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EXHIBIT 10.21
SHARE PURCHASE AGREEMENT
BY AND AMONG
COM21, INC.
COM21 ISRAEL, LTD.
S.E. NASAN & CO., LLC
June 5, 2001
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TABLE OF CONTENTS
Page
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ARTICLE I PURCHASE AND SALE OF SHARES 1
1.1 Purchase and Sale of Com21 Israel Shares 1
1.2 Convertible Promissory Note 1
1.3 Closing 1
1.4 Deliveries at the Closing 2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER AND COM21 ISRAEL
2
2.1 Organization, Standing and Power 2
2.2 Authority 3
2.3 Broker's and Finder's Fees 3
2.4 Representations and Warranties Complete 3
ARTICLE III REPRESENTATIONS AND WARRANTIES OF NASAN 4
3.1 Organization, Standing and Power 4
3.2 Authority 4
3.3 Broker's and Finder's Fees 4
3.4 Additional Funding and Sale of Equity Securities of
Com21 Israel 4
3.5 Additional Advances Beyond Payment of April 1, 2001
Through April 15, 2001 Expenses 5
3.6 Representations and Warranties Complete 5
ARTICLE IV ADDITIONAL AGREEMENTS 5
4.1 Access to Information 5
4.2 Confidentiality 6
4.3 Public Disclosure 6
4.4 Consents; Cooperation 6
4.5 Legal Requirements 6
4.6 Proprietary Information 6
4.7 Covenants Regarding Employees and Covenant Not to
Interfere, Compete or Solicit Business 7
4.8 Use of Names 9
4.9 Additional Agreements 9
4.10 Payment of Royalties to Office of Chief Scientist 10
4.11 Procurement Agreement 10
4.12 Training 10
4.13 Access to Certification Test Laboratory 10
4.14 Trademark Rights 10
4.15 Additional Advances Beyond Payment of April 1, 2001
Through April 15, 2001 Expenses 10
4.16 Additional Promissory Notes 10
ARTICLE V CONDITIONS 11
5.1 Conditions to Obligations of Each Party to Effect the
Closing 11
5.2 Additional Conditions to Obligations of Seller 11
5.3 Additional Conditions to Obligations of Nasan 12
ARTICLE VI INDEMNIFICATION 12
6.1 Survival of Representations and Warranties 12
6.2 Indemnification 13
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6.3 Procedure for Indemnification with Respect to 14
Third-Party Claims
6.4 Procedure for Indemnification with Respect to Non-Third
Party Claims 15
6.5 Tax Matters 15
ARTICLE VII CERTAIN TAX MATTERS 15
7.1 Returns; Indemnification; Liability for Taxes 15
7.2 Conduct of Audits and Other Procedural Matters 16
7.3 Definitions 16
ARTICLE VIII GENERAL PROVISIONS 16
8.1 Expenses 16
8.2 Notices 16
8.3 Interpretation 17
8.4 Counterparts 18
8.5 Entire Agreement; Nonassignability; Parties in Interest 18
8.6 Severability 18
8.7 Remedies Cumulative 18
8.8 Governing Law 18
8.9 Amendment and Modification 18
8.10 Arbitration of Disputes; Submission to Jurisdiction;
Consent to Service of Process 19
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SCHEDULES
Disclosure Schedule
Schedule 4.11 - Procurement Agreement Schedule
EXHIBITS
Exhibit A - Promissory Note
Exhibit B - Reseller Agreement
Exhibit C - Promissory Note for Draw Down
Exhibit D - Proprietary Information and Inventions Agreement
Exhibit E - License Agreement
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SHARE PURCHASE AGREEMENT
This SHARE PURCHASE AGREEMENT (this "AGREEMENT") is made
and entered into as of June 5, 2001, by and among Com21, Inc., a
Delaware corporation ("SELLER" or "COM21"); S.E. Nasan & Co., LLC, a
Delaware limited liability company ("BUYER" or "NASAN"); Com21 Israel,
Ltd. (Company No. 51-160916-6) (formerly known as GADline, Ltd. and
currently also known as Cablecom Solutions, Ltd.), an company organized
under the laws of Israel and a wholly-owned subsidiary of Com21 ("COM21
ISRAEL").
RECITALS
A. Com21 Israel is principally engaged in the development,
manufacturing and marketing of advanced cable broadband solutions (the "COM21
ISRAEL BUSINESS").
B. Seller is the beneficial and record owner of 7,928,771 of the
Ordinary Shares, NIS 0.5 nominal value per share, of Com21 Israel (the "COM21
ISRAEL SHARES"), which Com21 Israel Shares represent all of the issued and
outstanding share capital of Com21 Israel.
C. Seller desires to sell, and Nasan wishes to purchase, all the
Com21 Israel Shares owned by Seller, subject to the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the covenants and
representations set forth herein, and for other good and valuable consideration,
the parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
1.1 Purchase and Sale of Com21 Israel Shares. Upon the terms and
subject to the conditions set forth in this Agreement, Nasan agrees to purchase
from the Seller, and the Seller agrees to sell, assign, transfer and deliver to
Nasan, the Com21 Israel Shares, free and clear of all liens, pledges, claims,
charges, restrictions, encumbrances or third party rights, for an aggregate
purchase price (the "COM21 ISRAEL SHARE PURCHASE PRICE") equal to U.S. $1.00.
1.2 Convertible Promissory Note. Com21 and Com21 Israel shall
execute a Convertible Promissory Note (the "NOTE") in the amount of $1,320,000
upon the terms and conditions stated in the Note attached hereto as Exhibit A.
1.3 Closing. The closing of the purchase and sale of the Com21
Israel Shares (the "CLOSING") shall take place on June 5, 2001 (the "CLOSING")
at the offices of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, 2200 Geng Road, Palo Alto,
California, at 10:00 a.m. local time or at such other location or time as the
parties hereto agree.
