Exhibit 4.8
COMMON STOCK PURCHASE AGREEMENT
April 29, 2002
TABLE OF CONTENTS
PAGE
ARTICLE 1. Purchase and Sale of the Shares ............................... 1
1.1 Purchase and Sale of the Shares .................................. 1
1.2 Closing .......................................................... 1
1.3 Delivery ......................................................... 1
ARTICLE 2. Representations and Warranties of the Company and Supercom .... 2
2.1 Organization, Good Standing and Qualification .................... 2
2.2 Capitalization, Voting Rights .................................... 3
2.3 Subsidiaries ..................................................... 3
2.4 Authorization .................................................... 3
2.5 Governmental Consents ............................................ 3
2.6 Litigation ....................................................... 3
2.7 No Violations .................................................... 4
2.8 Financial Statements ............................................. 4
2.9 No Material Change ............................................... 4
2.10 Contracts and Other Commitments .................................. 5
2.11 Related-Party Transactions ....................................... 5
2.12 Patents and Trademarks ........................................... 6
2.13 Employees ........................................................ 7
2.14 Permits .......................................................... 8
2.15 Environmental and Safety Laws .................................... 8
2.16 Title to Property and Assets ..................................... 8
2.17 Insurance ........................................................ 9
2.18 Taxes ............................................................ 9
2.19 Brokers and Finders .............................................. 9
2.20 Disclosure ....................................................... 9
ARTICLE 2A. Representations and Warranties of Supercom ................... 9
2A.1 Organization, Good Standing and Qualification .................... 9
2A.2 Authorization .................................................... 9
2A.3 Good Title to Stockholder Shares ................................. 9
2A.4 Litigation ....................................................... 10
2A.5 No Violations .................................................... 10
2A.6 Brokers and Finders .............................................. 10
ARTICLE 3. Representations and Warranties of the Investor ................ 10
3.1 Authorization .................................................... 10
3.2 No Violations .................................................... 10
3.3 Investment Intent ................................................ 10
3.4 Legends .......................................................... 11
3.5 Investment Experience ............................................ 11
3.6 Accredited Investor .............................................. 11
3.7 Brokers and Finders .............................................. 11
ARTICLE 4. Conditions To the Investor's Obligations at Closing ........... 11
4.1 Representations and Warranties ................................... 11
4.2 Performance ...................................................... 12
4.3 Compliance Certificate ........................................... 12
4.4 Secretary's Certificate .......................................... 12
4.5 Opinion of Counsel ............................................... 12
4.6 Due Diligence .................................................... 12
4.7 Proceedings and Documents ........................................ 12
ARTICLE 5. Conditions To the Company's Obligations at Closing ............ 12
5.1 Representations and Warranties ................................... 12
5.2 Payment of Purchase Price ........................................ 12
ARTICLE 6. Covenants of the Company ...................................... 12
6.1 Taxes ............................................................ 12
6.2 Financial Information ............................................ 13
6.3 Insurance ........................................................ 13
6.4 Compliance with Laws ............................................. 13
6.5 Preservation of Corporate Existence .............................. 13
6.6 Inspection Rights ................................................ 13
ARTICLE 7. Indemnification ............................................... 14
7.1 Indemnification .................................................. 14
7.2 Right to Defend; Compromise of Claims; Contribution .............. 15
7.3 Remedies ......................................................... 15
ARTICLE 8. Miscellaneous ................................................. 16
8.1 Survival of Warranties ........................................... 16
8.2 Successors and Assigns ........................................... 16
8.3 Titles and Subtitles ............................................. 16
8.4 Notices .......................................................... 16
8.5 Amendments and Waivers ........................................... 16
8.6 Severability ..................................................... 16
8.7 Independence of Covenants and Representations and Warranties ..... 16
8.8 Further Assurances ............................................... 17
8.9 Governing Law .................................................... 17
8.10 Counterparts ..................................................... 17
8.11 Entire Agreement ................................................. 17
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE, AGREEMENT (this "Agreement") is made as of
the day of April. 2002, by and among InkSure Technologies Inc., a Delaware
corporation (the "Company"], Supercom Ltd., an Israeli corporation ("Supercom"),
and the investor listed on Exhibit A hereto (the "Investor").
RECITALS
WHEREAS, the Company has authorized 13,000,000 shares of common stock,
par value $.01 per share (the "Common Stock") of which 5,066,796 shares are
issued and outstanding.
WHEREAS. Supercom is the holder of 3,858,447 shares of Common Stock and
desires to sell to the Investor 782,771 shares of Common Stock (the "Shares");
and
WHEREAS, the Investor desires to purchase the Shares on the terms and
conditions set forth herein; and
WHEREAS, the parties wish to set out certain representations, warranties,
covenants and understandings with respect to the above matters.
PROVISIONS
In consideration of the foregoing recitals and the mutual covenants
herein, the undersigned parties agree as set forth herein.
ARTICLE 1. PURCHASE AND SALE OF THE SHARES
1.1 PURCHASE AND SALE OF THE SHARES. Subject to the terms and
conditions hereof, at the Closing (as defined below), Supercom will sell and
deliver, and the Investor will purchase from Supercom, the Shares, as set forth
on Exhibit A.
1.2 CLOSING. Subject to the terms and conditions hereof, the closing
of the purchase and sale of the Shares pursuant to Section 1.1 (the "Closing")
shall take place on April 29, 2002 , at the offices of ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other time
or place as the Company and the Investor may mutually agree (the "Closing
Date").
1.3 DELIVERY. At the Closing, subject to the terms and conditions
hereof, Supercom will deliver to the Investor the Shares to be purchased by the
Investor, against payment of the purchase price of an aggregate of $1,000,000 by
check or wire transfer to the account designated by Supercom.
ARTICLE 2. REPRESENTATIONS AND WARRAISTIES OF THE COMPANY AND SUPERCOM
The Company and Supercom each hereby represent and warrant to the
Investor, on a joint and several basis, as of the Closing:
2.1 ORGANIZATION. GOOD STANDING AND QUALIFICATION. The Company is duly
organized, validly existing and in good standing under the laws of the State, of
Delaware and the Company has all requisite power and authority to enter into
this Agreement and to carry out the provisions hereof. The Company is duly
qualified to conduct ID business as currently conducted and is in good sending
as a foreign corporation in all jurisdictions in which the nature of its
business or location of its properties requires such qualification, except where
the failure m be so qualified would not (have a material adverse effect on the.
business, financial condition, result* of operations or prospects of the Company
and its Subsidiaries, taken as a whole (a "Material Adverse Effect").
