ASSET CONTRIBUTION AND COMBINATION AGREEMENT
Exhibit
10.15
THIS
ASSET CONTRIBUTION AND COMBINATION AGREEMENT (this "Agreement") is entered
into
on January 31, 2008, by and among TRUST
BENEFITS ONLINE, LLC, a Delaware limited liability company ("TBOL"), INFORMATION
CONCEPTS, INC., a California corporation ("ICI"), ASSOCIATED THIRD PARTY
ADMINISTRATORS, INC., a California corporation ("ATPA"), XXXXX XXXXXXXXXX
("XxxXxxxxxx"), XXXXX X. XXXXXX (“Xxxxxx”), XXXXXX XXXXXX (“Xxxxxx”), and
BENEFITS TECHNOLOGIES, LLC, a Delaware limited liability company (the "Company")
(each party shall sometimes be referenced to herein
as a
"Party" and, collectively, as the "Parties").
EXPLANATORY
STATEMENT
A. ATPA
is a
third party administrator of single and multi-employer employee benefit plans,
including, without limitation, Xxxx-Xxxxxxx/ERISA benefit funds.
B. TBOL
is
engaged in the business of designing, creating and maintaining interactive
web
sites for employee benefit plan participants and software application programs
for the administration and management of employee benefit plans (the "TBOL
Business").
X. XxxXxxxxxx
is the Chief Executive Officer of TBOL.
D. ICI
is
engaged in the business of designing, creating and maintaining interactive
web
sites for Xxxx-Xxxxxxx employers and software application programs for the
administration and management of employee benefit plans (the "ICI Business").
Xxxxxx, the president of ICI, and Xxxxxx, the vice president of ICI, together
own all of the issued and outstanding capital stock of ICI (Xxxxxx and Xxxxxx
shall be referred to herein as the "ICI Stockholders").
E. The
Parties deem it advisable and in their best interests to contribute certain
assets to the Company, so that, upon the consummation of the transactions
contemplated by this Agreement, the Company will be capable of, among other
things, designing, creating and maintaining interactive web sites for employee
benefit plan participants and employers, and software application programs
for
the administration and management of employee benefit plans.
F. ATPA
and
TBOL deem it advisable and in their best interest to contribute all of the
assets relating to the TBOL Business to the Company, and
certain assumed liabilities of the TBOL Business, in exchange for certain
membership interests in the Company
(the
"ATPA Contribution"). The Parties agree that, at Closing (as defined below),
the
ATPA Contribution has a total value of $1 million.
G. ICI
and
the ICI Stockholders deem it advisable and in their best interest to contribute
all of those assets relating to the ICI Business to the Company and certain
liabilities of the ICI Business, in exchange for a certain membership interest
in the Company and the assumption of certain existing liabilities (the "ICI
Contribution"). The Parties agree that, at Closing (as defined below), the
ICI
Contribution has a total value of $1 million.
H. Prior
to
the execution of this Agreement, ATPA paid ICI nine hundred fifty thousand
($950,000) for, and ATPA has received, a non-exclusive beta license for certain
software.
NOW,
THEREFORE, in consideration of the mutual covenants of the parties as
hereinafter set forth and other good and valuable consideration, the receipt
and
sufficiency of which hereby are acknowledged, the parties hereto hereby agree
as
follows:
1. CONTRIBUTION
OF TBOL ASSETS TO THE COMPANY.
1.1 Contribution
of TBOL Assets to the Company.
1.1.1 Immediately
prior to the Closing, and as a condition precedent to the other transactions
contemplated herein, ATPA shall transfer to TBOL (the "ATPA Assignment") the
ATPA Assets (as defined in paragraph 1.1.4 below) free and clear of all Liens
(as defined below).
1.1.2 At
Closing, TBOL shall contribute to the Company all of the TBOL Assets (as defined
below) free and clear of all Liens.
1.1.3 The
term
"TBOL Assets" shall mean (i) all of the ATPA Assets (as defined in paragraph
1.1.4), and (ii) all assets and property owned or leased by TBOL that (together
with the ATPA Assets) are necessary to conduct the TBOL Business, including,
without limitation, the assets listed in Schedule 1.1.3
as attached hereto and made a part hereof.
1.1.4 The
term
"ATPA Assets" shall mean all of the assets and property owned by ATPA (i.e.,
as
of the date hereof, prior to the consummation of the ATPA Assignment) that
are
necessary to conduct the TBOL Business and listed in Schedule
1.1.4.
1.1.5 The
term
"Liens" shall mean claims, liens, charges, restrictions, options, preemptive
rights, mortgages, hypothecations, assessments, pledges, encumbrances, leases,
conditional sales contracts, other title retentions, or security interests
of
any kind or nature whatsoever.
1.2 Assumed
TBOL Liabilities.
At
Closing, the Company shall assume and agree to pay, perform and discharge when
due all Assumed TBOL Liabilities (as defined below) but excluding the Excluded
TBOL Liabilities (as defined below).
1.2.1 Assumed
Contracts.
At
Closing, ATPA and TBOL, as the case may be, shall assign to the Company their
respective contract rights with respect to those contracts identified as Assumed
TBOL Contracts on Schedule 1.2.1
and the Company shall assume the same (collectively, the "Assumed TBOL
Contracts").
1.2.2 TBOL
401k Plan.
At
Closing, the TBOL 401k Plan (the "TBOL Plan") shall be retained as an obligation
of TBOL, provided that, as soon as possible after the Closing, the Parties
shall
establish and implement an employee pension benefit plan, as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") for the benefit of Company employees (the “Company 401k Plan”)
and shall thereafter, as soon as practicable and legally permissible, permit
those employees of TBOL who become employees of the Company to join the Company
401k Plan and to transfer individual account balances from the TBOL Plan to
the
Company 401k Plan.
1.2.3 TBOL
Liabilities.
The
Company shall assume at the Closing and thereafter pay and fully satisfy when
due the indebtedness specifically listed on Schedule 1.2.3
(the Assumed TBOL Contracts and those liabilities listed on Schedule
1.2.3
shall be referred to herein as the "Assumed TBOL Liabilities").
1.2.4 Excluded
TBOL Liabilities.
Except
as otherwise set forth herein, the Company will not assume, agree to pay,
perform and discharge or in any way be responsible for any debts, liabilities
or
obligations of ATPA or TBOL of any kind or nature whether now or hereafter
accrued and whether known, unknown, contingent or otherwise, including, without
limitation, those liabilities listed on Schedule
1.2.4
(the "Excluded TBOL Liabilities"). The Excluded TBOL Liabilities shall remain
the sole responsibility of and shall be paid, performed and discharged by TBOL
and ATPA, as the case may be.
2. CONTRIBUTION
OF ICI ASSETS TO THE COMPANY.
2.1 ICI
Assets.
At
Closing, ICI shall contribute to the Company all of the ICI Assets, free and
clear of all Liens (except as otherwise set forth herein) including the Assumed
Liabilities. The term “ICI Assets” shall mean all of the assets and property
owned or leased by ICI that are necessary to conduct the ICI Business,
including, without limitation, the assets described in Schedule 2.1.
2.2 Excluded
ICI
Assets.
Notwithstanding anything to the contrary contained herein, the ICI Assets do
not
include the assets not used in the ICI Business as specifically identified
in
Schedule 2.2
("Excluded ICI Assets").
2.3 Assumed
Liabilities.
At
Closing, the Company shall assume and agree to pay, perform and discharge when
due all of the Assumed ICI Liabilities (defined below), but excluding the
Excluded ICI Liabilities.
2.3.1 Excluded
ICI Liabilities.
Except
as otherwise set forth below, the Company will not assume, agree to pay, perform
and discharge or in any way be responsible for any debts, liabilities or
obligations of ICI of any kind or nature whether now or hereafter accrued and
whether known, unknown, contingent or otherwise including, without limitation,
those liabilities listed on Schedule
2.3.1
(the "Excluded ICI Liabilities"). The
Excluded ICI Liabilities shall remain the sole responsibility of and shall
be
paid, performed and discharged by ICI.
2.3.2 Assumed
Contracts.
At
Closing, ICI shall assign to the Company its contract rights with respect to
those contracts identified as Assumed Contracts on Schedule 2.3.2
(collectively, the "Assumed ICI Contracts").
2.3.3 ICI
401k Plan.
At
Closing, the ICI 401k Plan (the "ICI Plan") shall be retained as an obligation
of ICI subject to the provisions of section 2.5.5 below, provided that, as
soon
as possible after the Closing, the Parties shall establish and implement an
employee pension benefit plan, as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") for the benefit
of
Company employees (the “Company 401k Plan”) and shall thereafter, as soon as
practicable and legally permissible, permit those employees of ICI who become
employees of the Company to join the Company 401k Plan and to transfer
individual account balances from the ICI Plan to the Company 401k
Plan.
2.3.4 Assumed
ICI Liabilities.
The
Company will assume at the Closing and thereafter pay and fully satisfy when
due
the indebtedness specifically listed on Schedule 2.3.4
(the Assumed ICI Contracts and those liabilities listed on Schedule 2.3.4 shall
be referred to herein as the "Assumed ICI Liabilities").
