Exhibit 10.6
EXECUTION COPY
SHARE PURCHASE AGREEMENT
This Share Purchase Agreement (the "AGREEMENT") is made and entered into as of
this 6th day of April, 2000, by and among LIOR SALANSKY of 19 Snir St. Yokne-am
Elit 20692, Israel ("SALANSKY"), OSCAR GRUSS & SON INCORPORATED, with offices at
74 Broad St., New York, NY 10004-2247, YARON AMIR of 73 Kalaniot St., Givat
Avni, ILAN MELAMED, and the individuals listed in Schedule 1.3 attached hereto
(collectively the "PURCHASERS", and each of them individually a "PURCHASER").
IN CONSIDERATION of the premises and the representations, warranties, covenants
and conditions set forth hereinafter, and intending to be legally bound, the
parties hereby agree as follows:
ARTICLE I
1. PURCHASE AND SALE OF SHARES
1.1 Purchase and Sale of Shares. At the Closing (as such term and other
terms are defined in Article 1.3 below), Salansky will sell to the
Purchasers 23,412 Voting Ordinary Shares of the Mind CTI Ltd.
("COMPANY"), par value NIS 0.01 per share, free and clear of any liens,
charges, pledges, encumbrances or third party interests of any kind
(the "PURCHASED SHARES"), at a price of $104.625 per share, for a total
purchase price for the Purchased Shares of $2,449,481. The Purchased
Shares shall have the rights, terms, preferences and privileges set
forth in the Company's Amended Articles of Association as recently
adopted.
1.2. Adjustment. The terms of Article 21.4 of the Company's Amended Articles
of Association (the "AMENDED ARTICLES") shall (inversely) apply to the
Purchased Shares, so that if the Company consummates a QIPO or
Corporate Sale (as such terms are defined in the Amended Articles)
within twelve (12) months of the date hereof, at a specified valuation,
the price per share of the Purchased Shares will be retrospectively
adjusted (in a manner exactly inverse to the adjustment of the
Applicable Conversion Value under Article 21.4, hereinafter: the
"RETROSPECTIVE PRICE PER SHARE") so that, pursuant to the computation
set forth below, as many as 29,265 Ordinary Shares shall be deemed to
have been sold to the Purchasers by Salansky under this Agreement. For
the purpose of implementing the arrangement contemplated herein, the
parties hereto shall enter into an escrow agreement concurrently with
the execution of this Agreement (the "ESCROW AGREEMENT"), by which an
aggregate number of 5,853 Ordinary Shares (in addition to
the Purchased Shares) will be bestowed by Salansky with the trustee,
designated under the Escrow Agreement (the "TRUSTEE"), and transferred
to the Purchasers for no additional consideration in a number equal to
the product of (i) 5,853 and (ii) a fraction, the numerator of which is
the difference between $104.625 and the Retrospective Price Per Share
after giving effect to such adjustment upon a QIPO or a Corporate Sale
in accordance with (and inverse to) the computation set forth in
Article 21.4 of the Amended Articles (down to a minimal Retrospective
Price Per Share of $83.700), and the denominator of which is the
difference between $104.625 and $83.700.
1.3. Closing. Subject to the satisfaction or waiver of the conditions set
forth in Articles 5 and 6 hereof, the purchase of the Purchased Shares
shall be made at a closing (the "CLOSING") to be held at the offices of
Ravillan, Volovelsky, Dinstein, Sneh & Co. at 76 Rothschild Blvd.,
Mozes House, Tel-Aviv, Israel, or by facsimile without requiring the
physical presence of the parties, at 10:00 A.M. on April 6th, 2000, or,
if later, a date specified by the Purchasers (the "CLOSING DATE").
Payment for the Purchased Shares shall be by wire transfer payable in
immediately available funds within 72 hours of the Closing (either in
U.S. Dollars or their NIS equivalent, computed according to the
representative exchange rate promulgated by the Bank of Israel
immediately prior to such transfer, and made to either a US or Israeli
bank account, at each Purchaser's discretion, and as further
coordinated with Salansky). Each Purchaser shall pay that amount for
the Purchased Shares being acquired by it at the Closing to Salansky as
described on Schedule 1.3 hereof. At the Closing, Salansky will deliver
to the Purchasers duly executed transfer deeds representing the
Purchased Shares purchased by each Purchaser, issued in such names as
may be requested by each Purchaser together with share certificates
executed in blank, such that the Purchasers may present such
certificates to the Company for issuance of the shares represented by
such certificates in the names of the Purchasers as may be requested by
the Purchasers.
