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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): July 6, 2023
OMNIQ
CORP.
(Exact
name of registrant as specified in charter)
Delaware |
|
001-40768 |
|
20-3454263 |
(State
or other jurisdiction |
|
(Commission |
|
(IRS
Employer |
of
incorporation) |
|
File
Number) |
|
Identification
No.) |
1865
West 2100 South, Salt Lake City, UT 84119
(Address
of Principal Executive Offices) (Zip Code)
(714)
899-4800
(Registrant’s
Telephone Number, Including Area Code)
Not
Applicable
(Former
Name or Former Address, If Changed Since Last Report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Ticker
symbol(s) |
|
Name
of each exchange on which registered |
Common
Stock, par value $0.001 |
|
OMQS |
|
The
Nasdaq Stock Market LLC |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mart if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01 Entry into a Material Definitive Agreement.
On
July 6, 2023, OmniQ Corp. (the “Company”) entered into a Share and Rights Purchase Agreement (the Agreement”) with
Afcon Holdings Ltd., (“Afcon”), a company organized under the
laws of the State of Israel, and Ateka Ltd. (“Ateka”), a company organized under the laws of the State of Israel (Afcon
and Ateka, jointly and severally, shall be referred to together as the “Sellers”) (OminQ and its newly formed wholly
owned subsidiary which shall be alternatively referred to together as the “Company” or the “Purchaser”), and
Tadiran Telecom Communication Services in Israel Ltd. (“TBSI”), a company organized under the laws of the State of Israel,
Tadiran Telecom Communication Services in Israel L.P. (“TBSI LP”), a limited partnership organized under the laws of the
State of Israel, Tadiran Telecom Technologies (2011) Ltd. (“TTT”), a company organized under the laws of the State of Israel,
Tadiran Telecom (TTL) L.P. (“TTL LP”) a limited partnership organized under the laws of the State of Israel (TBSI, TBSI LP,
TTT and TTL LP shall be referred together as “TT”).
Afcon
owns 100% of the shares of TBSI and 99% of the partnership equity rights in TBSI LP (the remaining 1% being held by TBSI), and Ateka
owns 100% of the shares of TTT, and 99% of the partnership equity rights in TTL LP (the remaining 1% being held by TTT) (collectively
the “Purchased Equity”). The Agreement provides that the Purchaser will acquire from the Sellers, the Purchased Equity in
exchange for total consideration of $15.25 million (the “Purchase Price”) to be paid as follows: (i) $12,500,000 in
cash and (ii) shares of the Company’s common stock having a value of $2.75 million based on market prices at closing. It is
expected that, as part of the consideration, OmniQ will arrange a loan to TT in the approximate amount of $6.1 million that will repay
all debts of TT to the Sellers. This $6.1 million debt repayment is part of the $12,500,00 cash portion of the Purchase Price. The
Sellers are also eligible to earn an additional $750,000 of shares of OmniQ common stock if TT’s EBITA is positive in 24 months
from closing.
The
closing of the Agreement is subject to certain closing conditions including but not limited to obtaining approval from the Israeli Competition
(Antitrust) Commission, all necessary union approvals, certain third party consents, and the compliance with certain cash and working
capital requirements.
The
description of the Share Purchase Agreement is a summary and is qualified by the actual agreement which is filed as exhibit 10.1 which
is incorporated herein.
Item
7.01 Regulation FD Disclosure
On
June 22, 2023, OmniQ Corp. (the “Company”) issued a press release regarding the subject matter of item 1.01.. A copy of the
press release is attached hereto and incorporated herein by reference in its entirety as Exhibit 99.1.
Item
9.01 Financial statements and Exhibits
(d)
Exhibits.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date:
July 10, 2023
|
OMNIQ
Corp. |
|
|
|
|
By: |
/s/
Shai S. Lustgarten |
|
|
Shai
S. Lustgarten |
|
|
President
and CEO |
Exhibit
10.1
Execution
Copy
SHARE
AND RIGHTS PURCHASE AGREEMENT
THIS
SHARE AND RIGHTS PURCHASE AGREEMENT (this “Agreement”), is made as of the 6 day of July, 2023, by and among AFCON
HOLDINGS LTD., (Registration Number 520033473) (“Afcon”) a company organized under the laws of the State
of Israel, ATEKA LTD. (Registration Number 510571193) (“Ateka”) a company organized under the laws of the State
of Israel (Afcon and Ateka, jointly and severally, shall be referred to together as the “Sellers”) and OmniQ Corp.,
a company organized under the laws of the State of Delaware, USA (“OminQ” and together with any fully owned subsidiary
which will purchase, directly any of the Purchased Rights, shall be referred to together hereinafter as the “Purchaser”),
and Tadiran Telecom Communication Services in Israel Ltd. (Registration Number 513588806) (“TBSI”), a company
organized under the laws of the State of Israel, Tadiran Telecom Communication Services in Israel L.P. (Registration Number 550217707)
(“TBSI LP”), a limited partnership organized under the laws of the State of Israel, Tadiran Telecom Technologies
(2011) Ltd. (Registration Number 514599224) (“TTT”), a company organized under the laws of the State of Israel,
Tadiran Telecom (TTL) L.P. (Registration Number 550241368)(“TTL LP”) a limited partnership organized under
the laws of the State of Israel (TBSI, TBSI LP, TTT and TTL LP shall be referred together as “TT”).
W
I T N E S S E T H:
WHEREAS,
Afcon owns 100% of the shares of TBSI and 99% of the partnership equity rights in TBSI LP (the remaining 1% being held by TBSI), and
Ateka owns 100% of the shares of TTT, and 99% of the partnership equity rights in TTL LP (the remaining 1% being held by TTT) (“Purchased
Equity”); and
WHEREAS,
the Purchaser desires to acquire from the Sellers, and the Sellers desire to sell to the Purchaser the Purchased Equity, as well as the
Seller’s and their affiliates’ rights to receive all Liabilities and Debts owed to them by TTG immediately after the Closing
(“Purchased Debt”), (The Purchased Equity together with the Purchased Debt “Purchased Rights”),
on the terms and conditions set forth herein; and
WHEREAS,
the Purchaser and TT have engaged with Lahav Fund, as set forth in the Lahav Fund Financing Agreement, in order to allow the repayment
of TT’s debts towards the Sellers and their affiliates and to finance TT’s activity, in the amount of 35,000,000 NIS ;
NOW,
THEREFORE, in consideration of the mutual promises and covenants set forth herein, the parties hereby agree as follows:
|
1.1. |
Certain
Definitions. |
As
used in this Agreement, the following terms shall have the following meanings, unless defined specifically elsewhere in this Agreement:
“Applicable
Law” or “Law” means, with respect to any Person, any law (including common law), statutes, regulations,
written regulatory guidance, directives, constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment,
decree or ruling enacted, adopted, promulgated or applied by a governmental authority that is binding upon and applicable at the relevant
time to such Person.
“Business
Day” means a day, other than Friday, Saturday, Sunday or other day on which commercial banks in Tel-Aviv or New York are closed
for clearing banking transactions.
“Consideration”
shall have the meaning ascribed to such term in Section 3.2.
“Closing”
shall have the meaning ascribed to such term in Section 3.6 below.
“Closing
Date” shall have the meaning ascribed to such term in Section 3.6 below.
“Debt”
or “Liabilities” means any debt or indebtedness, including, but not limited to: (a) all obligations (including
interest) for borrowed money or which have been incurred and remain outstanding; (b) all liabilities secured by any Lien upon property
or assets owned by TTG, to the extent that TTG has assumed or become liable for the payment of such liabilities; (c) all liabilities
with respect to interest rate or currency swaps, collars, caps and similar hedging obligations; (d) all liabilities in regard to guaranties
or sureties by others of such TTG liabilities, regardless of whether by payment or performance, or whether such guaranties are in the
form of, without limitation, letters of credit, deposits, bonds or other forms of security, indemnity, surety or guaranty; (e) all tax
liabilities; (f) all past due payables; (g) all liabilities, including tax, for declared and unpaid dividends; (h) all liabilities to
the Sellers, including without limitation, any liabilities with respect to loans provided to TTG by the Sellers and/or their Affiliates;
(i) all liabilities with respect to employees benefits and rights; (j) all liabilities with respect to the termination of lease agreements;
(k) all liabilities for accrued but unpaid interest and breakage fees; (l) all liabilities which derive from forward contracts; (m) all
liabilities related to transaction expenses paid by TTG in connection with the consummation of agreement; (n) all liabilities created
or arising under any framework arrangements for the purchase of inventory which are due and payable; (o) all lease obligations; (p) all
liabilities with respect to grants; (q) all liabilities created or arising under any capital notes, including such made in favor of the
Sellers.
“Earnout
Shares” means shares that were issued by OmniQ pursuant a ‘securities purchase agreement’, such that the issued
shares shall be governed by the United States Securities and Exchange Commission (“Commission”) pursuant to the Securities
Act of 1933 (as amended), and as the relevant rule may be amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission having substantially the same effect as such rule, and having a share value which is cash equivalent, equal to USD
750,000 according to the average closing price for OmniQ Common Stock on NASDAQ for the 10 consecutive trading days preceding (but not
including) the date of issuance of such shares to the Sellers.
“EBITDA”
means earnings before interest taxes depreciation and amortization all in accordance with the financial reports (audited or reviewed,
as the case may be) of TT, approved by the auditor of the Purchaser, provided that, any amount that the Purchaser or any of its affiliates
will receive from the TT entities as management fees exceeding the sum of USD 300,000 per year shall be excluded together with any transaction
which is not in arm’s length or fair market value with Purchaser or its affiliates.