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1.4 Deliveries at the Closing. At the Closing:
(a) the Seller shall deliver to Nasan the certificates (or
other evidence of transfer if the Com21 Israel Shares are not certificated)
representing the Com21 Israel Shares together with duly executed share transfer
deeds with respect to the Com21 Israel Shares being transferred;
(b) the Seller shall deliver to Nasan all other documents
and instruments required hereunder to be delivered by (or at the direction of)
the Seller to Nasan at the Closing as described in Article V hereof;
(c) Com21 Israel shall deliver to Nasan all other
documents and instruments required hereunder to be delivered by (or at the
direction of) Com21 Israel at the Closing as described in Article V hereof;
(d) Nasan shall deliver to the Seller all other documents
and instruments required hereunder to be delivered by (or at the direction of)
Nasan to the Seller at the Closing as described in Article V hereof; and
(e) Com21 Israel shall register the transfer of the Com21
Israel Shares in the share register of Com21 Israel.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER AND COM21 ISRAEL
In this Agreement, any reference to a party's "knowledge" means
actual knowledge of such party after such party has made due and diligent
inquiry of those officers, directors and other employees of such party who are
charged with senior administrative or operational responsibility of the matters
represented.
Except as disclosed in a document of even date herewith attached
as an exhibit to this Agreement and delivered by Com21 to Nasan prior to the
execution and delivery of this Agreement and referring to the representations
and warranties in this Agreement (the "DISCLOSURE SCHEDULE"), Seller and Com21
Israel represent and warrant to Nasan as follows:
2.1 Organization, Standing and Power.
(a) Seller is a corporation duly organized, validly
existing and in good standing under the laws of Delaware. Seller has the
corporate power to own its properties and to carry on its business as now being
conducted and is duly qualified to do business and is in good standing in each
jurisdiction in which the failure to so qualify would have a material adverse
effect on Seller's business.
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(b) The Com21 Israel Shares constitute all of the
issued and outstanding share capital of Com21 Israel. All issued share capital
of Com21 Israel is duly authorized, validly issued, fully paid and
nonassessable, and is owned directly by Com21, free and clear of all liens,
pledges, claims, charges, restrictions, encumbrances or third party rights.
There are no outstanding subscriptions, options, warrants, puts, calls, rights,
exchangeable or convertible securities or other securities of Com21 Israel, or
otherwise obligating Com21 Israel to issue, transfer, sell, purchase, redeem or
otherwise acquire any such securities.
2.2 Authority. Each of Seller and Com21 Israel has all requisite
corporate power and authority to enter into this Agreement and the Convertible
Promissory Note (collectively, the "TRANSACTION DOCUMENTS") to which it is a
party and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and each of the Transaction Documents
to which Seller and Com21 Israel is a party and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of Seller and Com21 Israel and no other
corporate proceedings on the part of Seller or Com21 Israel is necessary to
authorize this Agreement and Transaction Documents or to consummate the
transactions contemplated hereby and thereby. This Agreement and the Transaction
Documents have been duly executed and delivered by Seller and Com21 Israel and
constitute the valid and binding obligations of each of Seller and Com21 Israel
enforceable against Seller and Com21 Israel in accordance with their respective
terms except to the extent enforceability may be limited by applicable
bankruptcy, reorganization, moratorium or other laws affecting the enforcement
of creditor's rights generally and by general principles of equity, regardless
of whether such enforceability is considered in a proceeding at law or equity.
The execution and delivery of this Agreement and the Transaction Documents by
Seller and Com21 Israel does not, and the consummation of the transactions
contemplated hereby and thereby will not, conflict with, or result in any
violation of, or default under (with or without notice or lapse of time, or
both), or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of any benefit under any provision of the Certificate of
Incorporation or Bylaws (or comparable organizational documents) of Seller or
Com21 Israel. No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other governmental authority or instrumentality ("GOVERNMENTAL ENTITY") is
required on the part of Seller or Com21 Israel in connection with the execution
and delivery of this Agreement or the Transaction Documents or the consummation
of the transactions contemplated hereby or thereby, except for such consents,
authorizations, filings, approvals and registrations which, if not obtained or
made, could not reasonably be expected to have a material adverse effect on
Seller or Com21 Israel and would not prevent, or materially alter or delay any
of the transactions contemplated by this Agreement or the Transaction Documents.
2.3 Broker's and Finders' Fees. Seller has not incurred, nor will
it incur, directly or indirectly, any liability for brokerage or finders' fees
or agents' commissions or investment bankers' fees or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
2.4 Representations and Warranties Complete. Seller has not
relied on any other representations or warranties, whether express or implied,
of Nasan with respect to the transactions contemplated hereby except as
expressly set forth herein.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NASAN
Nasan represents and warrants to Seller and Com21 Israel as
follows:
3.1 Organization, Standing and Power. Nasan is a limited
liability company duly organized, validly existing and in good standing under
the laws of the state of Delaware. Nasan has the corporate power to own its
properties and to carry on its business as now being conducted and as proposed
to be conducted and is duly qualified to do business and is in good standing in
each jurisdiction in which the failure to be so qualified and in good standing
would have a Material Adverse Effect on Nasan.
3.2 Authority. Nasan has all requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement, and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of Nasan and no other corporate proceedings on the part of Nasan are necessary
to authorize this Agreement or to consummate the transactions contemplated
hereby or thereby. This Agreement have been duly executed and delivered by Nasan
and constitute the valid and binding obligations of Nasan enforceable against
Nasan in accordance with their respective terms, except to the extent
enforceability may be limited by applicable bankruptcy, reorganization,
moratorium or other laws affecting the enforcement of creditor's rights
generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding at law or equity. The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated hereby and thereby will not, conflict with, or result in any
violation of, or default under (with or without notice or lapse of time, or
both), or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of a benefit under any provision of the Certificate of
Incorporation or Bylaws (or equivalent organizational documents) of Nasan, as
amended. No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required by or with
respect to Nasan in connection with the execution and delivery of this Agreement
by Nasan or the consummation by Nasan of the transactions contemplated hereby,
except for such consents, authorizations, filings, approvals and registrations
which, if not obtained or made, could not reasonably be expected to have a
material adverse effect on Seller or Com21 Israel and would not prevent, or
materially alter or delay any of the transactions contemplated by this
Agreement.
