ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is entered into as of November 2, 2004
by and between SIGNATURE CREDIT CORPORATION, a California corporation
("Seller"), TRYCERA FINANCIAL CORPORATION, a Nevada corporation ("Buyer")
and DAVE MARGOLIN ("Margolin").
RECITALS
A. Seller distributes financial products and services including its
Classic Advantage Cards and the stored value Mastercards and sells general
merchandise on credit to holders of such cards (the "Business").
B. Buyer wishes to purchase from Seller, and Seller wishes to sell
to Buyer, the Business and Seller's related assets and rights.
C. Margolin is the sole shareholder, officer and director of Seller.
AGREEMENT
In consideration of the mutual agreements, representations and
warranties in this Agreement, the parties agree as follows:
1. Purchase and Sale of Assets
Buyer hereby purchases from Seller, and Seller hereby sells, conveys,
transfers and assigns to Buyer, all of Seller's assets and rights relating
to the Business, other than the assets excluded in Section 2 below (the
"Assets"), including (without limitation) all of Seller's right, titles and
interests in and to the following:
(a) Seller's rights under leases of equipment and licenses of
intellectual property rights presently used in the Business, and under
other agreements with vendors, customers and other third parties (excluding
the Excluded Agreements (as defined below), the "Assumed Agreements"),
including (without limitation) its rights and receivables under agreements
with customers relating to Seller's past sales and distribution of Classic
Advantage Cards, Seller's other accounts receivable from past sales of
goods or services, and Seller's rights under other agreements listed on
attached Schedule 1(a);
(b) Seller's computer hardware, peripherals and accessories, phone
system, other equipment, tools, signs, furniture, fixtures, leasehold
improvements, written marketing materials, inventory and other tangible
assets used in or related to the Business, including (without limitation)
the items listed on attached Schedule 1(b);
(c) Seller's rights to the "Signet" account management and billing
software system, Seller's corporate name and all other computer software,
copyrights, customer lists, domain names, URL addresses, fictitious
business names, trade names, trademarks, service marks, telephone numbers,
transferable permits and licenses, goodwill and other intellectual property
rights and intangible assets used in or related to the Business, including
(without limitation) the items and rights listed on attached Schedule 1(c);
(d) All assignable warranties, indemnification and similar rights
against the manufacturers or sellers of Seller's assets relating to the
future use and performance of such assets; and
(e) All books, records, data, information and documents relating to
the Business or the Assets.
2. Excluded Assets
The following assets and items shall be retained by Seller and are not
included in the Assets (the "Excluded Assets"):
(a) Seller's cash;
(b) Seller's bank accounts;
(c) Seller's rights under (i) any agreements not listed on Schedule
1(a) between Seller and Margolin, Seller's employees or any third parties
controlled by any such person(s), (ii) Seller's real property lease,
(iii) Seller's banking or loan agreements with any banks or other lenders,
(iv) Seller's agreements with customers, financial institutions or other parties
in connection with Seller's past sales and distribution of Mastercards, and
(iv) any other agreements of Seller which are listed on attached Schedule 2
(together, the "Excluded Agreements");
(d) The corporate seal, minute books, stock books and other records
having to do solely with the organization and ownership of Seller; and
(e) any other assets listed on attached Schedule 2.
3. Assumption of Liabilities
In connection with its purchase of the Assets, Buyer agrees to assume
and pay or carry out Seller's future obligations under the Assumed
Agreements (the "Assumed Liabilities"). However, the Assumed Liabilities
will not include, unless separately expressly assumed in writing by Buyer
in its discretion: (a) any obligations arising out of Seller's past
violations or breaches of, or any existing conditions that, if continued,
with the passage of time or notice would constitute breaches by Seller
under, the Assumed Agreements, (b) any payments or actions that were due
before the date of this Agreement, (c) any obligations that are not
contained in the copies of the written Assumed Agreements that have been
provided by Seller to Buyer, (d) any material obligations in any material
oral Assumed Agreements that have not been accurately described to Buyer by
Seller under Section 5.4, and (e) any obligations under agreements of
Seller that are not listed in Schedule 1(a). No debts, obligations or
liabilities of Seller other than the Assumed Liabilities (the "Excluded
Liabilities"), whether accruing or incurred before or after the date of
this Agreement, will be assumed by or binding upon Buyer. The Excluded
Liabilities specifically include, but are not limited to, any liabilities
or obligations arising from Seller's past sales of any Mastercards, any
sales tax owed on account of the sale of the Assets under this Agreement,
Seller's tax obligations, Seller's employee relations or Seller's past
violations of any laws, rules or regulations relating to Seller or the
Business. Seller agrees to pay or satisfy when due all Excluded
Liabilities, without any reimbursement or obligation of Buyer.
