Document:

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of the 13th day of May,  2011, by and among Universal Business Payment Solutions Acquisition Corporation, a Delaware corporation (the “Company”), and the undersigned party whose name appears listed under the heading “Investor” on the signature page hereto (each, an “Investor” and collectively as scheduled on Exhibit A, the “Investors”).

 

WHEREAS, the Investors currently hold 3,450,000 issued and outstanding shares of the Company’s Common Stock (as defined below), of which up to 450,000 shares are subject to forfeiture if the underwriters do not exercise their over-allotment option in full;

 

WHEREAS, certain of the Investors are purchasing Insider Warrants (as defined below) in a private placement occurring simultaneously with the consummation of the Company’s initial public offering;

 

WHEREAS, EarlyBirdCapital, Inc.  or its designees (“EBC”) is purchasing EBC Warrants (as defined below) in a private placement occurring simultaneously with the consummation of the Company’s initial public offering;

 

WHEREAS, the Investors and the Company desire to enter into this Agreement to provide the Investors with certain rights relating to the Registration (as defined below) of Registrable Securities (as defined below) held by them;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.           DEFINITIONS.

 

1.1         Defined Terms.  The following capitalized terms used herein have the following meanings:

 

“Agreement” means this Agreement, as amended, restated, supplemented or otherwise modified from time to time.

 

“Business Combination” the consummation by the Company of a merger, share exchange, asset acquisition, stock purchase, plan of arrangement, recapitalization, reorganization or other similar business combination

 

“Commission” means the Securities and Exchange Commission, or any other federal agency then administering the Securities Act or the Exchange Act.

 

“Common Stock” means the common stock, par value $0.001 per share, of the Company.

 

“Company” is defined in the preamble to this Agreement.

 

“Demand Registration” is defined in Section 2.1.1.

 

“Demanding Holder” is defined in Section 2.1.1.

 

“EBC” is defined in the preamble to this Agreement.

 

“EBC Securities” means the EBC Warrants and the shares of Common Stock underlying the EBC Warrants.

 

“EBC Warrants” means the 720,000 Warrants being purchased by EBC in a private placement occurring simultaneously with the consummation of the Company’s initial public offering.

  

  

  

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect from time to time.

 

“Form S-3” is defined in Section 2.3.

 

“Indemnified Party” is defined in Section 4.3.

 

“Indemnifying Party” is defined in Section 4.3.

 

“Initial Shares” refers to the 3,450,000 shares of Common Stock that the Investors purchased prior to the Company’s initial public offering.

 

“Insider Warrants” means the 6,240,000 Warrants being purchased by certain of the Investors in a private placement occurring simultaneously with the consummation of the Company’s initial public offering.

 

“Insider Securities” means the Insider Warrants and the shares of Common Stock underlying the Insider Warrants.

 

“Investor” is defined in the preamble to this Agreement.

 

“Investor Indemnified Party” is defined in Section 4.1.

 

“Maximum Number of Securities” is defined in Section 2.1.4.

 

“Notices” is defined in Section 6.4.

 

“Person” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority or other entity or enterprise of whatever nature.

 

“Piggy-Back Registration” is defined in Section 2.2.1.

 

“Pro Rata” is defined in Section 2.1.4.

 

“Register,” “Registered” and “Registration” mean a registration effected by preparing and filing a Registration Statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such Registration Statement becoming effective.

 

“Registrable Securities” mean (i) the Initial Shares (ii) the EBC Warrants and (iii) the Insider Securities.  Registrable Securities include any warrants, shares of capital stock or other securities of the Company issued as a dividend or other distribution with respect to or in exchange for or in replacement of such Initial Shares or Insider Securities.  As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when: (a) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (b) such securities shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of them shall not require Registration under the Securities Act; or (c) such securities shall have ceased to be outstanding.

 

“Registration Statement” means a registration statement filed by the Company with the Commission in compliance with the Securities Act and the rules and regulations promulgated thereunder for a public offering and sale of securities (other than a registration statement on Form S-4 or Form S-8, or their successors, or any registration statement covering only securities proposed to be issued in exchange for securities or assets of another entity).

  

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“Release Date” means, for any Initial Shares, the date on which such Initial Shares are disbursed from escrow pursuant to Sections 3.2 or 3.3 of that certain Stock Escrow Agreement dated as of  May 13, 2011 by and among the Company, the Investors holding the Initial Shares and Continental Stock Transfer & Trust Company.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect from time to time.

 

“Underwriter” means a securities dealer who purchases any Registrable Securities as principal in an underwritten offering and not as part of such dealer’s market-making activities.

 

1.2         General Interpretive Principles.  Whenever used in this Agreement, except as otherwise expressly provided or unless the context otherwise requires, any noun or pronoun shall be deemed to include the plural as well as the singular and to cover all genders.  The name assigned to this Agreement and the section captions used herein are for convenience of reference only and shall not be construed to affect the meaning, construction or effect hereof.  Unless otherwise specified, the terms “hereof,” “herein,” “hereunder” and similar terms refer to this Agreement as a whole (including exhibits, schedules and disclosure statements hereto), and references herein to Sections refer to Sections of this Agreement.

 

2.           REGISTRATION RIGHTS.

 

2.1         Demand Registration.

 

2.1.1.     Request for Registration.  At any time and from time to time on or after the date that is (i) in the case of the Insider Securities or the EBC Securities, after the Company consummates a Business Combination or (ii) in the case of the Initial Shares, three months prior to the Release Date, the holders of a majority-in-interest of the Insider Securities, EBC Securities or the Initial Shares, as the case may be, may make a written demand for Registration under the Securities Act of all or part of their Insider Securities, EBC Securities the Initial Shares, as the case may be (a “Demand Registration”); provided that in no event may EBC make a Demand Registration after the fifth anniversary of this Agreement.  Any Demand Registration shall specify the number of Registrable Securities proposed to be sold and the intended method(s) of distribution thereof.  The Company will notify all holders of Registrable Securities of the demand, and each holder of such Registrable Securities who wishes to include all or a portion of such holder’s Registrable Securities in the Demand Registration (each such holder including Registrable Securities in such Registration, a “Demanding Holder”) shall so notify the Company within fifteen (15) days after the receipt by the holder of the notice from the Company.  Upon any such request, the Demanding Holders shall be entitled to have their Registrable Securities included in the Demand Registration, subject to Section 2.1.4 and the provisos set forth in Section 3.1.1.  The Company shall not be obligated to effect more than an aggregate of two (2) Demand Registrations under this Section 2.1.1 in respect of all Registrable Securities.

 

2.1.2.     Effective Registration.  A Registration will not count as a Demand Registration until the Registration Statement filed with the Commission with respect to such Demand Registration has been declared effective and the Company has complied with all of its obligations under this Agreement with respect thereto; provided, however, that if, after such Registration Statement has been declared effective, the offering of Registrable Securities pursuant to a Demand Registration is interfered with by any stop order or injunction of the Commission or any other governmental agency or court, the Registration Statement with respect to such Demand Registration will be deemed not to have been declared effective, unless and until, (i) such stop order or injunction is removed, rescinded or otherwise terminated and (ii) a majority-in-interest of the Demanding Holders thereafter elect to continue the offering; provided, further, that the Company shall not be obligated to file a second Registration Statement until a Registration Statement that has been filed is counted as a Demand Registration or is terminated.

 

2.1.3.     Underwritten Offering.  If a majority-in-interest of the Demanding Holders so elect and such holders so advise the Company as part of their written demand for a Demand Registration, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of an underwritten offering.  In such event, the right of any holder to include its Registrable Securities in such Registration shall be conditioned upon such holder’s participation in such underwriting and the inclusion of such holder’s Registrable Securities in the underwriting to the extent provided herein.  All Demanding Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected for such underwriting by a majority-in-interest of the holders initiating the Demand Registration.

  

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2.1.4.     Reduction of Offering.  If the managing Underwriter or Underwriters for a Demand Registration that is to be an underwritten offering advises the Company and the Demanding Holders in writing that the dollar amount or number of Registrable Securities which the Demanding Holders desire to sell, taken together with all other shares of Common Stock or other securities which the Company desires to sell and the securities, if any, as to which Registration has been requested pursuant to written contractual piggy-back registration rights held by other securityholders of the Company who desire to sell, exceeds the maximum dollar amount or maximum number of securities that can be sold in such offering without adversely affecting the proposed offering price, the timing, the distribution method or the probability of success of such offering (such maximum dollar amount or maximum number of securities, as applicable, the “Maximum Number of Securities”), then the Company shall include in such Registration:  (i) first, the Registrable Securities as to which Demand Registration has been requested by the Demanding Holders (pro rata in accordance with the number of securities that each such Person has requested be included in such Registration, regardless of the number of securities held by each such Person (such proportion is referred to herein as “Pro Rata”)) that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Securities; (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the shares of Common Stock or other securities registrable pursuant to the terms of the Unit Purchase Option to be issued to EBC or its designees in connection with the Company’s initial public offering on May 9, 2011 (the “Unit Purchase Option” and such registrable securities, the” Option Securities”) as to which “piggy-back” registration has been requested by the holders thereof, Pro Rata, that can be sold without exceeding the Maximum Number of Securities; and (iv) fourth, to the extent that the Maximum Number of Securities have not been reached under the foregoing clauses (i), (ii) and (iii), the shares of Common Stock or other securities for the account of other persons that the Company is obligated to register pursuant to written contractual arrangements with such persons and that can be sold without exceeding the Maximum Number of Securities.

 

2.1.5.     Withdrawal.  If a majority-in-interest of the Demanding Holders disapprove of the terms of any underwriting or are not entitled to include all of their Registrable Securities in any offering, such majority-in-interest of the Demanding Holders may elect to withdraw from such offering by giving written notice to the Company and the Underwriter or Underwriters of their request to withdraw prior to the effectiveness of the Registration Statement filed with the Commission with respect to such Demand Registration.  If the majority-in-interest of the Demanding Holders withdraws from a proposed offering relating to a Demand Registration, then such Registration shall not count as a Demand Registration provided for in Section 2.1.

 

2.2         Piggy-Back Registration.

 

2.2.1.     Piggy-Back Rights.  If at any time on or after the date the Company consummates a Business Combination, the Company proposes to file a Registration Statement under the Securities Act with respect to an offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into, equity securities, by the Company for its own account or for securityholders of the Company for their account (or by the Company and by securityholders of the Company including, without limitation, pursuant to Section 2.1), other than a Registration Statement (i) filed in connection with any employee stock option or other benefit plan, (ii) for an exchange offer or offering of securities solely to the Company’s existing securityholders, (iii) for an offering of debt that is convertible into equity securities of the Company  (iv) for a dividend reinvestment plan, or (v) solely in connection with a merger, consolidation or non-capital raising bona fide business transaction, then the Company shall (x) give written notice of such proposed filing to the holders of Registrable Securities as soon as practicable but in no event less than ten (10) days before the anticipated filing date, which notice shall describe the amount and type of securities to be included in such offering, the intended method(s) of distribution and the name of the proposed managing Underwriter or Underwriters, if any, of the offering, and (y) offer to the holders of Registrable Securities in such notice the opportunity to register the sale of such number of Registrable Securities as such holders may request in writing within five (5) days following receipt of such notice (a “Piggy-Back Registration”); provided that the Company shall not be obligated to provide such notice to EBC after the seventh anniversary of the date of this Agreement.  The Company shall cause such Registrable Securities to be included in such Registration and shall use its reasonable best efforts to cause the managing Underwriter or Underwriters of a proposed underwritten offering to permit the Registrable Securities requested to be included in a Piggy-Back Registration on the same terms and conditions as any similar securities of the Company and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof.  All holders of Registrable Securities proposing to distribute their securities through a Piggy-Back Registration that involves an Underwriter or Underwriters shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected for such Piggy-Back Registration.

  

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2.2.2.     Reduction of Offering.  If the managing Underwriter or Underwriters for a Piggy-Back Registration that is to be an underwritten offering advises the Company and the holders of Registrable Securities in writing that the dollar amount or number of securities which the Company desires to sell, taken together with the securities, if any, as to which Registration has been demanded pursuant to written contractual arrangements with Persons other than the holders of Registrable Securities hereunder, the Registrable Securities as to which Registration has been requested under this Section 2.2, and the securities, if any, as to which Registration has been requested pursuant to the written contractual Piggy-Back Registration rights of other securityholders of the Company, exceeds the Maximum Number of Securities, then the Company shall include in any such Registration:

 

(a)       If the Registration is undertaken for the Company’s account: (A) first, the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the shares of Common Stock or other securities, if any, comprised of Registrable Securities, as to which Registration has been requested pursuant to the applicable written contractual piggy-back registration rights of such security holders, Pro Rata, that can be sold without exceeding the Maximum Number of Securities; and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock or other securities for the account of other Persons that the Company is obligated to register pursuant to written contractual piggy-back registration rights with such Persons, Pro Rata, that can be sold without exceeding the Maximum Number of Securities; and

 

(b)      If the registration is a “demand” registration undertaken at the demand of holders of Option Securities, (A) first, the shares of Common Stock or other securities for the account of the demanding persons, Pro Rata, that can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock or other Registrable Securities, Pro Rata, as to which registration has been requested pursuant to the terms hereof, that can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), the shares of Common Stock or other securities for the account of other persons that the Company is obligated to register pursuant to written contractual arrangements with such persons, that can be sold without exceeding the Maximum Number of Securities; and

 

(c)       If the registration is a “demand” registration undertaken at the demand of persons other than either the holders of Registrable Securities or of Option Securities, (A) first, the shares of Common Stock or other securities for the account of the demanding persons that can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), collectively the shares of Common Stock or other securities comprised of Registrable Securities and Option Securities Pro Rata, as to which registration has been requested pursuant to the terms hereof and of the Unit Purchase Option, as applicable, that can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), the shares of Common Stock or other securities for the account of other persons that the Company is obligated to register pursuant to written contractual arrangements with such persons, Pro Rata, that can be sold without exceeding the Maximum Number of Securities.