3.3 Broker's and Finders' Fees. Nasan has not incurred, nor will
it incur, directly or indirectly, any liability for brokerage or finders' fees
or agents' commissions or investment bankers' fees or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
3.4 Additional Funding and Sale of Equity Securities of Com21
Israel. Nasan represents that it intends to cause Com21 Israel to issue common
stock of Com21 Israel to founders and options to Com21 Israel employees. Nasan
represents that following such issuances and upon closing of a transaction for
the funding of at least $2,500,000 to Com21 Israel (the "NEXT TRANSACTION"), (a)
the amount owing under the Promissory Note attached
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hereto as Exhibit A and (b) all other outstanding debts of Com21 Israel in the
aggregate amount of $13,900,000 (such amount shall not include other debts
pursuant to a Promissory Note or Promissory Notes referred to pursuant to
Section 4.15 hereof, if any), shall automatically convert into such equity
securities with the same rights, preferences and privileges as all other holders
of such equity securities in such a manner that Seller shall own 19% of Com21
Israel's Common Stock Outstanding immediately following the closing of the Next
Transaction. For the purposes of the prior sentence, the term "Common Stock
Outstanding" shall mean (i) all of the Company's outstanding shares of common
stock, (ii) all shares of common stock issuable upon the exercise of outstanding
exercisable and convertible securities including securities issued to the
investors in the Next Transaction and (iii) all shares of common stock issuable
upon the exercise of options granted through the closing date of the Next
Transaction under Com21 Israel's option plan. In addition, Nasan represents that
it shall use its best efforts to secure equity financing such that the
Promissory Note attached hereto as Exhibit A shall convert into such equity
securities as described therein. Such terms and conditions of conversion shall
be governed by the Promissory Note attached hereto as Exhibit A.
3.5 Additional Advances Beyond Payment of April 1, 2001 Through
April 15, 2001 Expenses. Nasan represents that it shall cause Com21 Israel to
execute an interest bearing promissory note for such amount of funds advanced to
Com21 Israel in excess of $320,000 (such $320,000 in funds are related to
expenses for the fifteen (15) days prior to and including April 15, 2001), such
note to be payable one year from the date of execution of each promissory note
pursuant to this Section 3.5; provided, further, however, that the aggregate
amount advanced shall not exceed $250,000.
3.6 Representations and Warranties Complete. Nasan has not relied
on any other representations or warranties, whether express or implied, of
Seller with respect to the transactions contemplated hereby except as expressly
set forth herein.
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 Access to Information.
(a) No information or knowledge obtained in any
investigation pursuant to this Section 4.1 shall affect or be deemed to modify
any representation or warranty contained herein or the conditions to the
obligations of the parties to consummate the transactions contemplated hereby.
(b) For a period of eight years after the Closing, upon
reasonable written notice, Nasan or its affiliates (as long as Nasan or any of
its affiliates controls a least 50% of Com21 Israel), including Com21 Israel,
will give or cause to be given to Seller and its authorized representatives,
reasonable access to such information relating to Nasan or its affiliates and
Com21 Israel prior to the Closing as is reasonably necessary for the preparation
or filing of any Tax Return, financial statement or report, or for the
preparation or filing of any agreement, statement or report necessary to be made
to any regulatory authority or in connection with any
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regulatory matter; provided, however, that any such access shall be conducted at
a reasonable time and in such a manner as not to interfere unreasonably with the
operations of the business of Seller.
4.2 Confidentiality. ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall each
execute a non-disclosure agreement (the "CONFIDENTIALITY AGREEMENT"). In
addition, the parties agree that the terms and conditions of the transactions
contemplated hereby and information exchanged in connection with the execution
hereof shall be subject to the same standard of confidentiality as set forth in
the Confidentiality Agreement between Nasan and its affiliates, Com21 Israel and
Seller.
4.3 Public Disclosure. Unless otherwise permitted by this
Agreement, Nasan or its affiliates, Com21 Israel and Seller must consult with
each other before issuing any press release or otherwise making any public
statement or making any other public (or non-confidential) disclosure (whether
or not in response to an inquiry) regarding the terms of this Agreement and the
transactions contemplated hereby, and neither shall issue any such press release
or make any such statement or disclosure without the prior approval of the other
(which approval shall not be unreasonably withheld), except as may be required
by law or by any stock exchange or the NASD (in respect of which the parties
will use their reasonable best efforts to allow the other party to review such
disclosures); provided, however, that such approval shall be deemed to have been
given if either party has notified the other party if (i) such party has been
noticed via facsimile pursuant to Section 8.2 of this Agreement and (ii) no
response by the notified party shall have been given to the notifying party
within two business days of the distribution of such notice.
4.4 Consents; Cooperation.
(a) Each of Nasan, Com21 Israel and Seller shall
promptly apply for or otherwise seek, and use its commercially reasonable
efforts to obtain, all consents, approvals, authorizations or permits required
to be obtained by it for the consummation of the transactions contemplated
herein.
4.5 Legal Requirements. Nasan, Com21 Israel and Seller will, and
will cause their respective subsidiaries to, take all reasonable actions
necessary to comply in all material respects promptly with all legal
requirements which may be imposed on them with respect to the consummation of
the transactions contemplated by this Agreement and will promptly cooperate with
and furnish information to any party hereto necessary in connection with any
such requirements imposed upon such other party in connection with the
consummation of the transactions contemplated by this Agreement and will take
all reasonable actions necessary to obtain (and will cooperate with the other
parties hereto in obtaining) any consent, approval, order or authorization of,
or any registration, declaration or filing with, any Governmental Entity or
other person, required to be obtained or made by them in connection with the
taking of any action contemplated by this Agreement.
4.6 Proprietary Information.
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(a) All information (i) about the Utilized Business and
Seller, including without limitation, the identity of the Seller's customers and
suppliers, and all of the Seller's internal procedures and processes, costs,
materials, special customer requirements, pricing techniques, business plans,
and operational procedures and policies; and (ii) about any Intellectual
Property is referred to herein as "SELLER PROPRIETARY INFORMATION." Seller
Proprietary Information shall not include, however, information which is or
becomes generally available to the public other than as a result of a disclosure
by Seller or their directors, officers, employees, agents and advisors
(including, without limitation, financial advisors, attorneys and accountants)
(collectively "REPRESENTATIVES"), as required by law or a court or regulatory
authority or which becomes publicly available other than by a breach of Nasan of
this Agreement. Unless otherwise agreed to in writing by Seller, each of Nasan,
its affiliates and Com21 Israel shall keep all Seller Proprietary Information
confidential, shall not disclose or reveal any Seller Proprietary Information to
any person and shall not use Seller Proprietary Information for any purpose
except for Proprietary Information relating to the business of Com21 Israel. The
provisions of this Section 4.6(a) shall survive the Closing indefinitely.
