EXHIBIT 99(b)
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STOCK PURCHASE AGREEMENT
BY AND AMONG
▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, FIRST ISRATECH FUND LP,
FIRST ISRATECH FUND LLC, FIRST ISRATECH FUND NORWAY A.S.
GREATWAY COMMERCIAL INC., ▇▇▇ ▇▇▇▇▇▇, CAREMI PARTNERS,
EMICAR, LLC, AND MA'ARAGIM ENTERPRISES LTD.
("SELLERS")
AND
BIOSONIX, LTD.
("COMPANY")
AND
NEOPROBE CORPORATION
("BUYER")
DATED NOVEMBER 29, 2001
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
1.1 Defined Terms.................................................. 1
ARTICLE II
PURCHASE AND SALE OF SHARES
2.1 Purchase and Sale.............................................. 5
2.2 Consideration.................................................. 5
2.3 Fractional Shares.............................................. 5
2.4 The Closing.................................................... 5
2.5 Deliveries at the Closing...................................... 5
2.6 Delivery of Additional Buyer Stock............................. 6
2.7 Company Stock Options.......................................... 6
2.8 Shareholder Agreement.......................................... 7
2.9 Post-Closing Balance Sheet..................................... 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Sellers...................... 7
3.2 Representations and Warranties of Sellers and the Company...... 9
3.3 Representations and Warranties of Buyer........................ 20
ARTICLE IV
COVENANTS
4.1 Implementing Agreement......................................... 23
4.2 Conduct of the Company's Business.............................. 23
4.3 Access to Information.......................................... 24
4.4 Exclusivity.................................................... 24
4.5 Notification of Certain Matters................................ 25
4.6 Regulatory and Other Authorizations............................ 25
4.7 Further Assurances............................................. 25
4.8 Board Representation........................................... 25
4.9 Extraordinary Transaction by Buyer............................. 26
4.10 Employment Agreements.......................................... 26
(i)
4.11 Restriction on Sale of the Company............................. 26
4.12 Indemnification................................................ 26
4.13 Covenant Not to Take Action.................................... 26
ARTICLE V
CONDITIONS TO CLOSING
5.1 Conditions to Obligation of Buyer.............................. 27
5.2 Conditions to Obligation of Sellers............................ 28
ARTICLE VI
INDEMNIFICATION
6.1 Survival of Representations and Warranties..................... 29
6.2 Indemnification by Buyer....................................... 29
6.3 Indemnification by the Sellers................................. 30
6.4 Limitations on Indemnification................................. 31
6.5 Calculation of Losses.......................................... 32
6.6 Satisfaction of Claims With Buyer Stock........................ 32
6.7 Exclusive Remedy............................................... 32
ARTICLE VII
TERMINATION
7.1 Termination of Agreement....................................... 33
7.2 Termination Fee................................................ 33
7.3 Effect of Termination.......................................... 34
ARTICLE VIII
APPOINTMENT OF SELLERS' REPRESENTATIVE
8.1 Irrevocable Appointment of Sellers' Representative............. 34
8.2 Acts of Sellers' Representative................................ 35
8.3 Replacement of Sellers' Representative......................... 35
8.4 Indemnification of Sellers' Representative..................... 35
8.5 Proof of Authority............................................. 35
8.6 Survival of Power.............................................. 36
(ii)
ARTICLE IX
MISCELLANEOUS
9.1 Press Releases and Public Announcements........................ 36
9.2 Fees and Expenses.............................................. 36
9.3 No Third-Party Beneficiaries................................... 36
9.4 Entire Agreement............................................... 36
9.5 Succession and Assignment...................................... 36
9.6 Counterparts................................................... 36
9.7 Headings....................................................... 37
9.8 Notices........................................................ 37
9.9 Governing Law.................................................. 38
9.10 Consent to Jurisdiction........................................ 38
9.11 Dispute Resolution............................................. 38
9.12 Amendments and Waivers......................................... 40
9.13 Severability................................................... 40
9.14 Incorporation of Appendices and Schedules...................... 40
Appendix A - Shareholder Agreement
Appendix B - Employment Agreements
Appendix C - [reserved]
Appendix D - Opinion of Sellers' Counsel
Appendix E - Opinion of Buyer's Counsel
(iii)
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is entered into as of November 29, 2001, by and among NEOPROBE
CORPORATION, a Delaware corporation with its principal place of business located
in Dublin, Ohio, USA (the "BUYER"), and ▇▇▇ ▇▇▇▇▇ (ID ▇▇. ▇▇▇▇▇▇▇▇), ▇▇▇ ▇▇▇▇
(▇▇ No. 55361992), ▇▇▇▇ ▇▇▇▇ (ID No. 57608225), residents of the State of
Israel, FIRST ISRATECH FUND LP, a Minnesota, USA limited partnership, FIRST
ISRATECH FUND LLC, a Minnesota, USA limited liability company, First Isratech
Fund Norway A.S, a Norway company, GREATWAY COMMERCIAL, INC., a corporation
organized under the laws of Panama, ▇▇▇ ▇▇▇▇▇▇, a resident of the State of New
York, CAREMI PARTNERS, a partnership organized under the laws of Delaware,
EMICAR, LLC, a limited liability company organized under the laws of New York,
and MA'ARAGIM ENTERPRISES LTD. (Co. No. 51-274661-1), an Israeli company limited
by shares (individually, a "SELLER", and collectively the "SELLERS"), and
BIOSONIX, LTD. (Co. No.51-267025-8), an Israeli company limited by shares (the
"COMPANY"). The Buyer, Sellers and the Company are referred to collectively
herein as the "PARTIES."
RECITALS
WHEREAS, Sellers in the aggregate own all of the issued and outstanding
shares of capital stock (the "SHARES") of the Company.
WHEREAS, Buyer desires to purchase from Sellers, and Sellers desire to
sell to Buyer, all of the Shares.
AGREEMENT
Now, therefore, in consideration of the foregoing and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
assigned to them in this Article I.
"ACCOUNTANTS" has the meaning set forth in Section 2.9
"ACTIONS" has the meaning set forth in Section 3.2(s).
"ADDITIONAL BUYER STOCK" has the meaning set forth in Section 2.2.
"ADDITIONAL BUYER STOCK ADJUSTMENT" has the meaning set forth in
Section 2.9.
"AFFILIATE" means a Person that directly, or indirectly through one or
more intermediaries, controls, is controlled by or is under common control with
the Person specified. For purposes of this definition, the term "control" of a
Person means the possession, direct or indirect, of the power to (i) vote 50% or
more of the voting securities of such Person or elect a majority of directors of
such Person or (ii) direct or cause the direction of the management and policies
of such Person, whether by contract or otherwise, and the terms and phrases
"controlling," "controlled by" and "under common control with" have correlative
meanings.
"AFFILIATED GROUP" means any affiliated group within the meaning of
Code Section 1504(a) or any similar group defined under a similar provision of
state, local or foreign law.
"ALTERNATIVE TRANSACTIONS" has the meaning set forth in Section 4.4(a).
"AUDITED STATEMENTS" has the meaning set forth in Section 3.2(i).
"BIOSONIX SHAREHOLDER AGREEMENTS" means (i) the Series B Preferred
Share Purchase Agreement dated as of April 5, 2001 by and among the Company, ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇ and Ma'aragim Enterprises Ltd. (ii) the Share
Purchase Agreement dated as of September 14, 1998, by and among the Company and
the Sellers (with the exception of Ma'aragim Enterprises Ltd.); and (iii) the
Shareholder Rights Agreement dated as of April 5, 2001, by and among the Company
and the Sellers.
"BUSINESS DAY" means any day other than a Saturday, Sunday, or other
day on which commercial banks in New York City are authorized or required by law
to close.
"BUYER" has the meaning set forth in the preface above.
"BUYER ACTIONS" has the meaning set forth in Section 3.3(j).
"BUYER EFFECT" means a material adverse effect on the business, assets,
financial condition or results of operations of Buyer and its Subsidiaries,
taken as a whole, which results otherwise than from changes in the economy
generally.
"BUYER SEC FILINGS" has the meaning set forth in Section 3.3(h).
"BUYER STOCK" has the meaning set forth in Section 2.2.
"CLOSING" has the meaning set forth in Section 2.4.
"CLOSING BALANCE SHEET" has the meaning set forth in Section 2.9.
"CLOSING DATE" has the meaning set forth in Section 2.4.
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"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY OPTIONS" has the meaning set forth in Section 2.7.
"CONFIDENTIAL INFORMATION" means any information concerning the
businesses and affairs of the Company that is not already generally available to
the public.
"DEDUCTIBLE" has the meaning set forth in Section 6.4.
"EMPLOYEE BENEFIT PLAN" means any (a) formal or informal deferred
compensation, severance, pension or retirement plan or arrangement, or (b)
health insurance, hospitalization, or other material fringe benefit plan or
program, including without limitation any plan, program or arrangement mandated
or administered by a governmental authority.
"ENTITY" means a corporation, partnership, limited partnership, limited
liability company, limited liability partnership or other form of business
organization.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FINANCIAL STATEMENTS" has the meaning set forth in Section 3.2(i).
"GOVERNMENTAL AUTHORIZATION" means any approval, consent, license,
permit, waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any governmental authority, domestic or
foreign.
"INITIAL BUYER STOCK" has the meaning set forth in Section 2.2.
"INTELLECTUAL PROPERTY RIGHTS" has the meaning set forth in Section
3.2(r).
"INTERIM BALANCE SHEET" has the meaning set forth in Section 3.2(i).
"INVESTMENT AGREEMENTS" means, collectively, (a) the Series B Preferred
Share Purchase Agreement dated as of April 5, 2001, by and among the Company and
certain of the Sellers, and (b) the Share Purchase Agreement dated as of
September 14, 1998 by and among the Company and certain of the Sellers.
"ISRAELI GAAP" means generally accepted accounting principles in Israel
as in effect from time to time.
"KNOWLEDGE" means (a) an individual will be deemed to have "Knowledge"
of a particular fact or other matter if such individual is actually aware of
such fact or other matter; and (b) a Person (other than an individual) will be
deemed to have "Knowledge" of a particular fact or other matter if any
individual who is serving, or who has at any time served, as a director,
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officer, partner, executor, or trustee of such Person (or in any similar
capacity) has, or at any time had, Knowledge of such fact or other matter.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, assets, financial condition, or results of operations of the Company
and any of its Subsidiaries, taken as a whole, which results otherwise than from
changes in the economy generally.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"PARTY" has the meaning set forth in the preface above.
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"PERSONNEL" has the meaning set forth in Section 3.2(s).
"RULES" has the meaning set forth in Section 9.11.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for taxes not yet due and payable (or for taxes
that the taxpayer is contesting in good faith through appropriate proceedings),
(c) purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
"SELLER" or "SELLERS" has the meaning set forth in the preface above.
"SELLERS' REPRESENTATIVE" has the meaning set forth in Section 8.1.
"SUBSIDIARY" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"TAX" means any U.S. or Israeli federal, state, local, or foreign
income, value added or property tax, including any interest, penalty, or
addition thereto, whether disputed or not.
"TAX REPORT" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto.
"TERMINATION FEE" has the meaning set forth in Section 7.2.
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All references to money or currency set forth in this Agreement are to
U. S. dollars, unless otherwise specified.
ARTICLE II
PURCHASE AND SALE OF SHARES
2.1 PURCHASE AND SALE. Subject to the terms and conditions of this
Agreement, Buyer agrees to purchase from each of the Sellers, and each of the
Sellers agrees to sell to Buyer, all of his or its Shares of the Company as set
forth on SCHEDULE 2.1, which Shares in the aggregate represent 100% of the
issued and outstanding shares of capital stock of the Company, free and clear of
all Security Interests, for the consideration specified in Section 2.2.