  

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2.2.3.     Withdrawal.  Any holder of Registrable Securities may elect to withdraw such holder’s request for inclusion of Registrable Securities in any Piggy-Back Registration by giving written notice to the Company of such request to withdraw prior to the effectiveness of the Registration Statement.  The Company (whether on its own determination or as the result of a withdrawal by Persons making a demand pursuant to written contractual obligations) may withdraw a Registration Statement at any time prior to the effectiveness of the Registration Statement.  Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the holders of Registrable Securities in connection with such Piggy-Back Registration as provided in Section 3.3.

 

2.3         Registrations on Form S-3.  Pursuant to a Demand Registration under Section 2.1, the holders of Registrable Securities may at any time and from time to time, request in writing that the Company register the resale of any or all of such Registrable Securities on Form S-3 or any similar short-form Registration which may be available at such time (“Form S-3”); provided, however, that the Company shall not be obligated to effect such request through an underwritten offering.  Upon receipt of such written request, the Company will promptly give written notice of the proposed Registration to all other holders of Registrable Securities, and, as soon as practicable thereafter, effect the Registration of all or such portion of such holder’s or holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities or other securities of the Company, if any, of any other holder or holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to effect any such Registration pursuant to this Section 2.3: (i) if Form S-3 is not available for such offering; or (ii) if the holders of the Registrable Securities, together with the holders of any other securities of the Company entitled to inclusion in such Registration, propose to sell Registrable Securities and such other securities (if any) at any aggregate price to the public of less than $500,000.  Registrations effected pursuant to this Section 2.3 shall not be counted as Demand Registrations effected pursuant to Section 2.1.

 

3.           REGISTRATION PROCEDURES.

 

3.1         Filings; Information.  Whenever the Company is required to effect the Registration of any Registrable Securities pursuant to Section 2, the Company shall use its reasonable best efforts to effect the Registration and sale of such Registrable Securities in accordance with the intended method(s) of distribution thereof as expeditiously as practicable, and in connection with any such request:

 

3.1.1.     Filing Registration Statement.  The Company shall, as expeditiously as possible and in any event within sixty (60) days after receipt of a request for a Demand Registration pursuant to Section 2.1, prepare and file with the Commission a Registration Statement on any form for which the Company then qualifies or which counsel for the Company shall deem appropriate and which form shall be available for the sale of all Registrable Securities to be registered thereunder in accordance with the intended method(s) of distribution thereof, and shall use its reasonable best efforts to cause such Registration Statement to become and remain effective for the period required by Section 3.1.3; provided, however, that the Company shall have the right to defer any Demand Registration for up to thirty (30) days, and any Piggy-Back Registration for such period as may be applicable to deferment of any Demand Registration to which such Piggy-Back Registration relates, in each case if the Company shall furnish to the holders a certificate signed by the Chief Executive Officer or the Chairman of the Board of the Company stating that, in the good faith judgment of the Board of Directors of the Company, it would be materially detrimental to the Company and its securityholders for such Registration Statement to be effected at such time; provided further, that the Company shall not have the right to exercise the right set forth in the immediately preceding proviso more than once in any 365-day period in respect of a Demand Registration hereunder.

 

3.1.2.     Copies.  The Company shall, prior to filing a Registration Statement or prospectus, or any amendment or supplement thereto, furnish without charge to the holders of Registrable Securities included in such Registration, and such holders’ legal counsel, copies of the Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such Registration Statement (including each preliminary prospectus), and such other documents as the holders of Registrable Securities included in such Registration or legal counsel for any such holders may request in order to facilitate the disposition of the Registrable Securities owned by such holders.

  

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3.1.3.     Amendments and Supplements.  The Company shall prepare and file with the Commission such amendments, including post-effective amendments, and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective and in compliance with the provisions of the Securities Act until all Registrable Securities and other securities covered by such Registration Statement have been disposed of in accordance with the intended method(s) of distribution set forth in such Registration Statement (which period shall not exceed the sum of one hundred eighty (180) days plus any period during which any such disposition is interfered with by any stop order or injunction of the Commission or any governmental agency or court) or such securities have been withdrawn.

 

3.1.4.     Notification.  After the filing of a Registration Statement, the Company shall promptly, and in no event more than two (2) business days after such filing, notify the holders of Registrable Securities included in such Registration Statement of such filing, and shall further notify such holders promptly and confirm such advice in writing within two (2) business days of the occurrence of any of the following: (i) when such Registration Statement becomes effective; (ii) when any post-effective amendment to such Registration Statement becomes effective; (iii) the issuance or threatened issuance by the Commission of any stop order (and the Company shall take all actions required to prevent the entry of such stop order or to remove it if entered); and (iv) any request by the Commission for any amendment or supplement to such Registration Statement or any prospectus relating thereto or for additional information or of the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of the securities covered by such Registration Statement, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and promptly make available to the holders of Registrable Securities included in such Registration Statement any such supplement or amendment; except that before filing with the Commission a Registration Statement or prospectus or any amendment or supplement thereto, including documents incorporated by reference, the Company shall furnish to the holders of Registrable Securities included in such Registration Statement and to the legal counsel for any such holders, copies of all such documents proposed to be filed sufficiently in advance of filing to provide such holders and legal counsel with a reasonable opportunity to review such documents and comment thereon, and the Company shall not file any Registration Statement or prospectus or amendment or supplement thereto, including documents incorporated by reference, to which such holders or their legal counsel shall object.

 

3.1.5.     State Securities Laws Compliance.  The Company shall use its reasonable best efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement as necessary under such securities or “blue sky” laws of such jurisdictions in the United States as the holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to enable the holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph or subject itself to taxation in any such jurisdiction.

 

3.1.6.     Agreements for Disposition.  The Company shall enter into customary agreements (including, if applicable, an underwriting agreement in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities.  The representations, warranties and covenants of the Company in any underwriting agreement which are made to or for the benefit of any Underwriters, to the extent applicable, shall also be made to and for the benefit of the holders of Registrable Securities included in such Registration Statement.  No holder of Registrable Securities included in such Registration Statement shall be required to make any representations or warranties in the underwriting agreement except, if applicable, with respect to such holder’s organization, good standing, authority, title to Registrable Securities, lack of conflict of such sale with such holder’s material agreements and organizational documents, and with respect to written information relating to such holder that such holder has furnished in writing expressly for inclusion in such Registration Statement.

  

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3.1.7.     Cooperation.  Officers and members of the management of the Company shall cooperate fully in any offering of Registrable Securities hereunder, which cooperation shall include the preparation of the Registration Statement with respect to such offering and all other offering materials and related documents, and participation in meetings with Underwriters, attorneys, accountants and potential investors.

 

3.1.8.     Records.  The Company shall make available for inspection by the holders of Registrable Securities included in such Registration Statement, any Underwriter participating in any disposition pursuant to such Registration Statement and any attorney, accountant or other professional retained by any holder of Registrable Securities included in such Registration Statement or any Underwriter, all financial and other records, pertinent corporate documents and properties of the Company, as shall be necessary to enable them to exercise their due diligence responsibility, and cause the Company’s officers, directors and employees to supply all information requested by any of them in connection with such Registration Statement.

 

3.1.9.     Opinions and Comfort Letters.  The Company shall furnish to each holder of Registrable Securities included in any Registration Statement a signed counterpart, addressed to such holder, of (i) any opinion of counsel to the Company delivered to any Underwriter and (ii) any comfort letter from the Company’s independent public accountants delivered to any Underwriter.  In the event no legal opinion is delivered to any Underwriter, the Company shall furnish to each holder of Registrable Securities included in such Registration Statement, at any time that such holder elects to use a prospectus, an opinion of counsel to the Company to the effect that the Registration Statement containing such prospectus has been declared effective and that no stop order is in effect.

 

3.1.10.   Earnings Statement.  The Company shall comply with all applicable rules and regulations of the Commission and the Securities Act, and also make available to its stockholders, as soon as practicable, an earnings statement covering a period of twelve (12) months, beginning within three (3) months after the effective date of the Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.

 

3.1.11.   Listing.  The Company shall use its reasonable best efforts to cause all Registrable Securities included in any Registration to be listed on such exchanges or otherwise designated for trading in the same manner as similar securities issued by the Company are then listed or designated or, if no such similar securities are then listed or designated, in a manner satisfactory to the holders of a majority of the Registrable Securities included in such Registration.

 

3.1.12.   Post-Effective Amendment.  The Company shall promptly incorporate in a prospectus supplement or post-effective amendment to the applicable Registration Statement such information as the managing Underwriter or Underwriters, if any, or the holders of a majority of the Registrable Securities of the class being sold agree should be included therein relating to the plan of distribution with respect to such Registrable Securities; and make all required filings of such prospectus supplement or post-effective amendment as soon as reasonably practicable after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment;

 

3.2         Obligation to Suspend Distribution.  Upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3.1.4(iv), or, in the case of a resale Registration on Form S-3 pursuant to Section 2.3 hereof, upon any suspension by the Company, pursuant to a written insider trading compliance program adopted by the Company’s Board of Directors or otherwise, of the ability of all insiders covered by such program to transact in the Company’s securities because of the existence of material non-public information, each holder of Registrable Securities included in any Registration shall discontinue disposition of such Registrable Securities pursuant to the Registration Statement covering such Registrable Securities immediately until such holder receives the supplemented or amended prospectus contemplated by Section 3.1.4(iv) or the restriction on the ability of insiders to transact in the Company’s securities is removed, as applicable, and, if so directed by the Company, each such holder will deliver to the Company all copies, other than permanent file copies then in such holder’s possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice.

  

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3.3         Registration Expenses.  The Company shall bear all costs and expenses incurred in connection with any Demand Registration pursuant to Section 2.1 (limited to one Demand Registration initiated by EBC), any Piggy-Back Registration pursuant to Section 2.2, any Registration on Form S-3 effected pursuant to Section 2.3 and all expenses incurred in performing or complying with its other obligations under this Agreement, whether or not the Registration Statement becomes effective, including, without limitation: (i) all Registration and filing fees; (ii) fees and expenses of compliance with securities or “blue sky” laws (including fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities); (iii) printing expenses; (iv) the Company’s internal expenses (including all salaries and expenses of its officers and employees); (v) the fees and expenses incurred in connection with the listing of the Registrable Securities as required by Section 3.1.11; (vi) Financial Industry Regulatory Authority fees; (vii) fees and disbursements of counsel for the Company and fees and expenses for independent certified public accountants retained by the Company (including the expenses or costs associated with the delivery of any opinions or comfort letters requested pursuant to Section 3.1.9); (viii) the fees and expenses of any special experts retained by the Company in connection with such Registration; and (ix) the fees and expenses of one legal counsel selected by the holders of a majority-in-interest of the Registrable Securities included in such Registration.  The Company shall have no obligation to pay any underwriting discounts or selling commissions attributable to the Registrable Securities being sold by the holders thereof, which underwriting discounts or selling commissions shall be borne by such holders.  In addition, in an underwritten offering, all selling holders of Registrable Securities and the Company shall bear any expenses of the Underwriter required to be borne by the selling securityholders or the company pursuant to the underwriting agreement pro rata in proportion to the respective amount of securities each is selling in such offering.

 

3.4         Information.  The holders of Registrable Securities shall provide such information as may reasonably be requested by the Company, or the managing Underwriter, if any, in connection with the preparation of any Registration Statement, including amendments and supplements thereto, in order to effect the Registration of any Registrable Securities under the Securities Act pursuant to Section 2 and in connection with the Company’s obligation to comply with federal and applicable state securities laws.

 

3.5         Underwritten Offerings.

 

3.5.1.     Underwriting Agreements.  If requested by the Underwriters for any underwritten offering requested by holders pursuant to Sections 2.1 or 2.3, the Company and the holders of Registrable Securities to be included therein shall enter into an underwriting agreement with such Underwriters, such agreement to be reasonably satisfactory in substance and form to the Company, the holders of a majority of each class of the Registrable Securities to be included in such underwritten offering and the underwriters, and to contain such terms and conditions as are generally prevailing in agreements of that type, including indemnities no less favorable to the recipient thereof than those provided in Section 4.  The holders of any Registrable Securities to be included in any underwritten offering pursuant to Section 2.2 shall enter into such an underwriting agreement at the request of the Company.  All of the representations and warranties and the other agreements by and on the part of the Company to and for the benefit of the underwriters included in any such underwriting agreement shall also be made to and for the benefit of such holders, and any or all of the conditions precedent to the obligations of the underwriters under such underwriting agreement shall be conditions precedent to the obligations of such holders.  No holder shall be required in any such underwriting agreement to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding such holder, such holder’s Registrable Securities, such holder’s intended method of distribution and any other representations required by law.

