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|
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Delaware
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4899
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93-0995165
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(State or other jurisdiction of
incorporation or organization)
|
(Primary Standard Industrial
Classification Code Number)
|
(I.R.S. Employer
Identification Number)
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Large Accelerated filer
|
☐
|
|
|
|
Accelerated filer
|
☐
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Non-accelerated filer
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☒
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|
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Smaller reporting company
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☒
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|
|
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Emerging growth company
|
☐
|
Title of Each Class of Securities to be Registered
|
|
Amount to be Registered
|
|
Proposed Maximum Offering Price Per Share
|
|
Proposed Maximum Aggregate Offering Price (1)
|
|
Amount of Registration Fee
|
||||||
Common Stock (new shares to be sold)
|
|
80,000,000 Shares
|
|
$
|
0.12
|
|
|
$
|
9,600,000
|
|
|
$
|
889.92
|
|
Common Stock Underlying Warrants (2)
|
20,000,000 Shares
|
$
|
0.12
|
$
|
3,000,000
|
$
|
278.10
|
|||||||
Common Stock Underlying Warrants (3)
|
7,791,658 Shares
|
$
|
0.12
|
$
|
934,999
|
$
|
86.67
|
|||||||
Common Stock (4)
|
25,079,999 Shares
|
$
|
0.12
|
$
|
3,009,600
|
$
|
278.99
|
|||||||
Common Stock Underlying Warrants (5)
|
12,540,000 Shares
|
$
|
0.12
|
$
|
1,504,800
|
$
|
139.49
|
|||||||
Common Stock (6)
|
126,614,436 Shares
|
$
|
0.12
|
$
|
15,193,732
|
$
|
1,408.46
|
|||||||
Common Stock (7)
|
18,975,000 Shares
|
$
|
0.12
|
$
|
2,277,000
|
$
|
211.08
|
|||||||
Common Stock (8)
|
22,647,751 Shares
|
$
|
0.12
|
$
|
2,717,730
|
$
|
251.93
|
|||||||
Total filing fee
|
$
|
3,544.64
|
(1)
|
Estimated solely for the purpose of calculating the registration fee under Rule 457(a) and (o) of the Securities Act. | |
(2) | Consists of 1 warrant for each for 4 shares of common stock purchased as part of this offering. | |
(3) | Consists of shares underlying warrants issued to CLOS Trading, Ltd. | |
(4) | Consists of shares sold pursuant to our 2021 private investment in public equity (“PIPE”) offering. | |
(5)
|
Consists of shares underlying warrants associated with the PIPE offering. | |
(6) | Consists of shares of common stock issued pursuant to our offering related to simple agreements for future equity (“SAFE”). | |
(7)
|
Consists Of 18,975,000 shares of which 13,313,062 are held by Everest Credit, LP. and 5,661,938 are held by Everest Corporate Finance.
|
|
(8) | Consists of 22,647,751 shares of common stock held by Yaron Elhawi Tr Ua 02/01/2021 Yaron Elhawi Trust Royal App Ltd. in Liquidation, issued as part of our acquisition of Royal App, Ltd. |
|
|
|
|
|
|
PRELIMINARY PROSPECTUS
|
SUBJECT TO COMPLETION
|
DATED FEBRUARY 10, 2022
|
|
|
Per Share
|
|
Total
|
|
||
Public offering price
|
|
$
|
0.12
|
|
$
|
9,600,000
|
|
Warrant Exercise Price for Public Offering
|
|
$
|
0.15
|
|
$
|
3,000,000
|
|
Proceeds to us, before expenses
|
|
$
|
|
$
|
12,600,000
|
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Page No.
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20
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20
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21
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30
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43
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Currently we are in the process of transforming our existing suite of products to a fully modular SaaS based platform. This will enable us to scale the company significantly, onboarding
multiple retailers simultaneously without any additional integration costs.
It allows retailers to effortlessly build a complete mobile commerce platform from scratch, adding additional features as their business grows and needs advance. A modular stack of technology also enables us to
target retailers who has an existing mobile commerce solution as they can merely plug into one our specific features enriching their offering. bile commerce suite, where the retailer can and as their business needs develop.
Principal products
|
•
|
Mobile Commerce Merchant Platform: Enabling SMB retailers to launch a fully branded and functional mobile app with tons of unique and patented features. Great for retailers with at least 200+ return customers. Our patented UX/UI features are
available on both IOS and Android and include unique features such as voice search, shoppable videos, and barkers for upselling.
|
•
|
Mobile Commerce Enterprise Platform: Enabling Enterprise retailers who own and operates both brick and mortar store as well as e-commerce platforms to better engage with their customer both online and in-store via the customer’s mobile
application.
|
•
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Instore engagement Suite: providing a purely customer-centric approach to shopping. Our Scan, Pay & Go reduces the customer’s shopping time by approximately 40%. Imagine no more waiting in lengthy lines, no more time and effort
spent on packing, unpacking and packing again … and for retailers, an effective way to reduce cost on hardware acquisition and maintenance. Additional instore features will include In-store navigation, in-store personalized shopping
experience, and in-store customer loyalty program activation. During this phase, we might consider the M&A of small startups with unique technological features enriching our suite of products without having to develop from scratch.
|
Marketing, Sales and Customer Service
Due to the dynamic nature of SaaS platforms and the market sector we are targeting, we have decided to focus on being a product-led company, merge the marketing, sales and customer success teams into one
department, providing a complete customer-centric approach. This approach gives us a 360 view of the customer journey and ensures that we can act in real-time to acquire new customers and provide the relevant support when and where needed
to retain the customers we have acquired. Using the latest marketing discipline called Product led Growth Hacking and automation we will be able to support and focus on rapid and optimized growth, consisting of both a process and a set of
cross-disciplinary (digital) skills. Our goal is to regularly conduct testing that will lead to improving the customer journey and replicate and scale the ideas that work and modify or abandon the ones that don't before spending vast
amounts of resources. Once a plan has been validated, it is automated and the system works by itself reducing overheads and lowering the cost of customer acquisition ("CAC").
To ensure we provide retailers the optimal results when using our platform our focus will not merely be on sales cycles but creating a community where they can learn and grow with plenty of engagement and
educational information such as blogs, webinars, and affiliation programs.
Competitive Strengths
It is important to emphasize that we are not we are not App developers -hence our direct competitors are not other app developers (which there are plenty off in the market). What we
provide is a mobile commerce platform that provides retailers software that enables them (big and small, offline and online) to build their own application without one line of code or any development needed from their side.
We differentiate our products primarily through functional points of difference between our products and those of our competitors, including:
- Intuitive drag and drop dashboards that enable
merchants to build their own branded mobile application
- Patented single product display graphical user
interface – called the shelf that makes mobile shopping truly mobile and is truly unique to our application
- An advanced in-app marketing suite consisting of
features such as shoppable videos and barkers, which has been shown to increase up-selling and cross selling threefold and increase product impression by 400%.1
|
Recent Developments
On March 30, 2021, the Company announced that its newly-formed, wholly owned Israeli subsidiary, Stratford Ltd. had received notification of approval from the Lod District Court in Israel for its winning bid to
acquire assets of Royal App, Ltd,. out of insolvency proceedings for approximately $2.4 million USD in cash as well as 8% equity in the Company on a diluted basis, post conversion of the Company’s preferred common stock and certain other
proposed sales of common stock in order to raise the required funds to complete the acquisition, (the “Recapitalization”).
Royal App, Ltd., is the developer of Shelfy, a white label, headless mobile commerce software platform that helps retailers and fast moving consumer goods companies become growth companies. The Shelfy product
incorporates sophisticated artificial intelligence and machine learning in its algorithms to markedly improve online shopping metrics through mobile phones for large consumer retailers such as supermarket chains, food and other clients.
To finance the acquisition as well as general working capital, the Company proposed to raise up to $3.5 million commencing March 2021 in the form of puttable Simple Agreements for Future Equity (“SAFE”) from
institutional investors and family offices. The terms of the SAFE require that they automatically convert into common stock of the Company following the conversion of all outstanding convertible preferred stock into common stock. The
Company’s intent was to undertake the conversion of preferred stock in the quarter ended September 30, 2021, following shareholder approval of certain proposed corporate restructure plans.
Subsequent to the conversion of the preferred stock, and as part of the agreement for the acquisition of the assets of Royal App, Ltd., the Company also agreed to issue common stock for commission fees of 2% of
the Company’s common stock on a diluted basis, and to the employees of Stratford as to 8% of the Company on a diluted basis, under the terms of an Employee Stock Option Plan, once approved by Shareholders. Further, in order to undertake
these issuances, the Company was required to increase the authorized common stock of the Company.
On June 9, 2021, the Company announced a Stockholders’ meeting to be held on June 30, 2021 to approve the following actions:
1. An amendment to the articles of the Company to increase the authorized shares of the Company from 50,000,000 to 600,000,000.
2. An amendment to the articles of the Company to effect a reverse stock split on the basis of not less than 1 for 10 and not more than 1 for 100. Such ratio to be determined by the
Board of Directors of the Company at such time as it is approved by the Board of Directors of the Company.
3. Approval of a 2021 Employee Stock Incentive Plan. The Plan will have available shares equity to 25% of the Company’s capitalization and a term of ten years from the effective date
of the Plan.
4. Approval of the Company’s reorganization from Oregon to Delaware.
The meeting was held on June 30, 2021, and the Company’s shareholders approved all of the actions detailed above, as well as the conversion of 1,000 outstanding shares of Company’s Series A convertible
preferred stock whereby each 1 share of Preferred stock held is convertible into 71,683.25 shares of common stock. As a result, during the period ended September 30, 2021, the holders of the Company’s Series A convertible preferred stock
successfully converted their holdings into 71,683,250 shares of Common Stock and the Board issued the remaining securities as agreed under the Acquisition Agreement including 22,647,751 shares to the Trustee as part of the asset acquisition
costs and 5,661,938 shares to the agent as financing costs. Further a total of $3.25 million raised in the form of SAFES were converted into a total of 126,614,436 shares of common stock at $0.02567 per share.
Risks
Our business and ability to execute our growth strategies are subject to a number of risks of which you should be aware before you make an investment decision. In particular, you should consider the risks
discussed in the “Risk Factors” section of this prospectus, including, but not limited to, the following:
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●
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we have incurred significant losses to date and may continue to incur losses;
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●
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we will need to raise additional capital;
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●
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growth of operations will depend on the acceptance of our products and consumer discretionary spending;
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we have limited management resources and are dependent on key executives;
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failure to achieve and maintain effective internal controls could have a material adverse effect on our business;
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competition that we face is varied and strong;
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We depend on a large volume of merchants and retailers paying us a small monthly usage fee which may mean a high cost of customer acquisition during the first 2-3 years of launching our new SaaS model.
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●
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In the first 4 years from launching our SaaS solution we are dependent on third-party eCommerce platforms such as Shopify to host our software. In the event that one of these platforms becomes redundant or
completely changes some of their policies it may have a negative impact on our business and result in loss of business or existing customers
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●
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failure of third party vendors and platforms upon which we rely could adversely affect our business; and
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●
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litigation and publicity concerning product quality and other issues could adversely affect our results of operations, business and financial condition;
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●
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the number of customers we are able to attract and retain over time;
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●
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the competitive environment in the mobile commerce industry, as well as the mobile application industry as a whole, may force us to reduce prices below our desired pricing level or increase promotional
spending; and
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the ability to anticipate changes in user preferences and to meet customers’ needs in a timely cost effective manner;
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our ability to integrate operations, products and services;
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our ability to execute our business plan;
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operating results below expectations;
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our issuance of additional securities, including debt or equity or a combination thereof, which will be necessary to fund our operating expenses;
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announcements of new or similar products by our competitors;
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economic and other external factors; and
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period-to-period fluctuations in our financial results.
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trends affecting our financial condition, results of operations or future prospects;
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our growth strategies;
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our financing plans and forecasts;
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the factors that we expect to contribute to our success and our ability to be successful in the future;
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our business model and strategy for realizing positive results when sales begin;
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competition, including our ability to respond to such competition and its expectations regarding continued competition in the market in which we compete;
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expenses;
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our expectations with respect to continued disruptions in the global capital markets and reduced levels of user spending and the impact of these trends on its financial results;
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our ability to meet our projected operating expenditures and the costs associated with development of new projects;
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our ability to pay dividends or to pay any specific rate of dividends, if declared;
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the impact of new accounting pronouncements on its financial statements;
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our market risk exposure and efforts to minimize risk;
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development opportunities and its ability to successfully take advantage of such opportunities;
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regulations, including anticipated taxes, tax credits or tax refunds expected; and
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the outcome of tax audits and assessments, should they occur, including appeals thereof, timing of resolution of such audits, our estimate as to the amount of taxes that will ultimately be owed and the impact
of these audits on our financial statements.
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●
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growth of operations will depend on the acceptance of our products and consumer discretionary spending;
|
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●
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we have limited management resources and are dependent on key executives;
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●
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competition that we face is varied and strong;
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●
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we depend on a small number of large retailers for a significant portion of our sales;
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we may fail to comply with applicable government laws and regulations;
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we face various operating hazards that could result in the reduction of our operations; and
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Name
|
Common Stock Beneficially
Owned Before Resale |
Amount Offered
(Assuming all shares sold separately) |
Common Stock Beneficially Owned After Resale
|
|||||||||
Asaf Talmor Wertheimer(1)
|
3,999,999
|
3,999,999
|
--
|
|||||||||
S.B Meger Consulting, Management and Investment(1)(2)
|
1,500,000
|
1,500,000
|
--
|
|||||||||
Eran Sela(1)
|
4,000,000
|
4,000,000
|
--
|
|||||||||
David Kyte(1)
|
3,000,000
|
3,000,000
|
||||||||||
Roberta P Dubrow Marital Trust(1)(3)
|
1,000,000
|
1,000,000
|
--
|
|||||||||
Pareto Optimum, LP(1)(4)
|
15,000,000
|
15,000,000
|
--
|
|||||||||
Dolder investments LTD(1)(5)
|
720,000
|
720,000
|
--
|
|||||||||
Oras Capital(1)(6)
|
2,000,000
|
2,000,000
|
--
|
|||||||||
Leader & co Finance (2001) Ltd(1)(7)
|
200,000
|
200,000
|
--
|
|||||||||
Erez Haver Adv. Law Firm(1)(8)
|
1,000,000
|
1,000,000
|
--
|
|||||||||
Moni Bar-El(1)
|
600,000
|
600,000
|
--
|
|||||||||
Ofer Shalev(1)
|
1,000,000
|
1,000,000
|
--
|
|||||||||
Shay Feldman(1)
|
600,000
|
600,000
|
--
|
|||||||||
Eli Menik(1)
|
600,000
|
600,000
|
--
|
|||||||||
Ruby Hersh(1)
|
600,000
|
600,000
|
--
|
|||||||||
Miri and Shahar Cohen(1)
|
600,000
|
600,000
|
--
|
|||||||||
Tereze Ben Soshan(1)
|
600,000
|
600,000
|
--
|
|||||||||
Tom Uliel(1)
|
600,000
|
600,000
|
--
|
|||||||||
Aron (Aharon) Cohen(9)
|
9,739,572
|
9,739,572
|
--
|
|||||||||
Asaf Talmor Wertheimer(9)
|
7,791,658
|
7,791,658
|
--
|
|||||||||
Marital T/I Roberta P. Dubrow(9)(3)
|
2,921,872
|
2,921,872
|
--
|
|||||||||
David Kyte(9)
|
15,583,315
|
15,583,315
|
--
|
|||||||||
Galnir Management and Investments Ltd.(9)(10)
|
5,843,743
|
5,843,743
|
--
|
|||||||||
Iris Vermouth(9)
|
3,895,829
|
3,895,8290
|
--
|
|||||||||
Jonny Kaye(9)
|
9,739,572
|
9,739,572
|
--
|
|||||||||
Oras Capital Ltd(9)(6)
|
5,843,743
|
5,843,743
|
--
|
|||||||||
Zwi Williger(9)
|
7,791,658
|
7,791,658
|
--
|
|||||||||
Schachaf Ohana(9)
|
3,895,829
|
3,895,829
|
--
|
|||||||||
Eran Sela(9)
|
3,895,829
|
3,895,829
|
--
|
|||||||||
Ritz Investments Limited(9)(11)
|
7,791,657
|
7,791,657
|
--
|
|||||||||
GT Ventures Ltd.(9)(12)
|
30,192,673
|
30,192,673
|
--
|
|||||||||
Erez Haver Adv. Law Firm(9)(8)
|
1,947,914
|
1,947,914
|
--
|
|||||||||
Smith Family Descendants Trust(9)(13)
|
9,739,572
|
9,739,572
|
--
|
|||||||||
CLOS Trading, Ltd.(14)
|
7,791,658
|
7,791,658
|
--
|
|||||||||
Everest Credit, LP(15)
|
71,683,250
|
13,313,062
|
58,370,188
|
|||||||||
Everest Corporate Finance Ltd. (15)
|
5,661,938
|
5,661,938
|
--
|
|||||||||
Yaron Elhawi TR UA 02/01/2021 Yaron Elhawi Trust Royal App, Ltd in Liquidation(16)
|
22,647,751
|
22,647,751
|
--
|
|||||||||
|
|
1) |
Consists of shares of common stock and shares of common stock underlying warrants sold as part of the 2021 PIPE offering. Each purchaser received shares of common stock as well as one half warrant for each share of common stock purchased,
all of which are being registered. The shares of common stock were purchased at a price of $0.075 per share, and the warrants have an exercise price of $0.0975 per share.
|
|
2) |
The control persons for S.B. Meger Consulting, Management and Investment are Sagiv and Bianca Meger.
|
|
3) |
The control person for the selling shareholder is Julie Duncan.
|
|
4) |
The control person for the selling shareholder is Shay Shalom.
|
|
5) |
The control person for the selling shareholder is Shai Podoshin.
|
|
6) |
The control person for the selling shareholder is Eyal Sheratzky.
|
|
7) |
The control person for the selling shareholder is Shay Ben Yakar.
|
|
8) |
The control person for the selling shareholder is Erez Haver.
|
|
9) |
Represents shares issued pursuant to the conversion of our preferred stock pursuant to our 2021 SAFE offering.
|
|
10) |
The control person for the selling shareholder is Nir Sheratzky.
|
|
11) |
The control person for the selling shareholder is Daniele Rudich.
|
|
12) |
The control person for the selling shareholder is Trident Chambers.
|
|
13) |
The control person for the selling shareholder is Marnie Naiburg-Smith.
|
|
14) |
Consists of shares underlying warrants issued to CLOS Trading, Ltd. The control person for CLOS Trading, Ltd. Is Itay Strum.
|
|
15) |
Consists of shares issued to Everest Credit, LP and Everest Corporate Finance Ltd. The control person for each of Everest Credit, LP and Everest Corporate Finance Ltd. is Elchanan Maoz.
|
|
16) |
Consists of shares of common stock issued pursuant to our acquisition of Royal App, Ltd. The control person for the shareholder is Yaron Elhawi.
|
|
•
|
contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;
|
|
•
|
contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties;
|
|
•
|
contains a brief, clear, narrative description of a dealer market, including “bid” and “ask” prices for penny stocks and the significance of the spread between the bid and ask price;
|
|
•
|
contains a toll-free telephone number for inquiries on disciplinary actions;
|
|
•
|
defines significant terms in the disclosure document or in the conduct of trading penny stocks; and,
|
|
•
|
contains such other information and is in such form (including language, type, size, and format) as the SEC shall require by rule or regulation.
|
|
•
|
bid and offer quotations for the penny stock;
|
|
•
|
details of the compensation of the broker-dealer and its salesperson in the transaction;
|
|
•
|
the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and,
|
|
•
|
monthly account statements showing the market value of each penny stock held in the customer’s account.
|
|
●
|
on an actual basis; and
|
|
|
|
|
●
|
on an as adjusted basis to give effect to the issuance and sale of 80,000,000 shares of our common stock in this offering at the assumed public offering price of $0.12 per share.
|
|
September 30,
2021
On an actual basis
|
Offering *
|
September 30,
2021
As adjusted
|
|||||||||
|
||||||||||||
Assets
|
||||||||||||
Current assets:
|
||||||||||||
Cash and cash equivalents
|
$
|
449,574
|
$
|
9,600,000
|
$
|
10,049,574
|
||||||
Common shares issued and outstanding
|
257,920,700
|
80,000,000
|
339,920,700
|
|||||||||
Net value per share
|
$
|
0.002
|
$
|
0.12
|
$
|
0.029
|
Assumed public offering price per share
|
$
|
0.12
|
||||||
Net tangible book value per share as of September 30, 2021
|
$
|
0.00012
|
||||||
Increase per share attributable to new investors
|
$
|
0.02838
|
||||||
As adjusted net tangible book value per share after this offering
|
$
|
0.02850
|
||||||
Dilution per share to new investors in the offering
|
$
|
0.02838
|
|
●
|
27,542,846 shares of our common stock pursuant to issuances of stock options under our 2021 Stock Incentive Plan and 40,331,658 shares of common stock underlying warrants.
|
|
• |
Increase customer retention (60%)
|
|
• |
Increase average basket size (30%)
|
|
• |
Increase Up sell and Cross sell x4
|
|
• |
Increase customers lifetime value CLV – drastic increase in repeat monthly purchases
|
|
●
|
Revenue. During the nine month period ended September 30, 2021, we generated revenue of $124,008. Our revenue for the period is primarily attributed to license fees,
subscriptions, and customized professional services related to our mobile commerce software platform.
|
|
|
|
|
●
|
Operating expenses. During the nine months ended September 30, 2021, our operating expenses were $1,691,571. Our operating expenses include management fees, research and
development costs, general and administrative expenses, sales and marketing costs and costs associated with our recent sales of securities.
|
●
|
Net income (loss). During the nine months ended September 30, 2021 the Company reported a net loss of $1,567,563 or approximately $0.04 per share.
|
|
• |
An amendment to the articles of the Company to increase the authorized shares of the Company from 50,000,000 to 600,000,000.
|
|
• |
An amendment to the articles of the Company to effect a reverse stock split on the basis of not less than 1 for 10 and not more than 1 for 100. Such ratio to be determined by the Board of Directors of the Company, at such time as it is
approved by the Board of Directors of the Company.
|
|
• |
Approval of a 2021 Employee Stock Incentive Plan. The Plan will have available shares equity to 25% of the Company’s capitalization and a term of ten years from the effective date of the Plan.
|
|
• |
Approval of the Company’s reorganization from Oregon to Delaware.
|
|
- |
9,000,000 fully vested incentive stock options to directors, officers and consultants of the Company for exercise at $0.02567 for a term of 4 years from grant.
|
|
- |
7,077,422 qualified employee stock options to certain officers, directors and employees of the Company’s wholly owned subsidiary, Stratford Ltd for exercise at $0.123 per share for a period of (4) four years from grant and vesting as to
25% (Twenty five percent) on the first anniversary of the Vesting Commencement Date (the “Cliff Date”), with an additional 6.25% (six and one quarter percent) of the options vesting at the end of each three (3) month period following the
Cliff Date. The options shall become fully vested by the fourth anniversary of the vesting commencement date, with a vesting commencement date of October 26, 2021.
|
|
- |
11,465,424 qualified employee stock options to certain officers and employees of the Company’s wholly owned subsidiary, Stratford Ltd., with an exercise price of $0.02567 per share for a period of four years from grant and vesting as to
25% (Twenty five percent) on the first anniversary of the Vesting Commencement Date (the “Cliff Date, with an additional 6.25% (six and one quarter percent) of the Option vesting at the end of each three (3) month period following the Cliff
Date. The Options shall become fully vested by the fourth anniversary of the Vesting Commencement Date, with a vesting commencement date of May 2, 2021.
|
|
●
|
We believe that expanding our marketing team, which may result in significant advertising expenses, will be necessary in order to increase product awareness in order to compete with our competitors, including
large and well established brands with access to significant capital resources
|
|
|
|
|
●
|
Customer trends and tastes can change for a variety of reasons including government regulations and variation in demographics. We will need to be able to adapt to changing preferences in the future.
|
|
|
|
|
●
|
Our sales growth is dependent upon maintaining our relationships with existing and future customers, which includes sales to large retailers.
|
Three months ended
September 30,
|
||||||||
|
2021
|
2020
|
||||||
Revenues
|
$
|
74,025
|
$
|
-
|
||||
Operating expenses
|
$ | $ | ||||||
General and administrative
|
268,491
|
4,344
|
||||||
Management Fees
|
142,267
|
12,000
|
||||||
Research and Development
|
266,342
|
-
|
||||||
Sales and Marketing
|
43,439
|
-
|
||||||
Finance Costs
|
9,916
|
-
|
||||||
Total operating expenses
|
730,455
|
16,344
|
||||||
|
||||||||
Loss
|
$
|
(656,430
|
)
|
$
|
(16,344
|
)
|
||
For the Nine Months Ended September 30,
|
||||||||
2021
|
2020
|
|||||||
Revenues
|
$
|
124,008
|
$
|
-
|
||||
Operating expenses:
|
||||||||
General and administrative
|
565,645
|
13,512
|
||||||
Management Fees
|
223,708
|
36,000
|
||||||
Research and Development
|
448,078
|
-
|
||||||
Sales and Marketing
|
78,284
|
-
|
||||||
Finance Costs
|
375,856
|
-
|
||||||
Total operating expenses
|
1,691,571
|
49,512
|
||||||
|
||||||||
Loss
|
(1,567,563
|
)
|
(49,512
|
)
|
For the Year ended
December 31, |
||||||
2020
|
2019
|
|||||
Operating expenses:
|
||||||
General and administrative expenses
|
53,236
|
103,277
|
||||
Total operating expenses
|
$
|
53,236
|
$
|
103,277
|
For the Year ended
December 31, |
||||||||
2020
|
2019
|
|||||||
Net cash provided (used by) operating activities
|
$
|
22,961
|
$
|
(128,299
|
)
|
|||
Net cash provided from (used by) investing activities
|
-
|
-
|
||||||
Net cash provided from financing activities
|
-
|
-
|
||||||
Increase (decrease) in cash and cash equivalents
|
$
|
22,961
|
$
|
(128,299
|
)
|
|
September 30, 2021
|
December 31, 2020
|
||||||
Current assets
|
$
|
696,423
|
$
|
24,788
|
||||
Less: current liabilities
|
473,491
|
51,175
|
||||||
Working capital (deficiency)
|
$
|
222,932
|
$
|
(26,387
|
)
|
|
●
|
a retained or contingent interest in assets transferred to the unconsolidated entity or similar arrangement that serves as credit;
|
|
|
|
|
●
|
liquidity or market risk support to such entity for such assets;
|
|
|
|
|
●
|
an obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument; or
|
|
|
|
|
●
|
an obligation, including a contingent obligation, arising out of a variable interest in an unconsolidated entity that is held by, and material to us, where such entity provides financing, liquidity, market risk
or credit risk support to or engages in leasing, hedging, or research and development services with us.
|
|
• |
Increase customer retention (60%)
|
|
• |
Increase average basket size (30%)
|
|
• |
Increase Upsell and Cross-sell x4
|
|
• |
Increase customers lifetime value CLV – drastic increase in repeat monthly purchases
|
|
• |
Mobile Commerce Merchant Platform: Enabling SMB retailers to launch a fully branded and functional mobile app with tons of unique and patented features. Great for retailers with at least 200+ return
customers. Our patented UX/UI features are available on both IOS and Android and include unique features such as voice search, shoppable videos, and barkers for upselling.
|
|
• |
Mobile Commerce Enterprise Platform: Enabling Enterprise retailers who own and operates both brick and mortar store as well as e-commerce platforms to better engage with their customer both online
and in-store via the customer’s mobile application.
|
|
• |
Instore engagement Suite: providing a purely customer-centric approach to shopping. Our Scan, Pay & Go reduces the customer’s shopping time by approximately 40%. Imagine no more waiting in
lengthy lines, no more time and effort spent on packing, unpacking and packing again … and for retailers, an effective way to reduce cost on hardware acquisition and maintenance. Additional instore features will include In-store navigation,
in-store personalized shopping experience, and in-store customer loyalty program activation. During this phase, we might consider the M&A of small startups with unique technological features enriching our suite of products without having
to develop from scratch.
|
|
- |
Intuitive drag and drop dashboards that enable merchants to build their own branded mobile application
|
|
- |
Patented single product display graphical user interface – called the shelf that makes mobile shopping truly mobile and is truly unique to our application
|
|
- |
An advanced in app marketing suite consisting of features such as shoppable videos and barkers, significantly increasing up selling and cross selling.
|
• developing a powerful, performance-oriented, and
metric-driven organizational culture;
|
|
• developing automated marketing, sales and customer
service tool kits to empower our sales force network to engage with global customers;
|
|
• developing brand/marketing tool kits for current and new
products and segments, to make onboarding as efficient and seamless as possible;
|
|
• launching and expanding our SaaS products domestically
and internationally;
|
|
• strengthening our supply chain to achieve best in class
costs, on-time/as promised products and customer service;
|
|
• improving margins with improved efficiency, and improved
net revenue per case with new products;
|
|
• upgrading infrastructure, systems and processes with
enterprise resource planning systems, improved financial reporting, operating expense control, and strengthened key metrics and accounting and control procedures; and
|
|
• strengthening our financial foundation via accessing the
capital markets, solidifying long-term banking partners and facilities, and pursuing transformative organic and external growth.
|
Name
|
|
Age
|
|
Position(s)
|
|
|
|
|
|
Bianca Meger
|
|
39
|
|
Chief Executive Officer
|
Elchanan (Nani) Maoz
|
|
55
|
|
President, Director
|
Jonah Meer
|
|
66
|
|
Secretary, Director
|
James Alexander Brodie
|
|
68
|
|
Treasurer, Director
|
Name and Principal
|
Fiscal Year Ended
|
Salary
|
Bonus
|
Stock Awards
|
Option Awards
|
All Other
|
Total
|
Position
|
12/31
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
Bianca Meger
Chief Executive Officer
|
2021
|
71,415
|
-
|
-
|
68,543
|
-
|
139,958
|
2020
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Elchanan Maoz
President and Director
|
2021
|
-
|
-
|
-
|
440,000
|
30,000
|
470,000
|
2020
|
-
|
-
|
-
|
-
|
24,000
|
24,000
|
|
Jonah Meer, Secretary and Director
|
2021
|
-
|
-
|
-
|
220,000
|
15,000
|
235,000
|
2020
|
-
|
-
|
-
|
-
|
12,000
|
12,000
|
|
James Alexander Brodie, Treasurer and Director
|
2021
|
-
|
-
|
-
|
220,000
|
15,000
|
235,000
|
2020
|
-
|
-
|
-
|
-
|
12,000
|
12,000
|
Name
|
2021
|
2020
|
Elchanan Maoz
|
$30,000
|
$24,000
|
Jonah Meer
|
$15,000
|
$12,000
|
James Brodie
|
$15,000
|
$12,000
|
|
Number of Shares of
Common Stock
Beneficially
|
Percentage of Shares of
Common Stock Beneficially |
Percentage of
Voting
Power of Common and
Preferred Stock Before
|
Percentage of Voting Power of Common Stock After
|
||||||||||||
Beneficial Owner
|
Owned
|
Owned
|
Offering(2)(3)
|
Offering
|
||||||||||||
Five Percent Stockholders:
|
||||||||||||||||
Yaron Elhawi TR UA 02/01/2021 Yaron Elhawi Trust Royal App Ltd in Liquidation (1)
|
22,647,751
|
8.8
|
%
|
—
|
6.7
|
%
|
||||||||||
GT Ventures Ltd (2)
|
30,192,673
|
11.7
|
%
|
—
|
8.9
|
%
|
||||||||||
David Kyte
|
17,583,315
|
6.8
|
%
|
—
|
5.2
|
%
|
||||||||||
Executive Officers and Directors:
|
||||||||||||||||
Bianca Meger (beneficially owned by SB Meger Consulting)
|
1,000,000
|
0.4
|
%
|
—
|
0.3
|
%
|
||||||||||
Elchanan Maoz(3)
|
83,333,290
|
31.81
|
%
|
—
|
24.4
|
%
|
||||||||||
Jonah Meer(4)
|
2,000,000
|
0.78
|
%
|
—
|
0.6
|
%
|
||||||||||
James Alexander Brodie(5)
|
2,000,000
|
0.78
|
%
|
—
|
0.6
|
%
|
||||||||||
|
||||||||||||||||
All Officers and Directors as a Group (4 persons)
|
88,333,290
|
33.21
|
%
|
—
|
25.9
|
%
|
|
●
|
to legal entities that are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;
|
|
|
|
|
●
|
to any legal entity that has two or more of (i) an average of at least 250 employees during its last fiscal year; (ii) a total balance sheet of more than €43,000,000 (as shown on its last annual unconsolidated
or consolidated financial statements) and (iii) an annual net turnover of more than €50,000,000 (as shown on its last annual unconsolidated or consolidated financial statement);
|
|
|
|
|
●
|
to fewer than 100 natural or legal persons (other than qualified investors within the meaning of Article 2(1)I of the Prospectus Directive) subject to obtaining the prior consent of the company or any
underwriter for any such offer; or
|
|
|
|
|
●
|
in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of common stock shall result in a requirement for the publication by the company of a prospectus
pursuant to Article 3 of the Prospectus Directive.
|
|
●
|
to Italian qualified investors, as defined in Article 100 of Decree no. 58 by reference to Article 34-ter of CONSOB Regulation no. 11971 of 14 May 1999 (“Regulation no. 1197l”) as amended (“Qualified
Investors”); and
|
|
|
|
|
●
|
in other circumstances that are exempt from the rules on public offer pursuant to Article 100 of Decree No. 58 and Article 34-ter of Regulation No. 11971 as amended.
|
|
●
|
made by investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with Legislative Decree No. 385 of 1 September 1993 (as amended), Decree No. 58, CONSOB
Regulation No. 16190 of 29 October 2007 and any other applicable laws; and
|
|
|
|
|
●
|
in compliance with all relevant Italian securities, tax and exchange controls and any other applicable laws.
|
Page | |
For the Three and Nine Months Ended September 30, 2021 and 2020
|
|
|
|
F-2 | |
|
|
F-3 | |
|
|
F-4 | |
|
|
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020 (unaudited) | F-5 |
F-6 | |
|
|
For the Years Ended December 31, 2020 and 2019
|
|
|
|
F-18 | |
|
|
F-19 | |
|
|
F-20 | |
|
|
F-21 | |
|
|
F-22 | |
|
|
F-23 | |
|
|
Page
|
|||
Condensed Consolidated Balance Sheets
|
F-2 | ||
Condensed Consolidated Statements of Operations
|
F-3 | ||
Condensed Consolidated Statements of Stockholders’ Equity
|
F-4 | ||
Condensed Consolidated Statements of Cash Flows
|
F-5 | ||
Notes to the Condensed Consolidated Financial Statements
|
F-6 |
|
September 30,
2021
|
December 31,
2020
|
||||||
|
||||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ |
449,574
|
$ |
24,788
|
||||
Accounts receivable
|
9,622
|
-
|
||||||
Prepaid expenses
|
32,002
|
-
|
||||||
Other current assets
|
205,225
|
-
|
||||||
Total current assets
|
696,423
|
24,788
|
||||||
Intangible assets (note 5)
|
3,309,434
|
-
|
||||||
Total assets
|
$ |
4,005,857
|
$ |
24,788
|
||||
|
||||||||
Liabilities and Stockholders’ (Deficit)
|
||||||||
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued liabilities
|
$ |
473,491
|
$ |
51,175
|
||||
Total current liabilities
|
473,491
|
51,175
|
||||||
Other liability
|
193,126
|
-
|
||||||
Total liabilities
|
666,617
|
51,175
|
||||||
|
||||||||
|
||||||||
Stockholders’ (deficit)
|
||||||||
Preferred stock, no par value, 10,000,000 shares authorized:
|
||||||||
Series A convertible preferred stock, 1,385 shares authorized
0 and 1,000 shares issued and outstanding: liquidation preference of $0 and $10,000 per share, respectively*
|
-
|
10,000,000
|
||||||
Common stock, no par value; 600,000,000 shares authorized
236,507,367 and 6,233,326 shares issued and outstanding, respectively
|
137,097,663
|
122,248,660
|
||||||
Additional paid in capital
|
91,482
|
-
|
||||||
Accumulated deficit
|
(133,842,610
|
)
|
(132,275,047
|
)
|
||||
Other comprehensive income
|
(7,295
|
)
|
-
|
|||||
Stockholders’ (deficit)
|
3,339,240
|
(26,387
|
)
|
|||||
Total liabilities, redeemable preferred stock and Stockholders’ Deficit
|
$ |
4,005,857
|
$ |
24,788
|
Three months ended
September 30,
|
Nine months Ended
September 30,
|
|||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Revenues
|
$
|
74,025
|
$
|
-
|
$
|
124,008
|
$
|
-
|
||||||||
Operating expenses
|
$ | $ | $ | $ | ||||||||||||
General and administrative
|
268,491
|
4,344
|
565,645
|
13,512
|
||||||||||||
Management Fees
|
142,267
|
12,000
|
223,708
|
36,000
|
||||||||||||
Research and Development
|
266,342
|
-
|
448,078
|
-
|
||||||||||||
Sales and Marketing
|
43,439
|
-
|
78,284
|
-
|
||||||||||||
Finance Costs
|
9,916
|
-
|
375,856
|
-
|
||||||||||||
Total operating expenses
|
730,455
|
16,344
|
1,691,571
|
49,512
|
||||||||||||
|
||||||||||||||||
Loss
|
$
|
(656,430
|
)
|
$
|
(16,344
|
)
|
$
|
(1,567,563
|
)
|
$
|
(49,512
|
)
|
||||
Basic and diluted net loss per common share
|
$
|
(0.01
|
)
|
$
|
(0.00
|
)
|
$
|
(0.04
|
)
|
$
|
(0.00
|
)
|
||||
|
||||||||||||||||
Weighted average shares – basic and diluted
|
107,862,699
|
6,233,326
|
40,607,967
|
6,233,326
|
||||||||||||
Other Comprehensive Income (loss)
|
||||||||||||||||
Net Loss
|
$
|
(656,430
|
)
|
$
|
(16,344
|
)
|
$
|
(1,567,563
|
)
|
$
|
(49,512
|
)
|
||||
Foreign currency translation adjustment
|
(1,469
|
)
|
-
|
(7,295
|
)
|
-
|
||||||||||
$
|
(657,899
|
)
|
$
|
(16,344
|
)
|
$
|
(1,574,858
|
)
|
$
|
(49,512
|
)
|
Preferred Shares
|
Common Stock
|
Additional
Paid-inCapital
|
Accumulated Other
Comprehensive
Income (loss)
|
|||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Accumulated
Deficit
|
Total
Stockholders’
Equity (Deficit)
|
|||||||||||||||||||||||||||
Balance at December 31, 2020
|
1,000
|
$
|
10,000,000
|
6,233,326
|
$
|
122,248,660
|
$
|
-
|
$
|
-
|
$
|
(132,275,047
|
)
|
$
|
(26,387
|
)
|
||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
-
|
(77,700
|
)
|
(77,700
|
)
|
||||||||||||||||||||||
Balance at March 31, 2021
|
1,000
|
10,000,000
|
6,233,326
|
122,248,660
|
-
|
-
|
(132,352,747
|
)
|
(104,087
|
)
|
||||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
(5,826
|
)
|
-
|
(5,826
|
)
|
||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
-
|
(833,433
|
)
|
(833,433
|
)
|
||||||||||||||||||||||
Balance at June 30, 2021
|
1,000
|
10,000,000
|
6,233,326
|
122,248,660
|
-
|
(5,826
|
)
|
(133,186,180
|
)
|
(943,346
|
)
|
|||||||||||||||||||||
Share issuance under private placement
|
-
|
-
|
130,281,102
|
3,433,518
|
91,482
|
-
|
-
|
3,525,000
|
||||||||||||||||||||||||
Share issuance under acquisition of assets
|
-
|
-
|
22,647,751
|
1,132,388
|
-
|
-
|
-
|
1,132,388
|
||||||||||||||||||||||||
Share issuance as financing costs
|
-
|
-
|
5,661,938
|
283,097
|
-
|
-
|
-
|
283,097
|
||||||||||||||||||||||||
Preferred shares converted*
|
(1,000
|
)
|
(10,000,000
|
)
|
71,683,250
|
10,000,000
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
(1,469
|
)
|
--
|
(1,469
|
)
|
||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
-
|
(656,430
|
(656,430
|
)
|
|||||||||||||||||||||||
Balance at September 30, 2021
|
-
|
$
|
-
|
236,507,367
|
$
|
137,097,663
|
$
|
91,482
|
$
|
(7,295
|
)
|
$
|
(133,842,610
|
)
|
$
|
3,339,240
|
|
Preferred Shares
|
Common Stock
|
Accumulated
|
Total
Stockholders’
|
||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Deficit
|
(Deficit)
|
||||||||||||||||||
Balance at December 31, 2019
|
1,000
|
$
|
10,000,000
|
6,233,326
|
$
|
122,248,660
|
$
|
(132,221,811
|
)
|
$
|
26,849
|
|||||||||||||
Net loss
|
-
|
-
|
(16,448
|
)
|
(16,448
|
)
|
||||||||||||||||||
Balance at March 31, 2020
|
1,000
|
10,000,000
|
6,233,326
|
122,248,660
|
(132,238,259
|
)
|
10,401
|
|||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(16,720
|
)
|
(16,720
|
)
|
||||||||||||||||
Balance at June 30, 2020
|
1,000
|
10,000,000
|
6,233,326
|
122,248,660
|
(132,255,979
|
)
|
(6,319
|
)
|
||||||||||||||||
Net loss
|
-
|
-
|
-
|
(16,344
|
)
|
(16,344
|
)
|
|||||||||||||||||
Balance at September 30, 2020
|
1,000
|
$
|
10,000,000
|
6,233,326
|
$
|
122,248,660
|
$
|
(132,272,323
|
)
|
$
|
(22,663
|
)
|
|
Nine Months Ended
September 30, |
|||||||
|
2021
|
2020
|
||||||
|
||||||||
Cash flows used in operating activities:
|
||||||||
Net loss
|
(1,567,563
|
)
|
(49,512
|
)
|
||||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Financing costs
|
283,096
|
-
|
||||||
Changes in certain assets and liabilities:
|
||||||||
Accounts receivable
|
(9,622
|
)
|
-
|
|||||
Prepaid expenses
|
(32,002
|
)
|
-
|
|||||
Other current assets
|
(40,690
|
)
|
27,000
|
|||||
Accounts payable and accrued liability
|
422,316
|
8,841
|
||||||
Net cash provided by (used in) operating activities
|
(944,465
|
)
|
2,673
|
|||||
|
||||||||
Cash flows from investing activities:
|
||||||||
Asset purchase
|
(2,147,661
|
)
|
-
|
|||||
Net cash provided by investing activities
|
(2,147,661
|
)
|
-
|
|||||
|
||||||||
Cash flows from financing activities:
|
||||||||
Proceeds from private placements
|
3,525,000
|
-
|
||||||
Net cash provided by financing activities
|
3,525,000
|
-
|
||||||
|
||||||||
Net decrease in cash and cash equivalents
|
432,874
|
2,673
|
||||||
Foreign Exchange Gain (loss)
|
(8,088
|
)
|
-
|
|||||
Cash and cash equivalents, beginning of year
|
24,788
|
1,827
|
||||||
Cash and cash equivalents, end of year
|
449,574
|
4.500
|
||||||
|
||||||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash received (paid) for income taxes, net
|
-
|
-
|
||||||
Cash paid for interest
|
-
|
-
|
||||||
Non-cash Investing and Financing Activities
|
||||||||
Royal App assets acquired by issuance of shares
|
967,853
|
-
|
||||||
Other current assets acquired by issuance of shares
|
164,535
|
|||||||
Royal App assets acquired through assumption of repayable government grant
|
193,920
|
-
|
||||||
Financing cost recorded as liability for unissued shares
|
283,096
|
-
|
1.
|
An amendment to the articles of the Company to increase the authorized shares of the Company from 50,000,000 to 600,000,000.
|
2.
|
An amendment to the articles of the Company to effect a reverse stock split on the basis of not less than 1 for 10 and not more than 1 for 100. Such ratio to be determined by the Board of Directors of the
Company.
|
3.
|
Approval of a 2021 Employee Stock Incentive Plan. The Plan will have available shares equity to 25% of the Company’s capitalization and a term of ten years from the effective date of the Plan
|
4.
|
Approval of the Company’s reorganization from Oregon to Delaware.
|
●
|
Level 1: Observable inputs such as quoted prices in active markets;
|
●
|
Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
|
●
|
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions
|
-
|
71,683,250 shares of unregistered restricted common stock upon conversion of 1,000 shares of the Series A convertible Preferred stock to its controlling shareholder, Everest Credit L.P., a company of which
our President and Director is a beneficial owner;
|
-
|
5,661,938 shares of unregistered restricted common stock to Everest Corporate Finance Ltd., a company of which our President and Director is a beneficial owner, as commission fees in respect to the
acquisition of the assets of Royal App Ltd;
|
-
|
22,647,751 shares of unregistered restricted common stock to the Trustee in Liquidation for Royal App as part of the agreed consideration under the acquisition agreement;
|
-
|
126,614,436 unregistered restricted shares of common stock in exchange for 3.25M in proceeds from SAFES from various accredited investors.
|
|
Number
of Warrants |
|
Exercise
Price ($) |
|
Expiry Date |
|
1,333,333
|
|
0.0975
|
|
September 9, 2023
|
|
500,000
|
|
0.0975
|
|
September 27, 2023
|
|
1,833,333
|
|
0.0975
|
|
|
|
|
Number of Warrants
|
|
|
Weighted Average
Exercise Price ($) |
|
Balance, December 31, 2020
|
|
-
|
|
$
|
-
|
|
Warrants issued
|
|
1,833,333
|
|
|
0.0975
|
|
Warrants expired
|
|
-
|
-
|
|||
Balance, September 30, 2021
|
|
1,833,333
|
|
$
|
0.0975
|
|
|
2021
|
|
|
Risk-free interest rate
|
0.23% ~ 0.31%
|
Expected life of warrants
|
2 years
|
Expected annualized volatility
|
427.03% ~ 428.65%
|
Dividend
|
Nil
|
Forfeiture rate
|
0%
|
Three months ended
September 30,
|
Nine months Ended
September 30,
|
|||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||
Management fees
|
$
|
142,267
|
$
|
12,000
|
$
|
223,708
|
$
|
36,000
|
||||
-
|
9,000,000 fully vested incentive stock options to directors, officers and consultants of the Company for exercise at $0.0257 for a term of 4 years from grant.
|
-
|
7,077,422 qualified employee stock options to certain officers, directors and employees of the Company’s wholly owned subsidiary, Stratford Ltd for exercise at $0.123 per share for a period of four years
from grant and vesting as to 25% (Twenty five percent) on the first anniversary of the Vesting Commencement Date (the “Cliff Date”), with an additional 6.25% (six and one quarter percent) of the Option vesting at the end of each three (3)
month period following the Cliff Date. The Options shall become fully vested by the fourth anniversary of the Vesting Commencement Date, with a vesting commencement date of October 26, 2021.
|
-
|
11,465,424 qualified employee stock options to certain officers and employees of the Company’s wholly owned subsidiary, Stratford Ltd for exercise at $0.02567 per share for a period of four years from grant
and vesting as to 25% (Twenty five percent) on the first anniversary of the Vesting Commencement Date (the “Cliff Date”), with an additional 6.25% (six and one quarter percent) of the Option vesting at the end of each three (3) month
period following the Cliff Date. The Options shall become fully vested by the fourth anniversary of the Vesting Commencement Date, with a vesting commencement date of May 2, 2021.
