Exhibit 10.2

 

 
ASSET PURCHASE AGREEMENT
 
by and among
 
MOBIVITY HOLDINGS CORP.,
 
MOBIVITY, INC.
 
and
 
SEQUENCE LLC
 

 

 

 
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ASSET PURCHASE AGREEMENT
 
ASSET PURCHASE AGREEMENT, dated as of May __, 2013 (this “Agreement”), by and
among Mobivity Holdings Corp., a Nevada corporation (“Parent”), Mobivity, Inc.,
a Nevada corporation (“Buyer”), and Sequence LLC, a Nevada limited liability
company ("Seller").
 
WITNESSTH:
 
WHEREAS, Seller has heretofore conducted a business which provides a mobile
customer loyalty platform and services, including under the name “Stampt” (the
“Business”); and
 
WHEREAS, Buyer desires to purchase substantially all of the assets of the
Business from Seller, and Seller desires to sell substantially all of the assets
of the Business to Buyer, upon the terms and subject to the conditions
hereinafter set forth.
 
NOW, THEREFORE, the parties hereto agree as follows:
 
ARTICLE I 
 
DEFINITIONS
 
Section 1.01 Definitions.
 
(a) The following terms, as used herein, have the following meanings:
 
 “Closing Date” means the date of the Closing.
 
 “Earn-Out Amount” means, for any month during the Earn-Out Period, the product
of (a) 10%, multiplied by (b) Buyer’s revenue (net of all sales refunds,
discounts and allowances) for such month to the extent actually collected during
such month from customers of the Stampt Platform.  Subject to the provisions of
this Agreement, Buyer will determine the Earn-Out Amount on a basis consistent
with Buyer’s financial statements.
 
“Earn-Out Period” means the two-year period starting on the date of the Closing
Date (if the Closing Date occurs on the first day of a month) or (otherwise)
starting on the first day of the first full month following the Closing.
 
“End User Relationship” means all contracts and agreements (including website
terms of service) between Seller and any registered user of the Stampt
Application.
 
“Environmental Laws” means any and all federal, state, local and foreign
statutes, laws (including common or case law), regulations, ordinances, rules,
judgments, judicial decisions, orders, decrees, codes, plans, injunctions,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions, relating to the environment or to emissions, discharges or
releases of pollutants, contaminants, petroleum or petroleum products, chemicals
or industrial, toxic, radioactive or hazardous substances or wastes into the
environment, including (without limitation) ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic, radioactive or hazardous substances or wastes or the clean-up
or other remediation thereof.
 
“Intellectual Property Rights” means all rights of the following types, which
may exist under the laws of any jurisdiction in the world: (i) rights associated
with works of authorship, including exclusive exploitation rights, copyrights,
moral rights, and mask works; (ii) trademark and trade name rights and similar
rights; (iii) trade secret rights; (iv) patents and industrial property rights;
(v) other proprietary rights in Technology of every kind and nature, whether
arising by operation of law, by contract or license, or otherwise; and (vi) all
registrations, applications, renewals, extensions, combinations, divisions, or
reissues of, and applications for, any of the rights referred to in clauses (i)
through (v) above.

 
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“Knowledge”;  Seller shall be deemed to have “Knowledge” of a particular fact or
other matter if: (a) any member, director, officer or employee of Seller is
actually aware of such fact or other matter; or (b) any of the persons
identified in clause (a), after reasonable investigation, should have known such
fact or other matter.
 
“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset.
 
“Merchant Relationship” means all contracts and agreements (including website
terms of service) between Seller and merchant customer of the Stampt Platform.
 
 “Parent Shares” means the Common Stock, par value $0.001 per share, of Parent.
 
“Permitted Liens” means (i) Liens for taxes not yet due or being contested in
good faith, (ii) Liens which do not materially detract from the value of any
Acquired Asset as now used, or materially interfere with any present or intended
use of any Acquired Asset, or (iii) Liens that will be released in connection
with the Closing.
 
“Person” means an individual, a corporation, a limited liability company, a
partnership, an association, a trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality.
 
“Personal Data” shall mean a natural person’s name, street address, telephone
number, e-mail address, photograph, social security number, driver’s license
number, passport number, or customer or account number, or any other piece of
information that allows the identification of a natural person.
 
“Post-Closing Tax Period” means any Tax period (or portion thereof) ending after
the Closing Date.
 
“Pre-Closing Tax Period” means any Tax period (or portion thereof) ending on or
before the close of business on the Closing Date.
 
“Proceeding” means any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Entity or arbitrator.
 
 “Registered IP” means all Intellectual Property Rights that are registered or
filed with or issued by any governmental authority, including all patents,
registered copyrights, and registered trademarks and all applications for any of
the foregoing.
 
“Seller Disclosure Schedule” means the disclosure schedules prepared by Seller
and delivered to Buyer in connection with this Agreement.
 
“Seller Privacy Policy” shall mean each external or internal, past or present
privacy policy of Seller (or any predecessor), including any policy relating to:
(a) the privacy of users of any Seller Website or the Stampt Application; (b)
the collection, storage, disclosure, and transfer of any User Data or Personal
Data; and (c) any employee Personal Data.
 
“Seller Websites” shall mean each and every website operated by Seller (or any
predecessor) as of or at any time prior to the date of this Agreement
 
“Stampt Application” mean Seller’s mobile customer loyalty application (in
Android and iOS versions) made available under the name “Stampt”.
 
“Stampt Platform” mean Seller’s mobile customer loyalty platform and database,
including (without limitation) the Stampt Application.

 
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“Source Code” means the human-readable source code for all aspects of the
computer programs included in the Stampt Platform, in the appropriate
programming language, and stored on electronic storage media, and which shall
contain sufficient narrative, including, without limitation, detailed
information in respect of the objects used in the programs, and the objectives
of each portion of the source code and how each portion of the source code
integrates with each other portion of the source code, so as to enable a
software programmer having average skill and ability in computer application
programming to understand, maintain and modify the source code and perform such
other functions as contemplated under this Agreement based solely on the
programmer’s familiarity with the Stampt Platform and the source code.
 
"Taxes" means any net income, alternative or add-on minimum tax, gross income,
gross receipts, sales, uses, ad valorem, franchise, capital, paid-up capital,
profits, greenmail, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property, environmental or windfall
profit tax, custom, duty or other tax, governmental fee or other like assessment
or charge of any kind whatsoever, together with any interest or any penalty,
addition to tax or additional amount imposed by any governmental authority
(domestic or foreign) responsible for the imposition of any such tax.
 
“Technology” means all products, product developments, apparatus, data,
databases and data collections, diagrams, inventions (whether or not
patentable), know-how, logos, marks, methods, processes, proprietary
information, protocols, schematics, specifications, algorithms, APIs, software,
software code (in source code and executable code), techniques, user interfaces,
URLs, web sites, works of authorship, network configurations and architectures,
documentation, and other forms of technology (whether or not embodied in any
tangible form and including all tangible embodiments of the foregoing such as
instruction manuals, laboratory notebooks, prototypes, samples, studies, and
summaries).
 
“User Data” shall mean any Personal Data or other data or information collected
by or on behalf of Seller from users of any Seller Website or the Stampt
Application.
 
(b)    Each of the following terms is defined in the Section set forth opposite
such term:
 
Term
 
Section
Acquired Assets
 
2.01
Assumed Liabilities
 
2.03
Business
 
Recitals
Business IP Rights
 
2.01(g)
Buyer
 
Preamble
Cash Payment
 
2.06(a)(i)
Closing
 
2.07
Commission
 
3.25(a)
Commission Documents
 
4.05
Contracts
 
2.02(b)
Damages
 
7.02
Escrowed Shares
 
2.06(c)
Exchange Act
 
4.05
Excluded Assets
 
2.02
Excluded Contracts
 
2.02(c)
Excluded Liabilities
 
2.04
Form 10-K
 
4.05
Governmental Entity
 
3.03
Indemnified Party
 
7.03
Indemnifying Party
 
7.03
Material Adverse Effect
 
3.01
Parent
 
Preamble
Permits
 
3.12

 
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Purchase Price
 
2.06
Securities Act
 
2.07
Seller
 
Preamble
Seller Balance Sheet
 
3.08
Seller Balance Sheet Date
 
3.06
Sequence Obligations
 
2.06(a)(i)
Stock Payment
 
2.06(a)(ii)
Transferred Employees
 
5.03(f)
WARN Act
 
3.16(b)

 
 
ARTICLE II
 
PURCHASE AND SALE

 
Section 2.01 Purchase and Sale.  Upon the terms and subject to the conditions of
this Agreement, Buyer agrees to purchase from Seller and Seller agrees to sell,
transfer, assign and deliver, or cause to be sold, transferred, assigned and
delivered, to Buyer at Closing, free and clear of all Liens, other than
Permitted Liens, all of the assets, properties and business, other than the
Excluded Assets, of every kind and description, wherever located, real, personal
or mixed, tangible or intangible, owned, held or used in the conduct of the
Business by Seller as the same shall exist on the Closing Date, including all of
the assets shown on the Seller Balance Sheet and not disposed of in the ordinary
course of business, and all assets of the Business thereafter acquired by Seller
(the “Acquired Assets”), and including, without limitation, all right, title and
interest of Seller in, to and under:
 
(a) All personal property and interest therein, including equipment, furniture,
office equipment, communications equipment in Seller’s possession;
 
(b) All accounts and other receivables of Seller (whether or not amounts due
have been invoiced to the customer)
 
(c) All rights under all End User Relationships  and all Merchant Relationships;
 
(d) All rights, claims, credits, causes of action or rights of set-off against
third parties relating to the Acquired Assets, including (without limitation)
un-liquidated rights under manufacturers’ and vendors’ warranties;
 
(e) All Technology and Intellectual Property Rights, including but not limited
to: (i) the goodwill associated with any trademarks or service marks (including,
without limitation, Stampt); (ii) rights to sue for past, present and future
infringements or misappropriation of any Technology or Intellectual Property
Rights, including the right to recover damages therefor, and the right to
receive royalties, license fees and income from any Technology or Intellectual
Property Rights; and (iii) any rights at common law directly arising from any
Technology or Intellectual Property Rights and any licenses with respect to any
Technology or Intellectual Property Rights (collectively the “Business IP
Rights”), including, without limitation, those Business IP Rights listed on
Sections 4.15(a) and 4.15(b) of the Seller Disclosure Schedule;
 
(f) All social media presence related to the Business, including (without
limitation) all associated passwords and other account management information in
Seller’s possession;
 
(g) All User Data;

 
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(h) All transferable licenses, permits or other governmental authorizations
affecting, or relating in any way to, the Business, including (without
limitation) the items listed on Section 4.12 of the Seller Disclosure Schedule;
 
(i) All books, records, files and papers, whether in hard copy or computer
format, used in the Business, including (without limitation) engineering
information, sales and promotional literature, manuals and data, sales and
purchase correspondence, lists of present and former suppliers, lists of present
and former customers, and any information relating to Tax imposed on the
Acquired Assets; and
 
(i) All goodwill associated with the Business or the Acquired Assets, together
with the right to represent to third parties that Buyer is the successor to the
Business.
 
