Exhibit 10.49
CONTRIBUTION AGREEMENT
CONTRIBUTION AGREEMENT ("Agreement") made as of the 9th day of March,
2000, between ATM SERVICE, LTD., a New York corporation having its principal
place of business at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 ("Seller"), and
XXXXXXXXXXXX.XXX, LLC, a Delaware limited liability company having its principal
place of business at 00 Xxxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 00000
("Purchaser").
W I T N E S S E T H:
WHEREAS, Seller is and has been engaged in the business of, among other
things, bulk asset recovery and liquidation of assets and businesses; and
WHEREAS, Purchaser desires to acquire, and Seller desires to contribute
non-exclusive rights to certain assets used in the business in exchange for
certain membership interests in Purchaser; and
WHEREAS, Purchaser is unwilling to consummate this Agreement unless
Seller makes certain representations and warranties and agrees to indemnify
Purchaser, all as herein provided.
NOW, THEREFORE, in consideration of the mutual promises set forth in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which is acknowledged, the parties agree as follows:
ARTICLE I - PURCHASE AND SALE
Subject to the terms and conditions set forth in this Agreement, Seller
hereby contributes, assigns, transfers, conveys and delivers to Purchaser, and
Purchaser hereby acquires and accepts from Seller, the assets of Seller listed
on SCHEDULE I attached hereto as the same shall exist on the close of business
on the date hereof (the "Closing Date") (the "Contributed Assets").
ARTICLE II - MEMBERSHIP INTEREST AND ASSUMPTION OF LIABILITIES
SECTION 2.1. MEMBERSHIP INTEREST.
In consideration of the contribution of Contributed Assets to
Purchaser, Seller has obtained from Purchaser 95 membership units in Purchaser
as described in the Operating Agreement of Purchaser of even date herewith among
Seller, Purchaser and certain other parties signatory thereto (the "Operating
Agreement").
SECTION 2.2. ASSUMPTION BY PURCHASER.
The Purchaser shall not assume or become liable for any of the Seller's
liabilities,
obligations, debts, contracts or other commitments of any kind whatsoever, known
or unknown, fixed or contingent.
ARTICLE III - INDEMNIFICATION
SECTION 3.1. INDEMNIFICATION BY SELLER.
(a) Seller shall indemnify Purchaser, its officers, managers and
members, and their respective heirs, successors and assigns (the "Purchaser
Eligible Parties") from and against and in respect of any and all losses,
expenses, damages, deficiencies, costs, obligations, and liabilities, interest,
additional taxes, fines, penalties, attorney's, accountant's, and other
professional fees and costs and expenses incident to any suit, action or
proceeding incurred or sustained, directly or indirectly, by any of the
above-named parties, which arise out of, or result from: (i) Seller's failure to
pay, discharge or perform any of its liabilities or obligations and (ii)
breaches of or inaccuracies in the representations, warranties and covenants and
agreements made by the Seller in this Agreement.
(b) The foregoing obligations of Seller to indemnify any Purchaser
Eligible Party set forth in subsection (a) shall be subject to and limited by
the qualification that each of the representations, warranties, covenants and
agreements made by Seller in this Agreement shall survive to the extent of the
applicable statute of limitations for breach of such representation, warranty,
covenant or agreement.
SECTION 3.2. INDEMNIFICATION BY PURCHASER.
(a) Purchaser shall indemnify Seller, its officers, directors and
shareholders, and their respective heirs, successors and assigns (the "Seller
Eligible Parties"), from and against, and in respect of any and all losses,
expenses, damages, deficiencies, costs, obligations, and liabilities, interest,
additional taxes, fines, penalties, attorney's, accountant's, and other
professional fees and costs and expenses incident to any suit, action or
proceeding incurred or sustained, directly or indirectly, by any of the
above-named parties which arise out of, or result from: (i) breaches of or
inaccuracies in the representations, warranties and covenants made by Purchaser
in this Agreement; and (ii) any liabilities and obligations arising out of or in
connection with the operation of the business of the Purchaser.
(b) The foregoing obligations of Purchaser to indemnify any Seller
Eligible Party set forth in subsection (a) shall be subject to and limited by
the qualification that each of the representations, warranties, covenants and
agreements made by Purchaser in this Agreement shall survive to the extent of
the applicable statute of limitations for breach of such representation,
warranty, covenant or agreement.
SECTION 3.3 NOTICE AND RIGHT TO PARTICIPATE IN DEFENSE OF THIRD PARTY
CLAIMS.
Promptly upon receipt of notice of any claim, demand or assessment or
the commencement of any suit, action or proceedings in respect of which
indemnity may be sought
-2-
on account of an indemnity agreement contained in this Article III, the party
seeking indemnification (the "Indemnitee") will notify, within sufficient time
to respond to such claim or answer or otherwise plead in such action, the party
from whom indemnification is sought (the "Indemnitor"), in writing, thereof.