"UTILIZED BUSINESS" shall be defined as all hardware and software related to the
Buell product, including but not limited to, third party software (WindRiver,
Broadcom, SNMP, IP and others), DOCSIS MAC, hardware interfaces, DOCSIS bridging
software, DOCSIS filtering software, packet buffer management and management
interfaces. Each of Nasan, its affiliates and Com21 Israel shall be responsible
for any breach of the terms of this provision by it or its Representatives;
provided, however, that Nasan and its affiliates shall be responsible for any
breach of the terms of this provision by Com21 Israel provided that at the time
of such breach, Nasan or its affiliates control at least 50% of Com21 Israel.
(b) All information (i) about the DOXphone and DOXcentral
business and Com21 Israel, including without limitation, the identity of the
Com21 Israel's customers and suppliers, and all of the Com21 Israel's internal
procedures and processes, costs, materials, special customer requirements,
pricing techniques, business plans, and operational procedures and policies; and
(ii) about any Intellectual Property is referred to herein as "COM21 ISRAEL
PROPRIETARY Information." Com21 Israel Proprietary Information shall not
include, however, information which is or becomes generally available to the
public other than as a result of a disclosure by Nasan or its affiliates, or
Com21 Israel, or any of their directors, officers, employees, agents and
advisors (including, without limitation, financial advisors, attorneys and
accountants) (collectively "REPRESENTATIVES"), as required by law or a court or
regulatory authority or which becomes publicly available other than by a breach
of Seller of this Agreement. Unless otherwise agreed to in writing by Com21
Israel, Seller shall keep all Com21 Israel Proprietary Information confidential,
shall not disclose or reveal any Proprietary Information to any person and shall
not use Proprietary Information for any purpose except for Com21 Israel
Proprietary Information relating to the business of Seller. Seller shall be
responsible for any breach of the terms of this provision by it or its
Representatives.
4.7 Covenants Regarding Employees and Covenant Not to Interfere,
Compete or Solicit Business.
(a) Each of Nasan and its affiliates and Seller hereby
agrees that, commencing on the date hereof, neither it nor any of its respective
affiliates shall induce or encourage, or assist others to induce or encourage,
any current employee of any of the other
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party to decline an employment arrangement with such other party, or interfere
in any manner with the relationship between each of the parties and such
employee and each of Nasan and its affiliates and Seller hereby agrees that for
a period of two years from the Closing, neither it nor any of its respective
affiliates shall induce or encourage, or assist others to induce or encourage,
any current employee of Seller or Nasan or its affiliates, as the case may be,
if such employee is hired by Nasan or Seller, to leave the other's employ,
whether to accept a position with it or an entity related to or affiliated with
it or otherwise. The provisions of this Section 4.8(a) shall survive the Closing
for a period of two years.
(b) Each of Nasan and its affiliates, and Seller
hereby agrees that commencing on the date hereof and ending on the second
anniversary of the Closing, neither it nor any of its respective affiliates
shall directly or indirectly in any manner whatsoever induce, or assist others
to induce any supplier of the other to terminate its association with such
entity or do anything, directly or indirectly, to interfere with the business
relationship between Seller or Nasan or its affiliates, as the case may be, and
any of its current or prospective suppliers.
(c) In furtherance of the sale of the Com21
Israel Shares to Nasan and more effectively to protect the business and good
will of Seller, upon the consummation of the transactions contemplated hereby,
Nasan and its affiliates agree that, for a period commencing on the Closing and
ending on the third annual anniversary of the Closing, it and its affiliates
will not: directly or indirectly (whether as an employer, employee, partner,
stockholder, consultant, investor, director, representative or otherwise)
anywhere within the world own, manage, operate, control or be employed by,
participate in, consult with, or be otherwise connected in any manner with the
ownership, management or operation of any business involving the (i) data-only
modems; (ii) voice modems which incorporate Seller's technology (such technology
shall include but not be limited to, Licensee Products and Licensee Hardware
Modifications as defined in the License Agreement attached hereto as Exhibit E,
or any modifications to or derivatives of any of the foregoing); or (iii)
stand-alone voice modems (such voice modems shall be defined as voice modems not
bundled with Com21 Israel's or a third party's end-to-end telephony system) (the
"COVERED ACTIVITIES"). Notwithstanding the foregoing, nothing herein shall
restrict Nasan or its affiliates from (i) owning, solely for investment purposes
up to five percent of any class of securities of any person engaged in the
Covered Activities, (ii) engaging and operating the DOXphone and DOXcentral
business, or any of other businesses (other than the business involving or
related to the Covered Activities), including without limitation, the business
of purchasing, reselling, installing, maintaining and servicing products
manufactured, distributed and sold by the DOXphone and DOXcentral business and
(iii) acquiring or owning, or managing or controlling any business whose annual
sales from products included in the Covered Activities represent less than
twenty percent of that business' annual sales, provided that the Seller disposes
of such competing business to a third party purchaser within 12 months after the
acquisition thereof.
(d) Without limiting the rights of the parties to pursue
all other legal and equitable rights available to them for violation of this
Section 4.7 or Section 4.8 by any of the other parties hereto, it is agreed that
other remedies cannot fully compensate a party for such a violation and that the
parties shall be entitled to injunctive relief to prevent the violation or the
continuing violation thereof. It is the intent and understanding of each party
hereto that if, in any action before any Governmental Entity legally empowered
to enforce Section 4.7 or Section 4.8,
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any term, restriction, covenant or promise in this Section 4.7 or Section 4.8 is
found to be unreasonable and for that reason unenforceable, then such term,
restriction, covenant or promise shall be deemed modified to the extent
necessary to make it enforceable by such court or agency.
4.8 Use of Names.
(a) For a period of three (3) months after the Closing,
Nasan and its affiliates shall have the royalty-free right to refer to the
Business as "formerly Com21 Israel, Ltd." and to use such reference in
advertising or in the description or name of any service or product from time to
time purchased, processed, manufactured or sold by Com21 Israel and its
affiliates in continuation of the Com21 Israel Business. Nasan and its
affiliates shall effect a name change from "Com21 Israel, Ltd." to CableCom
Solutions, Ltd. within 10 days of Closing, or such other name which does not
contain the name, and is not otherwise similar to, "Com21," as the Israeli
Registrar of Companies shall permit.
(b) From and after the Closing, neither Nasan nor any of
its affiliates nor Com21 Israel shall use any of the Seller's trademarks or
trade names other than DOXPHONE and DOXCENTRAL.
4.9 Additional Agreements. Com21 Israel and Seller shall use
commercially reasonable efforts to negotiate in good faith to enter into
agreements as described in this Section 4.10 within thirty (30) days of Closing.