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
F-18 |
Balance Sheets
|
F-19 |
Statements of Operations
|
F-20 |
Statement of Changes in Stockholders' Deficit
|
F-21 |
Statements of Cash Flows
|
F-22 |
Notes to Audited Financial Statements
|
F-23 |
|
|
Gries & Associates, LLC
Certified Public Accountants
501 S. Cherry Street Ste 1100
Denver, Colorado 80246
|
|
|
|
|
|
|
We have served as the Company’s auditor since 2021.
|
|
Denver, Colorado
February 10, 2022
|
|
December 31,
|
|||||||
|
2020
|
2019
|
||||||
|
||||||||
Assets
|
||||||||
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
24,788
|
1,827
|
||||||
Prepaid costs and other current assets
|
-
|
27,000
|
||||||
|
||||||||
Total current assets
|
24,788
|
28,827
|
||||||
|
||||||||
Total assets
|
24,788
|
28,827
|
||||||
|
||||||||
Liabilities and Stockholders’ Equity (Deficit)
|
||||||||
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
51,175
|
1,978
|
||||||
Total current liabilities
|
51,175
|
1,978
|
||||||
|
||||||||
Total liabilities
|
51,175
|
1,978
|
||||||
|
||||||||
Commitments and contingencies
|
||||||||
|
||||||||
Stockholders’ equity (deficit):
|
||||||||
Preferred stock, no par value, 10,000,000 shares authorized:
|
||||||||
Series A convertible preferred stock, 1,385 shares authorized 1,000 shares issued and outstanding; liquidation preference of $10,000 per share
|
10,000,000
|
10,000,000
|
||||||
Common stock, no par value; 50,000,000 shares authorized, 6,233,326 shares issued and outstanding
|
122,248,660
|
122,248,660
|
||||||
Accumulated deficit
|
(132,275,047
|
)
|
(132,221,810
|
)
|
||||
Stockholders’ equity (deficit)
|
(26,387
|
)
|
26,849
|
|||||
|
||||||||
Total liabilities, redeemable preferred stock and Stockholders’ equity
|
24,788
|
28,827
|
||||||
|
Years Ended December 31,
|
|||||||
|
2020
|
2019
|
||||||
|
||||||||
Costs and expenses:
|
||||||||
General and administrative
|
53,236
|
103,277
|
||||||
|
||||||||
|
||||||||
Loss from operations
|
(53,236
|
)
|
(103,277
|
)
|
||||
Net Loss
|
(53,236
|
)
|
(103,277
|
)
|
||||
|
||||||||
Net loss per share attributable to common shareholders:
|
||||||||
Basic and diluted
|
(0.00
|
)
|
(0.00
|
)
|
||||
|
||||||||
Weighted average shares outstanding
|
||||||||
Basic and diluted
|
6,233,326
|
6,233,326
|
||||||
|
|
Preferred Stock
|
|
|
Common Stock
|
|
|
Accumulated
|
|
|
Total
Stockholders’
Equity
|
|
||||||||||||
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Deficit
|
|
|
(Deficit)
|
|
||||||
Balance at December 31, 2018
|
|
|
1,000
|
|
|
$
|
10,000,000
|
|
|
|
6,233,326
|
|
|
$
|
122,248,660
|
|
|
$
|
(132,118,534
|
)
|
|
$
|
130,126
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
(103,277
|
)
|
(103,277
|
)
|
||||||||||
Balance at December 31, 2019
|
|
|
1,000
|
|
|
$
|
10,000,000
|
|
|
|
6,233,326
|
|
|
$
|
122,248,660
|
|
|
$
|
(132,221,811
|
)
|
|
$
|
26,849
|
|
Net loss
|
|
|
(53,236
|
)
|
(53,236
|
)
|
||||||||||||||||||
Balance at December 31, 2020
|
|
|
1,000
|
|
|
$
|
10,000,000
|
|
|
|
6,233,326
|
|
|
$
|
122,248,660
|
|
|
$
|
(132,275,047
|
)
|
|
$
|
(26,387
|
)
|
|
Years Ended
December 31, |
|||||||
|
2020
|
2019
|
||||||
|
||||||||
Cash flows used in operating activities:
|
||||||||
Net loss
|
(53,236
|
)
|
(103,277
|
)
|
||||
Changes in certain assets and liabilities:
|
||||||||
Prepaid costs and other assets
|
27,000
|
(27,000
|
)
|
|||||
Accounts payable and other liabilities
|
49,197
|
1,978
|
||||||
Net cash provided by (used in) operating activities
|
22,961
|
(128,299
|
)
|
|||||
|
||||||||
Cash flows from investing activities:
|
||||||||
Net cash provided by investing activities
|
-
|
-
|
||||||
|
||||||||
Cash flows from financing activities:
|
||||||||
Net cash provided by financing activities
|
-
|
-
|
||||||
|
||||||||
Net decrease in cash and cash equivalents
|
22,961
|
(128,299
|
)
|
|||||
|
||||||||
Cash and cash equivalents, beginning of year
|
1,827
|
130,126
|
||||||
|
||||||||
Cash and cash equivalents, end of year
|
24,788
|
1,827
|
||||||
|
||||||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash refunded (paid) for income taxes, net
|
(27,592
|
)
|
-
|
|||||
|
Year Ended
December 31, 2020 |
Year Ended
December 31, 2019 |
||||||
Current
|
||||||||
Federal
|
$
|
-
|
$
|
-
|
||||
State
|
-
|
-
|
||||||
|
-
|
-
|
||||||
Deferred
|
||||||||
Federal
|
-
|
-
|
||||||
State
|
-
|
-
|
||||||
|
-
|
-
|
||||||
Total income tax provision (benefit)
|
$
|
-
|
$
|
-
|
|
Year Ended
December 31, 2020 |
Year Ended
December 31, 2019 |
||||||
U.S. Federal (tax benefit) provision at statutory rate
|
$
|
(11,180
|
)
|
$
|
(21,680
|
)
|
||
Changes in valuation allowance
|
11,180
|
21,680
|
||||||
Total
|
$
|
-
|
$
|
-
|
|
December 31,
2020 |
December 31,
2019 |
||||||
Deferred Tax Assets
|
||||||||
Net operating losses
|
11,180
|
21,680
|
||||||
Total deferred tax assets
|
11,180
|
21,680
|
||||||
Valuation allowance
|
(11,180
|
)
|
(21,680
|
)
|
||||
Net deferred tax assets
|
-
|
-
|
||||||
|
||||||||
Deferred Tax Liabilities
|
||||||||
Total deferred tax liabilities
|
-
|
-
|
||||||
Net deferred tax
|
$
|
-
|
$
|
-
|
1.
|
An amendment to the articles of the Company to increase the authorized shares of the Company from 50,000,000 to 600,000,000.
|
2.
|
An amendment to the articles of the Company to effect a reverse stock split on the basis of not less than 1 for 10 and not more than 1 for 100. Such ratio to be determined by the Board
of Directors of the Company.
|
3.
|
Approval of a 2021 Employee Stock Incentive Plan. The Plan will have available shares equity to 25% of the Company’s capitalization and a term of ten years from the effective date of the
Plan
|
4.
|
Approval of the Company’s reorganization from Oregon to Delaware.
|
-
|
71,683,250 shares of unregistered restricted common stock upon conversion of 1,000 shares of the Series A convertible Preferred stock to its
controlling shareholder, Everest Credit L.P., a company of which our President and Director is a beneficial owner;
|
-
|
5,661,938 shares of unregistered restricted common stock to Everest Corporate Finance Ltd., a company of which our President and Director is a
beneficial owner, as commission fees in respect to the acquisition of the assets of Royal App Ltd;
|
-
|
22,647,751 shares of unregistered restricted common stock to the Trustee in Liquidation for Royal App as part of the agreed consideration under
the acquisition agreement;
|
-
|
126,614,436 unregistered restricted shares of common stock in exchange for 3.25M in proceeds from SAFES.
|
-
|
9,000,000 fully vested incentive stock options to directors, officers and consultants of the Company for exercise at $0.0257 for a term of 4 years from grant.
|
-
|
7,077,422 qualified employee stock options to certain officers, directors and employees of the Company’s wholly owned subsidiary, Stratford Ltd for exercise at $0.123 per share for a period of (4) four
years from grant and vesting as to 25% (Twenty five percent) on the first anniversary of the Vesting Commencement Date (the “Cliff Date”), with an additional 6.25% (six and one quarter percent) of the Option vesting at the end of each
three (3) month period following the Cliff Date. The Options shall become fully vested by the fourth anniversary of the Vesting Commencement Date, with a vesting commencement date of October 26, 2021.
|
-
|
11,465,424 qualified employee stock options to certain officers and employees of the Company’s wholly owned subsidiary, Stratford Ltd. for exercise at $0.02567 per share for a period of (4) four years from
grant and vesting as to 25% (Twenty five percent) on the first anniversary of the Vesting Commencement Date (the “Cliff Date”), with an additional 6.25% (six and one quarter percent) of the Option vesting at the end of each three (3)
month period following the Cliff Date. The Options shall become fully vested by the fourth anniversary of the Vesting Commencement Date, with a vesting commencement date of May 2, 2021.
|
|
|
SEC Registration Fee
|
$
|
3,544
|
||
Printing and Engraving Expenses
|
$
|
20,000
|
||
Legal Fees and Expenses
|
$
|
60,000
|
||
Accounting Fees and Expenses
|
$
|
23,150
|
||
Transfer Agent and Registrar Fees and Expenses
|
$
|
15,000
|
||
|
||||
TOTAL
|
$
|
121,694
|
Exhibit
|
|
|
Number
|
|
Description
|
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2.1
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3.1
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3.2
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3.3
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5.1
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10.1*
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Form of Subscription Agreement to be used with Registration Statement
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10.2*
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Form of Warrant to be used with Registration Statement
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10.3
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10.4
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10.5
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10.6
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10.7
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10.8
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23.1
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23.2
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Consent of Counsel, Smith Eilers, PLLC (See Exhibit 5.1)
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107
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Filing Fees Table
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A.
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Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we
have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by us of expenses incurred or paid by our director, officer or controlling person 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, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
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B.
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The undersigned registrant hereby undertakes:
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(1)
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To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
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a.
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to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
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b.
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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) (Section 230.424(b) of
Regulation S-K) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration
statement; and
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c.
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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.
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(2)
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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 the securities at that time shall be deemed to be the initial bona fide offering thereof.
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(3)
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To remove from the registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
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(4)
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That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
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(i)
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If the registrant is relying on Rule 430B (Sec.230.430B of this chapter):
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(a)
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Each prospectus filed by the registrant pursuant to Rule 424(b)(3) (Sec.230.424(b)(3) of this chapter) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed
part of and included in the registration statement; and
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(b)
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Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) (Sec.230.424(b)(2), (b)(5), or (b)(7) of this chapter) as part of a registration statement in reliance on Rule 430B relating to
an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) (Sec.230.415(a)(1)(i), (vii), or (x) of this chapter) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be
part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As
provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration
statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided,
however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or
prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was
part of the registration statement or made in any such document immediately prior to such effective date; or
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(ii)
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If the registrant is subject to Rule 430C (Sec.230.430C of this chapter), each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A (Sec.230.430A of this chapter), shall be deemed to be part of and included in the registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the
registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use;
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(5)
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That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:
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(i)
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The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such
securities to such purchaser:
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(a)
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Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 (Sec.230.424 of this chapter);
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(b)
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Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
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(c)
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The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned
registrant; and
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(d)
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Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
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(6)
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The undersigned registrant hereby undertakes that:
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(i)
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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.
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(ii)
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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.
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A.
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Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we
have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by us of expenses incurred or paid by our director, officer or controlling person 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, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
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B.
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The undersigned registrant hereby undertakes:
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(1)
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To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
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a.
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to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
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b.
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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) (Section 230.424(b) of
Regulation S-K) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration
statement; and
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c.
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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.
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(2)
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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 the securities at that time shall be deemed to be the initial bona fide offering thereof.
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(3)
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To remove from the registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
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(4)
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That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
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(i)
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If the registrant is relying on Rule 430B (Sec.230.430B of this chapter):
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(a)
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Each prospectus filed by the registrant pursuant to Rule 424(b)(3) (Sec.230.424(b)(3) of this chapter) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed
part of and included in the registration statement; and
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(b)
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Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) (Sec.230.424(b)(2), (b)(5), or (b)(7) of this chapter) as part of a registration statement in reliance on Rule 430B relating to
an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) (Sec.230.415(a)(1)(i), (vii), or (x) of this chapter) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be
part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As
provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration
statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided,
however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or
prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was
part of the registration statement or made in any such document immediately prior to such effective date; or
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(ii)
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If the registrant is subject to Rule 430C (Sec.230.430C of this chapter), each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A (Sec.230.430A of this chapter), shall be deemed to be part of and included in the registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the
registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use;
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(5)
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That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:
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(i)
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The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such
securities to such purchaser:
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(a)
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Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 (Sec.230.424 of this chapter);
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(b)
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Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
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(c)
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The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned
registrant; and
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(d)
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Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
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(6)
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The undersigned registrant hereby undertakes that:
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(i)
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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.
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(ii)
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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.
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Metro One Telecommunications, Inc.
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By:
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/s/ Bianca Meger
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Bianca Meger, CEO
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/s/ Bianca Meger
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Chief Executive Officer, Principal Executive Officer
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February 10 , 2022
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Bianca Meger
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Date
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/s/ Elchanan Maoz
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President, Director
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February 10, 2022
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Elchanan Maoz
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/s/ Jonah Meer
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Secretary, Director
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February 10, 2022
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Jonah Meer
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/s/ James Alexander Brodie
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Treasurer, Director, Principal Accounting Officer
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February 10, 2022
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James Alexander Brodie
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* By:
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/s/ Bianca Meger
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Bianca Meger
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Attorney-in-Fact
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Exhibit
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Number
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Description
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2.1
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3.1
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3.2
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3.3
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5.1
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10.1*
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Form of Subscription Agreement to be used with Registration Statement
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10.2*
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Form of Warrant to be used with Registration Statement
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10.3
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10.4
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10.5
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10.6
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10.7
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10.8
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23.1
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23.2
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Consent of Counsel, Smith Eilers, PLLC (See Exhibit 5.1)
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107
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Filing Fees Table
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Exhibit 2.1
9th March, 2021
Supplement to the offer to purchase the activity and assets of Royal App Ltd (in Rehabilitation) dated 2.3.2021
Further to the bidding process which was held on 9.3.2021 in the offices of the Trustee for Royal App Ltd (in Rehabilitation) we wish to revise our offer as follows:
1. | The consideration as defined in paragraph 4.1 of the Sale Agreement shall stand at a sum of NIS 6,900,000 (in words: six million and nine hundred thousand new shekels), together with VAT as required by law. It is clarified that the sum which shall be paid by the purchaser within 48 hours from the time when the preconditions stated in paragraph 4.1.1 of the Sale Agreement have been met shall stand at a sum of NIS 690,000 (in words: six hundred and ninety thousand new shekels), together with VAT as required by law. |
2. | The Purchaser undertakes to make up the amount which it deposited in the Trustee’s account to the sum of NIS 690,000 together with VAT as required by law within three (3) business days from the date of signing this supplement. |
3. | In addition to the cash element of the consideration as specified in paragraph 4.1 of the Sale Agreement and in paragraph 1 above, the Purchaser undertakes to ensure that shares in the parent company Metro One Telecommunications Inc (hereinafter: “the parent company”) amounting to 8% of the parent company’s issued share capital after the aforementioned allocation, shall be deposited in the Trustee’s Account. It is clarified that the securities issued to the Company’s employees shall not dilute the shares which are to be allocated to the Trustee’s Account and that new investments within the parent company shall dilute the number of shares which shall be allocated to the Trustee’s Account pro rata with the rest of the parent company’s shareholders. Should the procedures required for the purpose of allocating the shares to the Trustee’s Account not be completed by the consummation date, then the Purchaser shall make sure that prior to the consummation date it furnishes the Trustee with security to guarantee that the obligation to allocate shares to the Trustee’s satisfaction is honored. |
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In witness whereof we have signed:
An (Israeli) company which is in the course of formation and which shall be under the full control of Metro One Telecommunications Inc.
Confirmation
I the undersigned, Moran Mordechai, the Purchaser’s attorney hereby confirm as follows:
1. | Messr. Elchanan Maoz who signed the Agreement in the purchaser’s name, are authorized to sign this Agreement on its behalf. |
2. | The Purchaser’s above signature is binding upon it with regard to this Agreement. |
14.3.21 |
/s/ Moran Mordechai
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Date |
Moran Mordechai, Adv. (-) License No. 43543 AMP House 18 Raoul Wallenberg St. Building D Ramat HaHayal Tel Aviv 6971915 |
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AGREEMENT
[Agreement for the purchase of activity and assets]
Which was drawn up and signed on 2nd March 2021
Between
Advocate Yaron Elhawi is his capacity as trustee for the company Royal App Ltd
(in Rehabilitation), Private Company No. 515294437
(hereinafter: “the Trustee”)
of the one part;
and
An (Israeli) company in formation which shall be under the
full control of Metro One Telecommunications Inc.
(hereinafter: “the Purchaser”)
of the other part;
Whereas | On 1.2.2021 the District Court in Lod issued an order within the framework of Insolvency Case 53873-01-21 for the appointment of Advocate Yaron Elhawi as temporary trustee for the company Royal App Ltd which is attached to this Agreement marked Appendix 1A; |
And whereas | On 8.2.2021 the Court authorized the Trustee to publish an invitation to submit offers for the purchase of the Company and/or its activity and/or its assets; |
And whereas | On 28.2. 2021 the Court issued an order for the commencement of proceedings, the operation of the Company, and the appointment of Advocate Yaron Elhawi as trustee. The Court’s decision is attached to this Agreement marked Appendix 1B; |
And whereas | Subject to the Court’s approval, the Purchaser wishes to purchase the property as defined, detailed and stipulated hereinafter in this Agreement; |
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It is therefore stipulated, declared and agreed between the parties as follows:
1. | General |
1.1. | The foregoing preamble constitutes an integral part of this Agreement; |
1.2. | The paragraph headings in this Agreement have been provided solely for the reader’s convenience and orientation and shall not be used to interpret this Agreement or for any other purpose. |
1.3. | In this Agreement, the following terms shall have the meanings specified next to them: |
“The Court” | The Lod District Court within the framework of Insolvency Case 53873-01-21. |
“The Company” | Royal App Ltd |
“The Trustee” | Advocate Yaron Elhawi is his capacity as the Company’s Trustee |
“The Trustee’s Account” | Account No. 72103 which is held at the Main Branch of Bank Hapoalim (12) in the name of the Trustee, or any other account indicated by the Trustee. |
“The date of the Trustee’s appointment” | The date on which the Court appointed Advocate Yaron Elhawi to serve as temporary trustee for the Company - 1.2.2021. |
“The proposal form” | The proposal form which is attached herewith as an integral part of this Agreement marked Appendix 2. |
“The invitation documents” | This Agreement, the proposal form, the instructions to the offeror, the confidentiality letter, the noncompetition declaration and the guarantee/banker’s draft in accordance with the versions published by the Trustee and signed by the Purchaser. |
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“Customers’ debts” | Debts owed to the Company by its customers (rights against debtors) for services which the Company provided prior to the consummation date. |
“The preconditions” | The preconditions specified hereinafter in paragraph 9. |
“The consummation date” | A date which shall be coordinated between the parties being no later than seven (7) business days from the date on which all the preconditions shall be met. |
“The consideration” | The amount of the consideration specified in the proposal form and hereinafter in paragraph 4. |
“The interim period” | The period between the date of the Trustee’s appointment and the consummation date. |
2. |
The Purchaser’s declarations
The Purchaser declares and undertakes as follows: |
2.1. | By itself and through experts and professionals acting on its behalf, it has seen and examined the property and all the rights which connected to and/or involved in it, including their physical and legal situation, the possibilities for using them, and for their practical, operational and legal exploitation, the number and/or quantity of the items of the property and their actual location, the Company’s equipment, the Company’s agreements with its customers (in so far as they exist) - the rights and obligations created by them and the restrictions on their transfer, the Company’s intellectual property and trademark rights (including rights in patents) in so far as they exist and the restrictions on their transfer, and all the other matters and documents concerning this contract, and that after examining all of the foregoing, it has found the property, including its restrictions, shortcomings and defects, whether it is aware of them at the time of signing this Agreement or not - to be suitable for its purposes, needs and use. The Purchaser declares that it is aware that the Trustee and/or the Company bear no responsibility for the scope and nature of the rights included in the property, and it relinquishes any complaint of fault and/or defect and/or unsuitability and/or deficiency and/or claim concerning and/or relating to the property and all that is connected with and/or involved in it and any other complaint against the Trustee and/or the Company. |
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2.2. | The Purchaser is aware that some of the Company’s equipment as mentioned in Form 11 may not actually be in the Company’s possession, and should that equipment not be in the Company’s possession on the consummation date then it shall not be included in the property and shall not be sold to the Purchaser within the framework of this Contract, and the Purchaser is and shall be precluded from making any complaint and/or demand and/or claim against the Company and/or the Trustee and/or anyone acting on their behalf in this regard. |
2.3. |
It is known and agreed that the property and/or any of the assets and/or the rights included in it may not exist and/or may be invalid and/or defective, and the Trustee and/or the Company take no responsibility upon themselves in connection with the relevant customers agreements and/or the willingness of the customers to continue and/or extend their contracts and/or the possibility of assigning the aforementioned agreements to the Purchaser, and the Purchaser relinquishes any claim and/or demand against the Trustee and/or the Company in this regard. The Purchaser takes upon itself all the Company’s obligations under the relevant customers agreements which shall be transferred to it within the framework of this Agreement, and under the agreements relating to the property which the Company and/or the Trustee entered into during the interim period.
The Purchaser is also aware that the Company has received approximately NIS 883,185 in grants from the National Authority for Technological Innovation (hereinafter: “the Innovation Authority”), that prior to the date of the Trustee’s appointment the Company paid to the Innovation Authority royalties of approximately NIS 53,158 for the years 2018-20191, that transferring the property to the Purchaser is subject to obtaining and the conditions of the Innovation Authority’s approval, and that the Purchaser’s future income in connection with the property may be subject (inter alia) to a statutory obligation to pay royalties to the Authority. |
1 According to the data appearing in the Company’s books, without its accuracy having been confirmed by the Innovation Authority.
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2.4. | The Purchaser is purchasing the entire property with all its components in its prevailing condition (AS-IS) and location (WHERE-IS) on the handover day, with the clear knowledge and undertaking that the property, including its restrictions, deficiencies and defects, whether it is aware of them at the time of signing this Agreement or not, is being purchased in its existing condition, that this method of purchase is compatible with its needs, purposes and uses, and that it does not have and shall not have any claim, demand or right against the Company and/or the Trustee and/or anyone acting on their behalf. |
2.5. | The Purchaser is aware that between the date of the signing of this Agreement and the consummation date, the Trustee shall be using the property through any of the Company’s employees, within the framework of running the Company, including the collection of customers’ debts and continuing activity with some of the Company’s customers and/or suppliers, and that it does not and shall not have any complaint and/or demand and/or claim and/or right against the Trustee and/or the Company and/or against anyone acting on their behalf which is attributable directly or indirectly to the foregoing. Nothing in the foregoing shall constitute an undertaking by the Trustee to run the Company as a going concern until the consummation date. |
2.6. | The Purchaser declares that it is aware and agrees that the property under this Agreement consists solely of the assets included within its foregoing definition, and that all the other assets of the Company of any kind or type which are not counted amongst the aforementioned assets, including the excluded assets, are not been sold to it within the framework of this Agreement, and it shall have no rights in and/or claims in relation to and/or debts attributable to them. |
2.7. | It is agreed that should the Trustee require information which is stored in the Company’s computers, the Purchaser shall provide him with that information (through magnetic media and/or a hard copy, according to the Trustee’s preference), without any condition or restriction and in any case by no later than five (5) days from the date of the Trustee’s request, and should it be asked to do so, the Purchaser shall likewise grant the Trustee access to the Company’s computers and allow him to create a back-up for all the information stored in them, and all relating to the period up to the consummation date. |
2.8. | The Purchaser declares that no legal, factual or other obstacle exists to prevent it from entering into and honoring all its obligations under this Agreement, that it has taken all the decisions required in order to enter into this Agreement, and that it has the economic ability to perform its obligations under this Agreement. |
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3. | The essence of the Agreement In return for full and punctual payment of the consideration and the performance of all the Purchaser’s other obligations, the Purchaser shall receive and/or acquire the property, unencumbered by any charge, attachment, or other right in accordance with and subject to section 34A of the Sale Law, 5728-1968, in the manner and upon the terms specified in this Agreement and all provided that the preconditions as stated hereinafter in paragraph 9 have been met. |
4. | The consideration and the dates for its payment |
4.1. | In return for the property, the Purchaser shall pay to the Trustee a sum of NIS 1,180,000 (in words: NIS one million one hundred and eighty thousand) (hereinafter: “the consideration”), on the following terms and dates: |
4.1.1. | Within 48 hours from date on which the preconditions have been met, the purchaser shall pay to the Trustee a sum of NIS 118,000 (in words: one hundred and eighteen thousand new shekels) (which constitutes 10% of the consideration specified in paragraph 4.1.1 above) (hereinafter: “the first installment”). |
4.1.2. | On the consummation date, the purchaser shall pay to the Trustee the balance of the consideration (hereinafter: “the second installment”). |
4.2. | As security for the performance of its obligations under this Agreement, upon signing this Agreement the Purchaser shall hand over to the Trustee an autonomous bank guarantee worded in accordance with the version attached to the invitation documents, or a bank draft, in a total sum equivalent to 10% of the consideration together with the VAT payable thereon (hereinafter: “the bank guarantee”). The Trustee shall be entitled (but not be obliged) to cash the bank guarantee should the Purchaser breach its obligations under this Agreement, including if any of the sums which the Purchaser is obliged to pay under this Agreement shall not be fully and punctually paid. The bank guarantee shall be returned to the purchaser on the consummation date, subject to payment of the entire amount of the consideration and the performance of all the Purchaser’s obligations until that date. |
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4.3. | VAT shall be added to all components of the consideration as required by law, and shall be paid by the Purchaser to the Trustee in return for a lawful tax invoice. |
4.4. | The Purchaser shall pay the components of the consideration to the Trustee through a banker’s draft or bank transfer (IBAN transfer) to the Trustee’s account. Should either of the installments be paid by way of a bank transfer, the Purchaser shall bear the costs of the transfer and the installment shall only be regarded as having been paid after the Trustee’s Account has actually been credited. |
4.5. | Should any form of competitive bidding be orchestrated by either the Trustee or the Court, and the Purchaser shall submit the winning offer, then the amount of that offer shall be regarded as the sum specified in this Agreement and in the proposal form and shall constitute the consideration (as defined above in this Agreement). In the scenario stated in this paragraph, the Purchaser shall present the Trustee at his request with a suitable banker’s draft/bank guarantee in a sum equivalent to 10% of the amounts of the differential as aforesaid. |
5. | Running of the Company during the interim period |
5.1. | Until the consummation date, including after the date on which the preconditions were met, the Trustee shall be entitled (but not obliged) to continue running the Company upon such terms and to such extent as he shall in his discretion see fit and in accordance with the Court’s instructions, and the Purchaser shall have no claim or right against the Trustee and/or the Company in this regard. |
5.2. | The Purchaser is aware that during the interim period some of the Company’s customers shall pay excess sums that may be deducted from future sums which those customers are obliged to pay under their existing agreements with the Company. |
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5.3. | The Trustee shall be entitled to all sums payable to the Company under its existing contracts during the period prior to the consummation date, even if they shall be received after that date. For the avoidance of doubt, it is clarified that the Trustee shall not bear responsibility and shall not be accountable for any payment with respect to any contracts after the consummation date and shall not under any circumstances be required to pay or transfer to the Purchaser any sums which were received during or prior to the interim period. |
6. | Handing over of the property |
6.1. | On the consummation date, provided that all the Purchaser’s obligations have been fully honored and in return for punctual payment of the entire consideration, the Trustee shall hand over to the Purchaser the rights in and possession of the property. |
6.2. | The transfer of possession to the Purchaser shall be limited to receiving written authorization from the Trustee for the Purchaser to take legal possession of the property, without any physical handing over of the property taking place. |
6.3. | Should the Purchaser not receive possession of the property for reasons that depend on the Purchaser, including nonperformance of any of its obligations under this Agreement and/or nonpayment of the entire consideration by the consummation date and/or the Purchaser’s refusal to take possession of the property for any reason, the Purchaser shall bear responsibility from the consummation date as the owner and/or the party in possession of the property, including with respect to its preservation, maintenance, insurance, liability to third parties and payment of all taxes. Notwithstanding the foregoing, the Trustee shall be entitled, but not obliged, to take in its place actions which the Purchaser is obliged to take as the owner and/or the party in possession of the property, in which case the Purchaser shall be obliged to reimburse the Trustee for any sum which he paid with respect to the property. |
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7. | Customers’ debts |
7.1. | Customers’ debts do not constitute part of the property and the Trustee shall be entitled to any receipt pertaining thereto. Should the Purchaser for any reason receive sums on account of the customers’ debts it shall transfer them to the Trustee within 3 business days. |
7.2. | The Trustee shall be entitled to receive any information and/or document and/or authorization which in his judgment shall be required for redemption and/or calculation of customers’ debts, and the Purchaser undertakes to transfer them to the Trustee within 7 days. |
8. | The Company’s employees |
8.1. | The Purchaser declares that it has been given the details which it requires regarding the Company’s employees, including details of basic salaries, the deductions and contributions which the employer is obliged to make and the employer’s costs which the Trustee is aware of. |
8.2. | The Purchaser shall continue to employ the Company’s employees in the numbers and for the period specified in the proposal form which is attached to this Agreement (Appendix 2 above), in so far as they are specified. |
8.3. | The Purchaser undertakes to continue employing those employees whose continued employment is required by law, including under the Employment of Women Law, 5714-1954. |
8.4. | The Purchaser alone shall be responsible for reaching settlements with the Company’s employees concerning their employment by the Purchaser after the consummation date, should it wish to keep them on. The salaries of employees who were employed during the interim period shall be paid by the Company, and upon the consummation date their employment with the Company shall be deemed to have been terminated. |
8.5. | The Company and/or the Trustee do not take upon themselves any responsibility regarding the employment of the Company’s employees by the Purchaser, the willingness of the employees to continue working for the Purchaser and/or the redemption of past debts owed to those employees (apart from redemption of sums owed to the employees which the Trustee is obliged to pay by law) and the Purchaser shall make no claim in this regard. |
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8.6. | The Purchaser shall not be liable for the payment of any debt to the Company’s employees with respect to the period prior to the consummation date. |
8.7. | If in order to perform his functions, the Trustee shall require temporary assistance from the Company’s employees, then provided such assistance is reasonable and does not entail substantial expenses for the Purchaser, the Purchaser shall agree to provide it, gratuitously, through the employees. Beyond this, assistance as aforesaid shall be granted to the Trustee in return for payment in accordance with the number of work hours which shall actually be required and the cost to the Purchaser of employing the worker (without profit). |
9. | Preconditions |
9.1. | The validity of this Agreement is dependent upon fulfillment the following cumulative preconditions (jointly above and hereinafter: “the preconditions”) by no later than 60 (sixty) days from the date of filing the motion in the Court for approval of the contract under this Agreement (hereinafter: “the deadline for fulfillment of the preconditions”) : |
9.1.1. | Receipt of the Court’s approval for the transaction upon which this Agreement is predicated. |
9.1.2. | Receipt of the Innovation Authority’s approval for the transaction, should such approval be required. |
9.1.3. | Receipt of the Competition Director General’s approval, including an approval subject to conditions, should such approval be required. |
The Trustee shall be entitled (but not obliged) to extend the deadline for fulfillment of the preconditions from time to time, by additional periods, through written notices which shall be given to the Purchaser, and in such a case the deadline for fulfillment of the preconditions shall be regarded as the deferred date prescribed by the Trustee as aforesaid.
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9.2. | In this regard - the following provisions shall apply: |
9.2.1. | In the first stage this Agreement shall be signed by the Purchaser only. The Trustee shall add his signature to the Agreement shortly after the preconditions have been fulfilled. |
9.2.2. | Should approval of the transaction be required by law from the Competition Director General, then the Purchaser shall file an appropriate request with the Competition Authority within five (5) days from the Court’s endorsement of the Agreement and it shall do all it can to obtain the necessary approval as soon as possible. The Purchaser shall present the Trustee with a copy of any document which was filed on its behalf and shall update the Trustee with all information concerning its request to the Competition Director General as aforesaid. The Trustee shall bear no responsibility for submitting the request to the Director General or for its results. |
9.2.3. | Within five (5) days from the Court’s endorsement of the transaction the parties shall apply to the Innovation Authority for approval of the transaction upon which this Agreement is predicated, and shall act collaboratively in order to receive that approval as soon as possible. |
9.2.4. | Should the preconditions be fulfilled by the deadline for fulfillment of the preconditions then this Agreement shall be considered valid for all intents and purposes, and the Trustee shall sign it. |
9.2.5. | Should the preconditions not be fulfilled by the deadline for fulfillment of the preconditions, then at the Purchaser’s request the Trustee shall return the amount or the bank guarantee or the bank draft which the Purchaser deposited with him (as stated in paragraph 4.2 above) within seven (7) business days from the deadline for fulfillment of the preconditions, and all provided that the approval had not been withheld due to a breach on the part of the Purchaser. |
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10. | Taxes and mandatory payments |
10.1. | The Trustee shall pay the following mandatory charges: |
10.1.1. | Income tax, if and in so far as it shall apply to the sale of the property pursuant to this Agreement, on the date and in the manner prescribed by law. |
10.1.2. | All other taxes and mandatory payments applying to the property, which were levied and the payment of which is required prior to the consummation date, in so far as such taxes exist and in so far as the Trustee is obliged by law to pay them, within the framework of the statutory arrangements relating to insolvency proceedings that were taken against the Company. It is clarified that the Trustee may not reach any settlement with the tax authorities in connection with payment of the tax as aforesaid, including receipt of an exemption from paying it, or not to actually pay it, inter alia based on the setting off of the Company’s past losses and/or the statutory order of debt redemption. It is clarified that the Trustee shall pay the aforementioned sums from the consideration monies and only in so far as, in his capacity as a trustee, he shall be obliged by law to pay them, and in accordance with the statutory order of debt redemption. It is clarified that nothing in the foregoing shall constitute a contractual obligation to make payment contrary to the statutory order of debt redemption or any obligation in favor of a third party. |
10.2. | The Purchaser shall pay the following taxes and mandatory charges: |
10.2.1. | All government or municipal taxes and other mandatory charges applying to and/or in connection with the property (or to any of the assets incorporated therein), which were imposed and payable from the consummation date onwards, in so far as such taxes exist and the Purchaser is legally obliged to pay them. |
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10.2.2. | VAT on the sums paid pursuant to this Agreement. |
10.2.3. | All the sums required, in so far as they are required, in order to carry out and/or register and/or complete the transfer of the rights in the property and/or in any of its components. |
11. | Prohibition on transfer of rights Until full redemption of the consideration for the property and fulfillment of all its obligations under this Agreement, the Purchaser may not transfer the rights in the property and/or in any of its components, including its rights and obligations under this Agreement, to any third party without the Trustee’s prior written consent. |
12. | Breaches and remedies |
12.1. | Should the Purchaser breach a provision of this Agreement, the Trustee shall be entitled to all the reliefs prescribed in the Contracts (Remedies for Breach of Contract) Law, 5731-1970. |
12.2. | Without derogating from the foregoing, a fundamental breach of this Agreement by the Purchaser shall grant the Trustee a right to liquidated damages in a sum equivalent to the amount of the bank guarantee which the Purchaser is obliged to deposit as stated in paragraph 4.2 above, and this regardless of whether the Trustee shall choose to implement or rescind the Agreement and all without derogating from any other right and/or remedy which under the circumstances the Trustee has at his disposal. Should the Agreement be rescinded, the Trustee shall be entitled to set off this sum against any sum owed, if at all, to the Purchaser. |
12.3. | The Trustee may rescind this Agreement in response to a fundamental breach by the Purchaser provided that he gave the Purchaser 14 days’ prior warning of his intention to do so and during that period the Purchaser did not rectify the breach. |
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12.4. | Any installment of the consideration which was not paid on time shall carry interest at the prevailing rate normally charged by Bank Hapoalim Ltd on unauthorized current loan account overdrafts, from three (3) days after the date scheduled for its payment in this Agreement until the date on which shall actually be fully paid. A delay of more than seven (7) days in paying any installment of the consideration shall constitute a fundamental breach of this Agreement. Should the consideration in this Agreement be fixed, with the Trustee’s consent, in foreign currency, any sum not paid on time shall be paid in shekels according to the exchange rate in force on the specified payment date or, if higher, according to the rate in force on the date of actual payment. |
12.5. | The parties agree that a breach of one or more of the following paragraphs shall be regarded as a fundamental breach of this Agreement: 2, 4, 6, 7, 8, 10, 11 and 13. |
12.6. | Nothing in the provisions of this paragraph 12 shall derogate from any other right and relief which the Trustee shall have at his disposal in the event of a breach of any of the Purchaser’s obligations and from any right and/or relief under the Contracts (Remedies for Breach of Contract) Law, 5731-1970. |
13. | Liability and insurance From the consummation date onwards, the Purchaser shall be exclusively liable with respect to and in connection with the property, including liability towards any third party, for any damage which shall be caused, whether to its property or to the body or property of any third party in connection with the property. The foregoing shall also apply should possession not actually be handed over because of none payment of the full consideration or the Purchaser’s refusal to receive the property. |
14. | Resolution of disagreements and disputes The Court as defined in this Agreement shall have the exclusive jurisdiction to adjudicate any disagreement or dispute in connection with this Agreement, its implementation and/or interpretation, and by its signature on this Agreement the Purchaser expresses his consent to the resolution of any dispute between itself and the Trustees within the framework of a request for directions proceeding. |
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15. | Miscellaneous |
15.1. |
Either party to this Agreement (hereinafter: “the Payor”), may pay any sum which under its terms the other party is obliged to pay (hereinafter: “the Debtor”), provided that such payment was preceded by seven (7) days’ prior written notice and that no other arrangement is prescribed in the Agreement for ensuring payment of the outstanding sum.
