Exhibit 10.1

 

Execution Version

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made and entered into
as of June 23, 2016 by and among FinTech Acquisition Corp., a Delaware
corporation (the “Company”), and Falcon Strategic Partners V, LP (the
“Purchaser”). Certain terms used and not otherwise defined in the text of this
Agreement are defined in Section 10 hereof.

 

RECITALS

 

WHEREAS, the Company and the Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities
Act”), and/or Rule 506 of Regulation D (“Regulation D”), as promulgated by the
United States Securities and Exchange Commission (the “Commission”) under the
Securities Act;

 

WHEREAS, the Company desires to sell to the Purchaser, and the Purchaser desires
to purchase from the Company, (i) shares of common stock, $0.001 par value per
share (the “Common Stock”), and (ii) shares of Series A Preferred Stock, $0.001
par value per share (the “Preferred Stock”), each in accordance with the terms
and provisions of this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties and covenants herein contained, the parties hereto
hereby agree as follows:

 

1.            Authorization of Shares. The Company has authorized the issuance
and sale of Common Stock and Preferred Stock for the respective per share prices
of $10.00 and $21.796, respectively, with the per share price for the shares of
Common Stock hereunder to be proportionately reduced in the event of an increase
in the number of such shares to be purchased in accordance with Section 2 below.
The shares of Common Stock issuable at Closing are referred to herein as the
“Common Shares” and the shares of Preferred Stock issuable at Closing are
referred to herein as the “Preferred Shares”. The Common Shares and Preferred
Shares are referred to collectively as the “Shares”.

 

2.            Sale and Purchase of the Shares. Upon the terms and subject to the
conditions herein contained, the Company agrees to sell to the Purchaser, and
the Purchaser agrees to purchase from the Company, at the Closing (as defined in
Section 3), 480,544 Common Shares, which number shall be adjusted at Closing, if
necessary so that the number of Common Shares to be purchased hereunder shall
represent an aggregate of 1.25% of the Company’s fully-diluted outstanding
Common Stock (including the exercise or conversion of all securities exercisable
for or convertible into Common Shares) following the closing of the Merger and
the issuance of Common Shares hereunder, calculated in accordance with Annex A,
and 1,500,000 Preferred Shares in exchange for payment of an aggregate purchase
price of $37,500,000 (the “Total Purchase Price”). At or prior to the Closing,
the Purchaser will pay the Total Purchase Price by wire transfer of immediately
available funds in accordance with wire instructions provided by the Company to
the Purchaser prior to the Closing, provided, that an amount of the Total
Purchase Price equal to the Escrow Fund (as defined below) shall not be paid to
the Company at the Closing but shall be delivered to the Escrow Agent (as
defined below) to be held pursuant to the terms of the Escrow Agreement (as
defined below). At or prior to the Closing, the Company will instruct its
transfer agent to deliver to the Purchaser evidence of a book entry position
evidencing the Common Shares and Preferred Stock purchased by the Purchaser
hereunder, registered in the name of the Purchaser, or in such nominee name(s)
as designated by the Purchaser on the signature page to this Agreement.

 

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3.            Closing. Subject to all conditions set forth in Section 7 having
been satisfied or waived, the closing (the “Closing”) with respect to the
transactions contemplated in Section 2 hereof shall take place remotely via the
exchange of documents and signatures and shall occur and be effective
immediately prior to the closing of the merger of Target with and into a
wholly-owned subsidiary of the Company (the “Merger”) as contemplated by the
Merger Agreement (as defined below), or at such other time and place as the
Company and Purchaser may agree in writing. At or prior to the Closing, the
Company and the Purchaser shall execute any related agreements or other
documents required to be executed hereunder, dated as of the date of the Closing
(the “Closing Date”).

 

4.            Representations and Warranties by the Company. The Company
represents and warrants to the Purchaser that, except as set forth on the
Disclosure Schedule delivered to the Purchaser concurrently with the execution
of this Agreement (the “Disclosure Schedule”), or as disclosed in the
Registration Statement on Form S-4 (including all annexes and exhibits thereto)
initially filed by the Company on May 5, 2016, as may be amended or supplemented
(the “Registration Statement”), or in the Company’s SEC Reports (as defined
below), the statements contained in this Section 4 are true and complete as of
the date of this Agreement and, based on certificates obtained from the
appropriate officers of Target (but without limiting the Company’s
responsibility therefor), will be true and complete as of the Closing Date, as
the case may be. Unless otherwise noted, Representations and Warranties made as
of the Closing Date shall be deemed to be made as of immediately following the
consummation of the transactions contemplated by the Merger Agreement and assume
that no party to the Merger Agreement waives, amends or otherwise modifies any
closing condition under the Merger Agreement, and, if such Representations and
Warranties are based on or relate to capitalization or share amounts, shall be
deemed to be based on Target’s capitalization as of June 6, 2016 and assume that
Closing occurs on July 15, 2016 and that no shares of Common Stock are redeemed
in connection with the Merger.

 

4.1.          Organization. The Company and each Subsidiary (a) is duly
incorporated or otherwise organized, validly existing and in good standing under
the laws of the jurisdiction of its formation, (b) is duly qualified to do
business as a foreign entity and is in good standing in each jurisdiction where
the nature of the property owned or leased by it or the nature of the business
conducted by it makes such qualification necessary, except where the failure to
be so qualified would not have a Material Adverse Effect, and (c) has all
requisite corporate power and authority to own or lease and operate its assets
and carry on its business as presently being conducted as disclosed in the SEC
Reports or the Registration Statement, as applicable. The Company’s certificate
of incorporation (or a form thereof), as in effect as of the Closing, and the
Company’s bylaws (or a form thereof), as in effect as of the Closing, are each
filed as exhibits to the SEC Reports or Registration Statement.

 

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4.2.         Capitalization.

 

(a)       As of the date hereof, without giving effect to the Closing, the
authorized capital stock of the Company consists of 25,000,000 shares of Common
Stock and 5,000,000 shares of preferred stock. As of immediately prior to the
Closing, there will be 13,733,333 shares of Common Stock issued and outstanding
and no shares of preferred stock issued and outstanding. As of immediately
following the Merger closing, the authorized capital stock of the Company will
consist of 200,000,000 shares of Common Stock and 10,000,000 shares of preferred
stock, of which 1,500,000 shares shall be designated as Preferred Stock, and
there will be 29,074,102 shares of Common Stock issued and outstanding and
1,500,000 shares of Preferred Stock issued and outstanding. All of the
outstanding shares of capital stock of the Company have been duly authorized,
validly issued and are fully paid and non-assessable.

 

(b)       As of the Closing, the Company will have reserved 3,466,928 shares of
Common Stock for issuance pursuant to the FTS Holding Corporation 2010 Stock
Option Plan, and 3,792,296 shares of Common Stock for issuance pursuant to the
2016 CardConnect Corp. Omnibus Equity Compensation Plan (the “2016 Plan”). Of
such reserved shares, 5,643,460 shares will be subject to outstanding option
awards or awards expected to be issued to executive officers of the Company in
connection with and following the closing of the Merger and 1,619,764 shares
will remain available for issuance to officers, directors, employees and
consultants of the Company and its affiliates pursuant to the 2016 Plan.

 

(c)       Other than pursuant to this Agreement and the transactions
contemplated thereby, there are no outstanding options, warrants, rights
(including conversion or preemptive rights and rights of first refusal or other
similar rights) or agreements, orally or in writing, to purchase or acquire from
the Company any shares of capital stock or any securities convertible into
shares of capital stock. There are no provisions of the Charter Documents, and
no Material Contracts, other than this Agreement, that (i) may affect or
restrict the voting rights of any Purchaser with respect to the Shares in its
capacity as a stockholder of the Company, (ii) restrict the ability of
Purchaser, or any successor thereto or assignee or transferee thereof, to
transfer the Shares, (iii) would adversely affect the Company’s or any
Purchaser’s right or ability to consummate the transactions contemplated by this
Agreement or comply with the terms of this Agreement and the transactions
contemplated hereby, (iv) require the vote of more than a majority of the
Company’s issued and outstanding Common Stock, voting together as a single
class, to take or prevent any corporate action, other than those matters
requiring a different vote under Delaware law, or (v) entitle any party to
nominate or elect any director of the Company or require any of the Company’s
stockholders to vote for any such nominee or other person as a director of the
Company in each case. There are no securities or instruments issued by or to
which the Company is a party containing anti-dilution or similar provisions that
will be triggered by the issuance of the Shares and there are no registration
rights existing or that will be triggered by the issuance of the Shares.

 

4.3.          Subsidiaries. Immediately following the Closing, the only
Subsidiaries of the Company will be FinTech Merger Sub, Inc., which will change
its name to FTS Holding Corporation in connection with the Merger, CardConnect,
LLC and Princeton Payment Solutions, LLC, each of which the Company will,
directly or indirectly, own beneficially and of record 100% of the outstanding
equity interests of each Subsidiary.

 

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4.4.          Consents. Neither the execution, delivery or performance of this
Agreement by the Company, nor the consummation by it of the obligations and
transactions contemplated hereby (including, without limitation, the issuance,
the reservation for issuance and the delivery of the Shares and the provision to
the Purchaser of the rights contemplated by the Transaction Documents) requires
any consent of, authorization by, exemption from, filing with or notice to any
Governmental Entity or any other Person, other than filings required under
applicable U.S. federal and state securities laws and the approval of Target and
the lenders under the Senior Loan Documentation in connection with the Merger
(which approval has been obtained).

 

4.5.          Authorization; Enforcement. The Company has all requisite
corporate power and has taken all necessary corporate action required for the
due authorization, execution, delivery and performance by the Company of this
Agreement and the other Transaction Documents and the consummation of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance, the reservation for issuance and the delivery of the Shares and the
provision to the Purchaser of the rights contemplated by the Transaction
Documents). The execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the transactions contemplated
hereby (including, without limitation, the issuance of the Shares and the
provision to the Purchaser of the rights contemplated by the Transaction
Documents), have been duly authorized by the Company’s board of directors or a
duly authorized committee thereof and no further consent or authorization of the
Company, its board of directors or its stockholders is required. This Agreement
has been duly executed and delivered by the Company, and the other instruments
referred to herein to which it is a party will be duly executed and delivered by
the Company, and each such agreement constitutes or will constitute a legal,
valid and binding obligation of the Company enforceable against it in accordance
with its terms, except to the extent that enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and
any other laws of general application affecting enforcement of creditors’ rights
generally, and as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.

 

4.6.          Valid Issuance of Shares. The Shares have been duly and validly
authorized and, when issued and paid for pursuant to this Agreement, the Shares
will be validly issued, fully paid and non-assessable, and shall be free and
clear of all Liens, and will not be subject to preemptive rights or other
similar rights of stockholders of the Company.

