EXHIBIT 4.27
E-SIM LTD.
SHARE PURCHASE AGREEMENT
This SHARE PURCHASE AGREEMENT (this "AGREEMENT") is made and entered into
as of the ___4_ day of June, 2004 by and between the purchasers identified in
Schedule A attached hereto (each a "PURCHASER" and collectively the
"PURCHASERS"), and e-SIM, Ltd., an Israeli company (the "COMPANY").
RECITALS:
WHEREAS, the Company desires to issue and sell to the Purchasers and the
Purchasers desires to purchase from the Company (severally and not collectively)
Ordinary Shares as indicated in Schedule A hereto, in the aggregate of up to
8,000,000 (eight million) shares (the "SHARES") of the Company's Ordinary
Shares, par value ten Agorot (NIS 0.10) per share (the "ORDINARY SHARES").
NOW, THEREFORE, in consideration of the respective covenants,
representations and warranties herein contained, and intending to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE 1
PURCHASE OF SHARES
1.1 COMMITMENTS TO PURCHASE AND SELL. Subject to the terms and conditions
set forth herein and in reliance on the representations and warranties contained
herein, each Purchaser agrees to purchase from the Company, and the Company
agrees to sell to such Purchaser, the number of Shares set forth opposite the
name of such Purchaser on Schedule A hereto for the purchase price of FIFTY
UNITED STATES CENTS (US$0.50) per Share. The aggregate purchase price to be paid
by each Purchaser is referred to as the "SHARE PURCHASE PRICE" and each
Purchaser shall pay the Share Purchase Price set forth opposite the name of such
Purchaser on SCHEDULE A hereto. The aggregate of the Share Purchase Prices shall
not exceed $4,000,000 (Four Million Dollars) and the Company shall be entitled
to add additional Purchasers to Schedule A until the said aggregate is reached.
No Purchaser shall be liable, committed or required to make any payments on
account of any other Purchaser. Failure of any Purchaser to make any payment
required of it shall not relieve any other Purchaser of its obligations
hereunder.
1.2 At the Closing, the Company shall issue to each Purchaser a warrant
(each a "WARRANT") to purchase Ordinary Shares, the number of which is as set
forth opposite the name of each Purchaser on Schedule A hereto (the "WARRANT
SHARES") as may be amended from time to time in accordance with the terms and
provisions of the Warrant Certificate, at a price per share of Seventy Five U.S.
Cents ($0.75). The Purchase of the Warrant Shares shall be on the terms more
fully set forth in the warrant certificates attached as SCHEDULE B hereto (the
"WARRANT CERTIFICATES").
1.3 CLOSING
1.3.1 The purchase and sale of the Shares shall take place at a
closing (the "CLOSING") at the offices of the Company at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ on May 13 , 2004 ("CLOSING DATE")
provided however that in respect of any Purchaser whose purchase of shares
is subject to shareholder approval as specified in Section 2.1.5, such
Purchaser shall transfer funds to the Company as specified in Section 1.3.3
on the Closing Date, and issuance of shares, certificate representing the
shares and Warrant Certificate to such Purchaser shall take place within 7
days of receipt of shareholder approval. If such approval is not obtained
within 6 months of the Closing Date, the Company shall refund the funds
advanced, together with interest at the six month LIBOR in force on the
date of receipt of funds.
1.3.2 At the Closing, the Company shall deliver to each Purchaser,
against payment to the Company of the Share Purchase Price of such
Purchaser, certificates representing the Shares purchased by such Purchaser
and the Warrant Certificate.
1.3.3 At the Closing, each Purchaser shall pay the Share Purchase
Price of such Purchaser in United States Dollars to the Company by wire
transfer of immediately available funds to such bank account as the Company
may designate in writing to the Purchaser.
1.3.4 At the Closing, the parties shall also execute and deliver or
cause to be executed and delivered the documents referred to in Article 3
hereof. All actions taken and all transactions occurring at the Closing in
respect of each Purchaser shall be deemed to take place simultaneously, and
in respect of each Purchaser, no transaction shall be deemed to have been
completed or any document delivered until all such transactions with that
Purchaser have been completed and all required documents delivered.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company makes the
following representations and warranties to the Purchasers, each of which is
true and correct as of the date hereof and shall be true and correct as of the
Closing Date and shall be unaffected by any investigation heretofore or
hereafter made by any Purchaser.
2.1.1 ORGANIZATION AND GOOD STANDING. The Company is duly organized
and validly existing under the laws of the State of Israel. The Company has
the requisite power and authority to own, lease or otherwise hold the
assets owned, leased or otherwise held by it and to carry on its business
as presently conducted by it.
2.1.2 AUTHORIZATION AND EFFECT. This Agreement has been duly executed
and delivered by the Company and, assuming the due execution and delivery
of this Agreement by each Purchaser, this Agreement constitutes the valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights in general and subject to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
2.1.3 CAPITALIZATION. The registered share capital of the Company is
seventy million (70,000,000) Ordinary Shares, of which nineteen million,
eight hundred and twenty three thousand, five hundred and ninety five
(19,823,595) are issued and outstanding and ten million, one hundred and
ten thousand, two hundred and thirty (10,110,230) are reserved for issuance
upon the exercise of options held by employees, directors and others. All
of the issued and outstanding share capital of the Company is duly
authorized and validly issued and is fully paid and non-assessable. None of
the outstanding share capital of the Company has been issued in violation
of, and none of such outstanding share capital is subject to, any purchase
option, call, right of first refusal, preemptive, subscription or similar
rights, except as specified in the Company's Articles of Association and
Schedule 2.1.3.