4. Purchase Consideration
4.1 In addition to its assumptions under Section 3 above, Buyer
agrees to pay to Seller for the Assets and Seller's obligations under this
Agreement the following:
(a) the cash sum of Eighty Five Thousand Dollars ($85,000), which is
being paid to Seller concurrently with the execution and delivery of this
Agreement;
(b) the cash sum of Five Thousand Dollars ($5,000), which is being
paid to Sunbelt Business Brokers concurrently with the execution and
delivery of this Agreement in full payment of all Seller's obligations to
that entity, as evidenced by its executed release a copy of which is
attached to this Agreement as Exhibit A;
(c) Thirty Three Thousand Seven Hundred Fifty (33,750) shares of
Buyer's Common Stock, which are being issued to Margolin on the date of
this Agreement;
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(d) Three Thousand Seven Hundred Fifty (3,750) shares of Buyer's
Common Stock, which are being issued to Victor Lee on the date of this
Agreement in satisfaction of Seller's payment obligation to him for
advisory services;
(e) Seventy-Five Thousand (75,000) shares of Buyer's Common Stock,
which will be issued to Margolin six (6) months after the date of this
Agreement on November 2, 2004;
(f) Thirty-Seven Thousand Five Hundred (37,500) shares of Buyer's
Common Stock, which will be issued to Margolin one (1) year after the date
of this Agreement on November 2, 2004; and
(g) to be paid by check to Seller on the 61st day after the date of
this Agreement: (i) the cash sum of Ten Thousand Dollars ($10,000);
(ii) plus ninety-five percent (95%) of all cash receipts received by then
from Seller's mailings during the thirty (30) days before the date of this
Agreement, including (without limitation) mailings of Classic Advantage
Cards; (iii) less ninety-five percent (95%) of all refunds then paid or
owed on account of such mailings during that 30-day period, (iv) less the
accrued vacation pay owed to Seller's employees other than Margolin on
account of their ceasing to be employed on or about the date of this
Agreement, which shall be paid to such employees by Buyer; (v) less the
amounts of any refunds (not covered by Section 4.1(g)(iii) above) which are
then owed to Seller's customers, as of the date of this Agreement, and
which Buyer (in its absolute discretion) has agreed to pay.
4.2 If, after the date of this Agreement until the first anniversary
of the date of this Agreement, Buyer shall (a) make a distribution on its
shares of Common Stock in shares of its capital stock or stock equivalents,
(b) subdivide or reclassify its outstanding shares of Common Stock into a
greater number of shares, or (c) combine or reclassify its outstanding
shares of Common Stock into a smaller number of shares, the number of
shares of Common Stock thereafter issuable at any time under Section 4.1 to
Margolin shall be adjusted (without accelerating the actual date of
issuance) to equal the number of shares of Buyer's Common Stock Margolin
would have been entitled to receive if such issuance had occurred
immediately prior to the record date for such event and the shares received
in such issuance had been changed or affected by such event in the same
manner as the other outstanding shares of Buyer's Common Stock. For
example, if there should be a 2-for-1 stock split of Buyer's Common Stock,
the number of shares of Common Stock thereafter issuable under Section 4.1
would be doubled. Such an adjustment shall be made successively whenever
any event listed above shall occur.
4.3 If, after the date of this Agreement until the first anniversary
of the date of this Agreement, Buyer shall make any distribution of cash,
shares and/or other property to holders of Seller's Common Stock as a
dividend, distribution, spin-off, split-off or liquidating distribution
(other than a transaction described in Section 4.2), then provision shall
be made so that the shares of Buyer's Common Stock thereafter issuable at
any time under Section 4.1 to Margolin shall be supplemented (without
accelerating the actual date of issuance) to include the amount, number and
type of cash, shares and/or other property such Margolin would have been
entitled to receive in such distribution if such issuance had occurred
immediately prior to the record date for such distribution. Such an
adjustment shall be made successively whenever any such distribution shall
occur.