Should any sum be paid by the Payor as aforesaid, then unless stipulated otherwise in this Agreement, the Payor shall be entitled to reimbursement of the sum which he paid within seven (7) days from the date on which it was paid together with interest at the rate stated in paragraph 12.4 above. In any case, it is clarified that the Purchaser may not pay any of the Company’s and/or the Trustee’s liabilities which were created before the date of the Trustee’s appointment and/or which the Trustee is not obliged to pay by law. |
15.2. | It is hereby clarified, that so long as the Court has not endorsed the sale under this Agreement and/or so long as no such endorsement has been brought to the Trustee’s attention, the Trustee may accept higher offers than the Purchaser’s offer for the property (in its entirety or part thereof or as part of other property). The Purchaser undertakes not to make and shall be precluded from making assertions which are contrary to the provisions of this paragraph. |
15.3. | It is agreed that this Agreement does not constitute a contract in favor of any third party including any authority and that it only regulates the relationship between the Purchaser and the Trustee. |
15.4. | Should one of the parties not enforce, or not enforce punctually, any of the rights conferred on it under this Agreement and/or by law in a specific case or series of cases, this shall not be seen as a waiver of the said right and/or any other rights. No extension and/or deferral shall be valid unless made in advance and in writing. |
15.5. | The Purchaser undertakes to take all the additional steps (including, and without derogating from the foregoing, the signing of additional documents) which shall be required or wanted for the implementation and execution of this Agreement, in letter and spirit, and for fulfillment of the preconditions. |
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15.6. | No changes to this Agreement shall be valid unless made in writing and signed by all the parties to the Agreement. |
15.7. | Notwithstanding all the provisions of this Agreement, by signing this Agreement the Purchaser fully and peremptorily relinquishes rights of setoff and/or lien against the Trustee with regard to any payment and/or reimbursement which the Trustee is entitled to under this Agreement. Under no circumstances shall the Purchaser be entitled, with respect to any claims, to set off any sums against installments of the consideration or against any other amounts which it is obliged to pay under this Agreement, and it must fully and punctually pay the consideration and other sums which it is liable for under the Agreement. |
15.8. | The duties and obligations imposed on the Trustee in this Agreement shall be performed by him by virtue of his position and not in his personal capacity. The Trustee shall not be personally accountable to the Purchaser and/or to others concerning the payment of any sum or the taking of any action. It is further agreed that the Trustee does not represent the Purchaser with regard to this Agreement. |
15.9. | If this Agreement is being signed for a company in formation (in this paragraph: “the Company”), then the founder who is signing it (in this paragraph “the Founder”) shall be responsible for honoring the Purchaser’s obligation under this Agreement until the Company has been established as aforesaid and a lawyer’s written confirmation was served on the Trustee within 14 days from the date of the Court’s endorsement that the Agreement had been lawfully ratified by the Company and that it is bound by it for all intents and purposes. After service of the confirmation as aforesaid within the aforementioned period, the responsibility shall fall jointly and severally on the Founder and the Company. |
15.10. | If the Purchaser is signing this Agreement as a trustee for another/others (hereinafter in this paragraph: “the Beneficiary”), then the trustee who is signing it (hereinafter in this paragraph: “the Signing Trustee”) shall be responsible for honoring the Purchaser’s obligation under this Agreement until the Trustee has been served with confirmation signed by the Beneficiary and certified by a lawyer within 14 days from the date of the Court’s endorsement that the Agreement had been signed for him as a beneficiary and that it is binding upon him for all intents and purposes. After service of the confirmation as aforesaid within the aforementioned period, the responsibility shall fall jointly and severally on the Signing Trustee and the Beneficiary. |
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15.11. |
Notices relating to this Agreement shall be sent by registered post or served personally, according to the parties addresses which are specified below, or any other address in Israel for which appropriate written notification shall be given, or through the fax number specified next to their address or any other fax number for which appropriate written notification shall be given.
Every notice shall be regarded as having been delivered to the recipient at the earliest of the following times: If it was delivered by hand - upon its actual service (or at the time when it was offered to the addressee, in the case of a refusal to accept it); if it was sent by registered post - three (3) business days from the date on which it was handed over for dispatch by registered post; and if it was sent by fax, on the first business day following the date specified in the transmission confirmation produced by the fax which sent it:
The Trustee - The firm of Gornitzky & Co, Advocates, 45 Rothschild Boulevard Tel Aviv Tel. 03-7109191; Fax. 03-5606555
The Purchaser - Care of the firm of Amit, Pollak, Matalon & Co; Address: 18 Raoul Wallenberg Building D 7th Floor, Tel. 03-5689000; Fax. 03-5689001 |
[The signatures page has been moved to the next page]
In witness whereof the parties have signed:
/s/Elchanan Maoz
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/s/Yaron Elhawi
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The Purchaser
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The Trustee
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Confirmation
I the undersigned, Moran Mordechai, the Purchaser’s attorney hereby confirm as follows:
3. | Messr. Elchanan Maoz who signed the Agreement in the Purchaser’s name, are authorized to sign this Agreement on its behalf. |
4. | The Purchaser’s above signature is binding upon it with regard to this Agreement. |
2.3.21 |
s/Moran Mordechai
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Date | Moran Mordechai, Adv. | |
License No. 43543 | ||
AMP House 18 Raoul Wallenberg St. Building D | ||
Ramat HaHayal Tel Aviv 6971915 |
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Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
METRO ONE TELECOMMUNICATIONS, INC.
______________________________________
ARTICLE I.
NAME OF CORPORATION
The name of the corporation is Metro One Telecommunications, Inc. (the “Corporation”).
ARTICLE II.
REGISTERED OFFICE; REGISTERED AGENT
The address, including street, number, city and county, of the registered office of the Corporation in the State of Delaware is: 2140 S Dupont Highway, Camden, DE 19934 in the county of Kent; and the name of the registered agent of the Corporation in the State of Delaware at such address is: Paracorp Incorporated.
ARTICLE III.
PURPOSES AND POWERS
The purposes and powers of the Corporation are:
3.1 To engage in any lawful activities for which corporations may be organized under the Delaware General Corporation Law.
3.2 To do anything which shall appear necessary or beneficial to the Corporation in connection with (1) its operation; (2) the accomplishment of its purposes; or (3) the exercise of its powers set forth in this Certificate of Incorporation.
ARTICLE IV.
CAPITALIZATION
4.1 Authorized Capital Stock. The aggregate number of shares of capital stock that the Corporation is authorized to issue is Six Hundred Million (600,000,000), consisting of Six Hundred Million (600,000,000) shares of common stock, par value $0.0001 per share (the “Common Stock”).
ARTICLE V.
CONSENT TO ACTION
Any action which may be taken at a meeting of the shareholders or directors may be taken without a meeting if all shareholders or directors entitled to vote on the action consent in writing to the action taken. The written consent shall have the same force and effect as a unanimous vote of the shareholders or directors.
ARTICLE VI.
CUMULATIVE VOTING
No shareholder shall be entitled to cumulate his votes for election of directors of the Corporation.
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ARTICLE VII.
PREEMPTIVE RIGHTS DENIED
Unless otherwise determined by the Board of Directors, no shareholder of the Corporation shall be entitled, as a matter of right, to purchase or subscribe for any stock of any class which the Corporation may issue or sell, whether or not exchangeable for any stock of the Corporation of any class or classes and whether out of unissued shares authorized by the Certificate of Incorporation of the Corporation as originally filed or by any amendment thereof or out of shares acquired in the future. Nor, unless otherwise determined by the Board of Directors, shall any holder of any shares of the capital stock of the Corporation be entitled, as a matter of right, to purchase or subscribe for any obligation which the Corporation may issue or sell that shall be convertible into or exchangeable for any shares of the stock of the Corporation of any class or classes, or to which shall be attached to any warrant or warrants or any other instrument or instruments that shall confer upon the holder or holders of such obligation the right to subscribe for or purchase from the Corporation any shares or its capital stock of any class or classes.
ARTICLE VIII.
DIRECTORS
8.1 The number of directors of the Corporation shall not be less than three nor more than nine, and within such limits, the exact number shall be fixed and increased or decreased from time to time by resolution of the Board of Directors. The directors shall be elected by the shareholders at each annual meeting of shareholders. Each director shall serve for a term ending on the date of the next annual meeting and until his or her successor is duly elected and qualified or until his or her earlier resignation, removal from office, or death.
8.2 All or any number of the directors of the Corporation may be removed only for cause and at a meeting of shareholders called expressly for that purpose, by a vote of not less than seventy-five percent (75%) of the votes entitled to be cast for the election of directors. At any meeting of shareholders at which one or more directors are removed, a majority of votes then entitled to be cast for the election of directors may fill a vacancy created by such removal. If any vacancy created by removal of a director is not filled by the shareholders at the meeting at which the removal is effected, such vacancy may be filled by a majority vote of the remaining directors.
8.3 The provisions of this Article VIII may not be amended, altered, changed or repealed in any respect unless such action is approved by the affirmative vote of not less than seventy-five percent (75%) of the votes then entitled to be cast for election of directors.
ARTICLE IX.
QUORUM OF SHAREHOLDERS
A quorum at a meeting of shareholders is constituted by the representation in person or by proxy of fifty-one percent (51%) of the shares entitled to vote. Shares shall not be counted to make up a quorum for a meeting if voting of them at the meeting has been enjoined or for any reason they cannot be lawfully voted at the meeting. The shareholders present at a duly held meeting at which a quorum is present may continue to do business until adjournment in spite of the withdrawal of enough shareholders to leave less than a quorum.
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ARTICLE X.
INDEMNIFICATION
10.1 The Corporation shall indemnify to the fullest extent not prohibited by law any person who was or is a party or is threatened to be made a party to any Proceeding against all expenses (including attorney fees), judgments, fines, and amounts paid in settlement actually or reasonably incurred by the person in connection with such Proceeding.
10.2 Expenses incurred by a director or officer of the Corporation in defending a Proceeding shall in all cases be paid by the Corporation in advance of the final disposition of such Proceeding at the written request of such person, if the person furnishes the Corporation a written undertaking to repay such advance to the extent ultimately determined by a court that such person is not entitled to be indemnified by the Corporation under this Article X or under any other indemnification rights granted by the Corporation to such person. Such advances shall be made without regard to the person’s ability to repay such advances and without regard to the person’s ultimate entitlement to indemnification under this Article X or otherwise.
10.3 The term “Proceeding” shall include any threatened, pending, or completed action, suit, or proceeding whether brought in the right of the Corporation or otherwise and whether of a civil, criminal, administrative, or investigative nature, in which a person may be or may have been involved as a party or otherwise by reason of the fact that the person is or was a director or officer of the Corporation or a fiduciary within the meaning of the Employee Retirement Income Security Act of 1974 with respect to any employee benefit plan of the Corporation, or is or was serving the request of the Corporation as a director, officer, or fiduciary of an employee benefit plan of another corporation, partnership, joint venture, trust, or other enterprise, whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification or advancement of expenses can be provided under this Article X.
10.4 The indemnification and entitlement to advancement of expenses provided by this Article X shall not be deemed exclusive of any other rights to which those indemnified may be entitled under the Corporation’s Certificate of Incorporation or any statute, agreement, general or specific action of the Board of Directors, vote of the shareholders, or otherwise, shall continue as to a person who has ceased to be a director or officer, shall inure to the benefit of the heirs, executors and administrators of such person and shall extend to all claims for indemnification or advancement of expenses made after the adoption of this Article X.
10.5 Any repeal of this Article X shall only be prospective and no repeal or modification hereof shall adversely affect the rights under this Article X in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any Proceeding.
10.6 To the fullest extent permitted by law, no director of this Corporation shall be personally liable to the Corporation or its shareholders for monetary damages for conduct as a director. No amendment or repeal of this Article X, nor the adoption of any provision of this Certificate of Incorporation inconsistent with this Article X, nor a change in the law, shall adversely affect any right or protection of a director, which right or protection is based on this Article X and arises from conduct that occurred prior to the time of such amendment, repeal, adoption or change. No change in the law shall reduce or eliminate the rights and protections applicable immediately after this provision becomes effective unless the change in the law shall specifically require such reduction or elimination. If the Delaware General Corporation Law or its successor is amended, after this Article X becomes effective, to authorize corporate action further eliminating or limiting the personal liability of directors of the Corporation, then the liability of directors of this Corporation shall eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended.
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ARTICLE XI.
CONSTRUCTION AND DEFINED TERMS
11.1 Construction. As appropriate in context, whenever the singular number is used in this Certificate of Incorporation, the same includes the plural, and whenever the plural number is used in this Certificate of Incorporation, the same includes the singular. As used in this Certificate of Incorporation, each of the neuter, masculine, and feminine genders includes the other two genders. As used in this Certificate of Incorporation, “include,” “includes,” and “including” shall be deemed to be followed by “without limitation”.
11.2 Defined Terms. As used in this Certificate of Incorporation,
“Board of Directors” means the board of directors of the Corporation.
“Bylaws” means the bylaws of the Corporation, as the same may be amended from time to time.
“Certificate of Incorporation” means this Certificate of Incorporation of the Corporation, as the same may be amended from time to time.
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IN WITNESS WHEREOF, the undersigned, being the Sole Incorporator of the Corporation has executed this Certificate of Incorporation, on this 30th day of July, 2021.
/s/Elchanan Maoz, Sole Incorporator | |
c/o Metro One Telecommunications, Inc. | |
30 North Gould Street, Suite 2990 | |
Sheridan, WY 82801 |
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Exhibit 3.2
BYLAWS
OF
METRO ONE TELECOMMUNICATIONS, INC.
Article
I.
Offices
Section 1.1. Principal Office. The principal office of the Corporation shall be located at 30 North Gould Street, Suite 2990, Sheridan, WY 82801. The Corporation may have such other offices as the Board of Directors may designate or as the business of the Corporation may from time to time require.
Article
II.
SHAREHOLDERS
Section 2.1. Annual Meeting. The annual meeting of the shareholders shall be held during the month of May each year, unless a different date and time are fixed by the Board of Directors and stated in the notice of the meeting. The failure to hold an annual meeting at the time stated herein shall not affect the validity of any corporate action.
Section 2.2. Special Meetings. Special meetings of the shareholders maybe called by the President or by the Board of Directors and shall be called by the President (or in the event of absence, incapacity, or refusal of the President, by the Secretary or any other officer) at the request of the holders of not less than one-tenth of all the outstanding shares of the Corporation entitled to vote at the meeting. The requesting shareholders shall sign, date, and deliver to the Secretary a written demand describing the purpose or purposes for holding the special meeting.
Section 2.3. Place of Meetings. Meetings of the shareholders shall be held at the principal business office of the Corporation or at such other place, within or without the State of Wyoming, as may be determined by the Board of Directors (or may not be held at any place, but may instead be held solely by means of remote communication if so decided by the Board of Directors in its sole discretion).
Section 2.4. Notice of Meetings. Written notice stating the date, time, and place of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called shall be mailed to each shareholder entitled to vote at the meeting at the shareholder’s address shown in the Corporation’s current record of shareholders, with postage thereon prepaid, not less than ten (10) nor more than sixty (60) days before the date of the meeting.
Section 2.5. Waiver of Notice. A shareholder may at any time waive any notice required by law, the Certificate of Incorporation, or these Bylaws. The waiver must be in writing, be signed by the shareholder entitled to the notice, and be delivered to the Corporation for inclusion in the minutes for filing with the corporate records. A shareholder’s attendance at a meeting waives objection to lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting. The shareholder’s attendance also waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented.
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Section 2.6. Record Date.
(a) For the purpose of determining shareholders entitled to notice of a shareholders’ meeting, to demand a special meeting, or to vote or to take any other action, the Board of Directors may fix a future date as the record date for any such determination of shareholders, such date in any case to be not more than sixty (60) nor less than ten (10) days before the date of the meeting or action requiring a determination of shareholders. The record date shall be the same for all voting groups.
(b) A determination of shareholders entitled to notice of or to vote at a shareholders’ meeting is effective for any adjournment of the meeting unless the Board of Directors fixes a new record date, which it must do if the meeting is adjourned to a date more than one hundred and twenty (120) days after the date fixed for the original meeting.
(c) If a court orders a meeting adjourned to a date more than one hundred and twenty (120) days after the date fixed for the original meeting, it may provide that the original record date continue in effect or it may fix a new record date.
Section 2.7. Shareholders’ List for Meeting. The Secretary of the Corporation shall prepare, at least ten (10) days before every meeting of shareholders, a complete list of the shareholders entitled to vote at the meeting (provided, however, if the record date for determining the shareholders entitled to vote is less than ten (10) days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth (10th) day before the meeting date), arranged in alphabetical order and showing the address of each stockholder and the number of shares of capital stock of the Corporation registered in the name of each stockholder at least ten days before any meeting of the stockholders. The list must be arranged by voting group and within each voting group by class or series of shares and show the address of and number of shares held by each shareholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least ten days before the meeting: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list was provided with the notice of the meeting; or (b) during ordinary business hours, at the principal place of business of the Corporation. If the meeting is to be held at a place, the list shall also be produced and kept at the time and place of the meeting the whole time thereof and may be inspected by any shareholder who is present. If the meeting is held solely by means of remote communication, the list shall also be open for inspection by any shareholder during the whole time of the meeting as provided by applicable law. Except as provided by applicable law, the stock ledger of the Corporation shall be the only evidence as to who are the shareholders entitled to examine the stock ledger and the list of stockholders or to vote in person or by proxy at any meeting of shareholders.
Section 2.8. Quorum; Adjournment. Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. A majority of the votes entitled to be cast on the matter by the voting group constitutes a quorum of that voting group for action in that matter. A majority of shares represented at the meeting, although less than a quorum, may adjourn the meeting from time to time to a different time and place without further notice to any shareholder of any adjournment. At such adjourned meeting at which a quorum is present, any business may be transacted that might have been transacted at the meeting originally held. Once a share is represented for any purpose at a meeting, it shall be deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting, unless a new record date is set for the adjourned meeting.
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Section 2.9. Voting Requirements; Action Without Meeting.
(a) Unless otherwise provided in the Certificate of Incorporation, each outstanding share entitled to vote shall be entitled to one vote upon each matter submitted to a vote at a meeting of shareholders. If a quorum exists, action on a matter, other than the election of directors, is approved if the votes cast by the shares entitled to vote favoring the action exceed the votes cast opposing the action, unless a greater number of affirmative votes is required by law or the Certificate of Incorporation. If a quorum exists, directors are elected by a plurality of the votes cast by the shares entitled to vote unless otherwise provided in the Certificate of Incorporation. No cumulative voting for directors shall be permitted unless the Certificate of Incorporation so provides. Action required or permitted bylaw to be taken at a shareholders’ meeting may be taken without a meeting if the action is taken by the shareholders holding of record or otherwise entitled to vote in the aggregate not less than the minimum number of votes necessary to authorize or take such action at a meeting at which all shares entitled to vote on the action were present and voted. The taking of action by shareholders without a meeting must be evidenced by one or more written consents describing the action taken, signed by all the shareholders holding of record or otherwise entitled to vote in the aggregate not less than the minimum number of votes necessary in order to take such action by written consent, and delivered to the Corporation for inclusion in the minutes for filing with the corporate records. Action taken under this section is effective when the last shareholder signs the consent, unless the consent specifies an earlier or later effective date. If the law requires that notice of proposed action be given to nonvoting shareholders and the action is to be taken by unanimous consent of the voting shareholders, the Corporation must give its nonvoting shareholders written notice of the proposed action at least ten (10) days before the action is taken. The notice must contain or be accompanied by the same material that, under the Delaware General Corporation Law, would have been required to be sent to nonvoting shareholders in a notice of meeting at which the proposed action would have been submitted to the shareholders for action.
(b) No consent shall be effective to take the corporate action referred to therein unless consents signed by a sufficient number of holders or members to take action are delivered to the corporation in the manner required by this section within 60 days of the first date on which a consent is so delivered to the Corporation. Any person executing a consent may provide, whether through instruction to an agent or otherwise, that such a consent will be effective at a future time (including a time determined upon the happening of an event), no later than 60 days after such instruction is given or such provision is made, if evidence of such instruction or provision is provided to the Corporation. Unless otherwise provided, any such consent shall be revocable prior to its becoming effective.
Section 2.10. Proxies.
(a) A shareholder may vote shares in person or by proxy by signing an appointment, either personally or by the shareholder’s attorney-in-fact. An appointment of a proxy shall be effective when received by the Secretary or other officer of the Corporation authorized to tabulate votes. An appointment is valid for 11 months unless a longer period is provided in the appointment form. An appointment is revocable by the shareholder unless the appointment form conspicuously states that it is irrevocable and the appointment is coupled with an interest that has not been extinguished.
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(b) The death or incapacity of a shareholder appointing a proxy shall not affect the right of the Corporation to accept the proxy’s authority unless notice of the death or incapacity is received by the Secretary or other officer authorized to tabulate votes before the proxy exercises the proxy’s authority under the appointment.
Section 2.11. Corporation’s Acceptance of Votes.
(a) If the name signed on a vote, consent, waiver, or proxy appointment corresponds to the name of a shareholder, the Corporation, if acting in good faith, is entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholder.
(b) If the name signed on a vote, consent, waiver, or proxy appointment does not correspond to the name of a shareholder, the Corporation, if acting in good faith, is nevertheless entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholder if:
(i) The shareholder is an entity and the name signed purports to be that of an officer or agent of the entity;
(ii) The name signed purports to be that of an administrator, executor, guardian, or conservator representing the shareholder and, if the Corporation requests, evidence of fiduciary status acceptable to the Corporation has been presented with respect to the vote, consent, waiver, or proxy appointment;
(iii) The name signed purports to be that of a receiver or trustee in bankruptcy of the shareholder and, if the Corporation requests, evidence of this status acceptable to the Corporation has been presented with respect to the vote, consent, waiver, or proxy appointment;
(iv) The name signed purports to be that of a pledgee, beneficial owner, or attorney-in-fact of the shareholder and, if the Corporation requests, evidence acceptable to the Corporation of the signatory’s authority to sign for the shareholder has been presented with respect to the vote, consent, waiver, or proxy appointment; or
(v) Two or more persons are the shareholder as co-tenants or fiduciaries and the name signed purports to be the name of at least one of the co-owners and the person signing appears to be acting on behalf of all co-owners.
(c) The Corporation is entitled to reject a vote, consent, waiver, or proxy appointment if the Secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory’s authority to sign for the shareholder.
(d) The shares of a corporation are not entitled to vote if they are owned, directly or indirectly, by a second corporation, and the first corporation owns, directly or indirectly, a majority of the shares entitled to vote for directors of the second corporation; provided, however, a corporation may vote any shares, including its own shares, held by it in a fiduciary capacity.
(e) The Corporation and its officer or agent who accepts or rejects a vote, consent, waiver, or proxy appointment in good faith and in accordance with the standards of this provision shall not be liable in damages to the shareholder for the consequences of the acceptance or rejection. Corporate action based on the acceptance or rejection of a vote, consent, waiver, or proxy appointment under this provision is valid unless a court of competent jurisdiction determines otherwise.
Section 2.12. Notice of Business to be Conducted at Meeting. At an annual meeting of the shareholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (c) otherwise properly brought before an annual meeting by a shareholder.
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For business to be properly brought before an annual meeting by a shareholder, the shareholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a shareholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than sixty (60) days nor more than ninety (90) days prior to the meeting; provided, however, that in the event that less than sixty (60) days’ notice or prior public disclosure of the date of the meeting is given or made to shareholders, notice by the shareholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made.
A shareholder’s notice to the Secretary shall set forth as to each matter the shareholder proposes to bring before the annual meeting (a) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on the Corporation’s books, of the shareholder proposing such business, (c) the class and number of shares of stock of the Corporation which are beneficially owned by the shareholder, and (d) any material interest of the shareholder in such business. Notwithstanding anything in the Bylaws to the contrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Section 2.12.
The Chairman of the annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting and in accordance with the provisions of this Section 2.12 and if the Chairman should so determine, the Chairman shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.
Article
III.
Board of Directors
Section 3.1. Duties. All corporate powers shall be exercised by or under the authority of the Board of Directors and the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.
Section 3.2. Number and Qualification. As set forth in the Certificate of Incorporation, the number of directors of the Corporation shall be not less than three nor more than nine, and within such limits, the exact number shall be fixed and increased or decreased from time to time by resolution of the Board of Directors. At such time as the Board of Directors fixes the number of directors at six or more, the directors shall be divided into three classes designated Class I, Class II and Class III, each class to be as nearly equal in number as possible. At the first annual meeting of shareholders following the designation of six or more directors (the “First Meeting”), directors of all three classes shall be elected. The term of office of the Class I directors shall expire at the annual meeting of shareholders held in the first calendar year following the calendar year in which the First Meeting is held. The term of office of the Class II directors shall expire at the annual meeting of shareholders held in the second calendar year following the calendar year in which the First Meeting is held. The term of office of the Class III directors shall expire at the annual meeting of shareholders held in the third calendar year following the calendar year in which the First Meeting is held. At each annual meeting of shareholders after the First Meeting, each class of director selected to succeed those directors whose terms expire shall be elected to serve for three-year terms and until their successors are elected and qualified, so that the term of one class of directors will expire each year. When the number of directors is changed within the limits provided herein, any newly created directorships, or any decrease in directorships, shall be so apportioned among the classes as to make all classes as nearly equal as possible, provided that no decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent directors. Directors need not be residents of the State of Delaware or shareholders of the Corporation.
Section 3.3. Chairman of the Board of Directors. The directors may elect a director to serve as Chairman of the Board of Directors to preside at all meetings of the Board of Directors and to fulfill any other responsibilities delegated by the Board of Directors.
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Section 3.4. Regular Meetings. A regular meeting of the Board of Directors shall be held without other notice than this Section 3.4 immediately after, and at the same place as, the annual meeting of shareholders. The Board of Directors may provide, by resolution, the time and place, either within or without the State of Wyoming, for the holding of additional regular meetings without other notice than the resolution.
Section 3.5. Special Meetings. Special meetings of the Board of Directors may be called by or at the request of the President or any director. The person or persons authorized to call special meetings of the Board of Directors may fix any place, either within or without the State of Wyoming, as the place for holding any special meeting of the Board of Directors called by them.
Section 3.6. Notice. Notice of the date, time, and place of any special meeting of the Board of Directors shall be given at least three days prior to the meeting by any means provided by law. If mailed, notice shall be deemed to be given upon deposit in the United States mail addressed to the director at the director’s business address, with postage thereon prepaid. If by telegram, notice shall be deemed to be given when the telegram is delivered to the telegraph company. Notice by all other means shall be deemed to be given when received by the director or a person at the director’s business or residential address whom the person giving notice reasonably believes will deliver or report the notice to the director within 24 hours. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.
Section 3.7 Waiver of Notice. A director may at any time waive any notice required by law, the Certificate of Incorporation, or these Bylaws. Unless a director attends or participates in a meeting, a waiver must be in writing, must be signed by the director entitled to notice, must specify the meeting for which notice is waived, and must be filed with the minutes or corporate records.
Section 3.8. Quorum. A majority of the number of directors fixed by Section 3.2 shall constitute a quorum for the transaction of business at any meeting of the Board of Directors.
Section 3.9. Manner of Acting.
(a) The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors, unless a different number is provided by law, the Certificate of Incorporation, or these Bylaws.
(b) Members of the Board of Directors may hold a board meeting by conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in such a meeting shall constitute presence in person at the meeting.
(c) Any action that is required or permitted to be taken by the directors at a meeting may be taken without a meeting if a consent in writing setting forth the action so taken shall be signed by all of the directors. The action shall be effective on the date when the last signature is placed on the consent or at such earlier or later time as is set forth therein. Such consent, which shall have the same effect as a unanimous vote of the directors, shall be filed with the minutes of the Corporation.
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Section 3.10. Vacancies. Any vacancy, including a vacancy resulting from an increase in the number of directors, occurring on the Board of Directors may be filled by the shareholders, the Board of Directors, or the affirmative vote of a majority of the remaining directors if less than a quorum of the Board of Directors, or by a sole remaining director. If the vacant office is filled by the shareholders and was held by a director elected by a voting group of shareholders, then only the holders of shares of that voting group are entitled to vote to fill the vacancy. Any directorship not so filled by the directors shall be filled by election at an annual meeting or at a special meeting of shareholders called for that purpose. A director elected to fill a vacancy shall be elected to serve until the next annual meeting of shareholders and until a successor shall be duly elected and qualified. A vacancy that will occur at a specific later date, by reason of a resignation or otherwise, may be filled before the vacancy occurs, and the new director shall take office when the vacancy occurs.
Section 3.11. Compensation. By resolution of the Board of Directors, the directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.
Section 3.12. Presumption of Assent. A director of the Corporation who is present at a meeting of the Board of Directors or a committee of the Board of Directors shall be presumed to have assented to the action taken (a) unless the director’s dissent to the action is entered in the minutes of the meeting, (b) unless a written dissent to the action is filed with the person acting as the secretary of the meeting before the adjournment thereof or forwarded by certified or registered mail to the Secretary of the Corporation immediately after the adjournment of the meeting or (c) unless the director objects at the meeting to the holding of the meeting or transacting business at the meeting. The right to dissent shall not apply to a director who voted in favor of the action.
Section 3.13. Removal. All or any number of the directors of the Corporation may be removed with or without cause and at a meeting of shareholders called expressly for that purpose, by the vote of a majority of the votes then entitled to be cast for the election of directors. At any meeting of shareholders at which one or more directors are removed, a majority of votes then entitled to be cast for the election of directors may fill any vacancy created by such removal. If any vacancy created by removal of a director is not filled by the shareholders at the meeting at which the removal is effected, such vacancy may be filled by a majority vote of the remaining directors.
Section 3.14. Resignation. Any director may resign by delivering written notice to the Board of Directors, its chairperson, or the Corporation. Such resignation shall be effective at the earliest of the following, unless the notice specifies a later effective date, (a) on receipt, (b) five (5) days after its deposit in the United States mails, if mailed postpaid and correctly addressed, or (c) on the date shown on the return receipt, if sent by registered or certified mail, return receipt requested, and the receipt is signed by addressee. Once delivered, a notice of resignation is irrevocable unless revocation is permitted by the Board of Directors.
Section 3.15. Nominations for Election to Board of Directors. Only persons who are nominated in accordance with the procedures set forth in this Section 3.15 shall be eligible for election as directors. Nominations of persons for election to the Board of Directors may be made at a meeting of shareholders by or at the direction of the Board of Directors or by any shareholder of the Corporation entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth in this Section 3.15.
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Such nominations, other than those made by or at the direction of the Board of Directors shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a shareholder’s notice shall be delivered to or mailed and received at the principal executive offices of the Corporation not less than sixty (60) days nor more than ninety (90) days prior to the meeting; provided, however, that in the event that less than sixty (60) days’ notice or prior public disclosure of the date of the meeting is given or made to shareholders, notice by the shareholder to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made.
Such shareholder’s notice shall set forth (a) as to each person whom the shareholder proposes to nominate for election or re-election as a director, (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) the class and number of shares of stock of the Corporation which are beneficially owned by such person, and (iv) any other information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including, without limitation, such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (b) as to the shareholder giving the notice, (i) the name and address, as they appear on the Corporation’s books, of such shareholder, and (ii) the class and number of shares of stock of the Corporation which are beneficially owned by such shareholder.
At the request of the Board of Directors, any person nominated by the Board of Directors for election as a director shall furnish to the Secretary of the Corporation that information required to be set forth in a shareholder’s notice of nomination which pertains to the nominee.
No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 3.15. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by these Bylaws, and if the Chairman should so determine, the Chairman shall so declare to the meeting and the defective nomination shall be disregarded.
Article
IV.
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 4.1. Designation of Executive Committee. The Board of Directors may designate two or more directors to constitute an executive committee. The designation of an executive committee, and the delegation of authority to it, shall not operate to relieve the Board of Directors, or any member thereof, of any responsibility imposed by law. No member of the executive committee shall continue to be a member thereof after ceasing to be a director of the Corporation. The Board of Directors shall have the power at any time to increase or decrease the number of members of the executive committee, to fill vacancies thereon, to change any member thereof, and to change the functions or terminate the existence thereof. The creation of the executive committee and the appointment of members to it shall be approved by a majority of the directors in office when the action is taken, unless a greater number is required by the Certificate of Incorporation or these Bylaws.
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Section 4.2. Powers of Executive Committee. During the interval between meetings of the Board of Directors, and subject to such limitations as may be imposed by resolution of the Board of Directors, the executive committee may have and may exercise all the authority of the Board of Directors in the management of the Corporation, provided that the committee shall not have the authority of the Board of Directors with respect to the following matters: authorizing distributions; approving or proposing to the shareholders actions that are required to be approved by the shareholders under the Certificate of Incorporation or these Bylaws or by law; filling vacancies on the Board of Directors or any committee thereof; amending the Certificate of Incorporation; adopting, amending, or repealing bylaws; approving a plan of merger not requiring shareholder approval; authorizing or approving a reacquisition of shares, except according to a formula or method prescribed by the Board of Directors; authorizing or approving the issuance or sale or contract for sale of shares or determining the designation and relative rights, preferences, and limitations of a class or series of shares except within limits specifically prescribed by the Board of Directors.
Section 4.3. Procedures; Meetings; Quorum.
(a) The Board of Directors shall appoint a chairperson from among the members of the executive committee and shall appoint a secretary who may, but need not, be a member of the executive committee. The chairperson shall preside at all meetings of the executive committee and the secretary of the executive committee shall keep a record of its acts and proceedings, which shall be filed with the minutes of the Corporation.
(b) Regular meetings of the executive committee, of which no notice shall be necessary, shall be held on such days and at such places as shall be fixed by resolution adopted by the executive committee. Special meetings of the executive committee shall be called at the request of the President or of any member of the executive committee, and shall be held upon such notice as is required by these Bylaws for special meetings of the Board of Directors.
(c) Attendance of any member of the executive committee at a meeting shall constitute a waiver of notice of the meeting. A majority of the executive committee, from time to time, shall be necessary to constitute a quorum for the transaction of any business, and the act of a majority of the members present at a meeting at which a quorum is present shall be the act of the executive committee. Members of the executive committee may hold a meeting of such committee by conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in such meeting shall constitute presence in person at the meeting.
(d) Any action that is required or permitted to be taken at a meeting of the executive committee may be taken without a meeting if a consent in writing setting forth the action so taken shall be signed by all members of the executive committee. The action shall be effective on the date when the last signature is placed on the consent or at such earlier or later time as is set forth therein. Such consent, which shall have the same effect as a unanimous vote of the members of the executive committee, shall be filed with the minutes of the Corporation.
(e) The Board of Directors may approve a reasonable fee for the members of the executive committee as compensation for attendance at meetings of the executive committee.
Section 4.4. Other Committees. By the approval of a majority of the directors when the action is taken (unless a greater number is required by the Certificate of Incorporation), the Board of Directors, by resolution, may create one or more additional committees, appoint directors to serve on them, and define the duties of such committee or committees. Each such committee shall have two or more members, who shall serve at the pleasure of the Board of Directors. Such additional committee or committees shall not have the powers proscribed in Section 4.2.
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Article
V.
OFFICERS
Section 5.1. Number. The officers of the Corporation shall be a President and a Secretary. The Corporation may also have one or more Vice Presidents, one or more Assistant Secretaries, and such other officers and assistant officers as are deemed necessary or desirable by the Board of Directors, and such officers shall have such powers and duties prescribed by the Board of Directors or the officer authorized by the Board of Directors to prescribe the duties of other officers, provided such powers and duties are not in contravention with these Bylaws. A duly appointed officer may appoint one or more officers or assistant officers if such appointment is authorized by the Board of Directors. Any two or more offices may be held by the same person.
Section 5.2. Appointment and Term of Office. The officers of the Corporation shall be appointed annually by the Board of Directors at the first meeting of the Board of Directors held after the annual meeting of the shareholders. If the officers shall not be appointed at the meeting, a meeting shall be held as soon thereafter as is convenient for such appointment of officers. Each officer shall hold office until a successor shall have been duly appointed and qualified or until the officer’s death, resignation, or removal.
Section 5.3. Qualification. An officer need not be a director, shareholder, or a resident of the State of Delaware.
Section 5.4. Resignation and Removal. An officer may resign at any time by delivering notice of such resignation to the Corporation. A resignation is effective on receipt unless the notice specifies a later effective date. If the Corporation accepts a specified later effective date, the Board of Directors may fill the pending vacancy before the effective date, but the successor may not take office until the effective date. Once delivered, a notice of resignation is irrevocable unless revocation is permitted by the Board of Directors. Any officer appointed by the Board of Directors may be removed at any time with or without cause. Appointment of an officer shall not of itself create contract rights. Removal or resignation of an officer shall not affect the contract rights, if any, of the Corporation or the officer.
Section 5.5. Vacancies. A vacancy in any office because of death, resignation, removal, disqualification, or otherwise may be filled by the Board of Directors for the unexpired portion of the term.
Section 5.6. President. The President shall be the chief executive officer of the Corporation and shall be in general charge of its business and affairs, subject to the control of the Board of Directors. The President shall preside at all meetings of shareholders and at all meetings of directors (unless there is an acting Chairman of the Board presiding at the meeting). The President may execute on behalf of the Corporation all contracts, agreements, stock certificates, and other instruments. The President shall from time to time report to the Board of Directors all matters within the President’s knowledge affecting the Corporation that should be brought to the attention of the Board of Directors. The President shall vote all shares of stock in other corporations owned by the Corporation and is empowered to execute proxies, waivers of notice, consents, and other instruments in the name of the Corporation with respect to such stock. The President shall perform other duties assigned by the Board of Directors.
Section 5.7. Vice Presidents. In the absence of the President or in the event of the President’s death or inability or refusal to act, the Vice President (or, in the event there be more than one Vice President, the Vice Presidents in the order designated at the time of their election, or in the absence of any designation, then in the order of their election), if any, shall perform the duties of the President and, when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Any Vice President shall perform other duties assigned by the President or by the Board of Directors.
Section 5.8. Secretary. The Secretary shall prepare the minutes of all meetings of the directors and shareholders, shall have custody of the minute books and other records pertaining to the corporate business, and shall be responsible for authenticating the records of the Corporation. The Secretary shall countersign all instruments requiring the seal of the Corporation and shall perform other duties assigned by the Board of Directors. In the event no Vice President exists to succeed to the President under the circumstances set forth in Section 5.7 above, the Secretary shall make such succession.
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Section 5.9. Assistant Secretaries. The Assistant Secretaries, when authorized by the Board of Directors or these Bylaws, may sign, with the President or Vice President, certificates for shares of the Corporation the issuance of which shall have been authorized by resolution of the Board of Directors. The Assistant Secretaries shall, if required by the Board of Directors, give bonds for the faithful discharge of their duties in such sums and with such sureties as the Board of Directors shall determine. The Assistant Secretaries shall, in general, perform such duties as shall be specifically assigned to them in writing by the President or the Board of Directors.
Section 5.10. Salaries. The salaries of the officers shall be fixed from time to time by the Board of Directors, and no officer shall be prevented from receiving such salary because the officer is also a director of the Corporation.
ARTICLE
VI
ISSUANCE OF SHARES
Section 6.1. Certificates for Shares.
