ASSET PURCHASE AGREEMENTAsset Purchase Agreement |
|
|
|
You are currently viewing: This Asset Purchase Agreement involves
SEAENA INC. | U.C. LASER LTD. | CRYSTALIX GROUP INTERNATIONAL, INC.,. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
|
|
|
Search Asset Purchase Agreement by:
ASSET PURCHASE
AGREEMENT
BY AND
BETWEEN
U.C.
LASER LTD.
AND
CRYSTALIX GROUP
INTERNATIONAL, INC.,
DATED
AS OF
DECEMBER
29, 2005
45931.0009\YOKENS\LAS\100852.3
<PAGE>
ASSET
PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is executed December 29, 2005,
and effective as
of January 1,
2006, by and
between Crystalix Group
International, Inc., a
corporation organized under the laws of the State of
Nevada, United States of America ("CRYSTALIX") and U.C. Laser Ltd., a company
organized under the laws of the State
of Israel of P.O.B 351
Karmiel 21613,
Israel (the "COMPANY").
RECITALS
A.
The Company wishes to sell to Crystalix, and
Crystalix wishes to
purchase from the Company (the
"TRANSACTION"), all the
assets of the Company
that are used in connection with the
manufacturing, distribution and
marketing
of the Company's decorative
images and products (the "COMPANY'S BUSINESS")
including the Company's Accounts Receivable
(as defined below), the Company
Contracts (as defined below) and the Company's
worldwide, exclusive license to
use the colored glass technology owned by Laser Glass Ltd. (the "COLORED
GLASS
TECHNOLOGY LICENSE") and the
Company's shares in U.C. Laser, Inc. and CIC Laser
Technologies Ltd. (the
"PURCHASED
SUBSIDIARIES" and, collectively, the
"PURCHASED ASSETS") and EXCLUDING the securities of UCLT Ltd. and of
Laser Glass
Ltd. (the "EXCLUDED SUBSIDIARIES").
B.
In consideration of the transfer
of the Purchased Assets, Crystalix
will (i) assume the Assumed Liabilities
(as defined below), and (ii) issue and
deliver to the Company such number of
shares of the Class B Preferred Stock of
Crystalix (the "ISSUED Stock") as will collectively have voting rights equal to
45% of all voting rights of Crystalix
Common Stock and any other class of Stock
as will be outstanding immediately
after the Closing,
determined on a Fully
Diluted Basis (as defined below). The Issued Stock will be convertible into a
total number of shares of Crystalix
Common Stock as would, immediately
after
such conversion, represent 45% of all
shares of capital Stock of Crystalix then
outstanding on a Fully Diluted Basis. The conversion rights of the Issued Stock
will be exercisable after the
shareholders of Crystalix have approved a reverse
35 to 1 stock split which is
necessary to permit such
conversion within the
number of shares of Common Stock
authorized in the Articles of Incorporation of
Crystalix, as referenced in Section 5.1 below.
C.
The board of directors of each of Crystalix and the Company believes
that it is in the best interests of
Crystalix and the Company (as applicable)
and their respective
shareholders to consummate
the Transaction and,
in
furtherance thereof, has approved the Transaction and this Agreement.
D.
Each of the
Company and Crystalix
desires to make
certain
representations, warranties, covenants and
agreements in connection with the
Transaction.
NOW, THEREFORE,
in consideration of
the covenants, premises,
representations and warranties set forth
herein, intending to be legally bound
hereby, the parties agree as follows:
45931.0009\YOKENS\LAS\100852.3
<PAGE>
ARTICLE 1
PURCHASE
AND SALE
1.1 PURCHASE
AND SALE OF ASSETS; PURCHASE AND ISSUANCE
OF SHARES;
ASSUMPTION OF LIABILITIES; GRANT OF LICENSE.
Upon the
terms and subject
to the conditions set
forth in this
Agreement:
(a) The
Company agrees to sell,
convey, transfer, assign
and deliver to Crystalix and/or the Israeli
Subsidiary (as defined below),
and
Crystalix agrees to purchase
and acquire (directly
or through the Israeli
Subsidiary) from the Company, at the Closing, good title in and to all of the
Purchased Assets, including
but not limited
to (x) all of the issued and
outstanding share capital of the Purchased Subsidiaries, and (y) the equipment,
Company Contracts (as
defined below) and other assets set forth in Schedule
1.1(a) hereto. The Purchased Assets shall be free and clear of all Liens,
except
for (i) Liens securing the Assumed Liabilities
(as defined below), and (ii)
Liens for taxes not yet due and payable.
