PURCHASE AGREEMENT AND ASSIGNMENT, made this 5th day of January, 1995,
by and among TTR TECHNOLOGIES LTD., an Israeli company with temporary offices at
16/8 Hatam Sofer Street, Emanuel 44545, Israel (the "Purchaser") and RINA
MARKETING R&D LTD., an Israeli company with offices at 3 Hahilazon Street, Ramat
Gan 52522, Israel ("Seller").
W I T N E S S E T H
WHEREAS, Seller is the sole owner of the rights, title and interests in
and to the Purchased Property (as defined below);
WHEREAS, the Purchaser desires to purchase, and the Seller desires to
sell and assign to the Purchaser, subject to the terms and conditions contained
herein, all of Seller's right, title and interest in and to Purchased Property
(as defined below);
WHEREAS, the Purchaser and the Seller desire to set forth their
agreement relating to the sale and assignment to Purchaser of all of Seller's
rights, title and interest to the Purchased Property.
NOW, THEREFORE, in consideration of the terms and conditions hereafter set
forth, the parties hereto mutually agree as follows:
1. Definitions & Interpretation
1.1 Definitions. As used herein, the following terms shall, unless the context
otherwise requires, have the following meanings ascribed to them
"Closing Date" shall mean January 5, 1995 or any subsequent date mutually agreed
to by the parties.
"Contracts" shall mean all agreements or undertakings listed on Schedule "E"
hereto with any existing or former customer, prospect, employee, contractor,
agent or supplier relating in any way to the Software, the Documentation or the
Intangible Property. If the assignment or transfer by the Seller of any Contract
referred to above pursuant to this Agreement shall require the consent of any
other party, and if the making of an agreement to assign would constitute a
breach thereof or impair the rights of the Seller thereunder, then this
Agreement shall not be construed as an agreement to make an assignment, but the
Seller nonetheless shall be obligated to take reasonable steps to obtain for the
Purchaser the benefits of such Contracts and the Purchaser shall be obligated to
perform all obligations of Seller under such contracts (even though the Seller
may remain liable to the other party or parties to such contracts or
agreements).
"Customer List" shall mean the list of customers of the Seller annexed hereto as
Schedule "B" to whom copies of the Software or any of the other Purchased
Property shall have been sold or assigned or who obtained a license to use the
Software or any of the other Purchased Property.
"Documentation" shall mean all user manuals, brochures, instructional guides and
other materials describing any aspect of the Software or designed to facilitate
the use or modification or enhancement of the Software.
"Equipment" shall mean the equipment or apparatus by which a computer diskette
is signed or altered for the purpose of protecting the diskette from
unauthorized copying.
"Intangible Property" shall mean all trade names and other identifying names
other than the trade name "Pass", all trademarks, service marks and other
identifying names and marks associated with the Software, whether registered or
unregistered, and including all goods relating to any of the foregoing, and all
applications for any of the foregoing, all patents, copyright, copyright
registrations and patent applications therefor, together with all divisions,
renewals and continuations of any of the foregoing, and all know-how, unpatented
inventions, trade secrets and other intangible and intellectual property
embodied in or pertaining to the Software and the Documentation.
"Marketing Information" shall mean all customer and marketing materials and
information relating to the Software, including without limitation, customer
lists, prospect lists, marketing plans, forecasts and assumptions, price lists
and lists of suppliers and contractors.
"Permits" shall mean all licenses, permits, authorizations, and other approvals
from any governmental or regulatory body or authority, or from any private party
pertaining to the Software or Documentation.
"Purchased Property" shall mean collectively, the Software, Contracts, Customer
List, Documentation, Equipment, Intangible Property, Marketing Information,
Permits, Contract and Technology, including, without limitation, name and
goodwill associated with the foregoing.
"Software" shall mean certain computer software applications programs known as
"Pass" as more particularly described and identified in Schedule "A" attached
hereto, together with all supplements, enhancements and modifications
(regardless of the state of development), as of the Closing Date, including
without limitation, source codes, object codes, technical documentation and
similar information necessary for the utilization and development thereof.