2.2 Capitalization. Voting Rights.
(a) The authorized capital stock of the Company consists of (i)
13,000,000 shares of common stock, par value $.01 per share (the "Common
Stock"), of which 5,066,796 shares arc issued and outstanding, and (ii)
2,000.000 shares of Preferred Stock, of which 1,312,785 shares are issued and
outstanding. Schedule 2.2(a) contains an accurate list of the name, of each
stockholder of the Company and the number of outstanding shares OF each class of
capital stock of the Company held by such stockholder. All of the, outstanding
shares of the capital stock of the Company are duly authorized and validly
issued, fully paid and nonassessable., and were issued in accordance with the
registration or qualification provisions of the Act, and any relevant state
securities laws or pursuant to valid exemptions
(b) Except -A* set forth herein or on Schedule 2.2(b), no
preemptive rights, rights OF first refusal or similar rights exii.1 with respect
to the shares of capital stock of the Company and. no such rights arise or
become, exercisable by virtue of or in connection with the transactions
contemplated, herein. No antidilution or similar rights arise by virtue of or in
connection with the delivery of the Shares. The Company has reserved 600,000
shares of Common Stock for issuance under its 2001 Stock Option Plan (the
"Plan"), of which 278.809 me covered by option grants which are presently
outstanding. Except as set forth on Schedule Z2(b) or as otherwise describe in
this paragraph (b), there are no outstanding or authorized lights, options,
warrants, convertible securities, subscription rights, conversion rights,
exchange rights or other agreements at" any kind that could require the Company
to issue or sell any shares of its capital stock (or Securities convertible into
or exchangeable for shares of its capital stock). The Company has granted to ▇▇▇
▇▇▇▇▇ an option (the "Rozen Option") to purchase 300,480 shares of the Common
Stock of the Company at an exercise price of $150,000, and has granted TO ▇▇▇▇
▇▇▇▇▇▇▇ an Option (the "▇▇▇▇▇▇▇ Option") to purchase up to 478,469 shares of the
Common Stock of the Company at an exercise price of U.S. $0.966 per share.
Neither the Rozen Option nor the ▇▇▇▇▇▇▇ Option were granted pursuant to the
Plan. Except as set forth on Schedule 2.2(b). the Company has no obligation in
register any shares of its capital stock, under the Act. Except AS
set forth on Schedule. 2.2(b). the Company is not obligated directly, indirectly
or contingently 10 purchase or redeem any shares of its capital stock.
(c) On or prior LU March 4, 2002, the Company and -Supercom (i)
converted all outstanding principal and accrued interest on approximately a
$1.42 million loan then outstanding from Supercom and all oilier intercompany
indebtedness (oilier than as described in this paragraph (c)) of the Company and
its Subsidiaries to Supercom into a contribution to [he capital of the Company,
(ii) sold all of [he issued and outstanding common stock of Kromotek Inc. held
by the Company to Supercom in exchange for conversion into a contribution m the
capital of the: Company by Supercom of $930,000 of principal and interest on
Supercom's then outstanding loan to the Company, and (iii) entered into a
promissory note in the amount of $250,000 in favor of Supercom-
2.3 SUBSIDIARIES Each subsidiary of the Company (a "Subsidiary") is
hated on Schedule 2.3. Each Subsidiary is a corporation or limited liability
company duly organized, validly existing and, in good standing under the laws of
the state of its incorporation or; formation. and is qualified to do business as
a foreign corporation in each jurisdiction where it is required to be 30
qualified, except where failure, in lie so qualified would not reasonably be
expected to have a Material Adverse Effect. Each Subsidiary is wholly owned by
the Company.
2.4 AUTHORIZATION, The Company has the. right, power and authority to
enter into and perform its obligations under this Agreement and the other
agreements contemplated hereby, All corporate action on the part of the Company,
its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement and the other agreements contemplated
hereby, the performance of all obligations of the Company hereunder. This
Agreement constitutes the valid and legally binding obligation of the Company,
enforceable in accordance with its terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
applications affecting enforcement of creditors' rights generally, (h) as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies and (c) to the extent any noncompetition or
Indemnification provisions of this Agreement may be limited by applicable
federal or state securities laws or by public policy.
2.5 Governmental.Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, slate or local governmental authority on the pan: of
the Company, Supercom or any Subsidiary (except such a& have been obtained) is
required in connection with the consummation of the transactions contemplated by
this Agreement.
2.6 LITIGATION. Except as set forth on Schedule 2.6, there is no
action, suit, proceeding or investigation pending or, to the Company's
knowledge, currently threatened against the Company or any of its Subsidiaries
or their properties or assets. nor is the Company aware that. there is a basis
for any of the foregoing. The Company is not nor is any of its Subsidiaries a
party or subject 10 the provisions of any order, ▇▇▇▇, injunction, judgment or
decree of any court or government agency or instrumentality except for those
having general' applicability. There is no action, suit, proceeding or
investigation by the Company or any Subsidiary currently pending or that the
Company or any Subsidiary intends to inmate.
3
2.7 NO VIOLATIONS. Neither the Company nor any Subsidiary is in
violation or default of any provision of its Certificate of Incorporation or
Bylaws as currently in effect, or in any material respect of any instrument,
contract judgment, order, writ or decree to which it is a party or by which it
is bound, or of any provision of any federal or state statute, rule or
regulation applicable to the Company or such Subsidiary. The execution, delivery
and performance of this Agreement and the consummation of the transaction
contemplated hereby will not result in any such violation on the part of the
Company or any Subsidiary or be in conflict with, or constitute (with or without
the passage of time and giving of notice) a default on the part of the Company
or any Subsidiary under any such instrument, contract, judgment, order, writ or
decree or an event that results in the creation of any lien, charge or
encumbrance, upon any assets of the Company or any Subsidiary or the suspension,
revocation, impairment, forfeiture, or nonrenewal of any permit, license.
authorization or approval applicable to the Company or any Subsidiary, their
respective business or operations or any of their respective assets or
properties.
