OMNIQ Corp 8-K, filed Mar 4, 2020
OMNIQ Corp. (OMQS)
About this 8-K
OMNIQ Corp filed this 8-K on March 4, 2020.
Items reported
- Item 1.01: Entered into a material agreement
- Item 3.02: Unregistered sale of equity
- Item 5.02: Director or officer change, or executive pay
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
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): March 4, 2020
OMNIQ CORP.
(Exact name of registrant as specified in charter)
| Delaware | 000-09047 | 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)
(800) 242-7272
(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 | ||
| N/A | N/A | N/A |
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 Agreement. |
On February 28, 2020, the Company entered in an asset purchase agreement (the “Asset Purchase Agreement”) with EyepaxIT Consulting LLC, a California limited liability company, (“Eyepax”) and the principal owners of Eyepax (collectively the “Sellers”), effective September 30, 2019, pursuant to which the Company purchased certain assets from the Sellers at a cash purchase price of $245,000. As additional consideration, the Company shall issue to the Sellers 80,000 shares of the Company’s common stock and an option to purchase 20,000 shares of the Company’s common stock at an exercise price of $5.00 per share, subject to adjustment, which shall vest quarterly in four (4) equal installments and expire on February 28, 2023. Pursuant to the Asset Purchase Agreement, the Company shall enter into an employment agreement with Mr. Lalith Caldera, a principal owner of Eyepax, and pay Mr. Caldera an annual salary of $100,000.
On February 27, 2020 OMNIQ Corp. (the “Company”) entered into an employment agreement with Shai Lustgarten, the Company’s Chief Executive Officer, (the “Lustgarten Agreement”) pursuant to which Mr. Lustgarten shall continue to serve as the Company’s Chief Executive Officer. The Lustgarten Agreement has a four (4) year term and automatically renews for additional one (1) year periods unless either party elects to terminate the Lustgarten Agreement. Pursuant to the Lustgarten Agreement, the Company shall pay Mr. Lustgarten an annual base salary of $560,000. Mr. Lustgarten shall also be eligible to receive i) equity awards pursuant to the Company’s 2018 Equity Incentive Plan (the “Plan”) and ii) certain milestone bonuses as set forth in Lustgarten Agreement. In the event Mr. Lustgarten’s employment is terminated by Mr. Lustgarten for good reason, or terminated by the Company without cause, Mr. Lustgarten shall be entitled to the greater of (i) the unpaid base salary or (ii) one (1) year’s base salary.
On February 27, 2020, the Company entered into a consutling agreement with Mr. Carlos J. Nissensohn and/or an entity under his control, a consultant to the Company and principal stockholder, (the “Nissensohn Agreement”) pursuant to which Mr. Carlos J. Nissensohn and/or an entity under his control shall provide certain consulting services to the Company. The Nissensohn Agreement has a four (4) year term and automatically renews for additional one (1) year periods unless either party elects to terminate the Nissensohn Agreement. Pursuant to the Nissensohn Agreement, the Company shall pay Mr. Nissensohn a monthly fee of $30,000. Mr. Nissensohn shall also be eligible to receive certain milestone bonuses as set forth in the Nissensohn Agreement. Mr. Nissensohn is a principal stockholder of the Company
The description of the material terms of the Asset Purchase Agreement, the Lustgarten Agreement, and the Nissensohn Agreement are not intended to be complete and are qualified in their entirety by reference to Exhibits 10.1, 10.2 and 10.3 respectively, to this Current Report on Form 8-K and incorporated herein by reference.
| Item 3.02, | Unregistered Sales of Equity Securities. |
Item 1.01 is incorporated by reference into this Item 3.02.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
Item 1.01 is incorporated by reference into this Item 3.02.
| Item 7.01 | Regulation FD Disclosure |
On March 3, 2020 the Company issued a press release. 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.
| Exhibit Number | Description | |
| 10.1 | Asset Purchase Agreement | |
| 10.2 | Employment Agreement with Shai Lustgarten | |
| 10.3 | Consulting Agreement with Carlos J. Nissensohn | |
| 99.1 | Press Release |
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: March 4, 2020
| OMNIQ CORP. | ||
| By: | /s/ Shai S. Lustgarten | |
| Shai S. Lustgarten | ||
| President and CEO | ||
Exhibit 10.1
ASSET PURCHASE AGREEMENT
between
EYEPAX IT CONSULTING LLC and LALITH CALDERA and SHIRDELLAH CALDERA
and
EYEPAX ACQUISITION CORPORATION dated as of
February 28, 2020
Effective as of December 31, 2019
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this “Agreement”), dated as of February 28, 2020, is deemed to be effective as of September 30, 2019 (the “Effective Date”) and is entered into between EyepaxIT Consulting LLC, a California limited liability company (“Seller”), Lalith Caldera, an individual (“Lalith”) and Shirdellah Caldera, an individual (together with Lalith, the “Members”) and Eyepax Acquisition Corporation, a Delaware corporation (“Buyer”).
RECITALS
WHEREAS, Seller wishes to sell and assign to Buyer, OMNIQ Corp., F/K/A Quest Solution, Inc. and Buyer wishes to purchase and assume from Seller, the rights of Seller to the Purchased Assets (as defined herein), subject to the terms and conditions set forth herein;
WHEREAS, the Buyer is a wholly-owned subsidiary of OMNIQ Corp., F/K/A Quest Solution, Inc., a Delaware corporation (“Parent”) and the Parent has agreed to make payment for the Purchased Assets on behalf of the Buyer and to make certain representations in connection with the issuance of certain equity consideration issuable hereunder;
WHEREAS, Member beneficially owns all of the membership interests in the Seller and it is in the best interest of the Shareholder for the Buyer to purchase the Purchased Assets from the Seller;
WHEREAS, Seller holds the necessary license,ownership rights and interests of the PERCS– Parking Enforcement and Revenue Control System, and is the owner of the source code to the improved, updated and enhanced PERCS application post October 1, 2018;
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE
Section 1.01 Purchase and Sale of Assets. Subject to the terms and conditions set forth herein, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from Seller, all of Seller’s right, title and interest in the assets set forth on Section 1.01 of the disclosure schedules (“Disclosure Schedules”) attached hereto as Exhibit “A” (the “Purchased Assets”), free and clear of any mortgage, pledge, lien, charge, security interest, claim or other encumbrance (“Encumbrance”).
Section 1.02 Assumption of Liabilities. Subject to the terms and conditions set forth herein, Buyer shall assume and agree to pay, perform and discharge the liabilities and obligations set forth on Section 1.02 of the Disclosure Schedules and the Purchased Assets, attached hereto as Exhibit “B”, but only to the extent that such liabilities and obligations do not relate to any breach, default or violation by Seller on or prior to the Closing (collectively, the “Assumed Liabilities”). Other than the Assumed Liabilities, Buyer shall not assume any liabilities or obligations of Seller of any kind, whether known or unknown, contingent, matured or otherwise, whether currently existing or hereinafter created (collectively, the “Excluded Liabilities”).
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Section 1.03 Purchase Price. The aggregate purchase price for the Purchased Assets shall be paid as follows:
(i) $100,000 shall be paid on the Closing, less $5,000 previously paid as an advance payment, (the “Initial Cash Payment”), accordingly the remaining balance to be paid on Closing is $95,000;
(ii) $25,000 per month for three months shall be paid on or before the last business day of the month beginning with the first month after the Closing, and a fourth payment of $20,000 until a total of $95,000 has been made (the “Initial Monthly Payments”);
(iii) beginning on the first month after closing, $5,000 per month shall be paid in ten (10) monthly installments (the “Subsequent Cash Payments”);
(iv) 80,000 shares of the Parent’s common stock in the name of the Seller (the “Purchase Shares”), [$400,000 shares of the common stock of the Parent being determined based on the average closing price of the Parent’s common stock on the OTCQB, stocks will be issued during 45 days from Closing];
(v) Options (the “Purchase Options”) to purchase 20,000 shares of the Parent’s common stock at an exercise price of $5.00 per share subject to adjustment as provide in the Purchase Option (the “Option Shares”). Option Shares will vest in equal quarterly periods. The Purchase Options will expire on February 28th, 2023.
(vi) The Initial Cash Payment, the Initial Monthly Payments, the Subsequent Cash Payments, the Purchase Shares, the Purchase Option are collectively the “Purchase Price”), plus the assumption of the Assumed Liabilities. The Buyer shall cause the Parent to pay the Initial Cash Payment to the Seller at the Closing (as defined herein) in cash, by wire transfer of immediately available funds in accordance with the wire transfer instructions set forth in Section 1.03 of the Disclosure Schedules, deliver to the Purchase Shares to the Seller or to a broker-dealer selected or identified by the Seller and deliver to the Seller the Purchase Option in a form attached hereto as Exhibit C.
Section 1.04 Employment Agreement. Within 90 days from Closing, Parent and Lalith Caldera will enter into an employment agreement (the “Employment Agreement”) pursuant to which Lalith Caldera will be paid an annual salary of $100,000, subject to the terms of the Employment Agreement.
ARTICLE II
CLOSING
Section 2.01 Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place on February [*], 2020 or on such later date as mutually agreed upon by the parties hereto (the “Closing Date”) at the offices of Sichenzia Ross Ference LLP, 1185 Avenue of the Americas, 37th Floor, New York, New York 10036. The consummation of the transactions contemplated by this Agreement shall be deemed to occur at 12:01 a.m. on the Effective Date. The effectiveness of this Agreement shall be conditional upon the approval of the Parent’s Board.
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Section 2.02 Closing Deliverables.