 

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4.7.          No Conflicts. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby
(including, without limitation, the issuance, the reservation for issuance and
the delivery of the Shares and the provision to the Purchaser of the rights
contemplated by the Transaction Documents) will not (a) result in a violation of
the certificate of incorporation, the by-laws or any equivalent organizational
document of the Company or any Subsidiary (the “Charter Documents”) or require
the approval of the Company’s stockholders, (b) violate, conflict with or result
in the breach of the terms, conditions or provisions of or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or give rise to any right of termination, acceleration or cancellation
under, any Material Contract to which the Company or any Subsidiary is a party,
(c) result in a violation of any law, rule, regulation, order, judgment or
decree (including, without limitation, U.S. federal and state securities laws
and regulations and regulations of any self-regulatory organizations to which
the Company or its securities are subject) applicable to the Company or any
Subsidiary or by which any property or asset of the Company or any Subsidiary is
bound or affected, (d) result in a violation of or require stockholder approval
under any rule or regulation of The NASDAQ Stock Market, or (e) result in the
creation of any Lien upon any of the Company’s or any of its Subsidiary’s
assets, except, in the case of subsections (b), (c) and (e), which would not,
individually or in the aggregate, have a Material Adverse Effect. Neither the
Company nor any Subsidiary is (i) in violation of its Charter Documents, (ii) in
default (and no event has occurred which, with notice or lapse of time or both,
would cause the Company or any Subsidiary to be in default) under, nor has there
occurred any event, other than those contemplated by the Merger Agreement,
giving others (with notice or lapse of time or both) any rights of termination,
amendment, acceleration or cancellation of, any material agreement, indenture or
instrument to which the Company or any Subsidiary is a party, nor has the
Company or any Subsidiary received written notice of a claim that it is in
default under, or that it is in violation of, any Material Contract (whether or
not such default or violation has been waived), except as would not,
individually or in the aggregate, have a Material Adverse Effect, (iii) in
violation of, or in receipt of written notice that it is in violation of, any
law, ordinance or regulation of any Governmental Entity, except where the
violation would not result in a Material Adverse Effect, and (iv) in violation
of any order of any Governmental Entity having jurisdiction over the Company or
any Subsidiary or any of the Company’s or any Subsidiary’s properties or assets.

 

4.8.          The Nasdaq Capital Market. The Common Stock is listed on The
Nasdaq Capital Market, and, except as disclosed in the SEC Reports, to the
Company’s Knowledge, there are no proceedings to revoke or suspend such listing.
The Company has applied for continued listing of the Common Stock thereon and as
of the Closing Date the Common Stock shall have been approved for continued
listing on The Nasdaq Capital Market, subject to official notice of issuance,
and the execution, delivery and performance of this Agreement by the Company and
the consummation by the Company of the transactions contemplated hereby
(including the issuance of the Shares) will not result in any noncompliance by
the Company with any Nasdaq listing requirements.

 

4.9.          Material Contracts. Except as set forth in Section 4.9 of the
Disclosure Schedule, each Material Contract is valid, binding and enforceable on
the Company or Subsidiary party to or bound by such agreement in accordance with
its terms except as such enforceability may be limited by applicable insolvency,
bankruptcy, reorganization, moratorium or other similar laws affecting
creditors’ rights generally and applicable equitable principles (whether
considered in a proceeding at law or in equity). None of the Company or, to the
Company’s Knowledge, any other party thereto is in breach of or default under
(or is alleged to be in breach of or default under) in any material respect, or
has provided or received any notice of any intention to terminate, any Material
Contract, except as would not reasonably be expected to have a Material Adverse
Effect. No event or circumstance has occurred that, with notice or lapse of time
or both, would reasonably be expected to constitute an event of default under
any Material Contract or result in a termination thereof or would cause or
permit the acceleration or other changes of any right or obligation or the loss
of any material benefit thereunder, except as would not reasonably be expected
to have a Material Adverse Effect. Complete and correct copies of each Material
Contract (including all modifications, amendments and supplements thereto) have
been made available to Purchaser.

 

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4.10.       Previous Issuances. All shares of capital stock and other securities
previously issued by FinTech Acquisition Corp. and FinTech Merger Sub, Inc. have
been issued in transactions registered under or exempt from the registration
requirements under the Securities Act and all applicable state securities or
“blue sky” laws, and in compliance with all applicable corporate laws. Neither
FinTech Acquisition Corp. nor FinTech Merger Sub, Inc. has violated the
Securities Act or any applicable state securities or “blue sky” laws in
connection with the previous issuance of any shares of capital stock or other
securities.

 

4.11.       No Integrated Offering. Neither the Company, any Subsidiary, nor any
of the Company’s or any Subsidiary’s Affiliates or any other Person acting on
the Company’s or any Subsidiary’s behalf, has directly or indirectly engaged in
any form of general solicitation or general advertising with respect to the
Shares, nor have any of such Persons made any offers or sales of any security of
the Company, any Subsidiary or any of the Company’s or any Subsidiary’s
Affiliates or solicited any offers to buy any security of the Company, any
Subsidiary or any of the Company’s or any Subsidiary’s Affiliates under
circumstances that would require registration of the Shares under the Securities
Act or any other securities laws or cause this offering of Shares to be
integrated with any prior offering of securities of the Company or any
Subsidiary for purposes of the Securities Act in any manner that would affect
the validity of the private placement exemption under the Act for the offer and
sale of the Shares hereunder. Notwithstanding anything herein to the contrary,
and without prejudice to the representations set forth in this Section 4.11 or
Section 5.11, in the event of any general solicitation or advertising with
respect to the Shares, the Company hereby represents that it has satisfied the
requirements set forth in Rule 506(c) of Regulation D under the Securities Act
with respect to the offer and sale of Shares contemplated by this Agreement.

 

4.12.       SEC Reports; Financial Statements.

 

(a)       The Company’s Common Stock is registered under Section 12 of the
Exchange Act. The Company has filed all reports, schedules, forms, statements
and other documents required to be filed by the Company under the Securities Act
and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
since February 19, 2015 (the foregoing materials, including the exhibits thereto
and documents incorporated by reference therein, being collectively referred to
herein as the “SEC Reports”) on a timely basis or has received a valid extension
of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act and, in each case, to the rules promulgated thereunder, as
applicable, and none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
Company has delivered to the Purchaser, or the Purchaser has had access to, true
and complete copies of the SEC Reports and all agreements to which the Company
or any Subsidiary is a party or to which the property or assets of the Company
or any Subsidiary are subject, which are required to be described in or filed as
exhibits to an SEC Report, and which have been so described or filed.

 

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(b)       The financial statements and the related notes of the Company included
in the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been
prepared in accordance with GAAP, except as may be otherwise specified in such
financial statements or the notes thereto; provided, however, that unaudited
financial statements may not contain all footnotes required by GAAP, and (ii)
fairly present the consolidated financial position of the Company as of and for
the dates thereof and the consolidated results of operations and cash flows for
the periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments and reclassifications. There is no
transaction, arrangement, or other relationship between the Company or any
Subsidiary and an unconsolidated or other off balance sheet entity that is
required to be disclosed by the Company in SEC Reports and is not so disclosed
and would have or reasonably be expected to result in a Material Adverse Effect.

 

4.13.       Disclosure Controls and Procedures. The Company has established and
maintains disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) that are effective in all material respects to ensure
that material information relating to the Company, including any consolidated
Subsidiaries, is made known to its chief executive officer and chief financial
officer by others within those entities. The Company’s certifying officers have
evaluated the effectiveness of the Company’s disclosure controls and procedures
as of the end of the period covered by the most recently filed quarterly or
annual periodic report under the Exchange Act (such date, the “Evaluation
Date”). The Company presented in its most recently filed quarterly or annual
periodic report under the Exchange Act the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date.

 

4.14.       Accounting Controls. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that: (i) all
assets, liabilities and transactions are accurately and timely recorded in all
material respects and as necessary to permit preparation of audited financial
statements and to maintain accountability for the assets and (ii) transactions
are executed and access to records is permitted only in accordance with
management’s authorization.

 

4.15.       Absence of Litigation. Except as set forth in Section 4.15 of the
Disclosure Schedule, there is no claim, action, suit, arbitration, investigation
or other proceeding pending against, or to the Knowledge of the Company and each
Subsidiary, threatened against the Company, any Subsidiary or any of the
Company’s or any Subsidiary’s properties or, to the Knowledge of the Company and
each Subsidiary, any of its respective officers or directors before any
Governmental Entity. Neither the Company nor any Subsidiary, nor to the
Company’s Knowledge, any director or officer thereof, is or has been the subject
of any action involving a claim of violation of or liability under federal or
state securities laws or a claim of breach of fiduciary duty relating to the
Company or any Subsidiary. There has not been, and to the Knowledge of the
Company and each Subsidiary, there is not pending or contemplated, any
investigation by the Commission of the Company or any Subsidiary or any current
director or officer of the Company or any Subsidiary. The Company has not
received any stop order or other order suspending the effectiveness of any
registration statement filed by the Company under the Exchange Act or the
Securities Act and, to the Company’s Knowledge, the Commission has not issued
any such order.

 

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4.16.        Taxes. The Company and each Subsidiary has properly filed all
federal, foreign, state, local, and other tax returns and reports which are
required to be filed by it, which returns and reports were properly completed
and are true and correct in all material respects, and all taxes, interest, and
penalties due and owing have been timely paid. There are no outstanding waivers
or extensions of time with respect to the assessment or audit of any tax or tax
return of the Company or any Subsidiary, or claims now pending or matters under
discussion between the Company and any taxing authority in respect of any tax of
the Company. The Company has no material uncertain tax positions pursuant to
FASB Accounting Standards Codification Topic 740, Income Taxes.

 

4.17.         Employee Matters.

 

(a)       The Company has disclosed in the SEC Reports any “employee benefit
plan” subject to the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), that it or any Subsidiary maintains for employees (without giving
effect to the Merger closing).

 

(b)      No director or officer or other employee of the Company or any
Subsidiary will become entitled to any retirement, severance, change of control,
or similar benefit or enhanced or accelerated benefit (including any
acceleration of vesting) or lapse of repurchase rights or obligations with
respect to any employee benefit plan subject to ERISA or other benefit under any
compensation plan or arrangement of the Company (each, an “Employee Benefit
Plan”) as a result of the transactions contemplated in this Agreement (and
without giving effect to the Merger closing).

 

(c)       No executive officer, to the Knowledge of the Company and each
Subsidiary, is, or is now reasonably expected to be, in violation of any term of
any employment contract, confidentiality, disclosure or proprietary information
agreement or non-competition agreement, or any other contract or agreement or
any restrictive covenant with the Company or any Subsidiary, and, to the
knowledge of the Company and each Subsidiary, the continued employment of each
such executive officer does not subject the Company or any Subsidiary to any
material liability with respect to any of the foregoing matters.