(a) As additional consideration for the Com21 Israel
Shares, Com21 Israel shall enter into an OEM agreement with Seller to purchase
Seller's DP1110 (Buell) and next derivative cable modem products with the
specific DOCSIS 1.0 software code (and the DP2060 (Boxter) which is anticipated
to be with the specific DOCSIS 1.1 software code, when and if it is developed)
for use in voice products which will only be sold with Com21 Israel's DOXphone
product. Com21 Israel and Seller agree to negotiate in good faith with respect
to other OEM arrangements for products developed in the future for sale with
Com21 Israel's DOXphone product, on a best-customer terms basis. Com21 Israel
and Seller may enter into an OEM agreement with Com21 for selling the Com21
Israel-designed audio plug-in board (the "V-BOARD") with its CPE products. Com21
Israel and Seller agree to negotiate in good faith any other OEM arrangements
for future developed products for sale with Seller's CPE products, on a
best-customer terms basis. Seller and Com21 Israel will provide the training and
support required for the implementation of the above OEM arrangements and will
be available on a reasonable basis.
(b) In addition, Seller and Com21 Israel will enter into
an OEM agreement under terms similar to those described in paragraph (a) above,
for the use of Seller's DP1110-1112 (Buell and Euro model) and DP2060 (Boxter)
cable modem within the framework of a joint venture/joint development agreement
with ▇▇▇▇▇▇ ▇▇, a company organized under the laws of Austria ("KAPSCH") for use
in a voice end to end solution. Com21 Israel and Seller agree to negotiate in
good faith with respect to other OEM arrangements for future developed products
for use with respect to such agreement with Kapsch, on a best-customer terms
basis.
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4.10 Payment of Royalties to Office of Chief Scientist. Com21
Israel shall remain solely responsible for any royalties required to be paid to
the Office of Chief Scientist, whether such royalty obligation was incurred
prior to Closing or post-Closing.
4.11 Procurement Agreement. Com21 shall sell to Com21 Israel
certain parts and components identified on SCHEDULE 4.11 and on such terms as
described on SCHEDULE 4.11.
4.12 Training. Following the Closing, Com21 will provide two
weeks of training on Buell and EuroBuell hardware, manufacturing, and support
software to specified Com21 Israel representatives at Com21's Milpitas facility
at a time to be mutually agreed upon by the parties. Seller agrees to provide
such additional training as may be necessary for an additional period of up to
six (6) months at cost.
4.13 Access to Certification Test Laboratory. Com21 shall provide
limited access to its DOCSIS certification test lab to Com21 Israel at a time
and on a materials fee basis as mutually agreed upon between the parties;
provided, however that such access shall only be provided by Com21 after
completion of preparation for Wave 19, which is currently scheduled to be
certified on or about July 20, 2001.
4.14 Trademark Rights. Com21 shall assign without fee the
trademark rights to the DoxCentral and Doxphone products to Com21 Israel.
4.15 Additional Advances Beyond Payment of April 1, 2001 Through
April 15, 2001 Expenses. Seller agrees to loan Com21 Israel funds from time to
time, at Com21 Israel's request, up to an aggregate of $250,000, such amount to
be in excess of $320,000 (such funds related to expenses for the fifteen (15)
days prior to and including April 15, 2001); provided, however, that Com21
Israel shall execute an interest bearing promissory note for each draw down from
the aggregate of $250,000, each such note to be payable one year from the date
of Closing. Such note shall be in the form attached hereto as Exhibit C.
4.16 Additional Promissory Notes. Com21 Israel agrees to pay to
Seller any amounts paid, whether applicable to principal amounts under the notes
or Linkage (as defined therein), to Com21 Israel, or Nasan or its affiliates, by
▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ pursuant to such notes by and between such
individuals and GADline, Ltd., each such note dated July 1, 2000.
4.17 Car Liens. Com21 Israel agrees to pay to any applicable
amounts in connection with any cars leased by Com21 Israel. Com21 Israel shall
effect the transfer of, guarantee, or assumption of liability pursuant to any
existing car liens within 10 days of the Closing.
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ARTICLE V
CONDITIONS
5.1 Conditions to Obligations of Each Party to Effect the
Closing. The respective obligations of each party to this Agreement to
consummate and effect this Agreement and the transactions contemplated hereby
shall be subject to the satisfaction at or prior to the Closing of each of the
following conditions, any of which may be waived, in writing, by agreement of
all the parties hereto:
(a) No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal or regulatory restraint or
prohibition preventing the consummation of the transactions contemplated hereby
shall be in effect, nor shall any proceeding brought by an administrative agency
or commission or other governmental authority or instrumentality, domestic or
foreign, seeking any of the foregoing be pending; nor shall there be any action
taken, or any statute, rule, regulation or order enacted, entered, enforced or
deemed applicable to the transactions contemplated hereby, which makes the
consummation of the transactions contemplated hereby illegal. In the event an
injunction or other order shall have been issued, each party agrees to use
reasonable best efforts to have such injunction or other order lifted.
(b) Representations, Warranties and Covenants. The
representations and warranties of Nasan and Seller in Article III and Article
II, respectively, in this Agreement shall be true and correct in all material
respects (except for such representations and warranties that are qualified by
their terms by a reference to materiality which representations and warranties
as so qualified shall be true in all respects) on and as of the date hereof and
on and as of the Closing as though such representations and warranties were made
on and as of such time. Nasan and Seller shall have performed and complied in
all material respects with all covenants, obligations and conditions of this
Agreement required to be performed and complied with by them as of the Closing.
5.2 Additional Conditions to Obligations of Seller. The
obligations of Nasan and Seller to consummate and effect this Agreement and the
transactions contemplated hereby shall be subject to the satisfaction at or
prior to the Closing of each of the following conditions, any of which may be
waived, in writing, by Nasan and Seller:
(a) Certificate of Nasan. Seller shall have been provided
with a certificate executed on behalf of Nasan to the effect set forth in
Section 5.2(a).
(b) Confidentiality Agreement. ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ shall have executed a Proprietary Information and Inventions Agreement
in the form attached hereto as Exhibit D.
(c) Promissory Note. Com21 Israel shall have executed the
Convertible Promissory Note in the form attached hereto as Exhibit A.
(d) Reseller Agreement. Com21 Israel shall have executed a
Reseller Agreement in the form attached hereto as Exhibit B.