2.8 FINANCIAL STATEMENTS. Prior to the Closing, the Company shall have
furnished to the Investor, jts balance sheet as of December 31, 2001 and its
statements of operations and cash flows for the year ended December 31, 2001
(the "Financial Statements"). A copy of the Financial Statements is attached to
Schedule 2.S hereto. The Financial Statements, together with any notes thereto
{if any), have been prepared in accordance ▇▇▇▇▇ the books and records of the
Company and each Subsidiary (which are true and correct in all material
respects) and fairly present the financial position of the Company and its
Subsidiaries on a pro forma consolidated basis as of the dates thereof and the
results of its operations and cash flows for the period then ended. Except as
disclosed or provided for in the balance sheet as of December 31, 2001, as of
the date hereof, there are no material liabilities of the Company or its
Subsidiaries taken together as a whole, of any kind whatsoever, whether accrued,
contingent or otherwise, other than liabilities incurred in the ordinary course
of business consistent with past practice since the date of such balance sheet.
2.9 NO MATERIAL CHANGE. Except as set forth on Schedule 2.9, since
December 31, 2001 there has not been:
(a) any change m the assets, liabilities, financial condition, or
operating results of the. Company and its Subsidiaries, taken together as a
whole, from that reflected in the Financial Statements, except for changes in
the ordinary coarse of business that have not been, in the: aggregate, material
and adverse:
(b) any damage, destruction or loss, whether or not covered by
insurance, that would have a Material Adverse Effect ;
(c) any waiver or compromise by the Company or any Subsidiary of a
valuable right or of a. material debt owed to the Company and the Subsidiaries,
taken together as a whole;
(d) any satisfaction or discharge of any lien, claim, or encumbrance
or payment. of any obligation by the Company or any Subsidiary, except in the
ordinary course of business and that is not material to the business,
properties, prospects or financial condition of die Company and its
Subsidiaries, taken together as a whole;
(e) any change to a contract or arrangement by which the Company or
any Subsidiary or any of their assets is bound or subject that is material to
the Company and the Subsidiaries, taken together as a whole;
(f) any material change in any compensation arrangement or agreement
with any employee, officer, director or stockholder;
(g) any sale, assignment, or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets;
(h) any resignation or termination of employment of any key officer of
the Company OR any Subsidiary;
(i) receipt of notice that there has been a loss of, or order
cancellation by. any customer of the Company or any Subsidiaries, that is
material to the Company and the Subsidiaries, taken together as a whole;
(j) any material mortgage, pledge, transfer of a security interest in,
or lien, created by the Company or any Subsidiary, with respect to any of its
properties or assets, except liens taxes not for yet due or payable;
(k) any material loans or guarantees made by the Company or any
Subsidiary to or for the benefit of their employees, stockholders, officers. 01:
directors, or any members of their immediate families, other than travel
advances and oilier advances made in the ordinary course of their business;
(l) any declaration, setting aside, or payment of any dividend or
other distribution of the assets in respect of any of the Company's capital
stock, or any direct or indirect or redemption, purchase, or other, acquisition
of any of such stock by the Company:
(m) to the best of the Company's knowledge, any other event or
condition of any character that is reasonably likely to have a Material Adverse
Effect: or
(n) any agreement or commitment by the Company or any Subsidiary to do
any of the things described in this Section 2.9.
2.10 Contracts and Other Commitments. Except as set forth on Schedule
2.10, the Company and its Subsidiaries do not have and arc not bound by any
contract, agreement, lease, or commitment, written or oral, absolute or
contingent, other than (i) contracts for the purchase of supplies and services
that were entered into in the ordinary course of business and that do not.
involve more than One Hunched Thousand Dollars ($I00.000), and do no: extend for
more than one year beyond the date hereof, (ii.) sales contracts entered into in
the ordinary course of business, (iii) contracts terminable at will by the
Company on no more than thirty (30) days' notice without cost liability in the
Company which neither involve any employment or consulting arrangement nor are
material to the conduct of the Company's or any Subsidiary's business and (iv)
confidentiality agreements. Neither the Company or its Subsidiaries, nor, to its
knowledge, any other party to any contract covered by clauses (i)-(iv) above or
any contract set forth on Schedule 2.30, is in default nuclei: any such
contract. Employment and consulting contracts and commas with labor unions, and
license agreements and any other agreements relating to the Company's
acquisition 01 disposition of patent, copyright, trade secret or other
proprietary rights or technology (other than standard end-user license
agreements) shall not be considered to be contracts entered into in the ordinary
course of business,
2.11 RELATED-PARTV TRANSACTIONS. Except as set forth on Schedule 2.11
hereto, no holder of 5% or more of any class of capital stock, of the Company at
the time such transaction was entered into, or any director, officer or employee
of the Company or any Subsidiary, or family member of any such person, or any
corporation, partnership , trust or other entity in which any such person, or
family member of any such person, has an interest or is an officer, director,
trustee, partner or holder of any equity interest, (i) is a party to any
transaction with the Company nr any Subsidiary, including, without limitation,
any contract, agreement or other
arrangement providing for the employment of, furnishing of services by, rental
of real or personal property from, license of Necessary Intellectual Property
(as defined below) or otherwise requiring payments or involving other
obligations to or from the Company or any Subsidiary or (ii) owns any assets
used in the business of the Company or any Subsidiary.
2.12 PARENTS AND TRADEMARKS.
(a) Intellectual Property" means all intellectual property, including,
without limitation, (i) patents, patent applications patent rights, trademarks,
trademark applications, copyrights, cop>right applications, know-how,
franchises. licenses, proprietary processes and formulae, layouts, processes,
inventions, and (ii) all proprietary rights pertaining :o any product or service
manufactured, sold, distributed or marketed, or used, employed or exploited in
the development. manufacture, license, sale, distribution, marketing or
maintenance thereof, and all documentation and media constituting, describing or
relating to the foregoing. The Company and its Subsidiaries own or have a valid
and enforceable license 10 use any and all intellectual Property necessary for
the operation of the business of the Company and its Subsidiaries as now
conducted or proposed to be conducted (the "Necessary Intellectual Property"),
which Necessary Intellectual Property is set forth on Schedule 2.12 hereto. The
Company has no knowledge of any misappropriation of, infringement of, alleged
infringement of or conflict with the rights of others with respect to the
Necessary Intellectual Property .The Company has no knowledge that any of ifs nr
its Subsidiaries' employees is obligated under any contract (including licenses,
covenants or commitments of any nature) or other agreement, or subject to any
judgment, decree or order of any court nr administrative agency that would
interfere with such employee's duties EO the Company or that would conflict with
the Company's and its Subsidiaries' business as proposed to be conducted.