"Technology" shall mean all things authored, discovered, developed, made,
perfected, improved, designed, engineered, acquired, produced, conceived or
first reduced to practice by Seller, any party commissioned by the Seller, or
any of the Seller's employees or agents that are (i) embodied in, derived from
or relate to the Software or (ii) intended to provide for the alteration of
computer diskettes for the purpose of protection from unauthorized copying, in
any stages of development, including, without limitation, modification,
enhancements, designs, concepts, techniques, methods, ideas, flow charts, coding
sheets, programmer's notes and all other information relating to the Software,
whether or not such information is patentable or otherwise subject to
registration or protection under any applicable intellectual property law and
whether or not such information is actually protectable as a trade secret under
applicable law; provided, however, that, the term "Technology" shall not
include, or be deemed to refer to, the technology, method or process by which
the Software accomplishes real-time encryption and decryption of information or
material.
1.2 Interpretation. The recitals set forth above are incorporated into the body
of this Agreement and constitute an inseparable part thereof.
2. Sale, Assignment and Purchase of Right, Title and Interests in Purchased
Property
2.1 Subject to the terms and conditions set forth herein, and on reliance on the
representations and warranties of the Seller, on the Closing Date the Seller
shall sell, assign, grant, convey, bargain and deliver all of the Seller's
right, title and interests in and to the Purchased Property, free and clear of
all liens, charges, encumbrances and defects of any kind whatsoever, and the
Purchaser shall purchase all of the Seller's such right, title and interest in
and to the Purchased Property (the "Sale and Assignment").
2.1.1 The Purchaser shall have until the Closing Date to investigate the title
to the Software or any of the other Purchased Property and shall on or before
the Closing Date give its objections, if any, to the Seller or its counsel.
Nothing contained in the foregoing shall in any way affect the representation
and warranties of the Seller or the Selling Shareholders contained herein nor
affect or be deemed to affect any conditions set forth herein.
2.2 The Sale and Assignment shall be effected on the Closing Date by bills of
sale, endorsements, assignments and such other instruments of transfer and
conveyance as shall be deemed necessary or desirable to counsel for the
Purchaser.
2.3. The Seller shall, at any time and from time to time after the Closing Date,
upon the request of the Purchaser and at the expense of the Seller, execute,
acknowledge and deliver, and will cause to be done, executed,
acknowledged and delivered all such further acts, deeds, assignments, transfers,
conveyances and assurances as may be reasonably required for better assigning,
transferring, granting, conveying, assuring and confirming to the Purchaser, or
to its successors and assigns, the right, title and interests in any or all of
the Purchased Property.
3. Purchase Price; Payment Terms
3.1 The Purchase Price for the Sale and Assignment shall be Fifty Thousand
United States Dollars ($50,000), exclusive of value added taxes which may be
assessed in respect thereof (the "Purchase Price"). The Purchaser shall pay, in
New Israeli Shekels at the Bank of Israel Representative US. Dollar Exchange
Rate then in effect, the full amount of the Purchase Price on the Closing Date.
3.1.1 At the option of the Purchaser, payment may be made by way of a bank draft
or wire transfer to the Seller's account. If payment is made by way of a bank
draft, such payment shall be at such bank's sell rate for the U.S. Dollar on the
Closing date.
3.2 The value added tax that may be assessed on the Sale and Assignment shall be
borne by the Purchaser. On the Closing Date, the Purchaser shall tender to the
Seller, the Purchaser's check, payable to the order of the Seller and post dated
to the date on which such value added tax is to be paid, in the amount of the
assessed value added tax, against delivery of Seller's tax receipt.
3.3 Any transfer fee or charge actually payable in connection with the payment
of the Purchase Price shall be borne by the Purchaser.
4. Closing
The Closing of the Sale and Assignment shall take place at the offices of Aboudi
& Brounstein, 6 Chen Blvd., Tel Aviv, or any other place mutually agreed to by
the parties, at 11:00 A.M. on the Closing Date.
5. Representations and Warranties of the Seller
The Seller represents and warrants to the Purchaser as of the Closing Date as
follows:
5.1 Organization. Seller is a corporation duly organized, validly existing and
in good Standing under the laws of the State of Israel.
