-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NcLBOYovMv4ZEQIcb0z+2t5SXyHVDTfkKx49VxS6z73DWOivg5EzjllnBjCL5RXq GE3PVgFWCLCVtZKgx5A02Q== 0000910662-01-500007.txt : 20010502 0000910662-01-500007.hdr.sgml : 20010502 ACCESSION NUMBER: 0000910662-01-500007 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20010501 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PARADIGM GEOPHYSICAL LTD CENTRAL INDEX KEY: 0000931131 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-55079 FILM NUMBER: 1618418 BUSINESS ADDRESS: STREET 1: GAV-YAM CENTER NO.3 STREET 2: 9 SHENKAR STREET CITY: ISRAEL STATE: L3 ZIP: 46120 BUSINESS PHONE: 2818763473 MAIL ADDRESS: STREET 1: TWO ALLEN CENTER STREET 2: 1200 SMITH STREET STE 2100 CITY: HOUSTON STATE: TX ZIP: 77002 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MASHOV COMPUTERS LTD CENTRAL INDEX KEY: 0000937407 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 5 HAPLADA ST STREET 2: OR YEHUDA CITY: ISRAEL STATE: L3 ZIP: 60218 MAIL ADDRESS: STREET 1: 5 HAPLADA ST STREET 2: OR YEHUDA CITY: ISRAEL STATE: L3 ZIP: 60218 SC 13D 1 sch13d.txt PARADIGMGEOPHYSICAL-ISSUER/MASHOVCOMPUTERS-FILER UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 PARADIGM GEOPHYSICAL LTD. ------------------------- (Name of Issuer) Ordinary Shares par value NIS 0.5 per share ------------------------------------------- (Title of Class of Securities) 69900J104 ----------- (CUSIP Number) Steven J. Glusband, Esq. Carter, Ledyard & Milburn 2 Wall Street, New York, New York 10005 (212) 732-3200 ---------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) April 20, 2001 ---------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [ ]. Note: Schedules filed in paper format will include a signed original and five copies of the schedule, including all exhibits. See ss. 240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page will be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page will not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but will be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 69900J104 1 NAME OF REPORTING PERSON: MASHOV COMPUTERS LTD. S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: None 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS: WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e): [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION: Israel NUMBER OF 7 SOLE VOTING POWER: 1,590,406 Ordinary Shares SHARES BENE- FICIALLY 8 SHARED VOTING POWER: -0- OWNED BY EACH 9 SOLE DISPOSITIVE POWER: 1,590,406 Ordinary Shares REPORTING PERSON WITH 10 SHARED DISPOSITIVE POWER: -0- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 1,590,406 Ordinary Shares 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 10.9% of the outstanding equity securities 14 TYPE OF REPORTING PERSON: CO -2- Item 1. Security and Issuer. The class of equity securities to which this Statement relates is the Ordinary Shares, par value NIS 0.5 per share (the "Ordinary Shares" or "Shares"), of Paradigm Geophysical Ltd. an Israeli corporation (the "Issuer"). The principal executive offices of the Issuer are located at Gav- Yam No. 3, 9 Shenkar Street, Herzlia B 46120 Israel. Item 2. Identity and Background. This Statement is filed by Mashov Computers Ltd. ("Mashov Computers"), a corporation formed under the laws of the State of Israel. The ordinary shares of Mashov Computers are publicly traded on the Tel Aviv Stock Exchange. Mashov's principal business, which it engages in through its affiliates, is the development of proprietary software products. The address of Mashov's principal business and principal office, and the business address of its executive officers listed below, is 3 Hagalim Boulevard, Herzlia, Israel 46766. Following is information concerning each executive officer and director of Mashov Computers: 1. Name: David Assia Position with Mashov Computers: Chairman and Director Present Principal Occupation: Vice Chairman, Magic Software Enterprises Ltd., 5 HaPlada Street, Or-Yehuda, Israel 60218 Business Address: 5 HaPlada Street, Or-Yehuda, Israel 60218 Citizenship: Israeli 2. Name: Bruria Gross-Prushansky - 3 - Position with Mashov Computers: Secretary Present Principal Occupation: Counsel, Formula Systems (1985) Ltd. 3 Hagalim Boulevard, Herzlia, Israel 46766 Business Address: 3 Hagalim Boulevard, Herzlia, Israel 46766 Citizenship: Israeli 3. Name: Danny Goldstein Position with Mashov Computers: Director Present Principal Occupation: Chairman and CEO, Formula Systems (1985) Ltd. 3 Hagalim Boulevard, Herzlia, Israel 46766 Business Address: 3 Hagalim Boulevard, Herzlia, Israel 46766 Citizenship: Israeli 4. Name: Gadi Goldstein