 

(d)       The Company and each Subsidiary is, and for the last three (3) years
has been in compliance in all material respects with, all applicable Laws
respecting labor and employment. Except as set forth in Section 4.17 of the
Disclosure Schedule, there are no pending or the Company’s Knowledge,
threatened, claims against any the Company or any Subsidiary on account of any
labor or employment matter or action. Except as set forth in Section 4.17 of the
Disclosure Schedule, neither the Company nor any Subsidiary is: (i) a party to
or otherwise bound by any collective bargaining; (ii) a party to, or the
Company’s Knowledge, threatened by, any unfair labor practice charge or
complaint, grievance or labor arbitration; or (iii) currently negotiating any
collective bargaining agreement to which the Company or any Subsidiary is or
would be a party. In the last year, neither the Company or any Subsidiary has
experienced any strike, lockout, slowdown or work stoppage, nor, to the
Company’s Knowledge, is any such action threatened. There is not pending, nor
has there ever been, any union election petition filed with the National Labor
Relations Board, or, to the Company’s Knowledge, union organizing activity by or
for the benefit of the employees of the Company or any Subsidiary or otherwise
affecting the Company or any Subsidiary. To the Company’s Knowledge, there are
no pending audits or investigations by any Governmental Entity involving any
Employee Benefit Plan and no threatened or pending material claims (except for
individual claims for benefits payable in the normal operation of the Employee
Benefit Plans), suits or proceedings involving any Employee Benefit Plan or
asserting any rights or claims to benefits under any Employee Benefit Plan, nor,
to the Company’s Knowledge, are there any facts which could reasonably be
expected to give rise to any material liability in the event of any such audit,
investigation, claim, suit or proceeding.

 

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4.18.       Compliance with Laws. The Company and each Subsidiary is now, and
for the past five (5) years has been, in compliance in all material respects
with all Laws applicable to it and its business. All franchises, permits,
licenses and other rights obtained from any Government Authority necessary for
the Company to operate its business (“Permits”) have been obtained by it and are
valid and in full force and effect. All fees and charges with respect to such
Permits as of the date hereof have been paid in full. Section 4.18 of the
Disclosure Schedules lists all current Permits issued to the Company. No event
has occurred that, with or without notice or lapse of time or both, would
reasonably be expected to result in the revocation, suspension, lapse or
limitation of any Permit set forth in Section 4.18 of the Disclosure Schedules.

 

4.19.       Brokers. Except for Piper Jaffray & Co. and Financial Technology
Partners LP, there is no investment banker, broker, finder or financial advisor
that has been retained by or is authorized to act on behalf of the Company or
any Subsidiary who is entitled to any fee or commission in connection with the
transactions contemplated by this Agreement.

 

4.20.       Environmental Matters.

 

(a)       (i) No written notice, notification, demand, request for information,
citation, summons, complaint or order has been received by, and no
investigation, action, claim, suit, proceeding or review is to the knowledge of
the Company and each Subsidiary, pending or threatened by any Governmental
Entity against the Company or any Subsidiary and no penalty has been assessed
against the Company or any Subsidiary with respect to any matters relating to or
arising out of any Environmental Law; (ii) the Company and each Subsidiary is in
compliance with all Environmental Laws except where the failure to comply would
not have a Material Adverse Effect; and (iii) to the knowledge of the Company
and each Subsidiary, there are no liabilities of or relating to the Company or
any Subsidiary relating to or arising out of any Environmental Law except such
as would not have a Material Adverse Effect, and, to the knowledge of the
Company and each Subsidiary, there is no existing condition, situation or set of
circumstances which could reasonably be expected to result in such a liability.

 

(b)       For purposes of this Agreement, the term “Environmental Laws” means
federal, state, local and foreign statutes, laws, judicial decisions,
regulations, ordinances, rules, judgments, orders, codes, injunctions, permits
and governmental agreements relating to human health and the environment,
including, but not limited to, Hazardous Materials; and the term “Hazardous
Material” means all substances or materials regulated as hazardous, toxic,
explosive, dangerous, flammable or radioactive under any Environmental Law
including, but not limited to: (i) petroleum, asbestos, or polychlorinated
biphenyls and (ii) in the United States, all substances defined as Hazardous
Substances, Oils, Pollutants or Contaminants in the National Oil and Hazardous
Substances Pollution Contingency Plan.

 

 - 9 - 

 

 

4.21.       Intellectual Property Matters.

 

(a)       Section 4.21(a) of the Disclosure Schedules lists all (i) Company IP
Registrations, indicating as to each item as applicable: (a) the owner; (b) the
jurisdictions in which such item is issued or registered or in which any
application for issuance or registration has been filed, (c) the respective
issuance, registration, or application number of the item, and (d) the dates of
application, issuance or registration of the item; and (ii) software included in
the Company Intellectual Property (listed by major point version) material to
the business or operations of the Company and its Subsidiaries. All required
filings and fees related to the Company IP Registrations have been timely filed
with and paid to the relevant Governmental Entities and authorized registrars,
and all Company IP Registrations are otherwise in good standing. The Company has
provided Purchaser with true and complete copies of any material file histories,
documents, certificates, office actions, correspondence and other materials
related to all Company IP Registrations.

 

(b)       Section 4.21(b) of the Disclosure Schedules lists all Company IP
Agreements that are (i) licenses of Company Intellectual Property granted to a
third party other than in the ordinary course of business or (ii) licenses of
Intellectual Property granted by a third party and material to the business or
operations of the Seller; or (iii) otherwise material to the business or
operations of the Company or any Subsidiary. The Company has provided Purchaser
with true and complete copies of all such Company IP Agreements, including all
modifications, amendments and supplements thereto and waivers thereunder. Each
Company IP Agreement is valid and binding on the Company in accordance with its
terms and is in full force and effect and neither the Company nor any other
party thereto is in breach of or default under (or is alleged to be in breach of
or default under), or has provided or received any notice of breach or default
of or any intention to terminate, any such Company IP Agreement.

 

(c)       Except as set forth in Section 4.21(c) of the Disclosure Schedules,
the Company, Target or one of their respective Subsidiaries is the sole and
exclusive legal and beneficial, and with respect to the Company IP
Registrations, record, owner of all right, title and interest in and to the
Company Intellectual Property, and has the valid right to use all other
Intellectual Property used in or necessary for the conduct of the Company’s
business or operations, in each case, free and clear of Liens other than
Permitted Liens. Without limiting the generality of the foregoing, the Company
(or its predecessors) has obtained binding, written agreements with every
current and former employee, and with every current and former independent
contractor, whereby such employees and independent contractors (i) assign to the
Company any ownership interest and right they may have in the Company
Intellectual Property; and (ii) acknowledge the Company’s exclusive ownership of
all Company Intellectual Property. The Company has provided Purchaser with true
and complete copies of all such agreements.

 

 - 10 - 

 

 

(d)       The Company’s rights in the Company Intellectual Property are
subsisting and enforceable and, to the Company’s Knowledge, valid. The Company
has taken commercially reasonable steps to maintain the Company Intellectual
Property and to protect and preserve the confidentiality of all trade secrets
included in the Company Intellectual Property.

 

(e)       The conduct of the business, and the products, processes and services
of the Company, have not infringed, misappropriated, diluted or otherwise
violated, and do not and will not infringe, dilute, misappropriate or otherwise
violate the Intellectual Property or other rights of any Person, and no Person
has infringed, misappropriated, diluted or otherwise violated, or is currently
infringing, misappropriating, diluting or otherwise violating, any Company
Intellectual Property.

 

(f)        Except as set forth in Section 4.21(f) of the Disclosure Schedule, no
computer software owned, purported to be owned, or developed for use in the
business includes, comprises or was developed using any software subject to open
source, “copyleft” or similar licensing terms, including the GNU General Public
License, where such use or incorporation would (i) dedicate to the public domain
such software, (ii) otherwise require the free licensure of such software or
public disclosure of the source code of such software to other Persons, or (iii)
prevent the Company or a Subsidiary from claiming ownership of or otherwise
enforcing Intellectual Property rights in such software.

 

(g)       Except as set forth in Section 4.21(g) of the Disclosure Schedule,
there are no Legal Proceedings (including any oppositions, interferences or
re-examinations) settled, pending or, to the Company’s Knowledge, threatened
(including in the form of offers to obtain a license): (i) alleging any
infringement, misappropriation, dilution or violation of the Intellectual
Property of any Person by the Company; (ii) challenging the validity,
enforceability, registrability or ownership of any Company Intellectual Property
or the Company’s rights with respect to any Company Intellectual Property; or
(iii) by the Company or any other Person alleging any infringement,
misappropriation, dilution or violation by any Person of the Company
Intellectual Property. The Company is not subject to any outstanding or
prospective Governmental Order (including any motion or petition therefor) that
does or would restrict or impair the use of any Company Intellectual Property.

 

4.22.        Privacy and Data Security.

 

(a)       Privacy Policy. The Company (including its Subsidiaries) has a privacy
policy regarding the collection, use and disclosure of personal information in
connection with the operation of its business which is in the Company and or any
Subsidiaries’ possession, custody or control, or otherwise held or processed on
its behalf and the Company and each Subsidiary and is and has been in compliance
with such privacy policy. True and complete copies of all privacy policies that
have been used by the Company and any Subsidiary at any time during the
preceding five (5) years have been provided or made available to the Purchaser.
The Company (including its Subsidiaries) has posted a privacy policy in a clear
and conspicuous location on all websites owned or operated by it.

 

(b)       Compliance with Privacy and Data Security Laws. The Company (including
its Subsidiaries) has complied at all times with all applicable Laws regarding
the collection, retention, use and protection of personal information, including
the Payment Card Industry Data Security Standards.

 

 - 11 - 

 

 

(c)       Privacy and Data Security Contractual Obligations. The Company
(including its Subsidiaries) is in compliance with the terms of all Material
Contracts to which such entity is a party relating to data privacy, security or
breach notification (including provisions that impose conditions or restrictions
on the collection, use, disclosure, transmission, destruction, maintenance,
storage or safeguarding of personal information).

 

(d)       Privacy and Data Security Complaints and Investigations. No Person
(including any Governmental Authority) has commenced any Legal Proceeding
relating to the Company or any Subsidiary’s information privacy or data security
practices, including with respect to the access, disclosure or use of personal
information maintained by or on behalf of the Company or any Subsidiary, or, to
the Company’s Knowledge, threatened any such Legal Proceeding, or made any
complaint, investigation or inquiry relating to such practices.

 

(e)       Effect of the Transaction. The execution, delivery and performance of
this Agreement and the consummation of the contemplated transactions, including
any transfer of personal information resulting from such transactions, will not
violate the privacy policy of the Company or any Subsidiary as it currently
exists.

 

(f)       Security Measures. The Company and its Subsidiaries have established
and implemented policies, programs and procedures that are commercially
reasonable, in material compliance with applicable industry practices and
appropriate, including administrative, technical and physical safeguards to
protect the confidentiality, integrity and security of personal information in
its possession, custody or control against unauthorized access, use,
modification, disclosure or other misuse.

 

(g)       Security Breaches and Unauthorized Use. The business of the Company
and its Subsidiaries have not experienced any loss, damage, or unauthorized
access, disclosure, use or breach of security of any personal information in the
possession, custody or control, or the Company or any Subsidiary or otherwise
held or processed on its behalf.

 

4.23.        Software and IT.

 

(a)       The Company’s Systems are reasonably sufficient for the immediate and
anticipated needs of its business, including as to capacity, scalability, and
ability to process current and anticipated peak volumes in a timely manner. The
Company’s Systems are in sufficiently good working condition to perform all
information technology operations and include sufficient licensed capacity
(whether in terms of authorized sites, units, users, seats or otherwise) for all
software, in each case as necessary for the conduct of its business.