(b) Crystalix agrees to
issue and deliver to the Company, at the
Closing, the Issued
Stock, free and clear of all
liens, pledge, security
interests, restrictions on
transfer (other than
restrictions imposed by
applicable securities laws) or other encumbrances, provided that twenty percent
(20%) of the shares of the Issued Stock (the "INDEMNITY ESCROW
DEPOSIT") shall
be deposited with an escrow agent acceptable
to Crystalix and the Company in
their reasonable discretion
(the "ESCROW AGENT")
pursuant to the terms and
conditions of an escrow agreement mutually acceptable to the Company, Crystalix
and the Escrow Agent (the "ESCROW
AGREEMENT"). The Indemnity
Escrow Deposit
shall be held, invested and disbursed as provided in ARTICLE 7 of this
Agreement
and the Escrow Agreement
(c) The
allocation of the
purchase consideration among the
Purchased Assets is set forth in Schedule 1.1 (c).
(d) The
Company agrees to
assign to Crystalix
and/or the
Israeli Subsidiary, and
Crystalix agrees to assume and
become responsible
(directly or through
the Israeli Subsidiary)
for, all of the Company's
Liabilities arising from or related to the Purchased Assets, which are listed
on
Schedule 1.1(d) hereto (the
"ASSUMED LIABILITIES"). Crystalix and the Israeli
Subsidiary will not assume or be
responsible for any other Liabilities of the
Company.
(e) In the
event the Company is unable to transfer the Colored
Glass Technology License, it shall grant the Israeli Subsidiary a
back-to-back
license, so that the Israeli Subsidiary will have the exclusive, worldwide
right
to exercise all rights and licenses
granted to the Company pursuant to the
Colored Glass Technology License, subject to applicable Law.
1.2 CHANGE OF NAME.
Following the
Closing, as further provided
in Section 5.1 below,
Crystalix shall undertake
all corporate actions,
and solicit all consents,
required to change its name to Seaena,
Inc., or, if such change of name
is not
approved by any competent governmental
authority, to any other similar
name,
approved in advance by the Company.
-2-
45931.0009\YOKENS\LAS\100852.3
<PAGE>
1.3 ESTABLISHMENT OF AN ISRAELI SUBSIDIARY.
Prior to the Closing, Crystalix shall establish a wholly owned
Israeli
registered subsidiary, which entity shall acquire and hold all rights, title
and
interest in the OCS financed
Purchased Assets listed in
Schedule 1.3 (the
"Israeli Subsidiary"), including
the Colored Glass
Technology License or
back-to-back license issued in lieu
thereof as provided in Section 1.1(e).
The
name of the Israeli Subsidiary shall be Crystal Impressions (Israel) Ltd. or,
if
such name is not approved by any
competent governmental authority,
any other
similar name, approved in advance by the Company. Any and all of the
obligations
and liabilities assumed by Crystalix under this Agreement with respect to the
purchase of the Purchased Assets set forth in Schedule 1.3 shall be
assumed, on
a joint and several basis, by the Israeli Subsidiary.
1.4 BOARD OF DIRECTORS.
Crystalix shall take all
corporate actions required to ensure
that its
board of directors immediately following the Closing shall consist of five
(5)
members, two (2) of which shall be Mr. Marshall D. Butler, and Dr. Zvi
Dinstein.
1.5 CLOSING.
Unless this Agreement is earlier terminated
pursuant to Section 8.1,
the closing of the Transaction (the "Closing") is expected to take
place on or
before January 31, 2006 and will take place as promptly as practicable, no
later
than 5 Business Days following satisfaction
or waiver of the conditions set
forth in Article 6, at the offices of Naschitz,
Brandes & Co., 5 Tuval
Street,
Tel-Aviv, Israel, unless another place or time is agreed to by Crystalix and
the
Company.
1.6 ALL TRANSACTIONS SIMULTANEOUS.
At the Closing, the following
actions will take
place, each of which shall
be deemed to have
occurred
simultaneously (no transaction
shall be deemed to have been
completed or any
document delivered until all such transactions
have been completed and all
required documents delivered).
