Investment Agreement
Made and entered into this 30 day of April, 1997
Between
CHEMONOL Ltd.
Address: Science Park Technion-Nesher,
P O. Box 2l2, Nesher 00000, Xxxxxx
(The "Company")
and
EUROTECH Ltd.
Address: 0000 Xxxxxxxx Xxxxxx,
Xxxxx 000, Xx Xxxxx, Xxxxxxxxxx 00000, XXX
(The "Investor")
WHEREAS the Company was formed according to the Founders Agreement Dated
April 16, 1997, attached hereto as Exhibit A and was duly registered
on _________________ under the laws of the State of Israel and,
WHEREAS the Company is engaged a Project for research and development of
"products based on Nonisocyanate Polyurethane Compounds" as approved
by the Chief Scientist of the Ministry of Industry and Trade (the
"CSO") of exhibit B (the "Project"), and,
WHEREAS the Investor is a company duly registered under the law of USA, and,
WHEREAS the Company desired to receive an equity investment of 60,000 USD,
and,
WHEREAS the Investor desires to subscribe for ordinary shares of the Company
and to make an equity investment in the Company, and,
WHEREAS the Investor has received all of the information requested by it
regarding the Project, the Company and all factual and legal
information related thereto,
NOW THEREFORE THE PARTIES HAVE AGREED AS FOLLOWS:
1. The preamble and exhibits to this agreement forms an integral part hereof.
2. Payment
In exchange for the issuance to it of ordinary shares of the Company, the
Investor shall invest in the Company a total amount of $ 60,000 (sixty
thousand US dollars), in accordance with the following schedule:
a) $ 15,000 Shall be paid by the Investor no later than May 5, 1997.
b) $ 15,000 Shall be paid by the Investor no later than November 1,
1997.
c) $ 15,000 Shall be paid by the Investor no later than May 1, 1998.
d) $ 15,000 Shall be paid by the Investor no later than November 1,
1998.
The said amounts will be transferred by the Investor from it's
non-resident bank account in Israel to the Israeli bank account of the
Company, or will be paid in N.I.S according to the representative rate of
the bank of Israel of the payment date.
3. Division of Shares and Issuance
3.1 The Company's share capital at the time of the signing of this
agreement consists of 30,000 authorized ordinary shares par value of
0.01 N.I.S. each, of which 700 shares are issued as follows:
a. Xx. Xxxxxx Xxxxxxxxxx 500 ordinary shares
b. Technion Entrepreneurial
Incubator Co. Ltd. 200 ordinary shares
The Company will issue 100 shares to the employees.
3.2 100 shares shall be issued to the Investor upon the payment of the
first installment and 100 shares will be issued to the Investor upon
the payment of the third installment.
Immediately following the issuance of the shares to the Investor,
the Investor shall own 200 shares of the Company.
4. Disclaimer
THE COMPANY, ITS AFFILIATES AND ALL OTHER SHAREHOLDER AND DIRECTORS
DISCLAIM ANY EXPRESS OR IMPLIED PROMISE, REPRESENTATION AND WARRANTY, (1)
THAT ITS TECHNOLOGY, OR THE USE THEREOF AND/OR ANY KNOW-HOW AND/OR
PRODUCTS INCORPORATED OR MANUFACTURED BY THE USE THEREOF, WILL BE FREE
FROM CLAIMS OF PATENT INFRINGEMENT, INTERFERENCE OR UNLAWFUL USE OF
PROPRIETARY INFORMATION OF ANY THIRD PARTY, AND (2) THE NOVELTY, ACCURACY,
RELIABILITY, TECHNOLOGICAL OR COMMERCIAL VALUE, COMPREHENSIVENESS OR
MERCHANTABILITY OF THE TECHNOLOGY, AND
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(3) THE SUITABILITY OR FITNESS OF THE FOR TECHNOLOGY ANY PURPOSE
WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE DESIGN, DEVELOPMENT,
MANUFACTURE USE OR SALE OF PRODUCTS AND (4) ALL OTHER WARRANTIES OF
WHATEVER NATURE, EXPRESS OR IMPLIED.
5. Commercialization
5.1 All patent rights whatsoever will continue to be the sole property
of the Company, and/or any patent that may be the result of the
project will be the sole property of the Company, and the Investor
or any other shareholder will not have any rights to said property.
