Turbogen Ltd F-1/A, filed Mar 20, 2026
Turbogen Ltd. (TRBG)
As filed with the Securities and Exchange Commission on March 20, 2026
Registration No. 333-294225
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
to
Form F-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
TURBOGEN LTD.
(Exact name of registrant as specified in its charter)
| State of Israel | 4931 | Not Applicable | ||
| (State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
Yaron Gilboa Chief Executive Officer 22 Efal Street, Kiryat Aryeh, Petah Tikva 4951122 Israel Tel: +972-3-579-5452 |
Puglisi & Associates 850 Library Ave., Suite 204 Newark, DE 19711 Tel: (302) 738-6680 | |
| (Address, including zip code, and telephone number, | (Name, address, including zip code, and telephone | |
| including area code, of registrant’s principal executive offices) | number, including area code, of agent for service) |
Copies to:
Oded Har-Even, Esq. Eric Victorson, Esq. |
Reut
Alfiah, Adv. Gal Cohen, Adv. | |
Sullivan & Worcester LLP 1251
Avenue of the Americas |
Sullivan &
Worcester Tel-Aviv (Har-Even & Co.) HaArba’a Towers 28 HaArba’a St. North Tower, 35th Floor Tel-Aviv, Israel 6473925 Tel: +972-74-758-0480 |
Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date hereof.
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. ☒
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company ☒
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards † provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
| † | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
EXPLANATORY NOTE
This Amendment No. 1 (the “Amendment”) to the Registration Statement on Form F-1 (File No. 333-294225) (the “Registration Statement”) of TurboGen Ltd. is being filed solely for the purpose of filing Exhibits 10.13, 10.14 and 10.15 to the Registration Statement. Accordingly, this Amendment consists of the facing page, this explanatory note, Part II of the Registration Statement (including the signature page and the exhibits index) and the filed exhibits only. The prospectus, constituting Part I of the Registration Statement, is unchanged and has therefore been omitted.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 6. Indemnification of Directors, Officers and Employees
Indemnification
The Companies Law, and the Israeli Securities Law, 5728-1968, or the Securities Law, provide that a company may indemnify an office holder against the following liabilities and expenses incurred for acts performed by him or her as an office holder, either pursuant to an undertaking made in advance of an event or following an event, provided its Articles of Association include a provision authorizing such indemnification:
| ● | A financial liability imposed on him or her in favor of another person by any judgment concerning an act performed in his or her capacity as an office holder, including a settlement or arbitrator’s award approved by a court; |
| ● | Reasonable litigation expenses, including attorneys’ fees, expended by the office holder (a) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (1) no indictment (as defined in the Companies Law) was filed against such office holder as a result of such investigation or proceeding; and (2) no financial liability as a substitute for the criminal proceeding (as defined in the Companies Law) was imposed upon him or her as a result of such investigation or proceeding, or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; or (b) in connection with a monetary sanction; |
| ● | Reasonable litigation expenses, including attorneys’ fees, expended by the office holder or imposed on him or her by a court; (1) in proceedings that the company institutes, or that another person institutes on the company’s behalf, against him or her; (2) in a criminal proceeding of which he or she was acquitted; or (3) as a result of a conviction for a crime that does not require proof of criminal intent; and |
| ● | Expenses incurred by an office holder in connection with an Administrative Procedure under the Securities Law, including reasonable litigation expenses and reasonable attorneys’ fees. An “Administrative Procedure” is defined as a procedure pursuant to chapters H3 (Monetary Sanction by the Israeli Securities Authority), H4 (Administrative Enforcement Procedures of the Administrative Enforcement Committee) or I1 (Arrangement to prevent Procedures or Interruption of procedures subject to conditions) to the Securities Law. |
The Companies Law also permits a company to undertake in advance to indemnify an office holder, provided that if such indemnification relates to financial liability imposed on him or her, as described above, then the undertaking should be limited and shall detail the following foreseen events and amount or criterion:
| ● | To events that in the opinion of the board of directors can be foreseen based on the company’s activities at the time that the undertaking to indemnify is made; and |
| ● | In amount or criterion determined by the board of directors, at the time of the giving of such undertaking to indemnify, to be reasonable under the circumstances. |
We have entered into indemnification agreements with all of our directors and with all members of our senior management. Each such indemnification agreement provides the office holder with indemnification permitted under applicable law and up to a certain amount, and to the extent that these liabilities are not covered by directors and officers insurance.
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Exemption
Under the Companies Law, an Israeli company may not exempt an office holder from liability for a breach of his or her duty of loyalty, but may exempt in advance an office holder from his or her liability to the company, in whole or in part, for damages caused to the company as a result of a breach of his or her duty of care (other than in relation to distributions), but only if a provision authorizing such exemption is included in its articles of association. Our Articles of Association provide that we may exempt, in whole or in part, any office holder from liability to us for damages caused to the company as a result of a breach of his or her duty of care, but prohibit an exemption from liability arising from a company’s transaction in which our controlling shareholder or officer has a personal interest. Subject to the aforesaid limitations, under the indemnification agreements, we exempt and release our office holders from any and all liability to us related to any breach by them of their duty of care to us to the fullest extent permitted by law.
Limitations
The Companies Law provides that our Company may not exempt or indemnify an office holder nor enter into an insurance contract that would provide coverage for any liability incurred as a result of any of the following: (1) a breach by the office holder of his or her duty of loyalty unless (in the case of indemnity or insurance only, but not exemption) the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice us; (2) a breach by the office holder of his or her duty of care if the breach was carried out intentionally or recklessly (as opposed to merely negligently); (3) any act or omission committed with the intent to derive an illegal personal benefit; or (4) any fine, monetary sanction, penalty or forfeit levied against the office holder.
Under the Companies Law, exemption, indemnification and insurance of office holders in a public company must be approved by the compensation committee and the board of directors and, with respect to certain office holders or under certain circumstances, also by the shareholders.
Our Articles of Association permit us to exempt (subject to the aforesaid limitation), indemnify and insure our office holders to the fullest extent permitted or to be permitted by the Companies Law.
Item 7. Recent Sales of Unregistered Securities
Set forth below are the sales of all securities by us in the last three years since December 2022 which were not registered under the Securities Act. We believe that each of such issuances was exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act, Rule 701 and/or Regulation S under the Securities Act.
In December 2022, we issued convertible loans to Mr. Alex Katz and Mr. Yoav Sharon in the amounts of NIS 3.5 million (approximately $1,032 thousand) and NIS 1.0 million (approximately $295 thousand), respectively, together with 250,000 warrants to Mr. Katz and 71,429 warrants to Mr. Sharon, each exercisable until December 1, 2024.
In February 2023, we issued a convertible loan to Mr. Zohar Rappaport in the amount of NIS 1.0 million (approximately $273 thousand), pursuant to a broader loan framework of up to NIS 2.5 million, and 71,429 warrants exercisable until February 26, 2025.
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In April 2023, we issued a convertible loan to Ms. Maayan Zvi in the amount of NIS 1.0 million (approximately $273 thousand), together with 71,429 warrants exercisable until October 3, 2024. In May 2023, we issued a convertible loan to Mr. Pinhas Hertz in the amount of NIS 1.0 million (approximately $273 thousand), together with 71,429 warrants exercisable until May 3, 2025.
In July 2023, we issued an additional convertible loan of NIS 4.0 million (approximately $1,079 thousand) to a lender group consisting of Messrs. Alex Katz, Eliot Tannenbaum, Dov Tannenbaum, and David Binyamin Greenberg, together with 285,714 warrants exercisable until July 2, 2025.
On February 14, 2024, we issued 262,064 Ordinary Shares for total gross proceeds of approximately $447 thousand.
In May 2024, we issued a convertible loan in the aggregate amount of NIS 2.0 million (approximately $535 thousand) to Messrs. Offer Eitan, Moshe Danino, Micha Pegasus, and Tal Levinson, together with 142,857 warrants exercisable until May 19, 2026.
In July 2024, we converted loans from Messrs. Sharon and Hertz in the aggregate amount of approximately $649 thousand into 367,738 Ordinary Shares, adjusted the exercise price of 142,858 outstanding warrants to NIS 7.68 (approximately $2.10) per warrant, and issued 180,000 additional warrants at an exercise price of NIS 10.50 (approximately $2.90) per warrant.
