Document:

ex101.htm

    EXHIBIT
10.1 

     

    ACQUISITION AGREEMENT DATED
SEPT 2009

     

    STOCK
PURCHASE AND SALE AGREEMENT

    

    THIS
STOCK PURCHASE AND SALE AGREEMENT (the "Agreement") is dated as of
September 7, 2009, by and among NEW AIR, INC.,
a  Maryland corporation (“Buyer”); each of the SELLERS
listed in Annex
A attached and incorporated hereto by reference (each a "Seller" and collectively the
"Sellers"); and BABY’S
BREATH LTD., an Israeli company ("Baby's Breath").

    

    WHEREAS, Baby's Breath is
engaged in the business of research, development, manufacturing and sale of
medical devise suitable for treatment of respiratory diseases; and

     

    WHEREAS, Sellers collectively
own all of the outstanding share capital of Baby's Breath comprised of
31,403  Ordinary Shares of Baby's Breath par value NIS1.00 ("Baby's Shares"),
each  which; and

    

    WHEREAS, Sellers want to
collectively sell to Buyer and Buyer wants to buy from Sellers all of Baby's
Shares, free and clear from any and all Encumbrances (as defined
below)  upon the terms and subject to the conditions set forth herein;
and

    

    NOW, THEREFORE, in
consideration of the premises and the representations, warranties and agreements
contained in this Agreement, the parties to this Agreement agree as
follows:

    

    ARTICLE
1

    GENERAL

    

    Terms
defined in the singular will have a comparable meaning when used in the plural,
and vice-versa. the preamble to this Agreement together with any and all
Schedules and Annexes hereto constitutes an integral part hereof. The term
"person" includes any individual, partnership, joint venture, corporation,
trust, unincorporated organization or government or any department or agency
thereof.

    

    ARTICLE
2

    PURCHASE
AND SALE; PURCHASE PRICE; REVOCATION OF SALE

    

    2.1           Purchase and Sale. By
executing this Agreement and the respective Deliverables (as defined below) and
in effect as of the date hereof, each of the Sellers hereby sells and transfers
to Buyer such Seller's entire portion of Baby's Shares as set forth in Annex
A hereto opposite such Seller's name, free and clear of any and all
liens, pledges and other third party rights (collectively "Encumbrances"), and Buyer
hereby purchases all of Baby's Shares and becomes the beneficial owner of all of
Baby's Shares, in consideration for the issuance by Buyer to each of the
Sellers, such amount of Shares of Common Stock of the Buyer par value US$0.001
each, as set forth in Annex
B hereto opposite each of the Seller's name, free and clear of any and
all Encumbrances, constituting in the aggregate 6,280,600  (
collectively the "Issued
Shares"). All Baby's Shares and all Issued Shares will be held by the
Trustee (as defined below), for the benefit of Buyer, or each of the respective
Sellers, as applicable, in accordance with the terms and provisions of the
Ruling, the Trust Agreement and the Ruling Undertaking (all as defined
below).

     

    2.2           Execution and Exchange of
Deliverables. Upon the execution of the Agreement, each of the parties
hereto shall deliver to the other parties a duly executed copy of each of the
following documents (collectively the "Deliverables"):

    

    (a) Deed
of Transfer of Shares, in the form attached hereto as Schedule
2.2(a), signed by each respective Seller, transferring such Seller's
entire portion of Baby's Shares to the Trustee, to be held by the Trustee for
the sole benefit of Buyer, under the terms and conditions of the Ruling and the
Trust Agreement (as defined herein);

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) the
Trust Agreement with Yardeni Gelfand (the "Trustee") in the form attached
hereto as Schedule
2.2(b) duly executed and signed by the Trustee, the Buyer and each of the
Sellers;

    

    (c) the
undertaking to be provided to the Israeli Tax Authorities in connection with the
Ruling, in the form attached hereto as Schedule
2.2(c) duly executed by each of the Trustee, and the
Sellers;

    

    (d) a
stock certificate of Baby's Breath, in the form attached hereto as Schedule
2.2(d) for all of Baby's Shares, in the name of the Trustee as a holder
of such shares for the sole benefit of Buyer under the terms and conditions of
the Pre-Ruling and the Trust Agreement;

    

    (e) a
duly executed resolution of: (i) the Board of Directors of Buyer, and the (ii)
stockholders of Buyer, in the form attached hereto as Schedule
2.2(e)(i) and (ii) authorizing: the entrance of Buyer into this
Agreement, any Annex or Schedule hereto and any and all other documents or
instruments to be executed or delivered by Buyer in connection with or in
furtherance of the transactions contemplated hereby (the "Transaction Documents"), and
the performance by it of any and all of its obligations hereunder and
thereunder;

    

    (f) a
duly executed resolution of the Board of Directors of Baby's Breath in the form
attached hereto as Schedule
2.2(f) authorizing the entrance of Baby's Breath into each of the
Transaction Documents and the performance by it of any and all of its
obligations hereunder and thereunder;

    

    (g) a
duly executed register of shareholder of Baby's Breath in the form attached
hereto as Schedule
2.2(g) reflecting the consummation of the transactions contemplated
hereunder;

    