(a) Certificates representing shares of the Corporation shall be in a form determined by the Board of Directors consistent with the requirements of the Delaware General Corporation Law and these Bylaws; provided that any shares of the Corporation may be uncertificated, whether upon original issuance, reissuance or subsequent transfer. Shares represented by certificates shall be signed, either manually or in facsimile, by two officers of the Corporation, at least one of whom shall be the President or a Vice President, and may be sealed with the seal of the Corporation or a facsimile thereof. The signature of officers upon a certificate may be facsimiles if the certificate is countersigned by a transfer agent or registered by a registrar other than the Corporation itself or an employee of the Corporation. All certificates for shares shall be consecutively numbered or otherwise identified. Except as otherwise provided by law, the rights and obligations of shareholders are identical whether or not their shares are represented by certificates.
(b) Every certificate for shares of stock that are subject to any restriction on transfer pursuant to the Certificate of Incorporation, these Bylaws, securities laws, agreements among or between shareholders, or any agreement to which the Corporation is a party shall have conspicuously noted on the face or back of the certificate either (i) the full text of the restriction or (ii) a statement of the existence of the restriction and that the Corporation retains a copy of the restriction. Every certificate issued when the Corporation is authorized to issue more than one class or series within a class of stock shall set forth on its face or back either (i) the full text of the designations, relative rights, preferences, and limitations of the shares of each class and the variations in rights, preferences and limitations for each series authorized to be issued and the authority of the Board of Directors to determine variations for future series or (ii) a statement of the existence of such designations, relative rights, preferences, and limitations and a statement that the Corporation will furnish a copy thereof to the holder of such certificate upon written request and without charge.
(c) Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation shall cause to be sent to the registered owner of such shares a written notice that will designate the name of the Corporation and the state law under which the Corporation is organized, the name of the person to whom the uncertificated shares are issued, and the number and class of shares and the designation of the series, if any, of the shares represented. The written notice will summarize any restriction on the transfer of shares imposed by the Certificate of Incorporation, these Bylaws, securities laws, agreements among or between shareholders or any agreement to which the Corporation is a party, and if the Corporation is authorized to issue different classes of shares or different series within a class, the full text of the designations, relative rights, preferences and limitations of the shares of each class, the variations in rights, preferences and limitations for each series authorized to be issued, and the authority of the Board of Directors to determine variations for future series, and further shall provide such other information as may be required under the Delaware General Corporation Law.
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(d) The name and mailing address of the person to whom shares are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the Corporation. Each shareholder shall have the duty to notify the Corporation of his or her mailing address. All certificates surrendered to the Corporation for transfer shall be canceled, and no new certificate of stock or uncertificated shares shall be issued for then-outstanding certificated shares until the former certificate for a like number of shares shall have been surrendered and canceled, except that in case of a lost, destroyed, or mutilated certificate a new one may be issued therefor upon such terms and indemnity to the Corporation as the Board of Directors prescribes. Upon receipt of proper transfer instructions from the holder of uncertificated shares, the Corporation shall cancel such uncertificated shares and issue new equivalent uncertificated shares, or, upon such holder’s request, certificated shares, to the person entitled thereto, and record the transaction upon its books.
Section 6.2. Transfer of Shares. A transfer of shares of the Corporation shall be made only on the stock transfer books of the Corporation by direction of the holder of record thereof or by direction of the holder’s legal representative, who shall furnish proper evidence of authority to transfer, or by the direction of the holder’s attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Corporation, and on surrender for cancellation of the certificate for such shares or upon proper instruction from the holder of uncertificated shares. The person in whose name shares stand on the books of the Corporation shall be deemed by the Corporation to be the owner thereof for all purposes.
Section 6.3. Transfer Agent and Registrar. The Board of Directors may from time to time appoint one or more transfer agents and one or more registrars for the shares of the Corporation, with such powers and duties as the Board of Directors determines by resolution.
Section 6.4. Officer Ceasing to Act. If the person who signed a share certificate, either manually or in facsimile, no longer holds office when the certificate is issued, the certificate is nevertheless valid.
Article
VII.
CONTRACTS, LOANS, CHECKS, AND OTHER INSTRUMENTS
Section 7.1. Contracts. The Board of Directors may authorize any officer or officers and agent or agents to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances.
Section 7.2. Loans. No loans shall be contracted on behalf of the Corporation and no evidence of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances.
Section 7.3. Checks; Drafts. All checks, drafts, or other orders for the payment of money and notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or officers and agent or agents of the Corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors.
Section 7.4. Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies, or other depositories as the Board of Directors may select.
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Article
VIII.
MISCELLANEOUS PROVISIONS
Section 8.1. Seal. The Board of Directors from time to time may provide for a seal of the Corporation, which shall be circular in form and shall have inscribed thereon the name of the Corporation, the state of incorporation and the words “Corporate Seal.”
Section 8.2. Severability. Any determination that any provision of these Bylaws is for any reason inapplicable, invalid, illegal, or otherwise ineffective shall not affect or invalidate any other provision of these Bylaws.
Article
IX.
AMENDMENTS
These Bylaws may be altered, amended, or repealed and new bylaws may be adopted by the Board of Directors at any regular or special meeting, subject to repeal or change by action of the shareholders of the Corporation.
ARTICLE X.
CONSTRUCTION AND DEFINED TERMS
Section 10.1. Construction. As appropriate in context, whenever the singular number is used in these Bylaws, the same includes the plural, and whenever the plural number is used in these Bylaws, the same includes the singular. As used in these Bylaws, each of the neuter, masculine, and feminine genders includes the other two genders. As used in these Bylaws, “include,” “includes,” and “including” shall be deemed to be followed by “without limitation”.
Section 10.2. Defined Terms. As used in these Bylaws,
“Board of Directors” means the board of directors of the Corporation.
“Bylaws” means these bylaws of the Corporation, as the same may be amended from time to time.
“Certificate of Incorporation” means the Certificate of Incorporation of the Corporation, as the same may be amended from time to time.
“Corporation” means Metro One Telecommunications, Inc.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Delaware General Corporation Law” means Chapter 1, Title 8 of the Delaware Code, as the same may be amended from time to time.
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Exhibit 3.3
AMENDED AND RESTATED BYLAWS
OF
METRO ONE TELECOMMUNICATIONS, INC.
Article
I.
Offices
Section 1.1. Principal Office. The principal office of the Corporation shall be located at 30 North Gould Street, Suite 2990, Sheridan, WY 82801. The Corporation may have such other offices as the Board of Directors may designate or as the business of the Corporation may from time to time require.
Article
II.
SHAREHOLDERS
Section 2.1. Annual Meeting. The annual meeting of the shareholders shall be held during the month of May each year, unless a different date and time are fixed by the Board of Directors and stated in the notice of the meeting. The failure to hold an annual meeting at the time stated herein shall not affect the validity of any corporate action.
Section 2.2. Special Meetings. Special meetings of the shareholders may be called by the President or by the Board of Directors and shall be called by the President (or in the event of absence, incapacity, or refusal of the President, by the Chief Executive Officer, Secretary or any other officer) at the request of the holders of not less than one-tenth of all the outstanding shares of the Corporation entitled to vote at the meeting. The requesting shareholders shall sign, date, and deliver to the Secretary a written demand describing the purpose or purposes for holding the special meeting.
Section 2.3. Place of Meetings. Meetings of the shareholders shall be held at the principal business office of the Corporation or at such other place, within or without the State of Wyoming, as may be determined by the Board of Directors (or may not be held at any place, but may instead be held solely by means of remote communication if so decided by the Board of Directors in its sole discretion).
Section 2.4. Notice of Meetings. Written notice stating the date, time, and place of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called shall be mailed to each shareholder entitled to vote at the meeting at the shareholder’s address shown in the Corporation’s current record of shareholders, with postage thereon prepaid, not less than ten (10) nor more than sixty (60) days before the date of the meeting.
Section 2.5. Waiver of Notice. A shareholder may at any time waive any notice required by law, the Certificate of Incorporation, or these Bylaws. The waiver must be in writing, be signed by the shareholder entitled to the notice, and be delivered to the Corporation for inclusion in the minutes for filing with the corporate records. A shareholder’s attendance at a meeting waives objection to lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting. The shareholder’s attendance also waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented.
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Section 2.6. Record Date.
(a) For the purpose of determining shareholders entitled to notice of a shareholders’ meeting, to demand a special meeting, or to vote or to take any other action, the Board of Directors may fix a future date as the record date for any such determination of shareholders, such date in any case to be not more than sixty (60) nor less than ten (10) days before the date of the meeting or action requiring a determination of shareholders. The record date shall be the same for all voting groups.
(b) A determination of shareholders entitled to notice of or to vote at a shareholders’ meeting is effective for any adjournment of the meeting unless the Board of Directors fixes a new record date, which it must do if the meeting is adjourned to a date more than one hundred and twenty (120) days after the date fixed for the original meeting.
(c) If a court orders a meeting adjourned to a date more than one hundred and twenty (120) days after the date fixed for the original meeting, it may provide that the original record date continue in effect or it may fix a new record date.
Section 2.7. Shareholders’ List for Meeting. The Secretary of the Corporation shall prepare, at least ten (10) days before every meeting of shareholders, a complete list of the shareholders entitled to vote at the meeting (provided, however, if the record date for determining the shareholders entitled to vote is less than ten (10) days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth (10th) day before the meeting date), arranged in alphabetical order and showing the address of each stockholder and the number of shares of capital stock of the Corporation registered in the name of each stockholder at least ten days before any meeting of the stockholders. The list must be arranged by voting group and within each voting group by class or series of shares and show the address of and number of shares held by each shareholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least ten days before the meeting: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list was provided with the notice of the meeting; or (b) during ordinary business hours, at the principal place of business of the Corporation. If the meeting is to be held at a place, the list shall also be produced and kept at the time and place of the meeting the whole time thereof and may be inspected by any shareholder who is present. If the meeting is held solely by means of remote communication, the list shall also be open for inspection by any shareholder during the whole time of the meeting as provided by applicable law. Except as provided by applicable law, the stock ledger of the Corporation shall be the only evidence as to who are the shareholders entitled to examine the stock ledger and the list of stockholders or to vote in person or by proxy at any meeting of shareholders.
Section 2.8. Quorum; Adjournment. Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. A majority of the votes entitled to be cast on the matter by the voting group constitutes a quorum of that voting group for action in that matter. A majority of shares represented at the meeting, although less than a quorum, may adjourn the meeting from time to time to a different time and place without further notice to any shareholder of any adjournment. At such adjourned meeting at which a quorum is present, any business may be transacted that might have been transacted at the meeting originally held. Once a share is represented for any purpose at a meeting, it shall be deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting, unless a new record date is set for the adjourned meeting.
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Section 2.9. Voting Requirements; Action Without Meeting.
(a) Unless otherwise provided in the Certificate of Incorporation, each outstanding share entitled to vote shall be entitled to one vote upon each matter submitted to a vote at a meeting of shareholders. If a quorum exists, action on a matter, other than the election of directors, is approved if the votes cast by the shares entitled to vote favoring the action exceed the votes cast opposing the action, unless a greater number of affirmative votes is required by law or the Certificate of Incorporation. If a quorum exists, directors are elected by a plurality of the votes cast by the shares entitled to vote unless otherwise provided in the Certificate of Incorporation. No cumulative voting for directors shall be permitted unless the Certificate of Incorporation so provides. Action required or permitted bylaw to be taken at a shareholders’ meeting may be taken without a meeting if the action is taken by the shareholders holding of record or otherwise entitled to vote in the aggregate not less than the minimum number of votes necessary to authorize or take such action at a meeting at which all shares entitled to vote on the action were present and voted. The taking of action by shareholders without a meeting must be evidenced by one or more written consents describing the action taken, signed by all the shareholders holding of record or otherwise entitled to vote in the aggregate not less than the minimum number of votes necessary in order to take such action by written consent, and delivered to the Corporation for inclusion in the minutes for filing with the corporate records. Action taken under this section is effective when the last shareholder signs the consent, unless the consent specifies an earlier or later effective date. If the law requires that notice of proposed action be given to nonvoting shareholders and the action is to be taken by unanimous consent of the voting shareholders, the Corporation must give its nonvoting shareholders written notice of the proposed action at least ten (10) days before the action is taken. The notice must contain or be accompanied by the same material that, under the Delaware General Corporation Law, would have been required to be sent to nonvoting shareholders in a notice of meeting at which the proposed action would have been submitted to the shareholders for action.
(b) No consent shall be effective to take the corporate action referred to therein unless consents signed by a sufficient number of holders or members to take action are delivered to the corporation in the manner required by this section within 60 days of the first date on which a consent is so delivered to the Corporation. Any person executing a consent may provide, whether through instruction to an agent or otherwise, that such a consent will be effective at a future time (including a time determined upon the happening of an event), no later than 60 days after such instruction is given or such provision is made, if evidence of such instruction or provision is provided to the Corporation. Unless otherwise provided, any such consent shall be revocable prior to its becoming effective.
Section 2.10. Proxies.
(a) A shareholder may vote shares in person or by proxy by signing an appointment, either personally or by the shareholder’s attorney-in-fact. An appointment of a proxy shall be effective when received by the Secretary or other officer of the Corporation authorized to tabulate votes. An appointment is valid for 11 months unless a longer period is provided in the appointment form. An appointment is revocable by the shareholder unless the appointment form conspicuously states that it is irrevocable and the appointment is coupled with an interest that has not been extinguished.
(b) The death or incapacity of a shareholder appointing a proxy shall not affect the right of the Corporation to accept the proxy’s authority unless notice of the death or incapacity is received by the Secretary or other officer authorized to tabulate votes before the proxy exercises the proxy’s authority under the appointment.
Section 2.11. Corporation’s Acceptance of Votes.
(a) If the name signed on a vote, consent, waiver, or proxy appointment corresponds to the name of a shareholder, the Corporation, if acting in good faith, is entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholder.
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(b) If the name signed on a vote, consent, waiver, or proxy appointment does not correspond to the name of a shareholder, the Corporation, if acting in good faith, is nevertheless entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the shareholder if:
(i) The shareholder is an entity and the name signed purports to be that of an officer or agent of the entity;
(ii) The name signed purports to be that of an administrator, executor, guardian, or conservator representing the shareholder and, if the Corporation requests, evidence of fiduciary status acceptable to the Corporation has been presented with respect to the vote, consent, waiver, or proxy appointment;
(iii) The name signed purports to be that of a receiver or trustee in bankruptcy of the shareholder and, if the Corporation requests, evidence of this status acceptable to the Corporation has been presented with respect to the vote, consent, waiver, or proxy appointment;
(iv) The name signed purports to be that of a pledgee, beneficial owner, or attorney-in-fact of the shareholder and, if the Corporation requests, evidence acceptable to the Corporation of the signatory’s authority to sign for the shareholder has been presented with respect to the vote, consent, waiver, or proxy appointment; or
(v) Two or more persons are the shareholder as co-tenants or fiduciaries and the name signed purports to be the name of at least one of the co-owners and the person signing appears to be acting on behalf of all co-owners.
(c) The Corporation is entitled to reject a vote, consent, waiver, or proxy appointment if the Secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory’s authority to sign for the shareholder.
(d) The shares of a corporation are not entitled to vote if they are owned, directly or indirectly, by a second corporation, and the first corporation owns, directly or indirectly, a majority of the shares entitled to vote for directors of the second corporation; provided, however, a corporation may vote any shares, including its own shares, held by it in a fiduciary capacity.
(e) The Corporation and its officer or agent who accepts or rejects a vote, consent, waiver, or proxy appointment in good faith and in accordance with the standards of this provision shall not be liable in damages to the shareholder for the consequences of the acceptance or rejection. Corporate action based on the acceptance or rejection of a vote, consent, waiver, or proxy appointment under this provision is valid unless a court of competent jurisdiction determines otherwise.
Section 2.12. Notice of Business to be Conducted at Meeting. At an annual meeting of the shareholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (c) otherwise properly brought before an annual meeting by a shareholder.
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For business to be properly brought before an annual meeting by a shareholder, the shareholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a shareholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than sixty (60) days nor more than ninety (90) days prior to the meeting; provided, however, that in the event that less than sixty (60) days’ notice or prior public disclosure of the date of the meeting is given or made to shareholders, notice by the shareholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made.
A shareholder’s notice to the Secretary shall set forth as to each matter the shareholder proposes to bring before the annual meeting (a) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on the Corporation’s books, of the shareholder proposing such business, (c) the class and number of shares of stock of the Corporation which are beneficially owned by the shareholder, and (d) any material interest of the shareholder in such business. Notwithstanding anything in the Bylaws to the contrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Section 2.12.
The Chairman of the annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting and in accordance with the provisions of this Section 2.12 and if the Chairman should so determine, the Chairman shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.
Article
III.
Board of Directors
Section 3.1. Duties. All corporate powers shall be exercised by or under the authority of the Board of Directors and the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.
Section 3.2. Number and Qualification. As set forth in the Certificate of Incorporation, the number of directors of the Corporation shall be not less than three nor more than nine, and within such limits, the exact number shall be fixed and increased or decreased from time to time by resolution of the Board of Directors. At such time as the Board of Directors fixes the number of directors at six or more, the directors shall be divided into three classes designated Class I, Class II and Class III, each class to be as nearly equal in number as possible. At the first annual meeting of shareholders following the designation of six or more directors (the “First Meeting”), directors of all three classes shall be elected. The term of office of the Class I directors shall expire at the annual meeting of shareholders held in the first calendar year following the calendar year in which the First Meeting is held. The term of office of the Class II directors shall expire at the annual meeting of shareholders held in the second calendar year following the calendar year in which the First Meeting is held. The term of office of the Class III directors shall expire at the annual meeting of shareholders held in the third calendar year following the calendar year in which the First Meeting is held. At each annual meeting of shareholders after the First Meeting, each class of director selected to succeed those directors whose terms expire shall be elected to serve for three-year terms and until their successors are elected and qualified, so that the term of one class of directors will expire each year. When the number of directors is changed within the limits provided herein, any newly created directorships, or any decrease in directorships, shall be so apportioned among the classes as to make all classes as nearly equal as possible, provided that no decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent directors. Directors need not be residents of the State of Delaware or shareholders of the Corporation.
Section 3.3. Chairman of the Board of Directors. The directors may elect a director to serve as Chairman of the Board of Directors to preside at all meetings of the Board of Directors and to fulfill any other responsibilities delegated by the Board of Directors.
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Section 3.4. Regular Meetings. A regular meeting of the Board of Directors shall be held without other notice than this Section 3.4 immediately after, and at the same place as, the annual meeting of shareholders. The Board of Directors may provide, by resolution, the time and place, either within or without the State of Wyoming, for the holding of additional regular meetings without other notice than the resolution.
Section 3.5. Special Meetings. Special meetings of the Board of Directors may be called by or at the request of the President or any director. The person or persons authorized to call special meetings of the Board of Directors may fix any place, either within or without the State of Wyoming, as the place for holding any special meeting of the Board of Directors called by them.
Section 3.6. Notice. Notice of the date, time, and place of any special meeting of the Board of Directors shall be given at least three days prior to the meeting by any means provided by law. If mailed, notice shall be deemed to be given upon deposit in the United States mail addressed to the director at the director’s business address, with postage thereon prepaid. If by telegram, notice shall be deemed to be given when the telegram is delivered to the telegraph company. Notice by all other means shall be deemed to be given when received by the director or a person at the director’s business or residential address whom the person giving notice reasonably believes will deliver or report the notice to the director within 24 hours. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.
Section 3.7 Waiver of Notice. A director may at any time waive any notice required by law, the Certificate of Incorporation, or these Bylaws. Unless a director attends or participates in a meeting, a waiver must be in writing, must be signed by the director entitled to notice, must specify the meeting for which notice is waived, and must be filed with the minutes or corporate records.
Section 3.8. Quorum. A majority of the number of directors fixed by Section 3.2 shall constitute a quorum for the transaction of business at any meeting of the Board of Directors.
Section 3.9. Manner of Acting.
(a) The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors, unless a different number is provided by law, the Certificate of Incorporation, or these Bylaws.
(b) Members of the Board of Directors may hold a board meeting by conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in such a meeting shall constitute presence in person at the meeting.
(c) Any action that is required or permitted to be taken by the directors at a meeting may be taken without a meeting if a consent in writing setting forth the action so taken shall be signed by all of the directors. The action shall be effective on the date when the last signature is placed on the consent or at such earlier or later time as is set forth therein. Such consent, which shall have the same effect as a unanimous vote of the directors, shall be filed with the minutes of the Corporation.
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Section 3.10. Vacancies. Any vacancy, including a vacancy resulting from an increase in the number of directors, occurring on the Board of Directors may be filled by the shareholders, the Board of Directors, or the affirmative vote of a majority of the remaining directors if less than a quorum of the Board of Directors, or by a sole remaining director. If the vacant office is filled by the shareholders and was held by a director elected by a voting group of shareholders, then only the holders of shares of that voting group are entitled to vote to fill the vacancy. Any directorship not so filled by the directors shall be filled by election at an annual meeting or at a special meeting of shareholders called for that purpose. A director elected to fill a vacancy shall be elected to serve until the next annual meeting of shareholders and until a successor shall be duly elected and qualified. A vacancy that will occur at a specific later date, by reason of a resignation or otherwise, may be filled before the vacancy occurs, and the new director shall take office when the vacancy occurs.
Section 3.11. Compensation. By resolution of the Board of Directors, the directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.
Section 3.12. Presumption of Assent. A director of the Corporation who is present at a meeting of the Board of Directors or a committee of the Board of Directors shall be presumed to have assented to the action taken (a) unless the director’s dissent to the action is entered in the minutes of the meeting, (b) unless a written dissent to the action is filed with the person acting as the secretary of the meeting before the adjournment thereof or forwarded by certified or registered mail to the Secretary of the Corporation immediately after the adjournment of the meeting or (c) unless the director objects at the meeting to the holding of the meeting or transacting business at the meeting. The right to dissent shall not apply to a director who voted in favor of the action.
Section 3.13. Removal. All or any number of the directors of the Corporation may be removed with or without cause and at a meeting of shareholders called expressly for that purpose, by the vote of a majority of the votes then entitled to be cast for the election of directors. At any meeting of shareholders at which one or more directors are removed, a majority of votes then entitled to be cast for the election of directors may fill any vacancy created by such removal. If any vacancy created by removal of a director is not filled by the shareholders at the meeting at which the removal is effected, such vacancy may be filled by a majority vote of the remaining directors.
Section 3.14. Resignation. Any director may resign by delivering written notice to the Board of Directors, its chairperson, or the Corporation. Such resignation shall be effective at the earliest of the following, unless the notice specifies a later effective date, (a) on receipt, (b) five (5) days after its deposit in the United States mails, if mailed postpaid and correctly addressed, or (c) on the date shown on the return receipt, if sent by registered or certified mail, return receipt requested, and the receipt is signed by addressee. Once delivered, a notice of resignation is irrevocable unless revocation is permitted by the Board of Directors.
Section 3.15. Nominations for Election to Board of Directors. Only persons who are nominated in accordance with the procedures set forth in this Section 3.15 shall be eligible for election as directors. Nominations of persons for election to the Board of Directors may be made at a meeting of shareholders by or at the direction of the Board of Directors or by any shareholder of the Corporation entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth in this Section 3.15.
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Such nominations, other than those made by or at the direction of the Board of Directors shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a shareholder’s notice shall be delivered to or mailed and received at the principal executive offices of the Corporation not less than sixty (60) days nor more than ninety (90) days prior to the meeting; provided, however, that in the event that less than sixty (60) days’ notice or prior public disclosure of the date of the meeting is given or made to shareholders, notice by the shareholder to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made.
Such shareholder’s notice shall set forth (a) as to each person whom the shareholder proposes to nominate for election or re-election as a director, (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) the class and number of shares of stock of the Corporation which are beneficially owned by such person, and (iv) any other information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including, without limitation, such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (b) as to the shareholder giving the notice, (i) the name and address, as they appear on the Corporation’s books, of such shareholder, and (ii) the class and number of shares of stock of the Corporation which are beneficially owned by such shareholder.
At the request of the Board of Directors, any person nominated by the Board of Directors for election as a director shall furnish to the Secretary of the Corporation that information required to be set forth in a shareholder’s notice of nomination which pertains to the nominee.
No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 3.15. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by these Bylaws, and if the Chairman should so determine, the Chairman shall so declare to the meeting and the defective nomination shall be disregarded.
Article
IV.
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 4.1. Designation of Executive Committee. The Board of Directors may designate two or more directors to constitute an executive committee. The designation of an executive committee, and the delegation of authority to it, shall not operate to relieve the Board of Directors, or any member thereof, of any responsibility imposed by law. No member of the executive committee shall continue to be a member thereof after ceasing to be a director of the Corporation. The Board of Directors shall have the power at any time to increase or decrease the number of members of the executive committee, to fill vacancies thereon, to change any member thereof, and to change the functions or terminate the existence thereof. The creation of the executive committee and the appointment of members to it shall be approved by a majority of the directors in office when the action is taken, unless a greater number is required by the Certificate of Incorporation or these Bylaws.
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Section 4.2. Powers of Executive Committee. During the interval between meetings of the Board of Directors, and subject to such limitations as may be imposed by resolution of the Board of Directors, the executive committee may have and may exercise all the authority of the Board of Directors in the management of the Corporation, provided that the committee shall not have the authority of the Board of Directors with respect to the following matters: authorizing distributions; approving or proposing to the shareholders actions that are required to be approved by the shareholders under the Certificate of Incorporation or these Bylaws or by law; filling vacancies on the Board of Directors or any committee thereof; amending the Certificate of Incorporation; adopting, amending, or repealing bylaws; approving a plan of merger not requiring shareholder approval; authorizing or approving a reacquisition of shares, except according to a formula or method prescribed by the Board of Directors; authorizing or approving the issuance or sale or contract for sale of shares or determining the designation and relative rights, preferences, and limitations of a class or series of shares except within limits specifically prescribed by the Board of Directors.
Section 4.3. Procedures; Meetings; Quorum.
(a) The Board of Directors shall appoint a chairperson from among the members of the executive committee and shall appoint a secretary who may, but need not, be a member of the executive committee. The chairperson shall preside at all meetings of the executive committee and the secretary of the executive committee shall keep a record of its acts and proceedings, which shall be filed with the minutes of the Corporation.
(b) Regular meetings of the executive committee, of which no notice shall be necessary, shall be held on such days and at such places as shall be fixed by resolution adopted by the executive committee. Special meetings of the executive committee shall be called at the request of the President or of any member of the executive committee, and shall be held upon such notice as is required by these Bylaws for special meetings of the Board of Directors.
(c) Attendance of any member of the executive committee at a meeting shall constitute a waiver of notice of the meeting. A majority of the executive committee, from time to time, shall be necessary to constitute a quorum for the transaction of any business, and the act of a majority of the members present at a meeting at which a quorum is present shall be the act of the executive committee. Members of the executive committee may hold a meeting of such committee by conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in such meeting shall constitute presence in person at the meeting.
(d) Any action that is required or permitted to be taken at a meeting of the executive committee may be taken without a meeting if a consent in writing setting forth the action so taken shall be signed by all members of the executive committee. The action shall be effective on the date when the last signature is placed on the consent or at such earlier or later time as is set forth therein. Such consent, which shall have the same effect as a unanimous vote of the members of the executive committee, shall be filed with the minutes of the Corporation.
(e) The Board of Directors may approve a reasonable fee for the members of the executive committee as compensation for attendance at meetings of the executive committee.
Section 4.4. Other Committees. By the approval of a majority of the directors when the action is taken (unless a greater number is required by the Certificate of Incorporation), the Board of Directors, by resolution, may create one or more additional committees, appoint directors to serve on them, and define the duties of such committee or committees. Each such committee shall have two or more members, who shall serve at the pleasure of the Board of Directors. Such additional committee or committees shall not have the powers proscribed in Section 4.2.
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Article
V.
OFFICERS
Section 5.1. Number. The officers of the Corporation shall include a Chief Executive Officer, a President and a Secretary. The Corporation may also have one or more Vice Presidents, one or more Assistant Secretaries, and such other officers and assistant officers as are deemed necessary or desirable by the Board of Directors, and such officers shall have such powers and duties prescribed by the Board of Directors or the officer authorized by the Board of Directors to prescribe the duties of other officers, provided such powers and duties are not in contravention with these Bylaws. Any two or more offices may be held by the same person.
Section 5.2. Appointment and Term of Office. Each officer shall be elected by the Board of Directors and shall hold office for such term as may be prescribed by the Board of Directors and until such person’s successor shall have been duly elected and qualified, or until such person’s earlier death, disqualification, resignation or removal. A duly appointed officer may appoint one or more officers or assistant officers if such appointment is authorized by the Board of Directors.
Section 5.3. Qualification. An officer need not be a director, shareholder, or a resident of the State of Delaware.
Section 5.4. Resignation and Removal. An officer may resign at any time by delivering notice of such resignation to the Corporation. A resignation is effective on receipt unless the notice specifies a later effective date. If the Corporation accepts a specified later effective date, the Board of Directors may fill the pending vacancy before the effective date, but the successor may not take office until the effective date. Once delivered, a notice of resignation is irrevocable unless revocation is permitted by the Board of Directors. Any officer appointed by the Board of Directors may be removed at any time with or without cause. Appointment of an officer shall not of itself create contract rights. Removal or resignation of an officer shall not affect the contract rights, if any, of the Corporation or the officer.
Section 5.5. Vacancies. A vacancy in any office because of death, resignation, removal, disqualification, or otherwise may be filled by the Board of Directors for the unexpired portion of the term.
Section 5.6. Chief Executive Officer. The Chief Executive Officer shall, subject to the control of the Board of Directors, share with the President the general supervision, direction and control of the business and the officers of the Corporation. The Chief Executive Officer shall preside with the President at all meetings of shareholders. The Chief Executive Officer may execute on behalf of the Corporation all contracts, agreements, stock certificates, and other instruments. The Chief Executive Officer shall from time to time report to the Board of Directors all matters within the Chief Executive Officer’s knowledge affecting the Corporation that should be brought to the attention of the Board of Directors. The Chief Executive Officer is authorized to vote all shares of stock in other corporations owned by the Corporation and is empowered to execute proxies, waivers of notice, consents, and other instruments in the name of the Corporation with respect to such stock. The Chief Executive Officer shall perform other duties assigned by the Board of Directors.
Section 5.7. President. The President shall, subject to the control of the Board of Directors, share with the Chief Executive Officer the general supervision, direction and control of the business and the officers of the Corporation. The President shall preside at all meetings of shareholders and, in the absence of the Chairman of the Board, or if there be none, the President shall preside at all meetings of the Board of Directors. The President may execute on behalf of the Corporation all contracts, agreements, stock certificates, and other instruments. The President shall from time to time report to the Board of Directors all matters within the President’s knowledge affecting the Corporation that should be brought to the attention of the Board of Directors. The President is authorized to vote all shares of stock in other corporations owned by the Corporation and is empowered to execute proxies, waivers of notice, consents, and other instruments in the name of the Corporation with respect to such stock. The President shall perform other duties assigned by the Board of Directors.
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Section 5.8. Vice Presidents. In the absence of the President or in the event of the President’s death or inability or refusal to act, the Vice President (or, in the event there be more than one Vice President, the Vice Presidents in the order designated at the time of their election, or in the absence of any designation, then in the order of their election), if any, shall perform the duties of the President and, when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Any Vice President shall perform other duties assigned by the President or by the Board of Directors.
Section 5.9. Secretary. The Secretary shall prepare the minutes of all meetings of the directors and shareholders, shall have custody of the minute books and other records pertaining to the corporate business, and shall be responsible for authenticating the records of the Corporation. The Secretary shall countersign all instruments requiring the seal of the Corporation and shall perform other duties assigned by the Board of Directors. In the event no Vice President exists to succeed to the President under the circumstances set forth in Section 5.8 above, the Secretary shall make such succession.
Section 5.10. Assistant Secretaries. The Assistant Secretaries, when authorized by the Board of Directors or these Bylaws, may sign, with the President or Vice President, certificates for shares of the Corporation the issuance of which shall have been authorized by resolution of the Board of Directors. The Assistant Secretaries shall, if required by the Board of Directors, give bonds for the faithful discharge of their duties in such sums and with such sureties as the Board of Directors shall determine. The Assistant Secretaries shall, in general, perform such duties as shall be specifically assigned to them in writing by the President or the Board of Directors.
Section 5.11. Salaries. The salaries of the officers shall be fixed from time to time by the Board of Directors, and no officer shall be prevented from receiving such salary because the officer is also a director of the Corporation.
ARTICLE
VI
ISSUANCE OF SHARES
Section 6.1. Certificates for Shares.
(a) Certificates representing shares of the Corporation shall be in a form determined by the Board of Directors consistent with the requirements of the Delaware General Corporation Law and these Bylaws; provided that any shares of the Corporation may be uncertificated, whether upon original issuance, reissuance or subsequent transfer. Shares represented by certificates shall be signed, either manually or in facsimile, by two officers of the Corporation, at least one of whom shall be the Chief Executive Officer, the President or a Vice President, and may be sealed with the seal of the Corporation or a facsimile thereof. The signature of officers upon a certificate may be facsimiles if the certificate is countersigned by a transfer agent or registered by a registrar other than the Corporation itself or an employee of the Corporation. All certificates for shares shall be consecutively numbered or otherwise identified. Except as otherwise provided by law, the rights and obligations of shareholders are identical whether or not their shares are represented by certificates.
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(b) Every certificate for shares of stock that are subject to any restriction on transfer pursuant to the Certificate of Incorporation, these Bylaws, securities laws, agreements among or between shareholders, or any agreement to which the Corporation is a party shall have conspicuously noted on the face or back of the certificate either (i) the full text of the restriction or (ii) a statement of the existence of the restriction and that the Corporation retains a copy of the restriction. Every certificate issued when the Corporation is authorized to issue more than one class or series within a class of stock shall set forth on its face or back either (i) the full text of the designations, relative rights, preferences, and limitations of the shares of each class and the variations in rights, preferences and limitations for each series authorized to be issued and the authority of the Board of Directors to determine variations for future series or (ii) a statement of the existence of such designations, relative rights, preferences, and limitations and a statement that the Corporation will furnish a copy thereof to the holder of such certificate upon written request and without charge.
(c) Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation shall cause to be sent to the registered owner of such shares a written notice that will designate the name of the Corporation and the state law under which the Corporation is organized, the name of the person to whom the uncertificated shares are issued, and the number and class of shares and the designation of the series, if any, of the shares represented. The written notice will summarize any restriction on the transfer of shares imposed by the Certificate of Incorporation, these Bylaws, securities laws, agreements among or between shareholders or any agreement to which the Corporation is a party, and if the Corporation is authorized to issue different classes of shares or different series within a class, the full text of the designations, relative rights, preferences and limitations of the shares of each class, the variations in rights, preferences and limitations for each series authorized to be issued, and the authority of the Board of Directors to determine variations for future series, and further shall provide such other information as may be required under the Delaware General Corporation Law.
(d) The name and mailing address of the person to whom shares are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the Corporation. Each shareholder shall have the duty to notify the Corporation of his or her mailing address. All certificates surrendered to the Corporation for transfer shall be canceled, and no new certificate of stock or uncertificated shares shall be issued for then-outstanding certificated shares until the former certificate for a like number of shares shall have been surrendered and canceled, except that in case of a lost, destroyed, or mutilated certificate a new one may be issued therefor upon such terms and indemnity to the Corporation as the Board of Directors prescribes. Upon receipt of proper transfer instructions from the holder of uncertificated shares, the Corporation shall cancel such uncertificated shares and issue new equivalent uncertificated shares, or, upon such holder’s request, certificated shares, to the person entitled thereto, and record the transaction upon its books.
Section 6.2. Transfer of Shares. A transfer of shares of the Corporation shall be made only on the stock transfer books of the Corporation by direction of the holder of record thereof or by direction of the holder’s legal representative, who shall furnish proper evidence of authority to transfer, or by the direction of the holder’s attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Corporation, and on surrender for cancellation of the certificate for such shares or upon proper instruction from the holder of uncertificated shares. The person in whose name shares stand on the books of the Corporation shall be deemed by the Corporation to be the owner thereof for all purposes.
Section 6.3. Transfer Agent and Registrar. The Board of Directors may from time to time appoint one or more transfer agents and one or more registrars for the shares of the Corporation, with such powers and duties as the Board of Directors determines by resolution.
Section 6.4. Officer Ceasing to Act. If the person who signed a share certificate, either manually or in facsimile, no longer holds office when the certificate is issued, the certificate is nevertheless valid.
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Article
VII.
CONTRACTS, LOANS, CHECKS, AND OTHER INSTRUMENTS
Section 7.1. Contracts. The Board of Directors may authorize any officer or officers and agent or agents to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances.
Section 7.2. Loans. No loans shall be contracted on behalf of the Corporation and no evidence of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances.
Section 7.3. Checks; Drafts. All checks, drafts, or other orders for the payment of money and notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or officers and agent or agents of the Corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors.
Section 7.4. Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies, or other depositories as the Board of Directors may select.
Article
VIII.
MISCELLANEOUS PROVISIONS
Section 8.1. Seal. The Board of Directors from time to time may provide for a seal of the Corporation, which shall be circular in form and shall have inscribed thereon the name of the Corporation, the state of incorporation and the words “Corporate Seal.”
Section 8.2. Severability. Any determination that any provision of these Bylaws is for any reason inapplicable, invalid, illegal, or otherwise ineffective shall not affect or invalidate any other provision of these Bylaws.
Article
IX.
AMENDMENTS
These Bylaws may be altered, amended, or repealed and new bylaws may be adopted by the Board of Directors at any regular or special meeting, subject to repeal or change by action of the shareholders of the Corporation.
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ARTICLE X.
CONSTRUCTION AND DEFINED TERMS
Section 10.1. Construction. As appropriate in context, whenever the singular number is used in these Bylaws, the same includes the plural, and whenever the plural number is used in these Bylaws, the same includes the singular. As used in these Bylaws, each of the neuter, masculine, and feminine genders includes the other two genders. As used in these Bylaws, “include,” “includes,” and “including” shall be deemed to be followed by “without limitation”.
Section 10.2. Defined Terms. As used in these Bylaws,
“Board of Directors” means the board of directors of the Corporation.
“Bylaws” means these bylaws of the Corporation, as the same may be amended from time to time.
“Certificate of Incorporation” means the Certificate of Incorporation of the Corporation, as the same may be amended from time to time.
“Corporation” means Metro One Telecommunications, Inc.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Delaware General Corporation Law” means Chapter 1, Title 8 of the Delaware Code, as the same may be amended from time to time.
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Exhibit 5.1
February 10, 2022
Metro One Telecommunications, Inc.
30 North Gould Street
Suite 2990
Sheridan, WY 82801
Re: Registration Statement on Form S-1
Ladies and Gentlemen:
We have acted as counsel to Metro One Telecommunications, Inc., a Delaware corporation (the “Company”), in connection with the Company’s registration statement on Form S-1 (the “Registration Statement”), under the Securities Act of 1933, as amended (the “Act”). The Registration Statement relates to the registration of (i) 193,317,186 shares of common stock, no par value held by selling stockholders (ii) the resale of up to 40,331,000 shares of common stock issuable upon the exercise of warrants, (iii) the issuance and resale of 80,000,000 shares of common stock (the “Common Shares”).
We have reviewed the corporate proceedings of the Company with respect to the authorization of the issuance of the Common Shares. As counsel, we have also examined originals or copies of the Registration Statement and the exhibits thereto and such other documents, corporate records and other instruments as we have deemed necessary or appropriate for the purpose of this opinion. As to questions of fact material to this opinion, we have relied on certificates or comparable documents of public officials and of officers and representatives of the Company. In rendering the opinion expressed below, we have assumed the genuineness of all signatures, the conformity to the originals of all documents reviewed by us as copies, the authenticity and completeness of all original documents reviewed by us in original or copy form and the legal competence of each individual executing any document.
Based upon and subject to the foregoing, we are of the opinion that the Common Shares are duly authorized, validly issued, fully paid and nonassessable, and that the Common Shares underlying the warrants and debentures will have been duly authorized, and when delivered and paid for, will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to this firm under the heading “Legal Matters” in the Prospectus included in the Registration Statement. In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Act, or the rules and regulations promulgated thereunder. In rendering the opinions set forth above, we are opining only as to the specific legal issues expressly set forth therein, and no opinion shall be inferred as to any other matter or matters.
The opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act, and no opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement or the prospectus which forms a part thereof, other than as to the due authorization and validity of the Common Shares. In addition, we acknowledge and understand that this opinion letter may also be relied upon by Pacific Stock Transfer Co. This opinion letter is limited to the specific legal matters expressly set forth herein and is limited to present statutes, regulations and administrative and judicial interpretations. We assume no obligation to revise or supplement this opinion in the event of future changes in such laws or regulations.
Very truly yours, | ||
Smith Eilers, PLLC | ||
By: | /s/ Smith Eilers, PLLC | |
Smith Eilers, PLLC |
Exhibit 10.3
Metro
One Telecommunications, Inc.
2021 STOCK INCENTIVE PLAN
1. Purposes of the Plan. The purposes of this Stock Incentive Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to the Employees and Consultants of the Company and to promote the success of the Company’s business.
Options granted hereunder may be either “incentive stock options,” as defined in Section 422 of the Internal Revenue Code of 1986, as amended, or “nonqualified stock options,” at the discretion of the Board and as reflected in the terms of the written option agreement. In addition, shares of the Company’s Common Stock may be Sold hereunder independent of any Option grant.
2. Definitions. As used herein, the following definitions shall apply:
(a) “Board” shall mean the Committee, if one has been appointed, or the Board of Directors of the Company, if no Committee is appointed.
(b) “Code” shall mean the Internal Revenue Code of 1986, as amended.
(c) “Committee” shall mean the Committee appointed by the Board of Directors in accordance with Section 4(a) of the Plan, if one is appointed.
(d) “Common Stock” shall mean the Common Stock of the Company.
(e) “Company” shall mean Metro One Telecommunications, Inc., a Delaware corporation.