5.2 Authority. Seller has full corporate authority to operate its business as
conducted and to execute and perform in accordance with this Agreement, and this
Agreement constitutes a valid and binding obligation of the Seller and is
enforceable in accordance with its terms. Each document of transfer
contemplated by this Agreement when executed and delivered by the Seller in
accordance with the provisions hereof, shall be valid and legally binding in
accordance with its terms. This Agreement, the Sale and Assignment and all
transactions contemplated hereby have been duly authorized by all requisite
action by the Seller.
5.3 Conflicting Agreements; No Liens. Neither the execution nor the delivery of
this Agreement nor the fulfillment nor the compliance with its terms and
conditions hereof will constitute a breach by the Seller of its articles or
memorandum of association or result in a breach of the terms, conditions or
provisions of, constitute a default under or result in a violation of any
agreement, contract, instrument, order, judgment or decree to which Seller is a
party or by which it is bound, or result in a violation by Seller of any
existing law or statute or any material rule or regulation or of any order,
decree, writ or injunction of any court or governmental agency or result in the
creation or imposition of any lien, charge, restriction, security interest or
encumbrance of any nature whatsoever on the Purchased Property.
5.4 Consents. No consent or other approval of any governmental entity or other
person is necessary in connection with the execution of this Agreement or the
consummation by the Seller of the Sale and Assignment or any other transaction
contemplated hereby.
5.5 Title to Purchased Property. Seller owns, or on the Closing Date shall own,
all of the right, title and interests in and to all of the Purchased Property
free and clear of all liens, charges, encumbrances or title defects of any
nature whatsoever, including, without limitation, patent or intellectual rights
or other proprietary rights infringement.
5.6 Litigation. There are no actions, suits, proceedings or investigations
pending, or, to the knowledge of the Seller, threatened against or involving
Seller or bought by Seller and affecting any of the Purchased Property. Seller
is not operating its business under or subject to, any order writ, injunction or
decree of any court or government agency.
5.7 Patents, Trademarks and Copyrights; Infringement. The Seller does not own
any patents, trademarks, patent rights, or copyrights, nor has the Seller
applied for any patent, trademark or copyright registrations, in respect of the
Software or any other Purchased Property. The Seller has not received any notice
or claim of infringement of any patent, invention, rights, trademarks, trade
names or copyrights of others with reference to the processes, methods, formulae
or procedures used by Seller in the design, development, marketing or sale of
the Software or any of the other Purchased Property, and such processes,
methods, formulae or procedures do not infringe on any patent, copyright,
trademark or other proprietary rights of a third party.
5.8 Customers. The Customer List attached hereto as Schedule "B" is complete and
accurate and there are no other customers, persons, individuals or entities
(other than those listed on Schedule B) to whom any version or copy of the
Software, or any other Purchased Property has been transferred, sold, licensed
or assigned. Other than the customers listed on Schedule "B", the Seller has not
granted to any other person, individual or entity a license in respect of the
Software or any other Purchased Property.
5.9 Customer Orders and Commitments. Schedule "C" annexed hereto lists all
unfilled customer orders and commitments, written or oral, of the Seller
pertaining to the Software and any other Purchased Property and on hand as of
the date first written above.
5.10 Trade Names. Attached as Schedule "D" hereto is a complete and accurate
list of all trade names used by the Seller in connection with the Software or
any other Purchased Property, and other than the trade names listed therein, the
Seller has not used any other trade name with respect to any of the Purchased
Property.
5.11 Material Contracts and Agreements. Other than for the contracts and
agreements listed on Schedule "E" hereto, there are no material contracts,
agreements or other commitments, written or oral, to which the Seller or either
of the Selling Shareholders is a party, or by which either is bound, which may
relate to the Purchased Property.
5.12 Untrue Statements or Material Omissions. No representation or warranty by
the Seller, and no statement contained in any certificate or other instrument
furnished or to be furnished by to the Purchaser pursuant hereto, or in
connection with the transactions contemplated hereby, contains or will contain
any untrue statement of a material fact, or omits or will omit to state any
material fact which is necessary in order to make the statements contained
therein not misleading.