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2.1.4 NO RESTRICTIONS; REQUIRED CONSENTS. Following the receipt by the
Company of the shareholders' approval referenced below, the execution and
delivery of this Agreement by the Company does not, and the performance by
the Company of the transactions contemplated hereby will not, (i) conflict
with the Company's Memorandum of Association or Articles of Association,
(ii) conflict with, or result in any violation of, or constitute a default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any debt or
obligation or constitute a breach of, create a loss of a material benefit
under, any contract, mortgage, indenture, lease, agreement or other
instrument or any permit, order, judgment or decree to which the Company is
a party or by which any is bound, or (iii) constitute a violation of any
domestic or foreign statute, law, ordinance, rule or regulation (the "LAW")
applicable to the Company, in each case which would result in a material
adverse effect on the Company and its Subsidiaries taken as a whole. No
consent, approval, order or authorization of, or registration, declaration
or filing with, any domestic or foreign court, government, governmental
agency, authority, entity or instrumentality (a "GOVERNMENTAL ENTITY") or
other party (other than the shareholders of the Company) is required to be
obtained or made by or with respect to the Company in connection with the
Company's execution and delivery of this Agreement or the consummation by
the Company of the transactions contemplated hereby.
2.1.5 SHAREHOLDER APPROVAL. The validity, enforceability and binding
nature of this Agreement and of the issuance of certain shares and other
securities hereunder, with respect to certain Purchasers, as specified in
Schedule A, is subject to the approval and consent of the shareholders of
the Company which the Company shall attempt to obtain and to solicit by way
of extraordinary general meeting. The Company makes no representation and
makes no guarantee that such approval shall be obtained. In the event that
the shareholders of the Company fail to consent to and approve the terms
and conditions of this Agreement or the issuance of certain securities
hereunder, with respect to such certain Purchasers, within 6 months of the
Closing Date, the Agreement shall be null and void, of no bearing and of no
force and effect with respect to such Purchasers alone.
2.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser makes
the following representations and warranties to the Company, each of which is
true and correct as of the date hereof and shall be true and correct as of the
Closing Date and shall be unaffected by any investigation heretofore or
hereafter made by the Company.
2.2.1 CORPORATE ORGANIZATION. If a corporation, such Purchaser is duly
organized and validly existing and in good standing under the laws of the
state in which it is registered and has the requisite corporate power and
authority to own, lease or otherwise hold its properties and assets and to
carry on its business as presently conducted.
2.2.2 AUTHORIZATION AND EFFECT. If a corporation, such Purchaser has
the requisite corporate power to execute and deliver this Agreement, and to
consummate the transactions contemplated hereby. If a corporation, the
execution and delivery by such Purchaser of this Agreement, and the
consummation by it of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action by such Purchaser. This
Agreement has been duly executed and delivered by such Purchaser and,
assuming the due execution and delivery of this Agreement by the Company,
this Agreement constitutes the valid and binding obligation of such
Purchaser enforceable against such Purchaser in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors'
rights in general and subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or
at law).
2.2.3 NO RESTRICTIONS; REQUIRED CONSENTS. The execution and delivery
of this Agreement by such Purchaser does not, and the performance by such
Purchaser of the transactions contemplated hereby will not, (i) in the case
of a corporate Purchaser, conflict with such Purchaser's certificate of
incorporation or by-laws, (ii) conflict with, or result in any violation
of, or constitute a default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any debt or obligation or constitute a breach of, create a
loss of a material benefit under, any contract, mortgage, indenture, lease,
agreement or other instrument or any permit, order, judgment or decree to
which such Purchaser is a party or by which it is bound, or (iii)
constitute a violation of any Law applicable to such Purchaser. No consent,
approval, order or authorization of, or registration, declaration or filing
with any Governmental Entity or other party is required to be obtained or
made by or with respect to such Purchaser in connection with the execution
and delivery of this Agreement by such Purchaser or the consummation by
such Purchaser of the transactions contemplated hereby.
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2.2.4 PURCHASE OF SHARES. (a) The Shares are being acquired for such
Purchaser's own account, not as a nominee or agent for any other Person,
and without a view to the distribution of such securities or any interest
therein in violation of the Securities Act.
(b) Such Purchaser (i) is an "accredited investor" within the meaning
of Rule 501(a) under Regulation D promulgated under the Securities Act,
(ii) has such knowledge and experience in financial and business matters so
as to be capable of evaluating the merits and risks of its investment in
the Shares, and (iii) is capable of bearing the economic risks of such
investment (including the risk of the complete loss of its investment in
the Shares); and
(c) Such Purchaser (i) acknowledges that the Shares have not been
registered under the Securities Act and understands that the Shares must be
held indefinitely unless they are subsequently registered under the
Securities Act or such sale is permitted pursuant to an available exemption
from such registration requirement and (ii) acknowledges and agrees that a
legend, stating such restrictions on transferability, will be placed by the
Company on the certificate or other document that evidences such Purchasers
Shares.
(d) Such Purchaser hereby agrees that such Purchaser will not resell
the Shares in whole or in part, other than pursuant to a registration under
the Securities Act or pursuant to an available exemption from registration
under the Securities Act and applicable United States state securities laws
exemptions.
2.2.5 DUE DILIGENCE REVIEW. Such Purchaser has received all of the
documents and other information that it has requested from the Company, and
such Purchaser has conducted such legal and financial due diligence of the
Company as it deems appropriate and is entering into this Agreement based
upon its own due diligence review.