(f) “Consultant” shall mean any person who is engaged by the Company or any Subsidiary to render consulting services and is compensated for such consulting services and any director of the Company whether compensated for such services or not.
(g) “Continuous Status as an Employee or Consultant” shall mean the absence of any interruption or termination of service as an Employee or Consultant. Continuous Status as an Employee or Consultant shall not be considered interrupted in the case of sick leave, military leave, or any other leave of absence approved by the Board; provided that such leave is for a period of not more than ninety days or reemployment upon the expiration of such leave is guaranteed by contract or statute.
(h) “Employee” shall mean any person, including officers and directors, employed by the Company or any Parent or Subsidiary of the Company. The payment of a director’s fee by the Company shall not be sufficient to constitute “employment” by the Company.
(i) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
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(j) “Immediate Family” shall mean, with respect to a particular Optionee, the Optionee’s spouse, children and grandchildren and such other persons as the Board from time to time may determine, subject to such conditions as the Board may prescribe from time to time.
(k) “Incentive Stock Option” shall mean an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.
(l) “Nonqualified Stock Option” shall mean an Option not intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.
(m) “Option” shall mean a stock option granted pursuant to the Plan.
(n) “Optioned Stock” shall mean the Common Stock subject to an Option.
(o) “Optionee” shall mean an Employee or Consultant who receives an Option.
(p) “Parent” shall mean a “parent corporation,” whether now or hereafter existing, as defined in Section 424 of the Code.
(q) “Plan” shall mean this 2021 Stock Incentive Plan.
(r) “Sale” or “Sold” shall include, with respect to the sale of Shares under the Plan, the sale of Shares for consideration in the form of cash or notes, as well as a grant of Shares without consideration, except past or future services.
(s) “Share” shall mean a share of the Common Stock, as adjusted in accordance with Section 11 of the Plan.
(t) “Subsidiary” shall mean a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424 of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 of the Plan, the maximum aggregate number of Shares which may be optioned and/or Sold under the Plan is 77,137,410. The Shares may be authorized, but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason without having been exercised in full, the unpurchased Shares which were subject thereto shall, unless the Plan shall have been terminated, become available for future Option grants and/or Sales under the Plan.
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4. Administration of the Plan.
(a) Procedures. The Plan shall be administered by the Board of Directors of the Company.
The Board of Directors may appoint a Committee consisting of not less than two (2) members of the Board of Directors to administer the Plan on behalf of the Board of Directors, subject to such terms and conditions as the Board of Directors may prescribe. Once appointed, the Committee shall continue to serve until otherwise directed by the Board of Directors. From time to time the Board of Directors may increase the size of the Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies however caused, or remove all members of the Committee and thereafter directly administer the Plan.
Members of the Board who are either eligible for Options and/or Sales or have been granted Options or Sold Shares may vote on any matters affecting the administration of the Plan or the grant of any Options or Sale of any Shares pursuant to the Plan, except that no such member shall act upon the granting of an Option or Sale of Shares to himself, but any such member may be counted in determining the existence of a quorum at any meeting of the Board during which action is taken with respect to the granting of Options or Sale of Shares to him.
(b) Powers of the Board. Subject to the provisions of the Plan, the Board shall have the authority, in its discretion: (i) to grant Incentive Stock Options in accordance with Section 422 of the Code, or Nonqualified Stock Options; (ii) to authorize Sales of Shares of Common Stock hereunder; (iii) to determine, upon review of relevant information and in accordance with Section 8(b) of the Plan, the fair market value of the Common Stock; (iv) to determine the exercise/purchase price per Share of Options to be granted or Shares to be Sold, which exercise/purchase price shall be determined in accordance with Section 8(a) of the Plan; (v) to determine the Employees or Consultants to whom, and the time or times at which, Options shall be granted and the number of Shares to be represented by each Option; (vi) to determine the Employees or Consultants to whom, and the time or times at which, Shares shall be Sold and the number of Shares to be Sold; (vii) to interpret the Plan; (viii) to prescribe, amend and rescind rules and regulations relating to the Plan; (ix) to determine the terms and provisions of each Option granted (which need not be identical) and, with the consent of the holder thereof, modify or amend each Option; (x) to determine the terms and provisions of each Sale of Shares (which need not be identical) and, with the consent of the purchaser thereof, modify or amend each Sale; (xi) to accelerate or defer (with the consent of the Optionee) the exercise date of any Option; (xii) to accelerate or defer (with the consent of the Optionee or purchaser of Shares) the vesting restrictions applicable to Shares Sold under the Plan or pursuant to Options granted under the Plan; (xiii) to authorize any person to execute on behalf of the Company any instrument required to effectuate the grant of an Option or Sale of Shares previously granted or authorized by the Board; (xiv) to determine the restrictions on transfer, vesting restrictions, repurchase rights, or other restrictions applicable to Shares issued under the Plan; (xv) to effect, at any time and from time to time, with the consent of the affected Optionees, the cancellation of any or all outstanding Options under the Plan and to grant in substitution therefor new Options under the Plan covering the same or different numbers of Shares, but having an Option price per Share consistent with the provisions of Section 8 of this Plan as of the date of the new Option grant; (xvi) to establish, on a case-by-case basis, different terms and conditions pertaining to exercise or vesting rights upon termination of employment, whether at the time of an Option grant or Sale of Shares, or thereafter; and (xvii) to make all other determinations deemed necessary or advisable for the administration of the Plan.
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(c) Effect of Board’s Decision. All decisions, determinations and interpretations of the Board shall be final and binding on all Optionees and any other holders of any Options granted under the Plan or Shares Sold under the Plan.
5. Eligibility.
(a) Persons Eligible. Options may be granted and/or Shares Sold only to Employees and Consultants. Incentive Stock Options may be granted only to Employees. An Employee or Consultant who has been granted an Option or Sold Shares may, if he is otherwise eligible, be granted an additional Option or Options or Sold additional Shares.
(b) ISO Limitation. No Incentive Stock Option may be granted to an Employee which, when aggregated with all other Incentive Stock Options granted to such Employee by the Company or any Parent or Subsidiary, would result in Shares having an aggregate fair market value (determined for each Share as of the date of grant of the Option covering such Share) in excess of $100,000 becoming first available for purchase upon exercise of one or more Incentive Stock Options during any calendar year.
(c) Section 5(b) Limitations. Section 5(b) of the Plan shall apply only to an Incentive Stock Option evidenced by an “Incentive Stock Option Agreement” which sets forth the intention of the Company and the Optionee that such Option shall qualify as an Incentive Stock Option. Section 5(b) of the Plan shall not apply to any Option evidenced by a “Nonqualified Stock Option Agreement” which sets forth the intention of the Company and the Optionee that such Option shall be a Nonqualified Stock Option.
(d) No Right to Continued Employment. The Plan shall not confer upon any Optionee any right with respect to continuation of employment or consulting relationship with the Company, nor shall it interfere in any way with his right or the Company’s right to terminate his employment or consulting relationship at any time.
6. Term of Plan. The Plan shall become effective upon the earlier to occur of its adoption by the Board of Directors or its approval by the stockholders of the Company as described in Section 17 of the Plan. It shall continue in effect until ten (10) years after it becomes effective (as described above), unless sooner terminated under Section 13 of the Plan.
7. Term of Option. The term of each Incentive Stock Option shall be ten (10) years from the date of grant thereof or such shorter term as may be provided in the Stock Option Agreement. The term of each Nonqualified Stock Option shall be ten (10) years and one (1) day from the date of grant thereof or such other term as may be provided in the Stock Option Agreement. However, in the case of an Option granted to an Optionee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, (a) if the Option is an Incentive Stock Option, the term of the Option shall be five (5) years from the date of grant thereof or such shorter time as may be provided in the Stock Option Agreement, or (b) if the Option is a Nonqualified Stock Option, the term of the Option shall be five (5) years and one (1) day from the date of grant thereof or such other term as may be provided in the Stock Option Agreement.
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8. Exercise/Purchase Price and Consideration.
(a) Exercise/Purchase Price. The per-Share exercise/purchase price for the Shares to be issued pursuant to exercise of an Option or a Sale (other than a Sale which is a grant for which no purchase price is payable) shall be such price as is determined by the Board, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of such Incentive Stock Option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be no less than one hundred ten percent (110%) of the fair market value per Share on the date of the grant,
(B) granted to any other Employee, the per Share exercise price shall be no less than one hundred percent (100%) of the fair market value per Share on the date of grant.
(ii) In the case of a Nonqualified Stock Option or Sale
(A) granted or Sold to a person who, at the time of the grant of such Option or authorization of such Sale, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise/purchase price shall be no less than one hundred ten percent (110%) of the fair market value per Share on the date of the grant or authorization of Sale, unless otherwise expressly determined by the Board;
(B) granted or Sold to any other person, the per Share exercise/purchase price shall be no less than eighty-five percent (85%) of the fair market value per Share on the date of grant or authorization of Sale, unless otherwise expressly determined by the Board.
(C) Any determination to sell stock at less than fair market value on the date of the grant or authorization of Sale shall be accompanied by an express finding by the Board specifying that the sale is in the best interest of the Company, and specifying both the fair market value and the grant or sale price of the stock.
(iii) In the case of an Option granted or Sale authorized on or after the effective date of registration of any class of equity security of the Company pursuant to Section 12 of the Exchange Act and prior to six (6) months after the termination of such registration, the per Share exercise/purchase price shall be no less than one hundred percent (100%) of the fair market value per Share on the date of grant or authorization of Sale.
(b) Fair Market Value. The fair market value per Share shall be determined by the Board in its discretion; provided, however, that where there is a public market for the Common Stock, the fair market value per Share shall be the closing price of the Common Stock for the date of grant or authorization of Sale, as reported in The Wall Street Journal (or, if not so reported, as otherwise reported by the National Association of Securities Dealers Automated Quotation (NASDAQ) System) or, in the event the Common Stock is listed on a stock exchange, the fair market value per Share shall be the closing price on such exchange on the date of grant of the Option or authorization of Sale, as reported in The Wall Street Journal.
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(c) Consideration. The consideration to be paid for the Shares to be issued upon exercise of an Option or pursuant to a Sale, including the method of payment, shall be determined by the Board and may consist in whole or part of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) transfer to the Company of Shares having a Fair Market Value at the time of such exercise equal to the Option exercise price; or
(v) delivery of instructions to the Company to withhold from the Shares that would otherwise be issued on the exercise that number of Shares having a Fair Market Value at the time of such exercise equal to the Option exercise price.
If the Fair Market Value of the number of whole Shares transferred or the number of whole Shares surrendered is less than the total exercise price of the Option, the shortfall must be made up in cash or by check.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Board, including performance criteria with respect to the Company and/or the Optionee, and as shall be permissible under the terms of the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Option by the person entitled to exercise the Option and full payment for the Shares with respect to which the Option is exercised has been received by the Company. Full payment may, as authorized by the Board, consist of any consideration and method of payment allowable under Section 8(c) of the Plan. Each Optionee who exercises an Option shall, upon notification of the amount due (if any) and prior to or concurrent with delivery of the certificate representing the Shares, pay to the Company amounts necessary to satisfy applicable federal, state and local tax withholding requirements. An Optionee must also provide a duly executed copy of any stock transfer agreement then in effect and determined to be applicable by the Board. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the stock certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 11 of the Plan.
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Exercise of an Option in any manner shall result in a decrease in the number of Shares which thereafter may be available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.
(b) Termination of Status as an Employee or Consultant. If an Employee or Consultant ceases to serve as an Employee or Consultant (as the case may be), he may, but only within three (3) months (or such other period of time not exceeding the limitations of Section 7 above as is determined by the Board at the time of grant of an Option or thereafter) after the date he ceases to be an Employee or Consultant (as the case may be) of the Company, exercise his Option to the extent that he was entitled to exercise it at the date of such termination. To the extent that he was not entitled to exercise the Option at the date of such termination, or if he does not exercise such Option (which he was entitled to exercise) within the time specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of Section 9(b) above, in the event an Employee or Consultant is unable to continue his employment or consulting relationship (as the case may be) with the Company as a result of his total and permanent disability (as defined in Section 22(e)(3) of the Code), he may, but only within twelve (12) months (or such other period of time not exceeding the limitations of Section 7 above as is determined by the Board at the time of grant of an Option or thereafter) from the date of termination, exercise his Option to the extent he was entitled to exercise it at the date of such termination. To the extent that he was not entitled to exercise the Option at the date of termination, or if he does not exercise such Option (which he was entitled to exercise) within the time specified herein, the Option shall terminate.
(d) Death of Optionee. In the event of the death of an Optionee during the term of the Option who is at the time of his death an Employee or Consultant of the Company and who shall have been in Continuous Status as an Employee or Consultant since the date of grant of the Option, the Option may be exercised, at any time within twelve (12) months (or such other period of time not exceeding the limitations of Section 7 above as is determined by the Board at the time of grant of an Option or thereafter) following the date of death, by the Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent of the right to exercise as of the date of death.
10. Limits on Transfer of Options. An Option may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will, or by the laws of descent and distribution, and may be exercised during the lifetime of the Optionee only by the Optionee or, if incapacitated, by his or her legal guardian or legal representative. Notwithstanding the foregoing, the Board may, in its discretion, permit the transfer of any Nonqualified Stock Option to (i) members of the Optionee’s Immediate Family, (ii) a trust in which the Optionee and/or members of the Optionee’s Immediate Family have more than 50% of the beneficial interest, or (iii) any other entity in which only the Optionee and/or members of the Optionee’s Immediate Family own all of the voting interests; provided that an Option shall terminate immediately if it has been transferred to an entity (other than a trust) as permitted above and any person who is not a member of the Optionee’s Immediate Family becomes the owner of a voting interest in such entity. Upon such a transfer, such Option shall continue to be subject to the same terms and conditions as were applicable immediately prior to such transfer, including Section 9 as it applies to the Optionee ceasing to serve as an Employee or Consultant or to the death of disability of the Optionee, but for all other purposes of this Plan, the members of the Optionee’s Immediate Family, trustee or other entity will be entitled to all the rights of the Optionee with respect to the transferred Option and the term “Optionee” shall be deemed to refer to the transferee. Any such transfer shall be (i) permitted only if the Optionee does not receive any consideration therefor and the transfer is expressly approved by the Board, and (ii) shall be evidenced by an appropriate written document executed by the Optionee in a form satisfactory to the Company and a copy thereof shall be delivered to the Company on or prior to the effective date of the transfer.
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11. Adjustments Upon Changes in Capitalization or Merger. Subject to any required action by the stockholders of the Company, the number of shares of Common Stock covered by each outstanding Option and the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Options have yet been granted or Sales made or which have been returned to the Plan upon cancellation or expiration of an Option, as well as the price per share of Common Stock covered by each such outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the Company, the Option will terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Board. The Board may, in the exercise of its sole discretion in such instances, declare that any Option shall terminate as of a date fixed by the Board and give each Optionee the right to exercise his Option as to all or any part of the Optioned Stock, including Shares as to which the Option would not otherwise be exercisable. In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger of the Company with or into another corporation, the Option shall be assumed or an equivalent option shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation, unless the Board determines, in the exercise of its sole discretion and in lieu of such assumption or substitution, that the Optionee shall have the right to exercise the Option as to all of the Optioned Stock, including Shares as to which the Option would not otherwise be exercisable. If the Board makes an Option fully exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the Board shall notify the Optionee that the Option shall be fully exercisable for a period of thirty (30) days from the date of such notice or such shorter period as the Board may specify in the notice, and the Option will terminate upon the expiration of such period.
12. Time of Granting Options. The date of grant of an Option shall, for all purposes, be the date on which the Board makes the determination granting such Option. Notice of the determination shall be given to each Employee or Consultant to whom an Option is so granted within a reasonable time after the date of such grant.
13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may amend or terminate the Plan from time to time in such respects as the Board may deem advisable; provided, however, that if required to qualify the Plan under Rule 16b-3 promulgated under Section 16 of the Exchange Act, as amended, no amendment shall be made more than once every six months that would change the amount, price or timing of the option grants, other than to comport with changes in the Code, as amended, or the rules and regulations promulgated thereunder; and provided, further, that, if required to qualify the Plan under Rule 16b-3, no amendment shall be made without the approval of the stockholders of the Company in the manner described in Section 17 of the Plan if the amendment would:
(i) increase the number of Shares subject to the Plan, other than in connection with an adjustment under Section 11 of the Plan;
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(ii) make a change in the designation of the class of Employees or Consultants eligible to be granted Options; or
(iii) if the Company has a class of equity security registered under Section 12 of the Exchange Act at the time of such revision or amendment, cause any material increase in the benefits accruing to participants under the Plan.
(b) Stockholder Approval. If any amendment requiring stockholder approval under Section 13(a) of the Plan is made subsequent to the first registration of any class of equity security by the Company under Section 12 of the Exchange Act, such stockholder approval shall be solicited as described in Section 17 of the Plan.
(c) Effect of Amendment or Termination. Any such amendment or termination of the Plan shall not affect Options already granted, and such Options shall remain in full force and effect as if this Plan had not been amended or terminated, unless mutually agreed otherwise between the Optionee and the Board, which agreement must be in writing and signed by the Optionee and the Company.
14. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant to the exercise of an Option or a Sale unless the exercise of such Option or consummation of the Sale and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended, applicable state securities laws, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange (including NASDAQ) upon which the Shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an Option or a Sale, the Company may require the person exercising such Option or to whom Shares are being Sold to represent and warrant at the time of any such exercise or Sale that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned relevant provisions of law.
15. Reservation of Shares. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.
Inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.
16. Option Agreement. Options shall be evidenced by written option agreements in such form as the Board shall approve.
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17. Stockholder Approval. Continuance of the Plan shall be subject to approval by the stockholders of the Company within twelve months before or after the date the Plan is adopted. If such stockholder approval is obtained at a duly held stockholders’ meeting, it may be obtained by the affirmative vote of the holders of a majority of the outstanding shares of the Company, such holders being present or represented and entitled to vote thereon. If and in the event that the Company registers any class of any equity security pursuant to Section 12 of the Exchange Act, the approval of such stockholders of the Company shall be:
(a) Solicitation.
(i) solicited substantially in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder, or
(ii) solicited after the Company has furnished in writing to the holders entitled to vote substantially the same information concerning the Plan as that which would be required by the rules and regulations in effect under Section 14(a) of the Exchange Act at the time such information is furnished; and
(b) Time. Obtained at or prior to the first annual meeting of stockholders held subsequent to the first registration of any class of equity securities of the Company under Section 12 of the Exchange Act.
If such stockholder approval is obtained by written consent, it must be obtained by the written consent of stockholders of the Company in compliance with the requirements of applicable state law.
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18. Section 409A. The Company intends that all Options granted and/or Shares Sold be structured to comply with, or be exempt from, Code Section 409A, such that no adverse tax consequences, interest, or penalties under Code Section 409A apply. Notwithstanding anything in this Plan or any applicable option agreement to the contrary, the Board may, without an Employee or Consultant’s consent, amend this Plan or applicable option agreement, adopt policies and procedures, or take any other actions (including retroactive actions) as are necessary or appropriate to preserve the intended tax treatment of Options granted and/or Shares Sold.
19. Severability. If any provision of this Plan or any applicable option agreement is or becomes or is deemed to be invalid, illegal, or unenforceable or would disqualify the Plan or any applicable option agreement under applicable law, such provision will be (i) construed or deemed amended to conform to applicable law or (b) if it cannot be construed or deemed amended without materially altering the Plan or any applicable option agreement, such provision will be stricken, and the remainder of the Plan or any applicable option agreement shall remain in full force and effect.
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ISRAELI APPENDIX
TO THE
Metro
One Telecommunications, Inc.
2021 STOCK INCENTIVE PLAN
1. Special Provisions for Persons who are Israeli Taxpayers.
1.1 This Israeli Appendix (the “Appendix”) to the Metro One Telecommunications, Inc. 2021 Stock Incentive Plan, as amended from time to time (the “Plan”) is made and entered effective as of September 10, 2021 (the “Appendix Effective Date”). The provisions specified hereunder shall form an integral part of the Plan.
1.2 The provisions set forth in this Appendix apply only to Optionees who are subject to taxation by the State of Israel with respect to Options granted thereto (each, an “Israeli Optionee”).
1.3 This Appendix applies with respect to Options granted under the Plan as aforesaid. The purpose of this Appendix is to establish certain rules and limitations applicable to Options that may be granted under the Plan to Israeli Optionees from time to time, in compliance with the securities and other applicable laws currently in force in the State of Israel. All grants made pursuant to this Appendix shall be governed by the terms of the Plan and the terms of this Appendix. This Appendix is applicable only to grants made after the Appendix Effective Date. This Appendix is subject to the ITO (as defined below) and Section 102 (as defined below) in particular.
1.4 The Plan and this Appendix shall be read together with respect to Israeli Optionees. In the event of a conflict between this Appendix and the Plan, this Appendix shall take precedence with respect to provisions relating to Section 102.
2. Definitions.
Capitalized terms not otherwise defined herein shall have the meaning assigned to them in the Plan. The following additional definitions will apply to grants made pursuant to this Appendix:
“102 Capital Gains Track” means the tax track set forth in Section 102(b)(2) or Section 102(b)(3) of the ITO, as the case may be.
“102 Capital Gains Track Grant” means a 102 Trustee Grant elected and designated to qualify for the special tax treatment under the 102 Capital Gains Track.
“102 Earned Income Track” means the tax track set forth in Section 102(b)(1) of the ITO.
“102 Earned Income Track Grant” means a 102 Trustee Grant elected and designated to qualify for the ordinary income tax treatment under the 102 Earned Income Track.
“102 Trustee Grant” means an Option granted pursuant to Section 102(b) of the ITO and held in trust by a Trustee for the benefit of the Eligible 102 Optionee, and includes 102 Capital Gains Track Grants and 102 Earned Income Track Grants, if and as applicable.
“Affiliated Company” means any Israeli resident legal entity that qualifies as both (i) a Subsidiary, and (ii) an “employing company” within the meaning of Section 102(a) of the ITO.
“Controlling Shareholder” means a “controlling shareholder”, as defined under Section 32(9) of the ITO, of the Company.
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“Election” means the Company’s election of the type (i.e., between 102 Capital Gains Track or 102 Earned Income Track) of 102 Trustee Grants that it will make under the Plan, as filed with the ITA.
“Eligible 102 Optionee” means an Israeli Optionee who is an individual employed by a Subsidiary that qualifies as an Affiliated Company or is a Non-Employee Director, and such individual is not a Controlling Shareholder.
“Fair Market Value” means, without derogating from the definition in the Plan of the term of “Fair Market Value” and solely for the purpose of determining the tax liability pursuant to Section 102(b)(3) of the Ordinance, as follows: if at the date of grant the Company’s shares are listed on any established stock exchange or a national market system or if the Company’s shares will be registered for trading within ninety (90) days following the date of grant, the Fair Market Value of a Share on the date of grant shall be determined in accordance with the average value of the Company’s shares on the thirty (30) trading days preceding the date of grant or on the thirty (30) trading days following the date of registration for trading, as the case may be.
“ITA” means the Israeli Tax Authority.
“ITO” or the “Ordinance” means the Israeli Income Tax Ordinance (New Version), 5721-1961 and the rules, regulations, orders or procedures promulgated thereunder and any amendments thereto, including specifically the ITO Rules, all as may be amended from time to time.
“ITO Rules” means the Income Tax Rules (Tax Benefits in Share Issuance to Employees), 5763-2003.
“Non-Trustee Grant” means an Option granted to an Eligible 102 Optionee pursuant to Section 102(c) of the ITO.
“Option” means the right to purchase shares of Common Stock of the Company granted to an Israeli Optionee.
“Required Holding Period” means the requisite period prescribed by Section 102 and the ITO Rules, or such other period as may be required by the ITA, with respect to 102 Trustee Grants, during which an Option granted by the Company and the share of Common Stock of the Company (“Shares”) issued or delivered upon the exercise or vesting or settlement (as the case may be) of such Option must be held by the Trustee for the benefit of the person to whom it was granted. As of the Appendix Effective Date, the Required Holding Period for 102 Capital Gains Track Grants is 24 months from the date the Option is granted and deposited with the Trustee, provided that all the conditions set forth in Section 102 and the related regulations have been fulfilled.
“Section 102” means the provisions of Section 102 of the ITO, as amended from time to time.
“Trustee” means a person or entity designated by the Board or the Compensation Committee to serve as a trustee and/or supervising trustee and approved by the ITA in accordance with the provisions of Section 102(a) of the ITO.
“Trust Agreement” means the agreement(s) between the Company and/or an Affiliated Company and the Trustee, regarding Options granted under this Appendix, as in effect from time to time.
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3. Types of Grants and Section 102 Election.
3.1 Grants of Options made pursuant to Section 102, shall be made pursuant to either (a) Section 102(b)(2) or Section 102(b)(3) of the ITO, as the case may be, as 102 Capital Gains Track Grants, or (b) Section 102(b)(1) of the ITO as 102 Earned Income Track Grants. The Company’s Election regarding the type of 102 Trustee Grant it elects to make shall be filed with the ITA before any grant is made pursuant to such Election in accordance with Section 102 and shall also be applicable to any stock dividend and/or additional rights that are granted with respect to an Option which was granted as a 102 Trustee Grant. Once the Company has filed such Election, it may change the type of 102 Trustee Grant that it elects to make only in accordance with the provisions of Section 102(g) of the ITO (i.e., after the lapse of at least 12 months from the end of the calendar year in which the first grant was made pursuant to the previous Election). For the avoidance of doubt, such Election shall not prevent the Company from granting Non-Trustee Grants to Eligible 102 Optionees at any time.
3.2 Eligible 102 Optionees may receive only 102 Trustee Grants or Non-Trustee Grants under this Appendix.
3.3 No 102 Trustee Grants may be made effective pursuant to this Appendix until 30 days after the requisite filings required by the ITO and the ITO Rules have been filed with the ITA; provided, however, that if the ITA provides approval for such - 102 Trustee Grants may be made effective prior to the lapse of the aforementioned 30 day period.
3.4 The Evidence of Option or other documents evidencing an Option granted or Shares issued or delivered pursuant to the Plan and this Appendix shall indicate whether the grant is a 102 Trustee Grant or a Non-Trustee Grant; and, if the grant is a 102 Trustee Grant, the Evidence of Option shall indicate, among other matters, whether it is a 102 Capital Gains Track Grant or a 102 Earned Income Track Grant, the vesting provisions, the settlement provisions and the exercise price (if any and as applicable). For the avoidance of doubt, each Eligible 102 Optionee granted a 102 Trustee Grant, shall be required to sign and deliver to the Trustee a consent letter (whether as part of the Evidence of Option or as a stand-alone consent, as the case may be) which includes several statements under which the Israeli Optionee, among others, (i) agrees to be subject to the Trust Agreement and agrees that the Trustee be released from any liability in respect of any action or decision duly taken and bona fide executed by it with respect to the Plan, this Appendix and/or any 102 Trustee Grants; (ii) declares that he/she understands and accepts the provisions of Section 102 and the applicable tax track and approves the tax arrangement contemplated thereby; and (iii) confirms that he/she shall neither sell nor transfer the Shares or any other right attributed thereto until the lapse of the Required Holding Period.
4. Terms And Conditions of 102 Trustee Grants.
4.1 Each 102 Trustee Grant will be deemed granted on the date of, or the date stated in, the applicable Board or Committee resolution (as applicable), in accordance with the provisions of Section 102 and the Trust Agreement.
4.2 Each 102 Trustee Grant, and any stock dividend and/or additional rights that are granted with respect to an Option which was granted as a 102 Trustee Grant, granted to an Eligible 102 Optionee shall be held by the Trustee and each Share acquired pursuant to a 102 Trustee Grant shall be deposited in a trust account in the name of a Trustee and shall be held in trust for the benefit of the Eligible 102 Optionee for the Required Holding Period. After the lapse of the Required Holding Period, the Trustee may release such Option and any such Shares, provided that (i) the Trustee has received an acknowledgment from the ITA that the Eligible 102 Optionee has paid any applicable tax due pursuant to the ITO; or (ii) the Trustee and/or the Company and/or the applicable Affiliated Company withhold any applicable tax due pursuant to the ITO. The Trustee shall not release any Option which is granted pursuant to a 102 Trustee Grant, or Shares issued thereunder and held by it, prior to the full payment of the Eligible 102 Optionee’s tax liabilities.
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4.3 Each 102 Trustee Grant (whether a 102 Capital Gains Track Grant or a 102 Earned Income Track Grant, as applicable), and any stock dividend and/or additional rights that are granted with respect to an Option which was granted as a 102 Trustee Grant, shall be subject to the relevant terms of Section 102 and the ITO, which shall be deemed an integral part of the 102 Trustee Grant and shall prevail over any term contained in the Plan, this Appendix or any Evidence of Option that is not consistent therewith. Any provision of the ITO and any approvals by the ITA not expressly specified in this Appendix or any document evidencing a grant that are necessary to receive or maintain any tax benefit pursuant to Section 102, shall be binding on the Eligible 102 Optionee. The Trustee and each Eligible 102 Optionee who is granted a 102 Trustee Grant shall comply with the ITO and the terms and conditions of the Trust Agreement entered into between the Company and/or an applicable Affiliated Company and the Trustee. For avoidance of doubt, it is reiterated that compliance with the ITO specifically includes compliance with the ITO Rules. Further, the Eligible 102 Optionee agrees to execute any and all documents which the Company, the applicable Affiliated Company or the Trustee may reasonably determine to be necessary in order to comply with the provision of any applicable law, and, particularly, Section 102.
4.4 During the Required Holding Period, the Eligible 102 Optionee shall not require the Trustee to release or sell the Option or the underlying Shares and other shares received subsequently following any realization of rights derived from Option or Shares (including stock dividends) to the Eligible 102 Optionee or to a third party. Notwithstanding the foregoing, the Trustee may, pursuant to a written request and subject to applicable law, release and transfer such Shares provided that both of the following conditions have been fulfilled prior to such transfer: (i) all taxes required to be paid upon the release and transfer of the Shares have been withheld for transfer to the ITA; and (ii) the Trustee has received written confirmation from the Company and the applicable Affiliated Company that all requirements for such release and transfer have been fulfilled according to the terms of the Company’s corporate documents, the Plan, this Appendix, any applicable agreement and any applicable law. To avoid doubt, such sale or release during the Required Holding Period will result in different tax ramifications to the Eligible 102 Optionee under Section 102 of the ITO and the ITO Rules and/or any other regulations or orders or procedures promulgated thereunder, which shall apply to and shall be borne solely by such Eligible 102 Optionee.
4.5 In the event a stock dividend is declared and/or additional rights are granted with respect to Shares which were issued upon an exercise or vesting and settlement of an Option which was granted as a 102 Trustee Grant, such stock dividend and/or rights shall also be subject to the provisions of this Section 4 and the Required Holding Period for such stock dividend and/or rights shall be measured from the commencement of the Required Holding Period for the Option with respect to which the stock dividend was declared and/or rights granted. In the event of a cash dividend which applies to an Option or Shares, the Trustee and/or the Company and/or the Affiliated Companies shall deduct all taxes and mandatory payments from the dividend proceeds in compliance with applicable withholding requirements before transferring the dividend proceeds to the Eligible 102 Optionee.
4.6 If an Option which is granted as a 102 Trustee Grant is exercised or vests and settled (as the case may be) during the Required Holding Period, the Shares issued or delivered upon such exercise or vesting and settlement, if and as applicable, shall be issued or delivered, as applicable, in the name of the Trustee (to the extent applicable) for the benefit of the Eligible 102 Optionee. If such Shares are issued or delivered, as applicable, after the Required Holding Period has lapsed, the Shares issued or delivered, as applicable, upon such exercise or vesting and settlement shall, at the election of the Eligible 102 Optionee, either (i) be issued or delivered, as applicable, in the name of the Trustee (if applicable), or (ii) be transferred to the Eligible 102 Optionee directly, provided that the Eligible 102 Optionee first complies with all applicable provisions of the Plan, this Appendix and Section 102, and the Eligible 102 Optionee pays all taxes which apply on the Shares or to such transfer of Shares.
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4.7 To avoid doubt, in the event that an Option granted to Eligible 102 Optionee pursuant to the Plan and this Appendix, is settled for cash, such Option most likely will not be qualified as a 102 Trustee Grant. It is also clarified that various amendments to the Plan or to the terms of an Option that has already been granted, as well as the performance of some of the procedures stipulated in the Plan or the resolution of the Board/Committee to condition an Option with various terms and conditions may be subject to obtaining the prior-approval (ruling) of the ITA as a condition to having the 102 Capital Gains Track Grants continue to be subject to the 102 Capital Gains Track, including, without limitation, any process of (i) acceleration of vesting that has not been originally stipulated in the Option Agreement, (ii) cashless/net exercise/delivery to the Company of Shares, settlement and payment of the Consideration by promissory note, and (iii) reduction of the exercise price or any other adjustments to the Option price or exercise or purchase price of any Option, whether pursuant to a distribution of dividend or changes in the Company’s capital structure.
Notwithstanding anything to the contrary in the Plan or this Appendix, it is hereby clarified that no “put” or “call” option provisions are deemed included in the Plan or this Appendix with respect to Options which are intended to qualify as 102 Trustee Grants without first obtaining the prior approval from the ITA.
4.8 Upon receipt of a 102 Trustee Grant, the Eligible 102 Optionee will sign an undertaking to release the Trustee, the Company and the Affiliated Companies from any liability in respect of any action or decision duly taken and bona fide executed in relation with this Appendix, or any 102 Trustee Grant Share granted to the Eligible 102 Optionee thereunder.
5. Exercise Of Options.
Options shall be exercised by the Eligible 102 Optionee by giving written notice to the Company and/or to any third party designated by the Company (the “Representative”), in such form and method as may be determined by the Company (and subject to the terms stipulated in the Plan and/or in such form) and, when applicable, by the Trustee, in accordance with the requirements of Section 102, which exercise shall be effective – except if otherwise set forth in the said form of notice - upon receipt of such notice by the Company and/or the Representative and the payment of the exercise price (if any) for the number of Shares with respect to which the Option is being exercised, at the Company’s or the Representative’s principal office. The notice shall specify the number of Shares with respect to which the Option is being exercised. Options that are not required to be exercised, but rather become payable in accordance with the terms and conditions of the Option shall be settled in cash (without, for the removal of a doubt, derogating from the provisions of Sections 4.7 and 7 hereof), Shares, or a combination thereof, as determined by the Company.
6. Assignability.
As long as an Option or Shares are held by the Trustee on behalf of the Eligible 102 Optionee, none of the rights of the Eligible 102 Optionee over the Option or the Shares nor any rights attributed thereto or derived therefrom may be (i) sold, assigned, pledged, given as collateral or mortgaged or otherwise transferred, other than by will or by operation of law, (ii) subject of an attachment, power of attorney, a proxy or a share transfer deed (other than a power of attorney or a proxy or a voting agreement with respect to the Shares which was pre-approved by the Company) unless Section 102 and/or any tax ruling issued by the ITA with respect to 102 Trustee Grants allow otherwise. During the lifetime of the Eligible 102 Optionee, each and all of such Eligible 102 Optionee’s rights to purchase, or be delivered with, Shares under the Plan and this Appendix shall be exercisable by, or be delivered for the benefit of, the Eligible 102 Optionee only. Any such action made directly or indirectly, for an immediate validation or for a future one, shall be void.
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7. Tax Consequences.
7.1 Any tax consequences arising from the grant or exercise or vesting or settlement of any Option, from the payment for Shares covered thereby, or from any other event or act (of the Company or any applicable Affiliated Company, the Trustee or the Israeli Optionee), hereunder, shall be borne solely by the Israeli Optionee. The Company and/or its Affiliated Companies and/or the Trustee shall be entitled to withhold taxes according to the requirements under the applicable laws, rules, and regulations, including withholding taxes at source. Furthermore, the Israeli Optionee shall agree to indemnify the Company and/or its Affiliated Companies and/or the Trustee and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to (i) the necessity to withhold, or to have withheld, any such tax from any payment made to the Israeli Optionee, (ii) any taxes that should have been paid by the Israeli Optionee in connection with the transfer of the Options from the Trustee to a designated transferee, whether or not a payment was deemed to be made as part of such transfer, and (iii) any taxes that the Israeli Optionee should have paid upon the exercise of the Options into Shares or settlement of Options for Shares, if and as applicable. The Company and/or any of its Affiliated Companies and/or the Trustee may make such provisions and take such steps as it may deem necessary or appropriate for the withholding of all taxes required by law to be withheld with respect to an Option granted under the Plan and this Appendix and the exercise or vesting or sale or settlement thereof, including, but not limited, to (i) deducting the amount so required to be withheld from any other amount then or thereafter payable to an Israeli Optionee, and/or (ii) requiring an Israeli Optionee to pay to the Company any of its Affiliated Companies the amount so required to be withheld as a condition of the issuance, delivery, distribution or release of any Shares, and/or (iii) by causing the exercise or settlement of an Option and/or the sale of Shares held by or on behalf of an Israeli Optionee to cover such liability, up to the amount required to satisfy minimum statutory withholding requirements. In addition, the Israeli Optionee will be required to pay any tax liability which exceeds the tax to be withheld and remitted to the tax authorities, pursuant to applicable tax laws, regulations and rules. It is hereby further clarified that nothing in the potential adverse tax consequences to the Israeli Optionees shall be deemed as restricting the Company from taking any action that it would have otherwise be eligible to perform, including any of the actions delineated in Section 4.7 above, and, without limiting the generality of the foregoing, the Company and/or Affiliated Companies make no assurances, promises, undertakings or otherwise assumes any obligation that any of them will seek the approval (whether prior or post factum) of the ITA with respect to any action taken, or contemplated to be taken, by the Company, including any of the actions delineated in Section 4.7 above (but subject to the obtainment of prior approval of the ITA in the case of placing “put” and “call” option provisions in the Plan or the Appendix with respect to 102 Capital Gains Track Grants) and will not, in any case, be restricted in any way from taking such action without the approval of the ITA, and such shall not derogate in any manner from the liability of each Israeli Optionee to bear (solely on such Israeli Optionee’s own) any tax consequences arising from, or related to, the grant or exercise or vesting or settlement of any Option granted to such person. To the extent an Israeli Optionee is or becomes subject to taxation in the United States, any Option granted hereunder is intended to be either exempt from or in compliance with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code” and “Code Section 409A”, respectively), and any regulations or guidance that may be adopted thereunder, and if an Israeli Optionee is a “specified employee” as defined in Code Section 409A at the time of the Optionee’s separation from service with the Company, then solely to the extent necessary to avoid the imposition of any additional tax under Code Section 409A, the commencement of any payments or benefits under an Option shall be deferred until the date that is six months following the Optionee’s separation from service or such other period as required to comply with Code Section 409A. This provision shall not derogate in any manner from any of the other requirements hereunder and the Optionee shall be responsible for any tax consequences in the United States.
7.2 With respect to Non-Trustee Grants, if the Eligible 102 Optionee ceases to be employed by any Affiliated Company, the Eligible 102 Optionee shall extend to the relevant Affiliated Company a security or guarantee for the payment of tax due at the time of sale of Shares to the satisfaction of the Company, all in accordance with the provisions of Section 102 of the ITO and the ITO Rules.
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8. Governing Law and Jurisdiction.
This Appendix and all Options granted hereunder are governed by the laws of Delaware without regards to conflicts of laws; provided, however, that all aspects of an Option which relate to Section 102 of the ITO, the rules and regulations promulgated thereunder, the Appendix and/or the Trust Agreement, shall be governed by and interpreted in accordance with the laws of the State of Israel and Section 102, in particular, with respect to Options granted pursuant to Section 102 to Eligible 102 Optionees, without regards to conflicts of laws. All Options and Shares which are governed by the provisions of this Appendix shall be subject to the laws and requirements of the State of Israel and the terms and conditions on which any such Option is granted are deemed modified to the extent necessary or advisable to comply with the applicable Israeli laws. It is hereby clarified that any ruling provided by the ITA with respect to Israeli Optionees and is required in order for the 102 Capital Gains Track Grants to continue to be subject to the 102 Capital Gains Track will be, upon the resolution of the Board/Compensation Committee, deemed incorporated into this Appendix such that the Board/ Committee will be able to act in accordance with such ruling.
9. Securities Laws.
Without derogation from any provisions of the Plan, all Options which are governed by the provisions of this Appendix shall also be subject to compliance with the Israeli Securities Law, 1968, and the rules and regulations promulgated thereunder.
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Exhibit 10.4
CONSULTING AGREEMENT
This CONSULTING AGREEMENT (the “Agreement”), effective as of the effective date set forth in Schedule 1 (the “Effective Date”), is entered by and between Metro One Telecommunications Inc., having its address as set forth in Schedule I hereto (the “Company”), and Bianca Meger (S.B Meger Consulting, Management and Investment) whose details are set forth in Schedule I hereto (“Consultant”).
