Execution Form
SHARE PURCHASE AGREEMENT
This Share Purchase Agreement (hereinafter the "AGREEMENT") is made as of July
29, 2003, by and between Tecnomatix Technologies Ltd., a company incorporated
under the laws of Israel (the "COMPANY") and SCP Private Equity Partners II,
L.P., a Delaware limited partnership ("PURCHASER").
R E C I T A L S
WHEREAS, Purchaser wishes to make an investment in the Company and become a
shareholder of the Company, subject to the terms and conditions of this
Agreement; and
WHEREAS, simultaneously with the execution of this Agreement, the Company is
entering into an Asset Purchase Agreement with USDATA Corporation, a Delaware
corporation ("USDATA") under which USDATA shall sell and transfer to the Company
substantially all the assets and liabilities of USDATA (the "ASSET PURCHASE
AGREEMENT"); and
WHEREAS, at and subject to the closing or termination in certain events of the
Asset Purchase Agreement, Purchaser wishes to purchase Ordinary Shares, par
value NIS 0.01 per share of the Company (the "ORDINARY SHARES") and the Company
wishes to issue and sell to Purchaser Ordinary Shares, upon and subject to the
terms and conditions of this Agreement; and
WHEREAS, as a condition precedent to the Company entering into the Asset
Purchase Agreement and completing the transactions contemplated therein,
simultaneously with entering into the Asset Purchase Agreement, Purchaser is
entering into this Agreement; and
WHEREAS, the Company and Purchaser desire, in connection with the execution of
the Asset Purchase Agreement, to make certain covenants and agreements with one
another pursuant to this Agreement, including, without limitation, certain
covenants concerning the Ordinary Shares issued pursuant to the terms of this
Agreement and additional Ordinary Shares that may be distributed to Purchaser
from USDATA;
NOW, THEREFORE, in consideration of the covenants and promises set forth herein,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereby agree as follows:
1. PURCHASE OF SHARES
1.1. PURCHASE OF SHARES. Subject to the terms and conditions hereof, at the
Closing (as defined below) the Company shall issue and sell to the
Purchaser, and the Purchaser shall purchase from the Company, an aggregate
of 113,838 Ordinary Shares (the "CLOSING SHARES") at a price per Ordinary
Share of US$ 15.645 (being 150% of the average last sale price of the
Ordinary Shares on Nasdaq during the 45 trading days ending on the day
preceding the date hereof) (the "PRICE PER SHARE"), and an aggregate
purchase price of US$ 1,781,000 (the "PURCHASE PRICE").
1.2. CLOSING. Subject to the fulfillment or waiver of the conditions set
forth in Section 3 herein, the issue and sale of the Closing Shares, and
the purchase thereof by the Purchaser in consideration for the payment of
the Purchase Price in accordance with Section 1.1 above, shall take place
at a closing to be held at a location agreed upon between the parties on
the date of and simultaneously with the earlier of (i) the closing under
the Asset Purchase Agreement, or, (ii) if so determined by the Company, in
its sole discretion, the termination of the Asset Purchase Agreement
pursuant to Sections 8.1.3(ii), (iii) or (iv), 8.1.4 or 8.1.6 of the Asset
Purchase Agreement (the "CLOSING") or such other date and time as the
Company and Purchaser shall mutually agree (the "CLOSING DATE"). If the
Company elects to proceed with the Closing after the termination of the
Asset Purchase Agreement as permitted by clause (ii) of the immediately
preceding sentence, the Company must provide Purchaser with notice of such
election in writing within 30 days of the date of termination of the Asset
Purchase Agreement.
1.3. TRANSACTIONS AT CLOSING. At the Closing, the following transactions
shall occur, which transactions shall be deemed to take place
simultaneously and no transaction shall be deemed to have been completed or
any document delivered until all such transactions have been completed and
all required documents delivered:
1.3.1. The Company shall deliver to the Purchaser the following:
(i) a certificate of an officer of the Company certifying that: (a)
the Board of Directors of the Company approved the execution of this
Agreement and the transactions contemplated hereby, and the issuance
and sale of the Closing Shares to the Purchaser in accordance with
this Agreement and (b) all documents to be executed and delivered by
the Company at the Closing have been executed by duly authorized
officers of the Company; and
(ii) a stock certificate representing the Closing Shares registered in
the name of the Purchaser.
1.3.2. Purchaser shall deliver or cause the transfer to the Company of the
following:
(i) the Purchase Price, by wire transfer, banker's check, or such
other form of payment as is mutually agreed by the Company and the
Purchaser; and
(ii) a duly executed standard undertaking letter towards the Office of
the Chief Scientist in the Israeli Ministry of Trade and Commerce (the
"OCS"), in the form attached hereto as EXHIBIT A.
2. REPRESENTATIONS AND WARRANTIES
2.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Purchaser as of the date hereof that the
following representations and warranties are true and accurate in all respects,
and further acknowledges that the Purchaser is entering into this Agreement in
reliance thereon:
2.1.1. ORGANIZATION. The Company is duly organized and validly existing
under the laws of the State of Israel. The Company has all requisite power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby.
2.1.2. ISSUANCE OF CLOSING SHARES. The Closing Shares, when issued and sold
at the Closing in accordance with this Agreement will be duly authorized,
validly issued, fully paid, non-assessable, and free of any pre-emptive
rights, and will have the rights, preferences, privileges, and restrictions
set forth in the Articles of Association of the Company as in effect from
time to time, and will be free and clear of any liens, claims, encumbrances
or third party rights, except as set forth in this Agreement and in the
Articles of Association of the Company.
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2.1.3. AUTHORIZATION; APPROVALS. All corporate action on the part of the
Company, and its directors and shareholders respectively, which are
necessary for the authorization, execution, delivery, and performance of
this Agreement and for the authorization, issuance, and sale of the Closing
Shares has been (or will be) taken prior to the Closing. This Agreement,
when executed and delivered by all parties hereto, shall constitute the
valid and legally binding obligation of the Company, legally enforceable
against the Company in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, debtor relief or
similar laws affecting the rights of creditors generally. No consent,
approval, order, license, permit, action by, or authorization of or
designation, declaration, or filing with any governmental authority on the
part of the Company is required in connection with the valid execution,
delivery and performance of this Agreement by the Company, that has not
been, or will not have been, obtained prior to the Closing.
2.1.4. NO BREACH. Neither the execution and delivery of this Agreement nor
compliance by the Company with the terms and provisions hereof, conflict or
will conflict with, or result in a breach or violation of (i) the Company's
Articles of Association, or other governing documents of the Company, (ii)
any judgment, order, injunction, decree, or ruling of any court or
governmental authority, domestic or foreign applicable to the Company,
(iii) any agreement, contract, lease, license or commitment to which the
Company is a party or to which it is subject, or (iv) any applicable law,
rule, regulation or statute.
2.1.5. SEC DOCUMENTS AND FINANCIAL STATEMENTS. The Company has previously
made available to Purchaser true and complete copies of (a) all annual
reports filed with the SEC pursuant to the Exchange Act since December 31,
1998, (b) all other reports, filed with the SEC since December 31, 1998,
and (c) any registration statements declared effective by the SEC since
December 31, 1998. Since December 31, 1998, the Company has timely filed
all reports and filings required to be filed under the Exchange Act (the
"COMPANY REPORTS"). The consolidated financial statements of the Company
and its subsidiaries included in the Company's most recent report on Forms
20-F and any other reports filed with the SEC by the Company subsequent
thereto were, or (if filed after the date hereof but prior to Closing) will
be, prepared in accordance with U.S. generally accepted accounting
principles ("GAAP") applied on a consistent basis during the periods
involved and fairly present, or will present, the consolidated financial
position for the Company and its subsidiaries as of the dates thereof and
the consolidated results of their operations and changes in financial
position for the periods then ended (except with respect to interim period
financial statements, for normal year-end adjustments which are,
individually or in the aggregate, not material in amount); the Company
Reports were, or (if filed after the date hereof) will be, prepared in all
material respects in accordance with the requirements of the Securities
Act, the Exchange Act and the rules of any stock exchange or trading system
on which the shares of the Company were traded or quoted at such time, as
the case may be; and, as of the time of filing or on the date that an
amendment or supplement thereto was filed, the Company Reports, as amended
or supplemented, did not and will not 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 light of the
circumstances under which they were made, not misleading. The Company has
delivered to the Purchaser draft consolidated, non audited and non reviewed
balance sheet and statement of profit and loss of the Company for the six
months ended June 30, 2003.