ARTICLE 3
CLOSING CONDITIONS
3.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASERS. The obligations
of each Purchaser under this Agreement to consummate the transactions
contemplated hereby will be subject to the satisfaction, at or prior to Closing,
of all of the following conditions, any one or more of which may be waived at
the option of such Purchaser:
3.1.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. All representations
and warranties of the Company made in this Agreement shall be true, correct
and complete in all material respects as of the date hereof and on and as
of the Closing Date as if made on and as of that date and the Company shall
have delivered to the Purchaser a certificate dated the Closing Date,
certifying that all representations and warranties of the Company made in
this Agreement are true, correct and complete in all material respects as
of the date thereof.
3.1.2 BANKING DOCUMENTS. The Company shall have entered into
agreements with Israel Discount Bank and the Industrial Development Bank of
Israel substantially in the forms attached hereto as Schedule 3.1.2.
3.1.3 CERTIFIED RESOLUTIONS. The Company shall have delivered to the
Purchaser certified resolutions of the Board of Directors of the Company
approving the execution and delivery of this Agreement and the consummation
by the Company of the transactions contemplated hereby.
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3.1.4 SHARE CERTIFICATE. The Company shall have delivered to each
Purchaser a share certificate with respect to the Shares issued in the name
of each of Purchaser pursuant hereto.
3.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY. The obligations of
the Company under this Agreement to consummate the transactions contemplated
hereby will be subject to the satisfaction, at or prior to the Closing, of all
the following conditions, any one or more of which may be waived at the option
of the Company:
3.2.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. All representations
and warranties of such Purchaser made in this Agreement shall be true and
complete in all material respects as of the date hereof and on and as of
the Closing Date as if made on and as of that date and the Purchaser shall
have delivered to the Company a certificate dated the Closing Date,
certifying that all representations and warranties of such Purchaser made
in this Agreement are true, correct and complete in all material respects
as of the date thereof.
3.2.2 CERTIFIED RESOLUTIONS. If a corporate Purchaser, such Purchaser
shall have delivered to the Company certified resolutions of the board of
directors of such Purchaser approving the execution and delivery of this
Agreement, and authorizing the consummation of the transactions
contemplated hereby.
ARTICLE 4
REGISTRATION
4.1 DEFINITIONS. As used in this Article 4, the following terms shall have
the following meanings:
"REGISTER," "REGISTERED" and "REGISTRATION" refer to a registration
effected by filing a registration statement on Form F-3 in compliance
with the Securities Act of 1933, as amended (the "SECURITIES ACT"),
and the declaration or ordering by the Securities and Exchange SEC
(the "SEC") of effectiveness of such registration statement, or the
equivalent actions under the laws of another jurisdiction.
"REGISTRABLE SHARES" refers to all Ordinary Shares issued pursuant to
this Agreement and any Ordinary Shares purchased pursuant to the
exercise of the Warrant Certificate or any part thereof, to the extent
held by any Purchaser or any permitted transferee thereof in
accordance herewith; provided, however, that Registrable Shares shall
not include any shares (i) the sale of which has been registered
pursuant to the Securities Act and which shares have been sold
pursuant to such registration or (ii) which have been or may be sold
pursuant to Rule 144 promulgated under the Securities Act.
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4.2 F-3 REGISTRATION
4.2.1 Subject to all of the provisions contained in this Agreement,
together with the filing by the Company of its Annual Report on Form 20-F
for the fiscal year ended January 31, 2004, which the Company hereby
undertakes shall take place no later than July 31, 2004 (the "FILING
DATE"), the Company shall prepare and file with the SEC a single
registration statement covering the resale of all Registrable Shares. The
Registration Statement shall be on Form F-3 to the extent that the resale
of the Registrable Shares for the account of any Purchaser is permitted
pursuant to General Instruction I.B>3. of Form F-3 and is not objected to
by the SEC because of the status of, or any action taken by, such
Purchaser. Notwithstanding the foregoing, if the Company is not eligible,
at any relevant time, to register any or all of the Registerable Shares of
an Purchaser on Form F-3 because of the SEC's objection relating to the
status of, or any action taken by, such Purchaser ("NON F-3 ELIGIBLE
REGISTRABLE SHARES"), the Company shall be exempt from performing such
registration of such Non F-3 Eligible Registrable Shares at that time.
4.2.2 The Company shall use its reasonable best efforts to cause the
Registration Statement to be declared effective by the SEC as promptly as
reasonably possible after the filing thereof, and shall use reasonable
commercial efforts to keep the Registration Statement continuously
effective under the Securities Act until the earlier of the date that all
Registrable Shares covered by such Registration Statement have been sold or
can be sold publicly under Rule 144(k) (the "EFFECTIVENESS PERIOD").
4.2.3 The Company shall notify the Purchasers in writing promptly
after receiving notification from the SEC that the Registration Statement
has been declared effective.