Position with Mashov Computers: Director Present Principal Occupation: President, Formula Systems (1985) Ltd. 3 Hagalim Boulevard, Herzlia, Israel 46766 Business Address: 3 Hagalim Boulevard, Herzlia, Israel 46766 Citizenship: Israeli 5. Name: Yoram Alster Position with Mashov Computers: Director Present Principal Occupation: Consultant Residence Address: 9 Sinai Street, Ramat Hasharon, Israel Citizenship: Israeli - 4 - 6. Name: Amir Geva Position with Mashov Computers: Director Present Principal Occupation: Consultant Residence Address: 4 Hameiasdim Street, Kfar Sava, Israel Citizenship: Israeli During the past five years, neither Mashov Computers nor (to the best knowledge of Mashov Computers) any of its executive officers or directors listed above has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (ii) a party to a civil proceeding of judicial or administrative body of competent jurisdiction, as a result of which proceeding it or he was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, United States federal or State, or Israeli, securities laws, or finding of any violation with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration. On April 20, 2001, pursuant to a Stock Purchase Agreement among Mashov Computers, Oscar Gruss & Son Incorporated, a New York corporation, and Certain Shareholders of Mashov Gruss Investments Ltd., an Israeli corporation (the "Selling Shareholders") (the "Stock Purchase Agreement"), Mashov Computers acquired all of the capital stock of Mashov Gruss Investments Ltd. not already owned by Mashov Computers. On April 20, 2001, Mashov Gruss Investments Ltd. held 1,497,766 Ordinary Shares of the Issuer. Consequently, Mashov Computers indirectly acquired 1,497,766 Ordinary Shares of the Issuer. The Stock Purchase Agreement and all - 5 - exhibits thereto are being filed herewith as Exhibit 1 to this Statement and are hereby incorporated herein by reference. Prior to the transaction, Mashov Computers owned 200,000 Ordinary Shares of the Issuer. Pursuant to the Stock Purchase Agreement, Mashov Computers paid the Selling Shareholders one of two forms of consideration, according to the choice of the Selling Shareholders. The first form of consideration was cash consideration in the aggregate amount of $1,906,108; the second form of consideration was Ordinary Shares of the Issuer in the aggregate amount of 107,360 Shares. Thus, after giving effect to the transaction, Mashov Computers holds (directly and indirectly) a total of 1,590,406 Ordinary Shares of the Issuer. All of the funds used in making the purchases stated in Item 5 below were from working capital. Item 4. Purpose of Transaction. The 1,497,766 Ordinary Shares indirectly acquired by Mashov Computers were acquired for investment purposes. Neither Mashov Computers nor any person named in Item 2 of this Statement (in his or her capacity as a director or officer of Mashov Computers) has any plan or proposal, directly or indirectly, which relates to or would result in: (a) the acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer; - 6 - (b) an extraordinary corporate transaction, such as a merger, reorganization, or liquidation, involving the Issuer or any of its subsidiaries; (c) a sale or transfer of a material amount of the assets of the Issuer or any of its subsidiaries; (d) any change in the present board of directors or management of the Issuer, including any plan or proposal to change the number or term of directors or to fill any existing vacancies on the board; (e) any material change in the present capitalization or dividend policy of the Issuer; (f) any other material change in the Issuer's business or corporate structure; (g) changes in the Issuer's charter or by-laws or other actions which may impede the acquisition of control of the Issuer by any person; (h) a class of securities of the Issuer being delisted from a national securities exchange or ceasing to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; - 7 - (i) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934; or (j) any action similar to any of those enumerated above. Item 5. Interest in Securities of the Issuer. (a) and (b) Mashov Computers is the beneficial owner of 1,590,406 Ordinary Shares which represents approximately 10.9% of the outstanding equity securities of the Issuer. Mashov Computers will have the power to vote and dispose of such Ordinary Shares and will not share power to vote or dispose of any its interests in the Issuer. To the best knowledge of Mashov Computers, none of its directors or officers is the beneficial owner of any interest in the Issuer. (c) Mashov Computers has not