    (h) duly
executed stock certificates of Buyer, in the form attached hereto as Schedule
2.2(h), each for the respective amount of the Issued Shares appearing
opposite the name of each Seller in Annex
B, and each in the name of the Trustee to be held by the Trustee for the
sole benefit of the respective Seller, in accordance with the Trust Agreement
and Ruling;

    

    (i)
capitalization table of Buyer in the form attached hereto as Schedule
2.2(i) reflecting the issuance of all Issued Shares to each of the
Sellers as of the date hereof;

    

    (j) duly
executed copy of authorization and approval of the Office of the Chief Scientist
of the Ministry of Industry and Trade in the form attached hereto as Schedule
2.2(j) for the consummation of the transactions contemplated hereunder
and under the Transaction Documents;

    

    (k) duly
executed copy of the Tax Pre- Ruling dated November
23, 2009 as was received by the Israeli Tax Authorities in connection
with the transactions hereunder in the form attached hereto as Schedule
2.2(k) (the "Ruling");

    

    (l) duly
executed copy of the Shareholders Agreement in the form attached hereto as Schedule
2.2(l) governing Parties rights with respect to their holdings in
Purchaser until the completion of a Registration (as that term defined
therein)

    

    All
transactions set forth herein shall be deemed to take place simultaneously and
no transaction described in any of the Transaction Documents shall be deemed to
have been completed until all such transactions have been completed and no
document to be delivered or exchanged between the Parties as per this Section 2
shall be deemed delivered or exchanged until all such Deliverables have been so
delivered and exchanged.

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
3

    REPRESENTATIONS
AND WARRANTIES OF SELLERS

    

    Each of
the Sellers hereby represents and warrants to Buyer as of the date of this
Agreement as follows:

    

    3.1           Organization; Directors and
Officers. Baby's Breath is a corporation duly organized, validly existing
under the laws of the State of Israel, and has all necessary corporate power and
authority to own its properties and assets and conduct its
business.

    

    3.2           Capital Stock. Baby's
Breath entire issued and outstanding share capital is comprised of Baby's
Shares. Baby's Breath's authorized share capital consists of 1,000,000 Ordinary
Shares par value NIS1.00. Except for certain hypothecation that exists over some
of the Baby's shares held by Dr. Israel Amirav pending the resolution of some
legal proceedings he is a party to, all of Baby's Shares are owned by Sellers,
free and clear of any Encumbrances. No options, rights or securities
exercisable, exchangeable or convertible into shares of Baby's Breath are
outstanding, and there are no plans, contracts or commitments or undertaking by
Baby's Breath or any of the Sellers providing for the issuance, sale, or grant
of any of Baby's Breath Shares or any securities or rights exercisable,
exchangeable or convertible into shares of Baby's Breath. All of Baby's Shares
have been duly authorized, validly issued, and are fully paid.

    

    3.3           Authorization and Binding
Obligation. The execution, delivery and performance by such Seller and
Baby's Breath of this Agreement and each of the Transaction Documents, have been
duly and validly authorized and approved by all requisite corporate action on
the part of each such person and each of the Transaction Documents constitutes,
when executed, a valid and binding obligation of Baby's Breath and each of the
Sellers, enforceable in accordance with its respective terms except as may be
limited by laws affecting creditors rights generally or by judicial limitations
on the right to specific performance or other equitable remedies.

    

    3.4           Consents Required.
The consummation of the transactions set forth in this Agreement and in the
Transaction Documents does not require any approval or permit from any
regulatory agency or other third party (except for those that have been obtained
and are attached as part of the Deliverables).

     

    ARTICLE
4

    REPRESENTATIONS
AND WARRANTIES OF BUYER

    

    Buyer
represents and warrants to each of the Sellers as of the date of this Agreement
as follows:

    

    4.1           Organization. Buyer
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Maryland.

    

    4.2           Authorization and Binding
Obligation. The execution, delivery and performance by Buyer of this
Agreement and each of the Transaction Documents have been duly and validly
authorized and approved by all requisite corporate action on the part of Buyer.
Buyer has all requisite power and authority to do and perform all acts and
things required to be done by it under this Agreement and the Transaction
Documents and each such document constitutes, when executed, a valid and binding
obligation of Buyer enforceable in accordance with its respective terms except
as may be limited by laws affecting creditors' rights generally or by judicial
limitations on the right to specific performance or other equitable
remedies.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
5

    COVENANTS

    

    5.1           Compliance with the
Ruling. Each of the Parties hereby undertakes to refrain from taking any
action, except with the prior written consent of the other Parties, that would
constitute a breach or default under the Ruling.

    

    5.2           Employment
Undertaking. As soon as practicable after the date hereof each of the
Chief Executive Officer of the Company and the Chief Financial Officer of the
Company shall enter into an Employment Agreement with the Buyer in the form to
be satisfactory to the Board of Directors of the Buyer, which will include inter
alia an undertaking in connection with intellectual property and an undertaking
in connection with non-compete.

    

    5.3           Amirav's holdings.
Buyer shall reflect in its records an hypothecation on 50% of the holdings of
Dr. Amirav in the Buyer pending the resolution of certain legal proceedings to
which Dr Amirav is a party.