(a) At the Closing, Seller shall deliver to Buyer the following:
(i) a bill of sale in form and substance satisfactory to Buyer (the “Bill of Sale”) and duly executed by Seller, transferring the Purchased Assets to Buyer;
(ii) an assignment and assumption agreement in form and substance satisfactory to Buyer (the “Assignment and Assumption Agreement”) and duly executed by Seller, effecting the assignment to and assumption by Buyer of the Purchased Assets and the Assumed Liabilities;
(iii) assignments in form and substance satisfactory to Buyer (the “Intellectual Property Assignments”) and duly executed by Seller, transferring all of Seller’s right, title and interest in and to the trademark registrations and applications, patents and patent applications, source code to Improved PERCS, copyright registrations and applications and domain name registrations included in the Purchased IP (as defined herein) to Buyer;
(iv) copies of all consents, approvals, waivers and authorizations referred to in Section 3.02 of the Disclosure Schedules;
(v) tax clearance certificates from the taxing authorities in the jurisdictions that impose taxes on Seller or where Seller has a duty to file tax returns in connection with the transactions contemplated by this Agreement and evidence of the payment in full or other satisfaction of any taxes owed by Seller in those jurisdictions;
(vi) a certificate of the Secretary or Assistant Secretary (or equivalent officer) of Seller certifying as to (A) the resolutions of the board of directors of Seller, duly adopted and in effect, which authorize the execution, delivery and performance of this Agreement and the transactions contemplated hereby; and (B) the names and signatures of the officers of Seller authorized to sign this Agreement and the documents to be delivered hereunder;
(vii) such other customary instruments of transfer, assumption, filings or documents, in form and substance reasonably satisfactory to Buyer, as may be required to give effect to this Agreement;
(viii) a balance sheet setting forth the assets and liabilities of Seller as of February 25,2020, (the “Interring Balance Sheet Date”);
(ix) a lockup agreement in the form attached hereto as Exhibit D (the “Lockup Agreement”), pursuant to which the Seller agrees that the Seller (or any assignee of the Seller) may not sell any of the Purchase Shares and/or Warrant Shares for 12 months from the date of the Closing and for the period beginning 12 months from the Closing until 24 months from the Closing the Seller may not sell more than half the Purchase Shares and/or Warrant Shares and no more than 5% of the Purchase Shares and Warrant Shares in any 30 day period; and
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(b) At the Closing, Buyer shall deliver to Seller the following:
(i) The Initial Cash Payment Cash by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer;
the Assignment and Assumption Agreement duly executed by Buyer; For purposes of this Agreement, the term “Transaction Documents” shall mean, collectively, this Agreement, the Bill of Sale, the Assignment and Assumption Agreement, Intellectual Property AssignmentLockup Agreement and the other agreements, instruments and documents required to be delivered at the Closing; and
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller and Member jointly and severally represent and warrant to Buyer except as set forth on the Disclosure Schedule attached hereto, which exceptions shall be deemed to be part of the representations and warranties made hereunder that the statements contained in this ARTICLE III are true and correct as of the date hereof. For purposes of this ARTICLE III
“Seller’s knowledge,” “knowledge of Seller” and any similar phrases shall mean the actual knowledge of the Member and/or any officer of Seller, after due inquiry.
“Material Adverse Effect” shall mean any event, occurrence, fact, condition or change that is materially adverse to (a) the business, results of operations, financial condition or assets of the Business, taken as a whole, or (b) the ability of Seller to consummate the transactions contemplated hereby; provided, however, that “Material Adverse Effect” shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions; (ii) conditions generally affecting the industries in which the Business operates; (iii) any changes in financial, banking or securities markets in general, including any disruption thereof and any decline in the price of any security or any market index or any change in prevailing interest rates; (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof; (v) any action required or permitted by this Agreement or any action taken (or omitted to be taken) with the written consent of or at the written request of Buyer; (vi) any matter of which Buyer is aware on the date hereof; (vii) any changes in applicable Laws or accounting rules (including GAAP); (viii) the announcement, pendency or completion of the transactions contemplated by this Agreement, including losses or threatened losses of employees, customers, suppliers, distributors or others having relationships with the Seller and the Business; (ix) any natural or man-made disaster or acts of God; or (x) any failure by the Business to meet any internal or published projections, forecasts or revenue or earnings predictions (provided that the underlying causes of such failures (subject to the other provisions of this definition) shall not be excluded).
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Section 3.01 Organization and Authority of Seller; Enforceability. Seller is a corporation duly organized, validly existing and in good standing under the laws of the state of California and has all necessary corporate power and authority to own, operate or lease the properties and assets now owned, operated or leased by it. Seller is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the ownership of the Purchased Assets makes such licensing or qualification necessary, except where the failure to be so licensed, qualified, or in good standing would not have a Material Adverse Effect. Seller has full corporate power and authority to enter into this Agreement and the documents to be delivered hereunder, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by Seller of this Agreement and the documents to be delivered hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of Seller. This Agreement and the documents to be delivered hereunder have been duly executed and delivered by Seller, and (assuming due authorization, execution and delivery by Buyer) this Agreement and the documents to be delivered hereunder constitute legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, or (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
Section 3.02 No Conflicts; Consents. The execution, delivery and performance by Seller of this Agreement and the documents to be delivered hereunder, and the consummation of the transactions contemplated hereby, do not and will not: (a) violate or conflict with the certificate of incorporation, by-laws or other organizational documents of Seller; (b) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Seller and/or the Member or the Purchased Assets; (c) conflict with, or result in (with or without notice or lapse of time or both) any violation of, or default under, or give rise to a right of termination, acceleration or modification of any obligation or loss of any benefit under any contract or other instrument to which Seller is a party or to which any of the Purchased Assets are subject; except in the cases of clauses (b) and (c), where the violation, breach, conflict, default, acceleration or failure to give notice would not have a Material Adverse Effect; or (d) result in the creation or imposition of any Encumbrance that will not be paid in full on or prior to the Closing on the Purchased Assets. No consent, approval, waiver or authorization is required to be obtained by Seller from any person or entity (including any governmental authority) in connection with the execution, delivery and performance by Seller of this Agreement and the consummation of the transactions contemplated hereby.
Section 3.03 [Deleted]
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Section 3.04 3.03 Absence of Certain Changes, Events and Conditions. Except as expressly contemplated by this Agreement, from the Interim Balance Sheet Date until the date of this Agreement, Seller has operated the Business in the ordinary course of business in all material respects and there has not been, with respect to the Business, and other than in the ordinary course of business any:
(a) event, occurrence or development that has had a Material Adverse Effect;
(b) incurrence of any indebtedness for borrowed money in connection with the Business; except unsecured current obligations and liabilities incurred in the ordinary course of business;
(c) sale or other disposition of any of the Purchased Assets;
(d) cancellation of any debts or claims or amendment, termination or waiver of any rights constituting Purchased Assets, except in the ordinary course of business;
(e) imposition of any Encumbrance upon any of the Purchased Assets;
(f) increase in the compensation of any employees, other than as provided for in any written agreements or in the ordinary course of business;
(g) adoption, termination, amendment or modification of any employee benefit plan;
(h) adoption of any plan of merger, consolidation, reorganization, liquidation or dissolution or filing of a petition in bankruptcy under any provisions of federal or state bankruptcy law or consent to the filing of any bankruptcy petition against it under any similar law; or
(i) any agreement to do any of the foregoing, or any action or omission that would result in any of the foregoing.
Section 3.05 Material Contracts.
(a) Section 3.05(a) of the Disclosure Schedules lists each of the following Contracts (x) by which any of the Purchased Assets are bound or affected or (y) to which Seller is a party or by which it is bound in connection with the Purchased Assets (collectively, the “Material Contracts”):
(i) All contracts requiring performance by any party more than one year from the date hereof, which, in each case, cannot be cancelled without penalty or without more than 180 days’ notice;
(ii) all contracts that relate to the sale of any of the Purchased Assets;
(iii) all contracts that relate to the acquisition of any business, a material amount of stock or assets of any other person or any real property (whether by merger, sale of stock, sale of assets or otherwise),;
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(iv) all contracts relating to indebtedness (including, without limitation, guarantees),;
(v) all contracts between or among the Seller on the one hand and any affiliate of Seller on the other hand;
(vi) all collective bargaining agreements or contracts with any labor organization, union or association.
(b) Seller is not in breach of, or default under, any Material Contract, except for such breaches or defaults that would not have a Material Adverse Effect.
Section 3.06 Assigned Contracts. Section 3.06 of the Disclosure Schedules includes each contract included in the Purchased Assets and being assigned to and assumed by Buyer (the “Assigned Contracts”). Each Assigned Contract is valid and binding on Seller in accordance with its terms and is in full force and effect. None of Seller or, to Seller’s knowledge, any other party thereto is in breach of or default under (or is alleged to be in breach of or default under), or has provided or received any notice of any intention to terminate, any Assigned Contract. To the Seller’s knowledge, no event or circumstance has occurred that, with or without notice or lapse of time or both, would constitute an event of default under any Assigned Contract or result in a termination thereof or would cause or permit the acceleration or other changes of any right or obligation or the loss of benefit thereunder. Complete and correct copies of each Assigned Contract have been made available to Buyer. There are no disputes pending or threatened under any Assigned Contract. Neither the Seller nor the Member has received any notice or indication of the termination of any contract or purchase order.
Section 3.07 Title to Purchased Assets. Seller owns and has good title to the Purchased Assets, free and clear of any and all Encumbrances.
Section 3.08 Condition of Assets. The Purchased Assets are in good condition and are adequate for the uses to which they are being put, and none of such Purchased Assets is in need of maintenance or repairs except for ordinary, routine maintenance and repairs that are not material in nature or cost.
Section 3.09 Inventory. All Inventory included in the Purchased Assets consist of a quality and quantity usable and salable in the ordinary course of business.
Section 3.10 Intellectual Property.
(a) “Intellectual Property” means any and all of the following in any jurisdiction throughout the world: (i) trademarks and service marks, including all applications and registrations and the goodwill connected with the use of and symbolized by the foregoing; (ii) source code, copyrights, including all applications and registrations related to the foregoing; (iii) trade secrets and confidential know-how; (iv) patents and patent applications; (v) websites and internet domain name registrations; and (vi) other intellectual property and related proprietary rights, interests and protections (including all rights to sue and recover and retain damages, costs and attorneys’ fees for past, present and future infringement and any other rights relating to any of the foregoing).
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(b) Section 3.10(b) of the Disclosure Schedules lists all the Intellectual Property included in the Purchased Assets (“Purchased IP”). Seller owns or has adequate, valid and enforceable rights to use all the Purchased IP, free and clear of all Encumbrances. Seller is not bound by any outstanding judgment, injunction, order or decree restricting the use of the Purchased IP, or restricting the licensing thereof to any person or entity. With respect to the registered Intellectual Property listed on Section 3.10(b) of the Disclosure Schedules, (i) all such Intellectual Property is valid, subsisting and in full force and effect; and (ii) Seller has paid all maintenance fees and made all filings required to maintain Seller’s ownership thereof. For all such registered Intellectual Property, Section 3.10(b) of the Disclosure Schedules lists (A) the jurisdiction where the application or registration is located; (B) the application or registration number; and (C) the application or registration date.
(c) To Seller’s Knowledge, Seller’s prior and current use of the Purchased IP has not and does not infringe, violate, dilute or misappropriate the Intellectual Property of any person or entity and there are no claims pending or threatened by any person or entity with respect to the ownership, validity, enforceability, effectiveness or use of the Purchased IP. No person or entity is infringing, misappropriating, diluting or otherwise violating any of the Purchased IP, and neither Seller nor any affiliate of Seller has made or asserted any claim, demand or notice against any person or entity alleging any such infringement, misappropriation, dilution or other violation.
