SHARE PURCHASE AND INVESTMENT
AGREEMENT
THIS SHARE
PURCHASE AND INVESTMENT AGREEMENT (the “ Agreement
”) is entered into as of the 2 nd day of June, 2009, by and among Kiryat Anavim
— Silicon Technologies Ltd., an Israeli private company
(company no. 51-314636-5) (the “ Company ” or
“ KAST ”) of the first part, TopSpin Medical
(Israel) Ltd., an Israeli company (no. 51-2836065) (“
TopSpin ”) of the second part, Anavid Insulation
Products Kiryat Anavim Agricultural Cooperative Ltd., an Israeli
Agricultural Cooperative (Cooperative no. 57-003929-7) (“
Anavid ”), of the third part and Ahzakot Upituach
Qiryat Anavim Agudah Shitufit Haklait Ltd., an Israeli Agricultural
Cooperative (cooperative no. 57-003914-9) (“ Ahzakot
Upituach ” or “ Ahzakot ”) of the
fourth part (the Company, TopSpin, Anavid and Ahzakot Upituach
shall each be referred to hereinafter as a “ Party
”, and collectively as the “ Parties
”).
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Anavid is the
controlling shareholder of the Company; and
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Anavid is 99%
owned by Ahzakot; and
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Anavid has
determined that it desires to sell all of its holdings in the
Company; and
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TopSpin has
agreed to purchase all of Anavid’s holdings in the Company
and Anavid has agreed to sell all of its holdings in the Company to
TopSpin, all upon the terms and subject to the conditions set forth
in this Agreement.
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NOW,
THEREFORE , in
consideration of the mutual covenants and agreements contained
herein and for other good and valuable consideration the receipt
and adequacy of which are hereby acknowledged, the Parties,
intending to be legally bound, agree as follows:
In addition to
the terms defined elsewhere in this Agreement, for all purposes of
this Agreement, the following terms have the meanings indicated in
this Section 1:
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1.1.
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“ Affiliate ”
shall mean with respect to any Person at any given time (i) a
Person directly or indirectly controlling, controlled by or under
common control with, such Person; or (ii) a Person owning 50%
(fifty percent) or more of the outstanding voting securities of
such Person. For these purposes, control means the possession,
direct or indirect, of the power to direct or cause the direction
of the management and policies of a Person, whether through the
ownership of voting securities, by contract or
otherwise;
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1.2.
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“ Agreement ”
shall mean this Share Purchase and Investment Agreement, including
all annexes, exhibits and schedules thereto, as the same may
hereafter be amended, modified or supplemented from time to
time;
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1.3.
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“ Anavid Loan ”
shall mean the loans made by Anavid and/or Ahzakot Upituach to the
Company prior to the date hereof, the details of which are set
forth on Schedule 1.3 hereto;
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1.4.
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“ Authority ”
shall mean any governmental, regulatory or administrative body,
agency or authority, any court of judicial authority, any
arbitrator or any public, private or industry regulatory authority,
whether international, national, state, municipal or
local;
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1.5.
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“ Business Day ”
shall mean a day (other than Friday or Saturday) on which banks
generally are open for business in Israel;
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1.6.
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“ Closing ”
shall mean the consummation of the transactions contemplated in
this Agreement as set forth in Sections 3 and 9;
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1.7.
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“ Closing Date ”
shall mean the date upon which the Closing occurs;
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1.8.
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“ Companies Law
” shall mean the Israel Companies Law — 1999 and the
rules and regulations thereunder as amended from time to
time;
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1.9.
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“ Contracts ”
shall mean all agreements, contracts, obligations, promises,
undertakings, commitments of any nature whatsoever, express or
implied, whether oral or written, and all amendments thereto,
entered into by or binding upon the Company or to which any of its
properties may be subject, including warranties, guaranties,
indentures, bonds, options, leases, subleases, easements, loan
agreements, mortgages, employee benefit or welfare plans,
collective bargaining agreements, licenses, purchase orders, sales
orders;
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1.10.
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“ Covenanter ”
shall mean Anavid and Ahzakot Upituach jointly and
severally;
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1.11.
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“ Dollars ”
shall denote the lawful currency of the United States of America.
“ US $ ”, “ USD ”, “
$ ”, “ dollars ”, “ US
Dollars ”, “ US dollars ”, “
U.S. Dollars ” shall likewise be construed;
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1.12.
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“ Founders Agreement
” shall mean that certain founders agreement, dated November
22, 2001 between Kiryat Anavim Assets Holding Company Ltd. and
Wolfson which, inter alia, sets forth certain mutual rights and
obligations towards each other as shareholders in the Company and
describes certain services to be provided by Wolfson to the
Company;
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1.13.
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“ Initial Balance
” shall mean the outstanding balance of the Anavid Loan,
including principal and any linkage and interest accrued thereon as
at the Closing, as detailed on Schedule 1.3, which is accurate
as of the date hereof and will be updated at Closing;
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1.14.
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“ The Kibbutz ”
shall mean Kibbutz Kiryat Anavim (Kiryat Anavim — Kvutzat
Poalim Lehityashvut Shitufit Ltd., Cooperative no.
57-000034-9);
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1.15.
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“ Law ” shall
mean any applicable law, statute, regulation, treaty, ordinance,
rule, requirement, official directive, announcement or other
binding action or requirement of an Authority, including
environmental laws;
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1.16.
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“ Lien or Other
Encumbrance ” shall mean any lien, pledge (whether fixed
or floating), mortgage, hypothecation, attachment, security
interest, lease, charge, conditional sales contract, option,
restriction, reversionary interest, deed, deposit arrangement,
right of first refusal, voting trust arrangement, preemptive right,
claim under bailment or storage contract, easement or any other
adverse claim or right whatsoever, or any obligation, whether
written or oral (including any conditional obligation) to create
any of the same;
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1.17.