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(e) Approval of Office of Chief Scientist. Nasan shall
have received the approval of the Office of Chief Scientist.
(f) License Agreement. Com21 Israel shall have executed a
License Agreement in the form attached hereto as Exhibit E.
5.3 Additional Conditions to Obligations of Nasan. The
obligations of Nasan and Seller to consummate and effect this Agreement and the
transactions contemplated hereby shall be subject to the satisfaction at or
prior to the Closing of each of the following conditions, any of which may be
waived, in writing, by Nasan:
(a) Transfer of Com21 Israel Shares. Seller shall have
delivered to Nasan the certificates and other instruments referred to in Section
1.4(a) above.
(b) Promissory Note. Seller shall transferred $1,320,000
to the account of Com21 Israel pursuant to the Promissory Note in the form
attached hereto as Exhibit A.
(c) Reseller Agreement. Seller shall have executed a
Reseller Agreement in the form attached hereto as Exhibit B.
(d) License Agreement. Seller shall have executed a
License Agreement in the form attached hereto as Exhibit E.
(e) Trademark Assignment. Seller shall have delivered to
Com21 Israel duly signed instruments of assignment of the trademark rights to
DOXCENTRAL and DOXPHONE.
ARTICLE VI
INDEMNIFICATION
6.1 Survival of Representations and Warranties.
(a) Notwithstanding any investigation conducted
at any time with regard thereto by or on behalf of either party, the
representations and warranties set forth in Articles II and III of this
Agreement shall, absent actual fraud, or intentional misrepresentation survive
the execution, delivery, and performance of this Agreement and the Closing until
the expiration of the applicable statute of limitations and the representations.
In the case of actual fraud or intentional misrepresentation, the
representations and warranties of such breaching party shall survive
indefinitely. All representations and warranties of each party set forth in this
Agreement shall be deemed to have been made again by such party at and as of the
Closing.
(b) As used in this Article, any reference to a
representation, warranty, or covenant contained in any Section of this Agreement
shall include the Schedule or Exhibit relating to such Section.
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6.2 Indemnification. Subject to the limitations set forth in this
Article VI, each of Nasan and its affiliates and Com21 Israel, jointly and
severally, will indemnify and hold harmless Seller and their respective
officers, directors, agents and employees, and each person, if any, who controls
or may control Seller within the meaning of the Securities Act (hereinafter,
including for this purpose Com21 Israel to the extent they are also damaged
parties, referred to individually as an "INDEMNIFIED PERSON" and collectively as
"INDEMNIFIED PERSONS"), from and against any and all losses, costs, damages,
liabilities and expenses arising from claims, demands, actions, causes of
action, including, without limitation, reasonable legal fees (collectively,
"DAMAGES") arising out of, or relating to (i) any misrepresentation or breach of
or default in connection with any of the representations, warranties, covenants
and agreements given or made by Nasan or its affiliates or Com21 Israel, as the
case may be, in this Agreement, the Disclosure Schedules or any exhibit or
schedule to this Agreement (provided, however, that Nasan shall not be required
to indemnify Seller as to such representations, warranties, covenants, or
agreements given or made by Com21 Israel if, at the time of any such
misrepresentation or breach of or default in connection with any of the
representations, warranties, covenants, actions or omissions in sections 4.3,
4.7, 4.8, 4.9, 4.10, 4.15 or 7 of this Agreement, or in the Reseller Agreement
attached hereto as Exhibit D or in the License Agreement attached hereto as
Exhibit E, such misrepresentation, breach or default occurred when Nasan
controlled less than 51% of ▇▇▇▇▇ ▇▇▇▇▇▇); (ii) the operations and liabilities
of the Com21 Israel business, whether known or unknown (provided, however, that
Nasan shall not be required to indemnify Seller as to such covenants, or
agreements given or made by Com21 Israel if, at the time of any such
misrepresentation or breach of or default in connection with any such covenant,
action or omission in sections 4.3, 4.7, 4.8, 4.9, 4.10, 4.15 or 7 of this
Agreement, such misrepresentation, breach or default occurred when Nasan
controlled less than 51% of ▇▇▇▇▇ ▇▇▇▇▇▇); (iii) any failure by Nasan or its
affiliates, or Com21 Israel to perform or comply with any covenant applicable to
them contained in this Agreement or any covenant applicable to them in the
Transaction Documents (provided, however, that Nasan shall not be required to
indemnify Seller as to such covenants, or agreements given or made by Com21
Israel if, at the time of any such misrepresentation or breach of or default in
connection with any such covenant, action or omission in sections 4.3, 4.7, 4.8,
4.9, 4.10, 4.15 or 7 of this Agreement, such misrepresentation, breach or
default occurred when Nasan controlled less than 51% of ▇▇▇▇▇ ▇▇▇▇▇▇); (iv) any
claim, action, proceeding, demand, action or cause of action relating to the
License Agreement and Distribution Agreement, each of these agreements by and
between Com21 Israel and Blonder Tongue Laboratories Inc., each dated January
31, 2000; and (v) any liability with respect to any agreement to which Com21
Israel is a party on or prior to Closing (provided, however, that Nasan shall
not be required to indemnify Seller as to such covenants, or agreements given or
made by Com21 Israel if, at the time of any such misrepresentation or breach of
or default in connection with any such covenant, action or omission in sections
4.3, 4.7, 4.8, 4.9, 4.10, 4.15 or 7 of this Agreement, such misrepresentation,
breach or default occurred when Nasan controlled less than 51% of Com21 Israel)
including, but not limited to, (a) the Lease Agreement by and between Com21
Israel and Rokar International Ltd., dated October 11, 1996, as amended; (b) the
License Agreement and Distributorship Agreement, each of these agreements by and
between Com21 Israel and Blonder Tongue Laboratories Inc., each dated January
31, 2000; (c) all prior customer and sales orders; (d) Agreement with Internet
Telecom Company, Ltd., dated March 31, 1999; (e) royalties payable to the
Israeli Office of the Chief Scientist; (f) the debenture agreements with Bank
Leumi (dated March 7, 1999), Bank Discount
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(dated February 1, 1999) and Bank Mizrahi (dated February 21, 1999); (g) any
agreements, whether oral or written with Liwest Kabelmedien BGmbH including the
agreement dated May 25, 2000; (h) a memorandum of understanding with
Breitbandkabelgesellschaft GmbH Neuruppin dated May 5, 1999; (i) any agreements,
whether oral or written with Siemens Nuremberg including a purchase order dated
February 4, 2000; and (j) any agreements, whether oral or written with Empresas
Publicas ▇▇ ▇▇▇▇▇▇▇▇. The calculation of Damages shall take into consideration
any Tax benefits or insurance recoveries realized by the Indemnified Person as a
result of the incurrence of the Damages (net of any Tax cost of the receipt of
the indemnity payments). In determining the amount of any Damage attributable to
a breach, any materiality standard contained in a representation, warranty or
covenant shall be disregarded.