     

     

    ARTICLE
6

    

    OTHER
PROVISIONS

    

    6.1           Further Assurances.
At such time and from time to time on and after the date hereof upon request by
another party, Sellers and Buyer will execute, acknowledge and deliver, or will
cause to be done, executed, acknowledged and delivered, all such further acts,
deeds, assignments, transfers, conveyances, powers of attorney and assurances
that may be required for carrying out the intention of the transactions
contemplated hereunder.

    

    6.2           Governing Law. This
Agreement will be governed by and interpreted in accordance with the laws of the
State of Maryland, including all matters of construction, validity, performance
and enforcement.

    

    6.3           Successors and
Assigns. This Agreement will be binding upon and inure to the benefit of
the parties to this Agreement and the successors or assigns of the parties to
this Agreement.

    

    6.4           Benefit. Nothing in
this Agreement, expressed or implied, is intended to confer on any person other
than the parties to this Agreement or their respective successors or assigns,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement.

    

    6.5           Counterparts. This
Agreement may be executed in any number of counterparts, each of which will be
deemed as original and all of which together will constitute one
instrument.

    

    

    IN WITNESS WHEREOF, each of
the parties has caused this Agreement to be executed in the manner appropriate
for each, and to be dated as of the date written on the first page of this
Agreement.

    

    [Execution
Page Follows]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Signature
Page for Stock Purchase Agreement

     

     

    
      	
               

            	
            
	
              New
      Air, Inc.

              By:
      /s/ Lior Carmeli

              
                
      
Lior Carmeli

              Title:
      CEO

            	
              Baby's
      Breath Ltd.

              

                By:
      /s/ Lior Carmeli

                
                  
      
Lior Carmeli

                Title:
      CEO

              

            
	
            	 
	 	
            
	
              /s/
      Prof.
      David Grusher

              

                
      

              Prof.
      David Grusher

            	
              /s/ Assaf Halamish

              
                
                  
      

              

              Assaf
      Halamish

            
	
            	
            
	 
      	 
      
	
            	
            
	
              GPI
      Granot Development Enterprises Ltd.

              By:
      ____________________________

              Title:
      ___________________________

            	
              A.M.
      Maagal – Marketing & Business

               Development
      Ltd.

              By:
      __________________________

              Title:
      _________________________

            
	 
      	 
      
	
            	
            
	
              /s/
      Alon Lifroni

              
                
      

              By:
      Alon Lifroni

              Title:
      CEO

            	
              Ramport
      Finance Ltd

              .

              By:
      /s/ Golan Gilad

              

              Golan Gilad

              Title:
      _____________________________________________

            
	 
      	 
      
	
              /s/
      Michael Newhouse

              
                

                Prof.
      Michael Newhouse

              

            	
              /s/ Israel Amirav

              
                
      Dr.
      Israel Amirav

            
	 
      	 
      
	
              /s/
      Orni Elad

              
                

                Orni
      Elad

              

            	
              /s/
      Boaz Gruener

              
                

                Boaz
      Gruener

              

            
	
            	
            
	 
      	 
      
	
              _______________________________

            	
            
	
              Yaniv
      Shekel in Trust for Microdel Ltd.

            	
              Life
      Support Ltd.

              By:
      __________________________

              Title:
      _________________________ex102.htm

    EXHIBIT
10.2 

    SHAREHOLDERS AGREEMENT DATED
SEPT 2009

     

     

    STOCKHOLDERS
RIGHTS AGREEMENT

     

    THIS
INVESTORS' RIGHTS AGREEMENT (this "Agreement") is made as of
September
7, 2009, by and among New Air, Inc., a Maryland corporation (the "Corporation"); and the
stockholders of the Corporation listed on Schedule
1 hereto (collectively, the "Holders" and individually, a
"Holder").

     

    W I T N E
S S E T H:

     

    WHEREAS, the Holders are the
holders of all issued and outstanding stock of the Corporation on the date
hereof;

     

    WHEREAS, the Holders wish to
guaranty certain rights with respect to the Corporation in connection with their
holdings therein.

     

    NOW, THEREFORE, in
consideration of the mutual promises and covenants set forth herein, the parties
hereby agree as follows:

     

    
      	
              1.  

            	
              Definitions. As
      used herein, the following terms have the following
    meanings:

            

    

     

    "Major Holder"  -
holder of 5% or more of the issued and outstanding share capital of the
Corporation.

     

    "Registration" - the
registration for trade on any stock exchange, OTC system or bulletin board of
the Company's issued share capital pursuant to any applicable securities laws
and regulations, whether as part of an offering to the public or
otherwise.

     

    
      	
              2.  

            	
              Right of Refusal on Corporation Issuances-
      Preemptive Rights.

            

    

     

    Until the
consummation of a Registration, any stockholder will have the right to purchase
its pro rata portion of any further issuance of New Securities (as hereinafter
defined) by the Corporation pursuant to the provisions below.

     

    
      	
              2.1.  