2.2 CONSIDERATION. The consideration payable for the Shares shall be
9,714,737 shares of common stock, $.001 par value, of Buyer ("INITIAL BUYER
STOCK"). The Initial Buyer Stock shall be delivered to Sellers (or to a trustee
on behalf of Sellers) or to the individuals designated by the Sellers on
SCHEDULE 2.2 by delivery of share certificates representing the Initial Buyer
Stock dated the Closing Date. Each of the Sellers shall receive the number of
shares of Initial Buyer Stock set forth on SCHEDULE 2.2. In addition, not later
than sixty (60) days following the satisfaction of the conditions specified in
Section 2.6 below, Buyer will deliver to the Sellers 2,085,826 shares of common
stock, $.001 par value, of Buyer ("ADDITIONAL BUYER STOCK"), as additional
consideration, less any offset for claims of Buyer under Sections 2.9 and 6.2.
The Additional Buyer Stock will be distributed to the Sellers as set forth on
SCHEDULE 2.2. As used in this Agreement, Initial Buyer Stock and Additional
Buyer Stock shall be collectively referred to as "BUYER STOCK."
2.3 FRACTIONAL SHARES. No certificates or scrip representing fractional
shares of Buyer Stock shall be issued upon the surrender for exchange of
certificates held by Sellers, and the proportionate number of shares of Buyer
Stock issuable to each Seller will be rounded to the next whole number of
shares.
2.4 THE CLOSING. The closing of the transactions contemplated by this
Agreement (the "CLOSING") shall take place at the offices of Sharir, Shiv,
▇▇▇▇▇▇▇▇ & Co. in Tel Aviv, Israel, commencing at 9:00 a.m. local time on the
fifth Business Day following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated hereby
(other than conditions with respect to actions the respective Parties will take
at the Closing itself) or such other date as the Buyer and Sellers may mutually
determine (the "CLOSING DATE"); PROVIDED, HOWEVER, that the Closing Date shall
be no later than December 31, 2001.
2.5 DELIVERIES AT THE CLOSING. At Closing,
(a) Sellers will deliver to Buyer:
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(i) certificates representing the Shares, duly endorsed (or
accompanied by duly executed stock powers), for transfer to Buyer;
(ii) the various certificates, instruments, agreements,
consents, waivers, opinions and other documents referred to in Section 5.1;
(iii) a copy of the resolution of the Company's board of
directors approving the transactions contemplated by this agreement,
particularly the sale of the Shares by each of the Sellers to Buyer;
(iv) letters of resignation from each of the members of the
board of directors of the Company and from each of the officers of the Company;
(v) a copy of the unanimous resolution of the Company's
shareholders, certified by the Secretary of the Company, approving the
transactions contemplated by this Agreement, all waivers required hereby to be
given by the shareholders, and adopting and approving, effective at the Closing,
any amendments to the Company's Articles of Association and bylaws that may be
requested by Buyer;
(vi) a counterpart of the Shareholder Agreement referenced in
Section 2.8 below, executed by all the Sellers; and
(vii) agreement(s) signed by all necessary parties terminating
the Biosonix Shareholder Agreements.
(b) Buyer will deliver to Sellers:
(i) the various certificates, instruments, and documents
referred to in Section 5.2.,
(ii) certificates for the Initial Buyer Stock, and
(iii) a counterpart of the Shareholder Agreement referenced in
Section 2.8 below, executed by a duly authorized officer of the Buyer.
2.6 DELIVERY OF ADDITIONAL BUYER STOCK. The Buyer's obligation to issue
and deliver to the Sellers the Additional Buyer Stock is subject to the
condition that the Company has applied before June 30, 2002 for approval of CE
Marking for its commercial BioFlow(TM) product from a notified body recognized
by the European Commission, in conformity with the European Community Medical
Device Directive, as amended.
2.7 COMPANY STOCK OPTIONS. SCHEDULE 2.7 sets forth the following
information with respect to all grants of options to purchase capital stock of
the Company ("COMPANY OPTIONS"): (i) the name of the option holder, (ii) the
date(s) of the option grant, (iii) the number of shares for which the option
grant is exercisable, (iv) the number of shares for which the option grant is
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vested as of the date of this Agreement, and (v) the exercise price(s) per share
for each option grant. At the Closing, Buyer shall pay to each holder of Company
Options $11.48 per option share shown as on SCHEDULE 2.7 as being vested as of
the date of this Agreement. All Company Options shown on SCHEDULE 2.7 will be
cancelled effective at the Closing, but holders of such Company Options who
continue as employees of the Company after the Closing will be eligible for
option awards under the stock option plans and policies of Buyer, to the same
extent as employees of Buyer are eligible for such awards.
2.8 SHAREHOLDER AGREEMENT. Each of the Sellers and Buyer shall execute
and deliver the Shareholder Agreement attached hereto as Appendix A.
2.9 CLOSING BALANCE SHEET. Promptly following the Closing, the Buyer
will cause the Company to prepare and cause the Company's independent
accountants to audit in accordance with Israeli GAAP at its expense a balance
sheet of the Company as of the Closing Date, with all values stated in U. S.
Dollars, which shall include a computation of net working capital (current
assets less current liabilities) as of the Closing Date (the "CLOSING BALANCE
SHEET"). If the Closing Balance Sheet indicates zero or a positive value for net
working capital or if the Closing occurs on or after January 1, 2002, no
adjustment to the consideration payable to Sellers will be made. Provided that
the Closing occurs on or before December 31, 2001, if the Closing Balance Sheet
indicates a negative value for net working capital, then the number of shares of
Additional Buyer Stock to be issued to Sellers shall be reduced, by such number
of shares of Buyer Stock as are equal in value to the deficiency, based upon a
deemed value of $.70 per share (the "ADDITIONAL BUYER STOCK ADJUSTMENT"). Buyer
shall notify Sellers in writing of the amount of the Additional Buyer Stock
Adjustment following delivery of the Closing Balance Sheet, and if Sellers do
not within twenty days give Buyer written notice objecting to the calculation of
the Additional Buyer Stock Adjustment, then the parties will attempt to reach
agreement within thirty days. If the parties are unsuccessful in reaching an
agreement, they will submit such issues to an internationally recognized
independent public accounting firm (the "ACCOUNTANTS") selected by mutual
agreement. If issues in dispute are submitted to the Accountants for resolution,
(i) each party will furnish to the Accountants such work papers and other
documents and information relating to the disputed issues as the Accountants may
request and available to that party, and will be afforded an opportunity to
present to the Accountants any material relating to the determination; (ii) the
determination by the Accountants, as set forth in a notice delivered to both
parties by the Accountants, will be binding and conclusive on the parties; and
(iii) Buyer on the one hand, and Sellers on the other hand, will each bear 50%
of the fees of the Accountants for such determination.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF SELLERS. Each of the Sellers
severally and not jointly represents and warrants to Buyer, as of the date of
this Agreement and as of the Closing
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Date (as if such representations and warranties were made on the Closing Date)
as follows, provided, however, that Ma'aragim Enterprises Ltd. makes no
representation or warranty as to any matter occurring prior to April 5, 2001:
(a) ORGANIZATION OF SELLER. If Seller is an Entity, Seller is duly
organized, validly existing, and (if applicable in such jurisdiction) is in good
standing under the laws of the jurisdiction of its organization, and has all
requisite Entity power to own or lease its properties and assets and to carry on
its business as it is now being conducted.
(b) AUTHORITY RELATIVE TO AGREEMENTS. Seller has all necessary power
and authority (including Entity authority) to execute and deliver this Agreement
and all other agreements contemplated hereby and to perform its obligations
hereunder, and, if Seller is an Entity, has taken all Entity action necessary to
consummate the transactions contemplated hereby and to perform its obligations
hereunder. This Agreement and all other agreements contemplated hereby, when
executed and delivered by or on behalf of the Seller, will constitute the valid
and legally binding obligations of the Seller, legally enforceable against the
Seller in accordance with its terms.
(c) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Seller is subject or, if the Seller is an
Entity, any provision of its charter, bylaws or other governing documents; or
(ii) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which Seller is a party or by which
he or it is bound or to which any of his or its assets is subject.
(d) INVESTMENT. Seller (i) understands that the Buyer Stock has not
been registered under the Securities Act, or under any state securities laws,
and is being offered and sold in reliance upon United States federal and state
exemptions for transactions not involving any public offering, (ii) is acquiring
the Buyer Stock solely for his or its own account for investment purposes, and
not with a view to the distribution thereof, (iii) is a sophisticated investor
with knowledge and experience in business and financial matters, (iv) has
received certain information concerning Buyer and has had the opportunity to
obtain additional information as desired in order to evaluate the merits and the
risks inherent in holding the Buyer Stock, (v) is able to bear the economic risk
and lack of liquidity inherent in holding the Buyer Stock, (vi) understands and
agrees that Buyer's offer to pay the consideration for the Shares by way of
issuing Buyer Stock does not constitute an Offer to the Public under the Israeli
Securities Law, 1968; and (vii) is either (x) an "accredited investor" as
defined in Rule 501 of Regulation D under the Securities Act, or (y) is a
"non-U.S. Person" as defined in Rule 902 under the Securities Act. If Seller is
a non-U.S. Person, Seller understands that the Buyer Stock may not be offered or
sold in the United States or to United States Persons in the absence of
registration under the Securities Act, and agrees not to conduct hedging
transactions involving the Buyer
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Stock except in compliance with the Securities Act. Seller understands that
certificates representing shares of Buyer Stock will bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. THE
SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR QUALIFICATION WITHOUT AN OPINION OF
COUNSEL SATISFACTORY TO NEOPROBE CORPORATION THAT SUCH
REGISTRATION OR QUALIFICATION IS NOT REQUIRED.
(e) COMPANY SHARES. Seller holds of record and legally and
beneficially owns the number of Shares set forth next to his or its name on
SCHEDULE 2.1, free and clear of any restrictions on transfer, taxes, Security
Interests, options, warrants, purchase rights, contracts, commitments, equities,
claims, and demands, other than pursuant to the Investment Agreements, which
shall be cancelled at Closing. Seller is not a party to any option, warrant,
purchase right, or other contract or commitment (other than this Agreement) that
could require Seller to sell, transfer, or otherwise dispose of any capital
stock of the Company. Seller is not a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any capital stock of
the Company.
3.2 REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE COMPANY. The
Sellers, jointly and severally, and the Company, represent and warrant to Buyer,
as of the date of this Agreement and as of the Closing Date (as if such
representations and warranties were made on the Closing Date) as follows:
(a) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. The Company
is a company limited by shares duly organized and validly existing under the
laws of the State of Israel. The Company is duly authorized to conduct business
in Israel. The Company conducts business in no jurisdiction other than Israel.
The Company has full corporate power and authority to carry on the businesses in
which it is engaged and to own and use the properties owned and used by it.
SCHEDULE 3.2(a) lists all of the directors and officers of Company. The Sellers
have delivered to Buyer a copy of the Certificate of Registration, Memorandum
and Articles of Association of the Company, as currently in effect.
(b) AUTHORITY RELATIVE TO AGREEMENTS. The Company has all requisite
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby and thereby. The Agreement, when executed and
delivered by or on behalf of the Company, will constitute the valid and legally
binding obligation of the Company, legally enforceable against the Company in
accordance with its terms.