2.4 New
Promissory Notes.
2.4.1 At
Closing, the Company shall assume ICI's payment obligations in the approximate
amounts set forth below (collectively, “Friendly Debt”), which are owed to each
of the parties set forth opposite each dollar amount (each a "Note
Holder"):
2.4.1.1 Xxxxxxx
Xxxxxx - $50,000;
2.4.1.2 Systems
Solutions Group - $13,362;
2.4.1.3 Xxxxx
Consulting - $23,318;
2.4.1.4 Xxx
Xxxxx
- $24,000; and
2.4.1.5 Xxxxxxxx,
Xxxxx & Xxxxxxxx - $22,100.
2.4.2 At
Closing, the Company shall execute and deliver a subordinated promissory note,
in the form of Exhibit
A (each,
a "Subordinated Note"), to each Note Holder, whereby the Company shall satisfy
the outstanding principal due thereunder from its "available cash," as that
term
is defined in the Subordinated Note, as approved by the Company’s Board of
Directors. In
addition, each Note Holder shall execute (i) an Intercreditor Agreement, in
the
form of Exhibit
B, as
attached hereto (the "Intercreditor Agreement") (which shall include a general
release of ICI and the ICI Stockholders).
2.5 Retained
Obligations - Individual ICI Creditors.
2.5.1 ICI
shall
retain the receivable from Adminisoft, Inc. and, to the extent expressly agreed
by ICI, retain revenue from ICI’s discontinued VMS product (the “VMS Revenue”)
and shall apply any collections from these revenue sources toward ICI's existing
payable to the following parties in the approximate amounts set forth below
(collectively, “Investor Debt”) which are owed to each of the parties set forth
opposite each dollar amount (each an "Individual ICI Creditor"):
2.5.1.1 Xxxxx
Xxxxxx - $133,380;
2.5.1.2 Xxx
Xxxxxx - $52,838; and
2.5.1.3 Xxx
Xxxxx
- $28,000.
2.5.2 Except
as
otherwise set forth below, the obligations listed above in this Section
2.5
shall be satisfied, pari passu, from the gross revenue received from Adminisoft,
Inc. under such ICI receivable and from the VMS Revenue.
2.5.3 In
the
event that the revenue from the sources described in section 2.5.2 has not
satisfied the amounts owed to the Individual ICI Creditors by the earlier of
(a)
the date on which the payments from such sources fall below $2,000 for two
(2)
consecutive months, or (b) the thirty-six (36) month anniversary of the Closing
Date (the "Adminisoft Payment Period"), then: (1) the Company shall assume
such
debts owed to the Individual ICI Creditors, and the Company shall provide each
Individual ICI Creditor with a Subordinated Note, in the form of Exhibit A,
for
the outstanding balance owed to each Individual ICI Creditor, whereby the
Company shall satisfy the outstanding principal due thereunder from its
"available cash," as that term is defined in the Subordinated Note, as approved
by the Company’s Board of Directors; and (2) ICI shall transfer and assign such
revenues to the Company. In addition, as a condition precedent to the Company
providing the Individual ICI Creditors the Subordinated Notes, each of the
Individual ICI Creditors shall enter into an Intercreditor Agreement, in a
form
required by the Company, and similar to that provided in Section
2.4.2
above.
2.5.4 Within
15
days following the end of each quarter during the term of the Adminisoft Payment
Period, ICI shall deliver a written report (a "Report") to the Company, ATPA,
TBOL and XxxXxxxxxx, which Report reflects (i) all gross receipts under the
Adminisoft Obligation, including VMS, collected during the immediately preceding
quarter, and all related underlying documentation related thereto as reasonably
requested by the Company or any of the parties hereto; and (ii) the amount
of
all prior payments made to each of the Individual ICI Creditors and the
outstanding principal and interest owed to each such creditor.
2.5.5 Retained
Obligations - Priority Institutional Creditors.
In
addition to the Individual ICI Creditor obligations, ICI shall retain the
liability for the Xxxxx Fargo, Employment Development Division, 401(k)
liabilities, and certain related costs and expenses listed in Schedule
2.3.1
(collectively, the “Priority Institutional Creditors”). As an express condition
to ICI’s willingness to enter into this Agreement and transfer the ICI Assets to
the Company, and as part consideration therefore, ATPA and the Company have
agreed to execute and deliver, or cause to be executed and delivered, that
certain ICI “WebERF” Software License Agreement with ICI of even date in the
form attached hereto as Exhibit
C (the
“License Agreement”). Among other things, the License Agreement provides for the
following:
2.5.5.1 The
term
of the License Agreement shall be that period of time that any amounts remain
outstanding and owing to the Priority Institutional Creditors (the “License
Agreement Term”);
2.5.5.2 During
the License Agreement Term, and so long as any amounts remain outstanding under
obligations to the Priority Institutional Creditors, ICI shall retain ownership
of the WebERF software product;
2.5.5.3 During
the License Agreement Term, ATPA shall receive and ICI shall provide certain
ongoing license and maintenance rights and obligations, as applicable, with
respect to the WebERF product, as set forth in the License Agreement, in
exchange for the payments from ATPA provided therein;
2.5.5.4 At
the
end of the License Agreement Term, upon payment by the Company of any balance
then outstanding with respect to the Priority Institutional Creditors, and
upon
ICI’s receipt of releases from the Priority Institutional Creditors regarding
such obligations, the Company shall purchase the WebERF product from ICI for
the
sum of one-hundred dollars ($100.00);
2.5.5.5 The
Company shall provide, at no cost to ICI, the workforce necessary to perform
the
License Agreement during the License Agreement Term;
2.5.5.6 To
secure
the performance of the License Agreement by ATPA, ATPA shall pledge one-half
(1/2) of its membership interest in the Company (as of the date hereof, such
pledge shall equal a twenty percent (20%) membership interest) (the “Pledge
Amount”), which interest shall transfer to ICI upon default by ATPA under the
License Agreement. The Pledge Amount shall be reduced by fifteen percent (15%)
of the total initial Pledge Amount for every $100,000 paid pursuant to the
License Agreement; provided
that,
during
the License Agreement Term the Pledge Amount shall never be reduced below an
amount such that the sum of ICI’s membership interest and the Pledge Amount is
less than fifty-one percent (51%) of the total voting membership interest of
the
Company; and provided
further,
that in
the event of issuances of additional voting membership interests of the Company
or other diluting events during the License Agreement Term, the Pledge Amount
shall be adjusted (including increased, as applicable, but not above one-half
of
ATPA’s total membership interest), to meet the minimum fifty-one percent (51%)
requirement.
2.5.6 Within
15
days following the end of each quarter during the License Agreement Term, ICI
shall deliver a written report (the "Report") to the Company, ATPA, TBOL and
XxxXxxxxxx, which Report reflects the outstanding balance owed to the Priority
Institutional Creditors.
3. ISSUANCE
OF UNITS.
3.1 In
exchange and as consideration for the contribution of the TBOL Assets to the
Company at Closing, and the agreement to assume, pay, perform and discharge
the
Assumed TBOL Liabilities, the Company shall issue to ATPA that number of units
of ownership in the Company (the "Units") which shall be equal to forty percent
(40%) of the issued and outstanding Units
in the
Company.
3.2 In
exchange and as consideration for the contribution of the ICI Assets to the
Company at Closing, and the agreement to assume, pay, perform and discharge
the
Assumed ICI Liabilities, the Company shall issue ICI that
total number of Units which shall be equal to forty percent (40%) of the issued
and outstanding Units
in the
Company.
3.3 In
exchange and as consideration for the contribution of one dollar ($1.00) from
XxxXxxxxxx to the Company at Closing, the Company shall issue to XxxXxxxxxx
that
number of Units which shall be equal to twenty percent (20%) of the issued
and
outstanding Units in the Company.
3.4 At
Closing, the Company, ICI, ATPA and XxxXxxxxxx (ICI, ATPA and XxxXxxxxxx shall
be collectively referred to as the "Members") shall execute the LLC Agreement,
in the form attached hereto as Exhibit D.
4. BUSINESS
AGREEMENTS TO BE EXECUTED AT OR BEFORE CLOSING.
4.1 At
or
before Closing, the Company shall enter into the following agreements (the
"Services Agreements"):
4.1.1 a
consulting agreement, in the form of Exhibit E,
whereby the Company will provide technical services to ATPA for existing Oracle
based applications;
4.1.2 an
administrative services agreement, in the form of Exhibit F,
whereby ATPA shall agree to provide the Company with accounting and financial
services and human resource services;
4.1.3 Conversion,
Configuration and Implementation Services Agreement for ATPA's existing
customers;
4.1.4 Software-As-A-Service Agreement to run ATPA's
business on the Company's software;
4.1.5 Non-Exclusive
Beta License Agreement for ATPA's right to use PlanIt for its
customers;
4.1.6 Maintenance
and Support Agreement once ATPA's customers go live on PlanIt;
5. CLOSING.
Closing
of the transactions contemplated by this Agreement (the "Closing") shall take
place at the offices of Xxxxxxx Xxxxxxx Xxxxxxx & Xxxxxx, LLP, 0000 X.
Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxxxx, on or before 12:01
a.m. on March 1, 2008 (the "Closing Date"), or at any other time or place upon
which the parties agree (including, without limitation, by way of
facsimile).
6. TRANSACTION
DOCUMENTS TO BE DELIVERED AT CLOSING.
6.1 Documents
of TBOL and ATPA.
At the
Closing, ATPA and/or TBOL, as the case may be, shall deliver, execute and
deliver, or cause to be executed and delivered to the Company:
6.1.1 the
LLC
Agreement;
6.1.2 the
License Agreement;
6.1.3 Services
Agreements (as applicable);
6.1.4 a
xxxx of
sale executed by TBOL in the form of Exhibit G,
whereby the TBOL Assets and the ATPA Assets will be assigned to the
Company;
6.1.5 an
Assignment and Assumption Agreement, in the form of Exhibit H
(the "TBOL Assignment Agreement") for the Assumed TBOL Liabilities;
6.1.6 a
Business Protection Agreement, in the form of Exhibit I
for ATPA and TBOL;
6.1.7 all
written warranties, guarantees, or similar documents which are in ATPA's or
TBOL's possession and which relate to the TBOL Assets;
6.1.8 any
transferable licenses applicable to the TBOL Business or the TBOL Assets and
any
forms which are necessary or required in order to assign or transfer to the
Company those licenses and permits;
6.1.9 the
written certificate of TBOL's Secretary, in the form of Exhibit J;
6.1.10 the
written certificate of TBOL's President in the form of Exhibit L,
certifying that all of the representations and warranties set forth in
Section 7
are true and correct as of the Closing Date and that all of TBOL's covenants
and
obligations contained hereunder have been fully performed or satisfied, as
the
case may be, as of the Closing Date;
6.1.11 Certificate
of Status from the State of Delaware certifying that TBOL is in good
standing;
6.1.12 a
certified copy of the filed Certificate of Amendment changing TBOL's name to
a
name that does not use any word (other than a word indicating the limited
liability company form) currently used in TBOL's name;
6.1.13 Authorizing
resolutions of TBOL approving the transaction contemplated by this Agreement,
and the execution of the documents required hereunder; and
6.1.14 Authorizing
resolutions of ATPA approving the transaction contemplated by this Agreement,
and the execution of the documents required hereunder;
6.1.15 Assignment
and Assumption of Lease and Landlord Consent for the real property lease
presently held by TBOL (the "TBOL Lease Assignment"); and
6.1.16 The
Assignment and Assumption of the co-location (Cage) Lease, and the Cage
Equipment Lease (collectively, the "Cage Lease Assignment").
6.2 Documents
of ICI.
At the
Closing, ICI (or the ICI Stockholders, as the case may be) shall deliver,
execute and deliver, or cause to be executed and delivered to the
Company:
6.2.1 the
LLC
Agreement;
6.2.2 the
License Agreement;
6.2.3 the
Services Agreements (as applicable) executed by the ICI Stockholders;
6.2.4 a
Xxxx of
Sale executed by ICI, in the form of Exhibit N;
whereby the ICI Assets will be assigned to the Company;
6.2.5 an
Assignment and Assumption Agreement, in the form of Exhibit O
(the "ICI Assignment Agreement") for the Assumed ICI liabilities;
6.2.6 a
Business Protection Agreement, in the form of Exhibit I
executed by ICI and the ICI Stockholders;
6.2.7 the
Subordinated Notes from the Note Holders;
6.2.8 the
Intercreditor Agreement from the Note Holders;
6.2.9 all
written warranties, guarantees, or similar documents which are in ICI's
possession and which relate to the ICI Assets;
6.2.10 any
transferable licenses applicable to the ICI Business or the ICI Assets and
any
forms which are necessary or required in order to assign or transfer to the
Company those licenses and permits;
6.2.11 the
written certificate of ICI's Secretary, in the form of Exhibit P;
6.2.12 the
written certificate of ICI's President in the form of Exhibit Q
that all of the representations and warranties set forth in Section 10
are true and correct as of the Closing Date and that all of ICI's covenants
and
obligations contained hereunder have been fully performed or satisfied, as
the
case may be, as of the Closing Date;
6.2.13 a
Certificate of Status from the State of California certifying that ICI in good
standing;
6.2.14 Assignment
and Assumption of Lease and Landlord Consent (the "ICI Lease Assignment") for
the real property lease presently held by ICI (the "ICI Lease Assignment");
and
6.2.15 Authorizing
resolutions of ICI’s Board of Directors and the ICI Stockholders approving the
transaction contemplated by this Agreement, and the execution of the documents
required hereunder.
6.3 Documents
of XxxXxxxxxx.
At the
Closing, XxxXxxxxxx shall deliver, execute and deliver, or cause to be executed
and delivered to the Company:
6.3.1 the
LLC
Agreement;
6.3.2 the
Services Agreements (as applicable);
6.3.3 a
Business Protection Agreement; and
6.3.4 One
Dollar ($1.00).
6.4 Documents
of the Company.
At or
within a reasonable time after the Closing, the Company shall deliver, execute
and deliver, or cause to be executed and delivered to the other Parties (as
applicable):
6.4.1 the
LLC
Agreement;
6.4.2 the
Subordinated Notes (to the Note Holders) and the Intercreditor
Agreement;
6.4.3 Services
Agreements;
6.4.4 the
ICI
Assignment Agreement;
6.4.5 the
TBOL
Assignment Agreement;
6.4.6 a
Certificate of Status from the State of Delaware certifying that the Company
is
in good standing.
6.4.7 Authorizing
resolutions of the Company approving the transaction contemplated by this
Agreement, and the execution of the documents required hereunder;
6.4.8 the
ICI
Lease Assignment.
6.4.9 the
TBOL
Lease Assignment;
6.4.10 the
Cage
Lease Assignment; and
6.4.11 the
License Agreement.
7. REPRESENTATIONS
AND WARRANTIES OF ATPA AND TBOL.
ATPA
and TBOL, jointly and severally, represent and warrant to all of the other
Parties, as of the date of this Agreement and as of the Closing,
that:
7.1 Organization
of ATPA.
ATPA is
a corporation duly organized, validly existing, and in good standing under
the
laws of the State of California; is qualified to transact business as a foreign
Company in and is in good standing under the laws of each other state or
jurisdiction where the nature of its business or other activities requires
it to
be qualified; and has all requisite corporate power and authority to own,
operate, and lease its properties, to carry on its business as now being
conducted, to enter into this Agreement, and to carry out the contemplated
transactions.
7.2 Organization
of TBOL.
TBOL is
a limited liability company duly organized, validly existing, and in good
standing under the laws of the State of Delaware; is qualified to transact
business as a foreign company in and is in good standing under the laws of
each
other state or jurisdiction where the nature of its business or other activities
requires it to be qualified; and has all requisite company power and authority
to own, operate, and lease its properties, to carry on its business as now
being
conducted, to enter into this Agreement, and to carry out the contemplated
transactions. ATPA is the sole member of TBOL.
7.3 Authorization.
The
execution, delivery and performance of this Agreement and the contemplated
transactions have been duly approved by the directors and stockholders of ATPA
and as otherwise required by the governing documents of ATPA and TBOL; this
Agreement has been properly executed by the duly-authorized officers of ATPA
and
TBOL; and this Agreement is the valid and binding obligation of ATPA and TBOL
and is enforceable in accordance with its terms.
7.4 No
Violation.
The
execution, delivery and performance of this Agreement and the consummation
of
the contemplated transactions will not violate the terms of the charter or
bylaws of ATPA, the certificate of formation or the limited liability company
agreement of TBOL and any other agreement to which ATPA or TBOL is a party,
or
any order, judgment, or decree applicable to ATPA or TBOL.
7.5 Title
to TBOL Assets.
Except
as set forth on Schedule
7.5,
ATPA is the owner of and has good and marketable title to the ATPA Assets free
and clear of all Liens. Immediately prior to Closing, TBOL will be the owner
of
and have good and marketable title to the TBOL Assets and the TBOL Business,
free and clear of all Liens.
7.6 Tangible
TBOL Personal Property.
Schedule 7.6
attached to this Agreement contains a list of all tangible personal property
used in the TBOL Business ("Tangible TBOL Personal Property") owned or leased
by
ATPA or TBOL (as such ownership is identified on that Schedule 7.6).
In ATPA’s and TBOL's judgment, the Tangible TBOL Personal Property listed on
Schedule 7.6
is all of the tangible personal property necessary for the conduct of the TBOL
Business as previously and currently conducted.
7.7 Intangible
TBOL Personal Property.
Schedule 7.7
attached to this Agreement contains a list of all intangible personal property
with respect to the TBOL Business, owned, leased or licensed by ATPA and TBOL
(the "Intangible TBOL Personal Property"). This list was prepared in good faith
by ATPA and TBOL for attachment to this Agreement. The Intangible TBOL Personal
Property listed on Schedule 7.7
is all of the intangible personal property, necessary for the conduct of the
TBOL Business as previously and currently conducted.