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2.1.6. SHARE CAPITAL.
(i) As of the date hereof: (i) the authorized share capital of the
Company consists of 20,000,000 Ordinary Shares of which 10,748,448 are
outstanding, 110,000 are held in treasury, and 850,000 are held by a
wholly owned subsidiary of the Company; and (ii) the Total Current
Voting Power consists of 10,748,448 Ordinary Shares. The designations,
powers, preferences, rights, qualifications, limitations and
restrictions in respect of the Ordinary Shares are as set forth in
Company's Articles of Association. All such designations, powers,
preferences, rights, qualifications, limitations and restrictions are
valid, binding and enforceable and in accordance with all applicable
laws.
(ii) The Company's annual report on form 20-F for the year ended
December 31, 2002 (the "2002 ANNUAL REPORT") contains a description of
the identity, to the best knowledge of the Company, of each holder of
record of shares in the Company holding more than 5% of the issued and
outstanding share capital of the Company, on an as-converted basis,
and the respective number and class of such shares. The 2002 Annual
Report and Section 4.7 of the Purchaser Disclosure Schedule attached
to the Asset Purchase Agreement sets forth all options and other
rights to acquire shares of Company as of the dates set forth in the
2002 Annual Report and the date hereof. There has been no material
change in the number or terms of such options and other rights to
acquire shares of the Company since the dates as of which such
information in provided in the 2002 Annual Report and in Section 4.7
of the Purchaser Disclosure Schedule attached to the Asset Purchase
Agreement, except for grants of employee stock options in the ordinary
course of business.
(iii) Except as set forth in the 2002 Annual Report, in Section 4.7 of
the Purchaser Disclosure Schedule attached to the Asset Purchase
Agreement and except for employee stock options granted by the Company
in the ordinary course of business since the dates as of which
information on the employee stock options is provided in the 2002
Annual Report and in Section 4.7 of the Purchaser Disclosure Schedule
attached to the Asset Purchase Agreement (a) there are no outstanding
shareholder loans, preemptive rights, convertible securities,
warrants, options, or other rights to subscribe for, purchase or
acquire from the Company any share capital of the Company; and (b)
there are no contracts, rights or binding commitments, written or
oral, providing for the issuance of, or the granting of rights to
acquire, any share capital of the Company or under which the Company
is, or may become, obligated to issue any of its securities.
(iv) All issued and outstanding share capital of the Company has been
duly authorized, is validly issued and outstanding, fully paid and
non-assessable.
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2.1.7. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 2002,
except as set forth in the 2002 Annual Report or otherwise publicly
disclosed through a press release or similar publication, the Company and
its subsidiaries have conducted their businesses only in the ordinary
course consistent with past practice and, since the December 31, 2002,
except as set forth in the 2002 Annual Report or otherwise publicly
disclosed through a press release or similar publication, there has not
been (a) any event or events having, individually or in the aggregate, a
"Purchaser Material Adverse Effect" (as this term is defined in the Asset
Purchase Agreement), provided that this subsection (a) shall apply only to
the period from December 31, 2002 until the date hereof; (b) any
declaration, setting aside or payment of any dividend or distribution in
respect of any share capital of the Company or any redemption, purchase or
other acquisition of any of its securities; (c) any material transaction
conducted between the Company, and any of its stockholders, officers,
employees or Affiliates (except for inter-company transactions); or (d) any
change in the accounting methods or accounting principles or practices
employed by the Company other than changes required by GAAP and disclosed
to USDATA.
2.1.8. ABSENCE OF LITIGATION. Except as set forth in the 2002 Annual Report
and in Section 4.9 of the Purchaser Disclosure Schedule attached to the
Asset Purchase Agreement, there are no Actions (as defined in the Asset
Purchase Agreement) pending or, to the best of the Company's knowledge,
threatened, against the Company or any of its subsidiaries, or, to the best
of Company's knowledge, their respective stockholders, directors, officers
or employees in their capacity as such, which, if determined adversely to
the Company or any of it subsidiaries, would result in a "Purchaser
Material Adverse Effect" (as defined in the Asset Purchase Agreement) and,
to the best of the Company's knowledge, there is no valid basis for any
such Action.
2.1.9. COMPLIANCE WITH LAWS. The Company has not been and is not presently
in material violation of any applicable law or Governmental Order (as
defined in the Asset Purchase Agreement) applicable to the Company or any
of its subsidiaries, except for such non-compliance that does not have and
is not reasonably likely to have a "Purchaser Material Adverse Effect".
2.1.10. GOVERNMENTAL LICENSES AND PERMITS. The Company holds all licenses
and permits necessary for the operation of its business as presently
conducted and as currently proposed to be conducted and is in compliance
with the terms of such licenses and permits, except for such licenses and
permits the absence of which or failures to comply that do not have, a
"Purchaser Material Adverse Effect". There are no pending, or to the best
knowledge of the Company, threatened, any proceedings which could result in
the termination or impairment of any such license or permit, except for
such termination or impairment that is not reasonably likely to have a
"Purchaser Material Adverse Effect".
2.1.11. PROPERTY AND LEASES. The Company has sufficient title to, or right
of use in, all its properties and assets with only such exceptions as would
not have a "Purchaser Material Adverse Effect".
2.1.12. INTELLECTUAL PROPERTY. Neither the Company nor any of its
subsidiaries has received, and to the best of the Company's knowledge,
there are no, injunctions or Actions from any Governmental Authorities or
from any other Person, in each case, in respect of the any Intellectual
Property (as defined in the Asset Purchase Agreement) material to the
Company's business (the "COMPANY INTELLECTUAL PROPERTY"), nor in respect of
any Actions for any third party rights in the Company Intellectual
Property. All the Company Intellectual Property is owned by the Company or
its subsidiaries or the Company or its subsidiaries have the right to use
the Company Intellectual Property. Except as referred to in the 2002 Annual
Report, all rights, title and interests of the Company in or related to the
Company Intellectual Property owned by the Company, to the best of the
Company's knowledge, are in full force and effect and the Company or its
subsidiaries has the unrestricted right to use, hold, dispose and exploit
all the Company Intellectual Property owned by the Company free and clear
of any Liens (as defined in the Asset Purchase Agreement). To the best of
the Company's knowledge, and except as set forth in Section 4.13 of the
Purchaser Disclosure Schedule, the consummation of the transactions
contemplated in this Agreement will not alter or impair any such rights. No
claims or Actions have been asserted against the Company or any of its
subsidiaries (and the Company is not aware of any claims which are likely
to be asserted against the Company or any of its subsidiaries or which have
been asserted against others) by any Person challenging the use or
disposition by the Company or its subsidiaries of the Company Intellectual
Property or challenging or questioning the validity or effectiveness of any
of the Company Intellectual Property owned by the Company. To the best of
the Company's knowledge, none of the use by the Company or its subsidiaries
of any of the Company Intellectual Property infringes or will infringe on
the right of, any Intellectual Property rights of any person except to the
extent that does not result in a Purchaser Material Adverse Change.
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2.1.13. ENVIRONMENTAL MATTERS. The Company and its subsidiaries are in
compliance with all applicable Environmental Laws (as defined in the Asset
Purchase Agreement) and have obtained and are in compliance with all
Environmental Permits (as defined in the Asset Purchase Agreement), except
for failure to comply or failure to hold such permits that does not and is
not reasonably expected to have a "Purchaser Material Adverse Effect".
