EXHIBIT 4.4
TAT PIPE
SHARE PURCHASE AGREEMENT
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THIS AGREEMENT (the "Agreement") is made as of June 15, 2004 (the
"Effective Date"), by and between (i) TAT Technologies Ltd. ("TAT"), an Israeli
company whose shares are traded on Nasdaq, and (ii) TA-TOP, Limited Partnership
(the "Investor"), a limited partnership wholly owned by (x) TA-TEK Ltd., an
Israeli private company, wholly owned by FIMI Opportunity Fund, L.P., a limited
partnership formed under the laws of the State of Delaware, and by (y) FIMI
Israel Opportunity Fund, Limited Partnership, a limited partnership, registered
in Israel. TAT and the Investor each, a "Party" and, collectively, the
"Parties".
WITNESSETH:
WHEREAS, the Investor desires to invest in the share capital
of TAT, by purchasing 857,143 Ordinary Shares of TAT, nominal value NIS 0.90
each (the "Shares"), upon the terms and subject to the conditions set forth in
this Agreement; and
WHEREAS, the Board of Directors of TAT has resolved to enter
into this Agreement for the issue and sale of the Shares to the Investor, all
upon the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the parties hereto hereby agree as follows:
1.1 Definitions
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In this Agreement, each of the following terms shall have the respective meaning
appearing next to it, if not inconsistent with the subject or context:
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"Agreement"- has the meaning ascribed to such term in the preamble.
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"Applicable Law"- has the meaning ascribed to such term in Section 3.9.
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"Closing" and
"Closing Date- have the meaning ascribed to such terms in Section 2.1.
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"Condition Precedent"- has the meaning ascribed to such term in Section 6.1.
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"Confidential
Information"- has the meaning ascribed to such term in Section 5.2.
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Compliance Certificate"- has the meaning ascribed to such term in Section 2.2.(1)(d).
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"Credit Line Agreement"- has the meaning ascribed to such term in Section 6.1(d).
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"Damages"- has the meaning ascribed to such term in Section 7.2.
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"Effective Date"- has the meaning ascribed to such term in the preamble.
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"Encumbrance"- has the meaning ascribed to such term in Section 3.3.(c)(3).
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"Engagement Agreements"- has the meaning ascribed to such term in Section 2.2.(1)(b).
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"Environmental Law"- has the meaning ascribed to such term in Section 3.14.
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"Exchange Act"- has the meaning ascribed to such term in Section 3.6(a).
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"2000 20-F"- has the meaning ascribed to such term in Section 3.1.
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"2002-2003 Financial has the meaning ascribed to such term in Section 3.6(b).
Statements"-
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"Governmental Entity"- has the meaning ascribed to such term in Section 3.5.
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"Investor"- has the meaning ascribed to such term in the preamble.
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"Investor Conditions"- has the meaning ascribed to such term in Section 6.1.
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"Knowledge"- has the meaning ascribed to such term in Section 3.10(a).
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"Management Fee"- has the meaning ascribed to such term in Section 5A.
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Material Adverse Effect"- has the meaning ascribed to such term in Section 3.1.
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"Material and "Material have the meaning ascribed to such terms in Section 3.11(a).
Agreements"-
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"Ordinary Shares"- has the meaning ascribed to such term in Section 3.3.
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"Outstanding Options"- has the meaning ascribed to such term in Section 3.3.
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"Party" or "Parties"- have the meaning ascribed to such terms in the preamble.
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"Purchase Price"- has the meaning ascribed to such term in Section 1.2.
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"SEC"- has the meaning ascribed to such term in Section 3.6(a).
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"Securities Act"- has the meaning ascribed to such term in Section 3.6.(a).
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"Services"- has the meaning ascribed to such term in Section 5A.
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"Shares"- has the meaning ascribed to such term in the preamble.
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"Shareholders Agreement"- has the meaning ascribed to such term in Section 6.1(d).
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"Subsidiary" or has the meaning ascribed to such term in Section 3.1.
"Subsidiaries"-
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"Registration Rights has the meaning ascribed to such term in Section 6.1(d).
Agreement"-
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"Representations and has the meaning ascribed to such term in Section 7.1.
Warranties Period"-
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"Required Approvals and has the meaning ascribed to it in Section 3.5.
Notices"-
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"TAT"- means TAT Technologies Ltd.
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"TAT Conditions"- has the meaning ascribed to such term in Section 6.2.
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"TAT Industries"- means TAT Industries Ltd.
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"TAT SEC Reports"- has the meaning ascribed to such term in Section 3.6(a).
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"Trade Secrets"- has the meaning ascribed to such term in Section 3.10(a).
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"Transaction Documents"- has the meaning ascribed to such term in Section 2.2.(1)(a).
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"Warrant Agreement"- has the meaning ascribed to such term in Section 6.1(d).
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1.2. Issue of Shares
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Upon the terms and subject to the conditions set forth in this Agreement, at
the Closing (as defined in Section 2.1 below) the Investor agrees to purchase,
and TAT agrees to issue to the Investor, the Shares, at a price per Share of
$7.00, and an aggregate purchase price of $6,000,001 (Six Million and One US
Dollars) (the "Purchase Price").