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(c) CAPITALIZATION. The entire registered share capital of the Company
is 75,100 New Israeli Shekels ("NIS") divided into 521,000 ordinary shares of a
nominal value of NIS 0.1 each, of which 140,001 shares are issued and
outstanding; 105,000 Series A preferred shares of a nominal value of NIS
0.1each, of which 87,525 are issued and outstanding; 55,000 Series A1 preferred
shares of a nominal value of NIS 0.1 each, of which 42,475 are issued and
outstanding and 70,000 Series B preferred shares of a nominal value of NIS 0.1
each, of which 57,737 are issued and outstanding. All of the issued and
outstanding Shares have been duly authorized, are validly issued, fully paid,
and nonassessable, and are held beneficially and of record by the respective
Sellers as set forth in SCHEDULE 2.1, free and clear of all Security Interests.
Except as set forth on SCHEDULE 2.7 in connection with the Company's employee
stock option plan and otherwise as set forth on SCHEDULE 3.2(c), there are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require the Company to issue, sell, or otherwise cause to become
outstanding any of its capital stock. There are no outstanding or authorized
stock appreciation, phantom stock, profit participation, or similar rights with
respect to the Company. Except as set forth on SCHEDULE 3.2(c), the Company is
not under any obligation to register for trading on any securities exchange any
of its currently outstanding securities. Since its incorporation, there has been
no declaration or payment by the Company of any assets of any kind to any of its
stockholders in redemption of or as the purchase price of any of the Company's
securities.
(d) SUBSIDIARIES. The Company has no Subsidiaries, nor owns, or has any
agreement to acquire, any share capital of any other Person, and is not a
participant in any partnership or joint venture.
(e) NONCONTRAVENTION. To the Knowledge of any of the Sellers or the
Company, neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will (i) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which the Company is subject or any provision of the Memorandum or
Articles of Association of the Company or (ii) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which any of the Company is a party or by which it is bound or to
which any of its assets is subject (or result in the imposition of any Security
Interest upon any of its assets), except where the violation, conflict, breach,
default, acceleration, termination, modification, cancellation, failure to give
notice, or Security Interest would not have a Material Adverse Effect.
(f) BROKERS. No agent, broker, investment banker, Person, or firm
acting in a similar capacity on behalf of or under the authority of the Sellers
or the Company is or will be entitled to any broker's or finder's fee or any
other commission or similar fee, directly or indirectly, on account of any
action taken by the Company in connection with any of the transactions
contemplated by this Agreement. Each of the Sellers will indemnify and hold
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Buyer harmless from and against any claim or liability resulting from any party
claiming any such commission or fee, if such claims shall be contrary to the
foregoing statement.
(g) TITLE TO TANGIBLE ASSETS. All the material tangible assets the
Company uses regularly in the conduct of its business are listed on SCHEDULE
3.2(G). Except as listed on SCHEDULE 3.2(g), the Company has good and marketable
title to, or a valid leasehold interest in, the assets listed thereon.
(h) CONSENTS. Except as set forth on SCHEDULE 3.2(h), no consent,
approval, order or authorization of, or registration, declaration or filing
with, any federal, state, local or foreign governmental or regulatory authority
or other third party is required to be made or obtained by the Company in
connection with the execution and delivery of this Agreement by the Company or
the Sellers or the consummation by the Sellers of the transactions contemplated
hereby, except for such consents, approvals, orders or authorizations which if
not obtained, or registrations, declarations or filings which if not made, would
not have a Material Adverse Effect or materially adversely affect the ability of
the Company to consummate the transactions contemplated hereby or the ability of
Buyer to conduct the business of the Company after the Closing Date. To the
extent that any consent or waiver is required from Sellers or their Affiliates
in connection with this Agreement or the consummation of the transactions
contemplated hereby, such consent or waiver shall be deemed to have been given
upon Sellers' execution of this Agreement.
(i) FINANCIAL STATEMENTS. Sellers and the Company have furnished to
Buyer the following financial statements: (i) the audited balance sheets and
statements of income, changes in stockholders' equity, and cash flow (in United
States dollars) as of and for the fiscal years ended December 31, 2000, December
31, 1999, and December 31, 1998 for the Company (the "AUDITED STATEMENTS"); and
(ii) unaudited balance sheet as of October 31, 2001, for the Company (the
"INTERIM BALANCE SHEET"). The Audited Statements and the Interim Balance Sheet
shall collectively be referred to as the "FINANCIAL STATEMENTS." The Financial
Statements are true and correct in all material respects and, are in accordance
with the books and records of the Company and have been prepared in accordance
with generally accepted accounting principles in Israel ("ISRAELI GAAP")
consistently applied, and fairly and accurately present in all material respects
the financial position of the Company as of such dates and the results of its
operations for the periods then ended, except that the Interim Balance Sheet
does not contain footnotes and is subject to normal year-end adjustments. The
Company's accounting system, books and records of the Company are and have been
properly prepared and maintained in form and substance adequate for preparing
audited financial statements in accordance with Israeli GAAP, and fairly and
accurately reflect in all material respects the assets and liabilities of the
Company and all contracts and transactions to which the Company are or were a
part of or by which the Company or any of its business or assets is or was
affected.
(j) ABSENCE OF LIABILITIES. Except as and to the extent (i) reflected
on the audited balance sheet of the Company as of December 31, 2000, referred to
above, (ii) incurred since December 31, 2000, in the Ordinary Course of Business
consistent with past practice, (iii)
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reflected on the unaudited balance sheet of the Company as of October 31, 2001,
or (iv) set forth on SCHEDULE 3.2(j) hereto, the Company does not have any
liabilities or obligations of any kind or nature, whether known or unknown or
secured or unsecured (whether absolute, accrued, contingent or otherwise, and
whether due or to become due) that would be required to be reflected on a
balance sheet. Since December 31, 2000, the Company has not suffered any
Material Adverse Effect. Except as set forth in SCHEDULE 3.2(j), the Company is
not a guarantor or indemnitor of any indebtedness of any other Person.
(k) BOOKS AND RECORDS. The accounting records, minute books, stock
record books, and other records of the Company, all of which have been made
available to Buyer, are complete and correct and have been maintained in
accordance with sound business practices and applicable Israeli law. The minute
books of the Company contain accurate and complete records of all meetings held
of, and corporate action taken by, the stockholders, the Board of Directors, and
committees of the Board of Directors of the Company, and no resolution of any
such stockholders, Board of Directors, or committee has been adopted or passed
for which minutes have not been prepared and are not contained in such minute
books. At the Closing, all of those books and records will be in the possession
of the Company.
(l) LEGAL COMPLIANCE.
(i) To the Knowledge of any of the Sellers or the Company, the
Company has at all time been in full compliance with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof), except where the failure to comply would
not have a Material Adverse Effect, and no event has occurred or circumstance
exists (with or without notice of lapse of time) that would cause the Company
not to comply with such requirements.
(ii) SCHEDULE 3.2(l) contains a complete and accurate list of each
Governmental Authorization that is held by the Company or that otherwise relates
to the business of, or to any of the assets owned or used by, the Company. Each
Governmental Authorization listed or required to be listed in SCHEDULE 3.2(l) is
valid and in full force and effect. Except as set forth in SCHEDULE 3.2(l):
(A) the Company is, and at all times since August 16, 1998, has
been, in full compliance with all of the terms and requirements of each
Governmental Authorization (as then in effect) identified or required to be
identified in SCHEDULE 3.2(l), except where the failure to comply would not have
a Material Adverse Effect;
(B) no event has occurred or circumstance exists that may
(with or without notice or lapse of time) (1) constitute or result directly or
indirectly in a violation of or a failure to comply with any term or requirement
of any Governmental Authorization listed or required to be listed in Schedule
3.2(l), or (2) result directly or indirectly in the revocation,
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withdrawal, suspension, cancellation, or termination of, or any modification to,
any Governmental Authorization listed or required to be listed in SCHEDULE
3.2(l);
(C) the Company has not received, at any time since August 16,
1998, any notice or other communication (whether oral or written) from any
governmental authority or any other Person regarding (1) any actual, alleged,
possible, or potential violation of or failure to comply with any term or
requirement of any Governmental Authorization, or (2) any actual, proposed,
possible, or potential revocation, withdrawal, suspension, cancellation,
termination of, or modification to any Governmental Authorization; and
(D) all applications required to have been filed for the
renewal of the Governmental Authorizations listed or required to be listed in
SCHEDULE 3.2(l) have been duly filed on a timely basis with the appropriate
governmental bodies, and all other filings required to have been made with
respect to such Governmental Authorizations have been duly made on a timely
basis with the appropriate governmental authorities.
(iii) The Governmental Authorizations listed in SCHEDULE 3.2(l)
collectively constitute all of the Governmental Authorizations necessary to
permit the Company to lawfully conduct and operate its business in the manner it
currently conducts and operates such business and to permit the Company to own
and use its assets in the manner in which it currently owns and uses such
assets.
(m) ABSENCE OF CERTAIN CHANGES. Except as set forth in SCHEDULE 3.2(m),
since December 31, 2000, the Company has conducted its business only in the
Ordinary Course of Business and there has not been any:
(i) change in the Company's authorized or issued capital stock;
grant of any stock option or right to purchase shares of capital stock of the
Company; issuance of any security convertible into such capital stock; grant of
any registration rights; purchase, redemption, retirement, or other acquisition
by the Company of any shares of any such capital stock; or declaration or
payment of any dividend or other distribution or payment in respect of shares of
capital stock;
(ii) amendment to the Memorandum or Articles of Association of the
Company;
(iii) payment or increase by the Company of any bonuses, salaries,
or other compensation to any stockholder, director, officer, or (except in the
Ordinary Course of Business) employee or entry into any employment, severance,
or similar contract with any director, officer, or employee;
(iv) damage to or destruction or loss of any asset or property of
the Company, whether or not covered by insurance, that would have a Material
Adverse Effect;
-13-
(v) sale, lease, assignment, transfer, or other disposition of any
material asset or property of the Company or creation of any Security Interest
on any material asset or property of the Company, including the sale, lease,
assignment, transfer, or other disposition of any of the Intellectual Property
Rights;
(vi) material change in the accounting methods used by the Company;
(vii) waiver by the Company of a valuable right or of a debt owed
to it;
(viii) change or amendment to a contract or arrangement by which
the Company or any of its assets or properties is bound or subject and that
would have a Material Adverse Effect;
(ix) satisfaction or discharge of any lien, claim or payment of any
obligation by the Company, except in the Ordinary Course of Business and that
would not have a Material Adverse Effect;
(x) loans or guarantees made by the Company to or for the benefit
of its employees, officers or directors, or any members of their immediate
families, other than advances made in the Ordinary Course of Business;
(xi) to the best of the Company's knowledge, information and
belief, any other event or condition of any character that may reasonably have a
Material Adverse Effect; or
(xii) agreement or commitment, whether oral or written, by the
Company to do any of the foregoing.
(n) CONTRACTS. SCHEDULE 3.2(n) contains a complete and accurate list of
(i) all agreements to which the Company is a party the performance
of which will involve consideration in excess of $20,000, in the aggregate.
(ii) each lease, rental or occupancy agreement, license,
installment and conditional sale agreement, and other agreement affecting the
ownership of, leasing of, title to, use of, or any leasehold or other interest
in, any real or personal property (except personal property leases and
installment and conditional sales agreements having a value per item or
aggregate payments of less than $5,000 and with terms of less than one year);
(iii) each licensing agreement or other agreement with respect to
patents, trademarks, copyrights, or other intellectual property, including
agreements with current or former employees (but not consultants or contractors)
regarding the appropriation or the non-disclosure of any of the Intellectual
Property Rights;
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(iv) each employment agreement or other agreement with any employee
or group of employees;
(v) each joint venture, partnership, and other agreement (however
named) involving a sharing of profits, losses, costs, or liabilities by the
Company with any other Person;
(vi) each agreement containing covenants that in any way purport to
restrict the business activity of the Company or any Affiliate of the Company or
limit the freedom of the Company or any Affiliate of the Company to engage in
any line of business or to compete with any Person; and
(vii) each power of attorney that is currently effective and
outstanding;
(viii) each policy of insurance to which the Company is a party or
under which the Company, is or has been covered at any time within the three
years preceding the date of this Agreement; and
(ix) each material report or grant application submitted to the
office of the Chief Scientist of the Ministry of Industry and Commerce of the
State of Israel.