effected any transactions in the Ordinary Shares of the Issuer since February 20, 2001. To Mashov Computers' best knowledge, the only transaction in the Issuer's Ordinary Shares, effected by any of its officers or directors since February 20, 2001, was performed by the Chairman of Mashov Computers Board of Directors, Mr. David Assia. In the month of March 2001, Mr. Assia sold a total of 25,000 Ordinary Shares of the Issuer for an average price of $5.25 per share. Pursuant to these transactions, Mr. Assia ceased to be a beneficial owner of the Issuer or hold any interest therein. (d) Not applicable. - 8 - (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. None. Item 7. Material to be Filed as Exhibits. Exhibit 1: Stock Purchase Agreement dated April 20, 2001 among Mashov Computers Ltd., Oscar Gruss & Son Incorporated and Certain Shareholders of Mashov Gruss Investments Ltd. - 9 - SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the undersigned certifies that the information set forth in this Statement is true, complete and correct. Date: May 1, 2001 MASHOV COMPUTERS LTD. /s/David Assia -------------- By: David Assia, Chairman - 10 - EX-99.1 2 ex1sch13d.txt STOCK PURCHASE AGREEMENT Exhibit 1 ================================================================================ STOCK PURCHASE AGREEMENT among MASHOV COMPUTERS LTD., OSCAR GRUSS & SON INCORPORATED and CERTAIN SHAREHOLDERS OF MASHOV GRUSS INVESTMENTS LTD. ----------------------------------- Dated as of April 20, 2001 ================================================================================ STOCK PURCHASE AGREEMENT ------------------------ STOCK PURCHASE AGREEMENT, dated as of April 20, 2001 ("the Agreement"), among Oscar Gruss & Son Incorporated, a New York corporation ("Gruss"), certain shareholders of Mashov Gruss Investments Ltd., a corporation incorporated in the State of Israel (the "Company"), listed on Schedule 2.02 hereto (collectively with Gruss, the "Selling Shareholders"), and Mashov Computers Ltd., a corporation incorporated in the State of Israel ("Buyer"). SUMMARY OF TRANSACTION ---------------------- The outstanding capital stock of the Company consists of 104 ordinary shares, par value NIS 1.00 per share, of which Buyer holds 51 shares, the Selling Shareholders hold, in the aggregate, 52 shares, and Jonathan Sherman (as trustee) holds 1 share. The Company holds 1,497,766 ordinary shares, par value NIS 0.5 per share, of Paradigm Geophysical Ltd., a corporation incorporated in the State of Israel ("Paradigm"). Buyer desires to purchase, and the Selling Shareholders desire to transfer and sell to Buyer, all of the ordinary shares of the Company held by the Selling Shareholders, upon the terms and subject to the satisfaction of the conditions set forth in this Agreement. In consideration of the foregoing, Buyer will transfer to the Selling Shareholders, at the election of each Selling Shareholder, either ordinary shares of Paradigm, or cash, or a combination thereof. In connection with this Agreement, each Selling Shareholder other than Gruss is executing and delivering (i) a Letter of Transmittal and Custody Agreement ("Custody Agreement") which includes, among other things, the election of such Selling Shareholder to receive either Paradigm shares, or cash, or a combination thereof; and (ii) a Power of Attorney which, among other things, authorizes Jonah Meer to sell the shares of the Company held by such Selling Shareholder. To effect such purchase and sale and in consideration of the mutual covenants, representations, warranties and agreements hereinafter set forth, and intending to be legally bound hereby, the parties hereto agree as follows: ARTICLE I SALE OF STOCK AND TERMS OF PAYMENT ---------------------------------- 1.01 The Sale. Upon the terms and subject to the satisfaction of the conditions contained in this Agreement, at the Closing (as hereinafter defined), the Selling Shareholders will sell, assign, transfer and deliver to Buyer, and Buyer will purchase and acquire from the Selling Shareholders, an aggregate of 52 ordinary shares, par value NIS 1.00 per share, of the Company (the "Transferred Company Shares"). 