2. Closing
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2.1 The Closing. The Parties shall hold the closing (the "Closing") at the
offices of _______________, on the 12th business day following the date on
which the last of the Conditions Precedent under Section 6.3 below is fulfilled
(provided that all other Closing conditions have been either met or waived, in
accordance with the provisions contained herein) or at such other place and
later date as the Parties shall agree (the "Closing Date").
2.2. Actions at the Closing. At the Closing, the following actions shall be
carried out, which actions shall be deemed to take place simultaneously and no
actions shall be deemed to have been completed or any required document
delivered until all such actions have been completed and all required documents
delivered:
(1) The Investor shall have received from TAT the following documents:
(a) True and correct copies of the resolutions of TAT's Board of
Directors
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approving (i) the execution of this Agreement and the performance of the
transactions contemplated herein, including the issuance, at the Closing, of
the Shares to the Investor subject to the provisions contained herein, (ii) the
execution of the Warrant Agreement (as defined below) and the grant of the
non-assignable Warrant (as such term is defined in the Warrant Agreement) to
the Investor, pursuant to the provisions contained therein, which shall become
effective upon the Closing, (iii) the execution of the Credit Line Agreement
(as defined below), which shall become effective as of the Closing, (iv) the
Management Fee arrangement (as more fully set forth below) which shall become
effective as of the Closing, and (v) the execution of the Registration Rights
Agreement (as defined below) which shall become effective as of the Closing.
This Agreement, the Warrant Agreement, the Credit Line Agreement and the
Registration Rights Agreement shall be referred to herein, collectively, as the
"Transaction Documents".
(b) True and correct copies of the resolutions of TAT's shareholders
approving (i) the transactions contemplated in the Transaction Documents, (ii)
the amendment of the Articles of Association of TAT, in the manner more fully
set forth in the amended Articles of Association , (ii) the approval of the
Engagement Agreements (the "Engagement Agreements") between TAT and each of Xx.
Xxxxxx Xxxxxxxxxxx and Mr. Dov Zeelim, and (iv) the election to TAT's Board of
Directors of three members designated by the Investor, of which one shall meet
the definition of an independent director for the purposes of Nasdaq. The forms
of the resolution of TAT's shareholders, the amended Articles of Association
and the Engagement Agreements are attached hereto as Exhibit 2.2.1(b); and
(c) An opinion of the counsel to TAT, substantially in the form of
Exhibit 2.2.1(c) to this Agreement; and
(d) A certificate duly executed by an officer of TAT dated as of the
Closing Date (the "Compliance Certificate") in the form attached hereto as
Schedule 2.2.1(d).
(2) TAT shall have obtained, and delivered to the Investor copies of, the
Required Approvals and Notices (as defined below).
(3) The Investor shall have received a letter from Gal-Tek Ltd., in the form
attached hereto as Exhibit 2.2(3), which shall be effective as of the Closing.
(4) The Investor shall have provided TAT with an opinion of the counsel to the
Investor, substantially in the form of Exhibit 2.2.4 to this Agreement.
(5) The Investor shall pay the Purchase Price to TAT by wire transfer of
immediately available funds to the following bank account at Union Bank of
Israel Ltd. (branch no.: 062 (Diamond Exchange Branch, Ramat-Gan)): Account no.
407000/54 and will obtain confirmation from its bank that the Purchase Price
has been transferred in accordance with the wire transfer instructions provided
to it (a copy of which will be delivered to TAT at the Closing), against the
receipt of the Shares and the Warrant.
3. Representations and Warranties of TAT
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TAT hereby represents and warrants to the Investor, and acknowledges that the
Investor
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is entering into the Investment Agreements, in reliance thereon, as follows:
3.1 Organization. TAT is a company duly organized and validly existing under
the laws of the State of Israel. TAT is duly qualified to conduct its business,
and (with respect to those jurisdictions in which the concept of good standing
is relevant) is in good standing, in each jurisdiction where the character of
its properties owned, operated or leased or the nature of its activities makes
such qualification necessary, except for such failures which would not
reasonably be likely to have a Material Adverse Effect (as defined below). TAT
has the requisite corporate power and authority and any necessary governmental
authority, franchise, license or permit to own, operate, lease and otherwise to
hold and operate its assets and properties and to carry on its businesses as
now being conducted, except for such failures which would not reasonably be
likely to have a Material Adverse Effect. The Annual Report of TAT filed on
Form 20-F for the Year 2002 (the "2002 20-F"), a copy of which has been
provided to the Investor, accurately sets forth each entity in which TAT owns
at least 50% of either the voting shares and/or the equity (each of the
aforesaid, a "Subsidiary" and, collectively, the "Subsidiaries") and all other
equity or similar interests, or any interest convertible or exchangeable or
exercisable for any such equity or similar interest, in any other entities held
by TAT or any Subsidiary, excluding any immaterial marketable securities held
by TAT or any of its Subsidiaries as part of the investment portfolio in their
ordinary course of business.
As used herein, the term "Material Adverse Effect" means any material adverse
effect on the business, as conducted by, the assets, financial condition,
liabilities or operations of TAT and its Subsidiaries taken as a whole.
