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Title: |
Asset Purchase Agreement |
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Entities: |
Golden Phoenix Minerals Inc. |
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Date: |
2006 |
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Size: |
175KB total |
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Price: |
$47 |
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ID: |
#2619866 |
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Start of
Preview |
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this Agreement), dated as of November 7, 2006, is by and between SuperCom Ltd., an Israeli corporation (Seller) and On Track Innovations Ltd., an Israeli corporation (Buyer).
WHEREAS, Buyer desires to purchase certain assets of Seller and to assume certain liabilities of Seller in connection with the Acquired Assets and Seller desires to sell such assets and assign such liabilities to Buyer, upon the terms and conditions set forth herein (the Asset Purchase); and
WHEREAS, and contemporaneous with Closing, Seller and Buyer will enter into the Service and Supply Agreement, and Buyer will issue to Seller and Seller will purchase from Buyer the Restricted Shares pursuant to the terms of this Agreement;
NOW, THEREFORE, in consideration of the premises and the representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
ARTICLE I
Certain Definitions
As used herein, unless the context otherwise requires, the following terms (or any variant in the form thereof) have the following respective meanings. Terms defined below or otherwise herein in the singular shall have a comparable meaning when used in the plural, and vice versa, and the reference to any gender shall be deemed to include all genders. Unless otherwise defined or the context otherwise clearly requires, terms for which meanings are provided herein shall have such meanings when used in any Schedule hereto and each collateral document and certificate executed or required to be executed pursuant hereto or thereto or otherwise delivered, from time to time, pursuant hereto or thereto.
Acquired Assets means all those properties, rights, interests and other tangible and intangible assets of Seller, except for the Excluded Assets (as defined below), whether or not required to be reflected on a balance sheet prepared in accordance with generally accepted accounting principles of Seller, including without limitations:
(a) the inventory scheduled in Part 1.1(a) of the Disclosure Schedule;
(b) the equipment scheduled in Part 1.1(b) of the Disclosure Schedule, together with all existing documentations, drawings, records, instructions, manuals and other information related thereto;
(c) the Software Agreements scheduled in Part 1.1(c) of the Disclosure Schedule;
(d) the rights of Seller under the Contracts scheduled in Part 1.1(d) of the Disclosure Schedule;
(e) the Governmental Authorizations scheduled in Part 1.1(e) of the Disclosure Schedule;
(f) the SuperCom Intellectual Property as scheduled in Part 1.1(f) of the Disclosure Schedule, including SuperCom Software (together with its source code and compilation modules);
(g) all claims of Seller (including claims for past infringement of Intellectual Property), and causes of action of Seller against other Persons (regardless of whether or not such claims and causes of action have been asserted by Seller), and all rights of indemnity, warranty rights, rights of contribution, rights to refunds, rights of reimbursement and other rights of recovery possessed by Seller (regardless of whether such rights are currently exercisable), scheduled in Part 1.1(g) of the Disclosure Schedule;
(h) all advertising and promotional materials relating to the Acquired Business; and
(i) all books, records, files and data of Seller relating to the Acquired Business and necessary to its continuance.
Acquired Business means the portion of Sellers business, which is specifically and principally dedicated to the development, license, sale, distribution, maintenance, or support of the IPS activities (in the meaning used by Seller), smartcards, ID cards and/or tags, plastic cards, passports, passport components, certificates and any similar technology, contact and/or contactless technology and any similar technology, except for the activities and rights used (and with regard to Intellectual Property rights, exclusively used) in the fields specified in sub sections (i) and (ii) under the definition of the Excluded Assets.
Action means any action, suit, arbitration, litigation, inquiry, proceeding or investigation by or before any court, governmental or other regulatory or administrative agency, commission or tribunal.