7.8 Contracts.
Schedule 7.8
attached to this Agreement contains a list of all oral or written contracts
or
commitments that relate to the TBOL Business and to which ATPA or TBOL is a
party or by which it may be bound. This list was prepared in good faith by
ATPA
and TBOL for attachment to this Agreement and includes (without limitation):
(i) each contract or commitment involving more than $10,000 for the
purchase or sale of capital assets, equipment, supplies, products, or services;
(ii) all contracts with or commitments involving more than $1,000 to any
present or former employee or consultant; (iii) all non-competition
covenants; (iv) all contracts or commitments evidencing loans or other
financing; (v) all leases; and (vi) all other contracts and
commitments which are, individually or in the aggregate, material as to amount
or effect on the TBOL Business or any of the ATPA Assets or the TBOL Assets.
Except as set forth in Schedule 7.8,
each contract or commitment is valid, binding, and fully enforceable in
accordance with its respective terms except to the extent that enforceability
may be limited by (a) bankruptcy, insolvency, reorganization, moratorium,
or similar laws now or hereafter in effect relating to the rights and remedies
of creditors generally and (b) general principles of equity. Except as set
forth in Schedule 7.8,
each contract or commitment that contains a term of more than 60 days, or that
is not terminable on 60 days or less notice, is fully and freely assignable
to
the Company without creating an event of default or imposing any other penalty.
No occurrence or circumstance is known by ATPA or TBOL to exist which would
constitute a breach or default thereunder by ATPA or TBOL or any other party
under any contract or commitment. None of the contracts or commitments will
be
binding upon the Company or will impose any obligation upon the Company unless
assumed by the Company.
7.9 Consents
and Approvals.
Except
as set forth on Schedule
7.9, no
consent, approval, or authorization of or designation, declaration, or filing
with any governmental authority or other person or entity is required on the
part of ATPA or TBOL in connection with the execution, delivery or performance
of this Agreement or the consummation of the contemplated transactions or the
operation of the TBOL Business by the Company.
7.10 Other
Agreements.
Neither
ATPA nor TBOL is a party to any agreement or instrument or subject to any
charter or other company restriction or any judgment, order, writ, injunction,
rule, or regulation which materially and adversely affects the TBOL Business
or
the operations, prospects, properties, assets, or condition (financial or
otherwise) of TBOL.
7.11 Suits
and Proceedings.
No
suit, action, litigation, administrative proceeding, arbitration proceeding,
governmental proceeding, investigation, inquiry, or other proceeding is pending
or, to the knowledge of ATPA or TBOL, threatened against TBOL or the TBOL
Business, including with respect to any claim by Xxxxxx Xxxxx LLP or Xxxxx
Xxxxxx. TBOL has not received, and does not have reason to believe that it
will
receive, oral or written notice of any claim or violation under any inquiry,
law, ordinance, requirement, regulation, or order applicable to the TBOL
Business or the TBOL Assets, including with respect to any claim by Xxxxxx
Xxxxx
LLP or Xxxxx Xxxxxx.
7.12 Impediments
to Use, Etc.
There
exists no easement, license, grant, restrictive covenant, zoning ordinance,
environmental law or ordinance, building ordinance, or any other law, rule,
regulation, or impediment of any kind which prohibits, interferes with, limits
or impairs, or would prohibit, interfere with, limit, or impair the use,
operation or maintenance of the TBOL Business or the TBOL Assets. To the
knowledge of ATPA and TBOL, no change in the environmental, zoning, or building
laws, regulations, or ordinances is pending or threatened which might singularly
or in the aggregate have a material adverse effect on the financial condition
of
the TBOL Business, or the TBOL Assets.
7.13 Compliance
with Laws.
To the
best of the knowledge of ATPA and TBOL, ATPA and TBOL have fully complied with
all federal, state, and local laws, rules, regulations, and administrative
directives which apply to or materially affect the conduct and operation of
the
TBOL Business.
7.14 Tax
Returns.
Each of
ATPA and TBOL has filed all tax returns, of every kind, nature, or description,
required to be filed by ATPA and TBOL and has paid or remitted to the proper
authority all taxes and assessments, including, without limitation, all excise
taxes, sales taxes, payroll withholding taxes, FICA taxes, unemployment taxes,
and personal property taxes, which are required to be paid or remitted by ATPA
and TBOL, and has established adequate reserves for the payment of all taxes
and
other governmental charges for the current period which are not yet
due.
7.15 Financial
Statements.
TBOL's
unaudited financial statements for the periods ending December 31, 2006 and
September 30, 2007, copies of which are attached to this Agreement as
Schedule 7.15,
are true, correct, and complete and have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis and
fairly present the financial position of TBOL as of the date of the statements
and the results of TBOL's operations for the periods covered by the statements.
There has been no material adverse change in the financial condition of TBOL
since the date of the most recent financial statements.
7.16 Records
of Business.
The
records of the TBOL Business are true and complete in all material respects,
and
there are no material matters as to which appropriate entries have not been
made
in the records.
7.17 Change
of Name, Etc.
During
the period that TBOL has been in existence, TBOL has not changed its name or
been involved in any merger, reorganization, or other proceeding whereby its
name has been changed.
7.18 Trade
Name.
TBOL
conducts the TBOL Business and has always conducted its business solely under
the name of "Trust Benefits Online" or "TBOL" and under no other name. To the
knowledge of ATPA and TBOL, no other person has a claim to the use of that
name,
and TBOL’s use of that name does not infringe upon or violate the proprietary
right of any person or entity.
7.19 Employee
Benefits.
Except
as set forth in Schedule
7.19,
TBOL does not maintain or contribute to (nor has it ever maintained or
contributed to): (i) any employee pension benefit plan, as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"); (ii) any employee welfare benefit plan, as defined in
Section 3(1) of ERISA; (iii) any stock option, stock purchase, stock
ownership, bonus, performance, or incentive plan or arrangement; (iv) any
plan or program providing noncash compensation or benefits, whether or not
taxable to the recipient; (v) any plan or arrangement providing
compensation or benefits upon a severance of employment, reduction in hours,
or
change of employment classification; (vi) any vacation, sick, holiday, or
other leave policy or program; or (vii) any other plan, agreement,
arrangement, or understanding (whether oral or written) which is similar to
any
of the foregoing in respect of its employees.
7.20 Acquisition
of Assets.
To
ATPA’s and TBOL's knowledge, ATPA and TBOL have acquired the TBOL Assets solely
from persons or entities who sell similar property in the ordinary course of
business.
7.21 Licenses
and Permits.
TBOL
has all licenses and permits necessary to conduct the TBOL Business as it is
now
being conducted and has paid all fees and charges due in connection therewith,
except where such failure would not have a material adverse effect.
7.22 Insurance.
TBOL
has delivered to the other Parties true and complete copies of all policies
of
insurance under which TBOL is a party or is or has been covered at any time
within the three (3) years preceding the date of this Agreement.
7.23 Employees.
Schedule 7.23
to this Agreement contains a complete and accurate list of each employee of
TBOL
(the "TBOL Employees") that are (or have been in the past) involved in the
TBOL
Business, including each employee on leave of absence or layoff status, stating
name, employer, current compensation paid or payable and any change in
compensation since December 31, 2005, vacation accrued and service credited
for purposes of vesting and eligibility to participate under any of the employee
benefit plans. No TBOL Employee is a party to, or otherwise bound by, any
agreement that in any way adversely affects or will affect the performance
of
the employee's duties as an employee of TBOL. To the knowledge of ATPA and
TBOL,
no key employee of TBOL intends to terminate that employee's employment with
TBOL.
7.24 Absence
of Certain Changes and Events.
Except
as set forth on Schedule 7.24
to this Agreement, since December 31, 2007, ATPA and TBOL have conducted the
TBOL business only in the ordinary course and there has not been
any:
7.24.1 change
in
the authorized or issued capital stock of TBOL; grant of any stock option or
right to purchase shares of capital stock of TBOL; issuance of any security
convertible into such capital stock; grant of any registration rights; purchase,
redemption, retirement, or other acquisition of any shares of any such capital
stock; or declaration or payment of any dividend or other distribution or
payment in respect of shares of such capital stock;
7.24.2 change
in
the outstanding ownership of TBOL; grant of any option or right to purchase
ownership in TBOL; issuance of any security convertible into such ownership
in
TBOL;
7.24.3 payment
or increase by ATPA or TBOL of any bonuses, salaries, or other compensation
to
any stockholder, director, officer, or (except in the ordinary course of
business) employee of TBOL or entry into any employment, severance, or similar
contract with any director, officer, or employee of TBOL;
7.24.4 adoption
of, or increase in the payments to or benefits under, any profit sharing, bonus,
deferred compensation, savings, insurance, pension, retirement, or other
employee benefit plan for or with any employees of TBOL;
7.24.5 damage
to
or destruction or loss of any asset or property, whether or not covered by
insurance, materially and adversely affecting the properties, assets, business,
financial condition, or prospects of TBOL, taken as a whole;
7.24.6 entry
into, termination of, or receipt of notice of termination of (i) any license,
distributorship, dealer, sales representative, joint venture, credit, or similar
agreement, or (ii) any contract or transaction involving a total remaining
commitment by or to TBOL of at least $10,000;
7.24.7 sale,
lease, or other disposition of any asset or property, or mortgage, pledge,
or
imposition of any lien or other encumbrance on any material asset or property,
including the sale, lease, or other disposition of any of the intellectual
property assets;
7.24.8 cancellation
or waiver of any claims or rights with a value to TBOL in excess of $10,000;
7.24.9 material
change in the accounting methods used by TBOL; or
7.24.10 agreement,
whether oral or written, by ATPA or TBOL to do any of the
foregoing.