There are no Environmental Liabilities (as defined in the Asset Purchase
Agreement) pending or, to the best of the Company's knowledge, threatened
relating to the Company, except for such liabilities that do not and are
not reasonably expected to have a "Purchaser Material Adverse Effect".
2.1.14. VALID PRIVATE PLACEMENT. The Company did not offer to sell the
Closing Shares so as to require the registration pursuant to all applicable
securities laws, including the federal securities laws of the United
States, and the issuance of the Closing Shares is exempt from such
registration requirements. This representation is based in part on the
accuracy of the representations provided by Purchaser.
2.1.15. TRUTHFULNESS. No representation or warranty of the Company in this
Agreement (including the Schedules) contains or, at the Closing Date, will
contain, any untrue statement of a material fact or omits or will, at the
Closing Date, omit, to state a material fact necessary in order to make the
statements contained herein or therein not misleading.
2.2. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser hereby
represents and warrants to the Company as of the date hereof that the following
representations and warranties are true and accurate in all respects, and
further acknowledges that the Company is entering into this Agreement in
reliance thereon:
2.2.1. ORGANIZATION. The Purchaser is duly organized and validly existing
under the laws of the State of Delaware. The Purchaser has all requisite
power and authority to execute and deliver this Agreement and to consummate
the transactions contemplated hereby.
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2.2.2. AUTHORIZATION; APPROVALS. All corporate and partnership action on
the part of the Purchaser and its partners, which are necessary for the
authorization, execution, delivery, and performance of this Agreement has
been (or will be) taken prior to the Closing. This Agreement, when executed
and delivered by all parties hereto, shall constitute the valid and legally
binding obligation of the Purchaser, legally enforceable against the
Purchaser in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, debtor relief or similar
laws affecting the rights of creditors generally. No consent, approval,
order, license, permit, action by, or authorization of or designation,
declaration, or filing with any governmental authority on the part of the
Purchaser is required in connection with the valid execution, delivery and
performance of this Agreement by the Purchaser, that has not been, or will
not be, obtained prior to the Closing.
2.2.3. NO BREACH. Neither the execution and delivery of this Agreement nor
compliance by the Purchaser with the terms and provisions hereof, conflict
or will conflict with, or result in a breach or violation of (i) the
Purchaser's partnership agreement, or any other governing documents of the
Purchaser, (ii) any judgment, order, injunction, decree, or ruling of any
court or governmental authority, domestic or foreign applicable to the
Purchaser, (iii) any agreement, contract, lease, license or commitment to
which the Purchaser is a party or to which it is subject, or (iv) any
applicable law, rule, regulation or statute.
2.2.4. ACCREDITED INVESTOR. Purchaser is an "accredited investor" within
the meaning of Rule 501 of Regulation D of the Securities Act, as presently
in effect. Purchaser is an investor with substantial experience in
evaluating and investing in private placement transactions of securities in
technology companies similar to the Company. Purchaser is capable of
evaluating the merits and risks of its investment in the Company and has
the capacity to protect Purchaser's own interests.
2.2.5. INVESTMENT. As of the date hereof neither Purchaser nor, to
Purchaser's Knowledge, any member of the Purchaser Control Group,
Beneficially Owns any Voting Shares or Non Voting Convertible Securities of
the Company. Purchaser is acquiring the Closing Shares for investment for
Purchaser's own account, not as a nominee or agent, and not with the view
to, or for resale or distribution thereof. Purchaser has no present
intention of selling, granting any participation in, or otherwise
distributing said Closing Shares. Purchaser understands that the transfer
of the Closing Shares and the issuance of the Additional Shares, have not
been, and will not be, registered under the Securities Act by reason of
specific exemptions from the registration provisions of the Securities Act,
the availability of which depends upon, among other things, the bona fide
nature of the investment intent and the accuracy of Purchaser's
representations as expressed herein. Purchaser represents and undertakes
that it does not have any contract, undertaking, agreement or arrangement
with any person pursuant to which Purchaser will sell, transfer, or grant
participation to any third person, with respect to any Closing Shares or
Additional Shares.
2.2.6. RESTRICTED SHARES. Purchaser acknowledges that the Closing Shares
and the Additional Shares, are characterized as "restricted securities"
under U.S. federal securities laws and must be held indefinitely unless
subsequently registered under the Securities Act or unless an exemption
from such registration is available. Purchaser is aware of the provisions
of Rule 144 promulgated under the Securities Act which permits limited
resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things, the
existence of a public market for the shares, the availability of certain
current public information about the Company, the resale occurring not less
than one year after a party has purchased and paid for the security to be
sold, the sale being effected through a "broker's transaction" or in
transactions directly with a "market maker" and the number of shares being
sold during any three-month period not exceeding specified limitations.
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2.2.7. ACCESS TO DATA. Purchaser has had an opportunity to discuss the
Company's business, management and financial affairs with its management.
Purchaser has also had an opportunity to ask questions of officers of the
Company, which questions were answered.
3. CLOSING CONDITIONS
3.1. The respective obligations of each party hereto to effect the Closing are
subject to the satisfaction at or prior to the Closing of the following
conditions:
3.1.1. Either the closing under the Asset Purchase Agreement shall have
been completed, or, if determined by the Company, in its sole discretion,
the termination of the Asset Purchase Agreement pursuant to Sections
8.1.3(ii), (iii) or (iv), 8.1.4 or 8.1.6 of the Asset Purchase Agreement
shall have occurred, simultaneously with and conditioned upon the Closing
under this Agreement.
3.1.2. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or enforced by any
Israeli, United States federal or state or foreign court or any Israeli,
United States federal or state or foreign Governmental Authority that
prohibits, restrains, enjoins or restricts the consummation of the Closing.
3.1.3. Any Governmental Authority notices, consents, approvals or other
requirements necessary to consummate the transactions contemplated hereby,
including, without limitation, the consent of the OCS and the consent of
the Investment Center in the Israeli Ministry of Trade and Commerce (the
"INVESTMENT CENTER") shall have been given, obtained or complied with, as
applicable.
3.2. The obligation of the Company to effect the Closing is subject to the
satisfaction at or prior to the Closing of the following conditions:
3.2.1. The representations and warranties of Purchaser contained in this
Agreement shall be true and correct, in all material respects, at and as of
the Closing with the same effect as if made at and as of the Closing and,
at the Closing, Purchaser shall have delivered to the Company a certificate
to that effect, executed by an executive officer of Purchaser.
3.2.2. Each of the covenants and obligations of Purchaser to be performed
at or before the Closing pursuant to the terms of this Agreement including
the payment of the Purchase Price shall have been duly performed in all
material respects at or before the Closing and, at the Closing, Purchaser
shall have delivered to the Company a certificate to that effect, executed
by an executive officer of Purchaser.
3.3. The obligation of the Purchaser to effect the Closing is subject to the
satisfaction at or prior to the Closing of the following conditions:
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3.3.1. The representations and warranties of the Company contained in this
Agreement shall be true and correct, in all material respects, at and as of
the Closing with the same effect as if made at and as of the Closing and,
at the Closing, the Company shall have delivered to the Purchaser a
certificate to that effect, executed by an executive officer of the
Company.
3.3.2. Each of the covenants and obligations of the Company to be performed
at or before the Closing pursuant to the terms of this Agreement shall have
been duly performed in all material respects at or before the Closing and,
at the Closing, the Company shall have delivered to the Purchaser a
certificate to that effect, executed by an executive officer of the
Company.
3.3.3. Receipt of an opinion from Meitar, Liquornik, Geva & Co., counsel to
the Company, in the form attached hereto as EXHIBIT B.
