AGREEMENT FOR THE SALE AND PURCHASE OF SHARES IN DEFENSE INDUSTRIES INTERNATIONAL, INC.
EXHIBIT
99.1
-
DATED 13 October 2010 -
by
and between
Xx.
Xxxxx Fostbinder as the heir of Xx. Xxxxxx Fostbinder
and
Xx. Xxxxx
Fostbinder
and
Xx.
Xxxxxx Fostbinder
and
Xx.
Xxxxxx Xxxxxx
and
Achiam
Investments Ltd.
1
THIS AGREEMENT is made on
the 13th day of October 2010,
Between
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(1)
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Xx. Xxxxx
Fostbinder,
a citizen of the State of Israel, bearer of an Israeli identification card
number 003915527, residing at 36, Sderot Ha'Tzionut, Ashkelon, Israel
(Meira);
and
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(2)
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Xx. Xxxxxx Fostbinder, a
citizen of the State of Israel, bearer of an Israeli identification card
number 038589172, residing at 00 Xxxxxx Xxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx
(Xxxxxx);
and
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(3)
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Xxxxxx Xxxxxx, a citizen
of the State of Israel, bearer of an Israeli identification card number
028801504, residing at 00 Xxxx Xxxxxx, Xxxxxxxx, Xxxxxx (Avital);
and
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(4)
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Achiam Investments Ltd.,
a company incorporated under the laws of the State of Israel, registration
number 514452895, whose registered office is at 0 Xxx Xxxxx Xxxxxx Xxx
Xxxx, Xxxxxx (the Purchaser),
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(hereinafter
each of Xxxxx, Xxxxxx and Avital a Vendor and
collectively the Vendors
and a Vendor and the Purchaser each a Party and
collectively the Parties).
Whereas
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(A)
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Defense Industries
International, Inc., is a corporation organized under the laws of
the State of Nevada, the United States of America, whose registered
offices at 0 Xxxxxx Xxxxxx, Xxxxxxxxxx Xxxx Xxxxxx, Xxxxxx (the Company).
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(B)
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Pursuant
to a succession order issued by the family court at Ashkelon, Israel on 27
October 2009 Meira is the sole heir of the late Xx. Xxxxxx Fostbinder and
has the right to be registered as the sole owner of nineteen million, four
hundred forty thousand two hundred and twelve (19,440,212) shares of
common stock of the Company held by the late Mr. Fostbinder in addition to
the nine thousand seven hundred and eighty eight (9,788) shares of common
stock of the Company held by Meira at the date
hereof.
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(C)
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Xxxxxx
and Avital each holding five thousand (5,000) shares of common stock of
the Company.
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(C)
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The
Purchaser wishes to acquire at the Closing Date (as such term is defined
below): (i) nineteen million, four hundred and fifty thousand (19,450,000)
shares of common stock of the Company, constituting approximately sixty
nine point zero nine two eight (69.0928) per cent of the issued and
outstanding share capital of the Company at the Closing Date from Meira
(the Meira Sale
Shares); and (b) an additional five thousand (5,000) shares of
common stock of the Company, constituting approximately zero point zero
one seven seven six (0.01776) per cent of the issued and
outstanding share capital of the Company at the Closing Date, to be
acquired from Xxxxxx (the Xxxxxx Sale
Shares); and (c) an additional five thousand (5,000) shares of
common stock of the Company, constituting approximately zero point zero
one seven seven six (0.01776) per cent of the issued and outstanding share
capital of the Company at the Closing Date, to be acquired from Avital
(the Avital Sale
Shares and the Meira Sale Shares and the Xxxxxx Sale Shares,
collectively the Sale
Shares) and, therefore, the Purchaser wishes to acquire in the
aggregate per the Closing Date nineteen million and four hundred and sixty
thousand (19,460,000) Sale Shares constituting approximately sixty nine
point one two eight three (69.1283) per cent of the issued and outstanding
share capital of the Company on a fully diluted basis at the Closing
Date.
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(D)
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The
Vendors have agreed to sell all of the Sale Shares to the Purchaser for
the consideration and upon the terms set out in this
Agreement.
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It is agreed as follows:
2
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1.
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Interpretation
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1.1.
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2.
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Sale of the Sale
Shares and the Purchase
Price
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2.1.
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The
Vendors shall sell, and the Purchaser shall purchase, the Sale Shares with
effect from the close of business on the Closing Date (as such term is
defined below). The Sale Shares shall be sold free from all Encumbrances
of any nature whatsoever, together with all rights attaching to them
including the right to receive all distributions and dividends as
declared, paid or made in respect of the Shares after
Closing.
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2.2.