7.25 Disclosures.
No
representation, warranty, or covenant made by either ATPA or TBOL herein, or
in
any certificate or document furnished or delivered by either ATPA or TBOL to
the
Company, contains or will contain any untrue statement of a material fact or
omits or will omit any material fact necessary to make the statements contained
herein or therein not misleading.
7.26 Representations
and Warranties True as of Closing.
All
representations and warranties contained herein will be true and correct as
of
the Closing.
7.27 Knowledge.
For
purposes of this Section 7,
the terms "knowledge," and "known," and words of similar import shall mean
the
current, conscious and actual knowledge, after due inquiry and investigation,
of
the senior management of ATPA and XXXX.
0. REPRESENTATIONS
AND WARRANTIES OF ICI and ICI Stockholders.
ICI and
the ICI Stockholders, jointly and severally, represent and warrant to the other
Parties, as of the date of this Agreement and as of the Closing,
that:
8.1 Organization
of ICI.
ICI is
a Corporation duly organized, validly existing, and in good standing under
the
laws of the State of California; is qualified to transact business as a foreign
corporation in and is in good standing under the laws of each other state or
jurisdiction where the nature of its business or other activities requires
it to
be qualified; and has all requisite corporate power and authority to own,
operate, and lease its properties, to carry on its business as now being
conducted, to enter into this Agreement, and to carry out the contemplated
transactions.
8.2 Authorization.
The ICI
directors and the ICI Stockholders have duly approved the execution, delivery
and performance of this Agreement and the contemplated transactions; this
Agreement has been properly executed by the duly-authorized officers of ICI;
and
this Agreement is the valid and binding obligation of ICI and is enforceable
in
accordance with its terms. The ICI Stockholders own all of the issued and
outstanding capital stock in ICI.
8.3 No
Violation.
Except
as set forth in Schedule
8.3, the
execution, delivery and performance of this Agreement and the consummation
of
the contemplated transactions will not violate the terms of ICI's charter,
bylaws, any agreement to which ICI is a party, or any order, judgment, or decree
applicable to ICI.
8.4 Title
to Assets.
Except
as set forth in Schedule
8.4, ICI
is the owner of and has good and marketable title to the ICI Assets and the
ICI
Business, free and clear of all Liens.
8.5 Tangible
ICI Personal Property.
Schedule 8.5
attached to this Agreement contains a list of all material tangible personal
property owned or leased by ICI (the "Tangible ICI Personal Property"). This
list was prepared in good faith by ICI for attachment to this Agreement. In
ICI's judgment, the Tangible ICI Personal Property listed on Schedule 8.5
is all of the tangible personal property necessary for the conduct of the ICI
Business as previously and currently conducted.
8.6 Intangible
ICI Personal Property.
Schedule 8.6
attached to this Agreement contains a list of all intangible personal property
owned, leased or licensed by ICI (the "Intangible ICI Personal Property").
This
list was prepared in good faith by ICI for attachment to this Agreement. The
Intangible ICI Personal Property listed on Schedule 8.6
is, in ICI's judgment, all of the intangible personal property necessary for
the
conduct of the ICI Business as previously and currently conducted.
8.7 Contracts.
Schedule 8.7
attached to this Agreement contains a list of all oral or written contracts
or
commitments to which ICI is a party or by which it is bound. This list was
prepared in good faith by ICI for attachment to this Agreement and includes
(without limitation): (i) each contract or commitment involving more than
$10,000 for the purchase or sale of capital assets, equipment, supplies,
products, or services; (ii) all contracts with or commitments involving
more than $10,000 to any present or former employee or consultant;
(iii) all non-competition covenants; (iv) all contracts or commitments
evidencing loans or other financing; (v) all leases; and (vi) all
other contracts and commitments which are, individually or in the aggregate,
material as to amount or effect on ICI or any of the ICI Assets. Each contract
or commitment listed in Schedule 8.7
represents a valid, binding, and enforceable right or obligation in accordance
with its respective terms except to the extent that enforceability may be
limited by (a) bankruptcy, insolvency, reorganization, moratorium, or
similar laws now or hereafter in effect relating to the rights and remedies
of
creditors generally and (b) general principles of equity. Except as set
forth in Schedule 8.7,
each contract or commitment that contains a term of more than 60 days, or that
is not terminable on 60 days or less notice is fully and freely assignable
to
the Company without creating an event of default or imposing any other penalty.
Except as set forth in Schedule
8.7, no
occurrence or circumstance is known by ICI to exist which would constitute
a
breach or default thereunder by ICI or any other party under any contract or
commitment, which breach or default would have a material adverse effect on
ICI
or the ICI Assets. None of the contracts or commitments will be binding upon
the
Company or will impose any obligation upon the Company unless assumed by the
Company.
8.8 Consents
and Approvals.
Except
as set forth in Schedule
8.8, no
consent, approval, declaration, or filing with any governmental authority or
other person or entity is required on the part of ICI in connection with the
execution, delivery or performance of this Agreement or the consummation of
the
contemplated transactions or the operation of the ICI Business by the
Company.
8.9 Other
Agreements.
ICI is
not a party to any agreement or instrument or subject to any charter or other
corporate restriction or any judgment, order, writ, injunction, rule, or
regulation which materially and adversely affects the ICI Business, the ICI
Assets, or the operations, prospects, properties, assets, or condition
(financial or otherwise) of ICI.
8.10 Suits
and Proceedings.
Except
as set forth on Schedule
8.10, no
suit, action, litigation, administrative proceeding, arbitration proceeding,
governmental proceeding, investigation, inquiry, or other proceeding is pending
or, to the best of ICI's knowledge, threatened against ICI or the ICI Business.
Except as set forth on Schedule
8.10,
ICI has not received, and does not have reason to believe that it will receive,
oral or written notice of any claim or violation under any inquiry, law,
ordinance, requirement, regulation, or order applicable to the ICI Business
or
the ICI Assets.
8.11 Impediments
to Use, Etc.
To the
best of ICI’s knowledge, there exists no easement, license, grant, restrictive
covenant, zoning ordinance, environmental law or ordinance, building ordinance,
or any other law, rule, regulation, or impediment of any kind which prohibits,
interferes with, limits or impairs, or would prohibit, interfere with, limit,
or
impair the use, operation or maintenance of the ICI Business or the ICI Assets
in any material way. To the best of ICI's knowledge, no change in the
environmental, zoning, or building laws, regulations, or ordinances is pending
or threatened which might singularly or in the aggregate have a material adverse
effect on the financial condition of ICI, the ICI Business or the ICI
Assets.
8.12 Compliance
with Laws.
Except
as set forth on Schedule
8.12, to
the best of ICI's knowledge, ICI has fully complied with all federal, state,
and
local laws, rules, regulations, and administrative directives which apply to
or
materially affect the conduct and operation of the ICI Business.
8.13 Tax
Returns.
Except
as set forth on Schedule
8.13,
ICI has filed all tax returns, of every kind, nature, or description, required
to be filed by ICI and to its knowledge has paid or remitted to the proper
authority all taxes and assessments, including, without limitation, all excise
taxes, sales taxes, payroll withholding taxes, FICA taxes, unemployment taxes,
and personal property taxes, which are required to be paid or remitted by
ICI.
8.14 Financial
Statements.
ICI's
internally prepared, unaudited financial statements, comprised of a balance
sheet and an income statement as of and for the period ending December 31,
2007,
copies of which are attached to this Agreement as Schedule 8.14,
are true and correct in all material respects and fairly present the financial
position of ICI as of the date of the statements and the results of ICI's
operations for the periods covered by the statements. There has been no material
adverse change in ICI's financial condition since the date of the most recent
financial statement.
8.15 Records
of Business.
The
records of the ICI Business are true and complete in all material
respects.
8.16 Change
of Name, Etc.
During
the period that ICI has been in existence, ICI has not changed its name or
been
involved in any merger, reorganization, or other proceeding whereby its name
has
been changed.
8.17 Trade
Name.
ICI
conducts its business and has always conducted its business solely under the
name of "Information Concepts, Inc." and/or "ICI" and under no other name.
To
ICI's knowledge, no other person has a claim to the use of those names, and
ICI's use of such names does not infringe upon or violate the proprietary right
of any person or entity.
8.18 Employee
Benefits.