Section 2.02 Excluded Assets.  Buyer expressly understands and agrees that the
following assets and properties of Seller (the “Excluded Assets”) will be
excluded from the Acquired Assets:
 
(a) All cash on hand of Seller;
 
(b) All contracts, agreements, leases, licenses, commitments, sales and purchase
orders and other instruments, including without limitation the items listed on
Sections 3.11 and 3.16 of the Seller Disclosure Schedule (collectively, the
“Contracts”), other than the End User Relationships and the Merchant
Relationships;
 
(c) All minute books and ownership records of Seller; and
 
(d) Any Acquired Assets sold or otherwise disposed of in the ordinary course of
the operation of the Business and not in violation of any provisions of this
Agreement during the period from the date hereof until the Closing Date.
 
Section 2.03 Assumption of Liabilities.  Upon the terms and subject to the
conditions of this Agreement, Buyer agrees, effective at the time of the Closing
to assume only the following liabilities and obligations of Seller (the “Assumed
Liabilities”) :
 
(a) Obligations to be performed after the Closing under the End User
Relationships and the Merchant Relationships , but specifically excluding any
liability or obligation that arises out of or relates to any indemnification or
warranty obligation thereunder or any default, breach, violation or failure to
perform or comply with the terms thereof relating to periods prior to, or that
occurred on or before, the Closing Date.
 
Section 2.04 Excluded Liabilities.  Notwithstanding any provision in this
Agreement or any other writing to the contrary, Buyer is assuming only the
Assumed Liabilities and is not assuming any other liability or obligation of
Seller of whatever nature whether presently in existence or arising
hereafter.  All such other liabilities and obligations shall be retained by and
remain obligations and liabilities of Seller (all such liabilities and
obligations not being assumed being herein referred to as the “Excluded
Liabilities”), and Seller will pay all such Excluded Liabilities as they become
due.  Notwithstanding anything to the contrary in this Section 2.04, none of the
following shall be Assumed Liabilities for the purposes of this Agreement:
 
(a) Any liability or obligation for Tax arising from or with respect to the
Acquired Assets or the operations of the Business which is incurred in or
attributable to the Pre-Closing Tax Period;
 
(b) Any liability or obligation for any accounts payable or other accruals
arising on or prior to the Closing Date;
 
(c) Any liability or obligation under the Contracts (other than the End User
Relationships and the Merchant Relationships), whether arising before or after
the Closing Date;
 

 
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(d) Any liability or obligation under any End User Relationship or any Merchant
Relationships that arises after the Closing Date but that arises out of or
relates to any default, breach, violation or failure to perform or comply with
the terms thereof that occurred on or before the Closing Date;
 
(e) Any liability or obligation under any Excluded Contract whether arising
before or after the Closing Date;
 
(f) Any liability or obligation, including indemnification and warranty
obligations, arising out of or related to any products or services,
manufactured, distributed or sold in connection with the Business on or prior to
the Closing Date;
 
(g) Any liability or obligation relating to employees of, or independent
contractors or consultants to, the Business for all periods ending on or prior
to the Closing Date, including, without limitation, workers’ compensation
claims, disability and occupational diseases in each case without regard to
whether such injuries, claims, conditions, events and occurrences are known or
otherwise manifest on or prior to the Closing Date and any bonuses, vacation
pay, or severance or retention obligations to such employees, whether or not
accrued on Seller’s books and records; and
 
(h) Any liability or obligation relating to any Excluded Asset.
 
Section 2.05 Assignment of Contracts and Rights.  Anything in this Agreement to
the contrary notwithstanding, this Agreement shall not constitute an agreement
to assign any Acquired Asset or any claim or right or any benefit arising
thereunder or resulting therefrom if an attempted assignment thereof, without
the consent of a third party thereto, would constitute a breach or other
contravention thereof to in any way adversely affect the rights of Buyer or
Seller thereunder.  Each of Seller and Buyer will use their commercially
reasonable efforts (but without any payment of money by Seller or Buyer) to
obtain the consent of the other parties to any such Acquired Asset or any claim
or right or any benefit arising thereunder for the assignment thereof to Buyer
as Buyer may request.  If such consent is not obtained, or if an attempted
assignment thereof would be ineffective or would adversely affect the rights of
Seller thereunder so that Buyer would not in fact receive all such rights, each
of Seller and Buyer will cooperate in a mutually agreeable arrangement under
which Buyer would obtain the benefits and assume the obligations thereunder in
accordance with this Agreement, including subcontracting, sublicensing, or
subleasing to Buyer, or under which Seller would enforce for the benefit of
Buyer, with Buyer assuming Seller’s obligations, any and all rights of Seller
against a third party thereto.  In the event such benefits and obligations have
not been provided by alternative arrangements satisfactory to Buyer and Seller,
Seller and Buyer shall negotiate in good faith an adjustment in the
consideration paid by Buyer for the Acquired Assets.  Seller will promptly pay
to Buyer when received all monies received by Seller under any Acquired Asset or
any claim or right or any benefit arising thereunder that relates to a period
after the Closing Date.
 
Section 2.06 Purchase Price; Escrow of Parent Shares.
 
(a) The purchase price for the Acquired Assets (the “Purchase Price”) is:
 
(i) $300,000 in cash (the “Cash Payment”) payable exclusively to satisfy the
liabilities of Seller listed on Section  2.06(a) of the Seller Disclosure
Schedule (the “Sequence Obligations”);
 
(ii) 750,000 authorized, but unissued, Parent Shares (the “Stock Payment”); and
 
(iii) Payments of the Earn-Out Amounts as provided in Section 2.08.
 
(b)  The Purchase Price will be paid as provided in this Section 2.06 and in
Sections 2.07 and 2.08.

 
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(c)         Fifty percent (50%) of the number of the Parent Shares constituting
the Stock Payment (the “Escrowed Shares”) will be held in escrow by Buyer as
security for Seller’s obligations under Section  7.02(a)),  and released in
accordance with Section 3.09.

Section 2.07 Closing.  The closing (the “Closing”) of the purchase and sale of
the Acquired Assets and the assumption of the Assumed Liabilities hereunder
shall take place at the offices of Buyer in Chandler, Arizona (or via electronic
exchange of closing documentation in PDF or other mutually acceptable
format)  as soon as possible, but in no event later than three business days,
after the satisfaction of the conditions set forth in Article VI, or at such
other time or place as Buyer and Seller may agree.  At the Closing,
 
(a) Buyer shall deliver the Cash Payment, less the Escrowed Cash, to the Persons
identified on Section  2.06(a) of the Seller Disclosure Schedule in exchange for
full and unconditional releases of all claims, obligations and liabilities (in
form and substance satisfactory to Buyer) from such Persons;
 
(b) Buyer shall deliver to Seller a stock certificate representing 50% of the
number of Parent Shares constituting the Stock Payment;
 
(c) Seller and Buyer shall enter into an Assignment and Assumption Agreement
substantially in the form attached hereto as Exhibit A;
 
(d) Seller and each member of Seller shall execute and deliver a Non-Competition
Agreement, in the form set forth as Exhibit B hereto, to Buyer; and
 
(e) Seller shall deliver to Buyer such deeds, bills of sale, assignment,
certificates or title, documents and other instruments of transfer and
conveyance as may reasonably be requested by Buyer, each in form and substance
satisfactory to Buyer and its legal counsel and executed by Seller.
 
All Parent Shares to be issued hereunder shall be deemed “restricted securities”
as defined in paragraph (a) of Rule 144 under the Securities Act of 1933, as
amended (the “Securities Act”).  All Parent Shares to be issued under the terms
of this Agreement shall be issued pursuant to an exemption from the registration
requirements of the Securities Act, under Section 4(2) of the Securities Act
(and the rules and regulations promulgated thereunder).  Certificates
representing the Parent Shares to be issued hereunder shall bear a restrictive
legend in substantially the following form:

The securities represented by this certificate have not been registered under
the Securities Act of 1933, as amended, and may not be offered for sale, sold,
or otherwise disposed of, except in compliance with the registration provisions
of such Act or pursuant to an exemption from such registration provisions, the
availability of which is to be established to the satisfaction of the Company.

Section 2.08.                                Earn-Out Payments.  Within 30 days
following the end of each month during the Earn-Out Period, Buyer will deliver
to the Seller a calculation of the Earn-Out Amount payable in respect of such
month and Buyer will deliver to Seller, as an adjustment to the Purchase Price,
an amount in cash equal to the Earn-out Amount for such month.
 
Section 2.09                                Escrowed Shares.
 
(a)  Buyer will hold the Escrowed Shares, as security for Seller’s obligations
under 7.02(a), until the first anniversary of the Closing (the “Escrow
Termination Date”).  Subject to the terms hereof, Seller will have all the
rights of a stockholder with respect to the Escrowed Shares, including without
limitation, the right to vote the Escrowed Shares and receive any cash dividends
declared thereon.
 

 
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(b)  If at any time on or prior to the Escrow Termination Date, Buyer (i)
believes in good faith that it or Parent is entitled to payment or that payment
should be made to a third party pursuant to the terms of Section 7.02(a), and
(ii) desires to make a claim for payment from the Escrowed Shares in connection
therewith, then Buyer shall give written notice of such claim (a “Payment
Notice”) to Seller, stating in general terms the events or circumstances which
are the basis for and amount (to the extent determined) of such claim.  If
Seller objects to such claim, Seller shall give written notice of such objection
to Buyer within 15 days after the date of Seller’s receipt of the Payment Notice
served either by certified mail, express mail or personal service (the
“Objection Period”), and shall state the basis for such objection in reasonable
detail.  If no objection to Buyer’s claim is made by Seller within the Objection
Period, the claim set forth in the Payment Notice shall be deemed approved and
accepted by Seller and Buyer will be entitled to withdraw and apply Escrowed
Shares in satisfaction of the claim.   Any Escrowed Shares withdrawn and applied
by Parent in satisfaction of a claim under this Section 2.09 will be valued at
closing price of the Parent Shares on the day preceding the day they are
withdrawn.   If an objection to Buyer’s claim is made by Seller within the
Objection Period, Buyer may initiate an arbitration proceeding under Section
9.05 hereof to resolve the claim within 60 days following its receipt of
Seller’s written objection.  If Buyer fails to initiate an arbitration
proceeding within such 60-day period, it will be deemed to have abandoned the
claim and released its rights with respect to the specific subject matter of
such claim

(c)  Buyer will hold and/or distribute any remaining Escrowed Shares (after
deduction of any amounts withdrawn and applied by Buyer pursuant to Section
2.09(b)) in accordance with the following:
 
(i) If on the Escrow Termination Date there is any pending indemnification
claim(s) asserted by Buyer or Parent under Article VII (a “Pending Claim”),
including (without limitation) any claim which Seller has objected to and Buyer
has not abandoned pursuant to Section 2.09(b), a number of Escrowed Shares
reasonably anticipated by Buyer to be necessary to satisfy such claim will be
retained by Buyer until such claim is resolved.  On the Escrow Termination Date,
Buyer will distribute the remaining Escrowed Shares less the amount reserved for
Pending Claims, as applicable, to Seller.
 