Neither the execution nor delivery of this Agreement will, to the best of the
Company's knowledge, conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any contract,
covenant or instrument under which any employee is now obligated. The Company
docs not believe it is or will be necessary to utilize any inventions,
trademarks or proprietary information of any of its employees matte print to
their employment by the Company : except for such inventions, trademarks or
proprietary information as have been assigned to the Company.
(b) The Company and its Subsidiaries have die right to use, sell,
license and dispose of, and have the right to brine actions for the infringement
of, and, where necessary, has made timely and proper application for the
registration of all Necessary Intellectual Property and such rights to use,
sell, license, dispose of and bring actions arc exclusive with respect to such
Intellectual Property. There are no royalties, honoraria, fees or other payments
payable by the Company or its Subsidiaries to any person by reason of the
ownership, use, license, sale or disposition of the Necessary Intellectual
Property, other than in connection with licensed Intellectual Property.
(c) The Company and its Subsidiaries have used commercially reasonable
efforts to safeguard and maintain the secrecy and confidentiality of, and its
proprietary rights in, all Necessary Intellectual Property. Schedule 2,12
contains a true and complete list of all applications Find filings made or taken
pursuant to federal, state, local and foreign laws by the Company and its
Subsidiaries to perfect or protect its interest in the Necessary Intellectual
Property , including, without limitation, oil patents, patent applications,
trademarks, *, service marks and service ▇▇▇▇ applications.
(D) THE COMPANY HAS NOT, NOR HAVE ANY OF ITS SUBSIDIARIES OR ANY
AFFILIATE, SENT TO ANY third party or otherwise communicated to another person
in the past five years any charge complaint, claim, demand or notice assorting
infringement or misappropriation of, or other
conflict with, any Necessary Intellectual Property right of the Company or any
or any Subsidiary' by such other person or any acts of unfair competition by
such oilier person, nor to the best knowledge of the Company, is any such
infringement, misappropriation, conflict or act of unfair competition occurring
or threatened.
2.13 EMPLOYEES,
(a) Each employee, consultant and officer of the Company and its
Subsidiaries has on or prior to the date hereof executed a Proprietary
Information and Inventions Agreement in the form attached as Exhibit C. The
Company IS not aware that any of its or any Subsidiary's employees, consultants
or officers is in violation thereof.
(b) Except as set forth in Schedule 2J.3, NO employee of the Company
or its Subsidiaries has an employment agreement or understanding. whether oral
or written, with the Company or such Subsidiary which is not terminable on
notice by the Company or such Subsidiary without cost or other liability LO the
Company at such .Subsidiary. Except as set forth in Schedule 2.13, no employee
of the Company or its Subsidiaries Has advised the Company or its Subsidiaries
(orally or m writing) that he or she intends to terminate his or her employment.
(c) To the Company's knowledge, the Company and its Subsidiaries have
complied in all material respect with all foreign and domestic laws relating to
the hiring of employees and the employment of labor, including provisions
thereof relating to wages, hours, equal opportunity, collective bargaining and
the payment of social security end other taxes. The Company and its Subsidiaries
do not have knowledge of any labor relations problems being experienced by it
(including, without limitation , any union organization activities, threatened
or actual strikes or work stoppages or material grievances).
(d) EXCEPT as set forth on Schedule 2.13, (i) the Company and its
Subsidiaries arc not delinquent in payments to any employees for any wages,
salaries, commissions, bonuses or other direct compensation for any services
performed by them 10 dace or amounts required TO he to such employees and upon
any termination of the employment of any such (ii) there is no unfair labor
practice complaint against the Company or its pending before the National Labor
Relations Board or any other governmental entity, (iii) there is no unfair
strike, material dispute, slowdown or stoppage pending or, to the best knowledge
of the Company , threatened against or involving the Company or its
Subsidiaries, (iv) no labor union currently represents the employees of the
Company or its Subsidiaries;, and (v) to the best knowledge of the Company, no
labor union has taken any action with respect to organizing the employees of the
Company or ITS Subsidiaries, The Company and its Subsidiaries are not a parry in
or bound by any collective bargaining agreement or union contract.
(e) Schedule 2,13 sets forth a true and complete list of all Employee
BENEFIT Plans (03 used in This Section 2.13, the "Plans") (i) that cover any
employees of the Company or its Subsidiaries (A) that are maintained, sponsored
or contributed it> by the Company or its Subsidiaries or (B) with respect to
which the Company or its Subsidiaries is obligated to contribute or has any
liability or potential liability, whether direct indirect or (ii) with respect
to which the Company and its Subsidiaries has any liability or potential
liability on account of the maintenance or sponsorship thereof or contribution
thereto by any present or former ERISA Affiliate of the Company or its
Subsidiaries. The Company, its Subsidiaries and their respective ERISA
Affiliates are not, and have never maintained or been, obligated to contribute
to a Multiple Employer Plan, a Multi -Employer Plan or a Defined Benefit Pension
Plan.
(f) For the purposes of this Section 2.13. the following terms shall
have the following meanings;
"DEFINED BENEFIT PENSION PLAN " means shall have the meaning set forth in
Section 3(35) of ERISA.
"EMPLOYEE BENEFIT PLAN" means any (a) qualified or non -qualified
Employee Pension Benefit Plan (including any Multiple Employer Plans or
Multi-Employer Plans), (b) Employee Welfare Benefit Plan, or (c) employee
benefit, fringe. benefit, compensation, incentive, bonus or other plan, program
or arrangement, whether or not subject to ERISA and whether or not funded.
"Employee Welfare Benefit Plan" shall have the meaning set forth in
Section 3(1) or FRISA.
"ERISA" means Die Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"ERISA Affiliates" means, with respect to any person, any other person
that is a member of a "controlled group of corporations" with, or is under
"common control" with, or is a member of the same "affiliated service group"
with such person us defined in Section 4I4(b), 414(c), or 414(m) or 414(o) of
the Code,
"Multi-Employer Plan" shall have the meaning set forth in Section 3(37)
of ERISA. "Multiple Employer Plan" means shall have the meaning sec forth in
Section 413 of the Code.
2.14 PERMITS. The Company and each .Subsidiary has all franchises,
permits, licenses, and any similar authority necessary for the conduct of its
business as now being conducted by it, the lack of which would have a Material
Adverse Effect, Neither the Company nor any Subsidiary is in default in any
respect under any of such franchises , permits, licenses, or other similar
authority.
