Contract
STOCK PURCHASE AGREEMENT, made
as of the 30th day of June, 2009, by and between XXXXX XXXXXXXXX (the “Buyer”)
and BLAST ACQUISITION
CORP. (the “Seller”).
RECITALS
WHEREAS, AIA-DCAP Corp., a
Pennsylvania corporation (“AIA”), was duly organized under and by virtue of the
laws of the Commonwealth of Pennsylvania.
WHEREAS, the Seller is the
owner of one hundred (100) shares of Common Stock, no par value, of AIA (the
“Shares”) which represents all of AIA’s issued and outstanding
shares.
WHEREAS, the Seller desires to
sell, and the Buyer desires to purchase, all of the Shares subject to the terms
and conditions set forth herein.
NOW, THEREFORE, the parties
agree as follows:
1. Sale of
Stock; Security; Subordination. (a) For and in consideration
of the Purchase Price (as hereinafter defined), the Seller hereby sells to the
Buyer, and the Buyer hereby purchases from the Seller, all of the
Shares.
(b) The
aggregate purchase price for the Shares is Three Hundred Ninety-Seven Thousand
Thirty Dollars ($397,030) (the “Purchase Price”), payable by delivery to the
Seller, on the date hereof, of two promissory notes, one in the principal amount
of Two Hundred Thirty-Eight Thousand Two Hundred Eighteen Dollars ($238,218)
(the “Senior Note”) and one in the principal amount of One Hundred Fifty-Eight
Thousand Eight Hundred Twelve Dollars ($158,812) (the “Subordinated Note” and
together with the Senior Note, the “Promissory
Notes”). Each of the Promissory Notes is payable to the order of DCAP
Group, Inc., the Seller’s sole shareholder (the “Parent”).
(c) As
security for the satisfaction of the Buyer’s obligations under the Promissory
Notes, simultaneously herewith, AIA is executing and delivering to the Parent a
Guarantee (the “Guarantee”) and, as security for its obligations under the
Guarantee, is granting to the Parent a security interest in all of its assets
pursuant to a Security Agreement of even date between AIA and the Parent (the
“Security Agreement” and together with this Agreement, the Promissory Notes and
the Guarantee, the “Transaction Documents”).
(d) The
Seller agrees that the Subordinated Note shall be subordinate and junior in
time, right of payment to the prior payment in full of any obligations of AIA in
connection with a Bank Financing (as hereinafter defined) by AIA (the “Senior
Debt”; and the holder of the Senior Debt referred to as, the “Senior
Creditor”). The Seller shall cooperate, as and to the extent
reasonably requested by AIA and the Senior Creditor, in connection with the
documentation and information required with respect to the subordination in time
and right of payment of the Subordinated Note. Such cooperation shall
include the execution of any documents reasonably requested.
2. Representations
of the Seller. The Seller represents and warrants to the Buyer
as follows:
(a) Ownership
of Shares. The Seller is the sole owner and holder of the
Shares, free and clear of all liens and encumbrances.
(b) Capitalization.
(i) The
authorized capital stock of AIA consists of two hundred (200) shares of Common
Stock, no par value, one hundred (100) of which are issued and outstanding and
held by the Seller.
(ii) There are
no subscriptions, options, warrants, rights, calls or other commitments to which
AIA or the Seller is a party, or by which either of them is bound, calling for
the issuance, sale, transfer or other disposition of any class of securities of
AIA and there are no outstanding securities or instruments of AIA convertible
into or exchangeable for shares of Common Stock or any other securities of
AIA.
(c) Consents. No
consent of any governmental or other regulatory agency, court or third party is
required to be received by or on the part of the Seller to enable it to enter
into and carry out this Agreement and the transactions contemplated
hereby.
(d) Authority;
Binding Nature of Agreement. The Seller has the power to enter
into this Agreement and to carry out its obligations hereunder. This
Agreement constitutes the valid and binding obligation of the Seller, and is
enforceable against it in accordance with its terms.