Except
as set forth on Schedule
8.18,
ICI does not maintain or contribute to (nor has it ever maintained or
contributed to): (i) any employee pension benefit plan, as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"); (ii) any employee welfare benefit plan, as defined in
Section 3(1) of ERISA; (iii) any stock option, stock purchase, stock
ownership, bonus, performance, or incentive plan or arrangement; (iv) any
plan or program providing noncash compensation or benefits, whether or not
taxable to the recipient; (v) any plan or arrangement providing
compensation or benefits upon a severance of employment, reduction in hours,
or
change of employment classification; (vi) any vacation, sick, holiday, or
other leave policy or program or (vii) any other plan, agreement,
arrangement, or understanding (whether oral or written) which is similar to
any
of the foregoing in respect of its employees.
8.19 [Intentionally
Omitted].
8.20 Licenses
and Permits.
ICI has
all licenses and permits necessary to conduct the ICI Business as it is now
being conducted and has paid all fees and charges due in connection therewith,
except where such failure would not have a material adverse effect.
8.21 Insurance.
ICI has
delivered to the Company true and complete copies of all policies of insurance
under which ICI is a party or is or has been covered at any time within the
three (3) years preceding the date of this Agreement.
8.22 Employees.
Schedule 8.22
to this Agreement contains a complete and accurate list of each employee of
ICI
(the "ICI Employees") that are (or have been in the past) involved in the ICI
Business, including each employee on leave of absence or layoff status, stating
name, employer, current compensation paid or payable and any change in
compensation since December 31, 2005, vacation accrued and service credited
for purposes of vesting and eligibility to participate under any of the employee
benefit plans. No ICI Employee is a party to, or otherwise bound by, any
agreement that in any way adversely affects or will affect the performance
of
the employee's duties as an employee of ICI. To the knowledge of ICI, no key
employee of ICI intends to terminate that employee's employment with
ICI.
8.23 Absence
of Certain Changes and Events.
Except
as set forth on Schedule
8.23,
since the date of the most recent financial statement, December 31, 2007, ICI
and its subsidiaries have conducted their business only in the ordinary course
and there has not been any:
8.23.1 change
in
the authorized or issued capital stock; grant of any stock option or right
to
purchase shares of capital stock; issuance of any security convertible into
such
capital stock; grant of any registration rights; purchase, redemption,
retirement, or other acquisition of any shares of any such capital stock; or
declaration or payment of any dividend or other distribution or payment in
respect of shares of capital stock;
8.23.2 payment
or increase by ICI of any bonuses, salaries, or other compensation to any ICI
Stockholders or any stockholder, director, officer, or (except in the ordinary
course of business) employee or entry into any employment, severance, or similar
contract with any director, officer, or employee;
8.23.3 adoption
of, or increase in the payments to or benefits under, any profit sharing, bonus,
deferred compensation, savings, insurance, pension, retirement, or other
employee benefit plan for or with any employees;
8.23.4 damage
to
or destruction or loss of any asset or property, whether or not covered by
insurance, materially and adversely affecting the ICI Assets or any other
properties, assets, business, financial condition, or prospects of ICI, taken
as
a whole;
8.23.5 entry
into, termination of, or receipt of notice of termination of (i) any license,
distributorship, dealer, sales representative, joint venture, credit, or similar
agreement, or (ii) any contract or transaction involving a total remaining
commitment by or to ICI of at least $10,000;
8.23.6 sale,
lease, or other disposition of any asset or property, or mortgage, pledge,
or
imposition of any lien or other encumbrance on any material asset or property,
including the sale, lease, or other disposition of any of the intellectual
property assets;
8.23.7 cancellation
or waiver of any claims or rights with a value to ICI in excess of
$10,000;
8.23.8 material
change in the accounting methods used by ICI; or
8.23.9 agreement,
whether oral or written, by ICI or the ICI Stockholders to do any of the
foregoing.
8.24 Disclosures.
No
representation, warranty, or covenant made by ICI or the ICI Stockholders
herein, or in any certificate or document furnished or delivered by ICI or
to
ICI Stockholders to any of the Parties, contains or will contain any untrue
statement of a material fact or omits or will omit any material fact necessary
to make the statements contained herein or therein not misleading.
8.25 Warranties
True as of Closing.
All
representations and warranties contained herein will be true and correct as
of
the Closing.
8.26 Knowledge.
For
purposes of this Section 8,
the
terms knowledge," or "known," and words of similar import shall mean the
current, conscious and actual knowledge, after due inquiry and investigation,
of
the ICI Stockholders.
9. REPRESENTATIONS
AND WARRANTIES OF XXXXXXXXXX
XxxXxxxxxx,
solely as an individual and Member of the Company and not on behalf of or with
respect to ATPA or TBOL, represents and warrants to the other Parties, as of
the
date of this Agreement and as of the Closing, that:
9.1 No
Violation.
The
execution, delivery and performance of this Agreement and the consummation
of
the contemplated transactions will not violate the terms of any agreement to
which XxxXxxxxxx is a party, or any order, judgment, or decree applicable to
XxxXxxxxxx.
9.2 Consents
and Approvals.
No
consent, approval, or authorization of or designation, declaration, or filing
with any governmental authority or other person or entity is required on the
part of XxxXxxxxxx in connection with the execution, delivery or performance
of
this Agreement or the consummation of the contemplated
transactions.
9.3 Suits
and Proceedings.
No
suit, action, litigation, administrative proceeding, arbitration proceeding,
governmental proceeding, investigation, inquiry, or other proceeding is pending
or, to the best of XxxXxxxxxx'x knowledge, threatened against XxxXxxxxxx, or
his
property interests. XxxXxxxxxx has not received, and does not have reason to
believe that it will receive, oral or written notice of any claim or violation
under any inquiry, law, ordinance, requirement, regulation, or order applicable
to him or his property.
9.4 Tax
Returns.
XxxXxxxxxx has filed all tax returns, of every kind, nature, or description,
required to be filed by XxxXxxxxxx and to its knowledge has paid or remitted
to
the proper authority all taxes and assessments, including, without limitation,
all income taxes and personal property taxes, which are required to be paid
or
remitted by XxxXxxxxxx.
9.5 Disclosures.
No
representation, warranty, or covenant made by XxxXxxxxxx herein, or in any
certificate or document furnished or delivered by XxxXxxxxxx to any of the
Parties, contains or will contain any untrue statement of a material fact or
omits or will omit any material fact necessary to make the statements contained
herein or therein not misleading.
9.6 Warranties
True as of Closing.
All
representations and warranties contained herein will be true and correct as
of
the Closing.
10. CONDITIONS
OF CLOSING - ICI AND ICI STOCKHOLDERS.
10.1 Conditions.
The
obligations of ICI and ICI Stockholders are subject to the satisfaction of
all
of the following conditions as of the time of the Closing, except those which
are waived in writing by ICI and ICI Stockholders:
10.1.1 TBOL,
ATPA and XxxXxxxxxx, as applicable, shall have delivered the documents and
things required under Section 6.1 and 6.3 of this Agreement;
10.1.2 The
representations and warranties set forth in Section 7
shall be true and complete as of the time of the Closing; and
10.1.3 All
documents referred to in Sections 6.1
and 6.3 which are required to be delivered, or to be executed and delivered
shall be delivered or executed and delivered, as the case may be.
10.2 Failure
of Condition.
If any
of the conditions set forth in this Section 10
have not been satisfied as of the time of the Closing, then ICI may terminate
this Agreement by written notice to ATPA and TBOL or ICI may waive the
unsatisfied condition or conditions and proceed with the Closing. A waiver
of
any unsatisfied condition of the Closing shall not constitute a waiver any
other
condition or any right or remedy to which ICI may be entitled.
11. CONDITIONS
OF CLOSING - TBOL AND ATPA.
11.1 Conditions.
The
obligations of TBOL and ATPA hereunder are subject to the satisfaction of all
of
the following conditions as of the time of the Closing, except those which
are
waived in writing by TBOL and ATPA:
11.1.1 ICI,
ICI
Stockholders, and XxxXxxxxxx, as applicable, shall have delivered the documents
and things required under Section 6.2 and 6.3 of this Agreement;
11.1.2 the
representations and warranties set forth in Section 8
shall be true and complete as of the time of the Closing;
11.1.3 all
documents referred to in Sections 6.2
and 6.3 which are required to be delivered, or to be executed and delivered
to
the Company or the other Parties shall be delivered or executed and delivered,
as the case may be; and
11.2 Failure
of Condition.
If any
of the conditions set forth in Section 11
have not been satisfied as of the time of the Closing, then ATPA and TBOL may
terminate this Agreement by written notice to the other Parties, or ATPA and
TBOL may waive the unsatisfied condition or conditions and proceed with the
Closing. A waiver of any unsatisfied condition of the Closing shall not
constitute a waiver any other condition or any right or remedy to which ATPA
and
TBOL may be entitled.
12. FURTHER
ASSURANCES.