Except to the extent that the Indemnitor is prejudiced thereby, the omission of
such Indemnitee so to notify promptly the Indemnitor of any such claim or action
shall not relieve such Indemnitor from any liability which it may have to such
Indemnitee in connection therewith, on account of the indemnity agreements
contained in this Article III. In case any claim, demand or assessment shall be
asserted or suit, action or proceeding commenced against an Indemnitee, and it
shall notify the Indemnitor of the commencement thereof, the Indemnitor shall be
fully and unconditionally entitled, if it so elects, to take control of the
defense and investigation of such lawsuit or action and to employ and engage
attorneys of its own choice to handle and defend the same, at the Indemnitor's
cost, risk and expense; provided, further, that the Indemnitee may, at its own
cost, participate therein, and in the settlement thereof, with counsel
satisfactory to the Indemnitor, which approval shall not be unreasonably
withheld. Each party will cooperate with the other parties in connection with
any such claim, make personnel, books and records relevant to the claim
available to the other parties, and grant such authorizations or limited powers
of attorney to the agents, representatives and counsel of such other parties as
such parties may reasonably consider desirable in connection with the defense of
any such claim.
ARTICLE IV - OTHER ACTIONS
SECTION 4.1. PURCHASER TO ACT AS AGENT FOR SELLER.
This Agreement shall not constitute an agreement to assign any claim,
contract, permit or right if any attempted assignment of the same without the
consent of the other party thereto would constitute a breach thereof or in any
way affect the rights of Seller thereunder. If such consent is not obtained, or
if any attempted assignment would be ineffective or would affect Seller's rights
thereunder so that the Purchaser would not in fact receive all such rights, then
Purchaser may act as agent for Seller in order to obtain for Purchaser the
benefits thereunder.
SECTION 4.2. EXECUTION OF FURTHER DOCUMENTS.
From and after the Closing, upon the reasonable request of Purchaser,
Seller shall execute, acknowledge and deliver all such further acts, bills of
sale, assignments, transfers, conveyances, powers of attorney and assurances as
may be required to convey and transfer to and vest in the Purchaser and protect
its right, title and interest in all of the Contributed Assets, and as may be
appropriate otherwise to carry out the transactions contemplated by this
Agreement.
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that:
SECTION 5.1. ORGANIZATION.
-3-
Seller is a corporation duly organized, validly existing and in good
corporate and tax standing under the laws of New York with all requisite
corporate power and authority to own and operate its properties and to carry out
its business as now being conducted, to execute and deliver this Agreement and
to consummate the transactions herein contemplated.
SECTION 5.2. DUE AUTHORIZATION.
The execution, delivery and performance of this Agreement by Seller and
the consummation of the transactions herein contemplated have been duly
authorized by all necessary action of Seller's Board of Directors and
stockholders. This Agreement constitutes the legal, valid and binding
obligations of Seller, enforceable against Seller in accordance with its terms
except to the extent that (a) such enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium, or other laws relating to or affecting
generally the enforcement of creditors' rights, (b) the availability of the
remedy of specific performance or other equitable relief is subject to the
discretion of the court before which any proceeding therefor may be brought, and
(c) the enforceability of the indemnity provisions contained herein may be
rendered ineffective or limited by applicable laws or judicial decisions
governing such provisions.
SECTION 5.3. NO VIOLATION.
The execution and delivery of this Agreement and the consummation of
the transactions contemplated herein are not contrary to any provisions
contained in Seller's Articles of Incorporation or By-Laws and do not
constitute, or with the passage of time will not constitute, a default under any
agreement to which the Seller is a party or by which it is bound or to which any
of the Contributed Assets are subject.
SECTION 5.4. LIENS.
All of the Contributed Assets are free and clear of all security
interests, mortgages, pledges, liens, conditional sales agreements, leases,
encumbrances, charges or claims of third parties of any nature whatsoever.
SECTION 5.5. LITIGATION.
There are: (i) no pending or threatened suits or proceedings, at law or
in equity, or before or by any governmental agency or arbitrator, and (ii) no
unsatisfied or outstanding judgments, orders, decrees, or stipulations affecting
Seller or the Contributed Assets or to which Seller is or may become a party
which would constitute or result in a breach of any representation, warranty or
agreement set forth in this Agreement or interfere with Seller's ability to
perform under this Agreement or Purchaser's enjoyment of the Contributed Assets.
SECTION 5.6. TAXES.
Seller has paid all federal, state and local taxes required to be paid
by Seller to the extent due, and all deficiencies, interest, penalties, or other
additions to such taxes. Seller has filed all
-4-
returns and reports concerning taxes that it has been required to file, which
returns and reports accurately reflected the amounts of Seller's liability
thereunder.