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“ Licensor ”
shall mean any Person (including, for the purpose of this term, any
Authority), who grants permission to perform a certain act, conduct
a particular business or occupation, operate machinery or vehicles,
use property for a certain purpose or grant a right for use of
intellectual property for a particular purpose(s);
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1.18.
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“ Management Shares
” shall mean the management shares ( manayot hanhala )
of the Company, nominal value of NIS 1.00 per share;
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1.19.
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“ Material Adverse
Change ” or “ Material Adverse Effect
” or other similar phrases shall mean any matter which would
have a material adverse effect on a party’s financial
condition, results of operations, assets, liabilities, business,
operations, prospects, without giving effect to the consequences of
the transactions contemplated by this Agreement or ability to
consummate the transactions contemplated hereby. The Company will
be deemed to have a Material Adverse Change if the Company’s
financial position, results of operations, assets, liabilities or
prospects are not at least favorable as determinable by the
Company’s financial statements for the period ending
December 31, 2007, which determination may be made at any time
prior to the Closing;
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1.20.
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“ NIS ” shall
mean New Israeli Shekels;
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1.21.
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“ Order ” shall
mean any decree, decision, order, judgment, writ, award,
injunction, rule or consent of or by an Authority;
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1.22.
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“ Ordinary Shares
” shall mean the ownership shares ( manayot baalut )
of the Company, nominal value of NIS 1.00 per share;
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1.23.
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“ Organizational
Documents ” shall mean the certificate of incorporation,
Memorandum of Association, Articles of Association, by-laws or
other governing or charter documents of any Person;
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1.24.
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“ Payment CPI ”
shall mean the CPI on the date of payment;
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1.25.
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“ Person ” shall
mean any entity, corporation, company, cooperative society,
association, limited liability company, joint venture, joint stock
company, partnership, trust, organization, individual (including
personal representatives, executors and heirs of a deceased
individual), nation, state, government (including agencies,
departments, bureaus, boards, divisions and instrumentalities
thereof), trustee, receiver or liquidator;
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1.26.
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“ Proceeding ”
shall mean any action, arbitration, audit, hearing, investigation,
litigation or suit (whether civil, criminal, administrative,
investigative or informal) commenced, brought, conducted or heard
by or before or otherwise involving, any Authority or
mediator;
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1.27.
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“ Recitals ”
shall mean the recitals to this Agreement;
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1.28.
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“ Sale Shares ”
shall have the meaning ascribed thereto in Section 3.1
below;
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1.29.
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“ Shareholders
Agreement ” shall mean that certain Shareholders
Agreement to be entered into between TopSpin and Wolfson upon the
Closing substantially in the form of
Schedule 1.29 hereto;
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1.30.
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“ Taxes ” shall
mean any and all present or future taxes, duties, tariffs, levies,
imposts, deductions, charges or withholdings levied or imposed by
any Authority or Law, including without limitation all income,
value added, franchise, property, social security, health, land,
betterment, capital gains, production, sales, use, payroll,
license, windfall profits, withholding, excise, stamp, gross
receipts and other taxes, and any and all liabilities with respect
to the foregoing, including any indexation, interest, penalties and
all other like governmental charges;
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1.31.
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“ VAT ” shall
mean value added tax or any tax replacing the same;
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1.32.
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“ Warrant ”
shall mean the warrant to be issued by the Company to Ahzakot at
the Closing as set forth in Section 3 of this
Agreement;
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1.33.
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“ Warrant Shares
” shall mean the Ordinary Shares issuable upon exercise of
the Warrant; and
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1.34.
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“ Wolfson ”
shall mean Yehoshua (Shuki) Wolfson, whose Israeli identity number
is 05040983-8.
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2.1.
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The various paragraph and/or
section headings in this Agreement are for reference and
convenience only and shall not be considered in the interpretation
hereof for any purpose and in no way alter, modify, amend, limit,
or restrict any contractual obligations of the Parties.
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2.2.
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The Recitals, annexes, appendices,
exhibits and schedules to this Agreement are an integral part
hereof and are expressly incorporated herein by
reference.
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2.3.
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Unless the context otherwise
requires, references to (or to any specified provision of) this
Agreement or any other document shall be construed as references to
that provision or that document as in force for the time being and
as amended, supplemented, modified or replaced in accordance with
the terms thereof; words importing the plural shall include the
singular and vice versa; “including” and
“includes” means including, without limiting the
generality of any description preceding such terms; the use of any
gender shall be applicable to both genders; and references to a law
or to a specific section thereof shall be construed as a reference
to such law, including any rules or regulations promulgated
thereunder, or section, as the same may have been, or may from time
to time be, amended, succeeded or re-enacted.
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3.1.
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At the Closing, Anavid shall sell
to TopSpin, and TopSpin shall purchase from Anavid, all of
Anavid’s shareholdings in the Company comprising: (i) 89
(eighty nine), Ordinary Shares and (ii) 1,610,000 (one
million, six hundred and ten thousand) Management Shares (together,
the “ Sale Shares ”) which Sale Shares shall be
free and clear of any Lien or other Encumbrance.
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3.1.1.
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In consideration for the Sale
Shares TopSpin shall pay Anavid $10,000 (ten thousand US dollars)
(the “ Cash Amount ”) and, as per Anavid’s
instruction and consent, the Company shall issue a warrant to
Ahzakot Upituach for the purchase of up to 35 (thirty five)
Ordinary Shares, substantially in the form of
Schedule 3.1.1 hereto (the “
Warrant ”). Anavid will hold the Company, TopSpin,
their directors, officers and shareholders and their respective
successors and assigns, harmless from any and all claims and/or
liabilities in connection with Anavid’s instruction to issue
the Warrant to Ahzakot Upituach, and not to Anavid.
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3.1.2.
