EXHIBIT 10.45
STOCK AND WARRANT PURCHASE AGREEMENT
STOCK AND WARRANT PURCHASE AGREEMENT (this "Agreement") made as of July
10, 2003 by and between ON TRACK INNOVATIONS LTD., an Israeli corporation having
its chief executive office located at ▇.▇.▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇ (the "Company"), and the purchaser identified on Exhibit 1 hereto (the
"Purchaser").
WHEREAS, the Purchaser has agreed to purchase from the Company, and the
Company has agreed to sell to the Purchaser, the Ordinary Shares, NIS 0.01
nominal value, of the Company (the "Ordinary Shares") described herein; and
WHEREAS, the Company has agreed to issue to the Purchaser certain
Warrants (the "Warrants") to purchase Ordinary Shares of the Company;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchaser and the Company
agree as follows:
Section 1. Issuance of Ordinary Shares and Warrant. Subject to the
terms and conditions of this Agreement, the Purchaser agrees, simultaneously
with the execution and delivery of this Agreement, to purchase from the Company
an aggregate of 181,818 Ordinary Shares at a purchase price of U.S. $2.75 per
share for an aggregate purchase price of U.S. $500,000, all as described on
Exhibit 1 hereto. Simultaneously with the execution and delivery of this
Agreement (i) the Purchaser is paying the Purchase Price by wire transfer of
immediately available funds to the Company in accordance with the wire transfer
instructions set forth on Exhibit 2 hereto and (ii) the Company is delivering to
the Purchaser a stock certificate evidencing the Purchaser's ownership of
181,818 Ordinary Shares. Simultaneously with the execution and delivery of this
Agreement, the Company is issuing to the Purchaser warrants to purchase an
aggregate of 90,909 Ordinary Shares of the Company, such Warrants to be in the
form attached hereto as Exhibit 3. Simultaneously with the execution and
delivery of this Agreement, the Company and the Purchaser are executing and
delivering a Registration Rights Agreement (the "Registration Rights Agreement")
substantially in the form of Exhibit 4 hereto. As used herein the term
"Transaction Documents" means this Agreement, the Warrants and the Registration
Rights Agreement.
Section 2. Representations and Warranties. The Company represents and
warrants to the Purchaser that:
(a) Organization, Good Standing, and Qualification of Company. The
Company is a corporation duly organized and validly existing and in good
standing under the laws of Israel, and has the corporate power to own its
properties and to carry on its business as now being conducted and as proposed
to be conducted. The Company is qualified to do business as a foreign
corporation and is in good standing in every jurisdiction in which the nature of
the business transacted by it or the character of the properties owned or leased
by it requires such licensing or qualification, except where the failure so to
qualify would not have a materially
adverse effect on its business or financial condition. The Company has the
corporate power and authority to execute, deliver and perform the Transaction
Documents to be issued by it and to deliver the Ordinary Shares issuable upon
exercise of the Warrants. The Transaction Documents have been duly authorized
and executed by the Company and constitute the Company's valid and legally
binding obligations enforceable in accordance with their respective terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
relating to, or affecting the enforcement of, creditors' rights generally.
(b) Financial statements. The financial statements of the Company for
the fiscal year ended December 31, 2002 and which the Company has previously
furnished to the Purchaser are true and correct, are in accordance with the
books and records of the Company and fairly present the financial position and
the results of operations of the Company, as at and for the periods indicated.
There have been no material adverse changes in the condition, financial or
otherwise, of the Company taken as a whole since December 31, 2002.
(c) Litigation, Compliance with Laws. Except as set forth on Schedule
2(d), there are no actions, suits or proceedings pending or, to the Company's
knowledge, threatened against or affecting the Company which may result in any
material adverse effect on its business, properties or condition. There is no
exiting law, rule, regulation or order, and the Company is not aware of any
proposed law, rule, regulation or order, whether Federal or state, which would
prohibit or restrict the Company from, or otherwise materially adversely affect
the Company in, conducting its business in any jurisdiction in which it is now
conducting business or in which it proposes to conduct business.
(d) Title and Liens. Except as set forth on Schedule 2(e) hereto, the
property and assets of the Company are free from all liens, charges, security
interests, and encumbrances and the Company has good and marketable title to all
personal property and assets included in its most recent balance sheet or
subsequently acquired by the Company, except personal property and assets
subsequently sold or otherwise disposed of in the ordinary course of business.