SECTION 5.7. INVESTMENT REPRESENTATIONS.
As of the date of this Agreement,
(a) Seller is acquiring the membership interest for Seller's own
account and not on behalf of any other person.
(b) Seller is not acquiring the membership interest for purposes of
distribution or with the present intent to resell or otherwise distribute such
membership interest.
(c) Seller has sufficient knowledge and experience in financial and
business matters such that Seller is capable of evaluating the merits and risks
of an investment in the Company and has a substantial net worth and annual
income such that Seller is able to bear the economic risk of an investment in
the Company, including the ultimate risk of a total loss of such investment.
(d) Seller is aware of the financial condition of the Company, and has
had the opportunity to investigate and ask questions of and receive answers and
to obtain additional information from the Company or its representatives
concerning the Company and its proposed plans, and does not have any unanswered
questions regarding the same.
ARTICLE VI - REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller that:
SECTION 6.1. ORGANIZATION.
Purchaser is a limited liability company duly organized, validly
existing and in good standing under the business and tax laws of Delaware with
all requisite power and authority to own and operate its properties and to carry
out its business as now being conducted, to execute and deliver this Agreement
and to consummate the transactions herein contemplated.
SECTION 6.2. DUE AUTHORIZATION.
The execution, delivery and performance of this Agreement by Purchaser
and the consummation of the transactions herein contemplated have been duly
authorized by all necessary action of Purchaser's Board of Managers and members,
and Purchaser has delivered to Seller certified copies of actions authorizing
the same. This Agreement constitutes the legal, valid and binding obligations of
Purchaser, enforceable against Purchaser in accordance with its terms except to
the extent that (a) such enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium, or other laws relating to or affecting generally the
enforcement of creditors' rights, (b) the availability of the remedy of specific
performance or other equitable relief is subject to the discretion of the court
before which any proceeding therefor may be
-5-
brought, and (c) the enforceability of the indemnity provisions contained herein
may be rendered ineffective or limited by applicable laws or judicial decisions
governing such provisions.
SECTION 6.3. NO VIOLATION.
The execution and delivery of this Agreement and the consummation of
the transactions contemplated herein are not contrary to any provisions
contained in Purchaser's Certificate of Formation or Operating Agreement and do
not constitute, or with the passage of time will not constitute, a default under
any agreement to which the Purchaser is a party or by which it is bound.
ARTICLE VII - GENERAL PROVISIONS
SECTION 7.1 NO WAIVER. Waiver of any provision of this Agreement, in
whole or in part, in any one instance shall not constitute a waiver of any other
provision in the same instance, nor any waiver of the same provision in another
instance, but each provision shall continue in full force and effect with
respect to any other then-existing or subsequent breach.
SECTION 7.2 NOTICE. Any notice required or permitted under this
Agreement shall be given in writing and shall be deemed to have been duly given
if (i) sent by postage prepaid, United States first class, registered or
certified mail, return receipt requested, or (ii) sent by a recognized overnight
delivery service to the parties at their respective addresses specified above,
or at such other address for a party as that party may specify by notice. Notice
shall be effective upon receipt.
SECTION 7.3 MISCELLANEOUS. This Agreement: (i) may be executed in any
number of counterparts, each of which, when executed by both parties to this
agreement shall be deemed to be an original, and all of which counterparts
together shall constitute one and the same instrument; (ii) shall be governed by
and construed under the laws of the State of New York applicable to contracts
made, accepted, and performed wholly within such state, without application of
principles of conflicts of laws; (iii) together with the Certificate of
Formation and Operating Agreement of the Company, constitutes the entire
agreement of the parties with respect to its subject matter, superseding all
prior oral and written communications, proposals, negotiations, representations,
understandings, courses of dealing, agreements, contracts, and the like between
the parties in such respect; (iv) may be amended, modified, or terminated, and
any right under this Agreement may be waived in whole or in part, only by a
writing signed by both parties of this Agreement; (v) contains headings only for
convenience, which headings do not form part, and shall not be used in
construction, of this Agreement; and (vi) shall bind and inure to the benefit of
the parties and their respective legal representatives, successors and assigns,
except that no party may delegate any of its obligations under this agreement or
assign this agreement, without the prior written consent of the other party.
-6-
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
ATM SERVICE, LTD.
By: /s/ XXXXXX XXXXXXXXX
----------------------
(Xxxxxx Xxxxxxxxx
Title: Chairman
XXXXXXXXXXXX.XXX, LLC
By: /s/ M. L.
-----------------------
Title: General Manager
SCHEDULE I
-----------
Contributed Assets
Know-how