(i) The Company shall deliver to Crystalix all
the documents
needed to consummate the transaction, including the following documents:
(a) A
copy of a resolution of the Company's
board of
directors and the general meeting of the Company's shareholders
approving this
Agreement and the Transaction;
(b) All
documents necessary for the assignment of all
right, title and interest in and to the
patents and the Intellectual Property
included in the Purchased Assets, as set forth in schedule 1.6(i)(b)
hereto,
duly executed by the Company in a form acceptable to Crystalix;
(c) Bills
of sale and
such other instruments
of
assignment, transfer, conveyance
and endorsement in the
form attached as
Schedule 1.6(i)(c) hereto, required to transfer assign, convey and deliver to
Crystalix or the Israeli Subsidiary the Purchased Assets as contemplated
hereby;
-3-
45931.0009\YOKENS\LAS\100852.3
<PAGE>
(d) All share certificates representing shares of
capital
stock of the Purchased
Subsidiaries, duly endorsed or with other appropriate
instruments of transfer to
Crystalix and all necessary
authorizations and
consents with respect to such transfers;
(e)
The Colored Glass Technology License executed by the
licensor or back-to-back license as provided in Section 1.1(e);
(f) Loan assumption documents for the Assumed
Liabilities
("LOAN ASSUMPTION
DOCUMENTS") acceptable to
Crystalix executed by the Company
and the respective lenders;
(g) Shareholder
agreement (the "SHAREHOLDER
AGREEMENT")
executed by Crystalix, the Company and Kevin T. Ryan ("RYAN");
(h) The
approval of the Israeli Tax Authority
exempting
Crystalix from actual payment of the Value Added Tax ("VAT") due with
respect to
this Transaction and a certificate from the Israeli Income Tax
Commissioner
evidencing an exemption from the
withholding of Taxes (the "CERTIFICATE OF
EXEMPTION");
(i) A Consent Judgment executed by U.C. Laser,
Inc. in
the form attached as Exhibit A to this Agreement (the "CONSENT
JUDGMENT");
(j) A Settlement
Agreement and Release by and
among the
plaintiffs named in the Consent Judgment (the
"PLAINTIFFS"), the
Company and
U.C. Laser, Inc.
in the form attached as Exhibit B to this Agreement
(the
"RELEASE"), executed by the Company and U.C. Laser, Inc.;
(k)
Assignments of any leases of real property leased by
the Company with the written
consent of the landlord if
required under such
leases or under leases to the Purchased
Subsidiaries upon a change of
control,
and any approvals required for the
assignment of each of the Company
Contracts
by the Company to Crystalix and/or the Israeli Subsidiary at the Closing;
(l) Any approvals required under Section 6.1(i)
below;
(m) The executed Escrow Agreement;
(n) A
Registration Rights Agreement
pursuant to which
the Company shall be entitled to
customary registration rights
which shall
include unlimited piggy-back
and S-3 registrations, and a right to effect a
demand registration as of the termination of one year following the Closing,
all
in accordance with customary terms and conditions (the
"REGISTRATION RIGHTS
AGREEMENT");
(o) Opinion
letter of the Company's
counsel concerning
(1) authorization of
the Company to
execute, deliver, and
perform this
Agreement; (2) authorization of the
Company to transfer or grant a back-to-back
license to the Colored Glass Technology License; (3) such matters concerning
the
share capital of the Purchased
Subsidiaries as may be
-4-
45931.0009\YOKENS\LAS\100852.3
<PAGE>
mutually agreed upon by Crystalix and the Company; and (4) such other matters
as
may be mutually agreed upon by Crystalix and the Company;
(p) Audited
financial statements of the Company for the
three (3) full years for which statements are available; and
(q) A Certificate of the Company that all
representations
and warranties are true and correct as
of the Closing and such other matters as
mutually agreed upon by the Parties.