1.02 Consideration. Subject to Section 1.05, upon the terms and subject to the satisfaction of the conditions contained in this Agreement, in consideration of the aforesaid sale, assignment, transfer and delivery of the Transferred Company Shares, Buyer, at the election of each Selling Shareholder, either (a) will pay to such Selling Shareholder an amount of cash, in United States dollars (rounded down to the nearest penny), equal to the product of (i) the number of Transferred Company Shares sold, assigned and delivered to Buyer by such Selling Shareholder, multiplied by (ii) the Conversion Ratio (as defined below), multiplied by (iii) US$5.125 per share, and multiplied by (iv) the Tax Adjustment Ratio (as defined below); or (b) subject to Section 1.03, will sell, assign, transfer and deliver to such Selling Shareholder a number of ordinary shares, par value NIS 0.5 per share, of Paradigm ("Transferred Paradigm Shares") equal to the product of (i) the number of Transferred Company Shares sold, assigned and delivered to Buyer by such Selling Shareholder, multiplied by (ii) the Conversion Ratio, multiplied by (iii) the Tax Adjustment Ratio; or (c) such combination of cash, calculated in accordance with clause (a) above, and Transferred Paradigm Shares, calculated in accordance with clause (b) above, as shall be requested by such Selling Shareholder and shall correspond to the total number of Transferred Company Shares transferred by such Selling Shareholder. As used herein, the "Conversion Ratio" is 14,401.59615 (the number of Paradigm shares held by the Company divided by the number of Company shares outstanding) and the "Tax Adjustment Ratio" is 0.64. (The Tax Adjustment Ratio is intended to pass through to the Selling Shareholders the consequences to the Company, under the income tax laws of Israel, of the transactions contemplated by this Agreement.) Transferred Paradigm Shares may be delivered to Selling Shareholders no later than the fifth trading day following the Closing. 1.03 No fractional shares. Buyer will not transfer fractional Transferred Paradigm Shares under this Agreement. Each Selling Shareholder who otherwise would have been entitled to receive a fraction of a Transferred Paradigm Share will instead be entitled to receive an amount of cash, paid by check, calculated as the product of such fraction multiplied by US$5.125, rounded down to the nearest penny. 1.04 Withholding taxes. Each Selling Shareholder acknowledges and agrees that, if such Selling Shareholder is transferring a number of Transferred Company Shares that equals or exceeds 10% of the total number of shares of the Company outstanding, Buyer may withhold the consideration otherwise payable under Sections 1.02 and 1.03 to the extent required by applicable law. 1.05 J Broker Commission. Each Selling Shareholder hereby instructs and directs Buyer to pay to J Broker LLC in cash a portion of the consideration payable to such Selling Shareholder pursuant to Section 1.02, equal to the product of (i) the number of Transferred Company Shares sold, assigned and delivered to Buyer by such Selling Shareholder, multiplied by (ii) the Conversion Ratio, multiplied by (iii) the Tax Adjustment Ratio, multiplied by (iv) US$0.05. - 2 - ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS --------------------------- As an inducement to Buyer to enter into this Agreement, each Selling Shareholder (except with respect to Section 2.05, which is made only by Gruss) hereby represents and warrants to Buyer that as of the date hereof and as of the Closing Date: 2.01 Organization; Qualification. If such Selling Shareholder is a corporation, trust, limited partnership, limited liability company or other entity, the Selling Shareholder is duly organized, validly existing and in good standing under the laws of its place of formation. 2.02 Title to Stock. Each Selling Shareholder owns and at the Closing will own the Transferred Company Shares set forth opposite the name of such Selling Shareholder on Schedule 2.02 hereto, free and clear of all pledges, security interests, liens, charges, or other encumbrances ("Liens") or limitations affecting its ability to vote the Transferred Company Shares or to transfer the Transferred Company Shares to Buyer. At the Closing each Selling Shareholder will transfer, assign and deliver good title to the Transferred Company Shares to Buyer, free and clear of all Liens. 2.03 Authority Relative to this Agreement. The Selling Shareholder has full legal power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Selling Shareholder and constitutes a valid and binding obligation of the Selling Shareholder, enforceable against it in accordance with its terms. 