“Employee
Representative” means the official representative of the employees of the relevant entity, in accordance with the Applicable
Law.
“Fully
Diluted Basis” means the number of the issued and outstanding share capital and the partnership equity rights (as applicable)
in each TTG entity after giving effect to the exercise, exchange or conversion of any outstanding securities, rights, options, warrants,
calls, commitments or agreements of any nature or character (whether debt or equity) that are, directly or indirectly, exercisable or
exchangeable for, or convertible into or otherwise represent the right to purchase or otherwise receive from such entity, directly or
indirectly, any such shares or partnership equity rights or any other outstanding arrangement to acquire from such entity at any time
or under any circumstance, shares or partnership equity rights of such entity or any such other securities of such entity, including
all Options and/or shares or partnership equity rights reserved by such entity for grant or issuance to officers, directors, employees
and consultants.
“Financial
Statements” means balance sheet and statement of operations, statement of changes in stockholders’ and partners’
equity and statement of cash flows, including notes thereto.
“Governmental
Consent” means the required (if required) written approvals of the following official governmental authorities, for the change
of Control over any entity in the TTG: (a) the Israel Innovation Authority; and (b) the Israeli Ministry of Communications.
“Lahav
Fund” means Lahav Fund Three, Limited Partnership (registration number 540300266).
“Lahav
Fund Financing Agreement” means the financing agreement signed between Omniq, Tadiran and Lahav Fund for the financing of the
Transactions.
“Lien”
means any mortgages, pledges, charges, security interests, encumbrances, hypothecations, lines of credits or third party rights.
“Losses”
means any and all direct losses, liabilities, claims, damages, fines, payments, taxes, charges, necessary costs and reasonable expenses,
sustained or incurred by a Purchaser Indemnified Party as a result of or arising out of an Indemnifiable Event.
“Listed
Shares” means shares that were issued by OmniQ pursuant a ‘securities purchase agreement’, such that the issued
shares shall be governed by the United States Securities and Exchange Commission (“Commission”) pursuant to the Securities
Act of 1933 (as amended), and as the relevant rule may be amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission having substantially the same effect as such rule. Such shares shall be restricted from trade in the stock exchange
for a period of 12 calendar months as of Closing Date and shall be released after such restriction period in a monthly amount equal to
the higher of: (a) 10% of the amount of the Listed Shares issued to the Sellers in the Closing; or (b) 10% of the trading volume in the
shares in the preceding month. As long that the Listed Shares have not been sold through the stock exchange, such shares shall be subject
to an irrevocable proxy appointing Shai Lustgarten or anyone appointed by him on his behalf with full power of substitution, to vote,
in his sole discretion, all of the Listed Shares, at all meetings, annual or special, of OmniQ’s shareholders, or any adjournment
or adjournments of the same, and in all unanimous or non-unanimous written consents of shareholders, with respect to all matters submitted
to the shareholders of OmniQ for approval. Save for selling the listed shares through the stock exchange, The Sellers may sell the Listed
Shares to a third party that will take upon himself the abovementioned limitations, and in case such third party requests a discount
on the Listed Share price due to the said proxy right, the Sellers shall notify the Purchaser and will grant the Purchaser 7 Business
Days to negotiate such matter with the third party. If such negotiations are unsuccessful in respect of removing such third party’s
discount request, then the said proxy shall be revoked.
“Material
Adverse Effect” means between the signing date of this Agreement and the Closing Date- any event, occurrence, fact, condition
or change that, individually or in the aggregate, is effecting TTG’s business as it is being conducted as of the date hereof, which
will reasonably result in at least a 5% decrease in TTG’s income, or at least a 10% increase in TTG’s Debt compared to the
financial results of TTG, prior to the signing of this Agreement;
“Memorandum
of Understandings” means the Agreement signed between the parties at December 4th, 2022.
“OmniQ
Common Stock” means the common stock, par value $0.001 per share of OmniQ.
“Options”
means any outstanding: (a) securities, instruments or obligations that are or may become convertible into or exchangeable for shares
or partnership equity rights of TTG entities or other securities of any Company; (b) subscriptions, options, calls, convertible notes,
warrants or rights (whether or not currently exercisable) to acquire any shares or partnership equity rights or other securities of TTG;
and (c) contracts or other arrangement under which TTG may become obligated to sell or otherwise issue any shares or partnership equity
rights or any other securities of TTG or any of its current or future affiliates.
“Person”
means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including
a governmental authority.
“Purchased
Debt” shall have the meaning ascribed to it in the Introduction of this Agreement.
“Purchased
Equity” shall have the meaning ascribed to it in the Introduction of this Agreement.
“Share
Value” means the average closing price for OmniQ Common Stock on NASDAQ for the 10 consecutive trading days preceding (but
not including) the signing date of this Agreement and the 10 consecutive trading days preceding (but not including) the Closing Date
of this Agreement.
“TT”
shall have the meaning ascribed to such term in the Introduction to this agreement.
“TTG”,
“TTG entities” means all TT entities and their subsidiaries including, but not limited to, Tadiran Telecom Inc. and
Kunming Tadiran Telecommunication Equipment Co.
“Transactions”
means the purchase of the Purchased Rights by the Purchaser for the Considerations paid thereof, and all the other transactions contemplated
by this Agreement and the other Transaction Documents and the debt repayments made by TT in accordance with this Agreement.
2. |
Definitional
and Interpretative Provisions |
(a)
the words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this Agreement; (b) the captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections, Exhibits and Schedules
are to Articles, Sections, Exhibits and Schedules of this Agreement, unless otherwise specified; (c) all Exhibits and Schedules annexed
hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized
terms used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement; (d) any
singular term in this Agreement shall be deemed to include the plural, and any plural term the singular (unless the context requires
otherwise); (e) whenever the words “include”, “includes” or “including” are used in this Agreement,
they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those
words or words of like import; (f) all references to time shall refer to Israel time. The word “extent” in the phrase “to
the extent” means the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”;
(g) the use of the word “or” shall not, necessarily, be exclusive; (h) any rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement; (i) any agreement
or instrument defined or referred to herein, or in any agreement or instrument that is referred to herein, means such agreement or instrument
as from time to time amended, modified or supplemented until the date hereof. Other terms may be defined elsewhere in the text of this
Agreement and shall have the meaning indicated throughout this Agreement; (j) the term “foreign” when used with respect to
Applicable Law or a governmental authority shall refer to all applicable jurisdictions other than Israel; (k) the term “Dollar”,
“$”, USD or US$ shall refer to the currency of the United States of America.
3. |
ESSENCE
OF THE AGREEMENT |
|
3.1. |
Purchased
Rights. Subject to the terms and conditions set forth in this Agreement, and in reliance on the representations, warranties and
covenants of the Sellers and TT regarding TTG, at the Closing, the Sellers shall sell, assign, transfer and deliver to the Purchaser
all of the Purchased Rights, and the Purchaser shall purchase, acquire and accept from the Sellers and any entity on their behalf
the Purchased Rights, in each case, free and clear of any and all Liens. |
As
a result of the foregoing, immediately after the Closing, the Purchaser shall be the sole owner, free and clear of any and all Liens
(excluding any liens, or encumbrances of any kind created by the Purchaser for the financing of the Transactions or otherwise), of 100%
of the Purchased Rights on a Fully Diluted Basis, representing all of the assets and Liabilities of TTG, except for Liabilities that
remain under the Sellers’ responsibility according to this Agreement.
|
3.2.1. |
Closing
Consideration. In consideration of the sale, assignment, transfer and delivery of the Purchased Rights to the Purchaser at the
Closing Date and all under the terms and conditions of this Agreement the Sellers shall receive from the Purchaser an amount of USD
15,250,000 (the “Consideration”). The Consideration will be paid at the Closing by the Purchaser to the Sellers,
as follows: |
|
3.2.1.1. |
An
amount of USD 12,500,000 shall be paid by wire transfer to the Sellers’ bank accounts, (or affiliated parties of the Sellers),
details of which will be provided to the Purchaser at least 3 Business Days prior to the Closing Date. Such amount shall be comprised
of: (a) approximately 22,300,000 NIS as debt repayment (amounting to approximately 6,123,000 USD in accordance with Section 3.4
below). Such amount will be determined at the Closing and will be notified to the Purchaser 3 Business Days prior to the Closing;
and (b) any balance from the Purchaser’s own resources (together the “Cash Consideration”). |
Any
Cash Consideration which will be paid to the Sellers in NIS will be calculated for the purpose of this Agreement in according to conversion
rate of USD 1 to NIS 3.65.