(e) Conflicting agreements and charter provisions. The execution and
delivery of the Transaction Documents and any other documents to be delivered by
the Company hereunder, the consummation of the transactions herein or therein
contemplated, the fulfillment of the terms hereof or thereof, and the compliance
with the terms and provisions hereof or the thereof, will not conflict with or
result in a breach of any of the terms, conditions, or provisions of any
corporate restriction or of any agreement or instrument to which the Company is
a party or by which it is bound, or constitute a default thereunder, except
where the consequences of any such breach or default would not have a material
adverse effect on the Company, or result in the creation or imposition of any
lien, charge, security interest, or encumbrance of any nature whatsoever upon
any of the property or assets of the Company pursuant to the terms of any such
agreement or instrument, except where consents have been obtained.
Section 3. Representations by the Purchaser
The Purchaser represents and warrants to the Company as follows:
(a) Investment Purposes. The Purchaser represents to the Company that
the Purchaser is acquiring the Ordinary Shares and the Warrants for its own
account, for the purpose of investment, and not with a view to the distribution
or resale of any thereof, and the Purchaser
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has no present plans to enter into any contract, undertaking, agreement or
arrangement for any such distribution or resale.
(b) Enforceability. This Agreement constitutes the Purchaser's valid
and legally binding obligation enforceable in accordance with its terms, except
as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
relating to, or affecting the enforcement of, creditors' rights generally.
(c) Sophistication. The Purchaser is a sophisticated investor, and has
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of investing in the Company and receiving the
Warrants. Without limiting the foregoing, the Purchaser represents and warrants
that its is an "accredited investor," as that term is defined in Rule 501 of
Regulation D under the Securities Act of 1933, as amended (the "Securities
Act"). The Purchaser has the financial ability to bear the economic risk of such
Purchaser's investment contemplated hereby and has adequate net worth and means
of providing for its current needs and contingencies to sustain a complete loss
of its investment and has no need for liquidity in its investment in the
Company.
(d) Restrictions on Transferability. The Purchaser understands and
agrees that (i) the Ordinary Shares, the Warrants and the Ordinary Shares
issuable upon exercise of the Warrants (the "Securities") have not been
registered under the Securities Act by reason of their issuance in a transaction
exempt from the registration requirements of the Securities Act, (ii) the
Securities must be held indefinitely unless a subsequent disposition thereof is
registered under the Securities Act or is exempt from such registration, (iii)
the Securities will bear a legend to such effect and (iv) the Company will make
a notation on its transfer books to such effect. Any such transfer, sale,
assignment or hypothecation shall be conditioned upon receipt by the Company by
an opinion of counsel satisfactory to the Company and its counsel, stating that
the transferee is a permitted transferee under this Section and that such
transfer does not violate the Securities Act or any state securities laws.
(e) Access to Information. The Purchaser and its advisers have been
furnished all materials relating to the Company which they have requested. The
Purchaser and its advisers have been afforded the opportunity to ask questions
of the Company concerning the investment contemplated hereby and to obtain any
additional information they have deemed necessary as a condition to making such
investment.
Section 4. Debt; Issuances of Securities. No provision of this
Agreement or of any other document executed and delivered by the Company in
connection with this Agreement restricts, or shall be construed to restrict, in
any way the ability of the Company to incur indebtedness or to issue capital
stock or other equity securities (or securities convertible into equity
securities) of the Company or to grant liens on its property and assets.
Section 5. Trading Limitations. For the period beginning on the date
hereof and ending on July 10, 2004 (the "Restricted Period") the Corporation
shall cause the officers and directors identified on Exhibit 5 hereto to refrain
from selling any Ordinary Shares held by them from time to time without the
prior written consent of Herald Investment Trust plc other than sales pursuant
to Rule 144 under the United States Securities Act of 1933, as amended or sales
of Ordinary Shares purchased in open market transactions. The foregoing covenant
shall cease to apply on the earlier of July 10, 2004 or the date after the
Registration Statement, filed
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pursuant to the Registration Rights Agreement, has been declared effective by
the United States Securities and Exchange Commission and the Closing price of
the Ordinary Shares traded on NASDAQ has been at least $5.50 on five consecutive
trading days (the "Release Date"). During the balance of the Restricted Period
after the Release Date, the Corporation shall cause its officers and directors
to refrain from selling, in the aggregate, not more than 200,000 Ordinary Shares
provided that the foregoing restriction on sales shall lapse when the closing
price of the Ordinary Shares traded on NASDAQ has been at least $8.25 on five
consecutive trading days.