4. STANDSTILL OBLIGATIONS AND TRANSFER RESTRICTIONS
4.1. THE PURCHASER'S STANDSTILL OBLIGATIONS
4.1.1. From the date hereof until the earlier of (i) the Closing or (ii)
the termination of this Agreement under Section 9.2 hereof, no member of
the Purchaser Control Group shall acquire the Beneficial Ownership of
Voting Shares or Non Voting Convertible Securities, or any securities of
USDATA, or authorize or make a tender offer, exchange offer or other offer
or proposal, whether oral or written, to acquire the Beneficial Ownership
of Voting Shares.
4.1.2. During the Standstill Period, no member of the Purchaser Control
Group shall acquire the Beneficial Ownership of Voting Shares or authorize
or make a tender offer, exchange offer or other offer or proposal, whether
oral or written, to acquire the Beneficial Ownership of Voting Shares, if
the effect of such acquisition of Beneficial Ownership would be to increase
above the Standstill Limit the Voting Shares represented by all Voting
Shares Beneficially Owned by Purchaser together with any Affiliate and any
13D Group to which Purchaser or any Affiliate is a party.
4.1.3. Purchaser shall not be deemed to have violated its covenants under
this Section 4.1 solely by virtue of (and only to the extent of) any
increase in the total number of Voting Shares Beneficially Owned by
Purchaser together with any Affiliate or any 13D Group to which the
Purchaser or any Affiliate is a party (i) if such increase is the result of
a stock split, stock dividend, recapitalization or similar event, (ii) if
such increase is the result of grant by the Company of stock options or
restricted stock, pursuant to a stock option plan or restricted stock plan
of the Company, to a director in the Company nominated in accordance with
Section 6 below, (iii) if such increase is the result of the release of
Additional Shares to the Purchaser pursuant to the Escrow Agreement, (iv)
if such increase is the result of the distribution of Additional Shares by
USDATA to the Purchaser, or (v) if such increase is the result of the
issuance of Voting Shares directly by the Company to Purchaser or any of
its Affiliates in consideration of a financing transaction of the Company
or in connection with an acquisition by the Company, in each case provided
that Purchaser shall promptly notify the Company in writing upon becoming
aware that a person which is an Affiliate of Purchaser is, or is
contemplating to be, a party to such transaction.
4.1.4. During the Standstill Period, no member of the Purchaser Control
Group shall solicit or participate in any solicitation of proxies with
respect to any Voting Shares, nor shall any member of the Purchaser Control
Group seek to advise or influence any person with respect to the voting of
any Voting Shares (other than as expressly provided in Section 5.1 of this
Agreement).
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4.1.5. During the Standstill Period, no member of the Purchaser Control
Group shall subject any Voting Shares to any arrangement or agreement with
any Person with respect to the voting of such Voting Shares, except as set
forth in Section 5.
4.1.6. During the Standstill Period, no member of the Purchaser Control
Group shall seek control of the management, Board of Directors or policies
of the Company, except in accordance with any other provision of this
Agreement.
4.1.7. Each member of the Purchaser Control Group shall (i) exercise any
voting or similar right it may have in its capacity as a stockholder of a
Portfolio Company against the taking of any action by such Portfolio
Company which the Purchaser is prohibited to take by virtue of this Section
4.1 ("PROHIBITED ACTION"), (ii) not act in concert with any Portfolio
Company to take any Prohibited Action, (iii) not induce any Portfolio
Company to take any Prohibited Action, and (iv) subject to applicable law,
use reasonable best efforts with the intention of not allowing the
Portfolio Company to take a Prohibited Action, provided however that
Purchaser shall not be obligated to take any action that results in the
imposition of additional financial liabilities on the Purchaser, or which
require the initiation of litigation proceedings.
4.1.8. Any violation of the covenants under this Section by a Purchaser
Controlled Person, a Purchaser Controlling Person or a Purchaser Common
Control Person shall be deemed to be a violation of this Agreement by
Purchaser.
4.1.9. Notwithstanding Section 5 hereof, in the event of a violation of
this Section 4.1, then, in addition to such other remedies as may be
available at law, in equity or hereunder, the Purchaser hereby irrevocably
appoints the Chairman of the Company's Board of Directors, or any other
designee of the Company, as the sole and exclusive attorneys and proxies of
the Purchaser, with full power of substitution and resubstitution, to vote
and exercise all voting rights with respect to such number of Voting Shares
held by the Purchaser which are in excess of the number permitted to be
Beneficially Owned at such time according to the provisions of this Section
4 4.1 by the Purchaser with any Affiliate and any 13D Group to which
Purchaser or any Affiliate is a party (the "EXCESS SHARES", it being
clarified that in the event of violation of Section 4.1.7, the Voting
Shares acquired by the Portfolio Company shall be deemed to be Beneficially
owned by Purchaser for the purpose of calculating the number of Excess
Shares), in the proxy's sole and absolute discretion, on every annual,
general, special, class or adjourned meeting of the shareholders of the
Purchaser and in every written consent in lieu of such meeting. To the
extent the Voting Shares held by the Purchaser are less than the Excess
Shares, the Purchaser shall take such action as may be reasonably required
so that the Voting Shares Beneficially Owned by any member of the Purchaser
Control Group (other than the Purchaser) shall be subject to such proxy,
and shall use all reasonable efforts to cause any Voting Shares held by any
Affiliate of Purchaser that is not a member of the Purchaser Control Group
or any 13D Group of which Purchaser or any Affiliate of Purchaser is a
party to be subject to such proxy, up to the maximum number of Excess
Shares which are not covered by a proxy from the Purchaser. This
irrevocable proxy shall only be effective during the period from the date
of violation of this Section 4 until such time as the transfer of Excess
Shares with respect to which the Option was exercised is effected.
10
The parties hereby acknowledge that monetary damages may not be a
sufficient or adequate remedy for violation of this Section 4.1 and that,
in addition to any other remedy which may be available in law or equity,
and without any waiver or limitation with respect thereto, the Company
shall be entitled to such injunctive or equitable relief as may be deemed
proper by a court of competent jurisdiction.
4.2. TRANSFER AND VOLUME RESTRICTIONS
4.2.1. Purchaser shall not, directly or indirectly, sell (including short
sale), transfer, pledge, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase, transfer the economic risk of ownership of, loan or
otherwise dispose of or offer any of the foregoing (each, a "TRANSFER"),
any Voting Shares or Non-Voting Convertible Securities, except as provided
in this Section 4.2. Any attempted Transfer not in compliance with this
Section 4.2 shall be null and void ab initio.
4.2.2. During the Standstill Period Purchaser shall not transfer any Voting
Shares or Non-Voting Convertible Securities to any person who is, or after
giving effect to the Transfer would be (a) a Beneficial Owner of more than
five percent (5%) of the then Total Current Voting Power, or (b) required
to file a Schedule 13D or Schedule 13G with the SEC with respect to such
Voting Shares; provided, however, that a Transfer otherwise in compliance
with this Section 4.2 shall not be prohibited solely pursuant to this
subsection 4.2.2 if (x) made to a publicly offered open-ended
institutional mutual fund unaffiliated with Purchaser and with whom
Purchaser has no arrangement or understanding with respect to the holding
or voting of Voting Shares (i) that is only in the business, at the time of
such transfer, of passively holding and trading shares of publicly traded
companies and (ii) that is not required to report its holdings of Ordinary
Shares on a Schedule 13D (or any successor form) or (y) made in good faith
in an open market sale under the Registration Statement or pursuant to Rule
144 through a broker dealer with no agreement, arrangement, understanding,
oral or written between the Purchaser and the buyer of such Voting Shares
under the Registration Statement.
4.2.3. During the Lock Up Period, Purchaser shall not directly or
indirectly Transfer any Voting Shares or Non-Voting Convertible Securities.
Any attempted Transfer not in compliance with this Section 4.2.3 shall be
null and void ab initio.