The Sellers or the Company have delivered to Buyer a correct and
complete copy of each contract or other agreement listed on SCHEDULE 3.2(n) (as
amended to date).
(o) EMPLOYEES.
(i) SCHEDULE 3.2(o) contains a complete and accurate list of the
following information for each employee or director of the Company, including
each employee on leave of absence or layoff status: name; job title; current
compensation paid or payable and vacation accrued; date of commencement of
employment with the Company.
(ii) To the Knowledge of any of the Sellers or the Company, no
employee or director of the Company is a party to, or is otherwise bound by, any
agreement or arrangement, including any confidentiality, noncompetition, or
proprietary rights agreement, between such employee or director and the Company
or other Person, that in any way adversely affects or will affect the
performance of his duties as an employee or director of the Company, or the
ability of the Company to conduct its business. Other than as set forth on
SCHEDULE 3.2(o)(b), to the Knowledge of any of the Sellers or the Company, no
director, officer, or other key employee of the Company intends to terminate his
employment with the Company.
(iii) The Company is in compliance with all laws and regulations of
any governmental authority relating to or regulating the employment of persons,
including without limitation all immigration or other laws regulating the
employment of persons who are not citizens.
-15-
(p) TAX MATTERS.
(i) The Company has filed all Tax Reports that it was required to
file, and has paid all Taxes shown thereon as owing, except where the failure to
file Tax Reports or to pay Taxes would not have a Material Adverse Effect.
(ii) SCHEDULE 3.2(p) lists all Tax Reports filed with respect to
the Company for taxable periods ended on or after December 31, 1998, indicates
those Tax Reports that have been audited, and indicates those Tax Reports that
currently are the subject of audit. Sellers have delivered to Buyer correct and
complete copies of all Tax Reports, examination reports, and statements of
deficiencies assessed against or agreed to by any the Company since December 31,
1998.
(iii) The Company has not waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
(iv) The Company is not a party to any Tax allocation or sharing
agreement.
(v) The Company has not been a member of an Affiliated Group filing
a consolidated Tax Report.
(vi) The Company has not made any elections under applicable laws
or regulations relating to taxation (other than elections relating solely to
methods of accounting, depreciation or amortization) that would have a Material
Adverse Effect.
(q) REAL ESTATE.
(i) The Company owns no real estate.
(ii) SCHEDULE 3.2(q) lists all real property leased or subleased to
the Company. Sellers or the Company have delivered to Buyer correct and complete
copies of the leases and subleases listed on SCHEDULE 3.2(q) (as amended to
date). To the Knowledge of any of the Sellers or the Company, each lease and
sublease listed on SCHEDULE 3.2(q) is legal, valid, binding, enforceable, and in
full force and effect, except where the illegality, invalidity, non-binding
nature, unenforceability, or ineffectiveness would not have a Material Adverse
Effect.
(r) INTELLECTUAL PROPERTY.
(i) The term "Intellectual Property Rights" includes:
(A) the name "Biosonix", all fictional business names, trading
names, registered and unregistered trademarks, service marks, and applications
(collectively, "Marks");
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(B) all patents, patent applications, and inventions and
discoveries that may be patentable (collectively, "PATENTS");
(C) all copyrights in both published works and unpublished
works (collectively, "COPYRIGHTS");
(D) all rights in mask works (collectively, "RIGHTS IN MASK
WORKS"); and
(E) all know-how, trade secrets, confidential information,
customer lists, software, technical information, data, process technology,
plans, drawings, and blue prints (collectively, "TRADE SECRETS"); owned, used,
or licensed by the Company as licensee or licensor.
(ii) SCHEDULE 3.2(r) contains a complete and accurate list and
summary description, including any royalties paid or received by the Company, of
all agreements relating to the Intellectual Property Rights to which the Company
is a party or by which the Company is bound, except for any license implied by
the sale of a product and perpetual, paid-up licenses for commonly available
software programs with a value of less than $1,000 under which the Company is
the licensee. There are no outstanding and, to the Knowledge of the Sellers or
the Company, no threatened disputes or disagreements with respect to any such
agreement.
(iii) Except as set forth in SCHEDULE 3.2(r), the Intellectual
Property Rights are all those necessary for the operation of the Company's
businesses as they are currently conducted or proposed to be conducted,
including without limitation the technologies described in Section 3 of the
Company's business plan dated October 2000. Except as described on SCHEDULE
3.2(r), the Company is the owner of all right, title, and interest in and to
each of the Intellectual Property Rights, free and clear of all liens, security
interests, charges, encumbrances, equities, and other adverse claims, and has
the right to use without payment to a third party all of the Intellectual
Property Rights.
(iv) Except as set forth in SCHEDULE 3.2(r), all former and current
employees of the Company have executed written agreements with the Company that
assign to the Company all rights to any inventions, improvements, discoveries,
or information relating to the business of the Company, or the Company has been
assigned all such rights by operation of law, and no such former or current
employee is entitled to compensation for such rights under the Patents Law,
1967. To the Knowledge of the Sellers or the Company, no employee of the Company
has entered into any agreement that restricts or limits in any way the scope or
type of work in which the employee may be engaged or requires the employee to
transfer, assign, or disclose information concerning his work to anyone other
than the Company.
(v) SCHEDULE 3.2(r) contains a complete and accurate list of all
Patents. Except as set forth in SCHEDULE 3.2(r), the Company is the owner of all
right, title, and interest in and to each of the Patents, free and clear of all
liens, security interests, charges, encumbrances, entities, and other adverse
claims. Except as set forth in SCHEDULE 3.2(r), no Patent has been or is
-17-
now involved in any interference, reissue, reexamination, or opposition
proceeding. To the Knowledge of the Sellers or the Company, there is no
potentially interfering Patent or Patent application of any third party, and no
Patent is infringed or has been challenged or threatened in any way. Except as
set forth in SCHEDULE 3.2(s), none of the products proposed manufactured and
sold, nor any process or know-how used, by the Company infringes or is alleged
to infringe any Patent or other proprietary right of any other Person.
(vi) Except as set forth in SCHEDULE 3.2(r) and SCHEDULE 3.2(s),
the Company conducts its business without infringement or claim of infringement
of any Intellectual Property Right of others and the conduct by Buyer after the
Closing Date of the Company's business, as it is currently conducted, will not
infringe or misappropriate or otherwise violate the Intellectual Property Rights
of any other person or constitute a breach or violation of any agreement
relating to the Intellectual Property Rights listed on SCHEDULE 3.2(r).
(vii) SCHEDULE 3.2(r) contains a complete and accurate list and
summary description of all Marks. The Company is the owner of all right, title,
and interest in and to the ▇▇▇▇ "Biosonix" in Israel, free and clear of all
liens, security interests, charges, encumbrances, equities, and other adverse
claims. Except as set forth in SCHEDULE 3.2(r), no ▇▇▇▇ has been or is now
involved in any opposition, invalidation, or cancellation and, to the Knowledge
of the Sellers or the Company, no such action is threatened with the respect to
any of the Marks. Except as set forth in SCHEDULE 3.2(r), no ▇▇▇▇ is infringed
or, to the Knowledge of the Sellers or the Company, has been challenged or
threatened in any way. Except as set forth in SCHEDULE 3.2(r), none of the Marks
used by the Company infringes or is alleged to infringe any trade name,
trademark, or service ▇▇▇▇ of any third party.
(viii) SCHEDULE 3.2(r) contains a complete and accurate list and
summary description of all Copyrights. The Company is the owner of all right,
title, and interest in and to each of the Copyrights, free and clear of all
liens, security interests, charges, encumbrances, equities, and other adverse
claims. No Copyright is infringed or, to the Knowledge of the Sellers or the
Company, has been challenged or threatened in any way. Except as set forth in
SCHEDULE 3.2(s), none of the subject matter of any of the Copyrights infringes
or is alleged to infringe any copyright of any third party or is a derivative
work based on the work of a third party.
(ix) The Company have taken all reasonable precautions to protect
the secrecy, confidentiality, and value of its Trade Secrets. The Company has
good title and an absolute (but not necessarily exclusive) right to use the
Trade Secrets. To the Knowledge of the Sellers and the Company, the Trade
Secrets are not part of the public knowledge or literature (other than published
patent applications), and, to the Knowledge of the Sellers or the Company, have
not been used, divulged, or appropriated either for the benefit of any Person
(other than one or more of the Company) or to the detriment of the Company.
Except as set forth in SCHEDULE 3.2(s), no Trade Secret is subject to any
adverse claim or has been challenged or threatened in any way.
-18-
(s) LITIGATION. Except as set forth in SCHEDULE 3.2(s), there is no
material action, order, writ, injunction, judgment or decree outstanding, or
suit, litigation, proceeding, labor dispute (other than routine grievance
procedures or routine, uncontested claims for benefits under any benefit plans
for any officers, employees or agents of the Company (collectively,
"PERSONNEL")), arbitration, investigation or reported claim, pending or to the
Knowledge of any of the Sellers or the Company, threatened, before any court,
governmental entity or arbitrator (collectively, "ACTIONS") relating to (i) the
Company or its business or assets, (ii) any benefit plan for Personnel or any
fiduciary or administrator thereof or (iii) the transactions contemplated by
this Agreement, except in each case for Actions which would not have a Material
Adverse Effect.
(t) EMPLOYEE BENEFITS.
(i) Schedule 3.2(t) lists each Employee Benefit Plan that the
Company maintains or to which the Company contributes.
(A) To the Knowledge of any of the Sellers or the Company, each
such Employee Benefit Plan (and each related trust, insurance contract, or fund)
complies in form and in operation in all respects with the applicable
requirements of Israeli law and its governing documents, except where the
failure to comply would not have a Material Adverse Effect.
(B) All contributions (including all employer contributions and
employee salary reduction contributions) which are due have been paid to each
such Employee Benefit Plan, and the Financial Statements accurately reflect all
liabilities of the Company under the Employee Benefit Plan.
(C) Sellers or the Company have delivered to Buyer summary plan
descriptions of Employee Benefit Plans between the Company and the Company's
employees.
(ii) With respect to each Employee Benefit Plan that the Company
maintains or ever has maintained or to which the Company contributes, ever has
contributed, or ever has been required to contribute, no action, suit,
proceeding, hearing, or investigation with respect to the administration or the
investment of the assets of any such Employee Benefit Plan (other than routine
claims for benefits) is pending, except where the action, suit, proceeding,
hearing, or investigation would not have a Material Adverse Effect.
(u) CERTAIN BUSINESS RELATIONSHIPS WITH THE COMPANY. Except as set
forth on SCHEDULE 3.2(u), none of the Sellers and their Affiliates has been
involved in any material business arrangement or relationship with the Company
within the past 12 months and none of the Sellers and their Affiliates owns any
material asset, tangible or intangible, which is used in the business of the
Company.