3.2 Organizational Documents. Set forth in Schedule 3.2 attached hereto is a
complete and correct copy of the Memorandum and the Articles of Association of
TAT, as amended to date. All of such organizational documents are in full force
and effect.
3.3 Capitalization.
(a) The registered share capital of TAT as of the date of this Agreement is NIS
6,300,000, divided into 7,000,000 Ordinary Shares, nominal value NIS 0.90 each
(the "Ordinary Shares"), of which 4,663,381 Ordinary Shares are issued and
outstanding. In addition, TAT has issued options and warrants (including
employee and consultant options) to purchase up to 798,635 Ordinary Shares (the
"Outstanding Options"). Except for the foregoing and for the transactions
contemplated by this Agreement, there are no other shares, convertible
securities, outstanding warrants, options, or other rights to subscribe for,
purchase, or acquire from TAT any securities of TAT, and there are no contracts
or binding commitments providing for the issuance of, or the granting of rights
to acquire from TAT, any securities of TAT or under which TAT is, or may
become, obligated to issue any of its securities.
(b) There are no bonds, debentures, notes or other indebtedness having the
right to vote on any matters on which TAT's shareholders may vote issued or
outstanding. There are no outstanding contractual obligations of TAT or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any of TAT's share
capital. All of the issued and outstanding share capital of TAT has been duly
authorized and validly issued and is
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fully paid and nonassessable.
(c)(1) All of the Shares issuable in accordance with of this Agreement will be,
when fully paid up as provided in this Agreement, and so issued, duly
authorized, validly issued, fully paid and nonassessable, shall not be subject
to call, forfeiture or preemptive rights, shall be delivered free and clear of
all Encumbrances (as defined below).
(2) The non-assignable Warrant granted in accordance with the provisions of
this Agreement and the Warrant Agreement, when granted at the Closing, shall be
duly authorized, validly granted, shall not be subject to call, forfeiture or
preemptive rights, and shall be delivered free and clear of all Encumbrances.
(3) All of the Ordinary Shares, issuable upon the exercise of the Warrant
in accordance with the provisions of the Warrant Agreement will be, upon
payment of the Exercise Price (as defined in the Warrant Agreement), duly
authorized, validly issued, fully paid and nonassessable, shall not be subject
to call, forfeiture or preemptive rights and shall be delivered free and clear
of all Encumbrances.
The term "Encumbrance" means and includes any interest or equity of any person
(including any right to acquire, option, or right of preemption) or any
mortgage, charge, pledge, lien, or assignment, or any other encumbrance or
security interest or arrangement of whatsoever nature over or in the relevant
property.
3.4 Authority. Subject to the Conditions Precedent under Section 6 below, TAT
has the necessary corporate power and authority to enter into the TAT
Transaction Documents and each of the other agreements, certificates or other
instruments required to be delivered hereunder at or prior to Closing and to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and each of the other Transaction Documents by TAT and the
consummation by TAT of the transactions contemplated hereby and thereby shall
have been, at the Closing (assuming the satisfaction of the Condition
Precedent), duly and validly authorized by all necessary corporate action, and
no other corporate proceedings on the part of TAT shall be necessary to
authorize this Agreement and each of the other Transaction Documents or to
consummate the transactions contemplated hereby and thereby. The Transaction
Documents shall be deemed as of the Closing to be duly executed and delivered
by TAT and, (assuming the satisfaction of the Condition Precedent) and the due
authorization, execution and delivery by the Investor, constitute legal, valid
and binding obligations of TAT, enforceable in accordance with their terms,
except as such enforceability may be limited by liquidation, insolvency,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors' rights generally and by the application of
general principles of equity.
3.5 No Conflict; Required Filings and Consents.
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Subject to satisfaction of all the Conditions Precedent under Section 6 below:
(a) The execution and delivery by TAT of this Agreement and each of the other
Transaction Documents and the performance by TAT of its obligations under this
Agreement and each of the other Transaction Documents, will not, with or
without the giving of notice or the lapse of time or both, (i) conflict with or
violate the organizational documents of TAT or any of its Subsidiaries, (ii)
subject to obtaining the Required Approvals and Notices (as defined below),
conflict with or violate any law, statute, ordinance, rule, regulation, order,
judgment or decree applicable to TAT or any Subsidiary or by which any of their
respective properties or assets is bound or affected, or (iii) result in any
breach of or constitute a default under, or give to others any rights of
termination, amendment, acceleration or cancellation of any Material Agreement
(as defined below), or result in the creation of any Encumbrance on the
properties or assets of TAT pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which TAT is a party or by which TAT is bound or affected.
(b) The execution and delivery by TAT of this Agreement and the other
Transaction Documents does not, and the performance by TAT of its obligations
under this Agreement and the other Transaction Documents, will not, require any
consent, approval, authorization or permit of or filing with or notification
to, any Governmental Entity (as defined below), by or with respect to TAT,
except (i) for applicable requirements, if any, of the consents, approvals,
authorizations, permits or notification described in Schedule 3.5 (the
"Required Approvals and Notices"), and (ii) where failure to obtain the
required consents, approvals, authorizations or permits, or to make such
filings or notifications, (A) would not prevent or delay consummation of any of
the transactions contemplated by this Agreement or any other Transaction
Document in any material respect, or otherwise prevent TAT from performing its
obligations under this Agreement or any other Transaction Document in any
material respect, and (B) would not reasonably be likely to have a Material
Adverse Effect. As used herein the term "Governmental Entity" means any Israeli
or U.S. entity exercising executive, legislative, judicial, regulatory or
administrative function of or pertaining to government.