4.2.4. During the Volume Restriction Period, Purchaser shall only be
permitted, subject to its compliance at such time with the provisions of
Sections 4.1, 4.2,4.3 and 7.1 of this Agreement, and subject further to
any and all applicable laws and regulations and regardless of the
effectiveness of any Registration Statement, to Transfer in any 90-day
period a number of Ordinary Shares that may not exceed, together for the
Purchaser and any persons holding Consideration Shares (as defined in the
Asset Purchase Agreement) and a party to an agreement substantially in the
form of this Agreement, 2% of the then Total Current Voting Power (the
"QUARTERLY Amount") which amount shall be allocated among all such persons
in accordance with an agreement among them. Sales by Purchaser pursuant to
this section may be made only (i) in compliance with Sections (e), (f) and
(g) of Rule 144, (ii) pursuant to another exemption from registration under
the Securities Act or (iii) pursuant to the Registration Statement subject
to and only up to the volume limitation under this Section 4.
Notwithstanding anything to the contrary in the Registration Rights
Agreement, any Transfers made under the Registration Statement shall be
made subject to and only up the volume limitations under this Section 4.
The right to require a Registration Statement or the effectiveness thereof
shall not imply any consent from the Company to make Transfers that exceed
the volume limitations included in this Section 4. If the Company is aware
of non-compliance by the Purchaser with the provisions of Sections 4.1,
4.2, 4.3 and 7.1 of this Agreement, it shall so notify the Purchaser,
provided that failure to so notify the Purchaser shall not prejudice any of
the Company's remedies or rights.
11
4.2.5. Purchaser agrees that the Company may instruct its transfer agent to
place stop-transfer notations in its records to enforce the provisions of
this section 4.
4.3. MARKET STAND-OFF
Upon the effective date of a registration statement for an underwritten public
offering of the Company's securities pursuant to a registration statement under
the Securities Act and ending ninety (90) days after such effective date,
Purchaser hereby agrees not to, directly or indirectly, Transfer any securities
of the Company (other than those included in the registration) to the extent
requested by the Company and its underwriter. Purchaser agrees that the Company
may instruct its transfer agent to place stop-transfer notations in its records
to enforce the provisions of this section. Purchaser agrees irrevocably that, if
so requested, Purchaser will execute an agreement with the managing underwriter
of such offering containing terms which are materially consistent with the
provisions of this section. This Section shall be deemed to inure to the benefit
of such underwriters as a third party beneficiary, and the provisions of this
Section 4.3 may be enforced by such underwriters as if they were a direct party
hereto.
4.4. NOTIFICATION OF CHANGE IN BENEFICIAL OWNERSHIP
Prior to any proposed Transfer of Voting Shares that is permitted under this
Agreement, unless there is in effect a registration statement under the
Securities Act covering the proposed Transfer, the Purchaser shall give written
notice to the Company of its intention to effect such Transfer. Such notice
shall describe the manner and circumstances of the proposed Transfer in
sufficient detail, and, unless the sale is made under Rule 144(k), shall be
accompanied, at Purchaser's expense by either (i) an opinion of counsel (whose
opinion shall be addressed to the Company and reasonably satisfactory to the
Company) to the effect that the proposed transfer of the Voting Shares may be
effected without registration under the Securities Act or (ii) a "no action"
letter from the SEC to the effect that the Transfer of such securities without
registration will not result in a recommendation by the staff of the SEC that
action be taken with respect thereto, whereupon the Purchaser shall be entitled
to transfer such restricted securities in accordance with the terms of the
notice delivered by Purchaser to the Company, to the extent such Transfer is
otherwise permitted under this Agreement.
5. VOTING OBLIGATIONS
5.1. During the Voting Period, Purchaser shall take such action as may be
required so that all Voting Shares Beneficially Owned by any member of the
Purchaser Control Group (and shall use all reasonable efforts to cause any
Voting Shares held by any Affiliate of Purchaser that is not a member of the
Purchaser Control Group or any 13D Group of which Purchaser or any Affiliate of
Purchaser is a party) are voted for or cast or cause to be voted or cast in the
same manner as recommended by the Board of Directors of the Company, and if no
such recommendation is made then in the same manner and proportion as the votes
cast by the holders of the Voting Shares other than Purchaser or any Affiliate
of Purchaser or any 13D Group of which Purchaser or any Affiliate of Purchaser
is a party.
12
5.2. During the Voting Period, Purchaser, as the holder of Voting Shares, shall
be present, in person or by proxy and shall cause all members of the Purchaser
Control Group Beneficially Owning Voting Shares to be so present, and shall use
reasonable efforts to cause any of its Affiliates that is not a member of the
Purchaser Control Group and all 13D Groups of which it or any member of the
Purchaser Control Group or Affiliates is a party Beneficially Owning Voting
Shares to be so present, at all meetings of shareholders of the Company so that
all Voting Shares Beneficially Owned by it, any of its Affiliates, any 13D
Groups of which it or any of its Affiliates is a party and all members of the
Purchaser Control Group will be counted for purposes of determining the present
of a quorum at such meetings.
5.3. During the Voting Period, Purchaser agrees not to exercise and to cause all
members of the Purchaser Control Group not to exercise and to use all reasonable
efforts to cause any Affiliate of Purchaser that is not a member of the
Purchaser Control Group and any 13D Group of which Purchaser or any Affiliate of
Purchaser is a party not to exercise dissenter's rights, if any, that it may
have with respect to Ordinary Shares under applicable law in connection with any
merger, consolidation or other reorganization or plan of arrangement which is
approved by the Company's Board of Directors, regardless of the manner in which
Purchaser or any member of the Purchaser Control Group or any Affiliate of
Purchaser that is not a member of the Purchaser Control Group or any 13D Group
of which Purchaser or any Affiliate of Purchaser is a party, voted or cast
Ordinary Shares Beneficially Owned by Purchaser with respect to such
transaction.
6. BOARD MEMBER
The Company agrees, that subject to the Purchaser's compliance at such time with
the provisions of Section 4.1 of this Agreement and for as long as Purchaser
Beneficially Owns Voting Shares constituting at least 5% of the Total Current
Voting Power, it shall cause one (1) nominee of Purchaser to be appointed to the
Board of Directors of the Company as a director of a class to be determined by
the Board of Directors of the Company. At such time that Purchaser Beneficially
Owns Voting Shares constituting less than 5% of the Total Current Voting Power
Purchaser agrees to cause its nominee to resign from the Board of Directors of
the Company and the Company shall be permitted to take all action necessary to
remove such Purchaser's nominee from the Company's Board of Directors. At such
time that Purchaser Beneficially Owns Voting Shares constituting less than 5% of
the Total Current Voting Power, as a result of a Transfer by the Purchaser of
Voting Shares, and not as a result of a decrease resulting solely from dilution
of the Purchaser's Beneficial Ownership, Purchaser undertakes to promptly notify
the Company in writing thereof (it being agreed that the filing of a Schedule
13D (or any successor form) with the SEC shall be deemed as if the Purchaser
notified the Company). For purposes of this Section 6, shares owned by USDATA
or any trust or other entity established to cause the liquidation of USDATA's
assets, and shares held under the Escrow Agreement shall be deemed Beneficially
Owned by Purchaser. If the Company is aware of non-compliance by the Purchaser
with the provisions of Section 4.1 of this Agreement, it shall so notify the
Purchaser, provided that failure to so notify the Purchaser shall not prejudice
any of the Company's remedies or rights.
13
7. TRANSFER OF VOTING SHARES
7.1. In the event that at any time any person becomes the holder of Voting
Shares by one or more Transfers of Voting Shares by Purchaser, except for
Transfers (a) by open market sales made under Rule 144 and permitted hereunder;
(b) by open market sales made through broker dealers pursuant to the
Registration Statement and permitted hereunder; or (c) to any persons who are
not Affiliates of Purchaser and own, after such transfer less than 1% of the
Total Current Voting Power, then as a condition to any such Transfer, the
Transferee of such Ordinary Shares (each, a "TRANSFEREE") shall execute and
deliver to the Company a written undertaking in the form of EXHIBIT C hereto
(the "UNDERTAKING") under which such Transferee agrees to be bound by and
subject to all the terms and conditions of this Agreement except for Sections 1
and 3. Purchaser shall be responsible for ensuring that each Transferee
executes and delivers to the Company the Undertaking.
