ASSET PURCHASE AGREEMENT by and between ASURE SOFTWARE, INC.

by and between

ASURE SOFTWARE, INC.

and

CORPORATE PAYROLL, INC.,

CPI-HR HOLDINGS, INC.,

and

▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇

Dated as of January 1, 2017

 

		Page
SECTION I. DEFINITIONS		1
SECTION II. SALE AND PURCHASE OF ASSETS AND CLOSING		8
2.1	Sale and Purchase.	8
2.2	Excluded Assets.	10
2.3	Purchase Price.	11
2.4	Allocation of Purchase Price.	11
2.5	Assumption of Seller Liabilities.	12
2.6	Excluded Liabilities.	12
2.7	Closing.	13
2.8	Proration of Expenses	13
SECTION III. REPRESENTATIONS AND WARRANTIES OF SELLER		14
3.1	Organization and Qualification.	14
3.2	Authority.	14
3.3	No Conflicts; Consents.	15
3.4	Financial Statements.	16
3.5	Undisclosed Liabilities.	17
3.6	Custodial Accounts.	17
3.7	Absence of Certain Changes, Events and Conditions.	17
3.8	Customer Accounts and ▇▇▇▇▇▇▇▇.	19
3.9	Title to Purchased Assets; Real Property.	20
3.10	Condition and Sufficiency of Purchased Assets.	20
3.11	[Intentionally Omitted]	20
3.13	Intellectual Property.	22
3.14	Customers and Suppliers.	24
3.15	Insurance.	24
3.16	Legal Proceedings; Governmental Orders.	25
3.17	Compliance With Laws; Permits.	25
3.18	Environmental Matters.	25
3.19	Employment Matters.	26
3.20	Employee Benefit Matters.	27
3.21	Service Warranties.	28
3.22	Taxes.	28
3.23	Finders’ Fees.	29
3.24	Computer Systems.	29
3.25	Privacy and Data Security.	30
3.26	Regarding the Acquisition of Asure Stock.	30
SECTION IV. REPRESENTATIONS AND WARRANTIES OF PURCHASER		32
4.1	Organization.	32
4.2	Authority.	32
4.3	No Conflicts; Consents.	32

		Page
4.4	Litigation.	32
4.5	Asure Stock / Capitalization	33
4.6	Finders’ Fees.	33
4.7	SEC Filings.	33
SECTION V. CLOSING DELIVERABLES		34
5.1	Deliveries to be Made by Seller at Closing.	34
5.2	Deliveries to be Made by Purchaser at Closing.	35
SECTION VI. SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND INDEMNIFICATIONS		36
6.1	Survival of Representations and Warranties.	36
6.2	Indemnification by Seller.	36
6.3	Indemnification by Purchaser.	37
6.4	Certain Limitations.	38
6.5	Indemnification Procedures.	39
6.6	Payments; Offset and Holdback from Note.	41
6.7	Tax Treatment of Indemnification Payments.	41
6.8	Effect of Investigation.	41
6.9	Cumulative Remedy	41
SECTION VII. COVENANTS AND AGREEMENTS		42
7.1	Transition Services Agreement.	42
7.2	Employee Matters.	42
7.3	Confidentiality, Non-Competition, Non-Solicitation and Non-Interference.	43
7.4	Audit Cooperation.	45
7.5	Books and Records.	45
7.6	Public Announcements.	46
7.7	Satisfaction of Excluded Liabilities.	46
7.8	Name Change; Usage.	46
7.9	Maintenance of Existence.	46
7.10	Collection of Accounts Receivable.	46
7.11	Transition Cooperation; Mail Received After Closing.	46
7.12	Further Assurances.	47
SECTION VIII. MISCELLANEOUS		47
8.1	No Waiver.	47
8.2	Successors and Assigns.	47
8.3	Governing Law; Jurisdiction; Waiver of Jury Trial.	47
8.4	Expenses; Transfer Taxes.	47
8.5	Notices.	48
8.6	Counterparts.	48
8.7	Announcements and Communications.	49

		Page
8.8	Entire Agreement.	49
8.9	Delays or Omissions.	49
8.10	Severability.	49
8.11	Time; Captions; Exhibits and Schedules.	49
8.12	Construction.	49
8.13	Third Party Beneficiaries.	49
8.14	Specific Performance.	50

 

 

 

 

 

 

THIS ASSET PURCHASE AGREEMENT (“Agreement”) is made as of the 1st day of January, 2017, by and between Asure Software, Inc., a Delaware corporation (“Purchaser”), Corporate Payroll, Inc., an Ohio Corporation (“Seller”), CPI-HR Holdings, Inc., an Ohio corporation (“Seller Parent”), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, individually (“Seller Principal”).

