THIS AGREEMENT (“Agreement”) is made on 28 February 2008
THIS
AGREEMENT (“Agreement”) is
made
on 28 February 2008
Between
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1.
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Lapis
Technologies, Inc.,
whose registered office is at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, the United States of America (the “Vendor”);
and
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2.
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▇▇▇▇
Holdings Ltd.
whose registered office is at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇
(the
“Purchaser”).
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Whereas
(A)
Enertec
Electronics Ltd.
(the “Company”)
is a
private company limited by shares, company number ▇▇-▇▇▇▇▇▇-▇, whose entire
issued share capital is NIS 100 divided into 100 shares of NIS 1 each (the
“Shares”).
The
Vendor is the sole legal and beneficial owner of the Shares.
(B)
The
Company has a wholly owned subsidiary wholly
owned subsidiary, Enertec Management Ltd. (“Management”)
(C)
The
Vendor has agreed to sell the entire issued and outstanding share capital of
the
Company, being all of the Shares, to the Purchaser for the consideration and
upon the terms set out in this Agreement.
It
is agreed as
follows.
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1.
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Sale
of the shares and
consideration
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1.1
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The
Vendor agrees to sell the entire issued and outstanding share capital
of
the Company, being all of the Shares, and the Purchaser agrees to
purchase
the Shares, subject to the conditions precedent set out in clause
6 below
and with effect per the Closing (as such term is defined in clause
2
below). The Shares shall be sold free from all security interests,
options, equities, claims or other third party rights (including,
without
limitation, rights of pre-emption) of any nature whatsoever, together
with
all rights attaching to them.
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1.2
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The
total purchase price for the Shares shall be the payment by the Purchaser
to the Vendor of the sum of US$250,000 (two hundred fifty thousand
US
Dollars) (the “Purchase
Price”).
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3.
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Closing
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3.1
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The
sale and purchase of the Shares shall be completed, upon the fulfilment
of
the conditions set out in clause 6 below (the “Closing”).
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3.2
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At
Closing, the Vendor and Purchaser shall deliver or cause to be delivered
to the Vendor or the Purchaser all those documents, items and actions
respectively listed in relation to that party set out in Schedule
1, and
all of the above documents, items and actions shall be deemed to
be
delivered or take place simultaneously and no document, item and
action
shall be deemed to have been completed or delivered until all have
been
completed and delivered or waived. The documents, items and actions
listed
in Schedule 1 include, but are not limited to:
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(a)
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a
duly executed transfer deed into the name of the Purchaser or its
nominee
in respect of all the Shares, together with the relative share
certificates; and
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(b)
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a
copy of a resolution of the board of directors of the Vendor, authorising
the execution of and the performance by the Vendor of its obligations
under this Agreement, including, but not limited to the undertakings
set
out in clause 3; and.
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(c)
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a
copy of a resolution of the board of directors of the Purchaser,
authorising the execution of and the performance by the Purchaser
of its
obligations under this Agreement, including, but not limited to the
undertakings set out in clause 3.
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3.3
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At
Closing, the Purchase Price shall be paid to the Vendor by cheque
or any
other method of payment agreed between the
parties.
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4.
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Party’s
indemnification
undertakings
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4.1.
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The
Vendor shall indemnify and hold the Purchaser harmless against any
tax
liabilities resulting from or in relation to the payment of a dividend
by
Management to the Company and the Company to the Vendor immediately
prior
and subject to Closing, in the gross amount of a dividend payment
the
Management and the Company received pursuant to sale by Management
of its
shares in Enertec Systems 2001 Ltd. (“Systems”).
Provided, however, that the above undertaking by the Vendor to indemnify
and hold the Purchaser harmless shall be limited to an amount equal
to the
portion of the consideration Management received for the sales of
shares
held by it in Systems in the amount of
US$1,095,000.
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4.2.
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The
Purchaser shall indemnify and hold the Vendor harmless against any
actual
and materialised tax liabilities to which the Vendor will be subject
resulting from or in relation to the payment of the Purchase Price
for the
Shares, if any. Provided, however, that the above undertaking by
the
Purchaser to indemnify and hold the Vendor harmless shall be limited
to an
amount equal to cover any applicable income tax imposed on and actually
and unconditionally paid by the Vendor over the receipt of the Purchase
Price.