(e) No
Breach. Neither the execution and delivery of this Agreement, nor
compliance by the Seller with any of the provisions hereof, nor the consummation
of the transactions contemplated hereby, will:
(i) violate
any provision of the Certificate of Incorporation or By-Laws, each as amended,
of the Seller;
(ii) violate
any judgment, order, injunction, decree or award against, or binding upon, the
Seller;
(iii) violate
or otherwise breach the terms of any agreement or understanding, written or
oral, to which the Seller is a party or is otherwise bound; or
(iv) violate
any law or regulation of any jurisdiction relating to the Seller.
(f) Brokers. The
Seller has not engaged, consented to, or authorized any broker, finder,
investment banker or other third party to act on its behalf, directly or
indirectly, as a broker or finder in connection with the transactions
contemplated by this Agreement.
(g) Liabilities. AIA
has no liabilities as of the date hereof that would be required by generally
accepted accounting principles to be disclosed on a balance sheet; provided,
however, that no representation or warranty is made with respect to any
liability or obligation of AIA to the Buyer.
(h) Commissions
Receivable. As of the date hereof, AIA’s commissions
receivable are approximately $40,041 (the “Commissions
Receivable”).
(i) Cash;
Prepaid Expenses; Rent Security Deposits. As of the date
hereof, AIA has approximately $11,600 in cash (plus such amount as shall be
required to satisfy AIA’s payroll obligations through the Closing and the amount
due by AIA to the Buyer for accrued and unused vacation pay through the
Closing), approximately $2,810 in prepaid expenses and approximately $8,576 in
rent security deposits.
3. Representations
of the Buyer. The Buyer represents and warrants to the Seller
as follows:
(a) Consents. No
consent of any governmental or other regulatory agency, court or third party is
required to be received by or on the part of the Buyer to enable him to enter
into and carry out this Agreement or the Promissory Notes and the transactions
contemplated hereby or thereby.
(b) Authority;
Binding Nature of Agreement. The Buyer has the power to enter
into this Agreement and the Promissory Notes and to carry out his obligations
hereunder and thereunder. This Agreement and the Promissory Notes
constitute the valid and binding obligations of the Buyer and are enforceable
against him in accordance with their respective terms.
(c) No
Breach. Neither the execution and delivery of this Agreement
or the Promissory Notes, nor compliance by the Buyer with any of the provisions
hereof or thereof, nor the consummation of the transactions contemplated hereby
or thereby, will:
(i) violate
any judgment, order, injunction, decree or award against, or binding upon, the
Buyer;
(ii) violate
or otherwise breach the terms of any agreement or understanding, written or
oral, to which the Buyer is a party or is otherwise bound; or
(iii) violate
any law or regulation of any jurisdiction relating to the Buyer.
(d) Brokers. The
Buyer has not engaged, consented to, or authorized any broker, finder,
investment banker or other third party to act on his behalf, directly or
indirectly, as a broker or finder in connection with the transactions
contemplated by this Agreement.
4. Closing.
(a) Time and
Location. The closing (the “Closing”) provided for herein
shall take place simultaneously with the execution of this Agreement at the
offices of Certilman Balin Xxxxx & Xxxxx, LLP, 00 Xxxxxxx Xxxxxx, Xxxx
Xxxxxx, Xxx Xxxx 00000. The Closing shall be deemed effective as of
the close of business on June 30, 2009.
(b) Items to
be Delivered by the Seller. At the Closing, the Seller will
deliver or cause to be delivered to the Buyer:
(i) a
certificate representing the Shares, together with a stock power, duly executed
in blank by the Seller;
(ii) the
resignation of each officer and director of AIA; and
(iii) the
Security Agreement, executed on behalf of the Parent.
(c) Items to
be Delivered by the Buyer. At the Closing, the Buyer will
deliver or cause to be delivered to the Parent:
(i) the
Promissory Notes, executed by the Buyer;
(ii) the
Guarantee, executed by AIA; and
(iii) the
Security Agreement, executed by AIA.
5. Covenants.
(a) The Buyer
and AIA agree that, in the event debt financing is offered to AIA by a financial
institution in an amount at least equal to the principal amount of the Senior
Note and which provides for a term of not greater than ten (10) years and the
payment of monthly self-amortizing installments not in excess of the monthly
installments payable pursuant to the Senior Note (a “Bank Financing”), AIA shall
accept such Bank Financing and shall use the proceeds thereof to prepay the
Senior Note in full. Except to the extent that transaction costs are
capitalized as part of the Bank Financing, the Buyer shall not be required to
pay any such costs.