Adverse, or Adversely when used in conjunction with Affect, Change and Effect means, with respect to Seller, Buyer or other Person, whichever is the obligor in the context to which such term applies, any event which could reasonably be expected to (a) adversely affect the enforceability of this Agreement by the obligee, or (b) adversely affect the obligors properties, financial condition or results of operations, or (c) impair the obligors ability to fulfill its obligations under the terms of this Agreement, or (d) adversely affect the aggregate rights and remedies of the obligee under this Agreement.
Affiliate means, with respect to any Person, any other Person controlling, controlled by or under common control with, such Person, with control for such purpose meaning the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or voting interests, by contract or otherwise.
Assumed Liabilities means those liabilities of Seller scheduled on Part 1.2 of the Disclosure Schedule (including the Contingent Liabilities).
Bill of Sale has the meaning assigned to it in Section 2.2(a) below.
Buyers Assumed Employees means employees of Seller as the date hereof, specified in Schedule I.
Buyer SEC Reports has the meaning assigned to it in Section 4.4(a) below.
Closing means the consummation of the transactions contemplated by Section 2.1 of this Agreement.
Closing Date means the date on which the conditions set forth in Articles VII and VIII hereof shall be satisfied or duly waived, or if Seller and Buyer mutually agree on a different date for the Closing, the date upon which they have mutually agreed.
Closing Documents has the meaning assigned to it in Section 2.2(b) below.
Contingent Liabilities means, those Liabilities of Seller as of the date of this Agreement to the extent not satisfied by Seller by the Closing Date (pursuant to their original terms), a list of which is scheduled in Part 1.2 of the Disclosure Schedule, plus each of the Liabilities incurred by Seller prior to Closing in the Ordinary Course of Business.
Contract means any written note, bond, mortgage, indenture, lease, contract, instrument, license, agreement, sales order, purchase order, open bid or other obligation or commitment and all rights therein.
Disclosure Schedule means the schedule (dated as of the date of the Agreement) delivered to Buyer on behalf of Seller, a copy of which is attached hereto and incorporated herein by reference.
Entity means any Person other than a natural Person.
Exchange Act means the Securities Exchange Act of 1934, as amended
Excluded Assets means, all of Seller's and its Affiliate's business activities, assets and rights, including IP rights, used in the following fields: (i) Tracking solutions based on active RF tags; (ii) IRMS systems (formerly known as SDSMS); and (iii) the Existing Projects, as defined herein. For the avoidance of doubt, notwithstanding anything to the contrary herein, none of the assets described in clauses (a) to (i) of the definition of Acquired Assets shall be deemed as Excluded Assets.
Existing Projects means all projects listed in Part 1.3 of the Disclosure Schedule, including inventory related thereto, but excluding the Intellectual Property rights related thereto.
Facility means the premises under lease pursuant to the Lease.
Governmental Authority means any nation or government, any state or other political subdivision thereof, any federal, state, local or foreign Entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any government authority, agency, department, board, commission, or instrumentality of the United States, any state of the United States or political subdivision thereof, and any tribunal or arbitral authority of competent jurisdiction, and any self-regulatory organization.
Governmental Authorizations means, with regard to any Person, all approvals, concessions, consents, franchises, licenses, permits, plans, registrations and other authorizations of all Governmental Authorities.
Indemnification Period has the meaning assigned to it in Section 9.1(a) below.
Intellectual Property means all intellectual property rights, including, without limitation, Patents with respect to a design or an invention, including patents and certificates of addition, utility models, and patent applications, as well as, any continuation, division, extension, renewal, revival, or reissue thereof or substitution therefore; Trademarks; Copyrights; Trade Secrets, including any (i) information which is currently in Sellers possession and used, compiled or produced by the Seller for its commercial activity, such as, for example, components supply and cost information, marketing plans, customer lists, sales leads, competitor analyses, active transaction files, business plans, business contacts, files, books, records and instruments, to the extent exist, (ii) information which is currently in Sellers possession that generally facilitates its activity, increases its revenues, or provides an advantage over the competition and is not generally known, to the extent exists, and (iii) any material currently in Sellers possession which embodies or describes the Seller and its activity; Know-How including, without limitation all factual knowledge and information currently in Sellers possession which is not capable of precise, separate description but which, in an accumulated form, after being acquired as a result of trial and error, gives to the one acquiring it the ability to produce and market something which one otherwise would not have known how to produce and market with the same accuracy or precision necessary for commercial success that Seller owns or is licensed to use or has in it's control; Technology including impositions, articles of manufacture, processes, apparatus, data, writings and works of authorship (including, without limitation, software, protocols, program codes, audio-visual effects created by program code, and documentation relating thereto); drawings and other tangible items (including, without limitation, materials, samples, components, and operating devices, e.g., board assemblies, prototypes, and engineering models), all of which are in Sellers possession at the date hereof.