7.2. In the event that a Transferee is required to deliver an Undertaking under
Section 7.1, (i) Transferee shall be deemed to be "Purchaser" under Sections 4
(Standstill Obligations and Transfer Restrictions) and 5 (Voting Obligations)
and all references to Purchaser thereunder shall also be deemed to refer to
Transferee, (ii) the amount of Voting Shares permitted to be Transferred under
Section 4.2.4. by the Purchaser and all Transferees together shall be the
Quarterly Amount which shall be allocated among the Purchaser and Transferees as
agreed upon among them in writing and reported to the Company in writing prior
to any Transfer under Section 4.2.4, (iii) the right to nominate a director
under Section 6 shall continue to be applicable only to Purchaser and there
shall be no aggregation of the Voting Shares held by Purchaser and Transferees
for the purpose of determining the right nominate a director under such Section
6.
7.3. Notwithstanding the foregoing, in the event that and as long as the
Transferee and any and all of its Affiliates together Beneficially Own less than
1% of the Total Current Voting Power, then such Transferee shall not be required
to execute the Undertaking and become subject to this Agreement, and Purchaser
hereby agrees and undertakes not to make any Transfer that requires the
Transferee to execute and deliver the Undertaking to the Company, unless such
Undertaking is duly executed by the Transferee and was delivered to the Company
and any such Transfer that does not comply with such requirement shall be deemed
void ab initio.
8. DEFINITIONS
For the purpose of this Agreement, the following terms shall have the meanings
specified with respect thereto below:
"ADDITIONAL SHARES" shall mean the (i) Ordinary Shares issued by the Company to
USDATA pursuant to the Asset Purchase Agreement (and all securities issued with
respect to or in exchange for such shares pursuant to stock splits, stock
dividends, recapitalizations and similar events) and distributed by USDATA to
the Purchaser; and (ii) the Ordinary Shares issued by the Company to the Escrow
Agent pursuant to the Escrow Agreement (and all securities issued with respect
to or in exchange for such shares pursuant to stock splits, stock dividends,
recapitalization and similar events) and released to the Purchaser in accordance
with the terms therein, if any.
"AFFILIATE" shall have the meaning set forth in Rule 12b-2 of the Exchange Act;
PROVIDED, HOWEVER, that for purposes of this Agreement, the Purchaser and its
Affiliates, on the one hand, and USDATA, on the other, shall be deemed to be
"Affiliates" of one another; and provided further, that Portfolio Companies
shall not be deemed to be Affiliates of the Purchaser.
Any person shall be deemed the "BENEFICIAL OWNER" of and shall be deemed to
"BENEFICIALLY OWN" and to have "BENEFICIAL OWNERSHIP" of any securities:
(i) which such person (or, if such person is the Purchaser, any member of
the Purchaser Control Group) beneficially owns, directly or indirectly, for
purposes of Section 13(d) of the Exchange Act and Rule 13d-3 thereunder (or
any comparable or successor law or regulation);
14
(ii) which a person (or, if such person is the Purchaser, any member of the
Purchaser Control Group) has the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a
bona fide public offering of securities), or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; or
(iii) which are beneficially owned, directly or indirectly, by any other
person (or any Affiliate thereof) with which a person (or, if such person
is the Purchaser, any member of the Purchaser Control Group) has any
agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a
bona fide public offering of securities) for the purpose of acquiring,
holding, voting or disposing of any securities of the Company.
"CONTROL" or "CONTROLLED BY" shall have the meaning set forth in Rule 12b-2 of
the Exchange Act.
"ESCROW" or "ESCROW AGREEMENT" shall mean the Escrow Agreement among the
Company, USDATA, the Escrow Agent and the Purchaser executed at the closing of
the Asset Purchase Agreement.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"GOVERNMENTAL AUTHORITY" shall mean any Israeli, United States (federal, state
or local) or foreign court or tribunal, or administrative, governmental or
regulatory body, agency or authority.
"LOCK UP PERIOD" shall mean the period beginning on the Closing Date and ending
on the first anniversary of the Closing Date.
"NON-VOTING CONVERTIBLE SECURITIES" shall mean any securities which are
convertible into, exchangeable for or otherwise exercisable to acquire Voting
Shares of the Company, including convertible securities, warrants, rights or
options to purchase Voting Shares.
"PERSON" shall mean an individual, corporation, partnership, limited liability
company, association, trust, or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"PORTFOLIO COMPANY" shall mean any Affiliate of the Purchaser in which the
Purchaser has Beneficial Ownership of not more than 50% of such person's
outstanding voting securities and does not have the right to appoint the
majority of the Board of Directors or other governing body of such person.
"PURCHASER CONTROLLED PERSON" shall mean any person in which the Purchaser has
Beneficial Ownership of more than 50% of such person's outstanding voting
securities, or has the right to appoint the majority of the Board of Directors
or other governing body of such person.
"PURCHASER CONTROLLING PERSON" shall mean any person, or group of persons, that
has Beneficial Ownership of more than 50% of the Purchaser's outstanding voting
securities, or has the right to appoint the majority of the Board of Directors
or the entity that Controls the Purchaser.
"PURCHASER CONTROL GROUP" shall mean the Purchaser, a Purchaser Controlled
Person, a Purchaser Controlling Person or a Purchaser Common Control Person.
"PURCHASER COMMON CONTROL PERSON" shall mean any person, or group of persons,
that a Purchaser Controlling Persons has Beneficial Ownership of more than 50%
of such person's outstanding voting securities, or has the right to appoint the
majority of the Board of Directors or other governing body of such person.
15
"PURCHASER'S KNOWLEDGE" shall mean the actual knowledge of any of the executive
officers and management personnel of the Purchaser and the knowledge that any of
them would have acquired in the performance of his or her duties as performed by
a prudent person in such position.
"REGISTRATION RIGHTS AGREEMENT" shall mean the Registration Rights Agreement,
entered into pursuant to the Asset Purchase Agreement, among the Company,
Purchaser and any other parties thereto.
"REGISTRATION STATEMENT" shall mean a registration statement on form F-3
prepared under the Registration Rights Agreement for the resale of Closing
Shares or Additional Shares by Purchaser, and which was declared and continues
to be effective under the Securities Act.
"RULE 144" shall mean Rule 144 as promulgated under the Securities Act.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"STANDSTILL LIMIT" shall mean a number of Ordinary Shares equal to the number of
the Closing Shares, which shall be increased solely by and to the extent of the
total number of Additional Shares actually distributed to Purchaser by USDATA or
released to Purchaser pursuant to the Escrow Agreement.
"STANDSTILL PERIOD" shall mean the period beginning on the Closing Date and
ending on the seventh (7) anniversary of the Closing Date.
"TOTAL CURRENT VOTING POWER" shall mean, with respect to the Company, at the
time of determination of Total Current Voting Power, the total number of votes
which may be cast in the election of members of the Company's board of directors
if all securities entitled to vote in the election of such directors are present
and voted, excluding any Ordinary Shares held in treasury or by a wholly owned
subsidiary of the Company.
"VOLUME RESTRICTION PERIOD" shall mean the period of time beginning on the first
anniversary of the Closing Date and ending on the fifth anniversary of such
Closing Date.
"VOTING PERIOD" shall mean the period beginning on the Closing Date and ending
on the fifth anniversary of the Closing Date.
"VOTING SHARES" shall mean Ordinary Shares and any other securities of the
Company or its successor having the power to vote in the election of members of
the Board of Directors of the Company or its successor.