 

(b)       In the last five years, there has been no unauthorized access, use,
intrusion or breach of security, or material failure, breakdown, performance
reduction or other adverse event affecting any of the Company’s Systems, that
has caused or would reasonably be expected to cause any: (i) substantial
disruption of or interruption in or to the use of such Systems or the conduct of
the business of the Company or its Subsidiaries; (ii) loss, destruction, damage
or harm of the Company or any Subsidiary or any of their business or operations,
personnel, property or other assets; or (iii) liability of any kind to the
Company or its Subsidiaries or their business. The Company (including its
Subsidiaries) has taken commercially reasonable actions, consistent with
applicable industry best practices, to protect the integrity and security of its
Systems and the data and other information stored thereon.

 

 - 12 - 

 

 

(c)       The Company and its Subsidiaries maintain commercially reasonable
back-up and data recovery, disaster recovery and business continuity plans,
procedures and facilities, act in material compliance therewith, and test such
plans and procedures on a regular basis, and such plans and procedures have been
proven effective upon such testing.

 

4.24.        Related-Party Transactions. Except as disclosed in the SEC Reports
or the Registration Statement, there are no transactions, agreements,
arrangements or understandings between the Company or a Subsidiary, on the one
hand, and any director, officer or stockholder (or Affiliate thereof) of the
Company or any Subsidiary, on the other hand, either (a) currently in effect or
(b) that would be required to be disclosed under Item 404 of Regulation S-K
promulgated under the Securities Act.

 

4.25.        Title to Property and Assets. The Company and its Subsidiaries have
good and valid title to, or a valid leasehold interest in, all Leased Real
Property and material tangible personal property and other material assets
reflected in the Company’s balance sheet as of the Balance Sheet Date, other
than properties and assets sold or otherwise disposed of in the ordinary course
of business consistent with past practice since the date of the Company’s
balance sheet as of the Balance Sheet Date. All such properties and assets
(including leasehold interests) are free and clear of Liens except for Permitted
Liens. Except as set forth in Section 4.23 of the Disclosure Schedules, the
buildings, plants, structures, furniture, fixtures, machinery, equipment,
vehicles and other items of tangible personal property of the Company are
structurally sound, are in good operating condition and repair, and are adequate
for the uses to which they are being put, and none of such buildings, plants,
structures, furniture, fixtures, machinery, equipment, vehicles and other items
of tangible personal property is in need of maintenance or repairs except for
ordinary, routine maintenance and repairs that are not material in nature or
cost.

 

4.26.        Absence of Changes. Since the Balance Sheet Date, there has not
been any Material Adverse Effect or any event or events that individually or in
the aggregate would reasonably be expected to have a Material Adverse Effect.
Since the Balance Sheet Date, neither the Company nor any of its Subsidiaries
(i) has declared or paid any dividend or distribution of any kind, (ii) has
sustained any material loss or interference with the Company’s or any
Subsidiary’s business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor disturbance or dispute or any
action, order or decree of any court or arbitrator or governmental or regulatory
authority, or (iii) has incurred any liabilities in excess of $500,000 except in
the ordinary course of business and consistent with past practice or in
connection with the pending Merger and other transactions expressly contemplated
by the Merger Agreement (including the exhibits thereto).

 

4.27.        Suppliers and Customers. Neither the Company nor any Subsidiary has
any knowledge of any termination, cancellation or threatened termination or
cancellation or limitation of, or any material dissatisfaction with, the
business relationship between the Company or any Subsidiary and any material
supplier, customer, vendor, customer or client.

 

 - 13 - 

 

 

4.28.        Indebtedness. Since the Balance Sheet Date, other than as set forth
on Section 4.27 of the Disclosure Schedules or Permitted Indebtedness, neither
the Company nor any Subsidiary (i) has incurred any Indebtedness in excess of
$150,000 in the aggregate except unsecured current obligations and Liabilities
incurred in the ordinary course of business consistent with past practice, or
(ii) is in violation of any term of or in default under any contract, agreement
or instrument to which it is a party or by which it is bound relating to any
Indebtedness, except where such violations and defaults would not result,
individually or in the aggregate, in a Material Adverse Effect or potential
future violations relating to the inability to honor conversions of indebtedness
into Common Stock due to having an insufficient number of shares of Common Stock
authorized and available for issuance.

 

4.29.        Investment Company. The Company is not, and is not an Affiliate of,
and immediately after receipt of payment for the Shares, will not be or be an
Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

 

4.30.        Accountants. Marcum LLP, who expressed their opinion with respect
to the financial statements included in the SEC Reports, are independent
accountants as required by the Exchange Act and the rules and regulations
promulgated thereunder. There are no material disagreements relating to the
preparation of the Company’s financial statements presently existing or, to the
Company's Knowledge, reasonably anticipated to arise between the Company and
Marcum LLP.

 

4.31.       Application of Takeover Protections. The Company and its Board of
Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s Charter Documents or the laws of its
state of incorporation (including Section 203 of the Delaware General
Corporation Law) that is or could become applicable to the Purchaser as a result
of such Purchaser and the Company fulfilling their obligations or exercising
their rights under this Agreement, including without limitation as a result of
the Company’s issuance of the Shares and the Purchaser’s ownership of the
Shares.

 

4.32.        Foreign Corrupt Practices. Since January 1, 2011, neither the
Company, its Subsidiaries, nor to the Company’s and each Subsidiary’s Knowledge,
any director, officer, agent, employee or other person acting on behalf of the
Company or any Subsidiary has, in the course of its actions for, or on behalf
of, the Company or any Subsidiary (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated or is in violation of in any material respect any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee.

 

 - 14 - 

 

 

4.33.        Private Placement. Neither the Company nor its Subsidiaries or any
affiliates, nor any person acting on its or their behalf, has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under any circumstances that would require registration of the
Shares under the Securities Act. Assuming the accuracy of the representations
and warranties of the Purchasers contained in Section 5 hereof, the issuance of
the Shares are exempt from registration under the Securities Act.

 

4.34.        Acknowledgment Regarding Purchaser’s Purchase of Securities. The
Company acknowledges and agrees that the Purchaser is acting solely in the
capacity of an arm’s length purchaser with respect to this Agreement and the
transactions contemplated hereby. The Company further acknowledges that the
Purchaser is not acting as a financial advisor or fiduciary of the Company (or
in any similar capacity with respect to the Company) with respect to this
Agreement and the transactions contemplated hereby and any advice given by the
Purchaser or its representatives or agents to the Company in connection with
this Agreement and the transactions contemplated hereby is merely incidental to
such Purchaser’s purchase of the Shares. The Company further represents to the
Purchaser that the Company’s decision to enter into this Agreement has been
based on the independent evaluation of the transactions contemplated hereby by
the Company and its representatives.

 

4.35.        Insurance. The Company is insured against such losses and risks and
in such amounts as the Company believes are prudent and customary for a company
(i) in the businesses and location in which the Company is engaged, (ii) with
the resources of the Company, and (iii) at a similar stage of development as the
Company. The Company has not received any written notice that the Company will
not be able to renew its existing insurance coverage as and when such coverage
expires. The Company believes it will be able to obtain similar coverage at
reasonable cost from similar insurers as may be necessary to continue its
business.

 

4.36.        No Manipulation of Stock. Neither the Company, nor any of its
Affiliates, has taken, nor will any of them take, directly or indirectly any
action designed to stabilize or manipulate the price of the Common Stock, the
Preferred Stock or any security of the Company to facilitate the sale or resale
of any of the Shares.

 

4.37.        Ability to Conduct Transactions under Rule 506. The Company is not,
to the best of its Knowledge, disqualified under Rule 506(d) of the Securities
Act from conducting an offering pursuant to Rule 506, and all disclosures, if
any, required by such Rule 506(d) to be disclosed to any Purchaser have been set
forth herein.

 

5.            Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to the Company that the statements contained in this
Section 5 are true and complete as of the date of this Agreement and will be
true and complete as of the Closing Date:

 

5.1.          Authorization. The execution, delivery and performance of this
Agreement and the other instruments referred to herein, in each case to which
the Purchaser is a party or is bound, and the consummation by the Purchaser of
the transactions contemplated hereby and thereby, have been duly authorized by
all necessary corporate, partnership, limited liability or similar actions, as
applicable, on the part of such Purchaser. This Agreement has been duly executed
and delivered by the Purchaser, and the other instruments referred to herein to
which it is a party will be duly executed and delivered by the Purchaser, and
each such agreement and other instruments constitutes or will constitute a valid
and binding obligation of the Purchaser, enforceable against it in accordance
with its terms, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, and any other laws of general
application affecting enforcement of creditors’ rights generally, and as limited
by laws relating to the availability of specific performance, injunctive relief,
or other equitable remedies.

 

 - 15 - 

 

 

5.2.          Brokers. There is no broker, investment banker, financial advisor,
finder or other Person which has been retained by or is authorized to act on
behalf of the Purchaser who might be entitled to any fee or commission for which
the Company will be liable in connection with the execution of this Agreement
and the consummation of the transactions contemplated hereby.

 

5.3.          Private Placement. The Purchaser understands and agrees that the
offering and sale of the Shares has not been registered under the Securities Act
or any applicable state securities laws and is being made in reliance upon
federal and state exemptions for transactions not involving a public offering
which depend upon, among other things, the bona fide nature of the investment
intent and the accuracy of the Purchaser’s representations as expressed herein.

 

5.4.         Acquisition for Own Account. The Purchaser is acquiring the Shares
for its own account for investment and not with a view toward distribution in a
manner which would violate the Securities Act or any applicable state securities
laws.

 

5.5.          Ability to Protect Its Own Interests and Bear Economic Risks. The
Purchaser, by reason of the business and financial experience of its management,
has the capacity to protect its own interests in connection with the
transactions contemplated by this Agreement and is capable of evaluating the
merits and risks of the investment in the Shares. The Purchaser is able to bear
the economic risk of an investment in the Shares and is able to sustain a loss
of all of its investment in the Shares without economic hardship, if such a loss
should occur.

 

5.6.          Accredited Investor. The Purchaser is an “accredited investor” as
that term is defined in Regulation D promulgated under the Securities Act.

 

5.7.          Access to Information. The Purchaser has been given access to
Company documents, records, and other information, and has had adequate
opportunity to ask questions of, and receive answers from, the Company’s
officers, employees, agents, accountants, and representatives concerning the
Company’s business, operations, financial condition, assets, liabilities, and
all other matters relevant to its investment in the Shares. The foregoing,
however, does not limit or modify the representations and warranties of the
Company in Section 4 of this Agreement or the right of the Purchaser to rely
thereon.

 

5.8.          Restricted Shares.

 

(a)       The Purchaser understands that the Shares will be characterized as
“restricted securities” under the federal securities laws inasmuch as they are
being acquired from the Company in a private placement under Section 4(a)(2) of
the Securities Act and that under such laws and applicable regulations such
Shares may be resold without registration under the Securities Act only in
certain limited circumstances.

 

 - 16 - 

 

 

(b)       The Purchaser acknowledges that the Shares must be held indefinitely
unless subsequently registered under the Securities Act and under applicable
state securities laws or an exemption from such registration is available. The
Purchaser understands that the Company is under no obligation to register the
Shares.