2.15 Environmental and Safety Laws. Neither the Company nor any
Subsidiary is in violation of any statute, law or regulation relating to the
environment or occupational health and safety, and no material expenditures ore
or will be required in order to comply with any such statute , law OR
regulation. There are no proceedings pending or, to the best knowledge of the
Company, threatened against the Company or its Subsidiaries alleging any such
violation 01 involving any of their past operations or any real property
currently used by the Company or its Subsidiaries. The Company and its
Subsidiaries have not received any written or oral notice or report with respect
to it or its facilities regarding any (i) actual or alleged violation of any
such statute , law or regulation or (ii) actual or potential liability arising
under such statute, law or regulation, including, without limitation, any
investigatory, remedial or corrective obligation,
2.16 TITLE TO PROPERTY AND ASSETS . The Company and the Subsidiaries
own, or lease under valid leases, all facilities, machinery, equipment and other
assets necessary for the conduct of their business as conducted as of the date
hereof and as proposed to be conducted. The Company and each Subsidiary owns its
respective properties and assets free and clear of all mortgages, liens, loans
and encumbrances, except such encumbrances and liens that arise in the ordinary
course of business and do not materially impair the Company's or such
Subsidiary's ownership or use of such property or assets. With respect to the
property and assets it leases, the Company and each Subsidiary Is in compliance
with such leases and holds a valid leasehold interest free of any liens, claims
or claims or encumbrances. Supercom does not own any assets used in the business
of the Company or any .Subsidiary,
2.17 INSURANCE. The Company and each Subsidiary has insurance on its
properties and business in such amounts, of such types and covering such
casualties, risks and contingencies as is ordinarily carried by companies
engaged in similar businesses and owning similar properties in the same general
area in which the Company or such Subsidiary operates.
2.18 TAXES. The Company and each Subsidiary has filed ail federal,
sure, local and other tax returns and reports required by law to be filed
(including, without limitation, those due in respect of its properties, income,
franchises, licenses, sales and payrolls), and has paid all such taxes
applicable to periods through the day of the Closing, and [here are no pending
or threatened claims against the Company or any Subsidiary for past due taxes.
There are no outstanding waiver* or agreements by the Company or any Subsidiary
for the extension of the lime fur (.he payment of any tax.
2.19 BROKERS AND FINDERS. Neither the Company nor any Subsidiary has
used or retained any broker, investment banker, financial advisor, finder or
agent in connection with This Agreement or the transactions contemplated hereby.
financial projections which have been provided by or on behalf of the Company to
the Investor or any of its respective directors, officers, partners, employees,
representatives or agents, taken as a whole, arc true and authentic in all
material respects. The representations and warranties made by or on behalf of
the Company to the investor in this Agreement do not contain any untrue
statement of a material fact and do not omit to state a material fact required
to be stated therein or necessary to make the statements made, in the context in
which made, not false or misleading.
ARTICLE 2A. REPRESENTATIONS AND WARRANTIES OF SUPERCOM
Supercom hereby represents and warrants to the Investor as of the Closing:
2A.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Supercom is duly
organized, validly existing and in good standing under the laws of Israel and
has all requisite POWER AND AUTHORITY TO ENTER INTO THIS Agreement and to CARRY
out the PROVISIONS HEREOF.
2A.2 AUTHORIZATION. Supercom has the right, power and authority to
enter into and perform its obligations under this Agreement and the other
agreements contemplated hereby to which Supercom is a party. All corporate
action on the pan of Supercom, its officers, directors and stockholders
necessary for the authorization, execution and delivery of this Agreement and
the other agreements contemplated hereby to which Supercom is party, the
performance of all obligations of Supercom hereunder, the sale and delivery of
the Stockholder Stock being sold hereunder has been taken. This Agreement
constitutes the valid and legally binding obligation of Supercom, enforceable in
accordance with its terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors' rights generally, (b) as limited by laws
relating to the availability of specific performance, injunctive relief, or
other equitable remedies and (c) to the extent any non -competition or
indemnification provisions of this Agreements may be limited by applicable
federal or state securities laws or by public policy.
2A.3 GOOD TITLE TO THE SHARES. The Shares being purchased by the
Investor hereunder, when sold and delivered in accordance with the terms of this
Agreement, will be duly authorized and validly issued, fully paid and
non-assessable, with no personal liability attaching to the ownership thereof,
free and clear of any liens whatsoever, other than liens arising out of the acts
or commissions of the Investor and with no restrictions the voting rights
thereof and other incident of record and beneficial ownership pertaining Thereto
other than as provided for herein.
2A.4 Litigation. Except as set forth on Schedule 2,6, there is no
action, suit, proceeding or investigation pending or to Supercom's knowledge,
currently threatened against Supercom that questions the validity of this
Agreement, or could affect any of [he properties or assets of the Company and
its Subsidiaries.
2A.5 NO VIOLATIONS . The execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby will not
result in any violation on the part of Supercom or be in conflict with, or
constitute (with or without the passage of time and giving of notice) a default
on the part of Supercom under any instrument, contract, judgment., order, writ
or decree to which Supercom is a party or by which it is bound.
2A.6 Brokers and hinders. Supercom has nor used or retained any broker,
investment banker, financial advisor, finder or agent in connection with this
Agreement or the transactions contemplated hereby.
INVESTOR THE OF WARRANTIES AND REPRESENTATIONS ARTICLES-
Investor hereby represents and warrants as of the Closing;
3.1 AUTHORIZATION. The Investor has the right, power and authority to
enter into and perform its obligations under this Agreement and the other
agreements contemplated hereby and thereby. All action on the part of the
Investor and its officers, directors, stockholders, partners. members or
managers, as applicable, necessary- for the authorization, execution and
delivery of this Agreement and the other agreements contemplated hereby, and the
performance of all obligations of such Investor hereunder and thereunder has
been taken or will be taken prior to the Closing, This Agreement constitutes a.
valid and legally binding obligation of such Investor, enforceable in accordance
with its terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of genera] application affecting
enforcement of creditors' rights generally, (b) as limited by laws relating to
the ^liability of specific performance, injunctive relief, or other equitable
remedies and (c) to the extent any non-competition or indemnification provisions
of such agreements may be limited by applicable, federal or state securities
laws or by public policy.
3.2 NO VIOLATIONS. The execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby will not
result in any violation on the part of such Investor or be in conflict with or
constitute (with or without the passage of time and giving of notice) a default
on the part of such Investor under any of its organizational or charter
documents, as applicable, or a default on the pan of such Investor under any
instrument, contract, judgment, order, writ or decree, or an event that results
in the creation of any Hen, charge or encumbrance upon any assets of such
investor or the suspension, revocation, impairment, forfeiture, or nonrenewal of
any material permit, license, authorization, or approval applicable 10 such
Investor, its business or operations or tiny of its assets or properties.