3.6 SEC Filings; Financial Statements.
(a) To TAT's knowledge, based on the advise of its U.S. securities counsel, it
has filed all forms, reports, statements and other documents required to be
filed with the Securities and Exchange Commission ("SEC") during the three year
period immediately prior to the Closing Date, and has heretofore delivered to
counsel for the Investor, in the form filed with the SEC since such date,
together with any amendments thereto, all (i) Annual Reports on Form 20-F, and
(ii) all proxy statements relating to meetings of shareholders (whether annual
or special) (collectively, the "TAT SEC Reports"). To TAT's knowledge, based on
the advise of its U.S. securities counsel, as of their respective filing or
publication dates, the TAT SEC Reports complied as to form in all material
respects with the requirements of the United States Securities Exchange Act of
0000 (xxx "Xxxxxxxx Xxx") xxx xxx Xxxxxx Xxxxxx Securities Act of 1933, as
amended (the "Securities Act"). To TAT's knowledge, based on the advise of its
U.S. securities
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counsel, the TAT SEC Reports did not at the time they were filed or published,
respectively, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(b) The audited consolidated financial statements of TAT for the years ended on
December 31, 2002 and December 31, 2003 (collectively, the "2002-2003 Financial
Statements") comply as to form in all material respects with applicable
accounting requirements. The Financial Statements, including all related notes
and schedules, present fairly in all material respects the financial position
of TAT as at the respective dates thereof and the results of operations and
cash flows of TAT for the periods indicated, in accordance with United States
GAAP, with respect to TAT's audited consolidated financial statements for the
year ended on December 31, 2002 and in accordance with Israeli GAAP, with
respect to TAT's audited consolidated financial statements for the year ended
on December 31, 2003.
3.7 Operations in the Ordinary Course. Except as set forth in Schedule 3.7
attached hereto, between January 1, 2004 and the date of this Agreement, TAT
has operated its business in the ordinary course consistent with past practices
and has not suffered any Material Adverse Effect.
3.8 Litigation. Except as set forth in Schedule 3.8 attached hereto, there are
no claims, actions or proceedings pending or, to TAT's knowledge, threatened
against TAT or any of its Subsidiaries, any of their respective properties or
to TAT's knowledge, any of their respective officers or directors before any
court, arbitration or mediation or regulatory authority or body, domestic or
foreign, that individually or in the aggregate (i) would reasonably be likely
to, or if adversely decided may be expected to, have a Material Adverse Effect,
or (ii) challenge or seek to prevent, enjoin, alter or materially delay the
transactions contemplated by this Agreement.
3.9 Licenses and Permits; Compliance with Laws. To TAT's knowledge, it does not
lack permits, licenses, authorizations or approvals, and is not in material
violation of Applicable Law or any permits, licenses, authorizations and
approvals that have been obtained by it, which the failure to obtain or such
violation, as applicable, would reasonably be likely to have a Material Adverse
Effect. As used herein, the term "Applicable Law" means any provision of any
statute, law, ordinance, rule, regulation, decree, order, grant, permit or
license or other governmental authorization or approval applicable to TAT.
3.10 Trade Secrets.
(a) To TAT's Knowledge (as defined below), TAT and its Subsidiaries have the
right to use all its trade secrets, including know-how, material computer
programs, documentation, processes, and technology which can reasonably be
anticipated to be material to the conduct of the businesses of TAT and its
Subsidiaries, taken as a whole, as conducted by TAT as of the date hereof (all
of the foregoing items collectively referred to as the "Trade Secrets").
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For purposes of this Section 3.10 and Section 3.14 below, "Knowledge" shall be
deemed to refer to the knowledge of reasonable managerial staff (which term
shall refer to any person who, either formally or in substance, serves as a
director, chief executive officer (CEO) or chief operating officer (COO), or any
other senior executive who reports directly to the chief executive officer). For
these purposes, if such managerial staff has not received any claims with
respect to manufacturing processes and know-how that have been utilized
consistently, or to products that have been sold, over a reasonably long period
of time, such managerial staff shall be deemed to have acted reasonably when
making the representations set forth in this Section 3.10 and Section 3.14
below, without conducting any special searches or investigation.
(b) (i) no proceedings are pending or, to TAT's Knowledge, threatened, which
challenge the use by TAT or any of the Subsidiaries of TAT of the Trade Secrets
could have, if resolved unfavorably to TAT, a Material Adverse Effect; (ii) to
TAT's Knowledge, no material infringement by TAT of any intellectual property
right or other proprietary right of any third party has occurred, or will
result in any way from the signing and execution of this Agreement or any of
the other Transaction Documents or the consummation of any or all of the
transactions contemplated hereby and thereby, and, no claim has been made by
any third party based upon an allegation of any such infringement; and (iii) to
TAT's Knowledge, there are no restrictions on the direct or indirect transfer
of any license, or any interest therein, held by TAT or any Subsidiary in
respect of the Trade Secrets.