The
Parties hereto shall execute such further documents, and perform such further
acts, as may be necessary to transfer and convey the TBOL Assets and the ICI
Assets to the Company, as the case may be, all on the terms contained herein,
and to otherwise comply with the terms of this Agreement and consummate the
transactions contemplated herein.
13. SURVIVAL.
The
covenants, representations, and warranties set forth herein shall not merge
into
any xxxx of sale or other instrument of transfer executed and delivered at
the
Closing. Instead, all covenants, representations, and warranties set forth
herein shall survive the Closing and shall continue in full force and effect
until the applicable statutes of limitations thereon shall have
expired.
14. SALES
AND OTHER TAXES.
Any
sales, use, excise, and/or similar taxes imposed upon, as an incident to, or
as
a result of the within sale shall be shared pari
passu
among
the Parties.
15. INDEMNIFICATION.
15.1 By
ICI
and ICI Stockholders.
ICI and
the ICI Stockholders shall defend, reimburse and indemnify TBOL, ATPA and
XxxXxxxxxx (together, the "ICI Indemnities") and hold the ICI Indemnities
harmless from, against, and in respect of, any and all claims, costs, expenses
(including the reasonable fees of counsel), liabilities, obligations, losses,
damages, actions, suits, or proceedings of any nature (unless due to a failure
of ATPA or the Company to perform under the License Agreement): (i) arising
in connection with the breach by ICI and/or ICI Stockholders of any
representation, warranty, obligation or covenant made by ICI or the ICI
Stockholders herein; (ii) arising from or in connection with the failure of
ICI or the the ICI Stockholders to perform any covenant made by such parties
herein; (iii) arising from or in connection with the assertion against any
or all of the ICI Indemnities of any claim for payment or performance of any
obligation, debt, or liability, whether fixed or contingent, in connection
with
the ICI Business or ICI Assets on account of any matter arising, occurring,
or
taking place prior to the Closing Date (including without limitation all tax
claims of every kind, nature and description); (iv) arising from the
Excluded ICI Liabilities and any contracts that is not an Assumed ICI Contracts;
(v) arising from ICI’s 401(k) plan and the related liabilities listed in
Schedule 2.3.1; or (vi) arising from or in connection with the assertion against
the ICI Indemnities of any claim relating to any party’s ownership in
ICI.
15.2 By
ATPA and TBOL.
TBOL
and ATPA (the "TBOL Indemnitor Parties"), jointly and severally, shall defend,
reimburse and indemnify ICI and the ICI Stockholders (“TBOL Indemnities”) and
hold the TBOL Indemnities harmless from, against, and in respect of, any and
all
claims, costs, expenses (including the reasonable fees of counsel), liabilities,
obligations, losses, damages, actions, suits, or proceedings of any nature:
(i) arising in connection with the breach by the TBOL Indemnitor Parties of
any representation, warranty, covenant or obligation made by the TBOL Indemnitor
Parties herein; (ii) arising from or in connection with the TBOL Indemnitor
Parties' failure to perform any covenant made by the TBOL Indemnitor Parties
herein; (iii) arising from or in connection with the assertion against the
the TBOL Indemnities of any claim for payment or performance of any obligation,
debt, or liability, whether fixed or contingent, in connection with the TBOL
Business or the TBOL Assets on account of any matter arising, occurring or
taking place prior to the Closing Date; (iv) arising from the Excluded TBOL
Liabilities and any contract that is not an Assumed TBOL Contracts; ); (v)
arising from TBOL’s 401(k) plan, (v) arising from or in connection with the
assertion against the TBOL Indemnities of any claim relating to any party's
ownership in TBOL; or (vi) arising from or in connection with the winding up
or
dissolution of XXXX.
00.0 By
XxxXxxxxxx.
XxxXxxxxxx shall defend, reimburse and indemnify all other Parties and hold
the
other Parties harmless from, against, and in respect of any and all claims,
costs, expenses (including the reasonable fees of counsel), liabilities,
obligations, losses, damages, actions, suits, or proceedings of any nature:
(i) arising in connection with the breach by XxxXxxxxxx of any
representation, warranty, covenant or obligation made by XxxXxxxxxx; and
(ii) arising from or in connection with XxxXxxxxxx'x failure to perform any
covenant made by XxxXxxxxxx herein.
15.4 By
Company.
The
Company shall defend, reimburse and indemnify the other Parties and hold the
other Parties harmless from, against, and in respect of any and all claims,
costs, expenses (including the reasonable fees of counsel), liabilities,
obligations, losses, damages, actions, suits, or proceedings of any nature
arising from or in connection with the assertion against any of the other
Parties of any claim for payment or performance of any obligation, debt, or
liability, whether fixed or contingent, in connection with (i) the ICI
Business, the TBOL Business, the ICI Assets or the TBOL Assets on account of
any
matter arising, occurring or taking place after the Closing Date; or
(ii) arising from the Assumed TBOL Liabilities, the Assumed TBOL Contracts,
the Assumed ICI Liabilities or the Assumed ICI Contracts.
16. CONFIDENTIALITY.
The
Parties will keep the contents of this Agreement in confidence; will not discuss
the transactions described herein with any person except their respective
accountants and attorneys; and will not otherwise reveal the contents of this
Agreement except (a) to the extent necessary to fulfill the conditions of
Closing or to satisfy such party's obligations hereunder, or (b) as may be
required by applicable law; provided,
however
each
party's obligations under this Section 16
shall cease to apply to any information that becomes generally known in the
public realm, other than pursuant to a breach of this Section 16
by such party.
17. TRANSITION.
17.1 TBOL,
ATPA and XxxXxxxxxx shall cooperate and shall use their commercial reasonable
efforts to assist the Company in the smooth transition of the ownership of
the
TBOL Assets and the TBOL Business; in the assumption of the Assumed ICI
Liabilities; in the securing for the Company the services of those TBOL or
ATPA
employees whom the Company elects to employ; and in the preservation for the
Company of the goodwill of TBOL's suppliers, customers, and others having
business relations with TBOL and ATPA in connection with the TBOL
Business.
17.2 ICI
and
the ICI Stockholders shall cooperate and shall use their commercial reasonable
efforts to assist the Company in the smooth transition of the ownership of
the
ICI Assets and the ICI Business; in the assumption of the Assumed ICI
Liabilities; in the securing for the Company the services of those ICI employees
whom the Company elects to employ; and in the preservation for the Company
of
the goodwill of ICI's suppliers, customers, and others having business relations
with ICI in connection with the ICI Business.
18. NOTICES.
18.1 Manner.
Any
notice or other communication ("Notice") required or permitted under this
Agreement shall be in writing and sent by overnight delivery, or certified
mail,
postage prepaid, return receipt requested.
18.2 Addressee.
A
Notice shall be addressed as follows:
Notice
to
ATPA to:
Associated
Third Party Administrators
Attention:
Xxxx Xxxxxxxxx
0000
Xxxxx Xxxx Xxxx
Xxxxxxx,
Xxxxxxxxxx 00000
Notice
to
TBOL to:
Trust
Benefits Online, LLC
Attention:
Xxxxx XxxXxxxxxx
0000
Xxxxxx Xxxxxx Xxxxx 000
Xxxxxxxxxx,
XX 00000
Notice
to
ICI to:
Information
Concepts, Inc.
0000
X.
Xxxxx 00
Xxxxx
000
Xxxxxxxx,
Xxxxxxxxxx 00000
Attn:
Xxxxx X. Xxxxxx, President
Notice
to
ICI Stockholders to:
Information
Concepts, Inc.
0000
X.
Xxxxx 00
Xxxxx
000
Xxxxxxxx,
Xxxxxxxxxx 00000
Attn:
Xxxxx X. Xxxxxx, President
Notice
to
Company to:
_____________________________
_____________________________
_____________________________
_____________________________
Notice
to
XxxXxxxxxx to:
Xxxxx
XxxXxxxxxx
0000
Xxxxxx Xxxxxx Xxxxx 000
Xxxxxxxxxx,
XX 00000
18.3 Changes.
Either
party may designate, by Notice to the other, substitute addresses for Notices,
and thereafter, Notices are to be directed to those substitute
addresses.
19. MISCELLANEOUS.
19.1 Exhibits
and Schedules.
Each
Exhibit
and
Schedule
attached
to this Agreement shall be deemed to be a part of this Agreement to the same
extent as if set forth in this Agreement. Each fact or statement recited or
contained in any Exhibit
or
Schedule,
certificate or other instrument delivered by or on behalf of any party to this
Agreement or in connection with any transaction contemplated by this Agreement
shall be deemed to be a representation and warranty by the party. If any
Exhibit or
Schedule
referred
to shall not have been attached at the time of execution of this Agreement,
or
if any Exhibit
or
Schedule
shall be
incomplete at the time of execution, it may, upon written approval of the
Parties, later be attached or completed.
19.2 Governing
Law.
The
laws of the State of California shall govern the validity and construction
of
this Agreement and any dispute arising out of or relating to this Agreement,
without regard to the principles of conflict of laws.
19.3 Dispute
Resolution/Binding Arbitration.