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The
Vendors represent, warrant and undertake that they have or cause that at
Closing will have the right to sell and transfer full legal and beneficial
title and ownership to and of the Sale Shares free from all Encumbrances
and any other rights exercisable by third
parties.
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2.3.
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The
total aggregate purchase price payable by the Purchaser to the Vendors for
the Sale Shares shall be the sum of US$2,142,852 (the Purchase
Price) subject to the provisions set out in Clause 5
below.
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2.4.
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Each
Vendor shall be paid a portion of the Purchase Price pro rata to the
number of Sale Shares sold by such respective
Vendor.
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2.5.
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The
Vendors and the Purchaser agree that the Purchase Price shall be paid in
accordance with the payment schedule set out in Schedule 4 (the Payment
Schedule).
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2.6.
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Each
Vendor shall be paid a respective portion of the each Payment as set out
in Schedule 4
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2.7.
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If
any payment is made in satisfaction of a liability arising under a Vendor
Obligation, it shall be set off and adjust against the Purchase
Price.
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3.
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Closing
and Closing Date
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3.1.
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Subject
to the waiver or fulfilment of the Conditions, the Closing shall take
place at the offices of the Legal Counsel on 13 October 2010 or, if Clause
4.1.1 applies, such date as the
Purchaser or Vendors may specify pursuant to that Clause (the Closing
Date).
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3.2.
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Prior
to or on the Closing Date, each of the Vendors and the Purchaser shall
deliver or perform (or cause that there is delivered or performed) all
those documents, items and actions respectively listed in relation to that
Party, as the case may be, in Schedule
5
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3.3.
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The
Purchaser shall, upon fulfilment of all obligations set out in Schedule 5,
the Conditions Precedent and covenants, and in satisfaction of its
obligations under Clauses 2 and 3 of Schedule 5, cause the Payments, on
each Payment's respective due date, in accordance with the provisions set
out in this respect in Schedule 4
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3.4.
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The
Vendors shall, upon fulfilment of all obligations set out in Schedule 5,
the Conditions and covenants, and in satisfaction of its obligations under
this Agreement, transfer on the Closing
Date:
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3
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3.4.1.
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a
total of nine million seven hundred thirty thousand (9,730,000) Sale
Shares, amounting to approximately thirty four point five six four
(34.564) per cent of the Company's outstanding and issued share capital as
of the Closing Date, to the Purchaser;
and
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3.4.2.
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a
total of nine million seven hundred thirty thousand (9,730,000) Sale
Shares, amounting to approximately thirty four point five six four
(34.564) per cent of the Company's outstanding and issued share capital as
of the Closing Date (the Escrow
Shares), to the Escrow Agent, who will hold and release the Escrow
Shares in accordance with the terms and conditions set out in the Escrow
Agreement (as defined below).
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3.5.
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The
Escrow Shares shall be registered in the name of the Purchaser and be held
in escrow by the Escrow Agent for the benefit of the Purchaser and the
Vendors in accordance with and subject to the provisions set out in this
respect in the Escrow Agreement. The Escrow Shares shall be released from
escrow against the actual payment by the Purchaser of the First, Second
and Third Payments (as adjusted in accordance with the provisions set out
in Clause 5 below) in accordance
with the provisions set out in the Escrow
Agreement.
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3.6.
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For
the avoidance of doubt, unless the Escrow Shares have been released from
escrow due to the Purchaser committing an Entitling Breach (as such term
is defined in the Escrow Agreement) all of the rights in the Escrow
Shares, inter alia, including, voting rights, right to dividends and/or
any other right shall be vested and remain with the Purchaser, however,
any sums, assets, or securities, including dividends to be received in
respect of the Escrow Shares shall be held in escrow by the Escrow Agent
until the Escrow Shares are released and shall be released together with
the Escrow Shares.
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3.7.
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The
Vendors and the Purchaser shall negotiate, in good faith and with a view
to agreeing prior to the Closing Date, whether additional security will be
provided by the Purchaser to further secure its obligations under this
Agreement and, if such is agreed upon, the form and amount of such
additional security.
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4.
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Postponement
of Closing
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4.1.
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If
any of the Vendors or the Purchaser fails or is/are unable to perform any
of its/their obligations (Closing
Obligations) set out in Schedule 5, which are required to be
performed by it on or before the Closing Date (and whichever of the
Vendors or the Purchaser is the defaulter being referred to as the Defaulting
Party and the other, (collectively) the Non-Defaulting
Party), the
Non-Defaulting Party shall not be obliged to complete the sale and
purchase of the Sale Shares and may, in its absolute discretion, by
written notice to the Defaulting Party at the time of the Closing Date
would otherwise be due to take
place:
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4.1.1.