Section 3.11 Permits. Section 3.11 of the Disclosure Schedules lists all permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances and similar rights obtained from governmental authorities included in the Purchased Assets (the “Transferred Permits”). The Transferred Permits are valid and in full force and effect. All fees and charges with respect to such Transferred Permits as of the date hereof have been paid in full. No event has occurred that, with or without notice or lapse of time or both, would reasonably be expected to result in the revocation, suspension, lapse or limitation of any Transferred Permit.
Section 3.12 Compliance With Laws. Seller has complied, and is now complying, with all applicable federal, state and local laws and regulations applicable to ownership and use of the Purchased Assets, except where the failure to be in compliance would not have a Material Adverse Effect.
Section 3.13 Legal Proceedings. Except as described in Section 3.13 of the Disclosure Schedule, there is no claim, action, suit, proceeding or governmental investigation (“Action”) of any nature pending or, to Seller’s knowledge, threatened against or by Seller (a) relating to or affecting the Purchased Assets or the Assumed Liabilities, which if determined adversely to Seller would result in a Material Adverse Effect; or (b) that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. To Seller’s Knowledge, no event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.
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Section 3.14 Employment Matters.
(a) Seller is not a party to, bound by, any collective bargaining or other agreement with a labor organization representing any of its employees. There has not been, nor, to Seller’s Knowledge, has there been any threat of, any strike, slowdown, work stoppage, lockout, concerted refusal to work overtime or other similar labor activity or dispute affecting Seller or any of its employees.
(b) Seller is in compliance with all applicable Laws pertaining to employment and employment practices to the extent they relate to its employees, except to the extent non-compliance would not result in a Material Adverse Effect.
Section 3.15 Taxes.
(a) Except as would not have a Material Adverse Effect, Seller has filed (taking into account any valid extensions) all material tax returns required to be filed by Seller and has paid all taxes shown thereon as owing. Seller is not currently the beneficiary of any extension of time within which to file any material tax return other than extensions of time to file tax returns obtained in the ordinary course of business.
(b) Seller is not a “foreign person” as that term is used in Treasury Regulations Section 1.1445-2.
Section 3.16 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Seller.
Section 3.17 Investment Representations.
(a) Seller is acquiring the Purchase Shares, and Option Shares for its own account and not with a view to the distribution thereof in contravention of the Securities Act.
(b) In proceeding with the transactions contemplated hereby, Seller is not relying upon any representation or warranty of Buyer or Parent, or any of its officers, directors, employees, agents or representatives thereof, except the representations and warranties set forth herein and the statements contained in Parent’s filings with the SEC. Seller is satisfied that it has received adequate information with respect to all matters which it considers material to its decision to make this investment.
(c) Seller has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of acquiring Purchase Shares, and Option Shares and understand the risks of, and other considerations relating to, its acquisition of the Purchase Shares.
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(d) the Purchaser understands that the Purchase Shares, and the Option Shares are restricted securities,” as such term is defined in Rule 144 promulgated under the Securities Act (“Rule 144”), and they may not be sold pursuant to Rule 144 unless all of the conditions of Rule 144 are met. The Subscriber also understands that, the Company is under no obligation to register the Securities on behalf of the Subscriber or to assist the Subscriber in complying with any exemption from registration under the Securities Act or applicable state securities laws. and Purchaser further understands that a legend t will be placed on the Purchase Shares, Purchased Warrant and the Warrant Shares in substantially the following form:
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE SECURITIES HAVE NOT BEEN RECOMMENDED, APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
Section 3.18 Full Disclosure. To the Knowledge of the Seller, no representation or warranty by Seller in this Agreement and no statement contained in the Disclosure Schedules to this Agreement or any certificate or other document furnished or to be furnished to Buyer pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller that the statements contained in this ARTICLE IV are true and correct as of the date hereof. For purposes of this ARTICLE IV, “Buyer’s knowledge,” “knowledge of Buyer” and any similar phrases shall mean the actual or constructive knowledge of any director or officer of Buyer, after due inquiry.
Section 4.01 Organization and Authority of Buyer; Enforceability. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware. Buyer has full corporate power and authority to enter into this Agreement and the documents to be delivered hereunder, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by Buyer of this Agreement and the documents to be delivered hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of Buyer. This Agreement and the documents to be delivered hereunder have been duly executed and delivered by Buyer, and (assuming due authorization, execution and delivery by Seller) this Agreement and the documents to be delivered hereunder constitute legal, valid and binding obligations of Buyer enforceable against Buyer in accordance with their respective terms.
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Section 4.02 No Conflicts; Consents. The execution, delivery and performance by Buyer of this Agreement and the documents to be delivered hereunder, and the consummation of the transactions contemplated hereby, do not and will not: (a) violate or conflict with the certificate of incorporation, by-laws or other organizational documents of Buyer; or (b) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Buyer. No consent, approval, waiver or authorization is required to be obtained by Buyer from any person or entity (including any governmental authority) in connection with the execution, delivery and performance by Buyer of this Agreement and the consummation of the transactions contemplated hereby.
Section 4.03 Sufficiency of Funds. Parent has sufficient cash on hand or other sources of immediately available funds to enable it to make payment of the Purchase Price and consummate the transactions contemplated by this Agreement.
Section 4.04 Reserved.
Section 4.05 Reserved.
Section 4.06 SEC Filings. The Parent has timely filed with or furnished to, as applicable, the SEC all registration statements, prospectuses, reports, schedules, forms, statements, and other documents (including exhibits and all other information incorporated by reference) required to be filed or furnished by it with the SEC (the “SEC Documents”), except where such failure to file would not have a Material Adverse Effect on the Purchase Shares. True, correct, and complete copies of all SEC Documents are publicly available in the Electronic Data Gathering, Analysis, and Retrieval database of the SEC (“EDGAR”). As of their respective filing dates or, if amended or superseded by a subsequent filing prior to the date hereof, as of the date of the last such amendment or superseding filing (and, in the case of registration statements and proxy statements, on the dates of effectiveness and the dates of the relevant meetings, respectively), each of the SEC Documents complied as to form in all material respects with the applicable requirements of the Securities Act, the Exchange Act, and the Sarbanes-Oxley Act of 2002 (including the rules and regulations promulgated thereunder, the “Sarbanes-Oxley Act”), and the rules and regulations of the SEC thereunder applicable to such SEC Documents. None of the SEC Documents, including any financial statements, schedules, or exhibits included or incorporated by reference therein at the time they were filed (or, if amended or superseded by a subsequent filing prior to the date hereof, as of the date of the last such amendment or superseding filing), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. To the Knowledge of the Buyer and of the Parent, none of the SEC Documents is the subject of ongoing SEC review or outstanding SEC investigation and there are no outstanding or unresolved comments received from the SEC with respect to any of the SEC Documents. None of the Parent’s Subsidiaries is required to file or furnish any forms, reports, or other documents with the SEC.
Section 4.07 Reserved.
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Section 4.08 Legal Proceedings. There is no Action of any nature pending or, to Buyer’s knowledge, threatened against or by Buyer that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.
Section 4.09 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Buyer.
ARTICLE V
COVENANTS
Section 5.01 Public Announcements. Unless otherwise required by applicable law, neither party shall make any public announcements regarding this Agreement or the transactions contemplated hereby without the prior written consent of the other party (which consent shall not be unreasonably withheld or delayed).
Section 5.02 Bulk Sales Laws. The parties hereby waive compliance with the provisions of any bulk sales, bulk transfer or similar laws of any jurisdiction that may otherwise be applicable with respect to the sale of any or all of the Purchased Assets to Buyer; it being understood that any Liabilities arising out of the failure of Seller to comply with the requirements and provisions of any bulk sales, bulk transfer or similar laws of any jurisdiction which would not otherwise constitute Assumed Liabilities shall be treated as Excluded Liabilities.
Section 5.03 Reserved.
Section 5.04 Further Assurances. Following the Closing, each of the parties hereto shall execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the documents to be delivered hereunder.
ARTICLE VI
INDEMNIFICATION
Section 6.01 Survival. Subject to the limitations and other provisions of this Agreement, the representations and warranties contained herein shall survive the Closing and shall remain in full force and effect until the date that is five (5) years from the Closing Date. Notwithstanding the foregoing, any claims asserted in good faith with reasonable specificity (to the extent known at such time) and in writing by notice from the non-breaching party to the breaching party prior to the expiration date of the applicable survival period shall not thereafter be barred by the expiration of such survival period and such claims shall survive until finally resolved.
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Section 6.02 Indemnification By Seller and Member. Subject to the other terms and conditions of this Article VI, Seller and the Member shall jointly and severally shall defend, indemnify and hold harmless Buyer, its affiliates and their respective stockholders, directors, and officers from and against any and all claims, judgments, damages, liabilities, settlements, losses, costs and expenses, including reasonable attorneys’ fees and disbursements (collectively, “Losses”), incurred or sustained by, or imposed upon, Buyer based upon, arising out of, with respect to or by reason of:
(a) any inaccuracy in or breach of any of the representations or warranties of Seller contained in this Agreement or any document to be delivered hereunder;
(b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Seller pursuant to this Agreement or any document to be delivered hereunder; or
(c) Excluded Liability.
Section 6.03 Indemnification By Buyer. Subject to the other terms and conditions of this ARTICLE VI, Buyer shall indemnify Seller against, and shall hold Seller harmless from and against, any and all Losses incurred or sustained by, or imposed upon, Seller based upon, arising out of, with respect to or by reason of:
(a) any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement;
(b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Buyer pursuant to this Agreement; or
(c) any Assumed Assets or Assumed Liability.
Section 6.04 Certain Limitations. The party making a claim under this ARTICLE VI is referred to as the “Indemnified Party”, and the party against whom such claims are asserted under this ARTICLE VI is referred to as the “Indemnifying Party”. The indemnification provided for in Section 6.02 and Section 6.03 shall be subject to the following limitations:
(a) The aggregate amount of all Losses for which an Indemnifying Party shall be liable pursuant to Section 6.02(a) or Section 6.03(a), as the case may be, shall not exceed $500,000.
(b) Payments by an Indemnifying Party pursuant to Section 6.02 or Section 6.03 in respect of any Loss shall be limited to the amount of any liability or damage that remains after deducting therefrom any insurance proceeds and any indemnity, contribution or other similar payment received or reasonably expected to be received by the Indemnified Party in respect of any such claim. The Indemnified Party shall use its commercially reasonable efforts to recover under insurance policies or indemnity, contribution or other similar agreements for any Losses prior to seeking indemnification under this Agreement.
(c) In no event shall any Indemnifying Party be liable to any Indemnified Party for any punitive, incidental, consequential, special or indirect damages, including loss of future revenue or income, loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement, or diminution of value or any damages based on any type of multiple.