(ii) Crystalix
shall deliver to the Company the Issued Stock
(less the shares of Issued Stock
constituting the Indemnity
Escrow Deposit,
which shall be deposited with the
Escrow Agent) and deliver to the Company
the
following documents:
(a) A
copy of a resolution
of Crystalix's board of
directors approving the issuance of the Issued Stock to the Company, and the
delivery of the Indemnity Escrow Deposit to the Escrow Agent;
(b) A copy of the amended stock ledger listing
the Issued
Stock;
(c) Duly executed
stock certificates representing
the
Issued Stock (less the shares of Issued Stock
constituting the Indemnity Escrow
Deposit which shall be deposited with the Escrow Agent);
(d) The
Colored Glass Technology License or back-to-back
license as provided in Section 1.1(e) executed by the Israeli Subsidiary as the
licensee;
(e) The Loan Assumption Documents
acceptable to Company
executed by Crystalix and/or the Israeli Subsidiary;
(f) The Shareholder Agreement executed by Ryan;
(g) The
Consent Judgment executed
by Laser Design
International, Inc., and Norwood Operating Company;
(h) The Release executed by the Plaintiffs;
(i) The executed Escrow Agreement;
(j) The executed Registration Rights Agreement;
and
(k) Opinion
letter of Crystalix's
counsel concerning
(1) authorization of Crystalix to execute,
deliver, and perform this Agreement;
(2) such matters concerning the share
capital of Crystalix as may be mutually
agreed upon by Crystalix and the
Company; and (3) such other matters as
may be
mutually agreed upon by Crystalix and the Company; and
-5-
45931.0009\YOKENS\LAS\100852.3
<PAGE>
(l) A Certificate of Crystalix that all representations
and warranties are true and correct as
of the Closing and such other matters as
mutually agreed upon by the Parties.
(iii) Crystalix shall deliver the Indemnity Escrow
Deposit and
duly executed stock certificates representing
the Indemnity Escrow Deposit to
the Escrow Agent to be held pursuant to the Escrow Agreement.
1.7 POSSESSION.
Possession of the Purchased
Assets will be delivered to
Crystalix
immediately upon Closing.
ARTICLE 2
REPRESENTATIONS AND
WARRANTIES OF CRYSTALIX
Crystalix hereby represents and
warrants to the Company, as of the date
hereof and as of the Closing, subject to
the exceptions specifically disclosed
in the attached disclosure schedule (the "CRYSTALIX DISCLOSURE
SCHEDULE"), as
follows:
2.1 ORGANIZATION AND QUALIFICATION.
Crystalix is a company duly organized and in good standing
under the
laws of the State of Nevada, and has full
corporate power and authority
to
conduct its business as now conducted and as currently proposed to be conducted
and to own, use, license and lease its Intellectual Property. Crystalix is duly
qualified, licensed or admitted to do
business and is in good standing in each
jurisdiction in which such qualification is necessary.
2.2 AUTHORITY RELATIVE TO THIS AGREEMENT.
Crystalix has full corporate
power and authority to execute and deliver
this Agreement, to perform its obligations
hereunder and to consummate the
Transaction contemplated hereby.
Crystalix's board of directors
has approved
this Agreement and declared its advisability.
The execution and delivery by
Crystalix of this Agreement and the consummation by Crystalix of the
Transaction
contemplated hereby, and
the performance by
Crystalix of its obligations
hereunder, have been duly and validly
authorized by all necessary action by the
board of directors of Crystalix, and no other action on the part of Crystalix
is
required to authorize the execution,
delivery and performance of this Agreement
and the consummation by Crystalix of the Transaction contemplated
hereby. This
Agreement has been duly and validly executed and
delivered by Crystalix and,
assuming the due authorization, execution and delivery hereof by the Company,
constitutes a legal, valid and binding obligation
of Crystalix enforceable
against it in accordance with its terms,
except as the enforceability thereof
may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization,
moratorium or other similar Laws
relating to the enforcement of
creditors'
rights generally and by general
principles of equity. This
Transaction and the
issuance of the Issued Stock is not subject to any preemptive
or other similar
rights.
-6-
45931.0009\YOKENS\LAS\100852.3
<PAGE>
2.3
CAPITAL STRUCTURE.
The authorized share capital of
Crystalix consists of:
(a) 300,000,000 shares of common stock,
$.001 par value
each (the "COMMON STOCK"),
of which 278,274,972 shares of Common Stock are
issued and outstanding as of the date hereof;
(b) 10,000,000 shares of Class A preferred
stock, $.001
par value each (the "PREFERRED A STOCK"), of which no shares of Preferred Stock
are issued and outstanding as of the date hereof; and
(c) 5,000,000 shares of preferred Class B stock, $.001
par value each (the "PREFERRED B STOCK"), of which no shares of Preferred
B
Stock are issued and outstanding as of the date hereof (the Preferred A Stock
together with the Preferred B Stock shall be
referred to as the "PREFERRED
STOCK");
All of the issued and outstanding Common Stock and Preferred Stock is validly
issued, fully paid and
non-assessable, and have been issued in
compliance with
all applicable Laws. There are no other classes of stock, outstanding warrants,
options or loans in Crystalix and there are no preemptive rights or agreements,
arrangements or understandings to issue
preemptive or other similar rights with
respect to the Transaction or the issuance or sale of the Issued Stock.