|
3.2.1.2. |
The
remaining USD 2,750,000 (“In Kind Consideration”) shall be paid by an allotment of Listed Shares of OmniQ Common
Stock that shall be issued by OmniQ to Afcon on the Closing Date, having a Share Value which is cash equivalent, equal to the In
Kind Consideration (“OmniQ Closing Shares”). |
|
3.2.2. |
Earnout
Consideration. After the end of 8 fiscal quarters following the end of the first fiscal quarter following the Closing Date (“Earnout
Period”), the Sellers shall receive from the Purchaser and/or TTG, as the Purchaser shall decide in its sole discretion,
an additional amount of USD 750,000 (the “Earnout Consideration”), which shall be paid by an allotment of Earnout
Shares in OmniQ Common Stock that shall be issued by OmniQ to the Sellers (to be allocated between them pursuant to the Sellers discretion)
following the Earnout Period. The Sellers will be entitled to the Earn out Consideration, provided that, during the Earnout
Period, TT’s accumulated EBITDA is a positive number. During the Earnout Period, the TT entities shall furnish the Sellers
with their quarterly Financial Statements within a reasonable time following each fiscal quarter. |
|
3.2.3. |
the
Earnout Shares shall be tradeable after the end of 10 months following their issuance to the Sellers in a monthly amount equal to
(a) 10% of the amount of the Earnout Shares issued to the Sellers; or (b) 10% of the trading volume in the shares in the preceding
month as long any of the Sellers, or any other shareholder that purchased said shares outside the stock exchange, holds the Earnout
Shares, such shares shall be subject to an irrevocable proxy appointing Shai Lustgarten, or anyone appointed by him on his behalf,
with full power of substitution, to vote, in his sole discretion, all of the Earnout Shares, at all meetings, annual or special,
of OmniQ’s shareholders, or any adjournment or adjournments of the same, and in all unanimous or non-unanimous written consents
of shareholders, with respect to all matters submitted to the shareholders of OmniQ for approval. Save for selling the listed shares
through the stock exchange, the Sellers may sell the Earnout Shares to a third party that will take upon himself the abovementioned
limitations, and in case such third party requests a discount on the Earnout Shares price due to the said proxy right, the Sellers
shall notify the Purchaser and will grant the Purchaser 7 Business Days to negotiate such matter with the third party. If such negotiations
are unsuccessful in respect of removing such third party’s discount request, then the said proxy shall be revoked. |
|
3.2.4. |
Cash
Consideration’s division between the Sellers. The following amounts shall be paid to the Sellers, out of the Cash Consideration
as follows: (a) US $4,947,000 shall be paid to Afcon; and (b) US $1,430,000 shall be paid to the Sellers shall be paid to Ateka. |
|
3.3. |
Outstanding
Obligation to Provide Services After the Closing Date. TT and any of its subsidiaries together with the Purchaser undertake to
provide the Sellers with the services required in each of the projects set forth in Schedule 3.3 attached hereto,
and in the scope described therein and subject to the payment of consideration and the terms as detailed in such Schedule. It is
hereby being clarified that as of the date hereof and as of the Closing Date, there are no outstanding debts of the Sellers towards
TT entities in connection with any service provided to the Sellers prior to the Closing Date, and all such payments were fully paid. |
|
3.4. |
Debt
Repayment. TT shall repay at Closing part of its debts towards the Sellers, as set forth below: |
|
3.4.1. |
TT
shall repay debts in the amount of US $6,123,000, by wire transfer, to Afcon (and/or any of its affiliates’) bank accounts
(details of which will be provided to the Purchaser at least 3 Business Days prior to the Closing Date), from the funds raised in
the Lahav Fund Financing Agreement, at the Closing date. |
|
3.4.2. |
All
debts repaid shall be divided between Afcon and its affiliates, pursuant to Afcon’s instructions to the Purchaser. |
|
3.5. |
Withholding
Taxes. The Purchaser shall be entitled to deduct and withhold from the Consideration such amounts as it is required by Israeli
Applicable Law to deduct and withhold from payment of the Consideration, unless the Sellers provides the Purchaser with a certificate
from the Israel Tax Authority (the “ITA”): (a) exempting the Purchaser from the duty to withhold Israeli taxes with
respect to the applicable Consideration of the Sellers; or (b) determining the applicable rate of Israeli tax to be withheld from the
applicable Consideration of the Sellers; or (c) providing any other instructions regarding the payment or withholding with respect to
the applicable Consideration of the Sellers, all in a form satisfactory to the Purchaser (a “Tax Withholding Certificate”),
in which case the Purchaser shall act in accordance with the terms of such Tax Withholding Certificate. To the extent that amounts are
so withheld by the Purchaser, the Purchaser shall promptly pay such amounts to the ITA and promptly provide the Sellers with written
confirmation as to the amount so withheld. Any withheld amounts shall be treated for all purposes of this Agreement as having been paid
to the Sellers as part of the applicable Consideration due to the Sellers.
|
|
|
|
|
3.6. |
Closing.
The closing of the Transaction (the “Closing”) shall take place at the last Business Day of a calendar month,
following the date on which all the Conditions to Closing set forth in Section 3.7 below, have been met, provided however,
that the Closing will not take place: (i) earlier than 5 Business Days after such conditions have been met (it being understood,
that if less than 5 Business Days remain until the end of the calendar month, the Closing shall be postponed to the end of the following
calendar month); and (ii) later than 60 days following the date hereof (the “Closing Date”). In the event that
the Conditions to Closing have not been met within that 60 days period, each party shall have the right to terminate this Agreement,
by sending a written notice to the other party, following such notice the parties shall be released of any of the obligations thereof,
all subject to the Seller’s or the Purchaser’s right to extend such 60 days period in an additional 30 days, in a written
notice to the other Party, at least 5 days prior to the termination of such 60 days period in such case the period in section (ii)
above will be extended accordingly. Neither party shall have any claim, demand, or liability towards the other party in connection
with such notice and the termination of this Agreement thereof, provided that such Party did not breach any of its obligations under
this Agreement. |
At
the Closing (except as stated otherwise in Section 3.6.1.7 below), the following transactions shall occur, which transactions shall
be deemed to take place simultaneously and no transaction shall be deemed to have been completed or any document delivered until all
such transactions have been completed and all required documents delivered:
|
3.6.1. |
TT
and the Sellers shall deliver to the Purchaser the following documents or take the following actions: |
|
3.6.1.1. |
True
and correct copies of the TT entities’ shareholders meetings resolutions or partnership resolutions approving the Agreement
in the form attached hereto as Schedule 3.6.1.1; |
|
3.6.1.2. |
True
and correct copies of the Sellers’ and TT’s Boards of Directors (the “Boards”) meetings resolutions
approving the Agreement in the form attached hereto as Schedule 3.6.1.2; |
|
3.6.1.3. |
Validly
executed share certificates and partnership equity rights certificates covering the Purchased Rights and, issued in the name of the
Purchaser, in the form attached hereto as Schedule 3.6.1.3; |
|
3.6.1.4. |
The
shareholder or partners register of the TT entities, evidencing the transfer of ownership of the Purchased Rights as of the Closing
Date to the Purchaser certified by officers of the TT entities; Schedule 3.6.1.4; |
|
3.6.1.5. |
Duly
executed share transfer deeds, and partnership equity rights transfer deeds, in the forms attached hereto as Schedule 3.6.1.5,
signed by the Sellers, effecting the transfer of the Purchased Rights from the Sellers to the Purchaser together, with either
(a) the share/partnership equity rights certificates therefor or (b) affidavits of loss of certificates; |
|
3.6.1.6. |
Duly
completed and executed notices to the Israeli Registrar of Companies, “Reshumot” and Registrar of Partnerships
in connection with this Agreement regarding the transfer of the Purchased Rights to the Purchaser, resignation letter of the Sellers’
representatives in the Companies’ and Partnerships’ boards, and the appointment of the Purchaser’s directors to
the Companies’ and Partnerships’ boards; Schedule 3.6.1.6; |
|
3.6.1.7. |
At
least 5 Business Days prior to the Closing Date, a compliance certificate duly executed by an authorized signatory on behalf of the
Sellers and with respect to TTG entities certifying that the representations given in this Agreement pursuant to Section 4 hereunder,
are true and correct in all material respects, subject to any update (if required) of the said representations, in the form to be
attached at the Closing as Schedule 3.6.1.7 (“Officer Certificate”); |
It
is hereby clarified, that in case the Officer Certificate shall include any updates to the representations given in this Agreement pursuant
to Section 4 hereunder, and if the circumstances that led to such updates have caused a Material Adverse Effect in connection, then
the Purchaser shall have the right, in its sole discretion, to terminate this Agreement, by sending a written notice to the Sellers prior
to the Closing Date, following such notice the Purchaser shall be released of any of its obligations thereof and the Purchaser shall
not have any claim, demand, or liability towards Sellers and/or TTG and/or any other party in connection with such notice and the termination
of this Agreement thereof. For the avoidance of doubt, Purchaser’s rights under this Section shall apply also in case the update
in the representations constitutes a Material Adverse Effect on the representations provided herein.
