EXHIBIT 10.24
Escrow Agreement with respect to the Share Purchase Agreement, dated as of June
15, 2000, by and among Xxxxxxx Xxxxx, Xxxxxx Xxxxxx Xxxxx, Xxxxxxx Xxxxxxx
Xxxxx, a civil partnership and the Registrant.
Escrow Agreement
with respect to the Share Purchase Agreement
between
Xxxxxxx Xxxxx, Xxxxxx Xxxxxx Xxxxx, Xxxxxxx Xxxxxxx Xxxxx
(the "Shareholders" or the "Sellers")
and
On Track Innovations Ltd
("OTI")
and
X X Xxxxxxx & Co KGaA
(the "Bank")
(the Shareholders, OTI and the Bank are hereinafter referred to as the
"Parties")
Whereas: The Sellers and OTI have entered into a Share Purchase Agreement (the
"SPA") dated June 15, 2000 pursuant to which OTI has acquired 51% ownership of
(i) InterCard GmbH Kartensysteme, registered in the Commercial Register of the
local court Villingen-Schwenningen under No. HRB 603 and having its offices at
Xxx xxx Xxxxx 0, 00000 Xxxxxxxxx-Xxxxxxxxxxxx ("InterCard K"), and (ii)
InterCard GmbH Systemelectronic, registered in the Commercial Register of the
local court Villingen-Schwenningen under No. HRB 532 and having its office at
XxxxxxxxxxXx 0, 00000 Xxx Xxxxxxxx ("InterCard S", collectively referred to in
this Agreement as "InterCard" or the "Companies") from the Shareholders (the
"Sold Interest"), and;
Whereas: The Sellers own the remaining 49% ownership interest in InterCard
(hereinafter the "Remaining Interest") or are entitled by way of call options
granted by Xx. Xxxxxx Xxxxxxx to acquire the Remaining Interest (the "Xxxxxxx
Options");
Whereas: The Sellers and OTI have agreed in the SPA to pay the purchase price
for the Sold Interest (as defined in the SPA) (the "Interest Price") by way of
transferring ordinary shares of NIS 0.01 n.v. each of OTI (hereinafter referred
to as "OTI Shares") to the
Shareholders and have agreed on a mechanism by way of which the Bank is
instructed to act as a trustee in relation to the transfer of the OTI Shares to
the Shareholders.
NOW, THEREFORE, the Parties agree as follows:
1. Escrow Account
1.1 The Bank shall establish an escrow account (the "Escrow Account") in the
name of OTI to which OTI is obliged and entitled to transfer OTI Shares as
purchase price for the Sold Interest.
1.2 OTI shall irrevocably transfer to the Bank (without any right of recall
except for OTI's right to the remainder according to Section 4 and free of
any third party rights) OTI Shares in an aggregate value of DM 5,500,000
according to the official average closing price of an OTI Share in the Neuer
Markt, traded in Frankfurt at the Xetra system (such official average
closing price hereinafter referred to as the "Closing Price"), in the 3
(three) trading days of May 29 to 31, 2000, which are admitted to trading at
Deutsche Borse AG in the Neuer Markt (the "OTI Trust Shares").
1.3 As long as any OTI Trust Shares are held in the Escrow Account with the Bank
they shall be "frozen" (as understood in accordance with the Israeli
Companies Law), i.e. the OTI Trust Shares shall not have any of the rights
attached to an OTI Share under OTI's Articles of Association, in particular
the right to vote and the right to receive profits.
2. Interest Price
2.1 As Interest Price for the Sold Interest in InterCard OTI and the
Shareholders agreed on a total amount of DM 5,000,000, payable in OTI
Shares. Xx. Xxxxxxx Xxxxx is irrevocably authorized by the other
Shareholders to receive the entire Interest Price.
2.2 OTI irrevocably instructs by these presents the Bank to transfer the amount
of the OTI Trust Shares which is required to be transferred for the payment
of the Interest Price to the following account.
Xxxxxxx Xxxxx, Baden-Wurttembergische Bank AG Donaueschingen, account no.
6208275540, bank sort code 000 000 00, X.X.X.X.X. XXXX XX 0X 000.
