Exhibit 10.3
THIS AGREEMENT (the
“Agreement”) is made and entered into as of July 10th, 2006,
by and among:
On Track Innovations Ltd., a
company duly organized and existing under the laws of the state of Israel (Reg No.
52-004286-2), which its ordinary shares are registered for trade in NASDAQ stock exchange
(XXXX), having its principle place of business at Z.H.R. I.Z. Xxxx-Xxxx 12000, Israel
(“OTI”);
Of the one part
a n d
Easy Park Ltd., a private
company, a subsidiary of OTI, duly organized and existing under the laws of the state of
Israel (Reg No. 51-161929-8), having its principle place of business at Z.H.R.I.Z. Xxxx-Xxxx 00000, Xxxxxx
(“EP”);
Of the second part
a n d
Xxxxx Xxxxxxx. (I.D. No. 00-580740-9), from kibbutz Hagoshrim ("Xxxxx Xxxxxxx").
Of the third part
(OTI, EP and Xxxxx Xxxxxxx, shall be
collectively referred to as the “Parties”)
WHEREAS, Xxxxx Xxxxxxx is the owner
of 2,600 Ordinary Shares par value NIS 0.01 each of EP (the “EP Shares”);
and
WHEREAS, Xxxxx Xxxxxxx wishes
to transfer to OTI 2,595 (two thousand, five hundred and ninety five) EP Shares (the
“Transferred Shares”) in consideration for the grant of an accumulated
amount of 12,000 (twelve thousand) Ordinary Shares, par value of NIS 0.1 each, of OTI (the
“OTI Shares”), and OTI wishes to receive such Transferred Shares in
consideration for the grant of such OTI Shares to Xxxxx Xxxxxxx, all in accordance with,
and subject to, the terms and conditions set forth in this Agreement; and
WHEREAS, Xxxxx Xxxxxxx and OTI
acknowledge and agree that a conversion ratio of 2,595 (two thousand, five hundred and
ninety five) EP Shares in exchange for an accumulated amount of 12,000 (twelve thousand)
OTI Shares (the “Conversion Ratio”), is satisfactory and fair.
NOW, THEREFORE, in
consideration of the mutual promises and covenants, set forth herein, the Parties hereby
agree as follows:
| 1. |
Representations
and Warranties of Xxxxx Xxxxxxx. |
| |
Xxxxx
Xxxxxxx hereby represents and warrants to OTI, and acknowledges that OTI is entering into
this Agreement in reliance thereon, as follows, which representations and warranties are
true and correct as of the date hereof and as of the Effective Date: |
| |
1.1 |
Xxxxx
Xxxxxxx is the sole owner and of record, and has good title to all the Transferred
Shares. The Transferred Shares are validly issued and outstanding and are fully paid and
non-assessable. The Transferred Shares are not subject to any liens, charges, claims,
pleas, encumbrances, or third party’s rights of any kind whatsoever, including but
not limited to any rights of first refusal or co-sale or any other restrictions or
limitations on transfer or sale or any other restrictions or limitations whatsoever (“Liens”). |
| |
1.2 |
The
Transferred Shares, when transferred to OTI in accordance with this Agreement, will be
free and clear of all Liens and will have the rights, preferences, privileges, and
restrictions set forth in the Company’s Articles of Association and can be duly
registered in the name of OTI in the Company’s share transfer register. |
| |
1.3 |
Authorization.
Xxxxx Xxxxxxx hereby represents and warrants, that all actions on his part for the
authorization, execution, delivery and performance by him of this Agreement and the
consummation of the transactions contemplated hereby and for sale, transfer and
assignment of the Transferred Shares have been, or will be taken, upon signature of this
Agreement. This Agreement is and will be valid and binding obligations of Xxxxx Xxxxxxx,
enforceable in accordance with its terms. |
| |
1.4 |
Neither
the execution and delivery of this Agreement and any ancillary document nor compliance by
Xxxxx Xxxxxxx with the terms and provisions hereof and thereof, will conflict with, or
result in a breach or violation of any of the terms, conditions and provisions of: (i)
the Company’s Articles of Association, or other governing instruments of the Company
(ii) any judgment, order, injunction, or ruling of any court or governmental authority,
domestic or foreign, (iii) any agreement, contract, lease, license or commitment to which
Xxxxx Xxxxxxx is a party or to which he or his assets or property is subject, or (iv)
applicable law. Such execution, delivery and compliance will not (a) give to others
any rights, including rights of termination, cancellation or acceleration, in or with
respect to any agreement, contract or commitment referred to in this paragraph, or otherwise
require the consent or approval of any person, including his spouse, which consent or
approval has not heretofore been obtained. No consent is required for Xxxxx Xxxxxxx to
become a party to this Agreement and to perform his obligations under this Agreement. |
2
| |
1.5 |
Enforceability.