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The payment of the Cash Amount
shall be effected upon the Closing, through the execution of a wire
transfer, in immediately available funds, to Anavid’s
account, details of which shall be specified in writing and
delivered to TopSpin by Anavid at least two (2) Business Days
prior to the Closing. Payment of the Cash Amount may be made in US
dollars or in NIS, in TopSpin’s sole discretion. If payment
is made in NIS, the sum will be calculated according to the US
dollar/NIS exchange rate published by the Bank of Israel on the
date of this Agreement (and if no US dollar/NIS exchange rate is
published by the Bank of Israel on such date, then the first US
dollar/NIS exchange rate published by the Bank of Israel
thereafter).
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3.1.3.
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The issue of the Warrant shall be
effected upon the Closing.
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3.1.4.
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Anavid and Ahzakot Upituach hereby
acknowledge and agree that, notwithstanding anything to the
contrary contained in, or concerning, the Warrant, and in addition
to the other terms and conditions set forth in the Warrant, the
Warrant will become exercisable upon the occurrence at any time of
any of the events listed in Section 2 (i), (ii) or
(iii) of the Warrant, or else only: (a) following the
third (3 rd ) anniversary of the Closing Date,
and (b) upon Ahzakot Upituach becoming a party to the
Shareholders Agreement, as may be amended from time to time,
provided however that no such amendment to the Shareholders
Agreement, or an amendment to the Company’s Articles of
Association, shall be made without Ahzakot’s prior written
consent if such amendment specifically avoids or seeks to avoid the
observance or performance of any of the terms to be observed or
performed hereunder, or specifically impairs the economic interest
of Ahzakot under the terms of the Warrant, the Shareholders
Agreement and/or the Company’s Articles of Association,
provided however that Ahzakot hereby agrees that any amendment to
the Shareholders Agreement or to the Company’s Articles of
Association will not be deemed to breach the foregoing as long as
(i) any derogation from Ahzakot’s rights as shareholder
or impairment of the economic interest of Ahzakot that is made pari
passu with the rights of the other holders of Ordinary Shares (it
being understood that the increase of the share capital of the
Company, the issuance of additional Ordinary Shares, or the
issuance of shares or other securities of other classes having the
same or preferred rights, shall all be deemed, to the extent they
have been performed in accordance with the provisions of Section
11.3 of this Agreement, to be a change that is made pari passu with
the rights of the other holders of Ordinary Shares), or
(ii) the amendment is made pursuant to the terms and
conditions of a financing transaction in which the lead investor
(together with its Affiliates) is an arms length, bona fide,
non-Affiliate of TopSpin. For the removal of doubt, nothing in
(ii) shall prevent a shareholder of the Company from
participating in such financing.
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4.
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Representation and Warranties in
respect of the Company
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Anavid
represents and warrants to TopSpin as of the date hereof, and
acknowledges that TopSpin is entering into this Agreement in
reliance thereon, as follows with respect to the Company, provided
that all such representations and warranties are subject to the
provisions of Section 4.26 below:
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4.1.
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Corporate Structure
.
Schedule 4.1 sets forth a true and accurate
schematic representation of the Company, its shareholders and their
respective shareholders and Affiliates.
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4.2.
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Organization
. The Company is a
private company duly incorporated on September 6, 2001, and
validly existing under the laws of the State of Israel.
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4.3.
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Corporate Power and Authority;
Standing .
The Company has all requisite power and authority (corporate and
other) to own and operate its properties and assets, perform all
its obligations under all Contracts, and to carry on its business
as presently conducted and as proposed to be conducted. No action
has been taken or been omitted from being taken which could
reasonably be expected to preclude or prevent the Company from
conducting its business after the Closing as presently conducted
and as proposed to be conducted. Attached hereto as
Schedule 4.3 are true, correct and complete
copies of the Company’s Organizational Documents as in effect
on the date hereof, and all resolutions adopted by the
Company’s board of directors and/or shareholders since its
inception amending the Company’s Organizational Documents.
The Company is duly qualified to do business in Israel and does not
do business in any other jurisdiction.
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4.4.1.
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The Company has all requisite
power, authority (corporate and other) and capabilities to execute
and deliver this Agreement and all arrangements contemplated herein
and to consummate the transactions contemplated hereby.
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4.4.2.
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The execution and delivery by the
Company of this Agreement and all documents ancillary hereto have
been duly authorized by all requisite corporate action. This
Agreement, and obligations entered into and undertaken in
connection with the transactions contemplated hereby, constitute
the valid and legally binding obligations of the Company,
enforceable against it in accordance with their respective
terms.
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4.4.3.
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The execution, delivery and
performance by the Company of this Agreement and the consummation
by the Company of the transactions contemplated hereby will not,
with or without the giving of notice or the passage of time or
both,
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4.4.3.1.
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violate the provisions of any Law
applicable to the Company;
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4.4.3.2.
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violate the provisions of the
Organizational Documents of the Company;
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4.4.3.3.
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violate any Order;
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4.4.3.4.
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create any Lien or Other
Encumbrance or third party right upon any assets of the
Company;
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4.4.3.5.
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create grounds for the suspension,
revocation, impairment, forfeiture, or non-renewal of any permit,
license, authorization, or approval applicable to the Company, its
business or operations or any of its assets, including the letter
of approval ( ktav ishur ) of the Investment Center (
Merkaz Ha’hashkaot ), dated April 14, 2002 as
amended; or
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4.4.3.6.
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violate, conflict with or
constitute a default under any Contract.
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4.5.
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Consents . No consent, approval, order,
license, permit, action by, or authorization of or designation,
declaration, or filing with any Authority or any other Person,
whether under Law, Contract or otherwise, is required that has not
been, or will not have been, obtained by the Company prior to the
Closing in connection with the valid execution, delivery and
performance of this Agreement and all documents ancillary hereto
and the consummation of the transactions contemplated hereby and
thereby. Schedule 4.5 sets forth a complete and
accurate list of any and all consents, approvals, orders, licenses,
permits, actions, authorizations, designations, declarations, or
filings that the Company has or is required to obtain or to make in
connection with the valid execution, delivery and performance of
this Agreement and all documents ancillary hereto and the
consummation of the transactions contemplated hereby and
thereby.
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4.6.