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elect
to defer the Closing Date and the Closing by not more than thirty (30)
Business Days after the original applicable date for the Closing to such
other date as it may specify in such notice (in which event the provisions
of this Clause 4.1.1 shall apply,
mutatis mutandis,
if the Vendors or the Purchaser fails or is unable to perform any of its
Closing obligations set out in Schedule 5 on such other date);
or
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4
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4.1.2.
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elect
to effect the Closing on that date and: (i) specify a further date (not
being more than thirty (30) Business Days after the original date for the
Closing) on which the Defaulting Party shall be obliged to complete its
outstanding Closing obligations set out in Schedule 5; and/or (ii) waive
all or some of the Closing obligations set out in Schedule 5 at its sole
discretion.
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If any
outstanding Closing obligations set out in Schedule 5 have not been performed by
the Defaulting Party by the Closing Date (or, if later, the date specified under
Clause 4.1.1), the Non-Defaulting Party
may, by written notice, terminate this Agreement. In such event, neither Party
shall have any claim under this Agreement of any nature whatsoever against the
other Party (except in respect of any rights and liabilities which have accrued
before termination of this Agreement).
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5.
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Adjustment
to the Purchase Price
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5.1.
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The
Parties hereby agree and acknowledge that upon the occurrence of any of
the events set out in Schedule 6 (each an Adjustment
Event), the Purchase Price may be adjusted and reduced (the Adjustment),
as follows:
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5.1.1.
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As
soon as practically possible after the occurrence of an Adjustment Event,
the Purchaser shall provide the Vendors a written notice (an Adjustment
Notice), setting out the details of the Adjustment Event and the
Adjustment Amount (as such term is defined
below).
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5.1.2.
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The
Purchase Price will be adjusted with the amount set out opposite the
corresponding Adjustment Event as set out in Schedule 6 (each an Adjustment
Amount).
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5.1.3.
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Subject
to the approval of the Adjustment by the Vendors in writing, the
Adjustment shall be effected by way of a set off of the relevant
Adjustment Amount or Amounts (as defined below) against the payment of any
of (or a portion thereof) the First, Second, Third, Forth and/or Fifth
Payments. The Vendors shall provide such approval not later than 3
Business Days as of the receipt of an Adjustment Notice and shall not
withhold their approval other than for reasonable
grounds.
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5.1.4.
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It
is hereby agreed that the Adjustment of the Purchase Price shall not
exceed an amount of US$800,000 in the aggregate for all Adjustment Events
collectively.
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6.
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Conditions
Precedent
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6.1.
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The
Closing shall be conditional on the following Conditions Precedent having
been fulfilled or waived in accordance with this
Agreement:
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6.1.1.
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there
shall not be any injunction, judgement, order, decree or ruling of any
governmental authority in effect preventing consummation of the
transactions contemplated by this
Agreement;
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6.1.2.
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the
Vendors shall have received all authorisations, consents and approvals of
any governmental authorities and third parties (if any) on terms
satisfactory to the Purchaser required for the consummation of
the transactions contemplated by this
Agreement;
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5
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6.1.3.
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the
Closing not resulting: (i) in the termination or material change of any
material contract of the Group, which would have a material adverse effect
on the Group; and (ii) any third party having a right to call for and/or
request or demand the issue of any share or loan capital of the Company
and/or the Subsidiaries;
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6.1.4.
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there
being no Material Adverse Effect on the business, operations, assets,
position (financial, trading or otherwise) and profits of the Company and
the Subsidiaries or otherwise, prior to
Closing;
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6.1.5.
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the
Purchaser and the Vendors shall negotiate in good faith and with a view to
agreeing following the date of the Signing, the final form of the To
Be Agreed Form documents set out below and shall duly sign, execute and
deliver, or where relevant, use their reasonably best efforts in order to
cause that the Company, its Subsidiaries and/or any third party shall duly
sign, execute and deliver, the following documents, as soon as practicably
possible after Signing:
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6.1.5.1.
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the
new service agreements (the Service
Agreements) between Mayo-Ben Investments and Development Ltd. and
each of: (i) Export-Erez Ltd.; and (ii) Mayotex Ltd., the terms
of which shall become effective as of 1 October 2010, however subject to
Closing, containing, inter alia, the key commercial terms set out in
Schedule 7;
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6.1.5.2.
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the
non-compete agreements between the Company and each of: (i) Gil
Fostbinder; and (ii) Xxxxxx Fostbinder; (and or their
assignees)
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6.1.5.3.
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the
IP assignment agreements between the Company and each of: (i) Gil
Fostbinder; and (ii) Xxxxxx Fostbinder;
and
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6.1.5.4.
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the
Escrow Agreement (as such term is defined
below).
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6.1.6.