In September 2024, we converted loans from Messrs. Pegasus and Levinson in the aggregate amount of approximately $102 thousand into 110,320 Ordinary Shares and adjusted the exercise price of 32,142 outstanding warrants to NIS 7.68 (approximately $2.10) per warrant.
On October 22, 2024, we issued 167,173 Ordinary Shares to Amalul Investments Ltd. for total gross proceeds of $291 thousand, together with 167,173 warrants at an exercise price of NIS 7.68 (approximately $2.11) per share and 334,346 warrants at an exercise price of NIS 10.50 (approximately $2.89) per share, exercisable until March 21, 2026.
On December 8, 2024, we issued 60,790 Ordinary Shares to Flash Projects K.E. Ltd. for total gross proceeds of $112 thousand, together with 60,790 warrants at an exercise price of NIS 7.68 (approximately $2.11) per share and 110,265 warrants at an exercise price of NIS 10.50 (approximately $2.89) per share, exercisable until May 7, 2026.
On December 21, 2024, we issued 135,597 Ordinary Shares to Ms. Vivian Trau for total gross proceeds of $249 thousand, together with 135,598 warrants at an exercise price of NIS 10.50 (approximately $2.89) per share, exercisable until May 20, 2026.
In December 2024, we converted loans from Messrs. Eitan and Danino in the aggregate amount of approximately $383 thousand into 566,990 Ordinary Shares and revised the exercise prices of certain outstanding warrants to NIS 3.73 (approximately $1.00) and NIS 4.51 (approximately $1.20) per warrant, respectively.
In February 2025, Mr. Rappaport provided an additional loan of $211 thousand and assigned his remaining right to provide an additional loan of approximately $211 thousand to Mr. Hertz.
In March 2025, we issued 74,627 Ordinary Shares and 74,627 warrants to Mr. Katz, at an exercise price of NIS 10.50 (approximately $2.90) per share, for total gross proceeds of $140 thousand.
On April 6, 2025, we issued 1,118,163 Ordinary Shares to A.I. Azimuth Capital, Limited Partnership for total gross proceeds of $2.9 million, and issued to Flash an additional 78,252 Ordinary Shares and 350,000 warrants as consideration for transaction services.
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On May 13, 2025, we issued 480,000 Ordinary Shares for total gross proceeds of $2.0 million, together with warrants to purchase up to 200,000 Ordinary Shares at an exercise price of NIS 18.00 (approximately $5.35) per share and up to 160,000 Ordinary Shares at an exercise price of NIS 22.50 (approximately $6.70) per share, exercisable until November 6, 2026, and subject to anti-dilution adjustments if subsequent financings occur below NIS 9.42 (approximately $2.80) per share.
On December 3, 2025, we issued 595,744 Ordinary Shares at a conversion price of NIS 6.58 (approximately $1.80) per share, subject to further adjustment, and up to 750,000 share rights contingent on future regulatory outcomes, pursuant to a settlement and conversion agreement entered into in October 2025 with Mr. Rappaport, Ms. Zvi, and certain assignees.
On December 8, 2025, we converted loans from Anglo Turbo Limited Partnership, in the aggregate amount of approximately $435 thousand into 136,450 Ordinary Shares at a conversion price of NIS 11.50 (approximately $3.19) per share.
On December 23, 2025, we issued 27,200 Ordinary Shares to a service provider, and 45,000 options to purchase 45,000 Ordinary Shares to another service provider. The options vested immediately and have an exercise price of NIS 10.50 (approximately $3.11) per share. We also issued 12,500 options to purchase 12,500 Ordinary Shares to another service provider. The shares vest over a two-year period and have an exercise price of NIS 0.30 (approximately $0.09) per share.
Item 8. Exhibits and Financial Statement Schedules
Exhibits:
| * | Filed herewith. |
| ** | Previously filed |
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Financial Statement Schedules:
All financial statement schedules have been omitted because either they are not required, are not applicable or the information required therein is otherwise set forth in the Company’s financial statements and related notes thereto.
Item 9. Undertakings
| (a) | The undersigned Registrant hereby undertakes: |
| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
| i. | To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
| ii. | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; |
| iii. | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
| (2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| (4) | To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3. |
| (5) | That for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. |
| (6) | That for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (b) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this amendment to the registration statement on Form F-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in Petah Tikva, Israel on March 20, 2026.
| TURBOGEN LTD. | ||
| By: | /s/ Yaron Gilboa | |
| Yaron Gilboa | ||
| Chief Executive Officer | ||
Pursuant to the requirements of the Securities Act of 1933, this amendment to the registration statement on Form F-1 has been signed by the following persons in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/ Yaron Gilboa | Chief Executive Officer, President, Director | March 20, 2026 | ||
| Yaron Gilboa | (Principal Executive Officer) | |||
| /s/ Neta Zruya Hashai | Chief Financial Officer | March 20, 2026 | ||
| Neta Zruya Hashai | (Principal Financial and Accounting Officer) | |||
| * | Chairman of the Board of Directors | March 20, 2026 | ||
| Itzhak Natan Even Ari | ||||
| * | Director | March 20, 2026 | ||
| Dov Fridman | ||||
| * | Director | March 20, 2026 | ||
| David Deri | ||||
| * | Director | March 20, 2026 | ||
| Ziv Gafni | ||||
| * | Director | March 20, 2026 | ||
| Eli Zooker | ||||
| * | Director | March 20, 2026 | ||
| Idan Ben Shitrit | ||||
| * | Director | March 20, 2026 | ||
| Ethy Levy | ||||
| * | Director | March 20, 2026 | ||
| Alex Katz |
| *By | /s/ Yaron Gilboa | |
| Yaron Gilboa | ||
| Attorney-in-Fact |
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SIGNATURE OF AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
Pursuant to the Securities Act of 1933, as amended, the undersigned, Puglisi & Associates, the duly authorized representative in the United States of TurboGen Ltd., has signed this registration statement on March 20, 2026.
| Puglisi & Associates | ||
| By: | /s/ Donald J. Puglisi | |
| Donald J. Puglisi | ||
| Managing Director | ||
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Exhibit 10.13
This
is a translation into English of the official Hebrew version of this agreement. In the event of a conflict
between the English and Hebrew
texts, the Hebrew text shall prevail.