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5.
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Restrictions
on Vendor
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5.1.
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The
Vendor shall not and shall procure that each other company with which
it
is or shall become affiliated in the period set forth in this clause
4.1
(whether alone or jointly with another and whether directly or indirectly)
within a period of 24 months after Closing, directly or indirectly,
solicit or endeavour to entice away from the Company, offer employment
to
or employ, or offer or conclude any contract for services with, any
person
who was employed by the Company in skilled or managerial work at
any time
during the 24 months prior to
Closing.
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2
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5.2.
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Except
so far as may be required by law and in such circumstances only after
prior consultation with the Purchaser, the Vendor shall not and shall
procure that each other company with which it is or shall become
affiliated shall not at any time disclose to any person or use to
the
detriment of the Company any trade secret or other confidential
information of a technical character which it holds in relation to
the
Company or its affairs.
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6.
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Warranties
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The
Vendor represents and warrants to the Purchaser in the terms of the warranties
set out in Schedule 2
and
acknowledges that the Purchaser entered into this Agreement in reliance upon
such representations and warranties.
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7.
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Conditions
to Closing
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7.1.
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Closing
shall be conditional on fulfilment or waiver at or before the date
of
Closing of the following
conditions:
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7.1.1.
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the
consummation of a transaction between ▇▇▇▇▇ ▇▇▇▇ and Management as
sellers
and SDS (Star Defense Systems) Ltd., an Israeli public company whose
shares are registered for trading on the Tel Aviv Stock Exchange,
as
purchaser for the purchase and sale of the entire outstanding share
capital of Systems the (“Systems
SPA”);
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7.1.2.
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the
receipt of a dividend payment by the Company from Management in the
amount
equal to its portion of the consideration for the sale of the shares
in
Systems under the transaction set out in clause 6.1.1 above, subject
to
the repayment of taxes - if any, upon Closing;
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7.1.3.
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the
release of the Company from all guarantees, indemnities,
counter-indemnities and letters of comfort of any nature whatsoever
given
to a third party by the Company in respect of any obligation of Systems
and/or the Vendor upon Closing;
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7.1.4.
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the
repayment of all Inter-Entity Indebtedness, as such term is defined
in the
Systems SPA, prior to Closing;
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7.1.5.
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the
payment of a dividend by the Company to the Vendor in the net after
taxes
amount of the dividend payment received from Management upon Closing;
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3
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7.1.6.
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the
consummation of a transaction between ▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the
“Investor”),
the ▇▇▇▇▇ ▇▇▇▇ and the Vendor, dated on or about the date of this
Agreement, in which the Vendor will issue [75,129,500] shares to
the
Investor for the consideration of 4,539,557 shares in Star Night
Technologies Ltd., an Israeli public company whose shares are registered
for trading on the Tel Aviv Stock Exchange (the “Lapis
SPA”);
and
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7.1.7.
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an
information statement under the Exchange Act (as such term is defined
in
the Lapis SPA) shall have been filed with the SEC and mailed to the
Vendor’s shareholders and a period of 20 days following the mailing of the
information statement to the Vendor’s shareholders shall have lapsed.
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7.2.
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The
Conditions set out in clauses 6.1.2 and 6.1.5 above may only be
waived by written notice from the Vendor, the Conditions set out
in
clauses 6.1.3 and 6.1.4 above may be only waived by written notice
from the Purchaser and the Conditions set out in clauses 6.1.1 and
6.1.6 shall automatically be waived if: (i) all conditions in the
Lapis
SPA shall have been fulfilled or waived, save for the conditions
in clause
12.1 of that agreement in respect of the closing of the Systems SPA
and
the closing of this Agreement; and (ii) all conditions in the Systems
SPA
shall have been fulfilled or waived, save for the conditions in clause
7.3
of that agreement in respect of the closing of Lapis SPA and the
closing
this Agreement.
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7.3.
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Notwithstanding
any other provision of this Agreement or any of the Transaction Documents
(as such term is defined in the Systems SPA and the Lapis SPA), the
Vendor
shall procure that if the Conditions set out in clauses 6.1.3 and
6.1.4
above will have been waived, and Closing will have become effective,
it
shall comply with its obligations under the above clauses notwithstanding
such waiver and upon the waiver of such Condition, the provisions
thereof
shall become a post Closing
covenant.