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the
Purchaser shall have received all authorisations, consents and approvals
of any governmental authorities and third parties (if any) on terms
satisfactory to the Purchaser required for the consummation of
the transactions contemplated by this
Agreement
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6.2.
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6.3.
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Each
of the Vendors and the Purchaser undertakes to use all reasonable
endeavours to ensure that the Condition(s) under its control are fulfilled
as soon as possible after the date of this
Agreement.
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7.
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Restrictions
on Vendors, Covenants and
Confidentiality
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7.1.
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As
promptly as practicable after the execution of this Agreement, each Party:
(1) shall make all filings (if any) and give all notices (if any)
required to be made and given by such Party in connection with the
transactions contemplated under this Agreement and the Transaction
Documents; and (ii) shall use all commercially reasonable efforts to
obtain all third party and other consents (if any) required to be obtained
by such Party in connection with or for the purpose of effecting the
transactions contemplated under the Transaction Documents. Each party to
the Transaction Documents shall (upon request) promptly deliver to the
other parties of the Transaction Documents a copy of each such filing
made, each such notice given and each such consent obtained by such party
to the Transaction Documents.
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6
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7.2.
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The
Vendors shall not and shall cause that each of their Affiliates (if any)
or entities and third parties that they hold, directly or indirectly
(whether alone or jointly with others), at least twenty five (25) per cent
of such entity's: (i) share capital or interest; and/or (ii) voting
rights; and/or (iii) rights to appoint members to the board of directors
or similar corporate body, shall not carry on or be engaged or be
interested economically or otherwise in any manner whatsoever, in any
Competing Business during a period of five (5) years after the Closing
Date, unless receiving the prior written consent of the Purchaser. For
this purpose, Competing
Business means any business
carried on by the Group prior to and as at the Closing Date and/or any
business directly or indirectly competing with such
business.
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7.3.
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Each
of the Vendors and the Purchaser undertakes
that:
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7.3.1.
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they
shall maintain Confidential Information in confidence and not disclose
such Confidential Information to any person except as permitted by this
Clause 7.3.1 or with the prior
written approval of the other Party or Parties (as relevant);
and
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7.3.2.
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return
and/or destroy all Confidential Information and/or information or other
documents derived from such Confidential Information upon termination of
this Agreement.
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7.4.
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The
confidentiality obligation under Clause 7.3 shall not apply if and to the
extent that the Vendors, a member of the Group or the Purchaser (as the
case may be) can demonstrate that:
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7.4.1.
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such
disclosure is required by law or regulation or by any stock exchange or
any regulatory, governmental or antitrust body (including, for the
avoidance of doubt, any tax authority) having applicable jurisdiction
(provided that, in such circumstances, the disclosing Party shall first
inform the Purchaser, the Company (in respect of the entire Group) or the
Vendors (as applicable) of its intention to disclose such information and
take into account the reasonable comments of the other
Party);
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7.4.2.
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the
Confidential Information concerned was lawfully in the relevant Party’s
possession (in either case as evidenced by written records) and not
subject to any obligation of secrecy on its part prior to its being
received or held as described in Clause 7.3;
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7.4.3.
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the
Confidential Information concerned has come into the public domain other
than through its fault; or
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7.4.4.
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the
disclosure is required for the purpose of any arbitral or judicial
proceedings arising out of this Agreement or any other Transaction
Document.
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7.5.
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Subject
to the provisions set out in Clause 14 below, the Purchaser shall not
assign and/or sell Control in the Company, irrespective of whether such is
done in a sole transaction or a series of transactions and/or cause that
the Company shall not issue such number of Shares that will result in a
change of Control in the Company to any third party until the completion
of all of the Purchaser payment obligations under this Agreement or after
receiving the prior written consent of the Vendors for such transaction or
transactions. For the purpose of this Clause 7.5, Control
means: (i) fifty (50) per cent of the issued share capital of the Company;
and/or (ii) fifty (50) per cent of the voting rights in the
Company.
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7
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8.
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Warranties
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8.1.
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Each
Party represents and warrants to the other Party as at the date of this
Agreement its respective Warranties and acknowledges that such other Party
has entered into this Agreement in reliance upon the
Warranties.
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8.2.
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The
Parties to this Agreement agree and acknowledge that the transaction under
this Agreement is entered into between the Parties on an "AS-IS" basis and
the Vendors do not make any representations and warranties in respect of
the Company, the Group, the Group's financial, business or trading
condition, other than the Vendor
Warranties.
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8.3.
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The
Vendors Warranties
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The
Vendors hereby each, jointly and severally, represents and warrants to the
Purchaser as follows:
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8.3.1.
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the
information set out in Schedule 2 in respect of the Company's share
capital immediately prior to and immediately following Closing will be, at
Closing, true, complete and
accurate;
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8.3.2.
