Xxxxxxx and the initial General Manager to be nominated
by Valor shall be Xx. Xxxxxx Xxxxx. At such time as the holdings
of the
Founding Shareholders (together with the holdings of their respective
Permitted Transferees) are not equal or the Founding Shareholders
shall
mutually agree upon a suitable candidate, the two General Managers
shall
be replaced with a single General Manager. Such General Manager shall
be
empowered with all the same rights and authorizations, and subject
to the
same duties, as the two General Managers. Subject to the provisions
of
Sections 9.6 and 9.7 below,
the General Managers shall have full authority to manage and execute
all
day-to-day business decisions relating to the JV
Entities.
|
|
9.5.
|
Management
and Officers.
The internal management structure of the JV Company and the JVLP
shall be
reflected in a management plan and organizational chart to be prepared
by
the Parties prior to or immediately after the Closing, in accordance
with
the principles set forth in the Budget. The General Managers will
recommend internal rules of procedure to be approved by the Board.
The
Board shall nominate and appoint personnel to fill senior managerial
functions. Initially, such senior functions shall be equally apportioned
between personnel recommended by each of the Founding Shareholders.
It is
hereby agreed that Xx. Xxxx Elhanan shall be the initial Vice President,
Research and Development of the JV and that Xx. Xxxx Xxxxxx or another
candidate to be nominated by Orbotech, shall be the initial Vice
President, Marketing and Sales of the
JV.
|
|
9.6.
|
Major
Decisions — Shareholders.
For as long as the holdings of the Founding Shareholders (together
with
the holdings of their respective Permitted Transferees) in the JV
are
equal, any of the following matters
|
-30-
CONSOLIDATED
VERSION
in
respect of the JV Entities may only be determined
with the approval of both of the Founding Shareholders regardless of whether
such matter might otherwise be deemed to be part of the day-to-day management
of
either of the JV Entities and regardless of whether such matter might otherwise
be deemed to be within the competence of the Board:
|
9.6.1.
|
Any
change in the number or composition of the Board or the method prescribed
for appointing the members to the
Board.
|
|
9.6.2.
|
Any
addition to, amendment, revision or other change of or to the
organizational or charter documents of any of the JV
Entities.
|
|
9.6.3.
|
Any
change in the capital structure of either of the JV Entities, including,
but not limited to, any split or subdivision of stock, the creation
of new
stock or separate classes of stock, the alteration of rights associated
with any class of stock, or the issue of any debenture or loan stock
of
either of the JV Entities and any recapitalization or reduction in
capital
structure of either of the JV Entities or any changes in the authorized
capital stock of either of the JV Entities and/or any increase in
the
issued and outstanding shares of capital stock of either of the JV
Entities, issuance of any new or additional shares in the JV Company,
issuance or authorization for issuance or sale of any of the capital
stock
of either of the JV Entities. For purposes hereof, the term “stock” shall
also mean “partnership interest” as applicable, mutatis mutandis.
|
|
9.6.4.
|
The
merger, reorganization, or consolidation of either of the JV Entities
or
the sale or other transfer of all or substantially all of the assets
of
the JV or obligating itself to do so with or into any other
entity.
|
|
9.6.5.
|
The
making, entry into, or agreement to make or enter into, or amendment
of
any contract or arrangement between either of the JV Entities or
their
subsidiaries and any shareholder, officer or director or any entity
controlled by, controlling, or under common control with any shareholder,
officer or director (other than as provided for in this
Agreement).
|
|
9.6.6.
|
The
appointment and removal of the auditors of any of the JV Entities
and the
fixing of their remuneration.
|
|
9.6.7.
|
The
formal approval of the actions by the Board and General Managers
as shall
be required pursuant to the applicable Articles of Association or
Limited
Partnership Agreement of the JV
Entities.
|
-31-
CONSOLIDATED
VERSION
|
9.6.8.
|
The
approval of a Budget or change thereto which shall allocate to annual
marketing or research and development amounts which are more than
20% or
30% of annual forecasted sales,
respectively.
|
|
9.6.9.
|
The
JV shall give prior notice to the Founding Shareholders of any agreements
with an entity which competes, directly or indirectly, with either
Founding Shareholder (other than an agreement solely for the sale,
license
and/or service of the JV Products to or by such entity as an end
user) and
the key terms thereof. In the event a Founding Shareholder so requests
by
written notice to the JV and the other Founding Shareholder within
15 days
of the JV’s notice, such agreement shall not be effective unless approved
by both Founding Shareholders, which approval will not be unreasonably
withheld.
|
|
9.6.10.
|
Any
matter which if not approved, or any matter which if approved, would
result in a freeze of either of the JV Entities’ business or lead to a
cessation or termination of either of the JV Entities’
business.
|
|
9.6.11.
|
The
taking by either of the JV Entities of any loan, or the granting
by either
of the JV Entities of any security in any of the assets of either
of the
JV Entities, which, in the aggregate, shall be in excess of 20% of
the
revenues of the JV for the previous year. For the removal of doubt,
this
provision shall not derogate from Orbotech’s obligations with respect to
Additional Working Capital as set forth in Section 3.5
above.
|
|
9.6.12.
|
Entering
into any contract, agreement, arrangement or commitment relating
to the JV
which provides for a cost or obligation to the JV in excess of
US$1,000,000.
|
|
9.7.
|
Major
Decisions — Board of Directors.
For as long as the holdings of the Founding Shareholders (together
with
the holdings of their respective Permitted Transferees) in the JV
Entities
are equal, any of the following matters in respect of the JV may
only be
determined by the Board regardless of whether such matter might otherwise
be deemed to be part of the day-to-day management of the JV Entities:
|
|
9.7.1.
|
The
entry by any of the JV Entities into any business not described in,
or any
material deviation from, the
Budget.
|
|
9.7.2.
|
Any
sale of any substantial asset of any of the JV Entities, or contract
or
agreement to sell, or removal, abandonment, or other disposition
of, any
substantial asset of any of the JV
Entities.
|
-32-
CONSOLIDATED
VERSION
|
9.7.3.
|
The
making and/or effecting of any change in any accounting principles
or
practices of either of the JV Entities or the method in which the
books
and records of either of the Joint Entities are
maintained.
|
|
9.7.4.
|
The
taking by either of the JV Entities of any loan, or the granting
by either
of the JV Entities of any security in any of the assets of either
of the
JV Entities if not approved in the
Budget.
|
|
9.7.5.
|
Entering
into any contract, agreement, arrangement or commitment relating
to either
of the JV Entities which provides for a cost or obligation to either
of
the JV Entities in excess of US$200,000, if
not included in the Budget.
|
|
9.7.6.
|
The
approval, amendment or modification of the Budget, or the adoption
of an
annual plan and budget for either of the JV Entities (apart from
the
Budget).
|
|
9.8.
|
Reports.
|
|
The
Parties acknowledge the existing reporting requirements of Orbotech
as a
company whose shares are publicly traded on the Nasdaq National Market
System and of the potential reporting requirements of Valor, which
intends
to conduct an initial public offering in the United States (and/or
Israel)
and to list its shares for trading on the Nasdaq National Market
System,
the Tel-Aviv Stock Exchange or any other recognized stock exchange.
Accordingly, the following shall
apply:
|
|
9.8.1.
|
Each
of the JV Entities shall maintain a system of accounting established
and
administered in accordance with Israeli and United States Generally
Accepted Accounting Principles consistently applied, shall keep full
and
complete financial records, and shall furnish to the Parties the
following
reports in NIS and in U.S. Dollars and in the English
language:
|
|
9.8.1.1.
|
within
15 days after the end of each month, an unaudited profit and loss
statement, balance sheet and schedule as to cash flow, in reasonable
detail, and a report by management with respect to the previous month
(which report shall include any other statements produced for internal
managerial purposes and events of importance to the JV Entity’s business
activities).
|
|
9.8.1.2.
|
within
20 days after the end of each fiscal quarter, an income statement
through
the end of such quarter
|
-33-
CONSOLIDATED
VERSION
and
a balance sheet as at the end of such quarter
(prepared on a consolidated basis, if applicable), and related statements of
changes in shareholder’s equity, together with a cash flow statement, all for
each such quarter and for that part of the fiscal year of the JV Entity then
ended, reviewed by the independent certified public accountants of the
JV.
|
9.8.1.3.
|
within
20 days after the end of each fiscal year, an income statement for
such
fiscal year, a balance sheet of the JV Entity and statement of
shareholder’s equity as of the end of such year, and a statement of cash
flow for such year, including notes and disclosure according to United
States securities regulations and, if requested by one of the Founding
Shareholders, according to Israeli securities regulations as well,
such
year-end financial reports to be audited by the independent certified
public accountants of the JV.
|
|
9.8.1.4.
|
as
soon as reasonably practicable, such other information relating to
the
financial condition, business, prospects or corporate affairs of
the JV
Entity, or material developments related thereto, as a Party may
from time
to time reasonably request.
|
|
9.8.2.
|
The
obligation of any JV Entity to provide monthly reports as aforesaid
shall
expire from the date such JV Entity becomes subject to the reporting
requirements of the United States Securities Exchange Act of 1934,
as
amended, or the Israeli Securities Law, 5728-1968, as amended, or
any
other comparable securities laws in other
jurisdictions.
|
|
9.8.3.
|
After
the Closing and upon request, each of Orbotech and Valor shall use
reasonable efforts to provide the other with proforma information
concerning its prior revenue performance with respect to the JV Existing
Products and prior direct R&D expenses with respect to JV Existing
Products and JV Development Products to the extent required by the
U.S.
Securities and Exchange Commission or the Israel Securities Authority.
|
SECTION
10
Intellectual
Property
|
10.1.
|
Intellectual
Property Owned/Retained by Orbotech and Valor.
Each of Orbotech and Valor shall as of the Closing Date, jointly
make
available
|
-34-
CONSOLIDATED
VERSION
the
IP Rights to the JV, subject to their retaining
an irrevocable, perpetual, non-exclusive, right to use and develop the IP Rights
in other fields of operations, all subject to the non-competition provisions
of
Section 11 of this Agreement. “IP
Rights”
of
the
Founding Shareholders shall mean all of their intellectual property rights
to
CAM and archiving systems for PCB Fabrication (including the graphical part
of
software interfaces between AOI and CAM systems for PCB Fabrication), including
but not limited to source codes, documentation, database formats and trade
names.
|
Neither
of the Founding Shareholders will be making available to the JV any
right
whatsoever in any other intellectual property right belonging to
it other
than as expressly specified in this Section 10.1. Without derogating
from
the foregoing, all intellectual property rights for all current products
of Valor and of Orbotech (other than with respect to the JV Existing
Products and the JV Development Products) will remain the sole property
of
the respective Founding Shareholder. No intellectual property rights
are
granted hereunder by one Founding Shareholder to the
other.
|
|
10.2.
|
Intellectual
Property Developed by the JV.
Any and all intellectual property developed by the JV (“IP
Developments”)
shall be the property of the JV, and subject to the following sentence,
of
the Founding Shareholders, but shall be subject to the non-competition
undertakings provided in Section 11 below. For so long as each of
the
Founding Shareholders and/or its Permitted Transferees shall hold
at least
a 30% interest in the JV, IP Developments shall be available to such
Founding Shareholder for the use by it or its Affiliates subject
to the
non-competition undertakings provided in Section 11 below, such use
to be
without charge.
|
|
10.3.
|
Enforcement
of Rights.
If any Party becomes aware of any product or activity of any third
party
that involves infringement or violation of the IP Rights or the IP
Developments, it shall promptly notify the other Parties of such
infringement or violation. The restraining or enjoining of any
infringement or violation of any IP Rights or IP Developments shall
be the
sole responsibility and expense of the JV (and any amounts awarded
by way
of judgment, settlement, or compromise shall be paid to the JV),
and the
JV shall promptly take all such actions as the Board shall determine
to
protect such rights. However, in
the event that the JV decides not to pursue or defend an action relating
to such intellectual property, either of the Founding Shareholders
shall
have the right to pursue or defend such action at its own cost in
order to
protect such rights for itself or the JV and, unless the JV’s
determination not to protect such rights derives only from such Founding
Shareholder’s vote or the vote of the directors nominated by such Founding
Shareholder, any amounts awarded by way of judgment, settlement or
compromise shall be paid to such Founding Shareholder. The Founding
Shareholders and the JV shall provide all reasonable cooperation
in any
action hereunder.
|
-35-
CONSOLIDATED
VERSION
|
10.4.
|
Further
Agreements.
Each of the Parties shall, promptly upon the request of any other
Party,
execute and deliver such documents or agreements (including, without
limitation, powers-of-attorney and licenses) as such Party shall
reasonably request to implement the provisions of this Section 10
from time to time.
|
|
10.5.
|
Chief
Scientist Funding.
Orbotech represents that the
research and development of the IP Rights (with respect to both JV
Existing Products and JV Development Products) to be made available
by
Orbotech were funded through the Office of the Chief Scientist at
the
Ministry of Industry and Trade of the State of Israel (the “OCS”)
and that the products and intellectual property of EIT which will
be made
available to the JV pursuant to Section 11.4 below were also funded
by the
OCS. Valor represents that none of the IP Rights made available by
Valor
were so funded. Accordingly, the availability and use of such IP
Rights
and other rights shall be subject to the approval of the OCS and
the terms
and conditions thereof and of the Law for the Encouragement of Industrial
Research and Development, 5744-1984 and the Regulations promulgated
thereunder. Orbotech shall apply to the OCS for its approval to the
transactions contemplated herein, and the Parties shall cooperate
as may
reasonably be required with respect thereto. The receipt of the approval
of the OCS in form and substance satisfactory to the Founding Shareholders
shall be a condition to Closing. Subject to the Closing, the JV shall
pay
all royalties due to the OCS with respect to the JV Products with
respect
to the period subsequent to the Closing and shall indemnify the other
Parties against any failure by the JV to pay such
royalties.
|
SECTION
11
Non-Competition,
Corporate Opportunities
Each
of
the Parties hereby undertakes to each of the other Parties as
follows:
|
11.1.
|
Non-Competition
of Founding Shareholders with the Joint Venture.
Unless otherwise set forth herein, each of the Founding Shareholders
shall
not, anywhere in the world, engage either “directly or indirectly” (as
defined in Section 11.5 below), in any activity which is one of the
JV
Activities or one of the activities approved pursuant to Section
11.2
below: for (a) a period which shall commence upon the Closing and
shall
continue for the period that such Founding Shareholder and/or its
Permitted Transferees shall hold an interest in the JV (the “Founding
Shareholder Holding Period”);
and (b) an additional period equal to the Founding Shareholder Holding
Period provided that such additional period shall not be more than
thirty-six (36) months or less than eighteen (18) months (the Founding
Shareholder Holding Period together with such additional period,
with
respect to each Founding Shareholder, is hereinafter called the
“Founding
Shareholder NC Period”).
|
-36-
CONSOLIDATED
VERSION
Notwithstanding
the above, no Founding Shareholder may
use any IP Developments in any activity which is one of the JV Activities
whether during its Founding Shareholder NC Period or thereafter.
|
11.2.
|
Non-Competition
of the JV Entities with Founding Shareholders.
For as long as both Founding Shareholders and/or their respective
Permitted Transferees hold interests in the JV, none of the JV Entities
shall engage, anywhere in the world, directly or indirectly in any
activity which is not one of the JV Activities without the consent
of both
Founding Shareholders. Thereafter, the JV will not compete with any
of the
products or services which were provided by a Founding Shareholder
upon
termination of its Founding Shareholder Holding Period, for the remainder
of its Founding Shareholder NC
Period.
|
|
11.3.
|
Deleted
|
|
11.4.
|
Purchase
of EIT and other CAM Opportunities by the
Parties.
|
|
11.4.1.
|
Orbotech
has represented that it has entered into an agreement with EIT and
Toyo
Ink. Mfg., Co. Ltd. (“Toyo”)
for the purchase of EIT’s assets and with respect to certain commitments
to support Toyo and its customers. Upon the later of the closing
of such
purchase or the Closing, Orbotech shall make available to the JV
all
rights and intellectual property acquired from EIT with respect to
the JV
Activities, including but not limited to, products, source codes,
documentation and the like, as well as the obligations to EIT and
Toyo
undertaken pursuant to such agreement against: (a) an immediate payment
of
US$*; and (b) additional quarterly payments equal to *% * derived
from the
sales of EIT products (not including support or service income) during
the
* years following the date that such assets become available to the
JV,
payable within 30 days of the end of each quarter, provided that
such
additional consideration shall not exceed US$*, in the aggregate
(i.e.,
US$* in all). V.A.T. shall be added by the JV to all payments hereunder.
Unless otherwise specified, the provisions of this Agreement shall
also
apply mutatis
mutandis to
the above rights and obligations made available to the JV as aforesaid.
Notwithstanding anything to the contrary contained herein (other
than as
set forth in Section 10.5 hereof and in Appendix
11.4.1
attached hereto), Orbotech makes no representation or warranty, express
or
implied, with respect to any rights or assets of EIT made available
in
accordance with the provisions hereof, all of which are provided
“as is”.
Orbotech shall indemnify and hold harmless the JV from and against
any
damages resulting from any breach by Orbotech of the agreement with
EIT
and Toyo and the JV shall indemnify
|
*
Omitted pursuant to a confidential treatment request.
The confidential portion has been filed separately with the SEC.
-37-
CONSOLIDATED
VERSION
and
hold harmless Orbotech from and against any
damages resulting from any non compliance by the JV with any obligation to
EIT
or Toyo assumed or to be performed hereunder by the JV.
|
11.4.2.
|
In
the event any of the Founding Shareholders or their Permitted Transferees
will otherwise purchase or receive rights with respect to CAM or
archiving products
for use by PCB Fabrication Entities during their respective Founding
Shareholder Holding Period, then such Founding Shareholder shall
give the
JV and the other Founding Shareholder prompt notice thereof and if
the JV
or the other Founding Shareholder shall so request, then: the acquiring
Founding Shareholder shall transfer and sell such purchased rights,
business or products to the JV at cost (or if the same shall not
be
permitted, behave with respect thereto in the manner set forth in
Section
5.13 hereof). In the event that such transfer (including in the manner
set
forth in Section 5.13 hereof) is prohibited by any law or agreement,
or in
the event rights as aforesaid with respect to CAM or archiving products
for use by PCB Fabrication Entities are purchased or acquired by
a
Founding Shareholder or its Permitted Transferee after the Founding
Shareholder Holding Period, then for the remainder of such Founding
Shareholder’s Founding Shareholder NC Period the relevant Founding
Shareholder shall not use such assets in a manner which shall violate
its
non-competition obligations set forth in Section 11 hereof or sell
such
assets (or otherwise make such assets available) to a competitor
of the JV
Entities without the prior written consent of the other Founding
Shareholder.
|
|
11.5.
|
“directly
or indirectly”.
Defined. For
purposes of this Section 11, “directly or indirectly” shall mean - either
as principal, agent, contractor, director, manager, shareholder,
investor,
guarantor, consultant or partner in any business, firm, partnership
or
corporation, either individually or in partnership or in conjunction
with
any person or persons, firm, business, association or corporation,
in any
way or manner, or any interest in or concern with or the assisting
of any
person or persons, firm, association, business or corporation engaged
which has as an objective, partial or otherwise, or is engaged with,
in
any manner of activity, in any of the activities specified in the
relevant
subsection of this Section 11.
|
|
11.6.
|
Corporate
Opportunities.
In addition to their obligations under Sections 11.1 through 11.5
above,
each of the Founding Shareholders shall notify the other Founding
Shareholder and the JV Company of any matter that might create a
potential
conflict with its obligations pursuant to this Agreement. The Founding
Shareholders and the JV Company will discuss the consequences and
implications of such issues or matters
and
|
-38-
CONSOLIDATED
VERSION
attempt
to resolve them amicably.
|
11.7.
|
Remedies.
The Founding Shareholders and the JV expressly agree and acknowledge
that
the detriment caused by any violation of any provision of Section
10 above
and this Section 11, among other sections of this Agreement, could
be so
severe and fundamental as to be impossible to quantify in monetary
damages. Accordingly, the Founding Shareholders agree that the JV
Company
and each Founding Shareholder shall be entitled to obtain an order
for
specific performance, by a temporary or permanent injunction against
a
violation, of any and all provisions of Section 10 above and this
Section
11 or any other appropriate equitable relief. Nothing in this Section
11.7
shall be interpreted to limit in any way any other legal or equitable
remedies which may be or become available as a result of a breach
of any
portion of Section 10 above and this Section 11, including monetary
damages.
|
|
11.8.
|
Employees.
Until the first to expire of the Founding Shareholder NC Periods
with
respect to either Founding Shareholder, neither of the Founding
Shareholders shall solicit for employment, or hire, until the lapse
of one
year from the termination of the employment of such employee by the
JV or
the other Founding Shareholder, whether directly or indirectly, any
of the
Designated Employees or any other employee of the JV or of the other
Founding Shareholder or of any of its Affiliates, and, in the event
this
Agreement is signed but the Closing does not occur, neither Founding
Shareholder shall, for a period of one (1) year following the date
hereof,
hire or solicit for employment, whether directly or indirectly, any
of the
employees of the other Founding Shareholder or its Affiliates without
its
written consent.
|
|
11.9.
|
Termination
upon Liquidation:
Notwithstanding anything contained in this Section 11 to the contrary,
the
Founding Shareholders’ obligations under this Section 11 shall terminate
upon completion of the dissolution or liquidation of the JVLP pursuant
to
the Partnerships Ordinance (New Version) 1975. The Founding Shareholders
hereby agree and undertake not to take any action including applying
to
any competent court or judicial body, for the liquidation or dissolution
of the JVLP prior to the expiration of 18 months from the Closing,
other
than as set forth in Section 3.5.3 above. Furthermore, upon such
dissolution or liquidation, each of the Founding Shareholders shall
be
free to employ any of the Designated Employees or any other employee
of JV
regardless of any undertaking of non-competition any such employee
may
have to the other Founding Shareholder, and no claim may be made
by such
other Founding Shareholder against such employee or the first Founding
Shareholder.
|
SECTION
12
Dispute
Resolution
-39-
CONSOLIDATED
VERSION
|
12.1.
|
Dispute.
In the event of a dispute that arises between the Parties based on
an
alleged breach or default of this Agreement, any question of
interpretation relating to this Agreement, or any other question,
conflict, or dispute relating hereto or to the Parties’ rights or
obligations hereunder, the disputing Parties shall meet and negotiate
in
good faith to settle the matter amicably. If the disputing Parties
are
unable to settle such matter within 3 days after either Party has
given
the other written notice of the dispute, either disputing Party may
initiate the arbitration procedure set forth below by notice in writing
to
the other Party (the “Dispute
Notice”).
The Dispute Notice shall set forth the subject matter of the dispute,
the
notifying Party’s proposed resolution of the dispute and, to the best of
the notifying Party’s knowledge and understanding, the other Party’s
proposed resolution of the dispute.
|
|
12.2.
|
Appointment
of Arbitrator.
Within thirty (30) days following delivery of the Dispute Notice,
the
Parties in dispute shall appoint a single arbitrator (the “Arbitrator”)
to finally resolve issues hereunder. The Arbitrator shall resolve
disputes
within 60 days of receipt of the Dispute Notice or within a time
frame as
shall otherwise be agreed by the disputing Parties. The governing
law
which the Arbitrator shall apply shall be the laws of the State of
Israel,
the Arbitrator shall be exempt from the rules of civil procedure
and
evidence, but shall be required to make his or her decision in accordance
with substantive law and shall be required to give reasons for his
decision. The decision of the Arbitrator shall legally bind the disputing
Parties and may be enforced by a court of competent jurisdiction.
The
arbitration proceedings shall be conducted in
Hebrew.
|
|
12.3.
|
Court
Jurisdiction.
Should the disputing Parties be unable to agree upon the Arbitrator
or
neither disputing Party shall elect to initiate arbitration within
30 days
following the Dispute Notice, then the matter shall be subject to
the sole
and exclusive jurisdiction of the competent courts of Tel-Aviv and
each
disputing Party shall have the right to file and submit their claims
with
such court against the other disputing
Party.
|
SECTION
13
Term
|
13.1.
|
Term.
The term of this Agreement shall expire at such time in which none
of the
Founding Shareholders (or their Permitted Tranferees) shall hold
any
Beneficial Interests.
|
|
13.2.
|
Breach.
It is the intention of the Founding Shareholders that none of the
Parties
shall have the right to terminate this Agreement and that the sole
remedies for a violation by any party hereto of any of its obligations
under the terms of this Agreement or if any representation or warranty
made by
|
-40-
CONSOLIDATED
VERSION
either
Party shall no longer be correct shall be
specific enforcement or damages. Notwithstanding the foregoing, in the event
that a Party shall commit a violation such that a court shall determine that
the
Parties would not have intended that this Agreement remain in effect, then,
any
other Party shall have the right to terminate this Agreement upon 90 days’ prior
written notice, and such notice of termination shall become effective unless
the
violation shall be completely remedied in the 90 day period (or, in case of
violations which may not be cured within 90 days, if the defaulting Party shall
not within such 90 day period undertake to cure such violation and to complete
such cure within an additional 90 days).
|
13.3.
|
Survival.
Without derogating from the effect of specific provisions in this
Agreement regarding term or survival of certain Sections, the following
provisions shall survive the expiration or other termination of this
Agreement: Sections 1, 5.6-5.8, 11.7, 12, 17 (other than indemnification
of the JV), 19 and 20.
|
SECTION
14
Closing
|
14.1.
|
Conditions
Precedent.
The Founding Shareholders’ obligations to consummate their obligations
hereunder are contingent upon the receipt of the following documents
in
form and substance acceptable to the Founding Shareholders (“Conditions
Precedent”),
on or before the Closing Date (the receipt of any or all of which
may be
waived by agreement between the Founding
Shareholders):
|
|
14.1.1.
|
Approval
of the transactions contemplated hereunder by the Israel Restrictive
Trade
Practices Commissioner.
|
|
14.1.2.
|
The
pre-ruling of the Israel Income Tax Authorities, stating that the
transactions contemplated hereunder and the establishment of the
JV may be
executed without any detrimental tax
result.
|
|
14.1.3.
|
The
approval of the Investment Center to the transactions contemplated
hereunder.
|
|
14.1.4.
|
The
approval of the OCS.
|
|
14.1.5.
|
The
approval by the United States Securities and Exchange Commission
confirming and approving the presentation of Valor’s interests in the JV
(including the proportionate JV sales turnover), in Valor’s financial
statements and in a prospectus for an IPO of Valor, in the “proportionate
consolidation” method.
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CONSOLIDATED
VERSION
|
14.2.
|
Each
Founding Shareholder’s Conditions to the Closing.
|
|
Valor’s
obligation to consummate its obligations hereunder is subject to
the
fulfillment, prior to or at the Closing Date, of each of the conditions
set forth in Sections 14.2.1 and 14.2.2 below and Orbotech’s obligation to
consummate its obligation hereunder is subject to the fulfillment,
prior
to or at the Closing Date, of each of the conditions set forth in
Sections
14.2.1 - 14.2.3 below (collectively the “Founding
Shareholder Conditions”)
(any or all of which may be waived by the relevant Founding
Shareholder):
|
|
14.2.1.
|
all
representations and warranties of the other Founding Shareholder
contained
herein are true and correct in all material respects at the Closing
Date.
|
|
14.2.2.
|
all
obligations, representations, warranties, covenants, agreements and
conditions contained in this Agreement to be made, performed or complied
with by the other Founding Shareholder at or prior to the Closing
Date
shall have been made, performed or complied with in all material
respects.
|
|
14.2.3.
|
Receipt
of the written consent of the banks set forth in Appendix
8
hereto in form and substance acceptable to Orbotech to the consummation
of
the transactions contemplated
herein.
|
|
14.3.
|
Closing.
The Closing shall take place at the offices of Xxxxx Xxxxx-Xxxxx
Xxxxx, 14
Abba Hillel Road, Ramat Gan, at 12:00 on
the Closing Date, or at such other date, time or place as the Parties
hereto shall mutually agree upon in
writing.