Shares Allocation Agreement
Entered into and executed in Tel Aviv as of this 1st day of January 2018
| Between: | TURBO-GAS CLEAN ENERGY CO LTD Company No. 51-508605-6 1 Mohilever St., Herzliya (hereinafter: the “Company”)
Of the One Part; |
| And between: | ANGLO
TURBO, Limited Partnership, No. 54-027843-9
Of the Second Part; |
| And between: | A.Y.A. PARIS HOLDINGS LTD Company No. 51-423141-4 1 Korazin St., Givatayim (hereinafter: “Paris Holdings”)
Of the Third Part; |
| And between: | CR ECO HOLDINGS LTD Company No. 51-448270-2 Of 15 Rashba St., Jerusalem (hereinafter: “Eco”)
Of the Fourth Part; |
| And between: | R-JET ENGINEERING LTD Company No. 51-320637-5 Of 1 Mohilever St., Herzliya (hereinafter: “R-Jet”)
Of the Fifth Part; |
| Whereas: | The Company is a private company duly incorporated in Israel on May 27, 2014, the issued and paid-up share capital thereof (100%) being held, as of the date of execution of this Agreement, by ECO, PARIS HOLDINGS and R-JET (hereinafter: the “Existing Shareholders”), in the proportions set forth in Appendix 3.1 to this Agreement (the “Capitalization Table”); |
| And whereas: | The Company is engaged in development (including systems engineering), manufacturing, quality assurance, marketing, commercialization, and the provision of ancillary services relating to products based on the Technology, as defined below (hereinafter: the “Field of Activity”); |
| And whereas: | The Company desires to allocate to the Investor the Shares Allocated to the Investor, Free and Clear (as such terms are defined below), all in accordance with the terms set forth in this Agreement below; |
| And whereas: | The Parties wish to regulate and set forth in writing the agreements between them in connection with the transaction which is the subject of this Agreement, all in accordance with the provisions set forth in this Agreement below; |
Therefore, it is Declared, Stipulated and Agreed between the Parties as Follows:
| 1. | Definitions |
| Fully Diluted Basis | The status of the issued share capital taking into account all options, convertible loans, and any other security exercisable or convertible into shares of the Company and any right to receive such a security that has been granted, as if exercised or converted; | |
| The Technology | Technology for the manufacture and operation of micro turbines for the generation of electricity (including Expander turbines) (hereinafter: “Micro Turbines”), as well as any related or similar technology for the generation of electricity, solely by means of turbines, up to an output of 500 kilowatts, excluding Micro Turbines: (a) for military purposes or uses; (b) for electric vehicles (for land, sea or air); (c) for aviation uses; | |
| Shares Allocated to the Investor | 450,000 ordinary shares of the Company, which immediately following their allocation shall constitute 60% of the issued and paid-up share capital of the Company and 52.36% of the issued and paid-up share capital of the Company on a Fully Diluted Basis, as set forth in the Capitalization Table; | |
| The Term Sheet | A term sheet signed between the Company, the Investor, Global Power, Rafael Advanced Defense Systems Ltd. (hereinafter: “Rafael”) and the David Lior Group on January 24, 2017, in connection with the transaction which is the subject of this Agreement; | |
| Completion
of the Development of TG 40 Turbine and/or TG 200 Turbine |
Completion of the development of the TG 40 Turbine and/or the TG 200 Turbine, as detailed in Appendix 3.6 to this Agreement; |
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| Intellectual Property Rights | Including patents, copyrights, designs, trademarks, trade secrets, trade names relating to the Field of Activity, goodwill and any other proprietary right, whether registered or not, whether existing as of the date of execution of this Agreement or not, including applications for registration of any of the aforesaid rights; | |
| Companies Law | The Companies Law, 5759–1999; | |
| Ordinary Shares | Ordinary shares of the Company with a nominal value of ILS 0.01 each; | |
| “Free and Clear” or “Free and Clear Shares” | Free of any debt, lien, pledge, charge, right of retention, attachment, levy, claim, option or any other third-party right of any kind whatsoever, including a right of first refusal, preemptive right, tag-along right or any other right of any of the shareholders or any other party, except for restrictions set forth in the Articles of Association of the Company; | |
| The Development Plan | The plan attached as Appendix 3.2 to this Agreement, which includes the investment milestones. |
| 2. | Termination of the Founders Agreement Period |
| 2.1. | It is agreed that, as part of the provisions of this Agreement, the Articles of Association of the Company shall be replaced with new Articles of Association, a copy of which is attached as Appendix 2.1 to this Agreement. |
| 2.2. | It is agreed that upon completion of the performance of the provisions of this Agreement, the provisions of the Founders Agreement executed in connection with the incorporation of the Company, including the appendices thereof, on March 3, 2015, shall terminate. |
| 3. | The Transaction – Allocation of Shares and Investment Amounts |
| 3.1. | The Company shall allocate to the Investor the Shares Allocated to the Investor, Free and Clear, in consideration for payment of a total amount of ILS 4,812,500 (calculated according to USD 1,250,000 at an exchange rate of ILS 3.85 per USD) (hereinafter: the “Investor Investment Amount”), such that following the allocation the Investor shall be the sole owner and holder of 60% of the issued and paid-up share capital of the Company and 52.36% of the issued and paid-up share capital of the Company on a Fully Diluted Basis, as set forth in the Capitalization Table. |
| 3.2. | It is agreed that all the Shares Allocated to the Investor shall be deposited in trust with the Attorney for the Investor, who shall be entitled to transfer them in installments to the Investor in accordance with the transfer of the investment amounts to the Company, in accordance with the milestones set forth in Appendix 3.2, such that only after the entire Investor Investment Amount has been transferred to the Company shall the Investor be entitled to the full number of Shares Allocated. In the event that the Investor Investment Amount is not transferred to the Company, the Investor shall not be entitled to the balance of the shares that have not yet been transferred to it, and the trustee shall return them to the Company. |
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| 3.3. | The Company shall complete the allocation of shares to ECO and PARIS HOLDINGS and shall allocate to them shares that shall bring their holdings to 75,000 Ordinary Shares of the Company each, Free and Clear. ECO and PARIS HOLDINGS shall complete their investment in the Company and shall transfer an amount of ILS 882,500 (calculated according to USD 250,000 at an exchange rate not lower than ILS 3.85 per USD) (hereinafter: the “ECO and PARIS HOLDINGS Investment Amount”), such that following the allocation ECO and PARIS HOLDINGS shall each be the sole owner and holder of 10% of the issued and paid-up share capital of the Company and 8.73% of the issued and paid-up share capital of the Company on a Fully Diluted Basis, as set forth in the Capitalization Table. |
It is agreed that all the shares to be allocated to ECO and PARIS HOLDINGS shall be deposited in trust with the Attorney for Global Power, who shall be entitled to transfer them in installments to ECO and PARIS HOLDINGS in accordance with the transfer of the investment amounts to the Company, in accordance with the milestones set forth in Appendix 3.2, such that only after the entire ECO and PARIS HOLDINGS Investment Amount has been transferred to the Company ECO and PARIS HOLDINGS shall be entitled to the full number of the aforesaid shares. In the event that the ECO and PARIS HOLDINGS Investment Amount is not transferred to the Company, ECO and PARIS HOLDINGS shall not be entitled to the balance of the shares that have not yet been transferred to them, and the trustee shall return them to the Company after receipt of a 60-day notice and subject to the Investor having completed the entire investment in the amount of USD 1,250,000, as stated in Section 3.1 of this Agreement.
For the avoidance of doubt, ECO and PARIS HOLDINGS shall be required to complete their investment as aforesaid only after 10 business days from the date of receipt of notice that the Investor has completed the entire investment in the amount of USD 1,250,000 as stated in Section 3.1 of this Agreement and in accordance with the milestones.
It is agreed that to the extent ECO and PARIS HOLDINGS do not provide any portion of the Global Power investment amount, the Investor shall be granted the option to invest such amount in their stead, and ECO and PARIS HOLDINGS shall transfer the relevant shares to the Investor.
| 3.4. | It is agreed that the Investor Investment Amount, the ECO and PARIS HOLDINGS Investment Amount under this Agreement, and the value of the Transferred Intellectual Property (as defined below) shall be classified as shareholders’ loans. The order of repayment of the shareholders’ loans from any free cash flow of the Company shall be as follows: (1) repayment of the shareholders’ loans of the Investor, ECO and PARIS HOLDINGS, pro rata in accordance with the loan amounts provided by them; (2) following repayment of the shareholders’ loans as set forth in Section 1 above, repayment of the amount representing the value of the transferred Intellectual Property. After repayment of the amounts set forth in Sections 1 and 2 above, the profits of the Company shall be distributed to the shareholders in accordance with their relative holdings in the Company. |
Subject to compliance with the milestones set forth in Appendix 3.2 to this Agreement, the investments of the Investor, ECO and PARIS HOLDINGS shall be transferred to the account of the Company on a quarterly basis and in advance at the beginning of each quarter. It is clarified that the first payment date by the Investor shall be made no later than 30 days from the date of execution of this Agreement, including the appendices thereof.
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| 3.5. | The Company shall complete the allocation of shares to R-JET and shall allocate to it shares that shall bring its holdings to 150,000 Ordinary Shares of the Company, Free and Clear, such that following the allocation R-JET shall be the sole owner and holder of 20% of the issued and paid-up share capital of the Company and 17.45% of the issued and paid-up share capital of the Company on a Fully Diluted Basis, as set forth in the Capitalization Table. |
| 3.6. | The Company shall allocate to R-JET an additional 75,000 Ordinary Shares of the Company, Free and Clear, in consideration for their nominal value, such that following the allocation R-JET shall be the sole owner and holder of an additional 8.73% of the issued and paid-up share capital of the Company on a Fully Diluted Basis. |
It is agreed that the shares to be allocated to R-JET under the aforesaid allocation shall all be deposited in trust with the Attorney for R-JET. The trustee shall be entitled to transfer half of the shares deposited with it under the aforesaid allocation to R-JET immediately after receipt of confirmation from the Investor that the development of the TG40 Turbine has been completed, and the second half after receipt of confirmation from the Investor that the development of the TG-200 Turbine has been completed.