6. Representations and Warranties of the Purchaser
The Purchaser represents and warrants to the Seller as of the Closing Date as
follows:
6.1 Organization. The Purchaser is a corporation duly organized, validly
existing and in good Standing under the laws of the State of Israel.
6.2 Authority. Purchaser has full corporate authority to execute and perform in
accordance with this Agreement, and this Agreement constitutes a valid and
binding obligation of the Purchaser and is enforceable in accordance with its
terms. Each instrument contemplated by this Agreement when executed and
delivered by the Purchaser in accordance with the provisions hereof, shall be
valid and legally binding in accordance with its terms. This Agreement, the Sale
and Assignment and all transactions contemplated hereby have been duly
authorized by all requisite action by the Purchaser.
6.3 Conflicting Agreements; No Liens. Neither the execution nor the delivery of
this Agreement nor the fulfillment nor the compliance with its terms and
conditions hereof will constitute a breach by the Purchaser of its articles or
memorandum of association or result in a breach of the terms, conditions or
provisions of, constitute a default under or result in a violation of any
agreement, contract, instrument, order, judgment or decree to which the
Purchaser is a party or by which it is bound, or result in a violation by the
Purchaser of any existing law or statute or any material rule or regulation or
of any order, decree, writ or injunction of any court or governmental agency.
6.4 Consents. No consent or other approval of any governmental entity or other
person is necessary in connection with the execution of this Agreement or the
consummation by the Purchaser of the Sale and Assignment or any other
transaction contemplated hereby.
7. Covenants and Undertakings of Seller
7.1 Interference. The Seller shall not interfere, disrupt or attempt to disrupt
the relationship, contractual or otherwise, between the Purchaser and any
customer of the Seller, which was such on or prior to the Closing Date.
7.2 Investigation. From and after the date hereof through the Closing Date, the
Seller will afford the officers and representatives of the Purchaser a full
opportunity to make such investigation as it shall desire with respect to the
Purchased Property.
7.3 Names. From and after the Closing Date, Seller shall cease to use any of
trade names or word listed on Schedule "D" hereto or any variations thereof or
any other trademarks, trade names or copyrights.
7.4 Notice to Existing Customers. Immediately after the execution of this
Agreement, the Seller shall notify in writing each of the persons listed on the
Customer List annexed hereto on Schedule "B" that the Seller has transferred to
the Purchaser all of the Seller's right, title and interests in and to the
Software and the other Purchased Property, and shall request of each such
customer to direct or refer any matter pertaining to the Software or the
Purchased Property to the Purchaser.
7.5 Reference of Future Inquires. From and after the Closing Date, the Seller
shall refer to the Purchaser any and all inquires from any person relating or
pertaining to the Software or any other of the Purchased Property, and shall
promptly inform the Seller of each such inquiry.
7.6 Non-competition. From and after the Closing Date and for a period of two (2)
years thereafter, neither the Seller nor Amnon Shoshtari, nor any business in
which either of them owns directly or indirectly more than 5% of the equity
interest thereof, shall engage, directly or indirectly, as a proprietor,
partner, employee, agent, consultant or stockholder (except as permitted
hereunder) or in any other capacity whatsoever, in the design or development or
marketing or distribution of any product or component which competes with the
Purchased Property.
8. Conditions Precedent of Purchaser
The obligations of Purchaser under this Agreement are subject to the conditions
that on or prior to the Closing Date the following conditions shall have been
satisfied in full, it being understood and agreed that if any of the foregoing
conditions shall not have been fulfilled by the Closing Date, the Purchaser may
terminate without penalty or liability this Agreement by written notice to the
Seller:
8.1 Accuracy of Representations and Warranties on Closing Date. The
representations, warranties, covenants and undertakings of the Seller contained
in this Agreement or in any certificate or document delivered pursuant to the
provisions hereof or in connection with the transactions contemplated hereby
shall be true on and as of the Closing Date as though such representations,
warranties, covenants and undertakings were made at and as of such date, except
as otherwise contemplated herein.
8.2 Seller's Compliance with Agreement. The Seller shall have performed and
complied with all agreements and conditions required by this Agreement to be
performed or complied with by it prior to or at the closing of this Agreement.