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all
of the Sale Shares transferred pursuant to this Agreement are fully-paid
or properly credited as fully-paid by the relevant Vendor and each of the
Vendors is the sole legal and beneficial owner of the Sale Shares
transferred by such Vendor;
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8.3.3.
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the
Sale Shares are free and clear of any Encumbrances or other third party
rights;
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8.3.4.
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neither
the Vendors nor any third party acting on their behalf have any rights
whatsoever to call for and/or request or demand the issue of any share or
loan capital of the Company and/or the
Subsidiaries;
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8.3.5.
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the
Company's holdings in the Subsidiaries are as set out in Schedule 3, the
information contained therein is true, complete and correct, and are free
of any Encumbrances or other third party rights. Save for the information
set out in Schedule 8, neither the Company, nor any member of the Group,
owns or has any interest of any nature whatsoever in any shares,
debentures or other securities including in any
partnership;
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8.3.6.
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each
of the Vendors is legally competent and has the authority to enter into
and consummate this Agreement, Transaction Documents and the transactions
contemplated thereunder;
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8.3.7.
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the
Vendors' entry into this Agreement and the Transaction Documents and the
performance of their obligation thereunder will not conflict with, or
otherwise result in a breach of, other undertakings and obligations of the
Vendors;
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8.3.8.
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the
Vendors have obtained all third party and other consents, permits and
authorisations required to enter and consummate this Agreement,
Transaction Documents and the transactions contemplated
thereunder;
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8
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8.3.9.
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there
has not been made or provided any fraudulent misrepresentation,
information and/or documentation associated by the Vendors in reply to
queries of the Purchaser during the course of the Purchaser's employment
and/or due diligence investigation over the
Group;
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8.3.10.
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the
sale of the Sale Shares by the each of the Vendors and the entry into this
Agreement and/or the Transaction Documents to which they are parties and
the performance of their obligations thereunder will
not:
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8.3.10.1.
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result
in violation or breach of any applicable laws or regulations in any
jurisdiction in which the Company or any of the Group companies operates
where such violation or breach would materially affect the Company's
and/or the Vendors' ability to perform their obligations under this
Agreement and/or the Transaction Documents;
and
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8.3.10.2.
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result
in a violation or default with respect to any statute, regulation, order,
decree or judgment of any court or any governmental or regulatory
authority (in any jurisdiction to which the Company or any of the Group
companies is subject) or the Company's constitutional
documents;
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8.3.11.
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for
the period prior to 1 January 2010 the Company and or any other member of
the Group:
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8.3.11.1.
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has
complied in all material respects with the rules and regulations of the
SEC and NASDAQ including, to the extent applicable the Sarbanes Oxley
regulations, other applicable relevant laws and regulations of the United
States and elsewhere, inter alia, including the Foreign Corruption
Practices Act; and
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8.3.11.2.
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has
not and will not infringe or exceed any limits, powers or restrictions or
the terms of any agreement, obligation or commitment to which the Company
and/or any member of the Group is a party or by which the Company and/or
any member of the Group is bound.
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8.3.12.
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The
Vendors undertake, jointly and severally, without limiting the rights of
the Purchaser in any way whatsoever, if there is a breach of any Vendors
Warranty, to pay, or cause payment, in cash, to the Purchaser on demand a
sum equal to the aggregate of:
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8.3.12.1.
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the
amount which, if received by the Group, would be necessary to put the
Group into the position which would have existed had there been no breach
of the Warranty in question; and
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8.3.12.2.
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all
Costs suffered or incurred by the Purchaser, directly or indirectly, as a
result of or in connection with such breach of
Warranty.
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9
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8.3.13.
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The
Tax Warranties set forth in Schedule 9 as at 31 December
2009.
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8.4.
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The
Purchaser's Warranties
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The
Purchaser hereby represents and warrants to the Vendors as follows:
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8.4.1.
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The
Purchaser's Warranties shall be deemed to be repeated immediately before
the Closing by reference to the facts and circumstances then existing as
if references in the Purchaser's Warranties to the date of this Agreement
were references to the date of the
Closing.
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8.4.2.
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The
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Israel, with all requisite power
and authority to carry on its business as now being conducted and to
consummate the transactions as contemplated in this Agreement. The
Purchaser has the financial means to consummate the transaction
contemplated in this Agreement and pay the agreed upon consideration to
the Vendor fully and timely in accordance with the terms of this
Agreement.
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8.4.3.