            	
              Subject
      to the foregoing provision, each Major Holder has rights of first refusal
      to purchase for its own account and not for resale, pro rata, all or any
      part of New Securities that the Corporation may, from time to time,
      propose to sell and issue. The Major Holder's pro rata share shall be the
      ratio of the number of shares of the Corporation's stock issued and
      outstanding then held by the Major Holder as of the date of the Rights
      Notice (as defined below), to the total number of shares of the
      Corporation's stock issued and outstanding on such date held by the Major
      Holders as of such date.

            

    

     

    
      	
              2.2.  

            	
              "New Securities" shall
      mean any securities of any type whatsoever that are, or may become,
      convertible into said shares of the Corporation, except for: (i)
      securities issued by reason of a dividend, stock split, split-up or other
      stock distribution (ii) securities issued pursuant to the grant of
      securities or shares pursuant to a stock purchase or stock option plan
      approved by the Board of Directors of the Company ("Board"); (iii) any
      securities issued in an initial public offering of Corporation's
      shares.

            

    

     

    
      	
              2.3.  

            	
              If
      the Corporation proposes to issue New Securities, it shall give the
      Stockholders written notice (the "Rights Notice") of its
      intention, describing the New Securities, the price, the general terms
      upon which the Corporation proposes to issue them and the number of shares
      that the Stockholder has the right to purchase under this
      Agreement.

            

    

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	
              2.4.  

            	
              Each
      Stockholder shall have  Fourteen (14) days from delivery of the
      Rights Notice to agree to purchase up to the full amount of its pro rata
      share of such New Securities (the "Basic Amount") for the
      price and upon the general terms specified in the Rights Notice, by giving
      written notice to the Corporation setting forth the quantity of New
      Securities to be purchased and, if such Stockholder shall elect to
      purchase all of its Basic Amount, such additional portion of the New
      Securities as such Stockholder shall indicate it will purchase should
      other Stockholder subscribe for less than their pro rata portion of the
      New Securities (the "Under-subscription
      Amount"). Failure by a Stockholder to respond to the Rights Notice
      within such Fourteen (14) day period will be deemed an unconditional
      waiver of the right to participate in such issuance of New
      Securities.

            

    

     

    
      	
              2.5.  

            	
              If
      the Basic Amounts subscribed for by all Major Holders are less than the
      total amount of the New Securities, then each Stockholder who has set
      forth Under-subscription Amounts in its notice of acceptance shall be
      entitled to purchase, in addition to the Basic Amounts subscribed for, all
      Under-subscription Amounts it has subscribed for; provided, however, that should the Under-subscription
      Amounts subscribed for exceed the difference between the New Securities
      and the Basic Amounts subscribed for (the "Available Under-subscription
      Amount"), each Major Holder who has subscribed for any
      Under-subscription Amount shall be entitled to purchase only that portion
      of the Available Under-subscription Amount as the Under-subscription
      Amount subscribed for by such Stockholder bears to the total
      Under-subscription Amounts subscribed for by all Major Holders, subject to
      rounding by the Board to the extent it reasonably deems
      necessary.

            

    

     

    
      	
              2.6.  

            	
              If
      the Major Holders fail to exercise in full the right of first refusal set
      forth in this Section 2 within the period specified above, the Corporation
      shall have Ninety (90) days after delivery of the Rights Notice to sell
      the unsold New Securities at a price and upon general terms no more
      favorable to the purchasers thereof than specified in the Rights Notice.
      The Corporation and the Major Holders shall be obligated to consummate the
      purchase of such New Securities only to the aggregate extent set forth in
      the Rights Notices, and only if the Corporation consummates the sale of
      the balance of the offered New Securities not purchased by the
      participating Major Holders, pursuant to the terms described in such
      Rights Notice. If the Corporation has not sold the New Securities within
      said Ninety (90) day period, the Corporation shall not thereafter issue or
      sell any New Securities without first offering such securities to the
      Major Holders in the manner provided
above.

            

    

     

    
      	
              2.7.  

            	
              The
      aforesaid right to purchase the Under-subscription Amount may be waived by
      any or all Major Holders by an affirmative vote or a written
      consent.

            

    

     

     

    
      	
              3.  

            	
              Right of Refusal on
      Dispositions by the Common Holders and a Right to Tag
      Along.

            

    

     

    
      	
              3.1.  

            	
              Until
      completion of a Registration, if any of the Major Holders (each, a "Selling Stockholder"),
      wishes to sell, assign transfer or otherwise dispose of any or all shares
      owned by him pursuant to the terms of a bona fide offer
      received from a third party, he shall submit a written offer to sell such
      shares to the  other Major Holders, on terms and conditions,
      including price, not less favorable to them than those on which he
      proposes to sell such shares to such third party (the "Offer"). The Offer shall
      disclose the identity of the proposed purchaser or transferee, the shares
      proposed to be sold or transferred (all such shares being referred to as
      the "Offered
      Shares"), the agreed terms of the sale or transfer and any other
      material facts relating to the sale or
transfer.

            

    

     

    
      	
              3.2.  

            	
              The
      Major Holders shall have the right to purchase, on the same terms and
      conditions set forth in the Offer, his Pro Rata of the Offered Shares. For
      the purpose hereof "Pro
      Rata Portion" shall mean the aggregate Offered Shares multiplied by
      a fraction, the numerator of which is the number of shares of the
      Corporation then owned by such Major Holder and the denominator of which
      is the aggregate number of shares of the Corporation then held by all
      Major Holders.