 

3.5.2.     Price and Underwriting Discounts.  In the case of an underwritten offering requested by holders pursuant to Sections 2.1 or 2.3, the price, underwriting discount and other financial terms of the related underwriting agreement for each class of Registrable Securities shall be determined by the holders of a majority of such class of Registrable Securities.  In the case of any underwritten offering pursuant to Section 2.2, such price, discount and other terms shall be determined by the Company, subject to the right of the holders to withdraw their request to participate in the Registration pursuant to Section 2.2.3 after being advised of such price, discount and other terms.

 

3.5.3.     Participation in Underwritten Offerings.  No Person may participate in an underwritten offering unless such Person (i) agrees to sell such Person’s securities on the basis provided in the underwriting arrangements approved by the Persons entitled to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

  

9

  

 

3.6         No Inconsistent Agreements; Additional Rights.  The Company will not enter into, and is not currently a party to, any agreement that is inconsistent with the rights granted to the holders of Registrable Securities by this Agreement.

 

4.           INDEMNIFICATION AND CONTRIBUTION.

 

4.1         Indemnification by the Company.  The Company agrees to indemnify and hold harmless each Investor and each other holder of Registrable Securities, and each of their respective officers, employees, affiliates, directors, partners, members, attorneys and agents and each Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) an Investor and each other holder of Registrable Securities (each, an “Investor Indemnified Party”) from and against any expenses, losses, judgments, claims, damages or liabilities, whether joint or several, arising out of or based upon any untrue statement (or allegedly untrue statement) of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained in the Registration Statement, or any amendment or supplement to such Registration Statement, or arising out of or based upon any omission (or alleged omission) to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of the Securities Act or any rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such Registration; and the Company shall promptly reimburse the Investor Indemnified Party for any legal and any other expenses reasonably incurred by such Investor Indemnified Party in connection with investigating and defending any such expense, loss, judgment, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case to the extent that any such expense, loss, claim, damage or liability arises out of or is based upon any untrue statement or allegedly untrue statement or omission or alleged omission made in such Registration Statement, preliminary prospectus, final prospectus or summary prospectus, or any such amendment or supplement, in reliance upon and in conformity with information furnished to the Company, in writing, by such selling holder expressly for use therein.  The Company also shall indemnify any Underwriter of the Registrable Securities, their officers, affiliates, directors, partners, members and agents and each Person who controls such Underwriter on substantially the same basis as that of the indemnification provided above in this Section 4.1.

 

4.2         Indemnification by Holders of Registrable Securities.  Each selling holder of Registrable Securities will, in the event that any Registration is being effected under the Securities Act pursuant to this Agreement of any Registrable Securities held by such selling holder, indemnify and hold harmless the Company, each of its directors and officers and each Underwriter (if any), and each other selling holder and each other Person, if any, who controls another selling holder or such Underwriter within the meaning of the Securities Act, against any losses, claims, judgments, damages or liabilities, whether joint or several, insofar as such losses, claims, judgments, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or allegedly untrue statement of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained in the Registration Statement, or any amendment or supplement to the Registration Statement, or arise out of or are based upon any omission or the alleged omission to state a material fact required to be stated therein or necessary to make the statement therein not misleading, if the statement or omission was made in reliance upon and in conformity with information furnished in writing to the Company by such selling holder expressly for use therein, and shall reimburse the Company, its directors and officers, and each other selling holder or controlling Person for any legal or other expenses reasonably incurred by any of them in connection with investigation or defending any such loss, claim, damage, liability or action.  Each selling holder’s indemnification obligations hereunder shall be several and not joint and shall be limited to the amount of any net proceeds actually received by such selling holder.

  

10

  

4.3         Conduct of Indemnification Proceedings.  Promptly after receipt by any Person of any notice of any loss, claim, damage or liability or any action in respect of which indemnity may be sought pursuant to Section 4.1 or 4.2, such Person (the “Indemnified Party”) shall, if a claim in respect thereof is to be made against any other Person for indemnification hereunder, notify such other Person (the “Indemnifying Party”) in writing of the loss, claim, judgment, damage, liability or action; provided, however, that the failure by the Indemnified Party to notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability which the Indemnifying Party may have to such Indemnified Party hereunder, except and solely to the extent the Indemnifying Party is actually prejudiced by such failure.  If the Indemnified Party is seeking indemnification with respect to any claim or action brought against the Indemnified Party, then the Indemnifying Party shall be entitled to participate in such claim or action, and, to the extent that it wishes, jointly with all other Indemnifying Parties, to assume control of the defense thereof with counsel satisfactory to the Indemnified Party.  After notice from the Indemnifying Party to the Indemnified Party of its election to assume control of the defense of such claim or action, the Indemnifying Party shall not be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that in any action in which both the Indemnified Party and the Indemnifying Party are named as defendants, the Indemnified Party shall have the right to employ separate counsel (but no more than one such separate counsel) to represent the Indemnified Party and its controlling Persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Indemnified Party against the Indemnifying Party, with the fees and expenses of such counsel to be paid by such Indemnifying Party if, based upon the written opinion of counsel of such Indemnified Party, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.  No Indemnifying Party shall, without the prior written consent of the Indemnified Party, consent to entry of judgment or effect any settlement of any claim or pending or threatened proceeding in respect of which the Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such judgment or settlement includes an unconditional release of such Indemnified Party from all liability arising out of such claim or proceeding.

 

4.4         Contribution.

 

4.4.1.     If the indemnification provided for in the foregoing Sections 4.1, 4.2 and 4.3 is unavailable to any Indemnified Party in respect of any loss, claim, damage, liability or action referred to herein, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the Indemnified Parties and the Indemnifying Parties in connection with the actions or omissions which resulted in such loss, claim, damage, liability or action, as well as any other relevant equitable considerations.  The relative fault of any Indemnified Party and any Indemnifying Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such Indemnified Party or such Indemnifying Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

4.4.2.     The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 4.4 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding Section.

 

4.4.3.     The amount paid or payable by an Indemnified Party as a result of any loss, claim, damage, liability or action referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this Section 4.4, no holder of Registrable Securities shall be required to contribute any amount in excess of the dollar amount of the net proceeds (after payment of any underwriting fees, discounts, commissions or taxes) actually received by such holder from the sale of Registrable Securities which gave rise to such contribution obligation.  No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

 

5.           UNDERWRITING AND DISTRIBUTION.

 

5.1         Rule 144.  The Company covenants that it shall file any reports required to be filed by it under the Securities Act and the Exchange Act and shall take such further action as the holders of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holders to sell Registrable Securities without Registration under the Securities Act within the limitation of the exemptions provided by Rule 144 under the Securities Act, as such Rules may be amended from time to time, or any similar Rule or regulation hereafter adopted by the Commission.

  

11

  

 

6.           MISCELLANEOUS.

 

6.1         Term.  This Agreement shall terminate upon earlier of (i) the tenth anniversary of the date of this Agreement or (ii) the date as of which (A) all of the Registrable Securities have been sold pursuant to a Registration Statement (but in no event prior to the applicable period referred to in Section 4(3) of the Securities Act and Rule 174 thereunder) or (B) the holders of all Registrable Securities are permitted to sell the Registrable Securities under Rule 144 (or any similar provision) under the Securities Act without limitation on the amount of securities sold or the manner of sale.  The provisions of Section 4 and Section 5 shall survive any termination.

 

6.2         Other Registration Rights.  Except with respect to those securities issued or issuable upon exercise of that certain Unit Purchase Option to be issued to EBC or its designees in connection with the Company’s initial public offering on May 9, 2011, the Company represents and warrants that no Person, other than a holder of the Registrable Securities, has any right to require the Company to register any shares of the Company’s capital stock for sale or to include shares of the Company’s capital stock in any Registration filed by the Company for the sale of any securities for its own account or for the account of any other Person.

 

6.3         Assignment; No Third Party Beneficiaries.  This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in part.  This Agreement and the rights, duties and obligations of the holders of Registrable Securities hereunder may be freely assigned or delegated by such holder of Registrable Securities in conjunction with and to the extent of any transfer of Registrable Securities by any such holder.  This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and the permitted assigns of the Investor or holder of Registrable Securities or of any assignee of the Investor or holder of Registrable Securities.  This Agreement is not intended to confer any rights or benefits on any Persons that are not party hereto other than as expressly set forth in Article 4 and this Section 6.3.

 

6.4         Notices.  All notices, demands, requests, consents, approvals or other communications (collectively, “Notices”) required or permitted to be given hereunder or which are given with respect to this Agreement shall be in writing and shall be personally served, delivered by reputable air courier service with charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile, addressed as set forth below, or to such other address as such party shall have specified most recently by written notice.  Notice shall be deemed given on the date of service or transmission if personally served or transmitted by telegram, telex or facsimile; provided, that if such service or transmission is not on a business day or is after normal business hours, then such notice shall be deemed given on the next business day.  Notice otherwise sent as provided herein shall be deemed given on the next business day following timely delivery of such notice to a reputable air courier service with an order for next-day delivery.

 

To the Company:

 

Universal Business Payment Solutions Acquisition Corporation

c/o UBPS Services, LLC

Radnor Financial Center

150 North Radnor-Chester Road, Suite F-200

Radnor, Pennsylvania 19087

Attn:  Bipin C. Shah

 

A copy of any notice sent hereunder shall be sent to:

 

Dechert LLP

1775 I Street, N.W.

Washington, D.C. 20006

Attn:  Thomas J. Friedmann

  

12

  

To EBC:

 

EarlyBirdCapital, Inc.

275 Madison Avenue

27th Floor

New York, NY 10016

Attn:  Steve Levine

 

To any other Investor, to the address specified on Exhibit B.

 

6.5           Severability.  This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof.  Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible that is valid and enforceable.

 

6.6           Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument.

 

6.7           Entire Agreement.  This Agreement (including all agreements entered into pursuant hereto and all certificates and instruments delivered pursuant hereto and thereto) constitute the entire agreement of the parties with respect to the subject matter hereof and supersede all prior and contemporaneous agreements, representations, understandings, negotiations and discussions between the parties, whether oral or written.

 

6.8           Modifications and Amendments.  No amendment, modification or termination of this Agreement shall be binding upon any party unless executed in writing by such party.

 

6.9           Titles and Headings.  Titles and headings of sections of this Agreement are for convenience only and shall not affect the construction of any provision of this Agreement.

 

6.10         Waivers and Extensions.  Any party to this Agreement may waive any right, breach or default which such party has the right to waive, provided that such waiver will not be effective against the waiving party unless it is in writing, is signed by such party and specifically refers to this Agreement.  Waivers may be made in advance or after the right waived has arisen or the breach or default waived has occurred.  Any waiver may be conditional.  No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof nor of any other agreement or provision herein contained.  No waiver or extension of time for performance of any obligations or acts shall be deemed a waiver or extension of the time for performance of any other obligations or acts.

 

6.11         Remedies Cumulative.  In the event that the Company fails to observe or perform any covenant or agreement to be observed or performed under this Agreement, the Investor or any other holder of Registrable Securities may proceed to protect and enforce its rights by suit in equity or action at law, whether for specific performance of any term contained in this Agreement or for an injunction against the breach of any such term or in aid of the exercise of any power granted in this Agreement or to enforce any other legal or equitable right, or to take any one or more of such actions, without being required to post a bond.  None of the rights, powers or remedies conferred under this Agreement shall be mutually exclusive, and each such right, power or remedy shall be cumulative and in addition to any other right, power or remedy, whether conferred by this Agreement or now or hereafter available at law, in equity, by statute or otherwise.

 

6.12         Governing Law.  This Agreement shall be governed by, interpreted under and construed in accordance with the internal laws of the State of New York applicable to agreements made and to be performed within the State of New York.

 

6.13         Waiver of Trial by Jury.  Each party hereby irrevocably and unconditionally waives the right to a trial by jury in any action, suit, counterclaim or other proceeding (whether based on contract, tort or otherwise) arising out of, connected with or relating to this Agreement, the transactions contemplated hereby, or the actions of the Investor in the negotiation, administration, performance or enforcement hereof.