-19-
(v) NO UNLAWFUL PAYMENTS. To the Knowledge of any of the Sellers or
the Company, neither the Company nor any director, officer, agent, employee, or
other person associated with or acting on behalf of the Company has, directly or
indirectly: (i) used any corporate funds for unlawful contributions, gifts,
entertainment, or other unlawful expenses relating to political activity; (ii)
made any unlawful payment to domestic or foreign government officials or
employees, or to domestic or foreign political parties or campaigns, from
corporate funds; (iii) violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended; (iv) established or maintained any unlawful or
unrecorded fund of corporate monies or other assets; (v) made any false or
fictitious entry on the books or records of any company; (vi) made any bribe,
rebate, payoff, influence payment, kickback, or other unlawful payment; (vii)
given any favor or gift which is not deductible for federal income tax purposes;
or (viii) made any bribe, kickback or other payment of a similar or comparable
nature, whether lawful or not, to any person or entity, private or public,
regardless of form, whether in money, property, or services, to obtain favorable
treatment in securing business or to obtain special concessions, or to pay for
favorable treatment for business secured or for special concessions already
obtained.
(w) DISCLOSURE. No representation or warranty of the Company or
Sellers in this Agreement or any Schedule thereto omits to state a material fact
necessary to make the statements herein or therein, in light of the
circumstances in which they were made, not misleading. There is no fact known to
Sellers or the Company that may reasonably be expected to have a Material
Adverse Effect that has not been set forth in this Agreement or the Schedules
hereto.
3.3 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Sellers and the Company as of the date of this Agreement and as of
the Closing Date (as if such representations and warranties were made on the
Closing Date) as follows:
(a) ORGANIZATION OF BUYER. Buyer is a corporation duly organized,
validly existing, and in good standing under the laws of the state of Delaware
and has full corporate power and authority to conduct its business as it is
presently being conducted and to own and lease its properties and assets.
SCHEDULE 3.3(a) lists all of the directors and executive officers of Buyer.
Buyer has delivered to Sellers' Representative a copy of the certificate of
incorporation and bylaws of Buyer, as currently in effect.
(b) AUTHORITY RELATIVE TO AGREEMENTS. Buyer has all necessary
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder, and has taken all corporate action necessary
to consummate the transactions contemplated hereby and to perform its
obligations hereunder. This Agreement and all other agreements contemplated
hereby, when executed and delivered by or on behalf of Buyer, will constitute
the valid and legally binding obligations of Buyer, legally enforceable against
Buyer in accordance with its terms.
(c) CAPITALIZATION. The total number of shares of capital stock
which Buyer is authorized to issue is 55,000,000 shares, consisting of (i)
50,000,000 shares of common stock,
-20-
par value $.001 per share, of which 26,266,770 shares are issued and
outstanding, and (ii) 5,000,000 shares of preferred stock, par value $.001 per
share, of which 500,000 shares are Series A preferred stock, par value $.001 per
share, none of which are issued and outstanding. All of the issued and
outstanding shares of Buyer have been duly authorized, are validly issued, fully
paid and non-assessable. Except as set forth on SCHEDULE 3.3(c) or in the Buyer
SEC Filings (defined herein), there are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights, or other contracts or commitments that could require Buyer to issue,
sell, or otherwise cause to become outstanding any of its capital stock, or
other agreement that would result in a change in capitalization of Buyer. There
are no outstanding or authorized stock appreciation, phantom stock, profit
participation or similar rights with respect to Buyer. Except as set forth on
SCHEDULE 3.3(c) or in the Buyer SEC Filings, Buyer is not under any obligation
to register for trading on any securities exchange any of its currently
outstanding securities. Since its incorporation, there has been no declaration
or payment by Buyer of any assets of any kind to any of its stockholders in
redemption of or as the purchase price of any of Buyer's securities.
(d) NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Buyer is subject or any provision of its
charter or bylaws or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
Buyer is a party or by which it is bound or to which any of its assets is
subject.
(e) BROKERS' FEES. No agent, broker, investment banker, Person, or
firm acting in a similar capacity on behalf of or under the authority of Buyer
is or will be entitled to any broker's or finder's fee or any other commission
or similar fee, directly or indirectly, on account of any action taken by Buyer
in connection with any of the transactions contemplated by this Agreement. Buyer
will indemnify and hold each of the Sellers harmless from and against any claim
or liability resulting from any party claiming any such commission or fee, if
such claims shall be contrary to the foregoing statement.
(f) CONSENTS AND APPROVALS. Except as set forth in SCHEDULE 3.3(f),
no consent, approval, order or authorization of, or registration, declaration or
filing with, any federal, state, local or foreign governmental or regulatory
authority is required to be made or obtained by Buyer in connection with the
execution and delivery of this Agreement by Buyer or the consummation by Buyer
of the transactions contemplated hereby, except for such consents, approvals,
orders or authorizations which if not obtained, or registrations, declarations
or filings which if not made, would not have a Buyer Effect.
(g) INVESTMENT. Buyer is not acquiring the Shares with a view to or
for sale in connection with any distribution thereof within the meaning of the
Securities Act.
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(h) SEC FILINGS. Buyer has filed all forms, reports and documents
required to be filed with the SEC since December 31, 1998, and prior to Closing,
Buyer has made available to Sellers, as filed with the SEC, complete and
accurate copies of (i) the Annual Report of Buyer on Form 10-KSB for the year
ended December 31, 2000, and (ii) all other reports, statements and registration
statements (including Current Reports on Form 8-K) filed by Buyer with the SEC
since December 31, 1998, in each case including all amendments and supplements
(collectively, the "BUYER SEC FILINGS"). The Buyer SEC Filings (including,
without limitation, any financial statements or schedules included therein) (i)
were prepared in compliance with the requirements of the Securities Act, or the
Exchange Act, and the rules and regulations thereunder, as the case may be, and
(ii) did not at the time of filing (or if amended, supplemented or superseded by
a filing prior to the date hereof, on the date of that filing) contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(i) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth on
SCHEDULE 3.3(i) and in the Buyer SEC Filings made through the date hereof, (i)
Buyer has not conducted its business and operations other than in the Ordinary
Course of Business, (ii) there has not been any fact, event, circumstance or
change affecting or relating to Buyer that has had or is reasonably likely to
have a Buyer Effect and (iii) Buyer does not have any liabilities or obligations
of any kind or nature, whether known or unknown or secured or unsecured (whether
absolute, accrued, contingent or otherwise, and whether due or to become due)
that would be required to be reflected on a balance sheet. Except as set forth
on SCHEDULE 3.3(i) or in the Buyer SEC Filings, since March 31, 2001, there has
not occurred any event reasonably likely to cause a Buyer Effect.
(j) LITIGATION. Except as disclosed in the Buyer SEC Filings, there
is no material action, order, writ, injunction, judgment or decree outstanding,
or suit, litigation, proceeding, labor dispute (other than routine grievance
procedures or routine, uncontested claims for benefits under any benefit plans
for any officers, employees or agents of Buyer), arbitration, investigation or
reported claim, pending or to the Knowledge of Buyer, threatened, before any
court, governmental entity or arbitrator (collectively, "BUYER ACTIONS")
relating to (i) Buyer or its business or assets or (ii) the transactions
contemplated by this Agreement, except in each case for Buyer Actions which
would not have a Buyer Effect.
(k) VALID ISSUANCE. The Initial Buyer Stock and the Additional
Buyer Stock to be issued pursuant to this Agreement will, when issued in
accordance with this Agreement, be validly issued, fully paid and nonassessable.
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ARTICLE IV
COVENANTS
4.1 IMPLEMENTING AGREEMENT. Subject to the terms and conditions
hereof, each of the Parties will use his or its reasonable best efforts to take
all action and to do all things necessary to consummate and make effective the
transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the closing conditions set forth in Article V).
4.2 CONDUCT OF THE COMPANY'S BUSINESS. The Company covenants and
agrees that, prior to the earlier of (i) the Closing Date or (ii) the
termination of this Agreement, unless Buyer shall otherwise consent in writing
or as otherwise expressly contemplated by this Agreement:
(a) The business of the Company shall be conducted only in,
and the Company shall not take any action except in, the Ordinary Course of
Business and the Company shall use commercially reasonable efforts to preserve
intact its present business organization, keep available the services of its
current officers and employees, maintain its assets (other than those permitted
to be disposed of hereunder) in good repair and condition, maintain its books of
account and records in the usual, regular and ordinary manner, and preserve its
goodwill and ongoing business;
(b) The Company shall not do any of the following:
(i) sell, pledge, dispose of or encumber any property or
assets (including Intellectual Property Rights) of the Company that are material
to the Company's business, except immaterial assets in the Ordinary Course of
Business and except that the Company may grant purchase money security
interests;
(ii) split, combine or reclassify any outstanding shares
of its capital stock, or declare, set aside or pay any dividend payable in cash,
stock, property or otherwise with respect to such shares;
(iii) redeem, purchase, acquire or offer to acquire any
shares of its capital stock;
(iv) issue, sell, pledge or dispose of, or agree to issue,
sell, pledge or dispose of, any additional shares of, or securities convertible
or exchangeable for, or any options, warrants or rights of any kind to acquire
any shares of, its capital stock of any class or other property or assets, or
modify the terms or any outstanding options, warrants or rights to acquire the
Company's capital stock;
(v) incur or guarantee any indebtedness for borrowed money
other than in the Ordinary Course of Business and consistent with past
practices, or refinance any such indebtedness or issue or sell any debt
securities;
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(vi) grant any increase in the salary or other compensation
of its officers or employees, except for reasonable salary increases in the
Ordinary Course of Business, or enter into any employment agreement or make any
loan to any officer or employee of the Company; or
(vii) adopt, amend, modify or terminate any plan for the
benefit of the Company's officers or employees, except as may be required by
applicable law or regulation.
(c) Each Seller agrees that such Seller will not take any
action that would cause, directly or indirectly, the Company to violate any of
the covenants set forth herein.
4.3 ACCESS TO INFORMATION.
(a) The Sellers and the Company shall, and shall cause their
respective officers, employees, representatives, advisors and agents to provide,
from the date hereof to the Closing Date, Buyer and its officers, directors,
employees, advisors and agents access at all reasonable times during normal
business hours to the Company's officers, employees, agents, properties,
facilities, books and records, and shall furnish Buyer with all financial,
operating and other information and data as Buyer may reasonably request;
PROVIDED, HOWEVER, that the Sellers or the Company, as the case may be, may
require advisors, agents, and any other external representatives of Buyer to
execute a non-disclosure agreement on terms mutually agreeable to the Sellers
and the Company, as the case may be, and Buyer, as a condition to providing such
advisors, agents or external representatives of the Company with access to the
aforesaid information. Buyer shall treat and hold as such an Confidential
Information it receives from any of Sellers and the Company in the course of the
reviews contemplated by this Section 4.3.
(b) If this Agreement is terminated, Buyer shall, and shall
cause its officers, directors, employees, advisors and agents, to promptly
deliver to Sellers or the Company, as the case may be, all Confidential
Information, and all copies thereof, obtained by it or on its behalf from
Sellers of the Company, as the case may be, as a result of this Agreement or in
connection herewith.
4.4 EXCLUSIVITY. Sellers and the Company shall not, nor shall they
authorize or permit any of their officers, employees, advisors, agents,
consultants or representatives to, directly or indirectly, solicit or entertain
offers from, negotiate with or in any manner encourage, discuss, accept, or
consider any proposal of any other person relating to the acquisition of the
Company, or all or substantially all of its assets, shares or business, in whole
or in part, whether directly or indirectly, through purchase, merger,
consolidation, or otherwise (other than sales of inventory in the ordinary
course) (the "ALTERNATIVE TRANSACTIONS"). Sellers and the Company shall
immediately notify Buyer if any proposal, offer, inquiry or other contact is
received by, any information is requested from, or any discussions are sought to
be initiated or continued with, the Sellers or the Company regarding an
Alternative Transaction and shall, in any such notice to Buyer, indicate the
identity of the offeror and the terms and conditions of any proposals or offers
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or the nature of any inquiries or contacts, and thereafter shall keep Buyer
informed of the status and terms of any such proposals or offers and the status
of any such discussions or negotiations.