6.3 Procedure for Indemnification with Respect to Third-Party
Claims.
(a) If any of the Indemnified Persons determines
to seek indemnification under this Article VI with respect to any Damage
resulting from the assertion of liability by third parties, such Indemnified
Person shall give notice to Nasan, its affiliates or Com21 Israel within 30 days
of such Indemnified Person becoming aware of any such Damage, or of facts upon
which any such Damage will be based. The notice shall set forth such material
information with respect thereto as is then reasonably available to such
Indemnified Person. In case any such liability is asserted against an
Indemnified Person, and such Indemnified Person notifies Nasan, its affiliates
or Com21 Israel thereof, Nasan, its affiliates or Com21 Israel will be entitled,
if it so elects by written notice delivered to such Indemnified Person within 20
days after receiving such Indemnified Person's notice, to assume the defense
thereof with counsel satisfactory to such Indemnified Person. Notwithstanding
the foregoing, (i) an Indemnified Person shall also have the right to employ its
own counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of such Indemnified Person unless Nasan, its affiliates or Com21
Israel has elected not to assume the defense thereof or unless such Indemnified
Person shall reasonably determine that there is a conflict of interest between
or among such Indemnified Person and Nasan, its affiliates or Com21 Israel with
respect to such Damage in which case the fees and expenses of such counsel will
be borne by Nasan, its affiliates and Com21 Israel, (ii) such Indemnified Person
shall not have any obligation to give any notice of any assertion of liability
by a third party unless such assertion is in writing, and (iii) the rights of
any Indemnified Person to be indemnified hereunder in respect of any Damage
resulting from the assertion of liability by third parties shall not be
adversely affected by its failure to give notice pursuant to the foregoing
unless, and, if so, only to the extent that, Nasan, its affiliates or Com21
Israel is materially prejudiced thereby. With respect to any assertion of
liability by a third party that results in a Damage, the parties hereto shall
make available to each other all relevant information in their possession
material to any such assertion.
(b) In the event that either Nasan, its affiliates or
Com21 Israel, within 30 days after receipt of the aforesaid notice of any
Damage, fails to assume the defense of an Indemnified Person against such
Damage, such Indemnified Person shall have the right to undertake the defense,
compromise, or settlement of such action on behalf of and for the account,
expense, and risk of Nasan, its affiliates or Com21 Israel; provided, however
that the Indemnified Person shall keep Nasan, its affiliates or Com21 Israel
timely apprised of the status of any claim with respect to such Damage and shall
not settle such claim without the written
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consent of Nasan, its affiliates or Com21 Israel, which consent shall not be
unreasonably withheld.
(c) Notwithstanding anything in this Article VIII
to the contrary, (i) if there is a reasonable probability that any Damage may
materially adversely affect an Indemnified Person, Seller shall have the right
to participate in such defense, compromise, or settlement and (ii) the Nasan,
its affiliates or Com21 Israel shall not, without Seller's written consent
(which consent shall not be unreasonably withheld), settle or compromise any
Loss and Expense or consent to entry of any judgment in respect thereof.
6.4 Procedure for Indemnification with Respect to Non-Third Party
Claims. In the event that an Indemnified Person asserts the existence of a claim
giving rise to a Damage (but excluding claims resulting from the assertion of
liability by third parties), it shall give written notice to Nasan, its
affiliates and Com21 Israel. Such written notice shall state that it is being
given pursuant to this Section 6.4, specify the nature and amount of the claim
asserted, and indicate the date on which such assertion shall be deemed accepted
and the amount of the claim deemed a valid claim (such date to be established in
accordance with the next sentence). If Nasan, its affiliates or Com21 Israel,
within 30 days after the receipt of notice by such Indemnified Person, shall not
give written notice to such Indemnified Person announcing its intent to contest
such assertion of such Indemnified Person, such assertion shall be deemed
accepted and the amount of claim shall be deemed a valid claim. In the event,
however, that Nasan, its affiliates or Com21 Israel contests the assertion of a
claim by giving such written notice to such Indemnified Person within said
period, then the parties shall act in good faith to reach agreement regarding
such claim. In the event that arbitration or litigation shall arise with respect
to any such claim, the prevailing party in such arbitration or litigation shall
be entitled to reimbursement of costs and expenses incurred in connection with
such arbitration or litigation including attorney fees, if the parties hereto,
acting in good faith, cannot reach agreement with respect to such claim within
thirty (30) days after such notice.
6.5 Tax Matters. The payment of, and indemnification for, Tax
liabilities shall be governed by the provisions of Article VII.
ARTICLE VII
CERTAIN TAX MATTERS
Nasan, Com21 Israel and Seller hereby covenant and agree with
respect to certain Tax matters as follows:
7.1 Returns; Indemnification; Liability for Taxes.
(a) Nasan and Com21 Israel (i) shall prepare and
file (or cause to be prepared and filed) on a timely basis all Tax Returns with
respect to Com21 Israel for all taxable periods ending after the Closing and
(ii) shall pay and indemnify and hold Seller harmless against and from, all
Taxes of Com21 Israel for all taxable periods ending after the Closing including
any Taxes imposed on Com21 Israel by reason of it having been a member of any
consolidated, combined, unitary or aggregate group for Tax purposes prior to
Closing.
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7.2 Conduct of Audits and Other Procedural Matters. Nasan and its
affiliates shall, at their own expense, control any audit or examination by any
Tax Authority, and have the right to initiate any claim for refund or amended
return, and contest, resolve and defend against any assessment, notice of
deficiency or other adjustment or proposed adjustment of Taxes of Com21 Israel
for any taxable period or for any Taxes for which Nasan or Com21 Israel is
charged with payment or indemnification responsibility under this Agreement.
Seller agrees to provide Com21 Israel with all information necessary in order
for Nasan and its affiliates to fulfill its obligations under this Article VII.