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7.4.
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If
any of the above Conditions will not have been fulfilled (or waived)
before the Date of Closing (as such term is defined in the Systems
SPA),
this Agreement shall automatically terminate, unless otherwise agreed
by
the parties hereto. In such event, no party to this Agreement shall
have
any claim under this Agreement of any nature whatsoever against any
other
party to this Agreement.
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8.
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Post
Closing covenant
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In
the
event that, notwithstanding that the Conditions set out in clauses 6.13 and
6.1.4 will have been waived and Closing will have become effective, the
Conditions set out therein shall not have been fully fulfilled per the Closing
(the release of the Company from: (i) all
guarantees, indemnities, counter-indemnities and letters of comfort of any
nature whatsoever given to a third party by the Company in respect of any
obligation of Systems and/or the Vendor; and (ii) all Inter-Entity
Indebtedness), then the Purchaser will take promptly all action required and/or
necessary after Closing to fully release the Company as set out in clauses
6.13
and 6.1.4 above.
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9.
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Entire
agreement
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This
Agreement and the documents required for the fulfilment of the Conditions set
out in clause 6 above, set out the entire agreement and understanding between
the parties in respect of the sale and purchase of the Shares. It is agreed
that:
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(a)
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No
party has entered into this Agreement in reliance upon any representation,
warranty or undertaking of any other party, which is not expressly
set out
or referred to in this Agreement.
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(b)
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A
party may claim in contract for breach of warranty under this Agreement
but shall have no claim or remedy under this Agreement in respect
of
misrepresentation (whether negligent or otherwise, and whether made
prior
to, and/or in, this Agreement) or untrue statement made by any other
party.
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10.
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Counterparts
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This
Agreement may be entered into in any number of counterparts and by the parties
to it on separate counterparts, each of which is an original, but all of which
together constitute one and the same instrument.
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11.
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Further
assurance
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The
Vendor agrees to perform (or procure the performance of) all further acts and
things, and execute and deliver (or procure the execution and delivery of)
such
further documents, as may be required by law or as the Purchaser may reasonably
require, whether on or after Closing, to implement and/or give effect to this
Agreement and the transaction contemplated by it and for the purpose of vesting
in the Purchaser the full benefit of the assets, rights and benefits to be
transferred to the Purchaser under this Agreement.
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12.
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Severability
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If
any
provision of this Agreement is held to be invalid or unenforceable, then such
provision shall (so far as it is invalid or unenforceable) be given no effect
and shall be deemed not to be included in this Agreement but without
invalidating any of the remaining provisions of this Agreement. The parties
shall then use all reasonable endeavours to replace the invalid or unenforceable
provision by a valid and enforceable substitute provision the effect of which
is
as close as possible to the intended effect of the invalid or unenforceable
provision.
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13.
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Variation
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No
variation of this Agreement (or of any of the documents referred to in this
Agreement) shall be valid unless it is in writing and signed by or on behalf
of
each of the parties to it. The expression "variation" shall include any
amendment, variation, supplement, deletion or replacement however
effected.
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14.
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Governing
law
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This
Agreement and the relationship between the parties shall be governed by, and
interpreted in accordance with, the laws of the State of Israel.
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In
witness whereof
this Agreement has been signed by and on behalf of the parties on the day and
year first before written.
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The
Vendor:
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The
Purchaser:
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/s/
Lapis Technologies, Inc.
Lapis
Technologies, Inc.
By:
/s/ ▇▇▇▇▇ ▇▇▇▇
Title:
Chief Executive Officer
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/s/
▇▇▇▇ Holdings Ltd.
▇▇▇▇
Holdings Ltd.
By:
/s/ ▇▇▇▇▇ ▇▇▇▇
Title:
Chief Executive Officer
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7
SCHEDULE 1
CLOSING
OBLIGATIONS
Vendor’s
Obligations
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1.