5.2 The Parties realize that the budget approved by the CSO together
with the investment herein provided for may not be sufficient to
finish the Project and to commercialize it.
5.3 The Investor agrees that it will not receive any rights other than
its right as a shareholder in the Company in accordance with its
Memorandum and Articles of Association.
6. The Company will do its utmost in the framework of its budget from the
Chief Scientist, to develop the project and to commercialize it.
7. The Investor will be given the right to elect one member to the Board of
Directors of the Company so long as the Investor hold at least 5% of the
Company's shares.
8. Being recently formed the Company has no past fiancee and/or business
history.
9. Confidentiality and Non Compete
9.1 The Investor agrees to hold in trust and maintain confidential and
not to disclose to others without prior written approval by the
Company, and not to use except for purpose of this agreement, any of
the proprietary information of the Company. The Investor shall limit
disclosure of the Company's confidential information to those of his
employees on a need-to-know basis and will cause its employees to
sign a confidentiality agreement.
9.2 The Investor agrees not to compete and/or to assist others to
compete, with the Company whether directly or indirectly for so long
as the Investor is a shareholder and for 3 years thereafter.
10. CSO
The Investor is aware that the Company has obligations towards the CSO,
and agrees to be bound by them and by all the provisions relevant to the
shareholders according to the Founders Agreement dated April 16, 1997 (a
copy of which is attached as
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exhibit A) as if the Investor was a party to the said Agreement.
11. Governing Law & Jurisdiction
This agreement shall be interpreted in accordance with, and governed in
all aspects by the laws of the state of Israel and the competent courts in
Haifa, shall have the exclusive jurisdiction over all disputes arising
between the parties with respect to this agreement, its implementation or
interpretation.
12. General
12.1 TEIC may sell all or part of its shares in the Company to any person
or entity without the need to offer the other shareholders a right
of first refusal.
12.2 Both parties agree that this agreement may be executed in several
counterparts and all such counterparts together shall be deemed to
be the original and will constitute but one and the same instrument.
To remove any doubt, facsimile signature shall be deemed as an
original for all purposes.
12.3 The failure or delay of either party to require the performance of
any term under this Agreement, or the waiver by either party of any
breach under this Agreement, shall not prevent subsequent
enforcement of such terms, nor be deemed a waiver of any subsequent
or prolonged breach.
12.4 Any notice sent by one party to the other by registered mail to the
addresses heading the Agreement, or to addresses provided by one
party to the other from time to time - will be deemed to have been
delivered on the 6th business day after the day of mailing. Fax
messages will be deemed to have been delivered one business day
after transmission.
13. 13.1 Should the Company obtain during the next three years any
additional equity investment from a third party, the Investor shall
be offered to participate in such investment by subscribing to a
number of shares that shall be necessary in order to allow the
Investor to maintain its pro-rata share of the issued stock of the
Company as it was prior to the new investment, at a price per share
and terms equal to those agreed with the third party ("Participation
Rights").
Prior to the closing of such additional investment, the Company
shall send to the Investor a written notice advising it of the
number of shares, the price per share and all other terms and
conditions under which the Investor may exercise its Participation
Rights ("Notice of Allotment").
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13.2 The Investor shall be entitled, within ten (10) days of receipt of
the Notice of Allotment (the "Acceptance Period") to notify the
Company of its desire to exercise its Participation Rights on the
conditions stated in the Notice of Allotment.
13.3 In the event that the Investor fails to give a written notice of its
desire to exercise its Participation Rights according to section
13.2 above, or, has the failed to make the payments on the dates
specified in the Notice of Allotment, the Company shall be entitled,
at its discretion to allot the shares that were offered to the
Investor to any third party, at its discretion.
13.4 Notwithstanding the terms of sections 13.1-13.3 above, the Company
shall be exempt from fulfilling the requirements contained therein
if the Investor express its agreement to such exemption in advance
and in writing.
IN WITNESS WHEREOF THE PARTIES HAVE SIGNED
/s/ X. Xxxxxxxxxx /s/ X. Xxxxxxxx
----------------------------- ---------------------------------
The Company The Investor
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Exhibit A -
Founders Agreement
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Exhibit B -
The project for research and development of "products based on Nonisocyanate
Polyurethane Compounds" as approved by the Chief Scientist of the Ministry of
Industry and Trade.
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