(ii) If on the Escrow Termination Date there is no Pending Claim, Buyer will
distribute the remaining Escrowed Shares to Seller.
 
(iii) Following the Escrow Termination Date, Pending Claims which are
adjudicated or determined by arbitration in favor of Buyer or Parent, Buyer will
be entitled to withdraw and apply Escrowed Shares in satisfaction of the
claim.  When no Pending Claims remain following the Escrow Termination Date,
Buyer will distribute the remaining Escrowed Shares following resolution of the
Pending Claims existing on the Escrow Termination Date to Seller.
 
ARTICLE III
 
REPRESENTATIONS AND WARRANTIES OF SELLER
 
Seller hereby represents and warrants to Buyer that:
 
Section 3.01 Organization.
 
(a)   Seller  is a limited liability company duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization and
has all requisite power and authority to own, lease and operate its properties
and to carry on its business as now being conducted.  Seller is duly qualified
or licensed and in good standing to do business in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except in such
jurisdictions where the failure to be so duly qualified or licensed and in good
standing would not in the aggregate have a material adverse effect on the
business, assets, condition (financial or otherwise), results of operations or
prospects (a “Material Adverse Effect”) of the Business.
 
(b) Seller does not have any direct or indirect subsidiaries, own, directly or
indirectly, any capital stock or other equity or ownership interests in any
other Person or have any direct or indirect equity or ownership interest in any
business or other Person.
 
 
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(c) Section 3.01 of the Seller Disclosure Schedule provides an accurate and
complete list of the members of, and their respective membership interests in,
the Seller as of the date of this Agreement.  None of the membership interests
of Seller are subject to any repurchase option, forfeiture provision or
restriction on transfer (other than restrictions on transfer imposed by virtue
of applicable securities laws).
 
Section 3.02 Authorization.  The execution, delivery and performance by Seller
of this Agreement and the consummation by it of the transactions contemplated
hereby are within its organizational powers and have been duly authorized by all
necessary organizational action of Seller.  This Agreement has been duly and
validly executed and delivered by Seller and constitutes a valid and binding
agreement of Seller, enforceable against it 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, and (b) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.
 
Section 3.03 Governmental Authorization; Consents.
 
(a) The execution, delivery and performance by Seller of this Agreement require
no action by or in respect of, or filing with, any governmental body, agency,
official or authority (a “Governmental Entity”).
 
(b) Except as set forth on Section 3.03 of the Seller Disclosure Schedule, no
consent, approval, waiver or other action by any Person (other than any
Governmental Entity referred to in (a) above) under any contract, agreement,
indenture, lease, instrument, or other document to which Seller is a party or by
which Seller is bound is required or necessary for the execution, delivery and
performance of this Agreement by Seller or the consummation of the transactions
contemplated hereby.
 
Section 3.04 Non-Contravention.  The execution, delivery and performance by
Seller of this Agreement do not and will not (a) contravene or conflict with the
articles of organization or operating agreement of Seller, (b) contravene or
conflict with or constitute a violation of any provision of any law, regulation,
judgment, injunction, order or decree binding upon or applicable to Seller; (c)
constitute a default under or give rise to any right of termination,
cancellation or acceleration of any right or obligation of Seller or to a loss
of any benefit to which Seller is entitled under any provision of any agreement,
contract, or other instrument binding upon Seller or any license, franchise,
permit or other similar authorization held by Seller; or (d) result in the
creation or imposition of any Lien on any Acquired Asset.

 
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Section 3.05 Sufficiency of and Title to Acquired Assets.
 
(a) The Acquired Assets constitute, and on the Closing Date will constitute, all
or the assets or property used or held for use by Seller in the Business, except
for the Excluded Assets.
 
(b) Upon consummation of the transaction contemplated hereby, Buyer will have
acquired good and marketable title in and to, or a valid leasehold interest in,
each of the Acquired Assets, free and clear of all Liens, except for Permitted
Lien, and without incurring any penalty, fee, expense or other adverse
consequence, including any increase in rentals, royalties, license or other fees
or expenses imposed as a result of, or arising from, the consummation of the
transactions contemplated hereby.
 
Section 3.06 Financial Statements.
 
(a)  The unaudited financial statements of operations for the Business as of
August  31, 2012 (the “Seller Balance Sheet Date”) previously delivered to Buyer
fairly present the financial position of the Business as of the date thereof and
its results of operations for the periods then ended.
 
(b)  Section 3.06 of the Seller Disclosure Schedule provides an accurate and
complete breakdown and aging of all accounts receivable, notes receivable and
other receivables of the Seller as of January 31, 2013.  All existing accounts
receivable of the Seller (including those accounts receivable have not yet been
billed or invoiced): (i) represent valid obligations of customers of the Seller
arising from bona fide transactions entered into in the ordinary course of
business; and (ii) are current and will be collected in full, without any
counterclaim or set off.
 
Section 3.07 Absence of Certain Changes.  Except as set forth in Section 3.07 of
the Seller Disclosure Schedule, since the Seller Balance Sheet Date, Seller has
conducted the Business in the ordinary course consistent with past practices and
has not:
 
(a) suffered any event that has had a Material Adverse Effect on the Business;
 
(b) sold, transferred, leased, licensed or otherwise disposed of any Acquired
Assets or any rights thereto (other than in the ordinary course of business);
 
(c) declared, set aside or paid any dividend or other distribution with respect
to any equity interests, or repurchased, redeemed or otherwise acquired any
outstanding equity interests or other securities or other ownership interests,
other than distributions for the payment of income taxes;
 
(d) incurred, assumed or guaranteed any indebtedness for borrowed money with
respect to the Business;
 
(e) permitted or allowed any of the Acquired Assets to be subjected to any Lien,
other than Permitted Liens;
 
(f) made any loan, advance or capital contributions to or investment in any
Person;
 
(g) suffered any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the Business or any Acquired Asset;
 
(h) allowed any insurance policy covering the Business or the Acquired Assets to
lapse or be cancelled or reduced the coverage or increased the deductible under
any such insurance policy;
 
(i) received any notice of termination of any Contract;

 
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(j) transferred or granted any rights under, or entered into any Contract
regarding any Technology or Intellectual Property Rights or similar rights
(including, without limitation, any settlement regarding the breach or
infringement or alleged breach or infringement thereof) or modified any existing
rights with respect thereto;
 
(k) instituted, been made a party to, settled or agreed to settle, any
Proceeding or suffered any material adverse determination in any Proceeding;
 
(l) made any transaction or commitment, or entered into any contract or
agreement, relating to any Acquired Asset or the Business (including the
acquisition or disposition of any assets) or relinquished any material contract
or other right, other than transactions and commitments in the ordinary course
consistent with past practices and those contemplated by this Agreement;
 
(m) changed any method of accounting or accounting practice with respect to the
Business, except for any such change after the date hereof required by reason of
a concurrent change in generally accepted accounting principles;
 
(n) (i) granted any severance or termination pay to any employee of the
Business, (ii) entered into any employment, deferred compensation or other
similar agreement (or any amendment to any such existing agreement) with any
employee of the Business, (iii) increased benefits payable under an existing
severance or termination pay policies or employment agreements or (iv) increased
compensation, bonus or other benefits payable to employees of the Business; or
 
(o) entered into any Contract or made any other commitment to take any of the
types of actions described in paragraphs (a) through (n) above.
 
Section 3.08 No Undisclosed Liabilities.  There are no liabilities of the
Business of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise and there is no existing condition,
situation or set of circumstances which could reasonably be expected to result
in such a liability, other than:
 
(a) Liabilities disclosed or provided for in the unaudited balance sheet of the
Business as of August 31, 2012 (the “Seller Balance Sheet”) previously delivered
to Buyer;  and
 
(b) Liabilities as and to the extent set forth on Section 3.08 of the Seller
Disclosure Schedule.
 
Section 3.09 Properties.  Seller has good and marketable title to, or in the
case of leased property has valid leasehold interests in, all Acquired Assets
(whether real or personal, tangible or intangible) reflected on the Seller
Balance Sheet or acquired after the Seller Balance Sheet Date, except for
properties and assets sold since the Seller Balance Sheet Date in the ordinary
course of business consistent with past practices or as contemplated by this
Agreement.  No Acquired Asset is subject to any Lien, except Permitted Liens.
 
Section 3.10 Litigation.  Section 3.10 of the Seller Disclosure Schedule lists
all Proceedings currently or at any time within the last twenty-four months
pending or to the Knowledge of Seller the Business or involving the Acquired
Assets.  None of the matters set forth on Section 3.10 of the Seller Disclosure
Schedule has had or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Business.  None of the matters set
forth on Section 3.10 of the Seller Disclosure Schedule affect the legality,
validity or enforceability of this Agreement or the consummation of the
transactions contemplated hereby.  Except as set forth on Section 3.10 of the
Seller Disclosure Schedule, no facts or circumstances exist which are reasonably
likely to lead to the instigation of any other Proceeding against or affecting
the Seller, the Business or the Acquired Assets.

 
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Section 3.11 Material Contracts.
 
(a) Except for agreements, contracts, plans, leases, arrangements or commitments
set forth on Section 3.11 of the Seller Disclosure Schedule and agreements with
the customers set forth on Section 3.19 of the Seller Disclosure Schedule, with
respect to the Business, Seller is not a party to or subject to:
 
(i)          Any agreement, contract or commitment related to an End User
Relationship or a Merchant Relationship;
 
(ii)          Any lease providing for annual rentals of $1,000 or more;
 
(iii)          Any contract for the purchase of materials, supplies, goods,
services, equipment or other assets providing for annual payments of $1,000 or
more;
 
(iv)          Any sales, distribution or other similar agreement providing for
the sale of materials, supplies, goods, services, equipment or other assets;
 
(v)          Any partnership, joint venture or other similar contract or
arrangement;
 
(vi)          Any contract relating to indebtedness for borrowed money or the
deferred purchase price of property (whether incurred, assumed, guaranteed or
secured by any asset), except contracts relating to indebtedness incurred in the
ordinary course of business in an amount not exceeding $1,000;
 
(vii)          Any license agreement, franchise agreement or agreement in
respect of similar rights granted to or held by Seller;
 
(viii)                     Any agency, dealer, reseller, sales representative,
affiliate or similar agreement;
 
(ix)          Any agreement, contract or commitment that substantially limits
the freedom of Seller to compete in any line of business or with any Person or
in any area or to own, operate, sell, transfer, pledge or otherwise dispose of
or encumber any Acquired Asset or which would so limit the freedom of Buyer
after the Closing Date;
 
(x)          Any agreement, contract or commitment which is or relates to an
agreement with or for the benefit of any affiliate of Seller; or
 
(xi)          Any other contract or commitment not made in the ordinary course
of business that is material to the Business.
 
(b) Seller has provided or otherwise made available to Buyer complete and
accurate copies of all standard form agreements used by the Seller that relate
to the Acquired Assets, including all customer agreements, development
agreements, distributor or reseller agreements, employee agreements containing
intellectual property assignments or licenses or confidentiality provisions,
consulting or independent contractor agreements containing intellectual property
assignments or licenses or confidentiality provisions, and confidentiality or
nondisclosure agreements. Section 3.11 of the Seller Disclosure Schedule sets
forth a complete and accurate list of all Contracts entered into by the Seller
that include deviations from such standard form agreements.
 