  

13

  

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

 

	  	
UNIVERSAL BUSINESS PAYMENT

	  	
SOLUTIONS ACQUISITION CORPORATION

	  	  
	  	
/s/ Bipin C. Shah

	  	
By: Bipin C. Shah

	  	
Title:  Chief Executive Officer

	  	  
	  	
INVESTOR:

	  	  
	  	
/s/ Bipin C. Shah

	  	
By: Bipin C. Shah

	  	
Address:

  

14

  

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

 

	  	
UNIVERSAL BUSINESS PAYMENT

	  	
SOLUTIONS ACQUISITION CORPORATION

	  	  
	  	
/s/ Bipin C. Shah

	  	
By: Bipin C. Shah

	  	
Title:  Chief Executive Officer

	  	  
	  	
INVESTOR:

	  	  
	  	
/s/ Peter Davidson

	  	
By: Peter Davidson

	  	
Address:

  

15

  

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

 

	  	
UNIVERSAL BUSINESS PAYMENT

	  	
SOLUTIONS ACQUISITION CORPORATION

	  	  
	  	
/s/ Bipin C. Shah

	  	
By: Bipin C. Shah

	  	
Title:  Chief Executive Officer

	  	  
	  	
INVESTOR:

	  	  
	  	
/s/ Frederick Hammer

	  	
By: Frederick Hammer

	  	
Address:

  

16

  

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

 

	  	
UNIVERSAL BUSINESS PAYMENT

	  	
SOLUTIONS ACQUISITION CORPORATION

	  	  
	  	
/s/ Bipin C. Shah

	  	
By: Bipin C. Shah

	  	
Title:  Chief Executive Officer

	  	  
	  	
INVESTOR:

	  	  
	  	
/s/ Arthur Ryan

	  	
By: Arthur Ryan

	  	
Address:

  

17

  

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

	  	
UNIVERSAL BUSINESS PAYMENT

	  	
SOLUTIONS ACQUISITION CORPORATION

	  	  
	  	
/s/ Bipin C. Shah

	  	
By: Bipin C. Shah

	  	
Title:  Chief Executive Officer

	  	  
	  	
INVESTOR:

	  	  
	  	
/s/ Robert Palmer

	  	
By: Robert Palmer

	  	
Address:

  

18

  

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

 

	  	
UNIVERSAL BUSINESS PAYMENT

	  	
SOLUTIONS ACQUISITION CORPORATION

	  	  
	  	
/s/ Bipin C. Shah

	  	
By: Bipin C. Shah

	  	
Title:  Chief Executive Officer

	  	  
	  	
INVESTOR:

	  	  
	  	
/s/ Richard Braddock

	  	
By: Richard Braddock

	  	
Address:

  

19

  

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

 

	  	
UNIVERSAL BUSINESS PAYMENT

	  	
SOLUTIONS ACQUISITION CORPORATION

	  	  
	  	
/s/ Bipin C. Shah

	  	
By: Bipin C. Shah

	  	
Title:  Chief Executive Officer

	  	  
	  	
INVESTOR:

	  	  
	  	
/s/ Jon Lubert

	  	
By: Jon Lubert

	  	
Address:

  

20

  

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

 

	  	
UNIVERSAL BUSINESS PAYMENT

	  	
SOLUTIONS ACQUISITION CORPORATION

	  	  
	  	
/s/ Bipin C. Shah

	  	
By: Bipin C. Shah

	  	
Title:  Chief Executive Officer

	  	  
	  	
INVESTOR:

	  	  
	  	
/s/ Ira Lubert

	  	
By: Ira Lubert

	  	
Address:

  

21

  

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

 

	  	
UNIVERSAL BUSINESS PAYMENT

	  	
SOLUTIONS ACQUISITION CORPORATION

	  	  
	  	
/s/ Bipin C. Shah

	  	
By: Bipin C. Shah

	  	
Title:  Chief Executive Officer

	  	  
	  	
INVESTOR:

	  	  
	  	
/s/ Douglas Anderson

	  	
By: Douglas Anderson

	  	
Address:

  

22

  

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

 

	  	
UNIVERSAL BUSINESS PAYMENT

	  	
SOLUTIONS ACQUISITION CORPORATION

	  	  
	  	
/s/ Bipin C. Shah

	  	
By: Bipin C. Shah

	  	
Title:  Chief Executive Officer

	  	  
	  	
INVESTOR:

	  	  
	  	
/s/ Douglas Rainey

	  	
By: Douglas Rainey

	  	
Address:

  

23

  

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

 

	  	
UNIVERSAL BUSINESS PAYMENT

	  	
SOLUTIONS ACQUISITION CORPORATION

	  	  
	  	
/s/ Bipin C. Shah

	  	
By: Bipin C. Shah

	  	
Title:  Chief Executive Officer

	  	  
	  	
INVESTOR:

	  	  
	  	
/s/ Eric Van Der Vlugt

	  	
By: Eric Van Der Vlugt

	  	
Address:

  

24

  

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

 

	  	
UNIVERSAL BUSINESS PAYMENT

	  	
SOLUTIONS ACQUISITION CORPORATION

	  	  
	  	
/s/ Bipin C. Shah

	  	
By: Bipin C. Shah

	  	
Title:  Chief Executive Officer

	  	  
	  	
INVESTOR:

	  	  
	  	
/s/ Thomas McHugh

	  	
By: Thomas McHugh

	  	
Address:

  

25

  

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

 

	  	
UNIVERSAL BUSINESS PAYMENT

	  	
SOLUTIONS ACQUISITION CORPORATION

	  	  
	  	
/s/ Bipin C. Shah

	  	
By: Bipin C. Shah

	  	
Title:  Chief Executive Officer

	  	  
	  	
INVESTOR:

	  	  
	  	
/s/ Dipak Shah

	  	
By: Dipak Shah

	  	
Address:

  

26

  

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

 

	  	
UNIVERSAL BUSINESS PAYMENT

	  	
SOLUTIONS ACQUISITION CORPORATION

	  	  
	  	
/s/ Bipin C. Shah

	  	
By: Bipin C. Shah

	  	
Title:  Chief Executive Officer

	  	  
	  	
INVESTOR:

	  	  
	  	
/s/ Anna Hassold

	  	
By: Anna Hassold

	  	
Address:

  

27

  

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

 

	  	
UNIVERSAL BUSINESS PAYMENT

	  	
SOLUTIONS ACQUISITION CORPORATION

	  	  
	  	
/s/ Bipin C. Shah

	  	
By: Bipin C. Shah

	  	
Title:  Chief Executive Officer

	  	  
	  	
INVESTOR:

	  	  
	  	
/s/ Roland Bullard

	  	
By: Roland Bullard

	  	
Address:

  

28

  

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

 

	  	
UNIVERSAL BUSINESS PAYMENT

	  	
SOLUTIONS ACQUISITION CORPORATION

	  	  
	  	
/s/ Bipin C. Shah

	  	
By: Bipin C. Shah

	  	
Title:  Chief Executive Officer

	  	  
	  	
INVESTOR:

	  	  
	  	
/s/ Fred R. Adams

	  	
By: Fred R. Adams

	  	
Address:

  

29

  

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

 

	  	
UNIVERSAL BUSINESS PAYMENT

	  	
SOLUTIONS ACQUISITION CORPORATION

	  	  
	  	
/s/ Bipin C. Shah

	  	
By: Bipin C. Shah

	  	
Title:  Chief Executive Officer

	  	  
	  	
INVESTOR:

	  	  
	  	
/s/ William M. Dougherty

	  	
By: William M. Dougherty

	  	
Address:

  

30

  

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

 

	  	
UNIVERSAL BUSINESS PAYMENT

	  	
SOLUTIONS ACQUISITION CORPORATION

	  	  
	  	
/s/ Bipin C. Shah

	  	
By: Bipin C. Shah

	  	
Title:  Chief Executive Officer

	  	  
	  	
INVESTOR:

	  	  
	  	
/s/ John W. Piasecki

	  	
By: John W. Piasecki

	  	
Address:

  

31

  

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

 

	  	
UNIVERSAL BUSINESS PAYMENT

	  	
SOLUTIONS ACQUISITION CORPORATION

	  	  
	  	
/s/ Bipin C. Shah

	  	
By: Bipin C. Shah

	  	
Title:  Chief Executive Officer

	  	  
	  	
INVESTOR:

	  	  
	  	
/s/ Valerie Phillips

	  	
By: Valerie Phillips

	  	
Address:

  

32Exhibit 10.1

 

 

ASSET PURCHASE AGREEMENT

AMONG

EP USA, LLC

AS COMPANY

EQUITY PARTNERS, INC. OF MARYLAND,

THE REXFORD COMPANY, LLC, AND

CROSS CONCEPTS, LLC

AS SELLERS

KEN MANN

DAN REXFORD

FRED CROSS

AS OWNERS

AND

EQUITY PARTNERS CRB LLC

AS BUYER

 

   

June 23, 2011

  

 

  

TABLE OF CONTENTS

	
1.

	
SALE OF ASSETS

	
1

	  	
1.1

	
Sale of the Assets

	
1

	  	
1.2

	
Excluded Assets

	
2

	  	
1.3

	
Liabilities

	
2

	  	
1.4

	
Purchase Price

	
2

	  	  	  	  
	
2.

	
CLOSING

	
3

	  	
2.1

	
Closing

	
3

	  	
2.2

	
Actions of Company, Sellers and Owners at Closing

	
3

	  	
2.3

	
Actions of Buyer at Closing

	
4

	  	  	  	  
	
3.

	
REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY

	
4

	  	
3.1

	
Organization

	
4

	  	
3.2

	
Powers; Consents; Absence of Conflicts With Other Agreements, Etc

	
5

	  	
3.3

	
Binding Agreement

	
5

	  	
3.4

	
Compliance With Laws; Permits

	
5

	  	
3.5

	
Property

	
6

	  	
3.6

	
Litigation or Proceedings

	
6

	  	
3.7

	
Environmental Matters

	
7

	  	
3.8

	
Taxes

	
7

	  	
3.9

	
Employee Relations

	
8

	  	
3.10

	
Employee Benefit Matters

	
8

	  	
3.11

	
Contracts

	
8

	  	
3.12

	
Inventory

	
9

	  	
3.13

	
Insurance

	
9

	  	
3.14

	
Books and Records

	
9

	  	
3.15

	
Broker’s or Finder’s Fees

	
9

	  	
3.16

	
No Undisclosed Liabilities

	
9

	  	
3.17

	
Intellectual Property

	
9

	  	
3.18

	
No Misleading Statements

	
10

	  	
3.19

	
Operations

	
10

	  	  	  	  
	
4.

	
REPRESENTATIONS AND WARRANTIES REGARDING SELLERS

	
10

	  	
4.1

	
Authorization

	
10

	  	
4.2

	
No Violations

	
11

	  	
4.3

	
Brokers, Finders and Investment Bankers

	
11

	  	
4.4

	
Ownership

	
11

	  	  	  	  
	
5.

	
REPRESENTATIONS AND WARRANTIES OF BUYER

	
11

	  	
5.1

	
Organization

	
11

	  	
5.2

	
Powers; Consents; Absence of Conflicts With Other Agreements, Etc

	
11

	  	
5.3

	
Binding Agreement

	
12

	  	
5.4

	
Proceedings

	
12

	  	
5.5

	
No Brokers

	
12

  

i

  

	
6.

	
REPRESENTATIONS AND WARRANTIES REGARDING PARENT

	
12

	  	
6.1

	
Incorporation; Authorization

	
12

	  	
6.2

	
Capitalization; Structure

	
13

	  	
6.3

	
Litigation

	
13

	  	
6.4

	
SEC Reports; Material Adverse Effect

	
13

	  	
6.5

	
Disclosure

	
13

	  	  	  	  
	
7.

	
REPRESENTATIONS AND WARRANTIES OF INVESTORS

	
13

	  	
7.1

	
Access

	
14

	  	
7.2

	
Investment Intent

	
14

	  	
7.3

	
Ability to Bear Economic Loss

	
14

	  	
7.4

	
Independent Investigations

	
14

	  	
7.5

	
Accredited Investor

	
14

	  	
7.6

	
State of Domicile

	
14

	  	  	  	  
	

8.

	COVENANTS	
14

	  	
8.1

	
Tax Matters.

	
14

	  	
8.2

	
Sales Tax

	
15

	  	
8.3

	
Prorations

	
15

	  	
8.4

	
Confidentiality

	
16

	  	
8.5

	
Winding Up

	
16

	  	
8.6

	
Assignment of Name Under Certain Conditions

	
16

	  	  	  	  
	
9.

	
MISCELLANEOUS

	
16

	  	
9.1

	
Definitions

	
16

	  	
9.2

	
Additional Assurances

	
21

	  	
9.3

	
Cost of Transaction

	
21

	  	
9.4

	
Choice of Law; Venue

	
21

	  	
9.5

	
Waiver of Jury Trial

	
21

	  	
9.6

	
Enforcement of Agreement

	
21

	  	
9.7

	
Survival

	
21

	  	
9.8

	
Notice

	
21

	  	
9.9

	
Benefit/Assignment

	
22

	  	
9.10

	
Third Party Beneficiaries

	
22

	  	
9.11

	
Waiver of Breach

	
23

	  	
9.12

	
Interpretation

	
23

	  	
9.13

	
Tax Advice and Reliance

	
23

	  	
9.14

	
Severability

	
23

	  	
9.15

	
Gender and Number

	
23

	  	
9.16

	
Divisions and Headings

	
23

	  	
9.17

	
Entire Agreement

	
23

	  	
9.18

	
Amendment

	
23

	  	
9.19

	
Counterparts

	
23

  

ii

  

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (“Agreement”) is entered into on June 23, 2011, by and among EP USA, LLC, a Maryland limited liability company (“Company”), Equity Partners, Inc. of Maryland, a Maryland corporation (“Equity Partners”), The Rexford Company, LLC, a Maryland limited liability company (“Rexford Company”), Cross Concepts, LLC, a Maryland limited liability company (“Cross Concepts”) (Equity Partners, Rexford Company and Cross Concepts are individually each a “Seller” and collectively referred to herein as “Sellers”), Ken Mann, an individual resident of the State of Maryland (“Mann”), Dan Rexford, an individual resident of the State of Maryland (“Rexford”), Fred Cross, an individual resident of the State of Maryland (“Cross”) (Mann, Rexford and Cross are individually each an “Owner” and collectively referred to herein as “Owners”) (Company, Sellers, and Owners are sometimes each referred to herein individually as an “Investor” and collectively as “Investors”), and Equity Partners CRB LLC, a Delaware limited liability company (“Buyer”).  Capitalized terms in this Agreement are defined where used or in Section 9.1.