|
3.6.1.8. |
Duly
signed approval by the Sellers that there is no outstanding intercompany (including with respect to Sellers’ Affiliates, as
defined below) Debt, in the form to be attached as Schedule 3.6.1.8 at the Closing. |
|
3.6.1.9. |
An updated Schedule 3.3. |
|
|
|
3.6.1.10. |
TT shall repay the debt as detailed in Section 3.4
above. |
|
3.6.2. |
The
Purchaser shall deliver to the Sellers the following documents or take the following actions: |
|
3.6.2.1. |
transfer
to the Sellers of the Consideration; |
|
3.6.2.2. |
repayment
of debts as detailed in Section 3.4. |
|
3.6.2.3. |
deliver
to the Sellers true and correct copies of the resolutions of the Purchaser’s board of directors and stockholders, as applicable,
approving the agreement substantially in the form attached hereto as Schedule 3.6.2.3; |
|
3.6.2.4. |
Securities
Purchase Agreement for the issuance of the OmniQ Closing Shares, in the form to be attached as Schedule 3.6.2.4; |
|
3.6.2.5. |
An
undertaking as required by the guidelines of the Israeli Innovation Authority (“IIA”), subject to section 3.7.2.7
below. |
|
3.6.3. |
Following
the Closing Date, the Sellers and entities held directly or indirectly by the Sellers (“Affiliates”) shall be
released of all debts towards TTG and from all obligations towards third parties in favor of TTG, as set forth in Schedule
3.6.3, including in connection with any service provided by TTG to the Sellers prior to the Closing Date, and the Purchaser
shall come in their place in all such obligations. |
|
3.6.4. |
Following
the Closing Date, there will be no outstanding debts of TTG towards the Sellers and their Affiliates, except as specifically stated
in this Agreement, including in connection with any service provided to the TTG by the Sellers prior to the Closing Date, and all
such payments were fully paid. |
|
3.7. |
Conditions
to Closing |
|
3.7.1. |
Mutual
Conditions and Governmental Consents |
The
respective obligations of each of the parties are subject to satisfaction or waiver, at or prior to the Closing Date, of each of the
following conditions:
|
3.7.1.1. |
at
the Closing Date, there shall be in effect no preliminary or permanent injunction or other order issued by any governmental authority
of competent jurisdiction which restrains, prohibits or otherwise makes illegal the consummation of the Transaction. |
|
3.7.1.2. |
Receipt
of a confirmation in writing from the Competition (Antitrust) Commissioner approving the Transaction. |
|
3.7.1.3. |
Letters
of consent signed by all the banks which have pledges over the Sellers’ assets and/or TT entities’ assets, approving
the Control change contemplated under this Agreement without applying any unreasonable restrictions or conditions upon the TTG entities
and/or the Purchaser. In the event that, prior to the Closing Date, it will be discovered that a bank consent is required in order
to allow change in control at Kunming Tadiran Telecommunication Equipment Co., or any other TTG entity, the parties shall act mutually
to obtain such consent as a condition to Closing. |
|
3.7.1.4. |
The
parties shall have obtained the relevant Governmental Consent necessary for the fulfillment of the Agreement. Each of the parties
hereto and its subsidiaries (as applicable) shall perform all acts and execute such further documents necessary on its behalf in
order to obtain all relevant Governmental Consents. In the event that, prior to the Closing Date, it will be discovered that additional
governmental consents are required in order to allow change in control at TTG, the parties shall act mutually to obtain such consent
as a condition to Closing. |
|
3.7.2. |
Purchaser’s
Conditions |
The
obligations of the Purchaser to consummate the Closing shall be further subject to the satisfaction or waiver by the Purchaser at or
prior to the Closing, of each of the following conditions:
|
3.7.2.1. |
Sellers’
representations shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as
though made on and as of such date (unless any such representation or warranty is made only as of a specific date, in which event
such representation or warranty shall be true and correct only as of such specific date). The representations of TT and Sellers shall
be updated (if required) pursuant to the Officer Certificate provided at the Closing Date and subject to the provisions of Section
3.7.1.1 above. |
|
3.7.2.2. |
The
Sellers shall have performed in all material respects the obligations, and complied with the agreements and covenants and provided
all documents and approvals according to the provisions of section 3.6.1 above at or prior to the Closing Date. |
|
3.7.2.3. |
Since
the date of this Agreement and until the Closing Date (included), no Material Adverse Effect have occurred. |
|
3.7.2.4. |
TT’s
aggregate cash balance immediately prior to the Closing, according to a bank certificate to be provided by the Sellers and approved
in writing by TT’s CEO and CFO at the Closing, shall not be less than USD 2,000,000 subject to the provisions of Section 3.4.2
above. |
|
3.7.2.5. |
The
Sellers and TT have reached an agreement with the Employee Representatives which was approved in advance and in writing by the Purchaser
according to the provisions of Section 7.6 below. |
|
3.7.2.6. |
The
relevant TT entity and relevant subsidiary or affiliate of Afcon shall have signed the Lease Agreements as set forth in Section 7.5
below. |
|
3.7.2.7. |
TT
have obtained the IIA’s approval including approval of settlement of all debts of TT to IIA relating to the period prior to
the Closing Date, and any agreement reached with the IIA that applies changes in the terms and conditions with respect to the settlement
of any future royalties following the Closing Date, shall be subject to the Purchaser’s prior written consent. It is hereby
acknowledged that the amount accredited in the provision for such purpose in the Financial Reports (as defined in Section 4.4
below) is equal to US $780,000, and it is hereby agreed that: (a) if the amount required to be paid by the IIA is equal to US $780,000,
the TT will bear the payment in an amount of US $390,000 (“TT IIA Liability Amount”) and the Sellers will provide
TT with a loan for the balance amount (i.e. US $390,000), which shall bear market terms interest rate and be repaid within 12 months
thereafter (“Sellers IIA Loan”); (b) if the amount required to be paid by the IIA is greater than US $780,000,
the provisions of subsection (a) above shall be apply with respect to the first US $780,000, and any amount in excess of such amount
shall be reduced from the Consideration payable in the Closing; or (c) if the amount required to be paid by the IIA is lesser than
US $780,000, then TT will pay the TT IIA Liability Amount and any remaining balance will be provided to TT by the Sellers, as Sellers
IIA Loan. In such a case, the balance between the amount so required by the IIA and US $780,000 shall be paid to the Sellers in addition
to the Consideration or the Earnout Consideration, within 12 months following the Closing Date (“Additional Consideration”). |
The
Sellers IIA Loan in each of the event in subsections (a) –(c) above and the Additional Consideration, shall be secured by TT’s
promissory note or simple check addressed to the Sellers, per their instructions.
For
the avoidance of doubt, it is hereby clarified that Sellers shall bear the advisors cost in connection with obtaining the IIA’s
approvals as stated above.
|
3.7.3. |
Sellers’
Conditions |
The
obligations of the Sellers to consummate the Closing shall be further subject to the satisfaction or waiver by Sellers at or prior to
the Closing of the following conditions:
|
3.7.3.1. |
the
representations of the Purchaser shall be true and correct as of the date of this Agreement and as of the Closing Date as though
made on and as of such date (unless any such representation or warranty is made only as of a specific date, in which event such representation
or warranty shall be true and correct in all material respects only as of such specific date). |
|
3.7.3.2. |
the
Purchaser shall have performed in all material respects the obligations, and complied with the agreements and covenants, required
to be performed by or complied with by it under this Agreement at or prior to the Closing Date. |
|
3.7.4. |
Waiver
of Conditions |
|
3.7.4.1. |
The
conditions set forth in Section 3.7.1 may only be waived in writing by the Purchaser and Sellers. |
|
3.7.4.2. |
The
conditions set forth in Section 3.7.2 may only be waived in a writing duly executed by the Purchaser. |
|
3.7.4.3. |
The
conditions set forth in Section 3.7.3 may only be waived in a writing duly executed by the Sellers. |
4. |
REPRESENTATIONS
AND WARRANTIES OF THE SELLERS |
The
Sellers and TT, jointly and severally, hereby represent and warrant to the Purchaser that, except as set forth on the Disclosure Schedule
attached as Exhibit A to this Agreement, which exceptions shall be deemed to be part of the representations and warranties
made hereunder (the Disclosure Schedule shall be arranged in sections corresponding to the numbered and lettered sections contained in
this Section 4, and the disclosures in any section of the Disclosure Schedule shall qualify other sections in this Section 4;
and reference to a Schedule in this Section 4 shall mean a Schedule of the Disclosure Schedule), as of the date hereof (except to the
extent such representations and warranties explicitly speak as of an earlier or later date), and acknowledge that the Purchaser is entering
into this Agreement as an “as-is” transaction, subject to reliance on the correctness of the following representations. All
the warrants and representations that are related to TT under this Section 4 shall be deemed as being made also with respect to TTG (if
applicable).
|
4.1.1. |
TT
entities are duly organized and validly existing under the laws of any jurisdiction where they are registered, and have full corporate
power and authority to own, lease and operate their properties and assets and to conduct their business as now being conducted and
as currently proposed to be conducted. The Sellers have all requisite power and authority to execute and deliver this Agreement and
all other Transaction Documents to which they are a party and to consummate the Transactions to be consummated by it and perform
its obligations contemplated hereby and thereby. TT entities have not taken any action or failed to take any action, which action
or failure would preclude or prevent them from conducting their business after the Closing in the manner heretofore conducted in
all material respects. TT has all material franchises, permits, licenses, and any similar authority necessary or required under any
Applicable Law for the conduct of its business as now being conducted and as currently proposed to be conducted. |
|
4.1.2. |
Each
of the Sellers: (a) it is duly incorporated and validly existing under the laws of the country of its incorporation; (b) all necessary
actions and conditions have been taken, fulfilled and done in order to enable it to enter into perform and comply with its obligations
hereunder and those obligations are validly, and legally binding and enforceable upon it. Sellers’ entry into and performance
of or compliance with its obligations hereunder does not violate or exceed any power or restriction granted or imposed by: (i) any
Applicable Law to which it is subject; or (ii) any of its constituting documents; and (iii) the entry into, performance of or compliance
by such Seller with its obligations under this Agreement will not: (X) constitute a breach of any contract to which it is a party
which breach will limit or prohibit the ability of the Seller to consummate the Transactions; nor (Y) result in the existence of,
or oblige it to create any Lien over those assets. |
|
4.2. |
Ownership
of Equity Rights. The Sellers are the owners of the Purchased Equity. Immediately after the Closing, the Purchaser shall
be the sole owner, free and clear of any and all Liens, of all equity rights of the Purchased Equity on a Fully Diluted Basis. Other
than according to this Agreement, no TT entities’ share capital or partnership equity rights are reserved for issuance upon
the exercise of Options. As of the Closing, there are no other share capital, partnership equity rights, preemptive rights, convertible
securities, outstanding warrants, Options or other rights to subscribe for, purchase or acquire from the TT entities and/or from
any existing shareholder or partner any share capital or partnership equity right of the TT entities and there are no contracts or
commitments, written or oral, providing for the issuance of, or the granting of, any rights to acquire, any share capital or partnership
equity rights of the TT entities or under which the TT entities and/or any existing shareholder or partner is, or may become, obligated
to issue any debt or equity securities and there are no commitments, promises, agreement or undertakings with respect to grants of
any Options. All issued and outstanding share capital or partnership equity rights of the TT’s entities have been duly authorized,
and is validly issued and outstanding and fully paid. |
|
4.3. |
Subsidiaries.