3.3 INVESTMENT INTENT. The Investor will acquire the Shares for the
Investor's own account for investment and not with a view to, or in connection
with, any resale 01 other-distribution of any part thereof, and the Investor has
no present intention of selling 01 otherwise distributing the same. The Investor
acknowledges that the Shares air not registered undo the Act or other applicable
securities laws and that they may not be sold, transferred, offered for
sale, pledged, hypothecated or otherwise disposed of without registration under
such Act and other applicable securities laws, except pursuant to mi exemption
from such registration available under the Act and other applicable securities
laws. In this connection, the Investor represents that the investor is familiar
with Rule 144 of the Act, as presently in effect, and understands the resale
limitations imposed thereby and by the Art,
3.4 Legends. It 13 understood that the certificates evidencing the
Shares may hear one or all or the following legends:
(I') "THE. SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND, ACCORDINGLY,
MAY NOT HE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT (I) UPON
EFFECTIVE REGISTRATION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (II) UPON AN EXEMPTION FROM SUCH
REGISTRATION REQUIREMENTS."
(ii) Any legend required by the Blue Sky laws of any oilier
stale to the extent such laws are applicable to the shares represented by the
certificate so legended.
(iii) Any legend required by any of the agreements entered into
by the parries hereto as of the date hereof,
3.5 Investment Experience and Counsel. The Investor is an investor in
securities of privately held companies, such as the Company, can bear the
economic risk of its investment, and has such knowledge and experience in
financial or bushes, matters. that it is capable of evaluating die merits and
risks of the investment in the Shares. The Investor acknowledges that it has had
the opportunity to review this Agreement, the exhibits and schedules attached
hereto and thereto and the transactions contemplated by the Agreements with us
own legal counsel. The Investor is relying solely on us own counsel and not on
any statements nr representation of the Company or .Supercom or its agents for
legal advice with respect to this investment or the transactions contemplated by
this Agreement.
3.6 _ACCREDITED INVESTOR. The Investor is an "accredited investor'1
within the meaning of Rule 501 of Regulation promulgated under the Act, as
presently in effect. The Investor (i) has been afforded the opportunity to ask
questions of, and receive answers from, the officer and/or directors of the
Company, acting on its behalf, concerning the Company, and LO obtain any
additional information, 10 the extent that the Company possesses such
information or can acquire it without unreasonable effort or expense, necessary
to verify the accuracy of the information furnished and (ii) has availed itself
of such opportunity to the extent such Investor considers appropriate in order
to permit such Investor to evaluate the merits and risks of an investment in the
Company.
3.7 BROKERS AND FINDERS. The Investor has not 'used or retained any
broker, investment banker, financial advisor, finder or agent in connection with
this Agreement nr the transactions contemplated hereby.
ARTICLE A. CONDITIONS TO THE INVESTOR'S OBLIGATIONS AT CLOSING
The obligations of the Investor under Section l.1 hereof arc subject to
the fulfillment on or before the Closing Date of each of the following
conditions:
4.1 REPRESENTATIONS AND WARRANTIES The representations and warranties
of the Company and Supercom contained in Article 2 and Article 2A shall be true
on mid as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the date of the Closing.
4.2 PERFORMANCE. The Company and Supercom shall have performed and
complied with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing.
4.3 COMPLIANCE CERTIFICATE. The President of the Company shall have
delivered to the Investor, a certificate, dated the date of the Closing, stating
that the conditions specified in Sections 4.1 and 4.2 have been fulfilled.
4.4 SECRETARY'S CERTIFICATE. The Company shall have delivered a
certificate of the Secretary of the Company, certifying (i) the Company's
Certificate of Incorporation (including the Certificate of Incorporation) and
By-laws, and (ii) the incumbency of the officers executing the transaction
documents.
4.5 Opinion of Counsel. The Investor shall have received from ▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Advocates, Israeli counsel to Supercom opinion dated as of the
Closing Date in a form satisfactory to the Investor.
4.6 DUE DILIGENCE. The Investor shall be satisfied in its sole
discretion with the results of its due diligence investigation and review of the
Company and its Subsidiaries.
4.7 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated at or prior to the Closing,
including, without limitation, the Reorganization, and all documents incident
thereto shall be reasonably satisfactory in form and substance to the Investor
at the Closing and the Investor shall have received all such counterpart
original and certified or other copies of such documents as such Investor may
reasonably request.
ARTICLES, CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING
The obligations of the Company to the Investor under this Agreement are
subject to the fulfillment or the Company's express written waiver, on or before
the Closing, of each of the following conditions by such Investor;
5.1 REPRESENTATIONS, AND WARRANTIES, The representations and
warranties of such Investor contained in Article 3 shall be true on and as of
the Closing with the same effect as though such representations and warranties
had been made on and as of such Closing.
5.2 PAYMENT OF PURCHASE PRICE. The Investor shall have delivered the
purchase price for the shares of Shares purchased by such Investor in accordance
with Section 1.3.
ARTICLE 6. COVENANTS OF THE COMPANY
6-1 TAXES. All United States federal, state or local sales, use,
transfer, stamp (including documentary stamp taxes, if any), excise, recording,
income, capital gain, franchise and other similar taxes or governmental charges,
but not including income taxes imposed on any Investor, with respect to the
securities issued pursuant to this Agreement or upon conversion of the Preferred
Stock in accordance with the Certificate of Incorporation shall be borne by the
Company,
6.2 FINANCIAL INFORMATION. For so long as the Investor and its
subsidiaries hold, in the aggregate, at least 78,000 of the Shares (as adjusted
for stock splits, stock dividends and the like) or more shares, the Company will
deliver the following reports to the Investor:
(a) As soon as practicable after the end of each fiscal year, and in
any event within 90 days thereafter, consolidated balance sheets of the Company
and its Subsidiaries, if any, as of the end of such fiscal year, and
consolidated statements of income and consolidated statements of changes in cash
flow of the Company and its Subsidiaries, if any, for such fiscal year, prepared
in accordance with GAAP and setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and audited by
independent public accountants selected by the Company, together with a
certificate of the Company executed by the chief executive officer or principal
financial or accounting officer of the Company certifying that all covenants to
be complied with by the Company hereunder have been complied with (or setting
forth in reasonable detail any covenants that have not been so complied with).