(b) Subject
to the compliance by the Buyer and AIA with their obligations under this
Agreement and the other Transaction Documents, the Seller agrees to reimburse
AIA for the direct costs incurred by AIA in connection with the closing of AIA’s
offices at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx (the “Market Street
Location”) and the moving of the assets from the Market Street Location to AIA’s
offices at 0000 Xxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxxxxxxx (the “Upper Xxxxx
Location”) (the “Market Street Move”), including rental payments due on the
lease for the Market Street Location (net of the security deposit held by the
landlord); provided, however, that the Seller’s obligation to reimburse AIA for
its costs in connection with the Market Street Move (exclusive of rental
payments due) shall not exceed an aggregate of Two Thousand Dollars ($2,000);
and provided further that the Seller shall have no liability under this
paragraph in the event that the Market Street Move is not completed for any
reason by September 30, 2009.
(c) Subject
to the compliance by the Buyer and AIA with their obligations under this
Agreement and the other Transaction Documents, the Seller agrees to reimburse
AIA for the following direct costs incurred by AIA in connection with the move
of the Upper Xxxxx Location to a location in Delaware County or West
Philadelphia, Pennsylvania (the “New Location”) (the “Upper Xxxxx Move”): (i)
the purchase and installation of a new store sign; (ii) the removal of the
mechanical filing system; and (iii) the direct costs of moving to, and setting
up at, the New Location; provided, however, that the Seller’s obligation to
reimburse AIA for its direct costs in connection with the Upper Xxxxx Move shall
not exceed an aggregate of Ten Thousand Dollars ($10,000); and provided further
that the Seller shall have no liability under this paragraph in the event that
the Upper Xxxxx Move is not completed for any reason by December 31,
2009.
(d) Subject
to the compliance by the Buyer and AIA with their obligations under this
Agreement and the other Transaction Documents, the Seller will cause its
wholly-owned subsidiary, Blast BSA Inc. (formerly Xxxxx Xxxxx Agency Inc.)
(“BSA”), to maintain its AMS 360 license in effect, and shall pay the base fee
and one user fee, until the last date on which customers of BSA are entitled
under applicable New York law to demand a copy of their insurance policies and
related documentation (the “AMS 360 Period”). During the AMS 360
Period, AIA will have access to the information set forth in the AMS 360 system
to the extent applicable to the customers of AIA. During the AMS 360
Period, the Buyer and AIA will assist the Seller, the Parent, BSA and the
Seller’s wholly-owned subsidiary, Blast DA, Inc. (formerly DCAP Accurate, Inc.)
(“DA”), in retrieving information and/or documents in connection with requests
made by customers of BSA and/or DA.
(e) The Buyer
acknowledges and agrees that neither the Seller nor the Parent nor any affiliate
thereof shall have any liability or obligation to the Buyer with respect to, in
connection with or arising out of the Employment Agreement, dated as of July 1,
2006, between AIA and the Buyer or otherwise in connection with any employment
or other relationship between the Buyer and AIA, the Seller, the Parent or any
affiliate thereof, any and all such liabilities and obligations being waived and
released.
(f) Following
the Closing and through January 31, 2018 (the “Premium Finance Period”), AIA
will refer each of its customers who desire premium financing to Payments Inc.,
and only to Payments Inc.
(g) Subject
to the compliance by the Buyer and AIA with their obligations under this
Agreement and the other Transaction Documents, the Seller will provide to AIA,
without cost or expense to AIA, monthly accounting services through December 31,
2009, it being understood that such services shall not include day-to-day
bookkeeping matters, including with regard to payments to vendors and
payroll.
(h) The
parties agree that the Buyer’s option to purchase shares of common stock of the
Parent, to the extent vested as of the Closing, shall remain exercisable until
ninety (90) days following the Closing and shall then expire.