 

(c)       The Purchaser is aware of the provisions of Rule 144 under the
Securities Act which permits limited resales of securities purchased in a
private placement.

 

5.9.          Tax Advisors. The Purchaser has had the opportunity to review with
the Purchaser’s own tax advisors the federal, state and local tax consequences
of this investment, where applicable, and the transactions contemplated by this
Agreement. The Purchaser is relying solely on the Purchaser’s own determination
as to tax consequences or the advice of such tax advisors and not on any
statements or representations of the Company or any of its agents and
understands that the Purchaser (and not the Company) shall be responsible for
the Purchaser’s own tax liability that may arise as a result of this investment
or the transactions contemplated by this Agreement.

 

5.10.        No General Solicitation and Advertising. The Purchaser represents
and acknowledges that is has not been solicited to offer to purchase or to
purchase any Shares by means of any general solicitation or advertising within
the meaning of Regulation D under the Securities Act.

 

5.11.        Rule 506(d) “Bad Actor” Representation. The Purchaser represents
that it is not a person of the type described in Section 506(d) of Regulation D
under the Securities Act that would disqualify the Company from engaging in a
transaction pursuant to Section 506 of Regulation D under the Securities Act.

 

6.            Covenants of the Company and Purchasers.

 

6.1.          Best Efforts; Merger Agreement. Each party shall use its best
efforts to timely satisfy each of the conditions to be satisfied by it as
provided in Section 7 of this Agreement. The Company shall not enter into any
amendments or modifications to the Merger Agreement or the forms of Ancillary
Agreements (as defined in the Merger Agreement and as on file with the
Commission as of the date of this Agreement) which could have a material adverse
effect on the Purchaser without the prior written consent of the Purchaser,
which consent shall not be unreasonably withheld .

 

6.2.          Reporting Status. During the Reporting Period, the Company shall
(i) timely file all reports required to be filed with the Commission pursuant to
the Exchange Act or the rules and regulations thereunder, and (ii) not take any
action or file any document (whether or not permitted by the Exchange Act or the
rules promulgated thereunder) to terminate or suspend the Company’s reporting
and filing obligations under the Exchange Act.

 

 - 17 - 

 

 

6.3.          Use of Proceeds; Dividends. The Company will use the proceeds from
the sale of the Shares to complete the transactions contemplated by the Merger
Agreement, to pay fees and expenses in connection with such transactions, to
redeem shares of Common Stock in connection with the Merger and for general
corporate purposes. In addition $7,500,000 of the Total Purchase Price (the
“Escrow Fund”) will be delivered to U.S. Bank National Association (the “Escrow
Agent”) at the Closing to hold in accordance the terms of an escrow agreement to
be executed at Closing by the Company and the Purchaser in the form attached
hereto as Exhibit C. Such proceeds shall be held by the Escrow Agent and used
solely for the payment of the Cash Accruing Dividends (as defined in the
Certificate of Designation) to the holders of outstanding shares of Preferred
Stock when due in accordance with the Certificate of Designation. The Company
shall use best efforts to ensure that from the Closing and for so long as any
Cash Accruing Dividends are accruing or remain unpaid, the Escrow Fund shall be
held in trust for the holders of outstanding Preferred Stock and the Company
shall use best efforts to ensure that there are no Liens on the Escrow Fund,
including from lenders or creditors of the Company or its Subsidiaries.

 

6.4.          Financial Information. The financial statements of the Company and
the notes related thereto to be included in any documents filed with the
Commission will be prepared in accordance with GAAP, consistently applied
(except (i) as may be otherwise indicated in such financial statements or the
notes thereto, or (ii) in the case of unaudited interim statements, to the
extent they may not include footnotes, may be condensed or summary statements or
may conform to the Commission’s rules and instructions for quarterly reports on
Form 10-Q or other applicable rules and regulations of the Commission), and will
fairly present in all material respects the consolidated financial position of
the Company and consolidated results of its operations and cash flows as of, and
for the periods covered by, such financial statements (subject, in the case of
unaudited statements, to normal and recurring year-end audit adjustments and
reclassifications). So long as any Shares are held by a Purchaser, the Company
agrees to send the following to such Purchaser during the Reporting Period
(except to the extent that the following are publicly available, in which case
the Company shall have no obligations under this Section 6.4 with respect to
such publicly available information): (i) within one (1) Business Day after the
filing thereof with the Commission, a copy of its Annual Reports and Quarterly
Reports on Form 10-K or 10-Q, any Current Reports on Form 8-K and any
registration statements (other than on Form S-8) or amendments filed pursuant to
the Securities Act, (ii) on the same day as the release thereof, facsimile or
e-mailed copies of all press releases issued by the Company, and (iii) copies of
any notices and other information made available or given to stockholders of the
Company generally, contemporaneously with the making available or giving thereof
to the stockholders. As used herein, “Business Day” means any day other than
Saturday, Sunday or other day on which commercial banks in New York City are
authorized or required by law to remain closed.

 

 - 18 - 

 

 

6.5.          Conduct of Business. The business of the Company shall not be
conducted in violation of any law, ordinance or regulation of any governmental
entity, except where such violations would not result, either individually or in
the aggregate, in a Material Adverse Effect. During the period of from the date
of this Agreement and continuing until the earlier of the termination of this
Agreement or the Closing, the Company agrees to carry on its business, and to
ensure that the business of the Target is carried on, in the ordinary course of
business consistent with past practice and use reasonable best efforts to
preserve their respective material assets, properties, business, operations,
organization (including officers and employees), goodwill and relationships with
suppliers, customers, lenders, regulators, and any other persons having a
material business relationship with the Company and/or the Target; provided,
however, that the Purchaser acknowledges and agrees that reasonable actions
taken by the Company and/or Target in good faith in furtherance of the Merger
and the transactions expressly contemplated by the Merger Agreement (including
the exhibits thereto) shall neither be prohibited by nor violate this Section
6.5. Without limiting the foregoing, the Company shall not, and shall ensure
that Target does not, do any of the following unless expressly contemplated by
this Agreement or consented to in writing by the Purchaser, which consent shall
not be unreasonably withheld:

 

(a)       Charter Documents. Cause or permit any amendments to the Charter
Documents other than as expressly contemplated by the Merger Agreement and this
Agreement;

 

(b)       Dividends. Declare or pay any dividends on or make any other
distributions (whether in cash, shares or property) in respect of any of its
shares;

 

(c)       Liabilities. Incur any liabilities in excess of $500,000 except in the
ordinary course of business and consistent with past practice or in connection
with the pending Merger and other transactions expressly contemplated by the
Merger Agreement (including the exhibits thereto).

 

6.6.          Disclosure of Transactions and Other Material Information; Use of
Name.

 

(a)       On or before the fourth Business Day following the date of this
Agreement, the Company shall file a Current Report on Form 8-K describing the
terms and conditions of the transactions contemplated by the Transaction
Documents (or, if the Company files a Quarterly Report on Form 10-Q within such
time period, the Company may include such description in such Form 10-Q) in the
form required by the Exchange Act and attaching this Agreement as an exhibit to
such filing (including all attachments, the “8-K Filing”).

 

(b)       The Company shall not publicly disclose the name of the Purchaser or
any affiliate or investment adviser of the Purchaser, including without
limitation in any press release, or include the name of the Purchaser or any
affiliate or investment adviser of the Purchaser in any filing with the
Commission (other than in any filings made in respect of this transaction in
accordance with periodic report or current report filing requirements under the
Exchange Act, or in the Registration Statement) or any regulatory agency,
without the prior written consent of the Purchaser (which consent shall not be
unreasonably withheld, conditioned or delayed), except to the extent such
disclosure is required by law, rule or regulations, in which case the Company
shall provide the Purchaser with prior notice of such disclosure and a
reasonable opportunity to comment on the proposed disclosure insofar as it
relates specifically to the Purchaser.

 

 - 19 - 

 

 

6.7.          Backstop Shares. The Purchaser acknowledges and agrees that, if
the Company requests in writing at any time prior to two (2) days prior to the
Closing Date, the Purchaser will purchase shares of Common Stock (the “Backstop
Shares”), subject to and contingent upon the Closing, in privately negotiated
transactions directly from stockholders of the Company (other than Affiliates of
the Company) who have elected to redeem or intend to redeem such shares pursuant
to Section 9.02 of the Amended and Restated Certificate of Incorporation of the
Corporation in connection with the consummation of the transactions contemplated
by the Merger Agreement; provided, however that in no event shall Purchaser be
required to make any such purchases at a purchase price of greater than $10.00
per share or for an aggregate purchase price (for all such purchases) of greater
than $5,000,000. Any such purchases described in subsection (b) shall be
pursuant to a Backstop Stock Purchase Agreement in substantially the form of
Exhibit D, including that any such purchase shall be contingent upon and
completed simultaneously with the Merger. The Backstop Shares purchased by the
Purchaser, if any, shall be evidenced by book-entry position with the Company’s
transfer agent, shall be freely-tradeable immediately upon receipt (subject to
compliance with the Securities Act and any applicable state securities laws) and
shall not be subject to any legends.

 

6.8.          Fees and Expenses. At the Closing, the Company shall pay to the
Purchaser (a) an expense reimbursement in an amount equal to (i) the reasonable,
invoiced fees and expenses incurred by the Purchaser and its legal counsel,
consultants and advisors in an amount not to exceed, in the aggregate, $225,000,
less (ii) $50,000, which was previously paid as a retainer against such fees,
and (b) a closing fee of $612,500. The Purchaser, at its option, may deduct such
amounts from the Total Purchase Price wired pursuant to Section 2. In the event
this Agreement is terminated pursuant to Section 8.1 prior to the Closing as a
result of the failure of any conditions set forth in Section 7.1 to be
satisfied, the Company shall pay to Purchaser the amount set forth in clause
(a)(i) above within five (5) business days following such termination.

 

6.9.          Pledge of Shares. The Company acknowledges and agrees that the
Shares may be pledged by the Purchaser in connection with a bona fide margin
agreement or other loan or financing arrangement that is secured by the Shares.
The pledge of Shares shall not be deemed to be a transfer, sale or assignment of
the Shares hereunder, and in effecting a pledge of Shares, the Purchasers shall
not be required to provide the Company with any notice thereof or otherwise make
any delivery to the Company pursuant to this Agreement. The Company hereby
agrees to execute and deliver such documentation as a pledgee of the Shares may
reasonably request in connection with a pledge of the Shares to such pledgee by
the Purchasers.

 

7.          Conditions of Parties’ Obligations.

 

7.1.          Conditions of the Purchaser’s Obligations at the Closing. The
obligations of the Purchaser under Section 2 hereof are subject to the
fulfillment, prior to the Closing, of all of the following applicable
conditions, any of which may be waived in whole or in part by the Purchaser in
its absolute discretion. If the following conditions are not satisfied on or
before the Termination Date, then the Purchaser may terminate this Agreement
upon providing written notice to the Company.

 

(a)       Representations and Warranties. The representations and warranties of
the Company contained in this Agreement and in any certificate or other document
delivered by the Company pursuant hereto shall be true and correct on and as of
the Closing Date with the same effect as though such representations and
warranties had been made on and as of the Closing Date (except to the extent
expressly made as of an earlier date, in which case as of such earlier date).