It is agreed that the confirmations of the Investor as aforesaid shall be given immediately after the development processes comply with the conditions specified in Appendix 3.6 to this Agreement.
| 3.7. | The amounts to be transferred to the Company as part of the Investor Investment Amount and the ECO and PARIS HOLDINGS Investment Amount shall be used by the Company in accordance with the budget set forth in Appendix 3.2 to this Agreement. |
| 3.8. | It is agreed that R-JET shall be entitled to receive from the Company royalties at a fixed rate of 4% of the amount of any income of the Company, plus statutory VAT and against a Valid tax invoice, including, without limitation, the sale of engines, spare parts, manufacturing rights or know-how. It is further agreed that after the royalty amount accumulates to USD 32 million (before tax), the royalty rate shall be reduced to 2%. |
Notwithstanding the foregoing, it is agreed that during the period in which R-JET has an obligation to pay royalties to the Chief Scientist at the Ministry of Energy and Water in connection with agreements entered into with it, under which it received grants for the development of the Technology (hereinafter: the “Chief Scientist Commitment Period”), the Company agrees to pay an additional 1% as part of the royalties in order to enable R-JET to meet its aforesaid obligations (hereinafter: the “Additional Percentage”).
| 3.9. | Upon execution of this Agreement, R-JET shall transfer to the Company the Intellectual Property Rights held by R-JET in connection with the Technology in consideration for ILS 1,500,000 plus statutory VAT (the “Transferred Intellectual Property”). The value of the Transferred Intellectual Property shall be classified as a shareholders’ loan as set forth above, and the VAT shall be paid on the date required by law. Immediately prior to the execution of this Agreement, the Company and Rafael shall execute a joint ownership agreement with respect to the Transferred Intellectual Property, in the form attached as Appendix 3.9 to this Agreement (the “Joint Ownership Agreement”). |
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Upon transfer of the Transferred Intellectual Property, and in accordance with the provisions of the agreements between R-JET and the Chief Scientist at the Ministry of Infrastructure, the Company shall undertake to step in and take over R-JET in all matters relating to the transfer of the Transferred Intellectual Property, and shall assume all the obligations undertaken by R-JET vis-à-vis the Chief Scientist in connection with the Transferred Intellectual Property, including, without limitation, the obligation to pay royalties, in accordance with the provisions of the agreements with the Chief Scientist.
It is agreed that any amount paid by the Company to the Chief Scientist within the framework of the obligations assumed by it in place of R-JET or in respect of the Additional Percentage shall be set off against the amount of royalties to which R-JET is entitled as set forth in Section 3.8 above.
The agreements between R-JET and the Chief Scientist are attached as Appendix 3.9A.
The Parties shall act in cooperation and efficiently in order to obtain any approval, to the extent required, for the transfer of the Transferred Intellectual Property, as aforesaid.
| 3.10. | It is agreed that the Company shall be responsible, inter alia, for the management of the Development Plan, including procurement and manufacture of prototypes, as well as for the management of the accounts relating to the Development Plan. Within this framework, the Company shall enter into an agreement with TMC for the provision of engineering services for the continuation of the development of the Technology, including completion of the development of TG40 and the planning and testing of the first two prototypes, on a Best Efforts basis in order to comply with the plan and the budget, in the form attached as Appendix 3.2 to this Agreement. |
It is agreed that the professional authority with respect to the development shall be Mr. David Lior, or an engineer on his behalf authorized by him for this purpose.
It is agreed that TMC shall be entitled to payment in the amount of ILS 632,000, plus VAT, for its activities performed prior to the execution of this Agreement, and that this amount shall be paid by the Company upon execution of the Agreement.
| 3.11. | Upon execution of this Agreement, the Company shall execute with Rafael an option agreement in the form attached as Appendix 3.11 to this Agreement (the “Option Agreement”), pursuant to which the Company shall grant Rafael: (1) an irrevocable option, without time limitation, pursuant to which Rafael shall be entitled to purchase 75,000 Ordinary Shares of the Company (subject to adjustments for share splits, bonus share distributions and the like) in consideration for their nominal value (the “Unlimited-Time Option”); (2) an option to purchase 34,375 Ordinary Shares of the Company (subject to adjustments for share splits, bonus share distributions and the like) in consideration for an investment in the amount of USD 100,000. The option shall be exercisable until the earlier of: (i) a period of 24 months from the date of execution of this Agreement; (ii) completion of an additional investment round in the Company in an amount of at least USD 1,500,000, all in addition to and subject to the provisions set forth in the Option Agreement. |
It is agreed that the exercise of the Unlimited-Time Option is subject to the receipt of a number of shares identical to the number of shares allocated by the Company to Rafael within the framework of the exercise of the Unlimited-Time Option from R-JET or from the trustee holding such shares, and it is clarified that in the event of adjustments for share splits, bonus share distributions or any other adjustment, the trustee shall transfer a number of shares held by it and shall not be required to transfer a greater number of shares), in consideration for their nominal value.
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| 4. | Actions Performed at the Time of Execution |
At the time of execution, all the actions specified below shall be carried out simultaneously, such that all the actions shall be performed at the same time and shall be deemed to occur simultaneously, and none of them shall be deemed valid and no document shall be deemed delivered unless all the other actions have been performed and all the other documents specified in this Section below have been delivered:
| 4.1. | Each Party shall deliver to the Attorney for the Company a duly certified copy of the resolutions of its competent organs approving its engagement in the transaction which is the subject of this Agreement, as well as the authorization of its officers or office holders to sign this Agreement and additional documents required for the performance thereof and to perform other actions required of it in accordance with the provisions of this Agreement. |
| 4.2. | All the appendices to this Agreement shall be executed, including: |
| 4.2.1. | A written resolution of the Board of Directors of the Company in the form attached as Appendix 4.2.1 to this Agreement, duly signed and certified, approving the transaction and all the actions under this Agreement, including: (1) allocation of the Shares Allocated to the Investor, allocation of shares to Global Power and to R-JET as detailed above; (2) amendment of the authorized signatory rights of the Company. |
| 4.2.2. | A written resolution of the general meeting of the Company, in the form attached as Appendix 4.2.2 to this Agreement, duly signed and certified, approving the transaction and all the actions under this Agreement, including: (1) amendment of the Articles of Association of the Company to the Articles in the form attached to this Agreement; (2) the changes in the composition of the Board of Directors as provided in this Agreement. |
| 4.2.3. | Reports regarding the allocation of shares and the change in the composition of the Board of Directors. |
| 4.2.4. | Amended Articles of Association. |
| 4.2.5. | The Option Agreement. |
| 4.2.6. | The Joint Ownership Agreement. |
| 4.3. | The allocation of shares to be allocated in accordance with the provisions of this Agreement to the Investor, to Global Power and to R-JET shall enter into force and be carried out. |
Accordingly, the register of shareholders of the Company shall be updated in the books of the Company and in the books of the Registrar of Companies.