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The
Purchaser has full corporate power and authority to execute and deliver
the Transaction Documents, to which it is a party, and to consummate the
transactions contemplated under this Agreement and the other Transaction
Documents. The execution and delivery of the Transaction Documents by the
Purchaser, the performance by the Purchaser of its obligations hereunder,
and the consummation by it of the transactions contemplated hereby have
been duly authorized by the Purchaser’s board of directors. No other
corporate proceeding on the part of the Purchaser is necessary to
authorize the execution and delivery of the Transaction Documents to which
the Purchaser is a party, or to consummate the transactions contemplated
under this Agreement and the other Transaction
Documents.
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8.4.4.
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The
Transaction Documents, to which the Purchaser is a party will, when
executed, have been duly and validly executed and delivered by the
Purchaser and constitute a valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with their
terms.
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8.4.5.
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The
execution, delivery and performance by the Purchaser of the Transaction
Documents, to which it is a party, do not and will not: (a) violate or
breach any provision of any law or statute applicable to the Transaction
Documents; or (b) violate, breach, cause a default under the Purchaser's
organizational documents or any agreement or instrument to which the
Purchaser is a party.
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8.4.6.
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Each
of the Purchaser's Warranties shall be construed as a separate warranty
and (save as expressly provided to the contrary) shall not be limited or
restricted by reference to or inference from the terms of any other
Purchaser's Warranty or any other term of this
Agreement.
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8.5.
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The
Warranties shall be deemed to be repeated immediately before the Closing
by reference to the facts and circumstances then existing as if references
in the Warranties to the date of this Agreement were references to the
date of the Closing.
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8.6.
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Each
of the Warranties shall be construed as a separate Warranty and (save as
expressly provided to the contrary) shall not be limited or restricted by
reference to or inference from the terms of any other Warranty or any
other term of this Agreement.
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10
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9.
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Indemnification
and Conduct of Claims
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9.1.
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From
and after the Closing Date, the Purchaser may seek, subject to the terms
of this Agreement, indemnification from each the Vendors, whether jointly
or severally, for any Costs that are suffered or incurred by the Purchaser
and which arise from or as a result of: (i) any inaccuracy in or
breach of any of the Vendors Warranties; or (ii) any breach of any
covenant or obligation of the Vendors under this
Agreement.
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9.2.
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The
Vendors shall not be liable for any Claim, unless it receives from the
Purchaser written notice of the
Claim;
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9.2.1.
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on
or before 31 October 2013, in the case of a Claim for Costs;
and
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9.2.2.
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unless
the aggregate amount of the liability of the Vendors for all Claims
exceeds US$25,000 (in which event the Purchaser shall be entitled to claim
the whole of the amount thereof and not merely the
excess).
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9.3.
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None
of the limitations contained in Clause 9.2 shall apply to any breach of any
Warranty which (or the delay in discovery of which) is the consequence of
dishonest, deliberate or reckless mis-statement, concealment or other
conduct by the Vendors or any officer or employee, or former officer or
employee, of the Vendors.
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9.4.
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The
Vendors shall not be liable for any Claim in the case of a Claim in
respect of a breach of the Vendors Warranties, if and to the extent that
the fact, matter, event or circumstance giving rise to such Claim was
fairly and reasonably disclosed to the Purchaser or to Nissani within the
framework of Nissani's appointment as the CEO of the
Company.
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10.
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Termination
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10.1.
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If
at any time before the Closing:
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10.1.1.
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any
Material Adverse Change occurs;
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10.1.2.
|
there
is a material breach of any of the Warranties as given on the date of this
Agreement and/or any facts, matters, events and/or circumstances are
disclosed in the Disclosure Letter;
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10.1.3.
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any
event occurs which, if the Warranties were repeated at any time before the
Closing by reference to the facts and circumstances then existing as if
references in the Warranties to the date of this Agreement were references
to the relevant date, would constitute a material breach of any of the
Warranties and/or any facts, matters, events and/or circumstances are
disclosed in the Disclosure Letter;
or
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10.1.4.
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there
is any breach or non-fulfilment by a Vendor of any of its material
obligations under this Agreement, then the Purchaser may by written notice
given to the Vendors at any time before the Closing Date terminate this
Agreement, in which case no Party shall have any claim of any nature
whatsoever against the other Party under this Agreement (save in respect
of any rights and liabilities which have accrued before
termination).
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11
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10.1.5.
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If
this Agreement is terminated pursuant to this Clause 10.1, then all rights and obligations
of the Parties hereunder shall terminate without any liability of any
Party to any other Party; provided,
however, that notwithstanding termination of this Agreement,
Clauses 7.3, 7.4, 16, 19 and 23 shall remain in full force and
effect and survive termination of this
Agreement.
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11.
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Representation
by the law firm of Xxxx. Xxxxx Xxxx &
Co.