WHEREAS | the Company desires that Consultant provide the Company with certain services and Consultant wishes to provide such services to the Company; |
WHEREAS, | Consultant is ready, qualified, willing and able to carry out all of her obligations and undertakings under this Agreement; |
WHEREAS, | the Consultant has chosen for Consultant’s own personal reasons (including physical and financial reasons) to be engaged with the Company as an independent contractor; and |
WHEREAS, | the Company desires to retain the services of Consultant pursuant to the terms and conditions set forth in this Agreement, and Consultant expresses consent to render the services, advice and assistance to Company on such terms and conditions as set forth hereinafter. |
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. | The Services |
1.1. | Consultant shall provide the Company with management services as the CEO of the Company (the “Services”). As part of the Services, Consultant shall be responsible for the ongoing management of the Company’s business and affairs including without limitation its ongoing operation, its sales and marketing activities, reporting and regulatory duties of the Company being a US public company, as well as any other duty and responsibility as may be directed by the Board of Directors of the Company (the “Board”). The Consultant shall report to the Board on a regular basis. |
1.2. | Consultant shall preform the Services from the Company’s offices in Israel, as may be from time to time. It is clarified however that the main offices of the Company are located in the US offices and accordingly, the performance of the Services shall require working with US personnel during US working hours as well as frequent traveling abroad to the US main offices and/or for other work meetings and assignments as shall be from time to time. It is further clarified that the performance of the Services might require immediate response to urgent or unexpected assignments that might require urgent traveling aboard or connecting to the remote computer systems/servers of the Company, including outside of the ordinary work hours. The terms and conditions of providing the Services abroad will be according to the Company’s policy as shall be in effect from time to time. |
1.3. | It is further clarified that concurrently with the signing of this Agreement, Consultant shall enter into an agreement with the Company’s subsidiary (the “Subsidiary”), for purpose of providing services as the Co-CEO of the Subsidiary. Consultant acknowledges her willingness to engage with the Company and the Subsidiary and understands and agrees that the Company shall not be responsible in any way whatsoever for any matter in connection with, or resulting from, Consultant’s engagement with the Subsidiary. |
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1.4. | Consultant shall devote the necessary time required for the performance of the Services in a diligent, professional and faithful manner, which shall not be less than the time specified in Schedule I hereto (the “Estimated Monthly Scope”). |
Notwithstanding the foregoing, it is acknowledged and agreed that the Services include management services which require a special degree of trust and do not enable the Company to supervise the actual hours of services to be performed by Consultant. Consultant further acknowledges and agrees that the performance of the Services may require, from time to time, to work beyond the Estimated Monthly Scope and beyond the regular working hours and on non-workdays and therefore the amount of the Consideration has been calculated to include an additional Global Overtime Compensation, which properly reflects the overtime hours that Consultant is expected to perform as part of the Services. Consultant hereby represents and warrants that such Global Overtime Compensation is fair and reasonable and accordingly Consultant shall not be entitled to any additional compensation of any kind resulting from, or in connection with, performing the Services beyond the Estimated Monthly Scope and/or beyond regular working hours or during non-workdays.
1.5. | Consultant shall not engage in other businesses and/or commercial activities outside the Services. Consultant represents that it owns certain businesses as set forth in Schedule I hereto and further represents that all such activities do not and shall not infringe on, or be inconsistent with, Consultant’s obligations and undertakings towards the Company pursuant to this Agreement. |
2. | Consultant’s Representations, Warranties and Undertakings |
Consultant hereby represents, warrants and undertakes, as follows:
2.1. | There is no legal or other restriction which could preclude or restrict the Consultant from executing this Agreement and performing all of Consultant’s commitments herein or that could require the consent of any person or entity. Consultant is not under any obligation, and no circumstances exist, which could create, directly or indirectly, a conflict of interest between the Consultant and the Company. In the event that the Consultant discovers that the Consultant has, or might have at some point in the future, any direct or indirect personal interest in any of the Company’s business, or a conflict of interest with the provision of the Services, Consultant shall immediately inform the Company upon such discovery. |
2.2. | Consultant has the experience, expertise and ability to carry out the obligations and undertakings according to this Agreement. Consultant has the full right, power and legal capacity to enter into and deliver this Agreement and to perform its duties and other obligations hereunder. No approvals or consents of any persons or entities are required for Consultant to execute and deliver this Agreement or perform her duties and other obligations hereunder. |
2.3. | Consultant is duly registered with the Israel Tax Authority and with the National Insurance Institute and solely responsible for the payment of any and all taxes and social security payments due to her earnings, in accordance with all relevant laws and regulations. |
2.4. | Consultant hereby undertakes to comply with all Company regulations, rules, policies, procedures and objectives, which are relevant to the performance of the Services. The provisions of the Company’s policies as shall be from time to time, form an integral part of this Agreement and Consultant shall fully comply with all such policies. |
2.5. | In the course of Consultant’s engagement with the Company, Consultant shall not utilize, any proprietary information of any other person or entity, including any previous or current employers, without due and timely permission to do so from the Company and the relevant third party. |
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2.6. | Consultant shall not receive any payment and/or benefit from any third party, directly or indirectly, in connection with the Services to the Company. In the event Consultant breaches this subsection, without derogating from any of the Company’s rights by law or contract, such benefit or payment shall become the sole property of the Company and the Company may set-off such amount from any sums due to Consultant. |
2.7. | Consultant has obtained all applicable business licenses and permits necessary to perform the Services hereunder, and that such Services shall be performed in accordance with the generally accepted professional standards and practices regarding such Services. In performing its duties hereunder, the Consultant shall observe, obey and comply with all applicable laws, ordinances, codes, orders, rules and regulations of any government or other duly constituted public authority including federal, state, municipal, and local governing bodies and agencies, having jurisdiction over the performance of the Services hereunder or any part thereof. |
3. | Consideration |
3.1. | Cash Fee; In consideration for the Services rendered by Consultant pursuant to this Agreement the Company shall pay Consultant the consideration specified in Schedule I, which consideration constitutes full and final consideration for the Services (the “Consideration”). |
3.2. | Out-of-Pocket Expenses: The Company will reimburse Consultant for reasonable and appropriately documented out-of-pocket expenses incurred in the performance of the Services, provided that such expenses: (i) were specifically approved in advance and in writing by the Company, and (ii) were invoiced to the Company in a timely manner together with a proof of payment of the expenses. |
3.3. | Setting Off: The Company will be entitled to deduct from and set off against amounts due to Consultant pursuant to this Agreement and/or pursuant to any other agreement, law, or otherwise, any amounts, which Consultant is required to pay the Company pursuant to this Agreement, any other agreement, any law, or otherwise. |
3.4. | General: The Consideration and the expenses set forth in this Section 3 constitute the full, final, and absolute consideration for the Services and Consultant shall not be entitled to any additional compensation of any kind whatsoever in consideration for, or with respect to, the Services and/or this Agreement. |
3.5. | Method of Payment: Payment to Consultant of amounts due pursuant to this Agreement shall be made by bank wiring to Consultant’s bank account (its details to be sent in writing by Consultant to Company) by no later than the 9th day of each calendar month with respect to Services rendered in the previous calendar month. Payment shall be made against, and subject to, a tax receipt to be dully issued by Consultant to the Company. |
3.6. | Taxes: All amounts and benefits pursuant to this Agreement are gross amounts and Consultant shall be responsible for the payment of all taxes and mandatory payments applicable with respect to amounts paid, and benefits granted, under this Agreement. Company may withhold the applicable withholding tax up to the full rate under applicable law unless Consultant shall provide the Company with a valid certificate of exempt from, or reduced rate of, withholding tax and in such case, the Company shall comply with such certificate. |
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4. | Reserved |
5. | Term and Termination |
5.1. | This Agreement shall commence upon the Effective Date and shall continue until terminated in accordance with this Section 5 (the “Term”). |
5.2. | Notwithstanding anything to the contrary, this Agreement may be terminated by either party, at any time and for any or no reason, by giving the other party a prior written notice (the “Notice Period”) of 60 (sixty) days, provided however that during the first 2 (two) months of this Agreement, the Company shall be entitled to terminate this Agreement for any or no reason by giving a Notice Period of 7 (seven) days. |
5.3. | Notwithstanding anything to the contrary, in the event that this Agreement is terminated by the Company for a Cause (as defined below), the Company shall be entitled to terminate this Agreement immediately with no prior notice. |
5.3.1. A termination for Cause is a termination due to any of the following:
5.3.1.1. The Consultant’s embezzlement of funds; or
5.3.1.2. The Consultant has been charged with a criminal offense involving moral turpitude; or
5.3.1.3. The Consultant’s act or omission which constitutes a fundamental breach of his duties and obligations pursuant to this Agreement, including any breach of trust or fiduciary duty owed to the Company, or a deliberate cause of harm to the Company or its business; or
5.3.1.4. The Consultant’s violation of the Consultant’s obligations as stated in Exhibit A below regarding confidentiality, intellectual property and non-competition.
5.4. | During the Notice Period, the Consultant shall continue the Services, and shall do all that is within the Consultant’s power to assist the smooth transfer of the Consultant replacement. |
5.5. | The Company may, at its sole discretion, waive the actual service by the Consultant during the entire or part of the Notice Period, as it chooses, for whatever reason, with or without changing the date of termination of this Agreement. |
5.6. | In the event of any termination of this Agreement, Consultant will promptly deliver to the Company all documents, data, records and other information pertaining to the Company and any other equipment belonging to the Company in Consultant’s possession, and Consultant will not take any documents or data, or any reproduction or excerpt of any documents or data, containing or pertaining to the Company. |
6. | Confidentiality, Non-Competition and Proprietary Rights Undertaking |
Simultaneously with the signing of this Agreement, and as a condition to the execution of this Agreement, Consultant shall sign an Undertaking in the form attached hereto as Exhibit A (the “Undertaking”).
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7. | Private Information |
7.1 | Consultant confirms and declares that Consultant has been informed that personal and private information about Consultant, which has been provided and/or shall be provided by Consultant to the Company during or as a result of performing the Services (the “Private Information”), is collected, held and processed by the Company and/or someone on its behalf during this Agreement, for the purposes of the ordinary course of business, including managing human resources and payments by the Company. Consultant declares that the abovementioned shall not be considered an infringement of Consultant’s privacy. In addition, Consultant confirms and declares that Consultant has been informed and hereby expressly agrees that the Company will be entitled to transfer the Private Information (in whole or in part) as part of the Company’s needs as mentioned above, to the following: (a) Public Entities as defined in the Privacy Protection Act, 1981, or in order for the Company to comply with any relevant legal requirements; (b) entities related to the Company, in Israel and abroad, including the Subsidiary and any other subsidiaries and associates of the Company; (c) legal advisors and tax consultants of the Company, as well as external entities that provide services of managing human resources and payroll to the Company; (d) third parties in the framework of any legal or economic due diligence; (e) other entities that are not mentioned in sections (a) to (d) above. In each of the above-mentioned transfers, the transferred Information shall be limited to the reasonable and necessary scope and the Company shall use its best efforts to ensure that the receiver of the Information shall undertake, to the extent possible, to preserve the privacy of the Private Information, at least at the level of privacy kept by the Company itself regarding the Private Information. |
7.2 | Consultant agrees that the Company may monitor Consultant’s use of the Systems (as defined below) and copy, transfer and disclose such electronic communications and content transmitted by or stored in such Systems, for purposes of the Company’s legitimate business interests, all in accordance with the Company’s policies from time to time, and subject to applicable law. For the purposes of this Section, the term “Systems” includes all of the computers, mobile phones and other mobile devices, keys, credit cards, printers, access to any Company facilities, files, e-mails, inbox, servers, programs, records and software, computer access codes or disks, and other similar systems used by or on behalf of the Company. |
8. | Relationship of Parties |
8.1. | Consultant acknowledges that Consultant has read and fully understood the terms of this Agreement and the structure of the relationship between the parties as a client and independent service provider; that no partnership, joint venture or employer-employee relationship between the parties hereto will be created or construed to be created by this Agreement; and that Consultant had sufficient opportunity to seek the professional advice of a counsel regarding same. |
8.2. | Consultant is not and shall not represent to be the agent, employee, partner or joint venture of the Company, or any of its affiliates, and the Consultant shall not obligate the Company or any of its affiliates by contract or otherwise without the Company’s prior written authorization. Consultant shall not make any representations or warranties to anyone with respect to any contract or otherwise, without the Company’s prior written authorization. |
8.3. | Consultant shall be solely responsible for payment of all taxes and mandatory payments due according to applicable law with respect to all payments and benefits to Consultant pursuant to this Agreement. Without derogating from the generality of the foregoing, it is expressly agreed and clarified that by calculating the amount of Consideration and other benefits under this Agreement, the parties took into consideration the “employer’s costs” that would have been due had Consultant was classified as an employee of the Company, such that the amount of Consideration includes all amounts due and payable on account of National Insurance, National Health Insurance, pension reservation, severance pay, disability coverage and Education Fund. Consultant hereby undertakes to pay in full all such mandatory payments to the fullest rate applicable under the law with respect to employees. Consultant represents and warrants that Consultant holds and shall maintain during the entire term of this Agreement, a provident fund or managers’ insurance policy as well as Education Fund, and shall contribute on a monthly basis the monthly contribution and reservation applicable on account of severance pay, pension, disability coverage and Education Fund with respect to the amount of the Consideration. Without imposing any obligation on the Company, upon request, Consultant shall provide the Company with records of such payments, contributions and reservations. |
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8.4. | Consultant will defend, indemnify and hold the Company, or any third party on its behalf, harmless from and against all claims, damages, losses and expenses, including reasonable fees and expenses of attorneys and other professionals (i) relating to any obligation imposed upon the Company to pay any withholding taxes, social security, vacation pay, sick pay, pension, convalescence pay, unemployment or disability insurance or similar terms in connection with compensation received by Consultant or, which are based upon a stipulation by a competent judicial authority that an employer - employee relationship was created between the Company or its affiliates and Consultant or her agents or employees; and (ii) resulting from any act, omission or negligence on Consultant’s part or on part of any of Consultant’s employees in the performance or failure to perform this Agreement. |
8.5. | Consultant, hereby releases and forever discharges the Company, its directors, officers, shareholders and its affiliates, from any and all claims, which Consultant ever had, now has, or may claim to have against any of them in connection with the existence of any employer-employee relationship between Company or its affiliates and Consultant or any of Consultant’s agents and employees. |
8.6. | In the event that any court or tribunal shall determine that notwithstanding the parties’ mutual understanding, as described in this Agreement, the Consultant is considered as an employee of the Company, the parties represent and acknowledge, that the total amount of Consideration was calculated and based on the following components of payments and benefits, which shall be considered as included in, and as have been paid in lieu of, the Consideration: |
8.6.1. | The monthly salary of the Consultant, including the base salary and overtime compensation, and all the social benefits to which Consultant would have been entitled to under applicable law (including, pension allocations, convalescence pay, travel reimbursement, sick days and vacation), shall be as detailed in Schedule II of this Agreement (the “Agreed Employee Compensation”). |
8.6.2. | The Company may set off any of the Consultant’s debt to the Company. For the avoidance of doubt, no deduction (as described in this section) shall exempt the Consultant from repaying the Company the Consultant’s overall debt. |
8.6.3. | It is clarified that, for the avoidance of doubt, the provisions of this Section 8.7 are included in this Agreement for the sake of caution only, and their inclusion shall not be considered as evidence that the parties intended to create an employment relationship between them. |
9. | Miscellaneous |
9.1. | Preamble. The preamble and all schedules and exhibits to this Agreement constitute an integral part hereof. |
9.2. | Assignment. Consultant shall not assign, transfer, pledge or otherwise transfer in any way, any of the Consultant’s obligations or rights under this Agreement to any third party without the express prior written consent of the Company. The Company may assign any of its rights or obligations under this Agreement, provided that the assignee has assumed the Company’s applicable obligations under this Agreement. |
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9.3. | Entire Agreement; Amendments. This Agreement constitutes the entire agreement between the parties with respect to the matters referred to herein, and supersedes any other arrangement, understanding, or agreement, verbal or otherwise. This Agreement may not be amended or modified except by the express written consent of the Company and Consultant. |
9.4. | Law; Jurisdiction. This Agreement shall be governed by the internal laws of the State of Israel (excluding its conflict of law principles) and the competent courts of Tel-Aviv shall have exclusive jurisdiction over any disputes arising hereunder. |
9.5. | No Waiver. No failure or delay on the part of any party hereto in exercising any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. Any waiver granted must be in writing and shall be valid only in the specific instance in which given. |
9.6. | Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable under applicable law, then such provision shall be excluded from this Agreement and the remainder of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms; provided, however, that in such event this Agreement shall be interpreted so as to give effect, to the greatest extent consistent with and permitted by applicable law, to the meaning and intention of the excluded provision as determined by such court of competent jurisdiction. |
9.7. | Notices. All notices hereunder will be in writing and shall be given by and be deemed received by the receiving party (i) if sent by a delivery service, on the date confirmed as the actual date of delivery by such service; (ii) if sent by registered mail, return receipt requested, within 3 days of mailing; or (iii) if sent by electronic means (fax, email etc.), on the next business day after electronic transmission. |
9.8. | Counterparts. This Agreement may be executed in any number of counterparts, each of which, when executed and delivered, shall constitute a duplicate original, but all the counterparts shall together constitute the one agreement. Copies signed electronically, by fax, pdf or in any similar format, shall be considered originals. |
9.9. | Survival. The provisions of this Agreement that, by their nature, should survive the expiration or other termination hereof, or the parties’ relationship, shall so survive and remain in full force and effect. |
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the date first above written.
/s/Bianca Meger
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Metro One Telecommunications Inc. | Bianca Meger | |||
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By: |
/s/ Nani Maoz
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Title: |
President
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[Signature Page to Consulting Agreement]
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Schedule 1
DETAILS:
1. | Effective Date: September 5th, 2021 |
2. | Address of Company: 30 North Gould St, Suite 5953, Sheridan, WY 82801. |
Att. Nani (Elchanan)Maoz;
3. | Consultant I.D. number: [*] |
4. | Address of Consultant: Ha Dafna Street 2, Tel Mond. |
5. | E-mail of Consultant: . |
SERVICES:
1. Description of Services: as set forth in Section 1 of the Agreement.
2. Estimated Monthly Scope: At least 46 monthly hours.
3. Other Permitted Activities: Ownership of family business of hotel and Jewellery line, which does not and shall not involve work or time consuming by Consultant.
4. Cash Fee: a gross amount equals to “employer’s costs” of a gross amount of NIS 11,250, i.e.: NIS 14,555 +VAT.
5. Vacation Pay: Consultant shall be entitled to enjoy 23 vacation days per year during which Consultant shall be paid the Consideration pursuant to this Agreement. Consultant shall use the vacation days on the same days in which Consultant shall use the vacation days pursuant to her engagement with the Subsidiary.
6. Reports: Hourly reports of time spent on the Services shall be provided by Consultant by the beginning of each calendar month with respect to the Services provided during the previous month. Periodically reports on the Services shall be provided upon request by the Company.
Bianca Meger
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September 5, 2021
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Name | Date |
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SCHEDULE II
THE AGREED EMPLOYEE COMPENSATION
In the event that Consultant shall be considered an employee of the Company, it is agreed that the total amount of Consideration is calculated and based on the following components of payments and benefits, which shall be considered as included in, and shall be paid in lieu of, the Consideration:
1. | Total Gross Amount of Consideration: NIS 14,555 equals to the total gross amount of “employer’s costs, based on the following components: |
2. |
Payment/Benefit | NIS Amount | |
Base Salary | NIS 7,875 | |
Global Overtime Compensation | NIS 3,375 | |
Employer National Insurance | NIS 772 | |
Pension(incl. disability coverage) | NIS 752 | |
Severance Pay | NIS 937 | |
Education Fund | NIS 844 | |
TOTAL: | NIS 14,555 |
3. | Vacation days: 23 days |
4. | Convalescence pay (“Dmei-Havraa”) and sick days as per applicable law. |
5. | All amounts are gross amounts and are subject to mandatory taxes and deductions including, but not limited to, National Insurance, National Health Insurance and income tax. |
Bianca Meger
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September 5, 2021
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Name | Date |
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Exhibit A
CONFIDENTIALITY, INTELLECTUAL PROPERTY & NON-COMPETITION UNDERTAKING
This Confidentiality, Intellectual Property and Non-Competition Undertaking (this “Undertaking”) is entered into and made effective as of the Effective Date by Bianca Meger (“Consultant”) for the benefit of Metro One Telecommunications Inc. (the “Company”, as further defined below).
This Undertaking constitutes an integral part of Consultant’s engagement agreement to which it is annexed (the “Agreement”).
All capitalized terms used in this Undertaking, and not otherwise defined herein, shall have the meanings assigned to such terms in the Agreement.
WHEREAS, | Consultant wishes to be engaged pursuant to the Agreement; and |
WHEREAS, | it is critical for the Company to preserve and protect its Confidential Information (as such term is defined below), its rights in Inventions (as such term is defined below) and all related Intellectual Property Rights (as such term is defined below), and Consultant is entering into this Undertaking as a condition to the Company’s agreement to engage Consultant pursuant to the Agreement. |
NOW, THEREFORE, Consultant undertakes and warrants towards the Company as follows:
1. | Confidentiality |
1.1. | Confidential Information. Consultant recognizes and acknowledges that Consultant’s access to trade secrets, confidential information and/or proprietary information (each “Confidential Information”) in the framework of their engagement pursuant to the Agreement, is essential to the performance of Consultant’s duties pursuant to the Agreement. |
Confidential Information shall include, without limitation: (i) any and all information concerning the Company’s product specifications, data, know-how, patents, technology, compositions, processes, formulas, methods, designs, samples, inventions, discoveries, research, test results, concepts, ideas, development or experimental work, computer software and programs (including object code and source code), databases, systems structures and architectures, algorithms, and/or works-in-process; (ii) any and all derivatives, improvements and enhancements to the Company’s technology, products or services; (iii) any and all information concerning the business and affairs of the Company, which includes historical financial statements, financial projections and budgets, historical and projected sales, capital spending budgets and plans, current and planned distribution methods and processes, customer lists, current and anticipated customer requirements, supplier lists, current and anticipated supplier requirements, price lists, market studies, policies, practices, strategies, surveys, business plans, lists of assets, data or reports relating to a financial condition, suppliers or partners, agreements, negotiations, transactions, undertakings and data concerning employees, consultants, officers, directors and shareholders; (iv) any and all information of the Company that is or may be considered a trade secret of the Company; (v) any and all trade secrets, confidential information and/or proprietary information of third parties; and (vi) any and all notes, compilations, studies, summaries, memoranda, books, records, correspondences, email transmissions, charts, lists, other documents and materials, relating, containing or based, in whole or in part, on any information included in the foregoing. Confidential Information shall include information referred to above, whether developed by the Company (including by Consultant) or received or obtained by the Company (including by Consultant) from third parties. Confidential Information shall include information in any form or media, and any portion of Confidential Information shall constitute Confidential Information.
The Confidential Information shall not include information: which (i) has become publicly known and made generally available through no wrongful act of Consultant or of others who were under confidentiality obligations as to the applicable Confidential Information, or (ii) is not by its nature confidential.
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Notwithstanding the above, Confidential Information may be disclosed by Consultant if required by order of competent court or governmental authority legally, but only if the Consultant fulfill all of the following conditions: (a) Consultant provides the Company with prompt written notice thereof so that the Company may seek to obtain a protective order affording confidential treatment to such Confidential Information or such other appropriate remedy which may be available under applicable law, (b) upon the Company’s request and at its expenses - Consultant shall use commercially reasonable efforts to obtain assurances from the applicable court or governmental authority that such Confidential Information will be afforded confidential treatment, and (c) disclosure pursuant to this paragraph is only that portion which Consultant is legally compelled to disclose.
1.2. | Ownership. All right, title and interest in and to Confidential Information are and shall remain the sole and exclusive property of the Company. |
1.3. | Disclosure and Use Restrictions. Consultant acknowledges and understands that the Confidential Information, in whole or in part, is a valuable and unique asset of the Company, and that its use or disclosure (except use or disclosure to the extent required for carrying out Consultant’s duties to the Company) would likely cause the Company substantial loss and damages. Consultant undertakes and agrees that Consultant will not, in whole or in part, disclose any Confidential Information to any person or organization under any circumstances, will not make use of any Confidential Information for their own purposes or for the benefit of any other person or organization, and will not reproduce any Confidential Information without the Company’s prior written consent, except reproductions which are carried out in the reasonable fulfillment of Consultant’s engagement duties. Consultant shall not remove from the Company’s offices or premises any Confidential Information, or any copy thereof, except in the reasonable fulfillment of Consultant’s engagement duties and in a manner which is not prohibited pursuant to the then applicable policies and regulations of the Company. Consultant will take strict precautions to maintain the confidentiality of any and all Confidential Information. |
The Consultant may disclose the Confidential Information to its employees (“Representatives”) who have a legitimate need to know such Confidential Information for performing the Services, provided that, prior to disclosing any Confidential Information to such Representatives, Consultant shall ensure that such Representatives are aware of the confidential nature of the Confidential Information and of the provisions of this Undertaking, and have signed or are otherwise bound by obligations no less restrictive than those contained in this Undertaking. Consultant shall be fully responsible for any breach of this undertaking by any of the Representatives.
1.4. | Information of Third Parties. Consultant will not, during Consultant’s engagement with the Company or otherwise in connection therewith, use, disclose or bring onto the premises of the Company, any proprietary information or trade secrets of any former or current employer or other person or entity, unless consented to in writing by such employer, person or entity. |
1.5. | Consultant acknowledge that Confidential Information which is received from, or relates to, third parties may be subject to certain limitations which the Company has undertaken towards the applicable third party, or which otherwise bind the Company pursuant to applicable law. With respect to any such Confidential Information, Consultant shall comply with the terms of this Undertaking and, if brought to the attention of Consultant, the terms of the Company’s undertaking towards the applicable third party, as well as any other obligation which binds the Company pursuant to applicable law. |
1.6. | Upon termination of Consultant’s engagement with the Company, or, if the Company so requests, at any time before such termination, Consultant will promptly deliver to the Company all copies of materials in any form (without retaining any copies thereof) in Consultant’s possession or under Consultant’s control, incorporating or otherwise including Confidential Information. |
1.7. | The obligations set forth in this Section 1 are perpetual and shall survive termination of the Agreement and of Consultant’s engagement with the Company. |
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2. | Intellectual Property |
2.1. | Work Product. Consultant will promptly disclose to the Company, as soon as practicable following discovery, conception, development, reduction to practice or invention (as applicable, “Creation”), and hold in trust for the sole right and benefit of the Company, any and all inventions, original works of authorship, developments, discoveries, ideas, research, test results, methods, concepts, improvements, designs, formulae, processes, information, techniques, know-how, data or trade secrets – in each case - whether or not patentable, copyrightable or registerable under copyright or similar laws - that (i) are discovered, conceived, developed, reduced to practice, or invented by Consultant and/or any Representatives (as applicable, “Created”), either alone or jointly with others, during performance of the Services, or (ii) result, wholly or partially, from Consultant’s and\or any Representatives’ engagement or the performance of the Services, or (iii) are Created with the use of any of the Company’s equipment, supplies or facilities, or (iv) result from, or stem from Consultant’s and\or any Representatives’ knowledge of Confidential Information, or (v) are related to the business of the Company as conducted during the Term or, to the knowledge of Consultant and\or any Representatives - proposed to be conducted in the future (each of the aforesaid: an “Invention”). Consultant shall keep and maintain adequate and current written records of all Inventions. Said records will be made available to, and shall be and remain the sole property of, the Company, at all times. |
2.2. | Consultant agrees and Consultant shall ensure that its Representatives agree, that any and all of the Inventions are, upon Creation, considered Inventions of the Company. Any and all Inventions shall be the property of the Company, exclusively, and the Company shall be the sole owner of all intangible legal rights, titles and interests evidenced by, or embodied in, or connected or related to, the Inventions, including without limitation, (i) any and all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof; (ii) any and all trademarks, service marks, trade dress, logos, trade names, and corporate names, domain names together with all translations, adaptations, derivations, and combinations thereof, and including any and all goodwill associated therewith, and any and all applications, registrations, and renewals in connection therewith; (iii) any and all works of authorship (regardless of the existence or non-existence of copyrightability with respect thereto), copyrights and all applications, registrations, and renewals in connection therewith; (iv) any and all trade secrets and business information; and (v) any and all other proprietary rights, industrial rights and any other similar rights - in each case (with respect to (i) through (v) above)) - on a worldwide basis, and all copies and tangible embodiments thereof, or any part thereof, in whatever form or medium (“Intellectual Property Rights”). |
2.3. | Work Made for Hire. Without derogating from the generality of the foregoing, Consultant agrees that if, notwithstanding this Undertaking and the Agreement, it will be decided by an authority, court or any other competent tribunal, whether at Consultant’s and\or any Representatives’ request or otherwise, that Chapter H of the Patents Law of 1967 (the “Patents Law”) is applicable to the engagement of Consultant and\or any Representatives by the Company, then Consultant further acknowledges that any and all Inventions are deemed “works made for hire” (service inventions) as contemplated under Chapter H of the Patents Law, that all such “works made for hire” are owned by the Company and that Consultant and\or any Representatives shall not be entitled to any compensation, nor any other consideration, except as explicitly set forth in the Agreement (if at all), for creation or assignment of the same to the Company, except as explicitly set forth in the Agreement (if at all). Consultant acknowledges and agrees that the consideration under the Agreement and all other engagement terms under the Agreement shall constitute the sole consideration and remuneration for any Inventions, including, without limitation, “works made for hire”, regardless of the current or future value of the Invention. Consultant understands and agrees that the decision whether or not to commercialize or market any invention developed by Consultant and\or any Representatives (including the Inventions), solely or jointly with others, is within the Company’s sole and unfettered discretion and for the Company’s sole benefit, and that no royalty will be due to Consultant and\or any Representatives as a result of the Company’s efforts to commercialize or market any such invention (including the Inventions). Without limitation of the foregoing, Consultant irrevocably confirms that the consideration explicitly set forth in the Agreement is in lieu of any rights for compensation that may arise in connection with the Inventions under applicable law and Consultant waives any right to claim royalties or other consideration with respect to any Invention, including under Section 134 of the Patents Law. This Section 2.3 shall be deemed as an “agreement” for purposes of Section 134 of the Patents Law. In no event will any Inventions become the property of Consultant and the provisions of Section 132(b) of the Patents Law shall not apply. With respect to all of the above, any oral understanding, communication or agreement shall be void, except and unless the content thereof is expressly reflected in a document which is signed by the Company. |
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2.4. | Assignment. To the extent necessary in order to vest fully in the Company all rights in and to all Inventions and all Intellectual Property Rights (to the extent legally possible), Consultant hereby irrevocably and unconditionally assigns to the Company, for no additional consideration, Consultant’s entire right, title and interest in and to all Inventions and Intellectual Property Rights therein, including the right to sue, counterclaim and recover for all past, present and future infringement, misappropriation or dilution thereof, and all rights corresponding thereto – in each case - throughout the world. |
2.5. | Exclusion of Prior Inventions. This Undertaking and the assignment herein shall not include inventions, if any, patented or unpatented, which Consultant made prior to the commencement of Consultant’s engagement with the Company (“Prior Inventions”). Consultant shall not incorporate, or permit to be incorporated, any Prior Inventions in any Inventions, nor shall Consultant use or exploit any Prior Inventions – in each case - without the Company’s prior written consent. If, despite the forgoing, in the course of engagement with the Company, Consultant will incorporate a Prior Invention into a Company product, service or Invention, or Consultant will otherwise use or exploit a Prior Invention without having received the Company’s prior written consent, Consultant hereby grant the Company a nonexclusive, royalty-free, irrevocable, perpetual, unlimited worldwide license (with rights to sublicense through multiple tiers of sublicenses) to make, have made, modify, use and/or sell and/or otherwise use and exploit in any manner, as the Company may wish, said Prior Invention and products or services based thereon, to the full extent of Consultant’s rights in such Prior Invention. |
2.6. | Power of Attorney. Consultant hereby covenants and agree to perform, during and after engagement, any acts reasonably required by the Company to permit and assist the Company, at the Company’s expense (provided that, during the term of Consultant’s engagement with the Company, no additional expense shall be charged to the Company, other than payments set forth in the Agreement), in obtaining, maintaining, defending and enforcing the Intellectual Property Rights in any and all countries, and generally cooperate reasonably, to aid the Company in its attempts to obtain, secure and enforce proper protection for the Inventions and the Intellectual Property Rights (including, to the extent necessary, the assignment and transfer thereof to the Company and its successors, assigns and nominees), in any and all jurisdictions. Such acts may include, but are not limited to, the execution of documents and assistance or cooperation in legal proceedings; provided that, following the term of Consultant’s engagement with the Company, Consultant and shall not be required to perform any act, or cooperate, in a manner which would unduly interfere with Consultant’s affairs and activities. Consultant hereby irrevocably appoint the Company as Consultant’s true and lawful attorney and attorney-in-fact, to act for and on Consultant’s behalf and instead of Consultant, to execute and file any documents and instruments, and to do such other acts and things as may be necessary or appropriate, in order to give effect and further the above purposes and the intentions contained in this Undertaking, with the same legal force and effect as if executed by Consultant. |
2.7. | No Contestation. Consultant hereby undertake that Consultant shall not, directly or indirectly, take any action to contest the Company’s rights in any of the Inventions and/or Intellectual Property Rights, or infringe them in any way, nor shall Consultant, directly or indirectly, make a claim for and/or sue and/or demand, any additional compensation for creation or assignment of Inventions beyond the consideration set forth in the Agreement. |
2.8. | Moral Rights Waiver. In connection to any work of authorship, Consultant hereby forever waive, and agree never to assert, any rights that may be known as or referred to as “moral rights”, including all rights of paternity, integrity, any right to object to any distortion or other modification of a work and any other similar right, existing under the law of any country in the world or under any treaty, and Consultant hereby consents to any action that would violate such “moral rights” in the absence of such consent. |
2.9. | The obligations set forth in this Section 2 are perpetual, and shall survive any termination of the Agreement and of Consultant’s engagement with the Company. This Section 2 shall be deemed as an “agreement” for the purposes of Section 35 of the Copyrights Law 2008. |
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2.10. | Consultant shall ensure that its Representatives are aware of the Consultant’s undertakings under this Section 2 and shall ensure that each Representative will acknowledge and agree to the provisions hereunder as if undertook directly by such Representative – each with respect to itself. |
3. | General |
3.1. | Non-Disparagement. Consultant undertakes that it will not at any time make, publish or communicate to any person or entity, or in any public forum, any defamatory or disparaging remarks, comments or statements concerning the Company or its business, or - with respect to their relationship with the Company - any of its employees, officers, directors and shareholders and other associated third parties. |
3.2. | Definition of the Company. In this Undertaking, the term “the Company” shall, except with respect to ownership of Confidential Information, Inventions and Intellectual Property Rights, also include, as applicable, the Subsidiary and any entity: (i) which holds – directly or indirectly - more than fifty percent of the issued share capital or voting power in the Company; or (ii) in which the Company holds – directly or indirectly - fifty percent or more of the issued share capital or voting power; or (iii) in which a parent company holds – directly or indirectly - fifty percent or more of the issued share capital or voting power. |
3.3. | Necessity of Undertakings. Consultant recognizes and agree that: (i) this Undertaking is necessary and essential to protect the Company’s business and to realize and derive all the benefits, rights and expectations of conducting the Company’s business; (ii) the duration and unlimited geographical application of the protective covenants contained in this Undertaking are reasonable in order to protect its legitimate interests with respect to the subject matter hereof; and (iii) the provisions of this Undertaking serve as an integral part of the terms of Consultant’s and engagement and that good and valuable consideration exists under the Agreement, for Consultant to be bound by the provisions of this Undertaking. |
3.4. | Injunctive Relief. Consultant recognizes and acknowledges that in the event of a breach or threatened breach of this Undertaking by Consultant, the Company may suffer irreparable harm or damage and will, therefore, be entitled to injunctive relief to enforce this Undertaking (without limitation to any other remedy at law or in equity). |
3.5. | Consultant shall be responsible for enforcing the terms of this Undertaking vis-à-vis any of its Representatives, and shall be liable for any breach of the terms of this Undertaking by any of its Representatives, as if such breach was a breach of the Consultant of this Undertaking. |
I, THE UNDERSIGNED, ACKNOWLEDGES THAT I AM FAMILIAR WITH THE ENGLISH LANGUAGE AND DO NOT REQUIRE TRANSLATION OF THIS UNDERTAKING TO ANY OTHER LANGUAGE. I FURTHER ACKNOWLEDGE THAT I HAVE BEEN ADVISED BY THE COMPANY THAT I MAY CONSULT AN ATTORNEY BEFORE EXECUTING THIS UNDERTAKING AND THAT I HAVE BEEN AFFORDED AN OPPORTUNITY TO DO SO.
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IN WITNESS WHEREOF, the undersigned, has executed this Undertaking:
Printed Name: |
Bianca Meger
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Signature: |
/s/ Bianca Meger
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Exhibit A1
Prior Inventions
None
/s/Elchanan Maoz
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Bianca Meger
|
|
The Company | The Consultant |
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CONSULTING AGREEMENT
This CONSULTING AGREEMENT (the “Agreement”), effective as of the effective date set forth in Schedule 1 (the “Effective Date”), is entered by and between Stratford Ltd., a company incorporated under the laws of the State of Israel, having its address as set forth in Schedule I hereto (the “Company”), and Bianca Meger (S.B Meger Consulting, Management and Investment) whose details are set forth in Schedule I hereto (“Consultant”).
WHEREAS | the Company desires that Consultant provide the Company with certain services and Consultant wishes to provide such services to the Company; |
WHEREAS, | Consultant is ready, qualified, willing and able to carry out all of her obligations and undertakings under this Agreement; |
WHEREAS, | the Consultant has chosen for Consultant’s own personal reasons (including physical and financial reasons) to be engaged with the Company as an independent contractor; and |
WHEREAS, | the Company desires to retain the services of Consultant pursuant to the terms and conditions set forth in this Agreement, and Consultant expresses consent to render the services, advice and assistance to Company on such terms and conditions as set forth hereinafter. |
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. | The Services |
1.1. | Consultant shall provide the Company with management services as the Co-CEO of the Company (the “Services”). As part of the Services, Consultant shall be responsible for the ongoing management of the Company’s business and affairs including without limitation its ongoing operation, its sales and marketing activities, reporting and regulatory duties of the Company being a subsidiary of a US public company, as well as any other duty and responsibility as may be directed by the Board of Directors of the Company (the “Board”). The Consultant shall report to the Board on a regular basis. |
1.2. | Consultant shall preform the Services from the Company’s offices in Israel, as may be from time to time. It is clarified however that the main offices of the Company are located in the US offices of the Parent Company (as defined below) and accordingly, the performance of the Services shall require working with US personnel during US working hours as well as frequent traveling abroad to the US main offices and/or for other work meetings and assignments as shall be from time to time. It is further clarified that the performance of the Services might require immediate response to urgent or unexpected assignments that might require urgent traveling aboard or connecting to the remote computer systems/servers of the Company, including outside of the ordinary work hours. The terms and conditions of providing the Services abroad will be according to the Company’s policy as shall be in affect from time to time. |
1.3. | It is further clarified that concurrently with the signing of this Agreement, Consultant shall enter into an agreement with the Company’s US parent company (the “Parent Company”), for purpose of providing services as the CEO of the Parent Company. Consultant acknowledges her willingness to engage with the Company and the Parent Company and understands and agrees that the Company shall not be responsible in any way whatsoever for any matter in connection with, or resulting from, Consultant’s engagement with the Parent Company. |
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1.4. | Consultant shall devote the necessary time required for the performance of the Services in a diligent, professional and faithful manner, which shall not be less than the time specified in Schedule I hereto (the “Estimated Monthly Scope”). |
Notwithstandingthe foregoing, it is acknowledged and agreed that the Services include management services which require a special degree of trust and do not enable the Company to supervise the actual hours of services to be performed by Consultant. Consultant further acknowledges and agrees that the performance of the Services may require, from time to time, to work beyond the Estimated Monthly Scope and beyond the regular working hours and on non-workdays and therefore the amount of the Consideration has been calculated to include an additional Global Overtime Compensation, which properly reflects the overtime hours that Consultant is expected to perform as part of the Services. Consultant hereby represents and warrants that such Global Overtime Compensation is fair and reasonable and accordingly Consultant shall not be entitled to any additional compensation of any kind resulting from, or in connection with, performing the Services beyond the Estimated Monthly Scope and/or beyond regular working hours or during non-workdays. |
1.5. | Consultant shall not engage in other businesses and/or commercial activities outside the Services. Consultant represents that it owns certain businesses as set forth in Schedule I hereto and further represents that all such activities do not and shall not infringe on, or be inconsistent with, Consultant’s obligations and undertakings towards the Company pursuant to this Agreement. |
2. | Consultant’s Representations, Warranties and Undertakings |
Consultanthereby represents, warrants and undertakes, as follows: |
2.1. | There is no legal or other restriction which could preclude or restrict the Consultant from executing this Agreement and performing all of Consultant’s commitments herein or that could require the consent of any person or entity. Consultant is not under any obligation, and no circumstances exist, which could create, directly or indirectly, a conflict of interest between the Consultant and the Company. In the event that the Consultant discovers that the Consultant has, or might have at some point in the future, any direct or indirect personal interest in any of the Company’s business, or a conflict of interest with the provision of the Services, Consultant shall immediately inform the Company upon such discovery. |
2.2. | Consultant has the experience, expertise and ability to carry out the obligations and undertakings according to this Agreement. Consultant has the full right, power and legal capacity to enter into and deliver this Agreement and to perform its duties and other obligations hereunder. No approvals or consents of any persons or entities are required for Consultant to execute and deliver this Agreement or perform her duties and other obligations hereunder. |
2.3. | Consultant is duly registered with the Israel Tax Authority and with the National Insurance Institute and solely responsible for the payment of any and all taxes and social security payments due to her earnings, in accordance with all relevant laws and regulations. |
2.4. | Consultant hereby undertakes to comply with all Company regulations, rules, policies, procedures and objectives, which are relevant to the performance of the Services. The provisions of the Company’s policies as shall be from time to time, form an integral part of this Agreement and Consultant shall fully comply with all such policies. |
2.5. | In the course of Consultant’s engagement with the Company, Consultant shall not utilize, any proprietary information of any other person or entity, including any previous or current employers, without due and timely permission to do so from the Company and the relevant third party. |
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2.6. | Consultant shall not receive any payment and/or benefit from any third party, directly or indirectly, in connection with the Services to the Company. In the event Consultant breaches this subsection, without derogating from any of the Company’s rights by law or contract, such benefit or payment shall become the sole property of the Company and the Company may set-off such amount from any sums due to Consultant. |
2.7. | Consultant has obtained all applicable business licenses and permits necessary to perform the Services hereunder, and that such Services shall be performed in accordance with the generally accepted professional standards and practices regarding such Services. In performing its duties hereunder, the Consultant shall observe, obey and comply with all applicable laws, ordinances, codes, orders, rules and regulations of any government or other duly constituted public authority including federal, state, municipal, and local governing bodies and agencies, having jurisdiction over the performance of the Services hereunder or any part thereof. |
3. | Consideration |
3.1. | Cash Fee; In consideration for the Services rendered by Consultant pursuant to this Agreement the Company shall pay Consultant the consideration specified in Schedule I, which consideration constitutes full and final consideration for the Services (the “Consideration”). |
3.2. | Out-of-Pocket Expenses: The Company will reimburse Consultant for reasonable and appropriately documented out-of-pocket expenses incurred in the performance of the Services, provided that such expenses: (i) were specifically approved in advance and in writing by the Company, and (ii) were invoiced to the Company in a timely manner together with a proof of payment of the expenses. |
3.3. | Car Expenses: Subject to the tax regulations applicable from time to time, the Company shall pay the Consultant car expenses in a gross monthly amount as specified in Schedule I hereto. |
3.4. | Equipment: Consultant shall be provided with a laptop for performing the Services and for personal reasonable and fair use per Company policy. Consultant shall return the Laptop (and its accessories) in a proper condition together with all the professional material on the laptop upon the earliest of termination of this Agreement or at such other time as directed by the Company. |
3.5. | Setting Off: The Company will be entitled to deduct from and set off against amounts due to Consultant pursuant to this Agreement and/or pursuant to any other agreement, law, or otherwise, any amounts, which Consultant is required to pay the Company pursuant to this Agreement, any other agreement, any law, or otherwise. |
3.6. | General: The Consideration, the expenses set forth in this Section 3 and the Options, constitute the full, final and absolute consideration for the Services and Consultant shall not be entitled to any additional compensation of any kind whatsoever in consideration for, or with respect to, the Services and/or this Agreement. |
3.7. | Method of Payment: Payment to Consultant of amounts due pursuant to this Agreement shall be made by bank wiring to Consultant’s bank account (its details to be sent in writing by Consultant to Company) by no later than the 9th day of each calendar month with respect to Services rendered in the previous calendar month. Payment shall be made against, and subject to, a tax receipt to be dully issued by Consultant to the Company. |
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3.8. | Taxes: All amounts and benefits pursuant to this Agreement are gross amounts and Consultant shall be responsible for the payment of all taxes and mandatory payments applicable with respect to amounts paid, and benefits granted, under this Agreement. Company may withhold the applicable withholding tax up to the full rate under applicable law unless Consultant shall provide the Company with a valid certificate of exempt from, or reduced rate of, withholding tax and in such case, the Company shall comply with such certificate. |
4. | Options |
The Company will recommend to the board of directors of its Parent Company (as defined above) to grant to Consultant options to purchase such amount of Common Stock of the Parent Company, representing as of the date of grant 1.8% of the issued and outstanding stock capital of the Parent Company (the “Options”), with a price per share to be determined by the board of directors of the Parent Company. The grant of the Options shall be subject to the terms of the Parent Company’s incentive share option plan (the “Plan”), and the execution and delivery by Consultant of an option grant letter and all other instruments required according to the Plan with respect to the Options so granted. The Options shall vest and become exercisable pursuant to the vesting schedule set forth under the option grant letter. Consultant shall be solely responsible to pay all taxes and mandatory rights with respect to the Options |
5. | Term and Termination |
5.1. | This Agreement shall commence upon the Effective Date and shall continue until terminated in accordance with this Section 5 (the “Term”). |
5.2. | Notwithstanding anything to the contrary, this Agreement may be terminated by either party, at any time and for any or no reason, by giving the other party a prior written notice (the “Notice Period”) of 60 (sixty) days, provided however that during the first 2 (two) months of this Agreement, the Company shall be entitled to terminate this Agreement for any or no reason by giving a Notice Period of 7 (seven) days. |
5.3. | Notwithstanding anything to the contrary, in the event that this Agreement is terminated by the Company for a Cause (as defined below), the Company shall be entitled to terminate this Agreement immediately with no prior notice. |
5.3.1. | A termination for Cause is a termination due to any of the following: |
5.3.1.1. The Consultant’s embezzlement of funds; or
5.3.1.2. The Consultant has been charged with a criminal offense involving moral turpitude; or
5.3.1.3. The Consultant’s act or omission which constitutes a fundamental breach of his duties and obligations pursuant to this Agreement, including any breach of trust or fiduciary duty owed to the Company, or a deliberate cause of harm to the Company or its business; or
5.3.1.4. The Consultant’s violation of the Consultant’s obligations as stated in Exhibit A below regarding confidentiality, intellectual property and non-competition.