TT entities own the share capital or partnership equity rights of certain corporations as detailed in Schedule 4.3.
Except as provided in Schedule 4.3, TT does not own, directly or indirectly, any of the issued and outstanding share capital or partnership
equity rights capital of any other company or other entity, and is not a participant in, nor does it hold any interest in any partnership,
joint venture or other business entity, association or organization. There are no contracts, arrangements or commitments providing
for the issuance or granting to the TT of, or the purchase by the TT of any share capital or partnership equity rights capital or
any other interest in any company, partnership, joint venture or other business association or organization. |
|
4.4. |
Financial
Statements. The audited Financial Statements of the TT and Kunming Tadiran Telecommunication Equipment Co. for the fiscal
year ended December 31, 2021 and Tadiran Telecom Inc.’s reporting package for such year (the “2021 Financial Statements”)
as Schedule 4.4a, the audited Financial Statements of the TT and Kunming Tadiran Telecommunication Equipment Co. for
the fiscal year ended December 31, 2022 and Tadiran Telecom Inc.’s reporting package for such year are attached hereto (and
if not yet prepared, shall be attached no later than July 31st, 2023) as Schedule 4.4b
(the “2022 Financial Statements “); and the unaudited and reviewed Financial Statements of the TT entities and
Kunming Tadiran Telecommunication Equipment Co. as of March 31, 2023 and June 30, 2023 and Tadiran Telecom Inc.’s reporting
package for such periods (the “Balance Sheet Date”), are attached hereto (and if not yet prepared, shall be attached
no later than August 31st, 2023 or the Closing date, the earlier of which) as Schedule 4.4c
(the “Interim Financial Statements” and collectively with the 2022 Financial Statements and the Interim Financial
Statements: the “Financial Reports”). The Financial Reports are true and correct, fairly present in all material
respects the financial position of the TT entities as of its respective dates and the results of its operations for the periods then
ended, and have been prepared in accordance with the International Financial Reporting Standards consistently applied except that
the Interim Financial Statements may not contain all footnotes required by IFRS. TT’s entities do not have any liability or
obligation (whether matured or unmatured, expected, fixed or determinable, absolute or contingent, accrued or charged, pending or
due, related or unrelated to taxes or otherwise, including without limitation, all Debt) (collectively, “Obligations”),
except Obligations, reflected in the Financial Reports. In the event that the closing will be delayed for more than an additional
quarter, for each such quarter the Sellers shall provide the Purchaser with additional reviewed interim Financial Statements for
such quarters, as applies to the Interim Financial Statements. |
Following
the signature date, the Sellers shall allow and reasonably assist the Purchaser and an auditor on their behalf, to adjust TT’s
financial statements to the US GAAP.
|
4.5. |
Main
Financial Terms |
|
4.5.1. |
Subject
to Section 3.7.2.7 and Section 3.4.2, the TT cash balance immediately prior to the Closing Date shall not be less than
250,000 USD (“TT Minimum Cash Balance”). |
|
4.5.2. |
Prior
to the Closing, TT entities’ net working capital will be no less than 2,000,000 USD, and after the Closing the TT entities’
net working capital shall be no less than 5,750,000 USD (“TT Net Working Capital Requirements”). |
|
4.5.3. |
TT’s
Equity Prior to the Closing shall be no less than 10,750,000 USD and after the Closing TT’s Equity shall be no less than 6,500,000
USD, in accordance with IFRS (“Minimal Equity” and “IFRS”, respectively). |
|
4.5.4. |
The
main financial terms set forth in Sections 4.5.1-4.5.3 above, will not take into account any amounts invested in TT prior to or at
the Closing by the Purchaser or any financial institute on its behalf (including from the Lahav Fund) which will not be paid as a
debt repayment according to Section 3.4 above. |
Should
there be a shortage of any of the above minimal financial requirements, the Sellers shall pay the Purchaser any such amount, according
to Section 4.6 below.
|
4.6. |
Settlement
of shortfall in Main Financial Terms |
|
4.6.1. |
No
later than 45 days following the Closing, TT and the Sellers, jointly and severally, shall prepare and provide the Purchaser with
a reviewed but unaudited Financial Statements as of the Closing Date, approved and signed by TT’s CEO and CFO (the “Reviewed
Financial Statements”). In the event that such Reviewed Financial Statements shall indicate a shortage of TT minimum
cash balance and/or the net working capital from the TT Net Working Capital Requirements, or a shortage in the Minimal Equity,
then the Sellers shall refund the Purchaser for said shortage within 30 days thereafter. |
A
draft of the Reviewed Financial Statements shall be provided to the Purchaser no later than 30 days following the Closing Date. Should
the Purchaser have any reservations or assertion with respect to the Reviewed Financial Statements draft, and the parties shall not agree
upon such reservations or assertions, the parties shall nominate an accountant from one of the 5 big accounting firms in Israel, as a
Determinator (the “Determinator”), and his determination with respect to the dispute shall be final and conclusive
upon the parties. Should the parties not reach an agreement with respect to the Determinator’s identity within 5 Business Days,
the Determinator’s identity shall be determined by the President of the Institute of the Certified Public Accountants in Israel.
Following the Determinator’s determination, the parties shall act in accordance to Section 4.6.1 above.
|
4.7. |
Business
in the Ordinary Course. Except as set forth in Schedule 4.7 attached hereto, since December
31st, 2022, and until the Closing Date TT has been operated only in the usual and ordinary course of business and there
has not been any material change in the assets, liabilities or operations of TT, other than changes in the ordinary course of business. |
|
4.8. |
Authorization.
Subject to the Conditions to Closing set forth above (including the Governmental Consent), no consent, approval, order, license,
permit, action by, or authorization of or designation, declaration, or filing with any governmental authority or any other third
party on the part of the Sellers or TT is required that has not been, or will not have been, obtained by the Sellers or TT prior
to the Closing in connection with the valid execution, delivery and performance of the Transaction Documents or the transfer of the
Purchased Rights hereunder (other than filings with the Israeli Register of Companies and Partnerships with respect to the transfer
of Equity Rights to the Purchaser). |
|
4.9. |
Capacity
of Sellers. Sellers have not, since the parties have signed, on December 4, 2022, the memorandum of understandings and are
not, as of today: (a) made a general assignment for the benefit of creditors of the Purchased Rights that is in effect on the Closing
Date; (b) filed, or had filed against them, any bankruptcy petition or similar filing that is in effect on the Closing Date; (c)
suffered the attachment or other judicial seizure of all or a substantially all of such Sellers’ assets that is in effect on
the Closing Date; or (d) taken or been the subject of any action that will have an adverse effect on such Sellers’ ability
to comply with or perform any of such Sellers’ covenants or obligations under any of the Transaction Documents. Sellers are
not subject to any Applicable Law that may have an adverse effect on their ability to comply with or perform any of their covenants
or obligations under any of the Transaction Documents. |
|
4.10. |
Compliance
with Law and non-violation of third party rights. To the Sellers’ best knowledge, the TTG entities are not in default
or in breach or violating: (a) the Articles or other formative document of the TTG entities; or (b) any note, indenture, mortgage,
lease, agreement, contract, purchase order or other instrument, document, Bank’s covenants, or agreement to which any of the
TTG entities is a party or by which it or any of its property is bound; or (c) any Law, statute, ordinance, regulation, order, writ,
injunction, decree, or judgment of any court or any governmental department, commission, board, bureau, agency or instrumentality,
including as to customs matters, domestic or foreign; or (d) Third-party rights. |
5. |
REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER |
The
Purchaser hereby represents and warrants to the Sellers with respect to itself as follows, and acknowledges that the Sellers are entering
into this Agreement in reliance thereon:
|
5.1. |
Organizational
Status. The Purchaser is a company, duly organized and validly existing and in good standing under the Applicable Law. |
|
5.2. |
Enforceability.
The Purchaser has full power, authority and means to enter into the Transaction Documents, and this Agreement, when executed
and delivered by the Purchaser and assuming the due authorization, execution and delivery by the other parties thereto, shall constitute
the valid and legally binding and enforceable obligations of Purchaser. |
|
5.3. |
Authorization.
The execution, delivery and performance of the obligations of the Purchaser hereunder and under the other Transaction Documents have
been duly authorized by all necessary corporate action, and the fulfillment of and compliance with the respective terms and provisions
hereof and thereof, and the consummation by the Purchaser of this Agreement and the Transaction Documents do not and will not require
any additional consent or approval on behalf of the Purchaser or from any court or governmental agency. |
|
5.4. |
Financial
Capabilities; Investment Experience. The Purchaser is a sophisticated and experienced party that is able to bear the economic
risk associated with the purchase of the Purchased Rights, and has the financial means and capabilities to uphold its obligations
set forth in this Agreement and the Transaction Documents. Additionally, the Purchaser has been afforded with the opportunity to
obtain information about TTG entities and perform a due diligence and any other investigation with respect to the TTG entities to
its full satisfaction. Notwithstanding the aforesaid, any information provided to the Purchaser other than pursuant to the representations
set forth in Section 4 above, shall not bind the Sellers. |
6. |
EFFECTIVENESS;
SURVIVAL; INDEMNIFICATION |
|
6.1. |
General.