            

    

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
              3.3.  

            	
              If
      a Major Holder does not wish to purchase his/her/its Pro Rata Fraction,
      then any other Major Holder who so elects shall have the right to
      purchase, on a pro rata basis with any other Major Holder who so
      elects any Pro Rata Fraction not purchased by an Major Holder. Each Major
      Holder shall act upon the Offer as soon as practicable after receipt of
      the Offer, and in all events within 60 days after receipt thereof ("Offer Period"). Each
      Major Holder shall have the right to accept the Offer as to all or part of
      his/her/its Pro Rata Fraction of the Offered Shares offered thereby. In
      the event that a Major Holder shall elect to purchase all or part of the
      Offered Shares covered by the Offer, said Major Holder shall individually
      communicate in writing such election to purchase to the Selling
      Stockholder who has made the Offer, which communication shall be delivered
      by hand, fax or mailed to the Selling Stockholder at the address set forth
      below and shall, when taken in conjunction with the Offer be deemed to
      constitute a valid, legally binding and enforceable agreement for the sale
      and purchase of the shares covered
thereby.

            

    

     

    
      	
              3.4.  

            	
              In
      the event that the Major Holders do not offer to purchase all of the
      Offered Shares pursuant to and within the Offered Period, such shares
      shall not be subject to the requirements of a prior offer and re-sale
      pursuant to this Section 8, and all of the Offered Shares may be sold by
      the Selling Stockholder at any time within 120 days after the expiration
      of the Offer. Any such sale shall be at not less than the price and upon
      other terms and conditions, if any, not more favorable to the purchaser
      than those specified in the Offer. Any sale of Offered Shares not sold
      within such 120 day period shall again be subject, following such period,
      to the requirements of a prior offer and re-sale pursuant to this Section
      3.

            

    

     

    
      	
              3.5.  

            	
              In
      lieu of its rights to purchase the Offered Shares as per the foregoing,
      each Major Shareholder shall have a right, by providing the Selling
      Shareholder with a written notice to that effect within 15 days from the
      date of the Offer, to participate in the sale by a Selling Shareholder and
      to sell on account of the Selling Shareholder and in its stead, an amount
      of shares out of the Offered Shares that corresponds to the ratio of
      holdings between the Selling Shareholder and the Major
      Shareholder.

            

    

     

    
      	
              4.  

            	
              Permitted
      Transfers.

            

    

     

    Notwithstanding
any of the provisions of this Agreement, transfers of shares to Permitted
Transferees are exempt from restrictions on transfer specified in Section
3.

     

    "Permitted Transferee" shall
mean:

     

    
      	 
      	
              (a)

            	
              With
      respect to an individual: (i) a parent, spouse, brother, sister, or
      child of the transferor (each, a "Family Member");
      (ii) a company wholly owned by such individual or by such individual
      and a Family Member; (iii) such individual's beneficiary (in the event the
      individual holds the shares as a trustee), or to such individual's trustee
      (including the trustee of a voting trust) and the beneficiary of such a
      trustee; provided, that both the
      transferor and the transferee shall undertake in writing towards the
      Corporation and its stockholders to be bound, jointly and severally, by
      the undertakings and obligations of the transferor hereunder; and in the
      case of a transfer to a wholly owned company, also that such company shall
      remain a wholly owned company of the transferor at all times it holds
      shares in the Corporation;

            

    

     

    
      	 
      	
              (b)

            	
              With
      respect to an incorporated entity (whether a company or partnership) which
      is not a company to which shares have been transferred as a Permitted
      Transferee under subsection (a) above: any legal entity which controls, is
      controlled by, or is under common control with the
    transferor;

            

    

     

    Provided
however that no transfer shall be permitted pursuant to this Section 4 unless
the transferee agrees in writing to be bound by all of the terms and conditions
of this Agreement.

     

    
      	
              5.  

            	
              Bring
    Along.

            

    

     

    Until
completion of a Registration, in the event that parties hereto that hold at
least 75% of the outstanding share capital of the Corporation, accept an offer
to sell all of their holdings in the Corporation to a third party purchaser (the
"Purchaser") and such
sale is conditioned upon the sale to the Purchaser of all remaining outstanding
stock in the Corporation, then all the parties hereto shall be required to sell
their stock in such transaction (and if requested by the Purchaser, also all of
their other securities in the Corporation), on the same terms and
conditions.

     

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
              6.  

            	
              Incorporation by Reference of
      Pre-Offering Agreement.

            

    

     

    All of
the provisions of the Pre-Offering Agreement entered into on June 24, 2009
between Microdel Ltd. and Baby Breath, and the Shareholders Agreement of July
2009 which are attached hereto as Exhibit
A are incorporated by reference herein in its entirety (collectively the
"Pre Offering
Agreements"). Nothing in this Agreement shall derogate from the
obligations and liabilities of Microdel to Baby Breath under the Pre Offering
Agreements. Each of the Parties hereby undertakes to: (i) comply with the
provisions of the Pre Offering Agreements; and (ii) take, execute and deliver,
or cause to be executed and delivered, all such further acts, deeds,
assignments, transfers, conveyances, powers of attorney and assurances that may
be required for carrying out the intention of the transactions contemplated in
the Pre Offering Agreements.