1.4. Ordinary Course of Business. Between the date of execution and delivery
of this Agreement and the Closing Date, Salansky undertakes to make his
best effort to cause the Company to comply with all the obligations set
forth in Article 1.6 of the Share Purchase Agreement between the
Company, Salansky, other principal shareholders of the Company and a
group of investors dated March 30, 2000 (the "SUMMIT INVESTMENT
AGREEMENT").
ARTICLE II
2. REPRESENTATIONS AND WARRANTIES OF SALANSKY
2.1. Correctness of Previous Representations. In order to induce the
Purchasers to purchase the Purchased Shares, Salansky represents and
warrants that, as a principal shareholder of the Company, he has no
reason to believe that any of the representations and warranties made
by the Company under Article 2 of the Summit Investment Agreement (and
any representation or warranty made by any of the Principal
Shareholders, as defined therein) (i) has been rendered untrue,
incorrect or incomplete in any respects since the closing of the
transaction contemplated therein or (ii) shall not remain true, correct
and complete in all material respects as of the Closing; except in each
case for those representations and warranties that address matters only
as of a particular date or only with respect to a specific period of
time.
2.2. Authorization. Salansky has full legal capacity and unrestricted power
to execute and deliver this Agreement, and any other agreements or
instruments executed by him in connection herewith or therewith and to
consummate the transactions contemplated herein or therein. The sale of
the Purchased Shares does not require any further action by Salansky or
the Company and is not and will not be subject to any veto right,
preemptive right, right of first refusal, tag-along right or the like.
This Agreement and any other agreements and instruments executed by
Salansky in connection herewith or therewith, will each be a valid and
binding obligation of Salansky, enforceable in accordance with its
terms, except as enforcement thereof may be limited by bankruptcy or
other similar laws relating to or affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject to
general principles of equity.
ARTICLE III
3. PURCHASERS' REPRESENTATIONS
Each Purchaser hereby represents and warrants to Salansky as follows:
3.1. This Agreement and any other agreements and instruments executed by
such Purchaser in connection herewith or therewith will each be a
legal, valid and binding obligation of such Purchaser, enforceable
against such Purchaser in accordance with its terms;
3.2. Oscar Gruss & Son Incorporated ("OSCAR GRUSS") represents that it is
acquiring the Purchased Shares solely for its own account as an
investment or on behalf of certain individuals and entities. Each of
the other Purchasers represents that he is purchasing the Purchased
Shares for his own account as an investment, and does not intend to
distribute such shares to any third party.
ARTICLE IV
4. CONDITIONS OF PURCHASERS' OBLIGATIONS
4.1. Effect of Conditions. The obligations of the Purchaser to purchase and
pay for the Purchased Shares at the Closing shall be subject at its
election to the satisfaction of each of the conditions stated in the
following Sections of this Article.
4.2. Representations and Warranties. The representations and warranties
contained in this Agreement shall be true and correct in all material
respects on the Closing Date with the same effect as though made on and
as of that date.
4.3. Performance. All parties to the Summit Investment Agreement shall have
performed and complied in all material respects with all of the
agreements, covenants and conditions contained in such agreement and
the related agreements required to be performed or complied with by
them at or prior to such agreement's closing date.
4.4. No Material Adverse Changes. The business, properties, assets or
condition (financial or otherwise) of the Company shall not have been
materially adversely affected since the date of this Agreement, whether
by fire, casualty, act of God or otherwise, and there shall have been
no other changes in the business, properties, assets, condition
(financial or otherwise), management or prospects of the Company or the
Mind Subsidiary that would have a material adverse effect.
4.5. Consents and Waivers. Salansky shall have obtained all consents or
waivers (if any) necessary to execute this Agreement and the other
agreements and documents contemplated herein, to issue the Purchased
Shares, and to carry out the transactions contemplated hereby and
thereby. All corporate and other action and governmental filings
necessary to effectuate the terms of this Agreement and other
agreements and instruments executed and delivered by Salansky in
connection herewith shall have been made or taken, including, without
limitation:
4.5.1. Validly executed certificates representing the Purchased Shares,
issued in the name of the Purchasers in accordance with the
allocation set forth in Schedule 1.3.
4.5.2. Validly executed transfer statements and transfer deeds of the
Purchased Shares in the name of the Purchasers, in accordance with
the allocation set forth in Schedule 1.3.
ARTICLE V
5. CONDITIONS OF SALANSKY'S OBLIGATIONS
5.1. Effect of Conditions. The obligation of Salansky to sell the Purchased
Shares shall be subject at his election to the satisfaction of each of
the conditions stated in the following Sections of this Article.