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(d) Each Indemnified Party shall take, and cause its Affiliates to take, all reasonable steps to mitigate any Loss upon becoming aware of any event or circumstance that would be reasonably expected to, or does, give rise thereto, including incurring costs only to the minimum extent necessary to remedy the breach that gives rise to such Loss.
Section 6.05 Indemnification Procedures. Whenever any claim shall arise for indemnification hereunder, the party entitled to indemnification (the “Indemnified Party”) shall promptly provide written notice of such claim to the other party (the “Indemnifying Party”). In connection with any claim giving rise to indemnity hereunder resulting from or arising out of any Action by a person or entity who is not a party to this Agreement, the Indemnifying Party, at its sole cost and expense and upon written notice to the Indemnified Party, may assume the defense of any such Action with counsel reasonably satisfactory to the Indemnified Party. The Indemnified Party shall be entitled to participate in the defense of any such Action, with its counsel and at its own cost and expense. If the Indemnifying Party does not assume the defense of any such Action, the Indemnified Party may, but shall not be obligated to, defend against such Action in such manner as it may deem appropriate, including, but not limited to, settling such Action, after giving notice of it to the Indemnifying Party, on such terms as the Indemnified Party may deem appropriate and no action taken by the Indemnified Party in accordance with such defense and settlement shall relieve the Indemnifying Party of its indemnification obligations herein provided with respect to any damages resulting therefrom. The Indemnifying Party shall not settle any Action without the Indemnified Party’s prior written consent (which consent shall not be unreasonably withheld or delayed).
Section 6.06 Tax Treatment of Indemnification Payments. All indemnification payments made by Seller under this Agreement shall be treated by the parties as an adjustment to the Purchase Price for tax purposes, unless otherwise required by law.
Section 6.07 Reserved.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.01 Conditions to Obligations of All Parties. The obligations of each party to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions:
(a) No governmental authority shall have enacted, issued, promulgated, enforced or entered any governmental order which is in effect and has the effect of making the transactions contemplated by this Agreement illegal, otherwise restraining or prohibiting consummation of such transactions or causing any of the transactions contemplated hereunder to be rescinded following completion thereof.
(b) Seller shall have received all consents, authorizations, orders and approvals from the governmental authorities and Buyer shall have received all consents, authorizations, orders and approvals from the governmental authorities, in each case, in form and substance reasonably satisfactory to Buyer and Seller, and no such consent, authorization, order and approval shall have been revoked.
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Section 7.02 Conditions to Obligations of Buyer. The obligations of Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or Buyer’s waiver, at or prior to the Closing, of each of the following conditions:
(a) The representations and warranties of Seller contained in ARTICLE III shall be true and correct in all respects as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, which shall be true and correct in all respects as of that specified date), except where the failure of such representations and warranties to be true and correct would not have a material adverse effect.
(b) Seller shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and each of the other Transaction Documents to be performed or complied with by it prior to or on the Closing Date.
(c) Seller shall have delivered to Buyer duly executed counterparts to the Transaction Documents (other than this Agreement) and such other documents and deliveries set forth in Section 2.02.
(d) Buyer shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Seller, that each of the conditions set forth in Section 7.02(a) and Section 7.02(b) have been satisfied (the “Seller Closing Certificate”).
(e) Buyer shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Seller certifying that attached thereto are true and complete copies of all resolutions adopted by the board of directors of Seller authorizing the execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby and thereby.
Section 7.03 Conditions to Obligations of Seller. The obligations of Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or Seller’s waiver, at or prior to the Closing, of each of the following conditions:
(a) The representations and warranties of Buyer contained in ARTICLE IV shall be true and correct in all respects as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, which shall be true and correct in all respects as of that specified date), except where the failure of such representations and warranties to be true and correct would not have a material adverse effect on Buyer’s ability to consummate the transactions contemplated hereby.
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(b) Buyer shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and each of the other Transaction Documents to be performed or complied with by it prior to or on the Closing Date.
(c) Buyer shall have delivered to Seller the Initial Cash Payment, duly executed counterparts to the Transaction Documents (other than this Agreement) and such other documents and deliveries set forth in Section 2.02.
(d) Seller shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Buyer, that each of the conditions set forth in Section 7.03(a) and Section 7.03(b) have been satisfied (the “Buyer Closing Certificate”).
ARTICLE VIII
TERMINATION
Section 8.01 Termination. This Agreement may be terminated at any time prior to the Closing:
(a) by the mutual written consent of Seller and Buyer;
(b) by Buyer by written notice to Seller if:
(i) Buyer is not then in material breach of any provision of this Agreement and there has been a material breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Seller pursuant to this Agreement that would give rise to the failure of any of the conditions specified in ARTICLE VII and such breach, inaccuracy or failure cannot be cured by Seller by , 2020 (the “Drop Dead Date”); or
(ii) any of the conditions set forth in Section 7.01 or Section 7.02 shall not have been fulfilled by the Drop Dead Date, unless such failure shall be due to the failure of Buyer to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing;
(c) by Seller by written notice to Buyer if:
(i) Seller is not then in material breach of any provision of this Agreement and there has been a material breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Buyer pursuant to this Agreement that would give rise to the failure of any of the conditions specified in ARTICLE VII and such breach, inaccuracy or failure cannot be cured by Buyer by the Drop Dead Date; or
(ii) any of the conditions set forth in Section 7.01 or Section 7.03 shall not have been fulfilled by the Drop Dead Date, unless such failure shall be due to the failure of Seller to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing; or
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(d) by Buyer or Seller in the event that:
(i) there shall be any law that makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited; or
(ii) any governmental authority shall have issued a governmental order restraining or enjoining the transactions contemplated by this Agreement, and such governmental order shall have become final and non-appealable.
Section 8.02 Effect of Termination. In the event of the termination of this Agreement in accordance with this Article, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except:
(a) as set forth in this ARTICLE VIII and ARTICLE IX hereof; and
(b) that nothing herein shall relieve any party hereto from liability for any intentional breach of any provision hereof or actual fraud.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses.
Section 9.02 Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 9.02):
If to Seller or Member:
with a copy to:
If to Buyer or Parent:
Quest Solution, Inc.
1865 West 2100 South Salt Lake City, UT 84119
Attn: Shai Lustgarten
Emil:
with a copy to:
Sichenzia Ross Ference LLP
1185 Avenue of Americas, 37th Floor
New York, NY 10036
Attention: Arthur Marcus, Esq.
amarcus@srf.com
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Section 9.03 Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.
Section 9.04 Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.
Section 9.05 Entire Agreement. This Agreement and the documents to be delivered hereunder constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and the documents to be delivered hereunder, the Exhibits and Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules), the statements in the body of this Agreement will control.
Section 9.06 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. No assignment shall relieve the assigning party of any of its obligations hereunder.
Section 9.07 No Third-party Beneficiaries. Except as provided in ARTICLE VI, this Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
Section 9.08 Amendment and Modification. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto.
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Section 9.09 Waiver. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.
Section 9.10 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction).
Section 9.11 Submission to Jurisdiction. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in the federal courts of the United States of America located in the city of Manhattan and county of New York, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding.
Section 9.12 Waiver of Jury Trial. Each party acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Agreement or the transactions contemplated hereby.
Section 9.13 Opportunity to Consult with Counsel. Each party acknowledges that it has had the opportunity to be represented by separate independent counsel in the negotiation and execution of this Agreement, that any such respective attorneys were of its own choosing, that each authorized representative has read this Agreement and that he or she understands its meaning and legal consequences to each party. The Parties warrant and represent that they have had sufficient time to consider whether to enter into this Agreement and that they are relying solely on their own judgment and the advice of their own counsel in deciding to execute this Agreement. Each of the parties warrant and represent that they have read this Agreement in its entirety. If any or all parties this Agreement have chosen not to seek alternative counsel, said party or parties hereby acknowledge that he or they refrained from seeking alternative counsel entirely of his or their own volition and with full knowledge of the consequences of such a decision. The parties further agree that any rule that provides that an ambiguity within a document will be interpreted against the party drafting such document shall not apply.
Section 9.14 Specific Performance. The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.
Section 9.15 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
| EYEPAX IT CONSULTING LLC | ||
| By | /s/ Lalith Caldera | |
| Name: | Lalith Caldera | |
| Title: | ||
| EYEPAX ACQUISITION CORPORATION | ||
| By | /s/ Shai Lustgarten | |
| Name: | Shai Lustgarten | |
| Title: | President | |
| Lalith Caldera, Individually | ||
ACKNOWLEDGED AND AGREED
(with respect to Sections 1.03, 2.02(b)(i), (b)(ii) and (b)(iii), 4.03, 4.04 and 4.06):
| OMNIQ CORP | ||
| By | /s/ Shai Lustgarten | |
| Name: | Shai Lustgarten | |
| Title: | CEO and President | |
Signature Page to Asset Purchase Agreement
Exhibit 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”) is entered into as of February , 2020 (the “Effective Date”) by and between OMNIQ Corp., a Delaware corporation (the “Company”), and Shai Lustgarten, an individual (the “Executive”).
WHEREAS, the Company and Executive entered into that certain Letter Agreement, dated September 5, 2019.
WHEREAS, the Company and Executive desire to have this Agreement replace the Letter Agreement as the governing document for Executive’s employment with the Company.
NOW, THEREFORE, in consideration of the premises and conditions set forth herein, the receipt and sufficiency of which are hereby acknowledged, the Company and the Executive hereby agree as follows:
1. Duties and Responsibilities.
1.1 Positions. Executive shall serve as the Company’s President and Chief Executive Officer (“CEO”), with such duties as are customarily associated with the position of a CEO for a public company. As part of these duties, Executive shall report to and perform the specific duties and responsibilities assigned to him by the Company’s Board of Directors during his tenure as CEO.
1.2 Efforts; Other Activities. Executive agrees to devote his best efforts, attention and energies to advance the business and welfare of the Company, to render his services under this Agreement, on a full- time basis, fully, faithfully, diligently, competently and to the best of his ability. Executive may conduct other non-competitive business or hold other positions or directorships with other non-competitive for- profit entities, provided that those activities do not create a conflict of interest with the Company or do not interfere with the performance of Executive’s duties to the Company. Executive may, without the prior approval of the Board, serve in any capacity with any civic, education, or charitable non-profit organization, provided such service does not interfere with Executive’s duties to the Company.
1.3 Location; Travel. Executive shall be based at the Company’s headquarters in Salt Lake City, Utah, but Executive will be required to travel from time to time to other geographic locations in connection with the performance of his duties.