     

    
      	
              7.  

            	
              Special Majority
      Issues.

            

    

     

    Until the
completion of the Registration, any of the following actions by the Corporation
or Baby Breath shall require the approval of 65% of the members of the Board of
Directors of Corporation, or where applicable, the affirmative vote of
shareholders of Corporations that hold 65% of the issued and outstanding share
capital of Corporation:

     

    
      	
              (a)  

            	
              Changes
      in any of charter documents;

            

    

     

    
      	
              (b)  

            	
              Increase
      of share capital;

            

    

     

    
      	
              (c)  

            	
              Performing
      a split or reverse stock split of the share
  capital;

            

    

     

    
      	
              (d)  

            	
              Liquidation,
      dissolution or winding up of the company, performance of a reorganization
      thereof or any similar action;

            

    

     

    
      	
              (e)  

            	
              Any
      material change in the nature or character of the business conducted or
      proposed to be conducted;

            

    

     

    
      	
              (f)  

            	
              Cessation
      of all or of a substantial part of the
business;

            

    

     

    
      	
              (g)  

            	
              Administering
      any changes to the share capital of the company or performing any action
      which changes the holdings of the shareholders of the company, including
      any issuance of shares, convertible securities or rights convertible or
      exercisable into shares;

            

    

     

    
      	
              (h)  

            	
               Any
      resolutions in connection with fund raising for the company, provision of
      shareholders loans or shareholders guaranties and their
    terms;

            

    

     

    
      	
              (i)  

            	
              Entering
      into investments or material joint
ventures;

            

    

     

    
      	
              (j)  

            	
              Provision
      by the company of any indemnification or guaranty for the liabilities of
      any person outside the ordinary course of business of the
      company;

            

    

     

    
      	
              (k)  

            	
              Related
      party transaction;

            

    

     

    
      	
              (l)  

            	
              Public
      offering;

            

    

     

    
      	
              (m)  

            	
              Distribution
      of dividends;

            

    

     

    
      	
              (n)  

            	
              Transactions
      not in the ordinary course of
business;

            

    

     

    
      	
              (o)  

            	
              The
      creation of any subsidiary or legal
entity;

            

    

     

    
      	
              (p)  

            	
              Creation
      of any pledge, or encumbrance over any of the assets except where required
      under law;

            

    

     

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

     

    
      	
              8.  

            	
              The
      Bylaws. The Bylaws of the Corporation shall be those attached as
      Exhibit B
      hereto.

            

    

     

    
      	
              9.  

            	
              Board
      Structure.

            

    

     

    Until the
consummation of a Registration, each of the following shareholders (each a
"Designating
Shareholders") shall have the right to designate members to the Board of
Directors, with respect to each of the Designating Shareholders, as long as such
Designating Shareholders holds (directly and/or through trustee, and
collectively with such Designating Shareholders Permitted Transferees) at least
50% of the amount of shares of the Corporation held by it on the date
hereof:

    

    (a) Life
Support Ltd.- may designate 1 (one) member to the Board;

    

    (b)
Ramport Finance Ltd. - may designate 1 (one) member to the Board;

    

    (c) Assaf
Halamish - may designate 1 (one) member to the Board;

    

    (c)
Microdel Ltd. – may designate 2 (two) members to the Board, and if its holdings
are reduced as per the transfer of the Conditional Shares as per Section 10(a)
below, then 1 (one) member to the Board as of such time; and

    

    (d) 1
(one) member to the Board will be designated by consent of the other members of
the Board and may be an industry expert.

     

    Each of
the parties shall vote all of its shares in Corporation in favor of those
directors selected in accordance with the provisions of Section 9. No Seller
shall vote any of its shares in Corporation in favor of the removal of a
director nominated as per Section 9  above; provided, however,
that upon the request of a Designating Shareholder to remove a director
previously nominated by it, all parties hereto shall vote all of their shares in
the Corporation (at any relevant meeting of stockholders or written action in
lieu of a meeting of stockholders of the Corporation) in favor of: (i) the
removal of such director and (ii) the election of any replacement director as
may be nominated as provided in this Section 9.

     

    
      	
              10.  

            	
              Certain Provisions of the Pre
      Offering Agreement.

            

    

     

    In this
section, unless defined otherwise, all capitalized terms shall have the meaning
ascribed thereto in the Pre Offering Agreement (the Hebrew version thereof will
govern over the English version thereof).

     

    
      	
              a)  

            	
              If
      the Offering is successful then the Conditional Shares held by the Trustee
      shall be released to Microdel. If the Offering fails then the Trustee
      shall transfer the Conditional Shares to the Current Shareholders in
      exchange for NIS 0.01 per share, in accordance with pro rata portion of
      each Current Shareholder out of the total shares held by the Current
      Shareholders.