8.3 Resolutions. The Seller shall have delivered to the Purchaser copies of the
resolutions of the Board of Directors and the members of the Seller authorizing
the transactions contemplated herein, together with a certificate from the
Seller's counsel certifying the above resolutions, all in the form attached
hereto as Exhibit A.
8.4 Release of First International Bank Lien. The Seller shall have furnished to
the Purchaser, in form and substance acceptable to counsel to the Purchaser, a
duly executed release by The First International Bank Ltd. ("FIB") releasing any
lien, encumbrance, charge or security interest in favor of FIB in any of the
Purchased Property and consenting to the Sale and Assignment and the other
transactions contemplated hereunder.
8.5 Intellectual Property Rights Infringement. The investigation undertaken by
the Purchaser with respect to the Purchased Property shall not have disclosed
any infringement by any of the Purchase Property (or any component thereof) of
the intellectual or other proprietary rights, including without limitation,
patent, copyrights or trademark infringement of any third party.
8.6 Injunction. On the Closing Date, there shall be no effective injunction,
writ, preliminary restraining order or any order of any nature issued by a court
of competent jurisdiction directing that the transactions provided for herein or
any of them not be consummated as herein provided.
8.7 Approval of Proceedings. All actions, proceedings, instruments and documents
required to carry out this Agreement, or incidental thereto, and all other
related legal matters shall have been approved by Aboudi & Brounstein, counsel
for the Purchaser.
9. Conditions Precedent of the Seller
The obligations of the Seller under this Agreement are subject to the conditions
that on or prior to the Closing Date the following conditions shall have been
satisfied in full, it being understood and agreed that if any of the foregoing
conditions shall not have been fulfilled by the Closing Date, the Seller may
terminate without penalty or liability this Agreement by written notice to the
Purchaser:
9.1 Accuracy of Representations and Warranties on Closing Date. The
representations and warranties of the Purchaser contained in this Agreement or
in any certificate or document delivered pursuant to the provisions hereof or in
connection with the transactions contemplated hereby shall be true on and as of
the Closing Date as though such representations and warranties were made at and
as of such date, except as otherwise contemplated herein.
9.2 Purchaser's Compliance with Agreement The Purchaser shall have performed and
complied with all agreements and conditions required by this Agreement to be
performed or complied with by it prior to or at the closing of this Agreement.
9.3 Resolutions. The Purchaser shall have delivered to the Seller copies of the
resolutions of the Board of Directors and/or the members of the Purchaser
authorizing the transactions contemplated herein, together with a certificate
from the Purchaser's president or chief operating officer, certifying that the
Purchaser shall have taken all action required under law and its memorandum or
articles of association authorizing the transactions contemplated in this
Agreement.
9.4 Injunction. On the Closing Date, there shall be no effective injunction,
writ, preliminary restraining order or any order of any nature issued by a court
of competent jurisdiction directing that the transactions provided for herein or
any of them not be consummated as herein provided.
10. Indemnification
10.1 Each of the Seller and Amnon Shoshtari (collectively, the "Indemnifying
Parties") shall, jointly and severally, indemnify and hold harmless the
Purchaser from and against and in respect of any and all liabilities, losses,
damages, claims, costs and expenses, including, without limitation, attorney's
fees and litigation costs, arising out of or due to:
(i) a breach of any representation, warranty, covenant, undertaking or
agreement of the Seller contained in this Agreement or in any statement or
certificate furnished to Purchaser pursuant hereto or in connection with the
Sale and Assignment or any other transaction contemplated hereby;
(ii) any claim by a creditor (trade or otherwise) of the Seller with
respect to the Purchased Property respecting any liabilities of the Seller with
respect thereto, including, without limitation, claims by tax authorities or any
governmental agency;
(iii) any intellectual property rights infringement claim as to the
Software or any Purchased Property, including without limitation, patent,
copyright, registered design or trademark or any other claim of proprietary
rights infringement as to any of the Purchased Property.