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|
14.4.
|
Transactions
at Closing.
Subject in each case to the terms and conditions contained in this
Agreement, the following documents shall be executed and delivered
by the
Parties prior to or concurrently with the Closing, except as otherwise
expressly stated; such documents shall be deemed to have been executed
and
delivered simultaneously and no documents shall be deemed to have
been
executed or delivered until all such documents have been executed
and
delivered:
|
|
14.4.1.
|
The
JVLP Agreement, in the form attached hereto as Appendix
14.4.1.
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|
14.4.2.
|
Notification
to Registrar of Partnerships, in the form attached hereto as Appendix
14.4.2.
|
|
14.4.3.
|
Memorandum
of Association of the JV Company, in the form attached hereto as
Appendix
14.4.3.
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CONSOLIDATED
VERSION
|
14.4.4.
|
Articles
of Association of the JV Company, in the form attached hereto as
Appendix
14.4.4.
|
|
14.4.5.
|
Notification
to Companies Registrar, in the form attached hereto as Appendix
14.4.5.
|
|
14.4.6.
|
Nomination
of Directors, in the form attached hereto as Appendix
14.4.6.
|
|
14.4.7.
|
Share
Certificates in the form attached hereto as Appendix
14.4.7.
|
|
14.5.
|
Outside
Closing Date.
In the event that as of October 31, 1998, any of the Conditions Precedent
or Founding Shareholder Conditions shall not have occurred and the
same
shall not have been expressly waived by the Founding Shareholders,
then
the Founding Shareholders shall discuss the extension of such date
as well
as their conduct during any such extension period provided that this
Agreement may be cancelled at any time after October 31, 1998 upon
written
notice by either Founding Shareholder to the other. In the event
that this
Agreement shall be so cancelled, this Agreement shall be null and
void and
none of the declarations, representations, warranties or undertakings
set
forth herein (including the Preamble and the Appendices hereto),
other
than that set forth in Section 11.8 hereof, shall be of any force
or
effect and, except as aforesaid, no Party shall have any further
obligation to the other.
|
SECTION
15
Post
Closing Covenants
|
15.1.
|
Transition.
During the Founding Shareholder’s NC Period, (a) such Founding Shareholder
shall refrain from taking any action that is designed or intended
to have
the effect of discouraging any lessor, licensor, customer, supplier
or
other business associate of the Founding Shareholders from maintaining
the
same business relationships with the JV Entities (or their sales
channels)
after the Closing Date as it maintained with the Founding Shareholders
(or
their sales channels) prior to the date hereof or is otherwise reasonably
expected to have a detrimental effect on the JV Activities; and (b)
during
the Founding Shareholder’s Holding Period, such Founding Shareholder will
refer to the JV Entities (or their sales channels) all inquiries
by its
current or former customers (as of the Closing Date) relating to
the JV
Activities.
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|
15.2.
|
Access
to Information.
Until the eighth (8th) anniversary of the Closing, each Founding
Shareholder shall: (a) retain or otherwise provide for the retention
and
safe keeping of all of its books and records that are not transferred
to
the JV Entities pursuant to this Agreement and which relate to the
JV
Existing Products or JV Development Products during
|
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CONSOLIDATED
VERSION
periods
prior to the Closing Date; and (b) upon
reasonable notice, afford or otherwise provide or enable the officers, employees
and authorized agents and representatives of the JV Entities reasonable access
(including the right to make photocopies at JV Entities’ expense), during normal
business hours, to such books and records.
SECTION
16
Transfer
of Shares; Exit Arrangements
|
16.1.
|
Transfer
of Shares.
|
|
16.1.1.
|
Except
as otherwise provided in this Section 16 below, no shareholder or
partner
shall be permitted to transfer any shares or other equity or partnership
interest in any of the JV Entities (but not including the right to
distributions from the JV) (the “Beneficial
Interests”)
without the prior written permission of both Founding Shareholders
for a
period of 5 years from the Closing (the “No
Sale Period”).
The provisions of this Section 16 shall also be set forth in the
respective Articles of Association and Limited Partnership Agreement
of
the JV Entities. Additionally, the JV Company shall not transfer
any of
its partnership interests in the JVLP without the consent of the
holders
of seventy-five percent (75%) the outstanding shares of the JV
Company.
|
|
16.1.2.
|
Except
as otherwise expressly provided herein, at no time during the term
of this
Agreement shall any shareholder or partner of any of the JV Entities
pledge, charge, hypothecate, encumber, grant any security interest
in, or
otherwise grant any rights to any third party concerning any Beneficial
Interests without the prior written permission of both Founding
Shareholders unless: (i) the pledgee is a “bank” (as such term is used in
the Israel Banking (Licensing) Law 1981-5741); and (ii) the pledgee
undertakes and agrees, in writing, that its rights in such Beneficial
Interests shall be subject to all the restrictions regarding transfer
of
Beneficial Interests contained in this Section 16.
|
|
16.1.3.
|
Subsequent
to the No Sale Period, any transfer of Beneficial Interests shall
be in
accordance with the provisions set forth in this Section
16.
|
|
16.1.4.
|
Unless
otherwise agreed by the Founding Shareholders, a Founding Shareholder
may
not, at any time, transfer any Beneficial Interest in any JV Entity
unless
it transfers at the same time and to the same Transferee the corresponding
Beneficial Interest in all JV
Entities.
|
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CONSOLIDATED
VERSION
|
16.1.5.
|
A
Permitted Transferee may not transfer its Beneficial Interests other
than
in connection with a transfer by a Founding Shareholder or as set
forth in
Section 16.5 hereof.
|
|
16.2.
|
Right
of First Negotiation; Open Negotiation Period.
|
|
16.2.1.
|
At
any time after the No Sale Period, either Founding Shareholder (the
“Transferor”)
desiring to transfer all or any portion of its Beneficial Interests
(other
than pursuant to the Permitted Transferee or Forced Exit provisions
set
forth in Sections 16.5 and 16.6 below) shall send to the JV Entities
and
to the other Founding Shareholder (the “Other
Founding Shareholder”)
a written notice (the “First
Negotiation Notice”)
stating the Transferor’s intention to transfer its Beneficial
Interests.
|
|
16.2.2.
|
For
a period of up to thirty (30) business days after the delivery of
the
First Negotiation Notice (the “First
Negotiation Period”),
the Transferor shall negotiate exclusively with the Other Founding
Shareholder with respect to the Other Founding Shareholder’s purchase of
all of the Transferor’s Beneficial Interests offered for transfer, subject
to any restrictions in law, free of any charge, pledge, lien or any
other
third party right.
|
|
16.2.3.
|
In
the event that the Founding Shareholders do not execute a definitive
agreement with respect to the Other Founding Shareholder’s purchase of all
of the Transferor’s Beneficial Interests offered for transfer within the
First Negotiation Period, then, the Transferor may, within ninety
(90)
days after the First Negotiation Period, offer for sale such Beneficial
Interests (the “Open
Negotiation Period”)
(subject to the Right of First Refusal, Right to Tag Along and Right
of
Approval set forth below).
|
|
16.2.4.
|
In
the event that the Transferor shall not execute an agreement with
a bona
fide purchaser upon the terms of the transfer of its Beneficial Interests
during the Open Negotiation Period, the Transferor shall not continue
to
offer or otherwise seek to transfer its Beneficial Interests without
again
complying with the first negotiation procedure set forth above (and
the
Right of First Refusal, Right to Tag Along and Right of Approval
set forth
below).
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|
16.3.
|
Right
of First Refusal; Right to Tag Along.
At any time during the Open Negotiation Period, the Transferor may
enter
into an agreement (the “Terms
Agreement”)
with a bona fide proposed purchaser
(the
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CONSOLIDATED
VERSION
“Transferee”)
with
respect to the terms of sale of all or such portion of the Transferor’s
Beneficial Interests offered for transfer during the First Negotiation Period
provided the Transferor shall first offer to the Other Founding Shareholder:
(a)
the right to purchase all or such portion of the Transferor’s Beneficial
Interests, pursuant to the Terms Agreement (“Right
of First Refusal”);
and
(b) the right to join the Transferor in its sale of Beneficial Interests to
the
Transferee, such that if the other Founding Shareholder so elects (as an
alternative to the Right of First Refusal), the Transferor may not sell its
Beneficial Interests unless the Transferee agrees to purchase the same
percentage of Beneficial Interests from the Other Founding Shareholder as it
is
purchasing from the Transferor, pursuant to the Terms Agreement (“Right
to Tag Along”).
Any
transfer of Beneficial Interests by the Transferor to the Transferee shall
also
be subject to the Right of Approval set forth in Section 16.4
below.
|
16.3.1.
|
Rights
Notice.
The Transferor shall offer the Right of First Refusal and the Right
to Tag
Along to the other Founding Shareholder pursuant to a written notice
to
the JV Entities and to the Other Founding Shareholder providing details
of
the Transferee and a copy of the Terms Agreement (the “Rights
Notice”).
|
|
16.3.2.
|
Exercise
Notice.
The Other Founding Shareholder may exercise its Right of First Refusal
or
Right to Tag Along by giving the Transferor and the JV Entities a
written
notice to that effect within thirty (30) days after being served
with the
Rights Notice subject to an additional 90 day period to permit the
Other
Founding Shareholder to obtain all necessary approvals in connection
with
such purchase (and the other Parties shall provide all reasonable
assistance to the Other Founding Shareholder in connection therewith)
(the
“Exercise
Notice”).
|
|
16.3.3.
|
Purchase
by the Other Founding Shareholder.
If the Other Founding Shareholder shall timely exercise its Right
of First
Refusal, then the Transferor’s Beneficial Interests will be sold and
transferred to the Other Founding Shareholder, in accordance with
the
provisions of the Terms Agreement and this Section
16.
|
|
16.3.4.
|
Purchase
by Transferee; Tag Along.
If, (a) the Transferor shall properly give the First Negotiation
Notice
and the Rights Notice, as set forth above; and (b) the Other Founding
Shareholder shall not timely exercise its Right of First Refusal,
then:
(i) none of the Transferor’s Beneficial Interests will be
|
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CONSOLIDATED
VERSION
sold
to the Other Founding Shareholder; and (ii) subject
to the Other Founding Shareholder’s Right of Approval, the Transferor shall,
within sixty (60) days after the last date on which the Exercise Notice may
be
submitted, sell to the Transferee, all of the Transferor’s Beneficial Interests
pursuant to the Terms Agreement provided
that
if the
Other Founding Shareholder shall have timely exercised its Right of Tag Along,
then none of the Transferor’s Beneficial Interests will be sold unless the
Transferee purchases (pursuant to the Terms Agreement) all of the Beneficial
Interests offered by the Other Founding Shareholder pursuant to its Right to
Tag
Along.
|
16.3.5.
|
In
the event that the Transferor’s Beneficial Interests are not sold by the
Transferor as set forth in Section 16.3.4 above (including by reason
of
the Transferee’s refusal to satisfy the Other Founding Shareholder’s
exercise of its Right to Tag Along) within such sixty (60) day period,
then the Transferor’s Beneficial Interests may not be offered or otherwise
transferred unless the Transferor shall again comply with all of
the
provisions of Section 16.2 and this Section
16.3.
|
|
16.4.
|
Right
of Approval.
|
|
16.4.1.
|
Notwithstanding
the foregoing provisions of this Section 16, any transfer of Beneficial
Interests to a Transferee which is not a Permitted Transferee of
the
Transferor shall also be subject to the approval of the identity
of the
Transferee by the Other Founding Shareholder, which approval may
not be
unreasonably withheld and without providing a written detailed explanation
(“Right
of Approval”)
provided that: (a) in the event that the Transferee is a competitor
of the
Other Founding Shareholder, then the Other Founding Shareholder may
refuse
to grant such approval, in its sole discretion, by giving written
notice
of such competitive relationship and without further explanation;
and (b)
no such approval shall be required in the event that the Other Founding
Shareholder shall exercise its Right to Tag
Along.
|
|
16.4.2.
|
The
Transferor may at any time request the Other Founding Shareholder’s
approval of the identity of the Transferee by giving written notice
of
name of the Transferee (including by providing written notice thereof
in
the Rights Notice). The Other Founding Shareholder shall respond
to the
Transferor’s request within ten (10) days after delivery of the
Transferor’s notice and such other information as the Other Founding
Shareholder may reasonably request. Such approval
shall
|
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CONSOLIDATED
VERSION
be
deemed granted in the event that the Other
Founding Shareholder shall fail to respond within such 10 day
period.
|
16.4.3.
|
If
the Transferor believes that the other Founding Shareholder is
unreasonably withholding its approval, then, within 10 days of delivery
of
the Other Founding Shareholder’s written explanation, the Transferor may
submit the matter to the dispute resolution procedure set forth in
Section
12 above.
|
|
16.5.
|
Certain
Permitted Transfers.
|
|
16.5.1.
|
Notwithstanding
the foregoing provisions of this Section 16, each of the Founding
Shareholders may transfer a portion of its Beneficial Interests to
an
entity in which the Founding Shareholder beneficially holds, directly
or
indirectly (including through other such wholly-owned entities),
all of
the voting and equity interests in such entity (each, a “Permitted Transferee”)
and Permitted Transferees may transfer Beneficial Interests to other
Permitted Transferees and the Founding Shareholders in the manner
set
forth in Section 16.5.2 below, and the Other Founding Shareholder’s Right
of First Refusal, Right to Tag Along and Right of Approval shall
not
apply, provided, however, that all such Beneficial Interests transferred
by a Founding Shareholder or its Permitted Transferee shall continue
to be
subject to such rights as if such Beneficial Interests were still
owned by
the transferring Founding
Shareholder.
|
|
16.5.2.
|
A
Founding Shareholder or a Permitted Transferee may transfer all or
any
portion of its Beneficial Interests to one or more Permitted Transferees
provided, however, that as a condition to the validity of any such
transfer:
|
|
16.5.2.1.
|
the
Founding Shareholder or transferring Permitted Transferee shall have
given
written notice to the JV Entities and the Other Founding Shareholder
of
details of the transfer, including the Founding Shareholder’s
certification that the transferee is a Permitted Transferee and that
all
necessary approvals in connection with such transfer have been obtained
and providing appropriate supporting
documents;
|
|
16.5.2.2.
|
such
Permitted Transferee shall agree in writing to be bound by all the
terms
and provisions of this Agreement and to assume all of the obligations
hereunder to the same extent as the transferring
|
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CONSOLIDATED
VERSION
Founding
Shareholder; and
|
16.5.2.3.
|
the
transferring Founding Shareholder shall acknowledge in writing that
it is
not released from any of its obligations hereunder and that it shall
be
liable for and guarantees the performance by the Permitted Transferee
of
its obligations and undertakings
hereunder.
|
|
16.5.3.
|
Change
in Permitted Transferee Relationship.
|
|
16.5.3.1.
|
Notwithstanding
any provision of this Agreement to the contrary, in the event that
a
transferee of Beneficial Interests pursuant to Sections 16.5.1 and
16.5.2
ceases to be a “Permitted Transferee” of a Founding Shareholder during the
term of this Agreement, then: (i) the transferring Founding Shareholder
(or if such transferring Founding Shareholder shall no longer hold
any
Beneficial Interests, the Permitted Transferee thereof) shall notify
the
Other Founding Shareholder (or the Permitted Transferee thereof)
and the
JV Entities of the change within ten (10) business days
thereof.
|
|
16.5.3.2.
|
Within
7 days of delivery of the foregoing notice, the Other Founding Shareholder
and the Founding Shareholder (or if any of the Founding Shareholders
shall
no longer hold any Beneficial Interests, such Permitted Transferee)
shall
appoint a mutually agreed professional third party appraiser (the
“Appraiser”)
to determine the value of the Permitted Transferee’s Beneficial Interests
(the “Valuation”).
In the event that the Founding Shareholders (and/or their Permitted
Transferees) shall fail to agree upon an appraiser, the same shall
be
appointed by the District Court in Tel-Aviv upon the application
of either
Founding Shareholder (or its Permitted Transferee). The Founding
Shareholder whose transferee ceased to be a Permitted Transferee
(or if
the Founding Shareholder shall no longer hold any Beneficial Interests,
such Permitted Transferee) shall pay the expenses of the
Appraiser.
|
|
16.5.3.3.
|
The
Appraiser shall complete the Valuation and shall provide both Founding
Shareholders with a signed written original thereof. The Valuation
shall
be final for purposes of this Section
16.5.3.
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CONSOLIDATED
VERSION
|
16.5.3.4.
|
The
Other Founding Shareholder shall have 30 days from the date of receipt
of
the Valuation to purchase the Beneficial Interests of such transferee
who
ceased to be a Permitted Transferee at a price which shall be equal
to 80%
of the value of such Beneficial Interests set forth in the
Valuation.
|
|
16.6.
|
Change
in Control.
|
|
16.6.1.
|
In
the event that there is a “Change in Control” (as defined below) of either
Founding Shareholder (herein, “Changed
Shareholder”)
during the period in which such Founding Shareholder and its Permitted
Transferees holds any Beneficial Interests, the Changed Shareholder
shall
give written notice thereof to the other Founding Shareholder (the
“Other
Shareholder”)
within 10 days thereof provided the Other Shareholder (together with
its
Permitted Transferees) holds at such time, at least a 30% interest
in the
JV. Within 30 days of the Changed Shareholder’s notice, the Other
Shareholder may give written demand to the Changed Shareholder to
negotiate exclusively with the Other Shareholder for a period of
thirty
(30) business days with respect to the Other Shareholder’s purchase of all
of the Changed Shareholder’s Beneficial
Interests.
|
|
16.6.2.
|
In
the event that the Founding Shareholders do not execute a definitive
agreement with respect to the Other Shareholder’s purchase of all of the
Changed Shareholder’s Beneficial Interests within such negotiation period,
then, the Other Shareholder may, within 15 days thereafter, give
written
notice to the Changed Shareholder invoking the “Sell-Buy Procedure” set
forth in Section 16.7 below (the “Sell-Buy
Notice”.)
|
|
16.6.3.
|
Change
of Control of a Founding Shareholder.
For purposes of this Section 16.6, a “Change
in Control”
of a Founding Shareholder shall be deemed to have occurred: (i) with
respect to Valor, until the closing of the initial public offering
of its
shares to the public pursuant to a prospectus or similar document
in
Israel or abroad, if the “Controlling
Group of Valor”
(as defined in Appendix
16.6.3),
directly or indirectly, owns beneficially or of record less than
50.01% of
the combined voting power of the outstanding voting securities of
Valor;
or (ii) with respect to either Founding Shareholder if the board
of
directors of such Founding Shareholder (or, if approval of the
shareholders is required, the shareholders of the Founding Shareholder)
shall approve: (a) any
|
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CONSOLIDATED
VERSION
consolidation
or merger of the Founding Shareholder in
which the Founding Shareholder is not the continuing or surviving corporation
or
pursuant to which shares of such Founding Shareholder would be converted into
cash, securities or other property, other than a merger of the Founding
Shareholder in which the holders of shares of such Founding Shareholder
immediately prior to the merger have the same proportionate ownership of shares
of the surviving corporation immediately after the merger; or (b) the adoption
of any plan or proposal for the liquidation or dissolution of the Founding
Shareholder; or (iii) during any period of two consecutive years, individuals
who at the beginning of such period constituted the entire board of directors
of
such Founding Shareholder cease for any reason to constitute a majority thereof
unless the election, or the nomination for election by such Founding
Shareholder’s shareholders, of each new director was approved by a vote of at
least two-thirds of the directors then still in office who were directors at
the
beginning of the period; or (iv) if a competitor of the other Founding
Shareholder shall acquire, directly or indirectly, beneficially or of record,
10% or more of the combined voting power of the outstanding voting securities
of
such Founding Shareholder.
|
16.7.
|
Sell-Buy
Procedure.
|
|
16.7.1.
|
In
the event that the Other Shareholder shall give the Sell Buy Notice
as set
forth above then within 7 days of delivery of such notice, the Founding
Shareholders shall appoint an Appraiser to provide a Valuation of
all of
the Beneficial Interests of both Founding Shareholders and their
Permitted
Transferees pursuant to the procedures set forth in Sections 16.5.3.2
and
16.5.3.3 except that the JV shall pay the expenses of the
Appraiser.
|
|
16.7.2.
|
The
Valuation shall be final for purposes of the remainder of this Section
16.7.
|
|
16.7.3.
|
Each
of the Founding Shareholders shall have 30 days from the date of
receipt
of the Valuation to make an offer to the other Founding Shareholder
to
purchase the other Founding Shareholder’s Beneficial Interests at a price
which shall at least equal the value of such Beneficial Interests
as set
forth in the Valuation (a “Buy Offer”).
|
|
16.7.4.
|
In
the event only one of the Founding Shareholders makes a Buy Offer,
the
other Founding Shareholder shall be obliged to sell its Beneficial
Interests to the offering Founding Shareholder at the price
offered.
|
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CONSOLIDATED
VERSION
|
16.7.5.
|
In
the event that both Founding Shareholders wish to buy the other Founding
Shareholder’s Beneficial Interests, the Founding Shareholders shall bid
against each other by means of sending Buy Offers and counter Buy
Offers
to each other. The Founding Shareholder offering the highest amount
shall
be entitled to buy all of the other Founding Shareholder’s Beneficial
Interests and such other Founding Shareholder shall be obliged to
sell the
same at the price offered. Counter Buy Offers shall be made within
15 days
of receipt of a Buy Offer. If an offeree Founding Shareholder fails
to
respond to a Buy Offer (i.e., to give a counter Buy Offer) within
15 days
of receipt of the Buy Offer, the Buy Offer shall be deemed to have
been
accepted by the offeree Founding Shareholder for all purposes
herein.
|
|
16.7.6.
|
In
the event that neither of the Founding Shareholders makes a Buy Offer
within 30 days of receipt of the Valuation or neither Founding Shareholder
agrees to purchase the other Founding Shareholder’s Beneficial Interests
based upon a price at least equal to that reflected in the Valuation,
the
Parties shall dissolve the JV Entities and all subsidiaries thereof
pursuant to applicable law.
|
|
16.8.
|
Closing;
Directors.
Once it is determined which Founding Shareholder will be transferring
its
Beneficial Interests in the JV to the other Founding Shareholder
or
another purchaser (the “Selling
Shareholder”),
the Founding Shareholders shall negotiate a closing date for the
transfer
of such Beneficial Interests to the purchasing Founding Shareholder
or its
designee for a date no later than 45 days from the date of the acceptance
(or deemed acceptance) of the Buy Offer. All members of the Board
of
Directors of the JV Entities who were designated by virtue of the
Beneficial Interests so transferred shall be deemed to be dismissed
from
their positions as of the date of the closing of such transfer, and
such
open directorships shall be filled by the remaining Founding Shareholder.
|
|
16.9.
|
Selling
Shareholder’s Obligations.
The Selling Shareholder shall comply with the following
provisions:
|
|
16.9.1.
|
For
a period of one (1) year following the sale of all of its Beneficial
Interests in the JV Entities in accordance with the provisions of
Sections
16.1 - 16.6 (the “Sale”),
each of the Selling Shareholder and the JV shall continue to supply
the
other with the type of goods and services that it supplied in the
six
month period prior to the Sale under a supply agreement to be entered
into
at arms length prices. The Selling Shareholder and the JV shall also
continue to provide any support for the products it provided prior
to the
Sale, and shall, for the same
|
-52-
CONSOLIDATED
VERSION
period
of time, continue to provide the same type and
level of support, if any, that it previously provided to the other for the
products produced by it. Notwithstanding the foregoing, the JV shall have the
right to terminate any sales, agency or customer support agreement with any
subsidiary of the Selling Shareholder without charge and the Selling Shareholder
shall cause its subsidiary to give its consent to any such termination. The
Selling Shareholder shall indemnify the other Founding Shareholder and the
JV
from and against any claims made by any of its subsidiaries in this
respect.
|
16.9.2.
|
The
Selling Shareholder and/or the JV shall provide to the other a list
of the
suppliers of goods and services used and/or utilized by it in the
procurement of raw or finished goods and materials that it sold to
the
other prior to the Sale.
|
|
16.9.3.
|
All
rights to IP Rights or other intellectual property granted by the
Selling
Shareholder to the JV Entities hereunder, and granted by the JV Entities
to the Selling Shareholder, under and during the course of this Agreement,
including rights to IP Developments granted under Section 10.2 shall
remain in effect after the Sale.
|
|
16.9.4.
|
The
Buying Shareholder shall be obliged to assume all outstanding loans
which
were granted by the Selling Shareholder to the JV
Entities.
|
SECTION
17
Indemnification
|
17.1.
|
Indemnification
by Orbotech.
Orbotech will indemnify Valor and the JV Entities and each of their
officers, directors, employees, and agents (collectively, “Orbotech Indemnified
Persons”)
against, and hold each of them harmless from, any and all damage,
loss,
liability and expense (including, without limitation, reasonable
expenses
of investigation and reasonable attorneys’ fees and expenses in connection
with any action, suit or proceeding) incurred or suffered by any
Orbotech
Indemnified Person arising out of any breach of any representation,
warranty, undertaking or agreement made or to be performed by Orbotech
pursuant to this Agreement.
|
|
17.2.
|
Indemnification
by Valor.
Valor will indemnify Orbotech and the JV Entities, and each of their
officers, directors, employees, and agents (collectively, “Valor Indemnified
Persons”)
against, and hold each of them harmless from, any and all damage,
loss,
liability and expense (including, without limitation, reasonable
expenses
of investigation and reasonable attorneys’ fees and expenses in connection
with any action, suit
|
-53-
CONSOLIDATED
VERSION
or
proceeding) incurred or suffered by any Valor
Indemnified Person arising out of any breach of any representation, warranty,
undertaking or agreement made or to be performed by Valor pursuant to this
Agreement.
SECTION
18
Confidentiality
|
18.1.
|
Publicity.
None of the Parties shall release any information or issue or cause
the
publication of any press release, other than the press release annexed
hereto as Appendix
18.1
and at such time as shall be agreed by the Founding Shareholders,
with
respect to the JV or the subject matter of this Agreement without
the
consent of the other Parties, except as required by regulatory bodies
having jurisdiction over such Party, and except as deemed necessary
by a
Party, in connection with reporting requirements applicable to its
status
as a publicly-traded company, or by the JV in connection with the
business
of the JV or as required pursuant to applicable securities laws and
regulations for the purposes of preparing or filing a prospectus
with
respect to the offering to the public of shares of either Founding
Shareholder, provided that such Founding Shareholder shall request,
and
use reasonable efforts to procure, that this Agreement be kept
confidential and not made available for public inspection or review.
For
so long as Valor’s shares are not publicly traded, all press releases with
respect to the JV or this Agreement as aforesaid will be made by
Orbotech,
and, at such time as both Founding Shareholders’ shares are publicly
traded, will be coordinated and made by both Founding
Shareholders.
|
|
18.2.
|
Confidentiality.
Each of the Founding Shareholders shall hold in strict confidence
and
shall cause its directors, shareholders, employees, consultants and
advisors to hold in strict confidence, all documents and information
concerning the JV Entities and the JV Products furnished to it or
its
representatives at any time (collectively, the “Confidential
Information”)
and will use the Confidential Information only in connection with
its
capacity as a shareholder of the JV Company; except as deemed necessary
by
such Founding Shareholder, in connection with reporting requirements
applicable to its status as a publicly-traded company, or to protect
its
rights hereunder or as otherwise required by law or as required pursuant
to applicable securities laws and regulations for the purposes of
preparing or filing a prospectus with respect to the offering to
the
public of shares of either Founding Shareholder, provided that such
Founding Shareholder shall request, and use reasonable efforts to
procure,
that this Agreement be kept confidential and not made available for
public
inspection or review.
|
SECTION
19
Waiver
of Claims
-54-
CONSOLIDATED
VERSION
|
19.1.
|
Waiver
by Founding Shareholders. Provided
that all Conditions Precedent and Founding Shareholder Conditions
specified in Section 14 have been fully met or waived in writing,
(a) the
Founding Shareholders hereby release and forever discharge each other
and
any Claims Affiliates (as defined in Section 19.3 hereof), of and
from any
and all claims, debts, liabilities, damages, lost profits, property
damages, losses of services, expenses, compensation, demands, obligations,
costs, actions and causes of action of every nature, character and
description, known and unknown, vested and contingent, which they
now own
or hold, or have at any time owned or held, against each other arising
from any of the Founding Shareholders’ activities, lack of activities or
from any reason whatsoever prior to the Closing; and (b) each Founding
Shareholder shall cancel and withdraw, immediately after the Closing,
all
proceedings, complaints etc., initiated by it (and shall cause the
same
with respect to proceedings initiated by its Claims Affiliates) against
the other Founding Shareholder or its Claims Affiliates pending before
any
Authority, person or corporation, whether in Israel or anywhere in
the
world.
|
|
19.2.
|
No
Claims Assigned.