Key Employees has the meaning assigned to it in Section 3.17(a) below.
Law means any statute, regulation, ordinance, rule, edict, resolution, principle of common law, treaty, convention, determination or decision and other law promulgated, issued, enacted, adopted, passed, approved or otherwise put into effect by a Governmental Authority.
Lease means that certain Lease Agreement, dated as of April 18 2005 by and between Seller and Somat Hasharon Ltd.
Liability means any debt, obligation, duty or liability of any nature (including any unknown, undisclosed, unmatured, unaccrued, unasserted, contingent, indirect, conditional, implied, vicarious, derivative, joint, several or secondary liability), regardless of whether such debt, obligation, duty or liability would be required to be disclosed on a balance sheet prepared in accordance with generally accepted accounting principles and regardless of whether such debt, obligation, duty or liability is immediately due and payable.
Lien means a restriction on voting or transfer, or a pledge, lien, mortgage, hypothecation, collateral assignment, encumbrance, easement or security interest.
Lock-Up Agreement means that certain Lock-Up Agreement, dated as of the Closing Date, between Seller and Buyer, in the form attached hereto as Exhibit A.
Machines means those machines scheduled in Part 1.4 of the Disclosure Schedule.
Options has the meaning assigned to it in Section 4.3(b) below.
Orders means judgments, orders, injunctions, decrees, stipulations or awards (whether rendered by a court, administrative agency, arbitrator or other tribunal and whether imposed or entered by consent).
Ordinary Course of Business means any action taken by or on behalf of Seller that is:
(a) recurring in nature, consistent with the past practices of Seller and taken in the ordinary course of the normal day-to-day operations of Seller;
(b) not required to be authorized or reauthorized by the shareholders of Seller, the board of directors of Seller or any committee of the board of directors of Seller; and
(c) notwithstanding the foregoing, with regard to Liabilities incurred by the Seller between the date of this Agreement and the Closing Date, such Liabilities shall be deemed as part of the Ordinary Course of Business, as long as they do not exceed $20,000 individually and $150,000 in the aggregate until December 31st 2006, and $300,000 for the entire period.
Ordinary Shares means Ordinary Shares, par value NIS 0.10 each, of Buyer.
Other Seller Businesses means all operations, activities and businesses conducted or committed to on or before the Closing Date, and all reasonably related activities conducted thereafter, by Seller, or any of its Affiliates, other than the operations and activities of Seller in connection with the Acquired Business.
Person means an individual, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a Governmental Authority.
Registration Rights Agreement means that certain Registration Rights Agreement, dated as of the Closing Date, between Seller and Buyer, in the form attached hereto as Exhibit B.
Regulation S means Regulation S under the Securities Act.
Restricted Shares means 2,827,200 Ordinary Shares, par value NIS 0.10 each of Buyer, to be issued to Seller at Closing.
SEC means the United States Securities and Exchange Commission.
Securities Act means the Securities Act of 1933, as amended.
Service and Supply Agreement means that certain Service and Supply Agreement dated as of the Closing Date between Seller and Buyer, in substantially the form attached hereto as Exhibit C.
SuperCom Contracts means the Contracts listed as Acquired Assets in Part 1.1(d) of the Disclosure Schedule.