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At
Closing, the Vendor shall deliver to the Purchaser (or made available
to
the Purchaser’s reasonable
satisfaction):
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duly
executed transfer forms in respect of the Shares into the name of
the
Purchaser,
as set out in clause 2.2(a) of this
Agreement;
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the
share certificates in respect of all the Shares, as set out in clause
2.2(a) of this Agreement;
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a
copy (certified by a duly appointed officer as true and correct)
of a
resolution of:
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the
board of directors of Lapis; and
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the
shareholders of Lapis,
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authorising
the execution of and the performance this Agreement and the performance of
its
obligations thereunder, as set out in clause 2.2(b) of this
Agreement;
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evidence
in respect of release of:
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Inter-Entity
Indebtedness
or
waiver in respect thereof; and
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all
guarantees, indemnities, counter-indemnities and letters of comfort
of any
nature whatsoever given to a third party by the Company in respect
of any
obligation of Systems and/or the Vendor.
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2.
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In
addition, at Closing, the Vendor shall deliver to the Purchaser (or
made
available to the Purchaser’s reasonable
satisfaction):
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a
copy (certified by a duly appointed officer as true and correct)
of a
resolution of:
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the
board
of directors of Management;
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the
shareholders of Management;
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the
board
of directors of the Company; and
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the
shareholders of the Company,
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authorizing
and effecting the Conditions set out under clauses 6.1.2 and 6.1.5 of this
Agreement.
Purchaser’s
Obligations
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3.
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At
Closing, the Purchaser shall:
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deliver
(or procure that there is delivered to the Vendor) a copy of a resolution
(certified by a duly appointed officer as true and correct)
of:
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the
board of directors of the Purchaser;
and
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the
shareholders of the Purchaser,
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authorising
the execution of and the performance by the Purchaser of its obligations under
this Agreement, as set out in clause 2.2(c) of this Agreement; and
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pay
to the Vendor the Purchase Price in accordance with clause 2.1 of
this
Agreement.
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General
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4.
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All
documents and items delivered at Closing pursuant to this Schedule
1 shall
be held by the recipient to the order of the person delivering the
same
until such time as Closing shall be deemed to have taken place in
accordance with clause 2.
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5.
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Simultaneously
with:
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delivery
of all documents and items required to be delivered at Closing (or
waiver
of the delivery thereof by the person entitled to receive the relevant
document or item);
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receipt
of the Purchase
Price by the Vendor,
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the
documents and items delivered in accordance with this Schedule shall cease
to be
held to the order of the person delivering the same and Closing shall be deemed
to have taken place.
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SCHEDULE
2
THE
WARRANTIES
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1.
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Authorisations
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The
Vendor has obtained all corporate authorisations and all other applicable
governmental, statutory, regulatory or other consents, licences, authorisations,
waivers or exemptions required to empower it to enter into and perform its
obligations under this Agreement.
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2.
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The
shares
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All
of
the Shares are fully-paid, or properly credited as fully-paid, and the Vendor
is
the sole legal and beneficial owner of the Shares free from all security
interests, options, equities, claims or other third party rights (including,
without limitation, rights of pre-emption) of any nature whatsoever. The Vendor
has the legal right to dispose of the Shares.
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3.
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Adequacy
of assets
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1.1
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The
assets of the Company and the facilities and services to which the
Company
has a contractual right include all rights, properties, assets, facilities
and services necessary for the carrying on of the business of the
Company
in the manner in which it is currently carried
on.
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1.2
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All
of the assets owned by the Company, or in respect of which the Company
has
a right of use, are in the possession or under the control of the
Company
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4.
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Taxes
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1.1
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All
local and national taxes and social security contributions whether
direct
or indirect, and any penalties, interest and other levies in respect
thereof (“Taxes”) for which the Company at the date of Closing or at any
time thereaf-ter may become liable to be assessed in respect of any
period
ending on or before the date of Closing have either been paid in
full or are adequa-tely provided for in the Company’s financial
statements. There are no facts or circumstances, which could give
rise to
any additio-nal liability to Taxes over and above that already paid
or
provided for.
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1.2
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All
filings which had ought to have been made or filed before the date
of
Closing have been properly and duly submitted by the Company and
were true
accurate and complete.
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5.
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Disputes
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1.1.
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The
Company is not engaged in any and there are no pending or threatened
legal
proceedings, or any other action from which damages or losses for
the
Company could arise and it is not aware of any circumstances that
could
result in the above.
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1.2.
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There
are no inves-tigati-ons or enquiries (whether pending or threatened)
by,
or on behalf of, any govern-mental or other body in respect of the
affairs
of the Company.
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