Each of the Founding Shareholders represents and warrants that it
has not
assigned or transferred or purported to assign or transfer to any
person,
firm or corporation whatsoever, any claim, debt, liability, demand,
obligation, cost, expense, action or cause of action herein released.
If
there is any claim, debt, liability, demand, obligation, cost, expense,
action or cause of action based on or arising out of or in connection
with
any such transfer or assignment or purported transfer or assignment,
the
transferring or assigning Founding Shareholder agrees to indemnify
and
hold the other Founding Shareholder and the JV harmless against such
assigned or purportedly assigned claim, debt, liability, demand,
obligation, cost, expense, action or cause of action, including reasonable
attorneys’ fees and costs incurred in connection
therewith.
|
|
19.3.
|
Claims
Affiliates Defined.
For the purpose of this Section 19 only, “Claims
Affiliates”
of a Founding Shareholder shall mean its direct and indirect shareholders,
subsidiaries, representatives, agents, employees, attorneys, officers
and
directors.
|
SECTION
20
General
Provisions
|
20.1.
|
Relationship
of the Parties.
The Parties are strictly independent contractors and shall so represent
themselves to all third parties. No Party has the right to bind any
other
in any manner whatsoever and nothing in this Agreement shall be
interpreted to make any Party the agent or legal representative of
any
other.
|
|
20.2.
|
Assignment.
This Agreement and its appendices shall not be assigned
by
|
-55-
CONSOLIDATED
VERSION
any
Party without the prior written consent of the other
Parties.
|
20.3.
|
Taxes.
Each Party shall be solely responsible for any income, sales, use,
service
or other tax levied or incurred on account of the Agreement or the
activities hereunder. If required by law, each Party may withhold
at the
source any withholding tax based on the income received by the other
Party
under this Agreement.
|
|
20.4.
|
Force
Majeure.
No Party shall be held responsible for any delay or failure in performance
hereunder caused in whole or in part by fires, strikes, floods, embargoes,
labor disputes, acts of sabotage, riots, accidents, voluntary or
mandatory
compliance with any governmental act, regulation or request, acts
of God
or public enemy, war acts, or omissions or other causes beyond its
control
and without its fault or
negligence.
|
|
20.5.
|
Notice.
Notice as required herein shall be delivered by courier service with
receipt of delivery at the address stated above. A notice shall be
effective as of the date so
delivered.
|
|
20.6.
|
Entire
Agreement and Amendment.
This Agreement and the Preamble and Appendices hereto, constitute
the
entire agreement between the Parties with respect to the subject
matter
hereof and contain all of the promises, undertakings, and other
representations made by the Parties to each other prior to its execution,
all of which are merged herein.
|
|
This
Agreement and the Appendices hereto override and supersede any prior
agreement, understanding, promise or undertaking of the Parties with
respect to the subject matter hereof, all of which are merged herein.
No
subsequent amendment to this Agreement shall be of any effect unless
executed in writing and signed by the
Parties.
|
|
20.7.
|
Severability.
Should any term or provision of this Agreement be or become invalid
or
unenforceable or should this Agreement contain an omission, the validity
or enforceability of the remaining terms or provisions shall not
be
affected. In such case, subject to the next following sentence, the
Parties shall immediately commence to negotiate in good faith in
order to
replace the invalid or unenforceable term or provision by such other
valid
or enforceable term or provision which comes as close as possible
to the
original intent and effect of the invalid or unenforceable term or
provision, or respectively, to fill the omission by inserting such
term or
provision which the parties would have reasonably agreed to, if they
had
considered the omission at the date hereof. In the event that any
term or
provision as aforesaid is invalid, void or unenforceable by reason
of its
scope, duration or area of applicability or some similar limitation
as
aforesaid, then the court making such determination shall have the
power
to reduce the scope, duration, area or applicability of the term
or
provision so that they shall be enforceable to the maximum scope,
duration, area or
|
-56-
CONSOLIDATED
VERSION
applicability
permitted by applicable law which shall
not exceed those specified in this Agreement or to replace such term or
provision with a term or provision that comes closest to expressing the
intention of the invalid or unenforceable term or provision, provided that
the
Parties would have entered into this Agreement as so amended.
|
20.8.
|
Governing
Law.
This Agreement shall be governed and construed in accordance with
the laws
of the State of Israel.
|
|
20.9.
|
Non-waiver
of Rights.
A
waiver by a Party hereto of a breach or non performance of one or
more of
the other Party’s obligations pursuant hereto, shall not constitute a
precedent and shall not be used as an inference for another case.
The
failure to exercise any right available to a Party pursuant to this
Agreement or by law shall not be construed as a waiver of such rights
in
any other instance and this behavior shall not be seen as any waiver
of
rights and obligations pursuant to this
Agreement.
|
|
20.10.
|
Headings.
The headings, titles and subtitles contained in this Agreement are
for the
convenience of the parties only and shall not affect the construction
or
interpretation of any provision
hereof.
|
|
20.11.
|
Counterparts.
This Agreement may be executed in multiple counterparts, each of
which
shall be deemed an original but all of which shall constitute but
one
instrument.
|
|
20.12.
|
Further
Assurances.
Each Party agrees to cooperate fully with the other party and to
execute
such further instruments, documents and agreements and to give such
further written assurances, as may be reasonably requested by the
other
Party to evidence and reflect better the transactions described herein
and
contemplated hereby and to carry into effect the intents and purposes
of
this Agreement.
|
|
20.13.
|
Expenses.
Each of the Parties shall be solely responsible for all of its respective
costs and expenses incurred, either directly or indirectly, with
respect
to this Agreement and the transactions contemplated hereby. In the
event
that the Parties agree to use the same consultant with respect to
an
agreed matter relating to this Agreement, the costs of such consultant
shall be shared equally between the
Parties.
|
|
20.14.
|
No Third
Party Beneficiary.
This Agreement is made solely for the benefit of the Parties and
no other
party shall acquire any right
hereunder.
|
-57-
CONSOLIDATED
VERSION
APPENDICES
|
Appendix
2.1(a)
|
JV
Existing Products
|
|
Appendix
2.1(b)
|
JV
Development Products
|
|
Appendix
7.1(i)
|
Sales
and Customer Support Agents in North America
|
|
Appendix
7.1(ii)
|
Basic
Terms of Sales and Customer Support Arrangements
|
|
Appendix
7.6
|
List
of Sales, Agency and Customer Support Agreements.
|
|
Appendix
7.9
|
List
of OEM Agreements
|
|
Appendix
8
|
Schedule
of Exceptions
|
|
Appendix
8.8
|
Revenues
of JV Existing Products and Related Services for 0000
|
|
Xxxxxxxx
11.3.2(1)
|
Deleted
|
|
Appendix
11.3.2(2)
|
Deleted
|
|
Appendix
11.4.1
|
Certain
Representations with Respect to EIT
|
|
Appendix
14.4.1
|
The
JVLP Agreement
|
|
Appendix
14.4.2
|
Notification
to Registrar of Partnerships
|
|
Appendix
14.4.3
|
Memorandum
of Association
|
|
Appendix
14.4.4
|
Articles
of Association of the JV Company
|
|
Appendix
14.4.5
|
Notification
to Companies Registrar
|
|
Appendix
14.4.6
|
Nomination
of Directors
|
|
Appendix
14.4.7
|
Share
Certificates
|
|
Appendix
16.6.3
|
Controlling
Group of Valor
|
|
Appendix
18.1
|
Press
Release
|
-
2 -
APPENDIX
2.1(a)
JV
Existing Products
All
existing (and prior generation) CAM and archiving software products for use
in
PCB
Fabrication now being offered and sold, namely:
STAR
1000
Genesis
2000 (including all options and interface packages, such as interfaces to
AOI,
direct imaging and electrical testing systems but excluding direct read from
CAD/EDA
data bases)
Genesis
1800 (including all options and interface packages as set forth
above)
VUV
(Valor Universal Viewer)
Xpert
1000 (including all options and interface packages as set forth
above)
Xpert
1700 (including all options and interface packages as set forth
above)
Xplan
Xplore
CDR
-
graphic component only (specifically excluding all non-CAM aspects and
interfaces
(e.g., Ref Manager))
- 3
-
APPENDIX
2.1(b)
JV
Development Products
All
CAM
and archiving software products or features for use in PCB Fabrication now
being
developed, including:
NGC
New
versions and options of JV Existing Products
- 4
-
APPENDIX
7. (i)
Sales
and Customer Support Agents in North America
Orbotech
Inc. will act as the JV's exclusive agent with respect to the following accounts
in North America:
|
1.
*
|
|
2.
*
|
|
3.
*
|
|
4.
*
|
|
5.
*
|
|
6.
*
|
|
7.
*
|
|
8.
*
|
|
9.
*
|
|
10.
*
|
|
11.
*
|
|
12.
*
|
|
13.
*
|
|
14.
*
|
|
15.
*
|
|
16.
*
|
|
17.
*
|
|
18.
*
|
|
19.
*
|
|
20.
*
|
|
21.
*
|
|
22. *
|
|
23.
*
|
|
24.
*
|
|
25.
*
|
|
26.
*
|
The
assignment of *
and its subsidiary
* to a specific agent will
be mutually agreed after the Closing.
Valor
Inc. will act as the JV's exclusive agent with respect to all other accounts
in
North America.
*
Omitted
pursuant to a confidential treatment request. The confidential portion has
been
filed separately with the SEC
Orbotech
Frontline Accounts
Northwest:
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
Southwest:
|
-
|
*
|
|
-
|
*
|
Central:
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
Eastern:
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
|
-
|
*
|
*Omitted
pursuant to a confidential treatment request.
The
confidential portion
has been
filed separately with the
SEC.
Frontline
P.C.B. Solutions (1998) LTD.
The
undersigned, all of the members of the Board of Directions of Frontline P.C.B.
Solutions
(1998) Ltd. (the “Company”),
hereby adopt
the following resolutions in writing:
Marketing
and Sales in
North
America
It
was
resolved, unanimously, that it being in the best interests of the Company
and of
Frontline
P.C.B. Solutions Limited Partnership (the “Partnership”) to do so, to designate
Orbotech Inc. as the exclusive agent/distributor of the Partnership's
products
in North America with respect to the accounts listed in the attached schedule
as
of
May
15th , 1999, in place of Valor Inc.
In
witness whereof, we affix our signatures hereto this 7th day
of June, 1999.
| /s/ Xxxx Xxxxxxxx | /s/ Schmil Xxxxxxx | ||
|
Xxxx Xxxxxxxx |
Schmil Xxxxxxx |
| /s/ Xxxxx Xxxxx | /s/ Xxxxx Xxxxxxxx | ||
|
Xxxxx Xxxxx |
Xxxxx Xxxxxxxx |
The
undersigned, all of the shareholders of the Company, approve and agree to
the
above.
| /s/ Xxxxx Xxxxx | /s/ Schmil Xxxxxxx | ||
|
Orbotech Ltd. |
Valor Computerized Systems Ltd. |
- 5
-
APPENDIX
7.1 (ii)
Basic
Terms of Sales and Customer Support Arrangements
In
order
to ensure efficient sales of the JV Products and related services, the JVLP,
its
subsidiaries and agents will provide for the following standard/basic terms
of
sales and customer support arrangements with agents.
| 1. |
The
commission percentage will be identical in all territories and
will be as
follows:
|
|
(a)
|
Sales
-* % of the purchase price, after reduction for any warranty at
a rate of*
% of the purchase price for each year of warranty;
and
|
|
(b)
|
Service
- * % of
the service fee, for the first year after the Closing; and thereafter,
on
a "cost" basis as agreed by the Parties. In the case of a warranty,
the
"service fee" shall be equal to the purchase price reduction set
forth
above.
|
Installation,
training and automation projects shall be on a fee (not commission)
basis at fixed cost basis rates to be agreed between the JV and the
agents.
|
2.
|
All
marketing communication (advertising, trade shows, etc.) will be
planned,
budgeted and paid by the JV.
|
|
3.
|
Each
agent will establish an internal business unit for the purpose
of CAM
sales
and service. The business unit will be able to show a profit and
loss
report.
|
|
4.
|
During
a transition period of 6 months from the date of Closing, each
agent
may require assistance or training from the other Founding Shareholder
or
its subsidiary or agent or previous representative for that territory
or
account. The JV will compensate the assisting Founding Shareholder,
agent
or representative on a cost basis.
|
|
5.
|
To
ensure efficient sales and services, the JV shall provide specific
training courses
for the sales personnel of the relevant agents of the JV. The agents
will
be obligated to send their relevant sales personnel to participate
in
these courses.
|
|
6.
|
The
compensation structure of agents to sales people will include increased
incentives
for achievements in PCB CAM areas, such as over achievement on
specific
quotas, new account sales etc.
|
|
7.
|
Each
agent will have to employ at least one full time marketing/sales
support
person
for sales and sales support of the JV
Products.
|
| * |
Omitted
pursuant to a confidential treatment request.
The confidential portion has been filed
seperately with the SEC.
|
- 6
-
|
8.
|
If
needed, an agent may be required to dedicate a minimum agreed
upon number
of sales and support personnel to sales and/or support of JV
Products
only.
|
- 7
-
APPENDIX
8
Schedule
of Exceptions
Valor
|
1.
|
Floating
charges in favor of:
|
| 1.1. |
The
Bank for the Development of
Industry
|
| 1.2. |
Bank
Leumi Le'Israel
|
| 1.3. |
Bank
Hapoalim B.M.
|
|
2.
|
Valor's
CAM and archiving activities have been recognized as an Approved
Enterprise by the Investment Center at the Ministry of Industry
and Trade
of the
State of Israel.
|
|
3.
|
Valor's
source codes in respect of certain CAM and archiving software licensed
by
Valor to some of its customers have been placed in escrow with
such
customers' attorneys as trustees, for the purpose of securing such
customers
license in the event that Valor shall cease to operate its business
or
shall
be liquidated.
|
Orbotech
|
1.
|
Orbotech
has received funding from the OCS with respect to the JV Existing
Products
and the JV Development Products to be made available by it to the
JV and
has certain obligations with respect thereto. See Section 10.5
of the
Agreement
and Appendix
11.4.1
with respect to EIT.
|
|
2.
|
Orbotech's
CAM and archiving activities have been recognized as an Approved
Enterprise, by the Investment Center at the Ministry of Industry
and Trade
of the State of Israel.
|
Orbotech
and Valor
Orbotech
and Valor are parties of various legal proceedings between them and/or their
subsidiaries both in Israel and U.S.A.
- 8
-
APPENDIX
8.8
Revenues
of JV Existing Products and Related Services for 1997
(in
thousands of U.S. Dollars)
|
Valor
|
Orbotech
|
||||||
|
North
America
|
|||||||
|
Sales
|
5,135
|
2,800
|
|||||
|
Services
|
1,349
|
1,900
|
|||||
|
Europe
|
|||||||
|
Sales
|
1,682
|
2,400
|
|||||
|
Services
|
212
|
2,000
|
|||||
|
Far
East
|
|||||||
|
Sales
|
2,870
|
3,900
|
|||||
|
Services
|
0
|
1,900
|
|||||
|
Japan
|
|||||||
|
Sales
|
1,036
|
800
|
|||||
|
Services
|
0
|
0
|
|||||
|
TOTAL
|
|||||||
|
Sales
|
10,723
|
9,900
|
|||||
|
Services
|
1,561
|
5,200
|
|||||
- 9
-
|
APPENDIX
11.3.2(1)
|
|
Deleted
|
- 10
-
|
APPENDIX
11.3.2(2)
|
|
Deleted
|
- 11
-
APPENDIX
11.4.1
Certain
Representations with Respect to EIT
|
1.
|
Revenues
of EIT (sales and service) for the years 1997 and 1996 pursuant
to
its audited financial statements for such years were as
follows:
|
1997:
US$2,006,749
1996:
US$2,299,003
|
2.
|
EIT
has received approximately US$1,087,649 as of December 31, 1997,
as
participation from the OCS in research and development costs and
EIT is
committed
to pay royalties to the OCS at a rate of 3% of the revenues derived
from
products in which development the OCS participated up to 150% of
the
participation received. With respect to the period through December
31,
1997, EIT has paid cumulative royalties of approximately
US$432,500.
|
|
3.
|
Subject
to the closing of the transaction with EIT and Toyo, Orbotech has
undertaken
to provide certain support and maintenance services with respect
to
EIT's Solio software product. These services include providing
Toyo with
two
(2) updated versions per year of Solio as they generally become
available
to
other customers. The term of the agreement is for a period of 2
years from
the closing of the transaction and is thereafter renewed automatically
for
additional periods of one year each, unless either party notifies
the
other in
writing that it does not wish to renew, such notice to be given
at least
three (3)
months prior to the termination of the relevant
period.
|
- 12
-
APPENDIX
14.4.1
The
JVLP Agreement
AGREEMENT
FOR THE ESTABLISHMENT OF
A
LIMITED
PARTNERSHIP
Made
and
entered into in on
this 1 day of November 1998
|
BY
AND BETWEEN:
|
Orbotech
Ltd.
|
|
|
Public
Company no. 00-000000-0
having
its registered address at
Xxx
Xxxxxxxxxx Xxxx, Xxxxx, Xxxxxx
(hereinafter:
“Orbotech”)
|
||
|
on
the first part;
|
||
|
AND:
|
Valor
Computerized Systems (Israel) Ltd.
|
|
|
Private
Company no. 00-000000-0
having
its registered address at
New
Industrial Zone, Yavne
(hereinafter:
“Valor”)
|
||
|
on
the second part;
|
||
|
(Orbotech
and Valor shall hereafter be referred
to
collectively as the “Limited
Partners” and
individually
as the “Limited
Partner”)
|
||
|
AND:
|
Scopus
Ltd. (in formation)
Private
Company no.
having
its registered address at
Ha
Movil Park, Yavne
(hereinafter
the “Company”
or
the “General
Partner”)
|
|
|
on
the third part;
|
||
|
(Orbotech,
Valor and the Company shall hereafter be referred to collectively
as the
“Parties”
or
individually as the “Party”)
|
|
WHEREAS
|
Orbotech
and Valor are both engaged, inter alia, in the development, manufacturing,
marketing, sale and after sales support of computer aided manufacturing
(“CAM”) and archiving systems for use in the manufacture
of printed circuit boards (“PCBs”);
and
|
|
WHEREAS
|
Orbotech
and Valor entered into a joint venture (hereinafter: the “Joint
Venture”
or
the “JV”)
through
a joint venture agreement dated August 10, 1998
in accordance with which, inter alia, Orbotech and Valor agreed
to
establish
a limited partnership (hereinafter: the “JV
Agreement”). The
|
2
| Company is currently in the process of formation and following registration shall serve as the general partner of the limited partnership; and |
|
WHEREAS
|
Orbotech
and Valor wish to consolidate their efforts in developing, manufacturing,
assembling and integrating, marketing, distributing, servicing,
supporting
and providing related services with respect to, inter alia, the
JV
Existing Products, JV Development Products, JV Future Products
and the JV Activities, as these terms are defined and more fully
detailed
in the JV Agreement, while retaining all their respective rights
relating
to all other developments and products in which each of them is
or may
become engaged, all subject to the terms and conditions set forth
in the
JV
Agreement and in this Agreement;
and
|
|
WHEREAS
|
Orbotech
and Valor wish to consolidate their efforts in the aforesaid field
and to
cooperate in the framework of a limited partnership, in which they
shall
be the limited partners and the Company, which is jointly owned
by them,
shall be the general partner; and
|
|
WHEREAS
|
the
Parties wish to determine and record in writing their mutual rights
and
duties, as well as the areas of liability and the functions of
each of the
Parties in the framework of the limited partnership, subject to
and
without derogating from the provisions of the JV
Agreement.
|
Therefore,
it was declared, stipulated and agreed by the Parties as
follows:
|
1.
|
Preamble
and Interpretation
|
|
1.1
|
The
preamble and the Appendices to this Agreement constitute integral
parts
hereof.
|
|
1.2
|
The
headings, titles and sub-titles of the sections in this Agreement
are for
the convenience
of the Parties only and shall not affect the construction or
interpretation of any provision
hereof.
|
|
1.3
|
The
terms in this Agreement shall have the meaning which was ascribed
to
them
in the JV Agreement, unless expressly indicated
otherwise.
|
|
2.
|
Establishment
of the Partnership
|
|
2.1
|
The
Parties hereby establish a limited partnership which shall bear
the name
Scopus
Limited Partnership or any other name which shall be decided upon
by
the
Parties and which shall be approved for registration by the Registrar
of
Partnerships
(hereinafter: the “Partnership”)
and
hereby undertake to one another
to procure the registration of the Partnership pursuant to the
Israeli
Partnership
Ordinance [New Version], 5735-1975 (the “Ordinance”)
forthwith.
Orbotech and Valor shall be the initial limited partners and the
Company
shall be the general partner of the
Partnership.
|
3
|
2.2
|
The
Partnership shall engage in the following activities: the development,
manufacturing, assembly and integration, marketing, distribution,
service,
support and provision of related services with respect to the JV
Existing
Products, the JV Development Products, JV Future Products, and
the JV
Activities,
as more fully described in the JV Agreement, and in any other areas
of
activity as shall be decided upon by the General Partner, subject
to the
provisions of Section 11.2 of the JV
Agreement.
|
|
2.3
|
The
initial partnership interests in the Partnership (percentage and
status)
and the capital contribution therefor shall be as
follows:
|
|
Orbotech
-
|
49.5%
|
limited
partner
|
NIS
4,950
|
|
Valor
-
|
49.5%
|
limited
partner
|
NIS
4,950_
|
|
The
Company -
|
1.0%
|
general
partner
|
NIS
100
|
The
initial capital of the Partnership shall be NIS 10,000
All
items
of income, gain, loss, expense and deduction shall be allocated, and all
distributions shall be made, among the partners in the Partnership (“Partners”)
in
accordance with the percentage interests set forth above.
|
2.4
|
The
administration of the JV Entities shall initially be conducted
at premises
located and leased by the JV Entities in proximity to Valor’s
location.
|
|
2.5
|
Upon
or prior to the registration hereof, the Parties shall purchase
partnership interests
in the Partnership as set forth in Section 2.3 hereof. To the extent
that
the Partnership shall require working capital in excess of that
provided
from the operations of the JV (“Additional
Working Capital”) the
Partnership shall acquire
such Additional Working Capital in the manner and under the terms
set
forth
in the JV Agreement. In the event any additional equity investments
are
required in the future in order to comply with the requirements
of the
Israeli Investment
Center with respect to Approved Enterprises, such investments shall
be made pro-rata by Orbotech and Valor and in accordance with the
JV
Agreement.
|
|
2.6
|
No
partner may withdraw any portion of its capital contribution or
capital
account balance. No partner shall be entitled to the return of
such
partner’s capital contribution or to a distribution in respect of such
partner’s capital account balance.
|
|
2.7
|
The
Partnership shall commence its operation from the date of its registration
and
it shall subsist for the term hereof, as provided pursuant to Section
17
below.
The provisions of this Agreement shall apply to the Partnership
subject
to
the provisions of the Ordinance.
|
|
2.8
|
All
the costs involved in registering and establishing the Partnership
shall
be borne
by and discharged by the
Partnership.
|
4
|
2.9
|
The
provisions of this Agreement shall constitute the Articles of Association
of the
Partnership.
|
|
3.
|
Transfer
of Assets to the
Partnership
|
Effective
as of the Closing Date, the Limited Partners shall make available to the
Partnership the assets, properties and business and the obligations with
respect
to the JV
Assets, as specified in the JV Agreement and in the manner and subject to
the
terms and
conditions set forth therein. The Parties shall cooperate to obtain all the
necessary licenses,
permits and consents towards this purpose.
|
4.
|
Transfer
of Employees, Equipment and Inventory, Purchase Order and
Warranties
|
The
transfer of the Designated Employees to the Partnership, the salary, employment
period
and other terms of employment of such Designated Employees or the terms
applying
to the termination of their employment, the terms of transfer of Equipment
and
Other
Inventory, Purchase Orders and Warranty Commitments to the Partnership, shall
be
governed by the provisions of the JV Agreement.
|
5.
|
Assignment
of Sales, Agency and Customer
Agreements
|
Subject
to the provisions of the JV Agreement, the Limited Partners shall assign
and
shall
cause their subsidiaries to assign to the Partnership, to the extent related
to
the JV Existing
Products and the JV Development Products, all sales, agency and customer
support
agreements, in accordance with the provisions of the JV Agreement.
|
6.
|
Addition
of Partners; Restriction on Transfer of Interests in the
Partnership
|
|
6.1
|
The
addition of any partner to the Partnership (which is not a transferee
of a
partnership
interest) shall require the written consent of the General
Partner.
|
|
6.2
|
Any
transfer of interests in the Partnership by any of the partners
in the
Partnership
shall be subject to the terms, restrictions and provisions set
forth in
Annex
A of
this Agreement, which is attached hereto as an integral part
hereof.
|
|
7.
|
Financing
of the Partnership’s Operations;
Liability
|
|
7.1
|
Except
as expressly provided in Section 2.5 of this Agreement and the
JV
Agreement,
no Limited Partner shall be required to make a contribution to
the
capital
of the Partnership, lend any money to the Partnership or guarantee
any
Partnership
indebtedness.
|
|
7.2
|
Except
as otherwise required by law, a Limited Partner shall have no personal
liability
for the debts and obligations of the
Partnership.
|
5
|
8.
|
Records,
Reports, Distribution of
Profits
|
|
8.1
|
The
Partnership shall maintain a system of accounting established and
administered
in accordance with Israeli and United States Generally Accepted
Accounting
Principles consistently applied, shall keep full and complete financial
records, and shall furnish to the Parties reports as provided in
the JV
Agreement.
|
|
8.2
|
All
of the Partnership’s revenues, profits and losses belong to the Parties
and shall be allocated among them. Cash or approved credit available
for
distribution
shall be distributed to the Parties on an on-going quarterly basis
subject
to and in the manner prescribed by the provisions of the JV
Agreement
|
|
8.3
|
The
Partnership shall withhold taxes from distributions to [and allocations
among,] the Partners to the extent required by law (as determined
by the
General
Partner in its reasonable discretion). Except as otherwise provided
in
this Section 8.3, any amount so withheld by the Partnership with
regard to
a Partner shall be treated for purposes of this Agreement as an
amount
actually distributed
to such Partner pursuant to Section 8.2. An amount shall be considered
withheld by the Partnership if, and at the time, remitted to a
governmental
agency without regard to whether such remittance occurs at the
same
time as the distribution or allocation to which it relates; provided,
however,
that an amount actually withheld from a specific distribution or
designated by the General Partner as withheld from a specific allocation
shall be
treated as if distributed at the time such distribution or allocation
occurs.
|
|
8.4
|
Each
Limited Partner hereby agrees to indemnify the Partnership and
the other
Partners
for any liability they may incur for failure to properly withhold
taxes in
respect of such Limited Partner; moreover, each Limited Partner
hereby
agrees
that neither the Partnership nor any other Partner shall be liable
for any
excess
taxes withheld in respect of such Limited Partner’s interest in the
Partnership and that, in the event of overwithholding, a Limited
Partner’s
sole recourse shall be to apply for a refund from the appropriate
governmental authority.
|
|
9.