SuperCom Intellectual Property has the meaning assigned to it in Section 3.11(a) below.
SuperCom Software has the meaning assigned to it part 1.1(h) to the Disclosure Schedule.
Taxes means all taxes (whether federal, state, local or foreign) based upon or measured by income (whether gross, net, alternative taxable or other) and any other tax whatsoever, including, but not limited to, gross receipts, profits, sales, use, occupation, value added, ad valorem, transfer, franchise, withholding, payroll, employment, excise or property taxes, together with any interest, penalties or additions imposed with respect thereto.
Transaction Documents means: (a) this Agreement; (b) the Service and Supply Agreement; (c) the Registration Rights Agreement; (d) the Bill of Sale; and (e) the other agreements and documents contemplated hereby.
ARTICLE II
Sale of Assets; Closing
Section 2.1 Purchase and Sale
(a) On the basis of the representations, warranties, covenants and agreements and subject to the satisfaction or waiver of the conditions set forth herein, at the Closing, against the issuance of the Restricted Shares free and clear of all Liens, Buyer will purchase from Seller and Seller will sell, convey, transfer, assign and deliver to Buyer, free and clear of all Liens, the Acquired Assets at Sellers premises, and Seller will assign and Buyer will assume and agree to pay, satisfy and discharge when due in accordance with their terms any and all Assumed Liabilities. All transactions at the Closing shall be deemed to be effective as of the close of business on the Closing Date, and events taking place and periods ending thereafter shall be deemed to have taken place or ended after the Closing Date.
(b) Seller shall retain all rights with respect to the Excluded Assets and Buyer shall have no rights with respect to the Excluded Assets.
(c) Seller shall retain all rights, liabilities and obligations related to the Acquired Assets and the Acquired Business, the due date of which is prior to the Closing Date.
Section 2.2 Closing Documents At the Closing:
(a) Seller shall assign and transfer to Buyer the Acquired Assets, and Buyer shall assume from Seller the due payment, performance and discharge of the Assumed Liabilities by delivery of (i) a General Assignment, Assumption and Bill of Sale in form and substance reasonably satisfactory to Seller and Buyer (the Bill of Sale), duly executed by Seller and Buyer, (ii) all such other good and sufficient instruments of conveyance, assignment and transfer, and such affidavits and other instruments in form and substance as shall be effective to transfer to Buyer the Acquired Assets, and (iii) all such other good and sufficient instruments of assumption as shall be effective to cause Buyer to assume the Assumed Liabilities.
Buyer shall issue the Restricted Shares to Seller, and shall, in such denominations as may reasonably be requested by Seller, deliver one or more share certificates evidencing the issuance of the Restricted Shares to Seller.
(b) Seller and Buyer shall deliver the certificates and other documents required to be delivered under Articles VII and VIII hereof (together with the other documents specified in Section 2.2(a), the Closing Documents).
Section 2.3 Time and Place of Closing The Closing shall take place on the Closing Date at 10:00 a.m. (Israel time), at the offices of Zysman, Aharoni, Gayer & Co., Law Offices, 52A Hayarkon St., Tel Aviv, or such other place or time as the parties may agree.
Section 2.4 Nonassignable Contracts Anything in this Agreement to the contrary notwithstanding, this Agreement shall not constitute an agreement to assign any claim or obligation imposed by Contract or Law or Governmental Authorization, or any claim, right or benefit arising thereunder or resulting therefrom, if the Asset Purchase would be deemed an attempted assignment thereof without the required consent of a third party thereto or Governmental Authority, as the case may be, and would constitute a breach thereof or in any way affect the rights of Seller or Buyer thereunder. If such consent is not obtained, or if the consummation of the Asset Purchase would affect the rights of Seller thereunder so that Buyer would not in fact receive the benefit of all such rights, Seller shall cooperate with Buyer in any arrangement designed to provide for the benefits thereof to Buyer, including subcontracting, sublicensing or subleasing to Buyer or enforcement for the benefit of Buyer of any and all rights of Seller against a third party thereto arising out of the breach or cancellation by such third party or otherwise; and any assumption by Buyer of obligations thereunder whether by operation of Law or otherwise in connection with the Asset Purchase which shall require the consent or approval of any third party shall be made subject to such consent or approval being obtained.