(c) Each agreement, contract, plan, lease, arrangement and commitment required
to be disclosed on Section 3.11 of the Seller Disclosure Schedule is a valid and
binding agreement of Seller and is in full force and effect, and neither Seller
nor any other party thereto is in default in any material respect under the
terms of any such agreement, contract, plan, lease, arrangement or commitment,
nor to the Knowledge of Seller, has any event or circumstance occurred that,
with notice or lapse of time or both, would constitute any event of default
thereunder.  Except as set forth on Section 3.11 of the Seller Disclosure
Schedule, Seller has performed all obligations required to be performed by it
under each Contract prior to the Closing.

 
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(d) Except as set forth on Section 3.11 of the Seller Disclosure Schedule, (i)
the consummation of the transactions contemplated hereby will not afford any
other party the right to terminate, modify, or exercise any right to increased
or accelerated performance under, any Contract and (ii) none of the Contracts
(A) except as set forth on Section 3.03 of the Seller Disclosure Schedule,
contains a provision preventing, prohibiting or requiring any consent or notice
in connection with the transfer or assignment of such Contract to Buyer or (B)
contains a “change of control” or similar provision triggered by the
consummation of the transactions contemplated hereby.
 
Section 3.12 Licenses and Permits.  Section 3.12 of the Seller Disclosure
Schedule correctly describes each license, franchise, permit or other similar
authorization affecting, or relating in any way to, the Business (the
“Permits”), together with the name of the Governmental Entity issuing such
Permits.  Except as set forth on Section 3.12 of the Seller Disclosure Schedule,
such Permits are valid and in full force and effect and are transferable by
Seller, and none of the Permits will be terminated or impaired or become
terminable as a result of the transactions contemplated hereby.  Upon
consummation of such transactions, Buyer will have all right, title and interest
to all such Permits.
 
Section 3.13 Insurance. Section 3.13 of the Seller Disclosure Schedule sets
forth a list of all insurance policies and fidelity bonds covering the Acquired
Assets, the business and operations of the Business and its employees.  There is
no claim  pending under any of such policies or bonds as to which coverage has
been questioned, denied or disputed by the underwriters of such policies or
bonds.  All premiums payable under all such policies and bonds have been paid
and Seller is otherwise in full compliance with the terms and conditions of all
such policies and bonds.  Such policies of insurance and bonds will remain in
full force and effect through the Closing Date.  Seller does not know of any
threatened termination of, or premium increase with respect to, any of such
policies or bonds.
 
Section 3.14 Compliance with Laws.  Seller has not violated and is not in
violation of, nor to Seller’s knowledge, is Seller under investigation with
respect to or has Seller been threatened to be charged with or given notice of
any violation of, any law, rule, ordinance or regulation, or judgment, order or
decree entered by any court, arbitrator or Governmental Entity applicable to the
Acquired Assets or the conduct of the Business.
 
Section 3.15 Intellectual Property.
 
(a) Section 3.15(a) of the Seller Disclosure Schedule contains a complete and
accurate list of all Registered IP owned by or filed in the name of Seller and
any other Intellectual Property Rights and Technology that are material to the
Business.
 
(b) Section 3.15(b) of the Seller Disclosure Schedule contains a complete and
accurate list of all Intellectual Property Rights or Technology licensed to
Seller (other than non-customized, executable code, internal use software
licenses for software that is not incorporated into, or used directly in the
development, manufacturing, or distribution of, the Seller’s products or
services and that is generally available on standard terms for less than $1,000
and used in the Business), and the corresponding Contracts in which such
Intellectual Property Rights or Technology are licensed to the Seller.
 
(c) Section 3.15(c) of the Seller Disclosure Schedule contains a complete and
accurate list of all Contracts in which any third party has been granted any
license under, or otherwise transferred or conveyed any right or interest in,
any Business IP Rights (other than non-exclusive, internal use licenses granted
to end user customers in the ordinary course of business pursuant to the
Seller’s standard form of customer agreement provided to Buyer).

 
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(d) All products, information, and services included in the Acquired Assets, and
the Business IP Rights, have never infringed, misappropriated, or otherwise
violated the Intellectual Property Rights of any third party.  There are no
pending or, to Seller’s knowledge, threatened infringement, misappropriation or
similar claims or Proceedings against Seller or against any other Person who
would be entitled to indemnification by Seller for any such claim or
Proceeding.  Neither Seller nor any direct or indirect subsidiary of Seller has
ever received any notice or other communication (in writing or otherwise) of any
actual, alleged, possible, potential or suspected infringement or
misappropriation of any third party’s Intellectual Property Rights by Seller or
any direct or indirect subsidiary of Seller or by any product or service
developed, manufactured, distributed, provided or sold by or on behalf of Seller
or any direct or indirect subsidiary of Seller.
 
(e) To Seller’s knowledge, no third party has infringed, misappropriated, or
otherwise violated, and no third party is currently infringing,
misappropriating, or otherwise violating, any Business IP Rights.
 
(f) Seller exclusively owns, and after the Closing, Buyer will exclusively own,
free and clear of all Liens, all right, title, interest in and to the Business
IP Rights, and the Business IP Rights include all Intellectual Property Rights
and Technology needed to operate the Business as currently conducted.
 
(g) Neither the execution, delivery, or performance of this Agreement nor the
consummation of the transactions contemplated by this Agreement will result in,
or give any other Person the right or option to cause or declare: (i) a loss of,
or Lien or restriction on, any of the Business IP Rights; (ii) the release or
delivery of any of the Business IP Rights to any other Person; or (iii) the
grant, assignment or transfer to any other Person of any license or other right
or interest under, to or in any of the Business IP Rights.
 
(h) None of the processes and formulae, research and development results and
other know-how relating to the Business, the value of which is contingent upon
maintenance of the confidentiality thereof, has been disclosed by Seller or any
affiliate of Seller to any Person other than employees, representatives and
agents of Seller.
 
(i) None of the software (including firmware and other software embedded in
hardware devices) owned, developed (or currently being developed), used,
marketed, distributed, licensed or sold by Seller or included in the Acquired
Assets (collectively, the “Seller Software”) contains any “back door,” “drop
dead device,” “time bomb,” “Trojan horse,” “virus,” or “worm” (as such terms are
commonly understood in the software industry) or any other code designed or
intended to have, or capable of performing, any of the following functions: (i)
disrupting, disabling, harming or otherwise impeding in any manner the operation
of, or providing unauthorized access to, a computer system or network or other
device on which such code is stored or installed; or (ii) damaging or destroying
any data or file without the user’s consent.
 
(j) The source code for all Seller Software contains reasonably clear and
accurate annotations and programmer’s comments, and otherwise has been
documented in a professional manner that is both: (i) consistent with customary
code annotation conventions and practices in the software industry; and (ii)
sufficient to independently enable a programmer of reasonable skill and
competence to understand, analyze, and interpret program logic, correct errors
and improve, enhance, modify and support such Seller Software.  No source code
for any Seller Software has been delivered, licensed or made available by
Seller to any escrow agent or other Person who is not, as of the date of this
Agreement, an employee or independent contractor of Seller.  Seller has any duty
or obligation (whether present, contingent or otherwise) to deliver, license or
make available the source code for any Seller Software to any escrow agent or
other Person.  No event has occurred, and no circumstance or condition currently
exists, that (with or without notice or lapse of time) will, or could reasonably
be expected to, result in the delivery, license or disclosure of the source code
for any Seller Software to any other Person.
 
(k) No Seller Software contains, is derived from, or is distributed with or
developed using any “open source” code in a manner that: (i) imposes or could
impose a requirement or condition that any Seller Software or part thereof:  (A)
be disclosed or distributed in source code form; (B) be licensed for the purpose
of making modifications or derivative works; or (C) be redistributable at no
charge; or (ii) imposes or purports to impose a requirement or condition that
Seller grant any license, covenant not to sue or other right under or with
respect to any Business IP Rights.

 
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(l) Section 3.15(l) of the Seller Disclosure Schedule contains each Seller
Privacy Policy in effect at any time and identifies, with respect to each Seller
Privacy Policy: (i) the period of time during which such privacy policy was or
has been in effect; (ii) whether the terms of a later Seller Privacy Policy
apply to the data or information collected under such privacy policy; and (iii)
if applicable, the mechanism (such as opt-in, opt-out or notice only) used to
apply a later Seller Privacy Policy to data or information previously collected
under such privacy policy.  Seller has complied at all times with all of the
Seller Privacy Policies and with all applicable laws, rules, and
regulations  pertaining to privacy, User Data or Personal Data (including the
Children’s Online Privacy Protection Act of 1998, 15 U.S.C. § 6501 et
seq.).  Seller has collected, stored, processed, transferred and deleted user
data and Personal Data using commercially reasonable technical means designed to
ensure the security and integrity of the user data and personal data.  Neither
the execution, delivery or performance of this Agreement or any of the other
agreements referred to in this Agreement nor the consummation of any of the
other transactions contemplated by this Agreement or any such other agreements,
nor Buyer’s possession or use of the user data or any data or information in the
Seller Databases as permitted by or in accordance with the applicable Seller
Privacy Policy, will result in any violation of any Seller Privacy Policy or any
requirement of applicable law, rules or regulations pertaining to privacy, user
data or personal data in effect as of the Closing.
 
(m) Section 3.15(m) of the Seller Disclosure Schedule identifies and describes
each distinct electronic or other database containing (in whole or in part)
Personal Data maintained by or for Seller at any time (the “Seller Databases”),
the types of personal data in each such database, and the security policies that
have been adopted and maintained with respect to each such database.  There has
been no unauthorized or illegal use of or access to any user data or personal
data or any of the data or information in any of the Seller
Databases.  Seller is in compliance with all applicable laws, rules, ordinances
and regulations pertaining to data security.
 
(n) None of the Seller Software (including the Stampt Platform and the Stampt
Application), or the other software incorporated in any of the foregoing (i)
contains any bug, defect or error that materially and adversely affects the use,
functionality or performance thereof or (ii) fails to comply with any applicable
warranty or other contractual commitment relating to the use, functionality or
performance thereof. Seller has delivered to Buyer a complete and accurate list
of all material bugs, defects and errors in the current version of the Seller
Software.
 
(o)  Section 3.15(o) of the Seller Disclosure Schedule identifies and describes
each social media presence maintained by or for Seller at any time, and the
paswords and other account management information with respect to each such
social media presence.
 
Section 3.16 Employees.
 
(a) Section 3.16 of the Seller Disclosure Schedule sets forth a true and
complete list of the names, titles, annual salaries (or wage rates for
non-salaried employees) and other compensation of, and any and all amounts
payable to, all current and former employees of, and consultants to, the
Business.  None of such employees or consultants has indicated to Seller that he
intends to resign or retire as a result of the transactions contemplated by this
Agreement.  No third party has asserted any claim in writing against Seller that
either the continued employment by, or association with, Seller of any of the
present officers or employees of, or consultants to, Seller contravenes any
agreements or laws applicable to unfair competition, trade secrets or
proprietary information.  Except as set forth on Section 3.16 of the Seller
Disclosure Schedule, Seller has no employment contract, agreement regarding
proprietary information, non-competition agreement, non-solicitation agreement,
confidentiality agreement, or any other similar contract or restrictive
covenant, relating to the right of any employee or consultant of the Business.