4.2.4 Notwithstanding anything in this Agreement to the contrary, the
Company may, by written notice to the Purchasers, suspend sales under a
Registration Statement after the Effective Date thereof and/or require that
the Purchasers immediately cease the sale of Ordinary Shares pursuant
thereto and/or defer the filing of any subsequent Registration Statement if
the Company is engaged in a merger, acquisition, or sale, private or public
offering or similar events and the Board of Directors of the Company
determines in good faith, by appropriate resolutions, that, as a result of
such activity, (A) it would be materially detrimental to the Company to
maintain a Registration Statement at such time or (B) it is in the best
interests of the Company to defer proceeding with such registration at such
time. Upon receipt of such notice, each Purchaser shall immediately
discontinue any sales of Registrable Shares pursuant to such registration
until such Purchaser has received copies of a supplemented or until such
Purchaser. In no event, however, shall this right be exercised to suspend
sales beyond the period during which (in the good faith determination of
the Company's Board of Directors) the failure to require such suspension
would be materially detrimental to the Company. Immediately after the end
of any suspension period under this Section 4.1.4 the Company shall take
all necessary actions to restore the effectiveness of the applicable
Registration Statement and the ability of the Purchasers to publicly resell
their Registrable Shares pursuant to such effective Registration Statement.
4.3 REGISTRATION PROCEDURES.
4.3.1 In connection with the Company's registration obligations
hereunder, the Company shall:
4.3.1.1 Prior to the filing of a Registration Statement, (i)
furnish to the Purchasers copies of all such documents proposed to be
filed, which documents (other than those incorporated or deemed to be
incorporated by reference) will be subject to the review of such
Purchasers, and (ii) cause the Company's officers and directors,
counsel and independent certified public accountants to respond to
such inquiries as shall be necessary, in the reasonable opinion of
Company counsel, to conduct a reasonable investigation within the
meaning of the Securities Act.
4.3.1.2 Subject to Section 4.1.4., prepare and file with the SEC
such amendments, including post-effective amendments, to the
Registration Statement and the prospectus used in connection therewith
as may be necessary to keep the Registration Statement continuously
effective, as to the applicable Registrable Shares for the
Effectiveness Period and prepare and file with the SEC such additional
Registration Statements in order to register for resale under the
Securities Act all of the Registrable Shares.
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4.3.1.3 Notify each Purchaser as promptly as reasonably possible,
of any of the following events: (i) the SEC or any other federal or
state governmental authority requests any amendment or supplement to
any Registration Statement or prospectus or requests additional
information related thereto; (ii) the SEC issues any stop order
suspending the effectiveness of any Registration Statement or
initiates any proceedings for that purpose; (iii) the Company receives
notice of any suspension of the qualification or exemption from
qualification of any Registrable Shares for sale in any jurisdiction,
or the initiation or threat of any proceeding for such purpose; or
(iv) the financial statements included in any Registration Statement
become ineligible for inclusion therein or any statement made in any
Registration Statement or any document incorporated or deemed to be
incorporated therein by reference is untrue in any material respect or
any revision to a Registration Statement, or other document is
required so that it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
4.3.1.4 Use its reasonable commercial efforts to avoid the
issuance of or, if issued, obtain the withdrawal of (i) any order
suspending the effectiveness of any Registration Statement, or (ii)
any suspension of the qualification of any of the Registrable Shares
for sale in any jurisdiction, as soon as possible.
4.3.1.5 If requested by a Purchaser, provide such Purchaser,
without charge, one conformed copy of each Registration Statement and
each amendment thereto, including financial statements and schedules,
and all exhibits to the extent requested by such Purchaser (including
those previously furnished or incorporated by reference) promptly
after the filing of such documents with the SEC.
4.3.1.6 Comply, in all material respects, with all rules and
regulations of the SEC applicable to the registration of the
Registrable Shares.
4.4 DISPOSITIONS. Each Purchaser agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Shares pursuant to the Registration
Statement. Each Purchaser further agrees that, upon receipt of a notice from the
Company of the occurrence of any event of the kind described in Sections
4.2.1.3, such Purchaser will discontinue disposition of such Registrable Shares
under the Registration Statement until such Purchaser is advised in writing by
the Company that the use of the applicable prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such prospectus or
Registration Statement. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph.
4.5 The Purchaser shall pay the SEC registration fee, the underwriting
discount or commission, if any, and the cost of any legal opinions required by
the underwriters with respect to any Registrable Shares to be sold by the
Purchaser hereunder, and the Company shall bear all other costs.
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4.6 PIGGYBACK REGISTRATION.
If, following the Closing Date, and at any time until the earlier of (i)
registration pursuant to Section 4.2, or (ii) the date that all Registrable
Shares can be sold publicly under Rule 144(k), the Company at any time proposes
to register any of its securities for its own account (other than securities
registered on Form S-4 or S-8 or any similar successor form), it shall give
notice to each Purchaser of such intention not less than thirty (30) days prior
to the filing of a registration statement in connection therewith. Upon the
written request of the Purchaser given within twenty (20) days after receipt of
any such notice, the Company shall include in such registration all of the
Registrable Shares indicated in such request, so as to permit the disposition of
the shares so registered, PROVIDED, that, in the event the underwriter advises
the Purchasers that in its opinion all the shares sought to be sold by the
Purchasers in connection with the Company's offering (together with any other
shares to be sold by other shareholders in such offering) cannot be sold without
adversely impacting the Company's offering, the number of shares to be sold by
the Purchasers and any other selling shareholders and not the Company (which
shall have priority over all selling shareholders) shall be reduced pro rata to
the extent deemed advisable by the underwriter.
4.7 In effecting any registration hereunder, the Purchaser will enter
into an underwriting agreement with the underwriter, if applicable, in such form
as may be required by such underwriter, and the Purchaser will indemnify the
Company and its officers, directors and control persons for any liabilities
arising in connection with the registration based on information provided by the
Purchaser to the Company for use in such offering.