2.3 OTI irrevocably instructs by these presents the Bank to pay the Interest
Price from the Escrow Account in 5 (five) equal instalments (the
"Instalments"), each totaling DM 1,000,000 (one million Deutsche Xxxx). The
Bank shall transfer the Instalment in OTI Shares as follows:
2.3.1 The first Instalment (the "First Instalment") shall be paid on July
15, 2000 (the "First Instalment Date"),
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2.3.2 The second Instalment (the "Second Instalment") shall be paid on
August 15, 2000 (the "Second Instalment Date"),
2.3.3 The third Instalment (the "Third Instalment") shall be paid on
September 15, 2000 (the "Third Instalment Date"),
2.3.4 The fourth Instalment (the "Fourth Instalment") shall be paid on
October 15, 2000 (the "Fourth Instalment Date"),
2.3.5 The fifth Instalment (the "Fifth Instalment") shall be paid on
November 15, 2000 (the "Fifth Instalment Date"),
(and the First, Second, Third and Fourth Instalments shall be referred to
collectively as the "First Instalments'; and the First, Second, Third,
Fourth and Fifth Instalment Dates shall be referred to collectively as the
"Instalment Dates").
2.4 The Bank shall determine the number of OTI Trust Shares to be transferred to
the Shareholders as payment of the Interest Price for each of the
Instalments in accordance with the Closing Price in the 3 (three) trading
days prior to the relevant Instalment Date. In the event that these
instalments as calculated above do not result in a whole number of OTI
Shares, then these shall be rounded up by the Bank accordingly.
2.5 Prior to the Fifth Instalment the Bank shall make a calculation of the
aggregate Deutsche Xxxx value of each of the First Instalments according to
20 (twenty) trading days Closing Price following the relevant Instalment
Date of each of them (the "Aggregate Value"). The Deutsche Xxxx amount of
the Fifth Instalment shall be calculated as the difference between the
Interest Price less the Aggregate Value, and shall be transferred in OTI
Shares in accordance with the provisions of Section 2.4 above.
2.6 On December 15, 2000 (the "Sixth Instalment Date"), the Bank shall make a
calculation to the effect that the amount of the Aggregate Value and the
value of the Fifth Instalment according to 20 trading days Closing Price
following the Fifth Instalment Date shall be added together (the "Final
Value"). If the Final Value amounts to less than DM 5 million, the amount of
difference shall be transferred by the Bank to Xxxxxxx Xxxxx in OTI Shares
in accordance with the provision of Section 2.4 above.
2.7 If the OTI Trust Shares are not transferred to the Escrow Account with the
Bank on or before the First Instalment Date, the First Instalment Date is
moved to the business day following the date of transfer of the OTI Trust
Shares to the Bank, the other Instalment Dates and the Sixth Instalment Date
are moved correspondingly.
2.8 If there are not enough OTI Shares in the Escrow Account with the Bank to
transfer to the Shareholders for the payment of the Interest Price the Bank
shall inform OTI and the Shareholders immediately, no further action of the
Bank is required.
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3. Confirmation of Receipt of the OTI Trust Shares
The Bank shall immediately after the irrevocable receipt of the OTI Trust Shares
(without any right of recall of OTI whatsoever except for OTI's right to the
Remainder according to Section 4) confirm in writing to Xxxxxxx Xxxxx (on behalf
of the Shareholders) and to OTI the irrevocable receipt of the OTI Trust Shares
(without any right of recall of OTI whatsoever except for OTI's right to the
Remainder according to Section 4) (the "Confirmation"). The Confirmation shall
in substantially the form attached hereto as Exhibit A.
4. Remainder of OTI Trust Shares
The Bank keeps the remainder, if any, of the OTI Trust Shares in the Escrow
Account once all transfers of OTI Shares from the Escrow Account to the
Shareholders have been carried out in accordance with Section 2 of this
Agreement and the Bank shall act with respect to such remainder in accordance
with OTI's instructions without any right of the Shareholders to such remainder.
5. Special Account
5.1 The Bank shall establish a special account (the "Special Account") in the
name of Xx. Xxxxxxx Xxxxx, which Xx. Xxxxxxx Xxxxx may only dispose of
(verfugen uber) according to the following provisions or the prior written
consent of OTI.
5.2 The Bank shall deduct an amount equal to DM 800,000 in OTI Trust Shares (the
"Secured Amount") from the Fifth Instalment or, if the Fifth Instalment is
not effected in the year 2000, the last Instalment effected in the year
2000. Xx. Xxxxxxx Xxxxx herewith instructs the Bank to sell these OTI Shares
in portions of 1/20 of the number of shares each trading day following the
relevant Instalment Date.
5.3 Xx. Xxxxxxx Xxxxx herewith irrevocably authorizes OTI to instruct the Bank
to dispose of the Secured Amount in favour of Xx. Xxxxx Xxxxxxx'x bank
account, the bank account number of which shall be provided by Xx. Xxxxxxx
Xxxxx, with the aim of paying the purchase price for the Xxxxxxx Option. In
the event that OTI does not instruct the Bank to dispose of the Secured
Amount until 1 April, 2001, the Secured Amount shall be released to Xx.
Xxxxx.