(b) In the conduct of the Business, Seller is in compliance in all material
respects with all federal, state or other applicable laws, respecting employment
and employment practices (including, without limitation, all laws pertaining to
terms and conditions of employment, wages and hours, employee classification,
discrimination, affirmative action, civil rights, the Worker Adjustment and
Retraining Notification Act and similar state laws (collectively, the “WARN
Act”), occupational safety and health, collective bargaining, immigration,
workers’ compensation and the collection, payment and withholding of Taxes)
(except for violations or failures to comply which are not reasonably likely to
result in penalties in excess of $5,000 in the aggregate), and has not received
notice of, and is not engaged in, any unfair labor practice.  Seller has not
incurred any liability or obligation under the WARN Act in connection with the
conduct of the Business that remains unsatisfied.

 
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(c) No unfair labor practice complaint arising out of or relating to the conduct
of the Business is pending before the National Labor Relations Board.
 
(d) There is no labor strike, dispute, slowdown or stoppage involving any
employees of the Business actually pending against or affecting the Seller.
 
(e) Except as set forth in Section 3.16 of the Seller Disclosure Schedule, there
are not, and in the past three years have not been, any material claims,
grievances or arbitration proceedings, workers’ compensation proceedings, labor
disputes (including charges of violations of any federal, state or local laws or
regulations relating to current or former employees (including retirees) or
current or former applicants for employment), governmental investigations,
administrative proceedings or other Proceedings of any kind pending or, to
Seller’s knowledge, threatened against Seller, in each case that relate to the
conduct of the Business, the Business’s employees or employment practices, or
operations as they pertain to conditions of employment; nor is Seller subject to
any order or decree arising from any such matter.
 
(f) No collective bargaining agreement covering any employee of the Business is
currently in existence or is being negotiated by Seller.  As of the date of this
Agreement, no labor organization has been certified or recognized as the
representative of any employees of Seller or, to Seller’s knowledge, is actively
seeking such certification or recognition.
 
(g) Seller’s Contracts, if any, with temporary personnel agencies providing
personnel to perform services for the Business represent bona-fide, arm’s-length
agreements and the personnel provided by such agencies to perform services for
the Business are not the Seller’s employees for purposes of any federal, state
or local laws, including laws pertaining to tax withholding, provision of
benefits or union representation.  To the extent any Person performing services
for the Business has not properly been treated by Seller as an employee in the
past, any amount due such person if such person had been considered and treated
as an employee of Seller shall be an Excluded Liability.
 
(h) Except as set forth in Section 3.16 of the Seller Disclosure Schedule, at
the Closing, all salaries, wages, vacation pay, bonuses, commissions and other
compensation due from Seller will have been paid.
 
(i) Except as set forth in Section 3.16 of the Seller Disclosure
Schedule,  Seller does not have, or contribute to, any pension, profit-sharing,
option, other incentive plan, or any other type of Employee Benefit Plan (as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended), or have any obligation to or customary arrangement with employees
for bonuses, incentive compensation, vacations, severance pay, sick pay, sick
leave, insurance, service award, relocation, disability, tuition refund, or
other benefits, whether oral or written.    Neither Seller nor any of its
affiliates has incurred with respect to any Employee Benefit Plan any liability
to the Pension Benefit Guaranty Corporation or other liability.
 
(j) No employee of Seller will become entitled to any retirement, severance or
similar benefit or enhanced benefit solely as a result of the transactions
contemplated hereby.
 
Section 3.17 Environmental Compliance. Seller has obtained all material
approvals, authorization, certificates, consents, licenses, orders and permits
or other similar authorizations of all governmental authorities, or from any
other person, that are required under any  Environmental Laws in connection with
the Business.  There are no past or present events, conditions, circumstances,
incidents, actions or omissions relating to or in any way affecting the Business
or any Acquired Asset that violate or may violate any Environmental Law after
the Closing Date or that may give rise to any environmental liability (i) under
any Environmental Law, or (ii) based on or related to the manufacture,
processing, distribution, use, treatment, storage (including without limitation
underground storage tanks), disposal, transport or handling, or the emission,
discharge, release or threatened release of any hazardous substance.
 
 
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Section 3.18 Tax Matters.  Except as set forth in Section 3.18 of the Seller
Disclosure Schedule:
 
(a) Seller has timely paid all Taxes, and all interest and penalties due thereon
and payable by it for the Pre-Closing Tax Period which will have been required
to be paid on or prior to the Closing Date, the non-payment of which would
result in a Lien on any Acquired Asset, would otherwise adversely affect the
Business or would result in Buyer becoming liable or responsible therefor.
 
(b) Seller has established adequate reserves for the payment of, and will timely
pay all Tax liabilities, assessments, interest and penalties which arise from or
with respect to the Acquired Assets or the operation of the Business and are
incurred in or attributable to the Pre-Closing Tax Period, the non-payment of
which would result in a Lien on any Acquired Asset, would otherwise adversely
affect the Business or would result in Buyer becoming liable or responsible
therefor.
 
Section 3.19   Customers.  Section 3.19 of the Seller Disclosure Schedule lists
all active customers of the Business and, for each such customer, lists all
agreements or other arrangements between Seller and the customers (including all
End User Relationships and all Merchant Relationships).  Seller has not received
any written, oral or other notice (including by email, text message or
otherwise) that any customer of the Business expects or intends to cease doing
business with Seller, reduce the amount of business such customer does with
Seller or modify its relationship with Seller in a manner adverse to Seller.
 
Section 3.20 Books and Records.  The records and documents of Seller accurately
reflect in all material respects the information relating to the Business, the
location of the Acquired Assets, and the nature of all transactions giving rise
to the obligations or accounts receivable of the Business.
 
Section 3.21 Finders’ Fees.  There is no investment banker, broker, finder or
other intermediary that has been retained by or is authorized to act on behalf
of Seller who might be entitled to any fee or commission from Buyer or Parent or
any of their respective affiliates upon consummation of the transactions
contemplated by this Agreement.
 
Section 3.22  Absence of Certain Relationships.   None of (a) Seller, (b) any
executive officer of Seller, or (c) any member of the immediate family of the
Persons listed in (a) through (b) of this sentence, has any financial or
employment interest in any subcontractor, supplier, or customer of the Business
(other than holdings in publicly held companies of less than 2% of the
outstanding capital stock of any such publicly held company).
 
Section 3.23 No Questionable Payments.  Neither Seller nor any member, manager,
director, officer, agent, employee, or other person associated with, or acting
on behalf of, Seller has directly or indirectly:  used any corporate funds for
unlawful contributions, gifts, entertainment, or other unlawful expenses
relating to political activity; made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns from corporate funds; violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; or made any bribe, rebate, payoff, influence
payment, kickback, or other unlawful payment.
 
Section 3.24 Completeness of Disclosure.  No representation or warranty by
Seller in this Agreement contains or, and at the Closing Date will contain, an
untrue statement of material fact or omits or, at the Closing Date, will omit to
state a material fact required to be stated therein or necessary to make the
statements made not misleading.

 
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Section 3.25 Investment Representations and Covenants.
 
(a)           Seller is acquiring the Parent Shares for investment for its own
account and not with a view to distribution or resale thereof, and it will not
sell or otherwise transfer the Parent Shares except in accordance with the
provisions of the Securities Act and the rules and regulations promulgated under
the Securities Act by the Securities and Exchange Commission (the “Commission”)
and all applicable provisions of state securities laws and regulations.  Seller
further acknowledges that it understands the foregoing to mean that it will not
sell or otherwise transfer any Parent Shares unless such securities are
registered under the Securities Act and any other applicable federal or state
securities laws, or it obtains an opinion of counsel satisfactory to Parent
(both as to the issuer of the opinion and the form and substance thereof) that
the Parent Shares may be transferred in reliance on an applicable exemption from
the registration requirements of such laws.
 
(b)           Seller understands that acquisition of the Parent Shares is a
speculative investment involving a high degree of risk of the loss, and it is
qualified by knowledge and experience to evaluate investments of this type.  It
further acknowledges that it has carefully considered the potential risks
relating to an investment in the Parent Shares.
 
(c)           Seller is able to bear the economic risk of losing its entire
investment in the Parent Shares.
 
(d)           Seller understands and acknowledges that the Parent Shares have
not been registered under the Securities Act, or the securities laws of any
state and, as a result thereof, are subject to substantial restrictions on
transfer. It further acknowledges that the certificate or certificates
representing the Parent Shares shall bear a legend in substantially the form set
forth in Section 2.07 hereof.  
 
(e)           Seller has made an independent examination and investigation of an
investment in the Parent Shares and Parent and has depended on the advice of its
legal and financial advisors and agrees that neither Parent nor Buyer will be
responsible in anyway whatsoever for Seller’s decision to invest in the Parent
Shares and Parent, except as a result of their breach of this Agreement.  Seller
has been afforded access to all material information (including, without
limitation, Parent’s Form 10-K for the fiscal year ended December 31, 2011 filed
with the Commission on April 16, 2012, Parent’s Form 10-Q for the fiscal quarter
ended September 30, 2012 filed with the Commission on November 14, 2012, and all
other reports, schedules, forms, statements and other documents filed by Parent
with the Commission)  that it has requested relevant to its decision to acquire
the Parent Shares and to ask questions of Parent’s management.  Seller further
acknowledges that, except as set forth herein, neither Parent nor Buyer nor
anyone acting on behalf of Parent or Buyer has made any representations or
warranties (written or oral) to Seller (or any person acting on their behalf)
which have induced, persuaded, or stimulated it to acquire the Parent Shares,
including (without limitation) as to the future price or value of the Parent
Shares, except as provided in this Agreement.
 
(f)           Either alone, or together with its investment advisor(s), Seller
has the knowledge and experience in financial and business matters to be capable
of evaluating the merits and risks of the prospective investment in the Parent
Shares, and Seller is and will be able to bear the economic risk of the
investment in such Parent Shares.
 
 (g)           Seller understands and agrees not to engage in any hedging
transactions involving any of the Parent Shares unless such transactions are in
compliance with the provisions of the Securities Act and in each case only in
accordance with applicable state securities laws.

 
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ARTICLE IV
 
REPRESENTATIONS AND WARRANTIES OF
 
BUYER
 
Buyer hereby represents and warrants to Seller that:
 
Section 4.01 Organization.  Each of Parent and Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite power and authority to
own, lease and operate its properties and to carry on its business as now being
conducted, except in such jurisdictions where the failure to be so duly
qualified or licensed and in good standing would not in the aggregate have a
Material Adverse Effect on Parent and its subsidiaries, taken as a whole.
 
Section 4.02 Corporate Authorization.  The execution, delivery and performance
by each of Parent and Buyer of this Agreement and the consummation by each of
Parent and Buyer of the transactions contemplated hereby will be within their
respective corporate powers and will have been duly authorized by all necessary
corporate action of each of Parent and Buyer.  This Agreement has been duly and
validly executed and delivered by each of Parent and Buyer and constitutes a
valid and binding agreement of each of Parent and Buyer, enforceable against
them 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, and (b) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies.
 