Each of the Parties has the right to rely solely and fully upon all representations and warranties of the other Party, specifically
contained in this Agreement or any schedule hereto or thereto. |
|
6.2.1. |
The
Sellers shall, jointly and severally, indemnify the Purchaser (a “Purchaser Indemnified Party”) and hold each
such Purchaser Indemnified Party harmless of any Loss sustained or incurred by any of the Purchaser Indemnified Party as a result
of or in connection with the following (“Indemnifiable Event”): |
|
6.2.1.1. |
Breach
of the representations set forth in Section 4.1 (organization), Section 4.2 (Ownership of Equity Rights), Section
4.4 (Financial Statements), Section 4.8 (Authorization) and Section 4.9 (Capacity of Sellers) (“Fundamental
Representations”), which are to be true and correct, in any aspect, as of the Closing Date, except in the case of: (i)
Fundamental Representations which specifically relate to an earlier date, which representations and warranties shall be true and
correct, in any aspect, as to the said date, and (ii) if were updated pursuant to the Officer Certificate, then as of the date of
such update, or (iii) a representations given ‘to the best of the Sellers’ knowledge’ which in fact they were not
aware or shouldn’t have been aware of such breach at the Closing; |
|
6.2.1.2. |
Breach
of any representations other than the Fundamental Representations set forth in Section 6.2.1.1; |
|
6.2.1.3. |
Any
breach, default or violation of any covenant or obligation of, or agreement by, the Sellers or TT contained in this Agreement or
in any other Transaction Documents; |
|
6.2.1.4. |
Any
claim, or demand made against TTG by a third-party, including any Governmental Authority, which cause of action relates to the period
prior to the Closing Date and which was not reflected as required under IFRS in the Financial Statements. |
|
6.3. |
Limits
on Indemnification. |
|
6.3.1. |
Other
than in respect of intentional misrepresentation or fraud in no event shall the Sellers be liable to indemnify any Indemnified Party
for any indirect, consequential, special or punitive damages. |
|
6.3.2. |
No
claims shall be asserted against the Sellers, and the Sellers shall not be liable for any claim for indemnification in connection
with any Indemnifiable Events, for sums that exceed the actual Consideration received by the Seller and not more than 15,250,000
USD, and unless and until the amount of Losses claimed from the Sellers by Purchaser Indemnified Parties (i.e. related to Purchaser)
equals or exceeds USD 50,000 in the aggregate. |
|
6.3.3. |
Except
with respect to the Fundamental Representations (and other than in respect of intentional misrepresentation or fraud) no claim or
claims for indemnification may be made against the Sellers for any Losses following the lapse of twenty four (24) months following
the Closing Date. |
|
6.3.4. |
The
limitation of indemnification shall not apply to matters addressed in Section 6.2.1.4 above. |
|
6.3.5. |
In
matters addressed in Section 6.2.1.2 above, the limitation of indemnification shall not exceed 5,750,000 USD. |
Promptly
after the assertion of any claim by a third party or occurrence of any event which may give rise to a claim for indemnification from
the Sellers under this Section 6, a Purchaser Indemnified Party shall notify the Sellers immediately in writing of such claim. The Sellers
shall have the right to assume the control and defense of any such action (including, but without limitation, tax audits), provided that
the Purchaser Indemnified Party may participate in the defense of such action, shall fully cooperate with the defense and shall not sign
any plea or settlement agreement, without the prior consent of the Sellers. The party contesting any such claim shall be furnished all
reasonable assistance in connection therewith by the other party and be given full access to all information relevant thereto.
|
6.5. |
Sole
Remedy; Specific Performance. The indemnification provided by the Sellers pursuant to this Section 6 shall be
the sole and exclusive remedy available to the Purchaser against the Sellers in connection with this Agreement other than of intentional
misrepresentation or fraud and enforcement with respect to non competition and non solicitation undertaking. |
|
7.1. |
Conduct
of the Business. From the date of the signing of the Memorandum of Understandings (December 4th, 2022) until the Closing
Date (the “Interim Period”) (or the termination of this Agreement, whichever occurs earlier), except as (i) otherwise
contemplated in this Agreement, (ii) required by applicable Law or (iii) consented to by Purchaser in writing, the Sellers undertake
to procure, that TT entities and any subsidiary thereof will (A) operate their respective businesses in the ordinary course of business
in all material aspects and (B) preserve in all material respects their present business, properties and their tangible and intangible
assets, other than any dispositions in the ordinary course of business. |
|
7.2. |
Non-compete;
Non-solicitation. |
In
further consideration for and subject to the actual payment of the Consideration in full and in order to protect the value of TTG (including,
without limitation, the goodwill inherent in such entities as of the Closing), upon the Closing, the Sellers agree as follows (without
derogating from any other obligation undertaken by the Sellers):
|
7.2.1. |
Either
party shall not directly or indirectly through another entity: (a) encourage, induce, solicit or attempt to encourage, induce or
solicit any officer, director, manager, or employee of TTG, the Purchaser, or the Sellers and their respective affiliates, respectively,
to cease their employment by the relevant party (as applicable) at any time during the 12 month period immediately following to the
Closing Date; or (b) hire or employ any Person who was an officer, director, manager, or employee of the TTG, the Purchaser or the
Sellers (as applicable) at any time during the 12 month period immediately prior to the Closing Date. |
|
7.2.2. |
Either
party shall not, directly or indirectly through another entity, encourage, induce, solicit or attempt to encourage, induce or solicit
any client or subcontractor of TTG, the Purchaser or the Sellers and their respective affiliates, respectively, to cease their engagement
with the relevant entity they have been previously engaging with at any time during the 24 months period immediately following the
Closing Date. |
|
7.2.3. |
The
parties acknowledge and represent that: (a) sufficient consideration has been given by each party to this Agreement to the other
as it relates hereto; (b) such party has consulted with independent legal counsel regarding his rights and obligations under this
Section 7.2; (c) The parties fully understand the terms and conditions contained herein; (d) the scope of the business of TTG
and its Subsidiaries; (e) the restrictions and agreements in this Section 7.2 are reasonable in all respects and necessary for the
protection of TTG and the other members of the TTG entities and any subsidiary thereof and its confidential information and goodwill
and that, without such protection, the TTG entities and any subsidiary thereof; and (f) the agreements in this Section 7.2 are an
essential inducement to enter into this Agreement and they are in addition to, rather than in lieu of, any similar or related covenants
to which either party is bound. |
|
7.2.4. |
If
at any time a court or arbitrator’s award holds that the restrictions in this Section 7.2 are unreasonable under circumstances
then existing, the parties hereto agree that the maximum period, scope or geographical area reasonable under such circumstances shall
be substituted for the stated period, scope or area. The parties hereto agree that any breach of the provisions contained in this
Section 7.2 may result in serious and irreparable injury and therefore money damages would not be an adequate remedy for any such
breach. Therefore, in the event of a breach or threatened breach of any provisions of this Section 7.2 that is continuing, the Purchaser,
TTG, their respective successors and assigns, in addition to other rights and remedies existing in their favor, shall be entitled
to specific performance or injunctive or other relief in order to enforce, or prevent any violations of, the provisions hereof. |
|
7.2.5. |
The
Sellers acknowledge that they have and may further become familiar with confidential or proprietary information concerning TTG. Therefore,
with regards to the field of telecommunication switchboards and call centers in Israel, and abroad (the “Scope of Business”),
the Sellers and any of its Affiliates, its directors and officers) agree that during the period beginning on the Closing Date and
ending on the 2-year anniversary of the Closing Date (the “Non-Compete Period”), the Sellers shall not, directly
or indirectly, inter alia, through their Affiliates, either for such Seller or for any other Person, own, manage, control,
actively participate in, permit their name to be used or in any other manner engage in any business or enterprise which competes
with TTG in the aforementioned Scope of Business or that otherwise offers, develops or markets technologies or products that are
substantially similar to or substitute to, in whole or in part, any of the current technologies or products of TTG in the Scope of
Business, provided however, that D.M. (3000) Engineering Ltd. (“D.M.”) and/or Allegronet Ltd. (“Allegronet”)
may offer, market, resale and provide maintenance services in connection with call centers and/or cloud communication solutions,
as a component of general and comprehensive solutions provided to their clients and via third parties (“Overlapping Services”),
and such Overlapping Services shall not be deemed as a breach of the Sellers’ non-compete undertaking described hereinabove,
provided that (1) TTG will be granted the right of first refusal in connection with Overlapping Services ; and (2)
in no case will the Overlapping Services be provided by a third party (in such case where TTG has not exercised its right of first
refusal) in an aggregate and total amount exceeding USD 150,000 per year. |
It
is hereby clarified, for the avoidance of doubt, that in no case will the Sellers or their Affiliates (including D.M. and/or Allegronet),
be entitled. during the Non-Compete Period, to develop or offer self-developed and/or self-owned technologies, products or Services (including
but not limited to Overlapping Services) which compete with TTG in the Scope of Business.
The
Sellers or their affiliates shall not charge any management fees of any TTG entity with respect to the Interim Period.
|
7.4. |
Directors.