(c) No claim has been made in the last seven years prior to the date hereof by
any third party that the use, disclosure or appropriation of Confidential
Information not owned by TAT or any Subsidiary has been in material violation
of the terms of a written agreement between TAT or such Subsidiary and the
owner of such Confidential Information, or is otherwise materially unlawful.
3.11 Material Agreements and Claims
TAT has delivered to the Investor a true and full copy of each of the material
agreements, in effect on the date hereof, to which TAT or any of its
Subsidiaries is a party (including all agreements with TAT Industries and the
agreements referred to in TAT's filings) (the "Material Agreements").
For purposes of this Agreement, "Material" shall be determined based on the
criteria for inclusion in TAT's 20-F filings.
Except as set forth in Schedule 3.11(a) attached hereto, such Material
Agreements are valid and in full force and effect on the date hereof, and
neither TAT nor, to TAT's knowledge, any other party, has violated any material
provision thereof, or committed or failed to perform any material act which
with or without notice, lapse of time or both would constitute a fundamental
beach under the provisions of, any Material Agreement except for violations or
defaults which would not reasonably be likely to have a Material Adverse
Effect. The enforceability of any Material Agreement will not be affected in
any manner by, the existence of this Agreement and the Transaction Documents,
or the consummation of the transactions contemplated hereunder or thereunder.
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3.12 Employees
TAT has delivered to the Investor complete copies of the material
employment/engagement agreements currently in force for each of the five most
highly paid individuals employed by TAT or any of its Subsidiaries, including
TAT's CEO and Chairman of the Board of Directors and the President, both of
which shall be amended by the Engagement Agreements, as of the Closing.
3.13 Labor Relations. There is not now or has been threatened any material
labor dispute, strike, slow-down, picketing, work-stoppage, or other similar
labor activity with respect to the employees of TAT.
3.14 Environmental Matters. Except as set forth in Exhibit 3.14 attached
hereto, to TAT's Knowledge, TAT and each of its Subsidiaries, is in material
compliance with applicable material environmental laws and regulations
("Environmental Laws") in effect on the date hereof.
3.15 Taxation. To TAT's knowledge and based on the advice of experts (employed
by TAT's C.P.A), the Financial Statements as of December 31, 2003 make adequate
provisions for taxation for which TAT is liable which has accrued, on or before
December 31, 2003; provided, however, that based on prior experience, there may
be deficiencies of not more than an aggregate of $100,000 with respect to
withholding tax.
3.16 Insurance. To TAT's knowledge, and due to advice of its insurance agent,
TAT has the benefit of adequate insurance against such risks as are usually and
reasonably insured against by companies carrying on similar business.
3.17 Brokers. Except as set forth in Schedule 3.17, no person or firm has, or
will have, as a result of any act or omission by TAT or anyone acting on behalf
of TAT, any right, interest or valid claim against TAT or the Investor for any
commission, fee or other compensation as a finder or broker or in any similar
capacity with respect to the transactions contemplated under this Agreement.
3.18 Representations Complete. None of the representations or warranties made
by TAT herein or in any Schedule or Exhibit hereto contain or will contain at
the Closing Date (subject to the Compliance Certificate) any untrue statement
of a material fact, or omit or will omit at the Closing Date to state any
material fact necessary in order to make the statements contained herein or
therein, in the light of the circumstances under which they were made, not
misleading.
4. Representations and Warranties of the Investor
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The Investor hereby represents and warrants to TAT and acknowledges that TAT is
entering into the TAT Transaction Documents in reliance thereon, as follows:
4.1 This Agreement and the other Transaction Documents, constitute valid,
binding, and enforceable obligations of the Investor.
4.2 The Investor is an entity duly organized and validly existing under the
laws of
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the State of Israel, and has all requisite power and authority to carry out the
transactions contemplated hereby and under the Transaction Documents, and the
execution, delivery and performance of the obligations of the Investor
hereunder have been duly authorized by all necessary corporate action.
4.3 The Investor acknowledges that the offering and sale of the Shares is
intended to be exempt from registration under the Securities Act by virtue of
Section 4(2) of the United States Securities Act and the provisions of
Regulation D there under. The Investor is a special purpose vehicle formed for
the purpose of effecting the transactions contemplated herein. Each of the
entities beneficially owning the Investor (whether directly or indirectly) is
an "Accredited Investor", as such term is defined under Regulation D, and that
such entity is a sophisticated investor that has experience in business and
financial matters and is capable of evaluating the merits and risks relevant to
TAT, its business, the markets in which TAT and Limco operate and to the
transactions contemplated by this Agreement and the other Transaction
Documents. For the purpose of clarity, it is hereby clarified that the Investor
is aware of the fact that TAT is engaged in product manufacturing and sales in
the aviation field of business and is, therefore, exposed to certain risks
which are inherent to companies involved in product manufacturing and sales in
such field of business.
4.4 Without derogating from the representations and warranties set forth in
Section 3 above, the Investor and its auditors, legal counsels and other
representatives have been given access to information regarding TAT and Limco
and have utilized that access to their satisfaction in order to receive all
such information as they considered necessary, required and advisable for
deciding whether to enter into the investment contemplated by this Agreement
and the other Transaction Documents, including but not limited to, the
subscription for the Shares hereunder.