2.04 Consents and Approvals; No Violation. Neither the execution and delivery of this Agreement nor the consummation of the other transactions contemplated by this Agreement will (a) conflict with or result in any breach of any provision of the Certificate of Incorporation or By-Laws (or other similar governing documents) of the Selling Shareholder, (b) require any consent, approval, authorization or permit of, or filing with or notification to, any governmental or regulatory authority other than those that have been made or obtained; (c) to the best knowledge of the Selling Shareholder, result in a default (or give rise to any right of termination, cancellation or acceleration) under the terms, conditions or provisions of any note, bond, mortgage, indenture, license, agreement or other instrument or obligation to which the Selling Shareholder is a party or by which the Selling Shareholder or any of its assets may be bound, except for such defaults (or rights of termination, cancellation or acceleration) as to which requisite waivers or consents have been obtained; (d) to the best knowledge of such Selling Shareholder, result in the creation of any encumbrance, security interest, equity or right of others upon any of the properties or assets of the Selling Shareholder or under the terms, conditions or provisions of any agreement, instrument or obligation to which the Selling Shareholder or any of its assets may be bound or affected; or - 3 - (e) violate any order, writ, injunction, decree, law, statute, rule or regulation applicable to the Selling Shareholder or any of its assets. 2.05 Transferred Company Shares. Gruss represents and warrants that the Registration Company of Israel Bank Discount Ltd. (Street Name) is the record holder of all of the Transferred Company Shares and that Schedule 2.02 is a complete and accurate list of all persons who are beneficial holders of the Transferred Company Shares through the Registration Company of Israel Bank Discount Ltd. (Street Name). 2.06 Full Disclosure. No representation or warranty of the Selling Shareholder and no information, Schedule or certificate furnished or to be furnished by or on behalf of the Selling Shareholder to Buyer, its affiliates or its agents pursuant to or in connection with this Agreement contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary in order to make the statements contained herein or therein not misleading. ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER --------------------------------------- Buyer represents and warrants to each Selling Shareholder as follows: 3.01 Organization; Qualification. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Israel. 3.02 Title to Stock. Buyer represents that it owns and at the Closing will own the Transferred Paradigm Shares free and clear of all Liens or limitations affecting its ability to vote such Transferred Paradigm Shares or to transfer the Transferred Paradigm Shares to the Selling Shareholders. At the Closing Buyer will transfer, assign and deliver good title to Transferred Paradigm Shares to each Selling Shareholder who has elected to receive Transferred Paradigm Shares pursuant to Section 1.02, free and clear of all Liens. 3.03 Authority Relative to this Agreement. Buyer represents and warrants (a) that it has full legal power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby and (b) that this Agreement has been duly and validly executed and delivered by Buyer and constitutes the valid and binding obligation of Buyer, enforceable against it in accordance with its terms. 3.04 Consents and Approvals; No Violation. Neither the execution and delivery of this Agreement by Buyer, the transfer by Buyer to the Selling Shareholder of the Transferred Paradigm Shares nor the consummation of the other transactions contemplated by this Agreement will (a) conflict with or result in any breach of any provision of the Certificate of Incorporation or By-Laws (or other similar governing documents) of the Buyer, (b) require - 4 - any consent, approval, authorization or permit of, or filing with or notification to, any governmental or regulatory authority other than those that have been made or obtained; (c) to the best of Buyer's knowledge, result in a default (or give rise to any right of termination, cancellation or acceleration) under the terms, conditions or provisions of any note, bond, mortgage, indenture, license, agreement or other instrument or obligation to which the Buyer is a party or by which the Buyer or any of its assets may be bound, except for such defaults (or rights of termination, cancellation or acceleration) as to which requisite waivers or consents have been obtained; (d) to the best of Buyer's knowledge, result in the creation of any encumbrance, security interest, equity or right of others upon any of the properties or assets of Buyer under the terms, conditions or provisions of any agreement, instrument or obligation to which Buyer or any of its assets may be bound or affected; or (e) violate any order, writ, injunction, decree, law, statute, rule or regulation applicable to Buyer or any of its assets. 