"13D GROUP" means any group of persons formed for the purpose of acquiring,
holding, voting or disposing of Voting Shares which would be required under
Section 13(d) of the Exchange Act, and the rules and regulations promulgated
thereunder, to file a statement on Schedule 13D (a "SCHEDULE 13D") pursuant to
Rule 13d-1(a) of the Exchange Act or a Schedule 13G under the Exchange Act
pursuant to Rule 13d-1(c) with the SEC as a "person" within the meaning of
Section 13(d)(3) of the Exchange Act if such group Beneficially Owned Voting
Shares representing more than 5% of any class of Voting Shares then outstanding.
16
9. MISCELLANEOUS
9.1. GOVERNING LAW; JURISDICTION AND VENUE
9.1.1. This Agreement is to be construed in accordance with and governed by
the laws of the State of Delaware, United States of America without giving
effect to such jurisdictions principles of conflicts of laws.
9.1.2. Any legal action or other legal proceeding relating to this
Agreement or the enforcement of any provision of this Agreement may be
brought or otherwise commenced exclusively in any court located in the
State of Delaware, United States of America. Each party to this Agreement:
9.1.2.1. expressly and irrevocably consents and submits to the
exclusive jurisdiction of each court located in the State of Delaware,
United States of America in connection with any such legal proceeding,
including to enforce any settlement, order or award;
9.1.2.2. agrees that each court located in the State of Delaware,
United States of America shall be deemed to be a convenient forum; and
9.1.2.3. waives and agrees not to assert (by way of motion, as a
defense or otherwise), in any such legal proceeding commenced in any
court located in the State of Delaware, United States of America, any
claim that such party is not subject personally to the jurisdiction of
such court, that such legal proceeding has been brought in any
inconvenient forum, that the venue of such proceeding is improper or
that this Agreement or the subject matter hereof or thereof may not be
enforced in or by such court.
9.1.2.4. Each party hereto agrees to the entry of an order to enforce
any resolution, settlement, order or award made pursuant to this
Section 9.1 by the courts located in the State of Delaware, United
States of America and in connection therewith hereby waives, and
agrees not to assert by way of motion, as a defense or otherwise, any
claim that such resolution, settlement, order or award is inconsistent
with or violative of the laws or public policy of the laws of the
State of Delaware, United States of America or any other jurisdiction.
9.2. TERMINATION.
9.2.1. This Agreement may be terminated as follows:
9.2.1.1. by mutual written consent of both parties hereto.
9.2.1.2. by either Company or the Purchaser, as the case may be, upon
termination of the Asset Purchase Agreement under Sections 8 (other
than under subsections Sections 8.1.3(ii), (iii) or (iv), 8.1.4 or
8.1.6) of the Asset Purchase Agreement.
9.2.1.3. by the Company if (i) there shall have been a breach of any
representations or warranties on the part of Purchaser set forth in
this Agreement or if any representations or warranties of Purchaser
shall have become untrue such that the conditions set forth in Section
3.2.1 would be incapable of being satisfied by the date of the
closing under the Asset Purchase Agreement, PROVIDED that the Company
has not breached any of its obligations hereunder in any material
respect; or (ii) there shall have been a breach by Purchaser of any of
its covenants or agreements hereunder which has not been cured within
15 days of a written notice from the Company notifying Purchaser of
such breach.
17
9.2.1.4. by the Purchaser if (i) there shall have been a breach of any
representations or warranties on the part of the Company set forth in
this Agreement or if any representations or warranties of the Company
shall have become untrue such that the conditions set forth in Section
3.3.1 would be incapable of being satisfied by the date of the
closing under the Asset Purchase Agreement, PROVIDED that the
Purchaser has not breached any of its obligations hereunder in any
material respect; or (ii) there shall have been a breach by the
Company of any of its covenants or agreements hereunder which has not
been cured within 15 days of a written notice from the Purchaser
notifying the Company of such breach.
9.2.2. In addition, the provisions of Sections 4, 5 and 7 of this
Agreement may be terminated by either party, provided Closing has occurred,
as follows:
9.2.2.1. upon Purchaser's disposition to persons unaffiliated with the
Purchaser and with whom the Purchaser is not otherwise acting in
concert of more than seventy five percent (75%) of the aggregate
number of Closing Shares and Additional Shares issued, transferred or
distributed to Purchaser, as the case may be, or such time as
Purchaser's Beneficial Ownership of the then outstanding Voting Shares
together with the Beneficial Ownership of Voting Securities by all
members of the Purchaser Control Group, Affiliates of Purchaser and
other 13D Group members, in the aggregate, is less than two percent
(2%).
9.2.2.2. upon a sale of substantially all of the assets of the Company
or upon a change in ownership of the Company such that persons who
were not shareholders of the Company prior to such transaction own
more than 50% of the Total Current Voting Power after such
transaction.
9.3. ASSIGNMENT
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assignees. Except with the
prior written consent of the other party in writing, neither party shall be
permitted to assign this Agreement in whole or in part.
9.4. ENTIRE AGREEMENT; AMENDMENT
This Agreement, the Exhibits and Schedules attached hereto and the agreements
referred to herein (to the extent referred to herein) constitute the full and
entire understanding and agreement between the parties with regard to the
subject hereof. Except as expressly provided herein, neither this Agreement nor
any term hereof may be amended, waived, discharged or terminated other than by a
written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought.
18
9.5. NOTICES
All notices and other communications pursuant to this Agreement shall be in
writing and shall be given (i) by delivery in person (and shall be deemed to
have been duly given upon such delivery), (ii) by facsimile (and shall be deemed
to have been duly given after transmission in full with electronic confirmation
of transmission, if delivered during recipient's business hours), (iii) by
nationally-recognized overnight courier (and shall be deemed to have been duly
given two days after delivery to the courier service) or (iv) by registered or
certified mail (return receipt requested), postage prepaid (and shall be deemed
to have been duly given five days after delivery to the mail service), to the
parties at the addresses set forth below or to such other address as the party
to whom notice is to be given may have furnished to the other parties hereto in
writing in accordance herewith:
if to the Company: Tecnomatix Technologies Ltd.
Xxxxx Xxxxx, 00 Xxxxxxx Xxx.
Xxxxxxxxx 00000, Xxxxxx
Telecopier: 000-0-0000000
Attention: Legal Counsel
with a copy to: Meitar, Liquornik, Geva & Co.
00 Xxxx Xxxxxx Xxxxxx Xxxx
Xxxxx Xxx 00000, Israel
Telecopier: 972-3-610-3111
Attention: Xxx Xxxxxxx, Adv.
if to the Purchaser to: SCP Private Equity Partners II, L.P.
000 Xxxxx Xxxx Xxxxx, Xxxxxxxx 000
Xxxxx, Xxxxxxxxxxxx 00000, XXX
Attention: Xxxxxxx X. Xxxxxx, Esq.
Fax: 000.000.0000
with a copy to: Xxxx Xxxxx LLP
0000 Xxxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxxxxxxxxx 00000, XXX
Attention: Xxxxxxx X. Xxxxxx, Xx., Esq.
Fax: 000 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
9.6. DELAYS OR OMISSIONS
No delay or omission to exercise any right, power or remedy accruing to a party
under this Agreement shall impair any such right, power or remedy nor shall it
be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring.
9.7. EXPENSES
Except as otherwise specifically provided herein, the Company and Purchaser
shall bear their own expenses incurred with respect to this Agreement and the
transactions contemplated hereby.
19
9.8. SPECIFIC PERFORMANCE; INJUNCTIONS
The parties hereto agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with
their specific intent or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions, without bond, to
prevent or cure breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof, this being in addition to any
other remedy to which they may be entitled by law or equity, and any party sued
for breach of this Agreement expressly waives any defense that a remedy in
damages would be adequate.