 

A.          Equity Partners owns eighty-five percent (85%) of the Equity Interests of Company; Rexford Company owns ten percent (10%) of the Equity Interests of the Company; and Cross Concepts owns five percent (5%) of the Equity Interests of the Company (collectively the Equity Interests owned by the Sellers are referred to herein as “LLC Interests”);

 

B.           Company desires to sell certain assets of Company to Buyer, and Buyer desires to purchase such assets from Company;

 

Intending to be legally bound, the parties agree as follows:

 

1.           SALE OF ASSETS.

 

1.1         Sale of the Assets.  On and subject to the terms and conditions of this Agreement, at Closing (as defined in Section 2.1), Company shall sell, assign, transfer and deliver to Buyer, free and clear of all Encumbrances, the following assets, rights, titles and interests, owned or leased by Company as of the Closing Date, whether tangible or intangible and personal, but excluding the Excluded Assets pursuant to Section 1.2 (all of the assets to be sold, assigned, transferred and delivered to Purchaser hereunder are collectively referred to herein as the “Acquired Assets”):

 

(a)           all machinery, equipment, furniture, office and other supplies, computer hardware and equipment, furnishings, parts, and similar property (collectively, the “Equipment”);

 

(b)           Company’s right to payment for any engagement entered into after the Effective Time ;

 

(c)           all Intellectual Property owned by Company, and all of Company’s rights to Intellectual Property used but not owned by Company;

 

(d)           Company’s rights to payment as set forth on Schedule 1.1(d);

  

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(e)           Company’s rights to sublease property located at 101 N. West St., Easton, Maryland, covered by a lease between Equity Partners and D&M Properties;

 

(f)            To the full extent transferable, all licenses, permits, registrations, certificates, consents, accreditations, approvals and franchises necessary to operate and conduct the business of the Company, together with assignments thereof, if required, and all waivers which Company currently has, if any, of any requirements pertaining to such licenses, permits, registrations, certificates, consents, accreditations, approvals and franchises;

 

(g)           all rights relating to credits, prepaid expenses, deferred charges, advanced payments, security deposits, and prepaid items attributable to periods after the Effective Time; and

 

(h)           all customer lists and other books and records of the Company, and all manuals, books and records used in operating Company, including, without limitation, personnel policies and files and manuals, accounting records, and computer software.

 

1.2         Excluded Assets.  Notwithstanding anything to the contrary in this Agreement, the following assets of Company shall be retained by Company and are not being sold or assigned to Buyer hereunder (all of the following are referred to collectively as the “Excluded Assets”):

 

(a)           Company’s cash; and

 

(b)           all accounts and notes receivable (whether current or noncurrent) of Company; and all causes of action specifically pertaining to the collection of the foregoing incurred prior to the Effective Time and not set forth on Schedule 1.1(d).

 

1.3         Liabilities.  Buyer shall not assume or become obligated for any liabilities of Company, other than those Payables incurred since the Effective Time and listed on Schedule 1.3, which Buyer shall assume from the Company at Closing.

 

1.4         Purchase Price.  On and subject to the terms and conditions of this Agreement, Buyer shall deliver (or cause to be delivered) the consideration described below to Company, Sellers or Owners (as set forth below) as purchase price to Company for the Acquired Assets.  At Closing, Company, Sellers and Owners shall cause such consideration to be further distributed as follows:

 

(a)           Equity Partners.  At Closing, Equity Partners shall receive (i) One Hundred Thousand Dollars and Zero Cents ($100,000.00) in Immediately Available Funds, (ii) Eighty-One Thousand Nine Hundred Sixty Seven (81,967) Parent Shares, and (iii) a Parent Option to purchase Two Hundred Thousand (200,000) Parent Shares;

 

(b)           Rexford Company.  At Closing, Rexford Company shall receive (i) Fifty Thousand Dollars and Zero Cents ($50,000.00) in Immediately Available Funds; (ii) Twenty Seven Thousand Three Hundred Twenty Two (27,322) Parent Shares, (iii) a Parent Option to purchase Twenty Thousand (20,000) Parent Shares; and (iv) a put option from Parent allowing Rexford Company to cause Parent to buy the Parent Shares and cancel the Parent Option described in this paragraph in exchange for a cash payment of One Hundred Fifty Thousand Dollars ($150,000) (the “Put Option”); and

  

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(c)           Cross.  At Closing, Cross Concepts shall receive (i) Twenty Five Thousand Dollars and Zero Cents ($25,000.00) in Immediately Available Funds, (ii) Thirteen Thousand Six Hundred Sixty One (13,661) Parent Shares, and (iii) a Parent Option to purchase Ten Thousand (10,000) Parent Shares.

 

(d)           Immediately Available Funds Payments.  The payments of Immediately Available Funds referenced in (a) through (c) hereof shall be paid to Company at Closing and be distributed by Company to Sellers in accordance with the terms hereof.

 

(e)           Delivery.  Company, Owners and Sellers hereby authorize Buyer and Parent to deliver the Purchase Price as set forth in this Section 1.4, and shall jointly and severally indemnify Buyer and Parent for any claims or losses resulting from such delivery.

 

2.           CLOSING.

 

2.1         Closing.  The consummation of the transactions contemplated by this Agreement (“Closing”) will take place via email or facsimile on June 23, 2011 (“Closing Date”).  The transactions contemplated by this Agreement will be effective for accounting purposes as of 12:00:01 a.m. on March 10, 2011 (“Effective Time”).

 

2.2         Actions of Company, Sellers and Owners at Closing.  At or prior to Closing, the applicable Company, Seller, or Owner shall deliver to Buyer the following:

 

(a)           Bill of Sale.  A bill of sale executed by Company, transferring to Buyer title to all of the Acquired Assets, in form and substance reasonably acceptable to Buyer, together with physical possession of the tangible Acquired Assets;

 

(b)           Assignment of Right to Use Name.  An assignment by Equity Partners of all right, title and interest it may have to the name “Equity Partners” in form and substance reasonably acceptable to Buyer;

 

(c)           Authorizing Resolutions.  Copies of resolutions duly adopted by the governing body of Company authorizing and approving its performance of the transactions contemplated hereby and the execution and delivery of this Agreement and the Transaction Documents, certified as true and in full force as of the Closing Date;

 

(d)           Countersigned Option Agreements.  Option Agreements representing the options to purchase the Parent Shares required to be delivered pursuant to Section 1.4, executed on behalf of the applicable Investor;

 

(e)           Countersigned Put Option.  The Put Option, executed on behalf of Rexford;

 

(f)           Accredited Investor Questionnaire. A questionnaire, completed and executed by each Investor, indicating the basis upon which such Investor has represented that he or it is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended.

  

3

  

(g)           Other.  Such other instruments and documents as Buyer may reasonably request to effect the transactions contemplated hereby.

 

2.3         Actions of Buyer at Closing.  At Closing, Buyer shall deliver (or cause to be delivered) to, or as directed by Company, the following:

 

(a)           Cash Payment.  The cash payments required to be delivered pursuant to Section 1.4;

 

(b)           Parent Shares.  Stock Certificate(s) evidencing the Parent Shares required to be delivered pursuant to Section 1.4;

 

(c)           Countersigned Option Agreements.  Option Agreements representing the options to purchase the Parent Shares required to be delivered pursuant to Section 1.4, executed on behalf of Parent;

 

(d)           Countersigned Put Option.  The Put Option, executed on behalf of Parent;

 

(e)           Authorizing Resolutions.  Copies of resolutions duly adopted by Buyer authorizing and approving its performance of the transactions contemplated hereby and the execution and delivery of this Agreement and the Transaction Documents, certified as true and in full force as of the Closing Date; and

 

(f)           Other.  Such other instruments and documents as Company may reasonably request to effect the transactions contemplated hereby.

 

3.           REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY.  As of the Effective Time and as of the Closing Date, Company, Mann and Sellers, jointly and severally, represent and warrant to Buyer that the following statements are true and correct in all respects, provided in the event that the following statements are not true and correct, Buyer’s shall be entitled to recover any damages resulting therefrom, but such damages shall be limited to the total value of the Purchase Price on the Closing Date:

 

3.1         Organization.  Company (i) is a limited liability company duly organized, validly existing and in good standing under the laws of Maryland, (ii) has the limited liability company power and authority to own or lease and to operate its assets and to conduct its business as currently conducted, (iii) is not required to be qualified to do business in any other jurisdiction, except to the extent that a failure to qualify in such jurisdiction would not have a material adverse effect on the Company or its business; and (iv) has not issued any certificates evidencing any Equity Interests.  The LLC Interests constitute all of the Equity Interests in Company.  There are not any outstanding (i) options, warrants, calls, commitments, pre-emptive rights, agreements or other rights to purchase any Equity Interests in Company, (ii) securities convertible into or exchangeable for any Equity Interests in Company, (iii) equity-based awards or rights relating to or valued by reference to the equity of Company, or (iv) other commitments of any kind for the issuance of additional Equity Interests or options, warrants or other securities of Company.  Company does not own, directly or indirectly, any shares of capital stock or other Equity Interests, or securities or interests convertible into or exchangeable for capital stock or Equity Interests in any other Person.

  

4

  

3.2         Powers; Consents; Absence of Conflicts With Other Agreements, Etc.  The execution, delivery, and performance by Company of this Agreement and all other agreements referenced herein, or ancillary hereto, to which Company is a party, and the consummation of the transactions contemplated herein by Company:

 

(a)           are within its statutory powers, are not in contravention of law or of the terms of its organizational documents, and have been duly authorized by all appropriate action of its governing body;

 

(b)           do not require any approval or consent required to be obtained by Company of, or filing required to be made by Company with, any governmental agency or authority bearing on the validity of this Agreement which is required by law or the regulations of any such agency or authority;

 

(c)           will neither conflict with, nor result in any breach or contravention of, or the creation of any lien, charge or encumbrance under, any indenture, agreement, lease, instrument or understanding to which Company is a party or by which Company is bound;

 

(d)           will not violate any statute, law, rule, or regulation of any governmental authority to which Company may be subject; and

 

(e)           will not violate any judgment, decree, writ, or injunction of any court or governmental authority to which Company may be subject.

 

3.3         Binding Agreement.  This Agreement and all agreements to which Company will become a party pursuant hereto are and will constitute the valid and legally binding obligations of Company, and are and will be enforceable against Company in accordance with the respective terms hereof and thereof, except as limited by applicable bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditor’s rights generally from time to time in effect.

 

3.4         Compliance With Laws; Permits.

 

(a)           Compliance with Laws.  The Company has complied, and is now complying, with all Laws applicable to it or its business, properties or assets, except to the extent that a failure to comply would not have a material adverse effect on the Company or its business.

 

(b)           Permits.  All Permits required for the Company to conduct its business have been obtained and are valid and in full force and effect, except to the extent that a failure to obtain a Permit would not have a material adverse effect on the Company or its business. All fees and charges with respect to such Permits as of the date hereof have been paid in full.

 

(c)           Broker Registration.  The business activities of the Company do not require the Company to register or license as a broker or dealer under U.S. federal law or the law of any state, except to the extent that a failure to register or license would not have a material adverse effect on the Company or its business.

  

5

  

(d)           Acknowledgement.  The parties acknowledge and agree that the representations and warranties contained in this Section 3 are made as of the Effective Time and the Closing Date, and that none of Company, Owners, or Sellers have made the representations or warranties contained in this Section 3.4 with respect to the Company’s activities after the Closing Date.

 

3.5         Property.

 

(a)         Property.  The Company does not own Real Property.  The Company has good and valid title to, or a valid leasehold interest in, all leased Real Property and Personal Property.  All of Company’s Personal Property and leasehold interests in Real Property are free and clear of Encumbrances except for the following (collectively referred to as “Permitted Encumbrances”):

 

(1)           liens for Taxes listed not yet due and payable; or

 

(2)           easements, rights of way, zoning ordinances and other similar Encumbrances affecting Real Property which are not, individually or in the aggregate, material to the business of Company and any restrictions set forth in the lease between Equity Partners and D&M Properties.

 

(b)         Copies of Documents; Compliance with Laws.  Company has made available to Buyer complete and correct copies of any leases affecting the Real Property, the terms of which are described in Schedule 3.5.  No improvements constituting a part of the Real Property encroach on real property owned or leased by a Person other than a Company. There are no Actions pending nor, to Seller’s Knowledge, threatened against or affecting the Real Property or any portion thereof or interest therein in the nature or in lieu of condemnation or eminent domain proceedings.

 

(c)         Sufficiency.  The Personal Property and Real Property constitute all the assets necessary to operate the business of the Company as it is currently conducted, and other than vehicles and personal computers owned by its independent contractors, the Company does not rely on assets owned by any Seller or Owner for the conduct of its business.