4.5 The execution and delivery of this Agreement and the other Transaction
Documents, and the consummation of the transactions and the Investor's
performance of its obligations herein and therein contemplated will not,
whether with or without giving notice or the lapse of time or both (i) result
in any conflict with, breach of, or default (or give rise to any right of
termination, cancellation or acceleration or the loss of any benefit) under any
of the terms, conditions or provisions of the Investor's organizational
documents or of any material agreement, permit or other instrument or
obligation to which the Investor is a party or is bound, or (ii) violate any
law or regulation, or any order, injunction, or judgment of any court or any
governmental bureau or agency, domestic or foreign applicable to the Investor.
No consent or approval by any governmental authority is required in connection
with the execution by the Investor of this Agreement and the other Transaction
Documents, or the consummation by the Investor of the transactions contemplated
hereby and thereby except for such actions, consents or approvals as have been
obtained or will be obtained as of the Closing.
4.6 No Finders Fee. Except as set forth in Exhibit 4.6, no person or firm has,
or will have, as a result of any act or omission by the Investor or anyone
acting on its behalf, any right, interest or valid claim against TAT for any
commission, fee or other compensation as a finder or broker or in any similar
capacity, with respect to any of the transactions contemplated under this
Agreement.
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TAT Technologies PIPE
5. Confidentiality.
---------------
5.1 Without derogating from the non-disclosure undertaking executed by the
Investor on January 19, 2004, the Investor undertakes that any Confidential
Information (defined below) obtained or which shall be obtained in connection
with the transactions contemplated herein and in the Transaction Documents,
including information to be provided to the Investor prior to or following the
Closing, will not be disclosed without the prior written consent of TAT.
5.2 For the purposes of this Agreement, "Confidential Information" shall mean
all information, including, but not limited to, financial information, business
plans, budgets, customer lists, computer software, source codes, plans,
drawings, technical specifications, patents, copyrights, and other intellectual
property rights, in any form (paper, disk, or other), relating to the business
of TAT and its Subsidiaries. However, Confidential Information shall not
include information which (a) was in the Investor's possession prior to its
disclosure; (b) is or becomes available to the public through no fault of the
Investor; (c) is required by law to be disclosed by the Investor, provided that
the Investor gives TAT immediate written notice of such requirement prior to
such disclosure; or (d) is rightfully received by the Investor from a third
party without a duty of confidentiality.
5.A Management Fee.
--------------
During the Term (as defined in the Shareholders Agreement), the Investor shall
provide the Company with various management and consulting services (the
"Services"), as shall be mutually determined by the Company and the Investor
from time to time. Without derogating from the generality of the foregoing, the
Services shall include service on the Company's Board of Directors of the two
directors designated by the Investor, strategic guidance and consulting
services to the Company (which, for illustration purposes only, may include
introduction to potential customers and investors, consulting services with
respect to the business and strategic alliances) as well as guidance and
consulting services in connection with the management of the Company's
Subsidiaries. The Services shall be provided on an as needed basis, as shall be
mutually determined by the Company and the Investor from time to time.
For such Services, TAT shall pay the Investor annual management fees (the
"Management Fee") in accordance with the provisions contained in this Section
5A. The Management Fees shall be payable immediately following TAT's approval
of its quarterly audited or reviewed consolidated financial statements for each
of the first three fiscal quarters of the year and shall be equal to 3% of the
excess of (w) TAT's operating income ("Revach Tifuli") for the applicable
quarter, over (x) US$125,000, supplemented by applicable Value Added Tax
("VAT"); provided, however, that
(A) immediately following TAT's approval of the annual
consolidated financial statements of TAT for the calendar year (excluding 2004
and the last year of the Term, provided that it is not a full calendar year)
then ended (prepared in accordance with U.S. GAAP), the Investor shall promptly
receive (a) 3% of the excess of (y) TAT's operating income for the applicable
year, over (z) US$500,000, less (b) the aggregate
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TAT Technologies PIPE
amount paid to the Investor in the three preceding fiscal quarters as set forth
above (or, in the event that (b) exceeds (a) promptly return the excess amount
to TAT); and
(B) in any event, the Management Fee shall not exceed an
aggregate of US$250,000 per annum (pro rated for parts of a calendar year).
6. Conditions to Closing
---------------------
6.1 Conditions to the Obligation of the Investor to Close. The obligation
hereunder of the Investor to purchase the Shares and pay the Purchase Price is
subject to the satisfaction of the Conditions Precedent set forth in Section
6.3 below (the "Conditions Precedent") and to the fulfillment at or before the
Closing of the following Closing conditions (the "Investor Conditions"), any
one or more of the Investor Conditions may be waived in writing, in whole or in
part, by the Investor, which waiver shall be at the sole discretion of the
Investor.
(a) Accuracy of TAT's Representations and Warranties. Each of the
representations and warranties of TAT shall be true and correct in all material
respects as of the date when made and as of the Closing as though made on that
time.