4.4 If, after the date of this Agreement until the first anniversary
of the date of this Agreement, there shall occur any reclassification,
capital reorganization or recapitalization of Buyer directly affecting the
then outstanding shares of Buyer's Common Stock, any consolidation or
merger of Buyer with or into another corporation or other entity, or any
sale or disposition of all or substantially all of the assets of Buyer, but
excluding any transaction or distribution described in Section 4.2 or 4.3,
then, as part of any such transaction, provision shall be made so that the
shares of Buyer's Common Stock thereafter issuable at any time under
Section 4.1 to Margolin shall be adjusted (without accelerating the date of
issuance) to equal the amount, number and type of shares and/or other
property Margolin would have been entitled to receive if such issuance had
occurred immediately prior to the record date for such transaction and the
shares received in such issuance had been changed or affected in the same
manner in the transaction as the other outstanding shares of Buyer's Common
Stock. Such an adjustment shall be made successively whenever any such
transaction shall occur.
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4.5 In any case covered by Sections 4.2-4.4, the provisions set forth
in this Agreement relating to the shares issued under Section 4.1 shall be
appropriately adjusted so as to be applicable, as nearly as they may
reasonably be, to any shares of stock and/or other property thereafter
deliverable under Sections 4.2-4.4.
4.6 The numbers of shares of Buyer's Common Stock to be issued under
Section 4.1, and/or the cash payments to be received under Section 4.1, may
be reduced in accordance with Section 8 below.
4.7 Concurrently with the execution and delivery of this Agreement,
each of Margolin and Victor Lee has signed and entered into a Stock
Acquisition Agreement with Buyer, which is attached to this Agreement as
Exhibit B-1 or Exhibit B-2 (together, the "Stock Acquisition Agreements"),
and Buyer has delivered to Margolin and Victor Lee the certificates for the
shares of Buyer's Common Stock which they are entitled to receive under
Sections 4.1(c) and 4.1(d). The certificate for the Common Stock to be
issued to Margolin under Section 4.1(e) shall be delivered to him six
months after the date of this Agreement. The certificate for the Common
Stock to be issued to Margolin under Section 4.1(f) shall be delivered to
him one year after the date of this Agreement.
4.8 The purchase consideration shall be allocated among the Assets as
set forth on attached Schedule 4.8.
4.9 If Margolin dies while any of the purchase consideration has not
been paid to him under Section 4.1, his heirs or other legal successor(s)
in interest shall receive such unpaid consideration when due, subject to
the provisions of Section 1 of the Stock Acquisition Agreement between
Margolin and Buyer.
5. Seller's and Margolin's Warranties and Agreements
Seller and Margolin represent, warrant and agree to and with Buyer as
follows:
5.1 Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of California and has taken all
corporate actions necessary to authorize the execution and performance of
this Agreement. This Agreement constitutes the legal, valid and binding
obligation of Seller, enforceable in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency, reorganization
or similar laws or equitable principles relating to or limiting the rights
of creditors generally. Seller's execution and performance of this
Agreement will not violate or constitute a default, or a condition that, if
continued, with the passage of time or notice would constitute a default,
under any agreement to which Seller is a party, or constitute a fraudulent
conveyance or fraudulent transfer under or violate any statute or law or
any judgment, decree, order, regulation or rule of any court or
governmental entity to which Seller is subject. No authorization or
approval of, or filing with, any governmental, regulatory or administrative
body is required in connection with the execution and delivery by Seller of
this Agreement. Margolin is the sole shareholder, director and officer of
Seller.
5.2 The Consulting Agreement between Margolin and Seller being
entered into concurrently with the execution and delivery of this
Agreement, which is attached to this Agreement as Exhibit C (the
"Consulting Agreement"), and the Stock Acquisition Agreement constitutes
the legal, valid and binding obligations of Margolin, enforceable in
accordance with their respective terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or similar laws or
equitable principles relating to or limiting the rights of creditors
generally. Margolin's execution and performance of those agreements will
not violate or constitute a default, or a condition that, if continued,
with the passage of time or notice would constitute a default, under any
agreement to which Seller is a party, or constitute a fraudulent conveyance
or fraudulent transfer under or violate any statute or law or any judgment,
decree, order, regulation or rule of any court or governmental entity to
which Margolin is subject. No authorization or approval of, or filing
with, any governmental, regulatory or administrative body is required in
connection with the execution and delivery by Seller of those agreements.