|
Governance
of the Partnership
|
|
9.1
|
The
Company shall oversee, administer and manage the Partnership in
its
capacity
as general partner and the Partnership shall carry out the JV
Activities, all
subject to the provisions of the JV
Agreement.
|
|
9.2
|
Except
as specifically set forth in this Agreement, the Limited Partners
shall
take
no part in the management, control or operation of the Partnership
or its
business
and shall have no power or authority to act for the Partnership,
bind
the
Partnership under agreements or arrangements with third parties,
or vote
on Partnership
matters.
|
6
|
9.3
|
Subject
to the provisions of [this Agreement and] the JV Agreement, and
in
accordance with the purpose of the Partnership as set forth in
Section
2.2, the General
Partner shall have the exclusive power and authority to perform
acts
associated
with the management and control of the Partnership and its business,
including
the power and authority, in the name and on behalf of the Partnership,
to:
|
|
(a)
|
Receive,
buy, sell, exchange, trade and otherwise deal in and with the JV
Assets
and other property of the
Partnership;
|
|
(b)
|
Engage
in the JV Activities;
|
|
(c)
|
Sign
agreements, checks, bills of exchange, invoices and other
documents;
|
|
(d)
|
Borrow
money or property on behalf of the Partnership, encumber Partnership
property for the purpose of obtaining financing for the Partnership’s
business, and extend or modify any obligations of the
Partnership;
|
|
(e)
|
Employ
or retain any Designated Employee or other qualified person to
perform
services or provide advice on behalf of the Partnership and pay
reasonable
compensation therefor;
|
|
(f)
|
Form
and incorporate subsidiaries;
|
|
(g)
|
Compromise,
arbitrate or otherwise adjust claims in favor of or against the
Partnership, and commence or defend litigation with respect to
the
Partnership or any assets of the Partnership, at the Partnership’s
expense; and
|
|
(h)
|
Assume
and exercise all of the authority, rights and powers of a general
partner
under the laws of the State of
Israel.
|
|
9.4
|
Any
contract, agreement, deed, lease, note or other document or instrument
executed
on behalf of the Partnership by the General Partner shall be
deemed to
have
been duly executed. No other Partner shall have the authority
to bind the
Partnership and third parties shall be entitled to rely upon
the General
Partner’s power
and authority to bind the Partnership without otherwise ascertaining
that
the
requirements of this Agreement have been
satisfied.
|
|
10.
|
Budget
|
All
of
the JV Activities shall be conducted pursuant to a budget which shall be
prepared by
the
Company on a yearly basis prior to October 31 of each year, (the “Budget”),
as
shall
be in effect from time to time. Until such time as a new budget has been
adopted, the
prevailing Budget shall remain in force. The initial Budget (i.e., through
December
7
31,
1998), which shall include a projected balance
sheet for the Partnership, shall be determined
by the General Partner after the Closing.
|
11.
|
Management
|
The
internal management structure of the Partnership shall be reflected in
a
management plan
and
organizational chart to be prepared by the General Partner in accordance
with
the
principles set forth in the Budget.
|
12.
|
Intellectual
Property
|
The
rights and obligations of the Parties with respect to the ownership/retaining
of
intellectual
property rights, the terms and conditions governing the making of such
IP
Rights
available to the JV, the scope of the IP Rights, the terms applying to
any
intellectual
property developed by the JV, infringement or violation of the IP Rights,
etc.
shall
be
governed by the provisions of the JV Agreement.
|
13.
|
Non-competition
and Confidentiality
|
In
all
aspects relating to non-competition of the Limited Partners with the JV,
non-competition of the JV Entities with the Limited Partners, non-competition
between
the Limited Partners, the purchase of EIT and other CAM opportunities by
the
Parties,
corporate opportunities, the remedies available to the Parties in the event
of a
breach of their obligations relating to IP Rights, non-competition and
confidentiality, the
restrictions applying to any solicitation of employees, publicity relating
to
the JV, undertakings of confidentiality by the Parties with respect to
Confidential Information, etc.,
the
provisions of the JV Agreement shall apply.
|
14.
|
Dispute
Resolution; Arbitrator
|
In
the
event of a dispute arising between the Parties to this Agreement based
on an
alleged breach or default of this Agreement, any question of interpretation
relating thereto,
or any other question, conflict or dispute relating thereto or to the Parties’
rights or obligations hereunder, the mechanism prescribed in Section 12
of the
JV Agreement for
the
resolution of disputes shall apply, mutatis mutandis.
|
15.
|
Court
Jurisdiction
|
Subject
to the provisions of Section 14 above, the competent court in Tel-Aviv-Jaffa
shall
have exclusive jurisdiction in connection with or deriving from this
Agreement.
|
16.
|
Breach
|
It
is the
intention of the Parties that none of the Parties shall have the right
to
terminate this
Agreement and that the sole remedies for a violation by any party hereto
of any
of
its
obligations under the terms of this Agreement shall be specific enforcement
or
damages.
Notwithstanding the foregoing, in the event that a Party shall commit a
violation
such that a court shall determine that the Parties would not have intended
that
8
this
Agreement remain in effect, then, any other Party
shall have the right to terminate this Agreement upon 90 days’ prior written
notice, and such notice of termination shall become
effective unless the violation shall be completely remedied in the 90 day
period
(or,
in
case of violations which may not be cured within 90 days, if the defaulting
Party shall
not
within such 90 day period undertake to cure such violation and to complete
such
cure within an additional 90 days).
|
17.
|
Term
|
The
term
of this Agreement shall expire at the earlier of: (a) such time in which
none of
the Limited Partners (or their Permitted Transferees) shall hold any Beneficial
Interests; or
(b) a
termination of the JV Agreement.
Notwithstanding
the above, the Parties hereby agree and undertake not to take any action,
including applying to any competent court or judicial body, for the liquidation
or dissolution
of the Partnership prior to the expiration of 18 months from the Closing
Date,
other than as set forth in Section 3.5.3 of the JV Agreement.
|
17.A
|
Survival
|
The
following provisions shall survive the expiration or other termination
of this
Agreement: Sections 12,13, 14, 15 and 18.
|
17B.
|
Dissolution
|
The
Partnership shall be dissolved upon the first to occur of the following
events:
|
(a)
|
Expiration
of the term pursuant to Section 17
above;
|
|
(b)
|
Permanent
cessation of the Partnership’s
business;
|
|
(c)
|
The
withdrawal, removal, bankruptcy or dissolution of the General
Partner;
or
|
|
(d)
|
The
event described in Section 7.6 of Annex
A hereof.
|
Notwithstanding
the foregoing, the Partnership may be continued upon the election of
the
General Partner and all of the Limited Partners (or their Permitted Transferees)
then holding
any Beneficial Interests.
|
18.
|
Miscellaneous
|
|
18.1
|
Assignment.
This
Agreement shall not be assigned by any Party without the prior
written
consent of the other Parties.
|
|
18.2
|
Notice.
Notice
as required herein shall be delivered by courier with receipt
of
delivery
at the address stated above. A notice shall be effective as of
the date so
delivered.
|
9
|
18.3
|
Entire
Agreement and Amendment. This
Agreement, the JV Agreement and
the Appendices hereto, constitute the entire agreement between
the Parties
with
respect to the subject matter hereof and contain all of the promises,
undertakings,
and other representations made by the parties to each other prior
to
their execution, all of which are merged
therein.
|
|
This
Agreement, the JV Agreement and the Appendices hereto override
and
supersede any prior agreement, understanding, promise or undertaking
of
the parties
with respect to the subject matter hereof, all of which are merged
therein. No subsequent amendment to this Agreement shall be of
any effect
unless executed in writing and signed by all of the
Parties.
|
|
18.4
|
Severability.
Should
any term or provision of this Agreement be or become invalid
or unenforceable or should this Agreement contain an omission,
the
validity
or enforceability of the remaining terms or provisions shall
not be
affected.
In such case, subject to the next following sentence, the Parties
shall
immediately
commence to negotiate in good faith in order to replace the invalid
or unenforceable term or provision by such other valid or enforceable
term
or provision which comes as close as possible to the original
intent and
effect of the invalid or unenforceable term or provision, or
respectively,
to fill the omission by inserting such term or provision which
the parties
would have reasonably
agreed to, if they had considered the omission at the date hereof.
In the
event that any term or provision as aforesaid is invalid, void
or
unenforceable
by reason of its scope, duration or area of applicability or
some similar
limitation as aforesaid, then the court making such determination
shall
have
the power to reduce the scope, duration, area or applicability
of the term
or
provision so that they shall be enforceable to the maximum scope,
duration, area
or applicability permitted by applicable law which shall not
exceed those
specified
in this Agreement or to replace such term or provision with a
term or
provision
that comes closest to expressing the intention of the invalid
or
unenforceable
term or provision, provided that the Parties would have entered
into
this Agreement as so amended.
|
|
18.5
|
Governing
Law. This
Agreement shall be governed and construed in accordance with
the laws of
the State of Israel.
|
|
18.6
|
Non-waiver
of Rights. A
waiver by a Party hereto of a breach or non performance of one
or more of
the other Party’s obligations pursuant hereto, shall
not constitute a precedent and shall not be used as an inference
for
another case.
The failure to exercise any right available to a party hereto
pursuant to
this Agreement
or by law shall not be construed as a waiver of such rights in
any other
instance and this behavior shall not be seen as any waiver of
rights and
obligations pursuant to this
Agreement.
|
10
|
18.7
|
Counterparts.
This
Agreement may be executed in multiple counterparts, each of
which
shall
be deemed an original but all of which shall constitute but one
instrument.
|
|
18.8
|
Further
Assurances. Each
Party agrees to cooperate fully with the other Party and to execute
such
further instruments, documents and agreements and to give such
further written assurances, as may be reasonably requested by
the other
party to evidence and reflect better the transactions described
herein and
contemplated
hereby and to carry into effect the intents and purposes of this
Agreement.
|
|
18.9
|
Expenses.
Each
of the Parties shall be solely responsible for all of its respective
costs
and expenses incurred, either directly or indirectly, with respect
to this
Agreement
and the transactions contemplated
hereby.
|
|
18.10
|
JV
Agreement. In
the event of a discrepancy between this Agreement and the JV
Agreement, the provisions of the JV Agreement shall
prevail.
|
|
18.11
|
Taxes.
Each
Party shall be solely responsible for any income, sales, use,
service or
other tax levied or incurred on account of the Agreement or the
activities
hereunder. If required by law, each Party may withhold at source
any
withholding tax based on the income received by the other Party
under this
Agreement.
|
|
18.12
|
No
Third Party Beneficiary. This
Agreement is made solely for the benefit of the
Parties and no other party shall acquire any right
hereunder.
|
|
IN
WITNESS WHEREOF THE PARTIES HERETO HAVE EXECUTED THIS
AGREEMENT AS OF THE DAY AND YEAR FIRST ABOVE
WRITTEN:
|
|
/s/
Xxxx Xxxxxxxx
|
/s/
Xxxxx Xxxxx
|
|||
|
ORBOTECH
LTD.
|
VALOR
COMPUTERIZED
SYSTEMS
(ISRAEL) LTD.
|
SCOPUS
LTD.
|
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|
By:
Xxxx
Xxxxxxxx
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By:
Xxxxx
Xxxxxx
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By: _______________________
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Title:
CFO
|
Title:
V.P.
Operations
|
Title: ______________________
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Date:
1/11/98
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Date:
1/11/98
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Date: ______________________
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11
ANNEX
A
To
the Partnership Agreement
Transfer
of Partnership Interest; Exit Arrangements
| 1. |
Transfer
of Partnership
Interest.
|
| 1.1. |
Except
as otherwise provided in this Annex “A”, a partner in the Partnership
(“Partner”)
shall
not be permitted to transfer any interest in the Partnership
(but not
including the right to distributions from the Partnership)
(the
“Beneficial
Interests”) without
the prior written permission of both Limited Partners
for a period of 5 years from the Closing (the “No
Sale Period”). Additionally,
the Company shall not transfer any of its interests in the
Partnership
without the consent of the holders of seventy-five percent
(75%) of
the
outstanding shares of the
Company.
|
| 1.2. |
Except
as otherwise expressly provided herein, at no time during
the term of
the
Partnership Agreement shall any Partner pledge, charge, hypothecate,
encumber, grant any security interest in, or otherwise grant
any rights to
any third
party concerning any Beneficial Interests without the prior
written
permission
of both Limited Partners unless: (i) the pledgee is a “bank” (as such
term
is used in the Israel Banking (Licensing) Law 1981-5741;
and (ii) the
pledgee
undertakes and agrees, in writing, that its rights in such
Beneficial
Interests
shall be subject to all the restrictions regarding transfer
of Beneficial
Interests
contained in this Annex “A”.
|
| 1.3 |
Subsequent
to the No Sale Period, any transfer of Beneficial Interests
shall be
in
accordance with the provisions set forth in this Annex
“A”.
|
| 1.4 |
Unless
otherwise agreed by the Limited Partners, a Limited Partner
may not, at
any time, transfer any Beneficial Interest in the Partnership
unless it
transfers at the
same time and to the same Transferee the corresponding Beneficial
Interest
in
all JV Entities.
|
| 1.5 |
A
Permitted Transferee may not transfer its Beneficial Interests
other than
in connection
with atransfer
by a Limited Partner or as set forth in Section 5
hereof.
|
| 2. |
Right
of First Negotiation; Open Negotiation
Period.
|
| 2.1 |
At
any time after the No Sale Period, either Limited Partner
(the “Transferor”)
desiring
to transfer all or any portion of its Beneficial Interests
(other than
pursuant to the Permitted Transferee or Forced Exit provisions
set forth
in Sections 5 and 6 below) shall send to the JV Entities
and to the other
Limited Partner (the “Other
Limited Partner”) a written
notice (the “First
Negotiation
Notice”) stating
the Transferor’s
intention to transfer its Beneficial
Interests.
|
12
| 2.2 |
For
a period of up to thirty (30) business days after the
delivery of the
First Negotiation
Notice (the “First
Negotiation Period”), the
Transferor shall negotiate
exclusively with the Other Limited Partner with respect
to the Other
Limited
Partner’s
purchase of all of the Transferor’s
Beneficial Interests offered for transfer, subject to
any restrictions in
law, free of any charge, pledge, lien or any other third
party
right.
|
| 2.3. |
In
the event that the Limited Partners do not execute a definitive
agreement
with
respect to the Other Limited Partner's purchase of all
of the
Transferor’s
Beneficial
Interests offered for transfer within the First Negotiation
Period,
then,
the Transferor may, within ninety (90) days after the First
Negotiation
Period,
offer for sale such Beneficial Interests (the “Open
Negotiation Period”)
(subject
to the Right of First Refusal, Right to Tag Along and Right
of
Approval set forth
below).
|
| 2.4 |
In
the event that the Transferor shall not execute an agreement
with a bona
fide purchaser upon the terms of the transfer of its Beneficial
Interests
during the Open
Negotiation Period, the Transferor shall not continue to
offer or
otherwise
seek to transfer its Beneficial Interests without again
complying with
the
first negotiation procedure set forth above (and the Right
of First
Refusal, Right
to Tag Along and Right of Approval set forth
below).
|
| 3. |
Right
of First Refusal; Right to Tag Along. At
any time during the Open Negotiation Period the Transferor
may enter into
an agreement (the “Terms
Agreement”) with
a bona
fide proposed purchaser (the “Transferee”)
with
respect to terms of sale of all or such
portion of the Transferor’s
Beneficial Interests offered for transfer during the First
Negotiation
Period provided the Transferor shall first offer to the Other
Limited
Partner: (a)
the right to purchase all or such portion of the Transferor’s
Beneficial Interests, pursuant
to the Terms Agreement (“Right
of First Refusal”); and
(b) the right to join the
Transferor in its sale of Beneficial Interests to the Transferee,
such
that if the other Limited Partner so elects (as an alternative
to the
Right of First Refusal), the Transferor may not sell its
Beneficial
Interests unless the Transferee agrees to purchase the same
percentage
of Beneficial Interests from the Other Limited Partner as
it is purchasing
from
the Transferor, pursuant to the Terms Agreement (“Right
to Tag Along”). Any
transfer
of Beneficial Interests by the Transferor to the Transferee
shall also be
subject to the
Right of Approval set forth in Section 4
below.
|
| 3.1 |
Rights
Notice. The
Transferor shall offer the Right of First Refusal and the
Right
to Tag Along to the other Limited Partner pursuant to a written
notice to
the
TV Entities and to the Other Limited Partner providing details
of the
Transferee
and a copy of the Terms Agreement (the “Rights
Notice”).
|
| 3.2 |
Exercise
Notice. The
Other Limited Partner may exercise its Right of First Refusal
or Right to Tag Along by giving the Transferor and the
TV Entities a
written
notice to that effect within thirty (30) days after being
served with the
Rights
Notice subject to an additional 90 day period to permit
the Other Limited
Partner to obtain all necessary approvals in connection
with such purchase
(and the other Parties shall provide all reasonable assistance
to the
Other
Limited Partner in connection therewith) (the “Exercise
Notice”).
|
13
|
3.3
|
Purchase
by the Other Limited Partner. If
the Other Limited Partner shall timely exercise its Right
of First
Refusal, then the Transferor’s
Beneficial Interests will be sold and transferred to the
Other Limited
Partner, in accordance
with the provisions of the Terms Agreement and this Annex
“A”.
|
| 3.4 |
Purchase
by Transferee; Tag Along. If
(a) the Transferor shall properly give the First Negotiation
Notice and
the Rights Notice, as set forth above; and
(b) the Other Limited Partner shall not timely exercise its
Right of First
Refusal,
then: (i) none of the Transferor’s
Beneficial Interests will be sold to the
Other Limited Partner; and (ii) subject to the Other Limited
Partner's
Right of
Approval, the Transferor shall, within sixty (60) days after
the last date
on which the Exercise Notice may be submitted, sell to the
Transferee, all
of the Transferor’s
Beneficial Interests pursuant to the Terms Agreement provided
that
if
the Other Limited Partner shall have timely exercised its
Right of Tag
Along,
then none of the Transferor’s
Beneficial Interests will be sold unless the Transferee
purchases (pursuant to the Terms Agreement) all of the Beneficial
Interests
offered by the Other Limited Partner pursuant to its right
to Tag
Along.
|
| 3.5 |
In
the event that the Transferor’s
Beneficial Interests are not sold by the Transferor as set
forth in
Section 3.4 above (including by reason of the Transferee’s
refusal to satisfy the Other Limited Partner's exercise of
its Right
to
Tag Along) within such sixty (60) day period, then the Transferor’s
Beneficial
Interests may not be offered or otherwise transferred unless
the
Transferor
shall again comply with all of the provisions of Section
2 and this
Section
3.
|
| 4. |
Right
of Approval.
|
| 4.1 |
Notwithstanding
the foregoing provisions of this Annex “A”, any transfer of Beneficial
Interests to a Transferee which is not a Permitted Transferee
of the
Transferor
shall also be subject to the approval of the identity of
the Transferee
by
the Other Limited Partner, which approval may not be unreasonably
withheld
and
without providing a written detailed explanation (“Right of
Approval”) provided
that: (a) in the event that the Transferee is a competitor
of the Other
Limited
Partner, then the Other Limited Partner may refuse to grant
such approval,
in its sole discretion, by giving written notice of such
competitive
relationship
and without further explanation; and (b) no such approval
shall be
required
in the event that the Other Limited Partner shall exercise
its Right to
Tag Along.
|
| 4.2 |
The
Transferor may at any time request the Other Limited Partner’s
approval of the identity of the Transferee by giving written
notice of
name of the Transferee (including
by providing written notice thereof in the Rights Notice).
The Other
Limited
Xxxxxx shall respond to Transferor’s
request within ten (10) days after delivery
of the Transferor's notice and such other information as
the Other
Limited
Partner may reasonably request. Such approval shall be deemed
granted
in
the event that the Other Limited Partner shall fail to respond
within such
10 day period.
|
14
| 4.3 |
If
the Transferor believes that the other Limited Party is
unreasonably
withholding
its approval, then, within 10 days of delivery of the Other
Limited
Partner’s
written explanation, the Transferor may submit the matter
to the dispute
resolution
procedure set forth in Section 14 of the Partnership
Agreement.
|
|
5.
|
Certain
Permitted Transfers.
|
| 5.1 |
Notwithstanding
the foregoing provisions of this Annex “A”, each of the Limited
Partners may transfer a portion of its Beneficial Interests
to an entity
in which the Limited Partner beneficially holds, directly
or indirectly
(including through
other such wholly-owned entities), all of the voting and
equity interests
in
such entity (each, a “Permitted
Transferee”) and
Permitted Transferees may
transfer Beneficial Interests to other Permitted Transferees
and the
Limited Partners
in the manner set forth in Section 5.2 below, and the Other
Limited
Partner’s
Right of First Refusal, Right to Tag Along and Right of
Approval
shall
not apply, provided, however, that all such Beneficial
Interests
transferred by a Limited Partner or its Permitted Transferee
shall
continue to be subject to such rights as if such Beneficial
Interests were
still owned by the transferring Limited
Partner.
|
| 5.2 |
A
Limited Partner or a Permitted Transferee may transfer all
or any portion
of its
Beneficial Interests to one or more Permitted Transferees provided,
however, that
as a condition to the validity of any such
transfer:
|
| 5.2.1 |
the
Limited Partner or transferring Permitted Transferee shall
have given
written notice to the JV Entities and the Other Limited Partner
of details
of the transfer, including the Limited Partner’s certification that the
transferee is a Permitted Transferee and that all necessary
approvals in
connection with such transfer have been obtained and providing
appropriate
supporting documents.
|
| 5.2.2 |
such
Permitted Transferee shall agree in writing to be bound by
all the terms
and provisions of the Partnership Agreement and the JV Agreement
and to
assume all of the obligations hereunder to the same extent
as the
transferring Limited Partner; and
|
| 5.2.3 |
the
transferring Limited Partner shall acknowledge in writing
that it is not
released from any of its obligations hereunder and that it
shall be liable
for and guarantees the performance by the Permitted Transferee
of its
obligations and undertakings
hereunder.
|
| 5.3 |
Change
in Permitted Transferee
Relationship.
|
15
| 5.3.1 |
Notwithstanding
any provision of the Partnership Agreement [and the JV
Agreement] to the
contrary, in the event that a transferee of Beneficial
Interests pursuant
to Section 5.1 and 5.2 ceases to be a “Permitted Transferee” of a Limited
Partner during the term of the Partnership Agreement, then:
(i) the
transferring Limited Partner (or if such transferring Limited
Partner
shall no longer hold any Beneficial Interests, the Permitted
Transferee
thereof) shall notify the Other Limited Partner (or the
Permitted
Transferee thereof) and the JV Entities of the change within
ten (10)
business days thereof.
|
| 5.3.2 |
Within
7 days of delivery of the foregoing notice, the Other Limited
Partner and
the Limited Partner (or if any of the Limited Partners
shall no longer
hold any Beneficial Interests, such Permitted Transferee)
shall appoint a
mutually agreed professional third party appraiser (the
“Appraiser”)
to determine the value of the Permitted Transferee's- Beneficial
Interests
and its interest in the General Partner (the “Valuation”).
In the event that the Limited Partners (and/or their Permitted
Transferees) shall fail to agree upon an appraiser, the
same shall be
appointed by the District Court in Tel-Aviv upon the application
of either
Limited Partner (or its Permitted Transferee). The Limited
Partner whose
transferee ceased to be a Permitted Transferee (or if the
Limited Partner
shall no longer hold any Beneficial Interests, such Permitted
Transferee)
shall pay the expenses of the
Appraiser.
|
| 5.3.3 |
the
Appraiser shall complete the Valuation and shall provide
both Limited
Partners with a signed written original thereof. The Valuation
shall be
final for purposes of this Section
5.3.
|
| 5.3.4 |
the
Other Limited Partner shall have 30 days from the date
of receipt of the
Valuation to purchase the Beneficial Interest of such transferee
who
ceased to be a Permitted Transferee at a price which shall
be equal to 80%
of the value of such Beneficial Interests set forth in
the
Valuation.
|
|
6.
|
Change
in Control.
|
| 6.1 |
In
the event that there is a “Change in Control” (as defined below) of either
Limited Partner (“Changed
Partner”)
during the period in which such Limited Partner and its Permitted
Transferees holds any Beneficial Interests, the Changed Partner
shall give
written notice thereof to the other Limited Partner (the
“Other
Partner”)
within 10 days thereof provided the Other Partner (together
with its
Permitted Transferees) holds at such time, at least a 30%
interest in the
Partnership. Within 30 days of the Changed Partner’s notice, the Other
Partner may give written demand to the Changed Partner to
negotiate
exclusively with the Other Partner for a period of thirty
(30) business
days with respect to the Other Partner’s purchase of all of the Changed
Partner’s Beneficial
Interests.
|
16
| 6.2 |
In
the event that the Limited Partners do not execute a definitive
agreement
with respect to the Other Partner’s purchase of all of the Changed
Partner’s Beneficial Interests within such negotiation period, then,
the
Other Partner may, within 15 days thereafter, give written
notice to the
Changed Partner invoking the “Sell-Buy Procedure” set forth in Section 7
below (the “Sell-Buy
Notice”).
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| 6.3 |
Change
of Control of a Limited Partner. For
the purpose of this Section 6, a “Change
of Control”of
a Limited Partner shall be deemed to have occurred: (i) with
respect to
Valor, until the closing of the initial public offering of
its shares to
the public pursuant to a prospectus or similar document in
Israel or
abroad, if the “Controlling
Group of Valor”(as
defined in Appendix 16.6.3 of the JV Agreement), directly
or indirectly,
owns beneficially or of record less than 50.01% of the combined
voting
power of the outstanding voting securities of Valor; or (ii)
with respect
to either Limited Partner if the board of directors of such
Limited
Partner (or, if approval of the shareholders is required,
the shareholders
of the Limited Partner) shall approve: (a) any consolidation
or merger of
the Limited Partner in which the Limited Partner is not the
continuing or
surviving corporation or pursuant to which shares of such
Limited Partner
would be converted into cash, securities or other property,
other than a
merger of the Limited Partner in which the holders of shares
of such
Limited Partner immediately prior to the merger have the
same
proportionate ownership of shares of the surviving corporation
immediately
after the merger; or (b) the adoption of any plan or proposal
for the
liquidation or dissolution of the Limited Partnership: or
(iii) during any
period of two consecutive years, individuals who at the beginning
of such
period constituted the entire board of directors of such
Limited Partner
cease for any reason to constitute a majority thereof unless
the election,
or the nomination for election by such Limited Partner's
shareholders, of
each new director was approved by a vote of at least two-thirds
of the
directors then still in office who were directors at the
beginning of the
period; or (iv) if a competitor of the other Limited Partner
shall
acquire, directly or indirectly, beneficially or of record,
10% or more of
the combined voting power of the outstanding voting securities
of such
Limited Partner.
|
| 7. |
Sell-Buy
Procedure.
|
| 7.1 |
In
the event that the Other Partner shall give the Sell Buy
Notice as set
forth above, then within 7 days of delivery of such notice,
the Limited
Partners shall appoint an Appraiser to provide a Valuation
of all of the
Beneficial Interests of both Limited Partners and their Permitted
Transferees pursuant to the procedures set forth in Sections
5.3.2 and
5.3.3 except that the Partnership shall pay the expenses
of the
Appraiser.
|
| 7.2 |
The
Valuation shall be final for purposes of the remainder of
this Section
7.
|
| 7.3 |
Each
of the Limited Partners shall have 30 days from the date
of receipt of the
Valuation to make an offer to the other Limited Partner,
to purchase the
other Limited Partner’s Beneficial Interests at a price which shall at
least equal the value of such Beneficial Interest as set
forth in the
Valuation (a “Buy
Offer”).
|
17
| 7.4 |
In
the event only one of the Limited Partners makes a Buy
Offer, the other
Limited Partner shall be obliged to sell its Beneficial
Interests to the
offering Limited Partner at the price
offered.
|
| 7.5 |
In
the event that both Limited Partners wish to buy the other
Limited
Partner’s Beneficial Interests, the Limited Partners shall bid
against
each other by means of sending Buy Offers and counter Buy
Offers to each
other. The Limited Partner offering the highest amount
shall be entitled
to buy all of the other Limited Partner’s Beneficial Interests and such
other Limited Partner shall be obliged to sell the same
at the price
offered. Counter Buy Offers shall be made within 15 days
of receipt of a
Buy Offer. If an offeree Limited Partner fails to respond
to a Buy Offer
(i.e., to give a counter Buy Offer) within 15 days of receipt
of the Buy
Offer, the Buy Offer shall be deemed to have been accepted
by the offeree
Limited Partner for all purposes
herein.
|
| 7.6 |
In
the event that neither of the Limited Partners makes a
Buy Offer within 30
days of receipt of the Valuation or neither Limited Partners
agrees to
purchase the other Limited Partner’s Beneficial Interests based upon a
price at least equal to that reflected in the Valuation,
the Parties shall
dissolve the Partnership and all subsidiaries thereof pursuant
to
applicable law.
|
| 8. |
Closing.