WITNESSETH:

WHEREAS, Seller is a leading provider of human resource solutions in the areas of employee benefits, payroll, benefits administration, compliance, and wellness, with its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (the “Business Premises”);

WHEREAS, Seller Principal is the Chief Executive Officer of Seller and the sole shareholder of Seller Parent, which in turn is the sole shareholder of Seller;

WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, substantially all the assets and certain specified liabilities of Seller’s payroll service bureau business, consisting of payroll and tax management (collectively, the “Business”), subject to the terms and conditions set forth herein.

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

SECTION I. 
DEFINITIONS

The following terms used in this Agreement have the meanings set forth in this Section 1:

“Accounts Receivable” has the meaning set forth in Section 2.2(d).

“Action” means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity.

“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.  Notwithstanding anything in the preceding two sentences to the contrary, for purposes of Section 7.3 of this Agreement, the term “Affiliate,” with respect to Seller, Seller Parent or Seller Principal shall specifically exclude Alera Group Holdings, Inc. and all of its direct and indirect subsidiaries.

“Agreement” has the meaning set forth in the preamble.

“Assigned Contracts” has the meaning set forth in Section 2.1(h).

“Assigned Customer Accounts” has the meaning set forth in Section 2.1(e).

“Assignment and Assumption Agreement” has the meaning set forth in Section 5.1(c).

“Assumed Liabilities” has the meaning set forth in Section 2.5.

“Asure Stock” has the meaning set forth in Section 2.3(b).

“Audit Representation Letter” has the meaning set forth in Section 7.4.

“Benefit Plan” has the meaning set forth in Section 3.20(a).

“▇▇▇▇ of Sale” has the meaning set forth in Section 5.1(b).

“Bundled Services Agreements” has the meaning set forth in Section 3.8(b).

“Business” has the meaning set forth in the recitals.

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

“Business Premises” has the meaning set forth in the recitals.

“Client Development and Distribution Agreement” has the meaning set forth in Section 5.1(g).

“Closing” and “Closing Date” have the meanings set forth in Section 2.7.

“Closing Day Cash Payment” has the meaning set forth in Section 2.3(a).

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

“Commitments” has the meaning set forth in Section 2.1.

“Computer System” means any of or combination of the computer software, computer hardware (whether general or special purpose), telecommunications capabilities (including voice, data or video networks) and other similar or related items of any automated, computerized or software system and any other network or system or related service that is used by or relied on by Seller in the conduct of its business. The parties acknowledge that the telecommunications system and computer network are single networks supporting the operations of Seller and Corporate Plans, Inc., and the segregation of these systems will take place pursuant to the Transition Services Agreement. The foregoing acknowledgment and factual recitation qualifies in its entirety the representations and warranties of Seller contained in Section 3.24.

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

“Custodial Accounts” has the meaning set forth in Section 3.6.

“Customer Accounts” has the meaning set forth in Section 3.8.

“Direct Claim” has the meaning set forth in Section 6.5(c).

“Disclosure Schedule” means the Disclosure Schedule delivered by Seller concurrently with the execution and delivery of this Agreement.

“Disputed Allocation Amounts” has the meaning set forth in Section 2.4.

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

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

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

the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§ 7401 et seq.; and the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §§ 651 et seq.

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

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

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

“ERISA Affiliate” means, with respect to any Person, any other Person that, together with such first Person, would be treated as a single employer within the meaning of Section 414(b), (c), (m) or (o) of the Code.

“Excluded Assets” has the meaning set forth in Section 2.2.

“Excluded Business” means all business activities conducted by Seller or any of its Affiliates other than the Business, including, without limitation, the employee benefits brokerage, financial planning, retirement plan brokerage, and property and casualty insurance business operated by Corporate Plans, Inc., an Ohio corporation and an Affiliate of Seller.

“Excluded Liabilities” has the meaning set forth in Section 2.6.