 

3.6         Litigation or Proceedings.

 

(a)           No Actions.  There are no Actions pending or, to the best of their knowledge, threatened (i) against or by Company or affecting any of their properties or assets; (ii) against or by any Seller or any Affiliate of Seller and relating to Company or its business, properties or assets; or (iii) against or by Company, any Seller or any Affiliate of Seller that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement.  No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.

 

  

6

  

(b)           No Governmental Orders.  There are no outstanding Governmental Orders and no unsatisfied judgments, penalties or awards against or affecting Company or Company’s businesses, properties or assets.

 

3.7         Environmental Matters.

 

(a)           Compliance.  Company is currently and has at all times been in compliance with all Environmental Laws and has not, and no Seller or Owner has received from any Person any: (i) Environmental Notice or Environmental Claim, or (ii) written request for information pursuant to Environmental Law.

 

(b)           No Release.  There has been no Release of Hazardous Materials in contravention of Environmental Law with respect to the business or assets of Company or any real property currently or formerly owned, operated or leased by Company.

 

(c)           No Assumed Liabilities.  Company has not retained or assumed, by contract or operation of Law, any liabilities or obligations of third parties under Environmental Law.

 

3.8         Taxes.

 

(a)           Timely Filed.  Company has timely filed all Tax Returns or extensions that it was required to file under applicable laws and regulations for Tax years prior to 2011.  All such Tax Returns were correct and complete in all respects and were prepared in compliance with all applicable laws and regulations. All Taxes due and owing by Sellers or Company (whether or not shown on any Tax Return) have been paid.  Company is not currently the beneficiary of any extension of time within which to file any Tax Return.  No claim has ever been made by an authority in a jurisdiction where Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.  There are no Encumbrances for Taxes upon the LLC Interests or any of the assets of Company.  All Taxes that have not yet become due and payable on or at the Closing Date, have been adequately reserved in the financial statement of the Company.  Neither the Company nor the Sellers has entered into any “reportable transaction” as defined in Treasury Regulation Section 1.6011-4(b).

 

(b)           Withholding.  Company has never had Employees, and all Forms 1099 required with respect to independent contractors have been properly completed and timely filed.

 

(c)           No Assessments.  No taxing authority is expected to assess any additional Taxes for any period for which Tax Returns have been filed.  No foreign, federal, state, or local Tax audits or administrative or judicial Tax proceedings are pending or being conducted with respect to Company. Company has not received from any taxing authority any (i) notice indicating an intent to open an audit or other review, (ii) request for information related to Tax matters, or (iii) notice of deficiency or proposed adjustment for any amount of Tax proposed, asserted, or assessed by any taxing authority against Company. There are no matters under discussion by Company or Sellers with any Governmental Authority with respect Taxes that may result in an additional amount of Taxes for which Sellers or Company may have any liability. Company’s Tax Returns have not been or and are not currently are the subject of audit.  Sellers have delivered to Buyer correct and complete copies of all federal income Tax Returns, examination reports, and statements of deficiencies assessed against or agreed to by Company.

  

7

  

(d)           No Contracts.  Company is not a party to any Contract that has resulted or could result, separately or in the aggregate, in (i) the payment of any “excess parachute payment” within the meaning of Code §280G or any amount that will not be fully deductible as a result of Code §162(m), or (ii) the recognition of income and the imposition of any penalty or interest by any person under Code §409A.  Company has not been a United States real property holding corporation within the meaning of Code §897(c)(2) during the applicable period specified in Code §897(c)(1)(A)(ii).  Company has disclosed on its federal income Tax Returns all positions taken therein that could give rise to an understatement of federal income Tax within the meaning of Code §6662 (or any corresponding provision of state, local or foreign Tax law).  Company is not a party to, bound by, and has no liability pursuant to any Tax allocation or sharing agreement.  Company (A) has not been a member of an “affiliated group” defined under Code §1504(a) filing a consolidated federal income Tax Return, or (B) has no liability for the Taxes of any Person under Reg. §1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by Contract, or otherwise.

 

3.9         Employee Relations.  Company has never had Employees.  All individuals characterized and treated by Company as consultants or contractors are properly treated as independent contractors under all applicable Laws.  No collective bargaining agreement exists or is currently being negotiated by Company.  There are no pending or, to the Knowledge of Seller, threatened EEOC claims, OSHA complaints, union grievances, wage and hour claims, unemployment compensation claims, workers’ compensation claims or the like with respect to any Employees.  To the best of Mann’s knowledge, Company has complied in all respects with all state and federal laws, rules and regulations relating to employment, equal employment opportunity, nondiscrimination, immigration, wages, hours, benefits, collective bargaining, the payment of social security and similar Taxes, and occupational safety and health.

 

3.10       Employee Benefit Matters.

 

(a)           No Benefit Plans.  Company has no Benefit Plan for which Company could have any Liability (as defined in Section 3.16).

 

(b)           No Liability.  No Seller, Company or any of their Affiliates (i) has withdrawn from any pension plan under circumstances resulting (or expected to result) in a liability to the Pension Benefit Guaranty Corporation; (ii) has any assets subject to a lien for unpaid contributions to any Benefit Plan which would be a Liability of Company or become a Liability of Buyer; (iii) has failed to pay premiums to the Pension Benefit Guaranty Corporation when due with respect to any pension plan which would be a Liability of Company; or (iv) is engaged in any transaction which would give rise to Liability under ERISA §§4069 or 4212(c) which would be a Liability of Company or become a Liability of Buyer.

 

3.11       Contracts.

 

(a)           Pipeline.  Schedule 1.1(d) sets forth a complete and accurate list of contingency fees for services that Company was entitled to receive as of the Effective Time, if transactions related to those agreements reach completion.  The fees described on Schedule 1.1(d)  are due under written Contracts that are valid and binding in accordance with their terms and are in full force and effect.

  

8

  

(b)           Other Contracts.  Company has delivered to Buyer true and correct copies of any Contract to which the Company is a party or by which it is bound (including all modifications, amendments and supplements thereto and waivers thereunder).  Each such Contract is valid and binding in accordance with its terms and is in full force and effect.  Neither Company nor, to Seller’s Knowledge, any other party thereto is in breach of or default under or is alleged to be in breach of or default under, or has provided or received any notice of any intention to terminate, any such Contract.  No event or circumstance has occurred that, with notice or lapse of time or both, would constitute an event of default under any such Contract or result in a termination thereof or would cause or permit the acceleration or other changes of any right of obligation or the loss of any benefit thereunder.

 

3.12       Inventory.  Company has no inventory (whether raw materials, work-in-process or finished goods).

 

3.13       Insurance.  Schedule 3.13 sets forth all insurance policies maintained by Company covering the assets or operations of Company which are in full force and effect with no premium arrearage which arrearage would cause any cancellation or lapse of coverage.  Company has not (a) received any written notice or other communication from any such insurance company canceling or amending any of such insurance policies, and, to Sellers’ Knowledge, no such cancellation or amendment is threatened or (b) failed to give any notice or present any material claim which is still outstanding under any of such policies.

 

3.14       Books and Records.  Schedule 3.14 lists all organizational documents of the Company, copies of which have been provided to the Buyer.  Schedule 3.14 is complete and correct and represents all written records of meetings or actions taken by written consent of, the members of Company, or evidencing Ownership in the Company.

 

3.15       Broker’s or Finder’s Fees.  Company is not liable for the payment of any fee to any finder, broker or similar Person in connection with the transactions described in this Agreement.

 

3.16       No Undisclosed Liabilities.  Company has no liabilities, obligations or commitments of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise (“Liability” or “Liabilities”), except liabilities to be assumed by the Buyer in accordance with Section 1.3 all of which have been incurred in the ordinary course of business by the Company.

 

3.17       Intellectual Property.

 

(a)           Company owns all right, title and interest in and to all Intellectual Property used in Company’s business, including rights to use the name “Equity Partners,” that is necessary for the operation of the business of the Company as it has been conducted to date, free and clear of all Encumbrances.  Company has not licensed to any Person any right or interest in any of its Intellectual Property.

 

  

9

  

(b)           Company’s operations and use or exercise of any Company Intellectual Property do not give rise to or constitute any infringement, misappropriation or violation of the rights of any Person in such Intellectual Property.  Company has no obligation to compensate any Person for the ownership, license, acquisition, design, development, distribution, marketing, use or maintenance of any Intellectual Property.

 

(c)           Company has not received any notice or claim challenging or questioning the validity or enforceability of any of the Intellectual Property owned by Company.

 

3.18       No Misleading Statements.  To the best of Mann’s knowledge, no representation or warranty by Company or Sellers contained in this Agreement, and no statement contained in any schedule or the documents to be delivered by or on behalf of Company or Seller, contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact necessary, in light of the circumstances under which it was or will be made, in order to make the statements herein or therein not misleading.

 

3.19       Operations.  Prior to the 2010 calendar year, the Company conducted no business or operations.  Since the Effective Time, except as set forth on Schedule 3.19, there has been no:

 

(a)           material change, financial or otherwise, which has, or could reasonably be expected to have, an adverse effect on any of the Acquired Assets, the business of Company or its future prospects, or the results of the operations of Company;

 

(b)           increase in the compensation payable by Company to any of Company’s member, employees, directors, independent contractors or agents, or any increase in, or institution of, any bonus, insurance, pension, profit-sharing or other employee benefit plan or arrangements made to, for or with the employees, directors, members, independent contractors or agents of Company; or

 

(c)           termination, waiver or cancellation of any rights or claims of Company, under contract or otherwise.

 

4.           REPRESENTATIONS AND WARRANTIES REGARDING SELLERS.  Each of the Owners and Sellers represents and warrants on a several, and not a joint and several, basis that with respect to itself and the Owner or Seller listed opposite its name on Schedule X:

 

4.1         Authorization.  This Agreement and each agreement, document or instrument required to be delivered by such Seller or Owner hereby or in connection herewith has been duly executed and delivered by him, her or it and constitutes the valid and binding agreement of such Seller or Owner, enforceable against him, her or it in accordance with its terms, subject to applicable bankruptcy, insolvency and other similar laws affecting the enforceability of creditor’s rights generally, general equitable principles and the discretion of the courts in granting equitable remedies.  Such Seller or Owner has full corporate or other power and authority to execute and deliver this Agreement and each agreement, document, or instrument required to be delivered by, if hereby or in connection herewith and to perform its obligations hereunder and to consummate the transactions provided for herein.  There is no Action pending or, to the knowledge of Seller or Owner, threatened against Seller or Owner that in any manner challenges or seeks to prevent, enjoin, alter or delay any of the transactions contemplated by this Agreement.

  

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4.2           No Violations.  The execution, delivery and performance of this Agreement and each agreement, document or instrument required to be delivered by it hereby or in connection herewith and the consummation of the transactions contemplated by this Agreement do not and will not violate or conflict with, constitute a breach of or default under, result in the loss of any benefit under, or permit the acceleration of any obligation under, (a) any Contract to which such Seller or Owner is a party or by which he, she or it (or any respective properties or assets) is subject or bound, (b) any Governmental Order to which such Seller or Owner is a party or by which he, she or it or any of his respective properties or assets is bound, or (c) any Law applicable to such Seller or Owner or any of its respective assets.  No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Authority is required in connection with such Seller’s or Owner’s execution, delivery or performance of this Agreement and each agreement, document or instrument required to be delivered by it hereby or in connection herewith.

 

4.3           Brokers, Finders and Investment Bankers.  Neither such Seller nor the Owner listed on Schedule X opposite its name has employed any broker, finder or investment banker or incurred any Liability for any investment banking fees, financial advisory fees, brokerage fees or finders’ fees in connection with the transactions contemplated by this Agreement.

 

4.4           Ownership.  Such Seller is the record and beneficial owner of, and has good and valid title to, the LLC Interests listed on Schedule X opposite its name, free and clear of all Encumbrances, which LLC Interests represent all of the equity interests of the Company held or beneficially owned by such Seller.  Such Seller has not granted any option or right to purchase such LLC Interests other than to Buyer pursuant to this Agreement.  Such Seller is not a party to or bound by any agreement, option, warrant, right, contract, call or put that requires, or upon the passage of time or occurrence of any other event would require, the payment of money or transfer of any of such LLC Interests to anyone other than Buyer.  Such Seller is wholly owned, both beneficially and of record, by the Owner listed on Schedule X opposite its name, free and clear of all Encumbrances.  Such Owner has full corporate or other power and authority to execute and deliver this Agreement and the Transaction Documents on behalf of such Seller.

 

5.           REPRESENTATIONS AND WARRANTIES OF BUYER.   As of the Closing, Buyer represents and warrants to Seller the following:

 

5.1           Organization.  Buyer (i) is a limited liability company duly organized, validly existing and in good standing under the laws of Delaware, (ii) has the limited liability company power and authority to own or lease and to operate its assets and to conduct its business as currently conducted, and (iii) is not required to be qualified to do business in any other jurisdiction.