Section 4.03 Governmental Authorization; Consents.
 
(a) The execution, delivery and performance by Parent and Buyer of this
Agreement require no action by or in respect of, or filing with, any
Governmental Entity.
 
(b) Except as set forth on Schedule 4.03(b) attached hereto, no consent,
approval, waiver or other action by an Person under any contract, agreement,
indenture, lease, instrument, or other document to which Parent or Buyer is a
party or by which it is bound is required or necessary for the execution,
delivery and performance of this Agreement by Parent or Buyer or the
consummation of the transactions contemplated hereby.
 
Section 4.04 Non-Contravention.  The execution, delivery and performance by
Parent and Buyer of this Agreement do not and will not (a) contravene or
conflict with the articles of incorporation or bylaws of Parent or Buyer, (b)
contravene or conflict with or constitute a violation of any provision of any
law, regulation, judgment, injunction, order or decree binding upon or
applicable to Parent or Buyer; or (c) constitute a default under or give rise to
any right of termination, cancellation or acceleration of any right or
obligation of Parent or Buyer or to a loss of any benefit to which Parent or
Buyer is entitled under any provision of any agreement, contract, or other
instrument binding upon Parent or Buyer or any license, franchise, permit or
other similar authorization held by Parent or Buyer.
 
Section 4.05 Litigation.  There is no Proceeding pending against, or to the
knowledge of Parent or Buyer, threatened against or affecting, Parent or Buyer
before any court or arbitrator or any Governmental Entity which in any manner
challenges or seeks to prevent, enjoin, alter or materially delay the
transactions contemplated hereby.
 
Section 4.06 Finders’ Fees.  There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of Parent or Buyer who might be entitled to any fee or commission from Seller or
any of its affiliates upon consummation of the transactions contemplated by this
Agreement.

 
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Section 4.07 Validity of Parent Shares to be Issued.  The Parent Shares to be
issued pursuant to the terms of this Agreement are validly authorized and, when
such Parent Shares have been duly delivered pursuant to the terms of this
Agreement, will not have been issued in violation of any preemptive or similar
right of any stockholder or other Person. When the Parent Shares have been duly
delivered pursuant to the terms of this Agreement, such Parent Shares will be
validly issued, fully paid, and nonassessable.
 
ARTICLE V
 
COVENANTS
 
Section 5.01 Covenants of Seller.  Seller agree that:
 
(a) No Inconsistent Actions.  During the period from the date of this Agreement
and continuing until the Closing Date, Seller will not (i) take or agree or
commit to take any action that would make any representation and warranty of
Seller inaccurate in any respect at, or as of any time prior to, the Closing
Date, or (ii) omit or agree or commit to omit to take any action necessary to
prevent any such representation or warranty from being inaccurate in any respect
at any such time.
 
(b) Confidentiality.  Prior to the Closing Date and after any termination of
this Agreement, Seller and its affiliates will hold, and will use commercially
reasonable efforts to cause their respective officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold, in confidence,
unless compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information concerning
Parent or Buyer furnished to Seller or its affiliates in connection with the
transaction contemplated by this Agreement, except to the extent that such
information can be shown to have been (i) previously known on a nonconfidential
basis by Seller, (ii) in the public domain through no fault of Seller or (iii)
later lawfully acquired by Seller from sources other than Parent and Buyer;
provided that Seller may disclose such information to its officers, directors,
employees, accountants, counsel, consultants, advisors and agents in connection
with the transactions contemplated by this Agreement so long as such Persons are
informed by Seller of the confidential nature of such information and are
directed by Seller to treat such information confidentially.  The obligation of
Seller and its affiliates to hold such information in confidence shall be
satisfied if they exercise the same care with respect to such information as
they would take to preserve the confidentiality of their own similar
information.  If this Agreement is terminated, Seller and its affiliates will,
and will use commercially reasonable efforts to cause their respective officers,
directors, employees, accountants, counsel, consultants, advisors and agents to,
destroy or deliver to Buyer, upon request, all documents and other materials,
and all copies thereof, obtained by Seller and its affiliates or on their behalf
from Parent or Buyer in connection with this Agreement that are subject to such
confidence.
 
(c) Access to Information.  Upon reasonable notice and subject to restrictions
contained in confidentiality agreements to which such party is subject (from
which such party shall use reasonable efforts to be released), Seller shall
afford to the officers, employees, accountants, counsel and other
representatives of Buyer, access, during normal business hours during the period
prior to the Closing, to Seller’s  properties, books, contracts, commitments and
records to the extent relating to the Acquired Assets and, during such period,
Seller shall furnish promptly to the other all information concerning the
Acquired Assets as Buyer may reasonably request.  Unless otherwise required by
law or court order, Buyer will hold any such information which is nonpublic in
accordance with Section 5.02(b).
 
Section 5.02 Covenants of Buyer.  Buyer agrees that:
 
(a) No Inconsistent Actions.  During the period from the date of this Agreement
and continuing until the Closing Date, Parent and Buyer will not (i) take or
agree or commit to take any action that would make any representation and
warranty of Parent or Buyer inaccurate in any respect at, or as of any time
prior to, the Closing Date or (ii) omit or agree or commit to omit to take any
action necessary to prevent any such representation or warranty from being
inaccurate in any respect at any such time.
 

 
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(b) Confidentiality.  Prior to the Closing Date and after any termination of
this Agreement, Buyer and its affiliates (including Parent) will hold, and will
use commercially reasonable efforts to cause their respective officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all confidential documents and
information concerning Seller or the Acquired Assets furnished to Buyer or its
affiliates in connection with the transaction contemplated by this Agreement,
except to the extent that such information can be shown to have been (i)
previously known on a nonconfidential basis by Buyer, (ii) in the public domain
through no fault of Buyer or (iii) later lawfully acquired by Buyer from sources
other than Seller; provided that Parent and Buyer may disclose such information
to their respective officers, directors, employees, accountants, counsel,
consultants, advisors and agents in connection with the transactions
contemplated by this Agreement and to their respective financing sources so long
as such Persons are informed by Buyer of the confidential nature of such
information and are directed by Buyer to treat such information
confidentially.  The obligation of Buyer and its affiliates to hold such
information in confidence shall be satisfied if they exercise the same care with
respect to such information as they would take to preserve the confidentiality
of their own similar information.  If this Agreement is terminated, Buyer and
its affiliates will, and will use commercially reasonable efforts to cause their
respective officers, directors, employees, accountants, counsel, consultants,
advisors and agents to, destroy or deliver to Seller, upon request, all
documents and other materials, and all copies thereof, obtained by Buyer and its
affiliates or on their behalf from Seller in connection with this Agreement that
are subject to such confidence.
 
Section 5.03 Covenants of All Parties.  Each party agrees that:
 
(a) Commercially Reasonable Efforts.  Subject to the terms and conditions of
this Agreement, each of the parties hereto agrees to use its commercially
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement.  The parties each agree to execute and deliver
such other documents, certificates, agreements and other writings and to take
such other actions as may be necessary or desirable in order to consummate or
implement expeditiously the transactions contemplated by this Agreement.
 
(b) Certain Filings.  The parties will cooperate with one another (i) in
determining whether any action by or in respect of, or filing with, any
Governmental Entity is require or any actions, consents, approvals or waivers
are required to be obtained from parties to any material contracts, in
connection with the transactions contemplated by this Agreement and (ii) in
taking such actions or making any such filings, furnishing information required
in connection therewith and seeking timely to obtain any such actions, consents,
approvals or waivers.
 
(c) Public Announcements.  Seller understands that Parent is a publicly traded
corporation, and that the disclosure of information concerning Parent and its
business affairs and financial condition is strictly regulated by the Commission
and other legal and administrative bodies.  Accordingly, Seller hereby agrees
(i) that Parent may make or disseminate any public statement, press release or
other disclosure concerning this Agreement, any schedule or exhibit attached
hereto, or the transactions and relationships contemplated hereby and
thereby  as it deems necessary to comply with applicable law or regulation
(including, without limitation, the filing of this Agreement and its exhibits
and schedules) and (ii) to take reasonable measures not to make or disseminate
any public statement, press release or other disclosure concerning this
Agreement, any schedule or exhibit attached hereto, or the transactions and
relationships contemplated hereby and thereby, without the prior written consent
of Parent (which consent may be given or withheld in its sole discretion).
 
(d) Notices.  Each of the parties shall give prompt notice to the other party
of: (i) any notice of, or other communication relating to, a default or event
which, with notice or the lapse of time or both, would become a default,
received by it or any of its subsidiaries subsequent to the date of this
Agreement and prior to the Closing, under any agreement, indenture or instrument
material to the financial condition, properties, businesses or results of
operations of it and its subsidiaries, taken as a whole, to which it or any of
its subsidiaries is a party or is subject; and (ii) any notice or other
communication from any third party alleging that the consent of such third party
is or may be required in connection with the transactions contemplated by this
Agreement, which consent, if required, would breach the representations
contained in Articles III and IV.

 
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(e) Tax Cooperation; Allocation of Taxes.
 
(i) Seller and Buyer agree to furnish or cause to be furnished to each other,
upon reasonable request, as promptly as practicable, such information and
assistance relating to the Acquired Assets and the Business as is reasonably
necessary for the filing of all Tax returns, and making of any election related
to Taxes, the preparation for any audit by any taxing authority, and the
prosecution or defense of any claim, suit or proceeding relating to any Tax
return.  Seller and Buyer shall cooperate with each other in the conduct of any
audit or other proceeding related to Taxes involving the Business.
 
(ii) All real property, personal property and similar ad valorem obligations
levied with respect to the Acquired Assets for a taxable period which includes
(but does not end on) the Closing Date shall be apportioned between Seller and
Buyer as of the Closing Date based on the number of days of such taxable period
included in the Pre-Closing Tax Period and the number of days of such taxable
period included in the Post-Closing Tax Period.  Seller shall be liable for the
proportionate amount of such taxes that is attributable to the Pre-Closing Tax
Period, and Buyer shall be liable for the proportionate amount of such taxes
that is attributable to the Post-Closing Tax Period.  Within 90 days after the
Closing, Seller and Buyer shall present a statement to the other setting forth
the amount of reimbursement to which each is entitled under this Section 5.03(e)
together with such supporting evidence as is reasonably necessary to calculate
the proration amount. The proration amount shall be paid by the party owing it
to the other within 30 days after receipt of such statement by certified mail,
express mail or personal service.  Thereafter, Seller shall notify Buyer upon
receipt of any bill for real or personal property taxes relating to the Acquired
Assets, part or all of which are attributable to the Post-Closing Period, and
shall promptly deliver such bill to Buyer who shall pay the same to the
appropriate taxing authority, provided that if such bill covers the Pre-Tax
Closing Period, Seller shall also remit prior to the due date of assessment to
Buyer payment for the proportionate amount of such bill that is attributable to
the Pre-Closing Tax Period.  In the event that either Seller or Buyer shall
thereafter make a payment for which it is entitled to reimbursement under this
Section 5.03(e), the other party shall make such reimbursement promptly, but in
no event later than 30 days after the presentation of a statement setting forth
the amount of reimbursement to which the presenting party is entitled along with
such supporting evidence as is reasonably necessary to calculate the amount of
reimbursement.  Any payment required under this Section and not made within 30
days after receipt of the statement by certified mail, express mail or personal
service shall bear interest at a rate of 10% per annum until paid.
 