“Financial Statements” has the meaning set forth in Section 3.4.

“GAAP” means United States generally accepted accounting principles in effect from time to time.

“Goodwill” has the meaning set forth in Section 2.1(m).

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

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

“Hazardous Materials” means: (a) any material, substance, chemical, waste, product, derivative, compound, mixture, solid, liquid, mineral or gas, in each case, whether naturally occurring or manmade, that is hazardous, acutely hazardous, toxic, or words of similar import or

regulatory effect under Environmental Laws; and (b) any petroleum or petroleum-derived products, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing materials, urea formaldehyde foam insulation, and polychlorinated biphenyls.

“Holdback Amount” has the meaning set forth in Section 6.6.

“▇▇▇▇▇▇▇ Non-Compete Agreement” has the meaning set forth in Section 5.1(h).

“Indemnitee” has the meaning set forth in Section 6.5.

“Indemnifying Party” has the meaning set forth in Section 6.5.

“Independent Accountants” has the meaning set forth in Section 2.4.

“Insurance Policies” has the meaning set forth in Section 3.15.

“Intellectual Property Assignments” has the meaning set forth in Section 5.1(d).

“Intellectual Property Licenses” has the meaning set forth in Section 3.13(e).

“Intellectual Property Registrations” has the meaning set forth in Section 3.13(c).

“Interim Balance Sheet” has the meaning set forth in Section 3.4.

“Interim Balance Sheet Date” has the meaning set forth in Section 3.4.

“Interim Financial Statements” has the meaning set forth in Section 3.4.

“Knowledge of Seller” or “Seller’s Knowledge” means the actual knowledge, after reasonable inquiry, of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, or ▇▇▇▇▇ ▇▇▇▇▇▇, or such other key employees and professional advisors (including attorneys, accountants and consultants) of Seller who would reasonably be expected to have actual knowledge of the matters in question.

“Landlord” means MGAC Property Ltd., an Ohio limited liability company.

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

“Lease Agreement” means that certain Lease Agreement dated as of January 1, 2017, by and between Seller and Landlord with respect to the Business Premises, and all amendments, modifications, extensions and renewals thereof.

“Liabilities” has the meaning set forth in Section 3.5.

“Licensed Intellectual Property” has the meaning set forth in Section 3.13(a).

“License Termination Agreement” has the meaning set forth in Section 5.1(i).

“Lock-Up Agreements” has the meaning set forth in Section 2.3(b).

“Losses” has the meaning set forth in Section 6.2.

“Malicious Instructions” has the meaning set forth in Section 3.24(b).

“Material Adverse Effect” means any event, occurrence, condition, fact or change that is, or could reasonably be expected to become, individually or in the aggregate, materially adverse to the business, results of operations, condition (financial or otherwise) or assets of Seller.

“Material Customers” has the meaning set forth in Section 3.14.

“Material Suppliers” has the meaning set forth in Section 3.14(b).

“Offset Obligation” has the meaning set forth in Section 6.6.

“Ordinary Course of Business” means an action taken by a Person only if such action (i) is consistent in nature, scope and magnitude with the past practices of such Person and is taken in the ordinary course of, or incidental to, the normal day-to-day operations of such Person and (ii) does not require authorization by the board of directors or shareholders or members of such Person and does not require any other separate or special authorization of any nature.

“Owned Intellectual Property” has the meaning set forth in Section 3.13(a).

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

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

“Proprietary Information Technology System” means a Computer System (or portion of Computer System) that Seller (either directly or through or with any other Person) has developed, customized or enhanced or is in the process of developing, customizing or enhancing.

“Purchase Price” has the meaning set forth in Section 2.3.

“Purchased Assets” has the meaning set forth in Section 2.1.

“Purchaser” has the meaning set forth in the preamble.

“Purchaser Ancillary Agreement” or “Purchaser Ancillary Agreements” has the meaning set forth in Section 4.2.

“Purchaser Fundamental Representations” has the meaning set forth in Section 6.1.

“Purchaser Indemnitees” has the meaning set forth in Section 6.2.

“Purchaser’s Accountants” means ▇▇▇▇▇▇ LLP.

“Purchaser SEC Reports” has the meaning set forth in Section 4.7(a).

“Qualified Benefit Plan” has the meaning set forth in Section 3.20(b).