2. Agreement Term. Except as otherwise provided for herein, the term of this Agreement with Executive shall commence on the Effective Date and terminate on the four-year anniversary of the Effective Date (the “Termination Date”) (the duration between the Effective Date and Termination shall hereinafter be referred to as the “Term”). At that time, the parties will address and negotiate in good faith any mutually agreeable extension or replacement of this Agreement. Even so, the parties agree that the Executive’s employment with the Company during the Term, notwithstanding the provisions of this Agreement or the potential for any extensions thereof or subsequent agreements, may be terminated by either Executive or the Company, for any or no reason, with or without Cause (as defined below), and pursuant to the terms provided below. After the Expiration date of this Agreement, the Parties agree that the Term of this Agreement shall automatically be extended for consecutive periods of one (1) year each time, unless, not less than ninety (90) days preceding such anniversary date, the Parties to this Agreement shall decide not to extend the term of this Agreement.
3. Compensation and Benefits.
3.1 Base Salary. Executive’s base salary under this Agreement shall be Five Hundred Sixty Thousand Dollars ($560,000.00) (U.S.) per year (less applicable withholdings), which shall be payable as provided by law and in accordance with the Company’s standard payroll schedule, together with such increases as may be approved by the Company’s Compensation Committee and Board of Directors from time to time in their sole discretion (the “Base Salary”).
3.2 Executive Bonus Plan. Executive shall be eligible to participate in the Company’s Executive Bonus Plan, as it may exist from time to time, which will include both cash and equity components and be based on measurable objectives established by the Company’s Board of Directors for achievement in free cash flow, EBITDA, cost reduction, and/or any other factors the Board of Directors selects in its sole discretion. Such objectives shall be generated and approved by the Compensation Committee. The timing and frequency of the payout of Executive’s bonuses as CEO will be determined and confirmed by the Compensation Committee of the Board prior to payout.
3.3 Equity Awards, As CEO, Executive shall be eligible to participate in the Company’s Equity Incentive Plan and receive, inter alia, additional stock options or grants in the Company, which will be determined during the duration of Executive’s employment with the Company (the “Employment Period”) and offered both at times and in amounts subject to the Board of Directors’ sole discretion. All such awards under the Company’s Equity Incentive Plan shall be subject to a vesting schedule determined by the Compensation Committee of the Board of Directors.
3.4 Paid Time Off. Executive shall receive four (4) weeks of paid time off (“PTO”) per calendar year, which amount shall accrue in accordance with and subject to any caps on accrual established by the Company’s vacation policy in effect from time to time for employees of the Company. In addition, Executive shall be entitled to paid time off for all holidays provided under the Company’s regular holiday schedule.
3.5 National Securities Exchange Bonus. If the Company is successful in listing or offering its securities, or the securities of any subsidiary thereof, on the NASDAQ or New York Stock Exchange markets and such a listing or offering shall be consummated within 24 months of the Effective Date, then the Executive shall be entitled to a $60,000 onetime payment which shall be paid on the 1st day that the Company’s, or any subsidiary thereof, shares become traded on such national exchange.
3.6 Equity Financing Bonus. If the Company procures equity financing in an amount equal to or greater than $2,000,000 during the term of this Agreement, then the Executive shall be entitled to a success fee of $40,000 upon the Company’s receipt of at least $2,000,000. Executive’s right to receive such fee shall remain in force for a period of 24 months immediately following the termination of this Agreement. If the Company procures equity financing in an amount equal to or greater than $4,000,000 during the term of this Agreement, then the executive shall be entitled to a success fee of $120,000 upon the Company’s receipt of at least $4,000,000. Executive right to receive such fee shall remain in force for a period of 24 months immediately following the termination of this Agreement. If the Company procures equity financing in an amount equal to or greater than $6,000,000 during the term of this Agreement, then the executive shall be entitled to a success fee to be determined by the Board of Directors but not less than $200,000 upon the Company’s receipt of at least $6,000,000. Executive right to receive such fee shall remain in force for a period of 24 months immediately following the termination of this Agreement.
3.7 M&A Bonus.
| (a) | If the Company closes any M&A transaction with a third party target during the term of this Agreement, then the Executive shall be entitled to a success fee in the amount equal to two percent (2%) of the total transaction price, in any combination of cash and shares to be determined by the Company, to be paid to the Executive within two (2) weeks of the closing of such transaction. | |
| (b) | If the Company closes any M&A transaction in which it is the acquired company, then the Executive shall be entitled to a success fee in the amount equal to four percent (4%) of the total transaction price, in any combination of cash and shares to be determined by the Company, to be paid to the Executive within two (2) weeks of the closing of such transaction. | |
| (c) | The fees described in this Section 3.7 shall also apply to any M&A transaction that closes after the term of this Agreement but which the Executive substantially contributed to prior to the termination of this Agreement. |
3.8 Sales Bonus. If the Company achieves at least $65,000,000 in sales in any fiscal year covered by this Agreement, then the Executive shall receive a $40,000 bonus within a reasonable time after the end of such fiscal year. If the Company achieves at least $80,000,000 in sales in any fiscal year covered by this Agreement, then the Executive shall receive an $80,000 bonus.
3.9 Group Benefit Plans; Individual Insurance. Executive shall, throughout the Employment Period, be eligible to participate in all of the group term life insurance plans, group health plans, dental plans, accidental death and dismemberment plans, short-term disability programs, retirement plans, profit sharing plans, 401 (k), employee stock purchase plans or other plans for which Executive qualifies that are available to the executive officers of the Company as provided under the terms of such plans. With respect to any of the foregoing benefits, Executive may elect to receive the cash value of the premiums the Company would otherwise pay as additional compensation.
3.10 Withholdings. The Company shall deduct and withhold from any compensation payable to Executive hereunder (including but not limited to, any payments or benefits under this Section 3 and any payments or benefits under Section 5), any and all applicable federal and state income and employment withholding taxes and any other amounts the Company determines are required to be deducted or withheld by the Company under applicable statutes, regulations, ordinances or orders governing or requiring the withholding or deduction of amounts otherwise payable as compensation or wages to employees.
4. Expense Reimbursement. During the Employment Period, Executive shall be entitled to, in accordance with the reimbursement policies in effect from time to time, receive reimbursement from the Company for reasonable business expenses incurred by Executive in the performance of Executive’s duties hereunder, including, but not limited to, a car allowance per each and every year and international and intrastate flights, provided Executive furnishes the Company with vouchers, receipts and other details of such expenses in the form required by the Company sufficient to substantiate a deduction for the business expenses in question under all applicable rules and regulations of federal and state taxing authorities.
5. Termination of Employment. During the Term of this Agreement, Executive’s employment with the Company shall be at-will and may be terminated by either the Company or Executive for any reason not prohibited by law. During the first 12 months, the Executive can terminate the Agreement without cause and subject to 90 days’ prior written notice. After the first 12 months, either party may terminate the Agreement without cause, subject to 90 days’ prior written notice to the other party. If such termination occurs before the Termination Date, then Executive shall have no further rights to any other compensation or benefits from the Company under this Agreement other than the “Separation Benefits” as set forth in Section 5.l.
5.1 Separation Benefits. In the event the Executive resigns from the Company voluntarily, then the Company shall pay to Executive the following:
(a) Executive’s unpaid Base Salary that has been earned through the date that Executive’s employment with the Company is terminated (the “Early Termination Date”);
(b) Executive’s accrued but unused vacation:
(c) Any accrued but unpaid expenses pursuant to Section 4 above;
(d) Such vested accrued benefits, and other benefits and/or payments, if any, as to which the Executive (and his eligible dependents) may be entitled under, and in accordance with the terms and conditions of, the employee benefit arrangements, plans and programs of the Company as of the Early Termination Date (including, for example, the presentment of the right to continue health benefit coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), as applicable), but not including any severance pay plan; and
(e) Any other payments as may be required under applicable law. The benefits provided under subsections (a) through (d) of this Section 5.1 are collectively referred to as the “Separation Benefits.”
5.2 Termination without Cause or Resignation for Good Reason.
(a) Early Termination Benefits. If during the Term of this Agreement, the Executive voluntarily resigns for Good Reason (as defined below) or the Company terminates Executive’s employment for any reason other than for Cause (as defined below), then the Company shall pay to the Executive the following compensation and benefits in addition to the Separation Benefits set forth in Section 5.1, subject to the conditions set forth in Section 6 and contingent upon the Executive’s execution and delivery of a general release of claims in favor of the Company, its affiliates and representatives, the form of which is acceptable to the Company:
(i) Severance Payment. A lump sum payment equal to the greater of (A) the unpaid Base Salary through the end of the Term of this Agreement, at the rate in effect on the Early Termination Date, that otherwise would have been paid to the Executive if he remained employed through the end of this Agreement’s full Term, or (B) one (1) year of Base Salary, at the rate in effect on the Early Termination Date. Subject to Sections 7 and 8, the lump sum payment required by this Section shall be paid no later than thirty (30) days following the Early Termination Date.
(ii) COBRA Reimbursement. In the event that the Executive properly and timely elects to continue health benefit coverage under COBRA after the Early Termination Date and the Company received from Executive of a copy of such election and proof of Executive’s timely payment of each COBRA premium, the Company shall promptly reimburse Executive on a taxable basis for the amount of each such premium paid by Executive. Such COBRA premium reimbursements will be paid by the Company for coverage until the earliest of (A) the end of the period of time during which the Executive is entitled to continuation coverage under COBRA, or (B) such time as Executive subsequently becomes covered by another group health plan. Executive agrees to notify the Company immediately if he becomes covered by another group health plan. If, on the Early Termination Date, the Company determines in its sole discretion that it cannot reimburse the Executive for the COBRA premiums as provided in this Section 5.2(a)(ii) above without potentially violating, or being subject to an excise tax under, applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company will in lieu thereof provide to the Executive monthly payments (the “Section 5.2(a)(ii) Taxable Payments”) during the maximum period for which COBRA premiums otherwise were to be reimbursed. The amount of each monthly payment shall equal the COBRA premium that the Executive would be required to pay to continue his healthcare benefits under the Company’s group plans for the first month of COBRA coverage. For the avoidance of doubt, the Section 5.2(a)(ii) Taxable Payments, if any, will be made regardless of whether the Executive elects COBRA continuation coverage and may be used for any purpose, including, but not limited to continuation coverage under COBRA.
(b) Definition of Cause. For purposes of this Agreement, “Cause” shall mean any of the following:
(i) Executive’s misappropriation of the Company’s funds or property, or any attempt by Executive to secure any personal profit related to the business or business opportunities of the Company without the informed, written approval of the Audit Committee of the Company’s Board of Directors;
(ii) Any unauthorized use or disclosure by Executive of confidential information or trade secrets of the Company (or any parent or subsidiary of the Company);
(iii) Executive’s willful failure to perform, or continuing neglect in the performance of, duties lawfully assigned to Executive by the Company’s Board of Directors, provided that the Company shall have provided Executive with written notice of such failure or neglect and the Executive has been afforded at least ten (10) business days to cure such failure or neglect;
(iv) Executive’s conviction of, or plea of nolo contendre to, any felony or misdemeanor involving moral turpitude or fraud, or of any other crime involving material harm to the standing or reputation of the Company;
(v) Any other willful misconduct by Executive that the Board determines in good faith has had a material adverse effect upon the business or reputation of the Company;
(vi) Any other material breach or violation by the Executive of this Agreement, the Company’s written code of conduct, or other written policy of the Company that has been provided to the Executive; provided, however, that the Company shall have provided the Executive with written notice that such actions are occurring and the Executive has been afforded at least ten (10) business days to cure.