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| 4.4. | The change in the composition of the Board of Directors of the Company shall enter into force and be implemented, whereby from the date of execution of this Agreement the Board of Directors of the Company shall consist of five directors in accordance with the Articles of Association of the Company. |
Accordingly, the register of directors shall be updated in the books of the Company and in the books of the Registrar of Companies.
| 4.5. | The amendment to the authorized signatory rights of the Company shall enter into force. |
| 4.6. | The amendment of the Articles of Association of the Company shall enter into force. |
Accordingly, the Articles of Association of the Company shall be updated in the books of the Company and in the books of the Registrar of Companies.
| 4.7. | R-JET shall transfer to the Company the Intellectual Property Rights held by R-JET in connection with the Transferred Intellectual Property. |
| 4.8. | The services agreement between the Company and TMC in the form attached as Appendix 4.7 to this Agreement shall enter into force. |
| 5. | Representations and Undertakings of the Company and the Existing Shareholders |
The Company and the Existing Shareholders, jointly and severally, hereby represent and undertake toward the Investor as follows:
Incorporation and Capital Structure
| 5.1. | The Company is a private company duly incorporated in Israel. A copy of the certificate of incorporation and the Articles of Association of the Company are attached as Appendix 5.1 to this Agreement. |
| 5.2. | The registered share capital of the Company is 10,000 Ordinary Shares with a nominal value of ILS 0.01 each. |
| 5.3. | All the shares of the Company confer upon their holders equal rights in all respects, including the right to receive notice of shareholders’ meetings, to participate and vote therein, to participate in the distribution of profits and in the distribution of the surplus assets of the Company upon its liquidation. |
| 5.4. | The shares allocated pursuant to this Agreement to the Investor, to Global Power and to R-JET shall be Free and Clear. |
| 5.5. | Except as expressly provided in this Agreement, neither the Company nor the Existing Shareholders have any obligation to sell, transfer or allocate to any third party any of the shares of the Company, in whole or in part, and no right or option has been granted to acquire or to allocate them to any party, nor has any undertaking been given to pledge the shares of the Company in favor of any party whatsoever. |
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| 5.6. | No third party, including any employee, director, manager, officer, consultant or service provider of the Company, holds any shares or any securities of the Company, including debentures or loans convertible into shares or securities, or options or other undertakings of any kind granting a right to receive or purchase any shares or securities of the Company. |
| 5.7. | Save as provided in this Agreement, none of the Existing Shareholders has any right to any compensation from the Company or the right to receive any other consideration from the Company or any other preferential rights of any kind whatsoever in the event of the allocation of the Shares Allocated or in the event of the entry of a new investor or partner into the Company. The Existing Shareholders hereby waive any such right, including any preemptive right pursuant to Section 18 of the Articles of Association of the Company, in connection with the allocation of the shares in accordance with this Agreement. |
| 5.8. | Since the date of its incorporation the Company has been duly incorporated and no special resolution or order has been issued for its dissolution, liquidation, strike-off, receivership of its assets or arrangement of its debts. Likewise, the Company has not received any notice or warning of any intention to demand the dissolution or liquidation of the Company, the receivership of its assets, the arrangement of its debts or its strike-off from the records of the Registrar of Companies, and there is no reason which may cause any of the foregoing. |
Financial Statements
| 5.9. | The financial statements of the Company for the year 2016 are attached hereto as Appendix 5.9 to this Agreement (hereinafter: the “Financial Statements”). The Financial Statements have been prepared in accordance with generally accepted accounting principles applied consistently, are true and complete, and fairly present, as of the date of their preparation, the financial and business condition of the Company, as well as its assets, rights, receipts, debts and liabilities. |
| 5.10. | Since the date of the Financial Statements, the Company has conducted all its activities in the ordinary course of business, and no event has occurred that may have an adverse effect on the Company. |
Assets, Charges and Liabilities
| 5.11. | A list of all the assets of the Company is attached as Appendix 5.11 to this Agreement. Except for the assets listed in the aforesaid appendix, the Company has no other assets, and it has not undertaken or received an option to purchase, lease or otherwise hold rights in other assets in any form whatsoever. |
| 5.12. | All the assets of the Company and all its rights of any kind are Free and Clear. |
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| 5.13. | The Company has not provided any third party with any guarantee, indemnity or loan, nor any undertaking to provide a guarantee, indemnity or loan, and no third party has provided any guarantee or indemnity for any existing or future obligation of the Company, and no guarantee, charge, lien, right of set-off, assignment or indemnification undertaking has been exercised against the Company. |
Transactions and Arrangements with Interested Parties
| 5.14. | There is no agreement, arrangement or engagement, including any indemnification undertaking, loan or guarantee or voting agreement, whether written or oral, nor any negotiations or other contacts toward the conclusion of any agreement or arrangement, between the Company and the Existing Shareholders or R-JET or Rafael. |
Legal Proceedings, Disputes, and Investigations
| 5.15. | The Company or any of the directors or officers of the Company is not a party to any legal proceeding, whether as plaintiff or defendant, before any court, tribunal or other judicial body, in arbitration, in any quasi-judicial proceeding, administrative proceeding, investigation or inquiry by any governmental authority, and none of the foregoing has received any notice of the initiation of any such proceeding, nor is the Company aware of any circumstances that may lead to the initiation of any such proceeding. |
| 5.16. | The Existing Shareholders, R-JET and Rafael, or any of the officers of the Company, have no claim or demand against the Company. |
Employees
| 5.17. | The Company has no employees and has never had salaried employees. |
Agreements and Transactions
| 5.18. | A list of all the material agreements of the Company is attached as Appendix 5.18 to this Agreement and includes the details of the parties to each agreement and the date of execution of each of the material agreements. For this purpose, a “Material Agreement” means any agreement, engagement or undertaking, whether written or oral, which meets one or more of the following conditions: (1) the cumulative commitment undertaken by the Company thereunder exceeds ILS 50,000 (fifty thousand New Israeli Shekels); (2) it is not in the ordinary course of business; (3) it may materially affect the Company, its profits, its activities, its assets, its rights or its obligations; (4) it constitutes an engagement with an interested party or related party of the Company. |
| 5.19. | The Company has not received any notice or warning of any breach by any of the parties to any of the Material Agreements, nor has any notice been received of any intention to terminate them, to make changes thereto or to shorten the term of any of the Material Agreements, and there is no knowledge of any breach thereof or of the existence of any right which would allow their termination (except for termination rights in accordance with the terms of the agreement not due to breach), amendment or shortening of any of the Material Agreements. |
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| 5.20. | All the Material Agreements and all the obligations of the Company and of the other parties thereto are valid. |
| 5.21. | All the Material Agreements comply with and do not violate any license or permit required for their performance under any law, and no notice or warning has been received from any party regarding their breach. |
| 5.22. | There is no intermediary, agent, broker, investment banker, legal advisor, financial advisor or any other person or entity, whether such party is employed by the Company or not, who is entitled or shall be entitled to brokerage fees, commission or any other payment from the Company in connection with the transaction or its completion. |
Approvals, Licenses and Permits
| 5.23. | The Company holds all approvals, licenses and permits required for its activities under any law and is not in breach of any of the provisions or conditions of such approvals, permits or licenses. All such approvals, licenses and permits are valid and in force, and no third party has any claim regarding their validity or any intention to suspend, revoke or terminate them for any reason whatsoever. |
| 5.24. | As of the date of this Agreement, the Company is not required to obtain any licenses, permits or approvals for the purpose of its activities. |
Intellectual Property
| 5.25. | No third party has any right whatsoever in connection with the Technology and the existing know-how relating to the Technology, and all employees or persons involved in the license rights have executed irrevocable waivers with respect to any rights in connection with the Technology and the existing know-how. |
| 5.26. | For the avoidance of doubt, as of the Completion Date, R-JET shall not be entitled to make any use whatsoever in the Field of Activity of the existing know-how relating to the Technology, the Technology itself or the Intellectual Property Rights relating to the existing know-how and the Technology, involved therein or arising therefrom, without the prior written consent of the Company, including the granting of rights of use and exploitation to third parties. |
| 5.27. | The Company possesses all the know-how and rights, including Intellectual Property Rights, required for engagement in the Field of Activity, including completion of the development of TG 40 and completion of the development of TG 200, up to a final product of a micro turbine for the generation of electricity. |
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Insurance
| 5.28. | The Company does not have and has never had any insurance policies. |
Taxation
| 5.29. | The Company has timely filed with the tax authorities all tax reports required of it under applicable law, and such reports are true, accurate and complete and properly reflect the full tax liabilities applicable to the Company. |
| 5.30. | The Company has timely paid (or has made provisions for in the Financial Statements) all taxes required of it. |
Authority; Corporate Approvals; Absence of Need for Additional Approvals
| 5.31. | The Company and the Existing Shareholders are authorized to enter into this Agreement and have adopted all resolutions required under any law and under the incorporation documents of each such party for the purpose of entering into and performing this Agreement. |
| 5.32. | The signatories to this Agreement on their behalf are duly authorized to sign this Agreement on their behalf and to bind them by their signature, and there is no restriction under any agreement or under law preventing their execution thereof. This Agreement constitutes their valid and lawful obligation, enforceable against them, and there is no restriction under the incorporation documents of the Company or under any agreement or law preventing their entering into this Agreement or the performance of their obligations hereunder. |
| 5.33. | Except for the approval of the competent organs of each party, which has been obtained as stated above, no approval, permit or consent of any third party (including any governmental or regulatory authority) is required for entering into this Agreement and performing the obligations hereunder, except for the approval of the Chief Scientist at the Ministry of Infrastructure, as stated above, in connection with the transfer of the Intellectual Property. |