6. Costs
6.1 The Bank receives a fee of 2.25% of the Interest Price (the "Fee"). The
entire remuneration and expenses of the Bank shall be deemed to be covered
by payment of the Fee. Thereby 1% of the Interest Price is attributed to the
remuneration and expenses for the transfer of the OTI Shares, 1.25% of this
amount is attributed to the escrow function of the Bank according to the
terms and conditions of this Agreement. The Fee shall be due when the First
Instalment is effected in accordance with Sections 2.3, 2.4 of this
Agreement.
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6.2 The Fee incurred by the Bank shall be borne by OTI 50% and the Shareholders
50% equally.
7. Addresses
The Parties' addresses for the purpose of this Agreement are as set forth below,
unless otherwise notified in writing to all parties:
Shareholders:
Address: Xxxxxxx Xxxxx, Xxxxxxxxx 0, X-00000 Xxxxxxxxxxxx
Tel: xx00-0000-000000
Fax: xx00-0000-000000
Copy to Gleiss Xxxx Hootz Xxxxxx:
Attention: Xx. Xxxxxxx Xxxxxx
Address: XxxxxxxxxxxXx 0, X-00000 Xxxxxxxxx
Tel: xx00-000-00000
Fax: xx00-000-000000
XXX
Xxxxxxx: X.X.X. X.X., Xxxx Xxxx 00000, Xxxxxx
Tel: xx000-0-0000000
Fax: xx000-0-0000000
Copy to White & Case:
Attention: Xxxxxx Xxxxxxx/Xxxxxxxx Xxxxxxx/Xxxxxxx Xxxxxx
Address: Xxxxxxxxxxxx XxxxxxxxXx 00-00, X-00000 Xxxxxxxxx am Main
Tel: xx00-00-000 770
Fax: xx00-00-000 77 100
8. Miscellaneous
8.1 Governing Law. This Agreement shall be governed by the laws of the Federal
Republic of Germany without regard to its conflict of law provisions.
8.2 Partial Invalidity. If one or more provisions of this Agreement should be or
become wholly or partially invalid, void or impracticable, the validity of
the other provisions of this Agreement shall not be affected thereby. The
same shall apply if it should transpire that this Agreement contains a gap.
In place of the invalid, void or impracticable provision (or, as the case
may be, in order to fill the gap) the parties to this Agreement shall agree
on an appropriate provision which comes as close as legally possible to what
the parties were trying to achieve with the invalid, void or impracticable
provision (or, as the case may be, the invalid, void or impracticable part
thereof). In the event that a gap in this Agreement needs to be filled, a
provision shall be agreed upon which, in view of the purpose and intent of
this Agreement, comes as close as possible to what the parties would have
agreed if they had been aware of the gap at the time that this Agreement was
concluded.
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8.3 Liability of the Bank. The Bank shall be liable only for the care it employs
in its own affairs.
/s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
/s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
/s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
On Track Innovations Ltd.
ON TRACK INNOVATIONS LTD.
X.X. Xxxxxxx & Co KGaA
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EXHIBIT A
[Letterhead of X.X. Xxxxxxx & Co. XXxX]
Xxxxxxx Xxxxx
Xxxxxxxxx 0
X-00000 Xxxxxxxxxxxx
Fax: xx00-0000-000000
On Track Innovations Ltd.
Z.H.R. I.Z.
Rosh Xxxx 00000
Xxxxxx
Fax: xx000-0-0000000
cc: Gleiss Xxxx Hootz Xxxxxx
Attention: Xx. Xxxxxxx Xxxxxx
Xxxxxxxxxx 0
X-00000 Xxxxxxxxx
Fax: xx00-000-000000
White & Case
Attention: Xxxxxx Xxxxxxx/Xxxxxxxx Xxxxxxx/Xxxxxxx Xxxxxx
Xxxxxxxxxxxx XxxxxxxxXx 00-00
X-00000 Xxxxxxxxx xx Xxxx
Fax: xx00-00-000 77 100
Confirmation of Receipt of the OTI Trust Shares
Gentlemen,
In accordance with Section 3 of the Escrow Agreement with respect to the Share
Purchase Agreement of June 30, 2000 by and between Xxxxxxx Xxxxx, Xxxxxx Xxxxxx
Xxxxx, Xxxxxxx Xxxxxxx Xxxxx (the "Shareholders"), On Track Innovations Ltd.
("OTI") and X.X. Xxxxxxx & Co. KGaA ("Escrow Agreement") we hereby confirm the
irrevocable receipt of the OTI Trust Shares without any right of recall of OTI
whatosever except for OTI's right to the Remainder according to Section 4 of the
Escrow Agreement with respect to the Share Purchase Agreement.
Sincerely yours,
X.X. Xxxxxxx & Xx. XXxX
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