3.05 Securities Act Representations. Buyer is an Accredited Investor and is acquiring the Transferred Company Shares for its own account for investment purposes and not on behalf of, or with a view to a distribution to, any other person. 3.06 Full Disclosure. No representation or warranty of Buyer and no information, Schedule or certificate furnished or to be furnished by or on behalf of Buyer, its affiliates their affiliates or agents pursuant to or in connection with this Agreement contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary in order to make the statements contained herein or therein not misleading. ARTICLE IV THE CLOSING AND CERTAIN CLOSING DELIVERIES ------------------------------------------ 4.01 Time and Place of Closing. Upon the terms and subject to satisfaction or waiver of the conditions contained in this Agreement, the closing of the transactions contemplated by this Agreement (the "Closing") will take place as of the close of business on April 20, 2001, or on such other date on which the parties hereto agree, at the offices of Carter, Ledyard & Milburn, counsel for Buyer, or at such other place or time as the parties may agree in writing. The effective time of the Closing is hereinafter referred to as the "Closing Date." 4.02 Deliveries by the Selling Shareholders. At the Closing, the Selling Shareholders will deliver to Buyer the following: (a) One Affidavit and Indemnity Agreement, in the form attached as an exhibit to the Custody Agreement, completed and signed on behalf of each Selling Shareholder, and notarized. - 5 - (b) One Custody Agreement and one Power of Attorney, fully completed and signed on behalf of each Selling Shareholder, except Gruss; and (c) Resignations, dated the Closing Date, of the directors of the Company who had been nominated by the Selling Shareholders. 4.03 Payment of cash by Buyer. At the Closing, Buyer will deliver the cash portion of the consideration pursuant to Section 1.02 by sending a check, or making a wire transfer, to each Selling Shareholder in the manner specified in the Custody Agreement of such Selling Shareholder (or, in the case of Gruss, in a comparable written instruction of Gruss). ARTICLE V POST-CLOSING COVENANTS ---------------------- 5.01 Payment of Transferred Paradigm Shares by Buyer. No later than the seventh trading day after the Closing, Buyer will deliver the Transferred Paradigm Shares pursuant to Section 1.02 by sending share certificates to the Selling Shareholders in the manner specified in the Custody Agreement of each Selling Shareholder (or, in the case of Gruss, in a comparable written instruction of Gruss). The share certificates delivered to the Selling Shareholders shall not bear any restrictive legend under the Securities Act of 1933. 5.02 Expenses. Except as otherwise provided herein, the Selling Shareholders and Buyer each shall bear their own costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby and thereby. Buyer shall be responsible for the fees, commissions, expenses and reimbursements incurred by or required to be paid to its professional advisors and the Selling Shareholders shall be responsible for the fees, commissions, expenses and reimbursements incurred by or required to be paid their respective professional advisors. 5.03 Further Assurances. Subject to the terms and conditions of this Agreement, Buyer and the Selling Shareholders will use all reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the sale of the Transferred Company Shares and the Transferred Paradigm Shares and the other transactions contemplated by this Agreement. From time to time after the date hereof (including after the Closing Date if requested), Buyer and the Selling Shareholders will, at their own expense and without further consideration, execute and deliver to each other such documents as such party may reasonably request in order more effectively to vest in such party good title to the Transferred Company Shares and the Transferred Paradigm Shares, as the case may be, and to more effectively consummate the transactions contemplated by this Agreement. - 6 - 5.04 Public Announcements. Except as otherwise required by law or by the rules of any stock exchange, Buyer and the Selling Shareholders agree that none of them will issue any press releases or other statements with respect to this Agreement, or the transactions contemplated hereby and thereby, without consulting with each other before issuing any press release or otherwise making any public statement with respect to this Agreement and the transactions contemplated hereby and neither the Selling Shareholders nor Buyer shall issue any such press release or make any such public statement prior to such consultation. Gruss shall represent the Selling Shareholders for the purposes of the consultations required by this Section 5.04. 