There are no outstanding orders, judgments, injunctions, awards or decrees of any court,
governmental authority or arbitration tribunal by which Xxxxx Xxxxxxx or by which any his
assets are bound that will or could reasonably be expected to prohibit or render
unenforceable his execution, delivery or performance of this Agreement or the
consummation of the purchase and sale contemplated hereby and to Avner Simchai’s
best knowledge, no action or litigation of this type is threatened against him. |
| |
1.6 |
Compliance
with Other Instruments. Xxxxx Xxxxxxx is not in default (a) under any mortgage,
lease, agreement, contract, or other instrument, document or agreement to which Xxxxx
Xxxxxxx is a party or by which the Transferred Shares are bound or affected or (b) with
respect to any law, statute, ordinance, regulation, order, writ, injunction, decree, or
judgment of any court or any governmental commission or agency, which is related to the
Transferred Shares or otherwise would adversely affect his rights in and to the
Transferred Shares or his financial obligations |
| |
1.7 |
At
the Effective Date (as defined below), in exchange for the grant of OTI Shares, OTI will
receive good and exclusive title in all the Transferred Shares, subject to no liens,
charges, claims, pleas, encumbrances, or third party’s rights of any kind
whatsoever. |
| |
1.8 |
The
transaction contemplated in this Agreement was originally initiated by Xxxxx Xxxxxxx and
is hereby being executed pursuant to his request. Xxxxx Xxxxxxx has had the opportunity
to examine the terms and conditions of the transaction contemplated under this Agreement
by its legal counsels and any other counsel or advisor (financial or other) and found the
terms and conditions specified in this Agreement, including but not limited to the
Conversion Ratio, satisfactory and fair. |
| |
1.9 |
Xxxxx
Xxxxxxx has had an opportunity to review with his own tax advisors the tax consequences
of the transactions contemplated by this Agreement. Xxxxx Xxxxxxx understands that he
must rely solely on his advisors and not on any statements or representations made by OTI
or EP, if any, or any of their representatives, if any. Xxxxx Xxxxxxx understands that
he, Xxxxx Xxxxxxx, shall be responsible for his own tax liabilities and consequences that
may arise as a result of the transactions contemplated by this Agreement. |
| |
1.10 |
Xxxxx
Xxxxxxx recognizes that given the fact that OTI is engaged in the field of high-tech
industry and due to other risk factors, the purchase of OTI’s securities, as
specified in this Agreement, involves a high degree of risk. |
| |
1.11 |
Legal
Power. Xxxxx Xxxxxxx has all requisite power and the legal authority to enter into
and perform this Agreement, bind himself hereunder and comply with his obligations
hereunder. No bankruptcy and/or similar proceedings have been instituted or threatened by
or against Xxxxx Xxxxxxx, and he does not have any knowledge or information indicating
the possibility of such proceedings being instituted against him. |
3
| |
1.12 |
Other
than the OTI Shares that will be granted in accordance with this Agreement, Xxxxx Xxxxxxx
is not and will not be entitled to any other consideration and/or payments and/or any
other rights whatsoever from OTI and/or from EP. |
| 2. |
Representations
and Warranties of OTI. |
| |
OTI
hereby represents and warrants to Xxxxx Xxxxxxx, as follows: |
| |
2.1 |
OTI
is a company incorporated under the Laws of the State of Israel. |
| |
2.2 |
The
Ordinary Shares, par value NIS 0.1 each, of OTI are listed and traded on the NASDAQ
National Market. |
| 3. |
Transfer
of EP Shares and Grant of OTI Shares. |
| |
3.1 |
Subject
to the fulfillment of the conditions specified in Section 4 below, Xxxxx Xxxxxxx hereby
irrevocably undertakes to transfer on the Effective Date (as such term is defined below)
the Transferred Shares to OTI. |
| |
3.2 |
In
order to effectuate the transfer of the Transferred Shares to OTI, Xxxxx Xxxxxxx hereby
signs an irrevocable share transfer deed, in a form attached hereto as Schedule A(the
“Deed”). The date of actual transfer of shares under the Deed will
remain blank, and Xxxxx Xxxxxxx hereby irrevocably authorizes OTI to insert the
applicable Effective Date in the Deed concurrently with the fulfillment of the
pre-conditions stipulated in Section 4 below. |
| |
In
addition, Xxxxx Xxxxxxx shall deliver to EP on the date hereof the share certificate(s)
reflecting the Transferred Shares and EP will cancel such share certificate and issue a