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Conflicting Agreements
. The Company is not,
as a result of the nature of the business conducted or proposed to
be conducted by the Company or for any other reason, in violation
of (i) any fiduciary or confidential relationship,
(ii) any term of any Contract, including, for the removal of
doubt, any covenant relating to employment, patents, proprietary
information disclosure, non-competition or non-solicitation, which
may materially contravene, conflict with, or result in a material
violation or breach of, or give the Company or any other person the
right to accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Contract, or (iii) any Order to
which the Company or any of its property is subject. The Company
will not be, as a result of the execution and delivery of this
Agreement and all documents ancillary hereto and the consummation
of the transactions contemplated hereby and thereby, in violation
of any fiduciary or confidential relationship or any term of any
Contract, including, for the removal of doubt, any covenant
relating to employment, patents, proprietary information
disclosure, non-competition or non-solicitation, or any Order to
which the Company or any of its property is subject.
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4.7.1.
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On the date hereof and on the
Closing Date:
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4.7.1.1.
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The registered share capital of the
Company consists of NIS 1,610,100, divided into 100 Ordinary Shares
and 1,610,000 Management Shares.
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4.7.1.2.
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The issued and outstanding share
capital of the Company consists of 100 Ordinary Shares and
1,610,000 Management Shares, all of which have been duly registered
and validly issued and are fully paid up and
non-assessable.
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4.7.2.
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Except for the Warrant:
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4.7.2.1.
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There are no rights, options,
warrants, or other commitments, written or oral, to purchase or
acquire any equity securities of the Company, and there are no
securities convertible into, exchangeable or exercisable for or
evidencing the right to subscribe for equity securities of the
Company.
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4.7.2.2.
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The Company has not adopted or
approved any plan for the benefit of its officers, employees,
consultants or directors which requires or permits the issuance,
sale, purchase, or grant of any equity securities of the Company or
any other securities convertible into, exercisable or exchangeable
for or evidencing the right to subscribe for any such
securities.
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4.7.2.3.
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Neither the Company nor its current
shareholders are a party or subject to any agreement or
understanding, written or oral, and there is no agreement or
understanding, written or oral, between any third parties, that
affects or relates to the securities of the Company, except for the
Founders Agreement.
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4.8.
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Board of Directors
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4.8.1.
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The board of directors of the
Company consists of Mr. Tsvika Tsur, who is the chairman of
the board, and two (2) additional board members, whose names
are set forth in the Company’s shareholders resolution
confirmed as being duly adopted and binding on the Company by the
Company’s legal counsel, attached as Schedule
4.8.1 hereto.
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4.8.2.
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Other than as set forth herein and
in Schedule 4.8.2 , neither the Company nor its
shareholders are a party to any agreement, obligation or
commitment, written or oral, with respect to the number of its
directors, the composition of its board of directors or the
election of any individual or individuals to its board of
directors.
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4.8.3.
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The board of directors of the
Company has no committees.
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4.9.
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Company Registries and Minute
Books . The
Company delivered to TopSpin, prior to the signing hereof, accurate
and complete copies of all corporate, shareholder, director or
other records and registries required by Law that the Company
maintains, and all minute books, resolutions and summaries that are
in the Company’s possession in respect of meetings of
directors and shareholders of the Company since the time of its
incorporation and such are attached hereto as
Schedule 4.9 . Nothing in this Section 4.9
shall derogate from Section 4.26 below. Attached hereto as
Schedule 4.9 are true and accurate copies of the shareholders
and directors registries of the Company, both of which are correct
as of the date of this Agreement.
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4.10.
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Subsidiaries
. The Company has no
subsidiaries and does not own, control or participate in, directly
or indirectly, any interest in any legal entity or contractual
joint venture.
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4.11.
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Compliance . The Company is not in violation or
default of any provision of its Organizational Documents or any
Order to which it or any of its property is subject, and is not in
violation or default of any material provision of any license or
permit to which it is a party or which has been issued to the
Company or, of any provision of Law applicable to the Company, its
assets or its business. The Company has not received any notice
from any Authority claiming that the Company is in violation of or
otherwise not in compliance with any of the
aforementioned.
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4.12.
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Licenses and Permits
. Except for the
certificates, authorizations, licenses and permits (the “
Licenses and Permits ”) held by the Company as of the
date hereof, as listed on Schedule 4.12 , no
other License or Permit is material to or necessary for the conduct
of the Company’s business as conducted during the twelve (12)
month period prior to the date hereof, as presently conducted or as
proposed to be conducted. Each License and Permit held by the
Company as of the date hereof is in full force and effect. The
Company is now and has at all times in the past been in all
material respects in full compliance with each License and Permit
held by the Company and no violations are or have in the last three
(3) years been recorded by any Authority and/or Licensor in
respect thereof. No Proceeding is pending or, to the knowledge of
the Company or Anavid, threatened, to revoke, amend or limit any
License or Permit held by the Company as of the date hereof.
Without limiting the generality of the foregoing, the land on
which, and structures where, the offices and factory of the Company
are located are zoned for industrial use and may be used for the
purposes for which they are presently used. Anavid shall reimburse
the Company for any cost and/or expense in relation to the issue or
renewal of a business license ( ‘rishyon esek’ )
in the Company’s name for the operation of the Company in its
existing factory (and the issue of any documentation required for
that purpose), if the aggregate costs and expenses shall exceed US
$10,000.
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4.13.
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Financial Statements
.
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4.13.1.
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True, accurate and complete copies
of the Company’s audited financial statements for the years
ended December 31, 2003, 2004 and 2005, December 31, 2006
and December 31, 2007 (the “ 2007 Financial
Statements ”) and a trial balance, and a draft of the
cash flow statements for the year ended December 31, 2008 (the
“ 2008 Financial Statements ”) (the 2007
Financial Statements and the 2008 Financial Statements, together,
the “ Financial Statements ”) have been provided
to TopSpin prior to date hereof and are attached as
Schedule 4.13.1 hereto.