ARTICLE 5
MISCELLANEOUS PROVISIONS
5.1 NOTICES. All notices and other communications required or permitted
hereunder will be in writing and, unless otherwise provided in this Agreement,
will be deemed to have been duly given when delivered in person or when
dispatched by electronic facsimile transfer or one business day after having
been dispatched by a nationally recognized overnight courier service to the
appropriate party at the address specified below:
(a) If to the Company, to:
e-SIM Ltd.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Attention: Chief Financial Officer
Facsimile No.: 972-2-587-0773
with a copy to:
▇. ▇▇▇▇▇▇ Law ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Israel
Attention: ▇▇. ▇▇▇ ▇▇▇▇▇
(b) If to the Purchaser, to the address specified next to the name of
each Purchaser identified in Schedule A:
or to such other address or addresses as any such party may from time to time
designate as to itself by like notice.
5.2 EXPENSES. Each of the parties shall be responsible for its own costs
and expenses related to the negotiation, preparation, execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby.
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5.3 SUCCESSORS AND ASSIGNS. This Agreement will be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns, but will not be assignable or delegable by any party without
the prior written consent of the other party, which consent shall not be
unreasonably withheld.
5.4 ENTIRE AGREEMENT. This Agreement supersedes any other agreement,
whether written or oral, that may have been made or entered into by any party or
any of their respective affiliates (or by any director, officer or
representative thereof) relating to the matters contemplated hereby. This
Agreement constitutes the entire agreement by and among the parties hereto and
there are no agreements or commitments by or among such parties or their
affiliates except as expressly set forth herein.
5.5 AMENDMENTS AND SUPPLEMENTS. This Agreement may be amended or
supplemented at any time by additional written agreements signed by the parties
hereto.
5.6 RIGHTS OF THE PARTIES. Except as provided in Section 5.3, nothing
expressed or implied in this Agreement is intended or will be construed to
confer upon or give any person or entity other than the parties hereto and their
respective Affiliates any rights or remedies under or by reason of this
Agreement or any transaction contemplated hereby.
5.7 BROKERS. Each Purchaser hereby agrees to indemnify and hold harmless
the Company, and the Company hereby agrees to indemnify and hold harmless such
Purchaser, against any liability, claim, loss, damage or expense incurred by
such Purchaser or by the Company, respectively, relating to any fees or
commissions owed to any broker, finder, or financial advisor as a result of
actions taken by such Purchaser or by the Company, respectively.
5.8 FURTHER ASSURANCES. From time to time, as and when requested by either
party, the other party shall execute and deliver, or cause to be executed and
delivered, all such documents and instruments as may be reasonably necessary to
consummate the transactions contemplated by this Agreement.
5.9 TITLES AND HEADINGS. Titles and headings to sections herein are
inserted for convenience of reference only, and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
5.10 SEVERABILITY. The parties agree that if one or more provisions
contained in this Agreement shall be deemed or held to be invalid, illegal or
unenforceable in any respect under any applicable Law, then this Agreement shall
be construed with the invalid, illegal or unenforceable provision deleted, and
the validity, legality and enforceability of the remaining provisions contained
herein shall not be affected or impaired thereby.
5.11 GOVERNING LAW. This Agreement, including, without limitation, the
interpretation, construction and validity hereof, shall be governed by the Laws
of the State of Israel without regard to the conflicts of laws principles
thereof and the competent courts of Jerusalem shall have exclusive jurisdiction.
5.12 EXECUTION IN COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
5.13 PRESS RELEASE. Following the Closing, the parties hereby agree that
the Company may publicly disclose the transactions contemplated herein
(including the identity of the Purchasers and the terms thereof).
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5.14 CERTAIN INTERPRETIVE MATTERS AND DEFINITIONS. (a) Unless the context
otherwise requires, (i) all references to Sections are to Sections of or to this
Agreement, (ii) each term defined in this Agreement has the meaning assigned to
it, (iii) "OR" is disjunctive but not necessarily exclusive, (iv) words in the
singular include the plural and VICE VERSA and (vi) "PERSON" or "PERSON" means
any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or government or other
agency or political subdivision thereof. All references to "$" or dollar amounts
will be to lawful currency of the United States of America.
(b) No provision of this Agreement will be interpreted in favor of, or
against, either of the parties hereto by reason of the extent to which
either such party or its counsel participated in the drafting thereof or by
reason of the extent to which any such provision is inconsistent with any
prior draft hereof or thereof.
5.15 NO RECOURSE. Notwithstanding any of the terms or provisions of this
Agreement, except to the extent expressly permitted by applicable law (including
but not limited to the securities law of the United States) each of the
Purchasers and the Company agrees that neither it nor any person acting on its
behalf may assert any claims or cause of action against any officer, director,
partner or stockholder of the other party in connection with or arising out of
this Agreement or the transactions contemplated hereby.
[SIGNATURE PAGES FOLLOW]
10
IN WITNESS WHEREOF, the parties have executed this Agreement in one or more
counterparts as of the date first above written.
THE COMPANY:
e-SIM LTD.
By:_______________________
Name:
Title:
11
IN WITNESS WHEREOF, the parties have executed this Agreement in one or more
counterparts as of the date first above written.