new share certificate to OTI reflecting the Transferred Shares. In case Xxxxx Xxxxxxx
does not hold a share certificate covering the Transferred Shares, he will sign affidavit
of lost certificate and indemnification letter with respect to such share certificate in
the form satisfactory to OTI |
| |
3.3 |
In
consideration for the transfer of the Transferred Shares to OTI, pursuant to Section 3.1
above, and subject to the provisions of Section 4 below, OTI shall grant to Xxxxx Xxxxxxx
on the Effective Date the OTI Shares. |
| |
3.4 |
All
tax liabilities with relation to the grant of the OTI Shares, the allocation of shares
and sale of the Transferred Shares, shall be incurred solely by Xxxxx Xxxxxxx and he
shall be exclusively responsible to pay all such taxes in full. |
| |
The
grant of the OTI Shares under this Agreement is subject to and contingent upon the
following conditions, in a manner satisfactory to both OTI and its legal counsels, at
their sole discretion: |
4
| |
4.1 |
Approval
of this Agreement and the transfer of the Transferred Shares contemplated in
this Agreement by all shareholders of EP. |
| |
4.2 |
Approval
of this Agreement and the grant of the OTI Shares incorporated in this Agreement by the
Compensation Committee and the Board of Directors of OTI. |
| |
4.3 |
All
of Avner Simchai’s representations and warranties are true and correct of the date
of this Agreement and as of the Effective Date. |
| |
4.4 |
The
Parties hereby acknowledge and agree that at the date hereof, none of the OTI Shares, nor
the resale of the OTI Shares, have been registered with the U.S. Securities and Exchange
Commission (the “SEC”) under the U.S. Securities Act of 1933, as amended
(the “SecuritiesAct”), and that the OTI Shares may not be sold,
transferred or otherwise disposed of unless registered under the Securities Act
(and, where required, under the laws of one or more other jurisdictions), except in
accordance with Regulation S (“Regulation S”) under the Securities Act,
or unless another exemption from registration is then available. |
| |
4.5 |
Xxxxx
Xxxxxxx acknowledges and agrees that, until such time as a registration statement with
respect to the OTI Shares has been declared effective by the SEC, all certificates
representing the OTI Shares shall bear, and shall be subject to, a restrictive legend. |
| |
4.6 |
Xxxxx
Xxxxxxx undertakes not to engage in hedging transactions in the United States of America
with regard to the OTI Shares unless such transactions are conducted in compliance with
the Securities Act and the U.S. Securities Exchange Act of 1934, as amended (the “ExchangeAct”),
and the rules and regulations promulgated thereunder. |
| |
4.7 |
OTI
hereby undertakes to complete, as promptly as practicable, the necessary actions required
to register for resale the OTI Shares with the SEC and make the OTI Shares eligible for
trading in the NASDAQ National Market. As promptly as practicable thereafter, OTI shall
deliver to Xxxxx Xxxxxxx a notice confirming that a registration statement with respect
to the OTI Shares has been declared effective by the SEC and the OTI Shares are eligible
for trading in the NASDAQ National Market. |
| |
4.8 |
Xxxxx
Xxxxxxx hereby confirms that he shall be solely responsible and liable for any taxes
arising out of or in connection with the sale of the OTI Shares. |
| |
4.9 |
Xxxxx
Xxxxxxx hereby irrevocably waives, relinquishes and releases OTI from any and all claims,
rights, demands or causes of action asserted or non-asserted which Xxxxx Xxxxxxx may have
had, now has or hereafter may have against OTI and/or its directors, officers, employees,
agents and/or consultants, in connection with the issuance and sale of the OTI Shares,
including without limitation, any fluctuations in the OTI Share price. |
5
| |
The
date, on which all said conditions in this section 4 are completed in full, shall be
referred to as the “Effective Date”. |
| |
5.1 |
Xxxxx
Xxxxxxx hereby relinquishes all rights he has (if any) regarding the appointment of
Directors to the Board of Directors of EP. |
| |
5.2 |
Xxxxx
Xxxxxxx will treat and hold confidential all information concerning the businesses and
affairs of EP and its affiliates that is not already generally available to the public
including, without limitation, patents, trade secrets, know how, information relating to
products and research and development activities, pricing policies, customer lists and
other business affairs related to EP and its affiliates (“Confidential Information”),