2.4 NO CONFLICTS.
The execution and delivery by
Crystalix of this Agreement does not, and
the performance by Crystalix of its obligations
under this Agreement and the
consummation of the Transaction
contemplated hereby does
not and will not
conflict with or result in a violation or breach of any of the terms,
conditions
or provisions of the Bylaws or Certificate of
Incorporation of Crystalix, any
agreement, contract, law, ordinance, regulation or other undertaking,
obligation
or liability applicable to Crystalix.
2.5 FINANCIAL STATEMENTS.
Attached hereto as Schedule
2.5(a) of the Crystalix Disclosure Schedule
are the audited financial statements of Crystalix for the year
ended December
31, 2004 (including its balance sheet,
and its statements of income,
cash flow
and changes in shareholders equity,
and the notes thereto) and the
unaudited
financial statements for the nine months ended September 30, 2005 (together,
the
"Crystalix Financials"). The
Crystalix Financials have
been prepared in
accordance with US GAAP applied on a
consistent basis throughout
the periods
indicated therein and fairly and accurately present the financial condition and
operating results of Crystalix as of the
dates and during the periods indicated
therein, subject, in the case of the September 30, 2005 Crystalix Financials,
to
normal year-end adjustments, which adjustments will not be material in amount
or
significance. Except as set forth in
Section 2.5(b) of the Crystalix Disclosure
Schedule, since September 30, 2005, there has been no change in any accounting
policies, principles, methods or practices, including any change with respect
to
reserves (whether for bad debts, contingent
liabilities or otherwise),
of
Crystalix.
-7-
45931.0009\YOKENS\LAS\100852.3
<PAGE>
2.6 ABSENCE OF CHANGES.
Since September
30, 2005 there has not been, except as set forth in
Section 2.6 of the Crystalix
Disclosure Schedule, any material adverse effect
upon the business or condition of
Crystalix or any occurrence or event which,
individually or in the aggregate
could be reasonably
expected to have any
material adverse effect upon the
business or condition of Crystalix.
Since the
beginning of its 2005 fiscal year, Crystalix
has operated its business in the
ordinary course of business and in accordance with past practice.
2.7
NO UNDISCLOSED LIABILITIES.
There are no Liabilities of,
relating to or affecting Crystalix or
any
of its Assets and Properties, other
than Liabilities incurred in the ordinary
course of business consistent with past
practice and in accordance with the
provisions of this Agreement which,
individually and in the aggregate,
are not
material to the Business or Condition of Crystalix, and are not for tort or for
breach of contract.
2.8 LEGAL PROCEEDINGS.
Except as
set forth in
Section 2.8 of the
Crystalix Disclosure
Schedule: (i) there are no Actions or
Proceedings pending or, to the knowledge
of Crystalix, threatened
against, relating to or
affecting Crystalix or its
business; (ii) there are no facts or circumstances known to Crystalix that
could
reasonably be expected
to give rise to any action
or proceeding against,
relating to or affecting Crystalix or
any of its business; (iii) Crystalix has
not received notice,
and does not otherwise have
knowledge of any Orders
outstanding against Crystalix;
and (iv) Crystalix has not received notice and
does not otherwise have
knowledge of any defects, dangerous or
substandard
conditions in the products or materials sold, distributed, or currently
proposed
to be sold or distributed by Crystalix
that could cause damage to property, or
result in loss of use of property, or any claim, suit, demand for arbitration
or
notice seeking damages for bodily injury, sickness, disease, death, or damage
to
property, or loss of use of property.
2.9 INTELLECTUAL PROPERTY.
Except as
set forth in
Section 2.9 of the
Crystalix Disclosure
Schedule, Crystalix has all requisite
right, title and interest in or valid and
enforceable rights under
Contracts or Licenses to use all the Intellectual
Property necessary to the conduct of its business as presently conducted. All
of
Crystalix's Intellectual Property is owned exclusively by Crystalix
(excluding
Intellectual Property licensed to Crystalix under any License) and
is free and
clear of any Liens. Crystalix (i) owns exclusively all trademarks, service
marks
and trade names used by Crystalix in connection with the operation or conduct
of
the business of Crystalix; and (ii) owns
exclusively, and has good title
to,
each copyrighted work and each other work of authorship that Crystalix
otherwise
purports to own.