Once
it is determined which Limited Partners will be transferring
its
Beneficial Interests in the Partnership to the other Limited
Partner or
another purchaser (the “Selling
Partner”),
the Limited Partners shall negotiate a closing date for
the transfer of
such Beneficial Interests to the purchasing Limited Partner
or its
designee for a date no later than 45 days from the date
of the acceptance
(or deemed acceptance) of the Buy
Offer.
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-
13 -
APPENDIX
14.4.2
Notification
to Registrar of Partnerships
-
14
-
APPENDIX
14.4.3
Memorandum
of Association
COMPANIES
ORDINANCE
(NEW
VERSION) 5743-1983
MEMORANDUM
OF ASSOCIATION
of
CRSOFT
LTD.
A
COMPANY LIMITED BY SHARES
| 1. |
The
name of the Company is:
|
“CRSOFT
Ltd.”
The
name
in Hebrew is: [illegible]
| 2. |
The
objects for which the Company is established
are:
|
| (a) |
To
develop, manufacture, assemble and integrate, market, sell
and offer for
sale, directly
or through third parties, distribute, install, service, provide
training,
support
and related services with respect to, computer aided manufacturing
and
archiving
systems for use in the manufacture of printed circuit boards
and in
general to engage in all other activities as may be
agreed.
|
| (b) |
To
serve as the general partner of a limited partnership with
purposes
similar to those
set forth in Section 2(a) above.
|
| (c) |
To
conduct any activities which are not prohibited by
law.
|
The
Company shall have the legal capacity for any right or obligation and
for the
execution of any act.
| 3. |
The
liability of the members is
limited.
|
| 4. |
The
share capital of the Company is NIS. 36,000 divided into
36,000 shares par
value NIS.l.- per share.
|
The
rights of the holders of the shares will be in accordance with the
provisions of
the Company’s
Articles of Association and the Company may modify them from time to
time as
provided in the Companies Ordinance (New Version).
2
We
the
undersigned wish to form a company pursuant to this Memorandum of Association
and
we
agree to take the number of shares in the Company’s share capital set opposite
our respective
names.
|
Names,
Addresses &description
of subscribers
|
Number
of shares
taken
by each subscriber
|
Signature
|
|
Orbotech
Ltd.
New
Industrial Zone,
Yavne
Public
company
|
50
|
/s/
Xxxx Xxxxxxxx
00-000000-0
|
|
Valor
Computerized Systems
Ltd.,
New
Industrial Zone
Yavne
Private
company
|
50
|
/s/
Xxxxxx Xxxxx
00-000000-0
|
Dated
this 1 day of November, 1998
|
Witness
to signatures: /s/ Xxxxx Xxxxx
|
-
15
-
APPENDIX
14.4.4
Articles
of Association of the JV Company
COMPANIES
ORDINANCE
(NEW
VERSION) - 5743-1983
ARTICLES
FOR THE MANAGEMENT OF A
COMPANY
LIMITED BY SHARES
(Name
of Company):
FRONTLINE
P.C.B. SOLUTIONS LTD. (the “Company”)
INTERPRETATION
|
1.
|
The
sample Articles which appear in the Second Schedule to the
Companies
Ordinance
(New Version) 5743-1983 will not apply to this
company.
|
|
2.
|
Other
than as expressly provided herein, the terms in these articles
(hereinafter “Articles”) have the meaning that they have in the Companies
Ordinance (New Version)
5743-1983 (hereinafter the “Ordinance”), as amended from time to
time.
|
PRIVATE
COMPANY
| 3. |
The
Company shall be a private company.
Therefore:
|
|
(a)
|
The
number of Members of the Company is limited to fifty (50),
excluding
employees of the Company and former employees of the Company
who were
Members
of the Company while they were employees and continue to
be Members
of the Company even after their employment was
terminated.
|
Two
or
more shareholders who together hold one or more shares in the Company,
shall be
treated, for purposes of this paragraph, as a single member.
|
(b)
|
A
public offering to subscribe for shares or debentures of
the Company is
hereby prohibited.
|
|
(c)
|
The
right to transfer shares shall be restricted in the manner
hereinafter
provided.
|
CAPITAL
OF THE COMPANY
|
4.
|
The
share capital of the Company is 36,000 New Israeli Shekels
(“NIS”)
consisting of 36,000 (thirty six thousand) Ordinary Shares
of a nominal
value of NIS 1.- each (the “Shares”).
|
The
Ordinary Shares shall have equal rights including voting rights and
rights to
dividends. They shall confer upon the owners thereof the right to receive,
upon
the
2
winding
up of the Company, a sum equal to their nominal value, and if a surplus
remains,
to receive such surplus in proportion to the nominal value of the shares
held
by
them
respectively and in respect of which such distribution is being made
and to
receive
a
portion of the Company’s profits, when distributed, in proportion to the nominal
value of the shares held by them respectively and in respect of which
such
distribution is being made.
SHARES
|
5.
|
The
Company may issue shares that are preferred, or redeemable
or with any
other special right, or restricted in respect of dividend
distributions,
voting rights, the return
of share capital or other matters, all as determined by the
Company by
special resolution,
subject to the provisions of its memorandum and without infringing
on any
special
right previously granted to a
shareholder.
|
|
6.
|
The
Company may pay any person a commission for subscribing or
getting others
to subscribe,
or for agreeing or getting others to agree to subscribe to
the Company’s
shares, whether conditionally or unconditionally, provided
that the rate
or amount of the
commission does not exceed 10% of the value of those shares,
and the
commission may
be paid in cash or in the Company’s shares paid up in full or in part, or
partly in cash and partly in shares as
aforesaid.
|
|
7.
|
Subject
to the provisions of these Articles, the Company may change
the rights of
a certain class of shares, provided that the same is effected
by a special
general meeting of
the holders of those shares.
|
The
provisions of these Articles relating to general meetings and to the
convening
thereof
and to notices in respect thereof and to resolutions to be passed thereat
shall
mutatis mutandis apply to every separate general meeting as mentioned
above.
Unless
otherwise provided by these Articles, the enlargement of an existing
class of
shares,
or the issuance or allotment of additional shares thereof, or the creation
of
additional shares of that class as a result of conversion of shares
from another
class or unification with another class shall not be deemed to modify
or alter
the rights attached
to the previously issued shares of such class or of any other
class.
|
8.
|
The
Company’s funds shall not be expended for the purchase of its own
shares,
other than as allowed in accordance with applicable
law.
|
|
9.
|
Subject
to the provisions of these Articles, the shares of the Company
shall be at
the disposal
of the Board of Directors of the Company (the “Board”)
which
may allot them to such persons, at such times and on such
conditions as
the Board may determine,
whether at par or at a premium or at a discount (subject
to the provisions
of the
Companies Ordinance).
|
|
10.
|
The
Company is entitled to regard the registered owner of any
share as its
absolute owner and shall not be required to recognize any
shareholding by
way of trust, and shall
not be required to recognize any equitable, contingent, future
or partial
interest in any
share or any claim or right with respect to any share, other
than the
right to
|
3
entirety
thereof in the registered owner.
|
11.
|
If
by the terms of issue of any share the payment for the share
is to be made
wholly or partly
in installments, then each such installment shall be paid
to the Company
when due,
by the registered owner for the time being of the
share.
|
LIEN
|
12.
|
The
Company shall have a lien on every share that was not paid
up in full, in
respect of
money due to the Company on calls for payment or payable
at fixed times,
whether the
time for payment has arrived or not; the Company shall also
have a lien on
shares registered in the name of an individual that were
not fully paid up
in respect of money due to it from him or from his estate,
but the Board
may exempt any share, in full or in part,
from the provisions of this section; the lien on a share
shall also apply
to dividends payable on it.
|
|
13.
|
The
Company may sell any share on which it has a lien in any
manner the Board
sees fit,
but it shall not be sold before the date of payment of the
amount in
respect of which the lien exists, and until 14 days have
passed after
notification in writing has been
made to whoever is at that time registered as the share’s owner, or to
whoever is entitled to it upon the registered owner’s death or bankruptcy,
demanding payment of the
amount against which the lien exists and the time of payment
of which has
arrived.
|
|
14.
|
Any
balance from the sale, left after the amount the date of
payment of which
has arrived,
shall be paid to whoever is entitled to the share on the
day of the sale,
subject to
the lien on amounts the date of payment of which has not
yet arrived,
similar to the lien
on the share before its sale; the purchaser shall be registered
as the
share’s owner, and
it is not his responsibility to see to the use of the purchase
price, and
his right to the
share shall not be affected by any fault or error in the
procedure of
sale.
|
|
15.
|
The
provisions of Article 29 of these Articles relating to the
affidavit of a
Director regarding
a share that was forfeited shall apply mutatis mutandis,
to a share which
has been sold pursuant to a lien as described above, and
the Company shall
deliver such affidavit
to the purchaser who requests it.
|
CALLS
ON SHARES
|
16.
|
The
Board may from time to time make calls upon the Members in
respect of any
moneys
unpaid on their shares which are not made payable at a date
fixed by the
terms of
issue. Each member shall pay to the Company, at the time
and place
specified by the
Board the amount called on his shares. A call made by the
Board may be
made payable
by installments and shall be deemed to have been made at
the time when the
resolution
of the Board authorizing the call was
passed.
|
|
17.
|
A
notice regarding any call shall be given not less than 14
days in advance
and shall specify
to whom the required amount should be paid, and the time
and place of
payment,
provided that the Directors may, prior to the time of payment,
by a
written notice,
revoke or postpone the call.
|
4
|
18.
|
The
Board may, upon the issue of any shares, differentiate between
the
shareholders as to
the amount of calls to be paid and the terms of
payment.
|
|
19.
|
If,
by the terms of issue of a share or otherwise, any sum becomes
payable at
any fixed date or in fixed installments, whether on account
of the nominal
amount of the share or by
way of premium, such sum shall be paid as if it were a call
duly made by
the Board with proper notice, and all the relevant provisions
of these
Articles as to calls on shares shall
apply to any such sum or
installment.
|
|
20.
|
The
joint holders of a share shall be jointly and severally liable
to pay all
calls and installments
in respect thereof.
|
|
21.
|
If
the sum called in respect of a share, or an installment or
a sum payable
on a specific date
under the terms of issue, shall not be paid until the day
appointed for
payment thereof, then the holder for the time being of the
share shall pay
interest from the day appointed
for payment thereof to the time of actual payment at a rate
established by
the Board, which will approximate the current rate of interest
applicable
to bank overdrafts, or at a lower rate, or to demand either
linkage
differentials based on any cost of living index published
by any official
governmental agency, or linkage differentials based on foreign
exchange
rates, in addition to the prevailing rate of interest for
loans linked to
the index or to foreign exchange rates (such interest to
include
linkage differentials as aforesaid) as the Board may determine.
Such
interest shall
be payable for the period commencing on the day payment was
due, until the
date
such payment was actually made. The Board shall be at liberty
to waive
payment of
such interest wholly or in part.
|
|
22.
|
No
Member shall be entitled to receive any dividend or to exercise
any
privileges as a Member
until he shall have paid all calls for the time being due
and payable in
every share
held by him whether alone or jointly with any other person,
together with
interest and expenses (if any, pursuant to section 21
above).
|
|
23.
|
The
Board may, if it deems fit, receive from any Member willing
to advance all
or any part
of the moneys uncalled and unpaid upon any shares held by
him and upon all
or any
of the moneys so advanced may (until the same would but for
such advance,
become
presently payable) pay interest at a rate, as may be agreed
upon between
the Board
and the Member paying such sum in
advance.
|
FORFEITURE
OF SHARES
|
24.
|
If
a Member fails to pay in full any call or installment of
a call on the day
appointed for
payment thereof, the Board may at any time thereafter during
such time as
any part of
such call or installment remains unpaid, serve written notice
on him
requiring payment
of so much of the call or installment as is unpaid, together
with any
interest which
may have accrued.
|
|
25.
|
The
notice shall name a further day (not being less than fourteen
days from
the date of the
notice) on or before which, and the place or places where
the payment
together with
the interest required by the notice is to be made and shall
state that in
the event of non-payment
on or before the day and at the place appointed, the shares
in respect
of
|
5
which
such call was made or installment is payable will be liable to be
forfeited.
| 26. |
If
the requirements of any such notice as aforesaid are
not complied with,
any share in respect of which such notice has been given
may at any time
thereafter, be forfeited by a
resolution of the Board to that effect. Any forfeiture
as aforesaid shall
include all dividends declared in respect of the forfeited
shares and not
actually paid before the forfeiture.
|
| 27. |
Any
share so forfeited shall become the property of the Company,
and subject
to these
Articles may be sold, re-allotted or otherwise disposed
of as the Board
may deem fit.
The Board may, at any time before the sale, re-allotment
or disposition of
a forfeited
share, revoke such forfeiture under such terms and conditions
as the Board
determined.
|
| 28. |
Any
person whose shares have been forfeited shall thereupon
cease to be a
Member in respect
of the forfeited shares but shall, notwithstanding the
forfeiture, remain
liable to pay
to the Company all moneys which at the date of forfeiture
were presently
payable by him to the Company in respect of the shares.
Such obligation
shall be discharged when
the Company shall have received all amounts due for the
forfeited
shares.
|
| 29. |
An
affidavit containing a statement by a Director affirming
that a specified
share has been
properly forfeited as of the date of such affidavit,
will constitute
conclusive proof against
any person claiming an interest in such share. Such affidavit
together
with a receipt from the Company for consideration, if
any, for the sale or
transfer of such share, shall transfer title of such
share, and the
purchaser or transferee of such share will
be registered as the owner of the share and he shall
not be liable for any
sales proceeds, if any, and further his right in such
share shall not be
affected by any defect resulting
from the mechanism of the forfeiture, sale, or
transfer.
|
| 30. | (a) |
The
provisions of these Articles with regards to forfeiture
shall also apply
to any non payment of an amount payable, under the terms
of the issue of a
share, at a fixed date, whether for the nominal value of
the share or as
premium, as if such amount was payable by reason of a duly
made and
notified call.
|
| (b) |
Nothing
contained within these Articles regarding forfeiture
of shares shall in
any
way diminish the relief available to the Company from
a member by virtue
of
the Contracts Law (Remedies for Breach of Contract) 5731-1970,
or by
virtue of
any other statute.
|
TRANSFER
OF SHARES AND RIGHTS OF FIRST REFUSAL
| 31. |
Notwithstanding
any other provisions in these Articles, the following
provisions shall
apply:
|
| 31.1. |
Transfer
of Shares.
|
| 31.1.1. |
Except
as otherwise provided in this Article 31, no shareholder
shall be
permitted to transfer any shares in the Company without
|
6
the
prior written permission of both Orbotech Ltd.
(“Orbotech”)
and
Valor
Computerized Systems Ltd. (“Valor”)
(each,
a
“Founding
Shareholder”) for
a
period of 5 years from November 4,
1998
(the “No
Sale Period”).
| 31.1.2. |
Except
as otherwise expressly provided herein, no shareholder shall
pledge,
charge, hypothecate, encumber, grant any security interest
in,
or otherwise grant any rights to any third party concerning
the
shares
without the prior written permission of both Founding Shareholders
unless:
(i) the pledgee is a “bank” (as such term is used
in the Israel Banking (Licensing) Law 1981-5741); and (ii)
the
pledgee
undertakes and agrees, in writing, that its rights in such
shares shall be
subject to all the restrictions regarding transfer of shares
contained in
Article 31.
|
| 31.1.3. |
Subsequent
to the No Sale Period, any transfer of shares shall be in
accordance
with the provisions set forth in this Article 31 and Article
32.
|
|
31.1.4.
|
Unless
otherwise agreed by the Founding Shareholders, a Founding
Shareholder
may not, at any time, transfer any shares in the Company
unless it
transfers at the same time and to the same Transferee
the corresponding partnership interest in FrontLine PCB Solutions
Limited
Partnership (the “Limited
Partnership”).
|
|
31.1.5.
|
An
entity in which a Founding Shareholder beneficially holds,
directly
or indirectly (including through other such wholly-owned
entities)
all of the voting and equity interests in such entity (a
“Permitted
Transferee”) may
not transfer its shares other than in connection
with a transfer by a Founding Shareholder or as set forth
in
Article 31.5 hereof.
|
| 31.2. |
Right
of First Negotiation; Open Negotiation
Period.
|
|
31.2.1.
|
At
any time after the No Sale Period, either Founding Shareholder
(the
“Transferor”)
desiring
to transfer all or any of its shares (other than pursuant
to the Permitted
Transferee or Forced Exit provisions set
forth in Articles 31.5 and 31.6 below) shall send to the
Company and to
the other Founding Shareholder (the “Other
Founding
Shareholder”) a
written notice (the “First
Negotiation Notice”) stating
the Transferor’s intention to transfer its
shares.
|
|
31.2.2.
|
For
a period of up to thirty (30) business days after the delivery
of
the
First Negotiation Notice (the “First
Negotiation Period”),the
Transferor shall negotiate exclusively with the Other Founding
Shareholder
with respect to the Other Founding Shareholder’s purchase of all of the
Transferor’s shares offered for transfer, subject
to any restrictions in law, free of any charge, pledge, lien
or
any
other third party right.
|
7
|
31.2.3.
|
In
the event that the Founding Shareholders do not execute a
definitive
agreement with respect to the Other Founding Shareholder’s purchase of all
of the Transferor’s shares offered for transfer within the First
Negotiation Period, then, the Transferor may, within ninety
(90) days
after the First Negotiation Period, offer
for sale such shares (the “Open
Negotiation Period”) (subject
to
the Right of First Refusal, Right to Tag Along and Right
of Approval set
forth below).
|
|
31.2.4.
|
In
the event that the Transferor shall not execute an agreement
with
a
bona fide purchaser upon the terms of the transfer of its
shares during
the Open Negotiation Period, the Transferor shall not continue
to offer or
otherwise seek to transfer its shares without again
complying with the first negotiation procedure set forth
above
(and
the Right of First Refusal, Right to Tag Along and Right
of Approval
set forth below).
|
| 31.3. |
Right
of First Refusal; Right to Tag Along. At
any time during the Open Negotiation
Period, the Transferor may enter into an agreement (the “Terms
Agreement”) with
a bona fide proposed purchaser (the “Transferee”)
with
respect
to the terms of sale of all or such portion of the Transferor’s shares
offered for transfer during the First Negotiation Period
provided the
Transferor
shall first offer to the Other Founding Shareholder: (a)
the right to
purchase all or such portion of the Transferor’s shares, pursuant to the
Terms Agreement
(“Right
of First Refusal”); and
(b) the right to join the Transferor in its sale of shares
to the
Transferee, such that if the other Founding Shareholder so
elects (as an
alternative to the Right of First Refusal), the Transferor
may not sell
its shares unless the Transferee agrees to purchase the same
percentage of
shares from the Other Founding Shareholder
as it is purchasing from the Transferor, pursuant to the
Terms
Agreement
(“Right
to Tag Along”). Any
transfer of shares by the Transferor to
the Transferee shall also be subject to the Right of Approval
set forth in
Article
31.4.
|
|
31.3.1.
|
Rights
Notice.The
Transferor shall offer the Right of First Refusal and
the Right to Tag Along to the other Founding Shareholder
pursuant to a
written notice to the Company and to the Other Founding Shareholder
providing details of the Transferee and a copy
of the Terms Agreement (the “Rights
Notice”).
|
|
31.3.2.
|
Exercise
Notice.The
Other Founding Shareholder may exercise its Right
of First Refusal or Right to Tag Along by giving the Transferor
and the Company a written notice to that effect within thirty
(30) days after being served with the Rights Notice subject
to
an
additional 90 day period to permit the Other Founding Shareholder
to
obtain all necessary approvals in connection with such purchase
(and the
Company and the Transferor shall provide all reasonable assistance
to the
other Founding Shareholder in
|
8
connection therewith) (the “ExerciseNotice”).
|
31.3.3.
|
Purchase
by the Other Founding Shareholder. If
the Other Founding Shareholder shall timely exercise its
Right of First
Refusal,
then the Transferor’s shares will be sold and transferred to the
Other Founding Shareholder, in accordance with the provisions
of
the Terms Agreement and this Article
31.
|
|
31.3.4.
|
Purchase
by Transferee; Tag Along. If,
(a) the Transferor shall properly
give the First Negotiation Notice and the Rights Notice,
as set
forth above; and (b) the Other Founding Shareholder shall
not timely
exercise its Right of First Refusal, then: (i) none of the
Transferor’s
shares will be sold to the Other Founding Shareholder; and
(ii) subject to the Other Founding Shareholder’s Right of Approval,
the Transferor shall, within sixty (60) days after the last
date on which
the Exercise Notice may be submitted, sell to the Transferee,
all of the
Transferor’s shares pursuant to the Terms Agreement provided
that if
the Other Founding Shareholder shall have timely exercised
its Right of
Tag Along, then none of the Transferor’s shares will be sold unless the
Transferee purchases (pursuant to the Terms Agreement) all
of the shares
offered by the Other
Founding Shareholder pursuant to its Right to Tag
Along.
|
|
31.3.5.
|
In
the event that the Transferor’s shares are not sold by the Transferor
as set forth in Article 31.3.4 above (including by reason
of
the Transferee’s refusal to satisfy the Other Founding Shareholder’s
exercise of its Right to Tag Along) within such sixty (60)
day period, then the Transferor’s shares may not be offered or
otherwise
transferred unless the Transferor shall again comply with
all of the
provisions of Article 31.2 and this Article
31.3
|
| 31.4. |
Right
of
Approval.
|
|
31.4.1.
|
Notwithstanding
the foregoing provisions of this Article 31, any transfer
of shares to a Transferee which is not a Permitted Transferee
of the Transferor shall also be subject to the approval of
the
identity of the Transferee by the Other Founding Shareholder,
which
approval may not be unreasonably withheld and without providing
a written detailed explanation (“Right
of Approval”) provided
that: (a) in the event that the Transferee is a competitor
of the
Other Founding Shareholder, then the Other Founding Shareholder
may refuse
to grant such approval, in its sole discretion,
by giving written notice of such competitive relationship
and without
further explanation; and (b) no such approval shall be required
in the event that the Other Founding Shareholder shall exercise
its Right
to Tag Along.
|
|
31.4.2.
|
The
Transferor may at any time request the Other Founding Shareholder’s
approval of the identity of the Transferee by
giving
|
9
written notice of name of the Transferee (including by providing written notice thereof in the Rights Notice). The Other Founding Shareholder shall respond to the Transferor’s request within ten (10) days after delivery of the Transferor’s notice and such other information as the Other Founding Shareholder may reasonably request. Such approval shall be deemed granted in the event that the Other Founding Shareholder shall fail to respond within such 10 day period.
| 31.4.3. |
If
the Transferor believes that the other Founding Shareholder
is
unreasonably
withholding its approval, then, within 10 days of delivery
of the Other Founding Shareholder’s written explanation, the
Transferor may submit the matter to the dispute resolution
procedure
set forth in Section 12 of the Joint Venture Agreement entered
into by Orbotech and Valor on 10 August, 1998, as amended
(the
“Joint
Venture Agreement”).
|
| 31.5. |
Certain
Permitted Transfers.
|
| 31.5.1 |
Notwithstanding
the foregoing provisions of this Article 31, each of the
Founding Shareholders may transfer a portion of its shares
to a
Permitted
Transferee and Permitted Transferees may transfer shares
to
other Permitted Transferees and the Founding Shareholders
in the manner
set forth in Article 31.5.2 below, and the Other Founding
Shareholder’s Right of First Refusal, Right to Tag Along and
Right of Approval shall not apply, provided, however, that
all
such
shares transferred by a Founding Shareholder or its Permitted
Transferee
shall continue to be subject to such rights as if such shares
were still owned by the transferring Founding
Shareholder.
|
| 31.5.2. |
A
Founding Shareholder or a Permitted Transferee may transfer
all
or
any portion of its shares to one or more Permitted Transferees
provided,
however, that as a condition to the validity of any such
transfer:
|
|
31.5.2.1.
|
the
Founding Shareholder or transferring Permitted Transferee
shall have given written notice to the Company and
the Other Founding Shareholder of details of the transfer,
including the
Founding Shareholder’s certification
that the transferee is a Permitted Transferee and
that all necessary approvals in connection with such transfer
have been
obtained and providing appropriate supporting
documents;
|
|
31.5.2.2.
|
such
Permitted Transferee shall agree in writing to be bound
by all the terms and provisions of the Joint Venture Agreement
and to assume all of the obligations thereunder to
the same extent as the transferring Founding Shareholder;
and
|
10
| 31.5.2.3. |
the
transferring Founding Shareholder shall acknowledge in
writing that it is not released from any of its obligation
hereunder
and/or under the Joint Venture Agreement and that it shall
be liable for
and guarantees the performance by the Permitted Transferee
of its
obligations
and undertakings hereunder and
thereunder.
|
| 31.5.3. |
Change
in Permitted Transferee
Relationship.
|
|
31.5.3.1.
|
Notwithstanding
any provision of these Articles to the contrary,
in the event that a transferee of shares pursuant to
Articles 31.5.1 and 31.5.2 ceases to be a “Permitted Transferee”
of a Founding, then: (i) the transferring Founding
Shareholder (or if such transferring Founding Shareholder
shall no longer
hold any shares, the Permitted Transferee
thereof) shall notify the Other Founding Shareholder
(or the Permitted Transferee thereof) and the Company
of the change within ten (10) business days
thereof.
|
|
31.5.3.2.
|
Within
7 days of delivery of the foregoing notice, the Other Founding
Shareholder
and the Founding Shareholder
(or if any of the Founding Shareholders shall no
longer hold any shares, such Permitted Transferee) shall
appoint a mutually agreed professional third party appraiser
(the
“Appraiser”)
to
determine the value of the Permitted
Transferee’s shares in the Company and its interests
in the Limited Partnership (the “Valuation”).
In
the
event that the Founding Shareholders (and/or their Permitted
Transferees) shall fail to agree upon an appraiser, the same
shall be
appointed by the District Court
in Tel-Aviv upon the application of either Founding Shareholder
(or its Permitted Transferee). The Founding Shareholder
whose transferee ceased to be a Permitted Transferee (or
if the Founding
Shareholder shall no longer hold any shares, such Permitted
Transferee)
shall pay the expenses
of the Appraiser.
|
|
31.5.3.3.
|
The
Appraiser shall complete the Valuation and shall provide
both Founding Shareholders with a signed written original
thereof. The
Valuation shall be final for purposes of
this Article 31.5.3.
|
|
31.5.3.4.
|
The
Other Founding Shareholder shall have 30 days from the
date of receipt of the Valuation to purchase the shares in
the Company and the interests in the Limited Partnership
of such
transferee who ceased to be a Permitted Transferee at a price
which shall
be equal to
|
11
80%
of
the value of such shares in the Company and its interests in the Limited
Partnership set forth in the Valuation.
| 31.6. |
Change
in Control.
|
|
31.6.1.
|
In
the event that there is a “Change in Control” (as defined below)
of
either Founding Shareholder (hereinafter, “Changed
Shareholder”) during
the period in which such Founding Shareholder
and its Permitted Transferees holds any shares, the Changed
Shareholder
shall give written notice thereof to the other Founding
Shareholder (the “Other
Shareholder”) within
10 days thereof provided the Other Shareholder (together
with its
Permitted Transferees)
holds at such time, at least a 30% interest in the Company.