THE PURCHASER:
If an individual Purchaser:
__________________________
Name:
If a corporate Purchaser:
__________________________
By:_______________________
Name:
Title:
12
SCHEDULE A
INVESTORS
NUMBER OF PURCHASE NUMBER OF
NAME AND ADDRESS SHARES PRICE WARRANT SHARES
---------------- --------- -------- ------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇., 50,000 $ 0.50 12,500
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
KZ Limited, c/o Euro Dutch Trust Company, 175,000 $ 0.50 43,750
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇
▇▇▇▇▇, Nassau, Bahamas
JBE Limited, c/o Euro Dutch Trust Company, 175,000 $ 0.50 43,750
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇
▇▇▇▇▇, Nassau, Bahamas
Investscape (1) 975,000 $ 0.50 243,750
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇,▇▇▇▇-▇▇▇▇ West 1,000,000 $ 0.50 ▇▇▇,▇▇▇
▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (*)
▇▇▇▇ ▇▇▇▇▇▇▇▇ ,▇▇ ▇▇▇▇ ,▇▇▇▇▇▇▇▇▇,▇▇▇▇▇▇(*) 1,000,000 $ 0.50 250,000
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇ ▇▇▇▇, 1,000,000 $ 0.50 250,000
NY 10024(*)
Semamor Enterprises, 400,000 $ 0.50 100,000
c/o ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
Iroquois Capital LP 200,000 $ 0.50 50,000
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(1) This investor represents several private investors, the identity of which is
detailed in appendix A to this schedule. Each private investor shall execute the
SPA on its own behalf. Therefore this schedule A is subject to change. In any
event, the aggregate investment authorized pursuant to this agreement is in the
total amount of $4,000,000.
If an asterisk appears next to the name of the Purchaser, such purchase is
subject to approval of the shareholders of the Company.
13
Date: June 4, 2004
To:
WARRANT
To purchase Ordinary Shares
of
E-SIM LTD.
VOID AFTER 24:00 p.m. (prevailing Israel time)
On the last day of the Warrant Period (defined below)
e-SIM Ltd., a company registered in Israel (the "COMPANY") hereby grants to
------------------------ (the "HOLDER"), the right to purchase from the Company
----------fully paid and non-assessable Ordinary Shares of the Company, par
value NIS 0.1 per share in such number as is specified herein. The shares which
are purchasable pursuant to this Warrant are referred to herein as "WARRANT
SHARES".
1. DEFINITIONS
For the purpose of this Warrant:
1.1 "PUBLICOFFERING" shall mean the next underwritten public offering of
the Company's shares, pursuant to an effective registration statement
under the Securities Act of 1933, as amended, (the "SECURITIES ACT")
or pursuant to the corresponding securities laws of any other
jurisdiction (other than a registration statement effected solely to
implement an employee benefit plan).
1.2 "LIQUIDITY EVENT" shall mean (a) the sale of all or substantially all
of the Company's shares, property and/or assets (including by way of
share swap); or (b) the merger or consolidation of the Company with or
into another company following which more than fifty percent (50%) of
the Company's shares are held by persons who, prior to the said
transaction, held, in the aggregate, less than five percent (5%) of
the Company's shares, other than a merger, share swap or other
re-organization that is carried out in order for the Company to become
a subsidiary of a company (newly-organized or otherwise) which is
registered outside of Israel (provided that in such merger, share swap
or other re-organization, all shareholders and option holders receive
a pro-rata share of the shares and options issued in the non-Israeli
company).
1.3 "EXIT TRANSACTION" shall mean a Public Offering or a Liquidity Event.
1.4 "EFFECTIVE DATE" shall mean the date of execution of this Warrant.
1.5 "WARRANT PERIOD" shall mean the period for exercise of this Warrant,
as determined pursuant to Section 2.
1.6 "EXERCISE PRICE" shall mean the exercise price of each Warrant Share
purchasable hereunder, which shall be $0.75 (Seventy Five U.S. Cents),
subject to modification pursuant to Section 8.
2. WARRANT PERIOD.
The Warrant may be exercised, in whole or in part, and on one or more
occasions, during the period commencing from the Effective Date and ending
five (5) years following, provided however, that if the underwriter, in a
Public Offering, or the buying party(ies) in the Liquidity Event, insist or
request that all outstanding warrants of the Company, including this
Warrant (but excluding warrants and options granted to employees, directors
and consultants of the Company), be exercised, repurchased or waived and
all convertible loans or debentures be converted, prior to or as part of
the Public Offering or the Liquidity Event, as the case may be, then the
period for exercise of the Warrant shall terminate upon the consummation of
the Public Offering or the Liquidity Event.
- 2 -
3. NOTICE OF EVENTS.
Notwithstanding the foregoing or any other rights of the Holder pursuant to
the provisions of this Warrant, if at any time the Company shall offer for
subscription to the holders of Ordinary Shares any additional shares of any
class, other rights or any equity security of any kind, or there shall be
any capital reorganization or reclassification of the capital shares of the
Company, or consolidation or merger of the Company with, or sale of all or
substantially all of its assets to another person or there shall be a
voluntary or involuntary dissolution, liquidation or winding-up of the
Company, then, in any one or more of said cases, the Company shall give the
Holder written notice, by first class mail, postage prepaid, addressed to
the Holder at the address of the Holder as shown on the books of the
Company, of the date on which (i) a record shall be taken for such
subscription rights or (ii) such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up shall
take place, as the case may be. Such notice shall also specify the date as
of which the holders of record of Ordinary Shares shall participate in such
subscription rights, or shall be entitled to exchange their Ordinary Shares
for securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, as the case may be. Such written notice shall be given by not
later than seven (7) business days prior to the action in question and by
not later than seven (7) business days prior to the record date in respect
thereto.