10.2 The Purchaser shall promptly notify in writing the Indemnifying Parties of
the commencement of any claim or of any action or proceeding to which the
foregoing provisions relating to the Indemnifying Parties' obligations and
undertaking shall apply. The Purchaser may, in its sole and absolute discretion,
defend against or settle any such claim or litigation in the manner and on the
terms deemed appropriate by the Purchaser, provided, that, prior to settling any
such claim, action or proceeding or litigation, the Purchaser shall consult with
the Seller but shall be entitled to act in its sole and absolute discretion
barring agreement with the Seller. The Indemnifying Parties shall promptly
reimburse the Purchaser for the amount of all expenses, legal or otherwise,
incurred by the Purchaser in connection with the defense against or settlement
of such claim. If no settlement of the claim is reached, the Indemnifying
Parties shall promptly reimburse the Purchaser for the amount of any judgment
rendered with respect to such claim or in such litigation, and of all expenses,
legal or otherwise, incurred by the Purchaser in the defense against such claim.
10.2.1 The Seller may be entitled to participate, at its own expense, in
the defense of any such claim, provided, that, the (i) Seller notifies in
writing the Purchaser of its desire to so participate and (ii) the Purchaser
directs and
controls the defense of such claim and the Seller otherwise cooperates with the
Purchaser in the strategy to be adopted in the defense or settlement of such
claim or litigation and does not adopt a strategy opposed to that adopted by the
Purchaser
11. Miscellaneous
11.1 Entire Agreement. This Agreement constitutes the entire understanding and
agreement between the parties, and supersedes any and all prior discussions and
agreements and correspondence, and may not be amended or modified in any respect
except by a subsequent writing executed by both parties.
11.2 Successors & Assigns. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties.
11.3 Governing Law; Arbitration. All disputes, controversies, differences or
questions arising out of or relating to this Agreement, or to the validity,
interpretation, breach, violation or term thereof, will be finally and solely
determined and settled by a Bet Din to be mutually agreed upon or appointed by
the parties
The signing of this Agreement constitutes a Deed of Arbitration pursuant to the
Israel Arbitration Law 5721-1968.
11.4 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
11.5 Titles and Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing this
Agreement.
11.6 Notices. Unless otherwise provided, any notice required or permitted
hereunder shall be given in writing and shall be deemed effectively given upon
personal delivery to the other party to be notified or fourteen (14) business
days after deposit in the mail by prepaid registered mail and addressed to the
party to be notified at the address set forth in this Section as follows:
For the Purchaser:
TTR Technologies Ltd.
16/8 Hatam Sofer Street
Emanuel, 44545
For the Seller:
Rina Marketing R & D Ltd.
3 Hahilazon Street
Ramat Gan, 52522
or at such other address as such party may designate by written notice to the
other parties.
11.7 Amendments & Waivers. Any term of this Agreement may be amended and the
observance of any term may be waived only with the written consent of the party
to be charged.
11.8 Nature & Survival of the Representations. All statements contained in any
certificate or other instrument delivered by or on behalf of a party pursuant to
this Agreement or in connection with the transactions contemplated hereby shall
be deemed representations and warranties by such party. All representations and
warranties and agreements made by the parties hereto in this Agreement or
pursuant hereto shall survive the Closing Date hereunder.
11.9 Acknowledgment Regarding Legal Representation. Each of the parties hereto
acknowledges and confirms that it has had a full and complete opportunity to
obtain independent legal advice in connection with the advisability of entering
into this Agreement.
11.10 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provisions shall be excluded from this
Agreement and the balance of this Agreement shall be interpreted as if such
provisions were so excluded and shall be enforceable in accordance with its
terms.
IN WITNESS WHEREOF, the undersigned have set forth their signature as of the
date first written above.
TTR TECHNOLOGIES
LTD.
By: [SIGNATURE]
-----------------
[Signature in Hebrew Letters]
Title:
RINA MARKETING R&D
LTD.
By: [SIGNATURE]
------------------
[Signature in Hebrew Letters]
[51-164966-7 Hebrew Letters]
The undersigned undertakes to fully comply with and perform his obligations and
undertakings contained in this Agreement, including without limitation, those
obligations and undertakings contained in Sections 7.6 (No-competition) and 10
(Indemnification) hereunder.
January 5, 1995 AMNON SHOSHTARI
- ------------------- -----------------------
Date AMNON SHOSHTARI
I.D. No. 057795656