            

    

    

    
      	
              b)  

            	
              During
      the period until the Final Date, in any case where a vote is needed by
      virtue of the Conditional Shares at a general meeting of shareholders, the
      Trustee shall vote by virtue thereof provided the Conditional Shares are
      held by him, in accordance with a document signed by holders of majority
      of the shares held by the Current Shareholders, ("Voting Order"), and the
      Parties hereby irrevocably instruct the Trustee to vote by virtue of the
      Conditional Shares in accordance with the Voting Order that shall be given
      as stated.

            

    

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
 

     

    
      	
              c)  

            	
              During
      the interim period, and provided the Conditional Shares as held by the
      Trustee shall not endow him the right to appoint a director to the
      Company’s board of directors.  Only after the Conditional Shares
      have been transferred to Microdel (following the Success of the Offering)
      or to the Current Shareholders (following the Failure of the Offering) as
      relevant, shall the holders of the Conditional Shares enjoy all of the
      rights endowed to those shareholders according to the Corporation's
      charter documents.

            

    

    

    
      	
              d)  

            	
              If
      not all items
      comprising of the "Success of the Offering" are completed by February 1,
      2010 then shareholders of the Corporation that hold a majority of the
      Corporation's outstanding share capital out of the shares held by the
      following shareholders: Dr. Israel Amirav, Prof. David Grusher, Assaf
      Halamish, GAPI Granot Development Enterprises Ltd., Prof. Michaelis
      Neuhouse, Life Support Ltd., Ramport Finance Ltd. and A.M. Maagal –
      Marketing & Business Development Ltd, may, by an affirmative vote,
      cause for:

            

    

    

    
      	
              (i)             

            	
              the
      Corporation to acquire for no consideration all of the Issued Shares held
      by the Sellers (as such terms are defined in the Stock Purchase and Sale
      Agreement of September 7, 2009 between the Corporation, each of the
      parties hereto and Baby's Breath Ltd. (the "Acquisition Agreement")
      in return for the Sellers receiving, each its respective amount of the
      Baby's Shares, for no consideration all of Baby's Shares (as defined in
      the Acquisition Agreement);

            

    

    

    
      	
              (ii)             

            	
              For
      all other shareholders of the Corporation to sell their holdings in the
      Corporation to the Corporation in consideration for the issuance of shares
      in Baby's Breath at an amount of shares which shall bring each such
      shareholder to hold in Baby's Birth the same percentage of holdings held
      by them in the Corporation immediately prior
  thereto.

            

    

    

    
      	
              e)  

            	
              If
      not all items
      comprising of the "Success of the Offering" are completed by February 1,
      2010 then GAPI Granot Development Enterprise Ltd. shall have the right to
      appoint one member to the Board of Directors of the
      Corporation.

            

    

     

    
      	
              11.  

            	
              Certain Provisions of the Pre
      Offering Agreement.

            

    

     

    In this
section, unless defined otherwise, all capitalized terms shall have the meaning
ascribed thereto in the Pre Offering Agreement (the Hebrew version thereof will
govern over the English version thereof).

    

    Each of
the Current Shareholders hereby undertakes towards the Incubator that so long as
there is a restriction (under law or under the Israeli Tax Ruling) on the number
of shares in the Corporation that can be either: (i) registered for trade as
part of the registration so that not all of the shares of the Current
Shareholders can be registered for trade, or (ii) sold, then the Current
Shareholders shall waive their right to register their relative portion of their
shares in Corporation for trading, or their right to sell their respective
holdings, as applicable, and will allow the Incubator to register all of its
shares in the Corporation, or sell its holdings in the Corporation, as
applicable, before the registration or sale (as applicable) by any of them of
any of their respective holdings therein. The rights of the Incubator may be
assigned to a third party together with the transfer to such party of
Incubator's shares in the Corporation. The aforementioned right shall become
void in the case of a sale by Incubator of the shares after the
Registration.

    

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

     

    
      	
              12.  

            	
              Miscellaneous.

            

    

     

    
      	
              12.1.  

            	
              Termination of this Agreement. Except for
      the provisions of Sections 6 and 11 above, which will remain in effect,
      this Agreement shall automatically terminate without any further force and
      effect immediately after the completion of a
  Registration.

            

    

     

    
      	
              12.2.  

            	
              Further Assurances. From and after the date
      of this Agreement, upon the request of any Holders the Corporation shall
      execute and deliver such instruments, documents and other writings as may
      be reasonably necessary or desirable to confirm and carry out and to
      effectuate fully the intent and purposes of this Agreement and the stocks
      issued hereunder.

            

    

     

    
      	
              12.3.  

            	
              Governing Law; Jurisdiction. This Agreement
      shall be governed by and construed according to the laws of the State of
      Maryland, without regard to the conflict of laws provisions
      thereof.  Any dispute arising under or in relation to this
      Agreement shall, be resolved exclusively in the competent state and
      federal courts located in the State of Delaware, and each of the parties
      hereby irrevocably submits to the exclusive jurisdiction of such
      courts.

            

    

     

    
      	
              12.4.  