2.10 DISCLOSURE.
No representation or warranty
made by Crystalix contained in this
Agreement, and no statement contained in the Crystalix Disclosure Schedule or
in
any certificate, list or other writing
furnished to the Company pursuant to any
provision of this Agreement (including
the
-8-
45931.0009\YOKENS\LAS\100852.3
<PAGE>
Crystalix Financials) contains any
untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements
herein or
therein, in the light of the circumstances
under which they were made,
not
misleading. Crystalix has provided the Company with all of the Contracts
and
Licenses heretofore requested on behalf of the Company in writing, and all
other
material information concerning Crystalix in the possession, custody or control
of Crystalix.
2.11 EXPERIENCE; RECEIPT OF INFORMATION.
Crystalix has such knowledge and
experience in financial and business
matters as to be capable of evaluating
the merits and risks relating to the
Transaction, and has reviewed and
inspected all of the data
and information
provided to it by the Company in connection with this Agreement.
Crystalix has
been furnished by the Company with the documents and information
regarding the
Company in response
to Crystalix's request,
and has been
afforded the
opportunity to ask questions
of and receive answers
from duly authorized
officers or other representatives of the
Company concerning the
Company's
business, assets and financial position.
ARTICLE 3
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
The Company hereby represents
and warrants to Crystalix, as of the date
hereof and as of the Closing, subject to
the exceptions specifically disclosed
in the attached disclosure schedule (the "COMPANY DISCLOSURE
SCHEDULE"), as
follows:
3.1 ORGANIZATION AND QUALIFICATION.
The Company is a private company duly
organized and validly existing
under the Laws of the State of Israel.
U.C. Laser, Inc. is a private company
duly and validly existing under the Laws of the State of Delaware.
CIC Laser
Technologies Ltd. is a private company duly organized and validly existing
under
the laws of the People's Republic
of China. All such
companies have full
corporate power and authority to conduct
their business as now conducted and as
currently proposed to be conducted. The Company has full corporate
power and
authority to own, use, license and lease the Purchased Assets.
The Company and
the Purchased Subsidiaries
are fully qualified, licensed
or admitted to do
business, and are in
good standing, in
each jurisdiction in
which such
qualification is necessary.
Other than the Purchased
Subsidiaries and the
Excluded Subsidiaries, the
Company does not have any
subsidiaries or own,
beneficially or otherwise, any shares or
other securities of, or any direct or
indirect interest of any nature in, any
other entity. The Company and each of
the Purchased Subsidiaries have not conducted any business under or otherwise
used, for any purpose or in any jurisdiction, any fictitious name, assumed
name,
trade name or other name.
3.2 AUTHORITY RELATIVE TO THIS AGREEMENT.
The Company
has full corporate power and
authority to execute and
deliver this Agreement, to perform its
obligations hereunder and to consummate
the Transaction contemplated
hereby. The Company's
board of directors has
approved this Agreement
and declared its advisability.
The execution and
delivery by the Company of this Agreement and the consummation by the Company
of
the Transaction contemplated hereby, and the performance by the Company of
its
obligations hereunder, have been duly and validly authorized by all necessary
-9-
45931.0009\YOKENS\LAS\100852.3
<PAGE>
action by the Company (save for approval
by a general meeting of the Company),
and no other action on the part of the
Company (save for approval by a general
meeting of the Company) is required to
authorize the execution,
delivery and
performance of this
Agreement and the consummation
by the Company of the
Transaction contemplated hereby.
This Agreement has been
duly and validly
executed and delivered by the Company and,
assuming the due authorization,
execution and delivery hereof by
Crystalix, constitutes a legal,
valid and
binding obligation of the Company
enforceable against it in accordance with its
terms, except as the enforceability thereof
may be limited by
bankruptcy,
insolvency, fraudulent conveyance,
reorganization, moratorium or
other similar
Laws relating to the enforcement of creditors'
rights generally and by general
principles of equity.
The Transaction and the
transfer of shares
in the
Purchased Subsidiaries are not subject to any right of first refusal or other
similar rights.