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5.4. | During the Notice Period, the Consultant shall continue the Services, and shall do all that is within the Consultant’s power to assist the smooth transfer of the Consultant replacement. |
5.5. | The Company may, at its sole discretion, waive the actual service by the Consultant during the entire or part of the Notice Period, as it chooses, for whatever reason, with or without changing the date of termination of this Agreement. |
5.6. | In the event of any termination of this Agreement, Consultant will promptly deliver to the Company all documents, data, records and other information pertaining to the Company and any other equipment belonging to the Company in Consultant’s possession, and Consultant will not take any documents or data, or any reproduction or excerpt of any documents or data, containing or pertaining to the Company. |
6. | Confidentiality, Non-Competition and Proprietary Rights Undertaking |
Simultaneously with the signing of this Agreement, and as a condition to the execution of this Agreement, Consultant shall sign an Undertaking in the form attached hereto as Exhibit A (the “Undertaking”).
7. | Private Information |
7.1 | Consultant confirms and declares that Consultant has been informed that personal and private information about Consultant, which has been provided and/or shall be provided by Consultant to the Company during or as a result of performing the Services (the “Private Information”), is collected, held and processed by the Company and/or someone on its behalf during this Agreement, for the purposes of the ordinary course of business, including managing human resources and payments by the Company. Consultant declares that the abovementioned shall not be considered an infringement of Consultant’s privacy. In addition, Consultant confirms and declares that Consultant has been informed and hereby expressly agrees that the Company will be entitled to transfer the Private Information (in whole or in part) as part of the Company’s needs as mentioned above, to the following: (a) Public Entities as defined in the Privacy Protection Act, 1981, or in order for the Company to comply with any relevant legal requirements; (b) entities related to the Company, in Israel and abroad, including the Parent Company or any subsidiaries and associates of the Company; (c) legal advisors and tax consultants of the Company, as well as external entities that provide services of managing human resources and payroll to the Company; (d) third parties in the framework of any legal or economic due diligence; (e) other entities that are not mentioned in sections (a) to (d) above. In each of the above-mentioned transfers, the transferred Information shall be limited to the reasonable and necessary scope and the Company shall use its best efforts to ensure that the receiver of the Information shall undertake, to the extent possible, to preserve the privacy of the Private Information, at least at the level of privacy kept by the Company itself regarding the Private Information. |
7.2 | Consultant agrees that the Company may monitor Consultant’s use of the Systems (as defined below) and copy, transfer and disclose such electronic communications and content transmitted by or stored in such Systems, for purposes of the Company’s legitimate business interests, all in accordance with the Company’s policies from time to time, and subject to applicable law. For the purposes of this Section, the term “Systems” includes all of the computers, mobile phones and other mobile devices, keys, credit cards, printers, access to any Company facilities, files, e-mails, inbox, servers, programs, records and software, computer access codes or disks, and other similar systems used by or on behalf of the Company. |
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8. | Relationship of Parties |
8.1. | Consultant acknowledges that Consultant has read and fully understood the terms of this Agreement and the structure of the relationship between the parties as a client and independent service provider; that no partnership, joint venture or employer-employee relationship between the parties hereto will be created or construed to be created by this Agreement; and that Consultant had sufficient opportunity to seek the professional advice of a counsel regarding same. |
8.2. | Consultant is not and shall not represent to be the agent, employee, partner or joint venture of the Company, or any of its affiliates, and the Consultant shall not obligate the Company or any of its affiliates by contract or otherwise without the Company’s prior written authorization. Consultant shall not make any representations or warranties to anyone with respect to any contract or otherwise, without the Company’s prior written authorization. |
8.3. | Consultant shall be solely responsible for payment of all taxes and mandatory payments due according to applicable law with respect to all payments and benefits to Consultant pursuant to this Agreement. Without derogating from the generality of the foregoing, it is expressly agreed and clarified that by calculating the amount of Consideration and other benefits under this Agreement, the parties took into consideration the “employer’s costs” that would have been due had Consultant was classified as an employee of the Company, such that the amount of Consideration includes all amounts due and payable on account of National Insurance, National Health Insurance, pension reservation, severance pay, disability coverage and Education Fund. Consultant hereby undertakes to pay in full all such mandatory payments to the fullest rate applicable under the law with respect to employees. Consultant represents and warrants that Consultant holds and shall maintain during the entire term of this Agreement, a provident fund or managers’ insurance policy as well as Education Fund, and shall contribute on a monthly basis the monthly contribution and reservation applicable on account of severance pay, pension, disability coverage and Education Fund with respect to the amount of the Consideration. Without imposing any obligation on the Company, upon request, Consultant shall provide the Company with records of such payments, contributions and reservations. |
8.4. | Consultant will defend, indemnify and hold the Company, or any third party on its behalf, harmless from and against all claims, damages, losses and expenses, including reasonable fees and expenses of attorneys and other professionals (i) relating to any obligation imposed upon the Company to pay any withholding taxes, social security, vacation pay, sick pay, pension, convalescence pay, unemployment or disability insurance or similar terms in connection with compensation received by Consultant or, which are based upon a stipulation by a competent judicial authority that an employer - employee relationship was created between the Company or its affiliates and Consultant or her agents or employees; and (ii) resulting from any act, omission or negligence on Consultant’s part or on part of any of Consultant’s employees in the performance or failure to perform this Agreement. |
8.5. | Consultant, hereby releases and forever discharges the Company, its directors, officers, shareholders and its affiliates, from any and all claims, which Consultant ever had, now has, or may claim to have against any of them in connection with the existence of any employer-employee relationship between Company or its affiliates and Consultant or any of Consultant’s agents and employees. |
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8.6. | In the event that any court or tribunal shall determine that notwithstanding the parties’ mutual understanding, as described in this Agreement, the Consultant is considered as an employee of the Company, the parties represent and acknowledge, that the total amount of Consideration was calculated and based on the following components of payments and benefits, which shall be considered as included in, and as have been paid in lieu of, the Consideration: |
8.6.1. | The monthly salary of the Consultant, including the base salary and overtime compensation, and all the social benefits to which Consultant would have been entitled to under applicable law (including, pension allocations, convalescence pay, travel reimbursement, sick days and vacation), shall be as detailed in Schedule II of this Agreement (the “Agreed Employee Compensation”). |
8.6.2. | The Company may set off any of the Consultant’s debt to the Company. For the avoidance of doubt, no deduction (as described in this section) shall exempt the Consultant from repaying the Company the Consultant’s overall debt. |
8.6.3. | It is clarified that, for the avoidance of doubt, the provisions of this Section 8.7 are included in this Agreement for the sake of caution only, and their inclusion shall not be considered as evidence that the parties intended to create an employment relationship between them. |
9. | Miscellaneous |
9.1. | Preamble. The preamble and all schedules and exhibits to this Agreement constitute an integral part hereof. |
9.2. | Assignment. Consultant shall not assign, transfer, pledge or otherwise transfer in any way, any of the Consultant’s obligations or rights under this Agreement to any third party without the express prior written consent of the Company. The Company may assign any of its rights or obligations under this Agreement, provided that the assignee has assumed the Company’s applicable obligations under this Agreement. |
9.3. | Entire Agreement; Amendments. This Agreement constitutes the entire agreement between the parties with respect to the matters referred to herein, and supersedes any other arrangement, understanding, or agreement, verbal or otherwise. This Agreement may not be amended or modified except by the express written consent of the Company and Consultant. |
9.4. | Law; Jurisdiction. This Agreement shall be governed by the internal laws of the State of Israel (excluding its conflict of law principles) and the competent courts of Tel-Aviv shall have exclusive jurisdiction over any disputes arising hereunder. |
9.5. | No Waiver. No failure or delay on the part of any party hereto in exercising any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. Any waiver granted must be in writing and shall be valid only in the specific instance in which given. |
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9.6. | Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable under applicable law, then such provision shall be excluded from this Agreement and the remainder of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms; provided, however, that in such event this Agreement shall be interpreted so as to give effect, to the greatest extent consistent with and permitted by applicable law, to the meaning and intention of the excluded provision as determined by such court of competent jurisdiction. |
9.7. | Notices. All notices hereunder will be in writing and shall be given by and be deemed received by the receiving party (i) if sent by a delivery service, on the date confirmed as the actual date of delivery by such service; (ii) if sent by registered mail, return receipt requested, within 3 days of mailing; or (iii) if sent by electronic means (fax, email etc.), on the next business day after electronic transmission. |
9.8. | Counterparts. This Agreement may be executed in any number of counterparts, each of which, when executed and delivered, shall constitute a duplicate original, but all the counterparts shall together constitute the one agreement. Copies signed electronically, by fax, pdf or in any similar format, shall be considered originals. |
9.9. | Survival. The provisions of this Agreement that, by their nature, should survive the expiration or other termination hereof, or the parties’ relationship, shall so survive and remain in full force and effect. |
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the date first above written.
/s/Elchanan Maoz
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/s/Bianca Meger
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Stratford Ltd. | Bianca Meger | |||
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By: |
Elchanan Maoz
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Title: |
Director
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[Signature Page to Consulting Agreement]
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Schedule 1
DETAILS:
1. | Effective Date: September 1st, 2021 |
2. | Address of Company: at its legal counsel, APM House, 18 Raoul Wallenberg St. Tel Aviv |
Att. Nani (Elchanan) Maoz
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3. | Consultant I.D. number: [*] |
4. | Address of Consultant: Ha Dafna Street 2, Tel Mond |
5. |
E-mail of Consultant:
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SERVICES:
1. Description of Services: as set forth in Section 1 of the Agreement
2. Estimated Monthly Scope: At least 136 monthly hours.
3. Other Permitted Activities: ownership of family business of hotel and Jewellery line, which does not and shall not involve work or time consuming by Consultant
4. Cash Fee: a gross amount equals to “employer’s costs” on a gross amount of NIS 33,750, i.e.: NIS 43,665 +VAT
5. Car Expenses: a gross amount of NIS 3,000 +VAT
6. Vacation Pay: Consultant shall be entitled to enjoy 23 vacation days per year during which Consultant shall be paid the Consideration pursuant to this Agreement.
7. Reports: Hourly reports of time spent on the Services shall be provided by Consultant by the beginning of each calendar month with respect to the Services provided during the previous month. Periodically reports on the Services shall be provided upon request by the Company.
Bianca Meger
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September 1, 2021
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Name | Date |
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SCHEDULE II
THE AGREED EMPLOYEE COMPENSATION
In the event that Consultant shall be considered an employee of the Company, it is agreed that the total amount of Consideration is calculated and based on the following components of payments and benefits, which shall be considered as included in, and shall be paid in lieu of, the Consideration:
1. | Total Gross Amount of Consideration: NIS 43,665 equals to the total gross amount of “employer’s costs, based on the following components: |
Payment/Benefit | NIS Amount | |
Base Salary | NIS 23625 | |
Global Overtime Compensation | NIS 10125 | |
Employer National Insurance | NIS 2316 | |
Pension(incl. disability coverage) | NIS 2256 | |
Severance Pay | NIS 2811 | |
Education Fund | NIS 2532 | |
TOTAL: | NIS 43665 |
2. | A gross amount of NIS 3000 for car expenses in lieu and beyond the mandatory obligation for travelling expenses. |
3. | Vacation days: 23 days |
4. | Convalescence pay (“Dmei-Havraa”) and sick days as per applicable law. |
5. | All amounts are gross amounts and are subject to mandatory taxes and deductions including, but not limited to, National Insurance, National Health Insurance and income tax. |
Bianca Meger
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September 1, 2021
|
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Name | Date |
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Exhibit A
CONFIDENTIALITY, INTELLECTUAL PROPERTY & NON-COMPETITION UNDERTAKING
This Confidentiality, Intellectual Property and Non-Competition Undertaking (this “Undertaking”) is entered into and made effective as of the Effective Date by Bianca Meger (“Consultant”) for the benefit of Stratford Ltd. (the “Company”, as further defined below).
This Undertaking constitutes an integral part of Consultant’s engagement agreement to which it is annexed (the “Agreement”).
All capitalized terms used in this Undertaking, and not otherwise defined herein, shall have the meanings assigned to such terms in the Agreement.
WHEREAS, | Consultant wishes to be engaged pursuant to the Agreement; and |
WHEREAS, | it is critical for the Company to preserve and protect its Confidential Information (as such term is defined below), its rights in Inventions (as such term is defined below) and all related Intellectual Property Rights (as such term is defined below), and Consultant is entering into this Undertaking as a condition to the Company’s agreement to engage Consultant pursuant to the Agreement. |
NOW, THEREFORE, Consultant undertakes and warrants towards the Company as follows:
1. | Confidentiality |
1.1. | Confidential Information. Consultant recognizes and acknowledges that Consultant’s access to trade secrets, confidential information and/or proprietary information (each “Confidential Information”) in the framework of their engagement pursuant to the Agreement, is essential to the performance of Consultant’s duties pursuant to the Agreement. |
Confidential Information shall include, without limitation: (i) any and all information concerning the Company’s product specifications, data, know-how, patents, technology, compositions, processes, formulas, methods, designs, samples, inventions, discoveries, research, test results, concepts, ideas, development or experimental work, computer software and programs (including object code and source code), databases, systems structures and architectures, algorithms, and/or works-in-process; (ii) any and all derivatives, improvements and enhancements to the Company’s technology, products or services; (iii) any and all information concerning the business and affairs of the Company, which includes historical financial statements, financial projections and budgets, historical and projected sales, capital spending budgets and plans, current and planned distribution methods and processes, customer lists, current and anticipated customer requirements, supplier lists, current and anticipated supplier requirements, price lists, market studies, policies, practices, strategies, surveys, business plans, lists of assets, data or reports relating to a financial condition, suppliers or partners, agreements, negotiations, transactions, undertakings and data concerning employees, consultants, officers, directors and shareholders; (iv) any and all information of the Company that is or may be considered a trade secret of the Company; (v) any and all trade secrets, confidential information and/or proprietary information of third parties; and (vi) any and all notes, compilations, studies, summaries, memoranda, books, records, correspondences, email transmissions, charts, lists, other documents and materials, relating, containing or based, in whole or in part, on any information included in the foregoing. Confidential Information shall include information referred to above, whether developed by the Company (including by Consultant) or received or obtained by the Company (including by Consultant) from third parties. Confidential Information shall include information in any form or media, and any portion of Confidential Information shall constitute Confidential Information. |
The Confidential Information shall not include information: which (i) has become publicly known and made generally available through no wrongful act of Consultant or of others who were under confidentiality obligations as to the applicable Confidential Information, or (ii) is not by its nature confidential. |
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Notwithstanding the above, Confidential Information may be disclosed by Consultant if required by order of competent court or governmental authority legally, but only if the Consultant fulfill all of the following conditions: (a) Consultant provides the Company with prompt written notice thereof so that the Company may seek to obtain a protective order affording confidential treatment to such Confidential Information or such other appropriate remedy which may be available under applicable law, (b) upon the Company’s request and at its expenses - Consultant shall use commercially reasonable efforts to obtain assurances from the applicable court or governmental authority that such Confidential Information will be afforded confidential treatment, and (c) disclosure pursuant to this paragraph is only that portion which Consultant is legally compelled to disclose. |
1.2. | Ownership. All right, title and interest in and to Confidential Information are and shall remain the sole and exclusive property of the Company. |
1.3. | Disclosure and Use Restrictions. Consultant acknowledges and understands that the Confidential Information, in whole or in part, is a valuable and unique asset of the Company, and that its use or disclosure (except use or disclosure to the extent required for carrying out Consultant’s duties to the Company) would likely cause the Company substantial loss and damages. Consultant undertakes and agrees that Consultant will not, in whole or in part, disclose any Confidential Information to any person or organization under any circumstances, will not make use of any Confidential Information for their own purposes or for the benefit of any other person or organization, and will not reproduce any Confidential Information without the Company’s prior written consent, except reproductions which are carried out in the reasonable fulfillment of Consultant’s engagement duties. Consultant shall not remove from the Company’s offices or premises any Confidential Information, or any copy thereof, except in the reasonable fulfillment of Consultant’s engagement duties and in a manner which is not prohibited pursuant to the then applicable policies and regulations of the Company. Consultant will take strict precautions to maintain the confidentiality of any and all Confidential Information. |
The Consultant may disclose the Confidential Information to its employees (“Representatives”) who have a legitimate need to know such Confidential Information for performing the Services, provided that, prior to disclosing any Confidential Information to such Representatives, Consultant shall ensure that such Representatives are aware of the confidential nature of the Confidential Information and of the provisions of this Undertaking, and have signed or are otherwise bound by obligations no less restrictive than those contained in this Undertaking. Consultant shall be fully responsible for any breach of this undertaking by any of the Representatives. |
1.4. | Information of Third Parties. Consultant will not, during Consultant’s engagement with the Company or otherwise in connection therewith, use, disclose or bring onto the premises of the Company, any proprietary information or trade secrets of any former or current employer or other person or entity, unless consented to in writing by such employer, person or entity. |
1.5. | Consultant acknowledge that Confidential Information which is received from, or relates to, third parties may be subject to certain limitations which the Company has undertaken towards the applicable third party, or which otherwise bind the Company pursuant to applicable law. With respect to any such Confidential Information, Consultant shall comply with the terms of this Undertaking and, if brought to the attention of Consultant, the terms of the Company’s undertaking towards the applicable third party, as well as any other obligation which binds the Company pursuant to applicable law. |
1.6. | Upon termination of Consultant’s engagement with the Company, or, if the Company so requests, at any time before such termination, Consultant will promptly deliver to the Company all copies of materials in any form (without retaining any copies thereof) in Consultant’s possession or under Consultant’s control, incorporating or otherwise including Confidential Information. |
1.7. | The obligations set forth in this Section 1 are perpetual and shall survive termination of the Agreement and of Consultant’s engagement with the Company. |
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2. | Intellectual Property |
2.1. | Work Product. Consultant will promptly disclose to the Company, as soon as practicable following discovery, conception, development, reduction to practice or invention (as applicable, “Creation”), and hold in trust for the sole right and benefit of the Company, any and all inventions, original works of authorship, developments, discoveries, ideas, research, test results, methods, concepts, improvements, designs, formulae, processes, information, techniques, know-how, data or trade secrets – in each case - whether or not patentable, copyrightable or registerable under copyright or similar laws - that (i) are discovered, conceived, developed, reduced to practice, or invented by Consultant and/or any Representatives (as applicable, “Created”), either alone or jointly with others, during performance of the Services, or (ii) result, wholly or partially, from Consultant’s and\or any Representatives’ engagement or the performance of the Services, or (iii) are Created with the use of any of the Company’s equipment, supplies or facilities, or (iv) result from, or stem from Consultant’s and\or any Representatives’ knowledge of Confidential Information, or (v) are related to the business of the Company as conducted during the Term or, to the knowledge of Consultant and\or any Representatives - proposed to be conducted in the future (each of the aforesaid: an “Invention”). Consultant shall keep and maintain adequate and current written records of all Inventions. Said records will be made available to, and shall be and remain the sole property of, the Company, at all times. |
2.2. | Consultant agrees and Consultant shall ensure that its Representatives agree, that any and all of the Inventions are, upon Creation, considered Inventions of the Company. Any and all Inventions shall be the property of the Company, exclusively, and the Company shall be the sole owner of all intangible legal rights, titles and interests evidenced by, or embodied in, or connected or related to, the Inventions, including without limitation, (i) any and all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof; (ii) any and all trademarks, service marks, trade dress, logos, trade names, and corporate names, domain names together with all translations, adaptations, derivations, and combinations thereof, and including any and all goodwill associated therewith, and any and all applications, registrations, and renewals in connection therewith; (iii) any and all works of authorship (regardless of the existence or non-existence of copyrightability with respect thereto), copyrights and all applications, registrations, and renewals in connection therewith; (iv) any and all trade secrets and business information; and (v) any and all other proprietary rights, industrial rights and any other similar rights - in each case (with respect to (i) through (v) above)) - on a worldwide basis, and all copies and tangible embodiments thereof, or any part thereof, in whatever form or medium (“Intellectual Property Rights”). |
2.3. | Work Made for Hire. Without derogating from the generality of the foregoing, Consultant agrees that if, notwithstanding this Undertaking and the Agreement, it will be decided by an authority, court or any other competent tribunal, whether at Consultant’s and\or any Representatives’ request or otherwise, that Chapter H of the Patents Law of 1967 (the “Patents Law”) is applicable to the engagement of Consultant and\or any Representatives by the Company, then Consultant further acknowledges that any and all Inventions are deemed “works made for hire” (service inventions) as contemplated under Chapter H of the Patents Law, that all such “works made for hire” are owned by the Company and that Consultant and\or any Representatives shall not be entitled to any compensation, nor any other consideration, except as explicitly set forth in the Agreement (if at all), for creation or assignment of the same to the Company, except as explicitly set forth in the Agreement (if at all). Consultant acknowledges and agrees that the consideration under the Agreement and all other engagement terms under the Agreement shall constitute the sole consideration and remuneration for any Inventions, including, without limitation, “works made for hire”, regardless of the current or future value of the Invention. Consultant understands and agrees that the decision whether or not to commercialize or market any invention developed by Consultant and\or any Representatives (including the Inventions), solely or jointly with others, is within the Company’s sole and unfettered discretion and for the Company’s sole benefit, and that no royalty will be due to Consultant and\or any Representatives as a result of the Company’s efforts to commercialize or market any such invention (including the Inventions). Without limitation of the foregoing, Consultant irrevocably confirms that the consideration explicitly set forth in the Agreement is in lieu of any rights for compensation that may arise in connection with the Inventions under applicable law and Consultant waives any right to claim royalties or other consideration with respect to any Invention, including under Section 134 of the Patents Law. This Section 2.3 shall be deemed as an “agreement” for purposes of Section 134 of the Patents Law. In no event will any Inventions become the property of Consultant and the provisions of Section 132(b) of the Patents Law shall not apply. With respect to all of the above, any oral understanding, communication or agreement shall be void, except and unless the content thereof is expressly reflected in a document which is signed by the Company. |
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2.4. | Assignment. To the extent necessary in order to vest fully in the Company all rights in and to all Inventions and all Intellectual Property Rights (to the extent legally possible), Consultant hereby irrevocably and unconditionally assigns to the Company, for no additional consideration, Consultant’s entire right, title and interest in and to all Inventions and Intellectual Property Rights therein, including the right to sue, counterclaim and recover for all past, present and future infringement, misappropriation or dilution thereof, and all rights corresponding thereto – in each case - throughout the world. |
2.5. | Exclusion of Prior Inventions. This Undertaking and the assignment herein shall not include inventions, if any, patented or unpatented, which Consultant made prior to the commencement of Consultant’s engagement with the Company (“Prior Inventions”). Consultant shall not incorporate, or permit to be incorporated, any Prior Inventions in any Inventions, nor shall Consultant use or exploit any Prior Inventions – in each case - without the Company’s prior written consent. If, despite the forgoing, in the course of engagement with the Company, Consultant will incorporate a Prior Invention into a Company product, service or Invention, or Consultant will otherwise use or exploit a Prior Invention without having received the Company’s prior written consent, Consultant hereby grant the Company a nonexclusive, royalty-free, irrevocable, perpetual, unlimited worldwide license (with rights to sublicense through multiple tiers of sublicenses) to make, have made, modify, use and/or sell and/or otherwise use and exploit in any manner, as the Company may wish, said Prior Invention and products or services based thereon, to the full extent of Consultant’s rights in such Prior Invention. |
2.6. | Power of Attorney. Consultant hereby covenants and agree to perform, during and after engagement, any acts reasonably required by the Company to permit and assist the Company, at the Company’s expense (provided that, during the term of Consultant’s engagement with the Company, no additional expense shall be charged to the Company, other than payments set forth in the Agreement), in obtaining, maintaining, defending and enforcing the Intellectual Property Rights in any and all countries, and generally cooperate reasonably, to aid the Company in its attempts to obtain, secure and enforce proper protection for the Inventions and the Intellectual Property Rights (including, to the extent necessary, the assignment and transfer thereof to the Company and its successors, assigns and nominees), in any and all jurisdictions. Such acts may include, but are not limited to, the execution of documents and assistance or cooperation in legal proceedings; provided that, following the term of Consultant’s engagement with the Company, Consultant and shall not be required to perform any act, or cooperate, in a manner which would unduly interfere with Consultant’s affairs and activities. Consultant hereby irrevocably appoint the Company as Consultant’s true and lawful attorney and attorney-in-fact, to act for and on Consultant’s behalf and instead of Consultant, to execute and file any documents and instruments, and to do such other acts and things as may be necessary or appropriate, in order to give effect and further the above purposes and the intentions contained in this Undertaking, with the same legal force and effect as if executed by Consultant. |
2.7. | No Contestation. Consultant hereby undertake that Consultant shall not, directly or indirectly, take any action to contest the Company’s rights in any of the Inventions and/or Intellectual Property Rights, or infringe them in any way, nor shall Consultant, directly or indirectly, make a claim for and/or sue and/or demand, any additional compensation for creation or assignment of Inventions beyond the consideration set forth in the Agreement. |
2.8. | Moral Rights Waiver. In connection to any work of authorship, Consultant hereby forever waive, and agree never to assert, any rights that may be known as or referred to as “moral rights”, including all rights of paternity, integrity, any right to object to any distortion or other modification of a work and any other similar right, existing under the law of any country in the world or under any treaty, and Consultant hereby consents to any action that would violate such “moral rights” in the absence of such consent. |
2.9. | The obligations set forth in this Section 2 are perpetual, and shall survive any termination of the Agreement and of Consultant’s engagement with the Company. This Section 2 shall be deemed as an “agreement” for the purposes of Section 35 of the Copyrights Law 2008. |
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2.10. | Consultant shall ensure that its Representatives are aware of the Consultant’s undertakings under this Section 2 and shall ensure that each Representative will acknowledge and agree to the provisions hereunder as if undertook directly by such Representative – each with respect to itself. |
3. | General |
3.1. | Non-Disparagement. Consultant undertakes that it will not at any time make, publish or communicate to any person or entity, or in any public forum, any defamatory or disparaging remarks, comments or statements concerning the Company or its business, or - with respect to their relationship with the Company - any of its employees, officers, directors and shareholders and other associated third parties. |
3.2. | Definition of the Company. In this Undertaking, the term “the Company” shall, except with respect to ownership of Confidential Information, Inventions and Intellectual Property Rights, also include, as applicable, the Parent Company and any entity: (i) which holds – directly or indirectly - more than fifty percent of the issued share capital or voting power in the Company; (ii) in which the Company holds – directly or indirectly - fifty percent or more of the issued share capital or voting power; or (iii) in which a parent company holds – directly or indirectly - fifty percent or more of the issued share capital or voting power. |
3.3. | Necessity of Undertakings. Consultant recognizes and agree that: (i) this Undertaking is necessary and essential to protect the Company’s business and to realize and derive all the benefits, rights and expectations of conducting the Company’s business; (ii) the duration and unlimited geographical application of the protective covenants contained in this Undertaking are reasonable in order to protect its legitimate interests with respect to the subject matter hereof; and (iii) the provisions of this Undertaking serve as an integral part of the terms of Consultant’s and engagement and that good and valuable consideration exists under the Agreement, for Consultant to be bound by the provisions of this Undertaking. |
3.4. | Injunctive Relief. Consultant recognizes and acknowledges that in the event of a breach or threatened breach of this Undertaking by Consultant, the Company may suffer irreparable harm or damage and will, therefore, be entitled to injunctive relief to enforce this Undertaking (without limitation to any other remedy at law or in equity). |
3.5. | Consultant shall be responsible for enforcing the terms of this Undertaking vis-à-vis any of its Representatives, and shall be liable for any breach of the terms of this Undertaking by any of its Representatives, as if such breach was a breach of the Consultant of this Undertaking. |
I, THE UNDERSIGNED, ACKNOWLEDGES THAT I AM FAMILIAR WITH THE ENGLISH LANGUAGE AND DO NOT REQUIRE TRANSLATION OF THIS UNDERTAKING TO ANY OTHER LANGUAGE. I FURTHER ACKNOWLEDGE THAT I HAVE BEEN ADVISED BY THE COMPANY THAT I MAY CONSULT AN ATTORNEY BEFORE EXECUTING THIS UNDERTAKING AND THAT I HAVE BEEN AFFORDED AN OPPORTUNITY TO DO SO.
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IN WITNESS WHEREOF, the undersigned, has executed this Undertaking:
Printed Name: |
Bianca Meger
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Signature: |
/s/Bianca Meger
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Exhibit A1
Prior Inventions
None
/s/Elchanan Maoz
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Bianca Meger
|
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The Company | The Consultant |
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Exhibit 10.5
[INVESTOR NAME, ADDRESS AND EMAIL]
___, 2021
Metro One Telecommunications, Inc.
30 NORTH GOULD STREET SUITE 2990
SHERIDAN WY 82801
Attention: Nani Maoz
Re: | $[ ] Puttable SAFE Financing to Metro One Telecommunications, Inc. |
Dear Mr. Maoz:
The undersigned investor (the “Investor”) is pleased to provide financing in the amount indicated beneath such undersigned’s signature to the letter (the “Committed Amount”) to Metro One Telecommunications, Inc. (the “Company”), pursuant to the terms and conditions of the term sheet attached hereto as Exhibit A (the “Term Sheet”) to enable a newly formed subsidiary of the Company to bid on, and if the bid is accepted, to acquire, Royal App Ltd. (“Shelfy”) in a bankruptcy sale. Capitalized terms used by not defined here shall have the meanings set forth in the Term Sheet.
Immediately upon email direction by the Company, Investor shall fund the Committed Amount by wire transfer to the Company at the wire instructions set forth on Exhibit B. This commitment letter is a binding agreement by the Investor with respect to the Committed Amount. The foregoing obligation shall expire and have no further effect upon and after the Outside Date. Investor is, and will be at the time, if any, the investor becomes entitled to Common Stock pursuant to the Puttable SAFE (as described in the Term Sheet), an “accredited investor”, as such term is defined in Regulation D promulgated by the Securities and Exchange Commission under the Securities Act of 1933 (the “1933 Act”), is experienced in investments and business matters, has made investments of a speculative nature in the past and, with its representatives, has such knowledge and experience in financial, tax and other business matters as to enable the Investor to utilize the information made available by the Company to evaluate the merits and risks of and to make an informed investment decision with respect to the proposed purchase, which represents a speculative investment. Investor has the authority and is duly and legally qualified to purchase and own the Puttable SAFE and, to the extent issued pursuant to the Puttable SAFE, Common Stock. Investor is able to bear the risk of such investment for an indefinite period and to afford a complete loss thereof.
The Investor acknowledges and agrees that the Puttable SAFE and, to the extent issued pursuant to the Puttable SAFE, the Common Stock, are issued without representations, warranties, covenants or agreements by Everest Corporate Finance or, except to the limited extent expressly set forth in this letter, by the Company. The Investor acknowledges and agrees that none of the respective affiliates or any control persons, officers, directors, employees, agents or representatives of either of Everest Corporate Finance or the Company make any representation, warranty, covenant or agreement in connection with the Puttable SAFE, the Common Stock to the extent issued pursuant to the Puttable SAFE, this letter or otherwise.
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The Investor acknowledges and agrees that the Investor has received such information as the Investor deems necessary in order to make an investment decision with respect to the Puttable SAFE and, to the extent issued pursuant to the Puttable SAFE, the Common Stock, including, with respect to the Company, its newly formed subsidiary and Shelfy. The Investor acknowledges and agrees that the Investor and the Investor’s professional advisor(s), if any, have had the full opportunity to ask such questions, receive such answers and obtain such information as the Investor and such Investor’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the foregoing. The Investor became aware of this offering of the Puttable SAFE solely by means of direct contact between the Investor and the Company.
Investor acknowledges and agrees that the information set forth on the signature page hereto regarding Investor is accurate.
Investor will hold the Puttable SAFE and, to the extent issued pursuant to the Puttable SAFE, the Common Stock for its own account for investment only and not with a view toward, or for resale in connection with, the public sale or any distribution thereof. Investor understands and agrees that the Puttable SAFE and, to the extent issued pursuant to the Puttable SAFE, the Common Stock have not been registered under the 1933 Act or any applicable state securities laws, by reason of their issuance in a transaction that does not require registration under the 1933 Act (based in part on the accuracy of the representations and warranties of Investor contained herein), and that such Puttable SAFE and, to the extent issued pursuant to the Puttable SAFE, the Common Stock must be held indefinitely unless a subsequent disposition is registered under the 1933 Act or any applicable state securities laws or is exempt from such registration. Investor understands and acknowledges that the Company is not listed on an exchange and is not currently a Reporting Company under the Securities and Exchange Act of 1934. As a result,the Investor may find it difficult to dispose of or to obtain accurate quotations as to the market value of our common stock, and our Common Stock may be less attractive for margin loans, for investment by larger financial institutions, as consideration in possible future acquisition transactions or other purposed.
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This letter shall be construed and interpreted in accordance with the laws of the State of New York applicable to agreements made and to the performance wholly within that jurisdiction. Each party hereto irrevocably submits to the exclusive jurisdiction of any state or federal court within the State of New York with respect to any cause or claim arising under or relating to this letter. Each party hereto irrevocably consents to the service of process by registered mail or personal service, irrevocably waives any objection based on forum non conveniens with respect to such a court, and irrevocably waives any objection to venue of such court. This letter 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. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. This letter supersedes any prior letter as to a commitment entered into by Investor.
[Signature page follows]
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Sincerely, |
INVESTOR (if an entity): | |||
By: | |||
Name: | |||
Title: | |||
Address (incl email): | |||
Subscription Amount: | $ | ||
INVESTOR (if an individual): | |||
Signature: | |||
Address (incl email): | |||
Subscription Amount: | $ |
Accepted and Agreed:
METRO ONE TELECOMMUNICATIONS, INC.
|
|||
By: | |||
Name: | |||
Title: |
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Exhibit A
Term Sheet
The terms and conditions summarized below are intended as an outline of the terms and conditions of a Puttable SAFE which will be more fully set forth therein and delivered by the Company and do not purport to summarize all of the provisions which shall be contained in the Puttable SAFE’s.
(A) | The failure of the Company’s subsidiary to acquire Shelfy by the date that is six (6) months from the issuance of such Puttable SAFE; or |
(B) | The failure to occur of the Preferred Conversion (as defined below) on or after the date which is 24 months from the issuance of such Puttable SAFE. |
Conversion: So long as the foregoing put right is not exercised in respect of a Puttable SAFE, such Puttable SAFE shall automatically be converted into Common Stock of the Company in the event that the Company consummates an equity conversion whereby all Preferred Stock of the Company is converted to Common Stock (the “Preferred Conversion”). Such conversion shall entitle the holder of the Puttable SAFE to the number of shares of Common Stock obtained by dividing the amount invested in respect of such Puttable SAFE by (subject to the paragraph below concerning dilution) the quotient resulting from dividing $2,000,000 by the number of outstanding shares of common stock of the Company immediately following the Preferred Conversion (assuming conversion of all securities convertible into common stock and exercise of all outstanding options and warrants, but excluding the shares of equity securities of the Company issuable upon the conversion of all converting Puttable SAFEs).
Dilution: Prior to or following the Preferred Conversion, a dilution is expected in connection with (A) new employee stock options for each of employees of the Company and of Shelfy, (B) compensation to Everest Corporate Finance, and (C) 8% of the Company in respect of creditors of Shelfy. Such dilution shall ratably reduce the percentage ownership of the Company held, or to be held, in respect of the Puttable SAFE, whether such dilution occurs before or after the vesting of the Puttable SAFE.
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Change of Control: If the Company is acquired prior to the Preferred Conversion, then at the option of each holder of a Puttable SAFE, either (i) such holder shall receive a cash repayment equal to the amount invested in respect of such Puttable SAFE whereupon such Puttable SAFE shall be cancelled, or (ii) the Puttable SAFE shall convert into shares of common stock at the price (subject to the above-described dilution) set forth above.
Documentation: | The complete terms and conditions of the Puttable SAFE shall be set forth in a Puttable SAFE Agreement prepared by the Company’s legal counsel. The Puttable SAFE may be amended by the Company and the holders of a majority of the value of the outstanding Puttable SAFEs . |
Non-Transferrable | The Puttable SAFEs may not be transferred by a holder thereof. |
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Exhibit B
Wire Instructions
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THIS INSTRUMENT AND ANY SECURITIES ISSUABLE PURSUANT HERETO HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED IN THIS SAFE AND UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION THEREFROM.
METRO ONE TELECOMMUNICATIONS, INC.
SAFE
(Simple Agreement for Future Equity)
THIS CERTIFIES THAT in exchange for the payment by _________________ (the “Investor”) of $_____________ (the “Purchase Amount”) on __, 2021 (the “Effective Date”), Metro One Telecommunications, Inc., an Oregon corporation (the “Company”), issues to the Investor the right to certain shares of the Company’s Capital Stock, subject to the terms described below.
1. Put Right. The Investor may elect to sell this Safe to the Company for the Purchase Amount (a) upon the failure of the Company or its subsidiary to complete an acquisition of Royal App Ltd. (“Shelfy”) by the date that is six (6) months from the Effective Date, or (b) within the six (6) month period following the failure to occur of a Preferred Conversion by the date that is twenty-four (24) months from the Effective Date. The Investor shall exercise the put right by delivering written notice of such exercise (the “Put Exercise Notice”) to the Company. The Company shall pay the Purchase Amount to the Investor by certified or official bank check or by wire transfer of immediately available funds within ten (10) days of receipt of the Put Exercise Notice.