4.5 NOTIFICATION OF CERTAIN MATTERS. Each of the Sellers and the
Company shall give prompt notice to Buyer, and Buyer shall give prompt notice to
each of the Sellers and the Company, of (a) the occurrence, or failure to occur,
of any event that such party believes would be likely to cause any of its
representations or warranties contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Closing Date and (ii) any material failure of the Sellers, the Company, or
Buyer, as the case may be, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by them hereunder; PROVIDED, HOWEVER,
that failure to give such notice shall not constitute a waiver of any defense
that may be validly asserted.
4.6 REGULATORY AND OTHER AUTHORIZATIONS.
(a) Each of the Sellers, the Company and Buyer will use its
best efforts to obtain all authorizations, consents, orders and approvals of all
federal, state and foreign regulatory bodies and officials that may be or become
necessary for the performance of its obligations pursuant to this Agreement and
will cooperate fully with the other Party in promptly seeking to obtain all such
authorizations, consents, orders and approvals. None of the Sellers, the Company
or the Buyer will take any action that will have the effect of delaying,
impairing or impeding the receipt of any required approval.
(b) If in order to properly prepare documents required to be
filed with governmental authorities or its financial statements, it is necessary
that the Sellers, the Company or Buyer be furnished with additional information
relating to the Company, and such information is in the possession of the other
Party, such Party agrees to use its best efforts to furnish such information in
a timely manner to such other Party, at the cost and expense of the Party being
furnished such information.
4.7 FURTHER ASSURANCES. Each of the Sellers and Buyer shall execute
such documents and other papers and take such further actions as may be
reasonably required or desirable to carry out the transactions contemplated by
this Agreement. Upon the terms and subject to the conditions of this Agreement,
each of the Parties shall use its best efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all other things necessary, proper
or advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement.
4.8 BOARD REPRESENTATION. Concurrently with the Closing of the
transactions contemplated hereby, the Board of Directors of Buyer shall appoint
▇▇▇ ▇▇▇▇▇ as a member of Buyer's Board of Directors for a term to expire at
Buyer's 2003 annual meeting of stockholders, and shall appoint ▇▇▇▇▇▇ ▇▇▇▇▇▇ to
be appointed as a member of Buyer's Board of Directors for a term to expire at
Buyer's 2004 annual meeting of stockholders. Such directors shall have all of
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the rights and obligations belonging to the current members of Buyer's Board of
Directors as set forth in Buyer's certificate of incorporation and bylaws.
4.9 EXTRAORDINARY TRANSACTION BY BUYER. Buyer covenants and agrees
that, prior to the earlier of (i) the Closing Date or (ii) termination of this
Agreement, unless the Sellers' Representative shall otherwise consent in writing
or as otherwise expressly contemplated by this Agreement:
(a) The business of Buyer shall be conducted only in, and Buyer
shall not take any action except in, the Ordinary Course of Business and Buyer
shall use commercially reasonable efforts to preserve intact its present
business organization, keep available the services of its current officers and
employees, maintain its assets (other than those permitted to be disposed of
hereunder) in good repair and condition, maintain its books of account and
records in the usual, regular and ordinary manner, and preserve its goodwill and
ongoing business;
(b) Buyer shall take no action reasonably likely to cause a
Buyer Effect.
4.10 EMPLOYMENT AGREEMENTS. ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇ each
will execute and deliver to Buyer an Employment Agreement in he form attached
hereto as Appendix B.
4.11 RESTRICTION ON SALE OF THE COMPANY. For a period of two years
after the Closing Date, Buyer will not sell or transfer the Shares or
substantially all of the assets of the Company in a manner that will cause an
Israeli tax event to the Sellers unless the Sellers' Representative agrees in
writing to any arrangement that will reasonably compensate the Sellers for such
a tax event.
4.12 INDEMNIFICATION. From the Closing Date until the third
anniversary of the Closing Date, Buyer shall cause the Company to fulfill and
honor in all respects the obligations of the Company pursuant to indemnification
agreements (including any agreements contained in the Company's Articles of
Association) between the Company and its directors and officers existing on the
date of this Agreement. This Section 4.12 shall survive the consummation of the
transactions contemplated by this Agreement, is intended to benefit the Company
and each indemnified party, shall be binding, jointly and severally, on all
successors and assigns of the Company and Buyer, and shall be enforceable by the
indemnified parties and is in addition to, and not in substitution for, any
other rights to indemnification that any such person may have by contract or
otherwise.
4.13 COVENANT NOT TO TAKE ACTION. Except for acts constituting
fraud or breach of fiduciary duty, Buyer and the Company shall not take any
action, institute any legal proceeding or assert any claim against any of the
directors or officers of the Company, in their capacities as directors or
officers of the Company or as individuals, with respect to: (i) any
misrepresentation, breach or default as to any representation, warranty,
agreement, covenant or obligation contained in this Agreement or any certificate
or schedule delivered pursuant to this Agreement or (ii) any other matter
arising out of or related to their service as directors or officers of the
Company; it being understood that the foregoing shall in no way limit the rights
of Buyer to take action
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against the Company under Section 6.3 hereof. The foregoing shall not limit in
any way the remedies available to Buyer or the claims that may be asserted
against any officer or director under this Agreement if such person is also a
Seller in their capacity as a Seller.
ARTICLE V
CONDITIONS TO OBLIGATION TO CLOSE
5.1 CONDITIONS TO OBLIGATION OF BUYER. The obligation of the Buyer
to consummate the transactions to be performed by it under this Agreement is
subject to satisfaction at or prior to Closing of the following conditions:
(a) the representations and warranties of Sellers and the
Company set forth in Sections 3.1 and 3.2 shall be true and correct in all
material respects at and as of the Closing Date;
(b) each of the Sellers and the Company shall have performed
and complied in all material respects with all covenants, agreements and
obligations required to be performed and complied with by them prior to the
Closing Date;
(c) there shall not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the transactions
contemplated by this Agreement;
(d) the Sellers, the Company and/or Buyer shall have received
all authorizations, consents, and approvals of governments and governmental
agencies referred to in Sections 3.2(h), 3.3(f), and 4.6.
(e) since the date of this Agreement, there shall not have
occurred any event or development which reasonably could be expected to have,
individually or in the aggregate, a Material Adverse Effect;
(f) Buyer shall have obtained all waivers, consents and other
agreements requested by Buyer from the holders of options and warrants to
purchase capital stock of the Company in connection with the actions
contemplated under Section 2.7 of this Agreement
(g) the Chief Scientist of the Ministry of Industry and
Commerce of the State of Israel shall have unconditionally approved the
transactions contemplated by this Agreement;
(h) the agreement referenced in Sections 4.10 has been executed
and delivered by all the parties thereto;
(i) the Sellers and the Company each shall have delivered to
Buyer its certificate to the effect that each of the conditions specified in
Section 5.1(a) - (c) is satisfied in all material respects;
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(j) each of the Sellers and Buyer shall have executed the
Shareholder Agreement attached hereto as Appendix A;
(k) Buyer shall have received from counsel to Sellers an
opinion in form and substance as set forth in Appendix D attached hereto,
addressed to the Buyer, and dated as of the Closing Date; and
(l) Buyer shall have received from counsel to the Company on
intellectual property matters an opinion regarding patent infringement in a form
reasonably acceptable to Buyer, addressed to the Buyer, and dated as of the
Closing Date.
Buyer may waive any condition specified in this Section 5.1. if
it executes a writing so stating at or prior to Closing.
5.2 CONDITIONS TO OBLIGATION OF SELLERS. The obligation of
Sellers to consummate the transactions to be performed by it under this
Agreement is subject to satisfaction at or prior to Closing of the following
conditions:
(a) the representations and warranties of Buyer forth in
Section 3.3 shall be true and correct in all material respects at and as of the
Closing Date;
(b) Buyer shall have performed and complied in all material
respects with all covenants, agreements and obligations required to be performed
and complied with by Buyer prior to the Closing Date;
(c) there shall not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the transactions
contemplated by this Agreement;
(d) the Sellers, the Company and/or Buyer shall have received
all authorizations, consents, and approvals of governments and governmental
agencies referred to in Sections 3.2(h), 3.3(f), and 4.6.
(e) the Chief Scientist of the Ministry of Industry and
Commerce of the State of Israel shall have approved the transactions
contemplated by this Agreement;
(f) since the date of this Agreement, there shall not have
occurred any event or development which reasonably could be expected to have,
individually or in the aggregate, a Buyer Effect;
(g) Provided that they have timely made application therefore
and provided all necessary supporting information and documentation, certain of
the Sellers who are residents of Israel and/or the Company shall have received a
ruling from the Israeli Income Tax Commissioner to the effect that the
transactions contemplated by this Agreement will not result in the recognition
by such Sellers of taxable income until the sale of the Buyer Stock received by
such Sellers;
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(h) Buyer shall have delivered to Sellers a certificate to the
effect that each of the conditions specified in Section 5.2(a) - (c) is
satisfied in all material respects;
(i) each of the Sellers and Buyer shall have executed the
Shareholder Agreement attached hereto as Appendix A;
(j) Sellers shall have received from counsel to Buyers an
opinion in form and substance as set forth in Appendix E attached hereto,
addressed to the Sellers, and dated as of the Closing Date; and
(k) Sellers who are U.S. taxpayers shall have received from
counsel to Buyers an opinion to the effect that the transactions contemplated by
this Agreement constitute a tax-free reorganization under Section 368 of the
Code, subject however to each of such Sellers providing such counsel written
representations requested by such counsel as a condition to rendering the
opinion.
(l) Buyer's Board of Directors shall authorize Buyer's officers
to take all action reasonably necessary in the judgment of the Board of
Directors to cause Buyer's securities to be listed on the Nasdaq National
Market, the Nasdaq SmallCap Market, or the American Stock Exchange.
The Sellers' Representative may, on behalf of the Sellers, waive any
condition specified in this Section 5.2. if he or she executes a writing so
stating at or prior to Closing.
ARTICLE VI
INDEMNIFICATION
6.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations, warranties and covenants set forth in this Agreement shall
survive the Closing for a period of one year after the Closing Date; provided,
however, that the representations and warranties set forth in Section 3.2(p)
shall survive the Closing for the applicable statute of limitations period.
6.2 INDEMNIFICATION BY BUYER.
(a) Buyer agrees, subject to the other terms and conditions of
this Agreement, to indemnify Sellers (and each of Sellers' directors, officers,
employees, Affiliates, successors and assigns) against, and hold them harmless
from, all liabilities, costs and expenses (including, without limitation,
reasonable attorney and expert fees) of and damages to Sellers arising out of
the breach of any material representation, warranty, covenant or agreement of
Buyer herein. No claim may be asserted nor may any action be commenced against
Buyer for breach of any representation, warranty, covenant or agreement
contained herein, or for any liabilities of Buyer which are asserted against
Sellers unless written notice of such claim or action is received by Buyer
describing in detail the facts and circumstances with respect to the subject
matter of such
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claim or action on or prior to the date on which the representation, warranty,
covenant or agreement on which such claim or action is based ceases to survive
as set forth in Section 6.1, irrespective of whether the subject matter of such
claim or action shall have occurred before or after such date.