 

5.2           Powers; Consents; Absence of Conflicts With Other Agreements, Etc.  The execution, delivery, and performance by Buyer of this Agreement and all other agreements referenced herein, or ancillary hereto, to which Buyer is a party, and the consummation of the transactions contemplated herein by Buyer:

  

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(a)           are within its statutory powers, are not in contravention of law or of the terms of its organizational documents, and have been duly authorized by all appropriate action of its governing body;

 

(b)           do not require any approval or consent required to be obtained by Buyer of, or filing required to be made by Buyer with, any governmental agency or authority bearing on the validity of this Agreement which is required by law or the regulations of any such agency or authority;

 

(c)           will neither conflict with, nor result in any breach or contravention of, or the creation of any lien, charge or encumbrance under, any indenture, agreement, lease, instrument or understanding to which Buyer is a party or by which Buyer is bound;

 

(d)           will not violate any statute, law, rule, or regulation of any governmental authority to which Buyer may be subject; and

 

(e)           will not violate any judgment, decree, writ, or injunction of any court or governmental authority to which Buyer may be subject.

 

5.3         Binding Agreement.  This Agreement and all agreements to which Buyer will become a party pursuant hereto are and will constitute the valid and legally binding obligations of Buyer, and are and will be enforceable against Buyer in accordance with the respective terms hereof and thereof, except as limited by applicable bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditor’s rights generally from time to time in effect.

 

5.4         Proceedings.  There are no Actions pending or, to the knowledge of Buyer, threatened, challenging the validity or propriety of the transactions contemplated by this Agreement.

 

5.5         No Brokers.  Neither Buyer nor its Affiliates have engaged or are liable for the payment of any fee to any finder, broker or similar Person in connection with the transactions described in this Agreement.

 

6.           REPRESENTATIONS AND WARRANTIES REGARDING PARENT.  Buyer hereby represents and warrants to the Investors that the following statements are true with respect to Parent:

 

6.1         Incorporation; Authorization.

 

(a)           The Parent is a corporation duly organized, validly existing and in good standing under the laws of Florida.  The Parent has all requisite power and authority to own, lease and operate its properties and assets and to carry on its business as it is now being conducted, and is duly qualified to transact business in each jurisdiction in which the nature of property owned or leased by it or the conduct of its business requires it to be so qualified, except where the failure to be duly qualified to transact business, has not had or would not, individually or in the aggregate, be reasonably likely to have a material adverse effect.

  

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(b)           The Parent has all requisite corporate power and authority to execute and deliver this Agreement, to issue the Parent Shares and Parent Options required to be issued by Section 1.4.  Such issuance has been duly and validly authorized by the Board of Directors of the Parent.

 

6.2         Capitalization; Structure.  The authorized capital stock of the Parent consists of 300,000,000 shares of common stock and 10,000,000 shares of preferred stock.  After giving effect to this Agreement, (i) 27,083,030 shares of common stock are issued and outstanding, (ii) 592 shares of Series N preferred stock are issued and outstanding, and (iii) 3,776,607 shares of the Parent’s common stock have been reserved for issuance under the Parent’s equity incentive plans, of which options to purchase 2,492,031 shares of the Parent’s common stock are currently outstanding.  The Parent Shares and Parent Options required to be issued under Section 1.4 will, upon the issuance thereof following the payment therefore in accordance with the terms of this Agreement, be (i) duly authorized and validly issued and outstanding, (ii) fully paid and nonassessable, (iii) not subject to or issued in violation of preemptive or similar rights, rights of first refusal or other similar rights, and (iv) free and clear of any and all liens, claims and encumbrances of the Parent except as set forth in the articles of incorporation.

 

6.3         Litigation.  There are no pending or, to the knowledge of Parent, overtly threatened actions, suits or proceedings, either at law or in equity, which would reasonably be expected to impair in any material respect the ability of the Parent to perform its obligations under this Agreement or have a material adverse effect on the business condition of the Parent, or prevent or impede or delay the consummation of the transactions contemplated hereby.

 

6.4         SEC Reports; Material Adverse Effect.  The Parent has filed or furnished all required reports, schedules, forms, certifications, and other documents required to be filed by it with the Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934 (the “Exchange Act”) as the case may be (together with all exhibits and schedules thereto and documents incorporated therein by reference, the “SEC Reports”).  At the time filed (or if amended or superseded by a subsequent filing, at the time of such subsequent filing) or declared effective, the SEC Reports (i) were prepared in all material respects in accordance with the requirements of the Exchange Act, and in each case the published rules and regulations of the SEC thereunder, each as applicable to the SEC Reports, and (ii) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  Since the date of the Parent’s last filing required under the Exchange Act, there has not occurred any circumstance or event that, individually or in the aggregate, would be reasonably likely to have a material adverse effect on the Parent.

 

6.5         Disclosure.  The Parent has made available to the Investors all the information reasonably available to the Parent that Investors have requested for deciding whether to acquire the Parent Shares.

 

7.           REPRESENTATIONS AND WARRANTIES OF INVESTORS.  Each of the Investors, severally but not jointly, represents and warrants to the Parent that the following statements are true:

  

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7.1         Access.  Investor acknowledges the receipt of such information regarding the Parent and the Parent Shares and Parent Options that Investor has requested and that Investor, or Investor’s representative, has thoroughly read and evaluated and understands the same and understands the nature of the risks involved in investment in the Parent Shares and Parent Options.  Further, Investor has been advised that the Parent is available to answer any and all questions about the Parent or Investor’s acquisition of Parent Shares and Parent Options, and Investor has asked the Parent such questions in this regard as Investor has deemed appropriate and has received satisfactory answers from the Parent to all such questions.

 

7.2         Investment Intent.  Except for the transfers between Investors contemplated by this Agreement, Investor is acquiring the Parent Shares and Parent Options for its own account and not for the account of others, and is not acquiring the Parent Shares and Parent Options for the purpose of reselling, transferring, or subdividing, or otherwise disposing of or hypothecating all or any portion of the Parent Shares and Parent Options, and Investor does not presently have any reason to anticipate any change in circumstances or other occasion or event that would necessitate that Investor sell the Parent Shares and Parent Options.  Investor acknowledges that the Parent Shares have not been registered under the Securities Act or any applicable state securities laws and, therefore, cannot be sold unless subsequently registered under the Securities Act or any applicable state securities laws, or an exemption from registration is available.

 

7.3         Ability to Bear Economic Loss.  Investor has sufficient net worth so that Investor’s acquisition of the Parent Shares and Parent Options will not be material when compared with Investor’s total financial capacity, and Investor’s acquisition of the Parent Shares and Parent Options and total investments are reasonable in relation to Investor’s total financial capacity.  Investor can afford to bear the economic risks of investment in the Parent Shares and Parent Options, including the risk of losing the entire investment.  Investor has adequate means of providing for its current financial needs and possible contingencies, exclusive of its investment in the Parent Shares and Parent Options.

 

7.4         Independent Investigations.  Investor is experienced and knowledgeable in business and financial matters in general and with respect to investments similar to an investment in Parent in particular, and is capable of evaluating the merits and risks of acquiring Parent Shares and Parent Options.  Investor acknowledges that Investor has received no representations or warranties from the Parent or its Agents or Affiliates, other than those contained herein, and has relied only upon the representations and warranties contained herein and the investigations conducted by Investor and Investor’s advisors in acquiring the Parent Shares and Parent Options.

 

7.5         Accredited Investor.  Investor is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended.

 

7.6         State of Domicile.  Each Investor is domiciled in the state of Maryland.

 

8.           COVENANTS.

 

8.1         Tax Matters.

 

(a)           Tax Returns.  Sellers shall prepare and file, or cause to be prepared and filed, at their own expense, all Tax Returns of the Company.  Such Tax Returns shall be prepared in a manner consistent with past practices.  Sellers shall provide Buyer with copies of all Tax Returns of the Company prior to filing.  Notwithstanding anything to the contrary in this Agreement, Sellers shall pay any and all Pre-Closing Taxes and Post-Closing Taxes of the Company and the Sellers.

  

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(b)           Assistance.  The parties hereto agree to furnish or cause to be furnished to each other or their respective Agents, upon request, as promptly as practicable, such information and assistance (including access to books and records) relating to the Acquired Assets as is reasonably necessary for the preparation of any Tax Return, claim for refund, audit or similar matter, or the prosecution or defense of any claim, suit or proceeding relating to any proposed adjustment of Taxes.

 

(c)           Tax Allocation.  Attached hereto as Schedule 8.1(c) is a preliminary allocation of the applicable portion of the consideration paid by Buyer pursuant to this Agreement among the Purchased Assets in accordance with Code §1060 and the Treasury Regulations thereunder (and any similar provisions of state, local or foreign law, as appropriate) (“Tax Allocation”).  The Tax Allocation shall be binding upon all parties hereto and can only be revised with the consent of all the parties hereto.  Buyer, the Company and Sellers shall report, act and file Tax Returns (including, but not limited to Internal Revenue Service Form 8594) in all respects and for all purposes consistent with the Tax Allocation.  No party shall take any position (whether in audits, Tax Returns or otherwise) that is inconsistent with such allocation unless required to do so by applicable law.

 

(d)           Income and Transfer Taxes.  Notwithstanding the foregoing, all income Taxes and other Taxes measured by income or earned surplus accruing to Company, Sellers, Investors or Owners, with respect to the transactions contemplated in this Agreement or otherwise shall be paid by Sellers.  Except as specifically provided herein, all real property transfer taxes, stamp, documentary, filing, recordation, and other similar Taxes, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties, attributable to the transactions contemplated by this Agreement (the “Transfer Taxes”), shall be borne by the party on which they are primarily imposed under applicable Law.  Any Tax Returns that must be filed in connection with Transfer Taxes shall be prepared and filed when due by the party primarily or customarily responsible under the applicable local Law for filing such Tax Returns, and such party will use its reasonable efforts to provide such Tax Returns to the other party at least 10 days prior to the due date for such Tax Returns.

 

8.2         Sales Tax.  Sellers shall promptly pay any tax liability to the Maryland Department of Revenue arising as a result of the transactions contemplated by this Agreement, provided, however, that provided, however, that Sellers and Buyer shall each pay fifty percent (50%) of any sales or use tax imposed as a result of the transactions contemplated by this Agreement.

 

8.3         Prorations.  To the extent not otherwise prorated pursuant to this Agreement, Buyer and Sellers shall prorate, as of the Closing Date, any and all current real estate and personal property lease payments, charges against the real estate, power and utility charges and all expenses that are normally prorated upon the sale of a going concern. In addition, Buyer and Seller Entities shall prorate as of the Closing Date any amounts with respect to (i) ad valorem taxes on the Acquired Assets and (ii) property taxes on the Acquired Assets. Payments for ad valorem and property taxes shall initially be determined based on the previous year’s taxes and shall later be adjusted to reflect the current year’s taxes when the tax bills are finally rendered.

  

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8.4         Confidentiality.  From and after the Closing, Sellers and Owners shall, and shall cause their Affiliates and their respective Agents to, hold in confidence any and all confidential or proprietary information of the Company, whether written or oral, except to the extent that Sellers and Owners can show that such information (a) is generally available to and known by the public through no fault of any Seller, any Affiliate or Agent of Sellers or Owners; or (b) is lawfully acquired by such Seller or Owner after the Closing from sources which are not prohibited from disclosing such information by a legal, contractual or fiduciary obligation.  If Sellers or Owners or any of their Affiliates or Agents are compelled to disclose any confidential information by judicial or administrative process or by other requirements of Law, such Seller or Owner shall promptly notify Buyer in writing and shall disclose only that portion of such information which is legally required to be disclosed, provided that, at Buyer’s option and expense, Sellers or Owners shall use reasonable best efforts to obtain an appropriate protective order or other reasonable assurance that confidential treatment will be accorded such information.

 

8.5         Winding Up.  Following the Closing Date, Sellers and Owners shall commence the winding up of the remaining business of Company, including the proper discharge of any liabilities not assumed by Buyer, and refrain from conducting any new business through the Company.

 

8.6         Assignment of Name Under Certain Conditions.  In the event that Mann should cease to be employed by Buyer or one of its Affiliates for any reason prior to January 1, 2013, Buyer shall upon written request of Company or Company’s assignees, execute an Assignment in the form attached hereto as Schedule 8.6 in order to assign to Company or Company’s assignees Buyer’s interest in the name “Equity Partners”, all of the telephone numbers currently used for the business of Company, and the domain name “equitypartnersinc.com”.  The parties agree that upon the date of such Assignment, neither party shall have any exclusive right to the customer lists of the Company.  In addition to the foregoing, upon the date of such Assignment, Buyer shall file with the Delaware Secretary of State the documents necessary to remove the phrase Equity Partners or EPI from its name.

 

9.           MISCELLANEOUS.

 

9.1         Definitions.  In this Agreement, the following terms have the following meanings:

 

“Action” 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.

 

“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

  

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“Agents” means, with respect to any Person, any and all directors, managers, officers, employees, consultants, financial advisors, bankers, attorneys, accountants and other agents of such Person.