4. EXERCISE OF WARRANT
4.1 EXERCISE. This Warrant may be exercised in whole or in part, on one or
more occasions at any time during the Warrant Period. This Warrant
shall be exercised by presentation and surrender hereof to the Company
at the principal office of the Company or at such other office or
agency as the Company may designate in writing, accompanied by a
written notice of exercise in the form attached hereto as EXHIBIT 4.1
and for the purpose of determining the relevant Exercise Price, the
Warrant shall be deemed to have been exercised at such time.
4.2 EXERCISE FOR CASH. If the Holder, at its sole discretion, elects to
make a cash payment for the Warrant Shares it shall make such payment
by not later than seven (7) days from giving the Exercise Notice to
the Company in an amount equal to the Exercise Price multiplied by the
number of Warrant Shares specified in such notice. The Exercise Price
for the number of Warrant Shares specified in the notice shall be
payable in immediately available funds, in U.S. dollars.
4.3 PARTIAL EXERCISE, ETC. If this Warrant should be exercised in part
only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the rights
of the Holder to purchase the balance of the shares purchasable
hereunder.
4.4 ISSUANCE OF THE WARRANT SHARES. Upon presentation and surrender of the
notice of exercise and after the payment of the Exercise Price
pursuant to section 4.2, the Company shall issue promptly to the
Holder the shares to which the Holder is entitled.
The Company shall pay the stamp duty that may be payable in connection
with the issuance of the shares and the preparation and delivery of
share certificates pursuant to this Section 4 in the name of the
Holder. No fractions of shares shall be issued in connection with the
exercise of this Warrant and the number of shares shall be rounded to
the nearest whole number.
All Warrant Shares issued shall be fully paid and non-assessable.
- 3 -
5. RESERVATION OF SHARES AND PRESERVATION OF RIGHTS OF HOLDER
The Company will at all times maintain and reserve, free from preemptive
rights, such number of authorized but un-issued shares in its capital so
that this Warrant may be exercised without additional authorization of
Warrant Shares after giving effect to all other options, warrants,
convertible securities and other rights to acquire shares of the Company.
The Company further agrees that it will not, by charter amendment or
through reorganization, voluntary liquidation, consolidation, merger,
dissolution, winding up or sale of assets, or by any other voluntary act,
avoid or seek to avoid the observance or performance of any of the
covenants, stipulations or conditions to be observed or performed hereunder
by the Company.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Holder that as of the
Effective Date:
6.1 The grant of this Warrant, has been approved by the Board of Directors
of the Company and shall be approved by all necessary organs of the
Company within six months of the Effective Date. The failure to obtain
approval of all the requisite approvals shall cause the Warrant (and
the issuance thereof) to be null and void and without any force or
effect.
6.2 Subject to Section 6.1 above, the Warrant Shares when paid for and
issued in accordance with the terms hereof shall be duly authorized,
will be validly issued, fully paid and nonassessable, not subject to
any preemptive rights (other than preemptive rights waived prior to
the issue of this Warrant or shortly thereafter) and issued free and
clear of all debts, liens, encumbrances, taxes, charges, equities,
claims, any rights of third parties and any other liabilities, other
than any such liability created by the Holder, and other than tax
liabilities in connection with: (i) this Warrant and the Holder's
rights set forth herein, (ii) the exercise of this Warrant and/or the
rights set forth herein, (iii) the issuance of the Warrant Shares
(other than any stamp tax, which shall be borne by the Company only),
and/or (iv) the disposition of the Warrant Shares. If the Company is
subject to a withholding requirement in connection with an exercise of
this Warrant, it may postpone any issuance of Warrant Shares until the
Holder sufficiently proves that the applicable tax has been paid by
the Holder or provides exemption from such withholding obligation.
- 4 -
7. INVESTMENT REPRESENTATION
Neither this Warrant nor the Warrant Shares issuable upon the exercise of
this Warrant have been registered under the Securities Act, or any other
securities laws as of the Effective Date. The Holder acknowledges by
acceptance of this Warrant that (a) it has acquired this Warrant for
investment and not with a view to distribution; (b) it has either a
pre-existing personal or business relationship with the Company, or its
executive officers, or by reason of its business or financial experience,
it has the capacity to protect its own interests in connection with the
transaction; and (c) it is an accredited investor as that term is defined
in Regulation D promulgated under the Securities Act. The Holder agrees
that any Warrant Shares issuable upon exercise of this Warrant will be
acquired for investment and not with a view to distribution, that such
Warrant Shares will not necessarily be registered under the Securities Act
and applicable state securities laws or any other securities laws and that
such Warrant Shares may have to be held indefinitely unless they are
subsequently registered or qualified under the Securities Act and
applicable state securities laws, or an exemption from such registration
and qualification is available. The Holder, by acceptance hereof, consents
to the placement of legend(s) on all securities hereunder as to the
applicable restrictions on transferability in order to ensure compliance
with the Securities Act, unless in the opinion of counsel for the Company
such legend is not required in order to ensure compliance with the
Securities Act. The Company may issue stop transfer instructions to its
transfer agent in connection with such restrictions.
8. ADJUSTMENT
The number and kind of securities purchasable initially upon the exercise
of this Warrant and the Exercise Price shall be subject to adjustment from
time to time upon the occurrence of certain events, as follows:
8.1. ADJUSTMENT FOR SHARES SPLITS AND COMBINATIONS. If the Company at
any time or from time to time effects a subdivision of the
outstanding shares, the number of shares issuable upon exercise
of this Warrant immediately before the subdivision shall be
proportionately increased, and conversely, if the Company at any
time or from time to time combines the outstanding shares, the
number of shares issuable upon exercise of this Warrant
immediately before the combination shall be proportionately
decreased. Any adjustment under this Section 8.1 shall become
effective at the close of business on the date the subdivision or
combination becomes effective.