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5.3 The Assets, except for the Excluded Assets, consist of all the
non-cash properties, agreements and rights necessary for Buyer to continue
Seller's Business in the same manner as it has been conducted by Seller
prior to the date of this Agreement.
5.4 Schedule 1(a) accurately lists all of the material agreements to
which Seller is a party, except for the Excluded Agreements. Seller has
provided to Buyer copies of all such agreements which are written and
written descriptions of the material terms of all such agreements which are
oral. Except as set forth in Schedule 1(a), neither Seller nor another
party is in material violation of or default under, nor is there any
existing condition that, if continued, with the passage of time or notice
would constitute a material default by Seller or another party under, any
such agreement. No consent of any other party or person is required, which
has not been received by Seller, is required for the transfer to Buyer of
any rights or obligations under any such agreement.
5.5 Neither Seller nor Margolin: (i) is a party to or bound by or
subject to any agreement or instrument, or any judgment, order or decree of
any court or governmental agency or authority, which is violated by, or
materially impairs, the carrying out of this Agreement, the Stock
Acquisition Agreement or the Consulting Agreement (together, the
"Agreements"); or (ii) is a party to any pending, or knows of any
threatened, action, suit, proceeding or investigation in, before or by any
court, governmental agency or authority or arbitrator which may have a
material adverse effect on the Agreements, the Assets or the Business.
5.6 Seller is conveying to Buyer good and marketable title to all the
Assets, free and clear of all liens, claims, security interests or
encumbrances ("Liens").
5.7 Schedule 1(b) accurately lists all of the material tangible
Assets, and Schedule 1(c) accurately lists all of the material intangible
Assets, being purchased by Buyer.
5.8 To the best knowledge of Margolin, there are no liabilities of Seller,
whether accrued, absolute, contingent or otherwise, which arose or relate
to any action or transaction of Seller occurring before July 31, 2004, the
latest date of the financial statements of Seller recently prepared by
Steven Murphy for Seller, which are not disclosed by or reflected in such
financial statements and which in the aggregate have or reasonably could be
expected to have a material adverse effect on the Business or the Assets
(if they continued to be conducted and owned by Seller). Since July 31,
2004, there has been no material adverse change in Seller's Business or
value of the Assets, taken as a whole, or any material sale or disposition
of Seller's assets outside the ordinary course of its business, which has
not been made known to Buyer by Seller. Seller is not insolvent, its
liabilities do not exceed its assets, it is paying its debts as they come
due and the transactions contemplated by this Agreement will not cause
insolvency of Seller or the Business.
5.9 Schedule 5.9 to this Agreement lists all of the patents, patent
applications, copyrights, trademarks, service marks, names and internet
domain names that are presently used by Seller in connection with the
Business, and the present U.S. registration status of each of them. As
used in this Section 5.9, "Intellectual Property" means patents and patent
applications, trade secrets, copyrights, microcode, designs, maskworks,
technology, inventions, technical data, computer programs, trademarks,
service marks, trade names, internet domain names, business techniques and
other intellectual property rights and applications therefor, including
particularly (without limitation) the "Signet" software system used by
Seller in the Business (the "Signet Software") and the names "Signet
Software System," "Classic Advantage Card," "Signature Credit" and
variations thereof. Margolin, Seller, Buyer and Daryl Rice have executed
the Signet Software Agreement, which is attached to this Agreement as
Exhibit D, to clarify their respective rights with respect to the Signet
Software. Except as set forth in Exhibit D, Schedule 1(c) or Schedule 5.9:
(a) Seller has received no notice, and Seller is not aware, that Seller's
activities or any of the Intellectual Property owned or used by Seller has
infringed or violated any Intellectual Property right of any third party;
(b) to the best of Seller's knowledge, Seller owns or is entitled to use
all of the Intellectual Property required for the present conduct of its
Business; (c) Seller's entering into of this Agreement does not cause any
of Seller's Intellectual Property to be lost or reduced; (d) Buyer may
continue to use Seller's Intellectual Property in the future in the same
manner as it has been used by Seller, except for any expirations of Assumed
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Agreements or registered Intellectual Property in accordance with their
terms; (e) Seller has not licensed, leased or used any material
Intellectual Property owned by other Persons; (f) other than in the
ordinary course of the Business, Seller has not transferred, licensed or
leased to any third party any of its Intellectual Property; (g) Seller is
not aware of any infringement or unauthorized use by others of Seller's
Intellectual Property; (h) Seller has entered into an appropriate and
effective confidentiality and technology assignment agreement with each of
its past and current employees, and with each independent contractor who
has provided services relating to Seller's development or modification of
its Intellectual Property, copies of which have been provided to Buyer,
and, (i) under their agreements with Seller or applicable laws, all of the
Intellectual Property developed or generated by Seller's past and present
employees and individual independent contractors in the course of their
providing services to Seller have become the sole property of Seller.