Notwithstanding the foregoing, in subparagraphs (iii) and (vi), (A) the cure period shall apply neither to violations of the Company’s code of conduct or prohibition against unlawful harassment, and (B) such cure period shall only apply to breaches, violations, failures or neglect that in the Board’s sole judgment are capable of or amenable to such cure.
(c) Definition of Good Reason. For the purposes of this Agreement, “Good Reason” shall mean Executive’s voluntary resignation upon any of the following events:
(i) A material reduction in Executive’s authority, duties or responsibilities (and not simply a change in title or reporting relationships);
(ii) A material reduction by the Company in the Executive’s compensation (for avoidance of doubt, a ten percent (10%) reduction in the Executive’s Base Salary shall constitute a material reduction in Executive’s compensation);
(iii) Any breach by the Company of its obligations under this Agreement that results in material adverse consequences to Executive including but not limited to the failure to issue Executive the Stock Grant or the Signing Stock Options; or
(iv) The failure of any buyer or acquirer of the Company in a change in control to assume the Company’s obligations to Executive under this Agreement.
Notwithstanding the foregoing, “Good Reason” shall only be found to exist if the Executive provides written notice to the Company identifying and describing the event resulting in Good Reason within ninety (90) days of the initial existence of such event (“Good Reason Notice”), the Company does not cure such event within thirty (30) days following receipt of the Good Reason Notice from the Executive, and the Executive terminates his employment during the ninety (90)- day period beginning thirty (30) days after the Executive’s delivery of the Good Reason Notice.
6. Restrictive Covenants.
6.1 Noncompetition. Executive agrees that, for the duration of his employment with the Company and for a period of one (1) year after the termination thereof, Executive shall not engage in, or have any direct or indirect interest in any person, firm, corporation, organization, entity or business in North America - whether as an employee, officer, owner, director, agent, security holder, investor, creditor, consultant, partner, or otherwise - which engages in business that is similar to, or competitive with, the Company’s business. While Executive knows what the Company’s business is, for purposes of this Agreement, the Company’s business is defined as a reseller, integrator, developer, and software and services provider of mobile computing and data collection technology. Notwithstanding Executive’s noncompetition obligations in this Section 6.1, Executive may own (a) not more than one percent (1%) of the securities of any company whose securities are publicly traded, and (b) the securities of any company currently owned by Executive, which have been or are in the future disclosed in writing to the Company and approved by the Board of Directors.
6.2 Confidentiality. The Company and Executive acknowledge that the services to be performed by Executive under this Agreement are unique and extraordinary and, as a result of such employment, Executive shall be in possession of Confidential Information relating to the business practices of the Company and its subsidiaries and affiliates (collectively, the “Company Group”). The term “Confidential Information” shall mean any and all information (oral and written) relating to the Company Group, or any of their respective activities, or of the clients, customers, acquisition targets, investment models or business practices of the Company Group, other than such information that (a) is generally available to the public or within the relevant trade or industry, other than as the result of breach of the provisions of this Section, or (b) is required of Executive to disclose under any applicable laws, regulations or directives of any government agency, tribunal or authority having jurisdiction in the matter or under subpoena or other process of law. The Executive shall not, during his Employment Period with the Company or at any time thereafter (except as may be required in the course of the performance of his duties hereunder and except with respect to any litigation or arbitration involving this Agreement, including the enforcement hereof), directly or indirectly, use, communicate, disclose or disseminate to any person, firm or corporation any Confidential Information acquired by the Executive during, or as a result of, his employment with the Company, without the prior written consent of the Company. The confidentiality obligations contained in this Section 6.2 shall be in addition to any other confidentiality agreement entered into between the Company and Executive, including the proprietary information and invention assignment agreement to be signed by Executive as per the Company’s policy with respect to all employees.
6.3 Mutual Non-Disparagement. At no time during Executive’s Employment Period with the Company or within three (3) years after the termination thereof, will the Executive, directly or indirectly, disparage the Company Group or any of the Company Group’s past or present employees, officers, directors, attorneys, products or services. Notwithstanding the foregoing, nothing in this Section shall prevent Executive from making any truthful statement to the extent (a) necessary to rebut any untrue public statements made about him; (b) necessary with respect to any litigation, arbitration or mediation involving this Agreement, including, but not limited to, the enforcement of this Agreement; or (c) required or specifically protected by law, or any court, arbitrator, mediator or administrative or legislative body (including any committee thereof’) with appropriate jurisdiction.
(ii) At no time during Executive’s Employment Period with the Company or within three (3) years after the termination thereof, will the Company or any of its then officers and/or directors, directly or indirectly, disparage the Executive. Notwithstanding the forgoing, nothing in this Section shall prevent the Company from making any truthful statement to the extent (a) Necessary to rebut any untrue public statements made by the Executive about the Company; (b) Necessary with respect to any litigation, arbitration or mediation involving this Agreement, including, but not limited to, the enforcement of this Agreement; or (c) required or specifically protected by law, or any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with appropriate jurisdiction.
6.4 Cooperation. Upon the receipt of reasonable notice from the Company (including from the Company’s outside counsel), Executive agrees that during his Employment Period with the Company and at any time thereafter, Executive will respond and provide information to the best of his ability with regard to matters about which Executive has knowledge as a result of his employment with the Company, and will provide reasonable assistance to the Company Group and their respective representatives in defense of any claims that may be made against the Company Group (or any member thereof), and will also provide reasonable assistance to the Company Group in the prosecution of any claims that may be made by the Company Group (or any member thereof), to the extent that such claims may relate to matters related to Executive’s Employment Period with the Company (or any predecessors). If the Executive is required to provide any services pursuant to this Section following his termination, then the Company:
(a) shall promptly compensate Executive for all time actually incurred in these activities at an hourly rate of pay equal to Executive’s most recent annual Base Salary divided by 2080 hours; and
(b) shall promptly reimburse the Executive for reasonable out-of-pocket travel, lodging, communication and duplication expenses incurred in connection with the performance of such services and in accordance with the Company’s business expense reimbursement policies.
6.5 Injunctive Relief; Interpretation. Without limiting the remedies available to the Company, Executive acknowledges and agrees that a breach of any of the covenants contained in Section 6 will result in the material and irreparable injury to the Company, the Company Group, or their respective affiliates or subsidiaries, for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of such breach or threat by Executive, the Company shall be entitled to a temporary restraining order and/or a preliminary or permanent injunction restraining Executive from engaging in activities prohibited by this Section 6, without the necessity of posting a bond or other security. If for any reason it is held that the restrictions under this Section 6 are not valid or enforceable as written, such restrictions shall be interpreted or modified to render such restrictions valid and enforceable, and such interpretation or modification shall be to render such restrictions as broad as legally permissible.
6.6 Return of Company Property. Upon the cessation of Executive’s employment for any reason whatsoever, all Company Group property that is in the possession of the Executive shall be promptly returned to the Company, including, without limitation, all documents, records, notebooks, equipment, price lists, specifications, programs, customer and prospective customer lists, supplier lists and any other materials that contain or are derived from Confidential Information which are in the Executive’s possession, including all copies thereof whether in electronic, digital or paper form. Anything to the contrary notwithstanding, Executive shall be entitled to retain (a) papers and other materials of a personal nature, including, but not limited to, photographs, correspondence, personal diaries, calendars and rolodexes, personal files and phone books, (b) information showing his compensation or relating to reimbursement of expenses, (c) information that he reasonably believes may be needed for tax purposes and (d) copies of plans, programs and agreements relating to his employment, or termination thereof, with the Company.
7. Section 409A.
7.1 Interpretation. It is intended that the provisions of this Agreement comply with the requirements of Section 409A of the Internal Revenue Code (“Section 409A”) or an exemption therefrom, and all provisions of this Agreement shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A. A termination of employment shall not be deemed to have occurred for purposes of any payments or benefits subject to Section 409A that are to be paid or provided upon or following a termination of employment unless such termination qualifies as a “separation from service” within the meaning of Section 409A and, for purposes of any such payments or benefits, references in this agreement to “termination,” “termination of employment” or like terms shall mean “separation from service.” For purposes of Section 409A, each payment under this Agreement shall be treated as a separate payment. In no event may Executive, directly or indirectly, designate the calendar year of a payment. If any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause Executive to incur any additional tax or interest under Section 409A. the Company shall, upon the specific request of Executive, use its reasonable business efforts to in good faith reform such provision to comply with Section 409A; provided that, to the maximum extent practicable, the original intent and economic benefit to Executive and the Company of the applicable provision shall be maintained, but the Company shall have no obligation to make any changes that could create any additional economic cost or loss of benefit to the Company. Notwithstanding the foregoing, the Company shall not have any liability with regard to any failure of this Agreement to comply with Section 409A so long as it has acted in good faith with regard to compliance therewith.
7.2 Section 409A Delay. Notwithstanding any other provisions of this Agreement to the contrary, and solely to the extent necessary for compliance with Section 409A and not otherwise eligible for exclusion from the requirements of Section 409A, if as of the date of Executive’s separation from employment from the Company, (a) the Executive is deemed to be a “specified employee” (within the meaning of Section 409A), and (b) the Company or any member of a controlled group including the Company is publicly traded on an established securities market or otherwise, no payment or other distribution required to be made to the Executive hereunder (including any payment of cash, any transfer of property and any provision of taxable benefits) as a result of Executive’s separation from service shall be made until the date that is the earlier of (i) the first day of the seventh month following the date on which Executive separates from service with the Company, or (ii) the date of Executive’s death. Upon the expiration of the foregoing delay period, all payments and benefits delayed pursuant to this Section 7.2 (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to Executive in a lump sum, and all remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.
7.3 Reimbursements and In-Kind Benefits. To the extent that reimbursements or other in- kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Section 409A, (a) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (b) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, and (c) such payments shall be made on or before the last day of Executive’s taxable year following the taxable year in which the expense was incurred.