| 5.34. | They acknowledge that the Investor enters into this Agreement relying solely on their representations and declarations as set forth in this Agreement and the appendices thereto. |
Completeness and Validity of Representations
| 5.35. | This Agreement, including all information and documents delivered to the Investor in connection with this Agreement, constitute the entire information, documents and knowledge known to them in connection with the business and activities of the Company, and do not contain any false representation regarding the condition, assets, liabilities and business of the Company. In addition, they are not aware of any detail not specified in this Agreement that could have affected the decision of the Investor to enter into this Agreement had it been disclosed to it. |
| 5.36. | For the avoidance of doubt, the due diligence review (or any other review) conducted by the Investor shall not derogate from the representations or undertakings given to it under this Agreement. |
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| 6. | Representations and Undertakings of the Investor |
| 6.1. | The Investor hereby represents and undertakes that it has the financial capability to fulfill all its obligations under this Agreement. |
| 7. | Indemnification |
| 7.1. | Without derogating from any other remedy or right of the Investor under this Agreement or under any law, the Existing Shareholders (each separately: the “Indemnifying Party”) undertake to indemnify and compensate the Investor, in accordance with their respective holdings in the Company, immediately upon first demand and following a final judgment, provided that the Indemnifying Party has been granted the right to defend against such claim, for any direct damage caused to the Investor, based on contractual grounds, tort or any other cause of action (“Damage”), which may be incurred by the Investor as a result of any of the following: (a) any representation given by the Indemnifying Party under this Agreement being incorrect or incomplete; (b) any breach by the Indemnifying Party of any of its undertakings under this Agreement; or (c) any claim, demand, action against, or liability for payment imposed on the Investor or the Company in respect of events whose cause occurred prior to the Completion Date, whether or not a representation regarding such matter was given under this Agreement. The indemnification under this Agreement shall be several, and the Existing Shareholders shall not be guarantors for each other’s obligations. |
| 7.2. | The Indemnifying Party shall indemnify or compensate the Investor in accordance with its holdings in the Company for Damage as stated in Section 7.1 above within 30 (thirty) days from the date of receipt of a demand for indemnification from the Investor and following a final judgment, provided that the Indemnifying Party has been granted the right to defend against such claim. |
It is agreed that with respect to indemnification to which the Investor is entitled from R-JET, for as long as Rafael is a shareholder of R-JET, in the event that R-JET is required to indemnify the Investor under this Agreement, such indemnification shall be carried out exclusively through the transfer of shares of the Company held by R-JET, according to the fair market value of the shares at that time.
For the sake of good order, it is clarified that Rafael (and any of the members of its board of directors, its employees, its consultants or any party related to it) shall not be subject to any obligation under this Agreement, or in connection with transactions related to this Agreement or arising therefrom, and that none of the Parties shall have any claim or demand against Rafael by virtue of this Agreement, or in connection with transactions related to this Agreement or arising therefrom, or in respect of any act or omission occurring prior to the date of execution of this Agreement, including in respect of the following: (1) any representation given by a party to this Agreement being incorrect or incomplete; (2) breach of this Agreement by any of the Parties; or (3) any claim, demand, action against, or liability for payment imposed on the Investor or the Company in respect of events whose cause occurred prior to the Completion Date, whether or not a representation regarding such matter was given under this Agreement. For the avoidance of doubt, nothing in this Section shall prevent the Company or the Investor from raising any claims whatsoever against R-JET.
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| 8. | Confidentiality |
| 8.1. | Each Party to this Agreement shall keep confidential the contents hereof and any information of a confidential nature of another Party that comes into its possession as a result of the execution of this Agreement or the implementation of the transaction described herein. Each Party hereby undertakes not to make any use of such information other than for the purpose of examining the transaction described in this Agreement and implementing it, and not to disclose it to any person except to its employees and advisors who are obligated to maintain confidentiality and to make limited use of the information. |
| 8.2. | Notwithstanding the foregoing, each Party shall be entitled to disclose or publish information that it is required to disclose or publish under any law, provided that the fact of such disclosure or publication and its scope shall be coordinated in advance with the other Parties (to the extent permitted under any law and without prejudice to the full and timely performance of the obligations imposed by law on such Party). |
| 8.3. | This confidentiality undertaking shall not apply to information which: (i) is in the public domain or becomes part of the public domain after the execution of this Agreement, provided that it did not become part of the public domain due to a breach of confidentiality by the receiving Party or anyone on its behalf; (ii) was in the possession of the receiving Party prior to its disclosure to it as a result of the execution or implementation of this Agreement; (iii) was received by the receiving Party from a third party without any restrictions; or (iv) was developed by the receiving Party without reliance on information received from another Party. |
| 8.4. | The Parties shall fully coordinate between them, subject to any law, any communications to the media relating to or arising from the transaction which is the subject of this Agreement. |
| 9. | Taxes and Expenses |
| 9.1. | The Parties agree that each Party shall bear the mandatory payments and taxes applicable to it under any law, if and to the extent applicable, in connection with the engagement which is the subject of this Agreement. |
| 9.2. | Each Party shall bear its own expenses and the expenses of the preparation of this Agreement, including the expenses of the due diligence process and the expenses arising from the conduct of negotiations, drafting, execution and performance of this Agreement. |
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| 10. | Governing Law and Jurisdiction |
| 10.1. | The law governing this Agreement and all matters arising therefrom shall be solely the laws of the State of Israel. |
| 10.2. | Jurisdiction in all matters relating to or arising from this Agreement shall be vested exclusively in the competent courts in Tel Aviv-Yafo and not in any other courts. |
| 11. | Miscellaneous |
| 11.1. | The preamble to this Agreement and the appendices thereto constitute an integral part hereof. |
| 11.2. | This Agreement shall be construed as a contract for the benefit of a third party (Rafael) within the meaning of this term in Section 34 of the Contracts Law (General Part), 5733–1973. |
| 11.3. | The division of this Agreement into chapters and appendices and the inclusion of headings to the chapters of this Agreement and the appendices thereto are for convenience only and shall not be used for the purposes of interpretation. |
| 11.4. | In this Agreement, the term “including” means “including, but without derogating from the generality of the foregoing.” |
| 11.5. | In this Agreement, any reference to a law, regulation or other legislative enactment shall be deemed a reference to such law, regulation or legislative enactment as in force from time to time. |
| 11.6. | Execution of this Agreement may be effected by way of several documents in identical form, each of which is signed by one or more Parties to this Agreement (provided that, in total, all the Parties to this Agreement have signed such document). Transmission of the signature page of this Agreement by facsimile or by electronic means by one or more Parties to this Agreement to another shall constitute full execution of this Agreement by such Party or Parties. |
| 11.7. | Any amendment or addition to this Agreement shall be valid only if made in writing and signed by all the Parties to this Agreement. |
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| 11.8. | This Agreement embodies and exhaustively sets forth all the agreements between the Parties with respect to the matters set forth herein and supersedes and replaces all agreements, representations, undertakings and understandings made between the Parties prior to its execution with respect to the matters set forth herein, whether oral or written, including the Term Sheet. |
| 11.9. | The Parties undertake to perform all actions and to sign all documents that may be required for the performance of this Agreement. Each Party undertakes to act in good faith in the performance of its obligations and the exercise of its rights under this Agreement. |
| 11.10. | No conduct by any of the Parties shall be deemed a waiver of any of its rights under this Agreement or under any law, or a waiver or consent to any breach or non-performance of the terms of this Agreement by the other Party, or as granting any deferral or extension, or any amendment, cancellation or addition of any term whatsoever, unless expressly made in writing and signed by all the Parties. |
| 11.11. | The rights and obligations of the Parties under this Agreement are not assignable or transferable, save as expressly provided in this Agreement. |
| 11.12. | If at any time any provision of this Agreement becomes illegal, invalid, unenforceable, or ineffective in any respect, this shall not affect the legality, validity, enforceability, or effectiveness of the other provisions of this Agreement, nor shall it impair the force of such other provisions, which shall remain in full force and effect, mutatis mutandis. |
| 11.13. | Unless expressly stated otherwise in this Agreement, this Agreement shall not be deemed to be an agreement made for the benefit of any third party, and no third party shall have any right of action by virtue hereof or by virtue of any of its sections or provisions against any of the Parties hereto. |
| 12. | Addresses and Notices |
| 12.1. | Any notice in connection with this Agreement shall be delivered in writing, by hand delivery, registered mail, facsimile or electronic mail. Any notice delivered by one Party to another shall be deemed delivered as follows: (a) upon delivery, if delivered by hand; (b) 72 hours after dispatch from a post office in Israel, if sent by registered mail; or (c) upon receipt of confirmation of receipt by the addressee or on the first business day after its dispatch, whichever occurs earlier, if sent by facsimile or electronic mail. |
| 12.2. | The contact details of each Party for the purpose of this Agreement are as specified next to its name in the preamble, or as may be notified to the other Parties from time to time in writing. |
[Signatures on the following page]
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In Witness Whereof The Parties Hereto Have Hereunto Set Their Hands:
/s/ Turbo-Gas Clean Energy Co Ltd. |
/s/ Anglo Turbo, Limited Partnership |
/s/ A.Y.A. Paris Holdings Ltd. | |||||
TURBO-GAS CLEAN ENERGY CO LTD |
ANGLO TURBO, LIMITED PARTNERSHIP | A.Y.A. PARIS HOLDINGS LTD | |||||
| By: | /s/ Itzhak Natan Even Ari | By: | /s/ Nisan Caspi | ||||
| By: | /s/ Dov Friedman | ||||||
| /S/ CR Eco Holdings Ltd. | /s/ R-Jet Engineering Ltd. | |||
| CR ECO HOLDINGS LTD | R-JET ENGINEERING LTD | |||
| By: | /s/ Ehud Benshah | By: | /s/ David Lior | |
| By: | /s/ Giora Belkin | |||
Exhibit 10.14
This
is a translation into English of the official Hebrew version of this agreement. In the event of a conflict
between the English and Hebrew
texts, the Hebrew text shall prevail.