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

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

“Representative” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

“Retained Cash” has the meaning set forth in Section 2.1(a).

“SEC” has the meaning set forth in Section 3.26(b).

“Seller” has the meaning set forth in the preamble.

“Seller’s Accountants” means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, CPAs.

“Seller Ancillary Agreement” and “Seller Ancillary Agreements” has the meaning set forth in Section 3.2.

“Seller Basket Amount” has the meaning set forth in Section 6.4(a).

“Seller Fundamental Representations” has the meaning set forth in Section 6.1.

“Seller Indemnitors” has the meaning set forth in Section 6.2.

“Seller Indemnity Cap” has the meaning set forth in Section 6.4(c).

“Seller Indemnitees” has the meaning set forth in Section 6.3.

“Seller Intellectual Property” has the meaning set forth in Section 3.13(a).

“Seller Parent” has the meaning set forth in the preamble.

“Seller Principal” has the meaning set forth in the preamble.

“Software and Technology” has the meaning set forth in Section 3.13(b).

“Standard Terms and Conditions” has the meaning set forth in Section 3.21.

“Tangible Personal Property” has the meaning set forth in Section 2.1(d).

“Taxes” means all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, value added, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties.

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

“Third Party Claim” has the meaning set forth in Section 6.5(a).

“Transition Services Agreement” has the meaning set forth in Section 7.1.

“Union” has the meaning set forth in Section 3.19(b).

“Year End Financial Statements” has the meaning set forth in Section 3.4.

SECTION II. 
SALE AND PURCHASE OF ASSETS AND CLOSING

which Purchaser expressly agrees to assume, in Purchaser’s sole discretion, including without limitation, those set forth on Schedule 2.1(e) (collectively, the “Assigned Customer Accounts”);

Anything herein to the contrary notwithstanding, this Agreement and any instrument executed pursuant hereto shall not constitute an assignment of any claim, contract, license, lease, purchase order, or other commitment included in the Purchased Assets (collectively, the “Commitments”) if an attempted assignment or transfer of the same without the consent of the other party thereto or the applicable governmental agency would be ineffective or would constitute a breach or violation thereof so that Purchaser would not in fact receive all of the rights and benefits of  Seller or such other assigning party thereunder.  If by the Closing Date any such consent has not been obtained, Seller shall after the Closing use its reasonable efforts to provide for the Purchaser the benefits under any such Commitment without such arrangement causing a breach or violation of such Commitment.  If Seller or such other assigning party is unable to obtain such consent to any transfer or assignment of an Assigned Contract, Seller shall

so indicate as to each such Assigned Contract on Schedule 2.1(h) hereto, such inability shall not constitute or be deemed to be a breach of any provision of this Agreement, and Seller and Purchaser shall work together and reasonably cooperate following Closing to obtain such consents.

amounts remaining in dispute (the “Disputed Allocation Amounts”) shall be submitted to an independent accounting firm of national or regional standing jointly selected by Purchaser and Seller (the “Independent Accountants”) who, acting as experts and not arbitrators, shall resolve the Disputed Allocation Amounts only and make any necessary adjustments to the Allocation Schedule.  The Independent Accountants shall make a determination as soon as practicable within thirty (30) days, or such other time as Purchaser and Seller agree in writing) following their engagement and their resolution of the Disputed Allocation Amounts and any resulting adjustments to the Allocation Schedule shall be final and binding on the parties.  Fees and costs of the Independent Accountants shall be borne equally by Purchaser and Seller.  The parties agree that all state, federal and local Tax Returns (including IRS Form 8594) and all financial statements of the parties shall be prepared in a manner consistent with (and the parties shall not otherwise file a Tax Return or take any position inconsistent with) the Allocation Schedule.

than thirty (30) days after the Closing Date. Purchaser shall prepare, on or before May 15, 2017, a reconciliation statement detailing the prorations described in this sentence, and Purchaser shall pay to Seller, or Seller shall pay to Purchaser, the net amounts due such party within ten (10) days following receipt of such reconciliation statement unless Seller objects in writing to such statement, in which case the parties shall promptly meet and endeavor in good faith to resolve such dispute as expeditiously as possible.