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- 9 -
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4.13.2.
|
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The Financial Statements have been
prepared in accordance with Israeli generally accepted accounting
principles, applied in a consistent manner as in previous years
(other than as may be otherwise indicated in the notes to the
Financial Statements), and accurately present the financial
position of the Company at such dates and the results of its
operations for the periods then ended. The Financial Statements are
true and correct in all material respects, were not affected by any
extraordinary, exceptional or nonrecurring item and comply with the
requirements of all applicable Laws. Without derogating from the
generality of the foregoing, at such dates the Company did not have
any material liabilities, contingent or otherwise, and did not
provide guarantees or indemnities to any Person, except as and to
the extent reflected in the Financial Statements. There has been no
significant change in the Company’s accounting policies
during or following the periods covered by the Financial Statements
except as described in the notes to the Financial
Statements.
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4.13.3.
|
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Except to the extent reflected and
reserved against either in the Financial Statements, or in
Schedule 4.13.3 hereto, which will be reappended
hereto, in updated form, by Anavid at Closing (it being understood
that, as a condition to Closing, any disclosures made in such
updated Schedule that reflect a material adverse change to the
Company’s financial situation, relative to its financial
situation as disclosed to TopSpin up until the date of this
Agreement must be acceptable to TopSpin, in its sole and absolute
discretion), the Company does not have any liability or obligation,
secured or unsecured, whether accrued, absolute, contingent,
unasserted or otherwise, which is material to the financial
condition of the assets, properties, business or operation results
of the Company.
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4.14.1.
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The Company has accurately prepared
and timely filed all Tax returns, reports, elections, and
information statements (“ Returns ”) required to
be filed by it, which Returns are true, correct and complete in all
material respects, and has paid all Taxes, whether or not disputed,
required to be paid as shown on such Returns. No deficiency
assessment or proposed adjustment for any Tax is pending or has
been threatened and the Company and Anavid have no knowledge of any
proposed liability for any Tax to be imposed. The Returns were
audited and approved by the Israeli tax authorities for the years
through 2002. Returns for years which have not been audited and
approved by the Israeli tax authorities are attached hereto as
Schedule 4.14.1 .
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- 10 -
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4.14.2.
|
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The Company has withheld all Taxes,
has deposited such amounts, and made all such payments (including
on account of amounts withheld) to all Tax Authorities, as required
pursuant to Law (whether disputed or not), including, to the
Israeli National Insurance Institute in respect of wages, salaries
and other payments to employees, officers and directors, in respect
of advances or prepayments on account of undeducted and/or
non-deductible expenses, and regarding Taxes required to be
withheld from any Person. Any and all amounts that would be
properly attributable to the Company in respect of advances or
prepayments on account of undeducted and/or non-deductible expenses
have been made by the Company and recorded in the Company’s
files by the relevant Tax Authorities.
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4.14.3.
|
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The Tax affairs of the Company have
never been subject to any investigation or enquiry by any Tax
Authority (other than routine questions or normal field tax
audits), and no Tax Authority has indicated that it intends to
investigate the Company. There are no circumstances which will or
may, whether by lapse of time or the issue of any notice of
assessment or otherwise, give rise to any dispute with any relevant
Tax Authority in relation to the Company’s liability or
accountability for Tax under currently enacted statutes and
regulations, any claim made by it, any relief, deduction, or
allowance afforded to the Company, or in relation to the status or
character of the Company under or for the purpose of any provision
of any legislation relating to Tax.
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4.14.4.
|
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All Taxes due and payable by the
Company have been fully and timely paid. The Company is not
currently liable for any Tax other than ordinary periodic payments
of withholding tax and VAT.
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4.14.5.
|
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No Indebtedness
. Other than the Anavid
Loan and as set forth on Schedule 4.14.5 hereto,
the Company is not party to any loan, credit or similar agreements.
As of the Closing, the Company has discharged, paid or otherwise
finally settled any and all financial indebtedness owing by the
Company to Wolfson.
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4.14.6.
|
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Except as disclosed on
Schedule 4.14.6 , the Company (i) has no
obligations or liabilities (absolute or contingent) as guarantor,
surety, cosigner, endorser, co-maker, indemnitor, or otherwise
respecting the obligations or liabilities of any Person,
(ii) does not have any outstanding, including post-dated,
checks, promissory notes or money orders (the “ Company
Checks ”), which have been issued by or on behalf of the
Company (including Company Checks provided to guarantee payment)
and which are not reflected in the 2008 Financial Statements, and
(iii) has not transferred, assigned and/or deposited, to or
with any third party (the “ Receiving Party ”),
any checks, promissory notes or money orders received by the
Company from another third party, including for the purposes of
covering current and/or future liabilities of the Company to such
Receiving Party and/or for the purposes of guaranteeing payment by
the Company to such Receiving Party and/or in order to receive
funds from such Receiving Party. The Company has sufficient cash in
its bank accounts to cover all such Company Checks.
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- 11 -
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4.15.
|
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Since December 31, 2008, the
Company has not made or resolved to make any distributions (as such
term is defined in the Companies Law) or any other payments and/or
repayments to Anavid, its shareholders and/or Affiliates and/or
Ahzakot Upituach (including in respect of the Anavid Loan) other
than payments for services rendered to the Company in the ordinary
course of its business in the same amounts charged prior to the
date hereof. Since December 31, 2008, the Company did not make
or did not resolve to make any distributions (as such term is
defined in the Companies Law) and no payments and/or repayments
(including on account of any distributions) to Anavid, its
shareholders and/or Affiliates and/or Ahzakot Upituach (including
in respect of the Anavid Loan) were made by the Company other than
as reflected on Schedule 4.15 hereto.
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4.16.
|
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Tangible Property and
Assets .
|
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4.16.1.
|
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Schedule 4.16.1
hereto includes an
accurate and complete list of all tangible property and assets
owned or leased by the Company which are material to its business
(the “ Tangible Property ”), specifically
stating, for each such item of tangible property, whether it is
owned or leased by the Company.