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As per
the Parties' request and for the sake of efficiency, the Company's legal
counsel, the law firm of Xxxx. Xxxxx Xxxx & Co. (the Legal
Counsel), has agreed to act as legal counsel for all of the Parties
to this Agreement, provided that each of the Parties shall provide its
written consent to such joint representation, in accordance with the
provisions set out in Rule 14 of the Rules by Israeli Bar Rules
(Professional Ethics), 5745 – 1986.
Therefore,
the Parties hereby agree, acknowledge and confirm that the Legal Counsel
shall be appointed as legal counsel for all Parties to this
Agreement and that Legal Counsel shall represent all of the Parties to this
Agreement in respect of this Agreement and the Transaction
Documents.
The
Vendors and Purchaser further confirm their knowledge of the fact that
Legal Counsel previously provided, currently provides and will continue to
provide, legal services to the Company, to the Vendors and to the
Purchaser.
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12.
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Entire Agreement
|
This
Agreement and the Transaction Documents set out the entire agreement and
understanding between the Parties in respect of the sale and purchase of the
Sale Shares and related matters. This Agreement supersedes all prior agreements,
understandings or arrangements (whether oral or written) relating to the sale
and purchase of the Shares, which shall cease to have any further force or
effect and in particular a call option agreement, dated 31 December 2009,
entered into by Nissani and the Vendors. It is agreed that: no Party has entered
into this Agreement or any other document referred to in this Agreement in
reliance upon any statement, representation, warranty or undertaking of any
other Party or any other person other than those expressly set out or referred
to in this Agreement or such other document.
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13.
|
Variation
|
|
13.1.
|
No
variation of this Agreement shall be valid unless it is in writing and
signed by or on behalf of each of the parties to it. The expression variation
shall include any variation, supplement, deletion or replacement however
effected.
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13.2.
|
Unless
expressly agreed, no variation shall constitute a general waiver of any
provisions of this Agreement, nor shall it affect any rights, obligations
or liabilities under or pursuant to this Agreement which have already
accrued up to the date of variation, and the rights and obligations of the
parties under or pursuant to this Agreement shall remain in full force and
effect, except and only to the extent that they are so
varied.
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14.
|
Assignment
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|
14.1.
|
It
is acknowledged and agreed by the Vendors that the Purchaser may at any
time following the date of this Agreement transfer rights under this
Agreement to any Affiliate or Affiliates of the Purchaser. Accordingly,
subject to Clause 14.2, the
Vendors agree that the benefit of any provision of this Agreement may be
assigned (in whole or in part) by the Purchaser without the consent of the
Vendors, provided that the Purchaser provided the Vendors with prior
written notice of such intended
assignment.
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12
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14.2.
|
The
Purchaser may assign its rights under this Agreement by way of security to
any bank(s) and/or financial institution(s) lending money or making other
banking facilities available to the
Purchaser.
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15.
|
Announcements
|
No
announcement or circular in connection with the existence or the subject matter
of this Agreement and the Transaction Documents shall be made or issued by or on
behalf of the Vendors, without the prior written approval of the Vendors, such
approval not to be unreasonably withheld or delayed. This shall not affect any
announcement or circular required by law or the rules of any stock exchange, in
case of which each Party shall consult the other Party and any such announcement
or circular required by law or the rules of any stock exchange shall be drafted
by the Parties in mutual consent.
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16.
|
Costs
|
Each of
the Parties shall pay its own costs and expenses incurred in connection with the
negotiation, preparation and implementation of this Agreement and the
Transaction Documents. For the avoidance of doubt and without derogating from
the above, the Vendors shall be responsible for all of the Group's costs in
connection with this Agreement, the Transaction Documents and any document
and/or act ancillary or required within the framework of the transactions
contemplated therein.
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17.
|
Severability
|
If any
provision of this Agreement is held to be invalid or unenforceable, then such
provision shall (so far as it is invalid or unenforceable) be given no effect
and shall be deemed not to be included in this Agreement, but without
invalidating any of the remaining provisions of this Agreement.
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18.
|
Further
Assurance
|
The
Vendors agree to perform (or cause the performance of) all further acts and
things, and execute and deliver (or cause the execution and delivery of) such
further documents, as may be required by law or as the Purchaser may reasonably
require, whether on or after Completion, to implement and/or give effect to this
Agreement and the transaction contemplated by it and for the purpose of vesting
in the Purchaser the full benefit of the assets, rights and benefits to be
transferred to the Purchaser under this Agreement.