(b) Performance by TAT. TAT shall have performed, satisfied and
complied in all material respects with all conditions required by this
Agreement to be performed
(c) All Deliverables Ready. All documents and other items to be
delivered to the Investor at the Closing as specified in Section 2.2 above,
shall be duly executed, ready for delivery to the Investor, and in form and
substance reasonably satisfactory to counsel for Investor
(d) The following documents, executed on the Effective Date, shall
have come into effect as of the Closing: (i) the Registration Rights Agreement
(the "Registration Rights Agreement") attached hereto as Exhibit 6.1(d)(i),
(ii) the Warrant Agreement (the "Warrant Agreement"), attached hereto as
Exhibit 6.1(d)(ii), (iii) the Credit Line Agreement (the "Credit Line
Agreement") attached hereto as Exhibit 6.1(d)(iii), and (iv) the shareholders'
agreement (the "Shareholders Agreement") between the Investor and TAT
Industries Ltd.
(e) Capitalization. Except for any exercise of Outstanding Options,
the share capital of TAT at the Closing shall be as described in Section 3.3(a)
above.
6.2. Conditions to the Obligation of TAT to Close. The obligations hereunder of
TAT to issue and sell the Shares and to grant the Warrant to the Investor are
subject to the satisfaction of the Conditions Precedent and the fulfillment at
or before the Closing of the following Closing conditions (the "TAT
Conditions"), any one or more of the TAT Conditions may be waived in writing,
in whole or in part, by TAT, which waiver shall be at the sole discretion of
TAT.
(a) Accuracy of the Investor Representations and Warranties. Each of the
representations and warranties of the Investor shall be true and correct in all
material
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TAT Technologies PIPE
respects as of the date when made and as of the Closing, as though made at that
time.
(b) Performance by the Investor. The Investor shall have performed, satisfied
and complied in all material respects with all conditions required by this
Agreement to be performed.
(c) The Engagement Agreements shall have been executed and duly adopted by TAT
and the agreements listed in Section 6(1)(d)(i)-(iv) shall have come into
effect.
6.3. The transactions contemplated herein and in the Transaction Documents are
subject to the satisfaction and fulfillment of the following Conditions
Precedent, which may not be waived in whole or in part by the Parties, unless
permitted by applicable law, in which case, such waiver shall require the
mutual consent of both Parties, at their sole discretion:
(a) The General Meeting of TAT's shareholders shall have approved the
resolutions more fully set forth in Section 2.2.1(b) above.
(b) The General Meeting of Shareholders of TAT Industries shall have approved
(i) the Shareholders Agreement, and (ii) the participation in the General
Meeting of Shareholders of TAT and the voting in favor of the resolutions
referred to in sub-section (a) above.
6.4. It is hereby underlined that if, for any reason the Conditions Precedent
(including the approval of the General Meetings of both TAT and TAT Industries)
and the other Closing conditions set forth above (unless expressly waived in
accordance with the provisions contained herein) are not met within 60 days
from the date hereof, the Conditions Precedent shall be deemed to have not been
fulfilled and this Agreement and the Transaction Documents will become null and
void and neither Party shall have any claim or demand against the other Party
with respect to such termination.
6.5. Notwithstanding anything to the contrary contained herein, in the event
that compliance with the Conditions Precedent or any other Required Approval is
contingent upon TAT's taking any action of which TAT is unaware on the date
hereof and which is likely to adversely affect the commercial terms or the
feasibility of the transactions contemplated in the TAT Transaction Documents,
then TAT shall not be required to take such action(s), and will not be liable
to the Investor, provided that it had promptly provided the Investor with
written notice regarding its resolution not to obtain any Required Approval.
7. Survival of Representations and Warranties.
------------------------------------------
7.1 All representations and warranties made by any Party in this Agreement
shall survive the Closing and be in effect until the termination of two (2)
years following the Closing Date (the "Representations and Warranties Period"),
on which date they shall expire and be of no further force or effect, except
that if a claim has been made during such two year period, the subject matter
of the claim shall survive until the claim is finally resolved or settled.
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TAT Technologies PIPE
7.2 Excluding in the case of fraud or intentional misrepresentation, if a claim
is brought against TAT by the Investor during the Representations and
Warranties Period and results in TAT being obligated to pay the Investor
damages (the "Damages") in an aggregate amount -
(i) higher than US$200,000 but less than US$1,000,000 - TAT shall
promptly reimburse the Investor for such Damages in excess of US$200,000
(unless the court ruling had already taken into account the US$200,000
threshold in the damages it awarded, in which case the entire amount of Damages
will become due and payable to the Investor) and such payment will be the sole
and exclusive right and remedy available to the Investor with respect to such
breach of representations and warranties; and
(ii) equal to or higher than US$1,000,000, then TAT shall be
entitled, at its sole discretion, (i) to promptly pay to the Investor the
entire amount of Damages, or (ii) to cancel this Agreement and all other
Transaction Documents by providing the Investor with prompt written notice,
upon the receipt of which the Investor shall deliver the Shares and the Warrant
(and any Warrant Shares, if the Warrant was exercised prior to such
cancellation) to TAT in return for a full refund of the Purchase Price paid for
such Shares and Warrant Shares (if applicable), in US dollars (reduced by any
dividend distributions received by the Investor from TAT prior to the
cancellation of this Agreement). For the avoidance of doubt and without
derogating from the above, if the Loan (as defined in the Credit Line
Agreement), had already been provided to the Company, then upon the termination
of this Agreement and the Credit Line Agreement, all amounts due on account of
the Loan shall immediately become due and payable. 7.3 For avoidance of doubt
it is hereby clarified that, excluding in the case of fraud or intentional
misrepresentation and other than, the above remedies, no adjustment of the
Purchase Price or any other change of the terms hereunder or any other relief
may be available to the Investor in a court of law as a result of a breach of
representations or warranties under this Agreement or under applicable law.