and will refrain from (i) disclosing such Confidential Information, or (ii) using
any of the Confidential Information and will deliver promptly to EP all tangible
embodiments in any medium (and all copies) of the Confidential Information which are in
his possession. |
| |
5.3 |
Xxxxx
Xxxxxxx hereby agrees that, for as long as he continues to hold EP Shares, and for a
period of 3 (three) years thereafter, he shall not, directly or indirectly, (a) compete
with EP or any of its affiliated companies in the field of smart cards, including, but
not limited to, by way of becoming owner, executive officer, or director of any entity
that competes with EP or any of such affiliates companies and/or (b) otherwise become or
remain involved, or in any way participate, in any Competitive Activity. |
| |
“Competitive
Activity” shall mean any activity in the field of smart cards in which Xxxxx Xxxxxxx
and/or any company or other entity in which Xxxxx Xxxxxxx has any interest, (including by
way of consultation) participates, directly or indirectly. |
| |
Furthermore,
Xxxxx Xxxxxxx hereby undertakes that, for as long as he continues to hold EP Shares, and
for a period of 2 (two) years thereafter, he shall not directly or indirectly solicit,
entice, persuade, or induce any employee of EP or any of its affiliates, or any client of
EP, to terminate his employment by, or contractual relationship with, EP, or to enter
into contractual relations with competitor of EP, or authorize or assist in the taking of
any such actions by any third party. |
| |
6.1 |
Each
of the Parties hereto shall perform such further acts and execute such further documents
as may reasonably be necessary to carry out and give full effect to the provisions of
this Agreement and the intentions of the undersigned Parties as reflected thereby. |
6
| |
6.2 |
This
Agreement shall be governed by and construed according to the laws of the state of Israel
and the competent courts in Tel-Aviv shall have exclusive jurisdiction in all matters
pertaining to this Agreement. |
| |
6.3 |
This
Agreement and the Schedules hereto constitute the full and entire understanding and
agreement between the Parties with regard to the subject matters hereof and thereof. Any
term of this Agreement may be amended and the observance of any term hereof may be waived
(either prospectively or retroactively and either generally or in a particular instance)
only with the written consent of all of the parties to this Agreement. All article and
section headings are inserted for convenience only and shall not modify or affect the
construction or interpretation of any provision of this Agreement. The preamble and
schedules to this Agreement are incorporated herein and form an integral part of this
Agreement. |
| |
6.4 |
All
notices and other communications required or permitted hereunder to be given to a Party
to this Agreement shall be in writing and shall be telecopied, faxed or mailed by
registered or certified mail, postage prepaid, or otherwise delivered by hand or by
messenger, addressed to such Party’s address as set forth above or at such other
address as the Party shall have furnished to each other Party in writing in accordance
with this provision. Any notice sent in accordance with this Section 6.4 shall be
effective (i) if mailed, five (5) business days after mailing, (ii) if sent by messenger,
upon delivery, and (iii) if sent via telecopier or fax, upon transmission and
confirmation of receipt or (if transmitted and received on a non-business day) on the
first business day following transmission and electronic confirmation of receipt. |
| |
6.5 |
No
delay or omission to exercise any right, power, or remedy accruing to any party upon any
breach or default under this Agreement, shall be deemed a waiver of any other breach or
default theretofore or thereafter occurring. Any waiver, permit, consent, or approval of
any kind or character on the part of any Party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the extent specifically set
forth in such writing. All remedies, either under this Agreement or by law or otherwise
afforded to any of the Parties, shall be cumulative and not alternative. |
IN WITNESS WHEREOF, the parties
hereto have duly executed this Agreement as of the date first written above.
/s/ Xxxx Xxxxxx
/s/ Xxxxxx Xxxxxx
——————————————
On Track Innovation Ltd. |
/s/ Xxxx Xxxxxx
/s/ Xxxxxx Xxxxxx
——————————————
Easy Park Ltd. |
/s/ Xxxxx Xxxxxxx
——————————————
Xxxxx Xxxxxxx |
7