5.10 Within the times and in the manner prescribed by law, Seller has
filed all national, state and local tax returns and filings required by
applicable tax laws and Seller has paid and withheld all income,
employment, property, sales and other taxes (including estimated taxes),
unemployment and disability compensation insurance contributions,
assessments and penalties due and payable or required to be withheld by
Seller, except that Seller has not filed its income tax returns for its
fiscal year ending December 31, 2003.
5.11 Seller has complied in all material respects with all laws,
statutes and regulations applicable to the Business or the Assets, and
there exists no condition or event which with notice, lapse of time or both
would constitute a material violation by Seller of such laws, statutes or
regulations.
5.12 Except as set forth in Schedule 5.12, neither Seller nor Margolin
is a party to any current lawsuit, arbitration, governmental or regulatory
investigation or other legal proceeding and, to the best knowledge of
Margolin , no such lawsuit, arbitration, investigation or proceeding
against him or Seller has been threatened.
5.13 Except for Sunbelt Business Brokers and Victor Lee, neither
Seller nor any person acting on behalf of Seller has employed any broker,
agent or finder or incurred any liability or obligation for any brokerage
fees, agent's commissions, finder's fees or similar payments in connection
with the transactions related to this Agreement. Except for the shares of
Buyer's stock being issued to Victor Lee under Section 4.1(d) above in
satisfaction of Seller's payment obligation to him for advisory services,
Buyer will have no payment or other obligations whatsoever to Victor Lee in
connection with such services or otherwise. Seller and Margolin agree to
indemnify, defend and hold harmless Buyer against any and all Adverse
Consequences (as defined in Section 9.1) that Buyer may suffer or incur on
account of the representations in this paragraph being inaccurate.
5.14 No representation or warranty of Seller or Margolin contained in
this Agreement, nor any other schedule, document, certificate or statement
furnished to Buyer by or on behalf of Seller pursuant to or in connection
with this Agreement, contains or will contain any untrue statement of a
material fact or omits or will omit a material fact necessary in order to
make the other statements contained therein or in this Agreement not
misleading.
6. Buyer's Warranties and Agreements
Buyer represents, warrants and agrees to and with Seller and Margolin
as follows.
6.1 Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada and has taken all
corporate actions necessary to authorize the execution and performance of
this Agreement. Buyer has qualified to do business as a foreign
corporation in the state of California. Each of the Agreements constitutes
the legal, valid and binding obligation of Buyer, enforceable in accordance
with its terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization or similar laws or equitable principles relating
to or limiting the rights of creditors generally. Buyer's execution and
performance of the Agreements will not violate or constitute a default, or
a condition that, if continued, with the passage of time or notice would
constitute a default, under any agreement to which Buyer is a party, or
constitute a fraudulent conveyance or fraudulent transfer
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under or violate any statute or law or any judgment, decree, order,
regulation or rule of any court or governmental entity to which Buyer is
subject. No authorization or approval of, or filing with, any
governmental, regulatory or administrative body is required in connection
with the execution and delivery of the Agreements by Buyer, except for any
filings required under federal or state securities or tax laws.
6.2 Buyer (i) is not a party to or bound by or subject to any
agreement or instrument, or any judgment, order, or decree of any court or
governmental agency or authority, which is violated by, or could materially
impairs, the carrying out of the Agreements; and (ii) is not a party to any
pending, and does not know of any threatened, action, suit, proceeding or
investigation in, before or by any court, governmental agency or authority
or arbitrator which may have a material adverse effect on the Agreements.