6. Amendment. No
provision hereof may be changed, waived, discharged, or terminated orally, or in
any manner other than by an instrument in writing signed by the party against
which the enforcement of the change, waiver, discharge, or termination is
sought.
7. Binding
Effect. This Agreement shall be binding upon and inure to the
benefit of the respective parties, and their successors and assigns, heirs and
personal representatives.
8. Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original.
9. Entire
Agreement. This Agreement constitutes the entire understanding
between the parties with respect to the subject matter hereof and supersedes any
previous written or oral agreement with respect thereto. The express
representations, warranties and covenants set forth in this Agreement constitute
all of the representations, warranties and covenants of the parties and upon
which the parties have relied. Without limiting the generality of the
foregoing, except as expressly provided for in Section 2(g), no representation
or warranty is being made by the Seller with respect to the business, assets,
properties, condition (financial or otherwise) or prospects of AIA, any
agreement to which AIA is a party or is otherwise bound or the collectability of
the Commissions Receivable.
10. Construction. This
Agreement is made under and shall be construed in accordance with the laws of
the State of New York applicable to contracts made and performed within the
State of New York. As used herein, the term “including” shall mean
“including without limitation,” all references to the masculine pronoun or the
neuter shall be deemed to refer to the other where applicable and all references
to the singular shall be deemed to refer to the plural, and vice versa, where
applicable.
11. Notices. Any
and all notices or other communications or deliveries required or permitted to
be given or made pursuant to any of the provisions of this Agreement shall be
deemed to have been duly given or made for all purposes when hand delivered or
sent by certified or registered mail (return receipt requested, postage
prepaid), facsimile transmission, or overnight mail or courier, addressed as
follows:
If to the
Seller, at:
0000
Xxxxxxxx
Xxxxxxx,
Xxx Xxxx 00000
Attention: President
Telecopier
Number: (000) 000-0000
With a
copy to:
Certilman
Balin Xxxxx & Xxxxx, LLP
00
Xxxxxxx Xxxxxx
Xxxx
Xxxxxx, Xxx Xxxx 00000
Attention:
Xxxx Xxxxxxx, Esq.
Telecopier
Number: (000) 000-0000
If to the
Buyer, at:
000 Xxxxx
00xx
Xxxxxx #000
Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000
Telecopier
Number: (000) 000-0000
or at
such other address as any party may specify by notice given to the other parties
in accordance with this Section 11.
12. Further
Assurances. On or after the date hereof, the parties shall
take all such further actions and execute and deliver all such further
instruments and documents as may be necessary or appropriate to carry out the
transactions contemplated by this Agreement.
13. Severability. In
the event any clause, section or part of this Agreement shall be held or
declared to be void, illegal or invalid for any reason, all other clauses,
sections or parts of this Agreement which can be effected without such void,
illegal or invalid clause, section or part shall nevertheless continue in full
force and effect.
14. Headings. The
headings or captions in this Agreement are for convenience of reference only and
do not in any way modify, interpret or construe the intent of the parties or
affect any of the provisions of this Agreement.
15. Representation
by Counsel; Interpretation. Each party acknowledges that he
or it has been represented by counsel, or has been afforded the
opportunity to be represented by counsel, in connection with this Agreement and
the transactions contemplated hereby. Accordingly, any rule or law or
any legal decision that would require the interpretation of any claimed
ambiguities in this Agreement against the party that drafted it has
no application and is expressly waived by the parties. The provisions
of this Agreement shall be interpreted in a reasonable manner to give effect to
the intent of the parties hereto.
16. No Third
Party Beneficiaries. No person or entity not a party to this
Agreement shall be entitled to rely upon or enforce any of the provisions
hereof.
[Remainder
of page intentionally left blank. Signature page
follows.]
IN WITNESS WHEREOF, the
parties have duly executed this Agreement as of the date first above
written.
Xxxxx Xxxxxxxxx
BLAST ACQUISITION CORP.
By:
Xxxxx X.
Xxxxxxxxx, President
Agreed
to:
AIA-DCAP
CORP.
By:
Xxxxx
Xxxxxxxxx, President
DCAP
GROUP, INC.
By:
Xxxxx
X. Xxxxxxxxx, President