Amendment to Shares Allocation Agreement Dated January 1, 2018
Entered into and executed in Tel Aviv as of this 7th day of February 2018
| Between: | TURBO-GAS CLEAN ENERGY CO LTD Company No. 51-508605-6 1 Mohilever St., Herzliya (hereinafter: the “Company”)
Of the One Part; |
| And between: | ANGLO
TURBO, Limited Partnership, No. 54-027843-9
Of the Second Part; |
| And between: | A.Y.A. PARIS HOLDINGS LTD Company No. 51-423141-4 1 Korazin St., Givatayim (hereinafter: “Paris Holdings”)
Of the Third Part; |
| And between: | CR ECO HOLDINGS LTD Company No. 51-448270-2 Of 15 Rashba St., Jerusalem (hereinafter: “Eco”)
Of the Fourth Part; |
| And between: | R-JET ENGINEERING LTD Company No. 51-320637-5 Of 1 Mohilever St., Herzliya (hereinafter: “R-Jet”)
Of the Fifth Part; |
| Whereas: | On January 1, 2018, the Parties entered into a shares allocation agreement (the “Allocation Agreement”); |
| And whereas: | The Parties wish to amend the Allocation Agreement, subject to the provisions of this amendment; |
Therefore, it is Declared, Stipulated and Agreed between the Parties as Follows:
| 1. | This amendment to the Allocation Agreement constitutes an integral part of the Allocation Agreement. |
| 2. | Terms in this amendment shall have the meaning assigned to them in the Allocation Agreement, unless expressly defined otherwise in this amendment. |
| 3. | In any case of contradiction or inconsistency between the provisions of this amendment and the provisions of the Allocation Agreement and its appendices, the provisions of this amendment shall prevail. |
| 4. | Section 3.3 of the Allocation Agreement shall be revoked and replaced with the following Section: |
“The Company shall complete the allocation of shares to Eco and shall allot to it shares which shall bring its holdings to 75,000 ordinary shares of the Company, free and clear. Eco shall complete its investment in the Company and shall transfer an amount in ILS of 481,250 (calculated based on USD 125,000 at an exchange rate not lower than ILS 3.85 per USD) (hereinafter: the “Eco Investment Amount”), such that following the allocation Eco shall be the sole owner and holder of 10% of the issued and paid-up share capital of the Company and 8.73% of the issued and paid-up share capital of the Company on a fully diluted basis, as detailed in the capitalization table.
It is agreed that all shares to be allotted to Eco shall be deposited in trust with Mr. Asi Shalgi, who shall be entitled to transfer them in installments to Eco in accordance with the transfer of the investment amounts to the Company, in accordance with the milestones set forth in Appendix 3.2, such that only after the entire Eco Investment Amount has been transferred to the Company, Eco shall be entitled to all of the aforesaid shares. In the event that the Eco Investment Amount is not transferred to the Company, Eco shall not be entitled to the balance of the shares not yet transferred to it, and the trustee, Mr. Asi Shalgi, shall return them to the Company after receipt of a 60-day notice and subject to the Investor having completed the full investment in the amount of USD 1,250,000, as set forth in Section 3.1 of the Agreement.
For the avoidance of doubt, Eco shall be required to complete its investment as aforesaid only after 10 business days from the date of receipt of notice that the Investor has completed the full investment in the amount of USD 1,250,000 as set forth in Section 3.1 of the Agreement and in accordance with the milestones.
It is agreed that, to the extent Eco does not provide any portion of the Eco Investment Amount, Paris Holdings shall first be granted the option to invest such amount in its stead, and in such case Asi Shalgi shall transfer the relevant shares to Paris Holdings. To the extent Paris Holdings does not invest such amount within 14 days from the date of written notice from the Company, the Investor shall be granted the option to invest such amount in its stead, and Mr. Asi Shalgi shall transfer the relevant shares to the Investor.
| 5. | Section 3.3A shall be added to the Allocation Agreement as follows: |
“The Company shall complete the allocation of shares to Paris Holdings and shall allot to it shares which shall bring its holdings to 75,000 ordinary shares of the Company, free and clear. Paris Holdings shall complete its investment in the Company and shall transfer an amount in ILS of 481,250 (calculated based on USD 125,000 at an exchange rate not lower than ILS 3.85 per USD) (hereinafter: the “Paris Holdings Investment Amount”), such that following the allocation Paris Holdings shall be the sole owner and holder of 10% of the issued and paid-up share capital of the Company and of 8.73% of the issued and paid-up share capital of the Company on a fully diluted basis, as detailed in the capitalization table.
2
It is agreed that all shares to be allotted to Paris Holdings shall be deposited in trust with Adv. Yonatan Gershon, who shall be entitled to transfer them in installments to Paris Holdings in accordance with the transfer of the investment amounts to the Company, in accordance with the milestones set forth in Appendix 3.2, such that only after the entire Paris Holdings Investment Amount has been transferred to the Company, Paris Holdings shall be entitled to all of the aforesaid shares. In the event that the Paris Holdings Investment Amount is not transferred to the Company, Paris Holdings shall not be entitled to the balance of the shares not yet transferred to it, and the trustee, Adv. Yonatan Gershon, shall return them to the Company after receipt of a 60-day notice and subject to the Investor having completed the full investment in the amount of USD 3,250,000, as set forth in Section 3.1 of the Agreement.
For the avoidance of doubt, Paris Holdings shall be required to complete its investment as aforesaid only after 10 business days from the date of receipt of notice that the Investor has completed the full investment in the amount of USD 1,250,000 as set forth in Section 3.1 of the Agreement and in accordance with the milestones.