6.3 As of the date of this Agreement, the authorized capital stock of
Buyer consists of 100,000,000 shares of common stock of which 5,101,000
shares are outstanding. All of the outstanding shares of Buyer have been
duly authorized and validly issued and are fully paid and nonassessable.
As of the date of this Agreement, there are outstanding options to purchase
up to 2,215,000 shares of Buyer's common stock, of which options to
purchase up to 190,001 shares are currently vested and exercisable, and no
other options, warrants, debentures, conversion privileges, or other
rights, agreements or commitments obligating Buyer to issue or to transfer
any additional shares of capital stock to any person.
6.4 Buyer is currently in compliance with its filing and disclosure
requirements under the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Securities and Exchange Commission thereunder.
6.5 Neither Buyer nor any person acting on behalf of Buyer has
employed any broker, agent or finder or incurred any liability or
obligation for any brokerage fees, agent's commissions, finder's fees or
similar payments in connection with the transactions related to this
Agreement.
6.6 No representation or warranty of Buyer contained in this
Agreement, nor any other schedule, document, certificate or statement
furnished to Seller by or on behalf of Buyer pursuant to or in connection
with this Agreement, contains or will contain any untrue statement of a
material fact or omits or will omit a material fact necessary in order to
make the other statements contained therein or in this Agreement not
misleading.
7. Consents to Transfers of Agreements
If any of the agreements that would otherwise be an Assumed Agreement
is not assignable or may not be transferred without the consent of another
party to the agreement, this Agreement shall not constitute an assignment
of or attempt to assign such agreement if the failure to obtain such
consent would materially and adversely affect the rights of Buyer or
materially increase the liabilities of Buyer related to such agreement.
But the parties shall cooperate and use reasonable efforts to obtain any
such required consent of another party to an agreement. If no such consent
is obtained, Seller will cooperate with Buyer in any commercially
reasonable arrangements designed to provide to Buyer the benefits under any
such agreement including enforcement for the account of Buyer of any rights
of Seller under or related to such agreement. In such a case, Buyer may
perform the obligations with respect to such agreement for and on behalf of
Seller but for the account and benefit of Buyer and Seller shall hold the
benefits and privileges of such agreement arising after the date of this
Agreement in trust for Buyer.
8. Additional Agreements
8.1 Seller shall cease using any trade marks and names included in
the Assets and shall immediately change its corporate name to exclude any
such or similar marks or names.
8.2 Seller shall be permitted to retain copies of any and all records
and documents deemed reasonably necessary by Seller to prepare tax returns
and financial statements, and to respond to governmental authorities or
other third parties, so long as Seller maintains the confidentiality of
such items. Seller shall have the right of access to and the right to
copy, at Sellers' expense, any records copies of
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which are not retained by Seller, for the sole purpose of responding to
inquiries, audits, examinations or litigation initiated by tax authorities,
other governmental authorities or other third parties.
8.3 While Buyer has agreed to retain Margolin as a consultant under
the Consulting Agreement and to employ, or cause Execustaff to employee for
Buyer's benefit, Seller's other two employees as of the date of this
Agreement, Seller will continue, subject to Section 4.1(f), to be liable
for and will indemnify Buyer against all compensation and other benefits
owed to Seller's employees on account of their employment by Seller or any
termination of their employment in connection with the sale of the Assets
to Buyer. Margolin and such other employees are each entering into a
Proprietary Information and Inventions Assignment Agreement in the form
attached to this Agreement as Exhibit E.
8.4 In the event that any amount is owed to Buyer by Seller or
Margolin under this Agreement, or the exhibits to this Agreement, but
excluding the Consulting Agreement, including (without limitation) as
damages for any breach or misrepresentation by Seller under this Agreement
or as an indemnification obligation under Section 9 (an "Owed Amount"),
Buyer shall have the right to:
(a) reduce the number of shares of Buyer's Common Stock to be issued
to Margolin in the future under Section 4.1(d) or 4.1(e) of this Agreement
by a number of such shares equal to (i) all or a portion of the Owed
Amount, less any portions of the Owed Amount separately taken into account
under Sections 8.4(b) and 8.4(c) below, (ii) divided by $.75 (the agreed
fair market value of a share of Seller's Common Stock on the date of this
Agreement); and/or
(b) reduce the cash amounts to be paid to the Company Shareholders in
the future under Section 4.1(f) or 4.1(g) of this Agreement by all or a
portion of the Owed Amount, less any portions of the Owed Amount separately
taken into account under Sections 8.4(a) or 8.4(c); and/or
(c) offset or credit all or a portion of the Owed Amount, not in
excess of the total Owed Amount less the portions thereof separately taken
into account under Sections 8.4 and 8.4(b) above, and thereby satisfy or
reduce, any amounts owed by Buyer to Seller or Margolin under the
Agreements or otherwise.