(b) THIRD PARTY CLAIMS. Sellers agree to give Buyer prompt
written notice of any claim, assertion, event or proceeding by or in respect of
a third party of which it has Knowledge concerning any liability or damage as to
which it may request indemnification hereunder. Buyer shall have the right to
direct, through counsel of its own choosing, the defense or settlement of any
such claim or proceeding; Sellers may participate in such defense, but in such
case the expenses of each Seller shall be paid by such Seller. Sellers shall
provide Buyer with access to its records and personnel relating to any such
claim, assertion, event or proceeding during normal business hours and shall
otherwise cooperate with and aid at Buyer's request Buyer in the defense or
settlement thereof, and Buyer shall reimburse Sellers for all of their
reasonable out-of-pocket expenses in connection therewith. If Buyer elects to
direct the defense of any such claim or proceeding, Sellers shall not pay, or
permit to be paid, any part of any claim or demand arising from such asserted
liability, unless Buyer consents in writing to such payment or unless Buyer,
subject to the last sentence of this subsection (b), withdraws from the defense
of such asserted liability, or unless a final judgment from which no appeal may
be taken by or on behalf of Buyer is entered against Sellers for such liability.
If Buyer shall fail to defend, or if, after commencing or undertaking any such
defense, fails to prosecute or withdraws from such defense, Sellers shall have
the right to undertake the defense or settlement thereof, at Buyer's expense. If
Sellers assume the defense of any such claim or proceeding pursuant to this
subsection (b) and propose to settle such claim or proceeding prior to a final
judgment thereon or to forego appeal with respect thereto, then Sellers shall
give Buyer prompt written notice thereof, and Buyer shall have the right to
participate in the settlement or assume or reassume the defense of such claim or
proceeding.
(c) Buyer makes no representation, warranty, covenant or
agreement with respect to any matter contained in this Agreement except and to
the extent as expressly set forth in this Agreement. Anything herein to the
contrary notwithstanding, no breach of any representation, warranty, covenant or
agreement contained herein shall give rise to any right on the part of Sellers,
after the consummation of the transactions contemplated hereby, to rescind this
Agreement or any of the transactions contemplated hereby.
6.3 INDEMNIFICATION BY THE SELLERS.
(a) Each of the Sellers agrees, subject to the other terms and
conditions of this Agreement, to severally and not jointly indemnify Buyer (and
Buyer's directors, officers, employees, Affiliates, successors and assigns)
against, and hold it harmless from, such Seller's pro rata share (determined
according to the number of Buyer Shares distributable to such Seller) of all
liabilities, costs and expenses (including, without limitation, reasonable
attorney and expert fees) of and damages to Buyer, arising out of the breach of
any material representation, warranty, covenant or agreement of Sellers herein.
No claim may be asserted nor may any action be
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commenced against Sellers for breach of any representation, warranty, covenant
or agreement contained herein or for any liabilities of Sellers which are
asserted against Buyer, unless written notice of such claim or action is
received by the Sellers' Representative describing in detail the facts and
circumstances with respect to the subject matter of such claim or action on or
prior to the date on which the representation, warranty, covenant or agreement
on which such claim or action is based ceases to survive as set forth in Section
6.1 irrespective of whether the subject matter of such claim or action shall
have occurred before or after such date.
(b) THIRD PARTY CLAIMS. Buyer agrees to give Sellers'
Representative prompt written notice of any claim, assertion, event or
proceeding by or in respect of a third party of which it has Knowledge
concerning any liability or damage as to which it may request indemnification
hereunder. Sellers shall have the right to direct, through counsel of their own
choosing, the defense or settlement of any such claim or proceeding; Buyer may
participate in such defense, but in such case the expenses of Buyer shall be
paid by Buyer. Buyer shall provide Sellers with access to its records and
personnel relating to any such claim, assertion, event or proceeding during
normal business hours and shall otherwise cooperate with and aid at Sellers'
request Sellers in the defense or settlement thereof, and Sellers shall
reimburse Buyer for all its reasonable out-of-pocket expenses in connection
therewith. If Sellers elect to direct the defense of any such claim or
proceeding, Buyer shall not pay, or permit to be paid, any part of any claim or
demand arising from such asserted liability unless the Sellers' Representative
consents in writing to such payment or unless Sellers, subject to the last
sentence of this subsection (b), withdraw from the defense of such asserted
liability or unless a final judgment from which no appeal may be taken by or on
behalf of Sellers is entered against Buyer for such liability. If Sellers shall
fail to defend, or if, after commencing or undertaking any such defense, fail to
prosecute or withdraw from such defense, Buyer shall have the right to undertake
the defense or settlement thereof, at Sellers' expense. If Buyer assumes the
defense of any such claim or proceeding pursuant to this subsection (b) and
proposes to settle such claim or proceeding prior to a final judgment thereon or
to forego appeal with respect thereto, then Buyer shall give Sellers prompt
written notice thereof, and Sellers shall have the right to participate in the
settlement or assume or reassume the defense of such claim or proceeding.
(c) The Sellers make no representation, warranty, covenant or
agreement with respect to any matter contained in this Agreement except and to
the extent as expressly set forth in this Agreement. Anything herein to the
contrary notwithstanding, no breach of any representation, warranty, covenant or
agreement contained herein shall give rise to any right on the part of Buyer,
after the consummation of the transactions contemplated by this Agreement, to
rescind this Agreement or any of the transactions contemplated hereby.
6.4 LIMITATIONS ON INDEMNIFICATION. Notwithstanding the above,
the indemnification obligations of Buyer and Sellers under Sections 6.2. and
6.3., as the case may be, are subject to the limitations set forth below.
(a) Any indemnification pursuant to Article VI of this
Agreement shall be subject to the requirement that no claim be made until the
aggregate amount of losses subject to
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indemnification thereunder exceeds $25,000 (or in the case of a Seller, the
Seller's pro rata share of such amount, determined according to the number of
Buyer Shares distributable to such Seller) (the "DEDUCTIBLE"), after which time
claims for indemnification may be made to the extent and only to the extent that
the aggregate amount of all losses exceeds the Deductible, subject to the terms,
conditions and limitations set forth herein.
(b) The maximum amount of the liability of the Buyer in excess
of the Deductible in respect all Buyer's representations, warranties, covenants
and agreements shall not exceed $5,000,000. The maximum amount of the liability
of any Seller in excess of the Deductible in respect of such Seller's
representations, warranties, covenants and agreements shall not exceed the value
of the Buyer Stock distributable to the Seller hereunder. In addition, a Seller
may satisfy any indemnification obligation of such Seller under this Article VI
by transferring to Buyer such number of shares of Buyer Stock as are equal in
value to the amount of the Seller's indemnification obligation. For purposes of
this Section 6.4, the shares of Buyer Stock shall be deemed to have a value of
$0.70 per share.
(c) No Person may make a claim for indemnification with respect
to any event, occurrence, condition or fact that would constitute a breach of
any material representation, warranty, covenant or agreement of Sellers or
Buyer, as the case may be, set forth in this Agreement of which said Person (or
its directors, officers, employees or Affiliates) had actual knowledge at the
time of Closing.
6.5 CALCULATION OF LOSSES. The amount of losses recoverable by
an indemnified party under this Article VI shall be reduced, dollar-for-dollar,
by the amount of any proceeds actually recovered by the indemnified party from a
third party or under any insurance policies which may be in effect with respect
to such losses, and by the amount of tax benefits realized by such indemnified
party in respect of such losses.
6.6 SATISFACTION OF CLAIMS WITH BUYER STOCK. To the extent that
Buyer has asserted any claims under Section 6.3 prior to the time when the
Additional Buyer Stock is to be distributed to Shareholders pursuant to Section
2.6, Buyer may withhold the distribution of shares of Additional Buyer Stock
with an aggregate value (determined as provided in Section 6.4(b)) equal to the
amount of such claim until the resolution of such claim pursuant to Section 9.11
of this Agreement.
6.7 EXCLUSIVE REMEDY. Each of the Sellers and Buyer acknowledge
and agree that, from and after the Closing, its sole and exclusive remedy with
respect to any and all rights, claims, and causes of action (other than fraud)
for any breach of this Agreement shall be pursuant to the indemnification
provisions set forth in this Article VI. Each of the Sellers and Buyer hereby
waives any indemnification rights that might otherwise be available to such
parties under applicable federal, state and common law.
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ARTICLE VII
TERMINATION
7.1 TERMINATION OF AGREEMENT. Certain of the Parties may
terminate this Agreement as provided below:
(a) Buyer and the Sellers' Representative may terminate this
Agreement by mutual written consent at any time prior to the Closing;
(b) Buyer may terminate this Agreement by giving written notice
to the Sellers' Representative at any time prior to Closing in the event (i) any
of the Sellers has within the then previous 10 business days given the Buyer any
notice pursuant to Section 4.5 and (ii) the development that is the subject of
the notice has had a Material Adverse Effect;
(c) Buyer may terminate this Agreement by giving written notice
to the Sellers' Representative at any time prior to the Closing in the event any
of the Sellers has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the Buyer has notified the
Sellers' Representative of the breach, and the breach has continued without cure
for a period of 30 days after the notice of breach;
(d) the Sellers' Representative may terminate this Agreement by
giving written notice to the Buyer at any time prior to the Closing in the event
the Buyer has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, any of the Sellers has
notified the Buyer of the breach, and the breach has continued without cure for
a period of 30 days after the notice of breach;
(e) Buyer or the Sellers' Representative may terminate this
Agreement if the Closing shall not have occurred on or before December 31, 2001.
7.2 TERMINATION FEE.
(a) In the event that this Agreement is terminated by Seller's
Representative under Section 7.1(e) for any reason other than the failure of the
conditions set forth in Sections 5.1 (c)-(d), 5.2(c)-(d), 5.2(g), 5.2(l) and
5.2(f) and, within six (6) months after such termination, the Company or the
Sellers execute a memorandum of intent or other agreement relating to an
Alternative Transaction, and such transaction is ultimately consummated, then
immediately upon the closing of such Alternative Transaction, the Company shall
pay to Buyer a fee equal to 20% of the fair market value of the consideration to
be received by the Company and/or the Sellers in the Alternative Transaction,
but in no event more than $750,000 (the "TERMINATION FEE"). The payment of the
Termination Fee shall be without prejudice to any other remedies that Buyer may
have under this Agreement. In the event that the Alternative Transaction results
in the issuance of equity securities to the Company or the Sellers, then, at the
Company's option, the Company or the Sellers may pay the Termination Fee through
the transfer to Buyer of shares of such equity
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securities, free of any liens, encumbrances, claims or restrictions on transfer,
valued at the fair market value of such equity securities on the date of
delivery to Buyer; PROVIDED, HOWEVER, that equity securities of the same class
(i) are, at the time of delivery to Buyer, listed or admitted for trading on the
New York Stock Exchange, the American Stock Exchange, the Nasdaq National
Market, or the Nasdaq Small Cap Market, on any international securities exchange
of comparable stature, and (ii) may be sold or otherwise transferred by Buyer
immediately upon Buyer's receipt thereof through the facilities of such exchange
without any restriction or limitation whatsoever.
(b) For purposes of Section 7.2(a), "Alternative Transaction"
shall exclude a private placement of equity securities of the Company
representing upon issuance less than 50% of the common equity of the Company on
a fully converted basis.
7.3 EFFECT OF TERMINATION. If the Sellers' Representative or
Buyer terminates this Agreement pursuant to Section 7.1., all rights and
obligations of each of the Sellers and Buyer hereunder shall terminate without
any liability of any Party to any other Party (except for any liability of any
Party then in breach); PROVIDED, HOWEVER, that the provisions contained in
Section 4.3. shall survive termination.