Within 30 days of the Changed Shareholder’s notice, the Other
Shareholder may give written demand to the Changed Shareholder
to negotiate exclusively with the Other Shareholder for a
period of thirty (30) business days with respect to the Other
Shareholder’s
purchase of all of the Changed Shareholder’s shares in
the Company and its interests in the Limited
Partnership.
|
|
31.6.2.
|
In
the event that the Founding Shareholders do not execute a
definitive
agreement with respect to the Other Shareholder’s purchase
of all of the Changed Shareholder’s shares within such negotiation
period, then, the Other Shareholder may, within 15 days thereafter,
give written notice to the Changed Shareholder invoking the
“Sell-Buy
Procedure” set forth in Article 31.7 below (the “Sell-Buy
Notice”.)
|
|
31.6.3.
|
Change
of Control of a Founding Shareholder. For
purposes of this Article 31.6, a “Change
in Control” of
a Founding Shareholder
shall be deemed to have occurred: (i) with respect to Valor,
until the closing of the initial public offering of its shares
to
the
public pursuant to a prospectus or similar document in Israel
or
abroad,
if the “Controlling
Group of Valor” (as
defined in Appendix 16.6.3 of the Joint Venture Agreement),
directly or
indirectly, owns beneficially or of record less than 50.01%
of
the
combined voting power of the outstanding voting securities
of Valor;
or (ii) with respect to either Founding Shareholder if the
board
of directors of such Founding Shareholder (or, if approval
of the
shareholders is required, the shareholders of the Founding
Shareholder)
shall approve: (a) any consolidation or merger of the Founding
Shareholder in which the Founding Shareholder is not the
continuing
or surviving corporation or pursuant to which shares of such
Founding Shareholder would be converted into cash, securities
or
other property, other than a merger of the Founding Shareholder
in
which the holders of shares of such Founding Shareholder
immediately prior
to the merger have the same proportionate ownership of shares
of the
surviving corporation immediately
|
12
after the merger; or (b) the adoption of any plan or proposal for the liquidation or dissolution of the Founding Shareholder; or (iii) during any period of two consecutive years, individuals who at the beginning of such period constituted the entire board of directors of such Founding Shareholder cease for any reason to constitute a majority thereof unless the election, or the nomination for election by such Founding Shareholder’s shareholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period; or (iv) if a competitor of the other Founding Shareholder shall acquire, directly or indirectly, beneficially or of record, 10% or more of the combined voting power of the outstanding voting securities of such Founding Shareholder.
| 31.7. |
Sell-Buy
Procedure.
|
|
31.7.1.
|
In
the event that the Other Shareholder shall give the Sell
Buy Notice as set
forth above then within 7 days of delivery of such notice,
the Founding Shareholders shall appoint an Appraiser to provide
a Valuation of all of the shares in the Company and the partnership
interests in the Limited Partnership of both Founding Shareholders
and their Permitted Transferees pursuant to the procedures
set forth in
Sections 31.5.3.2 and 31.5.3.3 except that the
Company shall pay the expenses of the
Appraiser.
|
|
31.7.2.
|
The
Valuation shall be final for purposes of the remainder of
this
Article
31.7.
|
|
31.7.3.
|
Each
of the Founding Shareholders shall have 30 days from the
date of
receipt of the Valuation to make an offer to the other Founding
Shareholder
to purchase all of the other Founding Shareholder’s (and its Permitted
Transferees’) shares in the Company and partnership interests in the
Limited Partnership at a price which shall
at least equal the value thereof as set forth in the Valuation
(a
“Buy
Offer”).
|
|
31.7.4.
|
In
the event only one of the Founding Shareholders makes a Buy
Offer,
the other Founding Shareholder and its Permitted Transferees
shall
be obliged to sell their shares in the Company and their
partnership
interests in the Limited Partnership to the offering Founding
Shareholder
at the price offered.
|
|
31.7.5.
|
In
the event that both Founding Shareholders wish to buy the
other
Founding
Shareholder’s (and its Permitted Transferees’) shares in the
Company and partnership interests in the Limited Partnership,
the
Founding Shareholders shall bid against each other by means
of
sending
Buy Offers and counter Buy Offers to each other. The Founding
Shareholder offering the highest amount shall be entitled
to
buy all of the other Founding Shareholder’s (and its
Permitted
|
13
Transferees) shares in the Company and partnership interests in the Limited Partnership and such other Founding Shareholder and its Permitted Transferees shall be obliged to sell the same at the price offered. Counter Buy Offers shall be made within 15 days of receipt of a Buy Offer. If an offeree Founding Shareholder fails to respond to a Buy Offer (i.e., to give a counter Buy Offer) within 15 days of receipt of the Buy Offer, the Buy Offer shall be deemed to have been accepted by the offeree Founding Shareholder and its Permitted Transferees for all pherein.
| 31.7.6. |
In
the event that neither of the Founding Shareholders makes
a Buy
Offer
within 30 days of receipt of the Valuation or neither Founding
Shareholder
agrees to purchase the other Founding Shareholder’s (and its Permitted
Transferees’) shares in the Company and partnership interests in the
Limited Partnership based upon a price at
least equal to that reflected in the Valuation, the Members
shall dissolve
the Company, the Limited Partnership and all subsidiaries
thereof
pursuant to applicable law.
|
| 31.8. |
Closing;
Directors. Once
it is determined which Founding Shareholder will be
transferring its shares in the Company to the other Founding
Shareholder
or
another purchaser (the “Selling
Shareholder”), the
Founding Shareholders
shall negotiate a closing date for the transfer of such shares
to the
purchasing Founding Shareholder or its designee for a date
no later than
45 days from the date of the acceptance (or deemed acceptance)
of the Buy
Offer.
All members of the Board of Directors of the Company who
were designated
by virtue of the shares so transferred shall be deemed to
be dismissed
from their positions as of the date of the closing of such
transfer,
and
such open directorships shall be filled by the remaining
Founding
Shareholder.
|
|
32.
|
Any
transfer of shares other than transfers pursuant to Article
31 above
requires the approval
of the Board and the Board may, in its discretion, refuse
to register any
transfer
of shares of the Company. In the case of a deadlocked vote
on this matter
at a meeting
of the Board, the application for the registration of transfer
shall be
deemed to be
declined.
|
|
33.
|
Subject
to the restrictions contained in these Articles, shares shall
be
transferable. Every
transfer must be in writing, and shall not be registered
unless a duly
executed instrument of transfer is lodged with the Company.
The instrument
of transfer shall be signed by the transferor and transferee,
and the
transferor shall be deemed to remain a holder of the share
until the name
of the transferee is entered in the Members Register as
the owner of the transferred share.
|
|
34.
|
The
instrument of transfer shall be in the following form or
as close to it as
possible, or in such other form as the Board shall
approve:
|
I
(We)
(name(s)) of (address(es), etc.) in consideration of the sum of
________ paid
to
me
(us)
by ________ of (address(es), etc.) (hereinafter called the
transferee(s)) do
14
hereby
transfer to the transferee(s) the share(s) numbered ______ in
the
Company called
__________
Limited,
to hold unto the transferee(s) the administrator of his estate,
and the holder of his power of attorney, subject to the several conditions
on
which
I
(We) held the same immediately before the execution hereof; and I (We)
the
transferee(s),
do hereby agree to accept and take the said shares subject to the conditions
aforesaid.
In
Witness on the
_____(day)
of
(month) _____ of
_____
(year).
|
(TRANSFEROR’S
SIGNATURE)
|
WITNESS
|
|
|
|
||
|
|
||
|
(TRANSFEROR’S
SIGNATURE)
|
WITNESS
|
|
35.
|
Notwithstanding
any other limitation on the transfer of shares contained
in these
Articles,
the Board may decline to register the transfer of a share
not being a
fully paid up
share, and it may decline to register the transfer of a share
on which the
Company has a lien. The Board may also suspend the register
of transfer
during the 14 days immediately
preceding every annual ordinary General
Meeting.
|
| 36. |
The
Board may also decline to recognize any instrument of transfer
unless and
until:
|
|
(a)
|
The
instrument of transfer, accompanied by the certificate of
the shares to
which it
relates is lodged at the office for registration;
and
|
|
(b)
|
Such
evidence is given as may reasonably be required by the Directors
to show
the right of the transferor to make the
transfer.
|
|
37.
|
The
registered instruments of transfer shall remain with the
Company, but any
instrument
of transfer the registration of which was declined by the
Board, shall be
returned
to the person who lodged it.
|
TRANSMISSION
OF SHARES
|
38.
|
In
case of the death of a shareholder (not being a joint owner
of a share),
the executors or
administrators of the deceased or the legal heirs of the
deceased
shareholder where there
is no executor or administrator, shall be the only persons
recognized by
the Company as having any title to his
shares.
|
|
39.
|
If
a share is registered in the names of two or more persons
- the Company
shall recognize
only the surviving owners as persons having rights in the
share.
|
Nothing
in the aforementioned clause shall be construed as releasing the estate
of a
deceased shareholder from any liability in respect of the shares jointly
held by
him with other persons.
|
40.
|
Any
person becoming entitled to shares in consequence of the
death of a Member
shall be
registered as a shareholder with respect to these shares
upon producing
before the
|
15
Board
a
succession order or an order of probate of a will or an order appointing
an
administrator
by the competent court, or such other evidence as may be sufficient
in
the
opinion of the Board proving that he is entitled to be registered as
the
shareholder in
accordance with these Articles or which will prove his title to these
shares.
The Board
may
refuse or defer such registration in the same way that they were entitled
to
so
do if
the deceased had transferred the share prior to his death.
|
41.
|
A
receiver or a liquidator of a Member being a company or the
trustee in
bankruptcy or an official receiver of a bankrupt Member may,
with the
consent of the Board (which grant of consent by the Board
is not
mandatory) and upon producing such evidence
as may be sufficient in the opinion of the Board proving
that he is
entitled to appear
in such capacity or proving his title, be registered as a
shareholder of
such shares and subject to the provisions with regard to
limitations on
transfers herein contained, may transfer such
shares.
|
|
42.
|
A
person who has acquired shares by virtue of a transfer pursuant
to the
provisions of this
chapter shall be entitled to receive any dividend or other
moneys payable
in respect of the shares, and give to the Company a receipt
in respect of
the payments, but he shall not be entitled to receive notices
of, or to
attend or vote at general meetings,
or, except as herein provided, to exercise any of the rights
of a Member
until he shall have been registered as the owner of such
shares in the
Register.
|
SHARE
CERTIFICATES
|
43.
|
Except
as otherwise provided in the terms of the share offering,
each shareholder
shall within
two months following his request, be entitled to receive
a share
certificate for all
shares of the same class registered in his name. The Board
shall be
empowered to issue
several certificates, each for a specified quantity of
shares.
|
|
44.
|
All
share certificates shall specify the quantity of the issued
shares, the
sequential number of such shares, and the amount paid up
thereon.
|
|
45.
|
All
share certificates shall be issued with the Company’s seal or the rubber
stamp of the Company, and shall carry the signatures of at
least two
directors, unless at such time
the Company has only one director and in such case his signature
shall
suffice.
|
|
46.
|
A
share certificate which is registered in the joint name of
two or more
individuals shall
be delivered to that individual whose name appears first
in the Register
regarding joint
ownership.
|
|
47.
|
A
share certificate which was lost, defaced or destroyed, shall
be replaced
by the Company which shall issue a substitute certificate
provided that
any conditions established
by the Board at its discretion regarding proof and indemnification
shall
be satisfied.
|
REDEEMABLE
SHARES
|
48.
|
Subject
to the provisions of the Ordinance and the provisions of
Article 67
hereafter, the
Company may issue redeemable shares and redeem
them.
|
16
ALTERATION
OF CAPITAL
| 49. |
The
Company may, by special resolution and subject to the
provisions of
Article 67 hereafter, increase the share capital by an
amount which shall
be divided into shares of such
increments or classes as the resolution shall
prescribe.
|
| 50. | (a) |
New
shares shall be issued under the tand limitations and with
the same rights
and privileges as the special resolution creating such shares
shall
direct, and in the absence of such direction - as the Board
may
decide.
|
| (b) |
Subject
to any instruction in the special resolution which increases
the share
capital,
the shares shall be issued from the original or increased
capital of the
Company to such individuals and under such conditions, all
as prescribed
by the Board
in its absolute discretion.
|
| 51. |
Unless
otherwise required by the resolution increasing the capital,
and in
addition to the
abovementioned, the new shares shall be subject to the
payment of calls,
lien, forfeiture, transfer, transmissions and other provisions
as apply to
the shares of the original
share capital.
|
| 52. |
The
Company may, by special resolution, subject to the provisions
of Article
67 hereafter:
|
|
a)
|
Consolidate
all or any of its share capital into shares of larger amount
than the
nominal
amount of the existing shares;
|
|
b)
|
Sub-divide
its shares or any of them into shares of smaller nominal
amount than
is
presently fixed, subject to the provisions of the Companies
Ordinance.
|
|
c)
|
Cancel
any shares which at the date of the passing of the resolution
have not
been
taken by any person and which the Company has not undertaken
to
issue.
|
| 53. |
The
Company may, by special resolution, subject to the provisions
of Article
67 hereafter,
decrease its share capital, its special reserve for share
redemption, and
any other account containing premiums paid for shares,
provided that such
action is done in
accordance with the agreements and requirements set forth
in the
Ordinance.
|
| 53A. |
With
respect to any consolidation of issued shares into shares
of larger
nominal value, and with respect to any other action which
may result in
fractional shares, the Board may
settle any difficulty which may arise with regard thereto,
as it deems
fit, including, inter alia, resort to one or more of the
following
actions, subject to applicable law:
|
|
(a)
|
determine,
as to the holder of shares so consolidated, which issued
shares shall
be
consolidated into each share of larger nominal
value;
|
|
(b)
|
allot,
in contemplation of or subsequent to such consolidation or
other action,
such shares or fractional shares sufficient to preclude or
remove
fractional
|
17
share holders;
|
(c)
|
redeem,
subject to applicable law, such shares or fractional shares
sufficient to
preclude
or remove fractional share holdings;
and
|
|
(d)
|
cause
the transfer of fractional shares by certain shareholders
of the Company
to
other shareholders thereof so as to most expediently preclude
or remove
any fractional shareholdings, and cause the transferees to
pay the
transferors the fair value of fractional shares so transferred,
and the
Board is hereby authorized
to act as agent for the transferors and transferees with
power of
substitution for purposes of implementing the provisions
of this
Article.
|
GENERAL
MEETINGS
|
54.
|
General
meetings shall be held at least once in every calendar year
at such time,
being not
more than fifteen months after the holding of the preceding
General
Meeting, and at
such place as may be determined by the
Board.
|
|
55.
|
The
aforementioned general meetings shall be called “Ordinary Meetings” and
all other
general meetings shall be called “Extraordinary
Meetings”.
|
|
56.
|
The
Board may, whenever it deems fit, convene an extraordinary
general
meeting, and it
can be convened pursuant to a demand of the Members as stated
in section
109 of the Ordinance, and if the Board fails to so convene
it, the persons
making the demand may convene
the meeting according to section 110 of the
Ordinance.
|
| 57. | (a) |
The
Company shall send notice of a meeting, at least seven days
prior to the
meeting,
counting the day of the meeting but excluding the day of
mailing, to all
Members
who are entitled to receive it under Article 58 hereafter.
The notice
shall
specify the place, the day and the hour of meeting and the
general nature
of any
business on the agenda.
|
| (b) |
For
any general meeting whose agenda contains a proposal for
a special
resolution notice shall be given at least 21 days in advance,
satisfying
the requirements of section (a)
above.
|
| 58. |
The
Company must give notice of general meetings only to the
following:
|
|
(a)
|
To
any Member of the Company, excluding Members who have no
address in
Israel
and have not notified the Company of a mailing address in
Israel;
|
|
(b)
|
To
any person who has a right in a share by virtue of the death
or bankruptcy
of a Member,
who but for such would be entitled to receive notice of the
meeting,
and
who has given an address in Israel for the delivery of
notice.
|
|
59.
|
A
general meeting at which it is intended to propose a special
resolution,
or any other general
meeting may be called without the aforementioned 21 day or
7 day notices,
if all
shareholders who are entitled to receive such notice so
consent.
|
18
|
60.
|
No
matter shall be discussed at a meeting unless a quorum is
present at the
start of such
meeting. Subject to any contrary provision in these Articles,
a quorum
shall mean the presence of at least 2 Members in person or
by proxy, who
hold at least 51% of the voting
power of the Company.
|
|
61.
|
If
within thirty minutes after the time appointed for the meeting
called by
virtue of a demand by the Members a quorum is not present,
the meeting
shall be cancelled but if such meeting was otherwise called,
then it shall
stand adjourned to the same day in the next week at the same
time and
place. If at such adjourned meeting a quorum as above defined
is not
present within thirty minutes after the time appointed for
holding the
meeting,
any number of Members present in person or by proxy shall
constitute a
quorum.
Such adjourned meeting shall not consider any matter other
than matters
that were
on the agenda of the original
meeting.
|
|
62.
|
The
chairman of the Board who is elected pursuant to Article
107 or any other
person appointed
for this purpose by the Board shall preside as chairman at
every general
meeting.
|
|
63.
|
If
there is no such chairman, or if at any meeting the chairman
is not
present within fifteen
minutes after the time appointed for holding the meeting,
or shall be
present but unwilling to act as chairman, the Members present
shall choose
one of their number to act
as chairman.
|
|
64.
|
The
chairman, may, with the consent of any meeting at which a
quorum is
present, adjourn
any meeting to a different time and/or place, and must so
adjourn if
demanded to
do so by the meeting, but no business shall be transacted
at any adjourned
meeting other
than the business left unfinished at the meeting from which
the
adjournment took place.
When a meeting is adjourned for ten days or more, notice
of the adjourned
meeting
shall be given as in the case of an original meeting, but
otherwise it
shall not be
necessary to give any notice of an adjournment or of the
business to be
transacted at the
adjourned meeting.
|
|
65.
|
No
random omission or error in the delivery of notice for a
meeting to any
member entitled
to receive notice or failure to receive notice by any such
member shall
invalidate any resolution passed at such
meeting.
|
|
66.
|
Any
resolution signed by all shareholders of the Company who
are entitled to
receive notice
of and vote at general meetings of the Company or to which
all such
shareholders
have given their written consent including, but not limited
to, by letter,
telegram, telex, facsimile or otherwise, shall be treated
either as a
proper ordinary resolution, or as a proper extraordinary
resolution, or as
a proper special resolution, having
been passed at either an ordinary general meeting or an extraordinary
general meeting,
[and shall be viewed as having been adopted at a general
meeting] of the
Company.
Similarly, any resolutions passed by the shareholders of
the Company by
teleconference
or by video-conference shall be viewed as having been adopted
at a
general
meeting or an extraordinary meeting of the
Company.
|
VOTES
OF MEMBERS
19
| 67. |
Major
Decisions —
Shareholders.
For
as long as the holdings of the Founding Shareholders
(together with the holdings of their respective Permitted
Transferees) in
the
Company are equal, any of the following matters in respect
of the Company
or the Limited Partnership (each, a “JV
Entity”) may
only be determined with the approval of
both of the Founding Shareholders regardless of whether such
matter might
otherwise
be deemed to be part of the day-to-day management of such
JV Entity and
regardless
of whether such matter might otherwise be deemed to be within
the
competence of the Board:
|
|
67.1.
|
Any
change in the number or composition of the Board or the method
prescribed
for appointing the members to the
Board.
|
|
67.2.
|
Any
addition to, amendment, revision or other change of or to
the
organizational or charter documents of a JV
Entity.
|
|
67.3.
|
Any
change in the capital structure of a JV Entity, including,
but not limited
to,
any split or subdivision of stock, the creation of new stock
or separate
classes
of stock, the alteration of rights associated with any class
of stock, or
the
issue of any debenture or loan stock of the JV Entity and
any
recapitalization or reduction in capital structure of the
JV Entity or any
changes in the authorized capital stock of the JV Entity
and/or any
increase in the issued and outstanding shares of capital
stock of the JV
Entity, issuance of any new or additional shares in the JV
Entity,
issuance or authorization
for issuance or sale of any of the capital stock of the JV
Entity
(the
term “stock” or “shares” shall also mean “partnership interest” as
applicable, mutatis mutandis).
|
|
67.4.
|
The
merger, reorganization, or consolidation of a JV Entity or
the sale or
other transfer of all or substantially all of the assets
of a JV Entity or
obligating
a JV Entity to do so with or into any other
entity.
|
|
67.5.
|
The
making, entry into, or agreement to make or enter into, or
amendment of
any contract or arrangement between a JV Entity or its subsidiaries
and
any
shareholder, officer or director or any entity controlled
by, controlling,
or under common control with any shareholder, officer or
director (other
than as provided
for in the Joint Venture
Agreement).
|
|
67.6.
|
The
appointment and removal of the auditors of a JV Entity and
the fixing of
their
remuneration.
|
| 67.7 |
Deleted.
|
|
67.8.
|
The
approval of a Budget of a JV Entity or change thereto which
shall
allocate
to annual marketing or research and development amounts which
are
more
than 20% or 30% of annual forecasted sales,
respectively.
|
|
67.9.
|
The
Company shall give prior notice to the Founding Shareholders
of any
agreements
between any of the JV Entities and an entity which competes,
directly
or indirectly, with either Founding Shareholder (other than
an
|
20
agreement
solely for the sale, license and/or service of the “JV Products”, as
defined
in the Joint Venture Agreement, to or by such entity as an end user)
and
the
key terms thereof. In the event a
Founding Shareholder so requests
by written notice to the Company and
the
other Founding Shareholder
within 15 days of the Company’s notice, such agreement shall not be effective
unless approved by both Founding Shareholders, which approval will
not be
unreasonably withheld.
|
67.10.
|
Any
matter which if not approved, or any matter which if approved,
would
result
in a freeze of a JV Entity’s business or lead to a cessation or
termination of a JV Entity’s
business.
|
|
67.11.
|
The
taking by a JV Entity of any loan, or the granting by a JV
Entity of any
security
in any of the assets of a JV Entity, which, in the aggregate,
shall be
in
excess of 20% of the revenues of the JV Entity for the previous
year.
|
|
67.12.
|
Entering
into any contract, agreement, arrangement or commitment relating
to the
“Joint Venture”, as defined in the Joint Venture Agreement which provides
for a cost or obligation to the JV Entities in excess of
US$1,000,000.
|
|
68.
|
A
resolution put to the vote of the meeting shall be decided
on a show of
hands unless before or on the declaration of the result of
the show of
hands a poll is demanded by at least
one member.
|
|
69.
|
A
vote duly demanded to be taken by poll shall be taken in
such manner as
the chairman
shall direct, and the result of the poll shall be deemed
to be the
resolution of the
meeting at which the poll was
demanded.
|
|
70.
|
In
the case of an equality of votes whether on a show of hands
or on a poll,
the vote shall
be deemed to be deferred, and the chairman shall not be entitled
to a
second or deciding
vote.
|
|
71.
|
A
declaration by the chairman that a resolution has on a show
of hands been
carried unanimously or by a specified majority, or deferred
and an entry
to that effect in the minute book of the Company, shall be
conclusive
evidence of the fact without proof of the
number or percentage of the votes for or against such resolution.
For the
purposes of this Article, the “chairman” shall have the same meaning
ascribed to this term in Article
107 and the provisions of Article 107 shall apply to such
shareholders
meetings, mutatis mutandis.
|
|
72.
|
A
poll vote which was requested on the matter of the selection
of the
chairman or on the
adjournment of the meeting, shall be taken forthwith, but
the time for a
vote requested on any other matter, shall be set by the
chairman.
|
|
73.
|
Subject
to any special privilege or restriction for the time being
attached to any
class or
classes of shares, by the Articles, every member present
in person or by
proxy shall have
one vote, for each share of which he is the holder whether
in a vote by a
show of hands
or a poll. During any poll vote, if he so desires, a shareholder
or
his
|
21
|
representative for purposes
of the vote
may vote less than all of the shares under his control,
or may vote a portion of such shares in a manner diverging from
the vote
of the remaining shares.
|
|
74.
|
In
the case of joint holders of a share the vote of the senior who
tenders a
vote, whether
in person or by proxy, shall be accepted to the exclusion of
the votes of
the other
joint holders and for this purpose seniority shall be determined
by the
order in which
the names stand in the Register.
|
|
75.
|
A
member who is mentally retarded or judged legally incompetent
by an
authorized court
of law may vote both on a show of hands and on a poll by his
guardian or
by an individual
appointed by the court, and in the case of a poll vote, he may
vote by
means of
a designee for such voting.
|
|
76.
|
No
member shall be entitled to vote at any general meeting in respect
of any
share held
by him unless all calls and other sums presently payable by him
in respect
of this share
have been paid.
|
|
77.
|
Votes
may be exercised either personally or by proxy or, if the member
be a
corporation, by a duly authorized
representative.
|
|
78.
|
An
instrument appointing a proxy shall be in writing, made under
the hand of
the principal
or by his representative duly authorized in writing, and if the
principal
is a corporation, then it shall be made with the corporate seal
if any or
by an officer or his designee
designated for such purpose.
|
|
79.
|
An
instrument appointing a proxy and/or a power of attorney or other
instrument of designation under which such proxy is signed, or
a copy
thereof certified by a Notary Public
or by another method acceptable to the Board, shall be delivered
at the
office or presented
to the chairman of the meeting at or before the time appointed
for holding
the
meeting at which the person named in the instrument proposes
to vote, and
failure to do so shall invalidate the instrument for purposes
of such
meeting.
|
|
80.
|
An
instrument appointing a proxy for a vote may be in the following
form, or
in an alternative
form designated by the Board:
|
|
“I,
of, Member of __________
Ltd.. and entitled to vote hereby appoint _____________ of
_____________ to
vote for me and on my behalf
at the (Ordinary/Extraordinary) “General Meeting of the Company to be held
on the
__________ day
of __________ and
at every adjournment thereafter.
As
witness my hand this __ day
of ____ 19__.
Signed:
(Member’s Name)”
|
|
81.
|
A
vote given in accordance with the terms of an instrument of proxy
shall be
valid notwithstanding
the prior death or incapacity of the principal or the transfer
of the
share
in respect of which the proxy was given, unless notification
in writing of
such death,
incapacity or transfer shall have been receat the office prior
to the
commencement of the meeting. Provided that if a poll shall be
directed, a
notice in
|
22
|
writing revoking an instrument
of proxy
shall be effective if such notice shall be under the
hand of the principal and shall be received at the Company’s office not
later than one hour before the commencement of the
poll.
|
DIRECTORS
| 82. |
Board of
Directors.
Subject
to the following provisions of this Article 82 and to the provisions
of Article 105 below, the number of members of the Board of
Directors of
the
Company (“Directors” and the “Board”)
shall be determined from time to time by the Company in general
meeting
and the Directors shall be appointed by the members
in general meeting. The Board shall initially consist of four
Directors.
For as long as the holdings of the Founding Shareholders (together
with
the holdings of their respective
Permitted Transferees) in the Company are equal, each Founding
Shareholder
shall have the right to appoint (and shall have right to remove
and
replace)
two Directors. Directors shall be appointed, removed and replaced
by the
Founding
Shareholders by written notice to the Company. Any Founding
Shareholder
entitled
to appoint more than one Director hereunder shall also have
the right to
designate
that a Director appointed by it shall have more than one vote
provided
that the
aggregate number of votes held by all Directors appointed by
any such
Founding Shareholder
shall not exceed the aggregate number of Directors that such
Founding
Shareholder
is entitled to appoint
hereunder.
|
|
At such time as the holdings
of the
Founding Shareholders (together with the holdings of
their respective Permitted Transferees) shall no longer be
equal,
Directors shall be appointed
or removed by ordinary resolution of the Company in general
meeting.