Buyer shall give Seller written notice of any such offset.
8.5 Buyer has made its own investigation of the legality and
propriety of Buyer's use of the business methods and marketing materials
used by Seller in conducting its business, and Buyer agrees that Seller and
Margolin shall have no liability to Buyer under or in connection with this
Agreement solely because of Buyer's continuing to use the same or similar
business methods or marketing materials in Buyer's business.
9. Indemnification
9.1 Seller and Margolin agree to indemnify, defend and hold harmless
Buyer against any and all actions, suits, proceedings, investigations,
charges, complaints, claims, demands, injunctions, judgments, orders,
rulings, penalties, fees, losses, damages, injuries, obligations and
liabilities, including but not limited to interest, penalties and
reasonable attorney's fees ("Adverse Consequences"), but excluding the
Assumed Liabilities, that Buyer may suffer or incur by reason of a third
party claim, demand, action, suit or charge seeking damages or other
remedies or compensation (a "Claim") based on or resulting from: (a) any
inaccuracy or breach of a representation, warranty or covenant made by
Seller or Margolin in or pursuant to this Agreement; or the exhibits to
this Agreement, but excluding the Consulting Agreement; or (b) any Excluded
Liabilities.
9.2 Buyer agrees to indemnify, defend and hold harmless Seller and
Margolin against any and all Adverse Consequences that Seller or Margolin
may suffer or incur by reason of a third party Claim based on or resulting
from: (a) any inaccuracy or breach of a representation or covenant made by
Buyer in or pursuant to this Agreement; or (b) Buyer's failure to pay or
satisfy any of the Assumed Liabilities.
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9.3 A party entitled to indemnification under this Section 9 on
account of a third party Claim to which an indemnifying party's obligations
under this Section 9 would apply shall promptly notify the indemnifying
party of the existence of the Claim; provided, however, that the failure
promptly to give such notice shall not excuse or limit the indemnifying
party's obligation to indemnify the indemnified party, except to the extent
that the indemnifying party suffers damage or prejudice by reason of the
indemnified party's failure to give or delay in giving such notice.
Notwithstanding the foregoing, an indemnifying party's obligations under
this Section 9 relating to a Claim shall only apply if such notice relating
to that Claim is given to such party within four (4) years after the date
of this Agreement. Within a reasonable time after it or he receives such
notice, the indemnifying party will have the right and obligation to assume
and thereafter conduct the defense of such Claim at its or his expense,
with counsel of its or his choice reasonably satisfactory to the
indemnified party; provided, however, that the indemnified party will at
all times have the right fully to participate in the defense at its or his
own expense and the indemnifying party will not consent to the entry of any
judgment or enter into any settlement with respect to such Claim without
the prior written consent of the indemnified party (which shall not to be
withheld unreasonably) unless the judgment or proposed settlement involves
only the payment of money damages by the indemnifying party and does not
impose an injunction or other equitable relief upon the indemnified party.
If the indemnifying party, within a reasonable time after receiving such a
notice, should fail to defend against the Claim, the indemnified party will
have the right, but not the obligation, to undertake the defense of, and to
compromise or settle (exercising reasonable business judgment), the Claim
on behalf of and at the risk of the indemnifying party. The
indemnification provisions in this Section 9 are in addition to, and not in
derogation of, any statutory, equitable or common law remedy any party may
have for breach of a representation, warranty or covenant.
10. Miscellaneous Provisions
10.1 This Agreement will be governed by the laws of the State of
California.
10.2 This Agreement contains the entire agreement among the parties,
and supersedes all prior agreements, representations and understandings of
the parties, relating to the subject matter of this Agreement.