8. Section 280G.
8.1 Maximum Benefit. Notwithstanding any other provision of this Agreement or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided or to be provided by the Company or its affiliates to Executive or for Executive’s benefit pursuant to the terms of this Agreement or otherwise (“Covered Payments”) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code (“Section 2H0G”) and would, but for this Section 8.1, be subject to the excise tax imposed under Code Section 4999 (or any successor provision thereto) (the “Excise Tax”), then prior to making the Covered Payments, a calculation will be made comparing (a) the Net Benefit (as defined below) to Executive of the Covered Payments after payment of the Excise Tax, to (b) the Net Benefit to Executive if the Covered Payments are limited to the extent necessary to avoid being subject to the Excise Tax. If the amount calculated under (a) above is less than the amount calculated under (b) above, the Covered Payments will be reduced or eliminated to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax. “Net Benefit” means the present value of the Covered Payments net of all federal, state, local and foreign income, employment and excise taxes.
8.2 Order of Reduction. Any reduction or elimination of Covered Payments necessary pursuant to Section 8.1 will be made in accordance with Section 409A and the following:
(a) the Covered Payments that do not constitute nonqualified deferred compensation subject to Section 409A will be reduced or eliminated first in such order as may be specified by Executive (or, if Executive does not provide written notice to the Company specifying such order within 10 days of Executive’s receipt of a written notice from the Company requesting such information, the order specified by the Company); and
(b) all other Covered Payments will then be reduced or eliminated in the following order: (i) cash payments, (ii) non-cash-forms of benefits (other than equity-based payments and acceleration of vesting) and (iii ) equity-based payments and acceleration of vesting.
To the extent payments are to be reduced or eliminated pursuant to clause (b) above, payments or benefits to be made or provided on a later date will be reduced or eliminated before payments or benefits to be made or provided on an earlier date. Notwithstanding the foregoing, if the order of reduction or elimination specified in clause (b) would violate Section 409A, then the reduction or elimination shall be made in such other manner as may be necessary to comply with Section 409A.
8.3 Recalculation. If, notwithstanding the initial application of this Section 8, the Internal Revenue Service determines that all or any portion of any Covered Payment constitutes an excess parachute payment (as defined in Section 280G(b) of the Code), this Section 8 will be reapplied based on the Internal Revenue Service’s determination, and Executive will be required to promptly repay the portion of the Covered Payments required to avoid imposition of an excise tax under Section 4999 of the Code together with interest at the applicable federal rate (as defined in Section 7872(f)(2)(A) of the Code) from the date of Executive’s receipt of the excess payments until the date of repayment).
8.4 Determinations. Any determination required under this Section 8, including whether any payments or benefits are parachute payments, shall be made by the Company in its sole discretion. Executive will provide the Company with such information and documents as the Company may reasonably request in order to make a determination under this Section 8. For purposes of making the calculations and determinations required by this Section 8, the Company may rely on reasonable, good faith assumptions and approximations concerning the application of Section 280G and Section 4999. The Company shall bear all costs incurred in connection with any calculations contemplated by this Section 8. The Company’s determination will be final and binding on Executive.
9. Miscellaneous.
9.1 Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its headquarters in Salt Lake City, Utah to the attention of the Secretary, and to the Executive at the address last reflected on the Company’s payroll records, or such other address as either party may hereafter designate in writing to the other. Any such notice shall be delivered in person or shall be enclosed in a properly sealed envelope addressed as provided herein, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Postal Service. Any such notice shall be deemed given only when received, but if Executive is no longer employed by the Company or a subsidiary, such notice shall be deemed to have been duly given five (5) business days after the date it is mailed in accordance with the foregoing provisions of this Section.
9.2 Severability. Each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be unenforceable only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or any other provision of this Agreement. Furthermore, there shall be automatically substituted for any prohibited or invalid provision a provision as similar thereto as possible that is valid, legal and enforceable.
9.3 Binding Effect; Benefits. This is a contract pertaining to personal services. Accordingly, Executive may not delegate his duties or assign his rights under this Agreement. This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective heirs, legal representatives, successors and the Company’s assigns.
9.4 Entire Agreement. This Agreement represents the entire agreement of the parties with respect to the subject matter hereof and shall supersede any and all previous agreements, arrangements or understandings between the Company and Executive, except the Company’s policies and procedures as in effect from time to time and those plans and other arrangements which are specifically mentioned herein and incorporated by reference as a result. This Agreement may be amended at any time by mutual written agreement of the parties. In the case of any conflict between any express term of this Agreement and any statement contained in any plan, program, arrangement, employment manual, memo or rule of general applicability of the Company, this Agreement shall control.
9.5 Governing Law, Binding Arbitration, and Choice of Venue. This Agreement and the performance of the parties hereunder shall be governed by the substantive laws of the State of Utah (without applying its conflicts of laws provisions) and any applicable laws of United States of America, and shall be interpreted in conformity with the same. The parties agree that any dispute or difference between them with respect to or arising from this Agreement - whether about its content, execution, enforceability, or performance - and any dispute or different between them concerning or relating to Executive’s employment with the Company or the termination thereof shall be, and is, subject to mandatory, final and binding arbitration, which shall be conducted and governed pursuant to the rules and procedures of the American Arbitration Association. BOTH THE COMPANY AND EXECUTIVE, THEREFORE, WAIVE ANY RIGHT EACH MAY HAVE TO A TRIAL BY JURY FOR ANY SUCH DISPUTE. The parties further agree that any such arbitration shall be conducted in Salt Lake City, Utah, and they expressly agree to submit themselves to the jurisdiction of the federal and state courts located in Salt Lake County, Utah.
9.6 Remedies. All rights and remedies provided pursuant to this Agreement or by law shall be cumulative, and no such right or remedy shall be exclusive of any other. A party may pursue any one or more rights or remedies hereunder or may seek damages, injunctive relief or specific performance in the event of another party’s breach or may pursue any other remedy at law or equity, whether or not stated in this Agreement.
9.7 Breach of this Agreement. Executive understands and agrees that if he breaches any provision of this Agreement, specifically including without limitation the restrictive covenants contained in Section 6, all payments and benefits provided hereunder shall cease, and any continuing obligation the Company may have to Executive under this Agreement shall be deemed subject to a full accord and satisfaction and thus no longer chargeable against the Company. If the Company’s participation in any legal action is necessary to enforce the terms of this Agreement because of Executive’s breach - whether such action is brought by Executive, the Company, or a third party - the Company shall be entitled to reimbursement of the reasonable costs and attorneys’ fees it incurs in defending, pursuing or otherwise participating in such legal action in the event that such court determines that such breach is the fault of Executive.
9.8 Survivorship. Except as otherwise expressly set forth in this Agreement, the respective rights and obligations of the parties shall survive Executive’s cessation of employment to the extent necessary to carry out the intentions of the parties as embodied and expressed in this Agreement. This Agreement shall continue in effect until there are no further rights or obligations of the parties outstanding hereunder and shall not be terminated by either party without the express prior written consent of both parties.
9.9 Neutral Interpretation. The parties agree that this Agreement shall not be construed either for or against either of them in any dispute or interpretation hereof.
9.10 No Waiver. The waiver by either party of a breach of any provision of this Agreement shall not operate as, or be construed as, a waiver of any later breach of that provision.
9.11 Taxes. Except as otherwise specifically provided herein, each party agrees to be responsible for its own taxes and penalties.
9.12 Counterparts. This Agreement may be executed and delivered in counterparts (including by facsimile or pdf’) which, when taken together, shall constitute one and the same agreement of the parties.
9.13 Representation of Executive. Executive represents and warrants to the Company that Executive has read and understands this Agreement, has had the opportunity to consult with independent legal counsel of his choosing prior to agreeing to the terms of this Agreement and is entering into this Agreement in a knowing, willful and voluntary manner.
[Signature page follows]
IN WITNESS WHEREOF, the undersigned have executed this Employment Agreement as of the date first above written.
| OMNIQ CORP. | ||
| By: | /s/ Andrew MacMillan | |
| Name: | Andrew MacMillan | |
| Title: | Chairman of Compensation Committee | |
| EMPLOYEE | ||
| By: | /s/ Shai Lustgarten | |
| Shai Lustgarten | ||
Exhibit 10.3
CONSULTING AGREEMENT
This agreement (the “Agreement”), dated February , 2020 (the “Effective Date”) serves as the consulting agreement by and between OMNIQ Corp. and / or any of its subsidiaries (the “Company” or “OMNIQ”) and Campbeltown Consulting Ltd and/or Mr. Carlos J Nissensohn and/or any entity under his control (the “Consultant”) pursuant to which the Consultant shall provide the Company and its controlled entities with certain business development, managerial and financial services in accordance with the terms and conditions of this Agreement.
WHEREAS, the Company and Consultant entered into that certain Letter Agreement, dated September 5, 2019.
WHEREAS, the Company and Consultant desire to have this Agreement replace the Letter Agreement as the governing document for Consultant’s services.