5.2. Representations and Warranties. The representations and warranties of
the Purchasers contained in this Agreement shall be true and correct in
all material respects on the Closing Date with the same effect as
though made on and as of that date
5.3. Performance. The parties that had purchased shares under the Summit
Investment Agreement shall have performed and complied in all material
respects with all of the agreements, covenants and conditions contained
in such agreement required to be performed or complied with by them at
or prior to the closing thereof.
ARTICLE VI
INDEMNIFICATION
6.1. Survival of Representations and Warranties. The representations and
warranties contained in this Agreement shall survive the Closing until
the earlier of (i) ninety (90) days after receipt by the Purchasers of
audited financial statements for the Company for its year ending
December 31, 2001, or (ii) the consummation of an initial public
offering of the securities of the Company pursuant to a registration
statement filed under the Securities Act of 1933, as amended.
6.2. Indemnification of Purchasers. Salansky hereby agrees to indemnify and
hold the Purchasers and their respective directors, officers,
employees, agents, successors and assigns (collectively, the "PURCHASER
INDEMNIFIED PARTIES") harmless from and against (i) any and all losses,
liabilities, obligations and damages, including any interest thereon
(collectively, "LOSSES") based upon, attributable to or resulting from
any inaccuracy in or breach of any representation or
warranty of Salansky set forth in Articles 2 hereof, or any
representation or warranty contained in any other agreement or
certificate delivered by or on behalf of the Salansky pursuant to this
Agreement, to be true and correct; (ii) any and all Losses based upon,
attributable to or resulting from the breach of the covenant contained
in Section 1.4; and (iii) any and all costs, penalties and expenses
(including attorneys' and other professionals' fees and disbursements),
including any interest thereon (collectively, "EXPENSES"), incident to
any Losses, with respect to which indemnification is provided under
clauses (i) and (ii) above. .
6.3. Indemnification of Salansky. The Purchasers hereby agree that each
Purchaser shall indemnify and hold Salansky harmless from and against
(i) any and all Losses based upon, attributable to or resulting from
any inaccuracy or breach by such Purchaser of any representation or
warranty of such Purchaser set forth in Article 3 hereof, or any
representation or warranty contained in any other agreement or
certificate delivered by or on behalf of such Purchaser pursuant to
this Agreement, to be true and correct; and (ii) any and all Expenses
incident to any Losses for which indemnification is sought hereunder.
6.4. Indemnification Procedure. The indemnification procedure in the even
that any legal proceedings shall be instituted or that any claim or
demand shall be asserted by any person in respect of which payment may
be sought under Section 6.2 or 6.3 hereof shall be identical to the
procedure set forth in Article 9.4 of the Summit Investment Agreement,
hereby incorporated by reference with such changes in the context as
are necessary to substitute the Company and the Principal Shareholders
by Salansky and the Purchasers thereunder by the Purchasers hereunder.
6.5. Limitations. Notwithstanding the foregoing provisions, no amounts shall
be payable as a result of a claim under Section 6.2 or 6.3 in respect
of a misrepresentation or a breach of a warranty unless or until the
indemnified party shall have suffered, incurred, sustained, or become
subject to Losses and Expenses in excess of $500,000 in the aggregate
(whereas, for the purpose of examining whether the total Loss of any
indemnified party had exceeded $500,000, any Losses and Expenses
incurred by any indemnified party under the Summit Investment Agreement
shall be added to Losses and Expenses incurred under this Agreement),
in which case the indemnified party shall be entitled to seek indemnity
for all Losses and Expenses incurred irrespective of amount.
ARTICLE VII
7. MISCELLANEOUS
7.1. Parties in Interest. Except as otherwise set forth herein, all
covenants, agreements, representations, warranties and undertakings
contained in this Agreement shall be binding on and shall inure to the
benefit of the parties hereto and the respective successors and assigns
of the parties hereto.
7.2. Amendments and Waivers. Amendments or additions to this Agreement may
be made, and compliance with any term, covenant, agreement, condition
or provision set forth herein may be omitted or waived (either
generally or in a particular instance and either retroactively or
prospectively) upon the written consent of the Company and the
Purchasers holding a majority of the Purchased Shares. Prompt notice of
any such amendment or waiver shall be given to any party who did not
consent thereto. This Agreement (including the Schedules and Exhibits
annexed hereto, which are an integral part of this Agreement), and the
other agreements executed in connection herewith together constitute
the full and complete agreement of the parties with respect to the
subject matter hereof and thereof.