5.05 Commissions and Fees. The Selling Shareholders and Buyer each represent and warrant to the other that no broker, finder, financial adviser or other person is entitled to any brokerage fees, commissions or finder's fees in connection with the transactions contemplated hereby by reason of any action taken by the party making such representation, except as provided in Section 1.05. The Selling Shareholders, jointly and severally, and Buyer will pay to the other or otherwise discharge, and will indemnify and hold the other harmless from and against, any and all claims or liabilities for all brokerage fees, commissions and finder's fees incurred by reason of any action taken by such party. 5.06 Securities Act Restrictions. Buyer acknowledges that the Transferred Company Shares have not been registered for resale by Buyer pursuant to the Securities Act and agrees that Buyer shall not resell, convey or otherwise transfer the Transferred Company Shares except pursuant to an effective registration statement under the Securities Act or an applicable exemption from the registration requirements thereof. 5.07 Indemnification. (a) Gruss agrees to save, defend and indemnify Buyer, its directors, officers, advisors and agents, against and hold them harmless from any and all claims, liabilities, losses, costs and expenses, of every kind, nature and description, fixed or contingent ("Losses")(including, but not limited to, reasonable counsel's fees and expenses in connection with any action, claim or proceeding relating thereto or seeking enforcement of the obligations of Gruss hereunder or under the Custody Agreement), arising out of any breach of any breach of the duties of Gruss as custodian under the Custody Agreement. (b) Buyer agrees to save, defend and indemnify Gruss, its directors, officers, advisors and agents, against and hold them harmless from any and all Losses (including, but not limited to, reasonable counsel's fees and expenses in connection with any action, claim or proceeding relating thereto or seeking enforcement of the obligations of Buyer hereunder) arising out of any breach of any representation, warranty, covenant or agreement made by Buyer under this Agreement. - 7 - ARTICLE VI MISCELLANEOUS PROVISIONS ------------------------ 6.01 Amendment and Modification. This Agreement may be amended, modified or supplemented only by a written instrument executed by the parties hereto. 6.02 Waiver of Compliance. Except as otherwise provided in this Agreement, any failure of Buyer or Selling Shareholder to comply with any obligation, covenant, agreement or condition herein may be waived by the party entitled to the benefits thereof only by a written instrument signed by the party granting such waiver, but any such waiver, or the failure to insist upon strict compliance with any obligation, covenant, agreement or condition herein, shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure or breach. 6.03 Survival. Each and every representation, warranty, covenant and agreement contained in this Agreement or in any document delivered pursuant to or in connection with this Agreement shall survive the Closing and shall not be affected by any investigation made by any party. 6.04 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by facsimile transmission or mailed by reputable overnight delivery service or by registered or certified mail (return receipt requested), postage prepaid, to the parties at the following addresses (or at such other address as any party shall specify by like notice; provided that notices of a change of address shall be effective only upon receipt thereof): (a) if to the Selling Shareholders to: Oscar Gruss & Son Incorporated 74 Broad Street New York, New York 10004 Attention: Mr. Michael Shaoul, Executive Vice President Phone No.: 212-952-1100 Fax No.: 212-747-0147 with a copy to: Jonah Meer, Esq. 1488 E. 27th Street Brooklyn, New York 11210 Phone No.: 212-771-1010 Fax No.: 508-629-0074 - 8 - (b) if to Buyer to: Mashov Computers Ltd. 3 Haplada Street Or-Yehuda, 60218 Israel Attention: Mr. Roy Machnes Phone No.: 011-972-3-5389 201 Fax No.: 011-972-3-5389 393 with a copy to: Carter, Ledyard & Milburn 2 Wall Street New York, New York 10005 Attention: Steven J. Glusband, Esq. Phone No.: 212-732-3200 Telecopier No.: 212-732-3232 6.05 Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, personal representatives, successors and permitted assigns, but neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by either party hereto without the prior written consent of the other party. Any purported assignment in violation of the provisions hereof shall be void. 6.06 Governing Law. This Agreement shall be governed by the laws of the State of New York (without regard to the conflict of laws principles thereof) as to all matters, including but not limited to matters of validity, construction, effect, performance and remedies. 