NOW, THEREFORE, in consideration of the premises and conditions set forth herein, the receipt and sufficiency of which are hereby acknowledged, the Company and the Consultant hereby agree as follows:
| 1. | Title and Scope of Consultant’s Services. Pursuant to this Agreement, the Consultant is appointed as a financial and managerial consultant and will be involved with assisting the CEO in: (i) developing the OMNIQ business in the US, Israel, Europe and as requested by the CEO (ii) studying the cost structure and recommend measures to improve efficiency and cost savings, (iii) assisting the Company in structuring a credit facility or raising new debt financing for OMNIQ and/or its subsidiaries (iv) monitoring the up listing of OMNIQ to a national market (v) the initiation and consummation of certain mergers and/or, acquisitions (vi) supervising OMNIQ IR activities as well as other financial activities of OMNIQ as shall be reasonably required by OMNIQ (the “Services”). Consultant shall not be involved in soliciting any investors or taking any other action which may require his registration with the U.S. Securities Exchange Commission. Consultant will devote at least 80% of his working time to the Services. |
| 2. | Consideration and Payment Terms. In consideration for the Services, Consultant shall be entitled to receive the following fees: |
| a. | Monthly Fee: a monthly fee of $30,000. | |
| b. | Debt Financing Fee: If the Company procures debt financing during the term of this Agreement and without any equity component, then the Consultant, who shall have coordinated the transaction through which the Company procured the debt financing, shall be entitled to 5% of the gross funds raised; however if the Company is required to pay a success fee to another external entity, the Consultant shall be entitled to only 3% of the gross funds raised. Consultant’s right to receive such fee shall remain in force for a period of 24 months immediately following the termination of this Agreement. | |
| c. | Equity Financing Fee: If the Company procures equity financing in an amount equal to or greater than $2,000,000 during the term of this Agreement, then the Consultant shall be entitled to a success fee of $60,000 upon the Company’s receipt of at least $2,000,000. Consultant’s right to receive such fee shall remain in force for a period of 24 months immediately following the termination of this Agreement. If the Company procures equity financing in an amount equal to or greater than $4,000,000 during the term of this Agreement, then the Consultant shall be entitled to a success fee of $180,000 upon the Company’s receipt of at least $4,000,000. Consultant’s right to receive such fee shall remain in force for a period of 24 months immediately following the termination of this Agreement. If the Company procures equity financing in an amount equal to or greater than $6,000,000 during the term of this Agreement, then the Consultant shall be entitled to a success fee to be determined by the Board of Directors but not less than $250,000 upon the Company’s receipt of at least $6,000,000. Consultant’s right to receive such fee shall remain in force for a period of 24 months immediately following the termination of this Agreement. |
| d. | Uplisting to National Exchange. If the Consultant assists in the planning and monitoring of a successful listing or offering of securities by the Company, or any subsidiary thereof, on the NASDAQ or New York Stock Exchange markets and such a listing or offering shall be consummated within 24 months as of the date hereof, then the Consultant shall be entitled to a $80,000 onetime payment which shall be paid on the 1st day that the OMNIQ shares become traded on such national exchange. |
| e. | M&A Fee: |
| i. | If the Company closes any M&A transaction with a third party target during the term of this Agreement, then the Consultant shall be entitled to a success fee in the amount equal to five percent (5%) of the total transaction price, in any combination of cash and shares to be determined by OMNIQ, to be paid to the Consultant within two (2) weeks of the closing of such transaction. In the event an external entity is entitled to a success fee from the same M&A transaction, the Consultant’s fee shall be reduced to no less than two and one-half percent (2.5%) and such amount reduced from Consultant’s fee shall be reallocated to the fee due to such external entity. | |
| ii. | If the Company closes any M&A transaction in which it is the acquired company, then the Consultant shall be entitled to a success fee in the amount equal to two percent (4%) of the total transaction price, in any combination of cash and shares to be determined by the Company, to be paid to the Consultant within two (2) weeks of the closing of such transaction. | |
| iii. | The fees described in this Section 2(e) shall also apply to any M&A transaction that closes after the term of this Agreement but which the Consultant substantially contributed to prior to the termination of this Agreement. |
| f. | Foreign Sales Fee: Consultant shall be entitled to a fee equal to five percent (5%) of the year-to-year growth in the Company’s foreign sales of its products and services during the term of the Agreement. Such fee shall be paid within a reasonable time after the end of each fiscal year. If this Agreement is terminated prior to the end of a fiscal year, then the Consultant shall be entitled to receive a pro-rated amount of the sales growth realized by the Company that year. |
| 3. | Payments: Payments of all fees described in Section 2 hereof shall be made against receipt of lawful invoices. Monthly fees of $30,000 pursuant to Section 2(a) shall be made on the 3rd of each calendar month for the Services rendered in the previous month. The Company shall make fee payments pursuant to Sections 2(b) and 2(c) within seven (7) days of receipt of proceeds. | |
| 4. | Expenses: The Consultant’s overseas flights and accommodations shall be preapproved by OMNIQ and based on such approval will be fully covered by OMNIQ. Any additional related expenses shall be preapproved by OMNIQ and will be covered accordingly. Other than as set above, each party to this Agreement shall bear and pay its own expenses whatsoever, related to the execution of this Agreement. | |
| 5. | Confidential and Proprietary Information: All information supplied to between the parties shall be considered of confidential nature. Neither party shall disclose any such information to any other person without the prior written consent of the other party, save for information to be released based on a legal requirement. Every party shall take reasonable precautions to prevent unauthorized disclosure of such information during the term of this Agreement and for a period of 3 year thereafter. Either party agrees, upon termination of this Agreement by either party, to promptly return all such Confidential Information contained in any form to the other party. This letter of confirmation and agreement shall be subject to confidentiality obligation as set herein. The Consultant hereby grants, transfers and assigns to the Company all of its rights, title and interest, if any, in any and all materials and/or work or products, in all forms or formats and the copyrights and patent rights thereto, including documentation, literary work, audiovisual work and any other work of authorship, hereafter expressed, made or conceived in the scope of this engagement. | |
| 6. | Parties’ Relations: In performing the Services, nothing in this Agreement shall be construed to create the relationship of employer-employee either expressed or implied. Further, the relationship between the Parties is that of an independent contract, Consultant being an independent contractor, free from interference or control by the Company in the performance of Services, subject only to the terms of this Agreement. | |
| 7. | Reports: Unless otherwise mutually agreed with the Consultant, the Consultant will report on a regular and on-going basis directly to Mr. Shai Lustgarten, CEO of OMNIQ. | |
| 8. | Term: This Agreement shall terminate on the four-year anniversary of the Effective Date. After the Expiration date of this Agreement, the Parties agree that the Term of this Agreement shall automatically be extended for consecutive periods of one (1) year each time, unless, not less than ninety (90) days preceding such anniversary date, the Parties to this Agreement shall decide not to extend the term of this Agreement. | |
| 9. | Termination: During the first 12 months, the Consultant can terminate the Agreement without cause and subject to 90 days’ prior written notice. After the first 12 months, either party may terminate the Agreement without cause, subject to 90 days’ prior written notice to the other party. | |
| 10. | Miscellaneous: (i) Except as set forth herein, either party shall not assign its obligations without the prior written consent of the other, save if such assignment or transfer is made to a company under its Consultant control (ii) This Agreement shall be interpreted and enforced in accordance with the laws of the state of New York (iii) This Agreement and the agreements referenced herein represent the sole and entire agreement between the parties and supersede and terminate any and all prior agreements, negotiations, and discussions between the parties or their respective counsel with respect to the subject matters covered in this Agreement. This Agreement may be modified only in writing and signed by both parties (iv) Notices - All notices provided for hereunder shall be deemed accepted 7 business days after mailed by first-class mail, postage pre-paid, or hand delivered, addressed to the persons and at the address set in the preamble to this Agreement. |
[Signature Page Below]
| OMNIQ CORP. | |
| /s/ Shai Lustgarten | |
| Shai Lustgarten | |
| Chief Executive Officer | |
| CONSULTANT | |
| /s/ Carlos Nissensohn | |
| Campbeltown | |
| Consulting Ltd Carlos | |
| J.Nissensohn |
[Signature Page to Consulting Agreement]
Exhibit 99.1
OMNIQ
Corp. Acquires Eyepax USA’s Intellectual Property and Technology to Establish
Leadership in Multibillion Dollar Automated
Parking Solutions Market
| ● | OMNIQ is now positioned as a Prime Contractor within the $5.2 billion ticketless parking vertical | |
| ● | OMNIQ to expand its service offering beyond its AI-based Machine Vision solutions to provide an integrated comprehensive parking and campus management solution | |
| ● | OMNIQ to increase revenue share acting as the Prime Contractor instead of providing only AI-based sensors | |
| ● | Enables cloud-based recurring transaction revenue model, quick deployment and real-time control |
Salt Lake City, UT (March 3, 2020) – OMNIQ Corp. (OTCQB: OMQS) (“OMNIQ”) announces the acquisition of the IP and certain other assets of Eyepax USA, a provider of customizable software and hardware packages of cloud-based parking management solutions. Eyepax’s solutions include its Online Parking System (OPS), a cloud-based solution for managing parking permit citations and enforcement; Citation Pro, which processes parking violations; and Lane Pro, parking and license-plate recognition using OMNIQ – HTS cameras. This acquisition complements OMNIQ’s AI-based Machine Vision comprehensive Vehicle Recognition System (including patented, License Plate, Color and Make Recognition) and enables the Company to provide an integrated, comprehensive solution that combines fixed, mobile and handheld hardware with a robust solution for issuance of virtual permits, citations and collections.
OMNIQ AI-based Machine Vision solutions are already installed in over 30 Airports in the US including, JFK, La Guardia, Newark, Los Angeles, Miami and others, as well as in Public Safety Projects in Florida, South America and sensitive districts in the Middle East.
The Eyepax parking enforcement and revenue control system (PERCS) provides a wide range of operational benefits, including: increased efficiency and time management for operators, enhanced revenue generation and elevated customer satisfaction levels. PERCS incorporates parking access and revenue enforcement capabilities within a single platform, using license plate recognition (LPR) technology. The system allows an administrator to manage lanes and track revenue from one web portal, and utilizes a dashboard for the monitoring of all activity and transactions for visitors and transient parkers. The company’s customers include municipalities, universities, medical centers and public parking operations across the U.S.
Shai Lustgarten, CEO of OMNIQ Corp., commented: “This acquisition is a game changer for us. After being the pioneer in developing and providing Machine Vision – Object Identification solutions, this acquisition establishes us as a Prime Contractor offering an innovative and superior approach and propels us to the top of the food chain in the Parking Industry. The Automation of Parking Industry is expected to grow to $5.2B by 2023*.
“As the Prime Contractor, we shall benefit from capturing the whole project revenue versus just a fraction of the revenue acting exclusively as a provider of the Machine Vision solution. Moreover, our new comprehensive solution will accelerate the shift to a recurring transaction based revenue sharing model. Our Vehicle Recognition system was successfully tested by a leading Homeland Security Authority in the Middle East, proving its superior accuracy which is the key feature for Automated Parking solutions.
“Adding these new capabilities to our superior Machine Vision technology creates an innovative approach for the Industry, similar to how UBER changed the transportation industry. The combination of our AI-Machine Vision technology and the Eyepax cloud-based platform, creates a seamless solution that makes finding and paying for parking much more convenient to the customer, while also increasing efficiencies and enhancing revenue generating capacity for the parking provider. With the addition of the accessible, web-based PERC system, OMNIQ will now have the ability to engage directly with the end-user, providing a scalable platform that generates recurring revenue. We are energized by this acquisition and believe this enhanced fully integrated cloud and AI solution is a competitive advantage as we leverage the significant opportunities we see in the ticketless/safe parking industry.”
Mr. Lustgarten concluded, “We welcome the Eyepax founders and employees coming to our team, and we remain focused on continuing to innovate and leverage our AI-Machine Vision capabilities to meet the evolving needs of our growing Public Safety, Automation of Parking and Supply Chain verticals and our broad customer base including many Fortune 500 customers.”
(*)Source: MarketsandMarkets: Parking Management Market by Solution (Parking Guidance, Reservation Management, Permit Enforcement, PARC, Security & Surveillance, Analytics), Service, Deployment Type, Parking Site (Off-Street and On-Street), and Region-Global Forecast to 2023 (June 2018).
About OMNIQ Corp.
OMNIQ Corp. (OTCQB: OMQS) 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, and oil, gas, and chemicals. Since 2014, annual revenues have grown to more than $50 million from clients in the USA and abroad.
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.
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. Important factors that could cause these differences include, but are not limited to: fluctuations in demand for the Company’s products, 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 Quest Solution, Inc. please refer to the Company’s recent Securities and Exchange Commission filings, which are available at http://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.