7.3. Notices. All notices, requests, consents, reports and demands shall be
in writing and shall be hand delivered, sent by facsimile or other
electronic medium, or mailed (postage prepaid) to Salansky and the
Purchasers at the address set forth below or to such other address as
may be furnished in writing to the other parties hereto:
Salansky: Lior Salansky
19 Snir St.
Yokne-am Elit 20692, Israel
The Purchasers: The address set forth in the preamble above;
With a copy to: Ravillan, Volovelsky, Dinstein, Sneh & Co.
76 Rothschild Blvd. Mozes House, 6th Floor
Tel-Aviv, 65785 Israel
Facsimile: (972)-(3)-5664630
Attn: Dr. Eddo Dinstein, Attorney-at-Law
7.4. Expenses. Each party shall bear the expenses incurred thereby in
connection with this Agreement.
7.5. Counterparts. This Agreement and any exhibit hereto may be executed in
multiple counterparts, each of which shall constitute an original but
all of which shall constitute but one and the same instrument. One or
more counterparts of this Agreement or any exhibit hereto may be
delivered via facsimile, with the intention that they shall have the
same effect as an original counterpart hereof.
7.6. Effect of Headings. The article and section headings herein are for
convenience only and shall not affect the construction hereof.
7.7. Governing Law. This Agreement shall be deemed a contract made under the
laws of the State of Israel and together with the rights and
obligations of the parties hereunder, shall be construed under and
governed by the laws of such State.
7.8. Dollar Amounts. All dollar amounts referenced, incorporated, or set
forth in this Agreement shall refer to and mean such amounts as expressed in
United States Dollars, payable in their NIS equivalent according to the
representative exchange rate promulgated by the Bank of Israel immediately prior
to the applicable payment.
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SCHEDULE 1.3
------------
(Page 1 of 2)
of the Share Purchase Agreement dated April 6th 2000
Signature Page and Allocation Table
-----------------------------------
Name of Purchaser Dollar Amount Number of Shares Signature
- -------------------- --------------------- --------------------- ---------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
Rochelle Sivan $ 20,088.00 192 /s/ Rochelle Sivan
- ------------------------------------------------------------------ --------------------
Gabi Bar Haim $ 20,088.00 192 /s/ Gabi Bar Haim
- ------------------------------------------------------------------ --------------------
Zadok Eyal $ 30,132.00 288 /s/ Zadok Eyal
- ------------------------------------------------------------------ --------------------
Ami Arel $ 49,801.50 476 /s/ Ami Arel
- ------------------------------------------------------------------ --------------------
Gal Miara $ 49,801.50 476 /s/ Gal Miara
- ------------------------------------------------------------------ --------------------
Sagee Aran $ 49,801.50 476 /s/ Sagee Aran
- ------------------------------------------------------------------ --------------------
Shako Eli $ 49,801.50 476 /s/ Shako Eli
- ------------------------------------------------------------------ --------------------
Eyal Oren $ 49,801.50 476 /s/ Eyal Oren
- ------------------------------------------------------------------ --------------------
Sharli Bencherit $ 79,933.50 764 /s/ Sharli Bencherit
- ------------------------------------------------------------------ --------------------
Yuval Sarig $100,021.50 956 /s/ Yuval Sarig
- ------------------------------------------------------------------ --------------------
Arie Ganot $100,021.50 956 /s/ Arie Ganot
- ------------------------------------------------------------------ --------------------
Tudor Group Inc. $100,021.50 956 /s/ Eitan Lombard
- ----------------------------------------------------------------------------------------
SCHEDULE 1.3
------------
(Page 2 of 2)
of the Share Purchase Agreement dated April 6th 2000
Signature Page and Allocation Table
-----------------------------------
Yossi Azmon $ 100,021.50 956 /s/ Yossi Azmon
- ------------------------------------------------------------------ ------------------
David Shemla $ 100,021.50 956 /s/ David Shemla
- ------------------------------------------------------------------ ------------------
Gadi Lidror $ 100,021.50 956 /s/ Gadi Lidror
- ------------------------------------------------------------------ ------------------
Ilan Melamed $ 149,823.00 1,432 /s/ Ilan Melamed
- ------------------------------------------------------------------ ------------------
Yaron Amir $ 200,043.00 1,912 /s/ Yaron Amir
- ------------------------------------------------------------------ ------------------
Oscar Gruss & Son $1,100,236.50 10,516
Incorporated /s/ Michael Shaoul
- ------------------------------------------------------------------ ------------------
Total $2,449,481.00 23,412
- -----------------------------------------------------------------------------------------