2. Conversion.
(a) Preferred Conversion. If there is a Preferred Conversion before the termination of this Safe, this Safe will automatically convert into the number of shares of Common Stock equal to the Purchase Amount divided by the Safe Price (the “Conversion Shares”).
(b) Change of Control. If there is a Change of Control before the termination of this Safe, at the option of the Investor, the Investor shall receive either (i) a cash payment of the Purchase Amount (the “Cash-Out Amount”) concurrent with the consummation of such Change of Control (subject to the liquidation priority set forth in Section 2(c) below) or (ii) the Conversion Shares to be issued immediately prior to the consummation of such Change of Control.
(c) Liquidation Priority. In a Change of Control, this Safe is intended to operate like standard non-participating Preferred Stock. For clarity, the Investor’s right to receive its Cash-Out Amount is:
(i) Junior to payment of outstanding indebtedness and creditor claims, including contractual claims for payment and convertible promissory notes (to the extent such convertible promissory notes are not actually or notionally converted into Capital Stock);
(ii) On par with payments for other Safes and/or Preferred Stock, and if the applicable Proceeds are insufficient to permit full payments to the Investor and such other Safes and/or Preferred Stock, the applicable Proceeds will be distributed pro rata to the Investor and such other Safes and/or Preferred Stock in proportion to the full payments that would otherwise be due; and
(iii) Senior to payments for Common Stock.
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(d) Termination. This Safe will automatically terminate (without relieving the Company of any obligations arising from a prior breach of or non-compliance with this Safe) immediately following the earliest to occur of: (i) the exercise by the Investor of its put right pursuant to Section 1, (ii) the issuance of Common Stock to the Investor pursuant to the automatic conversion of this Safe under Section 2(a), or (iii) the payment, or setting aside for payment, of amounts due the Investor pursuant to Section 2(b).
3. Definitions.
“Capital Stock” means the capital stock of the Company, including, without limitation, the “Common Stock” and the “Preferred Stock.”
“Change of Control” means (i) a transaction or series of related transactions in which any “person” or “group” (within the meaning of Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of more than 50% of the outstanding voting securities of the Company having the right to vote for the election of members of the Company’s board of directors, (ii) any reorganization, merger or consolidation of the Company, other than a transaction or series of related transactions in which the holders of the voting securities of the Company outstanding immediately prior to such transaction or series of related transactions retain, immediately after such transaction or series of related transactions, at least a majority of the total voting power represented by the outstanding voting securities of the Company or such other surviving or resulting entity or (iii) a sale, lease or other disposition of all or substantially all of the assets of the Company.
“Company Capitalization” is calculated as of immediately following the Preferred Conversion and (without double-counting, in each case calculated on an as-converted to Common Stock basis):
• Includes all shares of Capital Stock issued and outstanding;
• Includes all Converting Securities;
• Includes all issued and outstanding Options.
“Converting Securities” means convertible securities issued by the Company, including but not limited to convertible promissory notes and other convertible debt instruments and convertible securities that have the right to convert into shares of Capital Stock, but excluding this Safe and any other Safes.
“Options” includes options, restricted stock awards or purchases, RSUs, SARs, warrants or similar securities, vested or unvested.
“Preferred Conversion” means the conversion of all of the Company’s outstanding Preferred Stock to Common Stock.
“Proceeds” means cash and other assets (including without limitation stock consideration) that are proceeds from a Change of Control and legally available for distribution.
“Safe” means an instrument containing a future right to shares of Capital Stock, similar in form and content to this instrument, purchased by investors for the purpose of funding the Company’s business operations. References to “this Safe” mean this specific instrument.
“Safe Price” means the price per share equal to $2,000,000 divided by the Company Capitalization.
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4. Company Representations.
(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation, and has the power and authority to own, lease and operate its properties and carry on its business as now conducted.
(b) The execution, delivery and performance by the Company of this Safe is within the power of the Company and has been duly authorized by all necessary actions on the part of the Company (subject to section 4(d)). This Safe constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and general principles of equity. To its knowledge, the Company is not in violation of (i) its current certificate of incorporation or bylaws, (ii) any material statute, rule or regulation applicable to the Company or (iii) any material debt or contract to which the Company is a party or by which it is bound, where, in each case, such violation or default, individually, or together with all such violations or defaults, could reasonably be expected to have a material adverse effect on the Company.
(c) The performance and consummation of the transactions contemplated by this Safe do not and will not: (i) violate any material judgment, statute, rule or regulation applicable to the Company; (ii) result in the acceleration of any material debt or contract to which the Company is a party or by which it is bound; or (iii) result in the creation or imposition of any lien on any property, asset or revenue of the Company or the suspension, forfeiture, or nonrenewal of any material permit, license or authorization applicable to the Company, its business or operations.
(d) No consents or approvals are required in connection with the performance of this Safe, other than: (i) the Company’s corporate approvals; (ii) any qualifications or filings under applicable securities laws; and (iii) necessary corporate (including any necessary shareholder) approvals for the authorization of Capital Stock issuable pursuant to Section 2.
5. Investor Representations.
(a) The Investor has full legal capacity, power and authority to execute and deliver this Safe and to perform its obligations hereunder. This Safe constitutes valid and binding obligation of the Investor, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and general principles of equity.
(b) The Investor is an accredited investor as such term is defined in Rule 501 of Regulation D under the Securities Act, and acknowledges and agrees that if not an accredited investor at the time of the Preferred Conversion, the Company may void this Safe and return the Purchase Amount. The Investor has been advised that this Safe and the underlying securities have not been registered under the Securities Act, or any state securities laws and, therefore, cannot be resold unless they are registered under the Securities Act and applicable state securities laws or unless an exemption from such registration requirements is available. The Investor is purchasing this Safe and the securities to be acquired by the Investor hereunder for its own account for investment, not as a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof, and the Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. The Investor has such knowledge and experience in financial and business matters that the Investor is capable of evaluating the merits and risks of such investment, is able to incur a complete loss of such investment without impairing the Investor’s financial condition and is able to bear the economic risk of such investment for an indefinite period of time.
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(c) The Investor acknowledges that the Company may, from time to time, issue inter alia (i) Options to its employees or employees of Shelfy, (ii) equity securities as compensation to Everest Corporate Finance and (iii) securities in an aggregate amount up to 8% of the Company Capitalization to certain creditors of Shelfy.
6. Miscellaneous
(a) Any provision of this Safe may be amended, waived or modified by written consent of the Company and either (i) the Investor or (ii) the majority-in-interest of all then-outstanding Safes, provided that with respect to clause (ii), the Purchase Amount may not be amended, waived or modified in this manner without the consent of the Investor. “Majority-in-interest” refers to the holders of the applicable group of Safes whose Safes have a total Purchase Amount greater than 50% of the total Purchase Amount of all of such applicable group of Safes.
(b) Any notice required or permitted by this Safe will be deemed sufficient when delivered personally or by overnight courier or sent by email to the relevant address listed on the signature page, or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, addressed to the party to be notified at such party’s address listed on the signature page, as subsequently modified by written notice.
(c) The Investor is not entitled, as a holder of this Safe, to vote or be deemed a holder of Capital Stock for any purpose other than tax purposes, nor will anything in this Safe be construed to confer on the Investor, as such, any rights of a Company stockholder or rights to vote for the election of directors or on any matter submitted to Company stockholders, or to give or withhold consent to any corporate action or to receive notice of meetings, until shares have been issued on the terms described in Section 2.
(d) Neither this Safe nor the rights in this Safe are transferable or assignable, by operation of law or otherwise, by the Investor.
(e) In the event any one or more of the provisions of this Safe is for any reason held to be invalid, illegal or unenforceable, in whole or in part or in any respect, or in the event that any one or more of the provisions of this Safe operate or would prospectively operate to invalidate this Safe, then and in any such event, such provision(s) only will be deemed null and void and will not affect any other provision of this Safe and the remaining provisions of this Safe will remain operative and in full force and effect and will not be affected, prejudiced, or disturbed thereby.
(f) All rights and obligations hereunder will be governed by the laws of the State of New York, without regard to the conflicts of law provisions of such jurisdiction.
(g) The parties acknowledge and agree that for United States federal and state income tax purposes this Safe is, and at all times has been, intended to be characterized as stock, and more particularly as common stock for purposes of Sections 304, 305, 306, 354, 368, 1036 and 1202 of the Internal Revenue Code of 1986, as amended. Accordingly, the parties agree to treat this Safe consistent with the foregoing intent for all United States federal and state income tax purposes (including, without limitation, on their respective tax returns or other informational statements).
(Signature page follows)
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IN WITNESS WHEREOF, the undersigned have caused this Safe to be duly executed and delivered.
METRO ONE TELECOMMUNICATIONS, INC. | ||
By: | ||
Name: | ||
Title: | ||
Address: | ||
Email: |
INVESTOR: | ||
By: | ||
Name: | ||
Title: | ||
Address: | ||
Email: |
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Exhibit 10.6
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this “Agreement”) is dated as of September 3, 2021, between Metro One Telecommunications, Inc., a Delaware corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).
WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506(b) promulgated thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement (the “Offering”).
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:
“Acquiring Person” shall have the meaning ascribed to such term in Section 4.4.
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Board of Directors” means the board of directors of the Company.
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close; provided, however, for clarification, banking institutions in the State of New York shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of banking institutions in the State of New York or are generally are open for use by customers on such day.
“Closing” means the closing of the purchase and sale of the Units pursuant to Section 2.1.
“Closing Date” has the meaning set forth in Section 2.1(b).
“Commission” means the United States Securities and Exchange Commission.
“Common Stock” means the common stock of the Company, $0.0001 par value per share, and any other class of securities into which such securities may hereafter be reclassified or changed.
“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Disclosure Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.
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“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.
“Liens” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Per Unit Purchase Price” equals $0.075, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Securities” means the Shares, the Warrants, and the Warrant Shares.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shares” means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement, but excluding the Warrant Shares.
“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing Shares and/or ADSs).
“Sophisticated Investor” means a Person who is not an accredited investor, within the meaning of Rule 501 under the Securities Act, and has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of the prospective investment, or the Company reasonably believes immediately prior to making any sale that such purchaser comes within this description.
“Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for the Units purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately available funds.
“Subsidiary” means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.
“Trading Day” means a day on which the principal Trading Market is open for trading.
“Trading Market” means any of the following markets or exchanges on which the Common Stock are listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
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“Transaction Documents” means this Agreement, the Warrants, and all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer Agent” means Computershare, the current transfer agent of the Company and any successor transfer agent of the Company.
“Units” means units of the Company, with each unit comprised of (i) one (1) Share and (ii) a Warrant to purchase one half of a share of Common Stock;
“Warrants” means the warrant to purchase Common Stock delivered to the Purchasers at the Closing in accordance with Section 2.2(a) hereof, which Warrant shall be exercisable immediately upon issuance and have a term of exercise equal to two (2) years from the initial exercise date, in the form of Exhibit A attached hereto.
“Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants.
ARTICLE II.
PURCHASE AND SALE
2.1 Closing.
(a) Purchase of Units; No Minimum Offering; Over-Subscription Option. Subject to the satisfaction (or waiver) of the terms and conditions of this Agreement, each Purchaser agrees, severally and not jointly, to purchase at Closing (as defined below), and the Company agrees to sell and issue to each Purchaser, severally and not jointly, at Closing, Units in principal amounts set forth on the signature pages attached hereto, attached hereto as Annex A, for each Purchaser affixed hereto. On the Closing Date (as defined below), upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase, up to an aggregate of $3,000,000 of Units; provided, each Purchaser is committed only to purchase Units in the principal amount set forth on its signature page attached hereto. Each Purchaser acknowledges that that: (i) the Offering is being conducted on a “best efforts/no minimum basis” and that, therefore, the Company makes no representation or guarantee that $3,000,000 of Units will be sold in the Offering; (ii) no actual Units will be issued in connection with the Offering, with each Purchaser only receiving Shares and Warrants at the applicable Closing and (iii) the Company shall have the option, in its discretion, to increase the size of the Offering by an addition $3,000,000 worth of Units without notice to or approval of the Purchasers.
(b) Closing Date. The initial closing of the purchase and sale of the Units (the “Closing”) shall take place on the date when all of the Transaction Documents have been executed and delivered by the applicable parties and the other conditions to the Closing set forth in Sections 2.2 and 2.3 have been satisfied or waived (or such later date as is mutually agreed to by the Company and the Purchaser(s)). There may be multiple Closings until the earlier of the Final Termination Date (as defined below) or such time as purchase for the sale of the Units are accepted (the date of any such Closing is hereinafter referred to as a “Closing Date”). Each Closing shall occur on a Closing Date remotely via the electronic exchange of documents and signatures. The Offering shall terminate on or before September 30, 2021 (the “Termination Date”). The Termination Date may be extended at the Company’s sole discretion for an additional 30 days, which extended Termination Date is referred to herein as the “Final Termination Date”. The Company reserves the right to terminate the Offering in its discretion following the initial Closing.
(c) Form of Payment. At the times specified in Section 2.2, (i) each Purchaser shall deliver or cause to be delivered to the Company, via wire transfer in accordance with wire instructions provided by the Company, immediately available funds equal to such Purchaser’s Subscription Amount as set forth on the signature pages hereto executed by such Purchaser, (ii) the Company shall deliver or cause to be delivered to each Purchaser (x) a number of Shares equal to such Purchaser’s Subscription Amount divided by the Per Unit Purchase Price and (y) a Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 50% of such Purchaser’s Shares determined in the preceding clause (x), with an exercise price equal to $0.0975 per share subject to adjustment therein; and (iii) the Company and each Purchaser shall deliver the other items set forth in Section 2.2.
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2.2 Deliveries.
(a) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:
(i) this Agreement duly executed by the Company; and
(ii) a Warrant registered in the name of such Purchaser with such terms as determined in accordance with Section 2.1(c).
(b) On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company, the following:
(i) this Agreement duly executed by such Purchaser; and
(ii) such Purchaser’s Subscription Amount by wire transfer in accordance with wire instructions provided by the Company.
(c) Within three (3) Business Days following the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver, on an expedited basis, a number of Shares as determined in accordance with Section 2.1(c), by book entry transfer registered in the Company’s share register in the name of the Purchaser or, at the request of the Purchaser, by physical delivery of a certificate evidencing such Shares, registered in the name of such Purchaser.
2.3 Closing Conditions.
(a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);
(ii) all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed; and
(iii) the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(b) The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:
(i) the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);
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(ii) all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;
(iii) the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(iv) there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and
(v) from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or any Trading Market and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Securities at the Closing.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser:
(a) Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a). The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.
(b) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing, and, if applicable under the laws of the jurisdiction in which they are formed, in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
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(c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(d) No Conflicts. Except as disclosed on Schedule 3.1(d), the execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected; except in the case of clause (ii), such as could not have or reasonably be expected to result in a Material Adverse Effect.
(e) Issuance of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Warrant Shares, when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Company has reserved from its duly authorized capital stock the maximum number of Common Stock issuable pursuant to this Agreement and the Warrants.
(f) Capitalization. The Company is authorized to issue 600,000,000 shares of Common Stock of which, as of the date of this Agreement, (i) 229,918,829 shares were issued and outstanding, (ii) 53,178,063 shares are reserved for various planned issuances of shares and securities exercisable into shares, including warrants and options (the “Planned Issuances”). No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except for the Planned Issuances and except as a result of the purchase and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. The issuance and sale of the Securities will not obligate the Company to issue Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. There are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary.
(g) Certain Fees. The Company may enter into arrangements pursuant to which brokerage or finder’s fees or commissions are or will be payable by the Company or its Subsidiaries to brokers, financial advisors consultants, finders, placement agents, investment bankers, banks or other Persons with respect to the transactions contemplated by the Transaction Documents. Other than for Persons engaged by any Purchaser, if any, the Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.
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3.2 Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such date):
(a) Organization; Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(b) Own Account. Such Purchaser understands that the Securities are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities law. Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business.
(c) Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which it exercises any Warrants it will be (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act, (ii) a Sophisticated Investor, or (iii) a Non U.S. Person as defined under Regulation S promulgated under the Securities Act. To the extent that the Purchaser is a non U.S. Person, the Purchaser (x) is not acquiring Securities for the account or benefit of any U.S. Person, (y) is not, at the time of execution of this Agreement, and will not be, at the time of the Closing, in the United States and (z) is not a “distributor” (as defined in Regulation S promulgated under the Securities Act). The Purchaser acknowledges that to the extent he or she is not a U.S. Person the offer and sale of securities contemplated hereunder have been made in accordance with Rule 903 under Regulation S, including but not limited to such offer and sale being made in an “offshore transaction” without any “directed selling efforts” in the United States as such terms are defined under Rule 902 of Regulation S. .
(d) Experience of Such Purchaser; Acknowledgment of Risk. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment. Such Purchaser acknowledges that an investment in the Securities is speculative and subject to significant risks, including the risk that the Company’s business might failure, which could result in the loss of the Purchaser’s investment in the Company.
(e) General Solicitation. Such Purchaser is not, to such Purchaser’s knowledge, purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or, to the knowledge of such Purchaser, any other general solicitation or general advertisement.
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(f) Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Such Purchaser acknowledges and agrees that neither the Company nor any Affiliate of the Company has provided such Purchaser with any information or advice with respect to the Securities nor is such information or advice necessary or desired.
(g) No Governmental Review. Such Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
(h) Brokers. Except as set forth on Schedule 3.2(h), no agent, broker, investment banker, person or firm acting in a similar capacity on behalf of or under the authority of the Purchaser is or will be entitled to any broker’s or finder’s fee or any other commission or similar fee, directly or indirectly, for which the Company or any of its Affiliates after the Closing could have any liabilities in connection with this Agreement, any of the transactions contemplated by this Agreement, or on account of any action taken by the Purchaser in connection with the transactions contemplated by this Agreement.
(i) Independent Advice. Such Purchaser understands that nothing in this Agreement or any other materials presented by or on behalf of the Company to the Purchaser in connection with the purchase of the Securities constitutes legal, tax or investment advice.
(j) Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty against, or a prohibition of, any actions with respect to the borrowing of, arrangement to borrow, identification of the availability of, and/or securing of, securities of the Company in order for such Purchaser (or its broker or other financial representative) to effect Short Sales or similar transactions in the future.
(k) Non-Public Information. Such Purchaser acknowledges that, pursuant to applicable law, it may not trade in the securities of the Company on the basis of material, non-public information concerning the Company or its Subsidiaries, or share any material, non-public information concerning the Company or its Subsidiaries in its possession with any third party.
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(l) Acknowledgment of Company Status. Such Purchaser acknowledges that (i) the Common Stock is not registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company is not subject to the reporting requirements of Section 13(a) or 15(b) of the Exchange Act, and (ii) the Company was previously an “issuer” described under paragraph (i)(1)(i) of Rule 144.
(m) No Other Representations. Such Purchaser acknowledges that, except for the representations and warranties made by the Company in this Agreement, neither the Company nor any representative of the Company makes or has made any other express or implied representation or warranty with respect to the Company or any of its Subsidiaries, and acknowledges that it has not relied upon or otherwise been induced by any such other express or implied representation or warranty.
The Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 Transfer Restrictions.
(a) The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, or to the Company or to an Affiliate of a Purchaser, the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights and obligations of a Purchaser under this Agreement.
(b) The Purchasers agree to the imprinting of a legend on any of the Securities in substantially following form:
[NEITHER] THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY [AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
4.2 Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.
4.3 Exercise Procedures. Each of the form of Notice of Exercise included in the Warrants set forth the totality of the procedures required of the Purchasers in order to exercise the Warrants. Without limiting the preceding sentences, no ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required in order to exercise the Warrants. No additional legal opinion, other information or instructions shall be required of the Purchasers to exercise their Warrants. The Company shall honor exercises of the Warrants and shall deliver or cause to be delivered Warrant Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.
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4.4 Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.
4.5 Use of Proceeds. The Company and its Subsidiaries shall use the net proceeds from the sale of the Securities hereunder for general corporate and working capital purposes.
4.6 Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise of the Warrants.
4.7 Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration is also offered to all of the parties to such Transaction Documents. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.
4.8 Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Purchaser.
ARTICLE V.
MISCELLANEOUS
5.1 Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.
5.2 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.3 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file a press release disclosing any such material non-public information.
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5.4 Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchasers who purchased at least 50.1% in interest of the Shares based on the initial Subscription Amounts hereunder or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required. Notwithstanding anything to the contrary herein, the Company may amend this Agreement without the consent of any Purchasers to add additional Purchaser parties hereto subsequent to the date of this Agreement and prior to the Final Termination Date. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment effected in accordance with this Section 5.4 shall be binding upon each Purchaser and holder of Securities and the Company.
5.5 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
5.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”
5.7 No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in this Section 5.7.
5.8 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence a Proceeding to enforce any provisions of the Transaction Documents, then the prevailing party in such Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.
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5.9 Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities for the applicable statute of limitations.
5.10 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.
5.11 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
5.12 Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however, that, in the case of a rescission of an exercise of a Warrant, the applicable Purchaser shall be required to return any Shares and/or Shares subject to any such rescinded exercise notice concurrently with the return to such Purchaser of the aggregate exercise price paid to the Company for such shares and the restoration of such Purchaser’s right to acquire such shares pursuant to such Purchaser’s Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).
5.13 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity but without any requirement to post any surety bond)) associated with the issuance of such replacement Securities.
5.14 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any Proceeding for specific performance of any such obligation the defense that a remedy at law would be adequate.
5.15 Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.
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5.18 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
5.19 Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.
5.20 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature Pages Follow)
13
IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
METRO ONE TELECOMMUNICATIONS, INC. | Address for Notice: | ||
30 North Gould Street, Suite 2990 Sheridan, WY 82801 Attention: Elchanan Maoz, President |
|||
By: | Email: nani@maozeverest.com | ||
Name: Elchanan Maoz | |||
Title: President | |||
With a copy to (which shall not constitute notice): |
Olshan Frome Wolosky LLP
1325 Avenue of the Americas
New York, NY 100019
Attention: Margaret C. Bae
E-Mail: mbae@olshanlaw.com
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGE FOR PURCHASER FOLLOWS]
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[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
Name of Purchaser: ________________________________________________________
Signature of Authorized Signatory of Purchaser: __________________________________
Name of Authorized Signatory: ____________________________________________________
Title of Authorized Signatory: _____________________________________________________
Email Address of Authorized Signatory: _____________________________________________
Facsimile Number of Authorized Signatory: __________________________________________
Address for Notice to Purchaser:
Address for Delivery of Securities to Purchaser (if not same as address for notice):
Subscription Amount: $_____________
Units:
Shares:________________
Warrants: _________________
Social Security/EIN Number: _______________________
[SIGNATURE PAGES CONTINUE]
15
Exhibit A
Form of Warrant
See attached.
16
Exhibit 10.7
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
Date of Issuance | Void after | |
[____________], 2021 | [____________], 2023 |
METRO
ONE TELECOMMUNICATIONS, INC.
WARRANT TO PURCHASE SHARES COMMON STOCK
In connection with and as consideration for the Holder (as defined below) purchasing certain shares of Common Stock pursuant to that certain Common Stock Purchase Agreement (the “Purchase Agreement”), dated as of September 3, 2021, this Warrant is issued to [_____________] or its assigns (the “Holder”) by METRO ONE TELECOMMUNICATIONS, INC., a Delaware corporation (the “Company”).
1. Purchase of Shares.
1.1 Number of Shares. Subject to the terms and conditions set forth herein, the Holder is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the Holder in writing), to purchase from the Company up to an aggregate of [__________] fully paid and nonassessable shares of the Company’s Common Stock (the “Common Stock”).
1.2 Exercise Price. The exercise price for the shares of Common Stock issuable pursuant to this Section 1 (the “Shares”) shall be $0.0975 per share (the “Exercise Price”). The Shares and the Exercise Price shall be subject to adjustment pursuant to Section 5 hereof.
2. Exercise Period. This Warrant shall be exercisable, in whole or in part, during the term commencing on [__________], 2021 and ending at 5:00 p.m. ET on [__________]1, 2022 (the “Exercise Period”).
1 NTD: to be two years from date of issuance.
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3. Method of Exercise.
3.1 While this Warrant remains outstanding and exercisable in accordance with Section 2 above, the Holder may exercise, in whole or in part, the purchase rights evidenced hereby. Such exercise shall be effected by:
(a) the surrender of the Warrant, together with a duly executed copy of the Notice of Exercise attached hereto, to the Secretary of the Company at its principal office (or at such other place as the Company shall notify the Holder in writing); and
(b) the payment to the Company of an amount equal to the aggregate Exercise Price for the number of Shares being purchased.
3.2 Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant is surrendered to the Company as provided in Section 3.1 above.
3.3 As soon as practicable after the exercise of this Warrant in whole or in part, and in any event within twenty (20) days thereafter (such date, the “Share Delivery Date”), the Company at its expense will cause the Shares purchased hereunder to be transmitted by (x) the Company’s transfer agent (the “Transfer Agent”) to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Shares to or resale of the Shares by the Holder or (B) the Shares are eligible for resale by the Holder pursuant to Rule 144, and (y) otherwise by book entry transfer registered in the Company’s share register in the name of the Holder or its designee (or at the request of the Holder, by physical delivery of a certificate, registered in the name of the Holder or its designee), for the number of Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise. The Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price, prior to the issuance of such Shares, having been paid.
3.4 In case such exercise is in part only, the Company shall, at the request of the Holder, issue a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for the number of Shares equal to the number of such Shares described in this Warrant minus the number of such Shares purchased by the Holder upon all exercises made in accordance with Section 3.1 above.
4. Covenants of the Company.
4.1 Notices of Record Date. In the event of any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend which is the same as cash dividends paid in previous quarters and stock dividends) or other distribution, the Company shall provide the Holder, at least ten (10) days prior to such record date, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution.
4.2 Covenants as to Exercise Shares. The Company covenants and agrees that all Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance in accordance with the terms hereof, be validly issued and outstanding, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issuance thereof. The Company further covenants and agrees that the Company will at all times during the Exercise Period, have authorized and reserved, free from preemptive rights, a sufficient number of shares of Common Stock to provide for the exercise of the rights represented by this Warrant. If at any time during the Exercise Period the number of authorized but unissued shares of Common Stock shall not be sufficient to permit exercise of this Warrant, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes.
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5. Adjustment of Exercise Price and Number of Shares. The number and kind of Shares purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows:
5.1 Subdivisions Other Issuances. If the Company shall at any time after the issuance but prior to the expiration of this Warrant subdivide its Common Stock, by split-up or otherwise, or issue additional shares of its Common Stock as a dividend with respect to any shares of its Common Stock, the number of Shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination. Appropriate adjustments shall also be made to the Exercise Price payable per share, but the aggregate Exercise Price payable for the total number of Shares purchasable under this Warrant (as adjusted) shall remain the same. Any adjustment under this Section 5.1 shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend.
5.2 Reclassification, Reorganization and Consolidation. In case of any reclassification, capital reorganization or change in the capital stock of the Company (other than as a result of a subdivision, or stock dividend provided for in Section 5.1 above), then, as a condition of such reclassification, reorganization or change, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities or property receivable in connection with such reclassification, reorganization or change by a holder of the same number and type of securities as were purchasable as Shares by the Holder immediately prior to such reclassification, reorganization or change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities or property deliverable upon exercise hereof, and appropriate adjustments shall be made to the Exercise Price per Share payable hereunder, provided the aggregate Exercise Price shall remain the same.
5.3 Notice of Adjustment. When any adjustment is required to be made in the number or kind of shares purchasable upon exercise of the Warrant, or in the Exercise Price, the Company shall promptly notify the Holder of such event and of the number of Shares or other securities or property thereafter purchasable upon exercise of this Warrant.
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6. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in effect.
7. No Stockholder Rights. Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a stockholder with respect to the Shares, including (without limitation) the right to vote such Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of stockholder meetings, and, except as otherwise provided in this Warrant, such Holder shall not be entitled to any stockholder notice or other communication concerning the business or affairs of the Company. Upon the exercise of the Warrant, if not already a party thereto, the Holder shall execute a joinder to each of the Transaction Documents (as defined in the Purchase Agreement) then in effect, and any other related agreements or instruments as reasonably requested by the Company at such time. If the Holder is already party to the Transaction Documents, the Holder agrees that upon the exercise of the Warrant, the Shares shall be subject to the terms and conditions of the Purchase Agreement in all respects.
8. Transfer of Warrant. Subject to compliance with applicable federal and state securities laws, the last sentence of this Section 8 and any other contractual restrictions between the Company and the Holder contained herein, this Warrant and all rights hereunder are transferable in whole or in part by the Holder to any person or entity upon written notice to the Company; provided, that the Holder shall not make any such transfer to any of the Company’s competitors as such is reasonably determined by the Company. Within a reasonable time after the Company’s receipt of an executed Assignment Form in the form attached hereto, the transfer shall be recorded on the books of the Company upon the surrender of this Warrant, properly endorsed, to the Company at its principal offices. In the event of a partial transfer, the Company shall issue to the new holders one (1) or more appropriate new warrants. Notwithstanding the foregoing, any transfer of this Warrant and any rights hereunder shall be subject to the terms and conditions regarding transfers set forth in the Company’s Bylaws, as amended from time to time.
9. Governing Law. This Warrant shall be governed by and construed under the laws of the State of New York as applied to agreements among New York residents, made and to be performed entirely within the State of New York.
10. Successors and Assigns. The terms and provisions of this Warrant shall inure to the benefit of, and be binding upon, the Company and the holders hereof and their respective successors and assigns.
11. Counterparts. This Warrant 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.
12. Titles and Subtitles. The titles and subtitles used in this Warrant are used for convenience only and are not to be considered in construing or interpreting this Warrant.
13. Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the respective parties at the following addresses (or at such other addresses as shall be specified by notice given in accordance with this Section 13):
4
If to the Company:
METRO
ONE TELECOMMUNICATIONS, INC.
30 North Gould Street, Suite 2990
Sheridan, WY 82801
Attention: Elchanan Maoz, President
If to Holder:
At the address shown on the signature page hereto.
14. Expenses. If any action at law or in equity is necessary to enforce or interpret the terms of this Warrant, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.
15. Entire Agreement; Amendments and Waivers. This Warrant and any other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. Nonetheless, any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Holder; or if this Warrant has been assigned in part, by the holders or rights to purchase a majority of the shares originally issuable pursuant to this Warrant.
16. Severability. If any provision of this Warrant is held to be unenforceable under applicable law, such provision shall be excluded from this Warrant and the balance of the Warrant shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Warrant as of the date first written above.
METRO ONE TELECOMMUNICATIONS, INC. | |||
By: | |||
Name: | Elchanan Maoz | ||
Title: | President |
ACKNOWLEDGED AND AGREED: | ||||||
HOLDER | ||||||
By: | ||||||
Name: | ||||||
Title: |
Address: | |||||
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NOTICE OF EXERCISE
METRO ONE TELECOMMUNICATIONS, INC.
Attention: President
The undersigned hereby elects to purchase, pursuant to the provisions of the Warrant, as follows:
_____________ shares of Common Stock pursuant to the terms of the attached Warrant, and tenders herewith payment in cash of the Exercise Price of such Shares in full.
☐ Check here if requesting delivery via book entry transfer.
☐ Check here if requesting delivery as a certificate to the following name and to the following address:
Issue to: | |
☐ Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows:
DTC Participant: | |
DTC Number: | |
Account Number: |
Date: ___________________ | HOLDER: | ||
By: | |||
Name: | |||
Title: |
Address: | ||
Name in which shares should be registered: | |
7
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
For Value Received, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
Name: | |
(Please Print) | |
Address: | |
(Please Print) | |
Dated: | |
Holder’s
Signature: |
|
Holder’s
Address: |
|
NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant. Officers of corporations and those acting in a fiduciary or other representative capacity should provide proper evidence of authority to assign the foregoing Warrant.
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Exhibit 10.8
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
Date of Issuance | Void after | |
October 1, 2021 |
October 1, 2023 |
METRO
ONE TELECOMMUNICATIONS, INC.
WARRANT TO PURCHASE SHARES COMMON STOCK
This Warrant is issued to CLOS TRADING LTD. or its assigns (the “Holder”) by METRO ONE TELECOMMUNICATIONS, INC., a Delaware corporation (the “Company”).
1. Purchase of Shares.
1.1 Number of Shares. Subject to the terms and conditions set forth herein, the Holder is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the Holder in writing), to purchase from the Company up to an aggregate of 7,791,658 fully paid and nonassessable shares of the Company’s Common Stock (the “Common Stock”).
1.2 Exercise Price. The exercise price for the shares of Common Stock issuable pursuant to this Section 1 (the “Shares”) shall be $0.02567 per share (the “Exercise Price”). The Shares and the Exercise Price shall be subject to adjustment pursuant to Section 5 hereof.
2. Exercise Period. This Warrant shall be exercisable, in whole or in part, during the term commencing on October 1, 2021 and ending at 5:00 p.m. ET on October 1, 2023, (the “Exercise Period”).
1
3. Method of Exercise.
3.1 While this Warrant remains outstanding and exercisable in accordance with Section 2 above, the Holder may exercise, in whole or in part, the purchase rights evidenced hereby. Such exercise shall be effected by:
(a) the surrender of the Warrant, together with a duly executed copy of the Notice of Exercise attached hereto, to the Secretary of the Company at its principal office (or at such other place as the Company shall notify the Holder in writing); and
(b) the payment to the Company of an amount equal to the aggregate Exercise Price for the number of Shares being purchased.
3.2 Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant is surrendered to the Company as provided in Section 3.1 above.
3.3 As soon as practicable after the exercise of this Warrant in whole or in part, and in any event within twenty (20) days thereafter (such date, the “Share Delivery Date”), the Company at its expense will cause the Shares purchased hereunder to be transmitted by (x) the Company’s transfer agent (the “Transfer Agent”) to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Shares to or resale of the Shares by the Holder or (B) the Shares are eligible for resale by the Holder pursuant to Rule 144, and (y) otherwise by book entry transfer registered in the Company’s share register in the name of the Holder or its designee (or at the request of the Holder, by physical delivery of a certificate, registered in the name of the Holder or its designee), for the number of Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise. The Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price, prior to the issuance of such Shares, having been paid.
3.4 In case such exercise is in part only, the Company shall, at the request of the Holder, issue a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for the number of Shares equal to the number of such Shares described in this Warrant minus the number of such Shares purchased by the Holder upon all exercises made in accordance with Section 3.1 above.
4. Covenants of the Company.
4.1 Notices of Record Date. In the event of any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend which is the same as cash dividends paid in previous quarters and stock dividends) or other distribution, the Company shall provide the Holder, at least ten (10) days prior to such record date, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution.
4.2 Covenants as to Exercise Shares. The Company covenants and agrees that all Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance in accordance with the terms hereof, be validly issued and outstanding, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issuance thereof. The Company further covenants and agrees that the Company will at all times during the Exercise Period, have authorized and reserved, free from preemptive rights, a sufficient number of shares of Common Stock to provide for the exercise of the rights represented by this Warrant. If at any time during the Exercise Period the number of authorized but unissued shares of Common Stock shall not be sufficient to permit exercise of this Warrant, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes.
2
5. Adjustment of Exercise Price and Number of Shares. The number and kind of Shares purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows:
5.1 Subdivisions Other Issuances. If the Company shall at any time after the issuance but prior to the expiration of this Warrant subdivide its Common Stock, by split-up or otherwise, or issue additional shares of its Common Stock as a dividend with respect to any shares of its Common Stock, the number of Shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination. Appropriate adjustments shall also be made to the Exercise Price payable per share, but the aggregate Exercise Price payable for the total number of Shares purchasable under this Warrant (as adjusted) shall remain the same. Any adjustment under this Section 5.1 shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend.
5.2 Reclassification, Reorganization and Consolidation. In case of any reclassification, capital reorganization or change in the capital stock of the Company (other than as a result of a subdivision, or stock dividend provided for in Section 5.1 above), then, as a condition of such reclassification, reorganization or change, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities or property receivable in connection with such reclassification, reorganization or change by a holder of the same number and type of securities as were purchasable as Shares by the Holder immediately prior to such reclassification, reorganization or change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities or property deliverable upon exercise hereof, and appropriate adjustments shall be made to the Exercise Price per Share payable hereunder, provided the aggregate Exercise Price shall remain the same.
5.3 Notice of Adjustment. When any adjustment is required to be made in the number or kind of shares purchasable upon exercise of the Warrant, or in the Exercise Price, the Company shall promptly notify the Holder of such event and of the number of Shares or other securities or property thereafter purchasable upon exercise of this Warrant.
3
6. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in effect.
7. No Stockholder Rights. Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a stockholder with respect to the Shares, including (without limitation) the right to vote such Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of stockholder meetings, and, except as otherwise provided in this Warrant, such Holder shall not be entitled to any stockholder notice or other communication concerning the business or affairs of the Company. Upon the exercise of the Warrant, if not already a party thereto, the Holder shall execute a joinder to each of the Transaction Documents (as defined in the Purchase Agreement) then in effect, and any other related agreements or instruments as reasonably requested by the Company at such time. If the Holder is already party to the Transaction Documents, the Holder agrees that upon the exercise of the Warrant, the Shares shall be subject to the terms and conditions of the Purchase Agreement in all respects.
8. Transfer of Warrant. Subject to compliance with applicable federal and state securities laws, the last sentence of this Section 8 and any other contractual restrictions between the Company and the Holder contained herein, this Warrant and all rights hereunder are transferable in whole or in part by the Holder to any person or entity upon written notice to the Company; provided, that the Holder shall not make any such transfer to any of the Company’s competitors as such is reasonably determined by the Company. Within a reasonable time after the Company’s receipt of an executed Assignment Form in the form attached hereto, the transfer shall be recorded on the books of the Company upon the surrender of this Warrant, properly endorsed, to the Company at its principal offices. In the event of a partial transfer, the Company shall issue to the new holders one (1) or more appropriate new warrants. Notwithstanding the foregoing, any transfer of this Warrant and any rights hereunder shall be subject to the terms and conditions regarding transfers set forth in the Company’s Bylaws, as amended from time to time.
9. Governing Law. This Warrant shall be governed by and construed under the laws of the State of New York as applied to agreements among New York residents, made and to be performed entirely within the State of New York.
10. Successors and Assigns. The terms and provisions of this Warrant shall inure to the benefit of, and be binding upon, the Company and the holders hereof and their respective successors and assigns.
11. Counterparts. This Warrant 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.
12. Titles and Subtitles. The titles and subtitles used in this Warrant are used for convenience only and are not to be considered in construing or interpreting this Warrant.
13. Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the respective parties at the following addresses (or at such other addresses as shall be specified by notice given in accordance with this Section 13):
4
If to the Company:
METRO
ONE TELECOMMUNICATIONS, INC.
30 North Gould Street, Suite 2990
Sheridan, WY 82801
Attention: Elchanan Maoz, President
If to Holder:
At the address shown on the signature page hereto.
14. Expenses. If any action at law or in equity is necessary to enforce or interpret the terms of this Warrant, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.
15. Entire Agreement; Amendments and Waivers. This Warrant and any other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. Nonetheless, any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Holder; or if this Warrant has been assigned in part, by the holders or rights to purchase a majority of the shares originally issuable pursuant to this Warrant.
16. Severability. If any provision of this Warrant is held to be unenforceable under applicable law, such provision shall be excluded from this Warrant and the balance of the Warrant shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Warrant as of the date first written above.
METRO ONE TELECOMMUNICATIONS, INC. | |||
By: | |||
Name: | Elchanan Maoz | ||
Title: | President |
ACKNOWLEDGED AND AGREED: | ||||||
HOLDER – CLOS TRADING LTD. |
||||||
By: | ||||||
Name: | ||||||
Title: |
Address: |
Ofek Building
|
||||
Hamenofim Street 8 | |||||
Herzeliya, Israel |
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NOTICE OF EXERCISE
METRO ONE TELECOMMUNICATIONS, INC.
Attention: President
The undersigned hereby elects to purchase, pursuant to the provisions of the Warrant, as follows:
_____________ shares of Common Stock pursuant to the terms of the attached Warrant, and tenders herewith payment in cash of the Exercise Price of such Shares in full.
☐ Check here if requesting delivery via book entry transfer.
☐ Check here if requesting delivery as a certificate to the following name and to the following address:
Issue to: | |
☐ Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows:
DTC Participant: | |
DTC Number: | |
Account Number: |
Date: ___________________ | HOLDER: | ||
By: | |||
Name: | |||
Title: |
Address: | ||
Name in which shares should be registered: | |
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ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
For Value Received, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
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NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant. Officers of corporations and those acting in a fiduciary or other representative capacity should provide proper evidence of authority to assign the foregoing Warrant.
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Gries & Associates, LLC
Certified Public Accountants
501 S. Cherry Street Ste 1100
Denver, Colorado 80246
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Denver, Colorado
February 10, 2022
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(1) | Each Unit consists of one Share of Common Stock, no par value, and 1 Common Share Purchase Warrant for each for 4 shares of Common Stock purchased as part of this Offering. | |
(2) | Consists of shares underlying warrants issued to CLOS Trading, Ltd. | |
(3) | Consists of shares sold pursuant to our 2021 private investment in public equity (“PIPE”) offering. | |
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Consists of shares underlying warrants associated with the PIPE offering. | |
(5) | Consists of shares of common stock issued pursuant to our offering related to simple agreements for future equity (“SAFE”). | |
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Consists Of 18,975,000 shares of which 13,313,062 are held by Everest Credit, LP. And 5,661,938 are held by Everest Corporate Finance Ltd.
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(7) | Consists of 22,647,751 shares of common stock held by Yaron Elhawi Tr Ua 02/01/2021 Yaron Elhawi Trust Royal App Ltd. in Liquidation, issued as part of our acquisition of Royal App, Ltd. |