ARTICLE III
Representations and Warranties of Seller
Seller hereby represents and warrants to Buyer as follows:
Section 3.1 Incorporation; Authorization; Capitalization; Etc.
(a) Seller is an Israeli corporation. Seller is duly organized and validly existing, and qualified to transact business in each jurisdiction in which the nature of property owned or leased by Seller or the conduct of its business requires it to be so qualified, except where the failure to be in good standing or to be duly qualified to transact business, does not have a material Adverse Affect on the Acquired Assets.
(b) Seller has all requisite power and authority (corporate and other) to own the Acquired Assets, to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of the Transaction Documents and the consummation of the transactions contemplated thereby have been duly and validly authorized by all necessary corporate proceedings on the part of Seller. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not (i) violate any provision of Sellers Articles of Association, or (ii) violate any provision of, or be an event that is (or with the giving of notice or the passage of time will result in) a violation of, or result in the acceleration of or entitle any Person to accelerate (whether after the giving of notice or lapse of time or both) any obligation under, or result in the imposition of any Lien upon (except such Liens as do not interfere with current use of) any of the Acquired Assets pursuant to, any Contract or Order to which Seller is a party or by which it is bound that, in the case of clause (ii), would, reasonably expected to have a material Adverse Effect on the Acquired Assets. This Agreement has been duly executed and delivered by Seller, and, assuming the due execution hereof by Buyer, this Agreement constitutes the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms.
Section 3.2 Title to Assets Except as set forth in Part 3.2 of the Disclosure Schedule, Seller owns and has good title to the Acquired Assets, free and clear of all Liens, and Seller will deliver the same to Buyer at the Closing, free and clear of all Liens. Except as set forth in Part 3.2 of the Disclosure Schedule, the Acquired Assets collectively constitute all of the properties, rights, Government Authorizations, interests and other tangible and intangible assets employed or relied upon by Seller to conduct the Acquired Business as conducted and as proposed to be conducted.
Section 3.3 Reserved
Section 3.4 Compliance with Laws (a) Except as set forth in Part 3.4 of the Disclosure Schedule and except for violations or failures, if any, that do not have a material Adverse Effect: (a) Seller is in material compliance with each Law that is applicable to the Acquired Business or to Sellers ownership or use of any of the Acquired Assets; and (b) Seller has not received any notice in writing or, to its knowledge, otherwise from any Governmental Authority regarding any actual or alleged violation of, or failure to comply with, any Law that is applicable to the Acquired Business or to Sellers ownership or use of any of the Acquired Assets. This Section does not relate to employee benefit matters to which Section 3.17 is applicable.
Section 3.5 Consents, Approvals, Other Authorizations Except as set forth in this Agreement, no filing with, notice to or authorization, consent or approval of, any Governmental Authority is required to be made, filed, given or obtained by Seller or any of its Affiliates, in connection with the consummation of the Asset Purchase, except as set forth in Part 3.5 of the Disclosure Schedule and except for those that the failure to make, file, give or obtain which are not expected to have a material Adverse Effect on the Acquired Assets. There is no material Governmental Authorization required of Seller that is required and that it has not obtained in connection with its conduct of the Acquired Business as conducted.
Section 3.6 Insurance Seller is adequately insured or has been self-insured against all risks and liabilities with respect to the Acquired Assets. No insurance policies or benefits thereunder are included in the Acquired Assets.
Section 3.7 Machines Seller has provided Buyer with all existing documentations, drawings, records, instructions, manuals and other information in writing in connection with the Machines, sufficient for the assembly, construction and maintenance of the Machines by a third party without prior experience with the assembly, construction and maintenance of such machines.
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