At the Closing Date all Sellers’ representatives in any TTG entity Board of Directors, shall resign and provide the TTG entity
with release letter in respect to any claim or demand against the TTG entities. For the avoidance of any doubt, in the TTG entities
there is a director which is the employees’ representatives, and it appointment or removal is not subject to the Sellers’
discretion. |
|
7.5. |
Lease
Agreement. The Sellers (or any affiliate thereof) shall cause TT to lease the currently leased property located in Simtat
HaTavor 4, Petah Tiqva for a period of at least two years following the Closing Date with an option granted to TT for early termination
of 12 months’ notice and to an extension option of an additional 12 months period, in accordance with current lease terms and
the terms and conditions set forth in Schedule 7.5. (“Lease Agreements”). |
In
addition, the Sellers have provided SH.I.R Shlomo Real Estate Ltd.’s signed letter attached as Schedule 7.5.
|
7.6. |
Employee
Matters. The Sellers undertake to make best efforts to reach a written agreement with all Employee Representatives of TTG
entities, that shall include an approval of the Employee Representatives to the change of Control in TTG according to this Agreement,
and a waiver by the Employee Representatives of all claims or demands with respect to any labor matters, including bonuses or special
awards, with respect to this Agreement and the change of Control. For avoidance of any doubt, no costs arising from matters addressed
in this Section 7.6, and obtaining the Employee representatives’ consent according to the Transactions contemplated in this
Agreement, including but not limited to any salary raise, social rights, bonuses, sale grants or compensations shall be borne by
the Purchaser or by TTG. The agreements with the Employee Representatives as stated in this Section shall be presented to the Purchaser
at least 10 Business Days prior to the Closing Date and shall be subject to the Purchaser’s prior approval in writing, and
in case not approved, Purchaser will state the reasons for its disapproval. It is further clarified that if the Sellers could not
reach an agreement with the Employee Representatives or if such agreement is not approved by the Purchaser, as set forth hereinabove,
this shall not constitute a breach of the Agreement by either Party. |
subject
and without derogating from the provisions of this Section 7.6, and subject to the Purchaser hereby agrees to take upon itself Afcon’s
obligations and undertakings according to the collective bargaining agreements listed in Schedule 7.6, to the extent that
such obligations and undertakings are in force, valid and obliging upon Afcon at the date of signing this Agreement.
|
7.7. |
Confidentiality;
Announcements. Each of the parties hereto shall treat (and shall direct its employees, counsels, auditors and
representatives to treat) the contents of this Agreement and all Transaction Documents as confidential and shall refrain from
disclosing this Agreement and the content of the Transaction Documents in whole or in part, to any person without the consent of the
other party (which consent shall not be unreasonably withheld), except to the extent necessary for enforcement hereof or as
otherwise required (in the reasonable opinion of counsel) by Applicable Law or by any governmental authority; Additionally and
without derogating from the Confidentiality obligations set forth above, it is hereby clarified that as Afcon and OmniQ are public
companies, any use of the information received by one of them or any one on their behalf, with respect to Afcon and Tadiran or
OmniQ, may be considered as the use of ‘inside information’ as such term is defined in section 52a of the Israeli
Securities Law, 5788-1968 and the respective USA law (“Securities Law”); furthermore, if and to the extent that,
within the negotiations on the Definitive Agreement and the due diligence made by OmniQ, OmniQ will be exposed to such inside
information or Afcon will be exposed to such inside information, any of them will not make any use of such information, including,
but not limited to, for the purpose of a ‘transaction’ (as such term is defined in section 52a of the Securities Law);
provided however, that Purchaser or the Sellers and their affiliates may, without the consent of the other party: (a) make any
public disclosure it in good faith believes to be required by Applicable Law or the regulations of the Israeli or US Securities Act,
SEC rules or any recognized stock exchange relating to any listing particulars, prospectus or circular, or any announcement required
to be made in relation to this Agreement or any matters contemplated hereby (in which case the Sellers shall, if requested by
Purchaser, provide the Purchaser with whatever information and reports concerning TTG may be required from the Purchaser in
compliance of any such Applicable Law or regulation; and (b) disclose and provide copies of this Agreement or any other Transaction
Documents to any of its financing sources, its affiliates, any potential acquirors (direct or indirect) of the Purchaser and its
affiliates and to its and their respective professional advisors |
|
8.1. |
Further
Assurances. Each of the parties hereto shall perform such further acts and execute such further documents as may reasonably
be necessary to carry out and give full effect to the provisions of this Agreement and the intentions of the parties as reflected
thereby. |
|
8.2. |
Taxes.
Each party shall bear and pay the taxes and levies imposed on it (if any) under any law in relation with this Agreement and the transactions
contemplated herein. |
|
8.3. |
Set-Off.
Notwithstanding any right the parties have pursuant to Applicable Law, it is hereby agreed that the Purchaser and any entity on its
behalf may set-off from any amount due to the Sellers any undisputed amounts due to it in accordance with this Agreement. |
|
8.4. |
Fees
and Expenses. Each of the Sellers and the Purchaser shall bear its own fees, costs and expenses incurred in connection with
this Agreement (including the preparation, negotiation and performance hereof) and the transactions contemplated hereby (including
fees and disbursements of attorneys, accountants, agents, representatives and financial and other advisors). |
|
8.5. |
Governing
Law; Jurisdiction. This Agreement shall be governed by and construed according to the laws of the State of Israel, 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 court in Tel Aviv, and each of the parties hereby irrevocably submits to the exclusive jurisdiction of such court. |
Notwithstanding
the aforesaid, any dispute arising in relation to the financial terms and covenants of the parties as set forth in this Agreement, and
specifically in Section 4.5 of this Agreement, shall be resolved by a single arbitrator with the relevant expertise from
one of the big 5 accounting firms in Israel, the identity of which will be determined by the parties and in the absence of such consent
shall be appointed by the president of the Institute of Certified Accountants in Israel.
|
8.6. |
Successors
and Assigns; Assignment. No party hereto may assign any of its rights or obligations under this Agreement unless each other
party hereto shall have consented in writing thereto in its sole and absolute discretion, provided however, that without such consent,
the Purchaser may transfer or assign all or any part of the benefit of, or its rights or benefits and obligations under this Agreement,
to one or more of Purchaser’s affiliates. |
|
8.7. |
Entire
Agreement. The Transaction Documents constitute the full and entire understanding and agreement between the parties with
regard to the subject matters hereof and thereof, and supersedes any prior understanding, agreement or representation between the
parties with respect to its subject matter, including without limitation, that Memorandum of Understanding dated December 4th,
2022. Any term of this Agreement may be amended and the observance of any term hereof may be waived (either prospectively or retroactively
and either generally or in a particular instance) only with the written consent of the Sellers and the Purchaser. |
|
8.8. |
The
Parties shall act in good faith to conclude and attach, within 30 days of the date herein, all Schedules that are yet to be concluded
and agreed upon. |
|
8.9. |
Notices.
All notices and other communications required or permitted hereunder to be given to a party to this Agreement shall be in writing
and shall be mailed by registered, electronic or certified mail, postage prepaid, or prepaid air courier, or otherwise delivered
by hand or by messenger, addressed to such party’s address as set forth below or at such other address as the party shall have
furnished to each other party in writing in accordance with this provision: |
if
to the Purchaser: _______ and to OmniQ Corp.
|
Attn: |
______________ |
|
Address: |
_________________ |
|
E-mail: |
_______________ |
With
a copy which shall not constitute a notice:
|
Goldfarb Gross Seligman & Co. |
|
Attn: Rami Sofer & Yael Zhout |
|
Address: 98 Yigal Alon Street, Tel Aviv
6789141, Israel |
|
E-mail: |
rami.sofer@goldfarb.com; |
|
|
yael.zhout@goldfarb.com |
if
to Afcon:
|
__________ |
|
Address: |
_________________ |
|
E-mail: |
_______________ |
With
a copy which shall not constitute a notice:
|
Goldfarb Gross Seligman & Co. |
|
Attn: Erez Altit & Eylon Szatmary |
|
Address: 98 Yigal Alon Street, Tel Aviv
6789141, Israel |
|
E-mail: |
erez.altit@goldfarb.com; |
|
|
Eylon.szatmary@goldfarb.com |
if
to Ateka:
|
__________ |
|
Address: |
_________________ |
|
E-mail: |
_______________ |
With
a copy which shall not constitute a notice:
|
Goldfarb Gross Seligman & Co. |
|
Attn: Erez Altit & Eylon Szatmary |
|
Address: 98 Yigal Alon Street, Tel Aviv
6789141, Israel |
|
E-mail: |
erez.altit@goldfarb.com; |
|
|
Eylon.szatmary@goldfarb.com |
Any
notice sent in accordance with this Section 8.8 shall be effective: (a) if mailed, 7 Business Day after mailing; (b) if by courier, 3
Business Days after delivery to the courier service; (c) if sent by messenger, upon actual receipt; and (d) if sent via email, upon transmission
and electronic confirmation of receipt or (if transmitted and received on a non-business day) on the first Business Day following transmission
and electronic confirmation of receipt (provided, however, that any notice of change of address shall only be valid upon receipt).
|
8.10. |
Delays
or Omissions. No delay or omission to exercise any right, power, or remedy accruing to any party upon any breach or default
under this Agreement, shall be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any amendment,
waiver, permit, consent, or approval of any kind or character on the part of any party or in respect to any breach or default under
this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law
or otherwise afforded to any of the parties, shall be cumulative and not alternative. |
|
8.11. |
Severability.
If any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable under Applicable Law, then such
provision shall be excluded from this Agreement and the remainder of this Agreement shall be interpreted as if such provision were
so excluded and shall be enforceable in accordance with its terms; provided however, that in such event this Agreement shall be interpreted
so as to give effect, to the greatest extent consistent with and permitted by Applicable law, to the meaning and intention of the
excluded provision as determined by such court of competent jurisdiction. |
|
8.12. |
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. |
|
8.13. |
Sellers.