6.07 Arbitration. Any dispute, controversy or claim arising out of or relating to this Agreement or the transactions contemplated hereby shall be settled and finally determined by arbitration in New York, New York, or at such other location as the parties may agree, in accordance with the Commercial Arbitration Rules of the American Arbitration Association in force at the time of such arbitration. Judgment upon any award rendered by such an arbitration may be rendered in any court having jurisdiction. All fees and charges of the American Arbitration Association and of the arbitrators and all arbitration-related costs of the parties shall be borne as the arbitrators shall determine in their award. 6.08 Counterparts. This Agreement may be executed in any number of counterparts, and by either party on separate counterparts, each of which as so executed and delivered shall be deemed an original, but all of which together shall constitute one and the same instrument, - 9 - and it shall not be necessary in making proof of this Agreement as to any party hereto to produce or account for more than one such counterpart executed and delivered by such party. 6.09 Entire Agreement. This Agreement including the schedules, exhibits, documents, certificates and instruments referred to herein and therein, embody the entire agreement and understanding of the parties hereto in respect of the transactions contemplated by this Agreement and supersede all prior agreements and understandings between the parties with respect thereto. 6.10 Specific Performance. (a) Each Selling Shareholder acknowledges that, in view of the uniqueness of the business of the Company and the transactions contemplated hereby, Buyer may not have an adequate remedy at law for money damages in the event that this Agreement with respect to the sale and delivery of the Transferred Company Shares has not been performed in accordance with its terms by such Selling Shareholder and therefore such Selling Shareholder agrees that Buyer shall be entitled to specific enforcement of the terms hereof with respect to the sale, transfer and delivery of the consideration contemplated by Section 1.02 of this Agreement and the other transactions contemplated hereby in the event of breach by such Selling Shareholder in addition to any other remedy to which such party may be entitled, at law or in equity, for such breach. - 10 - IN WITNESS WHEREOF, this Agreement has been duly executed on behalf of the parties hereto as of the date first above written. MASHOV COMPUTERS LTD. By: /s/ RoyMachnes -------------- Name: Roy Machnes Title: OSCAR GRUSS & SON INCORPORATED By: /s/ Michael Shaoul ------------------ Name: Michael Shaoul Title: Executive Vice President CHIANA BADACHE SYDRANSKI By: /s/ Jonah Meer -------------- Name: Jonah Meer Title: Attorney-in-Fact BANCROFT LTD. By: /s/ Jonah Meer -------------- Name: Jonah Meer Title: Attorney-in-Fact CHARANA HOLDINGS By: /s/ Jonah Meer -------------- Name: Jonah Meer Title: Attorney-in-Fact FRANCIS X. GALLAGHER By: /s/ Jonah Meer -------------- Name: Jonah Meer Title: Attorney-in-Fact HARVEY GELFENBEIN By: /s/ Jonah Meer -------------- Name: Jonah Meer Title: Attorney-in-Fact - 11 - ROBERT KORDA By: /s/ Jonah Meer -------------- Name: Jonah Meer Title: Attorney-in-Fact /s/ Jonah Meer -------------- Jonah Meer ROBERT J. MITTLEMAN By: /s/ Jonah Meer -------------- Name: Jonah Meer Title: Attorney-in-Fact RUHE ENTERPRISES By: /s/ Jonah Meer -------------- Name: Jonah Meer Title: Attorney-in-Fact TOMMY WYLER AND MICHAEL FOGEL J/T ACCT. By: /s/ Jonah Meer -------------- Name: Jonah Meer Title: Attorney-in-Fact - 12 - Schedule 2.02 Transferred Company Shares -------------------------- Selling Shareholder Transferred Company Shares Oscar Gruss & Son Incorporated 4.905 Chiana Badache Sydranski 1.389 Bancroft Ltd. 7.091 Charana Holdings 7.091 Francis X. Gallagher 4.727 Harvey Gelfenbein 3.431 Robert Korda 7.091 Jonah Meer 1.194 Robert J. Mittleman 4.652 Ruhe Enterprises 7.091 Tommy Wyler and Michael Fogel J/T acct. 3.339 -----END PRIVACY-ENHANCED MESSAGE-----