(b) As soon as practicable after the end of the first, second and
third quarterly accounting periods in each fiscal year of the Company, and in
any event within 60 days thereafter, a consolidated balance- sheet of the
Company and its Subsidiaries, if any, as of the end of each such quarterly
period, and consolidated statements of income and consolidated statements of
change in cash flow of the Company for such period and for the current fiscal
year to date, prepared in accordance with GAAP (other than for accompanying
notes), subject to changes resulting from normal year-end audit adjustments, for
the same periods of the previous fiscal year, all in reasonable detail and
signed by the principal financial or accounting officer of the Company, together
with a certificate of the Company executed by the chief executive officer or
principal financial or accounting officer of the Company certifying that all
covenants to be complied with by the Company hereunder have been complied with
(or setting forth in reasonable detail any covenants that have not been so
complied with).
6.3 INSURANCE. The Company shall maintain such other insurance with
such coverages and in such amounts as shall be determined by the Boards of the
Company and its Subsidiaries, including such insurance as the Board of the
Company shall deem necessary to protect the assets of the Company and its
Subsidiaries, which shall include, at a minimum, director and officer insurance
and error and omission insurance.
6.4 COMPLIANCE WITH LAWS. The Company will, and will cause its
Subsidiaries to, comply in all material respects with the requirements of all
laws, rules, regulations and orders.
6.5 PRESERVATION OF CORPORATE EXISTENCE. For as long as the Shares
remain outstanding, the Company will preserve and maintain its corporate
existence, rights, franchises and privileges in the jurisdiction of its
incorporation, and qualify and remain qualified, as a foreign corporation in
each jurisdiction in which such qualification is necessary or desirable in view
of its business and operations or the ownership of its properties.
6.6 INSPECTION RIGHTS. The Investor and its representatives shall have
the right to visit and inspect any of the properties of the Company or any of
its Subsidiaries, and to discuss the affairs, finances and accounts of the
Company or any of its subsidiaries with its officers, and to review such
information as is reasonably requested all at such reasonable times and as often
as may be reasonably requested.
ARTICLE 7. INDEMNIFICATION
7.1 INDEMNIFICATION..
(a) Indemnification by Company and Supercom, In addition to all other
rights and remedies available to the Investor at law or in equity (subject, in
the case of Supercom, to the limitation contained in Section 7(c)), the Company
and Supercom, on a joint and several basis, shall indemnify, defend and hold
harmless the Investor and its affiliates, stockholders, officers, directors,
employees, agents, representatives and permitted assigns from and against any
loss, liability, demand, claim, action, cause of action, cost, damage,
deficiency, penalty, fine or expense, including interest, penalties, reasonable
attorneys' fees and expenses and all reasonable amounts paid in investigation,
defense or settlement of any of the foregoing (collectively, "Losses") which any
such party may suffer, sustain or become subject to, as a result of:
(i) any misrepresentation or breach of a representation or
warranty (when viewed individually or in the aggregate) on the part of the
Company or Supercom under Article 2 and Article 2A; or
(ii) without duplication, any misrepresentation in or omission
from any of the representations or warranties contained in any of the
certificates or other documents furnished to the Investor by the Company or
Supercom.
(b) INDEMNIFICATION BY THE INVESTOR. In addition to all other rights
and remedies available to the Company at law or in equity, the Investor shall
indemnify, defend and hold harmless the Company and its affiliates,
stockholders, officers, directors, employees, agents, representatives and
permitted assigns from and against any Losses which any such party may suffer,
sustain or become subject to, as a result of:
(i) any misrepresentation or breach of a representation or
warranty (when viewed individually or in the aggregate) on the part of the
Investor under Article 3; or
(ii) without duplication, any misrepresentation in or omission
from any of the representations or warranties contained in any of the
certificates or other documents furnished to the Company by the Investor.
(c) LIMITATIONS.
(i) No claim for indemnification pursuant to this Article 7
shall be made, other than pursuant to Section 2.19 or Section 2A.6, unless the
aggregate Losses incurred by the party to be indemnified (the "Indemnified
Party") exceed $25,000, at which time all Losses (without regard to materiality
qualifiers) shall be subject to indemnification under this Article 7.
(ii) Supercom shall not be liable for, or otherwise obligated
for, any losses pursuant to this Article 7 or otherwise under this Agreement for
any amount in excess of the cash consideration received by it for the Shares, as
set forth on Exhibit A.
(d) OTHER LIMITATION. Notwithstanding the foregoing, and subject to
the following sentence, upon judicial determination, which is final and no
longer appealable, that the act or omission giving rise to the indemnification
hereinabove provided resulted primarily out of or was based primarily upon the
Indemnified Party's gross negligence, fraud, or willful misconduct (unless such
action was based upon the Indemnified Party's reliance in good faith upon any of
the representations, warranties, covenants or promises made by the party
required to provide indemnification under paragraphs (a) or (b) above (the
"Indemnifying Party") by the Indemnified Party, the Indemnifying Party shall not
be responsible for any Losses sought to be 14
indemnified in connection therewith, and the Indemnifying Party shall be
entitled to recover from the Indemnified Party all amounts previously paid in
full or partial satisfaction of such indemnity, together with all costs and
expenses of the Indemnifying Party reasonably incurred in effecting such
recovery, if any. The indemnity, contribution and expense reimbursement
obligations that the Indemnifying Party has under this Section 7.1 shall be in
addition to any liability that the Indemnifying Party may otherwise have. The
Indemnifying Party further agrees that the indemnification and reimbursement
commitments set forth in this Agreement shall apply whether or not the
Indemnified Party is a formal party to any such lawsuits, claims or other
proceedings.
(e) PAYMENT OF CLAIMS. Any indemnification of any Indemnified Party by
the Indemnifying Party pursuant to this Section 7.1 shall be effected by wire
transfer of immediately available funds from the Indemnifying Party to an
account designated by the Indemnified Party within 15 days after the
determination thereof.