Section 6. Survival of covenants, agreement, representations and
warranties. All covenants, agreements, representations and warranties made
herein and in certificates delivered pursuant hereto shall survive the execution
and delivery of this Agreement and the Warrants and shall continue in full force
and effect in accordance with applicable statutes of limitations.
Section 7. Entire agreement; no oral change. This Agreement and the
Warrants embody the entire agreement and understanding between the Company and
the Purchaser relating to the subject matter hereof, and supersede all prior
agreements and understandings relating to such subject matter. This Agreement
may not be changed orally, but only by an agreement in writing signed by the
party against whom enforcement of any waiver, change, modification, or discharge
is sought.
Section 8. Notices, etc. Any notice required by the provisions of this
Agreement will be writing and will be deemed effectively given: (a) upon
personal delivery to the party to be notified; (b) when sent by confirmed telex
or facsimile if sent during normal business hours of the recipient; if not, then
on the next business day; (c) three (3) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid; or (d)
one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. Notices
shall be sent to the addresses first set forth above or to such other address as
a party furnishes to other parties in writing.
Section 9. Law Governing. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York with respect
to contracts executed and performed in the State of New York.
Section 10. JURISDICTION. THE COMPANY AND THE PURCHASER CONSENT THAT
ANY LEGAL ACTION OR PROCEEDING AGAINST IT OR THEM UNDER, ARISING OUT OF OR IN
ANY MANNER RELATING TO THIS AGREEMENT, OR ANY OTHER INSTRUMENT OR DOCUMENT
EXECUTED AND DELIVERED IN CONNECTION HEREWITH, SHALL BE BROUGHT EXCLUSIVELY IN
▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ LOCATED IN NEW YORK COUNTY OR IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. THE COMPANY AND THE
PURCHASER, BY THEIR EXECUTION AND DELIVERY OF THIS AGREEMENT, EXPRESSLY AND
IRREVOCABLY CONSENT AND SUBMIT TO THE PERSONAL JURISDICTION OF ANY OF SUCH
COURTS IN ANY SUCH ACTION OR PROCEEDINGS. THE COMPANY AND THE PURCHASER AGREE
THAT PERSONAL JURISDICTION OVER THEM MAY BE OBTAINED BY THE DELIVERY OF A
SUMMONS (POSTAGE PREPAID) IN ACCORDANCE WITH THE PROVISIONS OF SECTION 8 OF THIS
AGREEMENT. ASSUMING DELIVERY OF THE SUMMONS IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 8 OF THIS AGREEMENT, THE COMPANY AND THE PURCHASER HEREBY EXPRESSLY AND
IRREVOCABLY
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WAIVE ANY ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OF FORUM NON
CONVENIENS OR ANY SIMILAR BASIS. EACH PARTY HERETO EXPRESSLY WAIVES ANY RIGHT TO
A TRIAL BY JURY IN ANY ACTION OR PROCEEDING UNDER THIS AGREEMENT, AND AGREES
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.
Section 11. Successors and Assigns. All the covenants and provisions of
this Agreement shall bind and inure to the benefit of the parties and their
respective successors and permitted assigns hereunder. No party may assign any
rights or obligations hereunder without the prior written consent of the other
parties and any purported assignment without such consent shall be null and
void.
Section 12. Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented, and waiver or consents to
departure from the provisions hereof may not be given without the consent of the
party against whom such waiver or consent is sought.
Section 13. Counterparts. This Agreement may be executed in any number
of counterparts, and by the parties hereto in separate counterparts, each of
which so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
Section 14. Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.
Section 15. Expenses; Attorney's Fees. Each party shall bear its own
expenses, including, without limitation, attorneys' fees, in connection with the
execution, delivery and performance of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
ON TRACK INNOVATIONS LTD.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: President
HERALD INVESTMENT TRUST PLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Fund Manager
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Exhibit 1
Name and Address Name of Ordinary Number of
of Purchaser Shares Purchased Purchase Price Warrants
Herald Investment Trust PLC 181,818 $2.75 per share 90,909
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▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Exhibit 2
Wire Transfer Instructions
[OMITTED - will be furnished to the Securities
and Exchange Commission upon request.]
Exhibit 3
Form of Warrant
[OMITTED - will be furnished to the Securities
and Exchange Commission upon request.]
Exhibit 4
Registrations Rights Agreement
[OMITTED - will be furnished to the Securities
and Exchange Commission upon request.]
Exhibit 5
Trading Limitations / List of Officers and Directors
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Schedule 2(d)
Litigation, Compliance with Laws
None
Schedule 2(e)
Title and Liens
Liens in favor of Ha'poalim Bank.