(iii) Any transfer, documentary, sales, use or other Taxes assessed upon or with
respect to the transfer of the Acquired Assets to Buyer and any recording or
filing fees with respect thereto shall be the responsibility of Seller.
 
(f) Employee Matters.
 
(i) On the Closing Date, Buyer will offer employment to those  employees of the
Business as it may determine in its sole discretion; provided that Buyer may
terminate at any time after the Closing Date the employment of any employee who
accepts such offer.  Any such offers will be at such salary or wage and benefit
levels and on such other terms and conditions as Buyer shall in its sole
discretion deem appropriate.  The employees who accept and commence employment
with Buyer are hereinafter collectively referred to as the “Transferred
Employees”.  Seller will not take, and will cause each of its affiliates not to
take, any action which would impede, hinder, interfere or otherwise compete with
Buyer’s effort to hire any Transferred Employees.  Buyer shall not assume
responsibility for any Transferred Employee until such employee commences
employment with Buyer.
 
(ii) Seller shall retain all obligations and liabilities under employee benefit
plans and benefit arrangements in respect of each employee or former employee
(including any beneficiary thereof) who is not a Transferred Employee.  Seller
shall retain all liabilities and obligations in respect of benefits accrued as
of the Closing Date by Transferred Employees under the employee benefit plans
and benefit arrangements, and neither Buyer nor any affiliate shall have any
liability with respect thereto. Except as expressly set forth herein, no assets
of any employee benefit plan or benefit arrangement shall be transferred to
Buyer or any of its affiliates or to any plan of Buyer or any of its affiliates.
 

 
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(iii) With respect to the Transferred Employees (including any beneficiary or
dependent thereof), Seller shall retain (A) all liabilities and obligations
arising under any group life, accident, medical, dental or disability plan or
similar arrangement (whether or not insured) to the extent that such liability
or obligation relates to contributions or premiums accrued (whether or not
payable), or to claims incurred (whether or not reported), on or prior to the
Closing Date, (B) all liabilities and obligations arising under any worker’s
compensation arrangement to the extent such liability or obligation relates to
the period prior to the Closing Date, including liability for any retroactive
workman’s compensation premiums attributable to such period and (C) all other
liabilities and obligations arising under any employee benefit plans and the
benefit arrangements to the extent any such liability or obligation relates to
the period prior to the Closing Date, including without limitation, accruals
through the Closing Date under any bonus plan or arrangement, any vacation
plans, arrangements and policies.
 
(iv) No provision of this Section 5.03(f) shall create any third party
beneficiary or other rights in any employee or former employee (including any
beneficiary or dependent thereof) of Seller or of any of its subsidiaries in
respect of continued employment (or resumed employment) with either Buyer or the
Business or any of their affiliates and no provision of this Section 5.03(f)
shall create any such rights in any such Person in respect of any benefits that
may be provided, directly or indirectly, under any employee benefit plan or
arrangement which may be established by Buyer or any of its affiliates.  No
provision of this Agreement shall constitute a limitation on the rights to
amend, modify or terminate after the Closing Date any such plans or arrangements
of Buyer or any of its affiliates.
 
ARTICLE VI 
 
CONDITIONS
 
Section 6.01 Conditions to Each Party's Obligations.  The obligation of each
party to consummate the Closing is subject to the satisfaction of the following
conditions:
 
(a) All authorizations, consents, orders or approvals of, or declarations or
filings with, or expirations or terminations of waiting periods imposed by, any
Governmental Entity, and all required third party consents (as set forth on
Section 3.03 of the Seller Disclosure Schedule), shall have been filed, occurred
or been obtained.
 
(b) No statute, rule, regulation, executive order, decree or injunction shall
have been enacted, entered, promulgated or enforced by any court or governmental
authority which prohibits the consummation of the Closing and shall be in
effect.
 
Section 6.02 Conditions to Obligations of Parent and Buyer.  The obligations of
Parent and Buyer to consummate the Closing is subject to the satisfaction of the
following further conditions:
 
(a) The representations and warranties of Seller set forth in this Agreement
shall be true and correct as of the date of this Agreement, and shall also be
true in all material respects (except for such changes as are contemplated by
the terms of this Agreement and such changes as would be required to be made in
the exhibits to this Agreement if such schedules were to speak as of the Closing
Date) on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date.
 
(b) Seller shall have performed in all material respects all obligations
required to be performed by it or him under this Agreement at or prior to the
Closing Date.
 
(c) Buyer shall have received a certificate signed by the Chief Executive
Officer of Seller confirming Sections 6.02(a) and (b).
 
(d) Buyer shall have received (i) resolutions duly adopted by the Board of
Directors and the members of Seller approving the execution and delivery of this
Agreement and all other necessary or proper organizational action to enable
Seller to comply with the terms of this Agreement, and (ii) all other documents
it may reasonably request relating to the existence of Seller and the authority
of Seller for this Agreement, all in form and substance reasonable satisfactory
to Buyer.

 
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(e) Each creditor of Seller listed on Schedule 2.06(a) attached hereto shall
have executed and delivered to Buyer a consent and release agreement (in form
and substance satisfactory to Buyer in its sole and absolute discretion)
providing, among other things, for: (i) the creditor’s consent to this Agreement
and the transactions contemplated hereby, (ii) a release of any and all Liens of
such creditor in respect of the Acquired Assets, and (iii) a full and
unconditional release by such creditor of Parent and Buyer from any and all
claims and liabilities related to this Agreement, the transactions contemplated
hereby and the obligations of Seller to such creditor.
 
(f) Each current and former member and director of Seller shall have executed
and delivered to Buyer a consent and release agreement (in form and substance
satisfactory to Buyer in its sole and absolute discretion) providing, among
other things, for: (i) such person’s consent to this Agreement and the
transactions contemplated hereby, (ii) a release of any and all Liens of such
person in respect of the Acquired Assets, and (iii) a full and unconditional
release by such person of Parent and Buyer from any and all claims and
liabilities related to this Agreement, the transactions contemplated hereby and
the obligations of Seller to such person.
 
(g) Seller and each member of Seller shall have executed and delivered a
Non-Competition Agreement, in the form set forth as Exhibit B hereto, to Buyer.
 
Section 6.03 Conditions to Obligation of Seller.  The obligation of Seller to
consummate the Closing is subject to the following further conditions:
 
(a) The representations and warranties of Buyer set forth in this Agreement
shall be true and correct as of the date of this Agreement, and shall also be
true in all material respects (except for such changes as are contemplated by
the terms of this Agreement and such changes as would be required to be made in
the exhibits to this Agreement if such schedules were to speak as of the Closing
Date) on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date.
 
(b) Buyer shall have performed in all material respects all obligations required
to be performed by them under this Agreement at or prior to the Closing Date.
 
(c) Seller shall have received a certificate signed by the Chief Executive
Officer of Buyer confirming Section 6.03(a) and (b).
 
(d) Seller shall have received (i) resolutions duly adopted by the Boards of
Directors of Parent and Buyer approving the execution and delivery of this
Agreement and all other necessary or proper corporate action to enable Buyer to
comply with the terms of this Agreement, and (ii) all other documents it may
reasonably request relating to the existence of Parent and Buyer and the
authority of Parent and Buyer for this Agreement, all in form and substance
reasonable satisfactory to Seller.
 
ARTICLE VII
 
SURVIVAL; INDEMNIFICATION
 
Section 7.01 Survival.  The covenants, agreements, representations and
warranties of the parties hereto contained in this Agreement or in any
certificate or other writing delivered pursuant hereto or in connection herewith
shall survive the Closing until the expiration of the applicable statute of
limitations (giving effect to any waiver, mitigation or extension thereof), (b)
in the case of the Non-Competition Agreements, for the period set forth therein
or (c) in the case of Sections  5.01(b) and 5.02(b),
indefinitely.  Notwithstanding the preceding sentence, any covenant, agreement,
representation or warranty in respect of which indemnity may be sought under
Section 7.02 shall survive the time at which it would otherwise terminate
pursuant to the preceding sentence if a claim for indemnity related to such
covenant, agreement, representation or warranty is made prior to the expiration
of the applicable survival period.
 

 
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            Section 7.02 Indemnification.
 
(a) Seller hereby indemnifies Parent and Buyer against and agrees to hold them
harmless from any and all damage, loss, liability and expense (including without
limitation reasonable expenses of investigation and reasonable attorneys’ fees
and expenses in connection with any action, suit or proceeding) (“Damages”)
incurred or suffered by Parent or Buyer arising out of (i) any misrepresentation
or breach of warranty, covenant or agreement made or to be performed by Seller
pursuant to this Agreement or (ii) the failure of Seller to perform any Excluded
Liability or any obligation or liability of the Business relating to the
Excluded Assets.
 
(b) Buyer hereby indemnifies Seller against and agrees to hold it harmless from
any and all Damages incurred or suffered by Seller arising out of (i) any
misrepresentation or breach of warranty, covenant or agreement made or to be
performed by Parent or Buyer pursuant to this Agreement or (ii) the failure of
Buyer to perform any Assumed Liability.
 
Section 7.03 Procedures.  The party seeking indemnification under Section 7.02
(the “Indemnified Party”) agrees to give prompt notice to the party against whom
indemnity is sought (the “Indemnifying Party”) of the assertion of any
third-party claim, or the commencement of any third-party suit, action or
proceeding in respect of which indemnity may be sought under such Section.  The
Indemnifying Party may at the request of the Indemnified Party participate in
and control the defense of any such suit, action, or proceeding at its own
expense.  The Indemnifying Party shall not be liable under Section 7.02 for any
settlement effected without its consent (which consent will not be unreasonably
withheld) of any claim, litigation or proceeding in respect of which indemnity
may be sought hereunder.
 
Section 7.04 Right to Withhold and Offset.  Notwithstanding anything to the
contrary in this Agreement, Parent and Buyer may withhold the aggregate amounts
of any indemnification claims then pending or unresolved against Seller pursuant
to Section 7.02(a) (including, without limitation, the amount of any Damages or
reasonably anticipated Damages for which Parent or Buyer would be entitled to be
indemnified for pursuant to Section 7.02(a)) against amounts otherwise payable
to Seller hereunder (including, without, limitation, any payment of Earn-Out
Amounts) as security for the Seller’s obligations under this Article VII.  If
any claim for indemnification pursuant to Section 7.02(a) is resolved, in whole
or in part, in favor of Parent or Buyer, then the amount determined to be due
Parent or Buyer, to the extent in excess of the any amounts previously received
by Parent or Buyer in respect of such claim for indemnification, may be off-set
by Buyer against amounts otherwise payable to Seller hereunder.  Any portion of
an amount previously withheld by Buyer in respect of any claim that is
determined not to be payable to Parent or Buyer shall forthwith be paid to the
Seller. The right of set-off described in this Section 7.04 shall not preclude
Parent or Buyer from pursuing any other remedy under this Agreement or seeking
injunctive relief or specific performance to enforce specifically the terms of
this Agreement to the extent permitted by applicable law.
 