19.3.1 All
disputes arising under or in connection with this Agreement or among the
Members, shall be submitted to a mutually agreeable arbitrator, or if the
parties are unable to agree on an arbitrator within fifteen (15) days after
a
written demand for arbitration is made by either party, to JAMS/Endispute
(“JAMS”) or successor organization, for binding arbitration in Los Angeles
County by a single arbitrator who shall be a former California Superior Court
judge. Except as may be otherwise provided herein, the arbitration shall be
conducted under the California Arbitration Act, Code of Civil Procedure 1280
et
seq. The parties shall have the discovery rights provided in Code of Civil
Procedure 1283.05 and 1283.1. The arbitration hearing shall be commenced within
ninety (90) days after the selection of an arbitrator by mutual agreement or,
absent such mutual agreement, the filing of the application with JAMS by either
party hereto, and a decision shall be rendered by the arbitrator within thirty
(30) days after the conclusion of the hearing. The arbitrator shall have
complete authority to render any and all relief, legal and equitable,
appropriate under California law, including the award of punitive damages where
legally available and warranted. The arbitrator shall award costs of the
proceeding, including reasonable attorneys’ fees and the arbitrator’s fee and
costs, to the party determined to have substantially prevailed. Judgment can
be
entered in a court of competent jurisdiction.
19.4 Severability.
A
ruling by any court that one or more of the provisions contained in this
Agreement is invalid, illegal or unenforceable in any respect shall not affect
any other provision of this Agreement so long as the economic or legal substance
of the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Thereafter, this Agreement shall be construed as if the
invalid, illegal, or unenforceable provision had been amended to the extent
necessary to be enforceable within the jurisdiction of the court making the
ruling and to preserve the transactions originally contemplated by this
Agreement to the greatest extent possible.
19.5 Counterparts.
This
Agreement may be executed by facsimile and in counterparts, each of which shall
be deemed an original. In that event, in proving this Agreement it shall only
be
necessary to produce or account for the counterpart signed by the party against
whom the proof is being presented.
19.6 Headings.
The
section and subsection headings have been included for convenience only, are
not
part of this Agreement and shall not be taken as an interpretation of any
provision of this Agreement.
19.7 Binding
Effect.
This
Agreement shall be binding upon and shall inure to the benefit of the parties
and their respective successors and permitted assigns. Except as otherwise
specifically provided, this Agreement is not intended and shall not be construed
to confer upon or to give any person other than the parties any rights or
remedies.
19.8 Amendments
and Modifications.
This
Agreement may be amended, waived, changed, modified or discharged only by an
agreement in writing signed by the party(ies) against whom enforcement is
sought.
19.9 Entire
Agreement.
This
Agreement constitutes the entire agreement between the Parties, and there are
no
representations, warranties, covenants or obligations except as set forth in
this Agreement. This Agreement supersedes all prior and contemporaneous
agreements, understandings, negotiations and discussions, written or oral,
of
the parties, relating to any transaction contemplated by this Agreement.
19.10 Waiver.
Failure
to insist upon strict compliance with any of the terms, covenants or conditions
of this Agreement shall not be deemed a waiver of that term, covenant or
condition or of any other term, covenant or condition of this Agreement. Any
waiver or relinquishment of any right or power hereunder at any one or more
times shall not be deemed a waiver or relinquishment of that right or power
at
any other time.
19.11 Costs
of Litigation.
If
either Party files suit to enforce its rights under this Agreement, the
substantially prevailing party shall be entitled to recover from the other
party
all expenses incurred by it in preparing for and in trying the case, including,
but not limited to, investigative costs, court costs and reasonable attorneys'
fees (including expenses incurred to collect those expenses).
19.12 Further
Assurances.
The
Parties shall execute and deliver or cause to be executed and delivered all
further instruments and documents and shall take any other action as may be
reasonably required to more effectively carry out the terms and provisions
of
this Agreement.
19.13 Construction.
Each
Party has participated to a significant degree in the drafting and preparation
of this Agreement. No provision of this Agreement shall be construed against
any
party on the basis of that party's being the "drafter."
19.14 Word
Forms.
Wherever used in this Agreement, the singular shall include the plural, and
the
plural shall include the singular. The use of any gender, tense or conjugation
shall include all genders, tenses and conjugations.
19.15 Tax
Consequences.
No
Party to this Agreement shall have recourse against any other party by reason
that the execution of this Agreement or consummation of any transaction
contemplated by this Agreement has or does not have any particular effect or
result under the federal or any state or local tax law.
19.16 Assignment.
No
Party shall transfer or assign any or all of its rights or interests under
this
Agreement or delegate any of its obligations without the prior written consent
of the other party(ies).
19.17 Consents.
In any
instance where the consent of a party is required by this Agreement, the Party
may withhold or delay that consent in its sole and absolute
discretion.
[Signatures
on following page.]
IN
WITNESS WHEREOF, the parties have entered into this Agreement as the date set
forth above.
|
ASSOCIATED
THIRD PARTY ADMINISTRATORS
|
TRUST BENEFITS ONLINE, LLC | ||
| By: /s/ Xxxxxxx Xxxxxxxxx | By: /s/ Xxxxx Xxx Xxxxxxx | ||
|
Name:
Xxxxxxx
Xxxxxxxxx
Title:
President/CEO
|
Name:
Xxxxx Xxx Xxxxxxx
Title:
President
|
|
INFORMATION
CONCEPTS, INC.
|
BENEFITS TECHNOLOGIES, LLC | ||
| By: /s/ Xxxxx X. Xxxxxx | By: /s/ Xxxxx Xxx Xxxxxxx | ||
|
Name: Xxxxx
X. Xxxxxx
Title:
President
|
Name:
Xxxxx Xxx Xxxxxxx
Title:
CEO
|
| By: /s/ Xxxxx X. Xxxxxx | |||
|
|
Name:
Xxxxx X. Xxxxxx
Title:
President, ICI
|
| By: | |||
|
|
Name:
Title:
|
/s/
Xxxxx
X. Xxxxxx
Xxxxx
X.
Xxxxxx
/s/
Xxxxxx Xxxxxx
Xxxxxx
Xxxxxx
Xxxxx
XxxXxxxxxx
Xxxxx
XxxXxxxxxx
TABLE
OF EXHIBITS AND SCHEDULES
Exhibit
A
- Form
of Subordinated Promissory Note
Exhibit
B
-
Intercreditor Agreement
Exhibit
C
-
License Agreement
Exhibit
D
- LLC
Agreement
Exhibit
E
-
Consulting Agreement
Exhibit
F
-
Administrative Services Agreement
Exhibit
G
- Xxxx
of Sale (TBOL)
Exhibit
H
- TBOL
Assignment Agreement
Exhibit
I
- Form
of Business Protection Agreement
Exhibit
J
-Secretary's Certificate - TBOL
Exhibit
K
-
Secretary's Certificate - ATPA
Exhibit
L
-
Closing Certificate - TBOL
Exhibit
M
-
Closing Certificate - ATPA
Exhibit
N
- Xxxx
of Sale (ICI)
Exhibit
O
- ICI
Assignment Agreement
Exhibit
P
-
Secretary's Certificate - ICI
Exhibit
Q
-
Closing Certificate - ICI
Schedule
1.1.3
- TBOL
Assets
Schedule
1.1.4
- ATPA
Assets
Schedule
1.2.1-
Assumed
TBOL Contracts
Schedule
1.2.3
-
Assumed TBOL Liabilities
Schedule
1.2.4
-
Excluded TBOL Liabilities
Schedule
2.1
- ICI
Assets
Schedule
2.2
-
Excluded ICI Assets
Schedule
2.3.1
-
Excluded ICI Liabilities
Schedule
2.3.2
-
Assumed ICI Contracts
Schedule
2.3.4
-
Assumed ICI Liabilities
Schedule
7.5
- Title
to TBOL Assets
Schedule
7.6
-
Tangible TBOL Personal Property
Schedule
7.7
-
Intangible TBOL Personal Property
Schedule
7.8
-
Contracts (TBOL/ATPA)
Schedule
7.9
-
Consents and Approvals (TBOL/ATPA)
Schedule
7.15
-
Financial Statements (TBOL)
Schedule
7.19
-
Employee Benefits (TBOL)
Schedule
7.23
-
Employees (TBOL)
Schedule
7.24
-
Absence of Certain Changes and Events (TBOL/ATPA)
Schedule
8.3
-No
Violation (ICI)
Schedule
8.4
-Title
to Assets (ICI)
Schedule
8.5
-Tangible ICI Personal Property
Schedule
8.6
-
Intangible ICI Personal Property
Schedule
8.7
-
Contracts (ICI)
Schedule
8.8
-
Consents and Approvals (ICI)
Schedule
8.10
- Suits
and Proceedings (ICI)
Schedule
8.12
-
Compliance with Laws (ICI)
Schedule
8.13
- Tax
Returns (ICI)
Schedule
8.14
-
Financial Statements (ICI)
Schedule
8.18
-
Employee Benefits (ICI)
Schedule
8.22
- ICI
Employees
Schedule
8.23
-
Absence of Certain Changes and Events (ICI)