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19.
|
Notices
|
|
19.1.
|
Any
notice or other communication to be given by one Party to the other under,
or in connection with, this Agreement and/or the Transaction Documents
shall be in writing and signed by or on behalf of the Party giving it. It
shall be served by sending it by fax to the number set out in
Clause 19.2, or e-mail to the
address set out in Clause 19.2, or delivering it by hand, or
sending it by pre-paid recorded delivery, special delivery or registered
post, to the address set out in Clause 19.2 and in each case marked for the
attention of the relevant Party set out in Clause 19.2 (or as otherwise notified from
time to time in accordance with the provisions of this Clause 19). Any notice so served by hand,
fax or post shall be deemed to have been duly
given:
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13
|
19.1.1.
|
in
the case of delivery by hand, when
delivered;
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|
19.1.2.
|
in
the case of fax, at the time of
transmission;
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|
19.1.3.
|
in
the case of prepaid recorded delivery, special delivery or registered
post, at 10am on the second Business Day following the date of posting;
and
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|
19.1.4.
|
in
case of e-mail at the time of
transmission,
|
provided
that in each case where delivery by hand or by fax/e-mail occurs after 6pm on a
Business Day or on a day which is not a Business Day, service shall be deemed to
occur at 9am on the next following Business Day.
References
to time in this Clause are to local time in the country of the
addressee.
|
19.2.
|
The
addresses and fax numbers of the Parties for the purpose of Clause 19.1 are as
follows:
|
Xxxxx,
Xxxxxx and Avital
Address:
00 Xxxxxxx Xxxxxxxxx Xxxxxxxx, Xxxxxx
E-mail:
________
Fax:
_______
For the
attention of: Gil Fostbinder
With a
copy to
Xxxx.
Xxxxx Xxxx & Co.
Address:
0 Xxx Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxx
E-mail:
xxxxxxxxxxx@xxxxxxx.xx.xx
For the
attention of: Ayal Klinemintz
Purchaser
Address: 00 Xxxxxxxxxx
Xxxxxx, Xxxxxx-Xxxxx, Xxxxxx
E-mail:
xxx@xxxx-xxxxx.xxx
Fax:
00-0000000
For the
attention of: Uri Nissani
With a
copy to
Xxxx.
Xxxxx Xxxx & Co.
14
Address:
0 Xxx Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxx
E-mail:
xxxxxxxxxxx@xxxxxxx.xx.xx
For the
attention of: Ayal Klinemintz
|
20.
|
Waivers/Purchaser's
Rights and Remedies
|
|
20.1.
|
No
failure or delay by the Purchaser in exercising any right or remedy
provided by law under or pursuant to this Agreement shall impair such
right or remedy or operate or be construed as a waiver or variation of it
or preclude its exercise at any subsequent time and no single or partial
exercise of any such right or remedy shall preclude any other or further
exercise of it or the exercise of any other right or
remedy.
|
|
20.2.
|
The
rights and remedies of the Purchaser under or pursuant to this Agreement
are cumulative, may be exercised as often as such Party considers
appropriate and are in addition to its rights and remedies under general
law.
|
|
20.3.
|
The
rights and remedies of the Purchaser under this Agreement shall not be
affected, and the Vendors’ liabilities under this Agreement shall not be
released, discharged or impaired, by: (i) Closing; (ii) any investigation
made into the affairs of any Group company or any knowledge held or gained
of any such affairs by or on behalf of the Purchaser (except, in respect
of the Warranties only, for matters fairly and reasonably disclosed in the
Disclosure Letter); or (iii) any event or matter whatsoever, other than a
specific and duly authorised written waiver or release by the
Purchaser.
|
|
21.
|
Payments
|
Any
payment to be made pursuant to this Agreement by the Purchaser shall be made in
US dollars on the due date for payment.
|
22.
|
Withholding
|
All sums
payable under this Agreement are gross amounts. Taxes due under Israeli or other
applicable law shall be due and payable by the Party liable to pay such taxes,
with the exception of taxes that by Israeli law must be withheld at source by
the person making the payment and with respect to such taxes the provisions of
Schedule 10 shall apply.
|
23.
|
Governing Law
|
This
Agreement and the relationship between the Parties shall be governed by, and
interpreted in accordance with, the Laws of the State of Israel. Any dispute
arising under or with respect to this Agreement shall be resolved exclusively in
the competent court in the District of Tel Aviv, Israel.
15
As witness this Agreement has
been signed on behalf of the Parties the day and year first before
written.
|
/s/Meira
Fostbinder
Xx. Xxxxx Fostbinder (as
the
heir of Xx. Xxxxxx Fostbinder) |
/s/Uri Nissani
Achiam
Investments Ltd.
By:
Uri Nissani
Title
Chairman
|
|
|
/s/Meira
Fostbinder
Xx.
Xxxxx Fostbinder
|
||
|
/s/Xxxxxx Fostbinder
Xx.
Xxxxxx Fostbinder
|
||
|
/s/Xxxxxx Xxxxxx
Xx.
Xxxxxx Xxxxxx
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16