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4.16.2.
|
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Except as set forth in
Schedule 4.16.2 hereto:
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4.16.2.1.
|
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All Tangible Property is in good
operating condition and repair, normal wear and tear excepted, is
currently used by the Company in the ordinary course of its
business, and normal maintenance has been consistently performed
with respect to all Tangible Property.
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4.16.2.2.
|
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All items of Tangible Property
owned by the Company are free and clear of all Liens and Other
Encumbrances.
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4.16.2.3.
|
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With respect to all items of
Tangible Property leased by the Company, the Company is in
compliance with such leases and, the Company holds a valid
leasehold interest therein free and clear of all Liens and Other
Encumbrances.
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4.16.3.
|
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The Company has the right to use
all Tangible Property to the full extent required for the purposes
of the business of the Company as presently conducted and as
proposed to be conducted, without any limitation
whatsoever.
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- 12 -
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4.17.
|
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Intellectual Property
.
|
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4.17.1.
|
|
In this Agreement, “
Intellectual Property ” shall mean all intangible,
proprietary and intellectual property and rights,
including:
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4.17.1.1.
|
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patents, trademarks, service marks,
trade names and copyrights, moral rights, and applications,
extensions, licenses and rights with respect to the
foregoing;
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4.17.1.2.
|
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goodwill and reputation, trade
secrets, know-how, inventions, designs, processes, works of
authorship, computer programs, domain names, logos and technical
data and rights with respect to the foregoing; and
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4.17.1.3.
|
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information used by the Company in
connection with its business, including, without limitation, data
and databases, distributor lists, supplier lists, customer lists,
manufacturing information and methods, and processes (“
Business Information ”).
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4.17.2.
|
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There is no Intellectual Property
owned by the Company, with the exception of registered trademarks
no. 182879 and 182880 (registered in the Israeli Registrar of
Designs, Patents and Trademarks), Business Information, goodwill
and reputation, and know-how received from Wolfson, to the extent
so received.
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4.17.3.
|
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There are no items of Intellectual
Property licensed by the Company, nor has the Company needed such
licenses for the purpose of the business of the Company as
currently conducted.
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4.17.4.
|
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To the best knowledge of the
Company and Anavid, after due inquiry, there is no third party
violating any of the Company’s Intellectual
Property.
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4.17.5.
|
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To the best knowledge of the
Company and Anavid, after due inquiry, in the conduct of the
business of the Company as currently conducted and as proposed to
be conducted, the Company has not violated and will not violate any
third party Intellectual Property. Neither the Company nor Anavid
have received any communications alleging, nor are any of them
aware of any basis for such allegations, that the Company has
violated or is about to violate any third party Intellectual
Property.
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4.17.6.
|
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The Company and Anavid do not
believe that for the purpose of the business of the Company as
currently conducted and as proposed to be conducted, it is or may
become necessary to utilize any third party Intellectual Property
not currently licensed by the Company.
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- 13 -
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4.17.7.
|
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Any and all Intellectual Property,
except for Intellectual Property received from Wolfson, which has
been developed or is currently being developed by the Company
(without derogating from the representation contained in Section
4.17.2 above), including, without limitation, by any employee or
consultant of the Company or by any other third party retained by
the Company for this purpose, which, if at all:
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4.17.7.1.
|
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has been developed or is currently
being developed with the use of any of the Company’s
equipment, supplies, facilities or trade secret information;
or
|
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4.17.7.2.
|
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results, directly or indirectly,
from any work performed by employees or consultants of the Company
or by any other third parties retained by the Company,
|
is to the best
knowledge of the Company and Anavid, and will, to the best
knowledge of the Company and Anavid, remain the sole and exclusive
property of the Company.
The Company has
not granted to any of its employees, consultants or any third party
any proprietary rights in or to any Intellectual
Property.
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4.17.8.
|
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Subject to the provisions of
Section 4.20.3 below, the Company has taken security measures which
it deemed necessary to protect the secrecy, confidentiality and
value of all its Intellectual Property, which measures are
reasonable and customary in the industry in which the Company
operates. Without derogating from the above, the Intellectual
Property was not presented to any third party without such third
party undertaking customary written confidentiality restrictions
and restrictions as to use.
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4.18.1.
|
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Schedule 4.18.1
includes a true and
complete list and description of all material Contracts (the
“ Company Contracts ”). True and correct copies
of all Company Contracts that are in writing have been delivered to
TopSpin prior to the date hereof and are attached hereto in
Schedule 4.18.1. and if such Contracts are not in writing then
true and correct descriptions of all of the material terms of such
Contracts have been provided to TopSpin in writing prior to the
date hereof and are attached hereto in
Schedule 4.18.1.
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4.18.2.
|
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Each Company Contract is a valid
and binding agreement of the Company, enforceable by or against the
Company in accordance with its terms, and the Company and Anavid do
not have any knowledge that any Company Contract is not a valid and
binding agreement of the other parties thereto.
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4.18.3.
|
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The Company is in compliance in all
material respects with the provisions of the Company Contracts and
the Company and Anavid have no reason to believe that it will not
be able to fulfill fully and in a timely manner all of its
obligations under the Company Contracts.
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4.18.4.
|
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The Company and Anavid have not
received notice that the Company is in breach of or default under
any Company Contract, and no event has occurred which with the
passage of time, the giving of notice or otherwise would constitute
such a breach or default, or would result in a loss of rights by
the Company or in the creation of any Lien or Other Encumbrance or
other third party right in or to any of its assets.
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- 14 -
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4.18.5.
|
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To the best knowledge of the
Company and Anavid, after due inquiry, there is no existing breach
or default by any other party to any Company Contract, and no event
has occurred which with the passage of time, the giving of notice
or otherwise would constitute a breach or default, which may
materially contravene, conflict with, or result in a material
violation or breach of, or give the Company or any other person the
right to accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Company Contract.
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4.18.6.
|
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The Company is not restricted by
any Company Contract from carrying on its business as presently
conducted or as proposed to be conducted, anywhere in the
world.