10.3 Each party agrees that after the delivery of this Agreement it or
he will execute and deliver such further documents and do such further acts
and things as the other party may reasonably request in order to carry out
the terms of this Agreement.
10.4 No supplement to or amendment of this Agreement will be binding
unless executed in writing by Buyer, Seller and Margolin.
10.5 Subject to the terms of the Stock Acquisition Agreement, this
Agreement will be binding on, and will inure to the benefit of, the parties
and their respective successors and assigns, and shall not confer any
rights or remedies on any others. No party may assign its or his rights or
obligations under this Agreement, except with the other parties' written
consent.
10.6 This Agreement may be executed in one or more counterparts, each
of which will be deemed a valid, original agreement, but all of which
together will constitute one and the same instrument.
10.7 If any provision of this Agreement or its application to any
person or circumstances is held to be unenforceable or invalid by any court
of competent jurisdiction, its other applications and the remaining
provisions of this Agreement will be interpreted so as best reasonably to
effect the intent of the parties.
10.8 Each party will pay its or his own legal fees and other expenses
in connection with the preparation of this Agreement and the sale of Assets
in accordance with this Agreement. However, if any legal action or other
proceeding is brought for the enforcement of this Agreement, or because or
arising out of an alleged dispute, breach, default or misrepresentation in
connection with any of the provisions of this Agreement, the prevailing
party will be entitled to recover reasonable attorneys fees and other costs
incurred in that action or proceeding, in addition to any other relief to
which it or he may be entitled.
9
10.9 Any notice or other communication to a party pursuant to this
Agreement will be deemed to have been duly given if given personally to the
party or on the date of delivery in writing, addressed to the party, at the
following address:
If to Buyer: 170 Newport Center Drive
Suite 210
Newport Beach, CA 92660
If to Seller or Margolin: 4423 West Coast Highway
Newport Beach, CA 92663
10.10 With respect to words used in this Agreement, the singular
form shall include the plural form, the masculine gender shall include the
feminine or neuter gender, and vice versa, as the context requires.
10.11 Any rule of law (including California Code of Civil
Procedure Section 1864 or California Civil Code Section 1654) or legal
decision that would require interpretation against the drafter of this
Agreement is not applicable and is waived.
10.12 Any provision of this Agreement may be waived at any time by
the party entitled to the benefit thereof by a written instrument executed
by the party or by a duly authorized officer of the party. No waiver of
any of the provisions of this Agreement will be deemed, or will constitute,
a waiver of any other provision, whether or not similar, nor will any
waiver constitute a continuing waiver.
EXECUTION
Seller, Buyer and Margolin have executed and delivered this Agreement
in Newport Beach, California as of the date set forth in the first
paragraph of this Agreement.
/s/ Dave Margolin
Dave Margolin
Signature Credit Corporation,
a California corporation
By /s/ David A. Margolin
Signature
David A. Margolin
Printed Name
President
Title
Trycera Financial, Inc.,
a Nevada corporation
By /s/ Matthew S. Kerper
Signature
Matthew S. Kerper
Printed Name
CEO
Title
10
Amendment to Asset Purchase Agreement
Subparagraph 4.1(g) of the Asset Purchase Agreement dated November 2,
2004, by and between Trycera Financial Corporation ("Buyer") and Signature
Credit Corporation ("Seller"), is hereby amended to read as follows:
(g) to be paid by check to Seller on the 61st day after the date
of this Agreement: (i) the cash sum of Ten Thousand Dollars
($10,000); (ii) plus ninety-five percent (95%) of all cash receipts
received by then from Seller's mailings, excluding the Trycera funded
mailing as referenced by the e-mail below dated October 14, 2004,
before the date of this Agreement, including (without limitation)
mailings of Classic Advantage Cards; (iii) less ninety-five percent
(95%) of all refunds then paid or owed on account of such mailings
during that 30-day period, (iv) less the accrued vacation pay owed to
Seller's employees other than Margolin on account of their ceasing to
be employed on or about the date of this Agreement, which shall be
paid to such employees by Buyer; (v) less the amounts of any refunds
(not covered by Section 4.1(g)(iii) above) which are then owed to
Seller's customers, as of the date of this Agreement, and which Buyer
(in its absolute discretion) has agreed to pay.