It is agreed that, to the extent Paris Holdings does not provide any portion of the Paris Holdings Investment Amount, Eco shall first be granted the option to invest such amount in its stead, and in such case Adv. Yonatan Gershon shall transfer the relevant shares to Eco. To the extent Eco does not invest such amount as aforesaid within 14 days from the date of written notice from the Company, the Investor shall be granted the option to invest such amount in its stead, and in such case Adv. Yonatan Gershon shall transfer the relevant shares to the Investor.
| 6. | In Section 3.4 of the Allocation Agreement, the words “Eco Investment Amount and Paris Holdings” shall be replaced with the words “Eco Investment Amount and Paris Holdings Investment Amount.” |
| 7. | In Section 4.2.1 of the Allocation Agreement, the words “allocation of shares to Global Power” shall be replaced with the words “allocation of shares to Eco and Paris Holdings.” |
| 8. | In Section 4.3 of the Allocation Agreement, the words “to Global Power” shall be replaced with the words “to Eco and Paris Holdings.” |
| 9. | In Section 5.4 of the Allocation Agreement, the words “to Global Power” shall be replaced with the words “to Eco and Paris Holdings.” |
| 10. | Except as expressly set forth in this amendment, the remaining provisions of the Allocation Agreement shall remain unchanged. |
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In Witness Whereof The Parties Hereto Have Hereunto Set Their Hands:
/s/ Turbo-Gas Clean Energy Co Ltd. |
/s/ Anglo Turbo, Limited Partnership |
/s/ A.Y.A. Paris Holdings Ltd. | |||||
| TURBO-GAS
CLEAN ENERGY CO LTD |
ANGLO TURBO, LIMITED PARTNERSHIP | A.Y.A. PARIS HOLDINGS LTD | |||||
| By: | /s/ Itzhak Natan Even Ari | By: | /s/ Nisan Caspi | ||||
| By: | /s/ Dov Friedman | ||||||
| /s/ CR Eco Holdings Ltd. | /s/ R-Jet Engineering Ltd. | |||
| CR ECO HOLDINGS LTD | R-JET ENGINEERING LTD | |||
| By: | /s/ Ehud Benshah | By: | /s/ David Lior | |
| By: | /s/ Giora Belkin | |||
Exhibit 10.15
This is a translation into English of the official Hebrew version of this agreement. In the event of a conflict between the English and Hebrew texts, the Hebrew text shall prevail.
Second Amendment to Shares Allocation Agreement Dated January 1, 2018
Made in Tel Aviv on October 9, 2018
| Between: |
TURBO-GAS CLEAN ENERGY CO LTD Company No. 51-508605-6 1 Mohilever St., Herzliya (hereinafter: the “Company”)
Of the One Part; |
| And between: |
R-JET ENGINEERING LTD Company No. 51-320637-5 Of 1 Mohilever St., Herzliya (hereinafter: “R-JET”)
Of the Other Part; |
| Whereas: | On January 1 the Parties entered into a Share Allocation Agreement, including an amendment to the Agreement dated February 7, 2018 (jointly: the “Allocation Agreement”); |
| And whereas: | The Parties wish to amend the Allocation Agreement with respect to the rights of R-JET in accordance with the provisions of this amendment; |
Therefore, it is Declared, Stipulated and Agreed between the Parties as Follows:
| 1. | This amendment to the Allocation Agreement constitutes an integral part of the Allocation Agreement. |
| 2. | The terms used in this amendment shall have the meanings ascribed thereto in the Allocation Agreement unless otherwise expressly defined in this amendment. |
| 3. | In the event of any conflict or inconsistency between the provisions of this amendment and the provisions of the Allocation Agreement and its appendices, the provisions of this amendment shall prevail. |
| 4. | Due to the fact that it will not be possible to complete the development of the TG40 Turbine and the TG 200 Turbine (as defined in the Allocation Agreement) in accordance with the conditions specified in the Allocation Agreement (and therefore there is no feasibility that R-JET will be entitled to receive the shares by January 1, 2020), it has been agreed between the Parties that 75,000 Ordinary Shares of the Company which were deposited with Adv. Shuki Regev as trustee shall be returned to the Company for the purpose of allocating options to the present and future employees of the Company, together with additional shares to be allocated by the Company in a total amount of up to 10% of the issued and paid-up share capital of the Company on a Fully Diluted Basis, subject to approval of the Board of Directors of the Company. |
| 5. | It is agreed that to the extent an external investor seeking to invest in the Company requires an amendment to Section 3.8 of the Share Allocation Agreement, it is hereby agreed that Section 3.8 shall be amended as follows (and Section 3.8 in its current wording shall be cancelled): |
“It is agreed that R-JET shall be entitled to receive royalties from the revenues of the Company in accordance with one of the following alternatives: (i) provided that the development cost of the TG40 Turbine does not exceed USD 1,800,000, R-JET shall be entitled to receive from the Company royalties at a fixed rate of 4% of the amount of any revenue of the Company, plus VAT and against a Valid tax invoice. In such case, it is agreed that after the royalty amount accumulates to USD 32,000,000 before tax, the royalty rate shall be reduced, as the case may be, to 2%; (ii) if the development cost of the TG40 Turbine exceeds USD 1,800,000 and up to USD 2,100,000, R-JET shall be entitled to receive from the Company royalties at a fixed rate of 3% of the amount of any revenue of the Company, plus VAT and against a Valid tax invoice. In such case, it is agreed that after the royalty amount accumulates to USD 24,000,000 before tax, the royalty rate shall be reduced, as the case may be, to 1.5%; and (iii) if the development cost of the TG40 Turbine exceeds USD 2,100,000 and up to USD 2,600,000, R-JET shall be entitled to receive from the Company royalties at a fixed rate of 2% of the amount of any revenue of the Company, plus VAT and against a Valid tax invoice. In such case, it is agreed that after the royalty amount accumulates to USD 16,000,000 before tax, the royalty rate shall be reduced, as the case may be, to 1%.
For the avoidance of doubt it is clarified that: (i) the revenues of the Company include, without limitation, the sale of engines, spare parts, manufacturing rights or know-how; (ii) the development cost of the TG40 Turbine means the cost of manufacturing two TG40 Turbines ready for operation, packaging and shipment.
Notwithstanding the foregoing, it is agreed that during the period in which R-JET has an obligation to pay royalties to the Chief Scientist at the Ministry of Energy and Water in connection with agreements entered into with it under which it received grants for the development of the Technology (hereinafter: the “Chief Scientist Commitment Period”), the Company agrees to pay any amount required by the Chief Scientist under the aforesaid agreements up to a maximum of 5% on account of the future royalties, in order to enable R-JET to meet its aforesaid obligations (hereinafter: the “Additional Payment”). For the sake of good order, it is clarified that the Additional Payment, beyond the royalties to which R-JET is entitled as aforesaid, shall be set off against the royalty amount as specified in Section 3.9 of the Agreement, mutatis mutandis. For the avoidance of doubt, the Parties shall conduct a corresponding reconciliation in the following years in order to adjust the royalties to the agreed amount as aforesaid.
Notwithstanding the foregoing, it is agreed that at any stage the Company shall be entitled to pay R-JET the amount of USD 5,000,000 (the “One-Time Royalty Payment”), which shall constitute full and final consideration in respect of the royalties to which R-JET is entitled, and that upon receipt of the One-Time Royalty Payment R-JET shall not be entitled to receive any additional amount in respect of the royalty component referred to in this Section.”
| 6. | The Company assumes the obligation of R-JET to pay Mr. Assi Shalgi the amount of USD 50,000 subject to completion of the development of two TG250 Turbines to the satisfaction of the Company at its sole discretion, such that the turbines are ready for operation, packaging and shipment. |
| 7. | Except as expressly provided in this amendment, the remaining provisions of the Share Allocation Agreement shall remain unchanged. |
| 8. | This Agreement shall be subject to and shall enter into force only after receipt of the approval of the Board of Directors of the Company. |
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In Witness Whereof The Parties Hereto Have Hereunto Set Their Hands:
/s/ R-Jet Engineering Ltd. |
/s/ Turbo-Gas Clean Energy Co Ltd. | |||
| R-JET ENGINEERING LTD | TURBO-GAS CLEAN ENERGY CO LTD | |||
| By: | /s/ Giora Belkin | By: | /s/ Turbo-Gas Clean Energy Co Ltd. | |
| By: | /s/ David Lior | |||