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4.19.1.
|
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Full and accurate copies of all
insurance policies of the Company since its incorporation
(including expired policies) have been delivered to TopSpin. A list
of such policies is included in Schedule 4.19.1
hereto. To the best of the Company and Anavid’s knowledge,
after due inquiry, the Company’s existing insurance policies
and the policies issued in previous periods provide sufficient
coverage against such risks, casualties and contingencies and of
such types and amounts as are reasonable and customary for the size
and scope of the Company’s businesses as of its
incorporation, as currently conducted and as proposed to be
conducted, including but not limited to any act or omission of the
Company up until the Closing.
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4.19.2.
|
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The Company has complied with all
conditions of such policies and has not done or suffered anything
to be done which has rendered or could be reasonably expected to
render any polices of insurance taken out by it void or voidable or
which could be reasonably expected to result in an increase in
premiums.
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4.19.3.
|
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There is no claim outstanding under
any of such policies, nor are there, to the best of the Company and
Anavid’s knowledge, after due inquiry, any currently existing
circumstances up to and through the Closing Date likely to give
rise to such claim.
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4.20.
|
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Employee Relations
.
|
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4.20.1.
|
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The Company is in compliance in all
material respects with all relevant employment laws, regulations
and collective agreements, and there are no arrears in the payment
of wages, social security taxes, withholding taxes etc.
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- 15 -
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4.20.2.
|
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Schedule 4.20.2
hereto sets forth a
true, correct and complete (i) list of the current payroll of the
Company, including salary, wage rates, the date of the start of
employment, number of vacation days entitled to, number of
accumulated vacation days, bonuses and benefit plans of each of the
Company’s employees and details regarding such benefit plans
and other material terms of employment, (ii) confirmation from
the issuer of all pension and insurance plans or other arrangements
for all current employees, (iii) copy of all employment
agreements with current employees of the Company, and
(iv) list of all payments made to the Kibbutz for services
(which are also described on Schedule 4.20.2, rendered by
Kibbutz members who have dedicated their business time to the
provision of such services to the Company (the “ Kibbutz
Members ”) as part of the current services agreement of
the Company with the Kibbutz.
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4.20.3.
|
|
The Company employees who had or
are likely to have access to confidential or proprietary
information of the Company have executed and delivered employment
agreements including, inter alia , customary provisions
regarding non-disclosure, non-competition and giving the Company
full ownership of intellectual property rights. Notwithstanding the
foregoing, Kibbutz members through whom the Kibbutz currently
provides services to the Company and had or are likely to have
access to confidential or proprietary information of the Company
have not signed agreements which include, inter alia ,
customary provisions regarding non-disclosure, non-competition and
giving the Company full ownership of intellectual property
rights.
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4.20.4.
|
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No employer-employee relations
exist or have ever existed between the Company and any of the
members of the Kibbutz (including the Kibbutz Members) and/or the
Kibbutz.
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4.20.5.
|
|
All of the Company’s
liabilities to existing or former employees (or beneficiaries
thereof), in respect of the period prior to the Closing, ,
including, liabilities in respect of any payments, rights or
benefits arising out of or related to employment relations,
including salary, payments equivalent to salary, bonuses, leave pay
and redemption of such, sick pay, recuperation pay ( dmey
havra’a ), payments pursuant to Hours of Work and Rest
Law, payments pursuant to Section 5 of the Wage Protection
Law, advance notice pay, severance pay, compensation for holding
back salary and/or severance pay and any other kind of compensation
regarding employment relations and/or termination thereof,
providence, pension, fringe benefits and social benefits, are fully
paid and/or are fully funded and deposited in funds and/or covered
by insurance policies and/or sufficient allowance was made therefor
in the 2008 Financial Statements, other than liabilities with
regard to current one-month salary or current reimbursable business
expenses. All of the Company’s liabilities to existing or
former consultants (or beneficiaries thereof), all in respect of
the period prior to the Closing, are fully paid up, other than
liabilities with regard to current one-month fees or current
reimbursable business expenses.
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- 16 -
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4.20.6.
|
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Any liability on account of
severance pay that was, is or may be due to the Company’s
employees and/or any other liability of the Company due to the
termination of employer-employee relations, according to the
Severance Pay Law 5723-1963 and/or any other agreement applicable
to the Company, collective or other, and/or any employment
agreement, is fully funded and/or deposited in funds and/or covered
by insurance policies for the period up until the Closing. The
Company is not aware of any circumstance whereby any employee might
reasonably make a claim for compensation in respect of termination
of employment, beyond any statutory severance pay to which such
employee would be entitled, which, as aforesaid is fully funded up
until the Closing.
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4.20.7.
|
|
All of the Company’s
liabilities to existing or former Kibbutz Members (or beneficiaries
thereof) and/or to the Kibbutz (including in respect of the Kibbutz
Members), are fully paid up.
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4.20.8.
|
|
The Company has no liabilities to
the Kibbutz with respect to services rendered through the Kibbutz
Members or any other members of the Kibbutz.
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4.21.
|
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Governmental Benefits
.
Schedule 4.21 hereto includes a true and
complete list and details of all grants, loans, tax relief or other
benefits received by the Company from the government of the State
of Israel or any agency thereof, or from any non-Israeli
governmental or administrative agency or for which the Company has
applied or received approval therefor. The Company is in compliance
with all provisions, terms and conditions of such benefits, the
failure of which would reasonably be expected to hinder the Company
from receiving the grants, loans, tax relief or other benefits
contemplated thereby. The Company has not received any notice
relating to the revocation or modification of any such grants,
loans, tax relief or other benefits contemplated thereby or of any
Proceeding relating to any such revocation or
modification.