7.3 Definitions. "TAX" (and, with correlative meaning, "TAXES"
and "TAXABLE") means (i) any net income, alternative or add-on minimum tax,
gross income, gross receipts, sales, use, ad valorem, transfer, franchise,
profits, license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property, environmental or windfall profit tax, custom duty
or other tax, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or any penalty, addition to tax or
additional amount imposed by any governmental entity (a "TAX AUTHORITY")
responsible for the imposition of any such tax (domestic or foreign), (ii) any
liability for the payment of any amounts of the type described in (i) as a
result of being a member of an affiliated, consolidated, combined, unitary or
aggregate group for any Taxable period, and (iii) any liability for the payment
of any amounts of the type described in (i) or (ii) as a result of being a
transferee of or successor to any person or as a result of any express or
implied obligation to indemnify any other person. As used herein, "TAX RETURN"
shall mean any return, statement, report or form (including, without limitation,
estimated tax returns and reports, withholding tax returns and reports and
information returns and reports) required to be filed with respect to Taxes.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Expenses. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby (including, without
limitation, the fees and expenses of its advisers, accountants and legal
counsel) shall be paid by the party incurring such expense, except as otherwise
provided in this Agreement.
8.2 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with confirmation of receipt) to the parties
at the following address (or at such other address for a party as shall be
specified by like notice):
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(a) if to Seller, to:
Com21, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Nasan or Com21 Israel, to:
S.E. Nasan & Co., LLC
Moshav Bet ▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Israel
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: 972-2-533-3453
with a copy to:
Shinar, Shachor Weissberger
1 Azrieli Center (The Round Tower - ▇▇▇▇
▇▇▇▇▇)
▇▇▇-▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Adv. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Facsimile No.: 972 3 6081790
Telephone No.: ▇▇▇ ▇ ▇▇▇▇▇▇▇
8.3 Interpretation. When a reference is made in this Agreement to
Exhibits, such reference shall be to an Exhibit to this Agreement unless
otherwise indicated. The words "include," "includes" and "including" when used
herein shall be deemed in each case to be followed by the words "without
limitation." The phrase "made available" in this Agreement shall mean that the
information referred to has been made available if requested by the party to
whom such information is to be made available. The phrases "the date of this
Agreement," "the date hereof," and terms of similar import, unless the context
otherwise requires, shall be deemed to refer to June 5, 2001. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
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8.4 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
8.5 Entire Agreement; Nonassignability; Parties in Interest. This
Agreement and the documents and instruments and other agreements specifically
referred to herein or delivered pursuant hereto, including the Exhibits, the
Schedules, including the Disclosure Schedule (a) constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof, (b) are not intended to confer upon
any other person any rights or remedies hereunder; and (c) shall not be assigned
by operation of law or otherwise except as otherwise specifically provided. This
Agreement shall be binding upon and insure to the benefit of the parties and
their respective successors and permitted assigns.
8.6 Severability. In the event that any provision of this
Agreement, or the application thereof, becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder of
this Agreement will continue in full force and effect and the application of
such provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further agree
to replace such void or unenforceable provision of this Agreement with a valid
and enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of such void or unenforceable provision.
8.7 Remedies Cumulative. Except as otherwise provided herein, any
and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by
law or equity upon such party, and the exercise by a party of any one remedy
will not preclude the exercise of any other remedy.
8.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of Israel without reference to such
state's principles of conflicts of law; provided, further, however that in the
event that Com21 Israel shall execute agreements to sell equity securities of
Com21 Israel which are governed by the laws of any other state other than
Israel, then upon the closing of such sale of equity securities, this Agreement
and the matters specified herein and in Section 8.10 shall be governed by the
laws of such other state by which the sale of equity securities shall have been
governed. In the event that Israeli law ceases to govern this Agreement pursuant
to this Section 8.8, the parties shall be deemed to submit to the jurisdiction
and arbitration procedures of such other jurisdiction by which the sale of
equity securities shall have been governed in the same manner and procedure as
Section 8.10 below.
8.9 Amendment and Modification. This Agreement may be amended,
modified or supplemented at any time by the parties hereto. This Agreement may
be amended only by an instrument in writing signed on behalf of the parties
hereto.
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8.10 Arbitration of Disputes; Submission to Jurisdiction; Consent
to Service of Process.
(a) Any and all disputes or controversies arising
under, out of, in connection with or in relation to this Agreement shall be
determined and settled by binding arbitration, held in Jerusalem, Israel in
accordance with this Section 8.10. Upon the occurrence of a dispute or
controversy, a party may submit the dispute or controversy for such arbitration
pursuant to this Section 8.10 by delivery of written notice to the other party
demanding an arbitration and specifying the controversy or dispute to be
arbitrated. Within ten (10) Business Days of the delivery of such notice, the
parties shall agree upon three arbitrators. If the parties are unable to select
three arbitrators within such ten (10) day period, each party shall within five
(5) Business Days thereafter select an arbitrator and the arbitrators so chosen
shall select the third arbitrator. The arbitration shall be held in accordance
with the rules of the American Arbitration Association and judgment upon any
award rendered by the three arbitrators shall be valid, binding, final and
nonappealable.
(b) For the purpose of enforcement of any
arbitration award hereunder, the parties hereto hereby irrevocably submit to the
exclusive jurisdiction of the court holding jurisdiction in Jerusalem, Israel
over any dispute arising out of or relating to this Agreement or any of the
transactions contemplated hereby and each party hereby irrevocably agrees that
all claims in respect to such dispute or any suit, action or proceeding related
thereto may be heard and determined in each court. The parties hereby
irrevocably waive, to the fullest extent permitted by applicable laws, any
objection which they may now or hereafter have to the laying of venue of any
such dispute brought in such court or any defense of inconvenient forum for the
maintenance of such dispute. Each of the parties hereto agrees that a judgment
in any such dispute may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.
(c) Each of the parties hereto hereby consents to
process being served by any party to this Agreement in any suit, action or
proceeding by the mailing of a copy thereof in accordance with the provisions of
Section 8.2 hereof. In the event that Israeli law ceases to govern this
Agreement pursuant to Section 8.8 above, the provisions of Section 8.8 shall be
deemed to reflect the parties' submission to the jursidictin and arbitration
procedures of such other jurisdiction by which the sale of equity securities
shall have been governed.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized,
all as of the date first written above.
COM21
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S.E. NASAN CO., LLC
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
COM21 ISRAEL, LTD.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
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