9.9. STOP TRANSFER ORDERS; LEGENDS.
The stock certificates representing the Closing Shares and the Additional Shares
shall bear legends and be subject to stop transfer orders in accordance with the
following legend (in addition to any legend required under applicable state
securities law):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A STOCK PURCHASE
AGREEMENT (A COPY OF WHICH MAY BE OBTAINED UPON WRITTEN REQUEST FROM THE
ISSUER). TRANSFER AND VOTING OF THE SHARES ARE RESTRICTED BY THE TERMS OF THE
STOCK PURCHASE AGREEMENT, AND BY ACCEPTING ANY INTEREST IN SUCH SHARES THE
PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME
BOUND BY THE APPLICABLE PROVISIONS OF SAID STOCK PURCHASE AGREEMENT.
If, and to the extent the Closing Shares and the Additional Shares are no longer
subject to the restrictions described in the legends set forth above, upon the
request of the Purchaser or the transferee of such shares, the Company shall
cause its transfer agent to remove the appropriate legend set forth above from
the certificates evidencing the Closing Shares and the Additional Shares or
issue to the Purchaser or such transferee new certificates therefore free of
such legend.
9.10. FURTHER ASSURANCES
The parties hereto shall do and perform or cause to be done and performed all
such further acts and things and shall execute and deliver all such other
agreements, certificates, instruments or documents as any other party may
reasonably request from time to time in order to carry out the intent and
purposes of this Agreement and the consummation of the transactions contemplated
hereby. Without limitation, Purchaser hereby agrees to execute the undertaking
in the form attached hereto as EXHIBIT A in connection with the approval of the
OCS to the transactions contemplated hereby.
9.11. FACSIMILE; COUNTERPARTS
This Agreement may be executed by facsimile and in any number of counterparts,
each of which may be executed by fewer than all of the parties, each of which
shall be enforceable against the parties actually executing such counterparts
and all of which together shall constitute one instrument.
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9.12. SEVERABILITY
In the event that any provision of this Agreement becomes or is declared by a
court of competent jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without said provision as
close as possible to the intent of the parties.
9.13. INTERPRETATION.
9.13.1. The various section headings are inserted for purposes of reference
only and shall not affect the meaning or interpretation of this Agreement
or any provision hereof. The definitions contained in this Agreement are
applicable to the singular as well as the plural of such terms and to the
masculine as well as to the feminine and neuter genders of such terms, as
well as to the noun and verb forms of such definitions.
9.13.2. Each party hereto acknowledges that it has been represented by
competent counsel and participated in the drafting of this Agreement, and
agrees that any applicable rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be
applied in connection with the construction or interpretation of this
Agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Parties hereto have executed this Share Purchase
Agreement as of the day and year first above written.
TECNOMATIX TECHNOLOGIES LTD.
By: ______________________________
Name:
Title:
SCP PRIVATE EQUITY PARTNERS II, L.P.
By: SCP Private Equity II General Partner, L.P.,
its general partner
By: SCP Private Equity II, LLC,
its manager
By:____________________________________
[Signature Page to Tecnomatix Share Purchase Agreement, July 29, 2003]
22
EXHIBIT A
OCS UNDERTAKING
To: The Research Committee
The Office of the Chief Scientist
X.X. Xxx 0000
XXXXXXXXX 00000
Relating to Projects File Numbers: per the attached list attached hereto as
Annex I.
Project Titles: per the attached list attached hereto as Annex I.
(the "RESEARCH AND DEVELOPMENT PROJECTS")
UNDERTAKING AND AGREEMENT
We the undersigned, having contemplated to purchase shares of Tecnomatix
Technologies Ltd. ("TECNOMATIX"), the holder of 100% of the outstanding share
capital of Tecnomatix Ltd. ("TL"):
Recognizing that the Research and Development Projects pursuant to the list
referred to above, are currently being financially supported by the Government
of the State of Israel through the Office of the Chief Scientist under the
Encouragement of Research and Development in Industry Law 5744-1984 (the "LAW")
and the regulations pursuant to the Law; and recognizing that the Law places
strict constraints on the transfer of know-how and/or production rights, making
all such transfers subject to the absolute discretion of the Research Committee
of the Office of the Chief Scientist, acting in accordance with the aims of the
Law, and requiring that any such transfer receive the prior written approval of
the Research Committee;
DO HEREBY UNDERTAKE,
To observe strictly all the requirements of the Law as well as the regulations
promulgated pursuant to the Law, as applied to Tecnomatix and TL and as directed
by the Research Committee, in particular those requirements of Section 19 of the
Law relating to the prohibition on the transfer of know-how and/or production
rights.
SCP PRIVATE EQUITY PARTNERS II, L.P.
By: SCP Private Equity II General Partner, L.P.,
its general partner
By: SCP Private Equity II, LLC,
its manager
By:____________________________________
Date: __________________________________
23
ANNEX I
TO OCS UNDERTAKING
PROJECT NUMBER FILES UNDER EACH PROJECT
6231 6231 12880 18901 22011 25866 32479
-------------------- ----------------- ------------------ ----------------- ----------------- ------------ -----------
6896 12883 18903 22012 25869 32481
-------------------- ----------------- ------------------ ----------------- ----------------- ------------ -----------
8397 12884 18904 23552 26874
-------------------- ----------------- ------------------ ----------------- ----------------- ------------ -----------
8848 14329 18905 23553 26875
-------------------- ----------------- ------------------ ----------------- ----------------- ------------ -----------
9381 14331 20393 23554 26876
-------------------- ----------------- ------------------ ----------------- ----------------- ------------ -----------
10175 15563 20394 24519 26872
-------------------- ----------------- ------------------ ----------------- ----------------- ------------ -----------
10183 15621 20395 24523 28174
-------------------- ----------------- ------------------ ----------------- ----------------- ------------ -----------
11052 17425 20396 24524 28175
-------------------- ----------------- ------------------ ----------------- ----------------- ------------ -----------
11151 17426 20399 24525 28176
-------------------- ----------------- ------------------ ----------------- ----------------- ------------ -----------
11152 17427 20400 24526 28178
-------------------- ----------------- ------------------ ----------------- ----------------- ------------ -----------
12000 17428 22009 25867 28179
-------------------- ----------------- ------------------ ----------------- ----------------- ------------ -----------
12001 18900 22010 25868 32477
-------------------- ----------------- ------------------ ----------------- ----------------- ------------ -----------
13702 13702
-------------------- ----------------- ------------------ ----------------- ----------------- ------------ -----------
14691
-------------------- ----------------- ------------------ ----------------- ----------------- ------------ -----------
16214
-------------------- ----------------- ------------------ ----------------- ----------------- ------------ -----------
17429
-------------------- ----------------- ------------------ ----------------- ----------------- ------------ -----------
18902
-------------------- ----------------- ------------------ ----------------- ----------------- ------------ -----------
20398
-------------------- ----------------- ------------------ ----------------- ----------------- ------------ -----------
23541 23541
-------------------- ----------------- ------------------ ----------------- ----------------- ------------ -----------
24
EXHIBIT C
FORM OF TRANSFEREE UNDERTAKING
To: Tecnomatix Technologies Ltd.
(the "COMPANY")
TRANSFEREE UNDERTAKING AND AGREEMENT
In accordance with the provisions of Section 7.1 of the Share Purchase
Agreement by and between SCP Private Equity Partners II, L.P. (the "PURCHASER")
and the Company, dated July 29, 2003 (the "AGREEMENT"), and as a condition to
any Transfer of any Voting Shares by the Purchaser to the undersigned, the
undersigned hereby agrees and undertakes to be bound by and subject to all of
the terms and conditions of the Agreement, as if was a "Purchaser" under the
Agreement and all references in the Agreement to the Purchaser shall be deemed
to be references to the undersigned. CAPITALIZED TERMS USED BUT NOT DEFINED
SHALL HAVE THE MEANING ASCRIBED TO THEM UNDER THE AGREEMENT.
[TRANSFEREE'S NAME ]
Date:_____________________
By:______________________
Name:
Title:
25