 

 - 20 - 

 

 

(b)       Performance. The Company shall have performed and complied in all
material respects with all covenants, agreements, obligations and conditions
contained in this Agreement that are required to be performed or complied by it
pursuant to this Agreement on or prior to the Closing Date.

 

(c)       Certificate of Designation. The Company shall have filed the
Certificate of Designation and delivered evidence of acceptance from the
Secretary of State of the State of Delaware to the Purchaser.

 

(d)       Qualification Under State Securities Laws. All registrations,
qualifications, permits and approvals, if any, required under applicable state
securities laws shall have been obtained for the lawful execution, delivery and
performance of this Agreement.

 

(e)       Consents and Waivers. The Company shall have obtained all consents or
waivers necessary to execute and perform its obligations under this Agreement.
All corporate actions and governmental filings necessary for the Company to
effectuate the terms of this Agreement and other agreements and instruments
executed and delivered by the Company in connection herewith shall have been
made or taken by the Company.

 

(f)       No Material Adverse Effect. Since the Balance Sheet Date, no event or
series of events shall have occurred that has had or would reasonably be
expected to have a Material Adverse Effect.

 

(g)       Merger Agreement. All conditions to closing under the Merger Agreement
to be fulfilled prior to closing of the transactions contemplated by the Merger
Agreement shall have been fulfilled or waived by the applicable parties to the
Merger Agreement. Any amendments or modifications to the forms of Ancillary
Agreements (as defined in the Merger Agreement and as on file with the
Commission as of the date of this Agreement) that materially adversely affect
the Purchaser shall be reasonably satisfactory to the Purchaser.

 

(h)       Legal Opinion. The Company shall have delivered to each Purchaser an
opinion, dated as of the Closing Date, from Ledgewood PC, counsel to the
Company, in substantially the form attached hereto as Exhibit E.

 

(i)       Management Rights Letter. A Management Rights Letter in the form
attached hereto as Exhibit B (the “Management Rights Letter”) shall have been
executed by the Company and delivered to the Purchaser.

 

(j)       Senior Loan Documentation. The Company shall have executed and
delivered that certain Senior Loan Documentation and that certain Second-Lien
Loan Documentation, and the financings contemplated thereby shall have been
consummated or will be consummated simultaneously with the Closing, and there
shall have been no changes or modifications to the forms of such agreements
provided to the Purchaser on June 9, 2016 that in the reasonable judgment of
Purchaser could adversely affect the Purchaser or the Preferred Stock.

 

 - 21 - 

 

 

(k)       Maximum Leverage Ratio. The ratio of the Company’s Indebtedness,
determined as of the Balance Sheet Date, on a pro forma basis to give effect to
the Merger and the other transactions contemplated by the Merger Agreement, the
Senior Loan Documentation and the Second-Lien Loan Documentation (including, for
the purposes of clarity, the Deemed Original Issue Price (as defined in the
Certificate of Designation) of the shares of Preferred Stock to be outstanding
immediately following the Closing) to its trailing twelve month Adjusted EBITDA
is equal to or less than 5.5x.

 

(l)       Expenses. The Company shall have wired the expense amounts due and
payable pursuant to Section 6.8 or such amounts shall be deducted from the Total
Purchase Price.

 

(m)      Transfer Agent Instructions. The Company shall have delivered to its
transfer agent irrevocable instructions to issue to the Purchaser, or in such
nominee name(s) as designated by the Purchaser, in writing evidence of a book
entry position evidencing the Common Shares and the Preferred Shares to be
purchased by the Purchaser hereunder.

 

(n)       Officer’s Certificate. The Company shall have delivered to the
Purchaser a certificate, dated as of the Closing Date and signed by its
President or Chief Executive Officer, certifying to the fulfillment of the
conditions specified in Sections 7.1(a), (b) and (f).

 

(o)       Secretary’s Certificate. The Company shall have delivered to the
Purchaser a certificate, dated as of the Closing Date and signed by its
Secretary, (a) certifying the resolutions adopted by the board of directors of
the Company or a duly authorized committee thereof approving the transactions
contemplated by this Agreement and the other Transaction Documents and the
issuance of the Shares, (b) certifying the current versions of the certificate
or articles of incorporation and by-laws of the Company and (c) certifying as to
the signatures and authority of persons signing the Transaction Documents and
related documents on behalf of the Company.

 

(p)       Absence of Litigation. No proceeding which could reasonably be
expected to succeed on its merits challenging this Agreement or the transactions
contemplated hereby, or seeking to prohibit, alter, prevent or materially delay
the Closing or the closing of the Merger, shall have been instituted or be
pending before any court, arbitrator, governmental body, agency or official.

 

(q)       Escrow Agreement. The Company and the Escrow Agent shall have entered
into the Escrow Agreement and it shall be in full force and effect.

 

(r)       No Governmental Prohibition. The sale of the Shares by the Company
shall not be prohibited by any law or governmental order or regulation.

 

(s)       Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
incident thereto shall be reasonably satisfactory in form and substance to the
Purchaser, and the Purchaser (or its counsel) shall have received all such
counterpart original and certified or other copies of such documents as
reasonably requested. Such documents may include good standing certificates.

 

 - 22 - 

 

 

7.2.          Conditions of the Company’s Obligations. The obligations of the
Company under Section 2 hereof are subject to the fulfillment, prior to or at
the Closing, of all of the following applicable conditions, any of which may be
waived in whole or in part by the Company in its absolute discretion.

 

(a)       Representations and Warranties. The representations and warranties of
the Purchaser contained in this Agreement shall be true and correct on and as of
the Closing Date with the same effect as though such representations and
warranties had been made on and as of the Closing Date (except to the extent
expressly made as of an earlier date, in which case as of such earlier date).

 

(b)       Performance. The Purchaser shall have performed and complied in all
material respects with all covenants, agreements, obligations and conditions
contained in this Agreement that are required to be performed or complied by it
on or prior to the Closing Date.

 

(c)       Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
incident thereto shall be reasonably satisfactory in form and substance to the
Company, and the Company (or its counsel) shall have received all such
counterpart original and certified or other copies of such documents as
reasonably requested.

 

8.           Termination, Amendment and Waiver.

 

8.1.         Termination. This Agreement may be terminated at any time prior to
the Closing (with respect to Section 8.1(b) through Section 8.1(c), by written
notice by the terminating party to the other party):

 

(a)       by the mutual written consent of the Company and Purchaser;

 

(b)       by either the Company and Purchaser if the Transaction shall not have
been consummated by July 31, 2016 (“Termination Date”), provided, however, that
the right to terminate this Agreement under this Section 8.1(b) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of or resulted in the failure of the Transaction to
occur on or before such date; or

 

(c)       by either the Company or Purchaser if a court of competent
jurisdiction or other Governmental Entity shall have issued a nonappealable
final order, decree or ruling or taken any other action, in each case having the
effect of permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement, unless the party relying on such
order, decree or ruling or other action has not complied in all material
respects with its obligations under this Agreement.

 

8.2.          Effect of Termination. In the event of termination of this
Agreement as provided in Section 8.1, there shall be no liability or obligation
on the part of Purchaser or the Company, or their respective officers,
directors, or stockholders, except to the extent that such termination results
from the intentional or grossly negligent breach by a party of any of its
representations, warranties or covenants set forth in this Agreement; provided,
however, that the provisions of Sections 6.6(b), 6.8, and 10 shall remain in
full force and effect and survive any termination of this Agreement.

 

 - 23 - 

 

 

9.           Transfer Restrictions; Legends.

 

9.1.          Transfer Restrictions on Common Shares. The Purchaser agrees that
from the Closing Date until the twelve (12) month anniversary of the Closing
Date it will not transfer, sell or otherwise dispose of any Common Shares
purchased pursuant to this Agreement without the consent of the Company. For the
avoidance of doubt, the transfer restrictions in this Section 8.1 shall not
apply to any Preferred Shares or Backstop Shares.

 

9.2.          Transfer Restrictions on Shares. The Purchaser understands that
the Company may require, as a condition to the transfer of any of the Shares,
that the request for transfer be accompanied by an opinion of counsel reasonably
satisfactory to the Company, to the effect that the proposed transfer does not
result in a violation of the Securities Act, unless such transfer is covered by
an effective registration statement or exempt from the registration requirements
of the Securities Act by reason of Rule 144 or Rule 144A thereunder. It is
understood that the book-entry positions evidencing the Shares may include
substantially the following legend, except as provided in Section 9.3:

 

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR APPLICABLE STATE SECURITIES
LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACT.”

 

9.3.          Unlegended Book-Entry Positions. The Purchaser may request that
the Company remove, and the Company agrees to authorize the removal of, any
legend from the book-entry position evidencing the Shares, (i) following any
sale of such Shares pursuant to Rule 144, (ii) if such Shares are eligible for
sale under Rule 144(b)(1), or (iii) following the time a legend is no longer
required with respect to such Shares. If a legend is no longer required pursuant
to the foregoing, the Company will no later than five (5) Business Days
following the request by the Purchaser to the Company, and after delivery to the
Company of such documents as the Company may reasonably request, establishing
that a legend is no longer required, deliver or cause to be delivered to the
Purchaser evidence of the book-entry position representing such Shares that is
free from all restrictive legends. The Company warrants that the Shares shall be
freely transferable on the books and records of the Company as and to the extent
provided in this Agreement, subject to applicable law, including, without
limitation, applicable securities law, rules and regulations, and excluding any
Lien on the Shares not imposed by the Company. If a Purchaser effects a transfer
of the Shares in accordance with Section 9.2 and with applicable law, the
Company shall permit the transfer and shall promptly instruct its transfer agent
to issue evidence of one or more book-entry positions, issue certificates or
credit shares to the applicable balance accounts at DTC in such name and in such
denominations as specified by the Purchaser to effect such transfer.

 

 - 24 - 

 

 

9.4.          Rule 144 Covenants. With a view to making available to the
Purchasers the benefits of Rule 144 promulgated under the Securities Act or any
other similar rule or regulation of the Commission that may at any time permit
the Purchasers to sell securities of the Company to the public without
registration (“Rule 144”), the Company agrees to:

 

(a)       if the Company is, or has been, an issuer identified in Rule 144(i)
under the Securities Act, use best efforts file all current “Form 10
information” (as defined in Rule 144(i)(ii)(2) of the Securities Act) as
promptly as practicable;

 

(b)       use commercially reasonable efforts to make and keep “current public
information” “available,” as those terms are understood and defined in Rule 144,
during the Reporting Period;

 

(c)       use commercially reasonable efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Exchange Act; and

 

(d)       furnish to the Purchasers so long as any Purchaser owns Shares or
Backstop Shares, promptly upon request during the Reporting Period, (i) a
written statement by the Company, if true, that it has complied with the
reporting requirements of Rule 144, the Securities Act and the Exchange Act,
(ii) a copy of the most recent annual or quarterly report of the Company and
such other reports and documents filed by the Company with the Commission as
Purchaser may reasonably request and (iii) such other information as may be
reasonably requested to permit the Purchasers to sell such securities pursuant
to Rule 144 without registration.