SECTION III. 
REPRESENTATIONS AND WARRANTIES OF SELLER

Except as set forth in correspondingly number Section of the Disclosure Schedule, Seller, Seller Parent, and Seller Principal, jointly and severally, represent and warrant to Purchaser that the statements contained in this Section 3 are true and correct as of the date hereof and shall surviving the Closing of the transactions contemplated herein.

similar Laws of general application affecting creditors’ rights or by the application by a court of equity principles.

Agreement and each Seller Ancillary Agreement and the consummation of the transactions contemplated hereby and thereby.

Year End Financial Statements, the “Financial Statements”). The Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved, subject, in the case of the Interim Financial Statements, to normal and recurring year-end adjustments (the effect of which will not be materially adverse) and the absence of notes (that, if presented, would not differ materially from those presented in the Year End Financial Statements). The Financial Statements are based on the books and records of Seller, and fairly present in all material respects the consolidated financial position of Seller as of the respective dates above and the consolidated results of the operations and cash flows of Seller for the periods indicated above. The balance sheet of Seller as of November 30, 2016, is referred to herein as the “Interim Balance Sheet” and the date thereof as the “Interim Balance Sheet Date”.  The books and records of Seller are true, correct and complete in all material respects and accurately present and reflect in all material respects all of the transactions and actions described therein.  Seller maintains a standard system of accounting established and administered in accordance with GAAP.

directors, consultants or independent contractors, other than as provided for in any written agreements or required by applicable Law, (ii) material change in the terms of employment for any employee or any termination of any employees for which the aggregate costs and expenses exceed $10,000 or (iii) action to accelerate the vesting or payment of any compensation or benefit for any employee, member, manager, consultant or independent contractor;

Services Agreements”) and showing the annual revenues attributable to such excluded services for the years ended December 31, 2014, and December 31, 2015, and for the eleven (11) month period ended November 30, 2016.

3.12    Material Contracts.

(i)

each Contract involving aggregate consideration in excess of $10,000 specifically including all customer agreements, support agreements, supplier agreements, reseller agreements, referral agreements, hosting agreements, licensing agreements, software development agreements, and agreements relating to the Seller Intellectual Property;

(ii)	all Contracts that require Seller to purchase its total requirements of any product or service from a third party or that contain “take or pay” provisions;

(iii)

all Contracts that provide for the indemnification by Seller of any Person or the assumption of any Tax, environmental or other Liability of any Person;

(iv)	all Contracts that relate to the acquisition or disposition of any business;

(v)	all reseller, distributor, dealer, manufacturer’s representative, franchise, agency, sales promotion, market research, marketing consulting and advertising Contracts to which Seller is a party;

(vi)	all employment agreements and Contracts with independent contractors or consultants (or similar arrangements) to which Seller is a party;

(vii)

except for Contracts relating to trade receivables, all Contracts relating to indebtedness (including, without limitation, guarantees) of Seller;

(viii)

except for those Contracts relating to commercially available off-the-shelf items as defined in Subpart 2.101 of the Federal Acquisition Regulations, all Contracts with any Governmental Authority to which Seller is a party;

(ix)	all Contracts that limit or purport to limit the ability of Seller to compete in any line of business or with any Person or in any geographic area or during any period of time;

(x)	any Contracts to which Seller is a party that provide for any joint venture, partnership or similar arrangement by Seller;

(xi)	all Contracts between or among Seller on the one hand and Seller or any Affiliate of Seller (other than Seller) on the other hand; and

(xii)

any other Contract that is material to the operation of the Business or any of the Purchased Assets or Assumed Liabilities and not previously disclosed pursuant to this Section 3.12.

(b) Each Material Contract (including those which are Assigned Contracts) is valid and binding in accordance with its terms and is in full force and effect. None of Seller or, to Seller’s knowledge, any other party thereto: (i) is in breach of or default under (or is alleged to be in breach of or default under) any Material Contract or Assigned Contract in any material respect, or (ii) has provided or received any notice of any intention to terminate, any Material Contract or Assigned Contract.  No event or circumstance has occurred that, with notice or lapse of time or both, would constitute an event of default under any Material Contract or Assigned Contract or result in a termination thereof or would cause or permit the acceleration or other material change in any right or obligation or the loss of any benefit thereunder. Complete and correct copies of each Material Contract and Assigned Contract (including all modifications, amendments and supplements thereto and waivers thereunder) have been made available to Purchaser. There are no material disputes pending or, to Seller’s knowledge, threatened under any Material Contract or Assigned Contract.