7.4 Claims made hereunder may not be initiated by or on behalf of the
Investor in respect of consequential damages or losses.
8. Miscellaneous.
-------------
8.1 Further Assurances. Each of the parties hereto shall perform such further
acts and execute such further documents as may reasonably be necessary to carry
out and give full effect to the provisions of this Agreement and the intentions
of the parties as reflected hereby.
8.2 Governing Law; Dispute Resolution. This Agreement shall be governed by and
construed according to the laws of the State of Israel, without regard to the
conflict of laws provision thereof. Any claim arising under or in connection
with this Agreement shall be resolved exclusively in the appropriate court in
Tel-Aviv, Israel. Each of the parties hereby irrevocably consents to the
exclusive jurisdiction of such courts and waives and agrees not to assert any
objection to the jurisdiction or convenience thereof.
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TAT Technologies PIPE
8.3 Assignment. Neither TAT nor the Investor may sell, assign, transfer, or
otherwise convey any of its rights or delegate any of its duties or obligations
under this Agreement. Except as otherwise expressly stated to the contrary
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns under law ("Ha'xxxxx Al Pi Din").
8.4 Entire Agreement; Amendment and Waiver.
This Agreement and the Exhibits and Schedules hereto (including all of the TAT
Transaction Documents) constitute the full and entire understanding and
agreement between the parties with regard to the subject matters hereof. All
prior understandings and agreements among the parties are void and of no
further effect. Any term of this Agreement may be amended, waived, or
discharged (either prospectively or retroactively, and either generally or in a
particular instance), by a written instrument signed by all the parties to this
Agreement.
8.5 Notices, etc. All notices and other communications required or permitted
hereunder to be given to a party to this Agreement shall be in writing and
shall be telecopied or mailed by registered or certified mail, postage prepaid,
or otherwise delivered by hand or by messenger, addressed to such party's
address as set forth below or at such other address as the party shall have
furnished to each other party in writing in accordance with this provision:
If to the Investor:
TA-TOP, Limited Partnership
c/o TA-TEK Ltd., its general partner
c/o FIMI 2001 Ltd.
"Xxxxxxxxxx House"
00 Xxxxxx Xxxxx Xxxx
Tel: 00-0000000
Fax: 00-0000000
With a copy to:
Xxxxxx Xxxx, Adv.
Naschitz, Xxxxxxx & Co.
0 Xxxxx Xxxxxx
Xxx-Xxxx 00000
Xxxxxx
Facsimile: x000-0-000-0000
If to TAT: TAT Technologies Ltd.
Industrial Xxxx, Xxxxx, Xxxxxx, 00000
PO Box. 80 (70750)
With a copy to: X. Xxxxxxxx,
X. Xxxxxxxx & Co.
0 Xxxxxxxxx Xxxxxx, Xxxxx-Xxx 00000
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TAT Technologies PIPE
Facsimile: 00-0000000
Attn: Adv. Xxxxx Xxxxxxxx
or such other address with respect to a party as such party shall notify each
other party in writing as above provided.
8.6 Delays or Omissions. No delay or omission to exercise any right, power, or
remedy accruing to any party upon any breach or default under this Agreement,
shall be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent, or approval of any kind or
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law, or otherwise afforded to any of the parties, shall be
cumulative and not alternative.
8.7 Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to be unenforceable under applicable law, then such
provision shall be excluded from this Agreement and the remainder of this
Agreement shall be interpreted as if such provision were so excluded and shall
be enforceable in accordance with its terms; provided, however, that in such
event this Agreement shall be interpreted so as to give effect, to the greatest
extent consistent with and permitted by applicable law, to the meaning and
intention of the excluded provision as determined by such court of competent
jurisdiction.
8.8 Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original and enforceable against the parties
actually executing such counterpart, and all of which together shall constitute
one and the same instrument.
8.9 Heading, Preamble, and Exhibits. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement. The Preamble and Exhibits are an
integral and inseparable part of this Agreement.
8.10 Expenses. Each party hereto shall pay its own expenses in connection with
the negotiation and preparation of this Agreement and the related agreements
and the consummation of the transactions contemplated hereby and thereby,
except that if the Closing is effected TAT shall pay the Investors' fees of
professional advisors for performing accounting and legal due diligence and
preparing this Agreement and all other TAT Transaction Documents, in an amount
not to exceed $50,000 plus applicable Value Added Tax.
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TAT Technologies PIPE
IN WITNESS WHEREOF the parties have signed this Agreement as of the date first
hereinabove set forth.
TAT Technologies Ltd. TA-TOP, Limited Partnership
c/o TA-TEK Ltd. its general partner
By: __________________________
By:________________
Name:
Name______________
Title:
Title_______________
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