 

“Benefit Plan” means each benefit, retirement, employment, compensation, incentive, stock option, restricted stock, stock appreciation right, phantom equity, change in control, severance, vacation, paid time off, fringe-benefit and other similar agreement, plan, policy, program and other arrangement (and any amendments thereto), and each multiemployer benefit plan (as described in ERISA §4001(a)(3)), whether or not reduced to writing, in effect and covering one or more Employees and the beneficiaries and dependents of any such Employee, and which is currently or at any time during the seven (7) years prior to the date of this Agreement been maintained, sponsored, contributed to, or required to be contributed to by Company or any ERISA Affiliate, or under which Company or any ERISA Affiliate has or may have any liability for premiums or benefits, or with respect to which Buyer or any of its Affiliates would reasonably be expected to have any liability, contingent or otherwise.

 

“Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located in New York City are authorized or required by Law to be closed for business.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Contracts” means all contracts, leases, deeds, mortgages, licenses, instruments, notes, commitments, undertakings, indentures, joint ventures and all other agreements, commitments and legally binding arrangements, whether written or oral.

 

“Dollars or $” means the lawful currency of the United States.

 

“Employees” means any current or former employees, agents, consultants, or contractors of Company.

 

“Encumbrance” means any charge, claim, community property interest, pledge, condition, equitable interest, lien (statutory or other), option, security interest, mortgage, easement, encroachment, right of way, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.

 

“Environmental Claim” means any Action, Governmental Order, lien, fine, penalty, or, as to each, any settlement or judgment arising therefrom, by or from any Person alleging liability of whatever kind or nature (including liability or responsibility for the costs of enforcement proceedings, investigations, cleanup, governmental response, removal or remediation, natural resources damages, property damages, personal injuries, medical monitoring, penalties, contribution, indemnification and injunctive relief) arising out of, based on or resulting from: (a) the presence, Release of, or exposure to, any Hazardous Materials; or (b) any actual or alleged non-compliance with any Environmental Law or term or condition of any Environmental Permit.

  

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“Environmental Law” means any applicable Law, and any Governmental Order or binding agreement with any Governmental Authority:  (a) relating to pollution (or the cleanup thereof) or the protection of natural resources, endangered or threatened species, human health or safety, or the environment (including ambient air, soil, surface water or groundwater, or subsurface strata); or (b) concerning the presence of, exposure to, or the management, manufacture, use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge, transportation, processing, production, disposal or remediation of any Hazardous Materials.  The term “Environmental Law” includes, without limitation, the following (including their implementing regulations and any state analogs): the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq.; the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§ 7401 et seq.; and the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §§ 651 et seq.

 

“Environmental Notice” means any written directive, notice of violation or infraction, or notice respecting any Environmental Claim relating to actual or alleged non-compliance with any Environmental Law or any term or condition of any Environmental Permit.

 

“Environmental Permit” means any Permit, letter, clearance, consent, waiver, closure, exemption, decision or other action required under or issued, granted, given, authorized by or made pursuant to Environmental Law.

 

“Equity Interests” mean membership interests, limited liability company interests and other ownership interests.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

 

“ERISA Affiliate” means (i) any Person or trade or business that is required to be aggregated with any the Company under Code Sections 414(b), (c), (m) or (o); (ii) any other Person or trade or business that has adopted, has ever participated in, has ever contributed to, has ever been obligated to contribute to or whose employees have ever participated in any Benefit Plan; and (iii) any predecessor or successor Person or trade or business of any entity or Person described in (i) or (ii) of this definition.

 

“Governmental Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.

  

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“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

 

“Hazardous Materials” means: (a) any material, substance, chemical, waste, product, derivative, compound, mixture, solid, liquid, mineral or gas, in each case, whether naturally occurring or manmade, that is hazardous, acutely hazardous, toxic, or words of similar import or regulatory effect under Environmental Laws; and (b) any petroleum or petroleum-derived products, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing materials, urea formaldehyde foam insulation and polychlorinated biphenyls.

 

“Immediately Available Funds” means paid by wire transfer in accordance with wire instructions delivered to Buyer or Seller, as applicable, not less than two Business Days prior to the date such payments are due.

 

“Intellectual Property” means all: (a) patents, provisionals, registrations and applications for registration; (b) trademarks, service marks, trade dress, Internet domain names, registrations and applications for registration; (c) copyrights and registrations and applications for registration;  (e) industrial designs and any registrations and applications; (f) inventions, trade secrets and confidential business information, whether patentable or nonpatentable; (g) domain names (h) other proprietary rights relating to any of the foregoing; and (i) copies and tangible embodiments thereof.

 

“Law” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.

 

“Material Adverse Effect” means any event, occurrence, fact, condition or change that is, or is reasonably expected to become, individually or in the aggregate, materially adverse to (a) the business, results of operations, prospects, condition (financial or otherwise) or assets of Company, or (b) the ability of any party to consummate the transactions contemplated hereby on a timely basis.

 

“Parent” means Counsel RB Capital Inc., a Florida corporation, and a third party beneficiary of this Agreement.

 

“Parent Option” means an option to purchase Parent Shares at an exercise price of $1.83 per share, subject to the terms and conditions of an option agreement executed by the recipient of the Parent Option and Parent.

 

“Parent Shares” means shares of common stock of Parent.

 

“Payables” means obligations of Company to make payment for goods provided or services rendered.

 

  

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“Permits” means all permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances and similar rights obtained, or required to be obtained, from Governmental Authorities.

 

“Person” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.

 

“Personal Property” means the tangible and intangible personal property and other assets (excluding the Real Property) owned, leased or subleased by the Company.

 

“Post-Closing Tax Period” means any taxable period beginning after the Closing Date and, with respect to any taxable period beginning before and ending after the Closing Date, the portion of such taxable period beginning after the Closing Date.

 

“Post-Closing Taxes” means Taxes for any Post-Closing Tax Period.

 

“Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date and, with respect to any taxable period beginning before and ending after the Closing Date, the portion of such taxable period ending on and including the Closing Date.

 

“Pre-Closing Taxes” means Taxes for any Pre-Closing Tax Period.

 

“Real Property” means the real property owned, leased or subleased by the Company, together with all buildings, structures and facilities located thereon.

 

“Release” means any actual or threatened release, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, abandonment, disposing or allowing to escape or migrate into or through the environment (including, without limitation, ambient air (indoor or outdoor), surface water, groundwater, land surface or subsurface strata or within any building, structure, facility or fixture).

 

“Sellers’ Knowledge” or “Knowledge of Seller” or any similar phrase means all facts and circumstances known by any Owner, or facts and circumstances that would have been known following reasonable inquiry.

 

“Tax” or “Taxes” means any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code §59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not and including any obligations to indemnify or otherwise assume or succeed to the tax liability of any other Person.

 

“Tax Return” means any return, declaration, report, claim for refund, information return or statement or other document relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

 

  

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“Transaction Documents” means this Agreement and each other agreement entered into pursuant to this Agreement.

 

9.2           Additional Assurances.  From time to time after Closing, any party shall execute and deliver such other instruments and take such other actions as is reasonably requested to give effect to the transactions contemplated by this Agreement.  Without limiting the foregoing, Sellers and Owners shall assign any assets or rights owned by them that are currently used in the business of the Company that are not effectively transferred by the transactions contemplated by this Agreement.

 

9.3           Cost of Transaction.  Whether or not the transactions contemplated hereby are consummated:  (i) Sellers and Owners shall pay the fees, expenses, and disbursements of Sellers and their Agents, accountants, and legal counsel incurred in connection with this Agreement; and (ii) Buyer shall pay the fees, expenses, and disbursements of Buyer and its Agents, accountants and legal counsel incurred in connection with this Agreement.

 

9.4           Choice of Law; Venue.  This Agreement will be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of laws principles.  Exclusive venue for any action arising out of or related to this Agreement will be in state or federal court located in the County of New York, and each party consents to the jurisdiction of such courts and waives any defense based on lack of personal jurisdiction or inconvenient forum.

 

9.5           Waiver of Jury Trial.  EACH PARTY IRREVOCABLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT BE TRIED BY JURY.  EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHT TO DEMAND TRIAL BY JURY.

 

9.6           Enforcement of Agreement.  Irreparable damage would occur if any of the provisions of this Agreement was not performed in accordance with its terms or was breached.  The parties are entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms, in addition to any other remedy to which they are entitled at law or in equity.

 

9.7           Survival.  The representations, warranties and covenants of the parties shall survive Closing and shall not be affected or deemed waived by reason of any investigation made by or on behalf of any party (including by any of its representatives) or by reason of the fact that any party or any of its representatives knew or should have known that any such representation or warranty is, was or might be inaccurate.

 

9.8           Notice.  Any notice, demand, or communication required, permitted, or desired to be given hereunder will be effective when personally delivered, when received by confirmed overnight delivery from a reputable carrier, or five (5) days after being deposited in the United States mail, postage prepaid, certified or registered mail, return receipt requested, addressed as follows:

  

21

  

	
Equity Partners

	  	
101N. West St.

	
or Mann:

	  	
Easton, MD 21601

	  	  	  
	
Rexford Company:

	  	
     

	
or Rexford:

	  	
     

	  	  	
     

	  	  	
     

	  	  	  
	
Cross Concepts or Cross:

	  	
     

	  	  	
     

	  	  	
     

	  	  	
     

	  	  	  
	
Buyer:

	  	
Jonathan Reich

	  	  	
Counsel RB Capital LLC

	  	  	
267 Central Avenue

	  	  	
White Plains, NY 10606

	  	  	  
	
With a

	  	
Adam Levy

	
simultaneous

	  	
Counsel Corporation

	
copy to:

	  	
1 Toronto Street, Suite 700

	  	  	
P.O. Box 3

	  	  	
Toronto, ON M5C 2V6, Canada

	  	  	  
	  	  	
and

	  	  	  
	  	  	
Curtis Capeling

	  	  	
Harwell Howard Hyne Gabbert & Manner, P.C.

	  	  	
315 Deaderick Street, Suite 1800

	  	  	
Nashville, TN 37238

or to such other address, and to the attention of such other Person or officer as any party may designate by notice to all other parties, with copies thereof to the respective counsel thereof as notified by such party.

9.9           Benefit/Assignment.  This Agreement inures to the benefit of and is binding upon the parties hereto and their respective legal representatives, successors, and assigns.  No party may directly or indirectly, including by assignment, operation of law or change of control, transfer or assign this Agreement without the prior written consent of the other parties.

 

9.10         Third Party Beneficiaries.  This Agreement is intended solely for the benefit of Buyer, Sellers and Owners and their respective permitted successors or assigns, and does not confer third-party beneficiary rights upon any Person.  Parent is specifically designated as a third party beneficiary of this Agreement.

  

22

  

9.11         Waiver of Breach.  The waiver by any party of a breach or violation of any provision of this Agreement is not a waiver of any subsequent breach of the same or any other provision hereof.

 

9.12         Interpretation.  For purposes of this Agreement, (a) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; and (c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole. This Agreement is to be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. Schedules and exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein.

 

9.13         Tax Advice and Reliance.  None of the parties (nor any of the parties’ respective counsel, accountants or other representatives) has made or is making any representations to any other party (or to any other party’s counsel, accountants or other representatives) concerning the consequences of the transactions contemplated hereby under applicable Tax laws.  Each party has relied solely upon the Tax advice of its own employees or of representatives engaged by such party and not on any such advice provided by any other party hereto.

 

9.14         Severability.  If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.  Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

 

9.15         Gender and Number.  Whenever the context of this Agreement requires, the gender of all words herein includes the masculine, feminine, and neuter, and the number of all words herein includes the singular and plural.

 

9.16         Divisions and Headings.  The division of this Agreement into articles, sections and subsections and the use of captions and headings are for convenience and have no legal effect in construing the provisions of this Agreement.

 

9.17         Entire Agreement.  This Agreement, including all exhibits and schedules hereto, and the Transaction Documents, supersedes all previous contracts, and constitutes the entire agreement among the parties regarding its subject matter.  No party is entitled to benefits other than those specified herein.  No oral statements or prior written material not specifically incorporated herein is of any force or effect.

 

9.18         Amendment.  This Agreement may be amended, modified or supplemented only by an agreement in writing signed by each party hereto.

 

9.19         Counterparts.  This Agreement may be executed in counterparts, each of which will be an original, and all of which together will be one and the same agreement.  A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission will have the same legal effect as delivery of an original signed copy of this Agreement.

 

[Remainder of page intentionally left blank]

  

23

  

The parties have executed this Agreement as of the date first above written.

 

	
COMPANY:

	  
	
EP USA, LLC

	  
	
By:

	
     

	
Name:

	
     

	
Title:

	
     

	  
	
SELLERS:

	  
	
EQUITY PARTNERS, INC. OF MARYLAND

	  
	
By:

	
     

	
Name:

	
     

	
Title:

	
     

	  
	
THE REXFORD COMPANY, LLC

	  
	
By:

	
     

	
Name:

	
     

	
Title:

	
     

	  
	
CROSS CONCEPTS, LLC

	  
	
By:

	
     

	
Name:  

	
     

	
Title:

	
     

	  
	
OWNERS:

	  
	
     

	
Ken Mann

	  
	
     

	
Dan Rexford

	  
	
     

	
Fred Cross

[Signature Page to Asset Purchase Agreement]

  

 

  

	
BUYER:

	  
	
EQUITY PARTNERS CRB LLC

	  
	
By:  

	
     

	  	
Jonathan Reich, Co-CEO

[Signature Page to Asset Purchase Agreement]

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