 

10.        Definitions. Unless the context otherwise requires, the terms defined
in this Section 10 shall have the meanings specified for all purposes of this
Agreement; provided, however, that capitalized terms that are not otherwise
defined herein shall have the meanings given to such terms in the Certificate of
Designation. All accounting terms used in this Agreement, whether or not defined
in this Section 10, shall be construed in accordance with GAAP. If the Company
has one or more Subsidiaries, such accounting terms shall be determined on a
consolidated basis for the Company and each of its Subsidiaries, and the
financial statements and other financial information to be furnished by the
Company pursuant to this Agreement shall be consolidated and presented with
consolidating financial statements of the Company and each of its Subsidiaries.

 

“8-K Filing” has the meaning assigned to it in Section 6.6 of this Agreement.

 

“Adjusted EBITDA” has the meaning assigned to it in the Certificate of
Designation.

 

“Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act.

 

 - 25 - 

 

 

“Agreement” has the meaning assigned to it in the introductory paragraph of this
Agreement.

 

“Applicable Laws” has the meaning assigned to it in Section 4.18(a) of this
Agreement.

 

“Backstop Shares” has the meaning assigned to it in Section 6.7 of this
Agreement.

 

“Balance Sheet Date” means the last day of the Company’s most recent fiscal
quarter for which the Company has filed audited annual or interim financial
statements pursuant to the Exchange Act.

 

“Business Day” has the meaning assigned to it in the introductory paragraph
Section 6.4 of this Agreement.

 

“Certificate of Designation” means the Certificate of Designation to be filed
prior to the Closing by the Company with the Secretary of State of Delaware, in
the form of Exhibit A attached hereto.

 

“Closing” has the meaning assigned to it in Section 3 of this Agreement.

 

“Closing Date” has the meaning assigned to it in Section 3 of this Agreement.

 

“Common Shares” has the meaning assigned to it in Section 2 of this Agreement.

 

“Commission” has the meaning assigned to it in the Recitals of this Agreement.

 

“Common Stock” has the meaning assigned to it in the Recitals of this Agreement.

 

“Company” has the meaning assigned to it in the Recitals of this Agreement.

 

“Company Intellectual Property” means all Intellectual Property that is owned by
the Company or any Subsidiary.

 

“Company IP Agreements” means all licenses, sublicenses, consent to use
agreements, settlements, coexistence agreements, covenants not to sue,
permissions and other contracts (including any right to receive or obligation to
pay royalties or any other consideration), whether written or oral, relating to
Intellectual Property to which the Company or any Subsidiary is a party,
beneficiary or otherwise bound.

 

“Company IP Registrations” means all Company Intellectual Property that is
subject to any issuance registration, application or other filing by, to or with
any Governmental Entity or authorized private registrar in any jurisdiction,
including registered trademarks, domain names and copyrights, issued and
reissued patents and pending applications for any of the foregoing.

 

“Disclosure Schedule” has the meaning assigned to it in Section 4 of this
Agreement.

 

“Employee Benefit Plan” has the meaning assigned to it in Section 4.17(b) of
this Agreement.

 

 - 26 - 

 

 

“Environmental Laws” has the meaning assigned to it in Section 4.20(b) of this
Agreement.

 

“ERISA” has the meaning assigned to it in Section 4.17(a) of this Agreement.

 

“Escrow Agent” has the meaning assigned to it in Section 6.2 of this Agreement.

 

“Environmental Laws” has the meaning assigned to it in Section 4.20(b) of this
Agreement.

 

“Escrow Fund” has the meaning assigned to it in Section 6.2 of this Agreement.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“GAAP” means U.S. generally accepted accounting principles consistently applied.

 

“Governmental Entity” means any national, federal, state, municipal, local,
territorial, foreign or other government or any department, commission, board,
bureau, agency, regulatory authority, self-regulatory organization or
instrumentality thereof, or any court, judicial, administrative or arbitral body
or public or private tribunal.

 

“Hazardous Material” has the meaning assigned to it in Section 4.20(b) of this
Agreement.

 

“Indebtedness” has the meaning assigned to it in the Certificate of Designation.

 

“Intellectual Property” shall have the meaning assigned to it in the Merger
Agreement.

 

“Key Employee” has the meaning assigned to it in Section 4.21(d) of this
Agreement.

 

“Knowledge” means the actual knowledge of any executive officer or director of
FinTech Acquisition Corp., including the actual knowledge of Jeff Shanahan,
Charles Bernicker, Nicholas Dermatas, Patrick Shanahan, Scott Dowty, Robert
Nathan, Rush Taggart and J. Alex Chapman.

 

“Leased Real Property” means all of the right, title and interest of the Company
and its Subsidiaries under all leases, subleases, licenses, concessions and
other agreements, pursuant to which the Company or any Subsidiary holds a
leasehold or sub-leasehold estate in, or is granted the right to use or occupy,
any land, buildings, improvements, fixtures or other interest in real property.

 

“Legal Proceeding” means any claim, action, cause of action, demand, lawsuit,
arbitration, inquiry, audit, notice of violation, proceeding, litigation,
citation, summons, subpoena or investigation of any nature, civil, criminal,
administrative, regulatory or otherwise, whether at law or in equity.

 

“Lien” means any mortgage, pledge, charge, security interest or other similar
encumbrance upon or in any property or assets (including accounts and contract
rights) other than restrictions pursuant to any applicable state or federal
securities laws.

 

 - 27 - 

 

 

“Management Rights Letter” has the meaning assigned to it in Section 7.1(i).

 

“Material Adverse Effect” means any (i) a material adverse effect on the
reservation, issuance, delivery or validity of the Shares, as applicable, or the
transactions contemplated hereby or on the ability of the Company to perform its
obligations under this Agreement, or (ii) material adverse effect on the
financial condition, properties, assets, business or operations of the Company
and its Subsidiaries, taken as a whole; provided, however, that “Material
Adverse Effect” shall not include, either alone or in combination, any event,
occurrence, fact, condition or change, directly or indirectly, arising out of or
attributable to: (i) general economic or political conditions or conditions
generally affecting the capital, credit or financial markets; (ii) conditions
generally affecting the industries in which the Company or any Subsidiary
operates; (iii) acts of war (whether or not declared), armed hostilities or
terrorism, sabotage or military actions or the escalation or worsening thereof,
or (iv) any failure of the Company and Subsidiaries to meet their financial
projections, budgets or estimates (provided that the underlying causes of such
failures (subject to the other provisions of this definition) shall not be
excluded); (v) any action required or permitted by this Agreement or the Merger
Agreement, or any action taken (or not taken) with the written consent or at the
request of Purchaser or any of its affiliates; (vi) any changes in applicable
laws or accounting rules, including GAAP; or (vii) the public announcement,
pendency or completion of the transactions contemplated by this Agreement or the
Merger Agreement; provided further, however, that any event, occurrence, fact,
condition or change referred to in clauses (i),(ii) and (vi) immediately above
shall be taken into account in determining whether a Material Adverse Effect has
occurred or would reasonably be expected to occur to the extent that such event,
occurrence, fact, condition or change has a disproportionate effect on the
Company compared to other participants in the industries in which any the
Company or any Subsidiary conducts its business; provided, further, that,
notwithstanding the foregoing, any event, occurrence, fact condition or change
referred to in clauses (v) through (vii) shall be taken into account for the
purposes of Section 7(f).

 

“Material Contract” means all written and oral contracts, agreements, deeds,
mortgages, leases, subleases, licenses, instruments, notes, commitments,
commissions, undertakings, arrangements and understandings (i) material to the
Company or any Subsidiary which by their terms provides for consideration in
excess of $100,000 annually or $250,000 in the aggregate, (ii) the breach of
which by the Company or any Subsidiary would reasonably be expected to have a
Material Adverse Effect, or (iii) which are required to be filed as exhibits by
the Company with the Commission pursuant to Items 601(b)(1), 601(b)(2),
601(b)(4), 601(b)(9) or 601(b)(10) of Regulation S-K promulgated by the
Commission.

 

“Merger Agreement” means that certain Agreement and Plan of Merger, dated as of
March 7, 2016, by and among Fintech Acquisition Corp., Fintech Merger Sub, Inc.
and FTS Holding Corporation.

 

“Person” means and includes all natural persons, corporations, business trusts,
associations, companies, partnerships, joint ventures, limited liability
companies and other entities and governments and agencies and political
subdivisions.

 

“Permit” has the meaning assigned to it in Section 4.18 of this Agreement.

 

 - 28 - 

 

 

“Permitted Indebtedness” has the meaning assigned to it in the Certificate of
Designation.

 

“Permitted Liens” means (1) any Lien disclosed in an SEC Report, (2) any Lien
for taxes not yet due or delinquent or being contested in good faith by
appropriate proceedings for which adequate reserves have been established in
accordance with GAAP, (3) any statutory Lien arising in the ordinary course of
business by operation of law with respect to a liability that is not yet due or
delinquent, (4) any Lien created by operation of law, such as materialmen’s
liens, mechanics’ liens and other similar liens, arising in the ordinary course
of business with respect to a liability that is not yet due or delinquent, (5)
Liens (a) upon or in any equipment acquired or held by the Company or any of its
Subsidiaries to secure the purchase price of such equipment or indebtedness
incurred solely for the purpose of financing the acquisition or lease of such
equipment, or (b) existing on such equipment at the time of its acquisition,
provided that the Lien is confined solely to the property so acquired and
improvements thereon, and the proceeds of such equipment, (6) Liens incurred in
connection with the extension, renewal or refinancing of the indebtedness
secured by Liens of the type described in clauses (1) through (4) above,
provided that any extension, renewal or replacement Lien shall be limited to the
property encumbered by the existing Lien and the principal amount of the
Indebtedness being extended, renewed or refinanced does not increase, (7)
leases, subleases, licenses and sublicenses granted to others in the ordinary
course of the Company’s business, not interfering in any material respect with
the business of the Company and its Subsidiaries taken as a whole, (8) Liens in
favor of customs and revenue authorities arising as a matter of law to secure
payments of custom duties in connection with the importation of goods and (9)
any Lien that is a Permitted Lien under the Merger Agreement or Senior Loan
Documentation.

 

“Preferred Shares” has the meaning assigned to it in Section 2 of this
Agreement.

 

“Preferred Stock” has the meaning assigned to it in the Recitals of this
Agreement.

 

“Purchaser” has the meaning assigned to it in the introductory paragraph of this
Agreement and shall include any Affiliates of the Purchaser.

 

“Registration Statement” has the meaning assigned to it in Section 4 of this
Agreement.

 

“Regulation D” has the meaning assigned to it in the Recitals of this Agreement.

 

“Reporting Period” means the period commencing on the Closing Date and ending on
the earlier of (i) the date as of which the Purchasers may sell all of the
Shares under Rule 144 without volume or manner of sale restrictions and without
the requirement for the Company to be in compliance with the current public
information requirements under Rule 144(c)(1) (or any successor thereto)
promulgated under the Securities Act and (ii) the date on which the Purchasers
shall have sold all of the Shares.

 

“Rule 144” has the meaning assigned to it in Section 9.5 of this Agreement.

 

“Shares” has the meaning assigned to it in Section 2 of this Agreement.