7.2 RIGHT TO DEFEND: COMPROMISE OF CLAIMS: CONTRIBUTION. Each
Indemnifying Party shall have the right to compromise or defend, at its own
expense and by its own counsel reasonably satisfactory to such Indemnified
Party, any matter involving the asserted liability of any Indemnified Party;
provided, however, that no compromise of any claim shall be made without the
consent of the Indemnified Party unless such compromise results in the full and
unconditional release of all claims against the Indemnified Party by the party
asserting such claim. The opportunity to compromise or defend as herein provided
shall be a condition precedent to any liability of an Indemnifying Party under
the provisions of this Section 7.2. If any Indemnifying Party shall undertake to
compromise or defend any such asserted liability, it shall promptly notify the
Indemnified Party and any other Indemnifying Party of its intention to do so. An
Indemnified Party shall cooperate with the Indemnifying Party and its counsel at
the Indemnifying Party's expense in the defense against any such asserted
liability and in any compromise thereof. Such cooperation shall include, but not
be limited to, furnishing the Indemnifying Party with any books, records or
information reasonably requested by the Indemnifying Party and taking such
action as the Indemnifying Party may reasonably request to mitigate or reduce
any claim, After an Indemnifying Party has notified an Indemnified Party of its
intention to undertake to compromise or defend any asserted liability, the
Indemnifying Party shall not be liable for any additional legal expenses
incurred by the Indemnified Party unless the Indemnifying Party fails to
prosecute the defense of such claim. If the Indemnifying Party shall desire to
compromise any such asserted liability by the payment of a liquidated amount
which the party asserting such liability is willing to accept in exchange for
fully and unconditionally releasing all claims against the Indemnified Party,
and the Indemnified Party shall refuse to consent to such compromise, then the
Indemnifying Party's liability under this Article 7 with respect to such
asserted liability shall be limited to the amount so offered in compromise.
Under no circumstances shall the Indemnified Party compromise any asserted
liability without the written consent of the Indemnifying Party. Nothing
contained herein shall be deemed to limit any right of contribution Supercom may
have against the Company under applicable law.
7.3 REMEDIES. The Parties shall each have and retain all other rights
and remedies existing in their favor at law or equity, including, without
limitation, any actions for specific performance and/or injunctive or other
equitable relief (including, without limitation, the remedy of rescission) to
enforce or prevent any violations of the provisions of this Agreement.
ARTICLE 8. MISCELLANEOUS
8.1 SURVIVAL OF WARRANTIES. The warranties, representations and
covenants of the Company and the Investor contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Investor or the Company; provided,
however, that Supercom shall have no further liability or obligation under this
Agreement pursuant to Article 2 or Article 2A after the date which is two (2)
years after the Closing Date other than with respect to the representations and
warranties made by it pursuant to Section 2.2, Section 2.4, Section 2.6 and
Article 2A hereof.
8.2 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of me panics. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations,-or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
8.3 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
8.4 NOTICES. Any notice, request, demand, waiver, consent, approval,
or other communication which is required or permitted to be given to a party
hereunder shall be in writing and shall be deemed given only if delivered to
such party personally or sent to such party by recognized overnight courier or
by registered or certified mail (return receipt requested), with postage and
registration or certification fees thereon prepaid, addressed to the party at
the address indicated for such party on the signature page hereof, or to such
other address or person as any party may have specified in a notice duly given
to the other party as provided herein. Such notice, request, demand, waiver,
consent, approval or other communication shall be deemed to have been given as
of the date so delivered.
8.5 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the Investor; provided, that,
Supercom's consent will be required in connection with any amendment that
affects Supercom's rights and obligations under this Agreement. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any Securities at the time outstanding, each future holder of all such
Securities, and the Company.
8.6 SEVERABILITV. If one or more provisions of this Agreement are held
to be invalid and unenforceable in any jurisdiction, then, to the fullest extent
permitted by law, (i) the other provisions hereof shall remain in full force and
effect in such jurisdiction and shall be liberally construed in order to carry
out the intentions of the parties hereto as nearly as may be possible and (ii)
the invalidity or unenforceability of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of such provision in any other
jurisdiction.
8.7 INDEPENDENCE OF COVENANTS AND REPRESENTATIONS AND WARRANTIES. All
covenants hereunder shall be given independent effect so that if a certain
action or condition constitutes a default under a certain covenant, the fact
that such action or condition is permitted by another covenant shall not affect
the occurrence of such default, unless expressly permitted under an
exception to such initial covenant. In addition, all representations and
warranties hereunder shall be given independent effect so that if a particular
representation or warranty proves to be incorrect or is breached, the fact that
another representation or warranty concerning the same or similar subject matter
is correct or is not breached will not affect the incorrectness of or a breach
of a representation and warranty hereunder.
8.8 FURTHER ASSURANCES. The parties agree, from time to time and
without further consideration, to execute and deliver such further documents and
take such further actions as reasonably may be required to implement and
effectuate the transactions contemplated in this Agreement,
8.9 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the substantive domestic laws of the State of New York,
without application of the conflicts of laws principles thereof.
8.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
811 ENTIRE AGREEMENT. This Agreement and the other documents referred
to herein constitute the entire agreement among the parties with respect to the
subject matter hereof and thereof and no party shall be liable or bound to any
other party in any manner by any warranties, representations, or covenants
except as specifically set forth herein or therein.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
COMPANY:
INKSURE TECHNOLOGIES INC.
[GRAPHIC OMITTED][GRAPHIC OMITTED]
BY:
Name: Yaron MerfefH"" -- Title: CEO
SUPERCOM:
SUPERCOM LTD.
BY:
Name: Avi ▇▇▇▇▇▇▇▇▇ Title: CEO
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇ ▇▇▇▇▇▇ ▇▇., ▇.▇.▇. ▇▇▇▇
Raanana, ▇▇▇▇▇, ▇▇▇▇▇▇
[GRAPHIC OMITTED][GRAPHIC OMITTED]
INVESTOR:
ICTS INFORMATION SYSTE
BY:
Name; ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇: Biesbosch
225, 1181 JC Amstelveen
and
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇, ▇▇ ▇▇▇▇▇
IN WITNESS WHEREOF, the parrtes have executed this Agreement as of the
date first set forth above.
COMPANY:
INKSURE TECHNOLOGIES INC.
[GRAPHIC OMITTED][GRAPHIC OMITTED]
SUPERCOM:
SUPERCOM LTD.
[GRAPHIC OMITTED][GRAPHIC OMITTED]
Name: Avi ▇▇▇▇▇▇▇▇▇ Title; CEO
Millennium BIDG., 3 Tidhar ST.,
P.O.B 2094
Raanana, 43665. Israel
Name; ▇▇▇▇ ▇▇▇▇▇ and Stefan
and
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇, ▇▇ ▇▇▇▇▇
INVESTOR:
ICTS INFORMATION SYSTEMS, BV
BY:
Vemneulen Holland; Biesbosch 225,1181 JC Amstelveen