8.2. ADJUSTMENT FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS. In the event
the Company at any time, or from time to time makes, or fixes a
record date for the determination of holders of shares entitled
to receive a dividend or other distribution payable in additional
shares of the Company, then and in each such event the number of
shares issuable upon exercise of this Warrant shall be increased
as of the time of such issuance or, in the event such a record
date is fixed, as of the close of business on such record date,
by multiplying the number of shares issuable upon exercise of
this Warrant by a fraction: (i) the numerator of which shall be
the total number of shares of the Company issued and outstanding
immediately prior to the time of such issuance or the close of
business on such record date plus the number of shares issuable
in payment of such dividend or distribution, and (ii) the
denominator of which is the total number of shares of the Company
issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date; PROVIDED,
HOWEVER, that if such record date is fixed and such dividend is
not fully paid or if such distribution is not fully made on the
date fixed thereof, the number of shares issuable upon exercise
of this Warrant shall be recomputed accordingly as of the close
of business on such record date and thereafter the number of
shares issuable upon exercise of this Warrant shall be adjusted
pursuant to this Section 8.2 as of the time of actual payment of
such dividends or distributions.
- 5 -
8.3. OTHER TRANSACTIONS. In the event that the Company shall issue
shares to its shareholders as a result of a split-off, spin-off
or the like, then the Company shall only complete such issuance
or other action if, as part thereof, allowance is made to protect
the economic interest of the Holder either by increasing the
number of Warrant Shares, adjusting the Exercise Price, and/or by
procuring that the Holder shall be entitled, on economically
proportionate terms, determined in good faith by the Company's
Board of Directors, to acquire additional shares of the spun-off
or split-off entities, in the event of an exercise of this
Warrant.
8.4. OTHER DILUTIVE EVENTS. In case any event shall occur as to which
the preceding Sections 8.1 through 8.4 are not strictly
applicable but as to which the failure to make any adjustment
would not fairly protect the rights to receive shares represented
by this Warrant in accordance with the essential intent and
principles hereof, then, in each such case, the Company's Board
of Directors shall, in good faith, determine what adjustments are
necessary to preserve the rights of the Holder to receive shares
represented by this Warrant.
8.5 ADJUSTMENT OF EXERCISE PRICE. Upon each adjustment in the number
of Warrant Shares purchasable hereunder, the Exercise Price shall
be proportionately increased or decreased, as the case may be, in
a manner that is the inverse of the manner in which the number of
Warrant Shares purchasable hereunder shall be adjusted.
9. NOTICE OF CHANGES AND EXCHANGE OR LOSS OF WARRANT
9.1 Whenever the number of Warrant Shares for which this Warrant is
exercisable is adjusted as provided in Section 8, the Company shall
promptly compute such adjustment and deliver to the Holder a
certificate, signed by a principal financial officer of the Company,
setting forth the number of Warrant Shares for which this Warrant is
exercisable and the Exercise Price as a result of such adjustment, a
brief statement of the facts requiring such adjustment and the
computation thereof and when such adjustment has or will become
effective.
9.2 Upon receipt by the Company of a declaration by an officer of the
Holder of the loss, theft, destruction or mutilation of this Warrant,
and (in the case of loss, theft or destruction) of a declaration that
the Holder will provide indemnification, and reimbursement to the
Company of all reasonable expenses incidental thereto and surrender
and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date.
- 6 -
10. ASSIGNMENT
The Holder may offer, sell or otherwise dispose of this Warrant, in whole
or in part and on one or more occasions, to any party controlled,
controlling or under common control of more than 25% with the Holder
provided such assignee does not compete with the Company and provided that
such assignment may only be made after conversion of the Loan into Ordinary
Shares in the Company.
11. RIGHTS OF THE HOLDER
The Holder shall not, by virtue hereof, be entitled to any rights of a
shareholder in the Company, unless specifically stated herein.
12. TERMINATION
This Warrant and the rights conferred hereby shall terminate at the
aforementioned time on the last day of the Warrant Period.
13. GOVERNING LAW
This Warrant shall be governed by, and interpreted in accordance with, the
laws of the State of Israel, without giving effect to the rules respective
conflict of law, and the parties hereto irrevocably submit to the exclusive
jurisdiction of the Courts of Tel Aviv in respect of any dispute or matter
arising out of or connected with this Warrant.
e-SIM Ltd.
By: ___________________
Title: CFO&COO
- 7 -
EXHIBIT 4.1
NOTICE OF EXERCISE
To: e-SIM Ltd.
1. The undersigned hereby elects to purchase _________ Shares of e-SIM Ltd.,
pursuant to the terms of the attached Warrant.
2. In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the Shares are being acquired solely for the account of
the undersigned and not as a nominee for any other party, or for
investment, and that the undersigned will not offer, sell or otherwise
dispose of any such Shares except under circumstances that will not result
in a violation of the Securities Act of 1933, as amended, or any other
securities laws.
3. Please issue a certificate representing said Shares in the name of the
undersigned, at the following address:
4. Please issue a new Warrant for the unexercised portion of the attached
Warrant (if any) in the name of the undersigned.
______________________ _________________________
(Date) (Print Name of Holder)
_________________________
(Signature)
Name:
Title:
Telephone:
- 8 -