 

“SEC Reports” has the meaning assigned to it in Section 4.12(a) of this
Agreement.

 

 - 29 - 

 

 

“Securities Act” has the meaning assigned to it in the Recitals of this
Agreement.

 

“Second-Lien Loan Documentation” has the meaning assigned to it in the
Certificate of Designation.

 

“Senior Loan Documentation” has the meaning assigned to it in the Certificate of
Designation.

 

“Systems” means software, servers, sites, circuits, networks, interfaces,
platforms, computers, hardware, databases, cable, networking, call centers,
equipment and all other technology or infrastructure assets or services.

 

“Subsidiary” means any corporation, association trust, limited liability
company, partnership, joint venture or other business association or entity (i)
at least 50% of the outstanding voting securities of which are at the time owned
or controlled directly or indirectly by the Company or (ii) with respect to
which the Company possesses, directly or indirectly, the power to direct or
cause the direction of the affairs or management of such Person.

 

“Target” means FTS Holding Corporation.

 

“Termination Date” has the meaning assigned to it in Section 8.1(b) of this
Agreement. “Total Purchase Price” has the meaning assigned to it in Section 1 of
this Agreement.

 

“Transaction Documents” means this Agreement, the Certificate of Designation,
the Management Rights Letter and all exhibits and schedules thereto and hereto
and any other documents or agreements executed in connection with the
transactions contemplated hereunder.

 

11.        Enforcement.

 

11.1.        Cumulative Remedies. None of the rights, powers or remedies
conferred upon the Purchaser on the one hand or the Company on the other hand
shall be mutually exclusive, and each such right, power or remedy shall be
cumulative and in addition to every other right, power or remedy, whether
conferred by this Agreement or now or hereafter available at law, in equity, by
statute or otherwise.

 

11.2.        No Implied Waiver. Except as expressly provided in this Agreement,
no course of dealing between the Company and the Purchaser or any other holder
of shares of the Company’s capital stock and no delay in exercising any such
right, power or remedy conferred hereby or now or hereafter existing at law in
equity, by statute or otherwise, shall operate as a waiver of, or otherwise
prejudice, any such right, power or remedy.

 

11.3.        Representations and Warranties. The representations and warranties
of the Company and the Purchaser contained in or made pursuant to this Agreement
shall survive the execution and delivery of this Agreement and the Closing and
shall in no way be affected by any investigation or knowledge of the subject
matter thereof made by or on behalf of the Purchaser or the Company.

 

 - 30 - 

 

 

12.          Non-Public Information. Except with respect to the material terms
and conditions of the transactions contemplated by the Transaction Documents,
which shall be publicly disclosed by the Company in any press release to be
issued, or 8-K Filing to be filed, pursuant to Section 6.6 herein, the Company
covenants and agrees that it and its subsidiaries shall use reasonable best
efforts to ensure that it does not provide the Purchaser or its agents or
counsel with any information the Company believes constitutes material
non-public information without the prior express permission of the Purchaser
after being informed by the Company of such belief and of the general nature of
the information, provided, that such efforts shall not extend to (i) information
delivered to the Board Observer (as defined in the Management Rights Letter) in
such capacity, to the extent delivered in connection with or at a meeting at
which the Board Observer is present, or (ii) the information to be delivered
under paragraph 3 of the Management Rights Letter, unless the Investor expressly
requests that the Company not deliver any such information a reasonable period
in advance of such time as such information would be customarily delivered. The
Company understands and confirms that the Purchaser shall be relying on the
foregoing covenant in effecting transactions in securities of the Company.

 

13.          Miscellaneous.

 

13.1.        Waivers and Amendments. Upon the approval of the Company and the
written consent of the Purchaser, the obligations of the Company and the rights
of the Purchaser under this Agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively and either for a
specified period of time or indefinitely). Neither this Agreement, nor any
provision hereof, maybe changed, waived, discharged or terminated orally or by
course of dealing, but only by an instrument in writing executed by the Company
and the Purchaser.

 

13.2.        Notices. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be deemed delivered (a) when
delivered, if delivered personally, (b) four Business Days after being sent by
registered or certified mail, return receipt requested, postage prepaid; (c) one
Business Day after being sent via a reputable nationwide overnight courier
service guaranteeing next business day delivery, or (d) when receipt is
acknowledged, in the case of facsimile or email, in each case to the intended
recipient as set forth below:

 

If to the Company:

 

Prior to Closing: 712 Fifth Ave, 8th Floor

New York, New York 10019

Attention: James J. McEntee, III

Email: jmce@stbwell.com

 

Following Closing:

1000 Continental Drive, Suite 300

King of Prussia, PA 19406

Attention: Jeffrey Shanahan

 

 - 31 - 

 

 

with a copy to (which shall not constitute notice):

 

Ledgewood, P.C.

2001 Market Street, Suite 3400

Philadelphia, PA 19103

Attention: Amanda Abrams

Facsimile No.: 215.735.2513

Email: aabrams@ledgewood.com

 

If to the Purchaser:

 

Falcon Strategic Partners V, LP

21 Custom House Street, 10th Floor

Boston, Massachusetts 02110

Attention: William J. Kennedy, Jr.

Facsimile No.: (617) 412-2799

Email: WKennedy@falconinvestments.com

 

with a copy to (which shall not constitute notice):

 

Latham & Watkins LLP

John Hancock Tower

200 Clarendon Street, 27th Floor

Boston, Massachusetts 02116

Facsimile: (617) 948-6001

Attention: Johan V. Brigham

 

or at such other address as the Company or each Purchaser each may specify by
written notice to the other parties hereto in accordance with this Section 13.2.

 

13.3.        No Waivers. No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.

 

13.4.        Successors and Assigns. All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective parties hereto, the successors and permitted assigns of each
Purchaser and the successors of the Company, whether so expressed or not. None
of the parties hereto may assign its rights or obligations hereof without the
prior written consent of the Company, except that the Purchaser may, without the
prior consent of the Company, assign its rights to purchase the Shares hereunder
to any of its Affiliates (provided such Affiliate agrees in writing to be bound
by the terms of this Agreement and makes the same representations and warranties
set forth in Section 5 hereof). This Agreement shall not inure to the benefit of
or be enforceable by any other Person.

 

 - 32 - 

 

 

13.5.        Headings. The headings of the Sections and paragraphs of this
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.

 

13.6.        Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York without regard to its
conflict of law principles.

 

13.7.        Jurisdiction. Any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby may be brought in any federal
or state court located in the City of New York and State of New York, and each
of the parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 13.2 shall be deemed
effective service of process on such party.

 

13.8.        Counterparts; Effectiveness. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
with the same effect as if all parties had signed the same document. All such
counterparts (including counterparts delivered by facsimile or other electronic
format) shall be deemed an original, shall be construed together and shall
constitute one and the same instrument. This Agreement shall become effective
when each party hereto shall have received counterparts hereof signed by all of
the other parties hereto.

 

13.9.        Entire Agreement. This Agreement contains the entire agreement
among the parties hereto with respect to the subject matter hereof and thereof
and, except as set forth below, such agreements supersede and replace all other
prior agreements, written or oral, among the parties hereto with respect to the
subject matter hereof and thereof. Notwithstanding the foregoing, this Agreement
shall not supersede any confidentiality or other non-disclosure agreements that
may be in place between the Company and any Purchaser.

 

13.10.      Trust Account Waiver. Reference is made to the Final Prospectus of
the Company, dated February 12, 2015 (the “Prospectus”). Capitalized terms used
and not otherwise defined in this Section 132.10 shall have the meanings
assigned to them in the Prospectus.

 

(a)       Purchaser acknowledges it has read the Prospectus and understands that
the Company has established the Trust Account initially in an amount of at least
$100,000,000 for the benefit of the Public Stockholders and the underwriter of
the Company’s initial public offering and that, except for a portion of the
interest earned on the amounts held in the Trust Account, the Company may
disburse monies from the Trust Account only: (i) to the Public Stockholders in
the event they elect to redeem their public shares in connection with the
consummation of a Business Combination, (ii) to the Public Stockholders if the
Company liquidates or fails to consummate a Business Combination within 18
months from the closing date of the Company’s initial public offering or (iii)
to the Company after or concurrently with the consummation of a Business
Combination. The Company represents and warrants that the Merger shall
constitute a Business Combination for such purpose.

 

 - 33 - 

 

 

(b)       Purchaser hereby agrees, on behalf of Purchaser and any of its
officers, directors, managers, shareholders, members, partners, affiliates,
agents and other representatives (collectively, “Representatives”), that
Purchaser and its Representatives do not have any right, title, interest or
claim of any kind in or to any monies in the Trust Account in connection with
this Agreement and the transactions contemplated thereby (each, a “Claim”) and
hereby waives any Claim they may have in the future as a result of, or arising
out of, this Agreement or the transactions contemplated by this Agreement and
will not seek recourse against the Trust Account.

 

13.11.      Severability. If any provision of this Agreement shall be found by
any court of competent jurisdiction to be invalid or unenforceable, the parties
hereby waive such provision to the extent that it is found to be invalid or
unenforceable. Such provision shall, to the maximum extent allowable by law, be
modified by such court so that it becomes enforceable, and, as modified, shall
be enforced as any other provision hereof, all the other provisions hereof
continuing in full force and effect.

 

(Signature Page Follows)

 

 - 34 - 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed as of the day and year first written above.

 

COMPANY       FINTECH ACQUISITION CORP.         By:        /s/ James J. McEntee,
III   Name: James J. McEntee, III   Title: Chief Financial Officer and Chief
Operating Officer       PURCHASER         FALCON STRATEGIC PARTNERS V, LP      
  By Falcon Strategic Investments V, LP, its General Partner By Falcon Strategic
Investments GP V, LLC, its General Partner       By:        /s/ John Schnabel  
Name: John Schnabel   Title: Director  

 

Name in which Shares are to be registered (if different):
______________________________

 

 

 

(Signature Page to Securities Purchase Agreement)

 

 

 

 

ANNEX A

 

Illustrative Calculation of Fully Diluted Shares of Common Stock

 

FinTech Acquisition Corp. Stockholders (Pre-Merger)   Shares of Parent
Common Stock /
at Close     Shares of Parent
Common Stock /
Fully Diluted   Common Stock     10,986,667       13,733,333   Warrants     -  
    3,433,333   Options     -           Total     10,986,667       17,166,666  
                  FTS Holding Corporation Existing Stockholders                
Common Stock Rollover     14,856,877       14,856,877   Common Stock for Option
Rollover     2,143,123       2,143,123   Share Repurchase w/ Option Rollover    
(1,329,383 )     (1,329,383 ) Options issued w/ Option Rollover     1,329,383  
    1,329,383   Total     17,000,000       17,000,000                    
Purchasers in Equity Financing                 Common Stock     -       -  
Warrants     -       -   Options     -       -   Total     -       -            
        Treasury Stock                                   Parent 2016 Omnibus
Equity Compensation Plan                 Shares Authorized for Issuance     -  
    3,796,296                     Total Fully Diluted Shares     26,657,284    
  37,962,962  

 

Falcon Shares - calculation      1.25 % Pool  480,544