Except in the case of a person nominated by the Board, no
person shall be
eligible to be elected as a Director unless notice in writing
of the
intention to nominate such person
is delivered to the registered office of the Company not
later than 48
hours, and not
earlier than 30 days, prior to the date scheduled for the
general meeting
at which Directors
are to be appointed, signed by a Member entitled to participate
in and
vote at the
scheduled meeting, together with the written consent of the
proposed
nominee.
|
| Deleted. |
|
84.
|
The
continuing Directors may act notwithstanding any vacancy or
vacancies in
the Board.
But if the number of Directors is reduced below two, the continuing
Directors may
act for the purpose — of summoning a general meeting of the Company for
this purpose.
|
| 85. | A Director need not hold qualification shares in the Company. |
|
86.
|
The
Directors shall be entitled to receive from the Company such
remuneration
for their
service on the Board as from time to time may be determined,
if at all, by
the Company
in general meeting.
|
|
87.
|
A
Director shall be entitled to be paid all reasonable traveling,
hotel and
other expenses properly incurred by him in attending the
meetings of the
Board or in connection with fulfilling his duties as a Director.
A
Director required (with his
|
23
|
consent) to render
special services to the
Company or to make special efforts for any of
the objects of the Company or to travel abroad or stay
abroad, or
otherwise shall be paid by the Company a remuneration of
a fixed sum or
otherwise, as the Board may determine,
subject to the provisions of the
Ordinance.
|
| 88. | The office of Director shall be vacated in any of the following events: |
|
(a)
|
by
his death, or if the director is a Company - upon its being dissolved
or
wound up;
|
| (b) | If he be incapacitated; |
|
(c)
|
If
he becomes bankrupt or makes any arrangement of compromise with
his
creditors;
|
| (d) | If he resigns his office by notice in writing to the Company; |
| (e) | If he is removed from office pursuant to Article 82 above. |
|
89.
|
Agreements,
contracts or arrangements between the Company and an interested
party
or
officer of the Company, shall be subject to the provisions of
chapter Dl
of the Ordinance as amended from time to time and in so far as
such
provisions are applicable to such agreement, contract or
arrangement.
|
No
Director shall be disqualified by his office from holding any office or
place of
profit under the Company or outside the Company or under any company in
which
the Company shall be a shareholder or otherwise interested, or under any
company
which
is
a shareholder of, or otherwise interested in, the Company or from contracting
with
the
Company either as vendor, purchaser, or otherwise, either on his own behalf
or
as a
Director of another company or member of a firm or otherwise, nor (unless
and
to
the
extent provided otherwise in the Ordinance) shall any such contract, or
any
contract
or arrangement entered into by or on behalf of the Company in which any
Director
shall be in any way interested, be void or voidable, nor shall any Director
be
liable
to
account to the Company for any profit arising from any such office or place
of
profit or realized by any such contract or arrangement by reason only of
such
Director
holding that office or of the fiduciary relations thereby established,
but it is
declared
that the nature of his interest must be disclosed by him as provided in
the
Ordinance
but in any event not later then at the meeting of the Board at which the
contract or arrangement is first taken into consideration, if his interest
then
exists, or in
any
other case - at the first meeting of the Board after the acquisition of
his
interest. Unless
and to the extent provided otherwise in the Ordinance, every Director shall
be
entitled, after such disclosure, to vote as a Director in respect of any
contract or arrangement
in which he is so interested as aforesaid. Unless and to the extent provided
otherwise in the Ordinance, a general notice that a Director is a member
of any
firm or company and is to be regarded as interested in all transactions
with
that firm or company shall be a sufficient disclosure under this Article
as
regards such Director and the said transactions, and after such general
notice,
(unless and to the extent
provided otherwise in the Ordinance) it shall not be necessary for such
Director
to
give a
special notice relating to any particular transaction with that firm
or
24
company.
ALTERNATE
DIRECTORS
| 90. |
Each
Director shall have the power to appoint by a written notice
to the Board,
an individual
to be his alternate Director and may remove such alternate
Director and
appoint
another in his or her place. Such alternate Director shall
have all the
rights and powers
in respect of participation in the meetings of the Board,
right of
signature etc. as
the Director appointing him. An alternate Director shall
ipso facto cease
to be an alternate
Director if his appointor ceases to be a Director or if one
of the
circumstances described in Articles 88(a)-(d) should befall
the
substitute. The appointment of an alternate Director is subject
to the
approval of the Board. A substitute for a Director shall
have ~ in
addition to his own vote, if he himself is a Director -
a number of votes equal to the number of Directors for whom
he acts as
substitute,
and shall be counted for purposes of establishing a quorum
as the number
of
Directors for whom he acts as substitute, provided however,
that not more
than one (1)
substitute appointed to act in place of a Director exercising
this power
may attend or vote at the same meeting. A substitute Director
shall alone
be responsible for his actions
and omissions, and shall not be deemed an agent of the Director(s)
who
appointed him.
|
GENERAL
MANAGERS AND BUSINESS MANAGERS
| 91. |
General
Managers. The
General Manager(s) of the JV Entities shall be appointed
by the
Board. Initially, and for as long as the holdings of the
Founding
Shareholders (together
with the holdings of their respective Permitted Transferees)
in the
Company are
equal, the Company and the Limited Partnership shall be managed
by two
joint General Managers, one of whom shall be appointed by
the Directors
appointed by Orbotech,
and one of whom shall be appointed by the Directors appointed
by Valor
(who may thereafter remove such General Manager appoint another
in his or
her place)
provided such appointees are reasonably acceptable to both
of the Founding
Shareholders.
At such time as the holdings of the Founding Shareholders
(together with
the holdings of their respective Permitted Transferees) are
not equal or
the Founding Shareholders shall mutually agree upon a suitable
candidate,
the two General
Managers shall be replaced with a single General Manager.
Such General
Manager
shall be empowered with all the same rights and authorizations,
and
subject
to the same duties, as the two General Managers. Subject
to the provisions
of Articles 67 and 106, the General Managers shall have full
authority to
manage and execute
all day-to-day business decisions relating to the Company
and its
business.
|
| 92. |
Management
and Officers. The
General Managers will recommend internal rules of procedure
to be approved
by the Board. The Board shall nominate and appoint personnel
to fill senior managerial functions. Initially, such senior
functions
shall be equally
apportioned between personnel recommended by each of the
Founding
Shareholders.
|
| 93. |
A
General, Business or other Manager shall receive such remuneration
as the
Board may
from time to time determine. Such remuneration may be either
by way of
salary, fees,
or profit sharing, or by a combination of
same.
|
25
| 94. |
Subject
to Articles 67 and 106, the Board may from time to time delegate
to any
General, Business, or other Manager for the time being such
of their
powers under these
Articles as they may think expedient, and they may delegate
such powers
for the time,
and for the purposes and for the periods and under the terms
and
restrictions as they may think expedient. These powers may
be granted
either parallel to the powers of
the Board in such area or outside or instead of all or any
of them, and
they may from
time to time cancel, suspend, alter, or replace any or all
of such
powers.
|
POWERS
OF THE DIRECTORS
| 95. |
The
business of the Company shall be managed by the Board, which
may expend
such sums as necessary for the founding and registration
of the Company
and to exercise all the
powers of the Company and to do all acts which the Company
is empowered to
do under these Articles and the law, excluding powers granted
by law or by
these Articles to
the Company in general meeting. No regulation of a general
meeting shall
invalidate
any prior act of the Board which would have been valid if
such regulation
had
not been made.
|
| 96. |
Subject
to Article 106 below, the Board may, at any time, enter into
or pursue any
action, sector, or type of business or act toward any purpose
toward which
the Company
is empowered, explicitly or implicitly to engage. Similarly,
the Board in
its discretion
may refrain from or cease acting in any such
activities.
|
| 97. |
The
Board in its discretion may, from time to time, borrow funds
or guarantee
the payment of any sum or sums for the purposes of the
Company.
|
| 98. |
(a)
|
The Board may secure the
payment of such
sums in the same manner and under the
same conditions as it deems fit, whether by means of issuing
debt,
securities, debentures,
or stock of debentures, against either a floating charge on
all or a
portion
of the Company’s property whether owned now or in the future, including
capital not yet called or called but unpaid, or against liens,
charges or
other
security interests of any
kind.
|
|
(b)
|
Any debt securities,
debentures, stock of
debentures or other security interest may be issued at
a discount or a
premium or in any other matter and with any other
pre-financial redemption, conversion, or allotment
rights.
|
PROCEEDINGS
OF THE DIRECTORS
| 99. |
The
Directors may meet together for the transaction of business,
adjourn and
otherwise regulate
their meetings as they think fit, including by telephone,
video conference
or any other means of communication or by written resolution
as described
in Article 114.
|
| 100. |
Quorum.
The
quorum for meetings of the Board shall be at least two Directors.
For as
long as the holdings of the Founding Shareholders (together
with the
holdings of their respective
Permitted Transferees) in the Company are equal, such quorum
must include
at least one Director appointed by each Founding Shareholder.
In the
event
|
26
that
none
of the Directors appointed by a Founding Shareholder is present, the meeting
shall
automatically be postponed 3 days to the same time and place (or in the
event
such day is not a business day in Israel, the first business day thereafter).
At
such postponed
meeting, any two of the Directors then in office shall constitute a quorum,
whether
or not Directors appointed by both Founding Shareholders are present. Unless
and
to
the extent provided otherwise in the Ordinance, a Director who is an interested
party in any transaction shall be counted for purposes of a quorum despite
his
interest.
| 101. |
A
Director may at any time, and the Secretary (if any) shall,
at the request
of a Director, convene a meeting of the
Directors.
|
| 102. |
Notice
of a Board meeting may be given in writing or by fax
provided that such
notice shall
be given at least 72 hours prior to the time fixed
for the meeting, unless
all the Directors who are entitled to receive notices
shall agree to a
shorter or longer or other form
of advance notice.
|
| 103. |
A
Director known to be absent for the time being
from Israel shall not be
entitled to receive
notice of a Board meeting during his absence, but
such notice shall be
given to his alternate, if any, and if appointed
by a Founding Shareholder
pursuant to Article 82 above, to the Founding Shareholder
which appointed
such Director.
|
| 104. |
A
Director and any alternate Director may
attend and vote by proxy at any meeting of the
Directors provided that such proxy has been appointed
in writing signed by
his appointor
and such appointment may be general or for any
particular meeting or
meetings.
A proxy so appointed shall not be entitled to
be present and vote in place
of his
appointor at any meeting of Directors at which
the Director appointing him
is present in person.
|
| 105. |
Majority;
Independent Director.
Resolutions
shall be passed by a simple majority of Directors
present and voting at a meeting of the Board
at which a quorum is present,
and it is the intention of the Parties that
the Board function with an
even number of Directors
as aforesaid. However, at any time after
November 4, 1999 provided that
the holdings of the Founding Shareholders
(and their respective Permitted
Transferees) are equal,
each of the Founding Shareholders shall be
entitled to request the
appointment of
an additional, independent, Director in the
event it believes that the
proper functioning of the Board requires
such appointment. Any such
request shall be made in
writing. In the event the other Founding
Shareholder agrees with such
request then a fifth member of the Board
(the “Independent
Director”) will
be appointed by both of the
Founding Shareholders acting jointly. In
the event the other Founding
Shareholder disagrees
it shall so notify the requesting Founding
Shareholder in writing within
seven
(7) days of receipt of the request and the
Founding Shareholders shall
meet to discuss the matter. In the event
that the requesting Founding
Shareholder has not withdrawn such request
in writing within thirty (30)
days of such request, then the Independent
Director will be appointed effective as of
the termination of such thirty
day
period. The making of any request and/or
the withdrawal of any such
request by a Founding
Shareholder shall not preclude such Founding
Shareholder (or the other
Founding Shareholder) from making any further
or subsequent request. A
person recommended by the requesting Founding
Shareholder and reasonably
acceptable to the
other Founding Shareholder shall serve as
the Independent Director.
Any
|
27
Independent Director appointed
may be removed at
any time by the Founding Shareholders,
acting jointly, and another may be appointed in his or her
place.
| 105A. |
Budget.
The
Board shall approve a budget prepared by the Company’s management
for
the JV Entities on a yearly basis prior to October
31 of each year (the
“Budget”).
All
of the “JV Activities”, as defined in the JVenture Agreement (including
those implemented by each of the JV Entities),
shall be conducted pursuant
to the Budget as shall
be in effect from time to time. Until such time
as a new Budget has been
adopted, the
prevailing Budget shall remain in force. The initial
Budget (i.e., through
December 31,
1998) of the JV Entities, which shall include a
projected balance sheet
for the Limited Partnership, shall be determined
jointly by the Founding
Shareholders immediately after November 4,
1998.
|
|
106.
|
Major
Decisions —
Board
of Directors. For
as long as the holdings of the Founding Shareholders
(together with the holdings of their respective Permitted
Transferees) in
the Company are equal, any of the following matters in
respect of the
Company or the Limited Partnership may only be determined
by the Board
regardless of whether such matter
might otherwise be deemed to be part of the day-to-day
management of such
JV Entity:
|
| 106.1 | The entry by a JV Entity into any business not described in, or any material deviation from, the Budget. |
|
106.2.
|
Any
sale of any substantial asset of a JV Entity, or contract or
agreement to
sell,
or removal, abandonment, or other disposition of, any substantial
asset of
a
JV Entity.
|
|
106.3.
|
The
making and/or effecting of any change in any accounting principles
or
practices
of a JV Entity or the method in which the books and records of
a JV
Entity
are maintained.
|
|
106.4.
|
The
taking by a JV Entity of any loan, or the granting by a JV Entity
of any
security
in any of the assets of a JV Entity if not approved in the
Budget.
|
|
106.5.
|
Entering
into any contract, agreement, arrangement or commitment relating
to
a
JV Entity which provides for a cost or obligation to such JV
Entity in
excess of
US$200,000, if not included in the
Budget.
|
|
106.6.
|
The
approval, amendment or modification of the Budget, or the adoption
of an
annual plan and budget for either of the JV Entities (apart from
the
Budget).
|
| 107. |
Chairman.
The
Chairman of the Board shall be elected by the Directors.
For as long as
the holdings of the Founding Shareholders (together with
the holdings of
their respective Permitted Transferees) in the Company
are equal, there
shall be two
Co-Chairmen, one elected by the Directors appointed by
Orbotech from among
themselves
and one elected by the Directors appointed by Valor from
among themselves
and the “chairman” shall be deemed to refer to both Co-Chairmen
collectively.
If at any meeting the Chairman is not present within fifteen
minutes after
the time appointed for holding the same, the Directors
present may choose
one of their
|
28
number
to be Chairman of the meeting. If at any
meeting of the Board, either one of the
Co-Chairmen is not present, the substitute Co-Chairman for that meeting
shall be
elected
by the Directors who were entitled to elect the absent
Co-Chairman.
| 108. |
In
case of an equality of votes, the motion shall be deemed
to be rejected
and the chairman shall not be entitled to cast a second
or deciding
vote.
|
| 109. |
Any
meeting of the Board where a quorum is present
may enjoy all the
authority, power,
and discretion for the time being vested in the
Board or usually practiced
by it.
|
| 110. |
The
Board may delegate any of its powers to committees
consisting of such
member or
members of their body as they think fit, and
it may cancel such
delegations. Any committee so formed shall
in the exercise of the powers
so delegated conform to any regulations
that may be imposed on it by the Board. The
meetings and proceedings of
such
meetings of such a committee, composed of two
or more Directors, shall be
conducted in accordance with the provisions
of these Articles with regard
to the meetings and proceedings of the Board,
mutatis mutandis, subject
always to the regulations
of the Board in appointing committees or at
any time
thereafter.
|
| 111. |
Executive
Committee.
The
Board shall appoint an executive committee
to define the strategic
business direction of the Company and the Limited
Partnership, which
committee
shall consist of four members (the “Executive
Committee”). For
as long as the
holdings of the Founding Shareholders (together
with the holdings their
respective Permitted
Transferees) in the Company are equal, two
of the members of the
Executive
Committee shall be appointed by the Directors
appointed by Orbotech from
among
themselves and two shall be appointed by the
Directors appointed by Valor
from
among themselves. In the event the Executive
Committee is unable to reach
a decision
on any matter, such matter shall revert to
the
Board.
|
| 112. |
Committees
and Boards of Subsidiaries. The
composition of all committees of the
Board
and all boards of directors (and committees
thereof) of any subsidiaries
of the Company and/or the Limited Partnership
and the management of any
other entity in which the Company and/or
the Limited Partnership holds or
will hold an equity or partnership
interest, shall resemble that of the
Board.
|
| 113. |
All
acts bona fide done by any
meeting of the Board or of
a committee of the
Board, or by
any person acting as a Director
shall not be made invalid
notwithstanding
any defect
in the appointment of any
such Director or person acting
as aforesaid, or
the fact that
they or any of them were
disqualified to be a
Director.
|
| 114. |
A
resolution in writing
signed by all the
Directors shall be
as effective
for all purposes
as a resolution passed
at a meeting of the
Board duly
convened, held and
constituted. Similarly,
any resolutions passed
by the Directors
of the Company by
teleconference
or by video-conference
shall be viewed as
having been adopted
at a meeting
of the Board.
|
| 115. |
The
Board may from
time to time
determine the
persons authorized
to act and/or
sign documents
on behalf of
the Company either
generally or
to sign documents
on specific
obligations
and the Board
may restrict
or limit the
extent of the
authority so
granted,
|
29
The
Board may
grant the
power to
act or sign
to
a single
director
and/or directors,
a manager
and/or managers
and/or agents
and/or other
individuals
as the Board
shall
determine,
and the Board
shall also
determine
the combination
of signatures
required
to bind the
Company.
|
116.
|
The
Company may have a seal and/or rubber stamp for the purpose
of stamping
its name on documents to be signed and if the Board so determines,
documents binding the Company shall carry the seal or stamp
in addition to
the signatures required by Article
115 above. Except in the cases where the seal or rubber stamp
is required
as specified above, the Company shall be bound in respect
of documents
signed on its behalf
by such person or persons authorized by the Board to sign
on behalf of the
Company in accordance with Article 108, together with the
written or
typewritten name of the
Company.
|
| 117. |
The
Board must follow the provisions of the Ordinance and especially
those
provisions dealing
with:
|
| (a) |
Registering
details of liens on the Company’s
assets;
|
| (b) |
Updating
the register of Directors;
|
| (c) |
Delivering
the following to the Registrar of
Companies;
|
|
(d)
|
the
Company’s annual report, notice of consolidation or increase of the share
capital or conversion of shares into stock; copies of extraordinary
special resolutions;
and copies of the register of Directors and notice of any changes
therein.
|
XXXXXXXXX,
XXXXXXXX XXX XXXXXX XX XXXXXXXX
| 000. |
The
Board may in its discretion from time to time appoint for
the Company a
secretary or
secretaries, officers, employees, agents, and attendants
for fixed tasks,
either temporary
or special. Similarly, the Board may terminate at its absolute
discretion
the service
of one or more of the aforementioned from time to time and
at any
time.
|
| 119. |
The
Board may determine the extent of the authority, functions,
salary and
remuneration
of any of the individuals mentioned in Article 118 above
and the Board
may
demand securities in such cases and determine the amounts
of such
securities as it deems
fit.
|
| 120. |
The
Board may at any time, and from time to time, grant a power
of attorney to
any company,
firm, person or body of persons to serve as the Company’s empowered agent
for such purposes, with such authority, for such time period,
and under
such which the Board determines fit, subject only that such
authorities
shall not exceed those vested in the Board. Such appointment
may include
provisions for the protection
and direction of such empowered agents. Such appointment
may also grant
to
such empowered agents the authority to transfer such powers
granted to
such agents.
|
30
DIVIDENDS
| 121. |
The
Company may, in general meeting, declare a dividend and it
may fix a time
for its payment,
provided that no dividend shall exceed the amount recommended
by the
Directors.
|
| 122. |
The
Board may in each year, before recommending any dividend,
set aside out of
the profits
of the Company available for dividend, such sums as it deems
proper as a
restricted
reserve or general reserves which shall, at the discretion
of the Board be
applicable
for special purposes or for the equalization of dividends
or for any
purpose to
which the profits of the Company may be properly applied
and pending such
application may also at such discretion either be employed
in the business
of the Company
or be invested in such investments as the Board may from
time to time
think fit.
|
| 123. | (a) |
Except
insofar as special rights regarding dividends attach to any
share, all
dividends
shall be paid according to the amounts paid up on or credited
as paid
against the nominal value of the shares regardless of premiums
paid
thereon. But no
amount paid up in advance on a share in advance of calls
and in advance of
the
time for payment on which the Company pays interest, shall
be deemed, for
the
purposes of this Article, as paid up on the
share.
|
| (b) |
Except insofar as
the rights attaching to,
or the terms of issue of any share otherwise provide,
any shares paid up
or credited as paid up in full or in part within
any period in respect of which dividends are paid, shall
entitle their
holder to
dividends pro rata according to the amounts paid up or
credited as paid up
on the
nominal value of the shares on a pro rata temporis
basis.
|
|
124.
|
The
Board may from time to time pay to the members such interim
dividends as
appear
to the Board to be justified by the profitability of the
Company.
|
| 125. |
The Company shall not pay
any dividends
except out of profits.
|
|
126.
|
Any
general meeting declaring a dividend may direct payment or
satisfaction of
such dividend wholly or in part by the distribution of specific
assets,
and in particular of paid-up
shares or debentures or stock of the Company or shares or
stock of
debentures of
any other company or by a combination of these
ways.
|
| 127. |
The Company shall not pay
interest on any
dividend.
|
|
128.
|
Each
of the persons who are registered as jointly holding a share
may give
valid receipts for any dividends paid on such
shares.
|
| 129. |
The
Board may deduct from any dividend, bonus or other amount
to be paid in
respect of
shares held by any Member, whether alone or together with
another Member,
any sum
or sums due from him and payable by him alone or together
with any other
person to
the Company on account of calls or the
like.
|
| 130. | (a) | The Board may retain any dividend or other monies payable or property |
31
| distributable in respect of a share on which the Company has a lien, and may apply the same in or towards satisfaction of the debts, liabilities, or engagements in respect of which the lien exists. |
| (b) |
The Board of Directors
may, when paying
any final or interim dividend, resolve to retain any dividend,
or other
monies payable or property distributable,
for distribution with respect to a share in respect of which
any
person
is under these Articles entitled to become a Member, or which
any person
is under these Articles entitled to transfer, until such person
shall
become
a Member in respect of such share or shall transfer the
same.
|
| 131. |
All
unclaimed dividends or other monies payable in respect of
a share may be
invested or
otherwise made use of by the Board for the benefit of the
Company until
claimed. The
payment by the Board of any unclaimed dividend or such other
monies into a
separate
account shall not constitute the Company a trustee in respect
thereof. The
principal
(and only the principal) of an unclaimed dividend or such
other moneys
shall be,
if claimed, paid to a person entitled
thereto.
|
CAPITALIZATION
| 132. |
Notice of the declaration
of dividends shall
be delivered to anyone entitled to receive part
of such dividend, as provided
below.
|
|
133.
|
Any
general meeting may, upon the recommendation of the Board,
resolve that it
is desirable to capitalize all or part of any undivided profits
standing
to the credit of any reserve
or of any other moneys or surplus which may by law be distributed
as
dividends or money derived as premiums paid on shares, or
reserves
deriving from a
revaluation of the assets to be used for the full or partial
payment of
shares or of debentures of the Company whether according
to the nominal
value or the premium. The said shares or debentures shall
be distributed
among the Members in the same proportion in which they are
entitled to the
distribution of dividends. Bonus shares divided
in respect of any shares shall be of the same class as the
shares in
respect of which
they were distributed, unless the general meeting has decided
to
distribute to all members
bonus shares of the same
class.
|
| 134. |
For
the purpose of carrying out any resolution passed by the
general meeting
as aforesaid
the Board may, at its absolute discretion, settle as it thinks
fit any
difficulty arising
as to any distribution; specifically they may issue certificates
for
fractional shares
or pay for such fractions either in cash or otherwise, or
determine that
fractions the value of which is less than the lowest par
value of the
shares shall not be taken into account
for the purpose of adjusting the Members’
rights.
|
The
Board
may also deposit such monies in trust for the beneficiaries as the Board
may
think
fit. If necessary an appropriate agreement shall be registered in accordance
with
section 129 of the Ordinance and the Board may appoint any person to sign
on the
contract
with the Company on behalf of the Members entitled to the dividend or the
capitalized reserve or shares that were distributed as a bonus as
aforesaid.
32
ACCOUNTS
AND REPORTS
| 135. |
The
Board shall cause true accounts to be kept in accordance
with the
Companies Ordinance and any
law.
|
| 136. |
The
books of account shall be kept at the Company’s registered office or at
such other place
as the Directors shall think fit and shall always be open
to the
inspection of the Board.
The Board shall be entitled to decide from time to time to
which extent,
and at which
time, place, and under which conditions the books of accounts
of the
Company or
some of them may be available for inspection by the Company’s Members. A
Member
who is not a director shall have no right to inspect such
books or
accounts of the
Company or its documents unless as granted permission by
law or by the
Board or by
the Company in general
meeting.
|
AUDIT
AND CERTIFIED PUBLIC ACCOUNTANT
| 137. |
The
accounts as well as the balance sheet and the profit and
loss account of
the Company
shall be audited at least once in every year by the certified
public
accountant who
shall deliver to the Company a report on the accounts he
has audited in
accordance with the provisions of the
Ordinance.
|
| 138. |
The
appointment, the powers, the remuneration and the duties
of the Auditors
shall be regulated
in accordance with the Ordinance and with the law applicable
for the time
being.
|
| 139. |
The
Directors shall procure that a copy of the balance sheet
and profit and
loss account referred
to in sections 203 and 204 of the Companies Ordinance shall
be sent, seven
days
before the ordinary general meeting, to each of the shareholders
entitled
to vote at the
general meeting who so requests same. The said documents
shall be sent in
a similar way to the sending of notices under these
Articles.
|
REGISTERED
OFFICE
| 139. |
The
Board shall from time to time establish the location of the
Company’s
registered office
and shall satisfy all of the requirements of the Ordinance
regarding
same.
|
WINDING
UP
| 140. |
If
the Company shall be wound up, the surplus assets shall be
distributed
among the Members xxxx any rights vested in any class of
issued shares at
such time, pro rata to the
amount paid up or credited as paid up on the nominal value
of the
shares.
|
INSURANCE
AND INDEMNIFICATION OF OFFICE HOLDERS IN
ACCORDANCE WITH CHAPTER Dl OF THE ORDINANCE
| 141. | (a) | The Company will be entitled to make insurance contracts in respect of the responsibility of office holders of the Company, in whole or in part, for each of the following: |
33
| 1. | Breach of duty of care to the Company or to another person; |
|
2.
|
Breach
of fiduciary duty to the Company, provided the office holder
of the
Company
has acted bona fide and had reasonable grounds to assume
that the action
shall not affect the interest of the
Company.
|
|
3.
|
Financial
liability imposed on him in favour of another person for
action
taken
by him as office holder of the
Company.
|
| 4. | Any other liability which is insurable by law. |
| (b) | The Company will be entitled to indemnify office holders of the Company for each of the following: |
|
1.
|
Financial
liability imposed on him in favour of another person
by virtue of a
judgment, including judgment given in a settlement
or arbitrators’
judgment approved by a court of law, for action taken
by him as office
holder of the Company.
|
|
2.
|
Reasonable
litigation expenses, including lawyers’ fees, spent by the office
holder
or imposed by Court in litigation initiated by the
Company or in its
behalf
or by another person, or in criminal proceedings
in which he is acquitted,
and all for an action taken by him as an office holder
of the
Company.
|
|
3.
|
Any
other act or omission for which an office holder
can be indemnified by
law.
|
NOTICES
| 142. |
Any notice or other document
may be served by
the Company upon any Member either
personally or by sending it by prepaid mail (air mail if
sent to a place
outside Israel)
addressed to such Member at his address as described in
the Register or
such other
address (if any) as he may have designated in writing for
the receipt of
notices and other documents. Any notice or other document
may be served by
any Member upon
the Company by tendering the same in person to the General
Manager of the
Company
at the registered office of the Company or by sending it
by prepaid
registered mail (air mail if posted outside Israel) to
the Company at its
registered office. Any such notice or other document shall
be deemed to
have been served forty-eight (48) hours after it has been
posted (seven
(7) days if sent to a place, or posted
at a place, outside Israel), or when actually received
by the addressee if
sooner than
forty-eight (48) hours or seven (7) days, as the case may
be, after it has
been posted, or when actually tendered in person, to such
Member (or to
the General Manager),
provided, however, that notice may be sent by cablegram,
telex or
facsimile and
confirmed by mail as aforesaid, and such notice shall be
deemed to have
been given
the first business day after such cablegram or telex or
facsimile has been
sent or when
actually received by such Member (or by the Company), whichever
is
earlier. If a
notice is, in fact, received by the addressee, it shall
be deemed to have
been duly
|
34
served,
when received, notwithstanding that it was defectively addressed or failed
in
some
other respect, to comply with the provisions of this Article.
| 143. |
A
notice may be given by the Company to the joint holders of
a share by
giving notice to the joint holder named first in the Register
in respect
of the share.
|
| 144. |
Any
Member whose address is not described in the Register, and
who shall not
have designated
in writing an address for the receipt of notices, shall not
be entitled to
receive any notice from the
Company.
|
| 145. |
The
Company may declare that any document(s) will be delivered
or be available
for review
at the registered office of the Company or any other place
designated by
the Board
of Directors.
|
| 146. |
Whenever
it is required to give prior notice a specified number of
days in advance
or where a notice is valid for a specified period, the day
of service of
the notice shall be included in such count or period. Where
notice is
given by more than one method, it will
be deemed served on the earliest of such
dates.
|
| 147. |
Service
of notice to a relative of a Member living under the same
roof with him,
will be deemed service to such
Member.
|
| 148. |
Subject
to applicable law, any Member, Director or any other person
entitled to
receive
notice in accordance with these Articles or law, may waive
notice, in
advance or
retroactively, in a particular case or type of cases or generally,
and if
so, notice will be
deemed as having been duly served, and all proceedings or
actions for
which the notice
was required will be deemed
valid.
|
| 149. |
Any
person entitled to a share by operation of law or by transfer,
transmission or otherwise,
will be bound by any notice served with respect to such shares
prior to
his being
registered in the Register as owner of the
shares.
|
| 150. |
It
shall not be necessary to set forth in detail in notice of
any meeting the
full text of any
proposed resolutions and a general description of the nature
of the
matters on the agenda
will suffice. The Company shall be entitled, however, but
shall be under
no obligation
to do so, to specify in a notice of a meeting, a place and
a time where
and when
the full text of proposed resolution(s) may be reviewed,
rather than
include in the
notice a general description of the nature of the matters
in the agenda as
aforesaid.
|
| 151. |
The
accidental omission to give notice of a meeting to any Member
or the
non-receipt of notice by any Member entitled to receive notice
shall not
invalidate the proceedings at
any meeting or any resolution(s) adopted by such a
meeting.
|
-
16 -
APPENDIX
14.4.5
Notification
to the Companies Registrar
-
17 -
APPENDIX
14.4.6
Nomination
of Directors
ORBOTECH
LTD.