3.3 NO CONFLICTS.
The execution and delivery by
the Company of this Agreement does not,
and the performance by the Company of its
obligations under this Agreement
and
the consummation of the Transaction contemplated
hereby does not and will not
conflict with or result in a violation or breach of any of the terms,
conditions
or provisions of the Articles of Association
of the Company or the Purchased
Subsidiaries, any agreement,
Contract, Law, ordinance,
regulation or other
undertaking, obligation or Liability
applicable to the Company or the Purchased
Subsidiaries.
3.4 FINANCIAL STATEMENTS.
Attached hereto as Schedule
3.4(a) of the Company Disclosure Schedule
are the audited financial
statements of the Company (including
its balance
sheet, and its statements
of income, cash flow and changes in
shareholders
equity, and the notes thereto) and the Purchased Subsidiaries
for the period
ending December 31, 2004 and the unaudited
financial statements of the
Company
and the Purchased Subsidiaries
for the period
ending September 30,
2005
(collectively, the "Company's Financials"). The Company's Financials
are correct
and complete in all material respects
and have been prepared in accordance with
Israeli or US GAAP (as applicable)
applied on a consistent basis throughout the
periods indicated therein
and fairly and accurately present
the financial
condition and operating results of the
Company and the Purchased Subsidiaries,
as applicable, as of the dates and
during the periods
indicated therein,
subject, in the case of the September 30, 2005 Company's Financials,
to normal
year-end adjustments, which
adjustments will not be material
in amount or
significance and except
that the Company's
Financials does not
contain
footnotes. Except as set forth in Section
3.4(b) of the Company
Disclosure
Schedule, since September 30, 2005, there has been no change in any accounting
policies, principles, methods or practices, including any change with respect
to
reserves (whether for bad debts,
contingent Liabilities or
otherwise), of the
Company or the Purchased Subsidiaries, as applicable.
3.5 ABSENCE OF CHANGES.
Since September
30, 2005, except as set forth in Section 3.5 of the
Company Disclosure Schedule, there has not been any material adverse effect
upon
the Business or Condition
of the Company or any
occurrence or event which,
individually or in the aggregate
could be reasonably
-10-
45931.0009\YOKENS\LAS\100852.3
<PAGE>
expected to have any material
adverse effect upon the Business
or Condition of
the Company. Since the beginning of its 2005 fiscal year, the Company and the
Purchased Subsidiaries have operated their respective businesses in the
Ordinary
Course of Business and in accordance with past practice.
3.6 LEGAL PROCEEDINGS.
Except as set forth in Section
3.6 of the Company Disclosure Schedule:
(i) there are no Actions or Proceedings pending or, to the knowledge the
Company
or the Purchased Subsidiaries,
threatened against, relating to or affecting any
of the Purchased Assets or the Company; (ii) there are no facts or
circumstances
known to the Company or the
Purchased Subsidiaries that could
reasonably be
expected to give rise to any
action or proceeding against,
relating to or
affecting the Purchased
Assets or the Company;
(iii) the Company
or the
Purchased Subsidiaries have not received notice,
and do not otherwise have
knowledge of any Orders outstanding against any of the Purchased Assets or the
Company; and (iv) the Company or the
Purchased Subsidiaries have not received
notice and do not
otherwise have knowledge
of any defects, dangerous
or
substandard conditions in the
Purchased Assets or in any of
the products or
materials sold, distributed or
currently proposed to be sold or
distributed by
the Purchased Subsidiaries
that could cause damage to property,
or result in
loss of use of property, or any
claim, suit, demand for arbitration or notice
seeking damages for bodily
injury, sickness, disease,
death, or damage to
property, or loss of use of property.
3.7 NO UNDISCLOSED LIABILITIES.
Except as reflected or reserved
against in the Company's Financials
(including the notes thereto)
or as disclosed in Section 3.7 of the Company
Disclosure Schedule (which includes a list of the Liabilities which relate to
the Purchased Assets), there are no Liabilities of, relating to or affecting
the
Purchased Assets, other than
Liabilities incurred in the
Ordinary Course of
Business consistent with past practice or in accordance with the
provisions of
this Agreement which, individually and in the aggregate, are not material to
the
Business or Condition of the Company or to the Business or
Condition of the
Purchased Assets, and are not for tort or for breach of Contract.