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4.22.
|
|
Litigation . No Proceeding is pending nor, to
the Company’s and Anavid’s best knowledge, after due
inquiry, threatened against the Company or any of the
Company’s officers, directors or employees (in their capacity
as such) or any of the Company’s assets, including, without
limiting the generality of the foregoing, a Proceeding which
adversely affects or challenges the legality, validity or
enforceability of the execution, delivery and performance of this
Agreement and all documents ancillary hereto and the consummation
of the transactions contemplated hereby and thereby, nor are the
Company and Anavid aware of any basis for the foregoing. There is
no Proceeding initiated by the Company currently pending or that
the Company intends to initiate. Without derogating from the
generality of the foregoing, there are no pending, or, to the best
knowledge of the Company and Anavid, after due inquiry, threatened,
claims under or pursuant to any warranty, whether expressed or
implied, on products or services sold or supplied by the Company
and except as set forth in Schedule 4.22 , there
has never been any material defects in, failures to warn, or
breaches of warranties or representations with respect to, any
product manufactured, shipped, sold or delivered by the
Company.
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- 17 -
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4.23.
|
|
No Broker . The Company has no contract,
arrangement or understanding with any broker, finder or person
acting in a similar capacity, with respect to the transactions
contemplated by this Agreement and no such person or entity is or
will be entitled to a finder’s fee or any other commission or
other similar fee, directly or indirectly.
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4.24.
|
|
No Material Adverse
Effect .
Since December 31, 2007, there has not been any Material
Adverse Effect to the Company, other than as reflected in the
Financial Statements.
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|
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4.25.
|
|
The Initial Balance
. The outstanding
balance of the Anavid Loan, including principal and any linkage and
interest accrued thereon, as of the date hereof, is in the amount
specified on Schedule 1.3 to this Agreement (such amount to be
updated at Closing).
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4.26.
|
|
Born Free . Material disagreements and/or
disputes have arisen between the Company and its most material
customer, Born Free Holding Ltd (“ Born Free ”),
including in relation to sums which the Company claims are owing to
it by Born Free, claims made by the Austrian mold supplier in
connection with the mold supplied by it to the Company for the
manufacture of the Born Free product and claims made by Born Free
against the Company and its products (the “ Born Free
Situation ”). The Born Free Situation could give rise to
a Material Adverse Effect. Anavid has delivered to TopSpin details
of the Born Free Situation and copies of correspondence between the
Company and Born Free. TopSpin hereby confirms (and this will be
deemed a representation and warranty delivered by TopSpin) that it
is aware of the foregoing and of the Born Free Situation. If
TopSpin shall reach any settlement with Born Free and/or the mold
supplier, including for payment of any compensation or other
benefit to Born Free and/or the mold supplier, then this will be at
the expense of TopSpin and/or at the expense of the Company, but
not Anavid or Ahzakot. Claims by Born Free against the Company
and/or Anavid in respect of matters that do not relate to the
manufacture and sale of bottle teats and valves and are therefore
outside the ordinary course of business — such as the
manufacture and sale of dies and other such circumstances —
are not included in the Born Free Situation (in this clause:
“ Extraordinary Matters ”). Resolution of
Extraordinary Matters shall be by means of negotiations between
TopSpin and Born Free, with any outcome that would involve payment
(including, without limitation, payment in kind, set off, waiver of
amounts due to the Company and other similar arrangement) being
made to Born Free and/or the mold supplier in excess of 180,000
Euros being subject to Anavid’s prior written approval which
shall not be unreasonably withheld, prior to Closing. If any
payment is made to Born Free in respect of Extraordinary Matters
prior to or after the Closing, then this shall be made by the
Company, by such means as it may see fit (including all other forms
of equity investments, shareholders loans and other types of
personal liability), but such payments (i.e. any payments up to
180,000 Euros and, in addition, any payments in excess of 180,000
for which Anavid provided its prior consent) shall be deducted in
full from amounts due to Anavid under Sections 11.5 — 11.7
below. If Born Free decides, prior to Closing, to terminate its
relations with the Company, at no fault of TopSpin, then either
Party may, within 15 days of becoming aware of such
termination, cancel this Agreement, with neither Party having any
claim against the other in this respect (but without releasing the
parties from liability for a breach of this Agreement prior to the
date of such termination). Without derogating from the above
provisions in relation to Extraordinary Matters, the Parties agree
that TopSpin shall have no claim, for indemnification or otherwise,
against Anavid and/or Ahzakot in relation to the Born Free
Situation, and shall not otherwise be entitled in connection with
the Born Free Situation to reduce any payment under this
Agreement.
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- 18 -
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4.27.
|
|
Disclosure . The information concerning the
Company set forth in this Agreement and any document, statement or
certificate furnished or to be furnished to TopSpin pursuant hereto
by the Company or Anavid, do not contain any untrue statement of a
material fact or omit any material fact necessary to make the
statements and facts contained herein and therein not false and
misleading. Copies of all documents heretofore or hereafter
delivered or made available to the TopSpin pursuant to this
Agreement were and will be complete and accurate copies of such
documents. There is no document, fact or information, individually
or in the aggregate, relating to the business, prospects, condition
(financial or otherwise), affairs, operations, assets or properties
of the Company that has not been delivered or disclosed to TopSpin
in writing by the Company and which is reasonably necessary to
enable TopSpin to make its investing decision.
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5.
|
|
Representations of each of the
Parties
|
Each of
TopSpin, Anavid and Ahzakot Upituach hereby, severally and not
jointly, represents, warrants and covenants to the other Parties
that, as of the date hereof, and acknowledges that the other
Parties hereto are entering into this Agreement in reliance
thereon, as follows with respect to such Party:
|
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5.1.1.
|
|
Such Party is validly existing
under the laws of the State of Israel.
|
|
|
5.1.2.
|
|
Such Party has all requisite power,
authority (corporate and other) and financial capabilities to
execute and deliver this Agreement and all arrangements
contemplated herein and to consummate the transactions contemplated
hereby.
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5.1.3.
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The execution and delivery by such
Party of this Agreement have been duly authorized by all requisite
corporate action. This Agreement, and obligations entered into and
undertaken in connection with the transactions contemplated hereby,
con
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