            	
              Successors and Assigns; Assignment. Except
      as otherwise expressly provided herein, the provisions hereof shall inure
      to the benefit of, and be binding upon, the successors, assigns, heirs,
      executors, and administrators of the parties hereto. None of the rights,
      privileges, or obligations set forth in, arising under, or created by this
      Agreement may be assigned or transferred without the prior consent in
      writing of each party to this Agreement, with the exception of (i)
      assignments by any Holder to Permitted Transferees thereof; provided,
      however, that that no such assignment or transfer shall become effective
      unless each such transferee has provided the Corporation with a
      confirmation in writing that it is bound by all terms and conditions of
      this Agreement as if it were an original party to it. This Agreement is
      not intended to and shall not confer upon any other person any rights or
      remedies hereunder.

            

    

     

    Notices, etc. All
notices to the parties shall be made in accordance with the provisions of the
Corporation's charter documents.

     

    
      	
              12.5.  

            	
              Counterparts. This Agreement may be
      executed in any number of counterparts, each of which shall be deemed an
      original and enforceable against the parties actually executing such
      counterpart, and all of which together shall constitute one and the same
      instrument. Signatures by facsimile or signatures which have been scanned
      and transmitted by electronic mail shall be deemed valid and binding for
      all purposes

            

    

     

    
      	
              12.6.  

            	
              Additional Parties. Joinder Agreement.
      Except if approved otherwise on a case-by-case basis by the Board, each
      future holder of Common Stock (including employees, consultants and any
      other optionees under any stock option plan, compensation plan or the
      like), shall be required, as a condition precedent to the issuance of any
      shares thereto, to undertake in writing, by way of execution of a joinder
      agreement in the form reasonably acceptable to the Board, to comply with
      the provisions of this Agreement. Upon execution and delivery of the
      Joinder Agreement by such future holder it shall be deemed a party to this
      Agreement for any and all purposes.

            

    

     

    IN WITNESS WHEREOF the parties
have signed this Stockholders Rights Agreement as of the date first hereinabove
set forth.

     

    [Remainder of page
intentionally left blank-execution pages follows]

     

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

     

    
       

      Signature
Page for Stockholders Rights Agreement

       

      
        
          	New
      Air, Inc.	 	 	Life
      Support Ltd.	 
	 	 	 	 	 
	 	 	 	 	 
	
                  /s/
      Lior Carmeli

                	 	 	
                  /s/
      

                	 
	
                  Lior Carmeli

                	 	 	
                  Name 

                	 
	
                  Title:
      CEO 

                	 	 	
                  Title

                	 

        

      

      
        
          	 	 	 	 	 
	
                  /s/
      Prof.
      David Grusher

                	 	 	
                  /s/
      Assaf
      Halamish

                	 
	
                  
                    Prof.
      David Grusher

                  

                	 	 	
                  
                    Assaf
      Halamish

                  

                	 
	
                   

                	 	 	
                   

                	 

        

      

      
        
          	 	 	 	 	 
	GAPI
      Granot Development Enterprises Ltd.	 	 	A.M.
      Maagal – Marketing & Business Development Ltd.	 
	 	 	 	 	 
	
                  /s/

                	 	 	
                  /s/
      

                	 
	
                  Name

                	 	 	
                  Name 

                	 
	
                  Title 

                	 	 	
                  Title

                	 

        

      

       

      
        
          	Microdel
      Ltd.	 	 	Ramport
      Finance Ltd.	 
	 	 	 	 	 
	 	 	 	 	 
	
                  /s/

                	 	 	
                  /s/
      

                	 
	
                  Name

                	 	 	
                  Name 

                	 
	
                  Title 

                	 	 	
                  Title

                	 

        

      

       

      
        
          	 	 	 	 	 
	
                  /s/
      Prof.
      Michaelis Neuhouse

                	 	 	
                  /s/ 
      Dr.
      Israel Amirav

                	 
	
                  Prof.
      Michaelis Neuhouse

                	 	 	
                  
                    Dr.
      Israel Amirav

                  

                	 
	
                   

                	 	 	
                   

                	 

        

      

      
        
          	 	 	 	 	 
	
                  /s/
      Orni
      Elad

                	 	 	
                  /s/
      Boaz
      Gruener

                	 
	
                  
                    Orni
      Elad

                  

                	 	 	
                  
                    Boaz
      Gruener

                  

                	 
	
                   

                	 	 	
                   

                	 
	 	 	 	 	 
	 	 	 	 	 
	/s/
      Yaniv
      Shekel in Trust for Microdel Ltd.	 	 	 	 
	
                  Yaniv
      Shekel in Trust for Microdel Ltd.

                	 	 	 	 
	 	 	 	 	 

        

      

       

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

     

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

     

    Schedule
1

     

    The Stockholders of the
Corporation

     

    Dr.
Israel Amirav

     

    Prof.
David Grusher

     

    Assaf
Halamish

     

    GAPI
Granot Development Enterprises Ltd.

     

    Prof.
Michaelis Neuhouse

     

    Life
Support Ltd.

     

    Ramport
Finance Ltd.

     

    A.M.
Maagal – Marketing & Business Development Ltd.

     

    Microdel
Ltd.

     

    Orni
Elad

     

    Boaz
Gruener

     

    Yaniv
Shekel in Trust for Microdel Ltd.

     

     

     

    9

    [Missing Graphic Reference]

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