(i)

trademarks, service marks, trade names, brand names, logos, trade dress and other proprietary indicia of goods and services, whether registered, unregistered or arising by Law, and all registrations and applications for registration of such trademarks, including intent-to-use applications, and all issuances, extensions and renewals of such registrations and applications  (Purchaser acknowledges that  (A) Seller and Corporate Plans, Inc. jointly have used the trade name “CPI-HR” and such use by Corporate Plans, Inc. and/or its successor-in-interest and parent company may continue following the Closing; and (B) Seller and Corporate Plans, Inc. historically have shared a domain name, “▇▇▇▇▇.▇▇▇,” which is registered in the name of Corporate Plans, Inc. and have jointly used the trade name “HR Connect” (human resource reference) in the ordinary course of their business.  The foregoing acknowledgments and recitations qualify in their entirety the representations and warranties contained in this Section 3.13 and all Disclosure Schedules delivered pursuant to this Section 3.13);

(ii)	Internet domain names, whether or not trademarks, registered in any generic top level domain by any authorized private registrar or Governmental Authority;

(iii)

original works of authorship in any medium of expression, whether or not published, including but not limited to the Software and Technology, all copyrights (whether registered, unregistered or arising by Law), all registrations and applications for registration of such copyrights, and all issuances, extensions and renewals of such registrations and applications;

(iv)	confidential information, formulas, designs, devices, know-how, research and development, inventions, methods, processes, compositions and other trade secrets, whether or not patentable;

(v)

patented and patentable designs and inventions, all design, plant and utility patents, letters patent, utility models, pending patent applications and provisional applications and all issuances, divisions, continuations, continuations-in-part, reissues, extensions, reexaminations and renewals of such patents and applications; and

(vi)	all rights to ▇▇▇ and recover and retain damages, costs and attorneys’ fees for past, present and future infringement and any other rights relating to any of the foregoing.

specifications, program specifications, designs, technical data, improvements, modifications, and versions thereof, and any documentation and other tangible embodiments of the foregoing, whether in eye readable or machine readable form, training manuals, user guides, end user instructional information, and all related technology information, that is used in, incorporated in, embodied in or displayed by any of the products or services developed, manufactured, marketed, licensed or sold in connection with the Business, or are used in the design, development, reproduction, maintenance or modification of any of products or services developed, manufactured, marketed, licensed or sold in connection with the Business.

of each Insurance Policy.  The Insurance Policies do not provide for any retrospective premium adjustment or other experience-based liability on the part of Seller.  All such Insurance Policies (a) are valid and binding in accordance with their terms; (b) are provided by carriers who are financially solvent; and (c) have not been subject to any lapse in coverage.  Except as set forth on Schedule 3.15, there are no claims related to the business of Seller pending under any such Insurance Policies as to which coverage has been questioned, denied or disputed or in respect of which there is an outstanding reservation of rights. None of Seller or any of its Affiliates (including Seller) is in default under, or has otherwise failed to comply with, in any material respect, any provision contained in any such Insurance Policy. To Seller’s Knowledge, the Insurance Policies are sufficient for compliance with all applicable Laws and Contracts to which Seller is a party or by which it is bound.

remains pending or unresolved, or is the source of ongoing obligations or requirements as of the Closing Date.

the right of Seller to merge, amend or terminate any Benefit Plan; (iv) increase the amount payable under or result in any other material obligation pursuant to any Benefit Plan; or (v) result in “excess parachute payments” within the meaning of Section 280G(b) of the Code.

(c) No Computer System has experienced any bug, failure, breakdown, continued substandard performance, data loss, data integrity problem, hacking attempt, security breach or other Malicious Instruction in the past 12 months that has caused any substantial disruption or substantial interruption in or to the use of any Computer System.

periodic and current reports filed with U.S. Securities and Exchange Commission (“SEC”) as publicly available at the SEC’s website at ▇▇▇.▇▇▇.▇▇▇.

3.27   Completeness.  No representation, warranty or statement of Seller, Seller Parent, or Seller Principal contained in this Agreement, the Disclosure Schedule or the Seller Ancillary Agreements contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements stated herein or therein, in light of the circumstances in which they are made, not misleading.