 
ARTICLE VIII
 
TERMINATION AND AMENDMENT
 
Section 8.01 Termination.  This Agreement may be terminated at any time prior to
the Closing Date:
 
(a) by mutual consent of Buyer and Seller;
 
(b) by either Buyer or Seller if the Closing shall not have been consummated on
or before [April 1], 2013 (unless the failure to consummate the Closing by such
date shall be due to the action or failure to act of the party seeking to
terminate this Agreement);
 
(c) by either Buyer or Seller if (i) the conditions to such party's obligations
shall have become impossible to satisfy or (ii) any permanent injunction or
other order of a court or other competent authority preventing the consummation
of the Closing shall have become final and non-appealable;
 

 
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(d) by Buyer if Seller has breached its obligations set forth in this Agreement
and such breach is not cured within five business days after written notice
thereof; or
 
(e) by Seller if Parent or Buyer have breached their obligations set forth in
this Agreement and such breach is not cured within five business days after
written notice thereof.
 
Section 8.02 Effect of Termination.  In the event of the termination and
abandonment of this Agreement pursuant to Section 8.01 hereof, this Agreement
shall forthwith become void and have no effect, without any liability on the
part of any party hereto or its affiliates, directors, officers or stockholders,
other than the provisions of Sections 5.01(b) and 5.02(b).  Nothing contained in
this Section 8.02 shall relieve any party from liability for any breach of this
Agreement.
 
Section 8.03 Amendment.  This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
 
Section 8.04 Extension; Waiver.  At any time prior to the Closing Date, the
parties hereto may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party.
 
ARTICLE IX 
 
MISCELLANEOUS
 
Section 9.01 Notices.  All notices and other communications hereunder shall be
in writing (and shall be deemed given upon receipt) if delivered personally,
electronically (which is confirmed) or mailed by registered or certified mail
(return receipt requested) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
 
(a) if to Parent or Buyer, to:
 
Mobivity, Inc.
58 W. Buffalo St. #200
Chandler, AZ 85225
Email:

Attn: Dennis Becker, CEO

 
and
 
(b) if to Seller, to
 
Sequence LLC

Attn:

Section 9.02 Descriptive Headings.  The descriptive headings herein are inserted
for convenience only and are not intended to be part of or to affect the meaning
or interpretation of this Agreement.
 

 
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Section 9.03 Counterparts.  This Agreement may be executed in two or more
original or electronic counterparts, all of which shall be considered one and
the same agreement and shall become effective when two or more counterparts have
been signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
 
Section 9.04 Entire Agreement; Assignment.  This Agreement (a) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
(other than any confidentiality agreement between the parties; any provisions of
such agreements which are inconsistent with the transactions contemplated by
this Agreement being waived hereby) and (b) shall not be assigned by operation
of law or otherwise, provided that Buyer may assign its rights and obligations
to any other wholly owned subsidiary of Parent or Buyer, but no such assignment
shall relieve Buyer of its obligations hereunder if such assignee does not
perform such obligations.
 
Section 9.05 Governing Law; Jurisdiction.
 
(a) This Agreement shall be governed by and construed in accordance with the
laws of the State of Arizona as applied to agreements among the residents of
such state made and to be performed entirely within such state (without giving
effect to principles of conflicts of laws).
 
(b) Any dispute, controversy or claim, whether based on contract, tort, statute,
fraud, misrepresentation or any other legal theory (a “Dispute”) between the
Buyer or Parent, on the one hand, and Seller, on the other hand, arising out of
or relating to this Agreement, any obligations hereunder or the relationship of
the parties under this Agreement shall be settled by binding arbitration
conducted in Chandler, Arizona in accordance with the then current arbitration
rules of JAMS as modified by the following provisions of this Agreement:
 
(i) Selection of one neutral arbitrator by the parties shall be from JAMS panel
list and shall be chosen by the Seller and the Buyer together; provided, that if
the Seller and the Buyer are unable to reach agreement with respect to the
arbitrator, the arbitrator shall be chosen in accordance with appointment rules
of JAMS.  The arbitrator shall be experienced in complex business matters and
mergers and acquisitions transactions.
 
(ii) Proceedings in arbitration shall begin no later than 45 days after the
filing of the Dispute with JAMS and shall be scheduled to conclude no later than
180 days after the filing of the Dispute (including delivery of the written
judgment under clause (vi) below).
 
(iii) The Seller and the Buyer may obtain and take discovery, including requests
for production, interrogatories, requests for admissions and depositions, as
provided by the Federal Rules of Civil Procedure; provided that the arbitrator
may, in his discretion, set parameters on the timing and/or completion of this
discovery and may order additional pre-hearing exchange of information,
including, without limitation, exchange of summaries of testimony or exchange of
statements of positions.
 
(iv) The arbitration proceedings and all testimony, filings, documents and
information relating to or presented during the arbitration proceedings shall be
disclosed exclusively for the purpose of facilitating the arbitration process
and for no other purpose.
 
(v) The award of the arbitrator shall be made in a written opinion containing a
concise reasoned analysis of the basis upon which the award was made.
 
(vi) A judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof.
 

 
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(vii) The parties to any arbitration shall share equally the fees and costs of
JAMS and the arbitrator(s).  The prevailing party or parties shall be entitled
to recover from the adverse parties his, her or its actual reasonable attorneys’
fees and costs incurred in connection with the arbitration and the enforcement
thereof.
 
(viii) Any party may apply to a court having jurisdiction to:  (A) enforce this
agreement to arbitrate; (B) seek provisional injunctive relief so as to maintain
the status quo until the arbitration award is rendered or the controversy is
otherwise resolved; (C) avoid the expiration of any applicable limitations
period; (D) preserve a superior position with respect to other creditors; or (E)
challenge or vacate any final judgment, award or decision of the arbitrator(s)
that does not comport with the express provisions of Section 10.05(b)(ix).
 
(ix) The arbitrator is only authorized to, and only have the consent of the
parties to, interpret and apply the terms and conditions of this Agreement in
accordance with the governing law.  The arbitrator( is not authorized to, and
shall not, order any remedy not permitted by this Agreement and shall not change
any term or condition of this Agreement, deprive either party of any remedy
expressly provided hereunder or provide any right or remedy that has not been
expressly provided hereunder.  In the event that the arbitrator exceeds his
authority under this Agreement and violates this provision, either party may
petition a court of competent jurisdiction to vacate the arbitration award on
the grounds that the arbitrator exceeded his authority.
 
(x) The Federal Arbitration Act, 9 U.S.C. Sections 1 through 14 (as amended and
including any successor provision), except as modified hereby, shall govern the
interpretation and enforcement of this Section 9.05(b).
 
Notwithstanding the foregoing, the parties shall continue performing their
respective obligations under this Agreement while the Dispute is being resolved
unless and until such obligations are terminated or expire in accordance with
the provisions hereof.
 
Section 9.06 Specific Performance.  The parties hereto agree that if any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached, irreparable damage would occur, no
adequate remedy at law would exist and damages would be difficult to determine,
and that the parties shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at law or equity.
 
Section 9.07 Expenses.  Whether or not the Closing is consummated, 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 9.08 Bulk Sales Laws.  Buyer and Seller each hereby waive compliance by
Seller with the “bulk sales”, “bulk transfer” or similar laws of any
state.  Seller agrees to indemnify and Buyer harmless against any and all
claims, losses, damages, liabilities, costs and expenses incurred by Buyer or
any of its affiliates as a result of any failure to comply with any such “bulk
sales”, “bulk transfer” or similar laws.
 
Section 9.09 Parties in Interest.  This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person or
persons any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement.
 

 
[SIGNATURES APPEAR ON FOLLOWING PAGE]
 

 

 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
as of the date first written above.
 
MOBIVITY HOLDINGS CORP.

By:
Name:  Dennis Becker
Title:  Chief Executive Officer

MOBIVITY, INC.

By:
Name:  Dennis Becker
Title:  Chief Executive Officer

SEQUENCE LLC

By:
Name:
Title:

 
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EXHIBIT A to ASSET PURCHASE AGREEMENT
Assignment and Assumption Agreement

ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”), dated as of ___ __,
2013, between Mobivity, Inc., a Nevada corporation (“Buyer”) and Sequence LLC
(“Seller”).

WHEREAS, Seller and Buyer have concurrently herewith consummated the purchase by
Buyer of the Acquired Assets pursuant to the terms and conditions of the Asset
Purchase Agreement, dated _______, 2013, among Mobivity Holdings Corp., Buyer,
and Seller (the “Asset Purchase Agreement”; terms defined in the Asset Purchase
Agreement and not otherwise defined herein being used herein as therein
defined);

WHEREAS, pursuant to the Asset Purchase Agreement, Buyer has agreed to assume
certain liabilities and obligations of Seller;

NOW, THEREFORE, in consideration of the sale of the Acquired Assets and in
accordance with the terms of the Asset Purchase Agreement, Buyer and Seller
agree as follows:

1.           Seller does hereby sell, transfer, assign and deliver to Buyer all
of the right, title and interest of Seller in, to and under the Acquired Assets.

2.           Buyer does hereby accept all of the right, title and interest of
Seller in, to and under the Acquired Assets and Buyer assumes and agrees to
perform all of the Assumed Liabilities.

3.           This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.  It shall be governed by and construed in
accordance with the laws of the State of Arizona, without giving effect to
conflict of laws.  Any Dispute arising out of, based on, or in connection with
this Agreement or the transactions contemplated hereby shall be resolved in the
manner contemplated by the Asset Purchase Agreement.

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first written above.
MOBIVITY, INC.

By: 
Name:  Dennis Becker
Title:  Chief Executive Officer

SEQUENCE LLC

By: 
Name:
Title:  Chief Executive Officer

 
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Schedule 2.02(a)

Excluded Contracts

 
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Schedule 2.06(a)

Sequence Obligations

[Note:  List and description of obligations to be revised during due diligence]

Creditor/Obligation
 
Amount of Liability Represented by Seller
 
All liabilities of Seller to ArcTouch, Inc. (“ArcTouch”), including (without
limitation)  under the Master Services Agreement, dated May 2012, between
ArcTouch and GME Marketing Solutions, LLC
  $ 90,000.00            
Nevada Labor Board (Anthony Clarke)
       
Nevada Labor Board (Cindy Scott)
       
Nevada Labor Board (Kane Scott)
       
Nevada Labor Board (Theresa Hallenbeck)
       
Nevada Labor Board (Kathleen Haynes)
       
Nevada Labor Board (Marcia Pope)
       
Nevada Labor Board
    46, 501.30  
Internal Revenue Service
  $ 80,129.00  
All liabilities of Seller to Randazzo Parties, LLC (“Randazzo”), including
(without limitation)  under the Lease Agreement between Randazzo and the Company
  $ 25,000.00  
Roemer & Harnik, LLP
    7,000.00  
Tramel Holdings
  $ 51,369.70