ARTICLE VIII
APPOINTMENT OF SELLERS' REPRESENTATIVE
8.1 IRREVOCABLE APPOINTMENT OF SELLERS' REPRESENTATIVE. By the
execution and delivery of this Agreement, including counterparts hereof, each
Seller hereby irrevocably constitutes and appoints ▇▇▇▇▇▇ ▇▇▇▇▇▇ and any
successor to the foregoing person appointed pursuant to Section 8.3 hereof, as
the true and lawful agent and attorney-in-fact (referred to in this Agreement as
the "SELLERS' REPRESENTATIVE") of such Seller with full power of substitution
and with full power and authority to act in the name, place and stead of such
Seller with respect to the terms and provisions of this Section 8.1, as the same
may be from time to time amended, and to do or refrain from doing all such
further acts and things, and to execute all such documents, as the Seller's
Representative shall deem necessary or appropriate in connection with the
following powers granted under this Section 8.1: (a) to approve any action
hereunder which requires the consent, approval or the waiver of the Sellers,
including, without limitation, any action under Section 5.2, (b) to settle all
claims, matters, disputes or disagreements under this Agreement (provided that
such settlement shall effect each Seller in a pro rata manner, determined in
accordance with the number of Buyer Share distributable to such Seller); (c) to
extend the Closing Date or change the location of the Closing; and, with the
consent of a majority-in-interest of the Sellers, terminate this Agreement as
provided in Article VII. A "majority-in-interest" means those Sellers entitled
to receive a majority of the Buyer Stock under this Agreement.
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8.2 ACTS OF SELLERS' REPRESENTATIVE.
(a) The appointment of the Sellers' Representative in Section
8.1 hereof shall be deemed coupled with an interest and shall be irrevocable,
and Buyer and any other Person may conclusively and absolutely rely, without
inquiry, upon any action of the Sellers' Representative as the act of each of
the Sellers in all matters referred to in Section 8.1 hereof. Each Seller hereby
ratifies and confirms all that the Sellers' Representative shall do or cause to
be done by virtue of Sellers' Representative's appointment as Sellers'
Representative of such Seller. The Sellers' Representative shall act for the
Sellers on all of the matters set forth in Section 8.1 hereof in the manner the
Sellers' Representative believes to be in the best interest of the Sellers and
consistent with Sellers' Representative's obligations under this Agreement, but
the Sellers' Representative shall not be responsible to any Seller for any loss
or damage any Seller may suffer by reason of the performance by the Sellers'
Representative of Sellers' Representative's duties under this Agreement,
including any loss or damage resulting from any error of judgment, mistake of
fact or law, or any act done or omitted to be done in good faith, other than
loss or damage arising from willful violation of law or gross negligence in the
performance of Sellers' Representative's duties under this Agreement.
(b) Each Seller hereby expressly acknowledges and agrees that
the Sellers' Representative is authorized to act on behalf of such Seller
notwithstanding any dispute or disagreement among the Sellers, and that the
Buyer shall be entitled to rely on any and all action taken by the Sellers'
Representative under this Agreement without liability to, or obligation to
inquire of, any of the Sellers. Buyer is hereby expressly authorized to rely on
the authority and genuineness of the signature of the Sellers' Representative on
any instrument, certificate or document. Upon receipt of any writing which
reasonably appears to have been signed by the Sellers' Representative, Buyer may
act upon the same without any further duty of inquiry as to the genuineness of
the writing.
8.3 REPLACEMENT OF SELLERS' REPRESENTATIVE. If the Sellers'
Representative resigns or ceases to function in Sellers' Representative's
capacity for any reason whatsoever, then ▇▇▇ ▇▇▇▇▇ shall become the Sellers'
Representative and if ▇▇▇ ▇▇▇▇▇ shall cease to serve, then a
majority-in-interest of the Sellers shall appoint a successor; provided,
however, that, if for any reason no successor has been appointed within thirty
(30) days, then any Seller or Buyer shall have the right to petition a court of
competent jurisdiction for appointment of a successor.
8.4 INDEMNIFICATION OF SELLERS' REPRESENTATIVE. Sellers do
hereby jointly and severally agree to indemnify and hold the Sellers'
Representative harmless from and against any and all liability, loss, cost,
damage or expense (including without limitation fees and expenses of legal
counsel) reasonably incurred or suffered as a result of the performance of
Sellers' Representative's duties under this Agreement except for actions
constituting gross negligence or willful misconduct.
8.5 PROOF OF AUTHORITY. Each Seller shall execute and deliver
to the Sellers' Representative such further documents requested by the Sellers'
Representative, if any, as may
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be necessary to the efficient proof of his authority to act and to exercise the
powers granted the Sellers' Representative under this Article VIII.
8.6 SURVIVAL OF POWER. Each Seller who is an individual intends
for the authorizations and agreements in this Article VIII to remain in force
and not be affected if such Seller subsequently becomes mentally or physically
disabled or incompetent.
ARTICLE IX
MISCELLANEOUS
9.1 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. Buyer and the Company
shall agree on the form and content of any public announcement relating to the
subject matter of this Agreement, and, neither Buyer nor the Company shall make
any such public announcement without the prior consent of the other, which
consent shall not be unreasonably withheld or delayed; PROVIDED, HOWEVER, that
Buyer may make a public disclosure it believes in good faith is required by
applicable federal or state securities laws or by any listing or trading
agreement concerning its publicly-traded securities, in which case the Buyer
will use its reasonable best efforts to advise the Company prior to making the
disclosure.
9.2 FEES AND EXPENSES. Buyer shall be responsible for its own costs and
expenses, including but not limited to any broker's or finder's fees, incurred
in connection with the negotiation, preparation, execution and performance of
this Agreement, and the costs and expenses of its authorized representatives.
Sellers and the Company shall each be responsible for their own costs and
expense incurred in connection with the negotiation, preparation, execution and
performance of this Agreement.
9.3 NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
9.4 ENTIRE AGREEMENT. This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, to the extent they have related in any way to the subject
matter hereof.
9.5 SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of his
or its rights, interests, or obligations hereunder without the prior written
approval of the Buyer and the Requisite Sellers.
9.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
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9.7 HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.8 NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
IF TO THE SELLERS, TO SELLERS' REPRESENTATIVE:
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Biosonix Ltd.
6 Haprachim Street
Kfar Mlal
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇-▇▇▇▇▇▇▇
Facsimile: 011-972-9-7421526
IF TO THE COMPANY:
Biosonix, Ltd.
6 Haprachim Street
Kfar Mlal
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇-▇▇▇▇▇▇▇
Facsimile: 011-972-9-7421526
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Adv.
Sharir, Shiv, ▇▇▇▇▇▇▇▇ & Co. Law ▇▇▇▇▇▇▇
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: 011-972-3-6074777 ext. 4763
Facsimile: 011-972-3-6074778
IF TO BUYER:
Neoprobe Corporation
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▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Porter, Wright, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
9.9 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Delaware.
9.10 CONSENT TO JURISDICTION. Each of the parties hereto (a) consents
to submit itself to the personal jurisdiction of any federal court located in
the State of Delaware or, if there is not a basis for federal court
jurisdiction, state court in the State of Delaware in the event any dispute
arises out of this Agreement or any of the transactions contemplated by this
Agreement, (b) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, and (c)
agrees that it will not bring any action relating to this Agreement or any of
the transactions contemplated by this Agreement in any court other than a
federal of state court sitting in the State of Delaware.
9.11 DISPUTE RESOLUTION.
(a) FINANCIAL MATTERS. Notwithstanding any provision of this
Agreement to the contrary, all disputes, controversies or claims arising out of
or relating to this Agreement or the transactions contemplated hereby relating
to financial matters (including without limitation
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claims for the payment of Additional Buyer Stock under Article II,
indemnification under Article VI, and payment of a Termination Fee under Article
VII) shall be resolved by agreement among the parties, or, if not so resolved
within forty-five (45) days following written notice of dispute given by either
party hereto to the other, by arbitration in accordance with Title 9 of the
United States Code (the United States Arbitration Act), the Commercial
Arbitration Rules of the American Arbitration Association, all as amended from
time to time (collectively, the "RULES") and the provisions of this Section;
provided, however, that the provisions of this Section shall prevail in the
event of any conflict with such Rules. The parties agree that they shall use
their best efforts to cause the matter to be presented to the arbitral tribunal
as soon as possible in light of the complexity of the dispute. The arbitral
tribunal shall consist of three neutral arbitrators, each of whom shall be
attorneys at law with at least ten years' experience in corporate and securities
practice. One of the arbitrators shall be chosen by the claimant and one chosen
by respondent, and the two so chosen shall choose the third arbitrator who shall
act as chairperson. The parties shall be entitled to engage in discovery in
connection with arbitration, which discovery shall be conducted in accordance
with Federal Rules of Civil Procedure and Federal Rules of Evidence.
Additionally, each party shall disclose a list of all documentary evidence to be
used, and a list of all witnesses and experts to be called by the party at least
twenty (20) days prior to the arbitration hearing. The decision of a majority of
the arbitration panel with respect to the matters referred to them pursuant
hereto shall be final and binding upon the parties to the dispute, and
confirmation and enforcement thereof may be rendered thereon by any court having
jurisdiction upon application of any Person who is a party to the arbitration
proceeding. The arbitral tribunal shall assess fees, expenses, compensation, and
attorney's fees in the award as provided in the Rules. The arbitral tribunal
shall have no power or authority under this Agreement or otherwise to award or
provide for the award of punitive or consequential damages against any party.
Any arbitration shall be conducted in the State of Delaware.
(b) OTHER MATTERS. Notwithstanding any provision of this Agreement to
the contrary, in respect of all disputes, controversies or claims arising out of
or relating to this Agreement or the transactions contemplated relating to any
matters other than financial matters the parties may exercise any and all rights
and remedies available at law or in equity. Without limiting the generality of
the foregoing, in the event of a breach or threatened breach by any party hereto
of any of its covenants or other obligations hereunder, including, without
limitation, the parties' respective obligations to close the transactions
contemplated hereby, each of the parties hereby consents and agrees that the
non-breaching party shall be entitled to an injunction or similar equitable
relief restraining the breaching party(s) from committing or continuing any such
breach or threatened breach or granting specific performance of any act required
to be performed by the breaching party(s) under any such provision, without the
necessity of showing any actual damage or that money damages would not afford an
adequate remedy and without the necessity of posting any bond or other security.
The right of the non-breaching party to injunctive relief shall be in addition
to any and all other remedies available to it and shall not be construed to
prevent it from pursuing, either consecutively or concurrently, any and all
other legal or equitable remedies available to them including the recovery of
monetary damages, subject to any applicable limitations contained in Article VI.
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9.12 AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Sellers' Representative. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
9.13 SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
9.14 INCORPORATION OF APPENDICES AND SCHEDULES. The Appendices and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
[signature page follows]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
as of the date first above written.
SELLERS: NEOPROBE CORPORATION
/s/ ▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------- ----------------------------
▇▇▇ ▇▇▇▇▇
Its: President and CEO
---------------------------
/s/ ▇▇▇ ▇▇▇▇
-------------------------------
▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇
-------------------------------
▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇ ▇▇▇▇▇▇
-------------------------------
▇▇▇ ▇▇▇▇▇▇
First Isratech Fund LP BIOSONIX, LTD.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇▇
--------------------------- ----------------------------
Its: Director Its: CEO
--------------------------- ---------------------------
First Isratech Fund LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------
Its: Director
---------------------------
First Isratech Fund Norway A.S
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------
Its: Director
---------------------------
Greatway Commercial, Inc.
By: /s/ Eva Quest
----------------------------
Its: Secretary
---------------------------
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Caremi Partners
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
Its: President
---------------------------
Emicar, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------
Its: Vice President
---------------------------
Ma'aragim Enterprises Ltd.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Its: General Manager
---------------------------
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