3.28   Effect of Disclosure.    Disclosure of an item in any part of the Disclosure Schedules, should the existence of the item or its contents be relevant on its face to any other section of this Agreement or Schedule to this Agreement, shall be deemed to be disclosed in that other Schedule, provided that an express cross reference is provided in such other Schedule and sufficient detail is provided to clarify such cross reference. Disclosure in the Schedules of items that may or may not be strictly required to be disclosed by this Agreement shall not be deemed to imply that such items are material or that the inclusion of such items creates a standard of materiality.

SECTION IV. 
REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to Seller that the statements contained in this Section 4 are true and correct as of the date hereof and shall survive the Closing of the transactions contemplated herein.

contemplated by this Agreement. To Purchaser’s knowledge, no event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.

throughout the periods indicated (except as may be indicated in the notes thereto, or in the case of unaudited statements, as may be permitted by the SEC on Form 10-Q under the Exchange Act), and (iii) fairly presented in all material respects the financial position of Purchaser at the respective dates thereof and the results of Purchaser’s operations and cash flows for the periods indicated (subject in the case of unaudited financial statements, to normal audit adjustments). There has been no change in Purchaser’s accounting policies except as described in the notes to the Purchaser Financial Statements.

SECTION V. 
CLOSING DELIVERABLES

between Seller and Purchaser, or their respective Affiliates, including without limitation, the ASP Service Bureau Payroll Processing Software License and Lease Distribution Agreement dated November 11, 2008, by and between Seller (as licensee) and Mangrove Software, Inc., a Florida corporation and Affiliate of Purchaser (as licensor), duly executed by Seller; a written subordination agreement in form and substance acceptable to ▇▇▇▇▇ Fargo duly executed by Seller;

SECTION VI. 
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
AND INDEMNIFICATIONS

and all demands, assessments, judgments (collectively, “Losses”), incurred by such Purchaser Indemnitee and resulting from, arising out of or related to:

other similar qualification contained in or otherwise applicable to such representation or warranty.

indemnification for any and all Losses based upon, arising from or relating to such Third Party Claim. Seller and Purchaser shall cooperate with each other in all reasonable respects in connection with the defense of any Third Party Claim, including (subject to reasonable privilege and confidentiality concerns) making available records relating to such Third Party Claim and furnishing, without expense (other than reimbursement of actual out-of-pocket expenses) to the defending party, management employees of the non-defending party as may be reasonably necessary for the preparation of the defense of such Third Party Claim.

SECTION VII. 
COVENANTS AND AGREEMENTS

provision hereof are severable and distinct covenants and provisions. The invalidity or unenforceability of any such covenant or provision as written shall not invalidate or render unenforceable the remaining covenants or provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such covenant or provision in any other jurisdiction.

SECTION VIII. 
MISCELLANEOUS

Asure Software, Inc.

▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇

▇▇▇▇▇▇, ▇▇▇▇▇  ▇▇▇▇▇

Attention:  CEO

Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

With a copy (which shall not constitute notice) to:

▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.A.

▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇▇▇▇▇▇▇▇▇, ▇▇  ▇▇▇▇▇

Attention:  ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.

Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

Corporate Payroll, Inc.

▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇

▇▇▇▇▇, ▇▇ ▇▇▇▇▇

Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, CEO

Email: ▇▇▇▇@▇▇▇▇▇.▇▇▇

With a copy (which shall not constitute notice) to:

Meyers, Roman, Friedberg & ▇▇▇▇▇

▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇

▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇

Attention:  ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.

Email:  ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

behalf of any Person other than parties hereto and their respective successors and permitted assigns.

 [Signature page to follow.]

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

PURCHASER:

ASURE SOFTWARE, INC.

By:                                                                           

Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇

Title: Chief Executive Officer

SELLER:

CORPORATE PAYROLL, INC.

By:                                                                            

Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇

Title: Chief Executive Officer

SELLER PARENT:

CPI-HR HOLDINGS, INC.

By:                                                                            

Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇

Title: Chief Executive Officer

SELLER PRINCIPAL:

▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, individually

[Signature page to the Asset Purchase Agreement dated January 1, 2017, between Asure Software, Inc., Corporate Payroll, Inc., CPI-HR Holdings, Inc., and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.]