Every Section in this Agreement addressing the Sellers in plural, unless specified by name or in singular, shall apply to both Sellers
Jointly and Severally. |
-Signature
Page Follows-
IN
WITNESS WHEREOF the parties have signed this Agreement as of the date first hereinabove set forth.
|
|
|
AFCON
HOLDINGS LTD
|
|
ATEKA LTD. |
|
|
|
|
|
|
TADIRAN
TELECOM COMMUNICATION SERVICES IN ISRAEL LTD. |
|
OMNIQ CORP. |
|
|
|
|
|
|
TADIRAN
TELECOM COMMUNICATION SERVICES IN ISRAEL L.P.
|
|
TADIRAN TELECOM TECHNOLOGIES
(2011) LTD. |
|
|
|
|
|
|
TADIRAN
TELECOM (TTL) L.P.
|
|
|
Exhibit 99.1
OMNIQ
ENTERS INTO A DEFINITIVE AGREEMENT TO ACQUIRE TADIRAN TELECOM A GLOBAL LEADER IN UNIFIED COMMUNICATIONS AND COLLABORATIVE (UC&C)
SOLUTIONS
| ● | omniQ
enhances product offering with a non-dilutive acquisition. |
| | |
| ● | omniQ
strengthens its position as a leading provider of Comprehensive Automation Solutions to its
Fortune 500 Customer Base, complementing its Supply Chain, Public Safety, Traffic Management
and Retail Solutions with advanced Unified Communications & Collaboration (UC&C)
platform under a UCaaS model. |
| | |
| ● | This
strategic move enables omniQ to integrate the new UC&C capabilities with omniQ’s
AI products delivering higher predictability, increased speeds with proactive real-time automated
actions. |
| | |
| ● | Tadiran’s
FY 2022 revenue was $26M with $1.7M of Operating Profit. |
| | |
| ● | The
Company will Pay a total of $15.25M for 100% of Tadiran. |
SALT
LAKE CITY, July 10th, 2023 — OMNIQ Corp. (NASDAQ: OMQS) (“OMNIQ” or “the Company”) a leading provider of
Supply Chain and Artificial Intelligence (AI)-based solutions, announced today that it has signed a definitive agreement to acquire Tadiran
Telecom, an international provider of Advanced Unified Communications and Collaboration (UC&C) Solutions enhancing its software.
Tadiran,
a pioneer in communication technologies and a well-known brand develops, designs, manufactures, and sells unified communications-as-a-service
solutions that enable businesses to better communicate, collaborate, and connect in Israel, the US, India, Far East and across additional
countries worldwide. The company offers cloud communications and contact center solutions based on a Message, Video and Voice platform
focused on highly secure, and reliable connectivity.
Tadiran
complements omniQ enabling a comprehensive advanced state of the art telecom solution combined with legacy solutions including unified
communications-as-a-service, hosted and on-premises UC&C platforms, a collaborative contact center solution that delivers Omni-channel,
IP PBXs, Telecom infrastructure integration and other legacy telecom solutions to a large base of customers over the world such as Governments,
Hospitals, Shopping Centers, Logistic Yards, Supermarkets, Transportation, Financial Institutions Hotels, Power Stations, Organizations,
and others. The comprehensive solution will improve connectivity, efficiencies and data management of omniQ’s customers.
Shai
Lustgarten, the CEO of omniQ, commented: “With the addition of Tadiran, we will possess a comprehensive proprietary communication
solution that enables us to better serve our customers. Our platform technology utilizes 3 steps, we Sense, Identify and Act. With the
addition of Tadiran, we can now add audio, cellular and WIFI signals to our current sensors which today include camera’s, scanners,
RFID and Bluetooth technologies allowing us to analyze the digital data in greater detail and at faster speeds. This significantly enhances
our ability to manage events and mitigate risks at all levels. The new smart automation is a unique solution into our supply chain, traffic
management, retail and hospitality customers, allowing us to provide superior service with more accurate and faster sensing, identification
and action. As omniQ continues to drive automation for our customers, this acquisition not only allows us to meet the existing organizational
communication needs of our current customers but also enables us to create automation through real-time AI communication sensing. This
is important as it provides us the capability to identify and respond faster and with greater accuracy. By leveraging the sensing and
digitization of communication data and identifying trends at the communication AI level, we can take prompt and precise actions. This
capability is crucial in our commitment to delivering predictive and proactive actions.
Tadiran
significantly strengthens our Safe City product, Q-Shield. By leveraging Tadiran’s expertise and resources, we enhance Q-Shield’s
capabilities, solidifying our position as a leader in the market. Q-Shield, along with Tadiran’s technologies will offer advanced
video surveillance, real-time data analytics, artificial intelligence, and integration with external devices and systems. This comprehensive
solution enables proactive monitoring, early threat detection, efficient emergency response, and overall improved public safety and security.”
Lustgarten
concluded, “Our acquisition of Tadiran is a pivotal moment for omniQ, as it aligns perfectly with our strategic goals of increasing
recurring revenue and enhancing profitability. By expanding our portfolio with Tadiran’s robust business model, customer base,
UC&C solutions, and enhanced Safe City offering, we strengthen our market position and unlock new revenue streams. Tadiran’s
UC&C solution, Aeonix, will empower our customers with an advanced, cloud-based communication platform, while enhancing our Safe
City product, Q-Shield. These synergies create opportunities for growth, market expansion, and increased shareholder value. We are dedicated
to delivering exceptional solutions and maximizing value for both our company and shareholders.”
Based
on reported segment results from Afcon’s 2022 annual financial statements: Tadiran had revenue of $26M in FY 2022 and $1.7M in
operating profit. Tadiran’s revenue also includes a significant portion which is recurring revenue. For 100% of Tadiran’s
shares, omniQ will pay a total consideration of $15.25M of which $12.5M will be paid in cash which is expected to be financed with traditional
debt. In addition, $2.75M of the consideration will be paid in the form of restricted non-discounted common stock. A potential performance
based earnout clause of up to $0.75M if earned would be paid by issuing restricted non-discounted omniQ common stock.
About
Tadiran:
Tadiran
boasts an impressive customer base, including renowned organizations such as the US Department of Veteran Affairs, US Banks and School
Districts, Israeli Ministry of Defense, India Metro, prominent medical centers, and leading supermarket chains.
A
standout solution offered by Tadiran is Aeonix, a pure software-based UC&C solution. Aeonix delivers advanced features and capabilities
of an on-premises PBX, without the need for most onsite hardware, eliminating related costs and maintenance concerns
The
benefits of Aeonix are substantial, including unified messaging, touch desktop/mobile voice, video, and messaging communications, advanced
call routing, contact center capabilities, collaboration via Zoom integration, emergency response control, real-time data processing,
integration with external devices and systems, large audio conferences, and call recording. These features enable customers to transform
their communication and collaboration practices, improving internal workflows and enhancing customer interactions, ultimately driving
overall business success.
The closing of the acquisition is expected
within 60 days and is subject to necessary regulatory approval and the satisfaction of other closing conditions. There can be no
assurance that the transaction will be consummated.
About
OMNIQ Corp:
OMNIQ
Corp. provides computerized and machine vision image processing solutions that use patented and proprietary AI technology to deliver
data collection, real-time surveillance and monitoring for supply chain management, homeland security, public safety, traffic & parking
management, and access control applications. The technology and services provided by the Company help clients move people, assets, and
data safely and securely through airports, warehouses, schools, national borders, and many other applications and environments.
OMNIQ’s
customers include government agencies and leading Fortune 500 companies from several sectors, including manufacturing, retail, distribution,
food and beverage, transportation and logistics, healthcare, oil, gas, and chemicals.
The
Company currently addresses several billion-dollar markets, including the Global Safe City market, forecast to grow to $29 billion by
2022, and the Ticketless Safe Parking market, forecast to grow to $5.2 billion by 2023 and the fast casual restaurant sector expected
to reach $209 billion by 2027.
For
more information please visit www.omniq.com.
Information
about Forward-Looking Statements
“Safe
Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Statements in this press release relating to plans,
strategies, economic performance and trends, projections of results of specific activities or investments, and other statements that
are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
This
release contains “forward-looking statements” that include information relating to future events and future financial and
operating performance. The words “anticipate”, “may,” “would,” “will,” “expect,”
“estimate,” “can,” “believe,” “potential” and similar expressions and variations thereof
are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance
or results and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved.
Forward-looking statements are based on information available at the time they are made and/or management’s good faith belief as
of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results
to differ materially from those expressed in or suggested by the forward-looking statements. Examples of forward-looking statements include,
among others, statements made in this press release regarding the closing of the private placement and the use of proceeds received in
the private placement. Important factors that could cause these differences include, but are not limited to: fluctuations in demand for
the Company’s products particularly during the current health crisis, the introduction of new products, the Company’s ability
to maintain customer and strategic business relationships, the impact of competitive products and pricing, growth in targeted markets,
the adequacy of the Company’s liquidity and financial strength to support its growth, the Company’s ability to manage credit
and debt structures from vendors, debt holders and secured lenders, the Company’s ability to successfully integrate its acquisitions,
and other information that may be detailed from time-to-time in OMNIQ Corp.’s filings with the United States Securities and Exchange
Commission. Examples of such forward looking statements in this release include, among others, statements regarding revenue growth, driving
sales, operational and financial initiatives, cost reduction and profitability, and simplification of operations. For a more detailed
description of the risk factors and uncertainties affecting OMNIQ Corp., please refer to the Company’s recent Securities and Exchange
Commission filings, which are available at https://www.sec.gov. OMNIQ Corp. undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future events or otherwise, unless otherwise required by law.
IR
Contact:
Koko
Kimball
kkimball@omniQ.com
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- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK.
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- DefinitionIndicate if registrant meets the emerging growth company criteria.
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- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
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- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC.
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- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS.
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- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.
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