New
Industrial Zone
Yavne,
Israel
November
10, 1998
Orsoft
Ltd.
New
Industrial Zone
Yavne,
Israel
Re:
Appointment
of Directors
Pursuant
to Article 82 of the Articles of Association of Orsoft Ltd., we hereby
appoint
Xxxx
Xxxxxxxx and Xxxxx Xxxxx as directors to the Board of Directors of Orsoft
Ltd.
-
18 -
APPENDIX
14.4.7
Share
Certificates
-
19 -
APPENDIX
16.6.3
Controlling
Group of Valor
| - |
Courses
Investment Holdings Ltd.
|
| - | Schmil Xxxxxxx |
| - | Xxxxxx Xxxxx |
| - | Xxxxxx Xxxxxxxx |
| - | Xxxxx Xxxxxxxx |
| - | DNLO Trustees Ltd. (To the best knowledge of Valor, these shares are held in trust for the benefit of Xxxx Xxxxxxx) |
| - | Xxxxx Xxxx |
| - | Xxxxxxxx Xxxxxxxx |
| - | Xxxxx Xxxxxx |
- 20
-
APPENDIX
18.1
Press
Release
FOR
IMMEDIATE RELEASE
|
CONTACT:
|
ORBOTECH
CONTACT:
|
VALOR
CONTACT:
|
|
Xxxx
Xxxxxxxxx [ext. 304]
Xxxx
Xxxxxxxxx [ext. 104]
Xxxxxxx/Heilshorn
&
Associates
(000)
000-0000
xxxx@xxxx.xxx
xxxx@xxxx.xxx
|
Xxxx
Xxxx, Executive Vice President
Xxxxxx
Xxxxx, Director of Finance Orbotech
Ltd.
x000-0-000-0000
Xxxxxxx
Xxxxxxxxx,
VP
Finance & Operations
Orbotech,
Inc.
(000)
000-0000
xxx.xxxxxxxx.xxx
|
Schmil
Xxxxxxx, President & CEO
Itsik
Ben Xxxxx, CFO
x000
0 0000 000
xxxxxx@xxxxx.xxx
xxxxx@xxxxx.xxx
|
ORBOTECH
AND VALOR ANNOUNCE JOINT
VENTURE WITH
RESPECT
TO CAM OPERATIONS
YAVNE,
ISRAEL - August XX 1998 - ORBOTECH, LTD. (NASDAQ/NM SYMBOL:
ORBKF) AND VALOR Computerized Systems LTD. today announced the
signature of an agreement to form a Joint Venture with respect to CAM
(Computer
Aided Manufacturing) software for PCB Fabrication applications. The interests
in the Joint Venture will be held equally by ORBOTECH and VALOR.
The
Joint
Venture will continue to support the existing installed base of products
from
both
companies and will focus on continuous development and marketing of advanced
CAM
and pre-production Engineering solutions to the PCB industry.
Commenting
on the news, Xxxxx Xxxxx, Co-General Manager of Orbotech’s PCB Division
said: “Combining the technologies, market knowledge and extensive global
presence of both companies, will allow us to support the PCB industry with
the
best
solutions available for its pre-production engineering and CAM needs. The
Joint
Venture will offer these solutions combined with the advantages of seamless
integration with Orbotech’s AOI, Imaging and other products. At the same time it
will
promote and support an open system and open format approach for the benefit
of
our
customers”.
Schmil
Xxxxxxx, President and CEO of Valor added: “The Joint Venture plans to
consolidate all state of the art pre-production technologies from Valor
and
Orbotech to support the PCB industry in meeting the next millennium challenges
of board density and speed. While promoting the open system approach, the
Joint
Venture is committed to migrating all its product lines to fully support
the
ODB++
data transfer format. This is expected to accelerate further endorsement
of
the
ODB++
as the de-facto standard of Design to Manufacturing data exchange and provide
a
widely accepted vehicle of production-ready, unambiguous and
- 21
-
comprehensive
data transfer Valor will continue to independently develop and sell software
products for PCB design and assembly applications”.
ORBOTECH
and VALOR shall apply for all necessary approvals in order to consummate
the agreement as soon as possible.
Except
for historical information, the matters discussed in this press release
are
forward-looking
statements that are subject to certain risks and uncertainties which
could
cause the actual results to differ materially from those projected, including
the
timely development and acceptance of new products, delays in factory testing
and
acceptance, industry trends, technology or pricing competition and other
risks
detailed from time to time in the ORBOTECH’S SEC reports. ORBOTECH assumes
no obligation to update the information in this press release.
ORBOTECH
LTD. is the world leader in the design, development, manufacture and marketing
of Automated Optical Inspection (“AOI”) systems for use in the manufacture
of PCBs, and is a leading manufacturer of CAM systems and laser plotters
for PCB production. In addition, the Company is a leading manufacturer
of AOI
systems for use in the production of liquid crystal flat panel displays
(“LCD”s
and “FPD”s) and for use in the electronics assembly industry, and is applying
its proprietary AOI technologies to other applications both within and
outside
the electronics
industry.
VALOR
Computerized Systems LTD. is a world leader in the development of software
products intended to provide a complete integrated solution to the Design,
Assembly
and Fabrication of high-technology circuit boards. Valor’s installed base
includes leading OEM and PCB assembly facilities located throughout the
world.
Aug
10,
1998
Further
to Section 5.1 of the Joint Venture Agreement (the “Agreement”) signed
between
us today, we agree that the JV shall have the right to select Orbotech’s seven
(7) Designated Employees from Orbotech’s personnel employed in the CAM business
to be operated by the JV according to the Agreement. Additional employees
required by the JV may be selected by the JV from among Orbotech’s above
mentioned personnel and Orbotech shall use reasonable efforts to transfer
such
employees to the JV,
including, in the event any such employee refuses to become an employee
of the
JV,
to
second such employee to the JV, but Orbotech shall have no obligation to
terminate
the employment of any such employee who refuses to be seconded to the JV.
Any
additional employee so transferred shall be deemed a “Designated Employee” for
purposes
of the Agreement.
Further
to Appendix 8 of the Agreement Valor undertakes to examine within 10 days
of the
date hereof its escrow arrangements mentioned in Appendix 8 and in the
event
that the release of any escrow pursuant to any such escrow arrangement
may be
triggered by the Agreement or the transactions contemplated therein to
supply
Orbotech with all information concerning such escrow arrangement and the
undersigned
shall discuss such matter and in such event, other than if such release
is a
limited release for internal use only of the relevant customer, either
of the
undersigned shall be entitled not to proceed to Closing without any liability
and without any mutual claims
between the undersigned as a result thereof.
MINUTES
OF A MEETING OF THE BOARD OF DIRECTORS
OF
FRONTLINE P.C.B. SOLUTIONS (1998) LTD.
HELD
ON NOVEMBER 12, 2002
| Present: |
Xxxx
Xxxxxxxx, Xxxxx Xxxx, Xxxx Xxxxxxx
|
| Agenda: |
Revised
Framework for the sale, marketing, servicing, support and maintenance
of
Frontline products.
|
Revised
Framework for the sale, marketing, servicing, support and maintenance of
Frontline products
At
the
request of Orbotech Ltd. (“Orbotech”), the Board discussed a revised framework
for the sale, marketing, servicing, support and maintenance of Frontline
products.
RESOLUTION
It
was
unanimously resolved, according and further to the Joint Venture Agreement
between Orbotech and Valor Computerized Systems Ltd. (“Valor”) dated August 10,
1998 (the “JV Agreement”) and the Limited Partnership Agreement with respect to
the Partnership dated November 1, 1998 (the “Partnership Agreement”), to ratify
and approve the Revised Framework for the Sale, Marketing, Servicing, Support
and Maintenance of Frontline Products, in the form attached hereto as
Exhibit
A,
beginning as of January 1, 2002.
IN
WITNESS WHEREOF, we affix our signatures as of November 12, 2002.
|
/s/
Xxxx Xxxxxxxx
|
/s/
Xxxxx Xxxx
|
|
|
Xxxx
Xxxxxxxx
|
Xxxxx
Xxxx
|
|
|
/s/
Xxxx Xxxxxxx
|
||
|
Xxxx
Xxxxxxx
|
The
undersigned, the General Partner of the Partnership, the shareholders of
the
General Partner and the Limited Partners of the Partnership agree to and
ratify
and approve the above, and agree that, to the extent necessary, the JV
Agreement
be deemed amended accordingly.
|
/s/
Xxx Xxxxxxx
|
||
|
Frontline
P.C.B. Solutions, LP
|
||
|
General
Partner
|
||
|
/s/
Xxxx Xxxxxxxx /s/ Xxxxx
Xxxx
|
/s/
Xxxx Xxxxxxx
|
|
|
Orbotech
Ltd.
|
Valor
Computerized Systems Ltd.
|
|
|
Limited
Partner and Shareholder
|
Limited
Partner and Shareholder
|
EXHIBIT
A
REVISED
FRAMEWORK FOR THE SALE, MARKETING,
SERVICING,
SUPPORT AND MAINTENANCE OF FRONTLINE PRODUCTS
|
1.
|
Definitions
and Scope
|
|
In
this Revised Framework:
|
|
The
“Company”
shall mean Frontline P.C.B. Solutions
Ltd.;
|
|
“Frontline”
shall mean Frontline P.C.B. Solutions Limited
Partnership;
|
|
The
“JV
Agreement”
shall mean that certain Joint Venture Agreement, by and among
Orbotech,
Valor, Frontline and the Company dated as of August 10, 1998,
as
amended;
|
|
The
“JV
Products”
shall have the meaning ascribed thereto in the JV
Agreement;
|
|
“Orbotech”
shall mean Orbotech Ltd.; and
|
|
“Valor”
shall mean Valor Computerized Systems
Ltd.
|
|
This
Revised Framework shall determine certain matters relating
to the sale,
marketing, servicing, support and maintenance of JV Products
which are
currently being carried out through the following agents (each,
an
“Agent”
and collectively, the “Agents”)
in the following territories, for so long as each such Agent
continues to
serve as the agent for the JV Products in such
territory:
|
|
(i)
|
Europe
-
Orbotech SA;
|
|
(ii)
|
Far
East (not including Japan) -
Orbotech Pacific Ltd. and/or Orbotech Asia
Ltd.;
|
|
(iii)
|
Japan
- Orbotech
Japan Ltd.; and
|
|
(iv)
|
North
America - Orbotech
Inc.
|
|
2.
|
Agreement
with Agents
|
As
soon
as practicable hereafter, agreements will be signed between Frontline
and each
Agent (an “Agent
Agreement”)
which
will provide, inter alia, for the following matters:
|
2.1
|
Agent
Employees.
Each Agent shall retain employees who will be solely engaged
in the sales,
marketing, servicing, support or maintenance of the JV Products
(the
“Agent
Employees”).
The initial number and titles of Agent Employees for a particular
calendar
year (defined as 1 January - 31 December) shall be set forth
in a Budget
(as defined below), and are subject to change, from time to
time, in
accordance with Section 4 below. Neither Frontline nor the
Company is, nor
shall they be deemed to be, an employer of the Agent Employees,
and the
Agent shall bear sole and exclusive responsibility in connection
with the
Agent Employees including but not limited to the salaries,
social benefits
and other rights of
|
2
the
Agent Employees. Without derogating from the above, each Agent shall
immediately indemnify and hold Frontline and the Company harmless for
any and
all claims and/or demands addressed or lodged against Frontline and/or
the
Company in connection with the employer-employee relationship between
such Agent
and its Agent Employees or the alleged existence of any such employer-employee
relationship between the Agent Employees and Frontline and/or the Company.
For
the avoidance of doubt, the above does not derogate from Frontline’s obligations
pursuant to Section 4 below to participate in certain severance payments,
all as
provided for in Section 4 below.
|
2.2
|
Revenue.
All income in connection with the sales, servicing, support
or maintenance
of the JV Products during any calendar quarter (the “Agent
Services”)
actually received by each Agent (excluding income in connection
with
automation services which are provided to Agents by third parties)
shall
be held in trust by the Agent in favor of Frontline and shall
be paid by
the same Agent to Frontline within thirty (30) days after the
end of such
calendar quarter. For the sake of clarification, no income
(commission or
fee etc.) may be retained, withheld or set-off by the Agent
from payments
to Frontline as aforesaid other than against any Fixed Costs
or Variable
Costs (as defined below) then due and payable, if any, from
Frontline to
such Agent. Frontline shall be responsible for all taxes or
other charges
with respect to such payments actually made to Frontline and
the Agent may
withhold any taxes or charges required to be withheld by applicable
law.
|
|
2.3
|
Reports.
Each Agent shall furnish reports to Frontline upon the latter’s request
and at least once every calendar quarter, detailing the sales
of JV
Products during the previous calendar quarter including at
least the
following details: customer name, CO number, item, quantity,
selling
price, price net of warranty, warranty period, PO date and
revenue date,
and any problems encountered by the Agent in collecting delinquent
debts.
|
|
2.4
|
Audit.
Each Agent shall keep complete and accurate records pertaining
to the
Agent Services for a period of at least two (2) years from
the date of
each Agent Service. Frontline will be entitled to send a representative
reasonably acceptable to the Agent to examine the Agent’s records insofar
as they pertain to Agent Services, to determine, with respect
to any
calendar year, the accuracy of any report or payment made under
the
applicable Agent Agreement. Such audit may be conducted from
time to time,
upon at least fourteen (14) days advance written notice and
during normal
business hours. The Agent shall provide any such representative
of
Frontline with reasonable assistance in carrying out any such
examination.
|
|
2.5
|
Budget
and Agent Employee Cost Schedule.
The following documents shall be attached to each Agent Agreement:
|
|
(i)
|
a
budget with respect to such Agent for the initial calendar
year, to be
updated annually according to the provisions of Section 3.1
hereunder; and
|
|
(ii)
|
the
Agent Employee Cost Schedule (as defined below) with respect
to such
Agent, to be updated annually according to the provisions of
Section 4.1
hereunder.
|
|
3.
|
Budget
|
|
3.1
|
Approval
of Budget.
Prior to the end of each calendar year, Frontline, with the
approval of
the Board of Directors of the Company, and each Agent will
agree upon a
budget for the upcoming year (the “Budget”),
detailing at least the following with respect to each
Agent:
|
3
|
(i)
|
Fixed
Costs - meaning, the general and administrative costs and management
fee
to be paid by Frontline to the respective
Agent;
|
|
(ii)
|
Variable
Costs - meaning, the aggregate costs for the Agent Employees
to be engaged
by the Agent.
|
The
2002
budget is attached hereto as Exhibit
A.
|
3.2
|
Extension
of Budget.
To
the extent that the Budget for a specific year has not been
agreed upon by
1 January of such year, the Budget from the previous year shall
continue
to apply, mutatis
mutandis,
until such time as the Budget for such year has been so agreed
and
approved but in any event, for a period of not more than three
months from
the beginning of such year. To the extent that no Budget has
been agreed
by the end of such three month period, the provisions of Section
5 shall
apply.
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3.3
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Payments.
Frontline will pay each Agent the Fixed Costs and the Variable
Costs.
Payments by Frontline to the Agents on account of the Fixed
Costs pursuant
to the Budget will be made prior to the first day of each calendar
quarter
with respect to the Budget for such quarter. Payments by Frontline
to the
Agents on account of the Variable Costs pursuant to the Budget
will be
made within thirty (30) days after the end of each calendar
quarter with
respect to the Budget for such quarter.
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4.
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Agent
Employee Changes
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4.1
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Agent
Employee Cost Schedule.
Frontline and the PCB division of Orbotech will agree annually,
as part of
the Budget for each year, as to the cost of each Agent Employee,
on a
territory-by-territory basis, according to the specified job
title held by
him/her (the “Agent
Employee Cost Schedule”).
The Agent Employee Cost Schedule will be reviewed and revised
(and updated
as necessary) concurrently with the approval of the annual
Budget pursuant
to Section 3.1 above.
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4.2
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Increase
in number of Agent Employees at the request of Frontline.
Subject to Sections 4.3 and 4.6 below, Frontline may, from
time to time,
request in writing that an Agent employ further Agent Employees
(a
“Hiring
Notice”).
The Hiring Notice shall state the number of additional employees
requested
to be employed, their positions, and any other requirements
of Frontline
with respect thereto. The Agent shall use reasonable commercial
efforts to
locate and employ such additional Agent Employees as soon as
practicable
subject to obtaining Frontline’s approval as to the identity of any such
employees. Commencing upon the first day of employment of such
additional
Agent Employees, the Variable Costs of the relevant Agent shall
be
increased by, and include (and Frontline shall accordingly
thereafter pay,
as provided in Section 3.3 above) the amount set forth in the
Agent
Employee Cost Schedule according to the position held by such
employees
(“Budget
Increase”).
In the event the relevant Agent Employee Cost Schedule does
not provide
for an employee of such title, Frontline and the relevant Agent
shall
agree upon the cost of such employee and amend the Agent Employee
Cost
Schedule accordingly.
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4.3
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Director
Approval for Hiring Notices.
Frontline shall obtain the prior written consent of the Board
of Directors
of the Company before issuing a Hiring Notice to an Agent,
if the
aggregate Budget Increase in connection with Hiring Notices
sent by
Frontline during the applicable calendar year (including the
proposed
Hiring Notice) would increase the aggregate
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4
Variable
Cost component of the applicable annual Budget with respect to
all Agents, by an amount greater than 10%.
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4.4
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Decrease
in number of Agent Employees at the request of Frontline.
Subject to Sections 4.5 and 4.6 below, Frontline may, from
time to time,
request in writing that an Agent decrease the number of Agent
Employees
retained to provide Agent Services (a “Dismissal
Notice”).
The Dismissal Notice shall set forth the number and position
of the
employees and the requested date of their cessation of provision
of Agent
Services. Frontline shall be entitled to request the cessation
of
provision of Agent Services by any specific employee (in which
case, if
requested by the Agent, Frontline will explain the reasons
for the request
and the parties will discuss the request, it being understood
and agreed
that the Agent will determine whether or not to accept the
request). This
type of request will not be deemed a Dismissal Notice. The
Variable Costs
of an Agent shall be reduced by the amount set forth in the
relevant Agent
Employee Cost Schedule for the employees who are subject to
the Dismissal
Notice, or who are dismissed pursuant to a specific request
as aforesaid,
according to the position held by him/her (“Budget
Reduction”),
effective as follows:
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(i)
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With
respect to Agent Employees whose employment is terminated by
the Agent
(upon Frontline’s request whether pursuant to a Dismissal Notice or in
response to a specific request as aforesaid), the Budget Reduction
shall
be effective beginning as of the day following the actual termination
of
employment of such employee, and, if termination is pursuant
to a
Dismissal Notice, in any event not more than 60 days (or a
longer period,
if mandated by law) after the requested date of cessation of
provision of
Agent Services for such employee(s) set forth in the relevant
Dismissal
Notice.
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If
severance payments are required to be paid by law to such Agent
Employees,
or are payable to such Agent Employees in accordance with the
Agent’s
customary practice, in connection with their termination of
employment,
Frontline shall pay the Agent its proportional amount of such
payments, to
the extent such payments have not been fully funded by the
Variable Costs
pursuant to the Budget. Frontline’s proportional amount shall be
calculated by dividing (x) the period commencing on the later
of (a)
November 3, 1998 and (b) the date such employee commenced his
employment
with the Agent as an Agent Employee, and
ending on the termination of employment of the Agent Employee
by (y) the
entire period of employment of the Agent Employee with the
Agent (the
“Frontline
Proportional Severance Amount”);
and
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(ii)
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With
respect to Agent Employees whose dismissal is requested by
Frontline
pursuant to a Dismissal Notice and whose employment is not
terminated by
the Agent, the Budget Reduction shall be effective upon the
actual day the
Agent Employee ceases to provide Agent Services, and in any
event not more
than 60 days after the requested date of cessation of provision
of Agent
Services for such employee(s) set forth in the relevant Dismissal
Notice
(the “Reduction
Date”).
With respect to Agent Employees whose dismissal is requested
by Frontline
pursuant to a specific request as set forth above, and whose
employment is
not terminated by the Agent but who ceases to provide Agent
Services, the
Reduction Date shall be the actual date such Agent Employee
ceases to
provide Agent Services.
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In
such cases, the Agent shall compute the Frontline Proportional
Severance
Amount which would have been payable pursuant to Sub-section
(i) above (if
any), had such employee’s employment been terminated by the Agent on the
Reduction Date, and shall notify Frontline in writing of such
amount (the
“Severance
Amount Notice”).
If
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5
severance
payments are subsequently actually paid by the Agent (or any
other entity related to Orbotech in the event that such employee’s employment is
assumed by such other entity) to the relevant employee in the future
whether
pursuant to law or in accordance with the Agent’s or such other entity’s
customary practice, then Frontline shall promptly pay the Agent (or such
other
entity), upon the first demand therefor, the amount stated in the Severance
Amount Notice.
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4.5
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Director
Approval for Dismissal Notices.
Frontline shall obtain the prior written consent of the Board
of Directors
of the Company, before issuing a Dismissal Notice to an Agent,
if:
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(a)
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the
Dismissal Notice requests the dismissal of all of the Agent
Employees then
being employed by such Agent (and therefore would have the
practical
effect of terminating Frontline’s operations with such Agent);
or
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(b)
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the
aggregate Budget Reductions in connection with Dismissal Notices
sent by
Frontline during the applicable calendar year (including the
proposed
Dismissal Notice) would reduce the aggregate Variable Cost
component of
the applicable Budget, with respect to all Agents, by an amount
greater
than 30%.
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4.6
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Orbotech
Approval for Hiring Notices and Dismissal
Notices
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Frontline
shall be required to obtain the written approval of the PCB division
of
Orbotech:
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(a)
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Prior
to sending a Hiring Notice to an Agent, if Frontline has sent
a Dismissal
Notice to such Agent during the preceding six month period
with respect to
an Agent Employee in the same position as an employee who is
the subject
of the Hiring Notice;
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(b)
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Prior
to sending a Dismissal Notice to an Agent, if Frontline has
sent a Hiring
Notice to such Agent during the preceding six month period
with respect to
an Agent Employee in the same position as an employee who is
the subject
of the Dismissal Notice.
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4.7
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Decrease
in number of Agent Employees at the request of the Agent.
The Agent may, upon at least one months’ prior notice and with the written
authorization of the PCB division of Orbotech, notify Frontline
of its
intention to dismiss Agent Employees (“Agent
Dismissal Notice”).
The Agent Dismissal Notice shall detail the name, number and
position of
the employees to be dismissed, the anticipated date of termination
of
employment and the reason for dismissal. The Variable Costs
of such Agent
shall be reduced by the amount set forth in the relevant Agent
Employee
Cost Schedule for the employee(s), beginning as of the day
following the
actual date of termination of employment of such Agent Employee(s).
Notwithstanding the foregoing, an Agent may terminate an Agent
Employee’s
employment immediately, without prior notice or PCB division
approval, in
the event that the Agent Employee’s employment is terminated for “cause”,
as customarily defined. In such event, the Agent shall notify
Frontline
promptly and in writing of such dismissal and the circumstances
thereof.
If severance payments are required to be paid by law to such
Agent
Employees, or are payable to such Agent Employees in accordance
with the
Agent’s customary practice, in connection with their termination
of
employment, and unless Frontline expressly objects to the dismissal
of
such Agent Employee (and provides a reasonable justification
to the Agent
for such objection), Frontline shall pay the Agent the Frontline
Proportional Severance
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6
Amount
with respect to such Agent Employee, to the extent such payments
have not been fully funded by the Variable Costs pursuant to the
Budget.
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5.
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Miscellaneous
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Notwithstanding
any of the above, (i) upon the failure of the parties to agree
to a Budget
within the three month period set forth in Section 3.2 above,
or (ii)
should either Orbotech or Valor, in their absolute discretion,
inform the
other party and Frontline by written notice of its desire to
terminate
this Revised Framework, then this Revised Framework (including
the payment
structure contained herein and any Agent Agreements entered
into based
hereon) shall terminate, and the marketing, sales, maintenance,
servicing,
customer support and payment structure contained in the JV
Agreement
(Appendix 7.1 (ii)) shall apply to the marketing, sales, servicing,
support and maintenance of JV Products by the Agents, effective
as set
forth in the following sentence. In such circumstances, unless
otherwise
agreed by Orbotech and Valor, this Revised Framework (including
the
payment structure contained herein and any Agent Agreements
entered into
based hereon) shall terminate and be of no further force and
effect as of
the close of business on: with respect to subsection (i) above,
March 31
of such year; and with respect to subsection (ii) above, the
last day of
the second full quarter following the date upon which the notice
was given
(e.g., on September 30, if notice was given during the first
quarter of
any year); after which the framework provided for in Appendix
7.1 (ii) of
the JV Agreement (including the marketing, sales, customer
support and
payment structure contained therein) shall apply to the marketing,
sales,
servicing, support and maintenance of JV Products by the Agents.
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