3.8 COLORED GLASS TECHNOLOGY LICENSE.
The Company
has made available to
Crystalix a true, correct
and
complete copy of the Colored
Glass Technology License
and any underlying
patents, as presently
in effect. The Company is not, and to the
Company's
knowledge, no party to the Colored
Glass Technology License is, in default in
the discharge of any obligation under,
or in the performance of any covenant or
obligation to be performed
by such party pursuant
to, the Colored
Glass
Technology License. The Company has not received any written
notice or claim
challenging or questioning
the validity or
enforceability of the Company's
rights under the Colored Glass
Technology License and the
Company is not aware
of any reasonable basis for such claim. Pursuant to the Colored Glass Technology
License, the Company,
and upon the transfer of such license or the grant of a
back-to-back
-11-
45931.0009\YOKENS\LAS\100852.3
<PAGE>
license to the Israeli Subsidiary, the
Israeli Subsidiary will have a worldwide
exclusive license to use the colored
glass technology owned by Laser Glass Ltd.
In addition, the
Company's rights, and upon the transfer of such license or
grant of
a back-to-back license
to the Israeli
Subsidiary, the Israeli
Subsidiary's rights, under the current license will expire or may
otherwise be
terminated only in accordance with terms and conditions set forth in the
Colored
Glass Technology License.
3.9 CONTRACTS.
The Company has made available
to Crystalix true, correct and complete
copies of all of the Contracts,
including Licenses, to which the Company is a
party which are
related to the Company's
Business or to which any of the
Purchased Subsidiaries is a party (the "Company Contracts"), all as
presently in
effect. The Company and the Purchased Subsidiaries are not, and to the
Company's
and the Purchased Subsidiaries'
knowledge, no third party to any of the Company
Contracts is, in default in the
discharge of any obligation under,
or in the
performance of any covenant or obligation to be performed by such party
pursuant
to, any Company Contract.
The Company is entitled
to assign its rights and
obligations under each Company
Contract to which it is a party
to Crystalix
and/or the Israeli
Subsidiary or will be entitled
to assign its rights and
obligations under each
Company Contract to
Crystalix and/or the
Israeli
Subsidiary with the prior
approval of one or more parties
to such Company
Contract. Except for (a) the
Company Contracts involving the payment by or to
the Company of Fifty
Thousand Dollars ($50,000)
or less within any twelve
(12)-month period from the date of this Agreement, and (b) as listed in Section
3.9 of the Company Disclosure Schedule, neither the Company, with respect to
the
Company's Business, nor either of the Purchased
Subsidiaries, is a party to or
bound by any:
(i) Contract, including any License, not made in
the Ordinary
Course of Business;
(ii) Bonus, pension,
profit sharing, retirement, stock purchase,
hospitalization, medical reimbursement, insurance,
or other plan providing
employee benefits;
(iii) Lease with
respect to any property, real or personal,
whether as lessor or lessee;
(iv) Continuing Contract for the future purchase of materials,
supplies, or equipment;
(v) Contract or commitment for capital
expenditures;
(vi) Contract, including any License, with a remaining term of
more than one (1) year from the date of this
Agreement that is not terminable
upon thirty (30) days notice;
(vii) Contract
for the lease, operation, or
maintenance of
any machinery or equipment with a
remaining term of more than one (1) year from
the date of this Agreement that is not terminable upon thirty (30) days notice;
or
(viii) Contract, including any License, to pay any royalties
or fees with respect to any sales of the Company.
-12-
45931.0009\YOKENS\LAS\100852.3
<PAGE>
3.10 INTELLECTUAL PROPERTY.
Except as set forth in Section
3.10 of the Company Disclosure Schedule,
the Company and each Purchased
Subsidiary have all requisite
right, title and
interest in or valid and enforceable rights under Contracts, including
Licenses,
to use all the
Intellectual Property necessary
to the conduct
of their
respective business as presently
conducted. All of the
Company's Intellectual
Property is owned exclusively by the Company
(excluding Intellectual Property
licensed to the Company under any License) and is free and clear of any Liens.
All the Intellectual Property of each
Purchased Subsidiary is owned exclusively
by the relevant Purchased Subsidiary
(excluding Intellectual Property
licensed
to each Purchased Subsidiary
under any License) and is free
and clear of any
Liens. The Company and each
Purchased Subsidiary (i) owns
exclusively all
trademarks, service marks and trade
names respectively used by the Company
and
each Purchased Subsidiary in
connection with the operation or
conduct of the
Company's Business or of such Purchased
Subsidiary's Business, as applicable;
and (ii) owns exclusively, and has good title to, each copyrighted work and
each
other work of authorship
that the Company
and each Purchased
Subsidiary
otherwise purports to own.
All of






